modul New Uzbekistan

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English	Uzbek	Russian
factor markets
Barter economy
allocation mechanism
laissez-faire capitalism
Non-monetary economy
Utilization
dichotomies
social system.

Question
1.What are four fundamental economic problems ?
2.Draw the distinctions between capitalism and socialism ?
3. Comparisons between market economies and planned economies ?
4. Describe the capitalist economic system ?

1.40 –modul

“Sound economics” and “Good politics”. Gram: Conditionals I. Conditional sentences.

While the politics behind the contentious Cabinet decision to allow FDI in multi-brand retail and then to subsequently put it on hold, succumbing to pressure from allies, is being debated ad nauseam, the policy does warrant a comprehensive, ideologically-detached discussion. With the issue being debated in the context of the current political milieu, failure to effectively judge the policy on its own merit places in jeopardy the reforms India so desperately needs. Each of the proposed benefits and the negative implications of such a move need to be thoroughly probed in order to reach a wellbalanced conclusion.

One of the main arguments in favour of the decision to allow FDI in multi-brand retail is the acute and urgent need for the country to develop efficient supply chains. The urgency is advocated on account of the need to minimise losses arising out of inadequate storage facilities, ineffective equipment and the lack of an effective backend network. By reducing wastage that is huge, increasing the supply of food grains, which is a key component of inflation, by reducing the farm-to-fork price differential, FDI in retail is touted as the panacea for all ills. It is expected that FDI will also help build the necessary distribution infrastructure and bring in better technology.
While there is no denying that the country needs a widespread and efficient supply chain, it is highly improbable that a few retail giants can enable the desired outcome.
The sheer size of the country and the Byzantine networks that companies have to navigate, render a low probability on the quick fructification of the current policy. Even big domestic retailers, backed by big cashrich Indian corporates, have failed to make a sufficient dent in the past years.
The share of organised retail to total retail trade in India is hardly 5% against 66% in Japan, 30% in Indonesia and 20% in China. It is high time for India to allow FDI in all possible categories to bring more competition in the market and reduce the gap between farm prices and retail prices.
On the issue of prices, it is quite possible that benefits that will accrue from removing the middlemen will be shared by farmers, consumers and the retailers. Farmers will benefit in the form of higher prices for their produce, while consumers will benefit in the form of lower prices. But this and other anticipated benefits may not materialise without changes in other laws, especially the Agricultural Produce Marketing Committee Act. But assuming that it plays out on expected lines, what will be the impact on inflation?
As food grains form a large component of the inflation index, many see this policy move as helpful in the context of controlling runaway inflation that India has experienced over the past few years. By reducing wastage, increasing supply and lowering prices, many argue inflation will be brought under control.
However, the point needs to be made that the entire process of setting up efficient supply chains and for organised retail to reach the scale of being capable of denting inflation will take a number of years, and its reach would have to be expanded beyond the current 50-odd towns that are currently open to it.
Thus, while theoretically it is a sound proposition, the reality is vastly different for the simple reason that the investment and work needed to develop supply chains to be effectively able to link the entire country cannot be carried out even by a few big international retailers. Building an entire retail backend ecosystem takes time, effort and capital. The fear that Walmart’s entry will effectively be the death knell of the kirana shops and local vendors is exaggerated.
Given the overtly populist nature of our democracy, political leaders have used this opportunity to emerge as saviours of this important constituency.


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