Barack Obama’s ascent to the Oval Office with a decisive victory puts him in a unique position to significantly shape not only the US economy but also the world order. The fact that his victory, along with his party’s gains in congressional contests, puts the Democrats in firm control of the US government, and legislature should enable him to take swift measures to stabilize the economy.
To address issues ranging from the immediate to the long term, I believe the next US president will have to take steps based on three guiding principles—stability, globality and sustainability.
With the US being the largest contributor (18.2%) to the global gross domestic product (GDP), he will have to take immediate steps to bring stability and kick-start economic growth even while introducing measures to boost markets worldwide.
As the economic challenge transitions from credit and leverage to consumption and then to trade and capital flows, he will need to take steps that address issues across all these dimensions. As a step towards this, he needs to implement his economic stimulus proposals with immediate effect to limit the impact of the meltdown both in amplitude and duration. This would stabilize the world economy and in effect help Indian markets and the information technology (IT) industry to maintain growth.
Globalization, with its inherent characteristic of deploying economic assets most optimally, is the only way to world prosperity, which is evident in the fact that it has, in effect, spurred world GDP growth of 4-5% since 2002, and the US has had the biggest share in this. The US will have to take the lead in embracing globalization wholeheartedly and lowering trade barriers. As the leader of the free world, Obama must promote greater mobility of workforce and free exchange of ideas and best practices across borders.
Good news: For India’s IT industry, Obama’s victory is an opportunity to further strategically partner with the US for economic growth. Madhu Kapparath / Mint
To ensure that these benefits continue and contribute to American prosperity, the incoming president must take some steps such as trade liberalization by restarting the Doha round of multilateral trade talks, bringing visa flexibility, a totalization agreement with countries such as India (to avoid dual social security taxation) and opening government agencies and the defence sector in the near future.
For India’s IT industry, this brings about a unique opportunity to further strategically partner with the US for economic growth.
Even as he addresses the immediate challenges, it is imperative that Obama takes steps to ensure that the global economic and social systems are sustainable. Be it addressing a food crisis or embracing the Kyoto protocol, the approach that the next US president needs to take is to focus on the durability of the solutions that help solve problems for generations to come.
America has been one of the most innovative countries in the world and Obama and his team have to promote innovation through adequate fiscal and monetary policies, be it in the public or private sector, to ensure a sustainable society. This would include prioritization of green technologies that will spur a new source of environment-friendly innovation. Countries such as India, which have taken up the challenge of economic stability, will play a pivotal role in this.
This three-level strategy, combined with three key initiatives for each level, will spur growth not only in the US economy but will benefit the world. A key enabler for all the above initiatives will be IT, and the Indian IT industry can play a leading role.
At a more fundamental level, India is positioned to play the role of a strategic partner for the US. The incoming US president needs to support this partnership by ensuring that the state and commerce departments are given clear directives to prioritize issues related to India-US bilateral trade.
The writer is executive director and joint CEO of Wipro Ltd’s IT business. Write to us at firstname.lastname@example.org