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The Asian Century Lectures: Regional Cooperation and Integration

Please join us for the fourth in the series of five lectures on the Asian Century by NCAER Distinguished Fellow, Mr Rajat M. Nag. Our commentator will be Mr Shyam Saran, Chairman of the National Security Advisory Board and Chairman of RIS.  Please join us for dinner after the lecture.

Asia’s prosperity and security in an increasingly interconnected and interdependent world will require greater regional cooperation in a spirit of open regionalism and not fortress Asia. Sub-regional cooperation initiatives have flourished, some more than others, in various parts of Asia, and the prospects of combining them, leading to greater Pan Asian integration, will be assessed in this lecture. As Asia grows economically and its standard of living increases, its demand for natural resources will increase significantly. In this lecture, Nag will also discuss how the competition for resources between the growing Asian economies, particularly large ones like China and India, will evolve.

In the Asian Century Lectures, Rajat Nag examines the challenges that Asia must confront and the opportunities it must exploit to make this century the Asian Century, a proposition that he argues is plausible but not inevitable. In his first lecture, Nag spoke about the need to pursue an inclusive growth strategy to meet the challenges of rising inequality in Asia. While the second lecture covered the demographics of Asia and the need for high productivity jobs, Rajat’s third lecture addressed the challenges of infrastructure deficit and the need for a robust financial sector in Asia.  The last lecture (on June 9th) will cover the issues of good governance, institutions, and green growth.

Rajat Nag is the former Managing Director-General of the Asian Development Bank and now a Distinguished Fellow at NCAER. He is currently also the Chair of the Look East Council of the Indian Chamber of Commerce, a Visiting Professor at the Asian Institute of Management in Manila, and a Senior Fellow at the Emerging Markets Forum, Washington, DC.  Mr Nag began his professional career at the Bank of Canada, and held senior positions in international consulting before joining the ADB. He has engineering degrees from IIT, Delhi and the University of Saskatchewan. He also has an MBA from the University of Saskatchewan and an MSc in Economics from the London School of Economics.

Shyam Saran is the Chairman of the National Security Advisory Board and Chairman, Research and Information System for Developing Countries. Ambassador Saran’s career in the Indian Foreign Services, spanning 36 years, has taken him to Beijing, Tokyo and Geneva. He has also served as India’s Ambassador to Indonesia and Nepal, and High Commissioner to Mauritius. In 2011, Ambassador Saran was awarded the Padma Bhushan.

Please join us for dinner after the lecture. For queries, please contact Ms Sudesh Bala at sbala@ncaer.org, or on 91-11-2345-2669.

Financial Globalization in India: Opportunities, Challenges and Reforms

Since the early nineties, India has cautiously opened up to private foreign capital. While financial openness has increased over time, it is still limited in many dimensions. Gross Capital Flows as a percentage to GDP, a measure of financial openness, peaked in 2007 at 67.4 per cent, from just 15 per cent in the 1990s. Post the global financial crisis of 2008, gross capital flows as a percentage of GDP fell and averaged 49 percent between 2009 and 2013. The overall increase in financial openness in India since the 1990s has been associated with higher economic growth and a gradual development of domestic financial markets. However, the impact on macroeconomic discipline has been ambiguous, particularly given the unusual circumstances surrounding the financial crisis of 2008.

NCAER organised a national workshop to discuss the findings of a new research project dealing with the impact of financial globalization in India. Ms Renu Kholi, Senior Consultant at NCAER spoke on Financial Globalization in India: Opportunities, Challenges & Reforms. Saugata Bhattacharya, Senior Vice-President, Business, and Chief Economist, Axis Bank also presented his views in a panel discussion.

The NCAER research project sheds light on three aspects. First, it provides an assessment of the benefits and costs of financial globalization from the Indian experience. Second, it studies exchange rate volatility, including that emerging from unregulated non-deliverable forward markets abroad, based on the cross-country experience, and identifies the key determinants of rupee volatility. Third, it presents a sequenced roadmap for reforms to lower exchange rate volatility while progressing with financial liberalization. This research project has been generously supported by the Foreign and Commonwealth Office of the British High Commission.

State of the Economy Seminar

NCAER presented its Quarterly Review of the Economy at this seminar held at NCAER. The review covered the performance of the economy in the last quarter of 2014-15 and presented forecast for 2015-16.

NCAER’s annual model predicts that GDP at market price, 2011-12 prices will grow at 7.8 per cent in 2015-16, according to this report release by NCAER. The WPI Energy assumption is crucial to this prediction. The baseline assumes that WPI Energy will fall by five per cent. However, if WPI Energy is assumed to fall by two per cent, GDP will grow at 7.7 per cent and if it is assumed to fall by ten per cent, GDP is expected to grow at 8.6 per cent.

The overall macroeconomic picture at the beginning of the new fiscal year is like the Curate’s egg – good in parts. There are unmistakable signs of recovery, especially in industrial production, where the year-on-year growth at 2.8% is well above the previous year’s decline of 0.1%. But the recovery is still too tepid given both our need and our potential. Add to this the doubts on the agriculture front on account of uncertainties regarding the impact of El Nino on the South-West monsoon and the somewhat uncertain global recovery and the outlook for the current fiscal is one of cautious optimism.

