China commends India’s GDP growth; says keen to invest more

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China has complimented India for “doing a good job” in maintaining an impressive growth rate despite a global slowdown and is keen on working together to push for reforms in the international financial system to offset the inherent weaknesses.

Stating that his country was keen to ramp up investments in India, Chinese Foreign Minister Wang Yi said the two major emerging economies can contribute significantly in helping the world economy by keeping up their growth momentum.

“First of all, we both need to grow our own national economies. On this front, we want to commend India for doing a good job in promoting economic growth,” said Wang.

Wang, who was here to attend Foreign Ministers’ meeting of RIC (Russia, India, China) grouping, further said reform of global financial system is key to protect the interest of developing countries and for recovery of the world economy.

“We need to join hands in playing a positive role in improving the global economic and financial governance because that will help protect the interests of the developing countries. It will also help the world economy to embark on a path of strong recovery,” Wang said.

He said China was “optimistic” about the prospect of deeper relationship between the two countries.

“Of course, we will be happy to invest more in India. There is no doubt about it,” he added.

After witnessing nearly three decades of close to double-digit growth, China has seen a decline in its growth rate, making room for India to replace it as the fastest-growing major economy of the world.

However, Chinese economy remains much bigger than that of India in terms of the overall size.

China clocked 6.9% growth in 2015 when India is estimated to have grown by 7.3%. The IMF has projected Indian economy to grow at 7.5% in 2016 and 2017.

The Chinese Foreign Minister also said his government was “looking forward” to President Pranab Mukherjee’s upcoming visit to China.

IMF knowledge sharing center to come up in India

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In a first for Asia, the International Monetary Fund (IMF) will set up a knowledge-sharing centre in India, to provide technical support and assistance here and to five other South Asian nations. Their team will extend expertise in core macroeconomic and financial management areas, said an unnamed government source. An agreement is likely to be signed here on Saturday by IMF Managing Director Christine Lagarde with Prime Minister Narendra Modi.

The new IMF centre, being set up amid global economic uncertainty, will provide assistance to India, Nepal, Bangladesh, Sri Lanka, Pakistan and Bhutan. Since the IMF team will be based out of the region, it will ensure better understanding of regional concerns, including trade, agriculture, climate change, facilitating a reform process and support to regional integration. The knowledge centre will come up in the wake of IMF announcing implementation of its long-pending quota reform, giving more voting rights to emerging economies.

With these changes, to be effected in the coming days, India’s quota in the IMF would rise to 2.7 per cent from the existing 2.44 per cent. Also, the voting share of India would increase to 2.6 per cent from 2.34 per cent. For the first time, four emerging market (EM) countries of the Brics bloc — Brazil, China, India and Russia — will be among the 10 largest members of IMF.

Two new multilateral agencies are also being set up — a New Development Bank of the Brics countries and an Asian Infrastructure Investment Bank.

An Asian economic crisis did occur in the late 1990s but from the Southeast Asian ‘tigers’ of that time. This time, one could emanate from China or another large economy from the EMs. According to the Economic Survey of 2015-16, if this kind of crisis does emerge, it would be very different from those of earlier decades. Since the 1980s, it said external financial crises have followed one of three basic forms — Latin American, Asian or global models.

In a Latin American debt crisis, governments went on a spending binge, financed by foreign borrowing (of recycled petrodollars) while pegging their exchange rates. In the Asian one of the late 1990s, the transmission mechanism was similar — overheating and unsustainable external positions under fixed exchange rates — but the instigating impulse was private borrowing rather than governnment borrowing.

The global one of 2008, with America as its epicentre, was unique in that it involved a systemically important country and originated in doubts about its financial system.

If a crisis occurs in China or another large EM, it is more likely to resemble events of the 1930s, when the UK and then the US went off the gold standard, triggering a series of devaluations by other countries and leading to a collapse of global economic activity.

If such a crisis hits India, it will require fresh prescriptions and it is here that the IMF centre would be of help, a source said.

Source: http://www.business-standard.com/article/economy-policy/imf-knowledge-sharing-centre-to-come-up-in-india-116030901112_1.html

Russia eyes trillion roubles from privatisation in 2016: Anton Siluanov, Finance Minister

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Anton Siluanov, Finance Minister, RussiaRussia aims to raise 1 trillion roubles ($13.53 billion) from privatisation next year, Finance Minister Anton Siluanov said in an interview aired on Thursday, signalling a major acceleration of plans to sell state assets.

