Articles by I S G

Flaws in Locomotive Theory I S G THERE is not much new about the locomotive theory. All that it says is that economic growth in certain countries provides the stimulus to other countries, through their exports to the former. Two aspects of the proposition need to be noted: (1) the growth process is mutually supportive

crisis-ridden structure by action from the top. The most important point for re-examination is the Section 112 of the CPI(M) Progamme. which really means the entire constitutionalist orientation of the party. Can it really undertake such a review7 This, of course, does not mean that the party's 'style of work' does not demand a second look. It really does and on a wide scale. To quote some glaring examples: should the CPI(M) transport minister have passed the time in the company of the fashionable crowd in the Eden Garden to watch a game of test cricket when the Congress (I) hoodlums were burn- ing buses and trams for hours and thus creating transport chaos? or should the chief minister have gone on his China trip leaving his junior and undistinguished colleagues to deal with the ravaging enteric epidemic which has so far taken a toll of over 2,000 lives? or, and even more important, should the Left Front government so zealously condone the atro cities of the police and remain largely indifferent to so many cases of suspicious death of undertrails in police custody?


present plight of the industry.
The UPASI report claims that it is possible to achieve the production target of 125 million kg of tea by 2002 AD, through productivity gains (52 million kg) and an additional extension of area by 10,000 hectares (25 million kg). The main weakness of the report lies in its assessment of the amount of funds required and the available sources of these funds. First, the estimate of the amount required for the development programmes is unreasonably high; secondly, though the sources of funds are not clearly specified, it would appear that the major portion is expected to come from internal sources. Considering the policies adopted by the Indian companies which have bought over erstwhile British tea interests, one has to be skeptical about funds on this scale coming from internal sources, According to one study (Business Standard, March 18, 1983), tea plantations (including a major tea company in Kerala) top the list among 20 THE March 1984 issue of the USIS magazine. Span, published in India, carries the story of Jugi Tandon. an engineer originally from this country, who has made it to the top in the United States, His firm, Tandon Corporation of California, which he started in 1975, has been declared the Up and Comer of 1983, heading a list of 277 in Forbes magazine's annual ranking of the best small publicly held companies in the United States. An Up and Comer is defined as ''a smallish company that has an excellent chance of turning into a great company ... perhaps ultimately to join Forbes' list of of the 500 largest companies".

Our Rouble Reserves I S G THE principal assumption underlying a bilateral payments arrangement is that the two countries entering into such an arrangement have broadly balanced trade between them. Then the need for the intermediation of a third country currency in the settlement of transactions is eliminated. In practice, this may not be always so. Not that bilateral payments arrangements altogether overlook this possibility. They usually provide for the eventual setllement of payments imbalances in third country currencies, but in not all such arrangements can this provision be easily invoked.

The South Bank Proposal Is OPEC Participation Critical?
I S G ACCORDING to an UNCTAD study, completed around mid-1983 at the request of the Group of 77, a South Bank, ie, a bank of and for the developing countries, is needed and is possible. The study suggests that the proposed bank should have a total capital of $38 billion, of which $ 4.8 billion would be paid-up capital and the rest on cal] in case it is needed to meet the bank's obligations. Callable capital performs a guarantee function. It is suggested that of the paid-up capital, it would be desirable if $ 1.5 billion consisted of convertible foreign exchange; the rest would be contributed in local currency which should be for use by the bank without restrictions except for convertibility. Assuming a very conservative gearing rate of 1:1 between capital and: loam; raised by the bank, the bank should be ab.e to mobilise additional funds from the private capital market. With the capital resources it can thus command, the proposed bank, it is suggested, could ''make a significant contribution to the developing countries' growth, diversification and mutual co-operation". In specific terms, three sets of activities are envisaged for the proposed South Bank: (1) stimulating and helping to finance joint ventures and extending export credit; (2) extending balance of payments support, and (.3) providing support to payments and credit arrangements of developing countries and commodity stabilisation finance. By undertaking these activities, the bank would be able to not only promote and help streamline economic co-operation among developing countries but also fill some of the gaps in the present structure of international finance, gaps that particularly affect developing countries adversely.