Author: Suman Bery, IGC
The Indian government presented its National Manufacturing Policy (NMP) to the nation in early November.
Presumably, the announcement was timed to demonstrate that reform is alive and kicking before parliament reconvenes later this month. With the final text now available on the Department of Industrial Policy and Promotion website, it is possible to take a considered view of the policy’s goals, the means proposed to achieve them and the probability of success. It is also possible to speculate on the unintended consequences and possible collateral damage.
Read more…
Author: Suman Bery, IGC
Following the torpor of the August holidays on both sides of the Atlantic, each September marks the revival of the international diplomatic calendar.
On the political side, the centrepiece is the annual meeting of the United Nations General Assembly in New York; on the economic side, a similar marker is the Annual Meetings of the World Bank and the International Monetary Fund, held in Washington twice every three years. Read more…
Author: Suman Bery, IGC
The narrative on the economic growth of ‘maritime East Asia’ in the period after the Korean War is well-established, and runs roughly as follows.
Japan’s reconstruction was facilitated by its integration with the US and Europe within the liberal trading and monetary order set up under US leadership at the end of the Second World War. Read more…
Author: Suman Bery, International Growth Centre
In the coming decade, Indian cities will grow exponentially. It is essential they are kept healthy.
More by accident than design, India’s Five Year Plans are today well synchronised with its population census. Read more…
Author: Suman Bery, NCAER
The earthquake, tsunami and nuclear disaster in Japan and the global financial crisis centred on the US and Britain suggest that decision makers in even the most advanced societies experience difficulty in acknowledging, let alone managing, worst-case scenarios in modern, complex systems.
In each case, the underlying ‘failures’ were more political than technical. In the US, both the Clinton and Bush administrations believed that market discipline was superior to regulatory oversight in achieving an appropriate balance between innovation and safety. Read more…
Author: Suman Bery, NCAER
On November 3, shortly before US President Barack Obama’s arrival in India, the Federal Open Market Committee (FOMC) of the US Federal Reserve announced that it intended to undertake a fresh round of purchases of longer-term treasury securities in an aggregate amount of US$600 billion until the second quarter of 2011, at a pace of approximately US$75 billion per month.
Even though Fed Chairman Ben Bernanke had done his best to ‘trail’ (that is, anticipate) this decision, starting with a speech at Jackson Hole, Wyoming in late August, the formal announcement of this move (so called QE2, denoting the second round of quantitative easing) has unleashed a firestorm of criticism both within the US and internationally. Read more…
Author: Suman Bery, NCAER
The East Asian countries responded with coherence and vigour to the weaknesses in their financial systems revealed by the crisis in 1997-98. This raises two issues. First, how important does that earlier agenda remain? Second, is it is reasonable to expect comparable alignment among the Asian members of the G20, particularly on the inter- related issues of global imbalances and the reform of the international monetary system?
Among the ASEAN+3 group of countries (the ASEAN 10, Japan, Korea and China), there is a well-established narrative on the 1997-98 financial crisis. Read more…
Author: Suman Bery
On the reasonable assumption that India’s current UPA government will complete its full term, the Twelfth Five-Year Plan (2012-2017) will be prepared on its watch. But is the idea of state planning in India still relevant?
Professor T N Srinivasan of Yale University, feels that the whole business of planning is an embarrassing relic of an earlier era. He argues that planning as we know it should be abolished, and the Planning Commission itself wound up. This seems unlikely to happen; instead, according to press reports, the Commission is currently engaged in an internal effort to rethink its role and purpose. Read more…
Author: Suman Bery, NCAER
The Business Standard editorial ‘The IMF gets more upbeat’ noted that the IMF has had a patchy record in charting the evolution of the present crisis, following developments more than anticipating them. Despite this performance, and its poor performance in predicting the crisis, each update of its forecast for the global economy (the World Economic Outlook, or WEO) receives considerable international press attention and commentary.
While the Fund’s full analysis of the global economy is undertaken twice a year — in April and September at the time of the meetings of the governors (i.e. finance ministers) of the IMF and the World Bank — the organisation also undertakes summary intermediate revisions. Read more…
Author: Suman Bery, NCAER
What is at the heart of the Greek crisis? What are the important lessons for India? Based on a fairly close reading of the international press, it has been surprisingly hard to answer the first of these questions, in a way that helps address the second.
The crisis first erupted in late 2009, when the incoming socialist government revealed that its predecessor had understated the country’s fiscal deficit. Read more…
Author: Suman Bery, NCAER
In his Budget speech on February 26, India’s finance minister articulated the three important challenges confronting him in preparing this year’s Budget.
These were to restore growth (to 9 per cent, ideally higher); to use this growth to make development more inclusive, particularly by strengthening rural infrastructure; and to address bottlenecks in public delivery mechanisms and institutions. Read more…
Author: Suman Bery, NCAER
Investors reacted with a yawn to Friday’s budget presentation by Indian Finance Minister Pranab Mukherjee—the Mumbai market closed almost flat on the day. That was less an endorsement of the government’s reform agenda and more a sigh of relief that the Minister was prepared to reduce the fiscal deficit after two years of a major expansion.
Mr. Mukherjee mostly accepted the recent recommendations of the 13th Finance Commission, a government committee that by law recommends reforms to the president. Read more…
Author: Suman Bery, NCAER
India’s forthcoming Union Budget, now just two weeks away, will be presented at an extraordinarily interesting moment. Two recent releases of data from India’s Central Statistical Organisation (CSO) have contributed to the build-up. These are the ‘Quick Estimates of National Income, Consumption Expenditure, Saving and Capital Formation 2008-09’, released on January 29, and the ‘Advance Estimates of National Income 2009-10’, released on February 8.
My own awareness of these data releases has been heightened by my induction as a Member of the National Statistical Commission, responsible for reviewing and monitoring the entirety of India’s statistical system. This position has led me to take interest in these numbers as they first appear, rather than only when or as I might need them for analysis. Read more…
Author: Suman Bery, NCAER
As The Economist magazine recently observed, one of the most important and surprising outcomes of the current economic crisis is that the economies of the large emerging market countries have been much more resilient than those of the advanced countries, and are returning to growth faster and more vigorously.
These countries, particularly China, India and Brazil, accordingly are expected to continue to provide the bulk of world growth in the near future. This continues the trend of the past half decade, even if the rhetoric of ‘decoupling’ was somewhat overdone. In turn, this trend parallels and reinforces another important structural trend in the global economy – the steady shift in the locus of economic activity toward Asia since the 1960s. Read more…
Author: Suman Bery, NCAER
What does it mean to be an emerging market? Is it an honour or a trap? Seen from within, India remains a country with the largest number of poor and malnourished people in the world, trying to make its way in a world dominated by countries considerably more affluent than her. This is no doubt the self-perception shared also by the citizens of other important emerging markets, such as Brazil, China and South Africa. This self-perception, in turn, is what generates the sense of entitlement to differentiated treatment in global affairs, as I discuss more fully below.
Shift the kaleidoscope slightly, though, and you begin to see the same countries increasingly portrayed in the legislatures and media of the rich countries as aggressive, fast-growing countries with world-beating capabilities in several fields, commanding increasing regional and global influence through the activities of both their governments and private sectors. Read more…
