The solution to counter the rise of demagogues, who feed off hatred, could lie in simple economics
Dr Joseph Rasquinha
Dr Joseph Rasquinha, a Bengalurean, received his PhD in Economics from St. Andrews University, Scotland. An economic analyst, he is currently the CEO of Blueleaf Software, Bengaluru.
Central government has to make some audacious moves soon to prevent the country from sinking into recession As Barack Obama said, “Yes, we can!” That is the reaction across the spectrum. From business leaders, politicians, industry, and even the World Bank, everyone says the problem is temporary, short term and India will come out trumps after a small period of disruption. How I would love to believe that!
As people stop spending out of fear, India’s services sector is likely to contract, which could lead to deflation and possible recession
Demonetisation has not worked in the past and will never work until the root of the problem is fixed
The French Nobleman Francois de Rochefoucauld said it well when he stated “Self-interest makes some people blind, and others sharp-sighted”. Most countries ensure that they follow their self-interest in all their policies. Their degrees of success depends on how ‘sharp-sighted’ they are. The most sharp-sighted of them all was Britain and its East India Company. At its peak, it controlled over 23 per cent of world trade. Self-interest here was the key.
When William Shakespeare said “Expectation is the root of all heartache”, he was talking literally. But expectations in the 21st century have literally become the root of all economic problems around the world. India has a particularly bad dose of great expectations fuelled by the nature of our political system. Be it a right-wing party, a left-wing party, a centrist party, or a communist party, promises abound. If Atlas, the Greek god who so easily carried the world on his shoulders, carried the world’s expectations instead, he would be crushed! But, what does the world and India expect?
The Bermuda Triangle. An area as big as Maharashtra, Rajasthan, and Madhya Pradesh combined. An area, according to believers, so unstable that people, planes, and ships are reported to have disappeared in that region. A place where logic and science seem to be absent; a place where the unknown comes into play. This is the uncertainty the world is facing today in economic and political terms.
India is the only country in the world to have an ocean named after it. But internationally, the importance of Singapore, Taiwan, Australia, Italy, even tiny Switzerland is far greater for one major reason - money. Bill Clinton in his first presidential campaign against George HW Bush took a huge lead with just 4 words, “It’s the economy, stupid!” And in India, a vast country with enormous natural and human resources, we are doing extremely poorly on the economic front.