Call me paranoid!
It seems that notwithstanding what the media has been saying about India, international investors in India remain reasonably committed. According to the Financial Times, only $900 million of the roughly $200 billion of foreign investments in India’s stock market have been withdrawn by the investors following the recent slowdown. Perhaps these investors are more open to the reality of India as opposed to what I see as scare mongering by the global media.
Why do I think it is scare mongering by the international media? First, there are some very well managed businesses in India and they will likely ride out the current situation successfully. Second, as I noted in an earlier musing, this is not 1991 all over again. There is a policy paralysis at the moment but elections are due in May 2014, and things are likely to change as there is likely to be change in the political landscape, notwithstanding the specific coalition that comes in to power. There is also a new leadership at the Reserve Bank of India, India’s central bank, which is likely to lead to a more aggressive and pragmatic decision making there. Collectively, there is a decent chance that the macroeconomic conditions in India will improve in the coming financial year.
Call me paranoid but, given the above, it seems to me that most benevolently, one can call the international media as sensationalist and seeking to sell more eyeballs with dramatic headlines. At worst, it is a concerted effort to undermine large emerging markets like India through manipulating public opinion globally, as it would be a danger to the cozy new post-colonial world order that has been established by the developed countries, if the larger emerging economies were to continue with their growth story and succeed. That would shift the center of gravity more decisively to the “South”, marginalizing all but the largest of the developed economies in the immediately foreseeable future. That would not do, would it?