The new wave of Emerging Markets- 1.0


English: Map of Emerging Markets

English: Map of Emerging Markets (Photo credit: Wikipedia)

On a friend’s suggestion, I have started reading this book the recent economic bestseller ‘Breakout Nations’ by Ruchir Sharma, who is the head of Emerging Market Equities and Global Macro at Morgan Stanley. It is one of the must reads for any who is interested in knowing how the emerging market economies run and insights on different sociological, demographical, political and industrial parameters required to judge the nation’s growth curve, or like he mentions a nation which can standout in the future of economic parade, the growth survivor Breakout Nation.

As we know, BRICS are more or less the most overhyped term used in the Emerging Market perspectives for businesses and nations. With the dominant force of the US in the world economy diminishing after the 2008 financial crises, there is an optimistic wave among investors and companies to reach out or expand or invest into these economies of the future who are turning out to be major players in the world market.

China: With China fueling over a double-digit growth over few years and dependent on exports, it runs on a constant urge to grow and become the world’s next superpower. Though, its communist political party which has been in power since a long time and has carried a legacy of their ‘its glorious to be rich’ leader Deng Xioping, it still has to keep up with the upcoming investment trends and demographical misfits which they are likely to face after 2014 read [the number of young people joining the workforce is going decrease over the next decade] and the businesses have overshot their manufacturing capacities in terms of labor and capital. The businesses in China run over exports and cheap labor, that might turn against them in the coming decade. With the center Beijing becoming a political powerhouse, the real estate market is on a high and has become unaffordable to the middle class chinese family. The first condition of girls in China for their marriage partners is that the latter should own a house. Though the per capita income is on rise, almost around $4000 and inflation at around 5.5 %, the future of the Chinese economy is not going to be based on the type of government in the center but on the kind of leadership that takes China forward. Owing to the popularity of chinese proverbs, one which their leader in Communist Party of China, Deng Xioping quoted ‘No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat’. They have been good cats in the last three decades, surviving as a cat is going to be important for them in the coming overturns and times.

India: As India’s great hope trick continues to pervade over the minds in the west, it is anticipated to grow in building conscience over its complexity of the Coalition government, State politics, diverse Stock markets (0ver 5000 listed companies in all types of sectors from Energy to Automobile to Pharmacy) and Sadhus of the himalayas. Coming from the crony past of License Raj, a red tape-driven bureaucracy in which licenses were given to only who could manufacture goods but also determining at how much and at what price, to the liberal economy from 1991, it has come a long way in reforms and policies mostly in favor of the nation’s capitalists. As Ruchir Sharma describes India as a high context society that believes deeply in tradition, history, favoring the in-group and hence more vulnerable to corruption. The country has deepened its roots in the world economy and has got a seat in the center-stage of developmental economics. Though the per capita income is around $1400, owing largely to its 1.2 Billion population, the country has witnessed a growth boom between 2003 and 2007, nearly 9% per year. With a large savings environment inherited from its ancestors and a large workforce, the domestic consumption in India is growing every year on year basis. Though, environment of doing business in India is largely dependent on your political connections, there is a lot of divestment from the large companies now ‘outward facing’ who are in-turn expanding their businesses to other emerging markets. Investment by Indian businesses has declined from over 17% of GDP in 2008 to 13% now and overseas operations now accounts to more than 10% of overall corporate profits compared with 2% five years ago. This leads to a spike in inflation. With inflation is around 7-7.5 % and the growth rate in GDP is around 5%, the Indian crony capitalism is at its peak leading to various scams in the past 5 years. With more number of Entrepreneurs and young people joining the workforce, the reforms of the government will help small businesses measure its true value. The Congress led UPA government has disappointed in its second term, but the bucks are on the mighty of the west in the upcoming 2014 elections. Democracy can always overturn and is sociologically unpredictable. As E.M Forster remarked about India, But nothing in India is identifiable, the mere asking of the question causes it to disappear or to merge in something else. If we are able to identify our core roots, we can be an economically sound nation in decades to come, if not a superpower. Definitely, a chance to become a breakout nation.

Will write about Brazil, Russia and other emerging markets in the coming posts.

India-Superpower in 2048?


Recently, came across this enthralling TED video based on statistics. Do we envision a hope here?

I am optimistic if there is good leadership at the center of Indian Politics.

The Game of throne


The one thing for which India is famous about is its political culture. It is that one thing which keeps everyone bonded in terms of happenings, opinions and the made-up news. The recent series of exposures made by Arvind Kejriwal from the India Against Corruption team (Yes, he finally joined politics forming his own party and departed ways with the Gandhian Anna Hazare) on different politicians has pervaded the stream of wave among the commons in India. Congress, which has formed UPA government (United Progressive Alliance), a coalition government infused with several political parties in India like BSP( Bahujan Samajwadi Party), SP( Samajwadi Party- who’s ruling Uttar Pradesh, largest state in India with highest number of parliamentary seats), NCP( Led by Sharad Pawar), Trinamool Congress (Now out congress over FDI in Retail and Diesel Price hike, originally from ) etc has been in doldrums since early 2009. The political instability lies in the formation of this coherent, co-operative and co-stupid government which is deep-rooted with corruption and ignorance.

