Do it yourself

The two-decade period between 1988-2008 saw the most remarkable progress in the sphere of international relations and collaborations. The technological developments made global trade faster and cheaper, aiding global businesses to collaborate with distant partners to optimally exploit their core competencies to materially enhance productivity. End of the Cold War and fall of the Berlin Wall led to nearly full integration of global economies and unprecedented growth in global trade. The global financial crisis (2008-09) however paused the trend. The global trade and technological partners forces began to grow increasingly uncomfortable with technological, trade and political collaborations. Emerging global forces like China & India erstwhile global political powers like Russia, the UK, and Japan etc. found the terms of engagement unfavorable and started to focus on developing regional alliances. Breaking of global supply chains due to outbreak of Covid-19 pandemic provided further...

Continuing from yesterday ( Struggle to find a balance ). From the developments, events, and engagements in the past two decades, it is evident that India has been making credible efforts to sustain an affirmative engagement with the global community. These efforts include opening the Indian economy to the global business community; actively participating in global alliances and forums; developing social and physical infrastructure; committing to global agreements in the areas like economic cooperation, climate change, transparency in fund flows & investments, crime prevention, terrorism, etc. These efforts have been made at three broad levels – (i)     At the state level through suitable changes in policy framework. This includes, inter alia , deeper strategic alliances with Western countries (civil nuclear deal, QUAD, etc.); bilateral (free) trade agreements, liberalized FDI regime; BRICS and G-20 cooperation; etc. The vaccine diplomacy during Covid was a sig...

Besides other things one thing that the year 2020 has established is the need for global manufacturing to rebalance its over reliance on China. This need was being felt for past many years, but the following factored appeared to have reinforced this need in 2020: (a)   Major global economies like US, Japan and India took some aggressive tariffs and non-tariff measures to correct the imbalances in their trade with China. (b)   Pandemic induced mobility restrictions exposed the vulnerabilities in the global supply chain and prompted businesses to diversify their manufacturing more widely. (c)    Geopolitical aggression shown by Chinese establishment is now increasingly perceived as potent risk for global supply chain. Political unrest in Hong Kong has may have also embellished this perception. A recent survey conducted by UBS highlighted that “70% in the China CFO survey and 86% in the US CFO survey said they had moved or plan to move a part of t...

Continuing from yesterday (see Preparing for chaos -2 ) As I said earlier, the world will be a materially different place in five year from now. However, notwithstanding the technological advances and development of advanced forecasting techniques, it may not be accurately predict the contours of the global order in 2025. The learnings from great depression may only inform us that changes will be dramatic. However, these may not guide us about the nature and direction of the changes, because the present circumstances are very different from 1930s. Given that I am a tiny investor, and my concerns are mostly limited to the local Indian assets, I would like to only assess (a)    Where India stands in this melee? (b)    What changes are required in my investment strategy to mitigate the impact of transformative changes that may take place in next 5 years? I hear lot about a Industrial revolution in India. The government has spoken about many ideas like "Make ...

In an interview with the Manchester Guardian in 1965, the then foreign minister of Pakistan Zulfikar Ali Bhutto famously said, “If India builds the bomb, we will eat grass or leaves, even go hungry, but we will get one of our own. We have no alternative.” The world has seen how Pakistan has built the nuclear bomb and what cost its citizens have paid for the toy that will perhaps never be unboxed. It may be argued that the nuclear arsenal build by Pakistan and India has created a strong enough deterrence for any war between the two countries. Regardless, we had a war in Kargil (1999) and significant rise in the violence in the Kashmir Valley and along the line of control (LoC) since both countries declared themselves to be the nuclear powers in 1998. India has struck twice deep into PoK and changed the status quo materially in J&K in past 5 years. Many soldiers and civilian die every year on the both sides of LoC; and Pakistan economy is surviving on the IMF support. Bhut...

Unpredictability has been one of the key characteristics of the incumbent Indian government ever since it assumed office in May 2014. The government, especially the political leadership, has taken numerous decisions that have surprised most of the citizens and global observers. Overnight decision to replace all large currency notes in circulation (demonetization); surgical strikes in PoK; air strikes in Pakistan territories; abrogation of article 370 of the constitution and bifurcation of the state of Jammu & Kashmir to carve out Ladakh as a separate union territory; criminalization of the practice of triple talaq; amendment in the citizenship law; abolition of planning commission; restructuring of corporate tax rates; and most recently the decision to impose a total lockdown in the country to control the spread of COVID-19 virus etc are some of the examples of unpredictable decision making. The tendency to surprise the stakeholders has not remained limited to the ...

The government has announced a spate of policy measures to put the economy back on the growth path. The measures and intent to encourage manufacturing in the country is however the most publicized and discussed about policy initiative. It is a clear departure from the extant policy of global cooperation and using bilateral and multilateral trade agreements to benefit from the resources and manufacturing prowess of partner countries , So far, we have not seen a comprehensive policy framework for the policy initiative. The basic principle of management would guide that to execute such a major policy intuitive, which may have significant impact on the lives of 140cr people, the planners must first lay down a detailed conceptual framework, which defines in very unambiguous terms, at least the following: (a)    The need for such policy initiative; especially the circumstances that have necessaitated the significant change in the policy direction and intent; ...