 |
The tendrils of the economic black hole spreading outward from Wall Street are oozing into all aspects of life, almost everywhere. Banks are teetering on the brink of, well, bankruptcy. Famous American car brands are on the verge of disappearing, throwing millions out of work. Shops are going without customers and eventually out of business. Governments seem powerless to intervene and the much-vaunted free market is proving a sick joke. What should have been obvious, that it was too free, has hit home too hard and too late.
The fundamentalists who championed deregulation and excess freedom of finance are taking their bonus billions and building higher walls around their mansions, to keep out the newly created rabble.
The world as we knew it, all of us in the global cash economy, is changing beyond all recognition What remains intact is the mediocrity and incompetence of those who govern us. Leave aside George W Bush and his rapacious Republican political party, the chancers and bandits whose looting exacerbated this mess to breaking point over the past eight years. Forget Tony Brown or Gordon Blair or whatever his name is in London, or Sarko of France. Never mind the faceless placemen who head our woefully underfunded multilateral agencies: the men who were supposed to protect capitalism from its worst excesses but presided instead over expansions of inequality and runaway market madness.
In America, it's a new political epoch so we must look to Barack Obama, president-in-all-but-name-already, and his economic team of Bill Clinton retreads, bankers and academics. Still, give them a chance I hear you say. Let them take office in January and start spending their way out of this swamp of toxic assets and failed casino economics.
Thing is, they won't. There is no money to borrow, pull from a secret savings account or print at the US Federal Reserve.
The United States is the spendthrift deadbeat in a troubled neighbhourhood of slightly more thrifty households. It was kept afloat by cheques, easy loans for years but has now blown the gaff. No more kiting checks just to pay the bills, let alone to rebuild the house and landscape the garden.
So Obama, however well intentioned, can but be a reassuring presence in a nation and global economy in indefinite decline as chickens come flapping home to roost in a threadbare coop.
His fine words and charisma will reassure empty stomachs and anxious hearts for only so long, and then the real crisis of confidence sets in, when America realises that there is no quick fix.
This is when it gets grim for Nepal and other poor nations deluding themselves that their lousy economies and minimal exposure to global finance are all of a sudden an asset. Aid and development spending, already a pittance of national budgets, are easily slashed by desperate donor governments looking for pennies to pinch. Well paid consultants and expat lifestyles will go. Nepal's tourism, painfully resurrecting itself after years of war, will dry up, however eco-friendly and unique the attractions of the Republic.
Most crucially, the country's most important source of income looks set to plummet.
Remittances keep this country's economy float in every way and the Persian Gulf is feeling the pinch of contracting demand and low petroleum prices. Along with declining revenues, there'll be returning workers aplenty, back from their global dreams of saving enough for a plot of land with little more than some loose change and the manpower company baseball cap.
How will this country absorb an influx of potentially angry young men like that? Integrate them into the Nepal Army or the PLA? Let's hope not. So with such obvious impacts looming, what is our government doing? They're debating pointless points of communist terminology and regulating alcohol sales, raiding casinos and lighting lamps at ceremonies all over Kathmandu.
Oh yes, and still dreaming of making this country the Switzerland of Asia, even as its key sources of prosperity are blasted by economic tsunamis. There are leftists who chuckle with glee at all of this but very soon there will be little to laugh about.
Daniel Lak resumes his column from this week. His latest book is India Express.
