Saturday, December 13, 2008

The Fragile Global Economy

Reading an article by Krugman titled the Great Illusion. This article was written during the Georgia crisis when Russian Tanks rolled into Georgia. The article talks about How Globalisation can get stalled by nationalistic forces.

He mentions - " our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism".

This article especially assumes significance in the current time due to tensions between India & Pakistan.The path of Globalisation and Growth followed by India will receive a setback once a war starts off. The fundamentalistic elements stand to gain in mutliple ways from such a war. For India we stand to loose much more even if we win. Unless we manage to extirpate the entire Jihadi & Let machinery on the process.

Even as the seige a happened at Mumbai there was polling happening in Kashmir despite a call for Boycott. That is a clear indicator of an undercurrent of peace. All the steps towards reactivation of trade , business and normalisation of life in this region would have to be suspended once there is war- which will lead to greater unemployment. And unemployed youth an easily fall prey to jihadi elements. Such a situation is avoidable.

Perhaps the Government needs to be appreciated for its restrained approach to tackle the cross border terrorism.

The complete article is available here: The Great Illusion