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This very timely discussion held at NCAER discussed the “Regional Economic Diplomacy in Asia: Opportunities and Challenges” with scholars from EABER .

The first panel explored the state of play in regional trade and economic diplomacy, including the emergence of mega-regional trade negotiations such as the TPP and RCEP and how they affect the global trading system and the opportunities for national development among the regional economies. The second panel will reviewed the priorities for Australian leadership in the G20 process, focusing on two main aspects: Asia’s interest in elevating growth and infrastructure investment; and review of issues affecting the global trade and investment regime. This discussion also reflected on the previous week’s visit of PM Tony Abbott to India to meet PM Modi and the opportunities that the visit may have created. The third panel discussed the challenges India faces in the dynamics of rapidly changing regional economic and diplomatic equations through RCEP and TPP agreements in the backdrop of limping multilateral discipline. However, there are opportunities India has for catching up with the growth and prosperity of other Asian countries. Of course there are challenges as well. The discussion was timely since the Commerce Ministry has announced undertaking a comprehensive analysis of India’s free trade agreements. The roundtable ended with closing remarks outlining the research ideas and the way forward.

As debate and speculation rage in New Delhi about a new avatar of the Indian Planning Commission following Prime Minister Modi’s Independence Day speech, it is useful to look at institutions in other countries that started out similarly to the Indian Planning Commission but whose roles have changed over time.  The most prominent among these is perhaps China’s National Development and Reform Commission (NDRC). The role of the NDRC in China’s transformation from a centrally planned to a market economy has been crucial, but is also puzzling to many outside observers. NDRC’s powers appear to have paradoxically expanded at the same time as the Chinese economy has moved rapidly towards a mixed economy in which the market plays a more decisive role in allocating resources and cities are becoming the centres of decision-making.  The key to understanding the role of the NDRC may be to appreciate China’s tiao-kuai governance matrix (vertical line of central control and horizontal blocks of regional competition), in which regional autonomy and central authority interact organically to generate a dynamic process of local experiments, regional competition, central planning, and market regulation.

In this seminar held at NCAER, Professor Xiao Geng , the Vice President of Research of the Fung Global Institute (FGI) in Hong Kong discussed this  Chinese governance model  that has not only produced spectacular economic growth in the past three decades, but has also created many new challenges, particularly in the area of social, financial and environmental sustainability. The role of the NDRC is likely to continue to evolve given the ambitious reform blueprint outlined by China’s new leadership in last November’s Third Plenum. The presentation by Professor Geng was followed by a very interesting presentation of viewpoints by T N Srinivasan and then by Dr Amitendu Palit, Senior Research Fellow at Institute of South Asian Studies, National University of Singapore; both of whom brought their own perspective on the lessons of the NDRC experience for the reborn Indian Planning Commission. Finally, Dr Ramgopal Agarwala, NCAER lead off to a very spirited open discussion with the audience.

The deadline for ratification of the WTO’s Trade Facilitation Agreement (TFA) under the Doha Round was July 31, 2014. India under the Modi Government chose not to ratify the TFA, signed in December 2013 by the previous Manmohan Singh Government at the 9th WTO Ministerial Meeting in Bali, and widely heralded at that time as the first major decision of this century on global trade after the WTO came into being. The Government of India’s decision not to ratify was unexpected and sudden. In this seminar held at NCAER, Professor T.N. Srinivasan, Professor of Economics at Yale University and a Non-resident Senior Fellow at NCAER presented his very interesting viewpoints as he argued that India’s decision—on the grounds that discussion on finding a permanent solution to the issue of public food stocks had not started in the WTO work programme following the TFA adoption and that the developed countries were stalling meaningful discussion—was unwarranted and unwise. He shared his view that ratification now would have still left India ample time to push for a discussion on public stockholding and food security. Also, in any case, the TFA itself had set a deadline until the 11th Ministerial Conference in 2017 to find a permanent solution to the issue of public stockpiling for food security, with progress to be reviewed at the 10th Ministerial Conference in 2015. Srinivasan also spoke on the related issue of the Aggregate Measurement of Support (AMS) limits, the limits that WTO Members should not cross in their support to staple food crops, India missed an opportunity to avail of the ‘Peace Clause’ protection of the TFA. Professor Abhijit Sen of Jawaharlal Nehru University and Member, 14th Finance Commission carried on the discussions further . The seminar received an overwhelming response from a houseful attendees; representatives of researcher community, student groups and policy makers alike.

T. N. Srinivasan is the Samuel C. Park, Jr. Emeritus Professor of Economics and former Chairman of the Economics Department at Yale University, where he has taught since 1980, and a Non-resident Senior Fellow at NCAER. He was Special Adviser to the Development Research Center at the World Bank from 1977 to 1980, and has taught at numerous academic institutions, including MIT, Stanford, and the Indian Statistical Institute. He has authored a number of books and articles on economics, international trade, development economics and the Indian economy. He is a Visiting Fellow at the Stanford Center for International Development, a Distinguished Fellow of the American Economic Association, a Fellow of the Econometric Society, of the American Academy of Arts and Sciences and the American Philosophical Society, and a Foreign Associate of the US National Academy of Sciences. He received the Mahalanobis Memorial Medal of the Indian Econometric Society in 1975. He was awarded the Padma Bhushan by the President of India in 2007.

Financial markets operate within a country’s legal, regulatory, and tax framework, often designed to overcome market failures. But as with almost any government, inappropriate regulation or laws may themselves create government failures.  Where does one lay the blame for excess volatility in financial markets, volatility that may impose huge costs on the rest of the economy?  In this seminar by Dr Gurubachan Singh based on his recent paper traced the causes of excess volatility and suggests that both market and government failure are usually at fault.  As suggested in his paper, Dr Singh explained  approaches based on regulation, law, taxation, and the macroeconomic policy regime that can be deployed to try to improve the functioning of financial markets. Dr Shesadri Banerjee , NCAER as the discussant for the paper presented his very interesting views on financial volatility.

Dr Gurbachan Singh is a visiting faculty member at the Indian Statistical Institute, Delhi, where he teaches a course on Finance and Volatility. He has previously taught at Jawaharlal Nehru University. His research interests focus on macro-financial stability. He has authored a book Banking Crisis, Liquidity, and Credit Lines (Routledge, 2012). He has a PhD from ISI and an MA from the Delhi School of Economics.

This seminar follows a number of recent NCAER seminars on international finance and monetary policy, including Gurbachan Singh’s last seminar on “Is India Hedged Against Systemic Risk?” (June 05, 2013); Shesadri Banerjee on “Inflation Volatility and Activism of Monetary Policy” (November 22, 2013); and Sanket Mohapatra on “The Effect of Quantitative Easing on Financial Flows to Developing Countries” (August 07, 2014).