Monday, December 5, 2011

"R" We Ready!!

The dreaded R word is back in our consciousness, though it’s debatable whether it actually ever left us. But now that it appears more likely to here than not, ironically the news coming in pretty much simultaneously to that of unemployment going down to its lowest in the US for two years now. However, given the pulls and pressures of the globalized world it’s quite unlikely that anyone is exempt from any consequences when a huge chunk of the world economy, called the Euro Zone, is having the sort of paralytic fit.

Forget the climatic and apocalyptic hullaballoo; there are enough real and present indicators that suggest that 2012 could be a “make or break” year, this no less coming from the UN. And making the news more morose is the fact that India and China – the two torchbearer economies of the new world, who led the world out of recession last time are now seem to have run out of steam and will face much of troubled times themselves.

The UN report categorically blames the “failure of policymakers, especially in US and Europe, to address job crisis, prevent sovereign debt distress and escalation of financial sector fragility” as the reasons for the impending “double-dip” gloom. Cut through the jargon and the phrase that stands out is “the failure of policy makers”. What should bother the common man is not the fact that we’re having another recession, instead it appears that it may well have been averted, at least we’d be better prepared, if our policy makers were more focused on resolving the problem than becoming more partisan, divided, narrow-visioned and downright senseless.

Against such backdrop what’s currently seen in our country can only be termed at best callous and indifferent. These are difficult times for us, our GDP has been at the bottom of its growth percentage in two years, the currency is performing as worst as it ever done, the forex reserves are down, employment hasn’t kept pace with needs and inflation still a worry. Add to it the impending recession in 2012, due to the crisis in Euro Zone and fragile US market, it has all necessary ingredients for the perfect storm.

And yet our policy makers have no time for any of this, the Parliament has become the epitome of how most things function in our country – dysfunctionally! The executive branch is busy firefighting the opposition and allies alike, while the much heralded ‘growth story’ is very much slipping away beneath our feet. If the failure of policy makers in US and Europe is the cause of the impending recession, sadly our own policymakers would be the reason for making it worse and difficult to find a way out of it. Key policy decisions need rolling out, and legislative matters discussed – neither have happened and worse wont in the near future. The FDI in retail and aviation sectors can go a long way in helping employment numbers. Other reforms of the insurance sector etc are very much essential. The state needs to stop itself from bleeding in companies like Air India. Public infrastructure needs a push, agriculture needs a helping hand and petty politics a kick on its rear.

Not everything envisioned by the government ought to be good, but surely everything stalled by politics must be a curse! Sure, this crisis is driven more outside-in, but the solutions need to be the reverse – both to placate the effects of the current crisis and also avert future ones. We don’t need outsiders to tell us our democracy doesn’t work, its better we realize it ourselves and correct it before fingers are pointed at us – both within and outside!!

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