Friday, June 2, 2017

Friday Feature Book Review: The Indian Renaissance by Mr. Sanjeev Sanyal インド経済のルネッサンス: サンジーブ・サンヤル

Recent economic summit events involving the US, Europe and China dominate global news. It reminds the same reader of how much has been lost by India, that now seeks to regain ground economically. This is a deeply researched book offering that will satisfy any fan of the Economist Magazine, The History Channel or Wall Street Journal. Foolishly, I have only read about the "IT rise of India" type stories. It would be better to describe these same headlines as "the return of India' economic power". I did not know much about Indian history before British rule, and I learned very critical insight about its roots. For example, at the time of Jesus Christ 2000+ year ago, India's economy made up 33% of global GDP, China was only 26% and Europe just 21%. 

At that time, the Roman Empire was just consolidating and spreading far and wide. The world's dominant economic superpower was India. Ships and trade made up a lot of this wealth, and gold was a key currency of exchange. The power of Indian traders was extreme, and the amount of gold that it brought into India was so huge, that it worried the Roman Emperor. The outflow of gold was so high, that they had to discourage the import of many Indian luxuries in order to stem the outflow of their Roman gold! I had never read that ever before, and it opened my eyes to India's economic power in the past. I have been it seems, historically ignorant with past market economies. I should add, it is not the first time. 

I find the learning of such a currency crisis in gold, true capital flight from Rome into India over 2000 years ago, to be amazing. Economics have been around for a long time, and the author Sanjeev Sanyal, does a great job of bringing a very clear view of how strong India was, and remained so for 1000 years. He later explains how it went inward in direction, and declined for the following 1000 years. He makes a firm case that two dates in recent memory are turning points. 1947, India's independence from the British Empire and 1991, when it began long overdue and badly needed financial & economic reforms. 

The year 1991, was fortunate as it came about at the same time as the internet itself. India's entire global dominance of overseas call centres, and other outsourcing functions would never have happened if these economic reforms were not in place. It was never a case of the internet spreading freely within India, and being allowed to take off all on its own, as if something purely by chance. It was planned and fully supported once key Indian entrepreneurs were allowed to do so. They were encouraged to take risk, and build global businesses never seen before, using a new internet backbone for various new online products and services. 

The Top 3 Takeaways from this book that really impact any reader are:

1) There is a lot of economic history in India that goes back over thousands of years. The long coastline of India has been at the core of commercial trading. This has often run in parallel with China trade over centuries.

2) The value of gold in India has been greatly valued for over 3000 years. The Roman Empire was in fact in fear of the economic power of India. It caused a gold currency crisis, and suffered huge capital outflows.

3) The capital markets are always driven by innovation, and India and been both a victim and a protagonist. Political change has been open, then inward, and now more open again in recent years. The Internet boom really aided this recent renaissance style with IT outsourcing.

Any reader of this great book will be more sensitive to the current leader Prime Minister Modi's impact. Going forward, it will help any reader to anticipate many new directions. It was well worth the read, and gave me a foundation of comfort that sees a bright economic future in India's new renaissance. Perhaps it signals a new cycle of dominance for another 1000 years? Time will of course tell, as history often repeats itself. This book was very eye opening and very engaging in both economic and historic senses. Highly recommended!

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