There is a US-led hegemony that Indians need to be wary of as explained in a previous piece in this paper, by this author.(US led financial hegemony Oct. 6) It is a key component supporting, if not pushing US exceptionalism and, in a sense, US geopolitical priorities over much of the world, including trying to do so with India.
It has become even more evident in recent weeks and more pressing due to upcoming elections, that without care, and the right, current leadership remaining in place, this hegemony will one day come to be a tail that wags many key decisions in New Delhi, as it now does elsewhere. And this outside financial mass power could lead to huge economic problems for most Indians.
Importantly, there is a major shift developing of money from Wall Street, and to some extent European finance moving away from China to India – or simply having a greater preference for the latter. Beijing is seen as overly authoritarian, excessive as a security threat and having gained too much power over strategic supply chains. Therefore, more democratic India, better aligned to the developed world with its Indo-Pacific strategy is western finance’s greater favorite for lending and investing. This is also more a given with India being,a highly populated market, fast growing and a low cost manufacturing centre. So far good.
While this apparent pro-India investment trend facilitated by the Prime Minister Narendra Modi led government, can provide the nation benefits, there are important lessons to be learned.
All of such will help India avoid many pitfalls that have devastated much of the world at times by irresponsible New York (and London) led global finance including banking.
Interestingly, not long ago, in weeks after a similar piece by this author was published in this newspaper, (Biased West Should Prioritize Investing in India Over China, Sept.11) supporting this shift of money going more to India, the so-called King of Wall Street, Larry Fink who manages BlackRock’s near ten trillion dollars of assets, flew into India. The stated purpose was as the lead web headline from CNBC 18 (India) an America connected, media TV channel stated, “Reliance Industries and BlackRock forge partnership to transform India’s asset management industry.”
Now, let us not forget that BlackRock along with a handful of other funds already controls, or has significant leverage over most companies on the S and P, main US stock exchange index, according to major podcaster, Patrick bet-David.
While this Indian-based initiative of BlackRock’s involves a partnership with a major Indian firm, to what degree will it take a huge disproportionate influence in directing Indian firms to adopt western standards at the expense of present positive national traditions and Made in India and for Indians policy? That is a consideration, more for the future as it grows so quickly as many of BlackRock funds usually do by the billions of US dollars, each year.
If India remains prudent, but dynamic on financial matters, including with foreign lenders and investors, it may surpass China economically, even well before this century. But alternatively, these Kings of Wall Street can be false “royalty” talking up dreams but ending up by creating so many nightmares.
The 2008, disastrous Great Recession is a highlighted example caused by Wall Street investment instruments, pioneered by BlackRock’s head, Larry Fink in particular And all the victims of the Washington based international Monetary Fund, (IMF) lender of last resort are indeed reminders. Deals offered up by the US- led financial hegemony can crush countries, even sometimes more than war.
Then, there is the question to what degree opposition parties, are pliant or would become highly pliant to letting a small western group of fund managers and bankers eventually control too much of the “show” in New Delhi.
After all, the Hindustan Times refers to allegations that Rajiv Gandhi while in New York City, not so very long ago, hobnobbed with George Soros, a top Wall Street player wanting Prime minister Modi thrown out of office and who has been using Wall Street money essentially to try to do so. (With near zero success, by the way.) Though, does such an idea of western financiers even taking control of large democracies and/or important ones, at least one day seem that much possible? Try the case in Europe?
Yet the former Greek finance minister Yanis Faroukakis has well explained that already such a small financial “hegemony” group essentially decides Europe’s budgets, no doubt well connected to the continent’s top bankers. He states on his website, “Indeed, it is in the Eurogroup where the crucial decisions are reached on which the present and future of Europe depend. Except that the Eurogroup does not exist in European law!.”
This is sad when countries have put themselves in place where the voters are marginalized to the unofficial bankers or their representative financial technocrats, “secretly” hidden away in various capitals and even some countries in the Global South. For developing countries this is well documented in John Perkins’ book of “Confessions of an Economic Hitman” showing how aggressive some western-based bankers are in loading up debt on a nation to a degree that they end up “owning” the country they targeted. Financiers like Soros have made billions imperiling countries, financially or the case of Wall Street’s Hindenburg that “almost” financially destroyed a leading Indian industrial champion through short selling. The warning signals are clearly there.
Now on China: Beijing with its Belt and Road Initiative is for the most part being accused of a parallel to a lot of what Perkins identified as destructive practices by the financial hegemonic forces based in the West.
The case of Pakistan, Sri Lanka and elsewhere in the Indo-Pacific region, some argue shows how China through financial “engineering” can end up taking control of key national assets they should not have so much foreign ownership of like ports that are strategic.
It is easy for political leaders under strain, including in certain parts of the impoverished Global South, to give into expedient bankers wanting high commissions for pushing their lending. Some leaders may be tempted into excessive and inappropriate deals that do not even meet reasonable national sustainable development goals.That is they are making financial Faustian bargains if you will that years later can “blow up” their people’s future.
While the focus can be on the US, and other western nations having historically committed financial “theft” from colonialism to neocolonialism, certain small, highly dominant financial groups today should be looked at, as well for undermining the Global South. With a Modi government continuing on, India should stay on a good financial course. But with others in charge, the nation could become a punctuated, western steered, financial “Titanic” disaster, sinking millions of Indians economically
Peter Dash writes on geopolitics. He has worked for a leading bank in his university years.