The first cases of unusual pneumonia were reported in Wuhan, a port city of 11 million people in the central Hubei province of China on December 31, 2019. China claimed to have alerted the World Health Organization (WHO) about this unknown virus which was later termed as 2019-nCoV on January 7, 2020. China announced its first death from COVID-19 on January 11. A second death in Wuhan was announced on January 17. Later, over the following days, news of confirmed cases of Coronavirus started coming from Thailand, Japan, South Korea, Vietnam, Taiwan, France, Australia, Malaysia, Singapore, Iran, Italy, the United States, the Middle East and host of other countries and regions. The WHO declared it a pandemic on March 11, 2020. Currently, the disease has spread across the world, affecting over 132,000 people in 123 countries and more than 4,900 deaths. China believes the peak of the COVID-19 outbreak in Wuhan and China has passed and they are now busy in containing the ‘imported’ cases. China expects that with $3 trillion in foreign reserves the country will not have a problem achieving a 6 percent GDP growth in 2020. Continue reading World Halted by Coronavirus. When Will Coronavirus Halt?
The theory of trickle-down economics, as propagated worldwide by economists of repute everywhere, has not worked the way it was supposed to have worked in theory. According to this theory, benefits given to the wealthy, and also the wealth created by them, trickle down to everyone else. The governments all over the world tend to provide such benefits in the form of tax cuts on businesses, high-income earners, capital gains, and dividends. Even subsidies of various kinds are also negotiated by governments to attract investments from outside to enhance the industrial activity and to boost industrialization and modernization in various priority sectors. Continue reading “Localization Of Globalization!”
The 10-member Association of Southeast Asian Nations (ASEAN) has free trade agreements with six partners namely People’s Republic of China (ACFTA), Republic of Korea (AKFTA), Japan (AJCEP), India (AIFTA) as well as Australia and New Zealand (AANZFTA). The Regional Comprehensive Economic Partnership (RCEP) was established by the 16 participating countries on the basis of existing ASEAN+1 FTAs with the spirit to strengthen economic linkages and to enhance trade and investment related activities. RCEP negotiations started in 2012 and participating countries included ASEAN members – Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, Cambodia – and six Asia-Pacific countries with which ASEAN has free trade agreements – Australia, China, India, Japan, South Korea and New Zealand. Continue reading Regional Comprehensive Economic Partnership: Dangerous For India?
The United States has decided to remove India from the list of eligible GSP countries. The reason for this move is that the Trump administration feels that India has failed to provide the United States with assurances that “it will provide equitable and reasonable access to its markets in numerous sectors.” The Generalized System of Preferences (GSP) is a U.S. trade program aimed to promote economic growth in the underdeveloped or least developed countries and also in the developing countries by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories. GSP is in existence since January 1, 1976. The scheme provided India tariff-free access to the US market. All benefits have stopped since June 5, 2019. India had been the largest beneficiary nation under the GSP and exported goods worth $6.35 billion every year. Continue reading Exclusion of India from GSP Could Be a New Beginning For Exporters
Millions of workers across the globe are deprived from the minimum wage required to live a decent life. For them, the Living Wage, a voluntary pay rate set above the statutory minimum wage, is still but a distant dream. Many employers who do not pay the Living Wage argue that they simply cannot afford to. According to them, a minimum wage destroys jobs, particularly for the young. Is their argument about greed – the quest for maximum profit from the bodies and labor of others? We are NOT talking about vulnerable persons who fall victim to traffickers, from desperation, deception, or coercion. Continue reading Fresh Thinking is Needed to Guarantee “Living Wage”
The US administration’s withdrawal of the generalized system of preferences (GSP) status for India is being discussed by all the stakeholders including exporters of ready-made garments because the US accounts for 30-35% of exports of this sector. There is no clear indication as to how much negative impact this would cause on India’s exports to the US, if at all there is going to be any effect. Around $5.6 billion worth of exports from India – covering 1,784 textiles, engineering, gems and jewellery and chemical products – will be impacted when the decision comes into force by May this year. If we look at the pattern of the decision making involved in this case by the US Department of Commerce, it is abundantly clear that the process was initiated after the US dairy and medical devices sectors lobbied against India’s so-called trade barriers affecting their exports. If the statement of the US commerce secretary, Wilbur Ross, is any indication, the final trigger could have come when India announced ‘stringent e-commerce rules’ that negatively affected two of the giant US companies – Amazon and Walmart-owned Flipkart. Continue reading GSP: Altering Preferential Status is ‘Significant’ or ‘Insignificant’?
First the ritual statement: The Textiles industry is the second most important economic activity in terms of employment generation after agriculture. It contributes 15% to the country’s total export earnings and has a 7% share in the total industrial output. Gujarat is the largest producer of Manmade Fibre, Synthetic Fabric and Denim. The state contributes about 12% to the country’s total textile exports. Gujarat contributes 35% to India’s total cotton production and 50% to the total manmade fibre production. Gujarat accounts for around 30% of India’s fabric production coming from the mill sector. Gujarat, with more than 30 sanctioned textile parks, ranks second highest among all the states. Moreover, Gujarat accounts for about 40% of the total MMF fabric production and about 25% of the country’s total output of technical textiles. In view of these facts, the government – both at central and state levels – must consider measures to support the industry which provides livelihood to millions of people.
The World Economic Forum Annual Meeting is being held from 22—25 January 2019 in Davos-Klosters, Switzerland. The 2019 event will focus on the theme, ‘Globalization 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution’. The stated mission of the World Economic Forum is to improve the state of the world. I came across a statement of Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, in which he says a “re-moralization” of globalization is needed. He said globalization produced many “winners” over the last generation or so. “But now we have to look after the losers, after those who have been left behind.” The intensity of this revealing statement drove me to write this piece and its title in the form of a question is equally revealing. This question needs to be earnestly answered if any meaningful dialogue has to happen for the required course correction.
For East African countries, duty-free incentives for exports to the US under the African Growth and Opportunity Act (AGOA) provide an immense opportunity to integrate the currently fragmented cotton-textile-apparel value chain and bring remarkable trade and economic growth to the region. The existing value chain is underdeveloped and incomplete despite the fact that the region has a potentially growing cotton sector and a vibrant export-oriented apparel industry. The sector has largely remained underdeveloped. It is reported that seventy percent of cotton produced in the region is exported, while export-oriented apparel factories in East Africa have to rely on imports instead of local supplies. Key textile inputs, accessories, and machine parts also have to be imported. This has resulted in higher costs, long delivery times, outdated technology, shortage of skilled manpower, and overall inefficiency in the sector which is characterised by the high-volume, low-margin market segment. Within the East African region, Kenya and Ethiopia are believed to be the top sourcing destinations of greatest interest to global buyers. Hence, they have the highest potential to achieve regional integration of the cotton textile apparel value chain. Kenya and Ethiopia have a rapidly growing garment sector with companies focussed on exporting to the US.
In good old days, Direct mail used to be a tool to generate sales, and now it’s moving customers from their desk top or mobile into stores. Stores remain a key part of the customer experience. Even now, consumers are more comfortable shopping clothes in stores and they can perhaps motivate Amazon to open up its own fashion apparel stores, featuring Amazon private labels. Or, Amazon might just buy an already existing chain of retail stores. The journey from Brick-and-mortar —-> Online —-> Online + brick-and-mortar…. Continue reading Time to shift into the reverse gear?