India’s impact on world economy
German Chancellor Angela Merkel on 23 January said countries like India and China have begun affecting the world economy much more today and that needs to be considered for having a relook at the global trade and financial systems. In a veiled attack at policies being adopted by countries like the US, she said, “There is a new approach in the world that says shouldn’t we look after our own, and ensure that our own are looked after.” Speaking at the World Economic Forum Annual Meeting in Davos, she said there are a number of disturbances around the world and the IMF has painted a rather gloomy picture of the global economy. She said there is a wakeup call for the world and we need to find out how to move forward. Merkel said compromise these days has a bad reputation, but a global architecture is only possible if we are able to compromise.
What are the views on chancellor Angela Merkel’s statement?
Basically, free market democracies have been looking for a third way which is not dictated by USA or China. This encompasses economic and related issues.
How has india started affecting world economy?
India is important but India’s exports are about 5 billion. So, we occupy a small portion of international trade.
However, India is one of the fastest growing economy. Thus, it will require greater capital and resources. So, the rest of the world will have to look India differently.
How can india pivotal role as far as the economic future of world is concerned?
- In matters of world GDP, india’s incremental growth puts us in 2nd place after China.
- India has emerged as a net security provider in the south asian continent.
- India is the storehouse of human resources. We claim to have the second largest workforce of engineers.
- India should leverage the shifting of economic power to Asia. Atlantic is no longer the world theatre. It is indo-pacific.
How much of a concern is slowdown in china?
- Basic underline reason is the credit bubble
- Tariff war has triggered the credit bubble
What issues will shape discussions in forthcoming WEF?
- Data protection
- Protectionism and Unilateralism by USA
- US-china trade war
- 4th industrialization disrupting traditional economic organization
- UK facing Brexit
- WTO seems dysfunctional
- Withdrawal of US from Iran nuclear deal
- Russia & European countries embroiled in their internal conflicts
- US withdrawal from Paris climate conference
- Chinese slowdown
- Global economic slowdown persists
- Price fluctuation of Crude oil
- US shale oil boom
- US govt shutdown
- India should be in forefront of leading the world towards solar energy.
- With Chinese slowdown and increasing wages, India must be able to attract foreign investment with policy changes.
- Increase the Govt spending on R&D.
- We should spend adequately on healthcare, education and infrastructure.
- Ensure fiscal consolidation and restrain populism.
- GoI should continue with pending reforms.
- We should start re-thinking of education sector to counter the ill-effects of 4th industrial revolution.