Most glorious ideas and extraordinary inventions come into
being during the time of existential crises. Human propensity to work at its best
comes into fruition when the species cowers under the fear of extinction of the
way of life which it holds most dear. New ideas and new horizons open
themselves up before the human eye only at the crisis when the human existence
finds the need for them.
The current global economic crisis is one such situation
which calls for new approaches and new kinds of solutions. Before we think about
possible solutions just let us have a look at how we arrive at our problems.
At the end of the Second World War, the all victorious
allies came together in what is now known as the Bretton Woods conference and
the bricks for the foundations of the current global economic order were laid.
The idea behind the global economic structure can be
observed such as this ; the two wings of the Western civilization aka Europe and
the United States were considered to be the primary consumers in the perennial
economic dialectic of supply and demand and the rest i.e. the nations from
Africa , Latin America and Asia were considered as the providers. Since economy
is an ever changing game of demand and supply, the health of the global economy
is thus dependent upon the social vagaries in the two wings of the Western
civilization which constitutes roughly 15-20 per cent of the global population
[1].
This is the model which would later come to be known as globalization.
That is why when USA goes into cold after playing with harmful
habits like reckless financial speculation or when Europe catches flue because
of bursts in real estate bubbles, the rest of the World needs to check their
temperatures.
Since much of the production of casual and familiar goods in
the Western countries have been outsourced to the meager wage countries , thus
there are very few primary avenues left in the Western World other than
enticing would be customers with proponents of cheap credit. Thus without the
prospects of improvements in terms of job prospects in the Western hemisphere
the only major form of consumption has been cheap credits and hopes of quick
gratification.
We need to mention that this system run its course as long
as it could have done however without viable means of repayment, this system
had to come to an end as it did in 2008.
In order for the global economy to arise from the ashes of
the globalization model thus the only plausible solution is for the
diversification of the global economy so as to create domestic demand in the
hitherto-providing nations.
Two of the Asian giants, India and China, can thus be said
to be the natural candidates for shoring up the global domestic demand.
The unfortunate scenario for the rest of the World is that
India as a democracy can seldom claim strong and decisive decision making as
its best forte in her last six decades of history. Prioritization of resources
also seems to elude the minds of Indian policymakers.
The current scenario whereby India tries to shore up the flagging
fortunes of the European nations by offering a $10 Billion USD into the IMF
coffers or India becoming the largest arms importer in the World hide the fact
that India has to think about lifting her fuel subsidies which are much needed
for its millions of poor citizens. The impact on the purchasing ability of the
common Indian “aam aadmi” as a result could be significantly compromised.
Thus it leaves the job of the heavy lifting of global
consumer demand on China which has a much sound leadership capable of taking
tough decisions.
