As The Global Economy Comes Unstuck, Can India Be The “Vishwaguru” Savior Of The World?

Ever since the Free Market Neoliberal Consensus emerged in the aftermath of the American repudiation of the Gold Standard, the Global Economy has been held together by the “forces” of Globalization, Free Trade, Migration, Cross Border Flows of capital and services, a Bi-Polar superpower rivalry, and above all, low to zero interest rates worldwide ushering in a decades long expansion, lifting Billions out of poverty, and leading to an “era of prosperity” and high growth world over.

There are enough indications that this “goldilocks phase” is coming to an end. For sure, the Ukrainian war accelerated the “demise” of the Post Second World War “consensus”, solidified by the aforementioned ideology. However, some of the “undercurrents” undermining the global economy predated the Ukrainian war and chief among them is the rise of “populist” leaders of the ultra nationalistic kind, more often than not belonging to the far right of the political spectrum. Donald Trump among others has done more damage to globalization, with his MAGA rhetoric, and all out “attacks” on immigration.

Apart from this, the Covid pandemic “buried” whatever was remaining of the Neoliberal “illusion” along with Millions of victims of the deadly virus. Next came Putin completing the Third P of the 3Ps of Populism and Pandemic. The combined impact of all these “destabilizers” has been high inflation, low growth, and an estimated 90 Million people pushed into poverty just in Asia alone. As Central Banks worldwide raised interest rates to rein in inflation, the “brunt” of the cumulative hikes is being felt now with depressed demand, delinquencies, debt crises, and massive reduction in purchasing power of consumers.

What we have now is a Global Economy in a “stagflationary” spiral where the Eurozone is testing recessionary conditions, and multiple Low Income countries on or already on the verge of default. If this weren’t bad enough, now we have the Big C, China, on a “deflationary” doom loop, spelling more trouble for the Global Economy. Remember, the Chinese “guzzle” Oil, gobble up commodities, import luxury goods, and are otherwise the “second engine” powering the global economy for the better part of three decades. Just imagine what would happen if all this “demand” dries up or turns to a trickle!

This, my dear friends is what the “problem” is! The party is coming to an end, and now the battles over who picks the tab, and who runs the show from now on begin. For sure, India under Modi looks poised to step in and step up. Who knows, maybe our “Vishwaguru” moment has come. Already the Indian Economy is clocking brisk growth rates. With a Billion plus consumers and a “healthy” 400 Million of them in the Middle class, there is a “market” for the taking. Add its Youthful population and there is no reason why Indians should “waste” the Demographic Dividend, especially when an Ageing China, is reaching the limits of its potential. Best of all, there is now a new “energy” and a self belief of “can do” attitude among us, though this borders on jingoism now and then.

I personally feel that given political will and more “tolerance” for diversity, India can “seize the moment”, given its “deep” linkages to the world, and its established base of human resources. Already our IT Industry is a significant success, though we DO need to move up the value chain quickly. Our services sector ranks as world class and our financial markets have been long enough to “absorb” foreign capital without much ado. Of course, there is gross inequality and unforgivable inequity in India, mainly due to the many “divisions” of caste, class, and religion. As I said before, this Decade is ours for the taking, if we can rise above the “millions of mutinies” that “tear” us apart.

Turning to the “forces” which I explained as coming “unstuck”, India has a chance to turn them to its advantage. We are “friends” with both the United States and Russia, and we also “sit at the table” with China, despite our many differences. We did jump on to the Globalization bandwagon, though not as early on as China. And, we have been electing populists since Independence, given our rather impoverished status. As for plagues and pandemics, we have long been looked down as a country of “diseease”, and sadly, something not to be proud of even now. My point here is that, we are acquainted with all these and much more in our Three Quarters of a Century as an Independent nation, and SO, it is time for us to now “conquer and balance” the centrifugal and centripetal forces which the global economy is now “reeling under”.

Before I conclude, there are a couple of things that I would discuss. We have the “hardware” for a manufacturing and infrastructural “renaissance”, the familiarity for an another Green Revolution in agriculture, and an institutional and bureaucratic framework to aid our “rise”. All we need now is the “software” of human capital, ease of both business and governance, mutual respect, eliminating red tape and minimizing corruption (I do believe that no country in the world can be totally free of corruption). In short, the “circuitry” for “take off” is there. What we need is a “will and vision” to soar high!