Today I read a note from an NGO-leftist type of a guy from my alumni egroup…. pointing to the short term infatuation on part of the foreign exchange and stock exchange investments in India and how it would not be helpful, while publishing the credit mess from Merrill Lynch. It just makes me feel cheated. And this is what I replied back:
….And, which, FE is of the “long duration” variety? Are the world’s wealthy – in typical Punju lingo – “mere Chache ke puttar” that they will simply wire money to RBI till cows come home?
I mean what do we expect the world to do for us? And why?
India and Indians should invest in other countries because it will benefit us. Similarly it is with the others!
However, what the inflow of money does for the investors is boost their savings …. and adds more individual investors to the mix.. and slowly the wealth that was in the hands of a few….. is distributed through broad ownership of stock – diffused in the economy.
Yes, the Ram Pyari living in a poor Rajasthan village would not benefit from it directly – but anyone who had hopes that building a bridge in Delhi across Yamuna would be of any benefit to her is living in the same hallucination!
Economics and Money does not always work directly! The FE increase has its own benefit….. as does increased investment in Indian stock exchanges and proliferation of VC funding. Now, a young MBA can come up with an idea in his hostel room and get funding if its worth it.
Now Dreams have an unusual companion in India…. its called Reality!
Yes, it happens for a few thousands….. but a few years back…. thanks to Mr. MK Gandhi and Nehru – it used to happen for Birla, Tata, and a couple of other families!
The debate on poverty and money in India is soooo screwed up …. that its amazing! When we concentrate on wrong issues to uplift poor…. it usually comes at the cost of NOT concentrating on issues that DO uplift the poor!
I can understand when a yuppie kid is impatient and totally loses control and perspective….. but what amazes me is the COMPLETE lack of patience and high level of ADD on part of the guardians of our poor! They want poverty to go right now…. a thing that occured over thousands of years.. is expected to go away right away! Little do these people understand that poverty elimination is NOT a one time act… but a structural change! If the substance of our act is NOT matched by the structure of the system, no matter how charitable we are… and no matter how rich we are, nothing much will happen! So, structure should change first!