The heady, hectic deliberations at WEF 2016 have drawn to a close, and the curtain settled to an overture that was both upbeat and somehow ominous. As I stood at the snow-filled kerbside waiting for my transfer to Zurich in sub-zero cold, I had lots to ponder about. In the play of global expectations unfolding on a stage staggering with actors who may just be guessing at their lines, India has a very complicated role to play.
What are implications of the fourth industrial revolution on emerging markets? Will it bridge the gap between developed and developing countries? Will India’s demographics be able to adapt to increased automation, and how will our manufacturing evolve? One thing is certain – all Indian industries, including our semi-opaque real estate, will mature into more transparent ones with cutting-edge technology becoming an increasingly important part of our lives.
As Colin Dyer wrote, technology will make strong, and established businesses even stronger, as we embrace the change. And it’s still just early days yet – we are just at the cusp of the ‘E-evolution’. Looking at it from today’s standpoint, it is almost impossible to predict in just how many ways – and to what extent – our world and we will change. I obviously hope it’s only for the better, but we hold a massive and unpredictable tiger by its digital tail.
On the last day at the WEF, the overall mood upbeat, but I attribute that to humankind’s undying pursuit of optimism. So what if the first three weeks of 2016 have been the worst start ever for the global economy, ever? So what if the US is definitely slowing down, and the chase to the White House this year may slow them down even more? Almost every Hollywood film tells us, America always comes good smelling like roses in the end. God help us if they don’t. Stock markets are currently overreacting to China, even though may be headed for a softer landing than expected. But China will need to transition from industrial to services and exports to consumption if it is to reclaim its former glory.
Let’s face it – the current low oil prices are good for the seven billion people that our blue planet supports. The IMF estimates that the world economy’s GDP growth is 3.1% in 2015, 3.4% in 2016 and 3.6% in 2017. It’s growth nevertheless. Among the others, India is the flavour of today and will likely see 7.5% growth, provided our politicians continue to roll out ground-altering reforms at the expected pace. Russia and Brazil, the favourites of yesteryears, have lost out in the popularity sweepstakes because of their domestic issues.
The European Union remains a major area of concern, and Christian Ulbrich leaves with a few more furrows on his brow. The EU definitely has its hands full with the challenges of Brexit and the refugee crisis. George Osborne’s remark that ‘UK wants to be in EU but not run by it’ may be a sign of things to come… if so, will I see the British breaking away from the EU in this lifetime? With millions of refugees pouring into Europe, having free borders is definitely being questioned. It is also hard to also ignore the brewing crisis in Middle-Earth.
According to IMF, India remains a bright spot. It has achieved escape velocity from the BRICS bloc and is off on its own growth trajectory. However, a lot – if not everything – depends on FM Jaitley delivering swift implementation of Indirect Tax reforms (read: GST), passage of the Bankruptcy Policy, lowered Corporate Tax rates and overall enhanced ease of doing business. I’m not certain whether all this can be done in the short term, but plodding optimism is still better than cynical despondency. One thing is for certain – India has reached the Bus Station and just needs to get on (and stay on), even while many other nations have yet to reach the terminus.
Authored By: Anuj Puri, Chairman & Country Head, JLL India
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