When was the last time you have seen a year go by without a war in some form or the other, in some scale or the other happening somewhere around the world. The famous political theorist, Francis Fukuyama, famously commented: the end of the Cold War marked “the end of history,” a triumph of capitalist, liberal Western democracy over competing ideologies. We had anticipated that a mono polar world would present itself less and less of conflicts. Alas that was not to be. Some where or the other, dictators were overthrown and some other dictators overthrew popular governments. Religious and ethnic strife has been the bane of our existence. Not to mention the leading cause for war and troubles all over. And this century has not been any different. Open warfare did come down but not wars. War became tech heavy. New additions like cyber wars and information upper hand became more popular mechanics for waging war that quickly caught on. Not that standard military versus military went away. The number of boots and bullets decreased and the back-room guys came in. More and more wars were being fought in the screen of computers and television screen and cyber muscle and drones played themselves up. Actually, google lists 37 conflicts in the last 24 years, big and small. Not that it had been any different the last century. Only the technology differed.
And so for elections too. In India it is so ubiquitous that we call them “election festival” I am not sure if that is the correct description but it is there and everyone uses the words. If not a country (Parliament) then perhaps a state, or else some local ones, somewhere, everywhere in the country, an election is taking place. Believe it or not, in the next 12 months or so, more than 30 countries all over the world is going in for a central election including of course India and the United States. Population wise, more than 30 percent of the global population will be casting their votes to choose their government. The dance of democracy!!!!
As investors, what is in it for us? Apart from the choice of our preferred side winning the battle for square kilometers or the preferred candidate/party forming the government, how does it affect us locally here in India?
In the short run both these things are disruptive to the flow of life. Wars for obvious reasons of course. Like the price of energy commodities can get challenging like it has in the Israel Hamas conflict. The availability of food grains can diminish sharply like it has post the Russia Ukraine conflict. The regular events in Africa impacts the population directly leading to untold misery, forcing massive migrations causing greater strain on the world’s ability to provide assistance and relief. But then, they have a shelf life, thank the lord. Conflicting parties run out of money, ability, willingness, what have you and simply give up. There are victors and vanquished. But it does come with an end date. And then life begins anew at these places. Creating demand for reconstruction and renewals. In life and living. Which of course puts the economic wheels chugging along adding those minor percentage points to global GDP, consumption, happiness index et al.
Elections are disruptive too. Administration goes for a toss as every one and their favourite camp guards go on mission to present their masters in the best light possible. To chose the leader for the next tenure. Particularly for India, elections do have a lot of consequences but for the broad economic canvas, the macros remain the same. India is in a sweet spot. A growing industrious and consuming population. Aided by strong fundamentals. A sure shot recipe for continued prosperity over the next decade or so.
I have been writing on the need to stay focussed on our investment goals over the last so many ears and every time I reiterate the same. There is nothing we can do to control global situations. But surely there is a lot of gain in staying the distance and being in the race. Remember, the road to prosperity is a marathon, not a sprint.
Great to hear such an empowering and grounding voice amidst these times of institutional turbulence
Your narrative is indeed powerful, the subtext even more so. I am — an admission: I do love your writing, it is gorgeous — totally in sync with the logical build-up you have offered to readers of your blog.
Waging peace (the only other alternative to waging war) is a die-hard socialist’s ultimate fantasy. The la-la land of peace is never to be found; indeed, war is as old as civilisation. That said, no, we haven’t lately seen a year without war; we have never seen a decade without conflict.
The fact is that we are, in the last and final analysis, mere mortals. As investors, we have our foibles. Countless backtrackings, numerous hesitations, severe bouts of doubt (and let’s not deny it, extreme avarice with regard to everything that spells ‘money’) — those are our stock in trade.
The forever-running saga of the victor and the vanquished, as your blog notes, has little to offer to investors. Little, except a sense of paranoia and longing. As a reader, I shall seek your views on the last bit.
Hurrah to you, and to your blog. May your quill produce profound words, may we derive a great deal more from your thoughts.
May the ballot be forever mightier than the bullet.
Arrivederci.
Quite an insightful article on how elections and wars have a major impact on investments. Yet on the personal front, staying focused on the investments decisions while keeping a watch on the global issues simultaneously is crucial to stay in the game.
Coming from the master, this is high praise indeed.
We will joust on the point you made. Anon.
And I promise to increase my writing frequency.
So very rightly encapsulated . Tech heavy Wars, more so Technology know-how is the new weapon in a Country’s arsenary . And to add to this , the World Economy is about to witness so many Elections including India, the largest Democracy -we are all set for too many upcoming events . India is a good destination to be and so is Indian Markets. Important to stay focused on our .. thanks for the advise!
Well said prasunjit… we need to have longterm view and stay invested to enjoy the compounding benefits.