Time to put on the boxing gloves

Conflicts. War and blood. Extreme regimes. Aggressive foreign policies. And a battered Asian economy!

The United States is not going to suffer as badly as many other economies around the world. The biggest fault lines in the global system are in Asia… That's where things are going to be really unpredictable… Asian economies are going to be really slammed this year. We may be looking at a Lost Decade.

That was Harvard author and financial crisis guru Niall Ferguson in a recent interview.

There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries.

About the International Monetary Fund predicting a quick end to it, Ferguson insists they are wrong. I think the IMF has been consistently wrong in its projections year after year. Most projections are wrong, because they're based on models that don't really correspond to the real world.

You're going to end up assuming that this recession is going to end up like other recessions, and the other recessions didn't last that long, so this one won't last so long. But of course this isn't a recession. This is something really quite different in character from anything we've experienced in the postwar era…

So, what do we do as a battered global economy contracts? Do we wait till it unravels? Do we anticipate the worst and be prepared? How well protected are our markets? Do we see a surge of buy-Indian as well?

More important, do we see an opportunity in the recession, as voiced by CII members at the annual day in Bangalore? Speakers repeatedly spoke of deriving strength from our human capital.

For industry, and hence the economy, there is need to infuse confidence among its ranks. The recession could well be the time for ‘cherry picking instead of carpet bombing’ . There is an untapped potential in rural India and this calls for reconfigurance of business potential to the ‘core of India’.

There is a surging demand from rural India, from energy, water, health facilities to goods. Should the focus turn inwards? What is being done to stimulate the economy? What about the urgent need for upgradation of skills required for a shift to a low carbon economy? How equipped are we for the drastic change it calls for? What are we doing about it?