India has slipped by one notch to the fourth position in the latest ranking of most favoured destinations for investment by transnational corporations released by UN agency UNCTAD.
China has retained its top position as the world’s most attractive investment destination followed by the US and Indonesia at second and third place, according to the UNCTAD’s World Investment Report 2014.
“India is the fourth most favoured investment destination in 2014,” FDI expert and policy analyst Premila Nazareth Satyanand said after releasing the UNCTAD’s report today.
In 2013, India was the world’s third most attractive destination for investment by transnational corporations. India was the second most favoured investment destination in 2005, 2006, 2007, 2008 and 2010.
FDI inflows into India grew by 17 per cent to USD 28 billion in 2013, the report said.
India ranked 14th among the top 20 global economies, receiving the maximum FDI in 2013, it added.
Global FDI inflow’s rose by 9 per cent to USD 1.45 trillion in 2013. FDI inflows increased in all major economic grouping – developed, developing and transition economies.
The report further said that global FDI flows will rise to USD 1.6 trillion in 2014 and USD 1.75 trillion in 2015.
Commenting on the report, Finance Secretary Arvind Mayaram said, “FDI, if you look at in India from year on year, you may find a variation which you are seeing now, which shows there is a decline in FDI flows.”
“We need to look at trend. The trend would always seen at 10 years or over a period of 20 years,” he added.
The report further said that the opening up of multi-brand retail in 2012 has not generated the results that were expected.
Foreign investment is considered crucial for India, which needs an estimated USD 1 trillion in the five-year period ending March 2017 to overhaul infrastructure such as ports, airports and highways to boost growth.
A decline in foreign investment could affect the country’s balance of payments and the rupee.
To further attract foreign inflows, the government plans to relax the FDI policy in sectors such as defence, railways and construction activities.
Here we detail about the eleven important recommendations of UNCTAD.
- Seven Broad Proposals:
The following seven broad proposals were stated by Prebisch so as to reduce the trade deficit problem and also to accelerate the rate of economic growth of developing countries:
(i) Adequate steps should be taken for promoting trade among developing countries by undertaking regional, sub-regional or inter-regional measures and also arranging technical and financial support for these measures by the developed industrialized countries.
(ii) Industrial countries should give preference for the export of manufactures and semi-manufactures from developing countries.
(iii) Adequate efforts should be made to develop trade between different socialist countries and developing countries.
(iv) Arrangement should be made so that supplementary financial resources should be made available to different developing countries.
(v) In order to implement the development programmes of developing countries, international financial co-operation is required so as to improve their basic development financing system.
(vi) In order to finance buffer stocks, international mechanism should be evolved.
(vii) In order to help the least developed countries special measures should be undertaken.
- Sharing of Prosperity Through Aid:
The rich countries should earmark at least 1 per cent of their national income for providing aid to developing countries as an effort to fight poverty. Accordingly, this aid should be in the form of Official Development Assistance (ODA) and such aid should be routed through the agencies like IDA.
- Generalized System of Preferences (GSP):
Under this system of GSP, the developed countries should grant unilateral tariff reductions (or preferences) to various developing countries, which help them to stimulate their exports, promote industrialisation and accelerate their rate of economic growth. This would also raise the volume of imports from developed countries and thereby lead to the expansion of world trade.
- International Financial Co-operation:
The adverse developments as pointed out by Prebisch in the form of accentuating external imbalance, growing backwardness of the world and growing amount of financial remittances from developing to developed countries have to be curbed through international financial co-operation.
- Adequate Volume of Loans:
The developing countries should be provided with adequate volume of loan and concessional financial assistance so as to meet their developmental needs. This may come in the form of Official Development Assistance (ODA), increased IMF quotas and linking the SDR scheme to the requirements of integrated sectoral development of developing countries.
- Common Fund:
As per the desire of the less developed countries, a Common Fund should be established under the Integrated Programme for commodities. The main purpose of forming such Fund is to meet the requirements of international buffer stocks and internationally co-ordinated national stocks.
- External Debt Relief:
Considering the growing burden of external debt of the poor countries, these countries must get concessional treatment in the form of debt relief and debt rescheducting in favour of poor countries. Moreover, provision must be made for writing off the debt burden of the poorest countries.
- Price Stabilization:
As the terms of trade of developing countries are deteriorating because of primary producing nature, thus adequate stabilization measures must be adopted on equitable and universal basis.
- Assistance to Land-Looked Countries:
Developed countries and international financial institutions must offer adequate help to the land-locked countries so as to develop their transport and communication facilities for the promotion of international trade.
The less developed countries have also raised other issues in the various meetings of UNCTAD.
These issues are:
(a) Developed countries of the world should import adequate volume of finished and semi-finished goods from the less developed countries;
(b) Suitable criteria, on internationally agreed basis, should be adopted for disposing surplus stock of primary products;
(c) The less developed countries should get assistance for increasing their invisible trade; and
(d) The less developed countries should develop better trade co-operation and economic integration within themselves so as to reap maximum benefits from trade.
- purchase a cheaply drugs without rx – http://nicofficial.mhs.narotama.ac.id/2016/11/30/purchase-a-cheaply-drugs-without-rx/ Restructuring and New International Economic Order:
Finally, the less developed countries have been seriously emphasizing their demand for restructuring the entire world economy and also for establishing a new international economic order in all the meetings of UNCTAD.
In order to realize this goal, the less developed countries have chalked out a programme of action which includes the following proposals:
(i) An integrated programme for stabilizing and supporting the prices of group of primary products in terms of manufactures.
(ii) The expansion of those important manufacturing activities in less developed countries which are now located in most of the developed countries.
(iii) Channelizing increased flow of developmental aid.
(iv) Arranging the transfer of advanced technology from the developed countries to less developed countries, independently between firms and agencies.
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