Tagged: Economy

The inevitable rise of the assertive hegemon


It is inevitable, isn’t it?

I am referring to the unstoppable rise of China as the new pivot in international relations, strongly positioning itself as a counter to U.S. interests in Asia-Pacific region. There is no competitor to China as such, with even Russia and Turkey vigourously supporting the rise of China as a strategic counterweight to the U.S. (even the U.K., France, and Germany seem to be drifting away from U.S. positions as witnessed recently in the Palestine vote in the U.N. General Assembly).

While no country would take an opposing view to China in global forums, given its economic and military might, a few countries are thinking aloud about the potential ramifications of what they consider as “influence-peddling” by China to gain global power, by lending billions of dollars to poor countries hungry for infrastructure investments. Thousands of Chinese workers have been deployed in scores of countries around Asia and Africa, with their visible presence communicating a sense of beholdenness on the part of the local populations who have to pay back the loans eventually to China, failing which China would demand a stronger involvement in more government and private sector projects in those countries, thereby making certain countries as its vassals. An extreme observation, but nevertheless likely to happen in the next 10 to 20 years, as part of China’s inevitable rise towards the #1 position in economic power. It is estimated that by 2032, China will match the U.S. in terms of GDP size.

Now, who are these few countries with doubts about China’s rise and influence-peddling? These are Japan, Australia, the European Union as a collective, and of course, India. For instance, the EU and India have raised objections to China’s OBOR (One Belt, One Road) initiative, which is mostly an economic exercise to spread China’s influence over 65 countries with USD 124B investment via loans which will eventually make most of those countries forever indebted to China. There is no transparency in the way China has promoted the OBOR initiative, which is mostly President Xi Jinping’s vision without a “hard” blueprint of planning and execution. It is touted as the world’s largest ever infrastructure investment, many times bigger than the U.S. Marshall Plan which was implemented in the aftermath of the Second World War. China will try to spread its political and military influence over many of these “poorer” countries, such as what it has been doing in Pakistan and Sri Lanka. It will “buy” entire sea ports or towns and develop these as its own enclaves in those countries. Economic dominance will eventually impoverish these countries.

A lot of thought is required before nations can commit to OBOR. They have to seriously question China’s intentions, which cannot just be global trade and economic growth. There is a cost to everything, and nations have to understand the overall plan and their role in it. Further, all procurement cannot go only to China companies, there must be fair and transparent bidding processes. Land grabbing cannot be allowed in return for money, and human rights have to be respected (not in the way China does these things, however). There cannot be institutionalized corruption as part of the OBOR rollout in countries with weaker governance or authoritarian rulers. What is touted as a global initiative and vision, need to have global governance and a strong underlying framework, and cannot just be controlled entirely by one country (China).

The EU is likely to demand all of the above and more – it would like to have a say if China wishes to extend the OBOR initiative deep into the European heartland. We have seen that the EU is more balanced than the U.S. (or even the U.K.) when it comes to trade matters and human rights, and may be it will become the last bastion for fairness in all global matters of critical importance like this initiative.

I would like to complement President Xi Jinping for his vision of OBOR. It might become a much needed investment plan for most of the world in the coming decades. It might further China’s strategic interests and enhance its geopolitical influence against the U.S. It might even make China a well-accepted “partner” in many of the countries who are in the process of signing up for the OBOR program. All good, but the policy planners in these countries should carefully analyze the cost-benefits of participation in OBOR and advise their governments to seek responses from China in an appropriate manner, conducive to eventual participation.

