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

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Technology Imports through NRIs

 present plight of the industry. The UPASI report claims that it is possible to achieve the production target of 125 million kg of tea by 2002 AD, through productivity gains (52 million kg) and an additional extension of area by 10,000 hectares (25 million kg). The main weakness of the report lies in its assessment of the amount of funds required and the available sources of these funds. First, the estimate of the amount required for the development programmes is unreasonably high; secondly, though the sources of funds are not clearly specified, it would appear that the major portion is expected to come from internal sources. Considering the policies adopted by the Indian companies which have bought over erstwhile British tea interests, one has to be skeptical about funds on this scale coming from internal sources, According to one study (Business Standard, March 18, 1983), tea plantations (including a major tea company in Kerala) top the list among 20 THE March 1984 issue of the USIS magazine. Span, published in India, carries the story of Jugi Tandon. an engineer originally from this country, who has made it to the top in the United States, His firm, Tandon Corporation of California, which he started in 1975, has been declared the Up and Comer of 1983, heading a list of 277 in Forbes magazine's annual ranking of the best small publicly held companies in the United States. An Up and Comer is defined as ''a smallish company that has an excellent chance of turning into a great company ... perhaps ultimately to join Forbes' list of of the 500 largest companies".

Financing Reagan s Deficit

Financing Reagan's Deficit I S G YOU make the Budget, especially the pre-election Budget, for the constituency you wish particularly to cultivate. This is probably what "Ronald Reagan too had in mind while presenting his 1984-85 Budget, envisaging - total spending of the order of $ 925 billion even though it entailed a deficit of $ 180 billion (i e, 20 per cent).

Our Rouble Reserves

Our Rouble Reserves I S G THE principal assumption underlying a bilateral payments arrangement is that the two countries entering into such an arrangement have broadly balanced trade between them. Then the need for the intermediation of a third country currency in the settlement of transactions is eliminated. In practice, this may not be always so. Not that bilateral payments arrangements altogether overlook this possibility. They usually provide for the eventual setllement of payments imbalances in third country currencies, but in not all such arrangements can this provision be easily invoked.

Bleak IDA-7 Prospects

Bleak IDA-7 Prospects I S G TO understand the current situation, let us start with a hit of past history. The sixth replenishment (IDA-6) of the International Development Association, the .soft loan window of the World Bank, was settled at $ 12 billion. This amount was to be contributed over a three-year period, 1980-81 to 1983? in successive tranches of at least 29 per cent, 33 per cent and 38 per cent of the total. The US contribution was fixed at $ 3.24 billion which works out to 27 per cent of the total amount to he raised. This itself was low in relative terms, being lower than the pro- portion of the US contribution to IDA replenishment in the past. Thus of the amounts of subscriptions and supplementary resources raised through IDA-o. the US contribution works out to 36 per cent.

The South Bank Proposal-Is OPEC Participation Critical

The South Bank Proposal Is OPEC Participation Critical? I S G ACCORDING to an UNCTAD study, completed around mid-1983 at the request of the Group of 77, a South Bank, ie, a bank of and for the developing countries, is needed and is possible. The study suggests that the proposed bank should have a total capital of $38 billion, of which $ 4.8 billion would be paid-up capital and the rest on cal] in case it is needed to meet the bank's obligations. Callable capital performs a guarantee function. It is suggested that of the paid-up capital, it would be desirable if $ 1.5 billion consisted of convertible foreign exchange; the rest would be contributed in local currency which should be for use by the bank without restrictions except for convertibility. Assuming a very conservative gearing rate of 1:1 between capital and: loam; raised by the bank, the bank should be ab.e to mobilise additional funds from the private capital market. With the capital resources it can thus command, the proposed bank, it is suggested, could ''make a significant contribution to the developing countries' growth, diversification and mutual co-operation". In specific terms, three sets of activities are envisaged for the proposed South Bank: (1) stimulating and helping to finance joint ventures and extending export credit; (2) extending balance of payments support, and (.3) providing support to payments and credit arrangements of developing countries and commodity stabilisation finance. By undertaking these activities, the bank would be able to not only promote and help streamline economic co-operation among developing countries but also fill some of the gaps in the present structure of international finance, gaps that particularly affect developing countries adversely.

