The wheel has come full circle
It was 1991. My country was going through a huge period of turbulence. Rajiv Gandhi had been brutally assassinated, and the leading party Congress was rudderless, when a dimunitive but extremely intelligent politician Mr P V Narsimha Rao was thrust into the limelight. All other satraps imagined he wouldn’t last too long, but he did. He not only lasted five full years, he ended up transforming India.
India abolishes industrial licensing – headline in Economic Times.
India adopts the New Economic Policy – headline in Times of India.
India opens up for business – headline in Hindustan Times.
As a young man about to graduate from the IIT Delhi, I was a curious newcomer reading these newspapers with intense interest. For the first time, I was introduced to the concepts called “globalisation”, “liberalisation”, and “privatisation”. These were projected almost as the panacea for an economy struggling with rapid population growth rates, but poor industrial output.
Prime Minister Rao thrust India into the golden period of high GDP growth rates (despite all the leaking public services) and ensured that Indian entrepreneurs (like me) got a fair chance at doing what we loved to do – building enterprises. That would have been impossible just a few years ago.
(By the way, the public services have remained leaky till date!)
It was a bright new era. Open borders. An open world. Free trade (whatever that was supposed to mean). A new WTO coming up (Jan 1995). Wow. The world will be a free place, no borders stopping capital or labour.
Today, 26 years later, while sitting with my son about to enter college, I watched Donald Trump say everything that was the direct opposite to what I experienced in 1991.
We will put America First ⇒ The end of liberal globalisation as we know it.
We will ensure that Americans get their due ⇒ The whole Chinese narrative of “free trade” whacked.
We will ensure others don’t get enriched at our cost ⇒ Allies, beware!
We will eradicate radical Islam from the face of this Earth ⇒ Pakistan – any reply to that?
We will eradicate radical Islam from the face of this Earth ⇒ Music to a patriotic Indian’s ears.
In the most radical of ways, Mr Trump has made it clear that starting Day 1, he intends to remain true to those who voted him to power, despite the brutal ridiculing he received at the hands of the liberal mainstream media and “coastal elite”. Even the media and the elite have powers that are not infinite. While he shook hands warmly with Obama, he made sure to pull the philosophical rug from under his feet almost immediately.
I could hear the globalisation engine emit a loud noise as the gears went into reverse.
Here is my take on what the coming era will hold for all of us :
- Bad days for Indian I.T. companies, if Trump really does what he said today. Since most Indian IT companies make their profits using cheap labour packaged into dollar-billable assets, their basic model may evaporate. Since these companies are largely into services and lack any world-beating product (say, in consumer internet segment – the market of the future), their profit story may get a rude shock. And don’t even imagine what will happen to the hundreds of engineering colleges dependent on “mass campus recruitments” to stay liquid. Bad luck for IT cos. shareholders, as valuations will tumble down the hole. If they don’t, it will be another mystery of this story called “globalisation”. All the effort Mr Jinping put in at Davos seemed futile today.
- Pakistan and China may get the hard end of the stick pretty soon. India has cried herself hoarse reminding China (touchy as they are about “One China”) that our own territorial sentiments must be respected. In the most blatant, devious and insulting of ways, the Pak-China combo has rubbed salt into India’s wounds. It will be very bad days for that approach, if Trump sticks to his words. And anyway, for Trump “Hindus are a great people”. Thank you Mr.Trump.
- India’s overall geo-strategic interests will get a terrific boost. We are not a major manufacturing nation anyway – at least not when compared to China. So any harm that comes to exporters to the US, will be minimal in our case (relatively). We will recover. But for those hoarding trillions of dollars and using that leverage geostrategically, time to make fun of the Commander in Chief is all but over. Good luck to them!
- The closeness of many Indian businessmen and leaders to Mr. Trump must be leveraged to push India’s case real hard. The time is right to reclaim the Indian Ocean Region for a long, long time. The time is right to speak aloud that enough is enough, stay off us. And anyway, Mr Rex Tillerson has warned the dragon to stay off the south China sea islands.
- More populism across the world – Trump’s remarkable campaign (for all the hatred it evoked) will be a template for many more watching him closely. The frustration of the 99% may spill over, flooding and swamping away the riches of the 1%. Anything seems possible now.
To all the liberal lobbies tearing their hair out, it is time for a cold, objective look into what prompted this amazing populist backlash.
Can technology really be allowed to take over millions of jobs?
Will people just sit and watch as elites corner all the benefits progress has to offer?
Will a condescending attitude towards the less fortunate ever sustain in the long run?
Will the narrative of a Utopian future in the presence of dystopian present ever hold?
Mr.Trump’s arrival is the beginning of a whole new era of trade, finance and economics. He will not rest until he gets the job again (the next 4 years). In that light, among other things, I wonder what mighty institutions like the IIMs will do now, as the whole edifice on which their lofty existence was built is crumbling right under their feet. First it was Baba Ramdev and Acharya Balakrishna who threw all the polish and facade of modern management practice down the gutter by upstaging monolithinc rivals through brutal innovation and back-to-the-roots. And now Trump. Ha ha – unimaginable.
Welcome to the brave new world, ladies and gentlemen. Get your seatbelts along.
And stay glued to Twitter. He is about to announce something soon 🙂