NYT World

Sunday, November 21, 2010

The Anatomy of Currency Wars

Of late,a hope has been gaining ground in recent days regarding the sustainability of the global economic recovery. This after a storm in the form of Global Financial Crisis,that emanated from the West in the late 2008,hit the developed and developing world drastically.It would not be extrapolation,however,to say that it affected the developing world more drastically than the developed world.However,the orchestrated actions that followed,set a precedence for the times to come.With the help of coordinated actions by the governments across the globe,the world was able to stave off what appeared imminent-a meltdown of the world economic order.

However,as has always been the case,events of the past pave the way for the events of the future,the same was true of this case as well.In a bid to boost the economic activity during the slump,governments resorted to varying measures.These were intended to provide stimulus to the economy.Now that the storm appears to have settled,it is becoming increasingly apparent that the crisis had led to increased distortions in the global system.The US which was already running huge trade deficits,now finds itself in a deeper deficit.And export driven economies such as China and Germany are now sitting on unprecedented levels of cash and forex reserves driven primarily by their trade surpluses.As a result,the gap between the trade deficit and trade surplus economies has widened further.

This has led to exacerbation of the already acrimonious relations between these countries which now threatens to kill an infant recovery.At the heart of the heated discussion is a newly coined term: "Currency Wars".The term,which has gained immense fancy within media circles,is a reflection of yet another challenge that the flagging World Economy faces. And at the centre of an unfolding drama are the two global economic powerhouses,China and the US. The anaemic recovery in the US is attracting public ires which is increasingly evident in the distrust people are expressing in their administration.For the Americans,this recovery is more of a farce and is far from reality,for the simple reason that this recovery is unable to provide them jobs and one in every 10 Americans is still seeking a job.The scenario in the far East(read China) is altogether different.The Chinese economy on the other hand is in Superheated mode(if one may say so).There are large number of jobs being created in a buoyant economy,the Asset prices are inflating,Manufacturing and Services sector is achieving higher Scalability.These are in stark contrast to what is happening in the US and the rest of the developed world,where people are losing jobs,federal governments are running Giant deficits,the manufacturing activity has almost reached stagnation,asset prices are going nowhere and the likes. 

This has led to contention between the two.And Currency has emerged as a new tool to control the dynamics of Global trade.China is accused of keeping its currency artificially low by not letting it appreciate and thereby giving undue advantage to its exports at the cost of growth in the West.This,the West accuses,has led to the their export being relatively less competitive vis-a-vis China.China(and much of the developing world),on the other hand,accuses the US of printing billions of dollars in cash to weaken its own currency against other currencies,to make its export cheaper.A microscopic look at the scenario seem to suggest that both of  them are justified in their own arguments.But at the same time it needs to be understood that it is not a case of Either-Or.The deadlock is hurting the prospects of a full-fledged recovery and threatens to take the recovery off-track.Having seen the consequences of the Economic crisis,which dragged millions of people in the developing world back into the poverty,we cannot afford the recurrence of such a disaster.Therefore, it is highly obligatory on the part of the decision makers to make preemptive efforts at resolving the crisis. 
The recently concluded G20 meet in South Korea was an attempt in this direction and towards averting a confrontation between the Developing and Developed world.And to everybody's expectation the leaders were clever enough(as has always been the case) to promise manipulation free trade regime across the world and to refrain from protectionist practices.However,history has it that such commitments(if at all they are any) are just acts of gimmick and it will take more than just courage to find a welfare solution.Every nation and its leadership is well aware of its obligations towards its citizens and therefore will continue to tread paths that may not necessarily concur with the interests of the world.

Monday, November 1, 2010

Obama's trip & the Great Indian dream

The much awaited trip of "the American President" Barack Obama is now less than a week away.And as has always been the case,there is much hoopla about this trip of an American President to the Indian Subcontinent.The stature of an American President is such that it always attracts attention,whether justified or not.This trip is seen as crucial in the light of the recent issues cropping up between the two countries,especially on the fronts of Outsourcing,Foreign Policy,Nuclear Deal and the likes.It also comes at a time when the US is having confrontations with China every other day on issues such as freedom of the Internet,or the hunt for new Energy rich geographies,or the long standing trade and currency disputes between the torch bearers of the new World Order among many others.

