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Showing posts with label India. Show all posts
Showing posts with label India. Show all posts

2015-08-25

External orientation still the way to go despite external headwinds

Comments on Alok Sheel "China, India and global headwinds", 25/08/2015

The GFC and its aftermaths exposed some weaknesses of high exposure of those economies to external demand/trade through external shocks in economics weakening. Due to the weakening of many industrial economies and their desire to get out of the weaknesses, the so called imbalances became very fashionable, because some industrial economies with trade deficits could get a boost if their trade deficits were reduced. China was a big target or a case of the imbalances.

Willingly or not, trade imbalances may have been reduced over the past few years. Adjustments of trade imbalances may or may not be optimal to the world economy as a whole or any pair of countries which have bilateral trade imbalance. For example, Australia is generally a capital importing country and trade deficits may be needed to balance its capital needs.

Even in a country that my not always need external capitals, from time to time it may be beneficial to use external capitals. In such cases, trade deficits may de desirable.

Furthermore, differential technical changes and productivity rises between countries may cause trade imbalance that may need a period of optimally transitional adjustment that can take relatively long time to complete.

The lessons from the GFC and its aftermaths is not turning to inward looking and deliberately reduce external trade. The lessons should be explore every part of demands, both internal and external to boost growth. It would be a costly mistake to give up external orientation in the age of globalisation and economic integration and to only focus on internal demand. Any reduction of trade to GDP ratio should be based on fully explore both internal and external demand, as opposed to purely internal orientation.

2015-07-21

The "not-quite-quatrilateral" won't work

Comments on David Lang "The not-quite-quadrilateral: Australia, Japan and India", 21/07/2015

If the so called "not quite quadrilateral" are as that as the author described, it is unlikely to end up nicely.

For one thing, Australia may even have difficulties to decide in terms its relationships with China and the USA with the latter as its closest military ally and the former as by far its largest export market.

I would suggest the author compare who are more important to Australia, is that Japan and India, or the US?

Then it is not too difficult to see the futility of the attempt of so called "not quite quadrilateral" in containing China. It simply does not work.

2015-07-08

GDP and employment both are important

Comments on Rajiv Kumar "Job growth not GDP growth matters for India", 8/07/2015

I find the title interesting.

While it is important to have a focus on employment growth, it does not mean that GDP growth is unimportant. Only focusing on GDP without attention to employment is not right, particularly in terms of inclusive growth and equity or income inequality. Equally problematic is that only focusing on employment without due attention to GDP growth. Neither is good for economic policies.

I am not familiar with the Indian economy and its statistics, if the author is correct in relation to GDP and employment growths, it may mean that the GDP growth was not enough to boost employment more significantly.

Alternatively, it reminds us about the US economy back a few years ago when it was labelled as jobless recovery. If that is the case, it may mean that it is only a matter of time for growth in employment to catch up with GDP growth.

2015-06-21

India may play a greater role in AIIB than Bery argued

Comments on Suman Bery "Why the AIIB could work for India", 17/06/2015

Amomg the three spheres that Bery identified India’s interests could be partitioned, namely political, financial and intellectual, I share the author’s view on the last one completely that collaboration between China and India could be transformational. I would further add that other countries which have successfully transformed from low income to middle income and then high income countries such as Korea, Singapore, Hong Kong and Taiwan into the partners of collaboration intellectually, if they are the members of AIIB.

The second sphere, namely financial, I share Bery‘s view only partly. I would also include sovereign guarantee as a preferable criterion but not as the one that would veto if there is no such a guarantee.

On the political sphere, however, I have a different view from that of Bery's. Even though China and India are not allies in the same way as the USA and Britain have, the former do have strong shared common interests as emerging economies wishing to reform the outdated governance structure of some existing international institutions, such as the world bank and the IMF. It is these shared interests that have driven their formation of the BRICS and that will outweigh their political dissimilarities.

In summary, I see that India is likely to play a greater role in AIIB than Bery envisaged.

2011-05-15

Development models

Comments Sandy Gordon “India and China: Mega-population, mega-corruption, mega-growth”, May 10th, 2011, http://www.eastasiaforum.org/2011/05/10/mega-population-mega-corruption-mega-growth/

Sandy Gordon's post indirectly raises a question, that is, is there a best model for a very large and developing or under-developed country to develop?

