MUMBAI, NEw DELHI, BENGALuRu, kOLkATA, CHENNAI, AHMEDABAD, HyDERABAD, CHANDIGARH*, PuNE*, LuCkNOw* VOL. 7 NO.

Monday, January 1, 2024

Think Ahead. Think Growth.

mint primer QUICK EDIT

India’s economy: New vibes

Will the dream in 2024
Will 2024 be the year of a baton
run go on in 2024? handover from public to private
investment as a driver of eco-
nomic growth? This is the big
BY N. MADHAVAN question for India’s economy,
For India, 2023 was a good year, underlined by strong economic which many analysts reckon is
growth, impressive tax mobilization, stable rupee and surging capital finally ready to regain its peak
markets. Will the economy continue on a similar path in 2024? Mint form after the disruptions of a
looks at factors that can aid or disrupt the dream run. cash-vacuum and pandemic. In
politics, general elections will
Strong Show tell us whether the country’s
Indian economy registered an accelerated pace of
ruling Bharatiya Janata Party
growth in 2023. (BJP) gets a third straight term
Year-on-year growth in GDP (in %) in power. It has already tri-
Q4FY23
umphed on two of the three
major issues over which it had
6.1
challenged the post-1947 Con-
Q1FY24
gress consensus, a Ram temple
7.8 to replace a mosque in Ayodhya
Q2FY24 and the official abrogation of
7.6 Jammu & Kashmir’s autonomy
Q3FY24* over its internal affairs. If the
6.5 BJP wins this year’s Lok Sabha
polls, it may push for a uniform
* Projection Source: National Statistics Office/RBI civil code (UCC), the third issue.
SATISH KUMAR/MINT Indian rules on marriage,
How did the economy Will this dream run divorce and inheritance vary, as
1 perform in 2023?
In 2023, Indian economy’s strong
2 continue in 2024?
It could. The Reserve Bank of
they go by religious tenets. It’s
not easy to enact a common
performance defied expectations. India has pegged FY24 GDP family law for people of diverse
The 6.1% growth in the January- growth at 7%. Fitch Ratings pegs beliefs in a way that makes due
March quarter pushed FY23 2024 growth at 6.6% to 6.8%. The space for gender justice,
growth to 7.2%. April-June and factors that drove economic upholds the BJP promise of
July-September quarters saw growth in 2023 remain. The focus securing everyone’s interests
heady 7.8% and 7.6% growth, on capital expenditure continues
(“sabka saath”), and isn’t judged
respectively. The quarter ending with states spending big.
December is seen at 6.5%. Strong Consumption will increase further as violative of religious free-
capex push, rising consumption, if rural India starts spending more. dom. The role that modern ide-
and continued growth in the Investment by corporate India is als of justice play in the UCC
global economy contributed to this increasing catalysed by production debate will be watched closely.
good show. Direct tax collections linked incentive schemes.
grew 18% as of 9 November. Goods Inflation seems controlled and so
and Services Tax mop up (April- further interest rate hikes are
November) rose by 12%. The rupee unlikely. Exports are rebounding
remained stable. Buoyed, foreign
investors pumped in ₹1.65 trillion,
as monetary tightening has eased
in developed economies as they
MINT METRIC
sending the stock markets soaring. have reined in inflation. by Bibek Debroy
AFP

2023 is dusted and done.

3 Will the election accelerate
economic growth?
The general election is due in May. There
May 2024 bring for everyone
is no evidence that elections cause an
Health, wealth and wishes met,
economic bump. In the last three elections, Full of joy, little to fret.
the economy slowed twice and grew
marginally once. Experts put FY24 growth
A wonderful leap—just begun.
rate marginally lower than the 7.2% in
FY23. Their fear is more about the risk of
fiscal profligacy and its after-effects as
populism has risen in recent elections.
QUOTE OF THE DAY
Today every corner of India is
4 What about the global
economy? 5 What can upset this
economic revival? brimming with self-confidence,
Runaway inflation across most A flare-up in geo-political tensions imbued with the spirit of a
developed economies forced their can play spoilsport. The widening
central banks to raise interest rates of the Israel-Palestinian crisis developed India; the spirit of self-
and this caused global economic appears real with Houthi rebels reliance. We have to maintain the
growth to slow down from 3.5% in attacking ships plying in the Red same spirit and momentum
2022 to 3% in 2023. The Sea. This could create a supply-
International Monetary Fund chain disruption. If the conflict in 2024 as well.
(IMF) expects 2024 growth at expands (US says Iran is behind the
2.9%. Fear of recession in Red Sea attacks), prices of oil and
developed countries has receded other commodities will increase.
as monetary tightening has almost This could fuel inflation, trigger
NARENDRA MODI
ended. IMF expects global another round of interest rate PRIME MINISTER
inflation to drop to 5.8% in 2024 hikes, and smother economic
from 6.9% in 2023. The Chinese revival. Although back to growth,
economy is back to growth after China is still wobbly as it struggles
measures taken by its government. to tame its property crisis.

THE WEEK AHEAD

UPI PILOT IN STOCKS FOMC MINUTES
4 JAN
1 JAN

National Payments Corp of India to launch UPI US Federal Reserve to release minutes of December
for cash segment of equity market in beta phase. meeting. (2 pm ET on 3 Jan; 12.30 am IST on 4 Jan).

DEARER CARS GDP ESTIMATE

5 JAN
1 JAN

Maruti Suzuki, Tata Motors and Audi among com- Statistics ministry to release first advance esti-
panies increasing prices of their cars. mate for 2023-24 GDP.
3 & 5 JAN

PMI DATA RELEASE ADITYA FEAT

6 JAN

S&P Global to release purchasing managers’ index India’s solar mission Aditya L1 will reach the cru-
for India’s manufacturing and services sectors. cial “Lagrange point 1”.
3-7 JAN

INDIA-SA TEST ELECTRIC VEHICLE SHOP

7 JAN

Second Test between India and South Africa Tata Motors’ EV-maker subsidiary to open
men’s teams in Cape Town. EV-only store to the public in Gurugram.
 PLAIN FACTS

States push welfare

spending envelope
BY HOWINDIALIVES.COM

W
elfare spending has been a key plank at recent election campaigns. Incumbents touted their achievements in this
area, while challengers promised to further such spending if elected. This theme may repeat itself at Lok Sabha
election campaigns this year, as states’ revenue collections rise. An overview of state budgets for 2023-24, released
by the reserve bank last month, shows that total social sector spending by states is projected to rise 9.2% to ₹24 trillion.
While the increase may not seem too high, especially in a pre-poll year, it comes on the back of a 28% increase in 2022-23,
when states had found themselves flush with funds following a recovery in economic activity after covid-19 lockdowns eased.
However, the 9.2% overall increase in social sector spending conceals wide variations across states. Fourteen states have
budgeted for greater increases, led by Jharkhand, Tamil Nadu, Andhra Pradesh and Telangana in the 19-22% range. Else-
where, prominent states below the all-India average include Punjab, West Bengal, Rajasthan, Gujarat and Maharashtra.
Further down that spectrum, six states have budgeted a decline in social sector expenditure, including Bihar and Assam.
Social sector expenditure here includes education, health, rural development, development schemes targeting specific
social groups (such as scheduled castes and tribes), and urban development. Across states, for 2023-24, education, sports,
art and culture account for about 31% of total social service expenditure. Health, social security and welfare, and rural develop-
ment account for another 10–11% each, and urban development, 7.2%.

Big states are budgeting above 10% Education, health lead social sector
growth in social spends spending at state level
Budgeted growth in social sector expenditure, 2023-24 (%) Share of different categories in social sector budgets
of states in FY24 (in %)
Education, sports, art and culture 31.3
<0 0–5 5–10 ≥10
Medical and public health 11.2

Assam Rural development 10.7

Bihar -16.8
Social security and welfare 10.5
-17.1
Welfare of SCs, STs and OBCs 7.4

Urban development 7.2

Water supply and sanitation 5.8

Mizoram Housing 3.7

-18.6
Jharkhand Family welfare 2
21.7
Expenditure on natural calamities 1.7

Nutrition 1.7

Tamil Nadu Food storage and warehousing 1.6

19.5
Labour and labour welfare 0.9

Based on revised estimates for 2022-23

Others 4.3
and budget estimates for 2023-24.
Source: State Finances: A Study of Budgets, Reserve Bank of India

Rising Self-reliance There is wide variance in

self-sufficiency of states
STATES HAVE budgeted an overall 8.2% increase in their State's own tax revenue as share of total tax revenue (%),
“own tax revenues” in 2023-24, up from 7% a year earlier. The last two years
RBI says strong growth in the state component of the goods and Haryana 87
services tax (state GST) has been instrumental in reducing the Telangana 84
Maharashtra 82
overall funding dependence of states on the Centre. Yet, 42% of Karnataka 80
state revenues are still from the Centre, either in the form of Tamil Nadu, Kerala 79
taxes raised by the Centre but shared with states under Gujarat 78
constitutional norms, or central grants to states for specific uses Punjab 73
or schemes. Andhra Pradesh 70
States differ widely in the extent to which they are reliant on Rajasthan 62
their own tax revenues to finance their spending. For richer Odisha, UP, West Bengal 54
Madhya Pradesh 51
states such as Maharashtra, Haryana and Gujarat, their own tax Chhattisgarh 50
revenues account for more than 80% of the overall tax Jharkhand 46
revenues. At the other extreme, there’s Bihar, which doesn’t Bihar 29
even cross 30%. For mineral-endowed, but poor, states such as Data is average of 2021-22 (actuals) and 2022-23 (revised estimates)
Jharkhand, Odisha and Chhattisgarh, this is around 50%. Source: State Finances: A Study of Budgets, Reserve Bank of India

Education is losing share, while social

security is gaining
Spending Shifts
Share in states' social sector expenditure (%) ON THE spending side, while the share of several components
45 of social sector spending has remained more or less constant,
there have been significant shifts in certain components. The
40
grouping “education, sports, art and culture” remains the
35 largest component, but its share in social sector spending has
Education, sports, art and culture
30 32 dropped by 10 percentage points since 2005-06 to around 32%.
25 Conversely, spending on social security, which is increasingly
20
taking the form of putting more money in the hands of people
Social security and welfare
via cash transfers, has increased by 6 percentage points.
15 Reflecting the increasing urbanization of different states,
10.7
10 spending on urban development now accounts for 7% of total
5 social sector spending, up 4 percentage points over the past 18
0
years. Meanwhile, spending on rural development has
2005-06 2023-24 remained more or less constant around 11%. Spending on
Revised estimates for 2022-23; budget estimates for 2023-24. natural calamities, mainly as relief to affected families, has
Source: State Finances: A Study of Budgets, Reserve Bank of India
dropped by 3 percentage points over that same period.

Persistent Inequalities The per capita income gap at the

extremes has grown
DESPITE GREATER social sector outlays, inequalities across State per capita income* (₹/year)
states persist. As countries develop, disparities in development 3,50,000
across regions should dip, as per mainstream economic theory, 3,10,201
a phenomenon known as ‘convergence’. One way this plays out 3,00,000

is that rich states draw migrants from poor ones, who then remit 2,50,000
Highest among states
earnings back home. Rich states also contribute more to central
taxes, which are then transferred to poor states and used for 2,00,000
developmental expenditure there, thus reducing inequalities.
1,50,000
However, disparities in per capita income persist, and have
grown over the past decade, as the Centre’s economic survey 1,00,000
noted a few years ago. Rich states also have the advantage of
being more self-sufficient in revenues. But as they step up social 50,000 Lowest among states 28,679
sector spending, especially involving cash transfers rather than 0
creating future assets, their finances will need to keep pace. 2011-12 2021-22
www.howindialives.com is a database and search engine for *Per capita net domestic product at constant prices.
public data. Source: Ministry of statistics and programme implementation
PARAS JAIN/MINT

PEANUTS by Charles M. Schulz

 MuMbAI, NEw DELHI, BENGALURU, kOLkATA, cHENNAI, AHMEDABAD, HYDERABAD, cHANDIGARH*, PUNE*, LUckNOw* VOL. 7 NO. 1 Rs. 10.00 16 PAGES

Monday, January 1, 2024

Arvind Panagariya to lead Modi terms 2023 a year of

livemint.com 16th Finance Commission uP2 special achievements uP2

SENSEX 72,240.26 0.00 NIFTY 21,731.40 0.00 DOLLAR ₹83.21 ₹0.00 EURO ₹91.94 ₹0.00 OIL $76.68 $0.58 POUND ₹105.73 ₹0.00

Rival bets set the stage E-commerce

policy soon, Looking ahead at 2024:
PMO ticking The shape of power
for rocky start to 2024 final boxes
A
fter another year marked by great-power rivalries, rising security risks, a string of
Dhirendra Kumar coups, land grabs, outright war and shifting strategic alignments, the role of hege-
Bullish institutions and bearish retail investors roll over bets to New Year dhirendra.kumar@livemint.com monic, middling and rising powers has become more fluid than at any time since the
NEw DELHI end of the Cold War. Around the world, foreign policy strategists are grappling with new
international dynamics, from the Sino-American rivalry and ongoing hot wars to the broader
Ram Sahgal

T
he Prime Minister’s breakdown in multilateral global governance. However, there is much debate about whether
ram.sahgal@livemint.com bRewIng stoRM Office (PMO) is examin- global power and alignments are truly shifting, and in what ways. Mint’s annual year-end
MUMBAI ing the national e-com- issue, in collaboration with Project Syndicate, looks at what’s in store in 2024, with original,
HNIs and retail investors have taken a bearish stance on index futures, while
merce policy to understand its exclusive and incisive analyses from current and former political leaders, senior policymak-

T
institutional investors have taken a bullish one.
he battle of sentiment between potential impact on domestic ers and renowned scholars. See Pages 3 to 11
the client category (comprising Net cumulative open index futures contracts retailers and small players, two
high net-worth and retail inves- 28 December 29 December people aware of the matter
120,000
tors), and institutional investors said. “The policy is in its final
has spilled over to the new year. 80,000 stage and will be released soon
The former has taken a bearish stance on 40,000 after the approval by the
index futures, and the latter a bullish one, PMO,” said one of the people,
0
a development likely to make markets adding the much-awaited pol-
choppy after a secular rally last month. -40,000 icy will protect the interests of
On 29 December, the first day of the -80,000 both consumers and industry.
January series, the combined cumulative Retail/HNIs Proprietary FPIs DIIs The development is signifi-
(clients) traders
net short Nifty and Bank Nifty futures cant given the draft policy
(index) contracts held by clients and pro- framed by the Union com-
prietary traders stood at 90,487. These Source: NSE
merce ministry has recom-
contracts have been purchased by foreign mended relaxations for com- ANGUS DEATON YUEN YUEN ANG JOSEPH E. STIGLITZ
portfolio investors (FPIs) and domestic panies that operate on e-mar- 2015 Economic Nobel winner Political scientist & author 2021 Economic Nobel winner
institutional investors (DIIs), with the FPIs MARKET PLAY ketplace business models such
accounting for most buys on a net basis, FPIs’ net purchases at DIIs bought net DAtA for BSE, NSE shows as Amazon, Flipkart and oth-
National Stock Exchange of India (NSE) ₹66,135 crore in Dec are a ₹12,942 crore worth of clients sold shares worth ers.
data shows. record high for any month shares during December ₹14,633 cr in December The evaluation by the PMO
The clients’ and proprietary traders’ follows a meeting on 2 August
SARVESH KUMAR SHARMA/MINT
short positions have been rolled over from conducted by the Department
the previous month, while FPIs have The same data for BSE and NSE shows NSE shows that while institutions have for Promotion of Industry and
rolled over long bets and added fresh ones. clients sold shares worth ₹14,633 crore in been bullish, clients or retail/high net- Internal Trade (DPIIT), which
DIIs have also rolled over their bullish December. worth individuals (HNIs) have booked is formulating the national
bets, albeit in smaller numbers than FPIs. On an annual basis, too, while FPIs pur- profits in the calendar year, which has e-commerce policy, with all
FPIs’ net purchases at ₹66,135 crore in chased a record ₹1.71 trillion worth of seen the Nifty jump 20% to close at stakeholders including repre-
December stand at a record high for any shares in calendar year 2023 and DIIs 21,731.4 on 29 December. sentatives of e-commerce
month, as per National Securities Deposi- bought ₹1.85 trillion, clients sold ₹72,921 Chandan Taparia, senior vice-presi- firms and a domestic traders’
tory Ltd (NSDL), while exchange data crore worth of shares in the secondary dent, derivatives research, Motilal Oswal body. MICHAEL IGNATIEFF SRI MULYANI INDRAWATI BEATA JAVORCIK
shows DIIs bought net ₹12,942 crore market. Professor of history Finance minister of Indonesia Economist
worth of shares during the month. Even cash market activity on BSE and TURN TO PAGE 12 TURN TO PAGE 2

Banks hike FD rates ‘Several EoIs for

as cash levels plunge chip, testing units’
Shayan Ghosh Shouvik Das & Gulveen Aulakh
shayan.g@livemint.com NEw DELHI
MUMBAI

A
top government body is

A
number of large and examining “a signifi-
mid-sized banks raised cant number” of appli-
term deposit rates in cations to set up semiconduc-
December, luring customers tor fabrication units and testing
to park surplus money with facilities in India, said Rajeev
them as the system liquidity Chandrasekhar, Union minis-
deficit widened following tax ter of state (MoS) for electronics
outflows and tepid govern- and information technology
ment spending. (IT). In an interview, Chan-
Some banks raised rates for SBI’s interest rates increased drasekhar spoke about domes- Rajeev Chandrasekhar, MoS,
deposits up to ₹2 crore; others by 25-50 bps for different tic electronics manufacturing, electronics and IT. PTI
raised rates for bigger depos- tenors. MINT likely production-linked
its. Top lenders State Bank of incentives, artificial intelli-
being evaluated today. They
India (SBI ) and Bank of Baroda hikes. Liquidity has remained gence (AI) technologies and span compound fabs, com-
(BoB) increased rates on fixed in deficit since mid-Septem- cybersecurity. Edited excerpts:
pound OSATs (outsourced
deposits by 25-50 basis points ber, with some days of surplus semiconductor
(bps) and 10-125 bps, respec- in between. According to How many INTERVIEW
m assembly and
tively, for different tenors on Bloomberg data, the deficit semiconduc- test), silicon
27 and 29 December. widened to ₹2.6 trillion on 21 tor project OSATs and sili-
A basis point is one-hun- December, the highest in proposals has India con fabs. We’ve also recently
dredth of a percentage point. 2023. received so far? floated an expression of inter-
A banking system liquidity We have a significant num-
crunch has sparked the rate TURN TO PAGE 12 ber of proposals that are all TURN TO PAGE 12

Global travel growth flies past domestic

Anu Sharma including Vistara and Air India
anu.sharma@livemint.com Express, are expanding in
NEw DELHI international skies. These air-
lines carried more passengers

T
he growth rate of inter- as they added flights during
national traffic at Indian the year.
airports has surpassed Data from the Directorate
that of domestic air traffic, as General of Civil Aviation
Indians increasingly opt for (DGCA) shows that IndiGo
foreign trips on the back of registered a 37% jump in inter-
improved connectivity and national air passenger traffic
relaxed visa norms. A low base (including both to and from
effect and more flights availa- India) to 2.9 million passen-
ble for international travel gers in July-September 2023,
have also contributed to this from 2.1 million in the same
trend. In the April-November period, international passenger traffic period a year ago.
As per data from the Air- handled at Indian airports jumped 25.3% year-on-year. ISTOCKPHOTO Similarly, Air India’s inter-
ports Authority of India, inter- national air passenger traffic
national passenger traffic han- The number of domestic air resumed operations to and rose 26% to 2 million passen-
dled at Indian airports this fis- passengers at Indian airports from India with effect from gers from 1.6 million passen-
cal year (April to November) was 100.4 million in April-No- March 2022 after a two-year gers a year ago for the July-
jumped 25.3% year-on-year vember, compared to 44.5 mil- hiatus induced by covid-19. September period.
(y-o-y). Comparatively, lion recorded for international Two, higher interest among According to ratings firm
domestic air passenger traffic passengers. international and domestic Icra Ltd, the growth in inter-
witnessed a 17.9% increase in Industry experts said the airlines to operate more flights national traffic has improved
the same period. higher growth rate is a result of to and from India. after curbs on international
However, domestic passen- two factors. One, a low base Among Indian carriers, travel were lifted. Last fiscal,
gers outnumber international effect, as international sched- market leader IndiGo and air-
passengers by a wide margin. uled commercial flights lines from the Air India Group, TURN TO PAGE 12
02 Monday, 1 January 2024
MuMbai NEWS LIVEMINT.COM

