Inflation fears blurring Modi’s ‘Made in India’ vision

Author: Ranjit Goswami, IMT Nagpur

On 15 August 2014, India’s Prime Minister Narendra Modi delivered his inaugural Independence Day speech. At 80 minutes, it was the longest speech by an Indian Prime Minister since Jawaharlal Nehru’s time. The speech touched upon the various challenges that the world’s largest democracy faces, from female feticide to sanitation. He talked about the need for a new institution in the place of the Planning Commission, created back in 1950, and the need for girls’ toilets at every school, to tackle the high drop-out rates of girls. Read more…

Revitalising India’s manufacturing industry

Indian workers use blowtorches in the heavy fabrication department of a factory near Ahmedabad. (Photo: AAP),

Authors: Anwarul Hoda and Durgesh Kumar Rai, ICRIER

Increasing the GDP growth rate will be a major task for India’s new government. GDP growth will be critical for eradicating poverty and improving the living standards of India’s population. The economy also faces the daunting challenge of providing employment opportunities to about a million people being added to the job market every month. Rapid expansion of the industrial base of the country through labour intensive manufacturing appears to be the perfect solution to the country’s problems. Read more…

Energy market reform needed as China heads for national emissions trading

Smoke is discharged from chimneys at an oil refining and chemical plant of Sinopec in Qingdao city, east China’s Shandong province, 9 February 2014. China has announced that its national emissions trading scheme will begin as early as 2016. (Photo: AAP)

Author: Frank Jotzo, ANU

China is shifting up a gear in its drive towards national emissions trading. Yet, for carbon pricing to be effective, market reform in China’s energy sector will be needed — a big task that will bring benefits not only for the environment but also to the quality of China’s economic growth.

China’s National Development and Reform Commission recently announced that a national emissions trading scheme would start as early as 2016. Read more…

Why is Indonesia terminating its bilateral investment treaties?

Authors: Leon E. Trakman and Kunal Sharma, UNSW

The value of investor-state dispute settlement (ISDS) procedures has been questioned by Australia and, more recently, Indonesia. The Australian government’s controversial 2011 Trade Policy Statement — stating that Australia would not agree to ISDS in its treaties — caused significant debate. In part, Australia’s policy was motivated by Philip Morris’ legal action against the government over legislation requiring the plain packaging of cigarettes. Read more…

Modi’s new financial inclusion plan is a step in the right direction

Authors: Akshay Gakhar and Geethanjali Nataraj, Observer Research Foundation

On Independence Day 2014, India’s Prime Minister Narendra Modi launched his financial inclusion plan to provide a bank account to every Indian household. His ‘Jan-Dhan Yojana’ (Scheme for People’s Wealth) — which, in typical Modi vernacular, plays on rhyming words — seeks to provide financial independence to unbanked Indians through a two-phase plan.

Phase one focuses on providing every household in India with a free zero-balance bank account and a RuPay debit card — which allows for electronic payment at all Indian banks — with an aim of increasing financial literacy among the poor. Read more…

The past successes and future pitfalls of decentralisation in Vietnam

Author: Thomas Jandl, American University

Vietnam’s market reforms are inseparable from the policy of economic decentralisation, which allowed for local experimentation and forced provincial leaders into competition. This improved the business climate throughout the country. In this sense, decentralisation is a root cause of Vietnam’s attractiveness to investors around the globe. Yet it would be a mistake to view decentralisation as one smooth process. Instead, it has gone through two main phases and is now entering a third. Read more…

Can Nishikawa resolve Japan’s TPP agricultural impasse?

Newly appointed Minister of Agriculture, Forestry and Fisheries Koya Nishikawa speaks during a press conference at the official residence of the Japanese prime minister in Tokyo, 3 September 2014. (Photo: AAP)

Author: Aurelia George Mulgan, UNSW Canberra

Japanese Prime Minister Shinzo Abe’s appointment of Koya Nishikawa as the new Minister of Agriculture, Forestry and Fisheries (MAFF) is a big plus for the Trans-Pacific Partnership (TPP). Nishikawa is an executive of the so-called ‘agricultural tribe’ (norin zoku) in the ruling Liberal Democratic Party (LDP). Read more…

Slow and steady approach needed for Burma reforms

Myanmar labourers unload pebbles from a ship, to be used at construction sites, in Yangon on 9 April 2013. A World Bank official said earlier this year that Myanmar has enormous potential as it undergoes reforms. (Photo: AAP).

