Grow Up

Issue 8- January  21,2009

It’s funny how people focus on growth when the going is good. It’s even funnier when they focus only on growth when the going is not good. Basically we are all growth freaks and look at it as the best benchmark at all times. So, we all need to grow and grow up!

Such is the intensity of this slowdown that the recent International Monetary Fund report says that global growth will be the lowest since World War II. The path from an American sub-prime crisis to a global prime crisis has been short, sudden and sour.

It has exposed the high might of America and the short sight of the others. It has also resulted in all and sundry going for cuts—taxes, interest rates and prices with the sole purpose of encouraging banks to lend and consumers to spend. Both, as of now, suffer from a lack of confidence. So the demand remains for higher demand. This accounts for the slow global growth.

But guess who saves the world from going into negative growth—India and China. The two countries who were hitherto blamed for the world population explosion, now find themselves on an explosive growth path. The last decade-and-a-half has seen a perceptible shift from production of humans to production of goods and services.

At Davos recently, the Indian commerce minister has demanded the world should be funding growth in the developing countries rather then bailing out the developed countries. After all the growing youth of the developed countries need to be strengthened to then support the growing elderly in the developed countries. It’s an age old truth!

The world’s future depends on India and China. A 7% growth each, in these trying times is remarkable even as other economies are slated to shrink from 2-4%. The men have to realise that the boys have arrived. The slum dogs are or are slated to be the millionaires of the future. This was indeed the case in the early nineteenth century. The wheel has taken a complete turn. To keep the growth rate up the west have to turn to the east. After all, we all need to grow up!

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