G 20 Finance Minister’s meeting concluded at the German spa town of Baden Baden is a break from the past. The meeting witnessed a clash between the resurged US economic nationalism and the rest of the G20 who are worried about the future of globalisation. There was an uneasy air as well as debate about the wording against protectionism. In the past, the G20 was the forum that passes resolution against trade barriers. Last year, the official summit communiqué adopted a tougher language to “resist all forms of protectionism”. But this year, the meeting declared that members were “working to strengthen the contribution of trade to our economies”.
The US Fed raised its short-term policy rate or the Fed rate by 25 basis points, signaling the continuation of monetary tightening. An explanation accompanied by the rate hike defended the rate hike on the ground of rising inflation. This is only the third time since the financial crisis that the Fed is raising its key rate. The policy rate now rose to 1 per cent. From the view point of the EMEs, the rate hike may bring more volatility in financial markets in near future. Here, the firm stand of the Fed that rate hike decision will be done in three quarters instead of yearly exercise indicate more scope for market turbulence. In the long term, the frequent rate hike may drain aw
India’s economic administrators’ attack on inconsistent credit rating standards of western agencies is now joined by the Chinese media. An article published in the partisan tabloid – the Global Times ‘Why India’s sovereign ratings lag behind China’, describes that foreign companies are correct in giving high ranking to China over India. India’s Economic Survey brought out a box criticizing the methodology of credit rating agencies. Edited by Arvind Subramanian, the Survey made a comparative study of ratings on India and China while concluding that China gets a higher rating despite macro indicators are more or less the same. According to
Deriving energy from Donald Trump’s patriotic and domestic labour promotion campaign, two US senators have proposed a new legislation to cut down legal immigration into the US. Senators Tom Cotton and David Perdue have introduced Reforming American Immigration for Strong Employment or Raise Act aimed to cut immigration avenues for people from across the world. Though the Bill is aimed to reduce the immigration of non-skilled people into USA, the bill is going to be a big setback for Indians who have little skill and at the same time would like to settle in the US. The Bill proposes to reduce the number of green card or legal permanent residency issued every year from about
The EU’s effort to create an investor-state dispute settlement mechanism (ISDS) at WTO was opposed by countries led by India, Japan and Brazil. According to Commerce Minister Nirmala Sitharaman, EU and Canada have made an informal proposal for creating such an arrangement within the present WTO format at the end of the Davos WEF. The WTO’s eleventh Ministerial Conference is about to take place in December at Buenos Aires, Argentina. A fresh wave of new issues is expected to be launched at least at the discussion level during the MC. Already, investor disputes are settled under Bilateral Investment Protection Treaties (BIT). India has signed nearly 84 BITs so far, g
The theme in front of the World Economic Forum meeting was the rising anti-globalisation trend. Chinese President Xi Jinping who came to Davos like a chief guest, was supposed to led the pro-globalisation camp. In the opposite was the swearing ceremony of Donald Trump who challenged the world trade order accusing that China is the only beneficiary in the current format. On the fate of globalisation, only the future can give some answer. This was the concluding point of the summit. Expectedly, Mr XI made a sound campaign for it and defended the benefits of economic globalization and its ability to lift people out of poverty. But the West was not equally zealous. Rather they seeme
The US lawmakers have reintroduced a bill seeking pinching restrictions on H1B Visa regime that may reduce opportunities for Indian techies in the US. Election of Donald Trump who vehemently opposed outsourcing has encouraged the law makers to bring the bill again into the Parliament’s consideration. India was one of the biggest beneficiary of the US visa regime as several Indian tech companies were able to recruit talented persons to the US by using it. The Bill makes a comeback after the initial rejection by the US Parliament earlier. Fresh changes are made in the bill proposing a minimum yearly income of $100000 for those who seeks the visa. Such a requirement is expecte
China is buying the world. Europe and US are scared of the Chinese money that is conquering tech companies and hotels. In 2016, Chinese foreign investment in the US has reached $51.09 bn, according to Mergermarket -a data analytics firm. Chinese have made 65 M&A deals in the US, raising their investment by 360%. In Donald Trump’s US, Chinese investment is not expected to come down in the coming years as well. In 2015, Chinese investment in the US was just 11.5 bn. One of the controversial investment by the Chinese that revealed the intention and nature of their investment was the acquisition of German robotic firm Kuka. After bunch of concerns from the Germany, and all
Nearly one year after the tenth Ministerial Conference of the WTO, India indicated intention to join the one of the most engaged new issues – ecommerce. Officials from Department of Industrial Policy and Promotion (DIPP) indicated that the country is going to engage with the new issues to be tabled at the Eleventh Ministerial Conference. The WTO is going to conduct the Eleventh MC at Buenos Aires, Argentina between December 11 -14, 2017. Indications are that several WTO members are seriously discussing the new issues including ecommerce, investment and government procurement. But of these, only ecommerce may materialize some agreement as members have serious divergences amo
The keenly watched Italian referendum on Prime Minister Matteo Renzi’s constitutional reforms was rejected by the people with a shockingly strong ‘no’ of 60 per cent. Mr Renzi designed big reforms through constitutional measures that may add power to the Prime Minister. He sought public ratification through the referendum. After the failure of the referendum, Mr Renzi is expected to submit resignation soon. Now the question is how far the Italian referendum and the victory for the rightists may trigger such reactions from other European countries that are approaching elections. Economic struggles under the currency union and the soft immigratnt policies by sever
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Why the GST reform is transformational?
- Raghuram Rajan: The Gladiator returns to Chicago
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- Why we need an emergency monetization plan as well?
- NREGS: give respect to the tax payer’s money