When the inflation is on a rise world over, the largest economy in the world is looking the face of recession and the food prices are rising on global level its all natural for a specialists like Amartya Kumar Sen to put forward their arguments on all this. And as judgmental creatures we are, we end up criticizing present rather than propose a future in form of a action.
For introduction, Amartya Kumar Sen is an Indian economist, philosopher, and a winner of the Bank of Sweden Prize in Economic Sciences (Nobel Prize for Economics) in 1998, "for his contributions to welfare economics" for his work on famine, human development theory, welfare economics, the underlying mechanisms of poverty, and political liberalism.
In his blog post he has explained the food mismatch citing example of a country with a lot of poor people who suddenly experience fast economic expansion, but only half of the people share in the new prosperity. The favored ones spend a lot of their new income on food, and unless supply expands very quickly, prices shoot up. The rest of the poor now face higher food prices but no greater income, and begin to starve.
He also takes a dig on the use of ethanol as fuel. Produced mainly from corn in US, it routes the food production for different consumption, and its the poor who has to pay for it. Logic is simple, countries like India, China, Vietnam and Argentina are experiencing rapid development; people move up to better and processed food; the food consumption per person rises and the food export which was coming from these nations earlier lessens or stops. The inflation rises and food prices shoot up, the poor who already were surviving on cheap and small food quantity are forced to hunger. The world’s poor are themselves divided between those who are experiencing high growth and those who are not; and the number of the latter is quite high.
This reminds me of a small game every new batch in FMS, Delhi (India) was made to play in Induction session by the faculty of organizational behavior. Crux of the game was that you may register a high growth or spikes of it in short run on your own. But to maintain growing in the long run, you need the co operation from all others. Same holds true for global economy and with more and more countries on development phase, it is going to hold more and more true for the world economy.
For introduction, Amartya Kumar Sen is an Indian economist, philosopher, and a winner of the Bank of Sweden Prize in Economic Sciences (Nobel Prize for Economics) in 1998, "for his contributions to welfare economics" for his work on famine, human development theory, welfare economics, the underlying mechanisms of poverty, and political liberalism.
In his blog post he has explained the food mismatch citing example of a country with a lot of poor people who suddenly experience fast economic expansion, but only half of the people share in the new prosperity. The favored ones spend a lot of their new income on food, and unless supply expands very quickly, prices shoot up. The rest of the poor now face higher food prices but no greater income, and begin to starve.
He also takes a dig on the use of ethanol as fuel. Produced mainly from corn in US, it routes the food production for different consumption, and its the poor who has to pay for it. Logic is simple, countries like India, China, Vietnam and Argentina are experiencing rapid development; people move up to better and processed food; the food consumption per person rises and the food export which was coming from these nations earlier lessens or stops. The inflation rises and food prices shoot up, the poor who already were surviving on cheap and small food quantity are forced to hunger. The world’s poor are themselves divided between those who are experiencing high growth and those who are not; and the number of the latter is quite high.
This reminds me of a small game every new batch in FMS, Delhi (India) was made to play in Induction session by the faculty of organizational behavior. Crux of the game was that you may register a high growth or spikes of it in short run on your own. But to maintain growing in the long run, you need the co operation from all others. Same holds true for global economy and with more and more countries on development phase, it is going to hold more and more true for the world economy.
Putin has stepped down as president and stepped up as prime minister now. The Russian economy has gone through a lot of changes and the baton has been passed now. The steel man Vladimir Putin’s administration appears to have left Russia’s economy in a rosy state. Economic growth averaged 7.2% between 1999 and 2008. Foreign reserves stand at 30% of GDP and are the third highest in the world in absolute terms. The stock market has increased twenty-fold. The middle class is buying foreign cars, vacationing abroad, and dining at sushi restaurants, and surveys show that life satisfaction has increased across the board.
As project syndicate reports, Russia’s economic success is partly attributable to high oil and commodities prices. But oil is not the whole story. The tax reform of 2001 improved incentives to work and decreased tax evasion by introducing a flat 13% income tax – one of the world’s lowest. Liberalizing the procedures for corporate registration and licensing, and limiting inspections, improved the climate for small businesses and entrepreneurs. Conservative macroeconomic policy and financial-sector reform lowered interest rates and fueled an investment and consumption boom. Real wages tripled, and poverty and unemployment fell by half.
Source: Wikipedia
Inequality and corruption are going to be the main obstacles now. Despite Russia’s recent economic achievements, both remain at alarmingly high levels. According to Forbes magazine, there were 87 Russian billionaires, with combined wealth of $471 billion, a figure second only to the United States. Yet their net worth accounts for roughly 30% of Russia’s GDP, whereas America’s 469 billionaires are worth only about 10% of US GDP.
Source: WikipediaInequality and corruption are going to be the main obstacles now. Despite Russia’s recent economic achievements, both remain at alarmingly high levels. According to Forbes magazine, there were 87 Russian billionaires, with combined wealth of $471 billion, a figure second only to the United States. Yet their net worth accounts for roughly 30% of Russia’s GDP, whereas America’s 469 billionaires are worth only about 10% of US GDP.
More importantly, inequality of opportunity is very high as well. According to a recent survey, a majority of Russians believes that acquiring wealth requires criminal activity and political connections. Only 20% believe that talent matters. These beliefs are self-fulfilling prophecies.
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