Yog, Surya, Solar, SoftBank, Shiller – Indian Economy in 2040

 

Last week’s article about the Foundation of Yog has been received very well. It was circulated by readers to their own networks and then re-circulated. We have received several private responses which we will post on the article in a day or two. Our sincere thanks to readers. It is this feedback that keeps us going.

The global interest in Yog became evident on the first International Yog Day celebrated around the world last Sunday. There is no question that today’s global popularity of physical Yog is due to its embrace by Americans. But there is no question either that Yog is Indian, pure Indian. Kudos to Prime Minister Modi for realizing that Indian Society as the creator of Yog delivers a strong positive image of India to the world – a beacon on the hill to borrow a term from President Reagan or India as Jagat-Guru (teacher of the world) to use NaMo’s phrase.

(courtesy – New York Times)

Another great export of Indian Society is Buddhism. Not only did Buddhism originate in India, its propagation around the world was due to the great Indian Emperor Ashok. This is why Ashok is regarded as the second most important man in Buddhist history. Buddhism is the most widely followed religion in Asia and all followers look to India as the birthplace of Buddha & Buddhism.

  

                      (Chakra of Ashok in the Indian Flag)       (an intact Ashok Pillar at Wat U Mong near Chiang Mai, Thailand) 

We have written on several occasions that Buddhism can serve as a bridge that unites Indian society with the rest of Asia, especially with China. We merely write while Prime Minister Modi does. Read what a visiting scholar at Brookings Doha wrote in his article Modi deploys his culture skills in Asia:

  • “Under the banner of India’s ‘Look East’/’Act East’ policy, Modi has used culture to
    appeal to the peoples of Asia. Much of this has been through Buddhism, which more than
    any other region or philosophy connects all of Asia. This year, India hosted the
    International Buddha Poornima Diwas, a global celebration of Buddha’s birth,
    enlightenment and passing. The decision to host was initiated by Modi who led the
    prayers on the day. Modi stated “without Buddha this century cannot be Asia’s
    century”.
  • “Cultural diplomacy was also deployed in India’s own neighborhood. Buddhism was used to
    appeal to Bhutan and Nepal. In Kathmandu one of the four ‘Cs’ of Modi’s Nepal visit
    was culture (a country which also received a Bodhi sapling from the PM). Modi’s
    efforts perhaps yielded most significant results in Sri Lanka – one of the oldest
    Buddhist countries”

What about China? The Brookings article writes:

  • “… culture is also being used by New Delhi and Beijing to appeal to each other’s populations and smoothen ties. Bilateral initiatives, like the ‘cultural parks’ planned for Bengaluru and
    Beijing are underway. While the influence of culture is somewhat stunted by competing
    strategic interests in India’s neighborhood, China’s neighborhood, along the shared
    disputed border, the Indian Ocean, and in the economic arena, New Delhi has greater
    cultural ties with Beijing than with any other great power. India and China are unique
    in that, as nation states, they constitute some of the oldest continuous cultural
    traditions in the world”

2. Role of Sun in Dharma, Economy & Leadership   

The vista of the rising Sun is glorious. As the rays of Sun reach us at dawn, the darkness of the night begins to disappear and optimism arises in us. This awakening inspired Indian Rushis at the beginning of known time and they looked to the morning Sun as a representation of the unimaginable brilliance of the Creator. They looked at the morning Sun and prayed that its brilliance would illuminate our minds on earth. That invocation is the Gayatri Mantra, probably the most famous among the immortal Vedic Mantra:

  • We meditate upon the Divine Brilliance of the Savitaar (Sun), May He Illuminate our Buddhi* 

This role of the Sun was hailed in the famous Surya-Namaskaar or Namaskaar to the Sun exercise in Yog.  

Participants in International Day of Yoga perform a pose as the sun comes up in New Delhi on June 21, 2015.

The Sun is not only to be invoked in Dharma & Yog. The brilliance of the Sun is a critical component in the drive to make Indian Economy strong & self-reliant in energy. This week saw an enormous step in that direction, a single step that in itself could meet 20% of Prime Minister Modi’s goal for solar power in India.

Japan’s Softbank, one of the most successful private equity & venture investors in the world, announced it was forming a joint venture with Taiwan’s Fox-Conn and India’s Bharti Enterprises. Softbank is a leading global investor in telecommunications & Internet, Bharti runs one of the largest wireless companies in India and Foxconn is the manufacturer of Apple iPhones. But their venture is not in telecommunications or internet.

So what will their venture, SBG Cleantech Ltd., do? The Financial Times quoted Masayoshi Son, chairman & ceo of Softbank:

  • Our commitment is to make 20GW as a minimum investment commitment into solar in India. That is, in economic terms, roughly $20bn in investment“.