A large country is different in many respects to a small or perhaps a city country.

Professor Gordon suggests that "The Indian one delivers economic delay, but its long-term promise is rule of law and relative transparency. The system in China has provided for rapid, command-driven economic growth. When needed, land is quickly, and often corruptly, appropriated. But the Chinese system contains little promise of a long-term amelioration of the grievances of affected people."

Obviously neither is perfect, but Professor Gordon appears to prefer the India one for its long run promise.

There is nothing wrong with that, except when one considers Keynes’ remark that in the long run we are all dead.

But to be a little serious, the post exposes the difficulties with development. Countries are different in their histories, cultures and social traditions, as well as values. Let’s leave ideology aside and ask a question: is there a way to optimise development, subject to the initial conditions?

Further, let’s go a step further than simple linear paths and assume that nonlinearity can be achieved, can the optimal path for development for a country mean non-democratic for some and possibly a significant period or periods on the way to final prosperity?

If the answer is yes, what would it mean for some ‘universal values’?

2010-11-24

Sourabh Gupta's conceptual confusion

Comments on Sourabh Gupta “Obama visit to India: East Asia’s emerging security multilateralism”, 24/11/2010, http://www.eastasiaforum.org/2010/11/24/obama-visit-to-india-east-asia%e2%80%99s-emerging-security-multilateralism/
With great respect, there appear some conceptual confusions in this post.

For example, the following statement obvious was mistaken the US as an Asian economy that is not only confusing but clearly wrong:
"Third, with Asia likely to play host in the not-too-distant future to six of the dozen largest economies in the world – US, China, Japan, India, Russia and Korea, it is not altogether clear that the Asian equilibrium is about to greatly disturbed … let alone submit to a new geo-political hegemony bearing dragon-like features."

While some Asians might be delighted that the inclusion of the US as an Asian economy could increase the weight and importance of Asia, a false self delusion may actually cause even greater disappointment.

Has anyone, or any international organisation apart from the author of this post classified the US as an Asian economy? What is the basis for doing that?

Of course, it is noted that the topic is about the US and India that may provide a clue to this confusion. However, that should not be the excuse for the confusion to occur in the first place.

2010-11-23

Interesting inconsisitency by Peter Hartcher

Comments on Peter Hartcher “India prospers in spite of scandals”, 23/11/2010, http://www.smh.com.au/opinion/politics/india-prospers-in-spite-of-scandals-20101122-1843u.html?posted=successful

It is interesting to see the inconsistency Peter Hartcher has shown in his approach to India and China.

He made a few summary points in his concluding remarks with the last one contrasting India with China.

Peter Hartcher can accept corruptions and economic growth with democratic India, but has great difficulties with China.

China has had a longer term rapid economic growth than India has so far and has a higher income and living standard.

But Peter Hartcher should also know that China also exposes corruptions and imposes severe punishment including death sentencing!

As in every country including India, the exposed corruption cases may be only a fraction of the real cases going on and China is no exception.

2010-09-24

Roach's use of statistics

Comments on Neville Roach “Rudd needs to make a deal with India”, 24/09/2010, http://www.theaustralian.com.au/news/opinion/rudd-needs-to-make-a-deal-with-india/story-e6frg6zo-1225928554544
While the trade surplus with India is encouraging, how much is Australia's total exports to India?

It is very interesting to see how Neville Roach uses statistics to support his point.

Good skills and well done, and congratulations!

PS: This is what Roach says: “The latest trade figures highlight just how rapidly India's importance to Australia is growing. Last year, India became Australia's third-largest export market. Australia's trade surplus with India was a staggering $15.5 billion, second only to Japan and significantly greater than the $10.6bn with China. With India also one of our main sources of skilled temporary and permanent migrants and overseas students, its growing importance to Australia cannot be overstated.”

2010-09-23

Interesting Chindia from Australians' view

The following is an itneresting perspective on China and India.

Michael Pascoe “Chindia - you aint seen nuthin' yet”, 22/09/2010, http://www.smh.com.au/business/chindia--you-aint-seen-nuthin-yet-20100923-15o2v.html

It starts with the following paragraph:

“Even if you think you know the “Chindia” story, odds are you don't really know the Chindia story. And if you're still caught up in China “housing bubble” and US-consumer-dependency yarns, you're blinded by Western conceit and actually don't have a clue.”

