Rise of India

The year was 2000, my uncle from USA had just landed in India. The time was well past 3 am and both of us were walking in the deserted streets of Adyar searching for an ISD booth. A gentle breeze was blowing across our streets, I certainly found it refreshing but for my Uncle it was hot air. As we started conversing about the hot climate and the ill effects of global warming our hope of finding an ISD booth started diminishing like an ice cream melting during a hot Indian summer. On the way back, my uncle was commenting how India and China will dominate the next century. My initial thought was he is too patriotic. Little did I realize later on in my life I will become a important cog in the wheel of life, churning away the poverty and bringing in the prosperity to the ‘New India’. And in 2001 Goldman sach’s in its famous report coined the term BRIC (Brazil, Russia, India and China) which also put our country amongst the international investors spotlight.

How can India and China over throw the mighty America? This was the question that had been lingering on in my mind for a very long time. As I graduated from college and pursued my masters slowly economics became started to become an interesting area for me. Any country or empire had ascended the throne of supremacy while the earlier super power started gradually declining. But how can you dethrone America when we have a Uni polar world and the way of life had become American especially after the disintegration of Soviet Union in the early 1990’s.

Fast forward to early 2006-07 the Big three(GM, Ford and Chrysler) from Detroit was falling away and Toyota was equipping itself to usurp General Motors(GM) to become the biggest automobile player in the world. GM had a two pronged fight. One hand had to fend off Toyota and it had to satisfy its labor union, with health care rising out of control. Meanwhile in the east coast the American Investment bankers (IB) with their wizard airy were making lots of paper based wealth by Centralized Debt Obligation (CDO’s) and putting the concept of globalization at work. Distributing this CDO’s to farfetched countries in the hope of distributing the shock. Having given to the lust of making money, the IB people were smart enough and insured their property with the big American insurers. The underlying asset of CDO’s were the housing loans given to subprime people ( who had very bad credit and hence were required to pay a higher interest rate). People bought their homes in the hope that their asset’s value will always move up which can help them in repaying their mortgage, the housing bubble. Post 9/11 the war against terror was the way of life. The Bush Jr coined the word ‘Axis of Evil’ and invaded Iraq first and then started a war against the Taliban’s to stop terrorism . As a result the American Defense expenditure was 22% of GDP. Quality high school and college Education was relegated in the priority list.

When the housing bubble burst, it not only resulted in property prices crashing it also brought the entire Wall street along with it and the big insurers of America. With price of Oil peaking the big three was fighting of stay afloat and were begging literally for Congressional aid. The war in Iraq, Afghanistan had gone awry wrong. People became desperate because of mounting job bless and America fast became a melting country. Being the most influential country, it naturally paved the way for global economic meltdown except for Brazil, India and China who had managed to post decent positive GDP’s during 2008-09.

Now the stage is set for a multi polar world where we don’t have a King (America) but a council of minister (America, China, India, ) who can play the geopolitical games. Where the youngistan is being groomed to take over from the old King.

America being America cant be relegated to the corners of geopolitics since the vision and attitude of founding fathers is still visible in the remote corners of the country where ordinary civilians still have the thirst for innovation which is unfortunately being blocked by the congress and influential lobbies.