How Russian access to Pakistan's Gwadar port and CPEC will weigh against the Russo-Indian Relations

[MultaniGuy]

We dont even need the whole of Afghanistan, just the Wakhan corridor will do.

I hope Afghanistan and Pakistan can unite one day.

There is so much in common between the two nations.

 

[NakedLunch]

I hope Afghanistan and Pakistan can unite one day.

There is so much in common between the two nations.

No country has managed to conquer and control Afghanistan. It would have to be a decision made by the populations through a referendum. But I doubt that can even happen. Afghans actually hate our guts.

 

[MultaniGuy]

No country has managed to conquer and control Afghanistan. It would have to be a decision made by the populations through a referendum. But I doubt that can even happen. Afghans actually hate our guts.

There are many Afghanistanis who are pro Pakistan.

 

[scionofPakwattan]

And, now Russia is getting all the "warm waters" with a "welcome note". I have to admit Putin is a master strategist!! He's shaking all the major capitals in the world...

They say, anything is possible if you ask nicely. Back in 80s they were trying to impose themselves on Pakistan. now, it benefits Pak and Russia to be trading as such.

 

[MultaniGuy]

They say, anything is possible if you ask nicely. Back in 80s they were trying to impose themselves on Pakistan. now, it benefits Pak and Russia to be trading as such.

I hope Russia and Pakistan becomes close.

 

[scionofPakwattan]

I hope Russia and Pakistan becomes close.

They are bound to, its becoming inevitable. But they cant become full on Allies, theres loads and loads of obstacles to that currently

 

[MultaniGuy]

They are bound to, its becoming inevitable. But they cant become full on Allies, theres loads and loads of obstacles to that currently

Agreed hopefully Pakistan and Russia can become close.
Perhaps Pakistan and Russia can become allies.

 

[scionofPakwattan]

Agreed hopefully Pakistan and Russia can become close.
Perhaps Pakistan and Russia can become allies.

Alot of other pieces in the puzzle have to fall into place before that can happen. Including some of Pakistan's allies changing their direction towards Russia. Including Saudi Arabia and Turkey.

 

[Ahmed shahjahan]

what are you trying to say.. what is your weed.

first thing first, stop copying 007, you have nothing new to tell us, did you not see or read what is been going on in US, are you so out of touch or just like to spin the matters, typical Indian.

 

[illusion8]

How Russian access to Gwadar, or what they call warm waters will weigh against the Russo-Indian Relations?
For example, how much political and financial pressure can India put on Russia to counter its arms sales to Pakistan, without jeopardizing the latter's vital longings to get access to the warm waters of the Arabian Sea?
Weighing both ends, Russia will try to find some equilibrium in its relations with India and Pakistan..Will the billions of Russian arms sales to India and their "Strategic" partnership outweigh the potential of more billions to be made through trade from Gwadar and CPEC?
Pakistan holds this politico-economic vital and important card to play with Russia and against Indian interventions in arms sales among other benefits..

I doubt it will make any difference.

Lets go by data.

American economy is worth 10's of trillions
China's economy is worth trillions
EU's economy is worth trillions
Japan / south Korean economy is worth trillions
India / Brazil / Russia are worth trillions

China and India are slated to be (forecast) to be number 1 and number 2 economies in a couple of decades.

All of the above have happened without the magical CPEC and it's worth. The world economy will go on with or without"CPEC" as its destined to.

 

[The SC]

I doubt it will make any difference.

Lets go by data.

American economy is worth 10's of trillions
China's economy is worth trillions
EU's economy is worth trillions
Japan / south Korean economy is worth trillions
India / Brazil / Russia are worth trillions

China and India are slated to be (forecast) to be number 1 and number 2 economies in a couple of decades.

All of the above have happened without the magical CPEC and it's worth. The world economy will go on with or without"CPEC" as its destined to.

CPEC is new, how do you know its effects?
Good for them all, but Pakistan will be worth trillions too in the foreseeable future..
Don't try to put India in the big league of US and China, not now and not in the foreseeable future..

 

[The SC]

India already in big league * economy * .... and you are not..