Modi terms 2023

a year of special
Panagariya to lead finance
achievements panel; local bodies in focus
Rituraj Baruah
rituraj.baruah@livemint.com
NEW DELHI
16th finance commission to suggest steps needed to augment the states’ consolidated fund
D
escribing 2023 as a year
of ‘special achieve- Lumpy skin disease led to milk
ments’, prime minister Gireesh Chandra Prasad Management Act of 2005. output decline in 2022-23. PTI
Narendra Modi on Sunday said gireesh.p@livemint.com The government has kept the ‘terms
the country is replete with self-
confidence and the momen-
NEW DELHI of reference’ of the commission short,
giving the SFC the flexibility to make IIL plans to

F
tum should continue in 2024. ormer vice chairperson of recommendations governing the tax
Addressing the nation
through the ‘Mann Ki Baat’
NITI Aayog Arvind Panagariya
will lead the Sixteenth Finance
revenue sharing within constitutional
limits. Mint had reported on 1 Decem-
develop
broadcast, Modi mentioned the
G20 summit, passing of the
Women’s Reservation Bill in
PM Narendra Modi addressed
the nation via‘Mann Ki Baat’. PTI
Commission (SFC), which will
set the formula for sharing a
big chunk of the Centre’s tax revenue
ber quoting finance secretary TV Som-
anathan that the terms of reference of
the commission was kept “short and
vaccines for
Parliament, landing of Chan-
drayaan-3 on the moon and
unlikely to be met, although
growth is expected at 7% in the
with states for five years from FY27, an
official order issued by the finance
direct,” on the basis of suggestions
from states. That move has helped to lumpy skin
successes in sports as key current fiscal. In Parliament, ministry on Sunday showed. avoid controversies, which have in the
achievements this year.
“Friends, today every corner
Union minister of state for
finance Pankaj Chaudhary had
Besides deciding on what share of
the Centre’s tax receipts should be
past surrounded the terms of reference
of the commission. Successive finance
disease
of India is brimming with self- said India will become a $5 tril- shared with states and how it is to be commissions act independently.
confidence, imbued with the lion economy early in ‘Amrit apportioned among them, a key task The ministry also said members of Somrita Ghosh
spirit of a developed India; the Kaal’ as it to becomes a devel- for the Commission is to ensure that the panel will be announced separately. somrita.ghosh@partner.livemint.com
spirit of self-reliance. We have oped nation by 2047. The gov- states have efficient systems and meas- The finance commission’s consultation NEW DELHI
to maintain the same spirit and ernment has termed the 25 ures in place for financing local bodies with state governments form the key

T
momentum in 2024 as well. years till 100 years of Inde- as advised by the state finance commis- Arvind Panagariya had also served as India’s G20 Sherpa and led the Indian teams inputs that go into the Centre’s devolu- he Indian Immunologi-
The record business on Diwali pendence as ‘Amrit Kaal’ or sions. that negotiated the G20 Communiqués in the three years from 2015. MINT tion of funds to states. The finance cal Institute, a subsidiary
proved that every Indian is giv- ‘Era of Elixir’. Panagariya, also a former chief econ- panel’s role is unique in the context of of the National Dairy
ing importance to the mantra of Modi mentioned achieve- omist of the Asian Development Bank ber, 2025, whichever is earlier, the very few states have regular state fiscal federalism, given that another Development Board (NDDB), is
‘Vocal For Local’,” a statement ments like the best original and a Padma Bhushan recipient, is now ministry said in the order. finance commissions to guide the state body which had recommendatory working on new vaccines to
from the prime minister’s office song and best documentary professor of economics and the Jagdish It said the commission will suggest administrations on issues including powers—Planning Commission—has treat lumpy skin disease and
quoted him as saying. short film awards won by ‘Natu Bhagwati Professor of Indian political steps needed to augment the states’ local body fund requirements. There- been replaced with NITI Aayog, which infectious bovine rhinotrachei-
He also said people have Natu’ song and The Elephant economy at Columbia fore, devolution of funds does not have fund allocation powers. tis (IBR) virus along with a com-
written letters expressing joy Whisperers at the Oscars. University. He had also MAKING NEw NORMS from union and states to The formula that applies till FY26 bination of vaccines for protec-
on India becoming the fifth In sports he said this year served as India’s G20 local bodies warrant recommended by the Fifteenth tion against rabies, said Dr K.
largest economy and the suc- athletes performed marvel- Sherpa and led the Indian THE panel will set A key task is to THE ministry also greater attention,” said Finance Commission led by NK Singh Anand Kumar, managing
cess of the G20 summit in the lously. “Our players won 107 teams that negotiated the formula for sharing a
big chunk of the
ensure states have
efficient systems,
said members of
the panel will be
NR Bhanumurthy, vice requires devolution of 41% of Centre’s director, Indian Immunologi-
national capital. India became medals in Asian Games and 111 G20 Communiqués in Centre’s tax revenue measures for announced chancellor of B.R. net tax revenues to states. Among cals Ltd.
the fifth largest economy in medals in Asian Para Games. the three years from for 5 years from FY27 financing local bodies separately Ambedkar School of Eco- states, the share is decided by a for- “Our research and develop-
FY22 overtaking UK. India’s Indian players won everyone’s 2015. nomics University. mula designed to incentivize demo- ment team is working on differ-
GDP is over $3.7 trillion. heart with their performance in The chairman and SFC has also been graphic performance and the state’s ent vaccines. We are working
The government had ini- Cricket World Cup. The victory other members of the commission shall consolidated fund to supplement the mandated to review the use of desig- effort to mobilize own tax revenue and on various combinations of
tially targeted becoming a $5 of our women’s cricket team in hold office from the date on which they resources of panchayats and munici- nated funds at the national and state also takes into account the geographic vaccine for dogs, developing
trillion economy by FY25, but the Under-19 T-20 World Cup respectively assume office up to the palities. levels for disaster management. These area, forest cover and the state’s per vaccines for IBR in cattle which
now the deadline seems is very inspiring.” date of submission of report or 31 Octo- “One area of concern has been that funds are set up under the Disaster capita income. is also a very big problem in
India, and developing vaccines
against lumpy disease,” he said.
The pace of milk production

PMO vetting new e-commerce policy India explores connectivity to slowed in 2022-23 due to out-
break of the lumpy skin disease
among cattle. The Union min-

FROM PAGE 1 cover that area, the first official

said. A detailed presentation in
Matarbari port in Bangladesh ister for fisheries, animal hus-
bandry and dairying Parshot-
tam Rupala said in Parliament
The relaxations suggested this regard was given to the that the annual growth rate of
in the policy include separate PMO, the official cited earlier Shashank Mattoo opment prospects for India’s milk production in the country
norms for marketplace and said. shashank.mattoo@livemint.com northeastern states, including fell to 3.83% in 2022-23 from
inventory models of e-com- The draft policy calls for NEW DELHI Tripura. The initiative follows 5.77% in 2021-22, adding that
merce on appointment of mandating e-commerce play- plans by Japan, Bangladesh, lumpy skin disease led to the

I
nodal grievance officers, no ers to procure agricultural ndia is considering propos- and India to attract manufac- decline.
mandatory registration on the products directly from farmer als to connect Bangladesh’s turing to the Northeast and Considering the demand for
Open Network for Digital producer organizations and strategically important Mat- Bangladesh to establish a new vaccines for veterinary diseases
Commerce (ONDC) for e-com- cooperatives, the officials arbari port to northeastern industrial value chain in South like foot and mouth, the IIL is
merce majors, no provision for mentioned above said. It also states, according to people Asia for exports to Indo-Pacific expanding their manufactur-
setting up of an independent has watertight norms for e-tail aware of the matter. markets. ing units. The IIL manufactures
regulator for online retail plat- giants on predatory pricing, Bangladesh expects to boost The people cited above said, 300 million Foot and Mouth
forms; etc. and mandatory registration of exports once the country’s first India is actively exploring Disease Vaccine (FMD-Vac) as
Queries sent to the PMO, all type of e-business portals deep sea port is built at Matar- ways to enhance connectivity well as Foot and Mouth Disease
ministries of commerce and with DPIIT. bari with assistance from to Matarbari, either through a + Haemorrhagic Septicaemia
consumer affairs, secretaries “A certificate issued by Japan. The port will enhance bilateral initiative or in part- Vaccine (FMD+HS-Vac) in a
of DPIIT and consumer affairs, The domestic traders’ body is demanding foolproof e-commerce DPIIT to registered e-com- exports to Southeast Asia, and The port will enhance exports nership with Japan, which is year of which the major pur-
and Amazon and Flipkart rules against predatory pricing and deep discounting.. MINT merce portals will be manda- other Asian markets, and to Southeast Asia. MINT engaged in major road con- chaser is the Union govern-
remained unanswered till tory for validation of online improve its capability to han- nectivity projects in Bangla- ment.
press time. that both the e-commerce pol- Khandelwal added, referring portals’ existence. It will save dle cargo from international Earlier this year, JICA desh. “We already have a plant
An e-commerce industry icy and its rules should be noti- to the practice of marketplace consumers from being markets. granted a $750 million loan to Queries mailed to the exter- where we are manufacturing
leader who spoke on condition fied immediately as it has been platforms in India selling their cheated by fake or unregu- “The objective of the project the Bangladesh government nal affairs ministry, and Bang- 300 mn vaccines and now with
of anonymity expressed con- assured.” own products, called white lated portals,” the second offi- is to strengthen the port’s car- for the Matarbari develop- ladesh high commission in the new unit BSL3 facility, the
cern that these relaxations The domestic labels. cial cited above said. go-handling capacity and to ment. New Delhi did not elicit any capacity is going to go up by
may not make it to the final traders’ body The draft policy The proposed The draft policy has also facilitate logistics operations The port is set to start opera- response till press time. more 150 million doses/annum
policy given that e-commerce demands fool- has no provision policy has no pro- pitched for relaxing manda- with neighbouring countries. tions in 2027, easing the bur- New Delhi is proactively of FMD vaccine or FMD+HS
is highly contentious, and proof e-com- for setting up of vision for setting tory registration on ONDC for It will do so by constructing a den on crowded ports like advocating for enhanced con- vaccine each in a year,” added
relaxations are opposed by merce rules an independent up of an inde- e-commerce majors, as multi-purpose deep-sea port Chittagong. In March, JICA nectivity with Bangladesh to Dr Anand.
conventional retailers. against predatory pendent regula- reported by Mint on 22 for containers and general extended an additional $400 boost bilateral trade and foster In a foot and mouth disease
regulator for
“The current e-commerce pricing, deep dis- tor for online November. Instead, it is likely cargo in the Matarbari area of million loan to boost road greater economic ties in South vaccination drive 24 crore cat-
scenario has an uneven play- counting and loss online retail retail platforms, to propose voluntary registra- Cox’s Bazar, under Chatto- infrastructure between Chit- Asia. tle and buffaloes were covered
ing field, giving many disad- funding. “Any platforms and e-commerce tion. gram division, contributing to tagong Port and Cox’s Bazaar Initiatives include the out of 25.8 crore, reaching a
vantages to small businesses,” entity having an firms will have to The policy also talks about Bangladesh’s economic devel- to improve road connectivity revival of cross-border railway near universal coverage of over
said Praveen Khandelwal, gen- economic inter- comply with the separate norms for market- opment,” said Japan Interna- to the Matarbari port. projects, construction of 95% which is well beyond herd
eral secretary of the Confeder- est should not be allowed to Digital Personal Data Protec- place and inventory models of tional Cooperation Agency The Matarbari port is energy pipelines, as well as immunity level, as per the
ation of All India Traders sell products on its own tion Act for data-related issues e-commerce on appointment (JICA),which is helping expected to enhance eco- sponsoring road projects in Union government’s figures till
(CAIT). “Now, it’s high time e-commerce platforms,” as the proposed policy will not of nodal grievance officers. finance the Matarbari project. nomic ties and open up devel- Bangladesh. March.

China’s economy is more

m MINT SHORTS declared pro-Pakistan separatist group Tehreek-e-Hurri-
yat, founded by late hardline separatist Syed Ali Shah
Geelani, as a banned organisation for the next five years.
China Dec factory activity
shrinks the most in 6 months resilient than before: Xi AP
CORRECTIONS AND
CLARIFICATIONS
Under Prime Minister Narendra Modi’s zero-tolerance REUTERS Chinese President Xi Jinping A 28 December, page 2 story,
Amidst festive season, daily policy against terrorism, Amit Shah emphasized that any said on Sunday that China’s ‘IntelliSmart to provide data
individual or organization found engaged in anti-India economy has become “more analytics services to discoms:
covid cases cross 800 mark activities would face strict measures. PTI resilient and dynamic than Anil Rawal’, should have said
that the company carried out
New Delhi: After a gap of seven months, the number of before” as he vowed to consol-
two pilot projects on data
new covid cases crossed the 800 mark. As per the Union idate and strengthen the analytics in association with
PTI health ministry data, the Gurugram housing sales up in momentum of economic the discoms of Haryana and
country reported 841 fresh recovery and work to achieve
cases, on Sunday. As per
2023; Noida, G. Noida see a dip long-term economic development. BLOOMBERG
Bihar. The error is regretted.

government data, three New Delhi: Housing sales in Gurugram rose by 13% annu- Mint welcomes comments,
suggestions or complaints
more deaths were reported ally in 2023 on high demand, especially for luxury flats, but about errors. Readers can
due to the virus, with one Noida and Greater Noida saw a 7-8% fall, according to Ana- ‘India making defence alert the newsroom to any
fatality each being reported rock data on the Delhi NCR market. Data showed that sales China’s factory activity shrank in December to the
in Kerala, Karnataka, and MINT of residential properties in lowest level in six months, fuelling expectations the
ecosystem for self-reliance’ errors in the paper by
emailing us, with your full
Bihar. SOMRITA GHOSH Gurugram went up 13% to government may have to act soon to add impetus to Tezpur: Defence minister Rajnath Singh on Sunday name and address to
36,970 in 2023 from 32,615 the economy. “The weaker-than-expected PMI said the government is developing a strong base of feedback@livemint.com.
units in the previous year. The data showed growth momentum has declined fur- domestic defence industrial ecosystem to make the Mint’s journalistic Code of
Tehreek-e-Hurriyat banned by total housing sales in Farida- ther amid a low season and the cold weather,” said country a strategic economy. Addressing the 21st Convo- Conduct that governs our
bad, Delhi and Bhiwadi Xing Zhaopeng, a senior strategist at Australia & cation of Tezpur University in Tezpur, Assam, Singh said
government decreased to 6,295 units dur- New Zealand Banking Group. BLOOMBERG his ministry is making all efforts to achieve the target of
newsroom is available at
www.livemint.com
New Delhi: In a decisive step, the government on Sunday ing 2023. PTI becoming self-reliant in the defence sector. PTI

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LIVEMINT.COM
2024: The shape of power Monday, 1 January 2024
MuMbai 03

Climate change puts progress in peril

AFP

I
t has been 10 years since I wrote The Great
Escape, which tells the story of how human
life improved over the past 250 years, par-
ticularly in terms of longevity and material
living standards. But the past decade has
been unkind to my overwhelmingly positive
account. My observation that “life is better now
than at any time in history” may have been true
in 2013, but it probably is not today, even for the
typical person. The question is whether this
reversal will be temporary, or whether it is only
the beginning of worse to come. Do recent
events demand that the basic story be retold?
It is all too easy to focus on current threats,
while ignoring the past and discounting the
longer-run forces that prevailed even in the face
of terrible setbacks. But one must remember
that we have an enormous accumulation of use-
ful knowledge—more than any of our predeces-
sors. It won’t allow us to solve every urgent
problem, but it is neither easily lost nor forgot-
ten.
We also should remember how and why
things got better in the past; how the desire to
escape from poverty, disease, and death
brought steady improvements. Solutions were
rarely immediate, but after the Enlightenment,
the triumph of reason over unthinking obedi-
ence and dogma increasingly produced reliable
answers to questions old and new. To take just
one notable example, the germ theory of disease
furnished humanity with some of the most use-
ful knowledge ever discovered.
Still, while the long-term trends of progress
are clear, history offers no support for blind
optimism. Improvements in human well-being
have repeatedly confronted reversals, many of
them lengthy, and some characterized by unim-
aginable devastation. In the twentieth century
alone, disastrous national and international pol-
itics caused tens of millions of deaths in two
world wars, the Holocaust, and from the mur-
derous policies of Stalin and Mao. The global
influenza pandemic of 1918-20 killed perhaps
50 million people out of a world population of
less than two billion. The HIV/Aids epidemic
has killed around 40 million people to date, and
more than half a million continue to die each
year from it, most of them in Sub-Saharan
Africa.
Most recently, the World Health Organiza-
tion estimates that covid-19 has killed close to
seven million people—and possibly multiples of
that number—many of them in rich countries,
including nearly 1.2 million Americans. The
pandemic arrested economic growth in many
countries and almost certainly halted the ongo-
ing reduction in global poverty. (But since it also
disrupted data collection in many places, the
uncertainty around such numbers is even
higher than usual.)
Typically, after such catastrophes, progress
eventually resumes, with the subsequent recov-
eries delivering health and wealth outcomes
that exceed their previous highs. True, this his-
torical fact offers no comfort to those who died
or lost relatives and friends. Progress does not
expunge previous horrors. But it does hold out
the hope of better lives
for the survivors and for
QUICK READ subsequent genera-
tions.
The single biggest threat to Moreover, history’s
continued progress is climate worst horrors often do
change. Though we know what not recur, because the
needs to be done, and though tools for handling and
the required technologies are avoiding catastrophes
rapidly improving, national and tend to improve over
international politics have not time. After the germ
supported the necessary action. theory of disease
became the basis for
If there is one lesson to take public health at the end
from the pandemic, it is an old of the nineteenth cen-
one: that hubris is the precursor tury, vaccines were
to nemesis. developed to prevent
much sickness; and
even when they failed,
new medicines allowed people to live with dis-
eases that previously would have been a death
sentence, as in the case of HIV/Aids. The devel-
opment of vaccines for covid-19 in under a year
is a spectacular testament to this story of
progress. action. Opportunistic politicians can advance and the still unclear effects of “long covid”, the grown accustomed to. Beyond pandemics,
Similarly, macroeconomic management has their own careers by opposing such a costly and most obvious lasting damage was confined to uncontrolled climate change is also a major
improved over time, not least because of John sweeping adjustment, and there are vast war schoolchildren, many of whom lost out on years threat to health, as is the pre-pandemic reversal
Maynard Keynes’s insights in the 1930s. Nowa- chests—especially in the fossil-fuel industries— of education. That poorer children have been of declining mortality among large segments of
days, many would argue that central banks are committed to preserving the status quo. Even in set back more than others is tragic, but not sur- the population, particularly in the United
better at monetary policy than in the past. Still, the face of frightening weather patterns that are prising. Widespread disasters very often pro- States.
long-run economic growth remains mysterious. almost impossible to explain without reference duce such disequalizing effects. Over the past quarter-century, national and
We know more about what impedes it than to anthropogenic climate change, there is a real On the other hand, the negative story of the international political arrangements have
about what causes it. possibility that not enough will be done before pandemic is that it was merely a preview of what undergone profound changes, with right-wing
Until recently, politics seemed better, too. it is too late. awaits us. Historically, plagues have spread populism spreading in rich democracies and
For half a century, we witnessed the spread of Still, one promising change is the increased along trade routes, and the situation today is no threatening domestic and international institu-
democracy, supported by an unusually stable use of climate policies based on incentives different. Since the 1990s, international trade tions. Globalization, especially, has become a
international order. Cooperation between sov- rather than on penalties. This is crucial, because has expanded at previously unseen rates, estab- source of discontent. The fact that it helped
ereign countries permitted extensive globaliza- democracies will always struggle to implement lishing not only global value chains but also bring about an unprecedented reduction in
tion, economic growth, and poverty reduction. policies that make substantial numbers of peo- global virus chains. During that period, there poverty has not assuaged domestic discontent
But none of this progress is guaranteed to ple worse off, even if only temporarily. have been two other, much smaller pandemics in the rich world; it has inflamed it.
continue. Yet tackling climate change also requires involving novel respiratory diseases: Severe To many working people in the US and
A thousand years from now, or perhaps much action by poorer countries, which in turn Acute Respiratory Syndrome (Sars) and Middle Europe, the world population’s great escape
sooner, the last 250 years may be seen as a requires large transfers of resources from rich East Respiratory Syndrome (Mers). With a from destitution is seen as having come at their
bygone golden age, a flash in history’s pano- countries. While such transfers have a poor death toll below 1,000 in each case, it was easy expense, by eliminating their jobs and hollow-
rama, an exception to the normal state of misery track record of stimulating democratization or to see these episodes as a vindication of the ing out their communities. Even if the world
and early death. Recent events present a economic growth, perhaps climate aid will global public-health system’s efficacy, and of overall is better off, the beneficiaries cannot
depressing catalogue: slow or negative growth; prove more effective in achieving its intended the limited threat posed by novel pathogens in vote in rich countries, leaving only those who
rising global temperatures; resurgent infectious objective. a richer, better-run world. have been hurt to complain that they did not
diseases; anti-democratic and right-wing popu- Climate policies may be easier to implement But after covid-19, it now looks like we may sign up for such involuntary foreign aid. Simi-
list politics; stalling globalization; stagnant life in non-democratic societies, as has sometimes have simply been lucky with those earlier out- larly, while immigration from poorer to richer
expectancy; and increased geopolitical ten- been the case with draconian public-health breaks. The Sars and Mers viruses just so hap- countries has helped millions leave poverty,
sions, particularly between the world’s two larg- measures. It would be a shameful outcome if, pened to have properties that made them easier many domestic workers in rich countries see it
est economies, the United States and China. Are after years of giving aid that undermined demo- to control. We might not be so fortunate in the as a threat to their own livelihoods and status.
we returning to a pre-Enlightenment world cratic governance in poor countries, the rich ANGUS DEATON future. Equally, rather than putting too much Whether such perceptions are inaccurate or
ruled by priests and warlords, or is today’s world provided aid to support the top-down is a Nobel laureate in store in the rapid rollout of covid vaccines, we overblown is beside the point. What matters,
darker outlook just another temporary setback imposition of climate policies that its own more economics and professor must remember that there is still no vaccine for politically, is that the current great escape is not
that will be overcome in time? democratic constituencies still resist. emeritus of economics and HIV/Aids after more than 40 years. If there is particularly popular in rich countries. A signifi-
The single biggest threat to continued Health threats also will remain central to the international affairs at the one lesson to take from the pandemic, it is an old cant share of voters regard immigration and
progress is climate change. Though we know story of progress and its reversals. On one hand, Princeton School of Public and one: that hubris is the precursor to nemesis. globalization as favouring a minority of well-ed-
what needs to be done, and though the required the positive story to emerge from the pandemic International Affairs. I do not know whether to believe the positive ucated, cosmopolitan elites. Working people
technologies are rapidly improving and becom- is about resilience. After developing vaccines or the negative account. Instead, I would simply who believe they have been harmed by such
ing more affordable, national and international with incredible speed, we achieved a relatively ©2023/PROJECT SYNDICATE stress the possibility that the future may have
politics have not supported the necessary rapid economic rebound. Beyond the death toll www.project-syndicate.org more morbidity and mortality than we have TURN TO PAGE 4
04 Monday, 1 January 2024
MuMbai 2024: The shape of power LIVEMINT.COM

