Thirty years ago, the period between May 1990 and December 1990,
was a watershed in global social, political and economic order. In the 7
months, the world changed the most in the post WWII era. For India, in
particular that was a defining period in post independence history.
In global context, some of the key events that took place in
those seven months included the following:
(a) Apartheid ended in
South Africa, marking the end of one of the darkest chapter in world history.
(b) The process of USSR
dissolution begins. The Supreme Soviet of the Soviet Union grants Gorbachev
special powers to secure the Soviet Union's transition to a market economy.
(c) Soviet Union collapse
marked the end of a bipolar world that had divided the world in two camps in
post WWII era. In the subsequent two decades, USA would reign over the world as
the only super power.
(d) End of cold war between
USA and USSR with treaty to destroy chemical weapons and most of the nuclear
arsenal.
(e) Iraqi forces invaded
Kuwait. This was followed by the invasion of Iraq by 34 nations in a joint
operation, first of its kind in post WWII era. This was followed by a long
bloody war between the super power USA & its allies on the one side and
radical Islamic forces on the other side. The war on terror thus started still
continues, but many key supporters like Saddam Hussain, Muammar al-Gaddafi,
Osama Bin Laden etc have been eliminated.
(f) Reunification of
Germany, ending more than four decades of separation of German people, healing
the post war wounds.
(g) LTTE guerillas
massacred 600 unarmed Lankan policemen intensifying the long violent conflict
in Sri Lanka.
(h) WHO removed
Homosexuality from its list of diseases, erasing the centuries old stigma
attached to the practice.
(i) The era of Iron Lady
Margret Thatcher ends in UK.
In the Indian context also many significant events took place,
which changed the course of Indian politics, economics and social milieu
forever.
(i) Massacre & exodus
of Kashmiri Pundits in January 1990 was followed by firing by CRPF on funeral
procession of Mirwaiz Moulana Muhammad Farooq in May 1990. These events
triggered a long intense terror war in the valley, nearly destroying the heaven
on earth.
(ii) Mandal Commission
report was implemented in India, reserving 49% of government jobs for SC/ST and
OBC in India. This changed the politics of India forever, marginalizing the
Congress Party and strengthening the regional parties who contested elections
on social justice slogan not the poverty elimination.
(iii) BJP President L. K.
Advani undertakes a road trip (Rath Yatra) to mobilize support for a Ram Temple
in Ayodhya. The V. P. Singh Govt falls, after Advani is arrested in Bihar. The
BJP rises as the primary challenger in India's national politics. 6 year later
Atal Bihari Vajpayee would make the first BJP led coalition government in India
that lasted 13 days.
(iv) Chandrasekhar, a
socialist leader becomes prime minister and initiates the transition of Indian
economy from a controlled economy to free market economy. The job would be
carried forward by the Congress government formed in 1991 under leadership of
P. V. Narasimha Rao.
This was also the period, when the stock markets globally,
including India, did rather well disregarding all the turmoil, uncertainty and
concerns.
Three decade later, the circumstances are almost similar to the
summer of 1990. The outbreak of novel coronavirus COVID-19 has completely
shaken the global economics, politics, geopolitics and social framework. The
things look set to change dramatically.
Nothing looks outside of the realm of possibilities. The ways
people work, travel, socialize, live, eat, and communicate are all set for
major changes. The global strategic and trade relations face the prospects of
dramatic paradigm shift.
India will also be a participant in these changes. Marking
"anything", yes I repeat "anything", as unlikely or impossible
may not be appropriate at this juncture. The more uncertainty we face, more
certain we must believe in the change.
The resilience of stock markets in light of this uncertainty has
perplexed many market participants. Many readers have asked about my views on
the divergence in the stock indices and real economy.
I will share my thoughts on this in next couple of days.
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