Oh, These Fly-by-Night NRI Depositors

October 29, 1983 maintained through the media and the sight of a Democratic party in disarray, his victory is by no means assured, certainly not, to use an Americanese, a 'shoo-in.' He will have to defend a four-year record which, despite all the trumpet-blowing, will be no easy task; it has several ugly features

IMF s Liquidity Gap

IMF's Liquidity Gap I S G SO the crunch has finally come. The International Monetary Fund has decided to suspend new negotiations on balance of payments support in view of, what has been described as, the Fund's "commitment gap". The timing of the suspension Ls itself bound to attract notice since it has occurred just before the Fund-Bank Annual Meeting. However, the Fund's 1983 Annual Report, released earlier this month, has been at pains to underline how the sharp escalation in the demands on its resources has "placed the Fund's financial resources under pressure". So the knowledgeable ones might well have guessed already what the "build up" in the Report was likely to lead to, or might even have been privy to the Fund's strategy. All the same, the matter the Fund's liquidity is serious enough to deserve notice regardless of the heroics. Let us rule out for our present purposes the possibility that the Fund action is an inspired stunt to pressurise the developing countries into inaction on issues of basic monetary reform or at least into an agreement on keeping the Fund supreme in the international financial arena.

Bleak IDA-7 Prospects

Bleak IDA-7 Prospects I S G TO understand the current situation, let us start with a bit of past history. The sixth replenishment (IDA-6) of the International Development Association, the soft loan window of the World Bank, was settled at $12 billion. This amount was to be contributed over a three-year period, 1980-81 to 1983, in successive tranches of at least 29 per cent, 33 per cent and 38 per cent of the total. The US contribution was fixed at $ 3.24 billion which works out to 27 per cent of the total amount to he raised. This itself was low in relative terms, being lower than the proportion of the US contribution to IDA replenishment in the past. Thus of the amounts of subscriptions and supplementary resources raised through IDA-5, the US contribution works out to 36 per cent.

Four Years of EMS

accountable to elected authorities. It is this what 'privatisation' really means, and what is in store for substantial sections of central and local administration (especially for the Tatter). It is happening or will happen before long, to most of the remaining nationalised industries, to local councils, to public utilities and services (includins those which are monopolies), to airports and shipyards, to North Sea oil, to steel and coal; to all the wealth of the nation. And it is in this way that a government elected by a minority will serve the interests of another, a privileged minority

Non-Resident Control and National Interest

Non-Resident Control and National Interest I S G I AM afraid the discussion on investment by non-resident Indians in Indian companies is altogether misplaced. The major issue, in my view, should not be whether non-resident control will replace resident control of Indian companies but whether attempts at such substitution, should they materialise, will be in the interest of the country.

NAM Tails behind Brandt

NAM Tails behind Brandt I S G TOWARDS the close of 1979 when the world in general and industrial countries in particular already faced prospects of prolonged, severe recession, the Independent Commission on International Development Issues under the chairmanship of Willy Brandt (commonly known as the Brandt Commission), had come out with what was called 'A Programme for Survival'. Many people, said .Willy Brandt, "may consider this to be the worst possible moment for advocating radical changes" but he believed that it was "precisely in this time of crisis that basic world issues must be faced and bold initiatives taken" to reshape worldwide relations. The existing system of international institutions which was established at the end of World War II, the Commission felt, faced numerous disadvantages which called for fundamental correction. Hence the demand for a new international economic order, "What is new on the agenda is a re-arrangement of international relations, the building of a new order and a new kind of comprehensive approach to the problems of development." In the establishment of the new order, the Brandt Commission called for co-operation between the industrialised, affluent North and the developing, poor South, pointing out, at practically every step in its exposition, to the mutuality of gains and benefits to all countries, rich and poor, from a strengthened, more just global economy.

Day Dreaming on Oil Price

Day Dreaming on Oil Price ISG OIL price hay been under downward pressure from early 1980, though for some time in between, in the early phase of the Iran-Iraq war, there was ;i firming up, Lately, however, there has been increasing talk of the oil price reverting to the nominal level that obtained in mid-year, 1979, i e, at mound $ 25-6 a barrel of marker crude. Is this purely wishful thinking? Or could there be a genuine possibility of the oil price declining in the near future? An answer is important, because depending" on it, one can form one's judgment on the shape of a country's balance or payments and its investment programme, both overall as well as that concerning specifically the energy sector. However, the answer is not so easily forthcoming.

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