Rise of Narendra Modi in power

-Suraj Neupane, January 2017

India, a country with ethnic diversity, largest democracy; will never fail to surprise you. From rich billionaires to poor slum, nobody is left behind in the process of exercising the greatest, of its kind, democratic process of election; that gives a sense of inclusion for every individual.

More than the process itself, you need to look at Indian election campaign to understand the real essence of democracy. Almost 50 regional parties fight together with 7 national parties to get elected to ‘Lok sabha’  member of lower house. During this process two major alliances is formed.

NDA, although it stands for National Democratic Alliance but it represents the Hindu nationalist agenda in the forefront. However on the other side, UPA; United progressive alliance is the establishment politics lead by Nehru Gandhi family since India got independence. This alliance has been in power for as long as 60 years since British colony was overthrown.

After partition of ‘Greater India’; Pakistan with Muslim majority while India as Hindu nation, there have been tensions between the two neighbouring nations heading towards war for at least 4 times in the last 70 years of independent. These tensions have raised alarm among the international community because of the fact that both the nations possess nuclear weapons while both have not signed the Non Proliferation Treaty. At the same time, India has seen communal violence between Hindus and Muslims within its territory.  

Although with the history of religious intolerance India is however a secular nation. This background provided Narendra Modi to carve a path to power. By 2002 a border state of Gujarat just elected state government of BJP led by Narendra Modi. Soon after his power the ‘Gujarat Riot’ was sparked with thousand of Muslims being set alive on fire. The allegation still follows Modi where he is accused of doing too little to stop the riot. The ground of human rights related to Gujarat riot United States rejected entry visa for Modi on 2006.  

After winning his first term as chief minister of Gujrat there was a clear message in Delhi high command of BJP that Modi and his team can bring BJP to life. Both Modi and his right-hand man Amit Shah were so powerful they both staged a branding of Gujarat as the model of development for the nation and Modi as the leader to lead this front. It took no longer for Modi to market his leadership capacity around the world  with ‘VIbrant Gujarat’ an event which would bring the world leaders and business investors to Gujarat every year since 2003.

Vibrant Gujarat became more and more talk of the town as Modi started staging himself as the future leader of India. On the other hand, UPA government was heading to its second term; with no strong leadership after Atal Bihari Vajpayee; BJP was in a chaotic transformation from the pre freedom leaders like L.K Advani to post freedom leaders like Narendra Modi. Meanwhile UPA had its bumpy ride of its second phase with 2008 credit crunch dragging the country into grinding halt of GDP growth.

By 2012, Modi and his team was successful to put himself in the position where they can bargain and lobby the high command of BJP to bring him as the face of prime ministerial candidate. UPA unable to deliver the promises made on election campaign and Anna movement ‘India against corruption’ gave Modi a ground to kickstart his PM election campaign. India against corruption was a movement where all indian youths came together to protest against the corruption scandal of UPA government and black money held in offshore bank a/c.

Modi with his clever tactic took the ownership of these agenda as his manifesto for the election campaign. He and his party was using a loophole of election commision law where no source needed to be disclosed for the amount less than 20000 INR. The election campaign portrait UPA and Gandhi family are the facilities of felony crime.

Like a master of the orchestra; Narendra Modi, engaged the whole BJP members along with RSS at the ground level. The engagement was fueled by the Anna moment’s youth voter who have no option than BJP to vote for. This result in the single party bringing the clear majority after 30 years. This is how the BJP government came to power leaded by Narendra Damodardas Modi. And the question lies ahead will this phenomenon be repeated in 2019 too?

{ Read More }

ICT Future of Finland in next decade

-Suraj Neupane, March 2012

It is the ICT (information communication technology) changing phase with more frequency; however, it is well linked with the value chain in business process for the competitive advantage. Considering, Finland’s strong foundation in education, research and development we can forecast the upcoming decade of glory. The expertise develop in sustainable business concept have open the boundary less opportunities in ICT for providing the infrastructure in eco-friendly and emission less society.

On the other hand, software, hardware and networking will be a core business playing its vital role for the growth of the IT based companies. By the time, some company will go for merger looking for venture capital and presence in international market. Lately, the retailing businesses have gone online providing entrepreneur a new platform to reach their costumer which will shape the future way of doing business in Finland.

State funded education with best skilled manpower and infrastructure is the well known characteristic of Finnish education system. Eventually, this will lead to the development of knowledge based community which will be more competitive and productive. R&D project will be focus on innovation, new product design and adding the value of existing product. ICT education (curriculum) will focus in producing market experts who will be both work as consultant on Finland and foreign market.