Another interesting paragraph:
"Spare me the usual myopic line born of American xenophobia and ignorance about China being dependent on exports to the USA. There is neither time nor space here to go into the detail of these four presentations, but Dines quickly dispatches such nonsense, pointing out that net exports' contribution to China's growth over the past decade has averaged just 1.5 per cent. And the United States' share of China's exports is 20 per cent so the much ballyhooed American consumer is only good for 0.3 per cent of China's GDP growth - growth that runs along in double digits or close to it even in the Great Recession."

2010-09-10

Morality of Japan-India nuclear pact

Comments on Purnendra Jain “Japan’s nuclear pact with India”, 7/09/2010, http://www.eastasiaforum.org/2010/09/07/japans-nuclear-pact-with-india/
The issue involving Australia has just become a little more complicated following effective alliance of the Labor and the Greens with the support of three independents to form the federal government early this week. The Greens is likely to oppose any escalation of uranium in the parliament with its balance of power in the senate, especially from first July 2011.

It is clear from the article that two main factors played the decisive role in Japan’s decision, namely commercial and security out of concerns of the rising power of China.

The commercial reason just makes a mockery of any moral standard by members of the Nuclear Non Proliferation Treaty. If issues as serious as nuclear can be compromised, is there any moral ground for any involved to criticise China or any other countries such as Russia to develop conventional resources in Africa countries or in Iran for that matter?

For security, what do any of such agreements in obvious violation of the NNPT mean really? Does it promote peace and stability or does it facilitate regional and possibly global arms race?

The real question is whether the current superpower accepts the inevitable trend that there will be power shift around the world and some of the existing interests are unlikely to be maintained forever and will change accordingly.

Bad decisions by some may only act as distractions to some inevitable and big world trends. That is unlikely to produce the results wished by them probably.

2010-07-23

A laptop revolution from India?

It is reported that India has unveiled world's cheapest laptop costing only $US35. It seems another revolution that will benefit many people especially poor people who can't afford more expensive computers.
See http://www.abc.net.au/news/stories/2010/07/23/2962729.htm?section=justin

The following is a copy of the ABC report:
India has come up with the world's cheapest "laptop," a touch-screen computing device that costs $US35 ($40).

India's Human Resource Development minister Kapil Sibal this week unveiled the low-cost computing device that is designed for students, saying his department had started talks with global manufacturers to start mass production.
"We have reached a [developmental] stage that today, the motherboard, its chip, the processing, connectivity, all of them cumulatively cost around $35, including memory, display, everything," he told a news conference.
He said the touchscreen gadget was packed with internet browsers, PDF reader and video conferencing facilities but its hardware was created with sufficient flexibility to incorporate new components according to user requirement.
Sibal said the Linux-based computing device was expected to be introduced to higher education institutions from 2011 but the aim was to drop the price further to $US20 and ultimately to $US10.
The device was developed by research teams at India's premier technological institutes, the Indian Institute of Technology and the Indian Institute of Science.
India spends about 3 per cent of its annual budget on school education and has improved its literacy rates to over 64 per cent of its 1.2 billion population but studies have shown many students can barely read or write and most state-run schools have inadequate facilities.

- Reuters

2010-03-06

Multiple equilibriums in exchange rate and implications for over or undervalue of a currency

Comments on Mathew Joseph and Karan Singh “Is the Indian rupee overvalued?” 6/03/2010, http://www.eastasiaforum.org/2010/03/06/is-the-indian-rupee-overvalued/

I'm even slower today and having difficulties in linking the two charts to form an idea what the authors are talking about.

Secondly, I am not sure the concept is always sound that the exchange rate is in equilibrium at the time when the current account is balanced.

While seemingly convincing, it would not be difficult for the existence of multiple equilibriums (i.e. multi value) of the exchange rate if such a criterion is used. So there is at least a mechanism to reconcile such multiple equilibriums.

This is because there are so many factors that affect current account balance (e.g. a severe incident can cause a change in current account balance), not to mention differential growths in productivity between countries and changes in consumer preferences between countries.

A simple test, though not necessarily always sound by itself, would be to see: how has the current account balance changed in India since 2004-05? Do they correspond to the changes in the exchange rate, nominal or real?