My guess is that even India will eventually consider participation in OBOR, if its concerns are appropriately addressed by China. More importantly, China has the continuing habit of trying to “block” the world’s largest democracy from the Nuclear Suppliers’ Group and acting against Pakistan’s terrorists in the U.N. Security Council – these things do not go down well in India for sure, and repeated needling at border locations like the recent skirmish at Doklam is not helpful at all. If China wants to defeat India economically, it needs to first understand that it has already achieved that objective couple of decades ago. If China wants to defeat India militarily, that goal has also been achieved 55 years ago (though that may not be possible again). However, if China wishes to “encircle” India in a strategic manner and constrict it from growth and multilateral participation, then India will retort by intensifying its strong strategic partnership with the U.S. and Japan. It will also bring in Australia and Israel into the equation. India has the advantage of “soft” power which China lacks. India is mostly trusted around the world and at the U.N., while China suffers from a strategic distrust about its territorial ambitions as evidenced in Asia by its claims on the South China Sea.

So, where are we? Where is the world? I mean, on the OBOR program? A lot of questions need to be clarified before it can make a big impact on the world.

I wish President Xi Jinping all the best in OBOR acceptance and rollout, but he better take actions to smoothen the rollout – otherwise it will be consigned to history as a program which was conceived well as a vision, but did not have the essential elements in place and the strategic concerns appropriately addressed.

Cheers,

Vijay Srinivasan

14th January 2018

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Language Emotions and Economic Loss


I came across a LinkedIn post and discussion thread today about Tamil vs Hindi (for people who do not know, both are Indian languages).

The original post was by a Chennai-based IT recruiter who complained that North Indians assume that he speaks Hindi when he calls them up, instead of responding to his English queries in English. He even goes on to mention that he teases the potential candidates by occasionally speaking in Tamil!

There were more than 10,000 comments by the time I came across this post, and thousands of “Like” (LinkedIn should also provide an easy button for “Dislike”).

Haven’t we heard this kind of topic before? Of course, we have, especially in Tamil Nadu.

Tamil Nadu and Tamilians apparently have not yet got the 1960’s imbroglio with the Central (Federal) Government on the then hot topic of imposition of Hindi on all States of India, against the Constitution of India and the regional peoples’ will, out of their heads even after 50 years. They are very emotional whenever the topic comes up.

Hindi is sparsely spoken in Tamil Nadu even today, though there are many Tamilians in Tamil Nadu who can speak Hindi rather well. It is not an accepted form of communication, however. Tamilians prefer English, even to talk to other Tamilians. Such is the impact of those old days when Tamil Nadu erupted in violence against Hindi. That misstep also led to the successful emergence of the Dravidian Political Parties of Tamil Nadu, which have been feuding even amongst themselves ever since. The result has been that the national political discourse and national political parties have been locked out of Tamil Nadu for all these past 5 decades.

The bad thing which came out of this anti-Hindi feeling has largely been detrimental to the overall economic interests of the State and its people, though many will argue (even now) that it was the best thing that could have happened for Tamil Nadu (apart from reduced plan allocations and constant challenges, I don’t know what we gained – if someone can elaborate, I would be more than happy to listen without a murmur). In the Sixties and Seventies, when Tamilians educated in Tamil Nadu purely in Tamil and English travelled to Delhi or Mumbai or Calcutta, they were at a big disadvantage. Those days (and even now), the Northern and Western regions of India had the biggest economic investments (both by governments and private sector), and offered more economic opportunities to job seekers. While English was the business language, more often than not it was not the spoken language in the office – it was almost always Hindi.

Who lost out?

Tamilians and Tamil Nadu. India is a country with more than 28 official languages and over 200 dialects. But, 70% of the populations (that is 900M as of now!) speak Hindi in almost a native fashion, or they learn the language from primary school onwards. Another 10% of the population (that is, another 130M people!) understand Hindi well, and would respond in Hindi if spoken to in Hindi.

So, a Billion people can operate in Hindi.

How about Tamil Nadu? It has 68M people only, just 5% of India’s population.

While I am not saying it is compulsory for everyone in the country to learn Hindi or speak Hindi, look at the advantages which I lacked as a non-Hindi speaker. One’s acceptance is higher at business offices, in government offices, in industrial environments and surely in society. Further, one would not need English sub-titles while watching Hindi movies! I survived with extremely half-baked and poor Hindi, and had to mostly depend on others to get my way through. I got into several tricky situations because I insisted on speaking only in English (you cannot blame me, apart from Tamil, English was the only other language that I know!).

