I just read in the newspapers that Donald Trump has been sworn in as 45th President of the United States and so the world is about to come to an end. It is the end of globalisation and the beginning of new protectionist order where the new mantra is buy American and hire American. It is the end of liberal democracy and the beginning of a new Putin-style illiberal autocracy. Francis Fukuyama and his thesis of "end of history" is now history -- "communist" USSR, in its new avatar of plutocratic Russia has eventually triumphed over the Anglo American vision of a new world order.
But should all this matter to me? Obviously it does, as otherwise why am I commenting on Trump's inauguration? Trump is now the key person in the world's richest and most powerful nation and he certainly has the capacity to both help and hurt me -- or rather my interests. My interests are of course related to Calcutta, India and of late, and still rather tangentially, to the United States. So let me how Trump stacks up in my perception.
To begin with I really cannot quarrel with his philosophy of -- Buy American and Hire American. If I was in his place, or if I was the Prime Minister of India I would have said something identical. I need to look after the people near me, around me and most importantly those who have elected me and so I cannot criticize him if he does exactly the same.
One of the claims of globalisation was that it was a win-win for all parties but this far from true. By exporting good or services from region A to B, we make A richer and B poorer. Win-win is possible if there is a bilateral flow of goods and services. A one way flow of goods, as is the case from China to the US ( and also to India) cannot be a win-win however much we twist and turn our words. Its a win for China and a loss for the other. Similarly, one way loss of jobs from the US to India cannot be win-win. It is a win for India and loss of the US. A win-win is possible if there is a balance in the value that flows across the border in both directions.
As long as the US economy was big enough, when it was far, far bigger than, say, China, India, it could tolerate a loss -- or haemorrhage -- of jobs and wealth across its border but, as anyone who has solved the "water flowing out of tank" series of problems in Jadav Chandra Chakraverty's classic book on arithmetic would know, there will come a time when the tank will run dry and not all the wishy washy theory on the win-win of globalisation will work. Let us admit it, the globalisation that we have had so far was never really a win-win game, its a zero-sum game. Someone wins and someone loses. As long as Americans were rich enough, they could talk big about globalisation and all that, while we, the poor in India would never allow imports of good and services because we had to save our precious "foreign exchange". But now that the US has been bled dry -- well you can always debate on how dry or poor the US -- it is impossible for them to be as generous as they once were. Let us face, when push comes to shove, everybody looks after his or her own interest. So is the case with Donald Trump. [ update ] Wonder how many of us in India would cheer if people from Bangladesh were allowed to come in and start working in our shops and establishments at lower wages?
Now let me see the Trump phenomenon from my narrow, selfish perspective of being an Indian, living in India and being a beneficiary of a buoyant Indian economy. What does the US buy from India? I looked at 2012 data and found that the US accounts for only 25% India's export of US$ 142 billion which again would be around 10% of India's 2012 GDP of US$ 1800 trillion. So if the US stops buying anything from India -- and this is highly unlikely -- the impact is about 2.5% of India's GDP. Now let us see from the other side and estimate the possibility of the US stopping all imports from India? My data shows that India accounts for only 2% of all US imports! China accounts for 22% of all US imports, while Mexico and Canada accounts for 13% each and so any hostile action towards exporting countries would first be directed towards these three. India's 2% is quite safe and so is our 2.5% of the GDP that finds its way to the US!
So if Trump starts to restrict imports, the one to get hurt the most is China, who of course is no friend of India and so what hurts a non-friend, is of little concern to me.
