Comment by Riaz Haq on February 27, 2014 at 10:52pm

Excerpts of a piece by Nobel Laureate Joseph Stiglitz:

Foreign investment is not one of the three main pillars of the Washington Consensus,but it is a key part of the new globalization. According to the Washington Consensus, growth occurs through liberalization, "freeing up"markets. Privatization, liberalization, and macrostability are supposed to create a climate to attract investment, including from abroad. This investment creates growth. Foreign business brings with it technical expertise and access to foreign markets, creating new employment possibilities. Foreign companies also have access to sources of finance, especially important in those developing countries where local financial institutions are weak. Foreign direct investment has played an important role in many—but not all—of the most successful development stories in countries such as Singapore and Malaysia and even China.
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Having said this, there are some real downsides. When foreign businesses come in they often destroy local competitors, quashing the ambitions of the small businessmen who had hoped to develop homegrown industry. There are many examples of this. Soft drinks manufacturers around the world have been overwhelmed by the entrance of Coca-Cola and Pepsi into their home markets.Local ice cream manufacturers find they are unable to compete with Unilevers ice cream products.
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Perhaps of greatest concern has been the role of governments, including the American government, in pushing nations to live up to agreements that were vastly unfair to the developing countries, and often signed by corrupt governments in those countries. In Indonesia, at the 1994 meeting of leaders of APEC (Asia-Pacific Economic Cooperation) held at Jakarta, President Clinton encouraged American firms to come into Indonesia. Many did so, and often at highly favorable terms (with suggestions of corruption "greasing" the wheels—to the disadvantage of the people of Indonesia). The World Bank similarly encouraged private power deals there and in other countries, such as Pakistan. These contracts entailed provisions where the government was committed to purchasing large quantities of electricity at very high prices (the so-called take or pay clauses). The private sector got the profits; the government bore the risk. That was bad enough. But when the corrupt governments were overthrown (Mohammed Suharto, in Indonesia in 1998, Nawaz Sharif in Pakistan in 1999), the U.S. government put pressure on the governments to fulfill the contract, rather than default or at least renegotiate the terms of the contract. There is, in fact, a long history of "unfair" contracts, which Western governments have used their muscle to enforce.
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The international financial institutions tended to ignore the problems I have outlined. Instead,the IMF's prescription for job creation—when it focused on that issue—was simple: Eliminate government intervention (in the form of oppressive regulation), reduce taxes, get inflation as low as possible, and invite foreign entrepreneurs in. In a sense, even here policy reflected the colonial mentality described in the previous chapter: of course, the developing countries would have to rely on foreigners for entrepreneurship. Never mind the remarkable successes of Korea and Japan, in which foreign investment played no role. In many cases,as in Singapore, China, and Malaysia, which kept the abuses of foreign investment in check, merit played a critical role, not so much for the capital(which, given the high savings rate, was not really needed) or even for the entrepreneurship, but for the access to markets and new technology that it brought along.

http://www.scribd.com/doc/184656067/47999746-Globalization-and-Its-...

Comment by Riaz Haq on March 15, 2020 at 7:51am

Jim O’Neill, ex Goldman Sachs investment banker who coined "BRICs", praises #China government’s #coronavirus response: ‘Thank God this didn’t start in somewhere like India’. His comments anger #Indian officials. #India #Modi #BJP #CowUrine #COVIDー19 https://www.cnbc.com/2020/03/11/thank-god-this-didnt-start-in-india...|twitter&par=sharebar


Jim O’Neill, the chair of U.K. think tank Chatham House, on Wednesday commended the “fast, aggressive” Chinese response to the coronavirus outbreak, suggesting western countries should follow suit.

“Thank God this didn’t start in somewhere like India, because there’s absolutely no way that the quality of Indian governance could move to react in the way that the Chinese have done,” O’Neill, the former Goldman Sachs chief economist, told CNBC’s “Squawk Box Europe” on Wednesday.

“That’s the good side of the Chinese model, and I think you could probably say the same about Brazil too,” he added.

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On one hand, O’Neill acknowledged that the dominance of President Xi Jinping and the diminished responsibility of officials in Wuhan, where the virus originated, may have enabled COVID-19 to initially spread quicker.

“That said — and it’s often like a lot of other things when China got hit with a crisis over the last 30 years — once they realized the scale of it, the system seems to be capable of dealing with it pretty quickly, relative to other places, and pretty decisively,” O’Neill contended.

Chinese authorities suppressed early warnings from doctors and citizens in Wuhan and forced them to apologize for spreading “lies” and in turn failed to contain the outbreak in its infancy. The government has been widely criticized for its delayed response at the outset, with Raymond James analysts likening the situation to the Soviet Union’s handling of the Chernobyl nuclear disaster.

Ophthalmologist Li Wenliang sounded the alarm in December when he told a group of doctors on Chinese social media about seven cases he saw. He and seven other whistleblowers were reprimanded by the Wuhan police in January for spreading “illegal and false” information.

Chinese authorities shut down vast swathes of the country’s travel infrastructure and industrial production last month, causing a profound short-term shock to the Chinese and global economy. However, new cases of the virus in greater China have now slowed to a trickle, while Italy deals with a rapid escalation in new infections and a spiking death toll.

Negi highlighted that the Indian government supplied 15 tons of medical assistance comprising masks, gloves and other emergency medical equipment to China on 26 February 2020.

The outbreak is now a global pandemic while new cases in China have begun to slow, and Beijing is now attempting to cast doubt over whether the virus actually originated in China at all.

A ‘globalized people’
O’Neill, the former commercial secretary to the U.K. Treasury suggested that western governments dealing with outbreaks of their own, such as Italy and the U.K., should look to emulate China, South Korea and Singapore in the swift deployment of aggressive containment measures.

He also argued that finance and economic policymakers must begin treating health policy more seriously and think of it in the same way as other investment spending, and criticized the protectionist agenda of the U.S. and other nations on international trade.

“Unless we get rid of all forms of communication, we are globalized people and we need to think and learn from each other about the right solutions at any moment in time for all of us,” O’Neill concluded.

Comment by Riaz Haq on June 30, 2021 at 8:12am

#India's Current Account #Deficit Grows to $8.1 billion, or 1% of #GDP in Jan-March 2021. Net foreign portfolio #investment was $7.3 billion, compared with a decline of $13.7 billion a year ago, mostly reflecting purchases of #Indian stocks. #economy #Modi https://mail.google.com/mail/u/0/?ogbl#inbox/FMfcgzGkZGdGQmzDbCKPzX...

India’s current-account deficit widened more than expected as the trade gap expanded and the country saw lower private transfers from abroad.

The shortfall in the current account, the broadest measure of overseas trade, was $8.1 billion, or 1% of gross domestic product, in January-March, the Reserve Bank of India said in a statement Wednesday. That compares with a median estimate of $7.5 billion in a Bloomberg survey of 15 analysts.

Key Insights
India’s balance of payments surplus last year hit a record, according to data going back almost a decade, as the Covid-19 pandemic decimated trade
Wednesday’s data, which covers a period before India’s second wave of cases, saw net services income rise on the back of higher earnings from computer, transport and business services, the RBI said
The underlying reason for the deficit was “primarily on account of a higher trade deficit and lower net invisible receipts than in the corresponding period of the previous year,” the RBI said
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Imports were higher during the quarter from a year ago while exports lagged
Net foreign portfolio investment was $7.3 billion, compared with a decline of $13.7 billion a year ago, mostly reflecting purchases of Indian stocks

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