Barack Obama's meteoric rise to the head of the largest economy of the world has been greeted with euphoria across the world. A campaign that started off as a showdown against Bush administration's inept handling of international affairs culminated in the American people's resolve to get out of the financial mess that has been created by the meltdown at Wall Street. Obama may be entering the 'White House' with a lot of hope but the financial mess will require a lot of grit and patience to be cleaned up. Obama's relative inexperience will mean that a lot will depend upon the team that he is able to put in place to deal with the worst economic crises that the US is facing after the 'Great Depression'.
It is too early to analyse the impact of this change on the Indian economy, but going by Obama's utterings in a run up to the Presidential election, it could be a mixed bag for India:
Positives: Leaning towards socialism, a pro middle class approach; Likely increase in R&D spending in the US; Economic policy to promote alternative energy (Solar & Wind energy): Affordable Healthcare- increase in spending on healthcare. A caliberated, less threatening security environment, including a possible pull out of US troops from Iraq, Afghanistan may de-escalate the global threat to the security of India.
Negatives: Increasing tax rates on higher income groups - a threat to US spending; Massive increase in State controlled regulation over insurance, banks, hedge funds etc; Pricing power of Pharma exporters to US will decrease; Not likely to accept India as Nuclear state, may force us to sign CTBT; Lesser outsourcing - a dampner for Asian expats; May like to play the role of mediator in resolving Kashmir issue.
The world markets after the initial euphoria are likely to decline or settle in a groove, till such time concrete measures are taken to resolve the global economic crises. The road ahead for Obama is laid with a lot of landmines, where he has to tread cautiously - the entire world will be anxiously watching the steps of the 'New World Hero'.
1 comment:
Obama has given a lot of hope to millions in the world, let's pray he succeeds in pulling the world out of the current mess created by his predeccessor.
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