Now let me turn to "Hire American" part of his agenda and as we all know that this can only impact our H1B "IT professionals" who are in the US. India's IT industry -- of which I have been a participant -- is worth US$ 147billion in 2015, out of a GDP of about US$ 2000 billion. Of this US$ 100 billion is exports mainly to the US. This is about 5% of the GDP. A lot of this, US$100 billion is in the form of offshore delivery that does not need H1B visas and is delivered digitally out of India. The total number of H1B visa holders in the US is about 800,000 in 2013 and about 65,000 visas are issued every year. Assuming that 65% H1B visa holders are from India this would be only 18% of the 3 million people who are directly employed by the IT industry in India. So assuming that all Indians with H1B visas are booted out of the US, the loss is capped to 18% of the IT industry which in turn is about 5% ( US$ 100B / US$ 2000B) of India's GDP. That is an impact of about 1% assuming -- rather ominously -- that all H1B visa holders from India lose their jobs and all Indian IT professionals are working on US project. In reality, the impact will be far less, because with at worst, new visas will may not be issued or renewed.
In fact, the threat to the IT industry is not so much from Trump's H1B policies but from automation of services and the reduction in the number of people required to deliver IT services. Most of our IT professionals are rather low end "techies" often referred to as cyber-coolies who have joined the profession, not because of any love or aptitude for the trade but because of the easy money to be made there. As automation eliminates many other blue-collared jobs, so too will these jobs gets eliminated and Trump has no role in that. In fact, if the IT industry in India has to survive, it has to wean itself from the labour arbitrage model of delivering inexpensive services and move into the high end of high value products -- but that is another story that has already been explored, ad nauseum, by many others.
Now that fear of the "Buy from America and Hire from America" is behind us, let us look at the other "grotesque" aspects of the Trump presidency!
We are told that he has no respect for women and is hostile to the LGBT community. Condemnable as that may be, our politicians in India are no better and if we can live with them right here in India, I am sure we can live with Trump and his misogynism in distant America. It is up to the American citizen and the American electorate to deal with him as they think fit. Just as I do not want Americans to interfere with our caste, religious and social issues, I have no interest in getting entangled with their affairs. We have enough problems here of our own making right here. In fact I only hope that unlike Barack Hussein Obama he does not instigate a hypocritical firestorm around the fake issue of "intolerance" in India -- on the instructions of the India's secular enemies.
Which brings us to his attitude towards minorities or to put it rather bluntly towards political Islam.
Hillary Clinton was in the pay of her Saudi Arabian paymasters, which is why she and Obama encouraged the rise of ISIS to counter the Iranian influence in the Middle East in general and Iraq and Syria in particular. The Great Game in the Middle East today is that the new Russia, under Putin, is trying to muscle into traditional Anglo-American turf, from Ukraine to Syria and in this they are opposed by the Saudi led Sunnis and hence assisted by the Iran led Shia. In this Great Game, Clinton was firmly in the Saudi - Sunni camp, hence opposed to the Iran - Shias, and so Russia's Putin threw in his weight behind Donald Trump so that he would win and support, or at least not oppose, Putin's grandiose plans in the Middle East.
How does that impact India?
India is in the crosshairs of political Islam with Ghazwa-i-Hind being a long sought political goal of both the Sunni and the Shia factions, neither of whom have any love lost for the Indic way of life and its inclusive philosophy. However, in the near term, Wahabbi Sunni Islam, funded by Saudi Arabia and provisioned by Pakistan is the more potent and dangerous threat both for India and the world. Hence, the Saudi-funded, Saudi-affiliated Hillary Clinton would have been an utter disaster.
But is Trump a friend of India and of Indic civilisation? Unlikely. His first interest is in himself and then his in cronies. Fortunately he and and his cronies are now allied against political Sunni Islam -- and as long as he remains so, their interests would be aligned to mine and ours.
Finally, Trump is supposed to be illiberal or anti-liberal. Unfortunately, the whole concept of being "liberal", of being "tolerant" of others and of "agreeing to differ" has disappeared. Violent intolerance is the new normal. For example, political Islam does not seek dialogue, only dominance. So if you are tolerant and liberal you are considered weak and liable to be hurt if not actually exterminated. In effect, you can be tolerant only if you tolerate intolerance and if you do so you would be eliminated along with your tolerant beliefs. So you can be liberal and tolerant if and only if you have a death wish! As I have explained in my blog post, and in Swarajya, the Second Law of Thermodynamics tells us that we will inexorably move towards more and more chaos, not just in the world of physics but also in society.