The coalition government has always divided the country by the political parties and there is no mutual decision-making in any of the issues faced inside or outside the country. This issue is the issue of division among the masses of the country, who eventually end up suffering. I don’t want to sound like Arundhati Roy here, but the country needs an elected representative from its capitalist regime, who just doesn’t see profits of his/her state or company but also see profits for the masses. And only a capitalist can understand this. The economy of the country lies in the hands of the capitalists and as they say the global economy is a capitalist economy. One such example is of Gujarat’s Chief Minister Narendra Modi from the Opposition Party ( BJP- Bhartiya Janta Party) who is serving as Chief Minister of Gujarat consecutively for the second time, and recently TIME Magazine covered him stating ‘Modi Means Business’ from the good he has done to Gujarat State in terms of business, trade and law. We need people like him at the center, if not him if we still hold the grudges of the past.

The country needs unidirectional people with a single focus of doing good to the country and not just doing good to their house. For that, everything matters. The single vote will matter. So, all those who have been thinking not to vote must stand up, renew their voting cards and vote in the upcoming elections whenever they be either Midterm polls or 2014. Then, we will be called the true citizens of the country, despite anything, for the love of god.

I am going to vote for the first time which will embark my start to all the next times.

You play the game in the game of throne. And let your voice count.

The Indian Urban


Is our country good at managing Urban Cities? The realities of our country is not just making it more populated but also poorly managed.

Check out this video from Economist.

The Urban India

And Surat which is 4th in the world’s foremost growing cities is featured in the end.

The White Leopard (Not Snow)


So this has been a long break from writing and I suddenly feel an urge of starting it all over again. But a lot has happened all this while in countries, businesses and people. There are elections coming in the US, the internal conflicts in India has been rising over corruptions and scandals, the Chinese businesses are leading their way in producing cheaper consumer products, the world is turning to renewable energies, Apple is making amazing products, Samsung is jealous and climate change, we realize, is not a hoax. But, in between all of these the best thing that I did my dream internship at Indian Institute of Management, Ahmedabad and then went to Berlin to visit a friend and then Falera, Switzerland (Breathtaking village between the swiss alps and 2 hours ride from Zurich) for an International Summer University in Energy. The urge to travel from a long time finally got fulfilled, and trust me friends travelling alone is the best thing you can ever do to yourself.

Soon after my stint from the Summer program, I am finally back to my place and nothing is as beautiful as your home and the of course food with spices you get in India (which was badly missing in Europe). Just when I was sorting out my library (with sole intention to dust it), I got my hands on a book called The White Tiger by Aravind Adiga, which won the booker prize in 2008. I completed that book in one go and I liked the way the author described the rave India with a lot of intended pun addressing the story to the Chinese Premier Wen Jiabao. This book is a story of a poor young boy from Rural India on how he gets corrupt and transform himself in the process of becoming an Entrepreneur. I realized that’s true with most of the people in India who actually don’t earn their Cheeseburger in a day, and there are millions of them. From the rich tradition to ravanous politics, this is the story of India. The India of all small things, we’ll talk about god later.

We talk our Indian Premier, who is known as the Silent man of India, the prime minister. He recently introduced FDI in retail, hiked diesel prices etc to give a boost to the Indian Economy despite of failed attempts to stop corruption in his own team. There were protests meanwhile from various personalities and all of them are tired and quiet now. The opposing government tries to pinpoint the government on policy changes and various other issues in the states or elsewhere. This is how the coalition government works and in democracy, there will always been someone losing in the whole process, that is the Common man. Just as described in the book The White Tiger, the boy who understands the system, gets into it and become successful from misdoings ( there are a lot of ‘success stories’ like that) and then become the Entrepreneur of principles for the people of his own company. And he was called the White Tiger. We need someone like that to run our country. The one who adapts to the system, gets into it and has one vision in his/her mind, to grow urban India as well the rural India and nor his team or him has accounts in Swiss banks. Then, he will be known as the White Leopard among the Black bulls. I believe there is some white leopard in the making. The Leader of leaders.

Ah, I love Swiss chocolates!

India- A Re-emerging Economy


As history remarks, from 0 AD to 1700 AD, India was the richest of all the economies in the world. By 1700, there was 32% of the wealth of the world, was in India. Then, came the era of colonization when different countries from the west started looting India with their trading prospects which ultimately led India to be a poor country (as westerners still think we are), but I am going to cite few examples as to how India is not an emerging economy, but a re-emerging economy. We were never poor.

At the time of Independence, the GDP of India was close to 4.2% and by 1973, during the state of Emergency declared by our then Prime Minister Indira Gandhi, India’s GDP was the lowest of around 3%. But, after that there was no looking back. Today, the world reckons and eyes the emerging markets which is adding more than 50% to the Global GDP Calculations and India is one of them. That means, the developed economies has realized the potential of these emerging markets, which has led to globalization. Rich in tradition and societal culture, India is not just an emerging economy but a well-balanced socio-economic hybrid.

