C. P. Chandrasekhar’s Blog

This propositional paper looks at the World Bank's new roadmap to evolve its mission. As the ongoing crisis of development reveals in the myriad forms it takes, it is clear that the international community and special institutions such as the World Bank, established with the promise that they would advance global development, have failed in their mission. Given that context, what is needed is not just “evolution” but radical reform. In this 75th year of the Universal Declaration of Human Rights, adopted by the United Nations General Assembly on Dec. 10, 1948, what stands out is that, from the perspective of…

Despite the far-reaching implications of debt distress and debt defaults in low- and middle-income countries, efforts at resolution are plagued by delay and ineffective when undertaken. This is largely because the solutions, influenced by unreformed international financial institutions and creditor interests, don’t address core structural issues that result in periodic crises. The need for reform is urgent and the role of civil society organisations in driving that reform crucial. Click here for full article. (This article was originally published on the website of Brettonwoods Project on April 19, 2023)    

The world economic outlook released in time for the recently concluded spring meetings of the World Bank and the IMF presents a gloomy picture. Global GDP growth is expected to fall from 3.4 percent in 2022 to 2.8 percent in 2023, and recover only marginally to 3.0 percent in 2024. Advanced economies are expected to experience a more pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. These projections have to be seen in the context of a long and deep recession that has afflicted the global economy since the North Atlantic financial crisis of 2008.…

The global distribution of surpluses and deficits in the balance of payments, or the excesses or shortfall in foreign exchange earnings vis-à-vis expenditures, has for multiple reasons been in constant flux. This has implications for the directions in which capital must flow or surpluses must be recycled to deficit countries to ensure global stability and prevent the disruption of development in those countries. One factor that influences the distribution of surpluses and deficits is the uneven development of capitalism with a small set of ‘advanced economies’ at one pole recording surpluses and a large number of less developed or underdeveloped…

C. P. Chandrasekhar speaks to us about the Silicon Valley Bank crisis and whether the financial contagion is likely to spread to India and other countries. Last week, California-based Silicon Valley Bank, the 16th largest bank in the United States, collapsed, sending shock waves through the start-up universe. Then two more banks – the crypto-currency focused Signature Bank and Silvergate Capital – shut down, sparking fears of wider financial contagion, similar to how the collapse of Lehman Brothers in 2008 triggered a global crisis. The American government and the Federal Reserve acted fast to try and avoid precisely such a…

While Pakistan is beset by multiple crises on the political, social and economic fronts, media attention is focused on the debt crisis and analysts are preoccupied with the question whether the IMF would soon release a last tranche of $1.1 billion out of a $6.5 billion loan programme sanctioned in July 2019 and subsequently extended and enhanced. That tranche is presented as a prerequisite for a resolution of the debt crisis facing the country. The government in Pakistan, beleaguered by multiple crises, also seems convinced by this argument and is struggling to meet conditions that have been set by the…

A strike on the Adani group by short-seller the U.S.-based Hindenburg Research has led to the unravelling of the Gautam Adani story, which celebrated the spectacular rise, in an extremely short period of time, of the wealth of a man and his business empire. Much of that wealth disappeared following a crash in the stock values that shaved more than $100 billion off the market capitalisation of seven publicly listed Adani group companies. That led to the withdrawal, post-launch, of a $2.5 billion share issue and, possibly, of rounds of borrowing. Meteoric Rise, Capital-Intensive Projects Following those events, attention has shifted to what this episode…

If we ignore the hype that accompanies and follows the presentation of the Centre’s annual budget, there are principally two strands in it that have attracted attention. The first is the claim of the finance minister Nirmala Sitharaman that in a growth-accelerating intervention, the step-up in capital or investment expenditure during the second term of the Modi-led government is to be sustained with a further 37 price from the Rs. 7.3 lakh crore revised estimate for 2022-23 to Rs. 10 lakh crore in 2023-24. The second is the evidence that budgetary allocations point to significant reductions or scaling down of…

The semi-annual Financial Stability Report from India’s central bank signals that India’s banking system, especially the public banking system, has put behind it the stress from disturbingly high non-performing or bad loans on its books. The story as officially told is now familiar. As a result of “aggressive lending practices” and “wilful default/loan frauds/corruption in some cases”, stressed assets in the banking system rose sharply along with a rise in aggregate gross advances of public sector banks (PSBs)from Rs. 16,98,570 crore at the end of March 2008 to Rs. 45,90,570 crore at the end of financial year 2014. Since this…

With the deficit on India’s trade in goods and services widening, from $19 billion in the quarter ending September 2021 to $49 billion in the corresponding quarter of 2022, net inward transfers recorded in the current account have become crucial to rein in the current account deficit. Personal income transfers provided India with a buffer of $25 billion during July-September 2022, of which $16 billion were on account of worker remittances, according to figures from the Reserve Bank of India (RBI). India is the world’s largest recipient of remittances (far ahead of second-placed Mexico), according to the World Bank’s Migration…