Those expert, will work for the sustainable business; the new concept where businesses are more eco-friendly, efficient and effective. The role of ICT will be finally linked with these new opportunities. For illustration, a wind turbine in remote place will use sophisticated software for the best performance. Likewise, more and more software and hardware devices will be installed in industries for the optimum utilization of the resources.

Beside these, the focal point of ICT will be the software, hardware and networking. Mobile application and 3D games will be the leading software areas whereas mass data storage for the client like banks, companies and individual (cloud computing) will be the growing hardware business. Furthermore, Internet will be accessible with more devices linked together in the network.

 Finland is exceptionally home of large number of software companies meaning graduate from the university will have a platform to show their competitiveness. In a global prospective by 2021, the influencing sector of development will be the software, where demand from the emerging market is of huge appetite.

ITC companies are the master of the universe, they hold the huge assets, sometime more than a country’s reserve. Being expertise in certain small area with large costumer portfolio make those big companies to bid on successful smaller one. These are many times a balance of take and give rather than a humiliating take over. This process provide with opportunity on both side where small companies will have a financial resources and supply chain in global prospective. On the other hand, bigger companies will exploit the patient right which will increase the service quality. By the coming decade in Finnish ICT companies this scenario will be commonly practice.

The most exciting and successful business concept is online. Dot com boom at the beginning of the millenium have sets its foundation and have a business potential for future. Talking with the structure of Finnish society where more than 80 percent of population is online this concept works at its best. Almost all the company have gone online for support of their business and many companies functions virtually for the sales of their product. This idea works well with cost efficiency and wide costumer reach in the future as well.

Thus development of ICT in Finland will be more or less depending on argument above. These factors will be certainly playing a role in global prospective. Finally, we can argue that Finland with its best IT infrastructure will play a role model for rest of the world and will lead in the sector of ICT for the prosperity of mankind.

{ Read More }

Europe's Diary

-Suraj Neupane, March 2013

”Europe” a continent that discovered rest of the world has a long history of rise and fall. No other continent has gone through so many ups and down, for illustration, Hitler has grown to the power to unite Europe as one, so did, Napoleon Bonaparte.

After the end of Second World War the need to unite Europe was more justified to counterbalance the growing power of Soviet Union.  The communist regime work well and the experiment done on leftist doctrine was successful at some point.

Ukraine and Russia have really done great with the science and technology, weapon and artillery etc. But the west was always against it and the regime had no legitimacy from its people. Russia paid heavy cost for the failure of Soviet Union.  

On the other hand, Europe; had a great foundation for next level of experiment to unite small nations together for the common interest. But this time, apart from Soviet Union, those member country will have their own choice either to join or not with the group of member states.

So far it looks good; by 1993 the treaty was signed between the countries with the common purposed name of European Union. But the epic tale begins when the idea of common currency Euro was on debate. By that time Germany was the player of EU and also it was the leading exporting country in the region. No dough, it pushed other to join Euro zone just to make sure that its export would be appreciated within the region.
However, the monetary policy of Euro Zone seems to be immature that was the only reason why country like Sweden, Denmark and Britain never replaced their legacy currency. There was a debate with in scholar and economist for long time predicting the future of common currency.
After the successful history of one decade now the currency is in trouble. Europe’s exposure of its financial institutions to American toxic assets was the first hint that Euro was not design to be immune from the crisis.
Secondly, PIGS nation (Portugal, Italy, Greece and Spain) was not playing with the same rule as other member state.  Budget deficit of these countries were unsustainable due to zero or negative GDP growth rate. Borrowing cost was as high as 7 percent for Italy at some point.

The borrowing cost grew so high that it was literally pilling the trouble by selling its state bond. European central bank (ECB) intervened Iceland and forced them to take rescue amount of more than 80 billion. But this phenomenon didn't stop there soon; after Iceland, Greece was on trouble now the mess was so big that ECB has to issue its own bond to generate money.  Soon this story continued with Spain, Italy and Portugal.
But what went wrong that Euro zone got in this scale of trouble. It was the fiscal policy of the member state that was not regulated at all or some point.  Country like Greece and Italy didn't have a significant growth rate which could balance the interest and installment for its borrowing so to fill that gap they borrowed more till those states bond were rated to junk by the rating agency.

However, country spending on its social services like health care, education and infrastructure was not scale down in fear of job cuts. There is always a simple formula to understand this complex phenomenon:  State earning (tax revenue) +borrowed loan (selling bond) should be always counter balance with spending (salary+ pension….) +interest and installment paid on borrowed loan.

The other strong reason for the failure of Euro currency was the tax legislation which was different for different member state. Global multinational company were using this loophole to redirect their earning to the safe heaven. Country like Netherlands enjoy this tag of safe heaven which was the fascinating story of Google and Starbucks in recent time in UK operation and Iceland invoicing.

