'Hyper-United, Hyper-Divided World'

Navneet Munot, Executive Director and Chief Investment Officer, SBI Funds Management Pvt Ltd, shares his views on US' Trumpnomics vs India's currency reforms

By Navneet Munot

Published: Thu 26 Jan 2017, 2:25 PM

Last updated: Sun 29 Jan 2017, 5:28 PM

What a year it was. The US voted for change, while Indians were looking for 'change'.
Barack Obama was a strong contender (for Person of the Year 2016). He took the reins in 2008 after the worst economic crisis and left office when the US saw nearly full employment, household and corporate balance sheets in good shape, the Fed unwinding accommodation, and the dollar and equity markets stand at a record high.
Superman, Batman, Ironman can wait.Donald Trump is currently "Captain America". And the Clintons should have read the e(thical)mail that those who serve the public can't have private servers.

Going by the rhetoric, this is Trumpnomics - climate change is a hoax by China, Janet Yellen is a puppet, companies with offshore production are anti-American, and all trade treaties are unfair. Don't forget, he is an astute businessman, not an idealist. A president chosen by the poor has a power centre open only to hardliners and soft-billionaires. Hopefully, real Trumpnomics would be about tax reforms, deregulation and infrastructure spending.
I thought of the US dollar. It is not only the Mexican peso that got 'Trumped' on the wall, but the dollar rose against most major currencies. Weaker currencies and cheaper money haven't helped Europe, the UK and Japan so far.

Narendra Modi was a strong contender. This popular leader of an aspirational middle class is transforming into a messiah of the poor. He is ambitious, courageous and an incomparable risk-taker. However, India is such a complex country that real change and last mile delivery will take longer and much larger bandwidth.
It was the 25th anniversary of economic reforms unleashed by Narasimha Rao. A country that had to pledge its gold has now the distinction of owning one of the largest foreign exchange chests. Will we remember 2016 for reforms like the Bankruptcy code, GST, Monetary Policy Committee and demonetisation after 25 years? Only time will tell.
CDR, SDR, 5:25 and S4A.That's the alpha-numeral soup to deal with the cold of bad loans. Catching defaulters has been tougher than finding Pikachu on Pokemon Go. Hope that the Bank Board Bureau is empowered and we get a Swachh Bank Balance Book. Demonetisation was a Herculean task and bankers were standing by India. Bad apples who connived for personal gains will pay a heavy price.
Facebook is now a nation of a billion users while Snapchat and WhatsApp made their way into millions of millennials' conversations. Humanity is getting hyperconnected. This hyper-united network is dispersing thoughts and emotions at the speed of light.
This world has hyper-polarised opinions. Clamour for higher economic and social walls seems to have increased. Make no mistake about it; this is neither the end of globalisation nor the beginning of nativism. We are just witnessing a high tide of envy, fear and anger - the deepest of human emotions.
The sentiment of the day and motion of the debate will keep changing, but the plurality and pace of the new, hyper-united world will not. "Hyper-United, Hyper-Divided World" is my person of the year.

Wish you a happy 2017.

Navneet Munot is the Executive Director of SBI Funds Management Pvt Ltd. The views expressed here are personal and do not reflect the newspaper's policy.