My hunch is that the Reserve Bank of India will not risk putting all of its
eggs in one basket. But in India most capitalists will have held US dollar
assets in the past, though these are people who most likely will have a
diversified portfolio over time. Judging from the movement of Rupee rates,
the rupee has fallen somewhat after a historic rise in the last couple of
years due to unprecedented forex reserves (mostly USD).
India's export volume is still fairly low, nowhere near China's though there
are specific sectors such as IT, which are highly dependent on the US
market. So a prolonged US recession will certainly hit India but
selectively. It is price of oil that will hit it hard, but some of the
impact is being dampened by comfortable forex earnings. India's high growth
is a product of deregulation, which has led to market widening and market
deepening selectively. This was possible because the capitalist class (esp
the industrial one) is mature and more are joining the ranks (landlords).
But this class-caste hegemony prevents a more fundamental bourgeois
revolution in the countryside that transfers agricultural surplus in a big
way. So both the source and challenge to capitalist growth in India is
dependent on this nexus and only in a limited way to external economic
conditions.
Anthony
On Thu, Jun 26, 2008 at 5:52 PM, Jim Devine <[EMAIL PROTECTED]> wrote:
> when I responded to Anthony at 6:36 AM, I forgot to add: I was talking
> about the very recent past (the last couple of years), which was the
> original topic. ("The population of millionaires grew five times as
> fast in emerging markets as it did in the U.S. last year.") Over the
> longer haul, I'd put much more weight on the rise of India and China
> as industrial powers (though I'd add that the fragility of these rises
> has not been tested by a US recession yet).
>
> (during 2007, the euro rose about 10% relative to the US$, helping
> those holding assets denominated in euros or hooked to the euro; the
> euro price of oil rose about 41%, so that the US$ price of oil rose
> about 51%.)
>
> On Thu, Jun 26, 2008 at 6:36 AM, Jim Devine <[EMAIL PROTECTED]> wrote:
> > Anthony D'Costa wrote:
> >> I am having difficulty in figuring this out: how rising oil prices and
> the
> >> falling dollar create millionaires in countries that have large net
> imports
> >> of oil and their dollar holdings is worth less in domestic currencies.
> I
> >> can understand this for Russia with massive new found oil revenues but
> India
> >> and China the wealth creation is due to something else, at least that's
> what
> >> I think.
> >
> > you're generally right: the fall of the US$ doesn't help those rich
> > folks in countries whose currencies are fixed to the dollar (e.g.,
> > China) directly, while the rise in oil prices doesn't help those in
> > countries that import oil. But it might do so indirectly, since rich
> > folks often diversify out of their home country currencies and out of
> > assets in their home countries. (Often those two diversifications are
> > the same thing.)
> >
> > --
> > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
> > way and let people talk.) -- Karl, paraphrasing Dante.
> >
>
>
>
> --
> Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
> way and let people talk.) -- Karl, paraphrasing Dante.
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>
--
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Anthony P. D'Costa
Professor of Indian Studies
Asia Research Centre
Copenhagen Business School
Porcelaenshaven 24, 3
DK-2000 Frederiksberg
Denmark
Email:[EMAIL PROTECTED]
Ph: +45 3815 2572
Fax: +45 3815 2500
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