Secret financial weapon India 0
Although it may seem that happened long ago, no more than a few months ago that the so-called hypothesis of “separation” dominated the economic information in the world media. The leading theory said that emerging markets grew independently of the United States and therefore were immune to a slowdown of U.S. origin. However, the second half of 2008 did not favor such an approach. Moreover, the conventional wisdom that countries prosper and fall together in today’s interconnected world has become to be felt, and grows.
Immediately after the fall of Lehman Brothers and AIG intervention in countries like South Korea, Mexico and Brazil, and even the normally well-governed city-state of Singapore, saw their banking systems with international contacts were made pieces. The U.S. Federal Reserve was forced to open lines of credit default swaps worth U.S. $ 30,000 million (about 23,200 million euros) for the central banks of those states. South Korea had even put together a megapaquete worth 130,000 million in October 2008 to come to the rescue of its banks.
However, there was an emerging economy that managed to buck this trend. More than four months after the fall of Lehman, Indian banks remain financially strong. They did not need bailouts and recapitalizations. It is expected that the economy will grow at a rate of 7% this year. Although this represents a significant decrease of 2% compared with the average of the past five years, is by no means the disaster that would be predicted to judge by the gloomy news and forecasts for the U.S. economy. How has India managed to succeed against all odds? Read the rest of this entry →