I suffered quite a bit during my sojourn in Mumbai for some six years. I always felt left out, and my rather late attempts to learn Hindi did not work out as I just could not recall the right word at the right time. If only I had had the opportunity to learn Hindi even as my third language in my primary school, I would not have had any problems.

At the end of the day, it is the business and social acceptance across the country, notwithstanding any perceived language or cultural supremacy. Tamil is rarely spoken outside of Tamil Nadu in India – except in Tamil communities spread around the country which also speak Hindi fluently as they have settled in the so-called Hindi heartland due to economic or job necessities.

Why take up a fight against Hindi and waste precious time now? What is it going to produce in terms of benefits to Tamilians?

The world is moving fast, and India is moving very fast. Tamil Nadu should worry more about keeping its #3 rank in the State-wise rankings of GDP, it is in a good position to overtake Uttar Pradesh which has three times its population. Let us focus on bread and economics, and jobs and wealth creation for Tamil Nadu. That is a more important fight (in a positive manner, competing with other States of India) than spending an inordinate amount of time on language issues. If Tamilians wish to proceed and establish strong working relationships with Northern and Western regions of India, I would say learning Hindi is a good place to start – a positive thing to progress economically, rather than a negative thing which will impact Tamil. Tamil will never be impacted, it is a language which has stood the test of time over 30 centuries or even more.

Let us make language-based fights and issues a thing of the past, and focus on what is best for our people.

Cheeers,

Vijay Srinivasan

29th November 2017

Great Truths


1. In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress.

John Adams

2. If you don’t read the newspaper you are uninformed, if you do read the newspaper you are misinformed.

— Mark Twain 

3. Suppose you were an idiot. And suppose you were a member of Congress. But then I repeat myself.

— Mark Twain

4. I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

— Winston Churchill 

5. A government which robs Peter to pay Paul can always depend on the support of Paul.

— George Bernard Shaw

6. A liberal is someone who feels a great debt to his fellow man, which debt he proposes to payoff with your money.

— G. Gordon Liddy 

7. Democracy must be something more than two wolves and a sheep voting on what to have for dinner.

— James Bovard, Civil Libertarian (1994)

8. Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries.

— Douglas Casey, Classmate of Bill Clinton at Georgetown University 

9. Giving money and power to government is like giving whiskey and car keys to teenage boys.

— P.J. O’Rourke, Civil Libertarian

10. Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. 

— Frederic Bastiat, French economist (1801-1850)

11. Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

— Ronald Reagan(1986) 

12. I don’t make jokes. I just watch the government and report the facts.

— Will Rogers

13. If you think health care is expensive now, wait until you see what it costs when it’s free!

— P.J. O’Rourke 

14. In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other.

— Voltaire(1764)

15. Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you!

— Pericles (430B.C.) 

16. No man’s life, liberty, or property is safe while the legislature is in session.

— Mark Twain (1866)

17. Talk is cheap…except when Congress does it.

–Anonymous 

18. The government is like a baby’s alimentary canal, with a happy appetite at one end and no responsibility at the other.

— Ronald Reagan

19. The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.

— Winston Churchill 

20. The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.

— Mark Twain

21. The ultimate result of shielding men from the effects of folly is to fill the world with fools.

— Herbert Spencer, English Philosopher (1820-1903) 

22. There is no distinctly Native American criminal class…save Congress.

— Mark Twain

23. What this country needs are more unemployed politicians.

— Edward Langley, Artist (1928-1995) 

24. A government big enough to give you everything you want, is strong enough to take everything you have.

— Thomas Jefferson

25. We hang the petty thieves and appoint the great ones to public office.

— Aesop

FIVE BEST SENTENCES

1. You cannot legislate the poor into prosperity, by legislating the wealth out of prosperity.

2.What one person receives without working for…another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else. 

