It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity…” 2016 was everything Charles Dickens conceived, a year the unexpected came to be the expected and the only certainty we live with is uncertainty.
Like the year began with Donald Trump as a joke and Trumpism as an alternate political language. There were those who went with the accepted “No Way Trump”. Well, the joke is on them… and on the pollsters and pundits. The simple fact is that Trumpism demonetised the establishment… rather, establishment thinking.
Like it is worth noting that many political careers have been demonetised this year—David Cameron in Britain, Dilma Rousseff in Brazil and Matteo Renzi in Italy, to name a few. And there are those on the way out, like Park Geun-hye in South Korea. The optics may vary, but the underlying theme is an unmistakable public anger. Many others threaten to follow.
Like, it is true that 2016 does not quite fall under the definition of a black swan. There were, after all, those who did imagine, some who apprehended a part, if not all of, what has transpired. Yet, the not-quite-black-swan phenomenon with almost a black swan impact does call for a definition, at least a moniker to go with. Maybe Nassim Nicholas Taleb, chronicler and analyst of fragility, could come up with a subsidiary option.
Like, there is little doubt that India had its event too. Demonetisation aka cancellation of high-value currency falls squarely in the expected unexpected category. Expected because there were votaries and unexpected because nobody thought a regime would vacuum 86 per cent of cash in circulation. Opinion is curiously black, white and grey—which is, those who don’t disagree with intent but with execution. The ubiquitous question that pops up is: what if the idea had allowed for a phased transition?
Like the existence of shades of opinion is fair, par for the course in a democracy. What is insufferable is the self-centred virtuosness that flanks the discourse. Suffice to say that it is easy to preach virtue when someone else is paying the price. Like the hardship faced by the many and the disruption—particularly of SMEs and farm produce—is real. What is worrisome is the compassion deficit. To top it all, it has been suggested that supply chains will be rebuilt, like after Katrina. Really? Was this THE plan?
Like, it is all very well to wax eloquent about short-term pain and long-term gain. The political question is who is bearing the pain and what will it cost to ease the pain. The big buzz is about a big bang announcement anytime soon—about defraying of loan repayment, about interest waiver, about cheap power, revival package for SMEs. Notwithstanding skepticism if that comes to be Budget 2017 could well be rendered a non-event.
Like there is a new binary in the discourse. There is “logically speaking” and then there is “WhatsAppically speaking”. Of course, people are entitled to their opinion. What is curious is that different sets of facts too are in, well, currency. Data from RBI suggests e-transactions have fallen while firms are talking about record growth. RBI says it has printed enough. The ministry says there is adequate currency. The queues at banks don’t quite validate the claims.
Like it is striking that view on the state of the economy is less about data and more about belief and faith. There is the “worst case” scenario and then there is the “long term dividends case”. Clearly, the pinch of salt test is called for—the landscape, after all, is virtually Rumsfeld territory. Uncertainty is back in the headlines—about when there will be enough cash, about the hit the economy will take. Ergo, estimations are clouded by assumptions.
Like it pays to look around the world as practitioners polish their predictions. In the US, the popular and conventional view was that a Trump victory would unleash the wrecking ball on the indices. As it turns, out global stocks added over $2 trillion in market capitalisation in a month post-November 9, US stocks were racing to a new high and the DJIA was heading for the 20,000 mark.
Like the Trump effect, for sure, is visiting and will impact other domains too. There is the risk to the “One China” policy, there is his view that NATO allies must pay to plug in and there is his perception on the United Nations. On Friday he tweeted, “As to the U.N., things will be different after Jan. 20th.” It is not inconceivable that Trump could take his “Drain the Swamp” strategy global.
Like amidst all this chaos it is worth noting that China has ceased to be in the news for the wrong reasons—that is, manufacturing slowdown, fall in consumption and bad loans. It bears mention that China, while doing all that is necessary at home, is expanding its footprint. Acquisitions by China in US and EU, in 2016, were more than previous three years combined.
Like Xi Jinping, President of China, does seem to be scripting a smart playbook, at least for now. Notice how China did not rise to the bait and practiced “strategic patience”. Indeed, to understand uncertainty, China connected with “old friend” Henry Kissinger earlier this month to try to decode what the new American playbook could be in the Trump regime.
Like 2017 promises to be more exciting. There are elections in the Netherlands, in France and in Germany, which will be events. Leading the opinion polls are Geert Wilders, who has promised to get the Dutch out of the EU, and Marine Le Pen, who has told France that her aim is to “destroy the EU”. Complexities of Dutch politics may inhibit Wilders from assuming charge even if he wins. However, if Marine Le Pen wins the election, Britain may not have to bother with triggering the Brexit process. The unravelling of Europe could render Brexit the preface in academic research.
Like there is a cliché—frequently attributed to Harold Macmillan—which sums up the days ahead. The question is what do politicians worry about? The answer: “Events, dear boy, events.” The coming year promises events aplenty. We are, as the old curse goes, “living in interesting times”.
Finally, best wishes for the year ahead and may you enjoy the journey. shankkar.aiyar@gmail.com