This fourth part in the Touchstone series by Vijay Eswaran explores how tides have turned in this ongoing recession.
The initial thunder of the economic crunch has waned and the world has somehow settled into this semi comfortable niche of nonchalance in this midst of arguably the biggest depression to hit this planet, since 1929. The problem though is that for most people who have survived thus far, and who are patting themselves on the back for having done so, are exactly like the people who don’t understand what a Tsunami is, for eg, after the first wave, there is a few more yet to come.
The complexities of the world economic grid today are far more onerous and intricate than they were seventy years ago. Hence, the first aftershocks that took off from ground zero a.k.a Wall Street are still resounding in most of the western world. But in many cases, yet to be completely felt in the third world. The third world countries that are proudly defending their closed economies and their protectionist policies as being the saving grace against this economic tsunami have not yet truly felt the impending damage that is still coming in the wake of the first wave, so to speak. Unlike a regular tsunami, this economic depression is going to be in pincer like movement, hence being on one side of this protectionist wall merely means the waves that are yet to come will hit you from behind.
The isolationist/protectionist policies that some of the third world nations had practised in order to prevent unwanted currency fluctuations and to protect their home grown industries, so to speak, were ill advised at the height of the economic upswing are just at this moment of potential downswing. These policies though having some sort of immediate effect in buffering the initial impact of the crisis are going to be at best a very short to midterm endeavour. The world today has come together as never before. And as I have previously mentioned in my earlier columns, globalisation had to not just come to stay, globalisation is also the only way forward. Globalisation is not about encroaching western dogma or philosophy. It is a historical epoch, inevitable as it is necessary.
With 6 billion people on the planet, where do you go? Today, where information or equally, misinformation, is instantaneous and in abundance, the net result is that anticipation becomes almost like a self fulfilling prophecy. Coming out of this, will require us to have an attitude that is all- embracing of the global village per se and as opposed to shutting down, as opposed to pulling down the shutters and building more walls, in the hope that all this would pass us by, we actually need to build bridges instead, open new windows and rebuild old ones. As I have also mentioned before, the critical component here is human capital. In effect, we are going to have to create new patterns of thinking. It’s going to be innovation and inspiration that is going to pull us out of this particular dilemma that we are all mired in. We have to understand the enemy and, he is us....
In essence, trade will have to continue but the focus therein will have to change. As opposed to providing goods and services, we should be creating new demand instead. We have to go back to the basics. In the haste to meet the brand new world, many third world countries have forgotten the entire economic ecosystem that they were literally bred into. They need to rediscover and explore these forgotten venues. There is yet so much potential within the 3rd world that it is mind boggling and this, my dear friends, is where the new world will emerge from.
The reality is that the world’s biggest markets are not going to remain in the American continent. It actually never really was. In effect, statistically speaking, one half of the world still live in the BRIC countries. And they are currently emerging, developing, seeking, and yearning for products and services that are yet to be delivered into their realm. Products and services that should be developed for them, engineered by them and customised to meet the local flavour. So the illusionary market that we have been feeding for the last 50 odd years will now have to recreate itself. The population of the United States of America is a mere 300 million out of the world population of 6 billion. It’s time that the world economic machinery provided for the rest. Amazing as it may seem, Brazilians, Chinese, Indians, Russians and the like, have their own set of desires, wants and needs. Communication now needs to be set into place and established within the South-South nations as opposed to being routed through Wall Street, London, Paris or the like.
There should be absolutely no reason why they cannot be outsourcing for each other, as opposed to being outsourced by the world. Instead of merely being a resource, they should be a destination. The rest of the world should be looking at studying various accents of Hindi, Portuguese and Mandarin for call centres as opposed to learning a Texas drawl or the New England accent! They should be understanding the difference between Cantonese, Hokkien and Hainanese. They need to understand that Brazilian Portuguese is different from the one spoken in Europe. And that there are over 30 recognised languages in the Indian subcontinent! There is a need to understand that Hamburgers, Pizzas and KFC are not the only way to go, that there are such basic cuisines like Chapatti, Char Kuay Teow and Paella that can become truly global. Globalisation is not westernisation. And what the policymakers need to realise today is that we’re going to have to understand each other better in order to come out of this stronger.
The new centres of economic power and the new arenas of expansion will now have to be re-delineated. With the coming of the World Cup to South Africa, the African nations are going to see certainly a new era of change. Asia, which has been already in the midst of major economic growth and development, will now need to slow down and stabilise. We need to re-engineer our growth and our systems of demand and supply as the shift of economic power moves eastwards. The world is already beginning to look eastwards. The recent Academy Awards being a clear indication of this with Slumdog Millionaire winning 8 Oscars. One clear message that came out of that movie is the fact that slums merely being eyesores or very benignly looked upon as warts on the city’s landscapes are actually a great resource unto themselves. Hence, it is from these slums that great expectations, great potential, can arise. And it is again on a global scale, the countries that are on the lowest end of the economic scale, have the most to gain out of this period of economic turmoil.
Simply put, as costs are realigned around the planet they will have an opportunity to reinvent, re-energise and re-industrialise. Looking eastwards is not just going to be a catchphrase. It’s going to have to be the air that we breathe in the decade to come.