ECONOMIC NOTES

The Devaluation of the Yuan

THE Chinese central bank’s decision last week to let the yuan depreciate in three stages by almost 4 percent against the US dollar, was officially explained as a move towards greater market determination of its exchange rate. Though this explanation pacified stock markets around the world, China’s devaluation of the currency portends a serious accentuation of the world capitalist crisis.

World Recession Set to Worsen

MORE than seven years after the world capitalist crisis began, not only is there no sign of any recovery from it, but the prospects appear even bleaker today than ever before. In fact, while the advanced capitalist world continues to remain mired in crisis, it is now spreading across the globe, even to countries like India and China that had appeared initially to have escaped its impact. India’s GDP growth rate is slowing down; what is more, the manufacturing sector continues to witness almost absolute stagnation.

The Impasse over Economic Policy

NEWSPAPERS have been full of stories about differences between the Reserve Bank and the finance ministry over economic policy issues. The differences are so sharp that the government is apparently planning to amend the Reserve Bank of India Act to clip the wings of its governor. These differences however are symptomatic of a deeper malaise afflicting the Indian economy. The point in this case is not who is right or who is wrong; the point is that whichever policy is pursued, the economy is headed for acute difficulties.

Greece for Sale

LET us forget for a moment that even the IMF, which happens to be one of Greece’s major creditors, has now publicly recognised that it is unrealistic to expect Greece to pay back its entire debt. Let us assume that Greece cannot be given any debt relief, but must pay back its debt, a certain amount each year. Even then however there are two ways to make Greece pay back this debt.

Europe’s Moment of Truth

GREEK Premier Alexis Tsipras’ acceptance of an “austerity package” on July 13, which contained measures rejected by the Greek people in a referendum barely a week before, represents not just an abject surrender by the Syriza government, or a sign of contempt on the part of German finance capital for the Greek electorate; it marks a decisive turning point for Europe (and indeed for the rest of the world), and the end of the road for a whole way of thinking on the Left, especially the European Left.

The Dismal State of Rural India

THE Socio-Economic and Caste Census 2011 (SECC), released by the Government of India on Friday, July 3, paints a dismal picture of the economic conditions of the people in rural India. The data it has unearthed need to be, and will no doubt be, discussed at great length in the days to come; I shall confine myself here to just one of the many striking findings of the Census, which relates to the proportion of total households in rural India that is engaged in manual casual labour.

The Spectre of the Thirties

THE Reserve Bank of India, as is to be expected, has been denying that its governor Raghuram Rajan had ever suggested that the world was facing the possibility of a 1930s-type Great Depression. Members of the “global financial community” are not supposed to say such things; so even if Dr Rajan did, a denial was inevitable.

The point however is not whether Rajan actually said this. The point is not even whether the world would actually slip into a 1930s-type depression. The point is whether the issues raised by Rajan at the event organised in London were valid and significant.

The Growing Centralisation

WHAT we are witnessing under the Modi regime is a significant reduction both in the relative amount of resources made available from the centre to the states, and also in the states’ ability to make their voices heard on matters of national economic policy. Such centralisation has been one of the chief hallmarks of the Modi administration.

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