4. You cannot multiply wealth by dividing it.

5. When half of the people get the idea that they do not have to work, because the other half is going to take care of them, and when the other half gets the idea that it does no good to work, because somebody else is going to get what they work for, that is the beginning of the end of any nation!

I think there are some good truths in the above sentences. It is funny that many of these truths are in play today in nations big and small. I thought this is a good education for my blog readers. Enjoy but also think about these truths. Aren’t these relevant even today?

Cheers,

Vijay Srinivasan

16th September 2017

 

The India Experience……..continues…….


I spent the past few days in Chennai, the Capital of Tamil Nadu, visiting relatives and finishing off some personal work which was waiting for my visit for the past 4 months.

Every time I visit India, my perception of the environment has kept going up – I mean, increasingly positive. The improvements that I see all around should have come about couple of decades ago, keeping in tune with global enhancement to living conditions. But India faltered on its way to economic growth, led by ineffective leaders who were always subject to political pressures and vagaries, and who made decisions not always keeping the welfare of the country at heart.

However, notwithstanding the huge delays which have cost dearly, finally things are shaping up. I am not going to be positive about most things, however. In a very large country like India, it is very tough and almost impossible to get every section of the society aligned with economic growth imperatives and the sacrifices that are sometimes necessary to achieve equitable growth for all. There are people who are always against the central government and its initiatives. There are state governments not ruled by the same party which rules in the centre (federal). There are religious factions, there are minorities and then there is the “silent” majority who do not care about anything.

With all these challenges, India is moving fast forward, which is a rather surprising development over the past year or so. It will take considerable time, but it is not inconceivable for India to reach a 9 to 10% GDP growth rate, and a per capita income of USD 3,000 in the next 5 years, which should lift the size of the GDP to more than twice what it is today. It is also entirely possible (given the trajectory and assuming minimal disruptions) to achieve a per capita income of USD 5,000 in about 10 years’ time, which would be roughly three times the size of the economy today.

Well, good to read. On the ground, things move slowly however. Corrupt practices continue, albeit with reduced intensity. I pick up feedback from cab and auto rickshaw drivers, who are rather articulate and voluble when it comes to criticizing everything around us. I also collect inputs from folks that I meet, because invariably the talk turns towards the ineffectiveness of state governments and economic growth, etc.,

One thing which worries me is that what you hear about the English capability of Indians is actually not true. Most people are more comfortable in their mother tongue or in Hindi, the de facto national language which 70% of India speaks and understands. When I called a central government agency in New Delhi which is responsible for the national bio-metric ID cards, and chose the option to receive instructions in English and to speak with someone in English, I could not get the right person despite multiple attempts. I was able to get only Hindi speakers, who were baffled that I could not converse in Hindi, and struggled to understand what I was trying to say. It was incorrigible that the senior management of that agency has not addressed the issue, as everything in Central Government in New Delhi (and elsewhere in the country) is supposed to deal with all parts of the country, not just with Hindi speakers. Further, I tested the basic English language of OLA and UBER drivers in Chennai, and they consistently demonstrated lack of grasp of basic English communication.

So, what are we talking?!!!

It is not adequate for just the IT workers and Financial Industry workers to speak English. India needs to do something urgently to rapidly enhance English literacy. The most popular language in China today is English! Is it surprising? No. China has repeatedly demonstrated that if it sets its mind and heart to achieving something, it will achieve that, come no matter what. India does not follow this tenacity in thinking to achieve and then achieving the target with heart and mind.

Another parameter that I use to measure improvement is the ability of the economy to maintain capital assets to ensure maximum utilization and productivity of the asset. India has repeatedly failed to maintain its assets. Simple examples include MIG fighter jets (“flying coffins” as these are called), roads, power plants, water supply, railway stations and rail tracks, airports (improving finally), and infrastructure in general. Faulty lifts (elevators) and escalators abound. Attention to detail is completely lacking. Maintenance discipline which is an essential and critical component of economic productivity does not exist. How then can India compete with China?

