There is a slowdown buzz all around the world and is visible also in India. Sectors such as automobile and real-estate are often making headlines and not for a good reason. It is only to report the falling sales figures, or slowing growth rates. In the latest quarter, non-oil, non-gold imports are down — indicating that Indians are buying less of imported goods too. On the other hand, the movie business is doing very well. Union Minister Ravi Shankar Prasad has cited that Rs 120 crore business done by three Bollywood movies on a single day suggests the strength in the fundamentals of the Indian economy, but he was actually articulating a real economic phenomenon playing out in India currently. It may be puzzling to see how few businesses such as Movies, and Electronics are performing so well despite the apparent slowdown in most of the other segments of economy. It does not mean the movie industry is defying the slowdown. It’s the ‘Lipstick Effect’ at play. It was first ob...
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The Debt Trap Diplomacy A case study of China Debt-trap diplomacy is a type of diplomacy based on debt carried out in the bilateral relations between countries. It involves one creditor country intentionally extending excessive credit to another debtor country with the alleged intention of extracting economic or political concessions from the debtor country when it becomes unable to honour its debt obligations. The conditions of the loans are often not made public and the loaned money is typically used to pay contractors from the creditor country. This is an extension of the well-known strategic foreign policy which openly uses economic aid and investment between countries to curry diplomatic favours. China’s Belt and Road Initiative (BRI) can be said as the leading example of Debt Trap Diplomacy. BRI hopes to invest an estimate of US$ 8 trillion in infrastructure financing to 68 countries in Asia, Europe and Africa most of which are under developed. Critics of Chinese lendin...