The point I am making is that in a globalized economy it is possible that a deep recession in the United States can actually lead to regime change in three to four countries. A US recession in very practical terms means that Americans will have to make do with one car less per family (they already have roughly 225 million cars for 298 million people). In China however, this means a large scale loss of jobs along the coast… and regime change.
Therefore, the first time since Mr Gorbachev set his people and the multitudes in Eastern Europe free, the world is again going to see another huge battle for the human spirit. The battle for ideas, that according to Daniel Yeargin resulted in a globalized economy, are now going to have us witness the power of the forces unleashed by Free Markets. This time again, these forces will free countries. Let no one be in any doubt of what market forces can achieve.
The Real Question
Given the potential size of the above prize, will the rescuers be inclined to come in and intervene in the markets in the massive way that is actually needed to preserve the current balance of power?
As far as the Indian military is concerned, there is a still a need for vigilance on the north eastern border, in time though we might need to redeploy those troops as the Chinese threat recedes.
This has huge implications for businesses around the world as currently perceived demand-supply gaps in specific industries are irrelevant when the powers that be, decide on the strategic landscape of their choice.
At a certain level of thinking, everything becomes a trade. It is therefore important for countries and companies to make an attempt to understand the big picture and then play their game in such a way that their strategies and investments are aligned to the larger strategy being played out. Basically you have to make sure you are going to fall in the direction that benefits you. This is very much like the game of Ju Jit Su where the winner falls in the direction that benefits him. Its all about falling artfully. It is good strategy.
In the case of companies therefore, this means that they should concentrate on markets they know best, and stay out of areas where huge turmoil is expected. Acquisitions like those of the Mittals / Tata’s (In India) need to be avoided as asset prices are going to fall. For Indian companies, overseas acquisitions should be focused on serving the domestic market/demand in India. I am personally extremely bullish as far as demand is concerned as I see close to $ 500 billion being invested in the infrastructure sector over the next five to six years. So what I am saying is… if you acquire companies overseas, do so with a focus on serving the Indian Market as this market is not going to disappoint despite the gloom everywhere else. There are specific strategies for this that however go beyond the scope of this note.
The danger here is not of any military misadventure by Pakistan, but close to five million refugees from Sindh could cross the international border into Gujarat after being driven out of Sindh due to a civil war there.
As far as the Indian military is concerned, there is a still a need for vigilance on the north eastern border, in time though we might need to redeploy those troops as the Chinese threat recedes. On the western flank though there is a need for extreme vigilance in the near term, mainly because Pakistan is showing signs of coming apart at the seams after Benazir’s brutal assassination. The danger here is not of any military misadventure by Pakistan, but close to five million refugees from Sindh could cross the international border into Gujarat after being driven out of Sindh due to a civil war there. If this happens, as some fear, our armed forces might actually have to go in and create safe areas within Pakistan. For now however, it’s necessary to take a wait and watch attitude.
Changing Geopolitical Equations (Mediterranean to the Indus)
This section is not particularly linked to the rest of the article, but I shall include it here to save the bother of writing another paper.
A lot has changed since President Roosevelt met King Saud of Saudi Arabia in Feb 1945. US Strategy in the Middle East is in tatters. The US / NATO Afghan campaign has failed to prevent Pakistan from reaching the brink of collapse. Even on the Palestinian question, the US & Israel, by not reading the signals properly have lost the strategic initiative to Hamas.
Those involved with tackling the terrorist threat must first appreciate that Osama Bin Laden thinks like Rockerfeller. His very ordered mind immediately grasped the strategic need for a benchmark project”¦
It would therefore not be unfair to say that the Americans, are in retreat across the entire region, as they do not have any significant ally in military or economic terms from Israel in the west to Australia in the east (except India, of course). In such a scenario, for them to take on Iran is suicidal as they will never be able to hold the country. People seem to forget that though the world has changed a lot since the time of Alexander, the rules for holding/controlling foreign lands as laid out by him remain the same.
Those involved with tackling the terrorist threat must first appreciate that Osama Bin Laden thinks like Rockerfeller. His very ordered mind immediately grasped the strategic need for a benchmark project that would move the theatre of war out of the Middle East to the developed world. Just as Rockerfeller saw that leadership in the oil business, and unprecedented wealth, could be achieved if someone could solve the huge logistics problems in the oil business and bring about price stability, Osama saw the need to establish a new scale in terrorist strikes and to show his cadres that to win, all they needed was to change the rules of engagement. Hence the use of airplanes as bombs, and the authorisation to any individual within the organisation to issue a fatwa. In 1532, Pizzaro, with just 168 of his Spanish soldiers brought the one million strong Inca empire that stretched from Peru to Chile to its knees. Pizzaro used strategy, Osama is doing the same and though his methods are primitive, he has effectively leveled the strategic playing field, which makes the advanced weapon systems of the west useless against his men, who now live amongst their targets in London and New York. The US now needs someone like Abraham to win the war which is now going to be upon us all. Leadership of a very different kind is needed in the new war. It is hoped that the Americans choose wisely this time.
Readers will be in agreement to the above in varying degrees. Actually, though you may disagree with the view totally, you will admit that its a different way of looking at things. All of you, however, will be hoping that if the forecasts come true, the changes will happen as peacefully as possible.
‘Sometimes, 24 hours can bring a total revolutionary change.’ – Aung San Suu Kyi
Please wait...
