ECONOMIC SCENE

Large countries must focus on internal Mkt: Unctad

The United Nations' Conference on Trade and Development (UNCTAD) Report 2002 has said that export-led growth is not feasible for all developing countries. Large countries like India and China must pay more attention to growing their own internal markets. 

Commodity exporters have been facing sluggish growth in demand. But even those economies which export technology or skill-intensive products have been hit. Growth of manufacturing value added (MVA) has consistently lagged export volumes in their case. 

TDR `02 says there no longer seems to be a positive link between export-growth and income-growth. Thus, developing economies have been feeling short-changed after their attempts to diversify; growth of earnings from exports has simply not kept pace.

In short, it is increasingly doubtful about just how much developing economies can expect from increased participation in globalisation and free-trade networks. 

One recommendation is that developing economies should take part in international value-adding chains. But it also cautions that "their share in value added is determined by the cost of the least scarce resource and weakest factor, unskilled labour".

Gains to exporters can be highly unequal in the case of arrangements that are "skewed in favour of" transnational companies (TNCs). TDR 02 says that it no longers seems that all developing economies should expect to gain from their participation in global trade. 

The difficulty lies in the combination of crowded markets for labour intensive goods, weak growth, unemployment and OECD protectionism. What might be good for a single exporter may be anything but if all try to export similar items all together.

Thus, another recommendation is that the larger developing countries should stimulate demand internally. 

They must allow access to their markets to smaller ones in their vicinity, while at the same time targeting OECD markets and ascending the value chain. 

Tirupur exporters to set up Rs.200 cr apparel park

Exporters of Tirupur are setting up Netaji Apparel Park of global standards in the small knitwear town to attract international buyers. 

The 200 crore project would house around 70 top units engaged mainly in knitting activities. Apart from the state and central governments' financial support, each exporter seeking a place may have to contribute atleast Rs.1 crore in the 40,000 sq. ft. built area. 

Common facilities, buyers lounge, business centre and captive power generation plant will be included. Textile processing facility would not be allowed within the complex. The GoI has also cleared the setting up of similar apparel parks in Surat and Ghaziabad.

Since Tirupur has been recognised as a "Town of export excellence (hosiery)", it'll receive priority towards critical infrastructural gaps from the Central pool of assistance. In Tirupur, private entrepreneurs have pooled in resources for providing facilities par excellence in a small town to serve larger interests of the society. The Tirupur water project was first mooted a decade back and a special purpose vehicle NTADCL formed with exporters pooling in a total of Rs.10 crore. 

$ 315m World Bank loan

The World Bank on May 06, 2002 signed agreements for providing $315 million in loan for two projects in India aimed at improving the transport system in Mizoram and Kerala.

From 14%, Developing Nations' Export growth down to less than 1% : UNCTAD

The sharp decline in the growth of world trade to 1.3 percent in 2001 from 3.8 percent in 2000 has pushed down the export growth of developing countries to less than 1 percent from 14 percent in this period, revealed United Nation Commission for Trade and Development (UNCTAD) Report, 2002.

The sharp slowdown in the world trade growth led to low levels of capital flows to the Third World countries, decline in credit for financing their exports and fall in the global commodity prices after the September 11 terrorist strikes on the US. 

The report has opined that improved market access could give a boost to economic activity in the developing countries and the challenge before them is to make the multilateral trading system more development-friendly. 

The outcome will be judged by the extent to which the developing countries achieve greater market access without their policy options being unduly restricted and in the interregnum greater use of regional trade and financing mechanisms may provide some relief from external constraints and protect against financial instability.

The global slowdown has adversely affected the Information Technology sector in Asia consisting of semi-conductors and consumer electronics. Despite the optimism that the downturn in the developed economies outside Japan would be reversed in early 2002, growth in the volume of world trade is expected to recover to only about 2 percent in 2002 from 1 percent in 2001, going by the predictions made by the International Monetary Fund (IMF). 

Growth in developing countries today is more directly linked to that of the US and provides little scope for diversification to investors seeking higher risk-adjusted rates of return. 

Handicraft exports rise to Rs.6,769.5 cr

The exports of handicrafts, including carpets, stood at Rs.6,769.5 crore in the last fiscal, textiles minister Shri Kashiram Rana said in New Delhi on May 03, 2002 at a function to give away export awards for handicrafts.

Handicraft exports witnessed a constant average growth of about 15 percent per annum in the last 10 years. In the current fiscal, the sector would be able to reach the target of $ 1.6 billion.

The reason for decline in exports in the last fiscal was due to the September 11 attack on the US.