Issue 4—November 12,2008
The difference between the above two statements is telling. Though what they are saying is in many ways the same, what is different is the way they are saying it. Both admit the impending impact of the credit crisis, but while Heemskark is cautious, Chidambaram throws caution to the wind. Some may blame it on a personality trait, some may argue that it is an extension of the India Shining confidence, but nobody can deny the political compulsion under which Chidambaram is under, given the upcoming elections. It is assumed that a posture of confidence often gets a vote of confidence.
The future will hinge upon hope and opportunity. A hope that the new Obama measures will be more proactive in stabilising the American financial system as well as the economy. He is no magician but his magic has worked thus far. America’s failure lies not so much in its economics but the politics that has controlled the economics. So the answer in many ways lies with its new political head.
And now the opportunity. As both Heemskark and Chidambaram have mentioned, it definitely lies in India. Both in times of growth as well as recession. Its population, often its bane, has in many ways proved to be a boon. In times of growth, the economist argues that India’s vast population offers the opportunity of consumerism. In times of recession, its population, thanks to its low wages, offers lower cost and higher efficiency, enabling companies to survive the downturn. This, in turn, also becomes the argument for greater outsourcing during slowdowns like these. The Dutch, being masters in international trade, are quick to realize this. The sooner they step in to capitalise, the better for both the countries.