Problems Facing Indian Economy


GDP per capita (in 1990 Geary-Khamis dollars) (data range 1950-2003)

Since 1991, the Indian economy has pursued free market liberalisation, greater openness in trade and increase investment in infrastructure. This helped the Indian economy to achieve a rapid rate of economic growth and economic development. However, the economy still faces various problems and challenges.

1. Inflation

Fuelled by rising wages, property prices and food prices inflation in India is an increasing problem. Inflation is currently between 8-10%. This inflation has been a problem despite periods of economic slowdown. For example in late 2013, Indian inflation reached 11%, despite growth falling to 4.8%. This suggests that inflation is not just due to excess demand, but is also related to cost push inflationary factors. For example, supply constraints in agriculture have caused rising food prices. This causes inflation and is also a major factor reducing living standards of the poor who are sensitive to food prices. The Central Bank of India have made reducing inflation a top priority and have been willing to raise interest rates, but cost push inflation is more difficult to solve and it may cause a fall in growth as they try to reduce inflation.

2. Poor educational standards

Although India has benefited from a high % of English speakers. (important for call centre industry) there is still high levels of illiteracy amongst the population. It is worse in rural areas and amongst women. Over 50% of Indian women are illiterate. This limits economic development and a more skilled workforce.

3. Poor Infrastructure

Many Indians lack basic amenities lack access to running water. Indian public services are creaking under the strain of bureaucracy and inefficiency. Over 40% of Indian fruit rots before it reaches the market; this is one example of the supply constraints and inefficiency’s facing the Indian economy.

4. Balance of Payments deterioration.

Although India has built up large amounts of foreign currency reserves the high rates of economic growth have been at the cost of a persistent current account deficit. In late 2012, the current account reached a peak of 6% of GDP. Since then there has been an improvement in the current account. But, the Indian economy has seen imports growth faster than exports. This means India needs to attract capital flows to finance the deficit. Also, the large deficit caused the depreciation in the Rupee between 2012 and 2014. Whilst the deficit remains, there is always the fear of a further devaluation in the Rupee. There is a need to rebalance the economy and improve competitiveness of exports.

5. High levels of private debt

Buoyed by a property boom the amount of lending in India has grown by 30% in the past year. However there are concerns about the risk of such loans. If they are dependent on rising property prices it could be problematic. Furthermore if inflation increases further it may force the RBI to increase interest rates. If interest rates rise substantially it will leave those indebted facing rising interest payments and potentially reducing consumer spending in the future

6. Inequality has risen rather than decreased.

It is hoped that economic growth would help drag the Indian poor above the poverty line. However so far economic growth has been highly uneven benefiting the skilled and wealthy disproportionately. Many of India’s rural poor are yet to receive any tangible benefit from the India’s economic growth. More than 78 million homes do not have electricity. 33% (268million) of the population live on less than $1 per day. Furthermore with the spread of television in Indian villages the poor are increasingly aware of the disparity between rich and poor. (3)

7. Large Budget Deficit

India has one of the largest budget deficits in the developing world. Excluding subsidies it amounts to nearly 8% of GDP. Although it is fallen a little in the past year. It still allows little scope for increasing investment in public services like health and education.

8. Rigid labour Laws

As an example Firms employing more than 100 people cannot fire workers without government permission. The effect of this is to discourage firms from expanding to over 100 people. It also discourages foreign investment. Trades Unions have an important political power base and governments often shy away from tackling potentially politically sensitive labour laws.

9. Inefficient agriculture

Agriculture produces 17.4% of economic output but, over 51% of the work force are employed in agriculture. This is the most inefficient sector of the economy and reform has proved slow.

10. Slowdown in growth

2013/14 has seen a slowdown in the rate of economic growth to 4-5%. Real GDP per capita growth is even lower. This is a cause for concern as India needs a high growth rate to see rising living standards, lower unemployment and encouraging investment. India has fallen behind China, which is a comparable developing economy

See also:

• Indian Economy 2014
• Strengths of Indian Economy

References

(1) Inflation in India at Economist
(2) Indian Overheats
(3) Inequality in Indian Economy
(4) India and its segregated growth by Alex M Thomas

http://www.economicshelp.org/india/problems-indian-economy/

 

[Nilgiri]

Problems Facing Indian Economy


GDP per capita (in 1990 Geary-Khamis dollars) (data range 1950-2003)

Since 1991, the Indian economy has pursued free market liberalisation, greater openness in trade and increase investment in infrastructure. This helped the Indian economy to achieve a rapid rate of economic growth and economic development. However, the economy still faces various problems and challenges.