The outlook for multilateralism in 2024

REUTERS

T
o gain a glimpse of the kind of strains assembled around specific topics or interests.
many countries will face in 2024, it Most of these are not meant to complement the
can help to focus on the challenges UN, but to substitute for it.
facing a single country. Consider That said, it is still possible that the coming
Egypt’s recent experience. year could bring some modest progress on both
When Russia invaded Ukraine in February fronts. In a polarized world, there will not be a
2022, the sharp global increase in grain and fer- cathartic “San Francisco moment” akin to the
tilizer prices disrupted the Egyptian economy, summit that established the UN at the end of
which was already worn down by the covid-19 WW-II, nor can we anticipate breakthroughs in
pandemic, water shortages, and debt. Then the intransigent debates over expanding the
came Russia’s withdrawal from the Turkish- security council. But it’s easy to see how crea-
mediated deal to allow Ukrainian grain exports tive, marginal measures could lend momentum
through the Black Sea, which pushed prices up to the push for change.
once again. By the time Hamas launched its bar- That could mean harnessing underused parts
baric attacks against Israel on 7 October, Egypt’s of the UN Charter. Article 27(3), for example,
annual inflation rate was nearing 40%. Since calls for countries to abstain from security
then, the Israeli reprisals and the unprece- council votes on issues where they have a con-
dented Palestinian casualties they have caused flict of interest; and Article 101 empowers the
in Gaza mean that Egypt has been on the front secretary-general to shape the agenda at secu-
line of a new security rity council meetings. The recent selections of
and humanitarian cri- secretary-generals have too often prioritized
QUICK READ sis. Finally, it bears the cautious candidate over the ambitious one.
mentioning that on 1 Countries remember the two great secretary-
The economic and climate- January 2024, this generals—Dag Hammarskjöld and Kofi
related disruptions that are long-standing regional Annan—who exercised an influence that they
falling hardest on non-Western pillar of the Western- often couldn’t control. This time, there is a
countries can’t be disentangled led security order will slight possibility of change, owing to the view
from the declining influence of join the Brics (Brazil, that it is time to choose a woman from Latin
the post-World War II multilateral Russia, India, China, America or the Caribbean, a region that pro-
institutions, particularly the UN. and South Africa). vides a rich pool of candidates. That, together
Such case studies with a possible consensus—even among ene-
The need for strong Western should disabuse us of a problems as they are if institutions do not reflect nificant progress will be made on reforming mies in the security council and in the general
commitments to support global- persistent misunder- the world as it is. Instead of solving problems, either the UN system or the MDBs, because assembly—that the UN’s current dysfunction
governance reform is even more standing about the they risk becoming part of the problem.” deepening global conflicts will have made such serves nobody well, could lead to ambition
urgent now than it was at the world today. The wars These tonal shifts have prepared the way for outcomes impossible. The West would end the trumping caution.
beginning of 2023. in Ukraine and Gaza various reforms. For example, proposals to aug- year even more alienated from the rest, and the Whatever happens, it would be a mistake to
cannot be neatly set ment the fiscal power and representative equity international system would appear even more view these challenges in isolation from conflicts
aside from the broader of the multilateral development banks (MDBs) out of step with what people around the world such as those in Ukraine and Gaza. Egypt’s
“polycrisis” and reorientation of global power. appeared to gain momentum at the annual want from it. Polling by the Open Society Foun- experience since the start of Russia’s war in
The economic and climate-related disruptions meetings of the World Bank and the Interna- dations across a representative group of 30 Ukraine ought to make that lesson clear. To
that are falling hardest on non-Western coun- tional Monetary Fund in Marrakesh in October. countries shows that clear majorities believe unite different parts of the world behind peace-
tries such as Egypt cannot be disentangled from And to make the UN system more responsive to low-income countries should have a greater ful and equitable solutions and respect for inter-
the declining influence of the post-World War member states and capable of taking the initia- share in global decision-making (61%), and that national law, all major powers must commit in
II multilateral institutions, particularly the tive, a new rule allows for a full General Assem- rich countries should give more money to the earnest to reforming multilateralism—both
United Nations. What matters most in the com- bly debate whenever a permanent member of World Bank (68%). through the MDBs and at the UN.
ing year is whether global issues can still be the security council wields a veto. Alternatively, 2024 might bring real progress But since new conflicts will undermine any
addressed simultaneously and in unison—as But reforms must be more ambitious than on MDB reform—with greater capitalization, reform efforts, major powers must ensure that
they must be if workable solutions are to be this to nudge a failing system on to a better path. improved debt-resolution mechanisms, and peace, human rights, and security prevail in
found. Western countries should recognize that it is in quota reforms—but no improvements at the Eastern Europe, the Levant, and elsewhere. A
The interlinked nature of today’s crises was their own interests to go further. As I write in UN. This scenario is also contingent on wider world of runaway wars—in which state and non-
evident at the 78th session of the UN General late October, their backing of Israel’s reprisals events. Between the carnage in the Middle East state actors conclude (with good reason) that
Assembly in September. There, Ukraine and its in Gaza appears to be driving an even deeper and a permanent member of the security coun- they can impose their will through military
Western allies recognized that to gain a wider wedge between the “West and the rest”, fuelling MARK MALLOCH-BROWN cil waging a war of aggression against its neigh- force—is not conducive to progress on prob-
hearing from the “Global South,” they must do renewed accusations of double standards. The is former deputy secretary-gen- bour, there is ample reason to doubt that a con- lems like unsustainable debt and climate
something about today’s economic and climate need for strong Western commitments to sup- eral, UN, and president, the sensus on UN reform is reachable. But this sce- change. At the end of another year in which the
turmoil, global inequities, and the wider failings port global-governance reform is even more Open Society Foundations. nario also would be an additional testament to world seems to be spinning out of control, we
of the UN and the international system. As UN urgent now than it was at the beginning of 2023. the system’s loss of influence more broadly. must approach our defining challenges holisti-
Secretary-General António Guterres himself I see three possible scenarios for 2024. In the ©2023/PROJECT SYNDICATE Countries are increasingly turning to other fora, cally. Our mantra must be “both/and”, not
acknowledged, “We cannot effectively address gloomiest—and arguably the likeliest—no sig- www.project-syndicate.org such as the G20, the Brics, or smaller coalitions “either/or”.

Progress in peril Evolve from

‘Can AI take my job?’
PTI
FROM PAGE 3

policies thus are tempted to abandon

democratic arrangements that seem
to be working for international busi-
ness and domestic elites, but not for
them. The risk now is that these side-
effects of the great escape will become
so severe as to slow or reverse it.
In the US, a half-century of wage
and income stagnation for the work-
ing class has been accompanied by a
slow reversal of progress against mor-
tality. Although Americans with a col-
lege education continue to enjoy
reduced mortality, those without it
have been losing years of life since
2010. In our 2020 book, Deaths of
Despair and the Future of Capitalism,
Anne Case and I document the
increase in mortality among men and
women without a college degree from
suicides, alcoholic liver disease, and,
international peace. Meanwhile, eco-
nomic growth in China has weakened,
gers reduced to homelessness,
joblessness, and despair.
to
most importantly, drug overdoses.
Looking ahead, it is hard to see a
partly because of covid-19, but more
importantly because of domestic poli-
In Britain and much of Europe, the
crisis was followed by austerity poli-
‘How can AI work for me?’
reversal of these trends without cies and demographic factors. In cies that devastated public services.
improvement in the lives of working- response, the Chinese leadership has With little to no economic growth
class Americans. Beyond that, the rate become more authoritarian, cracking ever since, it is little wonder that pop-
of reduction in mortality from cardio- down hard on dissent and political ulism’s appeal has grown, and that
vascular disease, which has driven freedom in Hong Kong. democracy and capitalism have fallen
much of the increase in life expect- The scope for serious miscalcula- out of favour. This development does
ancy in the rich world since 1970, has tion in the Sino-American rivalry has not bode well for the future. Populists
slowed in many countries and risen along with counter-productive and autocrats have little respect for
reversed among Americans without a sabre-rattling in both countries. institutions, including not only demo-
college degree. America’s valid complaints against cratic processes and protections for
On a more positive note, since drug China have been exaggerated by poli- minorities, but also the centers of sci-
epidemics have come and gone ticians playing to populist sentiment. entific knowledge associated with
throughout history, it is reasonable to Notwithstanding the cynical poli- educated elites.
hope that the opioid crisis will eventu- tics, we clearly cannot and should not Finally, on an immediate and
ally recede, too. Moreover, after two seek a return to the era of hyper-glo- more parochial note, data collection
decades of stagnation from 1970 to balization. We urgently need a new is under threat as never before.
1990, cancer rates have been falling, global economic order that can pre- While Chinese data have always
owing to declines in the prevalence of serve and extend the great escape, but required careful interpretation, the
smoking and various medical and sci- with greater care for domestic politics same is increasingly true for India,
entific advances. This positive trend and for the well-being of non-wealthy, whose published growth rates are
appears to have some room to run, not less-educated majorities in wealthy implausible and likely manipulated,
least because the new knowledge is countries. To its credit, the current US and whose poverty-monitoring sys-
transferable between countries, sev- administration’s policy agenda is tem has been suppressed. In the US,
eral of which have participated in cre- directed toward this end, and much political polarization has led to
ating the science that is driving it. My now depends on its long-term suc- divergent measures of poverty, To decode the right answers, you need to
ask better questions. Stay updated with
guess is that “normal” progress in life cess. some of which come close to deny-
expectancy will eventually resume, In retrospect, the 2008 financial ing its existence. Fifty years from
probably at a slower rate, and with all crisis has had much longer-lasting now, if we are still living in an the latest happenings in the word of tech,
the necessary caveats about pandem- negative effects than I anticipated. In increasingly illiberal and non-dem-
ics and climate change. the US, much of the population has ocratic world, we may not even be only with Mint.
As populism has risen in the US,
China has gone from being a partner
lost confidence in capitalism and the
idea that a rising tide lifts all boats.
able to tell, other than anecdotally,
whether the great escape continued Scan to watch the film.
to an apparent threat. The growing The financiers who caused that deba- or was choked off.
hostility between the two countries cle sailed off in their yachts, Adapted from a preface to the Prince-
has now reached a point that threat- untouched, while smaller craft were ton Classics edition of The Great
ens international stability—and even smashed into flotsam, their passen- Escape, to be published in 2024.
LIVEMINT.COM
2024: The shape of power Monday, 1 January 2024
MuMbai 05

Geopolitics and the great fragmentation

BLOOMBERG

G
eopolitical pressures and other EU are another major driver of global fragmenta-
non-economic factors have put the tion. These measures have already reshaped
global economy on a path towards regional trade patterns, leading to a sharp
fragmentation. Beyond its inher- decline in exports of goods from Europe and the
ent risks, this trend will not only US, due to sanctions and partly to the reputa-
have profound implications for economic sta- tional risks of continuing to trade with Russia.
bility and growth but also could jeopardize While some of this trade has found alternative
efforts to combat climate change. routes through Central Asia and the Caucasus,
Heightened geopolitical tensions, especially the volumes remain comparatively low.
the escalating rivalry between the United States These shifting trade dynamics are playing a
and China, are the primary catalyst of fragmen- significant role in segmenting the global econ-
tation. China, which emerged as the world’s omy. For example, as Western exporters with-
largest exporter more than a decade ago, over- drew from the Russian market, Turkey’s
took the US as the world’s largest economy (in exports rose sharply. Exports from China to
purchasing-power-parity terms) around 2016. Russia have also increased, particularly for
At the same time, the decline in US manufactur- goods subject to European sanctions.
ing jobs, partly attributed to the surge in Chi- While the US dollar’s global hegemony has
nese imports, has fuelled Americans’ discontent made the Western sanctions regime more effec-
with globalization and reshaped their views on tive, these measures might ultimately erode the
China. greenback’s dominance. A decade ago, only
Contrary to many one-tenth of Chinese exports to Russia were
QUICK READ Western analysts’ denominated in renminbi; now, roughly two-
expectation that thirds are. And a growing number of countries
The new US consensus on China increased trade would also have begun to denominate their exports to
seems to be, “The more we trade put China on a path to Russia in renminbi, especially those that estab-
with them, the more they use it democratization, the lished swap lines with the People’s Bank of
against us.” The Sino-American country has gone in the China and those that did not join the Western
trade war has become an integral opposite direction sanctions regime. Similarly, there has been a
part of a broader US geopolitical under President Xi Jin- noticeable increase in the use of national cur-
strategy backed by Democrats ping. Instead of liberal- rencies for invoicing exports to Russia by coun-
and Republicans in Congress. izing and pursuing pro- tries such as India, the United Arab Emirates,
market reforms, Xi has and Turkey.
At a time of increasing gravitated towards a And there is no end in sight to geopolitical
economic fragmentation, global state-centric system tensions, with the tragic developments in the
trade is no longer driven by controlled by the Com- Middle East further polarizing the world.
purely economic objectives. munist Party of China. So, where does all this leave us? At a time of
Former US President increasing economic fragmentation, global
Donald Trump’s trade is no longer driven by purely economic
administration responded to these develop- rials, the thinking goes, the EU could deter hos- cation in response to the enactment of the objectives. Instead, geopolitical factors are
ments by initiating a trade war with China, a tile countries from weaponizing trade. Russia’s CHIPS and Science Act, which curbed US tech increasingly shaping trade policies. The Euro-
move widely viewed outside the US as a protec- use of its oil and natural gas exports as a strategic exports to China. More recently, China intro- pean Bank for Reconstruction and Develop-
tionist aberration that reflected Trump’s tool against the bloc in the wake of its invasion duced export restrictions on graphite, a mineral ment, the International Monetary Fund, and
“America First” agenda. But President Joe of Ukraine, together with the Kremlin’s deepen- used in green technologies that is predomi- others have noted that economic fragmentation
Biden’s administration has maintained the tar- ing ties with China, has intensified the EU’s nantly sourced from the country. By 2022, will be expensive and will negatively affect
iffs. efforts to protect key sectors by reducing its reli- roughly 30% of the world’s critical raw materials almost every country in the world.
This should not come as a surprise. The new ance on both countries. Moreover, a growing were subject to such restrictions, compared to In the midst of a climate emergency that
US consensus on China seems to be, “The more number of voices within the European Com- just 5% in 2019. demands unprecedented international coop-
we trade with them, the more they use it against mission and among member states have called If the EU limits technology transfers to China, eration, fragmentation also poses a grave
us.” The Sino-American trade war has become for the EU to follow in America’s footsteps, cur- the Chinese could impose export restrictions on threat to planetary health and humanity’s
an integral part of a broader US geopolitical tail high-tech exports to China, and restrict the essential raw materials before European coun- future. The benefits of reducing greenhouse-
strategy backed by both Democrats and Repub- integration of Chinese technologies in Europe. tries manage to secure alternative sources. gas emissions are universal, offering abundant
licans in Congress. Technological decoupling, This strategy carries significant risks, as Many critical minerals, including those vital to opportunities and incentives for countries to
which entails curbing high-tech exports to China might retaliate by restricting the exports BEATA JAVORCIK the green transition, are predominantly pro- free ride on others’ decarbonization efforts.
China and restricting the use of Chinese equip- of essential raw materials required for high-end is chief economist of the Euro- duced by countries not aligned with the West. Against this backdrop, intensifying trade con-
ment in the US, is central to this strategy. semiconductors and renewable energy. pean Bank for Reconstruction Moreover, developing new mines takes time, flicts, accelerating fragmentation, and restric-
Meanwhile, the European Union has Already, China, which accounts for 98% of and Development. and the environmental toll of refining and pro- tions on the export of critical raw materials
embraced French President Emmanuel global production of gallium and controls 68% cessing certain raw materials might diminish reduce trust, hinder international coopera-
Macron’s vision of “strategic autonomy”. By of germanium production in various countries, ©2023/PROJECT SYNDICATE Europeans’ appetite for such activities. tion, and undermine efforts to tackle climate
securing access to critical inputs and raw mate- restricted exports of these inputs for chip fabri- www.project-syndicate.org The sanctions on Russia led by the US and the change effectively.