In a large metro city like Chennai, with a population of 8M (50% more than Singapore), the upkeep of public facilities and roads are found to be seriously in disarray. I dread the upcoming monsoon season when the number of potholes in roads will multiply rapidly. It is apparent that public money is not being spent wisely in the interest of the public. Many arterial roads do not have pavements, or have pavements which are occupied by hawkers. The city municipal corporation does not seem to be taking strict action on violators. All legislators are afraid of voter backlash, but they view the voters in pockets. The silent majority goes without a say.

I can go on and on, but the key point that I observed is that people are optimistic and the general economic environment is improving (notwithstanding President Trump).

I hope that one day, not in the too distant future, at least some Indian cities will reach the status of global cities which attract talent from around the world.

The Indian story continues……….

Cheers,

Vijay Srinivasan

13th August 2017

 

 

India needs Free Internet


More than any other country on this planet, I would say that India needs free access to the internet to help it leapfrog to the next stage of its already large economy (the Indian GDP just surpassed that of the U.K.). In order to sustain its economic growth, remove system inefficiencies, open up new opportunities for entrepreneurs and alleviate poverty levels, India needs to subsidize access to the internet for citizens earning less than USD 10 per day.

That figure is a mind-boggling 500M people in my estimate, mostly based in rural towns, and villages. Even large cities have huge populations of people with no access to electricity, or even potable water. Given this situation, is it not laughable that I am suggesting internet as a free (or almost free) utility for the people to use ?

No, it is not a matter to be sniffed at. Given that tablets are now available at less than USD 50 (though not great looking), access to the internet utility becomes the major constraint for those masses of people who are at the fringe of the Indian economy which is still slated to grow @ 7.5% or more this year. The key enabler for these people is going to be knowledge and application of knowledge to their vocations and school learning. And, how is India going to deliver knowledge and actionable learning to the masses when its educational infrastructure is so weak ? How is India going to develop its intellectual capabilities beyond the IITs ? There are many questions but it is unquestionable that people provided with opportunities at the right times in their lives make it to a successful life later in their lives. Opportunity is critical and the Indian economy would not be in a position to deliver opportunities to the roughly 10M people coming into its workforce every year, most of them waiting for a job. That is close to 1M people every month!

Facebook and Google are opening up the airwaves in India by offering WiFi access in railway stations and other public places. While their goals are not entirely philanthropic, such initiatives by private corporations have to be commended when the national resources are tight to deploy access throughout the rural areas of India. I believe that India stands to benefit in a huge manner when all its villages and rural population are connected via satellite-based internet. Already 400M Indians are connected to the internet via their mobile phones.

India is not only a huge consumer market which is becoming more knowledgeable about the products the people wish to consume. It is also a melting pot for all kinds of experimentation that companies would like to pursue in the interest of testing their offerings. India is also an entrepreneurial nation of youngsters rushing to launch their new ideas or adaptation of ideas which have worked elsewhere. Given that the government is pushing the idea of a “Digital India”, it is not surprising that the population is warming up quickly towards the concept of all time and real time connectivity to test ideas, consume products, evaluate anything and everything. This is nothing short of a revolution in the making.

The good thing about India is that there is space for everyone. With its English-speaking workforce and modern orientation, India will become the third largest economy of the world by 2030, if not by 2025. It is critical that India offers opportunities to its aspiring people via the concept of free internet. Such an offering can even be positioned as free for 3 years, followed by USD 1 per month thereafter, for segments of the population which has an annual per capita income of USD 2,000 or less. For people earning above this figure upto a cap of USD 5,000 per capita, the rate could be fixed at USD 3 per month. People outside this cap would have to pay the commercial price. Such a subsidy scheme would go a long way in facilitating internet access to the teeming millions of Indians, transforming the country towards a Digital India.

