India's furious economic pace is no accident 1214

The Trucker

..and the reason why he writes things which flies in the face of logic is because this is how he wants to spend his retirement days -by peeing on everybody and anybody to overcome the frustrations of a wasted life.

read up on "capital formation".

It does produce a lot of what the country wants. Internationa trade accounts for 25-30% of our GDP.

It is an ingredient -not necessarily the main ingredient. Wealth is something can be traded -it includes goods and services. Servces involve labour, goods may or may not involve labour. If you strike oil or gold -the goods extracted are of value. The labour involved may be minimal and-or result in minimal value addition.

It has land -but the water table is shrinking and the desert is expanding. The population is slowing -but not fast enough.

..and I hope you can hammer this info into his head -coz I have failed to do so. Governments can print as much money they like -it isn't going to result in greater levels of prosperity. Instead, it will trigger inflation -which is why the US Federal Reserve has "inflation targetting" as its official policy.

The ability of the country to survive or prosper depends on productivity. Whether MNC X brings in capital to employ people or whether we generate it from within -the key is being able to generate trade-able goods-services to finance our consumption.

If the Doha round doesn't come out of deadlock -we will likely have an FTA with EU for trade-able goods and services (involving movement of personnel)..

They represent captive labour-which is what you are saying above. I referred to it as slavery because of historical connotations and because the govt facilitates the creation of captive labour by way of legislation. Its not soemthing to do with market forces wherein people slog it out to earn their living or work harder in a tight job market. Its something beyond that -to taking away the civic rights of individuals so that they can be more productive to their employers.

If you get the idea and understand that your govt is actively involved in it -that is good enough for me.

Im not sure if workers there are captive.

The primary source is an unsustainable std of living. There is no fountain of wealth to enbreastle people of a particular country to live a lot better than others. Americans have one of the highest stds of living in the world. But do they produce as much as they consume? If the land provides them with lots of goodies -then why import so much and become the biggest debtor on Earth? To become compebreastive, you need both fixing monetray policy as well as accept a std of living in line with your productivity.

yeah -they are earning what they get by supplying you with goods-services. If you do not want their goods-services, just don't buy it. When people lose their jobs to overseas compebreastion -they lose the ability to buy products made overseas -and that means the exporters are actually killing the goose that lays golden eggs and should die out as a result. In contrast, referring to the latest issue of the economist -India and China are importing big time from the US creating a lot of jobs in the US.

it amounts to correcting exchange rates to reach parity. At one time, Japan and Germany had lower exchange rates vs the US and the trade imbalance forced central banks to correct exchange rates in line with PPP. Once that happened, they not only exported but also imported from the US and their exports were not as compebreastive as they were i.e they had to offer more than just cheaper goods to gain market share. You should read up on the latest issue of the economist if you hanen't which addresses all these issues and puts them in the context of widehly held economic theories.

With rising wealth, comes rising purchaisng power -triggerd in part by wage inflation. So, if you look at the chinese of Indians -their imports (sunsomption) are growing a lot faster than their imports -and it is like giving back dollars to where they came from.

depends on how productive the workers are. But I would say no country needs to be obliged to let foreigners come in. The president of Mexico, Vincente Fox -wants all illegals to be given green cards -not because it is your moral duty to share your wealth -but because all of those illegals are being employed to provide goods-services to americans and in general to contribute to the american economy. If you do not want their services nor want to give them green cards -that would probably be fine with Fox. But if you want their services but do not want them to be given due freedom or be made to go through a trial period (as Art calls indentured service) -then it amounts to perpetuating slavery.

regards -kamal