The buzz in the media circles,political community,business fraternity and the likes,about this trip,however,defies the long standing issues brewing among the two countries.Many see this trip as the recognition of India by the US as an emerging World power.Others(in India),see this trip as a step by the US to project India as a counter the rising Chinese influence in the continent and in the World affairs.Whatever may be the purpose of this trip,the outcome is more of obvious.The flagging American economy is more than a concern for the US administration.To provide a fillip it needs to create demand for its products outside the country as the demand in US itself is stagnating.And India appears well-placed to fulfill this need of America.A trillion-dollar plus economy,a 300 million strong middle class(and growing),continuing 8% plus GDP growth are more than just attractions for any market-oriented economy,including the US.Add to that,the recently implemented Nuclear Deal,the ever growing Indian defense sector(to catch up in the arms race with China & Pakistan),the whispers over a possible opening up of Multibrand retail sector of India,all these factors gives US companies Multibillion dollar opportunities in India.This boosts the prospects of the American exports and creates jobs back home,thereby fulfilling Obama administration's political interests.For long,the US has been a representative of the democratic values.But at the same time it has also been carrying the badge of a crony capitalist,hegemonic state that formulates actions driven by the interests of its industry.And this case appears no different.It is expected that on this trip Obama is going to make as strong case for American companies deeper penetration into Indian markets.Therefore,it is safe to assume that under the current Obama administration,India is an object of commerce.T he ever increasing US aid to Pakistan also needs to be seen in this perspective.For US,strong ties with India augurs well for its commercial interests,but at the same time it also sees Pakistan as a strategic ally in its fight against terror.And therefore time and again Indian concerns over the (mis)use of the aid against India by Pakistan have often been dispelled.And it is disheartening to see that India still hasn't been able to use state policies as a measure to make its presence felt.As long India keeps on ignoring the need for a proactive foreign policy and aggressive economic policy(like China),the effects will continue to be detrimental for our own long term interests

India sees a partner in US that can help it gain stature on the World stage.But I'm afraid that the Indian leadership is failing to understand somehow that the expression of superiority on the world stage is something that we need to be showing our acumen in and not depending on others to help us achieve goals that clash with their own vested interests.

So on this note,guys get ready for the Diwali bonanza this year in the form of an American President's state visit to India.

Welcome Mr.Obama!!

And as has been the Indian tradition,we greet you with the same spirit


Cheers to the Indo-American friendship(?)!! Long live the Great Indian Dream....

Monday, August 30, 2010

Autonomy as a Solution for Kashmir?

