If the beginning of the 1990's saw the end of Communism, 2010 and the couple of years preceding it virtually saw the demise of Capitalism. The impact on the demise of communism was not much as the Western World highlighted the Capitalism model as a balm to all the economic wounds of the World. But now, no one has a clue as to what the ideal model of economy is, as BOTH Communism and Capitalism has failed.
My worry is that world will end up with the disastrous Mixed Economy pursued by Nehru that almost ruined our Country.
Globalization is passe. Every country is going back to the era of post World War protectionism. The US and other European Countries, who used to wax eloquent about third world countries having to maintain better fiscal discipline and open up their economy to the world (read western countries), are silent on why they themselves are adopting massive protectionist measures these days. What is Sauce for the goose is no longer Sauce for the gander, it seems.
The US and the so called developed countries are reeling under massive debt. The US debt burden per family is close to a dangerous $ 100,000, and many European Countries have debt equal to 120% of their GDP. The servicing of debt alone will put a huge hole on these countries for decades to come. That is, if they start restructuring their economy from now on. The US is living far beyond their means. Their core competencies all shot down to bits. They possess neither the Financial nor the Technological clout which allowed them to dominate in the past. The reckless printing of dollars is certain to come back to hound them in the next 3-4 years. They and the Devleoped Countries are in for a prolonged period of Economic Stagnation.
The rising economies have problems of their own. Russia has the lineage to become a superpower, but the Governance and Corruption is a major issue. China, for all its might, is a Communist Country and have accumulated more enemies than friends. They dont invoke confidence in even their closest allies. India has major structural failings. They are timid at the Global level, are seen to be hanging on to the coat tails of a flailing US, are not assergive, have major problems in Governance, Corruption and Judiciary. And they are at cross roads not knowing whether to liberalize, which has made the poor more poor, or to adopt socialism, which has never worked in the past. A Catch 22 situation, if ever there was one. And the political parties at the Centre or at the State lacks the sagacity to decide on a growth model for the country. This will be their greatest undoing. The opportunity beckons, here and now, for India to take charge and unveil its vision for growth based on a historic past, but the country is stuck with a a moribund bunch of politicians who cant even see one step ahead. Brazil is an interesting story where the economic growth during the past decade has benefitted the majority and is more equitable. But, being a Latin American country, they are far removed from the other part of the world, at least psychologically, for them to have a major impact. They are more likely to become a super power in South America, at best.
Thus, we are in for a period of turmoil globally. A modelless, leaderless period. One just hopes there is enough churning happening, so that something good comes out of it - Picture sourced from Internet
