Tuesday, March 19, 2013

Prof. Pranab Bardhan delivers Exim Bank’s Commencement Day Lecture

Prof. Pranab Bardhan delivers Exim Bank’s 

Commencement Day Lecture

Mumbai 18 March, 2013 (Tabassum Malik) – Pranab Bardhan, professor of Graduate School at the Department of Economics at the University of California, Berkeley has done several studies in the areas rural institutions in poor countries and international trade, besides development economics among others. Bardhan was in Mumbai to deliver Exim Bank's commencement day annual lecture. At the Lecture, T.C.A. Ranganathan, Chairman and Managing Director, Exim Bank of India, said that Exim Bank’s Annual Lecture series, instituted in 1986 to mark the Bank’s Commencement Day, has earned recognition as an important milestone in contributing to the debate and discussions on contemporary trade and development issues impacting global economy. Dr. Urjit. R. Patel, Deputy Governor, Reserve Bank of India presided over the Lecture. In his distinguished teaching career since 1960s, Professor Bardhan also held a number of important professional positions. He has been the Chief Editor, Journal of Development Economics; Associate Editor, Journal of Economic Perspectives; Associate Editor, International Economic Review; and a member on the Boards of several reputed journal which include the American Economic Review; Studies in Comparative International Development; Environment and Development Economics; Social Justice Research; and Indian Economic Review.
Prof. Pranab highlighted the points on how trade affects the productivity and quality of the product within the country. He also explained the effects of trade policy on Indian development, particularly on manufacturing development. Talking about the current account deficit (CAD), he said current account deficit is a big deficit in India. According to him, it is an issue of larger investments. CAD is the difference between savings and investments. Populism is short term, something that will make gains for you in elections tomorrow or pacify some sections. But it is the long-term investment that is suffering. Peculiarly this is the exact counterpart of China. China's problem is over-investment. India's problem is under-investment. CAD is a symptom of larger problem of underinvestment.
Putting some lights on the foreign trade or exports, he explained how it can help address current account deficit. He said, of course, that goes without saying that we need to be able to export more. That will be related to what we do with infrastructure. Look at our ports. Our ports compared to many Asian ports are in a much worse condition. While the turnaround time of ships in Singapore is a few hours, it is a few weeks sometimes in Mumbai and at many of our big ports. Again the issue comes back to investments. Investments in electricity, ports, and roads are very important for trade. In a sense, I think some states have done better than others in infrastructure and they have done better in trade. Discussing on export competitiveness, he said it is very important. Because of the ports problem, our costs are too high.

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