I do hope this happens for the benefit of all Indians.

Cheers,

Vijay Srinivasan

11th June 2017

 

 

A negative vote today in French Elections


Will France follow Donald Trump’s unexpected victory in the U.S. Presidential Elections and the Brexit philosophy endorsed by millions of British voters to get Britain out of the European Union (EU)? Will the French voters elect an untested nationalist, against a well-established urbanite with a global outlook?

How France decides today in its Presidential Elections (7th May Sunday) will have far-reaching ramifications around Europe and the world. It will determine if the EU survives as a political and economic entity.

While I have no personal views on the French Elections, I am debating if  young, disillusioned French voters will swing in favour of Marine Le Pen, against Emmanuel Macron. If that swing happens in a wild fashion, it is not inconceivable for Le Pen to claim the French Presidency and that would turn Europe upside down. Le Pen is against all established norms in French and European society – against trade, against immigration, against globalization.

In the U.S. Presidential Elections, I bet against Hillary Clinton and won my bet. I thought that she did not really appeal vigorously to the male, white, Christian, rural base of the middle America – and she didn’t, apart from all the other issues which plagued her campaign (like the email server problem, et al). I was not entirely in favour of Donald Trump, but then there was no other credible alternative, and he easily won the elections against Hillary Clinton, though he missed out on the popular vote count.

Can something like that happen in the French Elections?

Why not? A negative vote is entirely possible.

France is in a crisis. Its political and societal divides have engulfed its core to such an extent that radical outcomes cannot be thrown out of the door. France is under attack by immigrant extremism, or terrorism. Economy is in a turmoil and youth unemployment is rising. France has so many problems today that a traditional, globalized, suave and urban President will not get far into his presidency. Macron could prove himself otherwise, but it is highly unlikely he can fix France’s problems, as he does not have enough political and economic management experience. If he fails in his first year as President, it is almost a given that Le Pen’s supporters will revolt and her base will increase dramatically. And, let us not forget that Macron does not even have any party’s support – in fact, he has no party! Yes, he is coming on the strength of a people movement, not a political party!!

Can Le Pen fix the problems of France?

Even less likely than Macron. Her party has always been on the fringes, and most people are shocked she made it to the final leg of the Presidential Elections. She has no experience managing a large country or economy. She would need a lot of management help if she ever gets close to the seat at the Elysee Palace.

So, in a nutshell, it is going to be a huge challenge for France. May be Macron will win as he has a 25 point lead over Le Pen, but then one never knows. But France has to blame itself for any fiasco, as both candidates have never held elected posts and have hardly got any experience, and may not win parliamentary elections scheduled for June this year. How can this happen? How will a President govern without the support of the French Parliament?

All this points to a hugely challenging time for the French people.

The implications for Europe and the larger world community are huge.

Watch the news today and tomorrow closely to see how France votes for its President.

Cheers,

Vijay Srinivasan

7th May 2017

Anti-Elitism and De-globalization


The world is rising against elitism, which is just another word for “learned segmentation”. It means that elitists are rather segmented folks – like a specific group of well-to-do people, a set of people who do certain things with a unique taste, a group of alumni from prestigeous institutions, a bunch of guys who drive Ferraris, a group of ultra-orthodox religious folks, a caste group (in the Indian context), and generally a bunch of well off folks who do similar things and think almost in the same manner, to the exclusion of almost all other people.

Personally, I have tried to stay away from any group with a label stuck on it. I exited the IIM-B Alumni activities as my socialist leanings are not compatible with an entrepreneurial or corporate money bags kind of people, though they may be my class mates. I have rarely seen any one of them doing charity, or engaging in philanthropic work for the downtrodden. They may well wish to do so, but evidence is limited. I even avoid brands – I don’t want to be seen driving a Mercedes or BMW or Audi; I do not wish to have a Rolex watch; and so on and so forth. I was without a Mont Blanc pen for a long, long time and could not say no when my children decided to gift one for my last birthday. When I am seen on the road, I just want to be a normal guy with no accessories which could define me in some way or the other.