Restoring trust in global leadership

AP

G
lobal leadership was woefully central-bank governors agreed on eight global Finally, it has become clear that the impact
absent in the wake of the covid-19 challenges to be tackled together and of climate change on agriculture will worsen
crisis, which left no country endorsed the World Bank’s new vision and global inequalities. In the first half of 2022,
unscathed. In 2021, I noted that mission to create a world free of poverty and we witnessed one of the largest shocks to
the shape and pace of the post- to boost shared prosperity on a livable planet. global food markets in decades, partly owing
pandemic economic recovery largely depended This goal underpins the Bank’s new playbook to poor harvests resulting from extreme
on multilateral cooperation. That remains true for development, as well as its enhanced weather events. Around 80% of those most at
today, as the global economy, which has yet to financing model, ensuring that our collective risk of climate-related crop failures and hun-
bounce back fully from the pandemic, faces a effort to combat global challenges is feasible ger are in Sub-Saharan Africa, South Asia,
new source of risk: proliferating geopolitical and strategically sound. and South-east Asia, where farming families
conflicts. Over the last two years, the war in There are three main threats to global tend to be poor and vulnerable. A severe
Ukraine, the Israel-Hamas war, and seven mili- growth prospects over the medium term: drought, whether caused by global warming
tary coups in Sub-Saharan Africa have increased escalating geopolitical tensions, which could or an El Niño weather pattern, could drive
fragility and have displaced huge numbers of lead to economic fragmentation; technologi- millions more into penury, even in relatively
people. cal decoupling, which could prevent the dif- high-income countries such as the Philippi-
And yet, despite conditions that require fusion of new digital technologies to boost nes and Vietnam.
strengthening collective action, multilateral productivity; and climate change, particu- As global leaders, we can advocate policies
cooperation appears to be in decline. We are larly its impact on agriculture. Unfortu- to help make agriculture more climate-resil-
not on track to meet the Sustainable Devel- nately, many countries have limited policy ient (such as using water more efficiently),
opment Goal of ending extreme poverty by space to support economic growth. Monetary manage demand, encourage the switch to
2030; an estimated policy has become largely restrictive to con- less thirsty crops, and improve soil health. At
7% of the world’s pop- tain inflationary pressure, while fiscal policy the same time, these efforts align with sus-
QUICK READ ulation will still be liv- is increasingly constrained, especially in low- tainability goals and could also cut green-
ing in penury, if cur- income developing countries facing debt dis- house-gas emissions from the food system,
To counter the threat from rent trends continue. tress and the twin challenges of food and which recent estimates show is responsible
geopolitics, we must emphasize Moreover, climate energy insecurity. for about one-third of GHG emissions and is
the importance of rules-based disasters are becom- Geopolitical competition and conflict the largest human-related source of meth-
multilateral cooperation that ing more common—a threaten to undo the gains of globalization. For ane, as well as the primary driver of biodiver-
values transparency, certainty, dangerous and wor- the last 30 years, cross-border trade and invest- sity loss.
and shared prosperity. sening trend. Dis- ment have tripled the size of the global econ- Given the rifts and disparities that confront
Concerted collective effort is couragingly, there is a omy and lifted 1.3 billion people out of poverty. the international community today, strength-
required to resist fragmentation lack of global leader- But today, new wars and simmering tensions ening multilateral cooperation is more impor-
on all fronts. ship in tackling these could unravel supply chains, halt investment tant than ever. On a positive note, one lesson
existential threats to flows, give rise to multiple competing interna- that global leaders have seemingly learned from
Monitoring and mitigating humanity. It would do tional standards for critical and emerging digital the pandemic—an extraordinary and unprece-
potential systemic threats are us well to acknowl- technologies, and lead to greater income and dented event—is the importance of building
crucial for economic stability. edge this reality and wealth inequalities. more resilience.
then decide how to To counter the threat from geopolitics, we Building on that lesson, we must sharpen our
change it. must emphasize the importance of rules- focus on four priorities. We must strengthen the
Even amid overlapping crises, there is based multilateral cooperation that values development in East Asia and the Pacific spirit of solidarity, multilateralism, and collabo-
good news. The world economy has shown transparency, certainty, and shared prosper- countries, a recent report by the World Bank ration to pave the way for peaceful conflict reso-
resilience in 2023, despite the slow and une- ity. Concerted collective effort is required to found that services firms that use more digi- lution and economic cooperation. We must
ven recovery since the pandemic. The fight resist fragmentation on all fronts. After all, a tal technologies increase their productivity, provide well-targeted fiscal supports and more
against stubbornly high global inflation breakdown in integration could lead to a sus- although adopting them often requires sub- robust debt-management mechanisms, partic-
seems to be working: inflation is projected to tained increase in price volatility, impede the stantial organizational change and comple- ularly for vulnerable countries. We must design
fall steadily from 8.7% in 2022 to 6.9% in cross-border flow of commodities, and leave mentary investments. Moreover, the diffu- policy responses to the current high-interest-
2023 and 5.8% in 2024. This can be attrib- us with fewer tools to make global economic sion of digital platforms, which offer cus- rate environment that balance stability with
uted to interest-rate hikes and lower interna- growth more inclusive. tomers new ways of connecting with growth. And we must ensure long-term growth
tional commodity prices, although prolonged Equally worrying is the recent trend toward suppliers, could drive explosive growth in sustainability through comprehensive struc-
monetary tightening will slow global eco- technological decoupling, particularly online wholesale and retail, as it did in the tural reforms and investment in a green global
nomic activity. Meanwhile, GDP growth in between the United States and China regard- Philippines. economy.
some emerging markets and developing ing critical areas like artificial intelligence and The rapid development of digital technolo- Monitoring and mitigating potential systemic
economies, especially in East Asia and the semiconductors. This raises the spectre of SRI MULYANI INDRAWATI gies, if properly managed, could thus be a boon threats are crucial for economic stability. Now
Pacific, has surpassed pre-pandemic levels, broader fragmentation, which could lead to is finance minister of Indonesia, for sustained economic recovery. We can unite and in the coming years, the actions we take—
with China, Vietnam, and Indonesia among losses in the order of 5% of GDP for many and co-chair of the Coalition of around a common strategy to increase their both globally and locally—will determine
the top performers. economies. G20 Finance Ministers for adoption and prevent fragmentation by ensur- whether we rise to pressing international chal-
Moreover, at the International Monetary At the same time, the potential for techno- Climate Action ing that we account for complementary factors lenges or fall victim to them. Multilateral coop-
Fund and World Bank annual meetings in logical change to contribute to development ©2023/PROJECT SYNDICATE such as skill endowments, regulatory issues, and eration is too important to let fall by the way-
Marrakesh in October, finance ministers and remains huge. Focusing on services and www.project-syndicate.org competition levels. side.
06 Monday, 1 January 2024
MuMbai 2024: The shape of power LIVEMINT.COM

The moral of the China story

REUTERS

O
nly a few years ago, at the Com-
munist Party of China’s (CPC’)
19th National Congress in 2017,
President Xi Jinping declared
that “socialism with Chinese
characteristics...[is] blazing a new trail for other
developing countries to achieve moderniza-
tion.” At the time, many countries across the
Global South seemed eager to learn China’s for-
mula for success, but the United States saw such
emulation as a threat to the democratic West’s
soft power. Six years later, the eastward shift in
geopolitical power seems to have reversed.
In early 2023, after three years of smothering
lockdowns, China reopened its doors to the
world. “China is back,” many declared. But by
the second quarter, the country’s economic out-
look was becoming gloomier by the week. West-
ern commentators duly swerved. After warning
that China was overtaking the West, they now
argued that it had peaked and would threaten
global stability by dint of its decline. (In these
narratives, China always constitutes a threat,
regardless of whether it is rising or falling.)
With Chinese leaders busy fighting fires at
home, nobody talks about learning from China
anymore. If Xi’s 2017 speech marked China’s
“coming out” as a superpower—one ready to
offer not only cash but also enlightenment—it
may have been the shortest-lived geopolitical
triumph in modern history. Yet even though
China is no longer “winning,” it would be short-
sighted to dismiss its recent experience as irrel-
evant. In fact, China’s combination of accom-
plishments and stumbles, from the “reform and
opening” of the 1980s through the present day,
makes it an even more instructive case than if it
were only a miracle.
A term from US history is useful in assessing
those accomplishments and stumbles. China
has gone through its own “Gilded Age,” deliver-
ing growth but also creating many new prob-
lems.
Crucially, “gilded” does not mean “golden.”
It implies that beneath the dazzling appearance
of gold lies a base, dark metal. That is why novel-
ists like Mark Twain and Charles Dudley
Warner seized on this metaphor to characterize
America’s rise as a global industrial power dur-
ing the late nineteenth century (roughly 1880-
1900). It was a time of spectacular growth but
also outrageous corruption, inequality, and
financial bubbles. If you take some US Gilded
Age stories and give the players Chinese names,
you might think you were reading a tabloid any-
where in China.
When Xi came to power in 2012, China could
boast many achievements, having sustained the
growth needed to lift 800 million people out of
absolute poverty. At the same time, however,
elite corruption was endemic and brazen,
income inequality had reached levels exceeding
that of the US, local governments were drown-
ing in debt, and a real-estate bubble loomed.
Xi thus inherited a China that was enjoying
prosperity, but also succumbing to gilded-age
excesses. Seen in this light, the question of how
China achieved its “economic miracle” is the
wrong one to ask, quality, equitable growth. In the American resentment against the establishment. tion is beneficial, and then moralistically criti-
because it presumes Gilded Age, the excesses of capitalism Looking back, America’s “total victory” after cize me for endorsing it. In fact, I am highlight-
QUICK READ that GDP growth rep- prompted a sweeping wave of social, economic, the Cold War now looks like the beginning of an ing the hypocrisy of rich countries in erasing
resents an unqualified and political reforms through democratic activ- era of hubris. Not coincidentally, it also marked their corrupt past (and sometimes legalizing
Though it is true that Deng success. A better ques- ism, which came to be known as the Progressive the start of the new Gilded Age, with steel and corruption today). Looking at contemporary
Xiaoping, the pathbreaking tion is: How did China Era. Analogously, Xi’s China is undergoing a railroad tycoons being replaced by titans of China forces us to revisit the troubled history of
reformist who succeeded Mao end up with its own “Red Progressive Era” with top-down methods finance, pharmaceuticals, and technology—all richer countries.In taking lessons from China—
Zedong, established an Gilded Age of crony- and communist-style “campaigns” being with deep pockets for lobbying and financing or any “success” story, for that matter—we
extraordinarily growth-oriented capitalist, unbalanced, deployed to tackle the same kinds of problems. political candidates. Now, many previous advo- should not only ask what to learn, but also what
political economy, he effectively risky growth? Xi chose to accompany this “progressive” cates of neoliberalism are aghast and insist that not to learn. Deng showed that a balance of sta-
put an expiration date on it. It is a big question— social agenda with an extreme concentration of governments ought to spend more, pursue bility and institutional checks on the political
one that I have spent personal power, heightened repression, and industrial policies, and reassert control over leadership is a necessary foundation for eco-
One of the most common two books (How China ideological control. Among other things, that markets. nomic growth. Adaptive governance paired
fallacies today is that China’s Escaped the Poverty meant reasserting the role of the state sector in Analysts and policy makers routinely think of with sensible macroeconomic and foreign poli-
growth has demonstrated the Trap and China’s the economy, embarking on an ambitious for- outcomes in binary, zero-sum terms: “success cies is also essential. We should not assume,
superiority of authoritarianism Gilded Age) seeking to eign policy, and ordering three years of “zero- vs. failure” or “winners vs. losers”—as in popular however, that concentrating power in one per-
over democracy. answer. In essence, covid” restrictions. While the latter policy did titles like Why Nations Fail: The Origins of son’s hands is the answer; in fact, it risks capri-
though it is true that not singularly cause today’s economic stagna- Power, Prosperity, and Poverty or Gambling on ciousness and wild policy swings.
Deng Xiaoping, the tion, it did amplify economic imbalances and Development: Why Some Countries Win and Oth- More broadly, China’s story reminds us that
pathbreaking reformist who succeeded Mao political tensions that had been building up for ers Lose. This way of seeing things has produced any success in modernization includes caveats.
Zedong, established an extraordinarily growth- more than two decades. the familiar cycle of euphoria, followed by disil- Other developing countries would do well to
oriented political economy, he effectively put Gilded Ages have much to teach us if we draw lusionment, which has persisted throughout avoid pursuing growth at all costs, especially
an expiration date on it. the right lessons from them. The challenge is to modern history. now that climate change is intensifying. Sus-
Deng implemented pragmatic policies that recognize the mixed outcomes they produce, When Western Europe was a colonial power, tainable growth also must be inclusive. If
liberated the private sector, partnered and rather than caricaturing them as “successes” or it regarded its idealized form of “liberal democ- growth enriches only a small handful of elites,
traded with the US, and introduced competi- “failures”. Economists’ view of development racy” as a silver bullet (with many prominent it may eventually trigger a political crisis.
tion, accountability, and adaptive mechanisms tends to equate GDP growth with progress, and, academics exaggerating the role of the 1688 It is equally important to distinguish between
into the government apparatus. More to the furthermore, attributes “success” to just one or Glorious Revolution in fuelling the English learning a principle and simply copying a par-
point, these reforms all rested on a quiet politi- a few simple causes that can then by “copied” Industrial Revolution). Then, in post-Cold War ticular practice. One valuable principle from
cal revolution: a fundamental shift from Mao’s elsewhere. America’s current “Gilded Age 2.0” America, neoliberalism was the answer to reform-era China was to “use what you have”.
one-man rule to a new model of collective, is a case in point. everything, as were “Confucian values” in East That is, local communities tapped into indige-
term-limited leadership. While Deng never The end of the Cold War handed the US the Asia and a “strong state” in China. In all these nous techniques and resources to spur entre-
endorsed corruption, he announced that “some ultimate victory, establishing it as the world’s instances, the very factor to which advocates preneurial activities. An example is “profit-
will get rich first,” implying that CPC officials unchallenged superpower. The political theo- attributed their success was later exposed as the sharing”, a practice adapted from tax-farming
would personally benefit from doing their part rist Francis Fukuyama famously argued that lib- source of their biggest problems. traditions in which civil-service compensation
to drive GDP growth at all costs. eralism would forever be the lodestar of govern- The political foundation of success has also is de facto but not de jure linked to economic
Subsequently, under Jiang Zemin (1989- ance, not only in the West but around the world. been misinterpreted in China’s case. One of the performance. Profit-sharing worked at an early
2002) and Hu Jintao (2002-12), the initially Through the 1980s and 1990s, the US govern- most common fallacies today is that China’s stage of growth by strongly incentivizing
rural orientation of China’s market reforms— ment and Washington-based international growth has demonstrated the superiority of bureaucrats to generate income; but it became
which massively benefited poor farmers—took institutions had carte blanche to prescribe mar- authoritarianism over democracy. This conclu- incompatible with the pursuit of higher-quality
a decidedly urban turn as export manufacturing ket-based policies—including privatization, sion has animated ideological debates in which growth and was gradually phased out. This
and foreign investment surged, including from deregulation, and trade liberalization—to the “China Model” is pitted against the “Ameri- example should inspire other countries to find
factories relocated from the US, yielding the developing countries. can Model”, as if the West’s successes stem ways to give their officials a personal stake in
greatest gains for producers. Rural areas fed cit- Within the US, the fervent belief that free solely from democracy, and China’s solely from development, in ways compatible with indige-
ies with a vast surplus of workers who lacked markets offered the best solutions to all prob- autocracy. In reality, China succeeded under nous practices. But they should not simply copy
equal access to urban services, thereby keeping lems gained doctrinal coherence under the Deng because he replaced one-man rule with an this practice, which has become obsolete even
labour costs low. Then, in the 2000s, land and label “neoliberalism”. Mainstream economists institutionalized leadership and rejected dogma in parts of China today.
real estate emerged as the favoured engines of reinforced the policy consensus by churning in favour of a culture of “seeking truth from As the Chinese economy enters a period of
growth. But the resulting wealth was highly out studies to show that “good institutions” facts”. By the same token, the recent economic stagnation, it will doubtless offer richer lessons
concentrated, creating robber barons like Hui (meaning private-property rights and checks on erosion under Xi was partly triggered by his own about development and governance. China’s
Ka Yan (the founder of the property developer government power) are the key drivers of revival of personalistic power and ideological trajectory reminds us that no solution, even one
Evergrande, who was placed under “residential growth, conveniently eliding the historical rele- controls. as ingenious as the model bequeathed by Deng,
surveillance” in September), while the vast vance of state capacity and government inter- A related problem occurs when commenta- can last forever. Every generation, and every
majority of Chinese either could not afford ventions, and the eradication of indigenous tors miss the right lessons because they have stage of development, confronts a new set of
housing or paid dearly for it. populations and colonial exploitation in West- YUEN YUEN ANG been misled by their own biases and distortions. problems that demands a new response. Xi
Far from failing, Deng’s capitalist reforms ern development. is chair of political economy at For example, in China’s Gilded Age, I argue that wants to prove that he can use top-down con-
served a historic role in pulling China out of But faith in neoliberalism took a hit in 2008. Johns Hopkins University, and “access money corruption” (meaning elite trols instead of bottom-up forces to contain
poverty within a single generation. When Xi Deregulation and years of reckless risk-taking the author of How China exchanges of power and wealth, as opposed to them. But reality, so far, is proving him wrong.
took over, his task was to confront the excesses by US financial institutions culminated in a Escaped the Poverty Trap and petty bribery or embezzlement) functioned like Cut-and-paste solutions or get-rich-quick
of the old model and facilitate a transition global financial crisis, and while Wall Street was China’s Gilded Age. “steroids” and led to the risky, unbalanced schemes exist only in commercials. Often, the
toward a new one. To that end, he launched his bailed out, Main Street suffered. As extreme ine- growth that China experienced in recent dec- best lessons are learned the hard way, by adapt-
anti-corruption drive, followed by his campaign quality continued to rise, Donald Trump rose to ©2023/PROJECT SYNDICATE ades. But some readers, including academics, ing the right principles to ever-changing con-
of “common prosperity”, emphasizing high- power by tapping into widespread popular www.project-syndicate.org miscast my argument as claiming that corrup- texts.
LIVEMINT.COM
2024: The shape of power Monday, 1 January 2024
MuMbai 07

