By Kanica Soni
India so far has put up a brave front to the global financial crisis that has hit our economy, where from the dawn of the technological advancements and globalization was pouring in new investments that fuelled a large economy to boost ahead, it is these very factors that have infact, as it seems metaphorically crippled us.
Looking at the global financial crisis from the perspective of a developing economy, it is hard to ignore the factors that has caused, the break-down of one large economy on many upcoming and growing ones.
In my last article(THE GLOBAL FINANCIAL CRISIS- UNDERSTANDING THE PRESENT AND LOOKING AHEAD) I spoke of how this happens, now I feel that it is important to dig deeper into why the recession has happened and we are unable to slow it down to turn the curve upward. one of the reasons as i explained in my last article is the fact that a problem at such a macro scale can not be resolved by measures taken by one country at a time. (like the issues arising due to the views of Angela Merkel, in the EU)
Besides this, it is important to look at the other factors that have caused this 'Boom' to turn into a 'Boo' so we can learn from them and not make the same mistakes again.
In my perspective it all started from the a simple human characteristic, that is infact causing alot other problems as well i.e. Greed!!
It is the urge to want more/ earn more on an essential commodity that people would pay for as it is a subsistence resource for a large part of many economies, as the Oil prices were increased, the world saw a drastic increase in the food prices (that use oil consuming machines for production and refinement) that in turn caused the food crisis early this year. Thus emerged the Food and Fuel Crisis.
In 2008, oil prices surpassed $100 a barrel for the first time, the first of many price milestones to be passed in the course of the year. In July, oil peaked at $147.30 a barrel.
Subsequently, the prices of many commodities, notably oil and food, got so high to cause genuine economic damage, threatening stagflation and a reversal of globalization, as first Egypt then Brazil (major exporters) curbed both production and stopped exports.
As prices soared, the crisis led to cash deficit (the credit available), and it is from this liquidity that investment banks multiplied the value of their capital, and therefore the investment banks began to suffer.
Gradually, as we see after investment banks, the automobile industry and luxury goods industry is suffering. The way is going to be long and hard but the world economies need to reverse the effects of large scale globalization to promote a sense of security in the consumers and the producers, simultaineously look at how to create jobs and continue to upkeep the cycle of
Looking at the global financial crisis from the perspective of a developing economy, it is hard to ignore the factors that has caused, the break-down of one large economy on many upcoming and growing ones.
In my last article(THE GLOBAL FINANCIAL CRISIS- UNDERSTANDING THE PRESENT AND LOOKING AHEAD) I spoke of how this happens, now I feel that it is important to dig deeper into why the recession has happened and we are unable to slow it down to turn the curve upward. one of the reasons as i explained in my last article is the fact that a problem at such a macro scale can not be resolved by measures taken by one country at a time. (like the issues arising due to the views of Angela Merkel, in the EU)
Besides this, it is important to look at the other factors that have caused this 'Boom' to turn into a 'Boo' so we can learn from them and not make the same mistakes again.
In my perspective it all started from the a simple human characteristic, that is infact causing alot other problems as well i.e. Greed!!
It is the urge to want more/ earn more on an essential commodity that people would pay for as it is a subsistence resource for a large part of many economies, as the Oil prices were increased, the world saw a drastic increase in the food prices (that use oil consuming machines for production and refinement) that in turn caused the food crisis early this year. Thus emerged the Food and Fuel Crisis.
In 2008, oil prices surpassed $100 a barrel for the first time, the first of many price milestones to be passed in the course of the year. In July, oil peaked at $147.30 a barrel.
Subsequently, the prices of many commodities, notably oil and food, got so high to cause genuine economic damage, threatening stagflation and a reversal of globalization, as first Egypt then Brazil (major exporters) curbed both production and stopped exports.
As prices soared, the crisis led to cash deficit (the credit available), and it is from this liquidity that investment banks multiplied the value of their capital, and therefore the investment banks began to suffer.
Gradually, as we see after investment banks, the automobile industry and luxury goods industry is suffering. The way is going to be long and hard but the world economies need to reverse the effects of large scale globalization to promote a sense of security in the consumers and the producers, simultaineously look at how to create jobs and continue to upkeep the cycle of
Income --- Expenditure --- Consumption--- 1. Investment
--- 2. Production
3. Consumption again ---------
Copyright © Kanica Soni 2008 owned by Kanica Soni . All Right Reserved
Copyright © Kanica Soni 2008 owned by Kanica Soni . All Right Reserved
No comments:
Post a Comment