In all this rise of violent intolerance, Trump is neither here, nor there. He is just another milestone in the long march to chaos. So what is there to be unduly alarmed by his ascendancy?
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To begin with I really cannot quarrel with his philosophy of -- Buy American and Hire American. If I was in his place, or if I was the Prime Minister of India I would have said something identical. I need to look after the people near me, around me and most importantly those who have elected me and so I cannot criticize him if he does exactly the same.
One of the claims of globalisation was that it was a win-win for all parties but this far from true. By exporting good or services from region A to B, we make A richer and B poorer. Win-win is possible if there is a bilateral flow of goods and services. A one way flow of goods, as is the case from China to the US ( and also to India) cannot be a win-win however much we twist and turn our words. Its a win for China and a loss for the other. Similarly, one way loss of jobs from the US to India cannot be win-win. It is a win for India and loss of the US. A win-win is possible if there is a balance in the value that flows across the border in both directions.
As long as the US economy was big enough, when it was far, far bigger than, say, China, India, it could tolerate a loss -- or haemorrhage -- of jobs and wealth across its border but, as anyone who has solved the "water flowing out of tank" series of problems in Jadav Chandra Chakraverty's classic book on arithmetic would know, there will come a time when the tank will run dry and not all the wishy washy theory on the win-win of globalisation will work. Let us admit it, the globalisation that we have had so far was never really a win-win game, its a zero-sum game. Someone wins and someone loses. As long as Americans were rich enough, they could talk big about globalisation and all that, while we, the poor in India would never allow imports of good and services because we had to save our precious "foreign exchange". But now that the US has been bled dry -- well you can always debate on how dry or poor the US -- it is impossible for them to be as generous as they once were. Let us face, when push comes to shove, everybody looks after his or her own interest. So is the case with Donald Trump. [ update ] Wonder how many of us in India would cheer if people from Bangladesh were allowed to come in and start working in our shops and establishments at lower wages?
Now let me see the Trump phenomenon from my narrow, selfish perspective of being an Indian, living in India and being a beneficiary of a buoyant Indian economy. What does the US buy from India? I looked at 2012 data and found that the US accounts for only 25% India's export of US$ 142 billion which again would be around 10% of India's 2012 GDP of US$ 1800 trillion. So if the US stops buying anything from India -- and this is highly unlikely -- the impact is about 2.5% of India's GDP. Now let us see from the other side and estimate the possibility of the US stopping all imports from India? My data shows that India accounts for only 2% of all US imports! China accounts for 22% of all US imports, while Mexico and Canada accounts for 13% each and so any hostile action towards exporting countries would first be directed towards these three. India's 2% is quite safe and so is our 2.5% of the GDP that finds its way to the US!
So if Trump starts to restrict imports, the one to get hurt the most is China, who of course is no friend of India and so what hurts a non-friend, is of little concern to me.
Now let me turn to "Hire American" part of his agenda and as we all know that this can only impact our H1B "IT professionals" who are in the US. India's IT industry -- of which I have been a participant -- is worth US$ 147billion in 2015, out of a GDP of about US$ 2000 billion. Of this US$ 100 billion is exports mainly to the US. This is about 5% of the GDP. A lot of this, US$100 billion is in the form of offshore delivery that does not need H1B visas and is delivered digitally out of India. The total number of H1B visa holders in the US is about 800,000 in 2013 and about 65,000 visas are issued every year. Assuming that 65% H1B visa holders are from India this would be only 18% of the 3 million people who are directly employed by the IT industry in India. So assuming that all Indians with H1B visas are booted out of the US, the loss is capped to 18% of the IT industry which in turn is about 5% ( US$ 100B / US$ 2000B) of India's GDP. That is an impact of about 1% assuming -- rather ominously -- that all H1B visa holders from India lose their jobs and all Indian IT professionals are working on US project. In reality, the impact will be far less, because with at worst, new visas will may not be issued or renewed.
