Monday, June 04, 2012

Growth in the Western Economies....

Once upon a time there were 10 friends. They all thought it would be good if we all started a business together. They started a factory and in the beginning it was all supposedly good.
But slowly everyone realised that although 7 friends were very hard working; 3 of them were not exactly good for the group. One of them lied a lot; the second wasn't very hard working and kept partying all day with under-age girls and the third was just lazy. One day all the other seven decided that for them to keep the business afloat the other 3 would have to leave the group. And so it was decided that Greece, Portugal and Ireland would leave the Euro Zone on 1st of January 2013!
  • For the West to remain an economic power I think that the Euro Zone must break and only the stronger economies should remain within the Euro Zone. The countries I think should be in Eurozone are Germany, France, UK, Spain, Italy, Belgium, Netherlands, Luxembourg, Austria & Sweden. That will make it a stronger economic area and will surely bring stability to the region & the world. With the stronger economic area we get a stronger currency and ultimately growth.
  • But then there should be growth in every sector. I believe for any economic sector to progress, there should be strong financial fundamentals, good manufacturing, efficient transportation, healthcare and housing for all. I strongly believe that with all the manufacturing moving to India and China, the West has found a huge hole in its pockets. The Euro Zone must try to innovate and manufacture high quality items in this area. Things like smart phones, Integrated Circuit chips, Satellite, Air-planes, etc should be the main focus and this can help in the growth of manufacturing in this zone.
  • Also, with Rising Inflation in Asia I think that the growth in that economic zone will slow down  in future. There are two ways to move ahead faster than others; first is you run fast and leave others behind and the second is that the others slow down. So, it comes to such a situation that for the West to grow faster, they need to pray that India and China slow down a bit!
  • We can only hope that the West doesn't manufacture everything in China. This weekend when my wife and I went to the supermarket to do some shopping for the Queen's Diamond Jubilee; we found that the commemorative mugs for this occasion were "Made in China!" - This is an absolute joke. For the West to have growth we need some - COMMON SENSE! And may be some good luck.
  • And lastly, when countries like India and China change from "Developing Countries" to "Newly Developed Countries" I think the salaries will go up, the cost of living will go up, the good manufactured in India and China would not be as cheap as they were 10-15 years ago and the companies that outsourced manufacturing to India and China would have to bring back the manufacturing and that will bring growth back in the West.
I look forward to watching what happens to the West in the next 2-3 years and hope for the best...

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