Politics

How Trump, Modi, Ratan Tata, Mulayam will change 2017 for us

Bindu DalmiaJanuary 19, 2017 | 09:50 IST

In their 70s or at its cusp, for Narendra Modi, Donald Trump, Ratan Tata and Mulayam Singh Yadav it may be platinum, but not sunset. Because the quartet that dominated mindspace in 2016 unleashed a set of causes, the political ramifications of which will play out through 2017 with Trump’s ascendancy, Modi’s demonetisation, and Tata and Mulayam in combat with the "New Order".

With the tumultuous changes last year, no forecaster can assert with certitude the macro future of what these watershed events portend in politics, economics and business. What the four at the helm share as common characteristics is rigidity, unpredictability, a plenipotentiary dominance in their sphere, and both Trump and Modi, a hostility towards elite press.

Authoritarian

Trump’s hubris-filled tweets (“The world was gloomy before I won”) and messages (“I will be the biggest jobs producer God ever made”) are symptomatic of politically elected leaders who are backed by supreme mandates, hence free to legislate on a whim.

Global strategist Ruchir Sharma’s findings endorse this growing preference amongst voters for authoritarian leaders like Trump and Modi, because they portend hard decisions in fixing the economy, a pivotal concern in the post-2008 world.

Trump’s over-regulating the US economy implies a contraction in global growth.

While PM Modi trumped 70 years of India’s illicit wealth overnight, an experiment that is being observed globally as a paradigm to curb corruption, should it succeed, and Trump’s intended deglobalising US, the pursuit of the “two unknowns” is predicted to plunge the world into a deeper depression, and India into an already forced recession, with 2017 spent on recalibrating towards this downward revision.

Trump’s over-regulating the US economy implies a contraction in global growth and a deceleration in the inflow of cross-border capital to emerging economies, triggering trade wars. That’s a space China now steps in, taking the lead in powering growth by opening up its own markets.

While Trump’s plan to lower corporate tax from 35 per cent to 15 per cent is intended to make the US the most preferred destination for industry, a strengthening dollar as a consequence will stir its own cascading ripples globally.

The Modi regime that initially came across as business-friendly, now reverses that perception with every index of internal consumption, capex expenditure, agrarian distress and exports plunging to a three-year low.

While the profit-and-loss statement of the note ban is a work-inprogress, its success will be gauged by the improvement in Ease of Living and the Ease of Doing Business post-reform, and if he confers tangible benefits by rewarding compliance, lowering corporate and personal tax rates, and ending lower bureaucracy corruption, the pain-point for all that affects day-to-day life, even more than electoral reforms.

To win UP, regain eroding political capital, and secure his command within the party, the PM cannot fall back on the old formula of 2014 in a negative campaign criticising adversaries or making far-fetched promises, because this Budget is his second-last, and it’s time to deliver.

New Order

If Modi and Trump are accelerators of change, Ratan Tata and Mulayam Singh seem to be the status quoists, remote controlling their outfits and refusing the powershift in ceding to the New Order.

Legacy issues dominate India Inc and political organisations because "valuations" of both have risen from being start-ups of the last century to becoming behemoths in 2017. Valuations are the notional price determined for brands that mature over time.

Who then should ownership of a political brand or conglomerates devolve upon in its tertiary stage of evolution, when a business or political outfit has grown to the level of a public limited company with multiple stakeholders? In commercial terms, for example, the net worth of the Congress in 1947 would be presumably higher in 2017, as equally the premium on the brand equity of the BJP, the SP and the AIADMK, raising the stakes for ownership.

Anachronism

Mulayam’s family soap opera might just have been stage-managed to brush up Akhilesh’s image, setting a new paradigm in rebranding an old party which was becoming an anachronism with the youth, one that could now set a template for scions of other feudal satraps to copy. But obduracy of elders in passing the baton forces rebellion amongst Gen-X to usurp, setting a wrong precedence of irreverence amongst scions.

Crystal gazing into 2017, this is predicted to be the shortest-lived presidency, because how and if Trump divests, recuses and distances himself from his business holdings that could cause conflict of interest with his duties makes him a sitting duck on the brink of impeachment, should there be even a perceived hint of ethical misdemeanor. And if that doesn’t down him, the findings on the Russian cyber espionage that favoured his electoral gains and subverted American elections might be the second political upset.

While back in the Indian landscape, the UP elections rivet as a one-day semi-final between a young CM pitted against the PM as arch campaigner, in a seemingly presidential contest. As for the House of Tatas, one hopes they go for truce in litigation, with PMO playing mediator to protect larger shareholder interests.

(Courtesy of Mail Today.)

Also read: How Donald Trump's election has exposed Modi’s foreign policy blunder

Last updated: January 19, 2017 | 13:14
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