Chalo*, chalo, chalo...'Am-merika'

America (or as we gujarati’s say ‘Am-merika’) was synonyms to dreams for the whole generation of Indian youths. It literally meant future. When an aged uncle/aunty would ask what your plans are for the future, most of the times, answer would be ‘I am planning to go to Am-merika’!

Believe it or not, but that one sentence answer in some cases also found prospective grooms there brides.

For better or for worst, America had become a ‘bench mark’ of sorts for everything. I remember driving on my LML Vespa NV with my friend, and each pot-hole would be compared to velvety streets of New York and New Jersey. Even the 'pathetic' mercury (white) street lights of VIP road drew comparison to sodium (yellow) street lights of US. The blue-ink pens that were standard in India, started to get the wrath of hatred because it’s rich cousin the ‘black-ink’ pens were a norm in USA.

Oh! Those good old days of singing ‘Chalo, chalo, chalo Am-merika’…

The reality as in most of the cases is always ‘everything but’, but ‘Am-merika’ was different. After this many years, my face still lights up under the sodium street lights of NYC and I very much appreciate the ‘black-ink’ pens that I have in my office drawer. But at the same time I do miss the mercury lights of VIP road and no matter how 'pathetic' & 'blinky' they were, it was under those lights that I dreamed about the sodium lights that I am standing beneath now !!

*'chalo' is 'Lets Go' in Hindi

Does Economic Prosperity trump Democratic Poverty?

Who would have thought that a small gathering of young unemployed graduates in Tunis, the capital city of Tunisia, would bring down (soon…) Mr. Hosni Mubarak, the powerful President of Egypt? I am sure not many in the western world knew about Hosni Mubarak and his not so glorious past. Although they might have seen him in photo ops with previous five US presidents.

The large gathering of Egyptians in Tahiri square in Cairo shows how people’s non-violence movement could overthrow a corrupt regime (The legend of Mahatma Gandhi lives on). As of today (11^th February, 2011) Mr. Mubarak hasn’t left the Presidency but has transferred all his powers to the Vice-President and is adamant that he will not leave till the September election, which he had called after the protests started two weeks back.

The scenario in Tunisia & Egypt made me think about how inter-related are a nations economic & political lives. Were Egyptians tired of there poor political lives, where in they had no say or was the economic state of Egypt responsible for Tahri square gatherings? Fareed Zakaria in the most recent Time issue stated that Egypt’s economy was doing quite well, growing at a rate of 6% (CAGR) in the last decade, when most of the world economies were facing a deep recession. So, as mostly thought economic depression was not the ‘main’ reason behind the gatherings. According to Alexis de Tocqueville, French political thinker, "the most dangerous moment for a bad government is when it begins to reform itself". Economic growth stirs things up, upsets the settled and produces inequalities and uncertainties. More importantly it creates new expectations and demands. It is a phenomenon that political scientists have dubbed "a revolution of rising expectations". Non-democratically chosen leaders like Mr. Mubarak & Mr. Ben Ali, find it difficult to handle change because the structure of power they have set up cannot respond to the new, dynamic demands coming from their people. Notice that more-stagnant countries like Syria and North Korea have remained more stable because of the same reason.

What about China, then? Was its Tiananmen Square incident the result of the above theory? Probably yes. Deng Xiaoping started the economic revolution in China from 1978 and the Tiananmen Square incident happened in 1989. To the ‘credit’ (due to the lack of a better term) of Chinese leadership at that time, they were able to crush people’s revolt, but learned that they can’t back track on economic progressive policies. Today Chinese state run media’s (with the help of Xinhua news agency) are not covering Cairo’s Tahiri square, instead they reported on how government arranged 8 flights from Egypt to bring back 1,800+ stranded Chinese.

True that China’s present economic & political model is ‘working’, and if it goes to the path of democracy its economic growth will definitely not be 10%-11%, but then Chinese will be able to ‘question’ government action of tearing down houses to build bridges. Have Chinese people chosen ‘economic prosperity’ over ‘political poverty’? I hope not, for I still believe in a government that is ‘of the people’, ‘for the people’ & ‘BY the people’.

A Tale of Two Economies

Two countries belonging to the G7 group of nations, each with a Budget deficit of roughly 10 per cent of there GDP and both applied two different approaches to bring it down.

Priority of Nation A was to stabilise the economy and then worry about the deficit. Nation B on the other hand thought that increasing deficit will negatively impact the economic growth.

Nation A, printed more money to increase the liquidity in the markets. Nation B started the austerity measures by cutting back government spending.

Nation A grew by 0.8% in the fourth quarter of 2010. (Annual rate of 3.2%)

Nation B declined by 0.5% in the same period. Also, the consumer sentiment index declined to the level not seen since early 1990’s.

Nation A is the United States of America

Nation B is the United Kingdom

UK Prime Minister, Mr. Cameroon’s intensions are noble, but when citizens are struggling with balancing there budgets, Government should absorb some deficit to help people balance there financials.

As Mao once said about the French Revolution, “Who’s right? It’s too early to say”, same may go for the two economies but round one definitely goes to President Obama’s adoption of the Keynesian approach to stabilise the US economy.