Jose Thomas

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A ROLE TO PLAY
Tuesday 26th November, 2013



     

 

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Hello everyone,

Most of you probably know that I haven’t written a blog in the last one month. While I would like to take full responsibility for this, I must admit that I got too busy travelling extensively. I've covered about 15 nations in past 150 days! Learned a lot and it gave me new vision and hopes. Nonetheless, I am glad to have the opportunity to start writing again.

As 2013 is coming to an end, I started to look back at the beginning of this year. The year took off very well with a lot of excitement and I have been able to achieve quite a bit. Of course, I had to face bumpy roads and many unexpected events. During the middle of 2013 I started to get a bit worried about the changing situation in India. High inflation, high interest costs, current account deficit, fiscal deficit, threats of down grading, political instability, forth coming elections, and so on. I started to feel the pinch as a businessman. I became shy to borrow and even invest into definite business opportunities. To borrow in India, when the whole world has got cheap money, is very risky. For those of you who do not know the interest rate in the hands of a borrower in India, its approximately 12% to 14% per year.I started to wonder why India, all of a sudden, started to take a back foot. There is no excuse in saying that every other economy is facing pain. My belief is that we should find solutions on how to fix our home instead of comparing ourselves to our neighbors. Since I love my nation, I have various business interests in India. I started to wonder “How can I contribute to my nation?” I started to get the inner feeling that I should do something for my country, to be able to share my rich experience especially in “crisis management”.

As I write this blog you can see the headlines of the world, “China economy being put back by Xi Jinping taking major steps including the ‘one child policy’”. I guess the Chinese government, which is very proactive in keeping the economy live and kicking, realized they were on a downstream and quickly moved in with corrective actions. I also wondered how the Chinese transformed from the Maoist days to what it is today. Through the Maoist regime tens of millions died through famine and political struggle. But see where they are today. I was amazed to see the moves they made in the recently concluded communist party meeting.

Same is the case with the United States of America. In 2008 the economy went into the tank with unemployment rates reaching close to 10%, leave alone the GDP. Now look at the way the U.S. transformed from recession to growth with unemployment currently at 7% and GDP close to 3%. They fixed it!

Now, look at Japan. Recently I was reading about the Japanese Government initiatives for adding more steam to the already “out of trouble Japanese economy”. It just took the action of one person, Mr. Shinzo Abe, the new Prime Minister who took charge without fearing political fallout from the opposition and went to work as a CEO driving the correction process. Today, the majority of Japanese businesses are on the rise. Most of the Japanese companies that were in the red are now making huge profits. I read recently that the Japanese Government is coming up with a very innovative idea, “cool Japan fund”. This fund backs its grand ambitions to explode Japanese goods and services on a world wide scale to become “a driving force for Japan’s economic growth”. Look at their creativity. They are going all out to fix things!

Now I am sure you are wondering what I am going to write about India. We all know that India is facing serious economic down turn and I wonder what corrective action we are taking. Unfortunately, what we see today are issues that are not related to “economic growth” but what we read in the press is all about negativity. While I agree politicians have limitations, one should wonder if, for saving the nation, politicians should leave behind their ideological differences and egos, and get to work along with the opposition in correcting the pit falls of the economy. As we all know, each nation’s economy’s strength determines the foundation of everyone’s life quality. From the richest to the poorest, everyone needs money to meet their various needs. What am I driving at? I wish the government of India hires more businessmen with real world experience to play a key role in correcting the economy, and here I am officially volunteering myself for the job. I am ready and well equipped and a lot can be done. According to me, the bureaucrats who advice and frame policies are not businessmen. Today, what the country needs are people with an entrepreneurial outlook. Besides me; there are many more experienced entrepreneurs like Deepak Parek and Ratan Tata who live in India. Recently I heard that Mr.Ratan Tata was elected as a board member of East West Centre, a prominent American think tank. Why couldn't the Government of India get him? I remember once he took up the chairmanship of Air India and he failed. But ones failure does not mean that we should fear failure again.

See what is happening every day. We read the newspapers and watch TV to see and hear many bureaucrats and senior politicians making their own predictions about GDP, fiscal deficit, CAD, etc. Sometimes I feel that some of these predictions are made by “palm readers”. I don’t think the hard truth is considered when these statements are made. I will be writing about this subject in detail in the next two to three months because I think, like the other major economies, India needs to act. India needs to take corrective action putting politics behind or else not only will the current generation face problems but also the future will have to face the consequences. Remember India has to feed 1.2 billion people, not only with food but also the desire and growing needs of close to 300 million youth.

What has India done other than making predictions? Let us follow the Chinese, the Japanese, and Americans and fix India. We have a lot of talent in India and with all the resources we have, we can easily turn around and be on the “driving seat”.

Friends, I wish I had a role to play. If you are a student reader, stop learning economics from your text books. If you are a white collar financial analyst, pay attention to my blog. Keep reading!

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