India’s Economy: Stamina Is The Name Of The Game


by Laura Papi and Rahul Anand*

So far 2013 has been a breath of fresh air in terms of economic news: financial markets have rallied and economic indicators have started to surprise on the upside. In India, the rupee has strengthened and the Bombay Stock Exchange index (Sensex) crossed the 20,000 mark for the first time in two years.  Industrial production has started picking up.

So is India’s growth about to go back to 8-9 percent? The short answer is no. But we need to look back to understand why India’s growth has decelerated to a decade low and why the slump, which has hit investment particularly hard, has persisted for over a year. As structural problems are at the root of the slowdown, so structural reforms must be at the core of the solution.

Continue reading

Subsidies—Love Them or Hate Them, It’s Better to Target Them


By Masood Ahmed

(Version in عربي)

For decades, countries in the Middle East and North Africa have relied heavily on food and fuel price subsidies as a form of social protection. And, understandably, governments have recently raised subsidies in response to hikes in global commodity prices and regional political developments.

Like many things, there may be a time and a place for using subsidies.But, they need to be better targeted. And, often, there will be better alternatives. Alternatives that do a better job of protecting the poor. Continue reading

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