Europe far from balance in its China ties

BLOOMBERG

T
he last year has solidified China’s sta- in October that China and Europe disagree on
tus as one of the most salient foreign- several important issues and, fundamentally, on
policy challenges facing Europe. But values.
it has been a long time coming. In By establishing the primacy of economic
fact, China’s emergence at the fore- growth and eschewing civil and political rights,
front of debate in Europe is the product of three China aims to challenge Europe’s vision of such
political realizations that have occurred since rights as universal, essential, and inalienable.
2020. And it has worked hard to bring the countries of
The first was the recognition, triggered by the the Global South on side. This clash of visions
covid-19 pandemic, that Europe had become shapes some of today’s most consequential
dependent on China for a wide range of goods. debates, not least on global standards for digital
After decades of single-mindedly pursuing technology and artificial intelligence.
comparative advantage by relocating indus- Another political message that the EU has
tries, including polluting industries, beyond its been keen to send to China is that the favourable
borders, Europe had to face hard facts. Distance terms under which Chinese firms access the
might not matter anymore, but geopolitics does. European market are not guaranteed. European
And a product that is not strategic can quickly firms are finding it increasingly difficult to com-
become so if a crisis erupts, if production or pete with their Chinese counterparts, and not
trade is disrupted, or if a single producer gains just because of their own shortcomings. China
monopoly power. offers massive subsidies to its firms, while erect-
But the pandemic, ing high entry barriers—both regulatory and
QUICK READ with its shortages of informal, national and regional—for foreign
ordinary-turned-criti- companies. As China seeks to enlarge its foot-
After decades of single-mindedly cal goods like masks print in industries that Europe has traditionally
pursuing comparative advantage and chemical reagents, dominated, such as automobiles and chemicals,
by relocating industries, including was just the beginning. this imbalance is becoming even more conse-
polluting industries, beyond its The stakes have since quential. Unless China changes course, Europe
borders, Europe had to face hard risen considerably, may have to adopt measures to protect domestic
facts. Distance might not matter because China has a industries.
anymore, but geopolitics does. virtual monopoly over Already, Europe is pursuing a “de-risking”
the production and/or strategy, which entails the diversification of its
For Europe, the Sino-American refining of raw materi- supply chains, especially in strategically impor-
competition does not drive als essential to the tant sectors. But, as it has also sought to commu-
every global trend or clean-energy transi- nicate to China, this is a practical move, not an
development, let alone justify tion. There is no ready- ideological one. The EU is merely attempting to
every action or response. made solution to this it to extract economic benefits, such as favoura- ally all global issues. mitigate the risks associated with excessive
challenge. Both vigi- ble energy deals, from the Kremlin. For Europe, the Sino-American competition dependence on one source. De-risking is a
lance and political pru- China wants Russia to remain afloat econom- does not drive every global trend or develop- shield, not a banner.
dence will be necessary. ically, though just above the waterline. But what ment, let alone justify every action or response. Ultimately, the EU is committed to maintain-
The second political realization came after tacit support China has offered Russia has been That is why the EU has assured China repeat- ing a high level of cooperation with China.
Russia’s full-scale invasion of Ukraine. Though enough to do severe damage to its relationship edly that it is not committed to a confrontational There is no denying that China is a systemically
China did not, strictly speaking, support Rus- with the European Union, which always saw approach. Europe is willing to recognize and important country with a huge market, or that
sia’s actions—and thus avoided exposure to the through China’s façade of neutrality. While accept China’s systemic importance, and has no many developing countries view it as a valuable
diplomatic and economic costs Russia has China never crossed whatever “red line” would desire to block its rise or to engage in strategic political and economic counterweight to the
incurred, especially via sanctions—it also get it added to the list of countries deliberately competition with it. West. It must be included in any effort to tackle
refused to push back against the Kremlin, in the violating Western sanctions, it has increased its Given this, Europe has not struggled to clarify global issues such as climate change, debt sus-
hopes that the war would weaken the United commercial relations with Russia (though it is its position on Taiwan, which is based on both tainability, and public health. Even regional
States and Nato. Having adopted a zero-sum far from alone). non-recognition of the island’s independence challenges, such as the Israeli-Palestinian con-
mindset, Chinese leaders assumed that any such The third realization that propelled China to and opposition to the use of force (including flict, call for cooperation with China.
weakening would automatically benefit China, the forefront of European foreign-policy con- provocation or coercion) to change the status Over the last three years, Europe has been
just as anything that harms China benefits the cerns arose from the intensification of the coun- ZAKI LAÏDI quo. The EU is willing to maintain and develop forced to abandon its geopolitical naiveté and
West. try’s competition with the US. Here, Europe is a professor at Sciences Po multifaceted ties with Taiwan, as long as they do recognize that normative power is no longer
With Russia struggling to achieve its goals in walks a fine line. Of course, it cannot establish and senior adviser to the High not imply recognition of Taiwan’s sovereignty. sufficient to wield strategic influence, and that
Ukraine, China’s hopes of a major blow to the itself as fully neutral, standing equidistant Representative of the At the same time, the EU has remained stead- multilateralism is giving way to transactional
West are probably dwindling; its main objective between the two powers, on issues such as Tai- European Union for Foreign fast in its assertion that a systemic rivalry with logic. If the EU is to thrive in a harsher, more
now is to limit its exposure to the ongoing con- wan, human rights, or conflicts in the South Affairs and Security Policy. China does exist. While China insists that its conflict-ridden world, striking the right balance
flict. Still, China’s leaders recognize that Russia China Sea. But nor can Europe give up its room only rival is the US, Josep Borrell, the EU’s high in its relations with China is essential. But that
is becoming practically a vassal state, which for manoeuvre, especially given the breadth of ©2023/PROJECT SYNDICATE representative for foreign affairs and security does not mean Europe has already done so. Far
lends China greater strategic depth and enables US sanctions and the rivalry’s impact on virtu- www.project-syndicate.org policy, explained to Chinese leaders in Beijing from it.

Presidential poll gives America the jitters

REUTERS

I
f one event dominates the coming year, it remarkably close to what was needed. A careful
will almost certainly be the US presidential examination of the data shows that the post-
election. Barring something unexpected, pandemic inflation was primarily caused not by
we are likely to see a rematch of Joe Biden excessive aggregate demand but by pandemic-
vs. Donald Trump, with the outcome being related supply shortages and demand shifts
perilously uncertain. One year out, polls in key (exacerbated by Russia’s invasion of Ukraine in
swing states give Trump the advantage. February 2022).
The election will matter not just for the Those of us who defended this stance sug-
United States but for the world. The outcome gested that inflation would be contained and
may hinge on the 2024 economic outlook, then start to decline (though no one could pre-
which in turn will partly depend on how the lat- dict precisely when). That is indeed what hap-
est conflagration in the Middle East evolves. My pened. Unfortunately, central banks misidenti-
best guess (and worst nightmare) is that Israel fied the source of inflation as excessive demand,
will continue to ignore international pleas for a and did everything they could to dampen it. That
ceasefire in Gaza, where 2.3 million Palestinians meant raising interest rates fast and furiously.
have been destitute for decades. What I saw Still, the US is lucky, in that two errors will off-
during a visit in the late 1990s as the World set each other. While fiscal policy is on track to
Bank’s chief economist was heart-wrenching be more robust than anticipated—the IRA is
enough, and the situation has only gotten worse now projected to drive three times more spend-
since Israel and Egypt imposed a full blockade ing than expected—the US Federal Reserve’s
16 years ago in response excessive monetary-policy tightening has offset
to Hamas’s takeover of that effect to produce a soft landing. That out-
QUICK READ the enclave. come alone would have substantially enhanced
Regardless of the Biden’s prospects, had he been spared the Mid-
The election will matter not just atrocities carried out by dle East turmoil.
for the United States but for the Hamas on 7 October, Looking ahead, America’s energy independ-
world. The outcome may hinge the Arab street will not ence means that high oil prices mainly serve to
on the 2024 economic outlook, tolerate the brutality redistribute income from consumers to oil pro-
which in turn will partly depend being visited on Gaza. ducers. True, this regressive outcome could be
on how the latest conflagration in Given this, it is hard to reversed with a well-designed windfall-profits
the Middle East evolves. see how we can avoid a tax. Even if Biden cannot get such a bill through
repeat of 1973, when Congress, taking a strong position in favour of
Before the Gaza conflagration, Opec’s Arab members it could help politically. Consumers would
I expected a soft landing in the organized an oil know that he is fighting for them and standing
US, but harder times in the rest embargo against coun- up to oil companies and the Republicans whose
of the world. Now, I expect tries that had stood by campaigns they fund. But I fear that Biden will
hardship all around. Israel in the Yom Kip- shy away from this option just as he did with
pur War. This retalia- windfall-tax proposals during the pandemic.
tory measure would not such as Russian president Vladimir Putin and govern—and uninterested in trying. The rest of the world is not so lucky. In
really cost Middle Eastern oil producers, Hungarian prime minister Viktor Orbán. Insofar as the Republican Party has a policy Europe, where weaker fiscal policies have failed
because the increase in prices would make up The best that one can hope for if Trump agenda, it is not what Americans want. Most vot- to counter contractionary monetary policy,
for the reduction in supplies. No wonder the returns may be political gridlock, but only if ers oppose regressive taxation and anti-labour higher energy prices will be devastating. There
World Bank and others have already been warn- Congress remains at least partly under Demo- policies (which contribute to inequality), attacks are also serious questions about China’s ability
ing that oil prices could rise to $150 per barrel or cratic control. Globally, however, international on universities and science (which will under- to overcome mounting problems in its real-es-
higher. That would trigger another bout of sup- agreements and the very idea of international cut future growth), and atavistic reversals of tate sector or the new cold war’s impact on its
ply-driven inflation, just as the post-pandemic rule of law will quickly become spent forces, as women’s rights. Nonetheless, Republicans have exports—especially now that its own govern-
inflation is being brought under control. Trump impulsively withdraws the US from been extraordinarily successful in shaping the ment is tightening control over the private sec-
In this scenario, Biden will inevitably be accords and institutions not to his liking. electoral battlefield to their advantage and tor. And across the Global South, many coun-
blamed for the higher prices and accused of mis- The tragedy is that Biden, objectively, has depicting Biden as too old. tries have excessive debts that could become
managing the Middle East. It will hardly matter been an extraordinarily successful president. Moreover, some turncoat Democrats have unsustainable in a global slowdown, especially
that the conflict was reignited by the Trump He has managed the situation in Ukraine better loudly echoed Republicans in pushing the idea if combined with high interest rates and higher
administration’s Abraham Accords and Israel’s than perhaps anyone else could. He has set the JOSEPH E. STIGLITZ that inflation was due to the Biden administra- oil and food prices.
lurch toward a de facto one-state solution. Justly US on a new economic course with a major Joseph E. Stiglitz, a Nobel tion’s spending on the pandemic recovery. But Before the Gaza conflagration, I expected a
or not, regional turmoil could tip the scale in infrastructure bill, the Chips and Science Act, laureate in economics, is that spending was pursued in the face of deep soft landing in the US, but harder times in the
Trump’s favour. A highly polarized electorate and the Inflation Reduction Act (which provides university professor at uncertainty, before the length and depth of the rest of the world. Now, I expect hardship all
and mountains of disinformation could once funding for the green transition). And since the Columbia University. pandemic downturn was known. The new around, with an increased chance of Trump
again saddle the world with an incompetent liar beginning of 2023, he has had to cope with a administration was wise to err on the side of returning to the White House. The world may
who is bent on eliminating US democratic insti- House of Representatives controlled by Repub- ©2023/PROJECT SYNDICATE doing too much, rather than too little, and Biden be entering its most perilous period since the
tutions and cozying up to authoritarian leaders licans who have shown themselves to be unfit to www.project-syndicate.org ultimately delivered a dose of stimulus that was 1930s.
08 Monday, 1 January 2024
MuMbai 2024: The shape of power LIVEMINT.COM

Making or breaking democracy

AFP

A
s we try to figure out what the next
year holds in store for the world,
one milestone looms menacingly
on the horizon: the US presidential
election on 5 November 2024.
The upcoming election will undoubtedly
shape the history leading up to it and the history
that follows. US President Joe Biden, having
restored respect for professional politicians
through his experience and acumen, will seek
a mandate to govern into his mid-eighties.
Some, even members of his own generation,
wonder whether this is wise.
Meanwhile, Biden’s likely opponent, former
president Donald Trump, is just three years
younger. Despite his age, numerous criminal
indictments, and refusal to accept the certified
results of the 2020 election, Trump’s grip on
the Republican Party’s base has enabled him to
evade disqualification.
No US presidential election in living memory
has felt so consequential—and none has offered
such uninspiring choices. In the run-up to the
vote, politicians, pundits, and corporate leaders
will have to hedge their bets, because the uncer-
tainty extends beyond the result to the question
of whether the loser will accept defeat. A consti-
tutional crisis is a real possibility.
The fate of leaders around the world hangs in
the balance as well. Ukrainian president Volo-
dymyr Zelensky, struggling to lead his country
following nearly two years of bloody war, will be
praying for Biden’s victory, while Russian presi-
dent Vladimir Putin will be hoping just as fer-
vently for Trump. Remarkably, Putin’s best
hope for victory in his war on Ukraine might be
the election of a Republican US president. Nev-
ertheless, whoever wins in 2024 will become
the steward of a world in flames, from Gaza
to Crimea.
The global significance of this US election
suggests that predictions of the United States’
decline might have been premature. It is still a
colossus dominating the global stage, out-
spending rivals on defence and leading a vast
system of alliances.
As home to the world’s most advanced uni-
versities and research centres, the US holds an
effective monopoly on many cutting-edge tech-
nologies, especially artificial intelligence. Its
new industrial strategy, which adapts mercan-
tilist economics to the twenty-first century,
shows the lengths it will go to maintain its com-
petitive edge. Confronted with the challenge of
a rising China, America has shown it can foster
alliances between erstwhile rivals like Japan
and South Korea and implement a “small yard,
high fence” policy to keep China from stealing
key technologies and high-value knowledge.
Lax Americana
Despite all this, US allies have good reason to
doubt America’s stability and staying power. As
a hegemon, it tends to waver: former president
Barack Obama failed to stop the Syrian regime
from gassing its own people, and Biden abruptly
abandoned the Afghans to the Taliban early in
his tenure. Even in regions where the US
remains engaged, like the Middle East, Amer-
ica’s grand designs
have been met with
QUICK READ frustration. Just
recently, Hamas, Hez-
America’s domestic politics has bollah, and Iran have
long perplexed its allies, but its demonstrated their dis-
polarized dysfunction can no ruptive capabilities
longer be borne lightly, as when they sabotaged,
partisan feuding hobbles or at the very least
American power overseas. delayed, success for the
American effort to
While the US has long been secure a historic rap-
torn between internationalism prochement between
and non-interference, never Israel and Saudi Arabia.
before has American isolationism America’s domestic
had such a wanton or dangerous politics has long per-
tribune as Trump. plexed its allies, but its
polarized dysfunction
can no longer be borne
lightly, as partisan feuding hobbles American
power overseas. The pathologies of the US
political system, frozen in time by an effectively represent more than just a defeat for Ukraine, The pillars of the post–WW-II international American isolationism had such a wanton or
unamendable constitution and riven by America, and Nato. It would herald a grim system—the UN Charter, the Universal Declara- dangerous tribune as Trump. This alone under-
regional, class, and racial cleavages, make it future for the entire European continent, tion of Human Rights, and the Geneva Conven- scores the election’s existential importance for
impossible for America’s allies to predict how which for the first time might find itself subor- tions—have been ignored more than they have the rest of the world.
these domestic political conflicts will affect US dinate to a triumphant Russo-Chinese sphere been upheld over the decades. Nonetheless, It will also likely be the last US presidential
foreign policy. These internal divisions may of influence in Eurasia. they established standards that acted as a brake election featuring two candidates who came of
even leave the US as fatally distracted as Israel’s This would be the worst possible outcome of on states’ conduct and created norms that age in post-war America, a generation that pros-
did before the 7 October Hamas attack. the 2024 election. But it’s a scenario that can encouraged most countries to value their moral pered during the Cold War and revelled in the
When a handful of Republican hardliners in still be averted if Americans on both sides of the standing, as a decent reputation was understood post-1989 euphoria, only to be jolted by the 9/11
the House of Representatives can put essential political divide remember why European secu- to be a critical lever of soft power. attacks and the 20 years of war, economic dislo-
military funding for Ukraine at risk, no ally can rity remains a vital national interest. At the same The haunting sight of the bodies of dead civil- cation, and rising inequality that followed.
be sure of America’s long-term commitment to time, Europeans must stop free-riding on ians left behind on the streets of Bucha after Beyond the collapse of the international order,
the war with Russia. As the Stanford University American security guarantees and invest in Russia’s withdrawal has underscored the wan- they leave the next generation with a mountain
historian Stephen Kotkin has warned, all Russia building their own military capabilities. The fact ton cruelty of a permanent member of the UN of unsolved problems such as climate change,
needs to do to upend the 2024 US election is to that Ukraine’s fate could determine the future Security Council that no longer cares what the unchecked AI, global pandemics, and deep
launch a surprise attack, as the North Vietnam- of Europe as a whole should keep allies on both world thinks. Similarly, the harrowing images democratic dysfunction. The geriatric options
ese did with the 1968 Tet Offensive. sides of the Atlantic focused and united. of Israelis massacred in kibbutzim and at a on the ballot in November are a crushing indict-
Amid the chaos of an election year, congres- But even if Ukraine survives and prevails, the music festival near the Gaza border have given ment of a generation that has clung to power for
sional support for Ukraine might increase, but next US president will inherit an international us a glimpse of a world where no rules restrain too long and failed the crucial leadership test of
then again, it might crumble, much like US order in ruins. While the West views Russia as combatants, where state deterrence fails, where preparing for its successors.
resolve in Vietnam did in 1968. This would jeop- a rogue state, the fact that 35 countries desperation fuels terror, and where countries Any thoughtful person is bound to be wor-
ardize the more than $1 billion a month in finan- abstained and five voted against the October like Iran and Qatar lack the ability or the will to ried. But worry need not lead to despair. Hope
cial and military aid that Ukraine needs to main- 2022 United Nations General Assembly resolu- restrain their proxies. depends, as it always does, on human virtues
tain its current position on the battlefield. If tion condemning its invasion of Ukraine sug- The foundations of the international order like wisdom, restraint, humility, and patience.
Congress buckles, US support dries up, and gests that a cornerstone of the international cannot be rebuilt in a year or even a decade. The To restore optimism in the coming year, several
Ukraine is forced to seek peace, the next US order—the UN Charter’s prohibition on using world’s countries may need to live through a conditions must be met: the US must stay the
president would face a Chinese-Russian alli- force to alter borders—is giving way. period of anarchy to rediscover the virtues of course in Ukraine, which must repel the Rus-
ance that has managed to redraw European land Historically, newly independent countries the order they have abandoned. Positive change sian invaders; Israel must crush Hamas without
borders by force. have been ardent champions of national sover- hinges on major powers realizing that their falling into the trap of reoccupying Gaza;
The Europeans, on their own, cannot step eignty. But now, emerging powers like Brazil, interests lie in maintaining stability rather than Europe must commit to self-defence; China
into the breach if the US fails them. They are South Africa, and India have maintained a self- undermining their adversaries. A shattered must edge away from its flailing Russian client
nowhere close to achieving the “strategic interested and cynical neutrality as Russia, global system rewards bad behaviour. Without state; and rising powers like India, Brazil, and
autonomy” that French president Emmanuel Europe’s last empire, tries to destroy a sover- significant incentives to cooperate or curb their South Africa must abandon moral equivocation.
Macron believes Europe needs to defend itself. eign state. MICHAEL IGNATIEFF worst instincts, large and small countries alike The rest of us observant and engaged citizens
Should US support for Ukraine falter, either This shift represents something less hopeful is professor of history and jostle for leverage and influence. must reaffirm our faith in human agency. Indi-
because Biden fails to secure aid through Con- than the mere maturation of the so-called rector emeritus of Central The 2024 election is shaping up to be a con- viduals do matter. We are not pawns in some
gress or because a re-elected Trump abandons Global South and its desire to break free of European University in Vienna test between a man who understands the value great historical chess match. The leadership
Ukraine and forces Zelensky to accept defeat, American hegemonic control. We are living and a former Canadian of the international order established in 1945 choices we make can shape the lives of millions
Nato’s survival might be called into question. through the unraveling of the international sys- politician. and aims to rebuild it, and one who does not for better or worse. As US citizens head to the
A Carthaginian peace that turns Ukraine into tem created in the aftermath of World War II. In care whether it burns to the ground. While the polls next November, their votes could alter the
a rump state and leaves it at the perpetual this emerging world, Anne Applebaum notes, ©2023/PROJECT SYNDICATE US has long been torn between international- course of history. We can only hope they
mercy of renewed Russian aggression would “There are no rules.” www.project-syndicate.org ism and non-interference, never before has choose wisely.
LIVEMINT.COM
2024: The shape of power Monday, 1 January 2024
MuMbai 09