In fact, the threat to the IT industry is not so much from Trump's H1B policies but from automation of services and the reduction in the number of people required to deliver IT services. Most of our IT professionals are rather low end "techies" often referred to as cyber-coolies who have joined the profession, not because of any love or aptitude for the trade but because of the easy money to be made there. As automation eliminates many other blue-collared jobs, so too will these jobs gets eliminated and Trump has no role in that. In fact, if the IT industry in India has to survive, it has to wean itself from the labour arbitrage model of delivering inexpensive services and move into the high end of high value products -- but that is another story that has already been explored, ad nauseum, by many others.
Now that fear of the "Buy from America and Hire from America" is behind us, let us look at the other "grotesque" aspects of the Trump presidency!
We are told that he has no respect for women and is hostile to the LGBT community. Condemnable as that may be, our politicians in India are no better and if we can live with them right here in India, I am sure we can live with Trump and his misogynism in distant America. It is up to the American citizen and the American electorate to deal with him as they think fit. Just as I do not want Americans to interfere with our caste, religious and social issues, I have no interest in getting entangled with their affairs. We have enough problems here of our own making right here. In fact I only hope that unlike Barack Hussein Obama he does not instigate a hypocritical firestorm around the fake issue of "intolerance" in India -- on the instructions of the India's secular enemies.
Which brings us to his attitude towards minorities or to put it rather bluntly towards political Islam.
Hillary Clinton was in the pay of her Saudi Arabian paymasters, which is why she and Obama encouraged the rise of ISIS to counter the Iranian influence in the Middle East in general and Iraq and Syria in particular. The Great Game in the Middle East today is that the new Russia, under Putin, is trying to muscle into traditional Anglo-American turf, from Ukraine to Syria and in this they are opposed by the Saudi led Sunnis and hence assisted by the Iran led Shia. In this Great Game, Clinton was firmly in the Saudi - Sunni camp, hence opposed to the Iran - Shias, and so Russia's Putin threw in his weight behind Donald Trump so that he would win and support, or at least not oppose, Putin's grandiose plans in the Middle East.
How does that impact India?
India is in the crosshairs of political Islam with Ghazwa-i-Hind being a long sought political goal of both the Sunni and the Shia factions, neither of whom have any love lost for the Indic way of life and its inclusive philosophy. However, in the near term, Wahabbi Sunni Islam, funded by Saudi Arabia and provisioned by Pakistan is the more potent and dangerous threat both for India and the world. Hence, the Saudi-funded, Saudi-affiliated Hillary Clinton would have been an utter disaster.
But is Trump a friend of India and of Indic civilisation? Unlikely. His first interest is in himself and then his in cronies. Fortunately he and and his cronies are now allied against political Sunni Islam -- and as long as he remains so, their interests would be aligned to mine and ours.
Finally, Trump is supposed to be illiberal or anti-liberal. Unfortunately, the whole concept of being "liberal", of being "tolerant" of others and of "agreeing to differ" has disappeared. Violent intolerance is the new normal. For example, political Islam does not seek dialogue, only dominance. So if you are tolerant and liberal you are considered weak and liable to be hurt if not actually exterminated. In effect, you can be tolerant only if you tolerate intolerance and if you do so you would be eliminated along with your tolerant beliefs. So you can be liberal and tolerant if and only if you have a death wish! As I have explained in my blog post, and in Swarajya, the Second Law of Thermodynamics tells us that we will inexorably move towards more and more chaos, not just in the world of physics but also in society.
In all this rise of violent intolerance, Trump is neither here, nor there. He is just another milestone in the long march to chaos. So what is there to be unduly alarmed by his ascendancy?
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