In 1991, as India opened its gates to the world, the post era of liberalization has given India Inc., an upper curvature in all the graphs. There are strengths, which cannot be unnoticed and itself being researched and published by a lot of westerners and Indians themselves, but more or less suppressed to the world. This is what I call an Indian Edge. 

There are few points which gives rise to this Indian Edge.

1. India, has always been a country of savings before liberalization and even after liberalization, the Gross Domestic Savings (GDS) accounts to around 30-32% despite western impact on India. Moreover, this GDS is utilized for capital formation which accounts parallel to the same amount of percentage growth. That means, a normal Indian still saves and create capital for himself/herself.

2. The domestic demand of India has always been more and despite of its global outreach, Indians consume a lot locally. That means, we are becoming globally local and locally global simultaneously.

3. India has low government and household debts then most of the developed economies in the world. That means, we are not that much in debt than most of the European countries like Italy, Spain, Germany etc and Britain having the highest debt.

4. India, is the second most entrepreneurial nation in the world, with the highest number of youth (aged 25 – 35), we have presently the highest number of startups in the world. Mexico being the first, marginally ahead by 1%. The number of Entrepreneurs in India, is around 18% from the world.

5. The Service sector in India accounts to 66%, which means a lot of Industries today are driven by different service sectors, which means there is an increasing demand-supply ratio in India, which will make us the most economically sustained nation in the future.

6. With people investing a lot in Gold (which is taken as consumption by global economists), even a small middle-class family has invested in gold, which has seen a tremendous and consistent rise in the last 30 years. And India is far more ahead than any other country in the world. Most of the gold reserves in US is under federal reserves, but in India, 75% of the total gold utilization is among the normal household.

7. The remittances to India from Indians all around the world is more than 50%. That means, there are a lot of Indians staying abroad who has a need to send their money to their loved ones in India or just for capital formation with sole intention of living their second innings in their home nation. This adds to the economic growth of India.

These are just few points, which describes India as a re-emerging economy. With ‘Jugaad’ i.e the Indian way of doing things out-of-the-box, Indians have more skills of doing the same thing in different ways. This adds to the Indian edge. With a lot more social parameters, which Indians are indebted to, India is not just a land of cows anymore. Well, every nation has its pros and cons. While every world is chasing its realms, India is never going to be ignored in the process. And the world will stop running behind GDP and Inflation but Human Development Index and Gross National Happiness, which India has to focus on. Then we will see India like in 1700.

Money can’t buy you happiness, or can it?

Indianess and Game.


Game theory has always been a zero sum game which determined that the profit of one will always be on the expense of others, which introduced by John Van Nuemann and Oskar Morgenstern until John Nash discovered the Nash Equilibria for the non-zero win-win situations and won a Nobel after quite a psychological stint in his life in 1994.

India, a cultural heritage has always been stodgy for economists and philosophers and they their own perception towards the abstract spectrum from its happenings and times. Nothing can match the susceptibility of the nation’s randomness and sovereignty. Psychology of an Indian has always been an outlook of its own kind, not really the demographics of the nation affecting it. Indians are known for their unruly social behavior and their unintentional verve. When it comes to making choice, we can be selfish as well as collaborative at the same time. Read the theory of Prisoner’s dilemma. We say that population, illiteracy, poverty and corruption are the  issues defining why we Indians are the way we are. But actually, it’s not the demographics that matters in our behavior but a social upbringing does. There are people spitting on the roads, throwing junk, breaking the queue, giving a bribe (most of them taking it), breaking the signals, urinating on the road sides and what not. Who is to blame? The system or the self? Often, we come across real-life situations where we end up being privately smart and publicly dumb. We celebrate festivals of colors and crackers and leave the roads and grounds defiled from their plastic wastes and chemical colors. Indians and Indianess goes along together irrespective of the caste, creed or position. We all belong to the same field of paddy crops. Then, we blame the system and its governance for its behavior, being publicly dumb. Social behavior is not something we just show it on Facebook, but how we actually implement it in our day-to-day lives. This is where Indianess differs from the Global social behavior. And we talk about globalization. That makes us self-contradictory.

Rationalism is a child’s play and when Indianess paints the canvas, the theory of game comes to being. We, Indians being superficially rational, be it in professional lives or the way we think, which still makes us the third world country because of this mass behavior. Only, when we try to change, others will. It’s like a movement with no incentives and holistic growth, which will be marginal for the self. As we know, we are heedless without incentives. And we blame the government, which itself runs like a tip-toed bulls. We have to create our own incentives for the satisfaction and not for the temptation. And then the Nash equilibrium is favorable for non-cooperative and win-win situations in particular circumstances stating that one can benefit, making others benefit too. Then the Indianess will make its hay shine in the field.

Few examples of game theory are Chess, Stone-Paper-Scissors and the art of tit for tat.

Adopted from the book Games Indians Play by V. Raghunathan and inferred by me.

Let not the game decide us, but our own behavior.