1. Inflation

Fuelled by rising wages, property prices and food prices inflation in India is an increasing problem. Inflation is currently between 8-10%. This inflation has been a problem despite periods of economic slowdown. For example in late 2013, Indian inflation reached 11%, despite growth falling to 4.8%. This suggests that inflation is not just due to excess demand, but is also related to cost push inflationary factors. For example, supply constraints in agriculture have caused rising food prices. This causes inflation and is also a major factor reducing living standards of the poor who are sensitive to food prices. The Central Bank of India have made reducing inflation a top priority and have been willing to raise interest rates, but cost push inflation is more difficult to solve and it may cause a fall in growth as they try to reduce inflation.

2. Poor educational standards

Although India has benefited from a high % of English speakers. (important for call centre industry) there is still high levels of illiteracy amongst the population. It is worse in rural areas and amongst women. Over 50% of Indian women are illiterate. This limits economic development and a more skilled workforce.

3. Poor Infrastructure

Many Indians lack basic amenities lack access to running water. Indian public services are creaking under the strain of bureaucracy and inefficiency. Over 40% of Indian fruit rots before it reaches the market; this is one example of the supply constraints and inefficiency’s facing the Indian economy.

4. Balance of Payments deterioration.

Although India has built up large amounts of foreign currency reserves the high rates of economic growth have been at the cost of a persistent current account deficit. In late 2012, the current account reached a peak of 6% of GDP. Since then there has been an improvement in the current account. But, the Indian economy has seen imports growth faster than exports. This means India needs to attract capital flows to finance the deficit. Also, the large deficit caused the depreciation in the Rupee between 2012 and 2014. Whilst the deficit remains, there is always the fear of a further devaluation in the Rupee. There is a need to rebalance the economy and improve competitiveness of exports.

5. High levels of private debt

Buoyed by a property boom the amount of lending in India has grown by 30% in the past year. However there are concerns about the risk of such loans. If they are dependent on rising property prices it could be problematic. Furthermore if inflation increases further it may force the RBI to increase interest rates. If interest rates rise substantially it will leave those indebted facing rising interest payments and potentially reducing consumer spending in the future

6. Inequality has risen rather than decreased.

It is hoped that economic growth would help drag the Indian poor above the poverty line. However so far economic growth has been highly uneven benefiting the skilled and wealthy disproportionately. Many of India’s rural poor are yet to receive any tangible benefit from the India’s economic growth. More than 78 million homes do not have electricity. 33% (268million) of the population live on less than $1 per day. Furthermore with the spread of television in Indian villages the poor are increasingly aware of the disparity between rich and poor. (3)

7. Large Budget Deficit

India has one of the largest budget deficits in the developing world. Excluding subsidies it amounts to nearly 8% of GDP. Although it is fallen a little in the past year. It still allows little scope for increasing investment in public services like health and education.

8. Rigid labour Laws

As an example Firms employing more than 100 people cannot fire workers without government permission. The effect of this is to discourage firms from expanding to over 100 people. It also discourages foreign investment. Trades Unions have an important political power base and governments often shy away from tackling potentially politically sensitive labour laws.

9. Inefficient agriculture

Agriculture produces 17.4% of economic output but, over 51% of the work force are employed in agriculture. This is the most inefficient sector of the economy and reform has proved slow.

10. Slowdown in growth

2013/14 has seen a slowdown in the rate of economic growth to 4-5%. Real GDP per capita growth is even lower. This is a cause for concern as India needs a high growth rate to see rising living standards, lower unemployment and encouraging investment. India has fallen behind China, which is a comparable developing economy

See also:

• Indian Economy 2014
• Strengths of Indian Economy

References

(1) Inflation in India at Economist
(2) Indian Overheats
(3) Inequality in Indian Economy
(4) India and its segregated growth by Alex M Thomas

http://www.economicshelp.org/india/problems-indian-economy/

Lets have a look at something more recent and relevant:

http://www.imf.org/en/News/Articles...strong-growth-persists-despite-new-challenges

For India, Strong Growth Persists Despite New Challenges
February 22, 2017

• India remains one of the fastest growing emerging market economies
• Due to recent cash shortages, growth is projected to slow temporarily this fiscal year
• Maintaining the reform momentum is key to stronger growth

India’s overall outlook remains positive, although growth will slow temporarily as a result of disruptions to consumption and business activity from the recent withdrawal of high-denomination banknotes from circulation.