{ Read More }

Bullish nature of Gold

-Suraj Neupane, June 2013

Chemistry is not always boring, when it comes to Aqua Regia (HNO3+3 HCl); why? Throughout, my higher secondary I never enjoyed the lesson more than when our chemistry teacher made a complex mixture of two strong acids which can dissolve the gold.

Those memories strike me recently when the market had a bearish attitude on gold. Nevertheless, the similarity of these two natures of gold both in chemistry and market, to surprise, fascinate the audience.

This glittering metal is so stable in terms of value since the money evolved it is always used to reserve centrally for each currency issued by a state.

Then what went wrong? Why did gold crash so deep? Will it bounce back to USD 1800 once again soon? This is what the common folks are seeking answer for. But wait, where are those pundits who soon behind forecasted for gold going as high as 10000 USD.

So what really happened goes behind to 2007, when gold market skyrocketed crossing the entire limit till the end of 2012. By 2007, housing market of US was about to burst and there were clear pictures of crisis ahead. Wall Street was in trouble, investor were in a panic on betting stock. A large proportion of investor started looking for a safe haven, and they ended up with few options.

Among those options there was a glittering metal; gold, sitting around with the tag of “safe haven “. This behavior of investors to add auric in their portfolio drive the gold price initially.

Then came 2008; Lehman Brother, player of Wall Street, investment bank; went bankrupt. Those masters of universe in Manhattan were losing their grip from the financial market and institution was hemorrhaging money. The option was either to go merger or write-down their balance sheet. Treasury was forced to pump billions and billions of dollars in the market. That didn’t make the market calm. Millions of jobs were lost. Soon the driver seat was fulfilled by the economist Bin Bernanke, in Federal Reserve; which slashed the enter banking lending rated equivalent of zero. This made money so cheap to the banker they literally started making record profit since their  worst time of just two quarter behind.

Eventually, this cheap money grows fear among the economist that Bernanke is welcoming the great depression by printing as much money as possible. And the consequences will be the higher inflation. So, how does market counterbalance the inflation? Yeah! That is true gold should be valued more, so it did rise.

If you are thinking these factors is the most influential factor for rise of gold than you are wrong, why? Because gold is more mysterious in market compared to chemistry lab.

There is a nation with average GDP growth rate of more than 7% for last 10 years. It is India; very few believe that India is the world biggest consumer of gold. This metal has been playing a significant role with attachment of traditions and Hindu religion. Last decade India was second nation after China who pulled the highest number of its population from slum to the middle class. This middle class had an appetite of gold as not just the traditional values but equally as investment for future. This factor was on count for driving gold so high.

Wait, what if a country increase its gold reserve? Will the demand surpass the supply and price hike? Yes, it does. BRICS nations have aggressively increased the stock of their treasury with the gold in past year.

The trade surplus of China along is so high that it is sitting on foreign currency pile of more than a trillion dollar. China wants its portfolio to be diverse and more independent rather than just depending on USD. So, it doubtfully gave signal of helping hand toward Europe at the time of crisis by buying ECB bond. This fuelled a speculation among the investor that Gold would be next target of Chinese surplus money. Later it was proven.

These were the main factor pulling gold for the bull case during the time of crisis till late 2012.

Whatever, the reason was, gold really didn’t make the landmark of 2000 USD however it was overwhelmed with the historic points of 1800 USD.

But, it fell so bad like it was inside trading. Why did it happen so fast with a mysterious way?

The reason is simple, housing market in US is recovering, and investors have gained confidence in market which increased market liquidity. More of all, the recovery is on the way signaling increase in non-farm payroll; so the gold stopped rising further.

Why it fell?  It is just as simple as it is. It is all about the guy on the driving seat Mr. Bernanke. Actually this time the genius economists prove that he really can drive it better. He has printed as much money as he wants. He kept interest rate so low for so long. But he never let the inflation go out of his control. Now he plans to increase interest rate.

Now there was fear that gold needs a correction with the adjustment of inflation, demand and supply. So it fell.

Suddenly, India imposes an import tax on gold which was more than 20%. It further fell.

Recently Cyprus got cramped with its exposure of Greece market and has chosen to sell some gold. So supply side eventually exceeded. This time gold really slammed the rock bottom and it bounced for a while.

In conclusion, gold is very stable and good for a passive investor in a long run. The Hindu symbol of prosperity and wealth has never let us down since its existence as precious metal. It is still above the average.

On the other hand, I start finding market character of gold similar to chemistry lab because both need to be fueled with catalyst for change in its property.

Like the post? Please donate

{ Read More }