Author: David Baulk, Chiang Mai, Thailand

Even the most implacable sceptic would accept that looking at Burma today gives greater cause for optimism than was the case five years ago. Compromises which were once unthinkable have commendably been reached in recent years. But progress has also given rise to a Panglossian narrative about the increasingly liberal rulers’ prioritisation of social welfare and ‘inclusivity’. As a result, advocates of a cautious slow-and-steady approach to reform have been drowned out by those propounding a model of trickle-down economic development. Read more…

Indonesia’s manufacturing sector needs a new industrial policy

An Indonesian worker makes incense in Malang, East Java, 19 March 2014. (Photo: AAP)

Author: Mohammad Zulfan Tadjoeddin, UWS

The World Bank and Asian Development Bank have recently advocated the importance of Indonesia’s manufacturing sector. Manufacturing is considered a key sector for the advancement of the country’s overall economy and as an important source of formal employment. The reality on the ground since the 1997–98 economic crisis, though, reveals a troubling picture about the sector. Read more…

Does a global growth target make sense for the G20?

G20 trade ministers from industrialised and emerging economies gather for a one-day meeting in Sydney, Australia, 19 July 2014. (Photo: AAP)

Author: David Vines, University of Oxford

The global recovery is strengthening but remains weak. A global growth target, pursued by the G20, could significantly strengthen this recovery process. But such a macroeconomic target needs to be supported by microeconomic reforms.

In advanced economies, demand is now growing more rapidly than in the previous three years, but output remains below potential. And the growth of potential output itself is low, due to reduced investment, low profitability and low demand. Read more…

China’s recipe for higher consumption and steady economic growth

Chinese customers buy snacks at a supermarket in Fuyang city, in the eastern Chinese province of Anhui, 16 July 2014. (Photo: AAP)

Authors: Wang Xiaolu, NERI, and Zhou Yixiao, ANU

The slowdown of economic growth in China, since the global financial crisis, is obvious. The average growth rate dropped from above 10 per centto 9.3 per cent between 2008–2011, and then to 7.7 per cent in both 2012 and 2013, according to China’s National Bureau of Statistics. In the first half of 2014, the growth rate was 7.4 per cent. Read more…

Moving Modi beyond Gujarat

Indian Prime Minister Narendra Modi addressing the nation in his first Independence Day speech from the Red Fort in New Delhi. (Photo: AAP).

Author: Rajiv Kumar, CPR

With the Modi government less than 3 months old, it is surely too early to make any assessments. But high expectations and his track record have generated an impatience for results even among Modi’s supporters. News trickles out mentioning an indefatigable prime minister driving from the front, changing the tenor and temper of the entire bureaucracy.
Read more…

Time for a new approach to Indonesia’s energy subsidies

A State Oil Company (Pertamina) employee checks a tank at an oil pump station in Jakarta, Indonesia. Indonesian energy subsidies will constitute a quarter of total government spending this year. (Photo: AAP).

Authors: Stephen Howes and Robin Davies, ANU

Indonesia’s new president, Joko Widodo (Jokowi), will face many challenges but none more pressing and immediate than dealing with Indonesia’s energy subsidies, which this year will constitute a quarter of total government spending. Everyone agrees that these subsidies are wasteful, but their persistence is striking. They were 20 per cent of expenditure when President Yudhoyono (SBY) came to power, and they will be almost 25 per cent when he leaves office later this year. Read more…

President SBY’s second-term development scorecard

Indonesian president Susilo Bambang Yudhoyono has a mixed policy scorecard at the end of his second and final term of office. (Photo: AAP).

Authors: Stephen Howes and Robin Davies, ANU

The recent election of Indonesia’s next president, Joko Widodo (Jokowi), provides an opportunity to reflect on the legacy and performance of Indonesia’s outgoing president Susilo Bambang Yudhoyono (SBY).

A useful starting point is to compare Indonesia’s performance against the targets SBY set in his 2010–14 National Medium-Term Development Plan. Read more…