Could the Israel-Hamas war pave the

way for lasting peace in the region?
AP

H
amas’s murderous raid into south-
ern Israel on 7 October triggered a
new round of horrific bloodshed in
the Middle East. Even if Israel’s
military campaign in response to
the atrocities succeeds in defanging Hamas, it
will leave behind a Gazan population that is
reeling, suffering, and angry. Moreover, the war
will damage Israel’s relations with the broader
Palestinian community and their Arab brethren
throughout the region. Picking up the pieces
will take quite some time.
It is hard to see any silver lining in this dread-
ful bout of violence. Nonetheless, it is worth
considering whether the shock caused by the
war could push the seemingly intractable Israel-
Palestine conflict towards an eventual resolu-
tion. Might this tragedy, which has forced both
Israelis and Palestinians to stare into the abyss,
prove to be a turning point that will clear the
path towards a lasting peace?
Taking this possibility seriously, and gazing
beyond the horizon more generally, is not just
an exercise in wishful thinking. Exploring how
the current conflagration could set the stage for
peace can help provide a road map for Israelis,
Palestinians, and the international community
to follow after the dust has settled.
For starters, the scope and intensity of the
conflict may drive home to Israelis and Palestin-
ians alike that they need to break the cycle of
violence that has plagued the region for dec-
ades. Admittedly, previous bursts of fighting
have over time hardened attitudes on both
sides, and for understandable reasons.
Israelis have tended to respond to sporadic
assaults by Palestinians by retaliating and
imposing tight restrictions on the Palestinian
people—an approach that has evolved, in part,
from Israel’s prior history with Gaza. When
Israel withdrew from the Gaza Strip in 2005, it
only cleared the way for Hamas to take power
and begin launching a succession of attacks.
That experience, along with the continuing acts
of violence carried out by Palestinians in the
West Bank, has convinced many Israelis that
peacemaking efforts aimed at returning more
land would be foolhardy and that maintaining
the status quo is a far safer alternative.
The problem is that the status quo—the occu-
pation of the West Bank and the throttling of
Gaza—is intolerable and unacceptable for Pal-
estinians, who see Israel’s mix of repression and
diplomatic intransigence as a casus belli. For
many Palestinians, only through active resist-
ance, including violence, can they impress upon
Israelis that their comfortable status quo is not
so comfortable.
As a result, Palestinians fight on, and Israelis
respond by tightening their grip. Each side
blames the other, and the cycle of violence
grinds on.
But this time could
QUICK READ be different. Israelis
are aghast at the fail-
It is hard to see any silver lining in ure of their country’s
this dreadful bout of violence. vaunted national-se-
Nonetheless, it is worth curity institutions.
considering whether the shock Military superiority,
caused by the war could push the deterrent threats, per-
seemingly intractable conflict vasive surveillance,
toward an eventual resolution. fences, walls, and
checkpoints: these
For starters, the scope and pillars of Israeli
intensity of the conflict may drive defence policy did
home to Israelis and Palestinians nothing to prevent
alike that they need to break the Hamas from slaugh-
cycle of violence. tering more than
1,400 people on 7
October. Something
needs to change.
The same goes for Palestinians. Hamas’s
nihilistic terror has brought only widespread
death and destruction to Gaza, driving home the
need for a change of course. In fact, even before
the current spasm of violence, many Gazans
were ready for an alternative to Hamas’s
extremism.
An opinion survey conducted only days
before the attack showed that 67% of Gazans
had little or no trust in the Hamas-led govern-
ment. Moreover, only 27% of the population
selected Hamas as their preferred party, and an
even smaller share—just 20%—supported judicial reforms that his government had been forward negotiations. Saudi Arabia and Israel on hold, but by no
Hamas’s call for the destruction of Israel. The pursuing prior to the war’s outbreak produced The US will need considerable help, espe- means dead, the US and China might be able to
vast majority of Gazans preferred a peaceful set- paralyzing discord within Israeli society. Netan- cially since the diplomatic chessboard in the work with a coalition of regional powers to
tlement to the conflict, with more than 50% yahu’s poll numbers are cratering as he deflects Middle East has been shifting, largely owing to make Iran less willing—and less able—to stoke
favouring a two-state solution. blame for the current crisis and as accusations China’s arrival on the scene. In 2023 alone, sectarian cleavages, inflame anti-Israeli forces,
If the current round of warfare simultane- mount that his divisive leadership set the stage China brokered the normalization of relations and stir up trouble across the region.
ously drives political change in Gaza, the West for the grave security lapse on 7 October. between Saudi Arabia and Iran, hosted Abbas in Against the backdrop of Hamas’s atrocities
Bank, and Israel, it could lead to a mutual awak- To be sure, the prospect of a concurrent Beijing to discuss the peace process, and deep- and the devastation wrought by Israeli retalia-
ening rather than just another turn in a continu- change in government in Gaza, the West Bank, ened ties with Saudi Arabia, the United Arab tion, a peace settlement seems far off. But no
ing cycle of violence. In Gaza, Hamas’s rule is and Israel could lead to a prolonged period of Emirates, and other Gulf monarchies. one imagined amid the shock of the 1973 Yom
presumably finished as a result of Israel’s cam- uncertainty and elevate even more radical for- The Israel-Hamas war has created an oppor- Kippur War that Israel and Egypt would sign a
paign to dismantle it, as well as growing disaf- ces. But it could also bring to power a new cadre tunity for the US and China to work together to peace treaty six years later. Wars can lead to new
fection among the local population. of Israeli and Palestinian leaders who are more advance peace prospects in the Middle East—a beginnings as they confront combatants with
In the West Bank, the sclerotic Palestinian willing to give peace a chance. subject that was high on the agenda during Chi- harsh realities that demand resolutions.
Authority—widely seen by residents of both the The latest round of warfare between Israel nese foreign minister Wang Yi’s visit to Wash- For Israelis and Palestinians, the harsh real-
West Bank and Gaza as corrupt and ineffec- and Hamas has repercussions beyond the Mid- ington in October. Given that both the US and ity is that there are around seven million Israeli
tive—staggers on with scant public support. dle East, precisely why the United States and the China seem interested in looking for ways to Jews and seven million Palestinians living
Despite being elected in 2005 to a four-year broader international community are engaging tame the intensifying geopolitical rivalry between the Jordan River and the Mediterra-
term, PA President Mahmoud Abbas remains in in intense diplomacy. Looking ahead, the inter- between them, teaming up to help advance the nean Sea, with the latter on their way to gain-
office; no presidential election has been held national community should build on its surging cause of peace between Israelis and Palestinians ing a demographic majority. Under these cir-
since then. Some 80% of Palestinians believe engagement in the region to revive a peace pro- would be a good place to start. cumstances, there is no such thing as a one-
that the 87-year-old president should step cess that has become effectively defunct. CHARLES A. KUPCHAN China’s diplomatic engagement could be par- state solution. Israelis will never allow their
down. Clearly, the PA’s leadership is well past its Despite making polite references to the is professor of international ticularly important in reining in Iran, which country to be governed by a Palestinian major-
expiration date. need for a two-state solution, American diplo- affairs at Georgetown remains a dangerous puppet master in the Mid- ity. At the same time, Israel cannot rule indefi-
In Israel, prime minister Binyamin Netan- mats have done almost nothing to match their University and has served on dle East, providing funds and arms to Hamas, nitely over millions of Palestinians living in a
yahu’s political career is likely over, too. The words with actions. But the Israel-Palestine the US National Security Hezbollah, and other extremist groups. China stateless limbo.
deadliest day in the country’s history occurred conflict is now front and centre: US President Council under Presidents Bill is Iran’s largest trading partner, giving the Chi- The only path to peace is a two-state solu-
on his watch—a devastating blow for a politician Joe Biden flies to wartime Tel Aviv rather than Clinton and Barack Obama. nese government considerable leverage over tion in which Israelis and Palestinians live
whose brand had been built on the idea that wartime Kyiv. After the current bloodshed the Islamic Republic. For its part, an isolated securely alongside each other. The shock of
only his leadership was capable of keeping Isra- comes to an end, American policy makers ©2023/PROJECT SYNDICATE Iran looks to China as its diplomatic lifeline. this war might just make both sides recognize
elis secure. It does not help matters that the must take advantage of this opening to drive www.project-syndicate.org With talks on normalizing relations between that reality.
10 Monday, 1 January 2024
MuMbai 2024: The shape of power LIVEMINT.COM

The battles Ukraine has already won

AP

N
early two years after Russia the Army of Drones project, which enables peo-
launched its full-scale invasion of ple around the world to contribute to the cause.
Ukraine, the war’s end seems With thousands of drones destroyed every
nowhere in sight. Nonetheless, month, these donations are enabling our mili-
Ukraine has already won numer- tary to replenish supplies quickly.
ous important battles, many of which we began Our innovative use of commercial technolo-
fighting long before Russia’s latest assault on gies has also cost Russia in the Black Sea. After
our country. These victories will, I am certain, Ukraine destroyed Russian ships using tradi-
help to ensure our final victory in this vile and tional anti-ship missiles, Russia’s navy began to
violent war. operate farther from shore. But Ukraine has
Ever since we regained our independence in taken the fight to Russia, by converting ordinary
1991, Ukrainians have struggled to be seen as jet skis into a fleet of explosive-packed, ship-
part of Europe. Today, however, no one thinks killing maritime drones.
of Ukraine as some no man’s land linking Russia Now, we are adding an even more dangerous
and the West. And only the most delusional of weapon to our arsenal: the Toloka TLK-150, a
Russians still imagines that Ukrainians will ever practically undetectable one-way unmanned
again see their country as part of some “Russkiy underwater vehicle, created by a Ukrainian
mir” (Russian world)—a fever dream of Vladimir technology-development cluster. In World War
Putin that apparently contributed to his deci- II, the United States liked to think of itself as the
sion to launch a war of “arsenal of democracy.”
aggression against us. Today, it is Ukraine, using the tremendous
QUICK READ Instead, it is now ingenuity and resourcefulness of its citizens,
clear to the entire that is leading the way in fortifying the arsenal
The second long-running battle in world that Ukraine is in that is defending democracy.
which Ukraine can now declare the West and of the Ukraine’s military is also innovating strategi-
victory is internal. Since regaining West—as European as cally. Russia’s generals seem determined to
our independence three decades France, Italy, Germany, wage war exactly as their grandfathers did in
ago, the Ukrainian people have or anyone else. Our WWII, with centralized, top-down decision-
twice needed to rise up to core values are West- making that regards ordinary soldiers (and not
overthrow dictatorial regimes. ern values: liberty, just the convicted murderers and rapists sent to
democracy, and the Ukraine as cannon fodder) practically with con-
The battle for trust was, in a rule of law. And our tempt. By contrast, Ukraine’s commanders and
sense, the most consequential for membership in the citizen-soldiers have significant leeway to
Ukraine. Our people trust our premier European and respond to events on the battlefield and shape
military and political leaders—not Western institutions – command decisions.
blindly, but with an abiding faith. the European Union Ukrainian computer programmers apply
and NATO—await only their skills—and the latest artificial-intelligence
our inevitable triumph assets—to support Ukrainian fighters’ ability to
over the Russian invaders. analyze circumstances and respond to events in
The second long-running battle in which real time.
Ukraine can now declare victory is internal. A third crucial battle that Ukraine has already
Since regaining our independence three dec- won is the battle against the Russian fifth col-
ades ago, the Ukrainian people have twice umn. At the time of Russia’s 2014 invasion of
needed to rise up to overthrow dictatorial defend our homeland. Our fighting forces—on ities. When the war began, Russia’s military Ukraine, our security services and military lead-
regimes that gained power by applying the the front lines and behind the lines—are truly expenditure was nearly ten times higher than ership were severely compromised by men and
old divide-and-rule principle. The divisions the Ukrainian nation at arms. ours. Ukraine’s only hope of leveling the battle- women who had sold their loyalty to Russia.
they exploited, cynically and ruthlessly, were Whereas Russia has been sending prison field was to leverage our citizens’ creativity. Our But, cooperating with our NATO allies, we have
those between our country’s west and east, inmates to the frontlines, Ukrainians who have achievements on this front have astonished the spent the last several years purging disloyal offi-
between its Ukrainian- and Russian-speaking joined the fight include some of the best and Russians and our friends in NATO alike. cials from positions of influence. This has
communities. brightest. Vasyl Kladko, an x-ray crystallogra- Ukrainian innovations, developed largely improved the relationship between our military
Russia undoubtedly hoped to take advantage pher at the V.E. Lashkaryov Institute of Semi- through public-private partnerships, have not and political leaders, and it has assured our
of precisely these divisions, in both invading conductor Physics, was gunned down by Rus- only changed the nature of the war; they have Western allies that Ukraine can be trusted with
and occupying our country. A defeated, disu- sian troops in Irpin during the Battle for Kyiv been remarkably cost-effective. For example, even the most sensitive intelligence.
nited people would be easier to govern. But vir- early in the war. Oleksandr Shapoval, a leading commercial drones have enabled Ukraine to This battle for trust was, in a sense, the most
tually all Ukrainians now understand the dan- dancer in our national ballet company, died on engage in effective and relatively inexpensive consequential for Ukraine. Our people trust our
gers to our very existence that superficial antag- the battlefield in Donetsk in September. Victo- reconnaissance along a 600-mile (965 kilome- military and political leaders – not blindly, but
onisms pose. At a time when much of Ukraine’s ria Amelina, an acclaimed novelist who had ters) front line—something Russia’s forces with an abiding faith that, unlike the men who
east is living under the Kremlin’s boot, it is dedicated herself to documenting Russian war never expected. According to former Google occupy the Kremlin, they are accountable to the
clearer than ever that only a fully united and crimes, was killed by a Russian missile this past CEO Eric Schmidt, Ukraine’s “drone swarms” people they serve. Such trust is essential to the
sovereign Ukraine can provide and safeguard July. These are just a few examples of the YULIYA TYMOSHENKO will “change combat dramatically.” preservation of liberty: it is because of the belief
our people’s freedom. Ukrainians who have died defending our coun- is a former prime minister In order to ensure that Ukraine can continue that our leaders will deliver a final and definitive
This newfound unity can be seen every day, try’s right to exist. of Ukraine. to make the most of this innovation, the Ukrain- victory that Ukrainians have willingly made the
as Ukrainian men and women from all walks of Ukrainians’ sense of shared purpose has ian general staff, the state special communica- kinds of sacrifices —of home, family, and physi-
life, from every part of the country and practi- unleashed not only our courage and fighting ©2023/PROJECT SYNDICATE tions Service, the ministry of digital transforma- cal safety—that have become the norm in our
cally every age group, risk life and limb to spirit, but also our talent and innovative capabil- www.project-syndicate.org tion, and the defense ministry have launched proud country.

The AI question we should be asking

REUTERS

A
lthough our age is defined by taining this symbiotic connection between
humanity’s disproportionate us and our rapidly evolving technologies can
influence on the planet, we our- we ensure that AI’s development brings
selves are undergoing profound more benefit than harm.
changes. Tasks that previously Make no mistake: the benefits of machine
could be accomplished only through human learning could be profound. As novel and
labour are increasingly being performed by alien as it may seem to us now, AI is uniquely
machines, including many tasks that rely on capable of serving human ends—from opti-
creativity. Far from a distant theoretical possi- mizing technological efficiency to aiding in
bility, artificial intelligence has arrived – and it the creation of artwork that can be appreci-
is here to stay. ated by audiences around the world. The
In considering AI’s potential, it can be human response to AI’s output is what will
tempting to channel the techno-optimism determine its utility, including as an instru-
of the 1990s, when IBM’s Deep Blue tri- ment of meaning-making. There is no deny-
umphed over the ing that AI will play an expanding role in our
world chess cham- increasingly digitalized world. What we
QUICK READ pion, unleashing a need is a strategy of co-existence that
wave of interdisci- respects, elevates, and optimizes both
Nowadays, the optimists fixate plinary interest in human and machine.
on what AI might do for us, while how AI might be To that end, we see Dvořák Dreams as a
the pessimists worry about what deployed and com- proof of concept. Rooted firmly in human
it will do to us. But the question mercialized in other sources and imaginative expressions, it lev-
we should be asking is what AI will domains. But it can eraged AI to retrieve, synthesize, and
do with us. also be tempting to extend the legacy of an earlier cultural pio-
adopt the opposing neer. The resulting presentation was not
Only by maintaining this view and insist that AI simply a machine-generated “hallucina-
symbiotic connection between will become an intol- tion”; it was a display of co-evolution. An
us and our rapidly evolving erable threat to most “artificial” intelligence, guided by human
technologies can we ensure that people’s livelihoods intervention, made a past cultural produc-
AI’s development brings more and perhaps even to tion real to us in the present. It both revived
benefit than harm. human existence history and created it anew. Finding value
itself. lies in uniting tradition with novelty. With-
Both reactions are out both elements, the final product would
not new: they have often accompanied the not move us.
emergence of major innovations. They also of darkness. annual Dvořák Prague Festival in Septem- Dvořák Dreams required us to put aside
make similar mistakes, because both treat Investing, too, is a hybrid enterprise. Suc- ber in front of the UNESCO-listed Rudolfi- debates about humans versus humans and
technological progress as if it were something cess lies in recognizing genuine forms of inno- num. As the inaugural project of the 0xCol- humans versus machines. The result was bene-
separate from us. Nowadays, the optimists fix- vation, which in turn requires an appreciation lection, a new cultural initiative dedicated ficial both for the development of technology
ate on what AI might do for us, while the pessi- of what has already been done. to digital art, the piece exemplified AI’s and for the progress of contemporary art. Now,
mists worry about what it will do to us. But the This interplay between past and present also potential as a tool for both transforming we find ourselves calling for a revolution – not
question we should be asking is what AI will do describes generative AI itself. By drawing on human creativity and enriching cultural of the technology, but of humanity’s attitudes
with us. vast stores of previous human expression— heritage. toward it. AI is admittedly extraordinarily
This question is as pertinent to fine art as it data—AI can achieve near-universal applica- Artists working with AI can map out a path powerful, but it is hardly the first technology to
is to finance, despite the apparent differences bility and facilitate innovation across many for the technology’s role across society more alter the human condition.
between these domains of quintessentially areas of culture and industry. broadly. Today’s algorithmic models rely on We need not assume the position of either
human activity. New-media art is best under- It was this understanding of AI that led us massive quantities of training data, most of a true believer or an unbending critic.
stood as a dialogue between experimentation to pursue our collaborative project Dvořák it created by and for human consumption, Human progress emerges from collabora-
and tradition. The human longing for novelty Dreams. By harnessing the power of REFIK ANADOL & KAREL KOMÁREK and this makes them immensely powerful tion between us and, beyond that, between
and tradition are mutually dependent: only by machine learning, we transformed the are, respectively, director at RAS LAB and tools for pursuits like research and develop- us and our machines. In this sense, the role
appreciating what came before an artwork can nineteenth-century Czech composer Anto- the founder of KKCG. ment. From hundreds of hours of classical of artists, investors, and innovators in the AI
we comprehend what makes it new. No work nín Dvořák’s compositions, visual archives, music to more quantitative types of data, it revolution is the same: to combine openness
is fully independent of cultural heritage, just and legacy into a 100-square-meter installa- ©2023/PROJECT SYNDICATE is human input that makes AI’s output toward the future with informed apprecia-
as light cannot be understood in the absence tion that was exhibited throughout the www.project-syndicate.org meaningful and intelligible. Only by main- tion of the past.
LIVEMINT.COM
2024: The shape of power Monday, 1 January 2024
MuMbai 11

Is the world moving towards greater

bipolarity than multipolarity?
PTI

Adekeye Adebajo

I
n the coming year, we will see not greater
multipolarity, but greater bipolarity.
China has replaced Russia as America’s
main competitor in a new cold war that is
less about ideology and more about mar-
kets and technology. The $18 trillion Chinese
economy has already overtaken that of all 27
European Union countries combined, and
China is the largest trading partner to more
than 120 countries. Its Belt and Road Initia-
tive continues to build infrastructure around
the world, and the Beijing-based Asian Infra-
structure Investment Bank (with a $100 bil-
lion capitalization) has 109 members repre-
senting 80% of the world’s population. In
January, the China-dominated Brics (Brazil,
Russia, India, China, and South Africa) will
expand to include Argentina, Ethiopia,
Egypt, Iran, Saudi Arabia, and the United
Arab Emirates.
Many of these countries from the Global
South have refused to condemn Russia’s inva-
sion of Ukraine. Now, they are seeking to bolster
the 120-strong Non-Aligned Movement, which
emerged from the 1955 Bandung Conference of
Asian and African governments. As part of a
strategy to avoid becoming embroiled in super-
power conflicts (between the Americans and
the Soviets, at the time), NAM members
abstained from collective defence arrange-
ments with either side. This weapon of the weak
lent momentum to efforts to enhance regional
autonomy and strengthen global-governance
institutions such as the United Nations, and it
may yet do so again.
Finally, as of this writing, Israel’s siege and
bombardment of Gaza in response to Hamas’s
attack (which killed 1,400 Israelis) has resulted
in more than 9,000 dead and 1.4 million dis-
placed Palestinians. Unquestioning Western
support for Israel will expose the double stan-
dards at the heart of the international system,
further weakening global support for Ukraine
in 2024.