A use of a different equilibrium point in a system of multiple equilibriums has a different implication for overvalue or undervalue!

2009-09-23

Questions for Harry Clarke on his "India & China to get tough on emissions?"

comments on Harry Clarke "India & China to get tough on emissions?" 22/09/2009, http://www.harryrclarke.com/2009/09/22/india-china-to-get-tough-on-emissions/#comments

hc, your guess seems to be wrong. I am afraid to say.You argue that "India and China will suffer far more serious costs as a consequence of global heating than will the US or Europe."

What is your basis of that argument? Why will they suffer more? Do you assume that a life in India and China is more precious than that in the US and Europe?

Do you really believe that they are terrified by the possible defeat of the US bill? Can you believe yourself, honoestly?

Do you think they are after charity or compensations? It is now that developing countries have been giving charity and free compensations to the developed countries, because the latter emit more than their rightful "permits" to do so on the per capita basis.

Why do you call it charity or compensations for developing countries? Is that the best logic you can come up?

You argue that their voluntary cuts not convincing. What do you expect them to do? Have the developed countries reduced their emissions to the levels in either India or China on the per capita basis?

I simply fail to understand your logic.

2009-09-11

On Dutch disease - a reply to Raghbendra Jha's comments

Comments on Raghbendra Jha’s reply to my comments on his article “India and the Copenhagen summit”, 9/09/2009, http://www.eastasiaforum.org/2009/09/04/india-and-the-copenhagen-summit/

You only mentioned the influx of foreign currency as capital inflow, you have not mentioned the need to use that foreign exchange to: 1. purchase the technologies and equipment necessary to reduce emissions without slowing economic growth, 2. to import other urgently needed technologies, capital goods and inputs by developing countries, 3. why can't a developing country use any foreign exchange to invest abroad, if appreciation is a concern?

The Dutch disease has been over blown out of proportions in many potential real scenarios. It partly reflects a poor understanding of economic development in its totality and to have only focused on effects of part of trade on exchange rate. It ignores so many things and is therefore is so incomplete to be used as a useful guide to economic development policy.

So I am afraid that the concern for appreciation is completely unnecessary and even unfounded. It is likely to reflect a poor understanding of the working processes of reducing emissions and the needs of many developing countries for more foreign currency to improve their economic conditions.

2009-08-24

History cannot and shouldn't be forgotten

Comments on Dibyesh Anand “Moving beyond the Blame Game: China-India Border Relations “, 22/08/2009, http://www.eastasiaforum.org/2009/08/22/moving-beyond-the-blame-game-china-india-border-relations/

I am a Chinese Australian, so my views may be biased in favour of the Chinese or China. I say that upfront so not to be accused that I may mislead people by disguise.

I do not find the statement that "... they avoid a serious engagement with the domestic and international compulsions of the Chinese leadership in 1950s and 1960s" justifies any improper behaviour and actions by India that may have provoked the China-India war in the early 1960s.

At that time, the least China wanted was a war, given its domestic economic problems. So I personally don't think that war was the fault of China.

If that statement by Dibyesh Anand is correct, it was most likely that India wanted to take advantage of that situation at the expenses of China. Of course, the Chinese leadership then could not tolerate violations of its sovereignty and territory integrity – China may be economically weak, but militarily it was not that weak to accept another country’s unfair will. On that one, while I don’t think it is a matter of whether the Chinese current communist leadership allows reflection of what occurred then at the border with India, it is more likely that most Chinese have the view that it was India’s fault that has little to do with current government view or policy.

Dibyesh Anand’s argument about the sovereignty, culture and politics is hardly acceptable by international standard. It sounds like an argument to support for an independent Tibet that does not disadvantage India in any way at the expense of China to lose its territory. I don’t know whether such an argument can receive any sympathy from China. It can only make the China-India border issues unnecessarily more complicated and it is highly likely to be completely rejected by China. I suspect that that argument reflects the fact that it is in India’s but not China’s interest to do so.

To most Chinese, although the war with India may have been won, but they still remember China voluntarily retreated more than they should, either for military reasons or political reasons. While the current political leadership may compromise with India, most Chinese are unlikely to support that approach even though they may be ignored by the political leadership for now.

There have been lot strong complaints about how the border issues with Russia have been settled. Most Chinese are unlikely to forget the border issues with India, no matter how their political leaderships think.