Role of Effective Policy Role of Effective Policy Management in Management in

Sustainable Economic Sustainable Economic IntegrationIntegration

K. T. ChackoK. T. Chacko

Director / Vice-ChancellorDirector / Vice-Chancellor

Indian Institute of Foreign TradeIndian Institute of Foreign Trade

New Delhi (India)New Delhi (India)

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Economic Integration maximizes global Economic Integration maximizes global

efficiency.efficiency. GATT / WTO MTNs deepened integration GATT / WTO MTNs deepened integration

process.process. Emergence of RTAs / PTAs / CECAs.Emergence of RTAs / PTAs / CECAs. Selective liberalization reduces injury to Selective liberalization reduces injury to

vulnerable sectors. vulnerable sectors.

Enhancing Economic Enhancing Economic IntegrationIntegration

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Burdens & Benefits of Integration may be Burdens & Benefits of Integration may be

asymmetrical. asymmetrical.

How to Share it equitably. How to Share it equitably.

Weak institutional and enforcement set – Weak institutional and enforcement set –

up pose challenges. up pose challenges.

Economic Integration - Economic Integration - IssuesIssues

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Economic Integration process got a jolt with Economic Integration process got a jolt with Global Economic Crisis.Global Economic Crisis.

Reducing the adverse impacts of crisis also Reducing the adverse impacts of crisis also depended on how Domestic and External Policy depended on how Domestic and External Policy Management was undertaken.Management was undertaken.

Countries adopted different Policies to boost Countries adopted different Policies to boost demand confronted with contraction of global demand confronted with contraction of global demand.demand.

Impact of Liquidity shortage sought to be reduced Impact of Liquidity shortage sought to be reduced through Trade Finance Measures. through Trade Finance Measures.

Response to Global Economic Response to Global Economic CrisisCrisis

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Monetary Policy played a crucial role, post crisis. Monetary Policy played a crucial role, post crisis.

Managing volatile capital flows proved important.Managing volatile capital flows proved important.

Semi – open emerging economies and their Semi – open emerging economies and their partially open capital account and its correlation partially open capital account and its correlation with impact of crisis.with impact of crisis.

Pre-mature opening hurts.Pre-mature opening hurts.

Need more research on the type of controls Need more research on the type of controls needed.needed.

Macro Economic Policies Macro Economic Policies

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Huge opportunities exist.Huge opportunities exist.

Efficient Domestic Policy Management Efficient Domestic Policy Management crucial for integration. Eg. Health Servicescrucial for integration. Eg. Health Services

Services Trade Services Trade IntegrationIntegration

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Economic Integration and Economic Integration and the need for SDT for the need for SDT for

Developing Countries Developing Countries

Distortions in Agriculture Trade impacting Developing Distortions in Agriculture Trade impacting Developing Countries adversely. Countries adversely.

State support for technology improvement, etc. vital. State support for technology improvement, etc. vital.

Developing Countries need labour absorbing technologies Developing Countries need labour absorbing technologies - Scope for South-South Cooperation.- Scope for South-South Cooperation.

External Policy induced distortions also need correction External Policy induced distortions also need correction through domestic action. through domestic action.

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Need to factor variables other than “efficient Need to factor variables other than “efficient allocation of resources”, also.allocation of resources”, also.

-- Diversification of production, structural Diversification of production, structural transformation, correction of Govt. &transformation, correction of Govt. &Market failures.Market failures.

Understand the forces underlying Growth.Understand the forces underlying Growth.-- Technology catch – up.Technology catch – up.-- Encourage Risk – taking.Encourage Risk – taking.

State’s role in selective interventions. State’s role in selective interventions.

GrowthGrowth

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To Maximize Benefits To Maximize Benefits of of

Economic Integration Economic Integration

Manage macro economic policies efficiently.Manage macro economic policies efficiently.

Build Institutions for efficient management.Build Institutions for efficient management.

Different tool sets required depending on the Different tool sets required depending on the

degree of openness. degree of openness.