Kashmir has been one of the most disturbed places in the world for more than 2 decades now.Of course,next only to West Asia and the Civil War stuck autocracies of Africa.However,over the past couple of months the reasons that has attributed to these disturbances are more local than global as has been the case so far.
The recent spate of violence and an upsurge in the separatist voices in Kashmir has made many wonder as to what has suddenly changed for Kashmir.The death of 63 Kashmiris in a matter of 2 months however,has evinced more curiosity than empathy among the rest of India.How are these deaths different? After all thousands of innocent Kashmiris have already lost their lives to the hands of militancy in the last 2 decades?
The answer lies in the question itself.This time around the deaths are a result of excesses of the security forces in dealing with mobs,as claimed by the people of Kashmir.No doubt that this has an element of truth in it.The violent protests that broke out as a result of a fake encounter has now thrown Kashmir into a seemingly endless cycle of violence.Although the issue of contention that was earlier limited to the abuse of the Armed Forces Special Powers Act(or AFSPA),a legislation that gives Security and Quasi-Security forces unlimited powers to deal with extremists,has now taken the form of a widespread resentment.
And like always the Indian establishment is busy finding a "foreign hand" to it.Some even consider it as an act of handful of Islamic miscreants.While for others it is the separatist forces that are playing.Although these apprehensions might be partially true.However,the fact appears starkly different.Under the shield of Article 370,J&K has been granted a special status.But the government has done nothing special to improve the conditions in Kashmir.This state,in fact,has become a scapegoat and a victim to lethargic diplomacy and pusillanimous politics.It took 60 years to build a rail link connecting a stretch of Kashmir valley(Qazigund-Baramulla) to the rest of India.There is still no proper educational infrastructure in the valley leave alone Centres of Excellence(like IITs,NITs etc.).Tourism and Cottage Industries are still the mainstay of the
state economy and the livelihood of the people that hasn't helped improve their incomes.People are harassed in the name of their own security(thanks to AFSPA).Still the people of the state have,time and again,reinstated their faith in the Indian democracy.
Why should we expect a generation which hasn't seen anything but violence since its birth,a generation that has no jobs,a generation that is skeptical about its own future;to be enthused about a depressing and constraining surrounding?
However,having said all that,the fact remains that azaadi is surely not the best of the possible solutions for Kashmir.Even if Kashmir is liberated,it will surrounded by three Nuclear states with countries such as China & Pakistan eager to express their influence on it.It will not be long before Kashmir falls into the hands of extremist forces,as rightly pointed out by Dr. Farooq Abdullah,Former CM of J&K.Neither is Autonomy as a feasible solution as it will lead to loosening of India's grip on the state.
It is high time that we honor the long standing faith of Kashmiris in Indian democracy and with such a crisis in sight,it seems inevitable that India should undertake an economic and social integration program for Kashmir,with the rest of India.And given the situation,this needs to be urgent.It should be made noticeable that a Kashmiri is as Indian as a Gujarati or a Marathi,in all possible terms of the Indian democracy and the Constitution.

Sunday, August 15, 2010

Is our Independence for real?

 On 15th August,the World's largest Democracy(so called!!) will celebrate its 64th Independence Day..A good reason to cheer for more than 1.1 billion(and counting..) Indians. But the events that took place over the past few days,weeks, and months have certainly left a lot to ponder upon,for our great Democratic state. 
On one hand we can be proud of our achievements in terms of the spectacular economic growth we've achieved over the past few years,we can be proud of our new currency symbol,we can be proud of our continuing success in the field of space exploration,we can also take pride in our increasing military might,in our successful and prospering services industry,in our increasing influence on the global stage,in our constitution that gives us the liberty like no other.And we can be proud of countless other things.
And while most of the Indians are eagerly waiting for the country to emerge as the next global superpower,the country is actually grappling with grave internal threats.The astonishing pace of economic growth over the past decades has changed the face of most of the geographical regions of India.However,the dividends of this growth haven't been distributed equally among all the stakeholders.The result is Maoist unrest in the Central & Eastern India that has now engulfed around 1/3rd districts of the country and now we are facing a war within,war with our very own civilians.
Separatist voices are being raised from the North(Kashmir) to the Far East(Meghalaya and Manipur).During our 63 years of freedom,we haven't been able to inculcate the feeling of belongingness among our own citizens.Isn't it a pity for us?
The state has failed miserably in ensuring food security for our(humongous) population.The result is  flaring up of food prices which is pushing fraction of population back into poverty. Isn't it a failure of government policies?
Inefficient governance,corrupt and unaccountable bureaucracy,lack of basic healthcare,sanitation and shelter in rural India,overloaded urban infrastructure-these are just a few stories that capture national attention,there are a countless others which simply go unnoticed but are persistent for years together.
So this Independence Day,isn't it a question that we need to ask ourselves-Is our Independence for real? If not,how can we as citizens can contribute to making this nation a better place to live?
How we can reintegrate India which has broken into regions of unrest,dissatisfaction?
And we need to get out of our complacency cocoon to make a brave attempt to make every Indian a stakeholder in the Indian aspirations of the 21st century.

Friday, August 13, 2010

Hello World !!

Hey Guys,
I feel happy to be a Blogger,finally!! One thing I yearned for quite some time now. And being an Engineer and that too Computer Science Engineer,I couldn't have thought of a better title for my first post i.e. "Hello World"-a universal program for those who are writing their first piece of code.
It(blogging) seems to be an exciting job(Hope it turns out the same way!!!)..
I hope you guys like my writing.Do keep visiting,commenting and following