The Terra-Luna crash in May made it clear that cryptocurrency is inherently volatile and prone to systemic crises. Yet, as long as there is excess liquidity sloshing about, speculative finance will fight any effort to regulate “alternative assets”, the gambling chips.
Although the BJP is against ‘freebies’ in principle, in practice it has been forced to use a version of concessions and transfers to counter the opposition’s attempt to flag economic issues and create a space for “secular” debate.
Inflation has been accelerating over the past few months. And supply levels and price trends are signalling imminent crises in global energy and food markets, with frightful humanitarian implications for vulnerable nations and populations.
The burden of climate finance must be shared fairly. But, in the context of the work being done by the IPCC, developed countries talk of measures such as “debt-for-climate swaps”, suggesting that the flow of new grant money is not the priority, even as developing countries link their climate plans and targets to certain levels of cross-border financial flows they must receive.
The Ukraine situation is having unexpected economic consequences, such as an explosion in nickel prices, and a prolonged war could be catastrophic for a financialised world economy mired in speculation.
High inflation in advanced economies is forcing central banks to go back on their unconventional monetary policies. It also spells trouble for emerging markets such as India, since foreign financial investors are likely to exit either because of rising capital costs or the need to cover losses at home.
The Modi government’s acquisition of a 35.8 per cent stake in Vodafone India is part-nationalisation that supports a set of well-heeled private telecom players even as it has let the public sector in the same industry atrophy. Neoliberalism has once again proved to be a means of engineered transfer of wealth from the government to big business.
The recent State Bank of India-Adani Capital co-lending scheme to help farmers is not only loaded in favour of Adani Capital but also appears to facilitate the back-door entry of business groups into banking. As with all public-private partnerships under capitalism, the public sector will bear the risk while the private sector will share the rewards generated by the investment of public capital.
Across the world, there is a sense of apprehension about the economic future owing to signs of inflation and a readjustment of monetary policy in advanced countries that would see a rise in interest rates. For emerging markets like India, this could mean the end of an era of cheap money and the exit of foreign investors from equity and bond markets.
The claim that private capital is “available” to help countries meet their climate change goals not only diverts attention from the problem of inadequate public funding but also drains public funds and, if that happens, it can harm the climate cause.
The so-called coal shortage in India was the result of botched policy initiatives that involved curbing public sector mining and getting the private sector to fill the gap as part of the neoliberal agenda. When the private sector failed to step up, and imports, which were seen as a solution, turned expensive, the country was left to face a coal crisis.
The difference in the responses to the allegations against Chile and China regarding manipulation of the World Bank’s Doing Business rankings in 2018 suggests that the institution itself is prone to such violations, not any one individual.
A Chinese behemoth’s missing of an interest payment triggers local and global fears of its impending collapse, but the government is in no hurry to bail it out, indicating that it seeks to control soaring property prices and curtail the wealth and power of corporates.
The entry of speculative investors into carbon markets could distort their working, and the resultant volatility and uncertainty are likely to inflict much collateral damage even as the objectives with which those markets were created remain unrealised.
Tariq Fancy, former chief investment officer of BlackRock Inc., says that the financial services industry that has promoted environmental, social and governance investing by big business not only “dupes the public” but also fails the cause of climate change itself.
There seem to be multiple motivations underlying the Union government’s recent interventions in the digital sphere, which target foreign e-commerce firms such as Amazon and Flipkart-Walmart in particular.
The global minimum tax proposal that the G7 Finance Ministers’ summit agreed upon falls disappointingly short of what is needed and possible. And the other commitments appear to be reiterations of what has been said before, with no evidence of moves towards effective and concrete action.
While two official reports on the economic fallout of the second wave of COVID-19 in India suggest that it has been less severe than the first, the fact remains that the ongoing economic emergency has not received the attention it deserves.
It is speculated that the world economy is set to experience another commodity price spike, or commodity “supercycle”, a tendency in which most commodity prices rise significantly and remain high for a decade or more, and the implications of this are different for advanced and emerging economies.
The annual Spring Meetings of the IMF and the World Bank note the sharp divergence in the economic impact of the COVID-19 pandemic globally and also point to the lack of ambition needed to bridge the performance gap which has crippled low- and middle-income countries and devastated vulnerable populations.
The Joe Biden administration may have ambitions of restoring U.S. economic competitiveness and dominance, but its position on digital services taxes sends out contradictory signals on its willingness to cooperate in the framing of a global minimum corporate tax.
The Joe Biden administration’s decision to hugely ramp up government spending through the American Rescue Plan Act signals a return to proactive government intervention and must be seen as a positive fallout of its response to the COVID pandemic.
Pakistan’s debt crisis, further aggravated by the COVID-19 pandemic, is the result of not only its fiscal profligacy but also the supply side debt push arising from the competing security ambitions of the United States and China.
Australia’s proposal to make big tech firms such as Google and Facebook pay for the news they link to is being closely watched by many countries as a way to facilitate the digital transition that publishers without a clear revenue model have begun.
The meteoric rise in video-game retailer GameStop’s share price, which was propelled by day traders using Reddit forums to take on the Wall Street majors, is bound to change the nature of the speculative game at the heart of global finance.
Finance Minister Nirmala Sitharaman claims that Union Budget 2021 will be one “like never before”, but the Narendra Modi government’s persistent neoliberal fiscal stance, resulting in collapsing revenues and stagnant expenditures, points to the contrary.
Even while the real economy remains in contractionary mode, not only have stock market returns exploded but India’s stock of foreign exchange reserves registered record-breaking increases in the April-September 2020 period mainly because expenditure, rather unusually, fell short of receipts in the current account.
The episode of violence at a Wistron iPhone assembling facility near Bengaluru was not the ploy of a set of rogue managers but is in tune with the nature of global value chains, where companies engage in exploitative practices to be profitable.
Entry of corporate players with deep pockets into the banking space, as the RBI’s internal working group proposes, could trigger certain processes that would both place lendable resources in fewer hands and concentrate risk.
South Korea may have been successful in handling the COVID-19 outbreak, but it nevertheless faces a soaring debt crisis, with the GDP shrinking and the government ramping up credit provision to address financial difficulties in the aftermath of the pandemic.
While the pandemic has damaged the economy, the Central government’s failure to address the pre-pandemic recession and its tepid response to the COVID-induced shock to the economy had a role to play in putting the nation in the predicament it is in now.
The recent sharp spike in India’s foreign exchange reserves is a result of recessionary conditions and the rush of speculative investors into Indian equity and debt markets and must not be used to divert attention from the economic crisis.
The Centre reneges on its commitment to compensate the States for any shortfall in revenues from the goods and services tax, claiming that its responsibility ends with transferring sums generated from the compensation cess to the compensation fund.
Using economic weapons to temper China’s stand on the border question would not be easy for India. The presence of Chinese firms in a relatively inconsequential area such as mobile apps was an easy and convenient lever for it to use.
The steep fall in oil prices improves India’s manoeuvrability to address an economic recession. However, the government’s decision to increase the excise duty on fuel betrays an attempt to appropriate for itself the benefits that may have otherwise accrued to the citizens.
The telecom sector is in danger of being reduced to a private monopoly following the Supreme Court ruling on the AGR issue even as a new stage of competition is set to arrive in the form of the 5G spectrum auction.
Reliance’s success in areas such as telecommunications and retail is the result of aggressive investment and predatory pricing, facilitated by capital accumulated in its traditional business and from massive borrowing and through government policies favouring its interests.
As the cracks in the business model employed by the budget hotel aggregator OYO are becoming apparent, both disgruntledhoteliers and investors are questioning its strategy of attracting investments at rising valuations.