Feb 2019: New Economic Order: 2019

The Year 2019 has started with great excitement — the world was waiting for the World Economic Forum, at Davos, to address the disruptive changes that are threatening its current order; closer to home, Indian Businesses were looking forward to Prime Minister Modi’s last budget before the General Elections, scheduled for between April and May 2019.

World Economic Forum, at Davos — Globalization 4.0

The theme of the World Economic Forum, this year, was “Globalization 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.” The world, right now, is witnessing the simultaneous and, often, contradictory development of multiple spheres of human life. According to the founder of the Forum, Klaus Schwab, “the challenges associated with the Fourth Industrial Revolution (4IR) are coinciding with the rapid emergence of ecological constraints, the advent of an increasingly multipolar international order”. These changes are redefining what it means to be globalized, and, “Globalization 4.0 has only just begun, but we are already vastly underprepared for it.”

Business and Investment elites came together, from the 22nd to the 25th of January, nestled among the snowcapped peaks of Davos, to discuss and deliberate over this uncertain state of affairs. Even before the event had formally begun, the energies seemed to be at a historical low, with some very important names missing from the attendee list, including the President of the United States, Donald Trump; the Chinese President, Xi Jinping; the Prime Minister of the UK, Theresa May; the French leader, Emmanuel Macron. Each of these leaders was busy dealing with their own form of domestic conflict.

The keynote address, at the Forum, was given by the newly elected Brazilian president, Jair Bolsonaro. In his speech, he drew attention to the tight-rope between business interests and environmental protection that twenty-first-century states have to walk on. The leader had, during his election campaign, declared, his willingness to harvest the riches of the Amazonian rainforests. Together with the changing nature of trade, environmental costs of unbridled industrial expansion, of the past few decades, was another important theme discussed at this year’s WEF meeting.

Interim Budget of India 2019 – The Agrarian and Middle-Class Emphasis

The need for digitization, or the upgrading of organization systems with the use of modern technology, was also a running theme in the Interim Budget presented by the Interim Finance Minister, Piyush Goyal. On the morning of the first of February, the Modi government presented its last budget, which the FM likened to “a totem of the nation’s future growth and development.”

The sectors that received the government’s favor was the Agrarian and the ‘middle-class,’ with extension of farm loans and changes in the income tax rebates available to individuals. The Small & Medium Enterprises (SME) space in India suffers from a lack of investment, and it is only when the industry is emphasized on an international scale, that foreign investors would look forward to entering and expanding the Indian market.

On the brighter side, the current government’s dedication to the Digital India cause is one of the biggest policy drives in the world, currently. Whether or not the scale is achieving equivalent results remains unclear, considering the social costs of the implementation of Aadhaar, Demonetisation as a means to a digital cashless economy, and so on. Nonetheless, the government announced a national forum for Artificial Intelligence (AI) development and declared its vision to involve the middle-class and the smaller businesses into the digital ecosystem.

At Karavan, the production of knowledge that helps a business maximize the returns on their resources, diversify and develop their processes, and maintain their organizational values, is central to how we look at the process of internationalization. Markets all around the world are, for the first time ever, in the twenty-first century, opened to each other by the means of the Internet, and Digital Technology. A rapid exchange of data and information have simplified global trade for Small and Medium Enterprises, on a global scale. In the coming future, expansion and inclusion are going to become the primary principles of business organization, underlined by a free exchange of information and resources. The growing B2B interaction on digital platforms is representative of a similar paradigm and the success of such initiatives is the most we can hope for, for the International Trade in 2019.