Ian Bremmer
Yes, the international trend towards “non-
alignment” will continue in 2024. But “multipo-
larity” is a different question, one that depends
on which arena of competition we’re thinking
about.
In 2024, non-alignment for many countries
will mean recognizing that overtly taking sides
in the intensifying rivalry between the United
States and China is a losing proposition. Some
governments, particularly those in countries
situated near China or Russia, will see the US as
an indispensable security partner. But commer-
cial partnership with China remains essential
for future growth.
“Multipolarity” is a more complex question.
In the security sphere,
we still live in a unipolar
QUICK READ world. Only the US can
project power into
Not only is multipolarity a myth, every region of the
but the system remains closer to world. China’s military
unipolarity than to Cold War-style clout is growing, but—
bipolarity. Though China is rising, importantly—it hasn’t share in high-tech industries, compared with a sia’s war in Ukraine, ethnic displacement in
the world’s largest-ever power been tested by a shoot- mere 6% for China. China is also only a regional Nagorno-Karabakh, the string of coups in
gap will take a long time to close. ing war in more than military power, and that will long remain the Africa, and the crisis in the Middle East are all
four decades. Russia’s case, leaving the US as the sole superpower that signs of the disruption of the world order that
New wars and the desire to conventional forces can command the global commons. emerged after World War II. These events are
avoid being drawn into US- were hollow even not outliers or isolated crises. With the United
Russia-China conflicts will before its full-scale Paula J. Dobriansky States somewhat removed and less assertive
continue to drive the new invasion of Ukraine Russia’s invasion of Ukraine has triggered than in the past, countries and non-state actors
multipolarity and the return of inflicted generational significant geopolitical changes. The war, com- ADEKEYE ADEBAJO IAN BREMMER JORGE HEINE ANA PALACIO feel emboldened to take risks and seize oppor-
non-alignment. damage on its military bined with rising US-China tensions, has uni- is a senior research is founder and presi- is a research professor is a former minister of tunities that they previously would have shied
capacity. And Europe fied the transatlantic community and prompted fellow at the University dent of Eurasia Group at Boston University’s foreign affairs of Spain, away from.
still relies on the US, as many Indo-Pacific governments to bolster their of Pretoria’s Centre for and GZERO Media. Pardee School of is a visiting lecturer at The current moment is characterized by an
do US allies in Asia. defences and secure their supply chains. The the Advancement of Global Studies. Georgetown alphabet soup of new coalitions that have formed
In the economic arena, however, we’re cer- same developments have also encouraged polit- Scholarship. University. in response to changing global power dynamics.
tainly living in a multipolar world, one in which ical leaders across the Global South to pursue The expanding Brics+ is just one example among
America, China, Europe, and India are all cru- “optionality,” making choices predicated on many. With middle powers increasingly vying
cial players in re-establishing the stability and their national interests, while doing what they for global influence, we have entered an age of
dynamism of the global economy. Then there’s can to avoid becoming mired in great-power disorder that will last until a new configuration
the digital realm, where the power of govern- disputes. of international relations solidifies.
ments is limited by the power of the tech com- Today’s ongoing geopolitical changes
panies that produce the advances that political include new or closer national alignments— Yu Jie
officials are scrambling to understand. Here, from Russia’s deepening ties with China, Iran, I agree. As myriad crises and elections unfold,
one finds an emerging “technopolar” world, and North Korea, to Australia’s engagement 2024 is set to be another geopolitically tumultu-
where governments and tech companies will with India and Indonesia, and with the United STEPHEN G. PAULA J. YU JIE ous year. But it also offers opportunities for non-
share power for the foreseeable future. States and the United Kingdom under AUKUS. BROOKS DOBRIANSKY is a senior research Western powers that champion “neutrality”
Put these trends together, and non-align- While the Quadrilateral Security Dialogue is professor of govern- is a senior fellow at fellow on China in the and “non-alignment” to play greater roles in
ment is the wave of the future. between Australia, India, Japan, and the US ment at Dartmouth Harvard Kennedy Asia-Pacific Program at global affairs. Most of these countries, including
(established in 2007) has become more ambi- College and a guest School’s Belfer Center Chatham House. China, base their foreign-policy priorities on
Stephen G. Brooks tious, other powers have taken pains to thwart professor at Stock- for Science and Inter- hard calculations of economic or political inter-
Multipolarity is a myth, as William Wohlforth emerging new alignments. Many view Hamas’s holm University. national Affairs. ests, whereas the collective West stresses the
and I argued recently in Foreign Affairs (which latest attack on Israel as an attempt to block Sau- importance of “being likeminded”.
also published a symposium of responses to our di-Israeli normalization, which could have ©2023/PROJECT SYNDICATE www.project-syndicate.org This state of play cannot fail to create greater
article). The United States has indeed become threatened not only Hamas but also its sponsors multipolarity. Pragmatism will demand that
less dominant than in the 1990s, when it was in Iran. many countries pick a side depending on the
further ahead militarily, economically, and America’s messy 2021 withdrawal from issue at hand. While “neutrality” will remain
technologically than any state had ever been Afghanistan contributed to this evolution in the unthinkable from G7 members’ perspective—
before. But a multipolar world is one with three international system by undermining percep- whether they are dealing with relations with
or more roughly equally matched leading pow- tions of US credibility, reliability, and effective- China or the war between Israel and Hamas—
ers at the top of the international heap. Who ness. That, in turn, caused some leaders (like many non-Western powers will consider it de
could fill that role today? Of all the countries Russian President Vladimir Putin) to re-evalu- albeit now in a new incarnation: active non- The rise of ANA has become especially appar- rigueur in conducting their foreign affairs.
that could plausibly rank third—France, Ger- ate the costs of pursuing policies contrary to US alignment (ANA). Originally triggered by Amer- ent in the aftermath of Russia’s invasion of For its part, China will continue to shift the
many, India, Japan, Russia, the United King- interests. These changes in preference and per- ican and Chinese pressure on Latin American Ukraine, with many countries across the Global rest of the world towards greater multipolarity,
dom—none is even roughly a peer of the US spective have facilitated not only new violence countries to take sides in their budding cold South refusing to take sides. This development since it sees that as the best way to manage its
or China. but also new or different relationships as Amer- war, ANA is now spreading across Africa and shows that the main cleavage in today’s world is stalemate vis-à-vis the United States. While
Not only is multipolarity a myth, but the sys- ica’s allies, rivals, and foes recalibrate their Asia. It takes a page from the Non-Aligned not between democracy and autocracy, but China’s initial position on Russia’s war in
tem remains closer to unipolarity than to Cold goals. Similarly, Russia’s faltering war effort in Movement of yesteryear, but adapts it to the between the Global North and the Global South. Ukraine worsened its ties with many Western
War-style bipolarity. Though China is rising, Ukraine appears to have created a more permis- realities of the new century. ANA’s spread is closely associated with the rise countries, attitudes within the West have since
the world’s largest-ever power gap will take a sive environment for Azerbaijan’s conquest of ANA should not be confused with neutrality of the Global South as a significant force in become more nuanced. There is now a strange
long time to close. China has ascended most sig- Nagorno-Karabakh. New wars and the desire to or equidistance. Rather, it is a dynamic concept world affairs, of which the recent expansion of mix of fear that China will aid the Kremlin mili-
nificantly in the economic domain (although avoid being drawn into US-Russia-China con- that allows countries to hold varying positions the Brics is Exhibit A. The best example of it in tarily, but also hope that it will limit President
less than is commonly assumed, since it signifi- flicts will continue to drive the new multipolar- depending on the issue at hand. As a foreign- practice is Brazilian President Luiz Inácio Lula Vladimir Putin’s nuclear brinkmanship.
cantly inflates its GDP data), but it has done ity and the return of non-alignment. policy doctrine, it means putting the interests of da Silva’s foreign policy over the course of 2023. Given that many countries around the world
much less to shrink the power gap in other one’s own country first, and not succumbing to do not view today’s geopolitical crises in stark
areas. It still lags very far behind the US techno- Jorge Heine pressure by the great powers. It requires highly Ana Palacio black-and-white terms, China may find that its
logically. A forthcoming (co-authored) book of In 2024, the great-power competition will developed analytical capabilities, so that each If recent events are any indication, the world preference for multipolarity is becoming more
mine shows that US firms hold a 53% profit continue, as will the rise of non-alignment, issue can be evaluated on its own merits. is indeed hastening toward a realignment. Rus- of an asset.
12 Monday, 1 JanuaRy 2024
MuMbai NEWS LIVEMINT.COM

Rival bets set

STRAIGHT
F O R WA R D
Funding winter for startups the stage for
SHASHI SHEKHAR

Respond to this column at

feedback@livemint.com
likely to thaw this year rocky start
to 2024
WORLD OF ARTIFICE The new year will likely see a flurry of investors coming into the market to back companies
FROM PAGE 1

Financial Services, feels that in

GAINS STRENGTH AS Sneha Shah tions. As the focus of growth-stage firms

January, volatility could be
high due to the ongoing ‘con-
flict’ between the two classes

DEEPFAKES, AI REIGN sneha.shah@livemint.com

mumbai
shifted from fund-raising to stronger
unit economics and profitability, they
have become investible. “The enhanced
of investors.
He expects Nifty to trade in
the 21,300-22,200 range in

V
enture capitalists, who had discipline of several sustainably grow- January, and the sectoral Bank

E
very time a year departs, it leaves us with some questions turned cautious amid last ing late-stage Indian startups is also a Nifty index to rule in the
and some answers. But 2023 seems to be an exception. This year’s high interest-rate positive sign that should attract global 47,500-49,500 range. The lat-
year, there were fewer answers than questions. Not unex- regime and frothy valua- investors into the country,” Pai added. ter closed at 48,292 on 29
pectedly, Merriam Webster and the Cambridge Dictionary both tions of startups not India has a much higher weightage December.
discovered something similar in their studies. The most backed by fundamentals, are likely to from global investors, raising optimism “Seasonally, January tends
searched word this year according to the Cambridge Dictionary return in 2024, betting on early-to about larger inflows, the experts said. to be a weak month for equi-
was “hallucinate”; Merriam Webster, in turn, found “authentic” growth-stage entities in their pursuit of In terms of funding activity, 2023 ties, with global fund manag-
to be the most searched word of the year. the next set of winners. marked a period of consolidation fol- ers taking some profits off the
Our world, which is riddled with ambiguity, is in desperate The new year will likely see a flurry lowing the build-up and exuberance table,” Taparia added.
need of authenticity. of investors coming in to back compa- from late 2019 to mid-2022. As we tran- Indeed, in the past five years
In 2016, this tendency became widely known. That year, nies, and funding rounds of Series A sitioned away from the zero interest through 2023, January has
Oxford Dictionary found “post-truth” to be the most searched and beyond are likely to gain traction, rate policy era, investors adjusted their given negative returns
word. Those were the days of Donald Trump’s ascension to industry experts and investors said. approach, shifting from a growth-at- between 0.1% and 2.5%.
power in America. What he was saying and doing caused outrage “There is adequate capital available, any-cost and early-leadership perspec- Gaurav Dua, senior vice-
among intellectuals around the world. Questions were being at least for the India opportunity. Over Companies like Oyo, Ola Electric, FirstCry, Lenskart, Ixigo, OfBusiness, Urban tive to a focus on business fundamen- president and head of capital
raised everywhere about how this man, who had been voted to the next 2-3 years, we’ll see $15 billion Company, Swiggy are some of the startups that are aiming to go public in 2024. . MINT tals, positive unit economics, and prof- market strategy at Sharekhan
the highest position in the globe, was behaving. The Oxford Dic- of dry powder being invested. I think itability. Thus, quality companies that by BNP Paribas, said he would
tionary defined post-truth as “relating to or denoting circum- there has been a nice 20-30-40% cor- venture capital funds totalled $27.9 bil- aiming to go public in 2024. had raised capital in the past three not be surprised if the Nifty
stances in which objective facts are less influential in shaping rection in valuations, and the deal vol- lion last year, a substantial 40% lower “As liquidity returns globally and the years refrained from seeking additional “pulled back by around 500
public opinion than appeals to emotion and personal belief”. umes have not gone down,” said Pra- than in 2022, data from Venture Intel- public markets rebound in the OECD, funds, while laggards struggled to points, given December’s stel-
Lies have since maintained their attempt to smear the truth. shanth Prakash, partner at Accel in a ligence, a private equity-venture capi- we should see a gradual uptick in pri- attract capital at even discounted valu- lar rally”.
Needless to say, society always wishes to walk with the truth, recent interview with Mint. tal data provider, shows. This data is vate market activity as well. While ear- ations, said Karan Sharma, MD, He expects the pullback in
but politicians, businesspeople, and courtiers have been entan- Valuations have become reasonable, updated till 20 December 2023. ly-stage VC activity stayed relatively co-head, digital and technology invest- micro- and small-cap indices
gling it in unfathomable debates. Let us quickly flip the pages of which will now kickstart the deal cycle In 2023, the VC funds also cashed consistent over 2023, mid and late- ment banking, Avendus Capital. to be sharper if one indeed
our country’s history. How big a war was required to determine again. “I think there has been a out to return money to their lim- stage investments were cer- “...we anticipate this year as a happens next month. How-
if the fight between the Kauravas and Pandavas was fought on the right-sizing of the valua- ited partners. Around $3.5 tainly down. We should see precursor to an exciting ever, his bullishness for the
issue of truth and lies? It is said that during that fight, every house tions, having a series A billion was returned them reactivate over growth phase,” he said. whole year is intact.
in Aryavarta experienced a loss of life or property. Despite the
best efforts of religious and philosophical figures, this trend has
round or a seed or a pre-
seed round, be of the $27.9 bn
Was the total for
through 79 exits in 2023, 2024, as they respond to
compared with $3.1 bil- highly positive signals $3.5 bn
Was the amount
India presents a five-year
growth outlook, and the
“In 2024, tactical plays
include chasing value over
not been stopped. right size, and have the lion in the year prior. from Indian IPO abundance of dry pow- growth in the large-cap space
The last two years’ events bear evidence of this. Russia began right valuations. I do not investments by pvt As mature startups demand,” said Pranav returned through der, narrowing valuation with a focus on capital, capex
a long period of bloodshed by attacking Ukraine. Putin had effec- want to see that change. I equity & VC funds head to the public markets, Pai, managing partner, 79 exits in 2023 gaps as businesses grow, (capital expenditure) and con-
tively built the backdrop by combining historical truths and think where we need more we would see some realign- 3one4 Capital. may attract big capital, sumer sectors. Also, IT (infor-
present geopolitical myths. As a result, the Russian authorities capital is at the growth stage. ment of their capitalization Firms that raised capital reversing the trend of the last mation technology), two-
and their generals were unable to achieve their ultimate goal, but But I think what we should see, table in 2024, with early backers during the covid-fuelled era of year and a half, Sharma added. wheeler autos and pharma,
the people of both countries were forced to endure terrible mis- and hopefully we’ll see a bit more of, is making way for long-term investors. cheap money in 2021 had to trim costs Sharma expects several tech leaders which were laggards in 2022
ery. focused pools of capital come in for These investors are likely to make and restructure their business models to to go public, with the overall confi- and 2023, could look up,” Dua
Certainly, the The current conflict between Israel early growth and create that entire manifold returns on their investments, become sustainable after the pandemic dence poised for further enhancement. added.
misinformed and Gaza is the next chapter in this spectrum, which is very different from either through the pre-IPO deals or subsided, and capital costs crept up. “We foresee the next three years as Index and stock futures
series. In both fights, over a lakh peo- the capital that was there because it was through OFS. Companies such as Ola While most startups slashed marketing defining for the industry, anticipating contracts normally expire on
world requires ple have been killed or injured. What there for a different class of compa- Electric, FirstCry, Lenskart, Ixigo, spends, others laid off employees. Also, a shift in the tech ecosystem towards the last Thursday of a month. If
some official if the devastation extends to other nies,” Prakash added. OfBusiness, Urban Company, Oyo, some either shuttered or sold non-core achieving a trillion-dollar milestone,” Thursday is a holiday, expiry
system of facts parts of the world? To put a stop to Investments by private equity and Swiggy are some of the startups that are businesses to focus on their core opera- he added. happens a day earlier.
and figures this, the current world needs to find
the correct balance of truth, facts,
words, and deeds. But how can this be
done?
Our elected representatives are victims of delusion. Even the
US president, widely regarded as the most powerful person on
‘Several EoIs for semiconductor units, labs’
the planet, is not immune to this. Let me use the first two weeks
of October as an example. An anonymous video purportedly FROM PAGE 1 mobile phones, laptops, tablets, by 2026, of which nearly $120
depicting Hamas’s murder of 40 Israeli children went viral on etc., is effectively characterized billion, or 40%, will be in
social media. Without confirming authenticity of the video, US est (EoI) for modernizing the by low margins—not as low as exports. Hence, the electronics
President Joe Biden said he had seen the video of children being Semi-Conductor Laboratory 1%—but very high volumes. manufacturing sector must
beheaded, causing worldwide outrage. However, when officials (SCL), Mohali. That has also That scale, when you reach, grow faster than the growth of
from the president’s office checked the footage for its authentic- received significant interest. allows you to develop an eco- the domestic market.
ity, they were stunned to discover that it was a fake video. Within All of these proposals and system of suppliers and supply Is there a concern around
hours of the finding, the official spokesperson clarified that nei- expressions of interest are with chain for electronics. the lack of dedicated legis-
ther the US president nor any other official of the country had the ISM TFAG. Will we have any dedi- lation on cybersecurity?
seen images or independently corroborated the horrible massa- What is the moderniza- cated PLIs for suppliers and That’s wrong to think so.