But the nation's expansion will pick up again as economic reforms kick in, said the IMF in its latest assessment. Growth is expected at 6.6 percent in this fiscal year and at 7.2 percent in the following year.


Speaking to IMF News, IMF mission chief for India Paul Cashin discusses these and other challenges, and also highlights the opportunities for this vibrant economy moving forward.


IMF News: The IMF just completed its annual assessment of the Indian economy. How is the economy doing?

The Indian economy is growing strongly and remains a bright spot in the global landscape. The halving of global oil prices that began in late 2014 boosted economic activity in India, further improved the external current account and fiscal positions, and helped lower inflation. In addition, continued fiscal consolidation, by reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability.

The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. In particular, the upcoming implementation of the goods and services tax, which has been in the making for over a decade, will help raise India’s medium-term growth to above 8 percent, as it will enhance the efficiency of production and movement of goods and services across Indian states.

Challenges remain, however, and there is little scope for complacency. A key concern for us is the health of the banking system, which is still dealing with a large amount of bad loans, and also heightened corporate vulnerabilities in several key sectors of the economy.

And, over the past few months, the economy has been hit by cash shortages, and accordingly we reduced our growth forecasts to 6.6 percent for fiscal year 2016/17 and to 7.2 percent in 2017/18.


IMF News: How is this recent “demonetization” initiative affecting the economy, and what are some of the long-term ramifications?

The initiative affected notes with a total value of about 15 trillion rupees, which amounted to 86 percent of all cash in circulation. Because payment transactions in India are primarily cash-based and electronic payments infrastructure is limited, the shortage of cash has disrupted economic activity, with smaller businesses and rural regions being particularly badly affected.

Fortunately, these effects are expected to gradually dissipate by March 2017 as cash shortages ease. It also appears that measures taken to alleviate payment disruptions, such as temporarily allowing use of old banknotes for purchases of fuel and agricultural inputs, have helped mitigate the negative impact. So we expect the slowdown to be limited and relatively short-lived and the financial system to come through unscathed. Of course, potential loan repayment risks should be monitored carefully, particularly given an already elevated level of non-performing loans.

The demonetization initiative presents an opportunity to increase the size of the formal economy and broaden financial intermediation in the longer term. It can also support a widening of the tax base, help reduce the fiscal deficit, enhance bank liquidity, and give a fillip to the government’s efforts to promote greater financial inclusion.


IMF News: How can India ensure that the fruits of its growth are shared by all?

India has made appreciable progress on several fronts. It achieved its Millennium Development Goals of halving poverty, infant and child mortality, and maternal mortality rates. Students are now staying in school longer, as evidenced by an increase in secondary school completion rates. Moreover, significant progress has been made in enhancing financial inclusion, leveraging technology to bring more of the population into the financial system.

However, progress on improving health, nutrition, and sanitation has been less encouraging, income inequality has risen, and employment growth has been sluggish. For instance, a very large share of Indian workers—more than 90 percent—remain employed in low-productivity informal sector jobs. Women’s participation in the labor force is also low at around 25 percent—the lowest among emerging markets. Further labor market reforms, at both the center and state levels, are needed to encourage better quality job creation and raise female labor force participation.

While there has been important progress, we see scope to pursue better targeting and greater efficiency of subsidy and social spending programs through greater use of the trio of Aadhaar unique beneficiary identification, direct benefit transfers, and information technology. Finally, more needs to be done to raise agricultural productivity and enhance market efficiency. This would help increase supply of high-value foods, enhance returns to farmers, and dampen food inflation pressures.


IMF News: As India’s economy becomes increasingly sophisticated, how does the government keep pace with its capacity to craft sound economic policy?

