The World of International Business 2025: Environment, Actors, Imperatives, Governance
B. Bhattacharyya
Global Business Press
Pages: 416;
Price: Rs 595
The travails of the last five years have almost wiped out the gung-ho spirit of resurgent capitalism that prevailed in the first years of the 21st century. How far away and long ago seems the time when double-digit growth for India was a real possibility. All kinds of stimuli and bailouts have failed to lift the global economy out of the swamp into which it fell in 2008. Orthodox policy instruments have proved ineffective, but no new ideas have emerged about what should be done. As the writer Salman Rushdie remarked in a different context, in times like the present, 'doubt is the only certainty'.
If this is the present, what will the medium-term future be like for international business? Will the dark clouds have lifted by 2025? B. Bhattacharyya, former dean of the Indian Institute of Foreign Trade, tries to answer that in this book. He calls himself an optimist, but - stray sections apart - his book provides little reason for optimism. If anything, it suggests that while particular aspects of global business will change considerably, overall, everything will be just as uncertain and strife ridden as it is today.
He starts by taking a hard look at global economic trends. If the world has grown smaller and flatter thanks to the communications revolution, there are also plenty of trends visible which are working against further shrinking and flattening. Inequality is growing both between countries and within countries. "In a large number of developed and developing countries, a sharp decline (in the gap between the richest and the poorest) was observed in the first half of the 20th century and for a few decades thereafter. A reversal is observed since the 1980s... This period is also the heyday of the present stage of globalisation," he notes.
Bhattacharyya agrees that the future will be a multi-polar world and that the Chinese economy may well outstrip that of the US.. Apart from its manufacturing muscle and other strengths, China has 'rare earths' aplenty, which he believes, in coming years, will prove as useful a resource as oil is for Saudi Arabia. But China has its problems too - Bhattacharyya identifies nine, most of which have been much discussed and concludes that, however well China may do, the yuan will not replace the American dollar as the world's primary currency in a hurry.
Even more interesting is his prediction of which other countries will be the stars of the multi-polar world. (Earlier Ruchir Sharma's Breakout Nations achieved worldwide fame by making just such picks.) Bhattacharyya goes beyond the BRIC nations to identify a 'string of 17 pearls', which he believes will be growth drivers for the next few decades - apart from the US and China, they are "Argentina, Brazil, Bangladesh, Canada, Germany, India, Indonesia, Mexico, Mongolia, Nigeria, Philippines, Russia, Sri Lanka, Turkey and Vietnam". Only two European nations and some of the choices seem quirky indeed! But he adds the caveat: "Over time a few pearls will fall and a few others will get strung in and the world will move on."
Given the generally clear eyed tenor of the book, it does get a little indulgent while examining India's prospects. Bhatta-charyya insists the current mood of gloom and doom is misplaced, since the problems India faces are shared by many other nations, while its strengths are formidable. Even the sliding rupee - now 60 to the US dollar - does not worry him much, because it is not yet fully convertible and can always be protected by hedging.