‘
cre of children. tion plan for SCL? component makers? There is a law—the IT Act—
The conflict between Russia and Ukraine could not be Given the size and scale of We’ll consider as well as cyber-
exploited as a weapon of sectarianism. But the conflict between SCL, its future should lie in it at the right security direc-
Israel and Hamas can be. Various fake videos, news reports, and being a commercial-grade, lim- time, because we For electronics, tions. But law and IndiGo registered a 37% jump in international air passenger
stories have been made during this conflict. During this time, the ited-volume production hub, India’s target for electronics certainly don’t we’re designing order is a state traffic to 2.9 million passengers in July-September 2023. MINT
leaders who have espoused post-truth have succeeded in per- as well as an R&D (research and manufacturing is $300 bn by want to offer local subject. A part of
plexing the entire world in a variety of ways.
This forced illusion has not spared India. A deepfake video of
Rashmika Mandanna, a popular actor of the south Indian film
development) hub—as
opposed to becoming a full-
scale, mass-volume fab. SCL
2026, says Chandrasekhar MINT

that we’re assembling a

double the sub-
sidy for the same
product. One be competitive in n o t
the problem on
manufacturing to cybersecurity
being
International air
industry, surprised even the central government last month.
Owing to the overwhelming reaction against the deepfake, infor-
mation technology minister Ashwini Vaishnav convened a hur-
also has a new director-general,
and our thought is to not
involve SCL in building chips
sizeable amount?
Even China, which controls
70-72% of the global value
important thing
to understand is
that we’re build-
exports.
Rajeev
Chandrasekhar
addressed ade-
quately
because
is
usually
passenger growth
ried meeting with government officials on 23 November. Deep- for mass-market devices. That chains (GVCs), makes a value ing this industry most cyber-
fakes were described as a menace to democracy, and he directed
that a rigorous regulation be enacted as quickly as possible. A day
earlier, Prime Minister Narendra Modi warned world leaders at
means SCL will create more
complex chips and devices, and
also be part of the R&D ecosys-
addition that is in the low two-
digits. Even they, for exports
exceeding $1 trillion, import
for exports as
well as domestic
MoS, electronics & IT
crimes—nearly
85% of it—are
supplies. Unlike automotive, multi-jurisdictional. The vic-
flies past domestic
the G-20 virtual summit against the misuse of AI and deepfakes. tem for semiconductors that $650-700 billion in compo- which only exports 3-4% of tim is in one jurisdiction, and FROM PAGE 1 tives, conferences and exhibi-
Certainly, the misinformed world requires some official sys- we are developing around the nents. To be in the GVC of elec- what is made locally, or even the perpetrator in another. In tions tourism), visa, Thomas
tem of facts and figures, for which the world’s leaders must reach India Semiconductor Research tronics is a low-margin, high- white goods, for electronics, our system, two police forces domestic traffic recovered to Cook (India) Ltd.
a consensus. We must not allow social media and artificial intelli- Centre (ISRC). volume game—unless you’re in we’re designing local manufac- have to both want to investigate 98% of pre-covid levels, while He added that the accessi-
gence to become a curse rather than a blessing. This is also one Will local electronics the strategic electronics space, turing to be competitive in a cybercrime, and also do it the recovery for international bility of easy-visa and visa-on-
of the year 2024’s most significant challenges. manufacturing need con- where it is low-volume and exports. cooperatively. This is a funda- traffic was lower at 86%. arrival options in these desti-
Shashi Shekhar is editor-in-chief, Hindustan. Views are per- certed efforts for a compo- high-margin. But consumer Our target for electronics mental problem. “Given the base effect nations further contributes to
sonal. nent supply chain given technology, which includes manufacturing is $300 billion shouvik.das@livemint.com because of lower recovery lev- the growing appeal for hassle-
els along with healthy interna- free international travel.
tional traffic growth, the “Increased preference for
growth rate in the interna- foreign vacations, travel for

Lenders raise fixed deposit rates as cash levels plunge tional traffic looks strong on a study and increase in business
y-o-y basis,” said Vinay Kumar travel to India as a major
G., vice-president and sector investment destination are
head for corporate ratings, expected to support the
FROM PAGE 1 not. When we do a maturity deposit rate hikes will result in apart, lenders are also likely to Icra. growth in international traffic
analysis of our deposits, we see upward repricing of the deposit see a compression of their net Kumar said to and from India
The liquidity situation is where the gap is or where base, the increase in lending interest margins, given the that in 2023-24, In 2023-24, Icra in the medium
expected to improve as gov- there could be a gap when out- yields will be limited to loans increasing cost of funds in the Icra expects expects term,” Kumar of
ernment spending picks up. flows happen on maturity,” that are linked to the marginal form of deposits. international international Icra added.
Kotak Institutional Equities said a senior official at a bank cost of funds-based lending “We believe that net interest traffic to improve traffic to improve Thomas Cook
said in a note on 26 December that raised deposit rates in rate (MCLR), an internal pric- margins (NIMs) for the bank- by 19-23% and sees Australia,
by 19-23% and
that the government has ade- December. ing benchmark. That’s because ing sector have peaked,” said domestic traffic New Zealand,
quate room to spend in the “Going forward, there will the repo-linked loans are Subha Sri Narayanan, director, by 13-15%. domestic traffic France, Switzer-
January-March quarter; it be more such rate changes in unlikely to be priced upward Crisil Ratings. According to by 13-15% land, Spain, Por-
expects the government to run various buckets,” he said on like the benchmark it tracks. Narayanan said that as the omnichannel tugal, Hungary
down on its cash balance in the condition of anonymity. Other experts pointed out recent deposit rate hikes come travel platform and Finland as
coming months. Others see this as a direct that although the differential into effect not only for incre- Thomas Cook, easier access to popular choices for long-haul
From May 2022 to Novem- fallout of the liquidity crunch. between the pace of credit and mental deposits, but also nearby countries without visa- journeys, while there is strong
ber 2023, the weighted aver- “The high liquidity deficit in A section of the market expects RBI to start lowering interest deposit growth has narrowed, where deposits come up for related hassles is one of the travel sentiment for medium-
age deposit rate increased by the banking system, whereby rates from 2024. MINT credit growth continues to repricing (typically in the drivers behind the sustained haul destinations such as
213 bps on fresh deposits, as banks are borrowing almost ₹3 outpace deposit growth and range of 30-35% in a year), growth in international air South Korea, Japan and Tur-
per Reserve Bank of India trillion of short-term funding and co-group head of financial A section of the market banks have continued to raise overall deposit costs will rise. traffic. key as well.
(RBI) data. from RBI under the MSF (mar- sector ratings, Icra Ltd. expects RBI to start lowering rates in a bid to attract depos- “And given the repricing on “The recent announce- For short-haul vacations,
Bankers said their asset-lia- ginal standing facility) and Gupta said the deposit rate rates from 2024. After raising its. the assets side has already ments of visa-free travel to the top choices that are
bility management commit- VRR (variable rate repo) win- hikes are expected to be lim- the repo rate by 250 bps Crisil Ratings Ltd expects been done, this could have an countries like Thailand, Viet- emerging among travellers
tees are figuring out which dow at 6.7-6.75%, has ited to 20 bps on longer between May 2022 and Febru- the trend of deposit rate hikes impact on NIMs to the extent nam, Malaysia and Kenya are include Singapore, Malaysia,
buckets need more funds. prompted banks to hike maturity deposits as the banks ary 2023, the central bank has to continue, and while credit of 10-20 bps. However, from expected to spark increased Maldives, Dubai, Abu Dhabi,
“The asset-liability manage- deposit rates, especially on the will not contract high-cost held the repo rate at 6.5% for growth is expected to be lower an overall banking sector prof- interest among Indian travel- Thailand, Indonesia, Saudi
ment committee decides shorter tenor maturities of up deposits for longer maturity the past five monetary policy than in FY23, it remains itability perspective, benign lers,” said Rajeev Kale, presi- Arabia, Ras Al Khaimah in the
whether funds are available for to six months,” said Anil amid expectations of rate cuts meetings. healthy and this should con- credit costs should continue to dent and country head, holi- UAE, Oman, Hong Kong, Viet-
a particular deposit tenor or Gupta, senior vice-president next year. According to Gupta, while tinue into FY25 as well. That provide an offset,” he said. days, mice (meetings, incen- nam and Bhutan.
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A year of enriching and

unusual conversations ISTOCKPHOTO

TO N G U E -
IN- CHEEK
MONDAY MOTIVATION
H A R I S H B H AT

Respond to this column at

feedback@livemint.com TTK Prestige’s
From humility to staying
positive, interactions
MD on why he
with strangers,
celebrities and poets values humility
taught me invaluable Chandru Kalro says humility is the
lessons through the year foundation of strong relationships
Shail Desai

A
m grateful for all the good things
the year 2023 brought me. Dur-

E
ing these 12 months, I lived the arly in his career, Chandru Kalro was offered a job at TTK
60th year of my life, and Prestige as a product manager. This was in the early 1990s,
authored two books. I worked soon after graduating with a degree in electronics and com-
hard, with satisfactory results (or so I think). I munication engineering from the Coimbatore Institute of Tech-
was invited to Cannes, where Forbes recognized nology. The profile at TTK seemed unusual given his qualifica-
me as one of the top 10 influential chief market- tion, but Kalro felt he had an edge over his competition. “I have
ing officers in the world for the second year run- been cooking since childhood. I felt like it gave me an advantage
ning. Most importantly, this was a year of good over a management graduate since this was a company that made
health, after a scare two years ago. products for cooking. My kitchen today is the beta kitchen and
There are also things that I failed to do well in new products that we make first go through there,” Kalro laughs.
2023, including some important relationships Over the last three decades, the Chennai-based managing
which I did not succeed in. A new book I have director of TTK Prestige has been instrumental in transforming
been working on progressed only in fits and what was essentially a pots and pans business into a contempo-
starts. I did not consistently walk 10,000 steps rary brand that makes premium kitchen and home products.
a day, which had been my absolute resolve at the “If you feel strongly about something, you are given the
start of the year. I could not say no to many empowerment and the autonomy to do it. That’s the gene code
requests, though I wanted to. This list is long, of the company. These are the things that really keep one going
but I will stop here, because I want to speak because you not only evolve as an individual, but also end up con-
about a unique high point of the year. tributing to the company’s welfare,” he says.
2023 was the year when unusual conversa- stadium, Mumbai, I had the unique opportunity through these conversations how many of the tions. On the other hand, they were beautiful, Kalro talks to Mint Lounge about the importance of humility
tions enriched my life. We all know that conver- of sitting next to a superstar for several minutes, people I knew on college campus had become meandering chats about interesting aspects of and how he goes about mentoring his team at work.
sations are important in building connections, even as we watched the match together. He was successful entrepreneurs. Some of the late life. This made me realise that there are so Who do you consider your mentor?
exchanging information, providing emotional Rajinikanth, the one and only “Thalaiva” who evening conversations morphed into the enthu- many parallel worlds out there, so dissimilar to My father, Madan Kalro. He passed away 28 years ago, but he
support, expressing love and generating ideas. has millions of fans across the world. Yet when siastic and soulful singing of old Hindi film the worlds that we live in every day. These par- continues to guide me. He taught me the basic values of life,
Typically, these are conversations with your I asked if I could sit next to him, he readily numbers, steered by a few die-hard members of allel worlds can provide us new insights and which I think are still relevant today.
partner, family members, colleagues, bosses, agreed, inviting me to be at ease. I spoke to him the college music club. Then, we also stood much joy. That’s why it is important to step Don’t mix up One major insight you worked on
team members and friends. All these types of in Tamil, telling how much I admired his mov- silently together over a warm campfire, listen- outside our own little worlds every now and the respect you with your mentor’s guidance?
conversations did happen during the year, but ies, and he responded so readily and gracefully. ing to the music band Indian Ocean on a cold then, and converse with the type of people we One of the things that he told me
what surprised me were the many unexpected He predicted that day India would win the semi- winter night. This taught me that meaningful don’t often meet in our workplaces. get at the office about was humility—don’t mix up the
conversations, each of which taught me some- final match against New Zealand hands-down, conversations do not necessarily require people for yourself; it respect you get at the office for your-
thing important. Here are some of them. which our team promptly did, perhaps fortified to speak to each other—they can occur through CONVERSATIONS WITH NATURE may just be for self; it may just be for the chair you’re
by Thalaiva’s pres- music or through Perhaps the best conversations I have had this your post sitting on. Build relationships with
CONVERSATIONS WITH STRANGERS ence in their midst. silence as well. year have been with nature, even as I have humility, so that even when you’re not
On a train journey from Paris to Cannes, I met an This was a brief con- The best conversations I had walked all by myself in parks, small towns or on on that chair, you have that respect.
elderly French grandmother, and spoke with versation, but what this year were with nature. I have CONVERSATIONS the beautiful walking track in the apartment What does being a mentor mean to you?
her for over two hours while eating chocolate blew me away was WITH WRITERS complex where I live. I have looked at the trees, I teach some of these values of helping people, empowering
truffles. She told me about the medical practice Rajinikanth’s humil- looked at the trees and spoken AND COMEDIANS leaves and flowers, sometimes paused by their and empathizing with people, on how to be constructive rather
she used to run many years ago, and the care ity. He is a mega star, to them about so many things In my corporate day side, and spoken to them about so many things than critical. These are some things I keep repeating, because at
with which she would treat her patients. She and yet he was so job, virtually all my that are always on my restless mind. I have used my position today, one of the things that I want to do is preserve
narrated a few interesting stories from her past, down to earth, and so interactions are with these conversations with myself to clarify what the culture of this wonderful company. And I can only do that
including what the Paris of the 1960s was like. I accessible. This is unlike many other celebrities corporate people, who are like me: people in I would like to do with the rest of my life. Some- when the people there imbibe the same values that we live for.
told her about my own career too, my workplace I have encountered, who maintain an air of formal attire, talking corporate language, mak- times, these silent walks and chats have helped What’s your morning schedule like?
and all the marketing stuff I have done over the aloofness, even arrogance. That brief conversa- ing presentations, and writing official sound- me resolve ongoing workplace or personal I look at the mail for the last billing from the previous day. And
years. She wanted to know more about India, tion reminded me once again the value of ing emails. However, I also participated in a few issues in my own mind. Conversations with then I do a lot of reading of short articles on various subjects. I like
and particularly about my hometown of Benga- humility in our lives. literary festivals during the year to talk about nature are therapeutic, and I would like to do to write something and send it to my team, maybe three out of
luru. I gave her the lowdown, including some my books. Here, I met writers, poets and many more of them in the years ahead. seven days. And after that, have tea and watch the birds.
downbeat tales about the unfortunate traffic sit- CONVERSATIONS WITH LONG stand-up comedians. I discovered that conver- On that note, thank you 2023, for all that you How do you unwind?
uation in the city. It was an enjoyable, uplifting LOST FRIENDS sations with them naturally traversed entirely have given me. You have been a wonderful year Music and a lot of movies. And I watch a lot of news. I like to be
conversation. She was perhaps 90 years old, and At the start of the year, my Alma Mater (BITS different subjects, such as catching the right of conversations. I look forward to many more on the ball on whatever is happening around the world. I enjoy
to see her positive energy at that age was inspir- Pilani) organized its global alumni meet at Jai- turn of phrase, how best to write about painful such chats in 2024. A Happy New Year to all of listening to classical Hindi music, Hindi film music especially
ing. I told myself that I should aspire to be as pur. There, I met some college friends whom I episodes from one’s past, building strong char- you! from the 70s and 80s, and English pop from the 80s.
positive as she is throughout my own life. had not seen for over 40 years. We spoke about acters, why a callback works so well in a com- Harish Bhat is a marketer, author and poet. He
our respective careers and lives, the passions we edy show, and why poetry is popular in Swe- has just retired from his role as brand custodian Write to us at businessoflife@livemint.com
CONVERSATIONS WITH CELEBRITIES had developed and also some knocks we had den. In all these conversations, there was no at Tata Sons. Some of his finest conversations have Monday Motivation is a series in which business leaders and cre-
At a World Cup cricket match in the Wankhede taken along the way. It was amazing to learn corporate jargon and no PowerPoint presenta- been with books. ative individuals discuss their mentors and their work ethics.

AI to diversity: What to expect at the workplace this year ISTOCKPHOTO

As use of generative AI AI IS HERE TO STAY stake, offering solutions to ensure their Unlike earlier, flexible workspaces are
Technology is all-pervasive in shaping the roles do not become redundant. the need of the hour, allowing employees
and automation tools industry’s approach to the workplace. “The rapid pace of technological the freedom to reconfigure spaces when
becomes widespread, Generative AI and automation tools are change may create a skills gap between they need to.
streamlining tasks, while immersive tech- the existing workforce and the demands Sonaali Bhatla, co-founder at Nori Nar-
employers will have to nologies like VR and AR are enhancing of 2024. To bridge this gap, employers rative, a New-Delhi based architecture
prioritize upskilling collaboration and training experiences. In
India, almost 75% of professionals have
must prioritise upskilling and reskilling,
equipping employees with skills to thrive
and design studio, says, “Previously, there
was a fixed population of employees com-
embraced AI tools for writing and editing, in the new technological landscape,” ing to work; now, the number is constantly
Geetika Sachdev image and video creation and writing code says Atul Tiwari, chief human resources floating. Workplaces should adapt to this
and have saved about 4.9 hours per week, officer at Spice Money, a fintech com- flexibility of occupancy and have modular

T
he year 2023 saw several changes to according to Slack, which surveyed 2,039 pany that empowers merchants and pods that can convert into working desks,
the workplace. After two years of a desk workers from India in 2023. nanopreneurs. if there are a lot of people. These pods
work-from-home regime, India Inc. Upasna Nischal, the head of human Nandkeolyar explains: “Whether it’s should also be able to convert into private
returned to the physical office. The con- resources (India) at Fidelity International, driven through corporate learning and conference areas if you want to take a call,
ventional five-days-a-week model seems which offers investment solutions and development, or if the employee has or expand into slightly bigger spaces when
redundant, with most surveys globally services and retirement expertise, says in access to resources, they need to reskill.” there is a need for collaboration.”
concluding that employees prefer hybrid 2024, the narrative will be about the art of Organizations that can reimagine tradi-
or remote work. Trends like “Bare Mini- leveraging AI’s transformative capabilities tional roles, and re-envision adjacent skills INCLUSIVITY AND DIVERSITY
mum Mondays” and “Coffee Badging”, to drive innovation and operational effi- for new roles, will be able to stay ahead of Companies are now expected to broaden
screamed that employees want greater ciency. competition and retain their key talent. their diversity and inclusion scope beyond
autonomy and flexibility at work, high- “The power of new-age tech will be lev- US-based resource for job seekers, 90% of Nandkeolyar, clinical faculty of organiza- “The key challenge for organizations gender and LGBTQ+ to other diversity
lighting an increased focus on work-life eraged across HR for analysing and antici- companies plan to implement return-to- tional behaviour at Indian Institute of will be to anticipate the skills of the future, strands like disabilities as well as cultural
balance. pating hot-spots or pain-points of office policies by the end of 2024. The sur- Management Ahmedabad. map the current skill sets, and expedite and social mobility, says Nischal. “Diver-
The use of generative AI as a powerful employees, helping managers make vey covered 1,000 company leaders, with This has a detrimental impact on an skill development before the next wave of sity, inclusion will get more pronounced,
tool for businesses was arguably the big- informed decisions around growth of nearly 30% of them admitting that their organization’s culture, because everyone disruption hits them. These interventions becoming integral to talent acquisition,
gest highlight of 2023. Several companies, their teams, faster query resolution, pre- company will threaten to fire employees is doing their own thing. “This has challen- will not only help them, but will go a long and business strategy,” she says.
including Google and Microsoft, intro- dicting employees at risk, informing peo- who don’t fulfil this mandate. Why? It’s ges, because we are unwilling to try new way in helping employees meet career At the same time, workspaces for the
duced or improvised on their AI tools due ple policies, and real-estate decisions difficult to build a collaborative culture in things—which affects innovation and cre- aspirations,” says Nischal. future are likely to have feeding areas for
to an increasing demand for AI assistants. based on working patterns,” she says. the absence of staff. ativity,” he says. breastfeeding moms, creches for babies
But, employees also harboured apprehen- “While we sometimes love to do things WORKPLACE DESIGN and little kids, and also simple, ergonomic
sions of the technology replacing them in BACK TO THE CABIN remotely, this leads to less access to RESKILLING IS TRENDING Companies might want to have employ- furniture—all the things that are still not
the future, pushing them to reskill. One thing is clear: many companies want resources, decreased collaboration, As the use of AI becomes more wide- ees in the office but they need to step up given much attention.
Here’s a look at some of the trends that employees in the physical office. Accord- reduced creativity, and a minimal relation- spread, it is important for companies to their game to attract and retain talent—
will rule the workplace of 2024. ing to a report by Resume Builder, a ship with our co-workers,” says Amit sensitize employees if their jobs are at through a modular approach to design. Write to us at businessoflife@livemint.com