This is a very big step for all partners in this venture. As the Wall Street Journal wrote:

  • “For SoftBank, a firm that invests in Internet and telecommunications technologies, the solar foray gives it an opportunity to explore manufacturing and expand its business interests.”
  • “For Foxconn, the venture would mean an expansion into making solar panels and other equipment. This comes as the Taiwanese company, which makes iPhones and iPads forApple Inc.AAPL +0.84%, looks at expanding its business interests because of lower sales growth and decline in profits, as well as a tax crackdown in China. Solar panels are relatively easy to manufacture and require sand, something India has a lot of.”

Not just sand. India has a lot of sunlight, the principal component of Solar power. Development of commercially successful solar power would be an enormous step for Indian plans for energy self-reliance.

(Workers add the finishing touches to solar panels at the Gujarat solar park at Charanka village in Patan district, some 250 kms from Ahmedabad, India, April 14, 2012. courtesy WSJ.com Sam Panthaky/Agence France-Presse/Getty Images)

3. Shiller’s Tale Risk and NaMo

Such a massive investment doesn’t take place without total confidence in the prospects for the Indian economy and a very high degree of trust in India’s leadership. Read the quotes attributed to Masayoshi Son by the Economic Times:

  • India’s economy is on the cusp of the “hockey stick” curve before takeoff, and has the potential to overtake the United States within 25 years … it will be India and China fighting for the number one and two positions this century after overtaking the United States. … I would like to participate in this exciting moment, as we participated in China’s hockey stick moment … That’s why I am not just saying these beautiful words, but I am saying it with the money. I am really interested in participating in India’s hockey stick moment …”
  • “Son added that the country today had the right leader that “you should be proud of””.

China’s hockey-stick of growth was made possible by the brilliant leadership of Deng Xiaoping. Japan has seen first hand how Deng Xiaoping transformed China while pathetic nepotistic Indian leadership kept India mired in an economic swamp. For Japan’s Masayoshi Son to speak of a potential hockey stick moment for India, a moment that could rival China’s moment under Deng, is a statement of enormous confidence. And such confidence leads to big bets like the one he made this week.

And this increase in confidence about India seems pervasive, at least among global investors. Read what Daniel Altman, adjunct professor at New York University’s Stern School of Business wrote this week:

  • “The Baseline Profitability Index (BPI) is back for its third year with some answers, and Narendra Modi’s India is the place to start.”
  • “But the big story in the BPI this year is India coming out on top, with growth forecasts up, perceptions of corruption down, and investors better protected following the election of a government led by Prime Minister Narendra Modi

What you are seeing is the concept of “Tale Risk” coming true in practice. This clever term was coined by Nobel Laureate Professor Robert Shiller of Yale in March 2014: 

  • Fluctuations in the world’s economies are largely due to the stories we hear and tell about them. Since Prime Minister Shinzo Abe assumed office in December 2012 and launched his program of monetary and fiscal stimulus and structural reform, the impact on Japanese confidence has been profound. According to the International Monetary Fund, the output gap – the difference between actual and potential GDP – narrowed from -3.6% in 2011 to -0.9% in 2013.”
  • He [Abe] sticks to the script, telling a story of taking aggressive and definitive action against an economic malaise that has plagued Japan for decades. He inspires confidence; I felt it immediately.”
  • “Abe is also described as reviving national patriotism, even nationalism. … I think it may be a central part of his story, too. Nationalism, after all, is intrinsically bound up with individual identity. It creates a story for each member of the nation, a story about what he or she can do as part of a successful country

We applied Shiller’s Tale Risk concept to Narendra Modi on March 29, 2014 in our article Why Are They Upgrading India Now? – “Wave” or “Tale Risk”?   

Frankly, the application of Shiller’s Tale Risk may be a better fit for NaMo than for Abe. Because, Prime Minister Abe has been greatly aided by the unprecedented stimulus policies of Bank of Japan Governor Kuroda while Reserve Bank of India Governor Rajan (pronounced Raajan) has not, correctly we might add, opened floodgates of monetary stimulus in India.

Shiller’s comments about “Nationalism“, “impact on confidence“, “being a part of a successful country” apply to Prime Minister Modi not just within India but globally. NaMo’s nationalism is not jingoistic like China’s. It is a beacon on the hill type of nationalism that is based on successful & respected ideas for the World like Yog & Dharma.  

After all, the most successful realization of Shiller’s “Tale Risk” concept was the leadership of President Reagan. That type of transformation of a large country is what Prime Minister Modi seeks to deliver in India. It won’t be easy but we are confident he will succeed.

 

* The Gayatri Mantra reads:

 ॐ  भूर भुवः स्वः तत् सवितूर वरेण्यं भर्गो देवस्य धीमहि  धियो यो नः प्रचोदयात्

(Om, Bhoor Bhuvah Svah; Tat Savitoor Varenyam Bhargo Devasya Dhimahi; Dhiyo Yo Nah Prachodayat

 

 

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