Sound economic policymaking underpinned by strong institutions is critical for sustainable growth. A recent example of a positive change in India is the implementation of flexible inflation targeting and creation of the Monetary Policy Committee, which have strengthened the credibility of monetary policy and helped maintain price stability in an increasingly complex economy.

In addition to providing policy advice, the Fund is committed to working with the Indian authorities to help build capacity for policymaking. The recently inaugurated South Asia Regional Training and Technical Assistance Center(SARTTAC) headquartered in New Delhi—which will serve Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka—is the first IMF-supported center to combine both technical assistance and training.

The center will provide training to government and public sector employees, enhance their skills and improve the quality of their policy inputs, and will also provide technical assistance to governments and public institutions. SARTTAC is expected to become the focal point for planning, coordinating, and implementing the IMF’s capacity development activities in the region on a wide range of areas, including macroeconomic and fiscal management, monetary operations, financial sector regulation and supervision, and macroeconomic statistics.

Full paper (worth looking at):

http://www.imf.org/en/Publications/...f-Report-and-Statement-by-the-Executive-44670

 

[The SC]

lol your biased hatred view.. you are posting 2014 data.. economy slowdown during that period, now we are back on track.. why yiu are changing goal posts.. India already in Big league economy.. you claimed soon pak will become trillions of dollars economy, that's fine and again you said we will never be in big league of economies. . I don't know in reality but in pdf some of you guys making trillion dollars just like that..

Juat like you made your trillion$..
I just pointed out to facts,, those facts are a long view on a long term, read the article again and see if India has managed to solve those problems and how much time is needed to do that.. unless you succeed in doing that, you are very far from your claims of being in the big league.. you sound like someone missing a whole leg pretending to be a big league football player..
Hatred and bias are spitted from your venomous mouth against Pakistan and China, I came up with facts..if you reject them blame the economists for "their hatred and bias against India"..

Lets have a look at something more recent and relevant:

http://www.imf.org/en/News/Articles...strong-growth-persists-despite-new-challenges

For India, Strong Growth Persists Despite New Challenges
February 22, 2017

• India remains one of the fastest growing emerging market economies
• Due to recent cash shortages, growth is projected to slow temporarily this fiscal year
• Maintaining the reform momentum is key to stronger growth

India’s overall outlook remains positive, although growth will slow temporarily as a result of disruptions to consumption and business activity from the recent withdrawal of high-denomination banknotes from circulation.

But the nation's expansion will pick up again as economic reforms kick in, said the IMF in its latest assessment. Growth is expected at 6.6 percent in this fiscal year and at 7.2 percent in the following year.


Speaking to IMF News, IMF mission chief for India Paul Cashin discusses these and other challenges, and also highlights the opportunities for this vibrant economy moving forward.


IMF News: The IMF just completed its annual assessment of the Indian economy. How is the economy doing?

The Indian economy is growing strongly and remains a bright spot in the global landscape. The halving of global oil prices that began in late 2014 boosted economic activity in India, further improved the external current account and fiscal positions, and helped lower inflation. In addition, continued fiscal consolidation, by reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability.

The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. In particular, the upcoming implementation of the goods and services tax, which has been in the making for over a decade, will help raise India’s medium-term growth to above 8 percent, as it will enhance the efficiency of production and movement of goods and services across Indian states.

Challenges remain, however, and there is little scope for complacency. A key concern for us is the health of the banking system, which is still dealing with a large amount of bad loans, and also heightened corporate vulnerabilities in several key sectors of the economy.

And, over the past few months, the economy has been hit by cash shortages, and accordingly we reduced our growth forecasts to 6.6 percent for fiscal year 2016/17 and to 7.2 percent in 2017/18.


IMF News: How is this recent “demonetization” initiative affecting the economy, and what are some of the long-term ramifications?

The initiative affected notes with a total value of about 15 trillion rupees, which amounted to 86 percent of all cash in circulation. Because payment transactions in India are primarily cash-based and electronic payments infrastructure is limited, the shortage of cash has disrupted economic activity, with smaller businesses and rural regions being particularly badly affected.