  • The growth prospects for agriculture in 2015-16 depend very much on the actual performance of monsoon. The India Meteorological Department released its first official forecast for the southwest monsoon in April 2015. It predicted that rainfall is likely to be 93 per cent of the Long Period Average with a model error of ± 5 per cent. The likely date of monsoon’s arrival is expected to be June 1, which suggests timely arrival.
  • The outlook for the industry and services sector is mixed. The industry sector is likely to gain from government initiatives like Make in India, skill development, FDI reforms, unblocking of various stalled projects etc. Specific industries like the IT-BPM (Information Technology-Business Processing Management industry) may provide the much needed fillip to the services sector.
  • World Trade volume is likely to improve with differences in outlook for advance economies and emerging market and developing economies. India may benefit with increase in world growth. Given that growth in Asia, where most of our merchandise trade is directed, is weak, merchandise trade prospects appear muted for India. On the other hand, services trade has a positive outlook, with improvement in outlook for advanced economies. Overall current account deficit is predicted to remain sustainable, well under two per cent.
  • Inflation outlook is muted due to dampened oil prices, which are predicted to remain low for the current fiscal. However, if there is deficient monsoon again in the current fiscal, food inflation may be affected.

For queries related to subscription to NCAER’s Quarterly Review of the Economy publication, you can email us at infor@ncaer.org

Addressing Infrastructure Deficits and Transforming Finance in Asia

Please join us for the third in the series of five lectures on the Asian Century by NCAER Distinguished Fellow, Mr Rajat M. Nag. Much of Asia is still plagued by severe physical infrastructure deficits. This lecture will address the important challenges of meeting such infrastructure deficits, both hard and soft, and how they could be financed from both public and private sources. Institutional arrangements for meeting the infrastructure challenges in Asia, including through public private partnerships will be discussed.  As Asia’s share in the global economy grows, it should also have proportionately similar shares of financial assets to efficiently recycle and allocate its huge savings and foreign reserves. The lecture will discuss how this transformation will unfold and also address the important aspects of financial inclusion.

In the Asian Century Lectures, Rajat Nag examines the challenges that Asia must confront and the opportunities it must exploit to make this century the Asian Century, a proposition that he argues is plausible but not inevitable. In his first lecture, Nag spoke about the need to pursue an inclusive growth strategy to meet the challenges of rising inequality in Asia. The second lecture covered the demographics of Asia and the need for high productivity jobs. The remaining two lectures over the next few months will cover regional cooperation and integration and the competition for natural resources and governance, institutions, and green growth.

      Rajat Nag is the former Managing Director-General of the Asian Development Bank and now a Distinguished Fellow at NCAER. He is currently also the Chair of the Look East Council of the Indian Chamber of Commerce, a Visiting Professor at the Asian Institute of Management in Manila, and a Senior Fellow at the Emerging Markets Forum, Washington, DC.  Mr Nag began his professional career at the Bank of Canada, and held senior positions in international consulting before joining the ADB. He has engineering degrees from IIT, Delhi and the University of Saskatchewan. He also has an MBA from the University of Saskatchewan and an MSc in Economics from the London School of Economics.

For up-to-date information on the Asian Century Lectures, please visit www.ncaer.org.

Please join us for high tea after the lecture. For queries, please contact Ms Sudesh Bala at sbala@ncaer.org, or on 91-11-2345-2669.

Addressing Infrastructure Deficits and Transforming Finance in Asia

Please join us for the third in the series of five lectures on the Asian Century by NCAER Distinguished Fellow, Mr Rajat M. Nag. Much of Asia is still plagued by severe physical infrastructure deficits. This lecture will address the important challenges of meeting such infrastructure deficits, both hard and soft, and how they could be financed from both public and private sources. Institutional arrangements for meeting the infrastructure challenges in Asia, including through public private partnerships will be discussed.  As Asia’s share in the global economy grows, it should also have proportionately similar shares of financial assets to efficiently recycle and allocate its huge savings and foreign reserves. The lecture will discuss how this transformation will unfold and also address the important aspects of financial inclusion.

In the Asian Century Lectures, Rajat Nag examines the challenges that Asia must confront and the opportunities it must exploit to make this century the Asian Century, a proposition that he argues is plausible but not inevitable. In his first lecture, Nag spoke about the need to pursue an inclusive growth strategy to meet the challenges of rising inequality in Asia. The second lecture covered the demographics of Asia and the need for high productivity jobs. The remaining two lectures over the next few months will cover regional cooperation and integration and the competition for natural resources and governance, institutions, and green growth.

Rajat Nag is the former Managing Director-General of the Asian Development Bank and now a Distinguished Fellow at NCAER. He is currently also the Chair of the Look East Council of the Indian Chamber of Commerce, a Visiting Professor at the Asian Institute of Management in Manila, and a Senior Fellow at the Emerging Markets Forum, Washington, DC.  Mr Nag began his professional career at the Bank of Canada, and held senior positions in international consulting before joining the ADB. He has engineering degrees from IIT, Delhi and the University of Saskatchewan. He also has an MBA from the University of Saskatchewan and an MSc in Economics from the London School of Economics.

For up-to-date information on the Asian Century Lectures, please visit www.ncaer.org.

Please join us for high tea after the lecture. For queries, please contact Ms Sudesh Bala at sbala@ncaer.org, or on 91-11-2345-2669.

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