The reason why young people are rising against elitism is the strong perception that they have about the relationship which exists between elitism and wealth, almost in an unholy manner, which in turn leads to inequalities in income. Wealth generates more wealth and income for the elitists or the rich folks. Others are excluded, and the exclusion is almost surreal. Things go on as though nothing has changed, everything is hunky dory. People who make obscene money on Wall Street continue to make that money year after year. Similar groupism and exclusions can be cited in almost every scenario. The insidious reach of money and networking power has to be seen to be believed.

One can argue about the merits of meritocracy in this context. I refute strongly the link and the necessity for any society or government to promote meritocracy at the cost of the rest of the society at large. What about the 95% of the people who cannot make it into that “special” list of people who will keep getting promotions and scholarships? In a nutshell, why would the special people be any different from their predecessors? They belong to a particular school, university, way of thinking, family, et al. That does not mean the rest of the people are stupid, or below average, or even average. There is this argument that societies and institutions prosper because a set of meritocrats has been handpicked to manage them and deliver results that are expected. While in a limited set of circumstances this may be true, in the larger context a social mix would provide better stability and sustainability with deeper understanding of societal issues and challenges.

I have not seen a huge difference between people with prestigeous MBAs and non-MBAs in the corporate context. There is only one difference – there is more structured thinking when you have some MBAs around you, and less of that when you have staff without MBAs. Apart from that, outcomes are not particularly impacted because MBAs are driving the businesses or even governments.

So, let us come now to the issue of “de-globalization”. Is there a relationship between “anti-elitism” and “de-globalization”? What do you think?

I believe that the movement against globalization has to be seen in the context of social elitism which predicates that globalization is the way to go for the world as a whole, since societies, countries and organizations can work together to produce better than average results for their combined economies. As a social theory, it is fantastic with an altruistic bent to it, no doubt. However, as a practical application of an interesting theory, it comes short as the results have been less than spectacular. The idea is not “win-win” but rather “win-some win for some time-lose-lose ultimately”. This means that not all sides are winners in a globalization effort. In the outsourcing example, India and the Philippines can be winners to a large extent, the U.S. and the U.K. are initially winners from a corporate cost-slashing perspective, but later become losers when the enhanced business competitiveness cannot continue at the cost of increasing job losses for locals.

The argument that outsourcers make the U.S. businesses more competitive does not hold water for the long term (it is fine in the medium term), as competitiveness in this context refers just to increased business profits. Competitiveness in terms of enhanced proficiency can also be obtained by training the locals to a large extent. Let us not forget the increased business profits come because of lower wages paid to foreigners as compared to the locals.

The liberal thinking is that globalization is great for increasing the volume of trade, and as more nations trade goods and service, eventually the world will become one homogeneous market. Great idea, no doubt. But it is naive and misses out on key economic fundamentals – that average per capita income across supplying and consuming countries need to be similar in order to enjoy true globalization. When India has a per capita income of USD 3,000 (on a PPP basis), and China has USD 8,000, the difference is huge between these two nations and the developed countries which have upwards of USD 40,000 per capita. So, a job loss in a developed country is going to have a major impact in its society.

For the elitists, it is okay – as they are perched on the top anyway. Armchair theorists won’t do anymore given the disarray in the developed countries. Fresh thinking is needed. The answer is not coming from anti-elitists only, but governments and economists have to think harder in terms of sustainable solutions.

Is it any wonder that social democrats such as Bernie Sanders enjoy rock star status? It is easy to jump into a movement and start shouting at the top of your voice, but harder to derive economic solutions which will stand the scrutiny of society. Anti-elitism and de-globalization are not new fads or book topics, but social forces which would make policy makers think deep and in a totally new way.

Cheers,

Vijay Srinivasan

19th February 2017