These plans, ambitious on paper, have largely ground to a halt over the last three years against the background of poor stock market conditions, exacerbated by a plunge in oil prices and Western sanctions linked to the Ukraine conflict.

However, the same negative economic developments also mean that the government is increasingly strapped for cash, giving it an incentive to speed up privatisation as an alternative to raising taxes, cutting spending or exhausting fiscal reserves.

“Next year we will seriously change our approach to privatisation,” Siluanov said in the interview on Rossiya-24 television. “The Russian government is preparing proposals to sell stakes in large companies.”

He added that “in the first instance” the state oil firm Rosneft was being prepared for privatisation. Bashneft , a smaller oil company that was renationalised last year, is also under consideration.

Plans to sell a 19.5 per cent stake in Rosneft were first announced in 2013 and approved by the government a year ago, but progress has been minimal. Rosneft is presently 69.5 per cent state-owned.

While the finance ministry is eager to accelerate privatisation to boost state revenues, opponents – among them Rosneft’s CEO Igor Sechin – have repeatedly argued that privatisation should be delayed until stock prices are significantly higher.

Source:  http://economictimes.indiatimes.com/articleshow/50394780.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

PM Narendra Modi world’s 9th most powerful person in Forbes list. Putin on the Top.

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Prime Minister Narendra Modi has been ranked as the world’s ninth most powerful person by Forbes magazine in a 2015 list which is topped by Russian President Vladimir Putin.Modi was placed 14th in the 2014 Forbes list of world’s powerful people.

Forbes while releasing the list today at the same time said governing 1.2 billion people in India requires more than “shaking hands” and that Modi must pass his party BJP’s reform agenda and keep “fractious opposition” under control.

German Chancellor Angela Merkel is at the second spot followed by US President Barack Obama (third) and Pope Francis (fourth) and Chinese President Xi Jinping (fifth).

Apart from Modi who is at the ninth position, others in the top ten are Microsoft Founder Bill Gates at the sixth place, US Federal Reserve Chairperson Janet Yellen (7), UK Prime Minister David Cameron (8) and Google’s Larry Page(10)

About Modi, the magazine said that India’s “populist” Prime Minister presided over 7.4 per cent GDP growth in his first year in office, and “raised his profile” as a global leader during official visits with Barack Obama and Xi Jinping.

“A barnstorming tour of Silicon Valley reinforced his nation’s massive importance in tech. But governing 1.2 billion people requires more than shaking hands: Now Modi must pass his party’s reform agenda and keep fractious opposition under control,” it said.

To compile the list of world’s most powerful people, the magazine said it considered hundreds of candidates from various walks of life all around the globe, and measured their power along four dimensions. They are whether the candidate has power over lots of people, financial resources controlled by each person, whether the candidate is powerful in multiple spheres and whether the candidates actively used their power.

The only other Indian in the most powerful people’s list is Reliance Industries Chairman Mukesh Ambani who is ranked at the 36th position.

Among Indian-origin people, steel tycoon Lakshmi Mittal is at the 55th spot while Microsoft CEO Satya Nadella is ranked 61st.

About Putin, the magazine said he “continues to prove he’s one of the few men in the world powerful enough to do what he wants — and get away with it”.

“International sanctions set in place after he seized Crimea and waged war-by-proxy in the Ukraine have kneecapped the Ruble and driven Russia into deepening recession, but haven’t hurt Putin one bit: In June his approval ratings reached an all-time high of 89 per cent,” it noted.

The magazine said that German Chancellor Angela Merkel continues her reign as the most powerful woman on the planet for 10 years running.

About Obama, Forbes said there is no doubt that the US remains the world’s greatest economic, cultural, diplomatic, technological and military power.

“But as Obama enters the final year of his presidency, it’s clear his influence is shrinking, and it’s a bigger struggle than ever to get things done.

“At home, his approval ratings are perpetually stuck under 50 per cent; abroad, he’s outshined by Angela Merkel in Europe, and outmaneuvered by Putin in the Middle East,” it added.

Source: http://economictimes.indiatimes.com/articleshow/49663215.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst