Towards a slow and painful recovery.

Those desperate for some positive news on the economic front in the United States have something to cheer about. For the first time in nearly fifteen months, the U.S. unemployment rate fell by a smart margin, indicating a slow and painful movement towards recovery. Provided, of course, the relative data as presented in surveys carried out by Bloomberg and others is accurate and reliable.

One of the most important aspects of the current crisis is the issue of credibility of the institutions that were considered above reproach, and totally reliable. As it transpired later, many of these institutions were found sorely wanting in competence, as well as integrity.

The optimism about the current situation is mainly on account of the fact that job losses that were supposedly estimated to be in the region of approximately 325,000, turned out to be only around 247,000. It is not clear if the estimates were accurate or there is a real improvement in the ground level situation.

Some of the areas where job losses occurred in good numbers are the financial services, the construction sector, and the hospitality industry, while the auto industry added several thousand jobs in the otherwise cloudy scenario.

It remains to be seen, however, as to when and at what rate consumer spending would improve. That would be a key indicator of consumer confidence, as well as availability of disposable incomes. The economic recovery chain does not appear to be consistently strong throughout. There are weak points that could easily pull the positives back to square one.

If the American economy is really on the mend, it is definitely not at a pace that many fondly look forward to.

THE GULF DOOM!

Is it the end of the Gulf Boom?   Is it time to write the obit of the Gulf Boom?   By all available indications, yes!   A regular stream of expatriates is returning to India and other countries of the Third World, with broken dreams in their suitcases.

The lucky ones are those that have already made their pot of gold, and have to look for a job in their country, more for an occupation than for subsistence.   The unlucky ones are those that had borrowed money to chase their dreams, and have now to go back to their places and face the moneylenders.   It is a tragedy being played out across the Indian subcontinent, and some other countries in the less developed world.

So how do we rationalise this tragedy?   Who do we hold responsible for this unfolding tragedy?   The Government, the Citizens, fate, circumstances?   On balance, it would appear that the Governments and their citizens are responsible in almost equal measure, with the scale tilting slightly towards the Government.

One of the simple and abiding truths of life is, when you depend on others for anything, you are risking your own interests, and putting yourselves at the sweet mercies of the others.   The overdependence of countries like India on overseas jobs to take care of their unemployed millions has now boomeranged on them, and it may be only a matter of months before the deluge of returning for good expatriates delivers a body blow to their already wobbling economies.

It is an undeniable fact that Governments in many of the less developed countries like India, Pakistan, Philippines, etc., have taken the easy way out to deal with the unemployment problem by encouraging their citizens to migarate to the Gulf and other prosperous destinations, instead of making concerted efforts to fulfil their basic responsibilities towards their citizens.   What’s more they get cheap foreign exchange by way of remittances from the expatriates.   On their part, the citizens of these countries have also not bothered to fight for their rights in their own land.   Rather, they have taken the easy way out by taking up jobs abroad, than traverse the rough road of activism to bring about responsible governance in their own countries.  

So long as the going was good, neither the Governments, nor their citizens bothered about the implications of their respective actions or inaction.   But all good things have to come to an end.   And so it is with the Gulf Boom.

What now?   Increase in unemployment, social tensions, religious strife, political instability, economic chaos, crimes etc., etc.   We are in for some pretty tough times ahead.   It is a scary scenario alright!

On the brighter side, this situation offers both the Governments and the citizens of the affected countries, to ponder over their past mindless conduct, and their penchant to skirt chronic problems, and to finally put their collective heads together and find solutions for the exploding problem of the Gulf Doom.   And if that happens, there may yet be a chance to escape the worst consequences of this developing tragedy.

Views expressed above are the personal ones of the author.