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

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JVs, FDI and Technology Transfer

Joint Ventures, International Investment and Technology Transfer edited by Nirvikar Singh and Sugata Marjit; Oxford University Press, New Delhi, 2003; pp 404 + xxii, Rs 650.

IMF: Concerns, Dilemmas and Issues

The main concerns relating to the IMF's policies are relatable to intrusive conditionalities without due regard to the needs of and impact on the borrowers, with expanding scope of surveillance applied asymmetrically between borrowers or programme countries and others with no financial accountability except that of reputational risks. The response of the Fund has been to attune its policies to meet these concerns, emphasise aspects such as national ownership, leaving culture, transparency in its operation, independent evaluation and wider consultations. However, the basic limitations of resources, instruments and mandate in meeting the problems arising from volatile financial markets explain some of the persisting concerns. Three major issues are posed here for discussion to meet these concerns and improve the quality of resolving some of the tradeoffs and judgments involved. The first suggestion is to separate the surveillance function from lending, making the former somewhat independent of political processes as well as the weighted voting structure. The second suggestion is to remove the distortion in current voting strength by recognising intra-monetary union trade as not amounting to international trade since neither currency nor trade restrictions are in place and by accepting the Purchasing Power Parity basis of GDP computation. The third suggestion proposes that the Fund be given some authority to create limited but temporary liquidity under certain circumstances, to be "a lender of some resort".

What Ails Kerala's Economy:A Sectoral Exploration

The `Kerala model' of development has been facing a serious crisis due to low growth, high cost, low productivity, low investment and low employment in the state economy. This paper analyses the performance of major sectors of the state economy, such as agriculture, industry and the financial sector, during the past two decades and brings out the problems they confront. The paper highlights the lack of a development strategy in Kerala for growth and employment generation.

Banking on Universality

If universal banking is to work, we should have guidelines that are clear and manageable; and once the guidelines are in place, there should not be any concessions on a piecemeal basis.

Need to Resurrect Rural Credit Institutions

A determined effort is called for to strengthen the rural credit system by creating new institutions if necessary and strengthening the multi-agency arrangement of commercial banks, regional rural banks and credit cooperatives and assigning to them specific regional, sectoral and functional responsibilities.

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.
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