"The mania at the start of the 2010s was the big emerging markets, in particular the belief that the economies of China, India, Brazil and Russia would continue at the astonishing rapid pace of the previous decade. This was a unique golden age, unlikely to be repeated yet widely accepted as the new standard by which poorer nations should measure growth. The emerging-market mania began with China, which for two decades starting in 1978 grew rapidly, but erratically, anywhere from 4 to 12 percent a year. Then in 1998 China began an unbroken run of growth at 8 percent or more each year, almost as if the lucky Chinese number 8 had also become an iron rule of Chinese economies."
Ruchir goes on to state that the period from 2003 to 2007, at specially at its peak in 2007, 114 countries out of the 183 worldwide grew at over 5 percent, up from just about 50 countries over the past decades.
"This was the fastest, most all-encompassing growth spurt the world has ever seen. Even more unusual, these economies were taking wing at the same time that inflation, a constant threat in periods of rapid growth, was falling back everywhere ... This illusion, which in large part persists to this day, is fed by the fashionable explanation for the boom - that emerging markets succeeded because they had learned the lessons of the Mexican peso crisis, the Russian crisis and the Asian crisis of the 1990s, all of which began when piles of foreign debt became too big to pay. But starting in the late 1990s, these formerly irresponsible debtor nations cleaned up the red ink and became creditors, even as former creditor nations, led by the United States, began sinking into debt. Thus the emerging nations were poised, as never before, to take advantage of the global flows of people, money, and goods..."
The easy money of course, was the prime cause of the crisis of 2008 that started with the subprimes and cascaded across the economies of the west. By 2010, the now infamous "decoupling" theory was debunked as the BRIC bloc and Asian tigers caught the cold even if it was just a whiff! Confidence remained high well into 2011 that the economy would climb back to its high growth trajectory through prudent policies, but politics, cronyism, frenzied populism and greed overrode economic common sense.
In the present state of "policy paralysis", the counter intuitive monetary policy and with the downgrading of the outlook for the economy from "Stable" to "Negative" by Standard & Poor, there is little doubt in anyones mind that it would be a miracle, if we were to hit even the modest 7 percent projected growth envisaged by our finance minister. This economic deep freeze is expected to persist till general elections in 2014 irrespective of whatever positive spin Sachin Tendulkar's nomination to the Rajya Sabha achieves. Talk about wagging the dog!
With this background, what is the possibility of landing jobs?
The chances are slim to negligible.
So unless your second name is Tata, Birla or Ambani, and if you are sitting on the fence, you are better off continuing in service for a couple of years more. And for those of you who have just retired, attempting to maximize output from your kitchen garden would be a prudent step considering that the only thing in the country that is on the high growth trajectory is the price of vegetables!
Will we ever be a super-power?
Well maybe, but not in this century.
When we write the story of this century, it will be about how the political class in general, took a perfectly good thing, and flushed it straight down the toilet! And when our great grand children talk about it at the dawn of the 22st century, they will no doubt wonder, how a billion people, including you and me, just stood by quietly and watched it happen.
To not end on a negative note, and to get you thinking on what you should do (or should have done right from the outset) is to drop your entitlements pouch and put on your entrepreneur hat!
The country needs you! AGAIN!
- Ruchir Sharma in Breakout Nations [Penguin Books 2012]
Ruchir goes on to state that the period from 2003 to 2007, at specially at its peak in 2007, 114 countries out of the 183 worldwide grew at over 5 percent, up from just about 50 countries over the past decades.
"This was the fastest, most all-encompassing growth spurt the world has ever seen. Even more unusual, these economies were taking wing at the same time that inflation, a constant threat in periods of rapid growth, was falling back everywhere ... This illusion, which in large part persists to this day, is fed by the fashionable explanation for the boom - that emerging markets succeeded because they had learned the lessons of the Mexican peso crisis, the Russian crisis and the Asian crisis of the 1990s, all of which began when piles of foreign debt became too big to pay. But starting in the late 1990s, these formerly irresponsible debtor nations cleaned up the red ink and became creditors, even as former creditor nations, led by the United States, began sinking into debt. Thus the emerging nations were poised, as never before, to take advantage of the global flows of people, money, and goods..."
The easy money of course, was the prime cause of the crisis of 2008 that started with the subprimes and cascaded across the economies of the west. By 2010, the now infamous "decoupling" theory was debunked as the BRIC bloc and Asian tigers caught the cold even if it was just a whiff! Confidence remained high well into 2011 that the economy would climb back to its high growth trajectory through prudent policies, but politics, cronyism, frenzied populism and greed overrode economic common sense.
In the present state of "policy paralysis", the counter intuitive monetary policy and with the downgrading of the outlook for the economy from "Stable" to "Negative" by Standard & Poor, there is little doubt in anyones mind that it would be a miracle, if we were to hit even the modest 7 percent projected growth envisaged by our finance minister. This economic deep freeze is expected to persist till general elections in 2014 irrespective of whatever positive spin Sachin Tendulkar's nomination to the Rajya Sabha achieves. Talk about wagging the dog!
With this background, what is the possibility of landing jobs?
The chances are slim to negligible.
So unless your second name is Tata, Birla or Ambani, and if you are sitting on the fence, you are better off continuing in service for a couple of years more. And for those of you who have just retired, attempting to maximize output from your kitchen garden would be a prudent step considering that the only thing in the country that is on the high growth trajectory is the price of vegetables!
Will we ever be a super-power?
Well maybe, but not in this century.
When we write the story of this century, it will be about how the political class in general, took a perfectly good thing, and flushed it straight down the toilet! And when our great grand children talk about it at the dawn of the 22st century, they will no doubt wonder, how a billion people, including you and me, just stood by quietly and watched it happen.
To not end on a negative note, and to get you thinking on what you should do (or should have done right from the outset) is to drop your entitlements pouch and put on your entrepreneur hat!
The country needs you! AGAIN!
No comments:
Post a Comment