ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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IMF's Autocritique of Neo-liberalism?

In a recent article published in Finance and Development, an International Monetary Fund magazine, three economists have critically evaluated the policies the IMF promotes. They acknowledge evidence that suggests that economic growth under neo-liberalism is difficult to sustain, that it leads to an increase in inequality, and that continuing inequality is harmful for sustainable (or continuing) growth.

IMF's Call for Complacence

The International Monetary Fund's World Economic Outlook of April 2016 bodes that emerging market economies, including India, are at risk of sudden capital outflows. The IMF once again makes a case for its conventional, much-discredited tools to manage this risk. To repeat these recommendations, that on many occasions have only worsened crises, is to encourage complacency.

Capital Account Management in India

India has been subject to capricious capital flows since its integration with the global capital markets in the early 1990s. In a bid to balance diverse objectives, India, like many other emerging markets, has resorted to active management of various types of capital flows. This paper finds that while the calibrated liberalisation approach resulted in altering the composition of capital flows towards more stable flows, and has helped India to negotiate the "Trilemma," the use of sporadic capital account management measures in the face of surge or stop of capital flows has not been very effective in achieving their objectives of reducing external vulnerability or mitigating macro-prudential risks.

Turning the Light Inward

The IMF's newly set up Independent Evaluation Office has recently released its first report. The report analyses the causes of prolonged use of IMF resources by borrowing countries, with case studies of Pakistan, Philippines and Senegal. This report, to be followed by one on fiscal adjustment in Fund programmes and another on capital account crises in Korea, Indonesia and Brazil, signals that the IMF is serious about turning the light inward to confront its mistakes and shortcomings and draw relevant lessons for its future work. Discussion of the core analysis of the report bearing on the Fund's policies in programme design and implementation in general and in respect of prolonged users of the Fund's resources in particular.

Globalisation, the IMF and Governance

Joseph Stiglitz's new book breathes moral outrage against the IMF. But any reform measures confined to the Bretton Woods institutions would not be an adequate response to the challenges of global capitalism. The scope and dimensions of collective action have to be much wider than redefining the role of the IMF and reforming its governance as recommended by Stiglitz.

Indian Statistical System at the Crossroads

The modernisation project was apparently the ultimate objective of the flurry of initiatives of the Department of Statistics (DoS). The paper in this part analyses the contents of the project and the philosophy, strategies and approach that shaped it, and brings out its serious implications for the Indian statistical system (ISS). The project is formulated with the short-term objective of meeting the requirements of Special Data Dissemination Standards (SDDS) of the IMF and for monitoring poverty. By design it does not address the problems and development of the ISS. Instead, it established the NSSs as an alternative system to ISS, and aims for a massive expansion of the NSSO and modernise its operations. The project covers only marginally the modernisation of other sub-systems, and where it does so it does not address the vital problem of collection of data and their quality. It requires the government of India to adopt measures that will centralise the statistical system of the country. The paper shows that the project, driven not by national needs but by international demands for data, and based on unjustified NSSO expansion, will lead to the neglect of ISS. The paper ends with broad suggestions for reformulation of the project, and a call to state governments to set their statistical house in order and to beware of the emerging tendencies to centralise the ISS.

Is the IMF a Lender of First or Last Resort?

The IMF may have acted as a crisis manager and crisis lender but it lacks the very basic attribute of a lender of last resort, which is the political and legal prerogative to create high-powered money without limit. Further, the entire spirit and intent of the Fund's policy on use of its general resources is to encourage early recourse to its financial facilities and to ensure that liquidity crises do not develop into solvency crises.

Calcutta Diary

It is not any extraordinary development that the US government has of late decided to go public with its choice of heads of states and prime ministers of countries located in different continents. The Palestinians have been told in no uncertain terms that, no fooling, should they want a state of their own, they must ditch Yasser Arafat as their leader and choose one more to the liking of the United States.

International Financial Liberalisation

Theory offers a number of plausible benefits from international financial liberalisation. However, a careful examination of available empirical literature on the subject suggests much less reason to be sanguine about the benefits. In view of the widelynoted concerns regarding short-term indebtedness, a strong case can be made for the setting of prudential limits on the amount of short-term debt that a country can accumulate. Somewhat less clear is what steps need to be taken to reduce vulnerability due to uncovered long-term foreign currency borrowing.

India's Foreign Exchange Reserves

The questions addressed in this paper are: What are forex reserves? Why hold forex reserves and how did the policy evolve? What is the appropriate level of reserves? How does the current status appear in terms of indicators of adequacy of reserves? The author also focuses on several aspects of forex management such as the implications for quasi-fiscal deficit and communication policy of the RBI. The issues in regard to policy and management of forex reserves in India are posed in some detail. The concluding part contains some random thoughts from a futuristic perspective.

People's Movement against Global Capitalism

In the post-cold war world, issues of equality and social justice still remain vital concerns. As the increasing gap between rich and poor countries, and the growing desperation of the poor and the unemployed reveal, market economy is not an all-encompassing panacea and it thus becomes necessary to find an alternative. It is here that civil society and the local community must have the space to act and where necessary even solicit the state's intervention - a moving idea behind those protest movements seen earlier this year. The challenge of the new century is to bring these ideas together in a new consistent design, towards a "mobilisation against globalisation" through which a more humane and equitable economic and social order will possibly take shape.

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