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Saturday, October 22, 2016

BREXIT : Fuel for a further Disruptive Discourse?

The World is going Global . But is it ? Looking at the statistics over the past three to five years I find a surprising rise in fundamental tribalism.

BREXIT has just added another dimension as unsaid issues are finally becoming mainstream . Trump has openly said that he wants to protect the boundaries of the USA in terms of migration , travel and trade . The British are in their "stiff upper lipped" manner seem to be pointing the same way.

Curbs on student movement , increase in anti dumping duties globally are feeding into a movement that is making politicians across markets focus on their respective  vote banks .

Domestically too everyone from the Jats to the Patels and Marathas,Gujars are asking for reservation a curiously Indian system to keep jobs limited to particular communities irrespective of eligibility or talent.Is that a sustainable practise?

Can the World go back to an age of iron boundaries that prevent labour movement across them and will it really benefit the economy? As per Noriel Roubini , noted economist ,the weak recovery post 2008 although it did not lead to a great depression , it gave the far right a strong plank to take forward the disaffection of the working class to create this impression that others were responsible for job losses etc


The Top Five Factors being :-

a)Technology advancements over the last decade have created a vast underclass that hitherto was 
    doing well into a more belligerent mood across large swathes of the globe.Brexit does but
    reflect this new underclass that voted to keep themselves an island literally.

b)The rise of authoritarian regimes like China and Russia that tries to control even the internet

c)Weaker than expected recovery in USA , Europe

d)Wars fuelled by ideology - ISIS in Iraq and Syria , continuing unrest in Libya and Middle East

e) Election victories by the far right in Germany , France as well as the increased insignificance of
    world bodies like the United Nations

This new economic nationalism has heightened race , gender and income disparities to a level where none of the moderate , liberal political class has the strength to stand up and be brave enough to be different.

Elections in the only World Superpower are increasing critical to determining what sort of Leader emerges to give the directional guidance , will they have the willpower and the desire is an entirely separate question!

Again unfortunately I am only left with questions...

How will the Global GDP be in the coming two to three years

New War(s)....World War III...?

More "surgical"strikes by neighbours...?

All this time the burgeoning credit mess in China and the lack of instruments in the hands of Mario Draghi keeps Europe on tenterhooks.Haruhiko Kuroda has tried every means including negative rates to boost spending in Japan to no avail.

Yes the commodity prices have cooled down but as I travel and speak to a wide range of clients I cannot help but repeat that its an unstable world we live in.The markets are but a reflection and volatility is but sure in the coming months.

It so seems that financial,economic and political are  merging with religious intolerance,bigotry and environmental degradation to create an aura of uncertainty.The british have set in motion a monster that will be held up by far right forces to build moats around themselves and am sure even the most farsighted economist will be unable to translate the repercussions.

Till then let us stick to the present!!