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10 hopes for the New Year: Will PM Narendra Modi get his mojo back?December 21, 2015, 5:30 AM IST
As 2016 beckons, the world looks a sober, sombre place. While the Islamic State and it depredations may get the headlines, the number one crisis facing the planet is not terrorism but an economic downturn that shows no signs of ending.
Much of the past decade, following the financial mess of 2008, has seen the global economy at slow speed. Since then, it has got only worse. One by one, all the emerging markets have lost their sheen, with even China falling from a 10% GDP growth era to a 5% perch.
The problem is the coming decade threatens to be no better. Tepid growth is widely predicted. The commodities super-cycle has turned so negative that whole societies and (for India) export markets are in turmoil. This is largely a post-2014 phenomenon.
It means industries such as mining, which were meant to create jobs in India — in Jharkhand, Orissa, West Bengal and Chhattisgarh, for instance — are silent. While India (and China) will be better off than most in this decade ahead, there are still too many questions looming.
For India, the global downturn — history will give it a name, as it did the Great Depression — has coincided with the peaking of its youth bulge. A youth bulge is a social challenge at the best of times. In an age of economic uncertainty, such a challenge is heightened. India is right in the middle of this intersection, which will throw up volatility, unpredictability, policy swings and electoral impatience.
What does this augur for Prime Minister Narendra Modi? Seen in the context of expectations generated by his mandate of 2014, it gives him limited room for failure. Seen in the context of international economic currents, other than low oil prices, it gives him limited room for success.
Yet, notwithstanding the clutter and noise, in Parliament and outside, amid culture wars that few normal people either understand or quite care for, Modi is aware the benchmark against which he will be judged in 2019 is the economy. This has been his focus in the last 18 months, never mind the attendant drama.
His foreign policy has been used primarily as a tool for his economic strategy: to revive the India story; talk up business confidence; promise, to the degree any government in India can promise, policy consistency; and invite long-term investors, from pension funds to sovereign wealth funds, to put their money on India and Indian infrastructure. Even his simultaneous minuet with Japan and China — with a clear preference for one — has aimed at offering market access as an inducement for investment and manufacture in India.
sent from samsung galaxy note3 neo, so please excuse brevity