“God sent economists to the planet to make astrologers look respectable,” said John K. Galbraith, noted economist. His Excellency Sanjay Verma, Consul-General of India in the UAE, quoted these words as he addressed the Institute of Chartered Accountants of India, Dubai Chapter’s 30th Annual International Conference. The topic for discussion was “The Global Economy… Poised for a Paradigm Shift?” Given the current economic climate, it seemed a timely and appropriate subject.
“The chartered accountant is a very silent worker; a lot of people talk about the many doctors working in this country; how many engineers working in this country; but people don’t talk about so many chartered accountants working in this [UAE] country,” said Indian Ambassador to the UAE, H E M. K. Lokesh.
Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research said, “Accounting laid down the background of our economy.” They are “pillars of support”. In the global climate that we are facing today, the integrity of the accounting profession is paramount. Even if the global economic conditions are in flux, accountancy must be stable.
Sheikh Nahyan had strong views about the accounting profession. He stated that accountancy practices must always be transparent and accessible, and that this profession must always attract high calibre persons with integrity, objectivity and competency.
M. K. Lokesh agreed. “Indian chartered accountants are recognised worldwide as being among the best and the brightest in the profession.” However, he pointed out “…ethical standards are essential… to the development of the profession.”
In the larger scheme of things, accountants are still four years behind. “It [the paradigm shift of the global economy] is not poised; it’s happened,” said Abdul Kadir Hussain, CFA, Chief Executive, Mashreq Capital, DIFC body of Mashreq Bank, as is evidenced by the fact that Hussain is a Pakistan-born, US-trained, Europe and Asia experienced individual speaking at a conference to Indians in the Middle East. Professor Ujjwal K. Chowdhury, Dean, School of Communications at Whistling Woods International, Mumbai and Managing Editor of New Global Indian, expanded on the global challenges of today: decline or stagnancy in growth-rates of developed nations, rise of BRICS nations in contrast to the financial struggles of the Euro zone, high unemployment rates around the world and Occupy Movements taking place in several Western cities.
The reaction to economic crises has changed over the decades. In the 1987 stock market crash in the United States, Asia suffered badly and recovered much slower than the US did. As Hussain allegorically put it, in those days “the US sneeze[d], the world [caught] a cold.” The same, however, could not be said about the Asian crisis in 1998 – the US came out of that unscathed, they did not even feel it. The 2008 crash was again US-centric. The transmission was global and instantaneous. But the recovery of emerging economies was almost instantaneous as well. Hong Kong, Hussain informed the audience, recovered better than the US.
More proof of the change in global economy is apparent from the fact that nowadays people keep an eye on the Chinese stock exchange and the Reserve Bank of India. Only when the yen is on par with the dollar will there be an indication of a complete shift in the global economy.
In the 21st century, HE Sanjay Verma pointed out, there is no “full-spectrum” global authority. There is no clear-cut developed and developing society. The BRICS nations (Brazil, Russia, India, China and South Africa) contribute 50% of the global wealth. India is at a threshold, he insisted. The country can develop and innovate.
India being a younger nation, the aspiration values are increasing. India is the most diverse country in the world, and its foreign endeavours have never been violent. But, unfortunately, this approach has led to India being perceived as a soft nation. India has to alter its global image, Verma stated. Dr. Sanjiv R. Das, Professor of Finance at Santa Clara University, US spoke on “Global Debt Restructuring: The Case of Paradigm Shift in Distressed Mortgage Debt”. His focus was on the housing market in the United States of America.
Dr. Das’ argument was that the falling housing prices were a global problem. The banks were implementing an incorrect model on instalments – leading to foreclosures. According to his research and mathematical models, debt restructuring is optimal for both lenders and investors. The “incorrigible optimist”, Harish Salve, CA., Senior Advocate, Supreme Court, India spoke on the subject of Democracy and Growth. Sir Winston Churchill had predicted anarchy in the independent Indian state, but as pointed out by Salve, anarchy exists all over the world – the London riots in 2011 busted the myth of a serene West; the Arab Spring in the Middle East is also proof of anarchy. India’s experiment with democracy is very successful. India has a robust free press – it is “noisy and irresponsible”, but those are attributes that Salve says he prefers over a “silent and responsible” press that is “just the master’s voice”. However, as noted by Professor Chowdhury, the media plays an important role in representing the image of a country. The negative news stories that are usually generated about the Indian sub-continent by the worldwide press fail to accurately portray the huge strides that India has made in development. Proof of global economic change will be seen when the media focuses on the positives.
Another positive that Salve observed about India, is the robust Indian judiciary, which even has the power to prosecute politicians. Looking at the big picture, the political governance in India is in the hands of the people – the government is changed by the public ballot. This is another strong piece of evidence in favour of India’s democracy.
To ensure the growth of the nation and hence lead to an economic shift, innovation must be encouraged, and money needs to be put into the creation of innovators. Salve said that though corruption was rampant in India, it was no different from other countries that also suffer from corruption. But in today’s world, corruption has a question mark next to it, due to the degree of transparency in India.
However, for India to really move forward and grow, “we need less governments and more governance.”
Piyush Goyal, Member of Parliament, Rajya Sabha presented a step-by-step “Transforming India” campaign. To reform India, the country should focus on particular sectors – 1) Education, 2) Urbanisation, 3) Transportation and Connectivity, 4) Rural Empowerment, 5) Energy Security, and 6) Manufacturing. Developing —these areas would truly shift the global economy in India’s favour. He suggested three ways to achieve the transformation – 1) reinvention of the government 2) build a trusting nation and 3) empowering the people and communities of people. Only in a crisis, he stated, does a country’s people stand up.
Dr. Faisal Devji from Oxford University, United Kingdom, a follower of Mahatma Gandhi’s practices, addressed the fact that the paradigm shift had taken place before, in the 19th and early 20th centuries. That shift however was more on a moral front.
Gandhi’s commentary on the Bhagwad Gita in the early 20th century emphasised the Individual’s (or Corporate’s) duties rather than on the Human Rights given by the government — this was an essential change and shift in thinking.
Dr. Devji referred to another of Gandhi’s ideologies, which is relevant to present-day India — simply joining the proverbial club would not benefit the country, in fact, it would lead to sacrifices. India has to offer the world something, he explained. That shift in thinking is becoming more and more prevalent in today’s world.
Professor Chowdhury enumerated on the various changes already taking place – there is now a demand for alternative energy sources, corporate social responsibility is becoming a business agenda and countries are collaborating rather than competing against each other in several spheres. He emphasised the importance of the Indian Diaspora in making a global change – the Diaspora is distributed over a hundred nations.
The paradigm shift in the global economy has already occurred, but for India to evolve into a true global leader, it has to make greater strides into governance, education and development. But more importantly, the people of India need to have more faith and optimism in their country.