Fortunately, these effects are expected to gradually dissipate by March 2017 as cash shortages ease. It also appears that measures taken to alleviate payment disruptions, such as temporarily allowing use of old banknotes for purchases of fuel and agricultural inputs, have helped mitigate the negative impact. So we expect the slowdown to be limited and relatively short-lived and the financial system to come through unscathed. Of course, potential loan repayment risks should be monitored carefully, particularly given an already elevated level of non-performing loans.

The demonetization initiative presents an opportunity to increase the size of the formal economy and broaden financial intermediation in the longer term. It can also support a widening of the tax base, help reduce the fiscal deficit, enhance bank liquidity, and give a fillip to the government’s efforts to promote greater financial inclusion.


IMF News: How can India ensure that the fruits of its growth are shared by all?

India has made appreciable progress on several fronts. It achieved its Millennium Development Goals of halving poverty, infant and child mortality, and maternal mortality rates. Students are now staying in school longer, as evidenced by an increase in secondary school completion rates. Moreover, significant progress has been made in enhancing financial inclusion, leveraging technology to bring more of the population into the financial system.

However, progress on improving health, nutrition, and sanitation has been less encouraging, income inequality has risen, and employment growth has been sluggish. For instance, a very large share of Indian workers—more than 90 percent—remain employed in low-productivity informal sector jobs. Women’s participation in the labor force is also low at around 25 percent—the lowest among emerging markets. Further labor market reforms, at both the center and state levels, are needed to encourage better quality job creation and raise female labor force participation.

While there has been important progress, we see scope to pursue better targeting and greater efficiency of subsidy and social spending programs through greater use of the trio of Aadhaar unique beneficiary identification, direct benefit transfers, and information technology. Finally, more needs to be done to raise agricultural productivity and enhance market efficiency. This would help increase supply of high-value foods, enhance returns to farmers, and dampen food inflation pressures.


IMF News: As India’s economy becomes increasingly sophisticated, how does the government keep pace with its capacity to craft sound economic policy?

Sound economic policymaking underpinned by strong institutions is critical for sustainable growth. A recent example of a positive change in India is the implementation of flexible inflation targeting and creation of the Monetary Policy Committee, which have strengthened the credibility of monetary policy and helped maintain price stability in an increasingly complex economy.

In addition to providing policy advice, the Fund is committed to working with the Indian authorities to help build capacity for policymaking. The recently inaugurated South Asia Regional Training and Technical Assistance Center(SARTTAC) headquartered in New Delhi—which will serve Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka—is the first IMF-supported center to combine both technical assistance and training.

The center will provide training to government and public sector employees, enhance their skills and improve the quality of their policy inputs, and will also provide technical assistance to governments and public institutions. SARTTAC is expected to become the focal point for planning, coordinating, and implementing the IMF’s capacity development activities in the region on a wide range of areas, including macroeconomic and fiscal management, monetary operations, financial sector regulation and supervision, and macroeconomic statistics.

Full paper (worth looking at):

http://www.imf.org/en/Publications/...f-Report-and-Statement-by-the-Executive-44670

Economy alone does not put a nation in the big league players, other factors _relevant ones_ are equally important.. that was stated in the article of 2014 I have posted above..Venezuela for instance, with its biggest OIL reserves of the world won't dare pretend that it plays even at the junior level although it has trillions of dollars in oil reserves..

==============================================

India is a significant force in world trade. Corruption, underdeveloped infrastructure, and poor management of public finance continue to undermine overall development, although the economy has sustained an average annual growth rate of about 7 percent over the past five years.

Growth is not deeply rooted in policies that preserve economic freedom. Progress on market-oriented reforms has been uneven. The state maintains an extensive presence in many areas through public-sector enterprises. A restrictive and burdensome regulatory environment discourages the entrepreneurship that could provide broader private-sector growth.

http://www.heritage.org/index/country/india
They forgot to add.."but"

 

[Nilgiri]

Economy alone does not put a nation in the big league players, other factors _relevant ones_ are equally important..

The IMF report goes into all the details about Indian economy (Good, the bad and the ugly) if you read the full report.

Many of the points are salient given they address the issues from your source 2 - 3 years before....and what steps and reforms the current Indian govt has taken and which results are already happening and which ones need further looking into.

The point is Indian economy and Indian socio-economics are not stuck in 2014's problems.