PM lists research areas in intl economic relations

New Delhi, Nov 6: Prime Minister Manmohan Singh today drew attention to a number of key issues relating to India's closer engagement with the global economy, including the recent trend of ''reverse brain drain'', and asked think tanks to invest in informing and shaping public opinion and policy making based on sound research in this regard.

The Prime Minister set out detailed priority areas of research relating to international economic relations in his address to Indian Council for Research on International Economic Research (ICRIER) at its Silver Jubilee Conference.

''I do believe that there are no binding external constraints on India's economic growth. Most constraints we face are internal. This does not mean that external developments or trends may not re-emerge as constraints on our growth process. Nor does it mean that we have taken full advantage of all opportunities available to us. What it means is that the global environment is more benign today than at any time in recent history,'' he said.

Dr Manmohan Singh described his participation in the inaugural of the two-day Conference as a ''home coming of sorts'', having been associated with ICRIER's creation as a founder member of its General Body. THe Prime Minister has been a guiding spirit for ICRIER in his capacity as an economist and policy maker.

The theme of the event is ''India and the Global Economy''.

''We must remain prepared at all times to deal with any external challenges to our development process, develop the necessary analytical tools to forecast global trends and their implications for us and design policy response systems which are rapid and flexible enough for our needs,'' Dr Manmohan Singh said.

Dr Singh said as the Indian economy modernises and grows the country should expect a reverse migration of talent, especially from within the diaspora. ''What I would call a 'reverse brain drain' is in the making. How can we encourage this? What domestic policy changes should we make to encourage this? What are the likely implications for various sectors and regions of such a 'reverse brain drain'. These and such other questions must engage the attention of researchers at ICRIER,'' he said.

Considering the rise of China on the global economic scenario, Dr Manmohan Singh said there needs to be a sharper focus on development trends in that country and their consequences. ICRIER should consider acquiring a deeper understanding of China which would be of immense value to economic planners, diplomats and the polity at large, he said.

The other areas where expertise needs to be established relate multilateral negotiations, especially in the WTO, South Asia, South-East Asia, West and Central Asia, Africa, Latin America, Europe, and North America.

The Prime Minister said as APEC is set to invite new members, it was necessary to study the costs and benefits of APEC membership.

Dr Singh it was essential to look at the effects of the large number of Free Trade Agreements the country has entered or planning to enter into.

"In the last decade, services trade and inward remittances have not only outperformed merchandise trade but have kept our balance of payments in a comfortable zone. We cannot underestimate the importance of this for our macro-economic management", he said.

The Prime Minister said another area that needs examination relates to the characterising driving trade in natural resources and energy. This relates to impact of international economic relationships on this trade, the perceived drive by some countries for securing sources and energy and minerals in third countries and the implications of this for free markets.

The Prime Minister said there was also a need for a better understanding of the safe limits for capital flows from abroad, in view of India having a more open capital account.

Dr Singh expressed disappointment at the lack of adequate appreciation in the country,including political leaders, of the changing nature of India's relationship with the world and "the world around us." "Very often, we adopt political postures that are based on the past and out of line with our current interests as an increasingly globalised and globally integrated economy", he said.

"Even today, our energy security is closely intertwined with our political relations with a wide range of countries around the globe.

Our food seurity, our technological security, indeed our national security are closely linked to developments around the world." The Prime Minister in this regard asked think tanks to engaged in political debate based on honest research.

UNI