By J Mulraj
Nov 24 – Dec 1, 2023

And it’s impact on trade, inflation and growth

There appears to be a shift to the right in several countries, probably a whiplash to immigrant related acts of random violence. In this video, veteran journalist Shekhar Gupta talks about election victories in countries like the Netherlands, where the anti-Islam populist leader, Geert Wilders, who is also anti EU and anti immigration, won a surprising victory. His party, PVV, called the Freedom Party,  though, is far short of a majority (it got 37/150 seats), needing support of other parties to form a Government.

The video points to the electorates of Sweden, Finland and Italy also having elected right wing led Governments.

The angst is understandable when incidents like the one in Dublin, Ireland, happen. There, an Algerian man, randomly stabbed 5 persons, including 3 children, resulting in riots in protest. The man had lived in Ireland for 23 years, never had a job, and was provided for by the State. Pakistan is dispelling thousands of undocumented Afghans, who are of course, protesting. In USA, the Republicans are protesting, to no avail, the dangers of allowing a deluge of immigrants with little or no checks, to enter America, and disappear, often bringing with them the opioid drug, fentanyl, which has caused many deaths? Inexplicably, Biden’s heart bleeds for undocumented immigrants, and he dis-houses American war veterans in order to provide accommodation for them. Biden’s myopic policies have helped Donald Trump, who is more to the right, gain a commanding lead in Presidential polls for the election in Nov 24.

Argentina has also turned right with the election victory, last week, of economist Javier Milei , who vows to have closer ties with USA and distance from China. That, though, can hurt its $641 b. economy, reliant on export of bovine meat, soybean, sorghum to China. Argentina recently joined the BRICS alliance, but Miles now wants to peg its currency to the USD.

A clash of culture between (nuclear armed) North and (aging) South Korea is, perhaps, more worrying. Tensions have risen last week after the North launched a satellite, objected to by the South, leading to a troop build up at the border).

In another theatre, Palestine and Israel, there is a temporary lull, as a deal to exchange civilian hostages abducted by Hamas, for Palestinian prisoners held by Israel, has been reached. The lull will permit the flow of aid, food, water, medical supplies, to flow into Gaza, which has been badly destroyed. Qatar and Egypt worked with USA to stitch the deal.

The height of insanity in civilizational conflict is the Ukraine-Russia conflict, one that ought never to have started, one that was inexplicably extended two months after it began, when the collective West intervened to scuttle a negotiated truce between the two warring nations, and one where the collective West, USA and NATO, have outsourced deaths to Ukraine in exchange for monetary and military aid.

The insanity continues. EU President Ursula Von Der Leyen (not to be mistaken for Alice in Won Der Land) is contemplating a scheme to use the profits from frozen Russian assets to fund Ukraine’s reconstruction. Poking a bear in the eye is never a good idea and will lead to retaliatory action.

Such clashes of Civilizations leads nations, already over indebted, to waste more money on defense spending, and blowing up bridges, instead of on trade, and building them. The trade sanctions that ensue result in de-globalization, and reduced economic growth. How, with reduced economic growth, do political leaders hope to service the additional debt taken to fight more wars? Why do political leaders think it necessary to store their brains in the cloud?

Instead of funding wars, to kill people, why not spend it on new technologies, such as Crispr, to save lives? The UK medical regulator permitted the use of Crispr, a gene slicing technology, to cure sickle cell anemia, a disease that causes excruciating pain, and thallasemia, a disease that requires frequent blood transfusion. That’s great news! Sadly hardly covered by main stream media which prefers to splash war news in headlines.

American billionaire hedge fund manager Ray Dalio says that, since the tech war between US and China isn’t going away, venture capital firms will have to chose between supporting US and Chinese firms. If trade disputes continue to escalate, consumers, too would need to chose between the two. In effect, the global market for goods and services would be split; the theory of competitive advantages ripped, and inflation would rise as both sides would seek to  make everything so as not to be reliant on the other.

This, at a time when new technologies promise to reduce costs in healthcare (Crispr, protein folding etc), in transportation (autonomous vehicles, competition between EVs and hydrogen powered vehicles), energy (the possibility of nuclear fusion), product manufacture and construction (3D printing, AI, IoT, robotics).

So the clashes of Civilizations, bringing with them discord, hatred and conflicts, are only succeeding in slowing progress and growth. Sad, but true.

Last week the Sensex closed at 67481 for a weekly gain of 1511 points.

The week saw the rescue, after a 17 day ordeal, of 41 trapped miners in Uttarakhand, a major achievement of all participants, especially of the ‘rat miners’ who manually excavated debris, even as machines had failed. The episode serves to highlight, once again, the need to examine feasibility of projects from an environmental perspective. Politicians and bureaucrats examine projects from their personal pecuniary benefits. Corruption has not, despite promises to eradicate it, been dented, far less vanished. News reports suggest that Congress may shift Telangana MLAS to prevent poaching (which may sound like an egg, perhaps a nest egg, but is another word for bribery). This shows a failure of governance. Common citizens are made to annually fill in KYC (Know Your Customer) forms. How did KYC forms help banks avoid lending to the likes of defaulters like Vijay Mallya, Nirav Modi or Mehul Choksey? And why should citizens have to suffer bureaucratic torture for no worthwhile purpose, annually? Do politicians raking in crores in unaccounted money during elections need to fill in a KYP form?

There is a huge mountain of private, largely institutional, wealth invested in financial assets. Over $350 trillion. This mountain sloshes around, propping up equity and bond markets, making them seemingly impervious to geopolitical risks. Let’s pray that the geopolitical risks don’t result in a calamity. The global polity is too myopic to prevent one.


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