The Business Times

India Surpasses Japan GDP

ndias GDP is now worth 5.5 trillion dollar, this year it surpassed Japan as
the worlds 3rd largest economy next to US and China. It is inching close
towards Chinas GDP which stands at 5.9 trillion dollars. Indias enviable
growth rate of 9.2% is contributed by the robust private consumption demand,
increased infrastructure spending, substantial growth in investment activity and
strong growth in services sector.
There is a concomitant rise in income levels coupled with increasing young
working-age population worked towards increasing the share of discretionary
spending in private final consumption expenditure and raising the savings rate.
Growth of urban population is one of the most important demographic shifts
that were witnessed during the current decade.
Infrastructure is both a cause and a consequence of economic growth during
the current decade. The rising incomes and urbanization boosted demand for
infrastructure investment in sectors such as electricity, roads, telecom et al.

Massive infrastructure investment by the Government along with increased

investment activity by the private sector accelerated overall investment during
the current decade. Government of Indias (GoIs) thrust on infrastructure
development in recent years and the structural policy changes provided the
third big push to the Indian economy, enabling it to achieve inclusive growth
during the current decade (Current decade refers to FY11-FY20).
Indian economy got its first big push with the first phase of economic
reforms in 1980s. The economy recorded annual average growth of around
5.6% during this decade, with significant decline in population below the
poverty line from more than 50% in late 1970s to below 40% in late 1980s.
The second major push came post 1991, following liberalization of the
economy, which helped it to move on to a sustainable higher growth trajectory.
Indias growth performance was even more impressive in the subsequent
decade, with per capita income (at constant prices) rising to 38,408 in FY10,
versus 16,065 in FY91.

Dethroning US Dollar

he role of the US dollar as the worlds leading reserve currency is more

than a status symbol. Since the creation of the Bretton Woods monetary order
in 1944, the role of the dollar as reserve currency has been at the center of
American power. After August 1971, when Nixon ended the convertibility of
foreign-held dollars for US Federal Reserve gold stocks, the dollar has been a
fiat currency whose relative value has fluctuated up and down.
In 2014, despite the worst economic depression in the USA since the 1930s
and despite three decades of US trade deficit, combined with a soaring
Government debt that was then over 103% of GDP, the US Government was
able to finance wars in Syria, Libya, Afghanistan and elsewhere because of the
reserve currency role. Other trading nations like China or Russia who bought
or sold dollar-priced goods must have dollars for trade, so their central banks
invested their trade surpluses into safe US Treasury bonds.
Ironically, that had in effect meant that the US had been able to finance its
foreign wars and trillion dollar military budget using Chinese, Russian and
other nations dollars.
When the Euro threatened the reserve currency status of the dollar in 2010 as
Washington ran annual trillion dollar budget deficits, the Chinese and others
bought bonds denominated in Euros instead to diversify their risk of a possible
US default.
To prevent the emergence of the Euro, Washington launched a financial
warfare operation using key Wall Street banks like Goldman Sachs and JP
MorganChase together with the US-based credit rating agencies Standard &
Poors and Moodys and the US Federal Reserve to prevent the shift to the Euro.
It was called the Greek Crisis. The Euro fell and the dollar was suddenly
safe haven..., for a while.
But other national central banks noticed that the dollar was losing its value, as
Washington continued to print money without limit, in order to rescue the
bankrupt Wall Street banks with what the Federal Reserve called Quantitative
Easing.

The most dramatic point in the IMF report 2014 was the fact that the relative
role of the US dollar in central bank reserves was rapidly declining. Yes, the
dollar was still the largest reserve currency. But whereas in 2000 some 55% of
all reserves worldwide were in US dollars, in 2014 it had declined to 33% and
today it declined even further to mere 20%. And the trend is accelerating. The
IMF listed the Yuan as an official reserve currency in 2018, as it is fully
convertible. It is interesting to note that IMF its statistics in 2014 had the Yuan
falls under the category other currencies. The Other Currency share
according to the IMF had doubled since the US invasion of Iraq in 2003.
Starting from 2013, the central bank of China had been buying gold in huge
amounts to prepare for Yuan becoming a fully convertible currency. With
Russian companies increasingly looking east to China and Asia generally, the
shift away from the dollar accelerated dramatically, it forced US interest rates
sharply higher and significantly increased the pressures on Washingtons
government spending.

A new report by the International Monetary Fund then revealed a

dramatic shift in the role of the US dollar as reserve currency. Some 23
countries in 2014 reported holding Chinese Yuan as official reserves. That,
despite the fact the Yen, much like the French Franc after World War II, was
not yet fully convertible into other currencies. The Chinese were then moving
to convertibility in very carefully measured steps.
Not only did 23 other central banks hold Yuan officially, twelve more had
invested in Yuan without officially declaring so.

The number of Internet users has now reached almost 5 billion, equivalent to
the entire world population in 1987. This compares with 1.7 billion users in
2010 and only 360 million in 2000.* Vast numbers of people in the developing
world now have access to the web, thanks to a combination of plummeting
costs and exponential technology improvements. This includes laptops, phones
and tablet devices costing only a few tens of dollars, together with explosive
growth in mobile networks. Even some of the most remote populations on
Earth can take advantage of the web, thanks to the infrastructure now in place.

The repeated threats and sanctions by US administration from 2014 onwards

against Moscow simply accelerated the refocus of giant Russian companies
like Gazprom and Norlisk Nickel to the huge Asian market. Russian mining
companies, including OAO GMK Norilsk Nickel, the worlds largest producer
of nickel, stepped up activities in Asian markets.

A China-Iran-Russia Triangle
The NATO-led Ukraine coup and ensuing crisis have dramatically accelerated
the trend not only by Russian companies to look east. Other nations realized
they could someday be target of Washington sanctions and were looking to
lessen their dollar exposure. Iran and Russia announced a huge barter deal that
allows the two to skirt US-imposed economic sanctions.
On April 2, 2014, the two countries agreed a barter deal that would reportedly
be worth up to $20 billion, enabling Tehran to boost vital energy exports in
defiance of Western sanctions. Reportedly Moscow would buy up to 500,000
barrels a day of Iranian oil in exchange for Russian equipment and goods.
Russian technical assistance in building two new nuclear plants in Iran were
reported part of the deal, as well as purchases of various metals and perhaps
Russian missiles. The dollar, of course, would play no role. Washington was
furious, but why should Russia or Teheran obey US-dictated measures of
economic warfare when both now were being attacked by them?

China, Russia and other major trading nations had quietly begun to develop
alternatives to using the US dollar for their bilateral trade.

Dramatic shift in dollar role

Internet use reaches 5 billion

worldwide

During May 2014, Russian President Putin signed a mammoth 30-year deal to
supply Chinas energy-hungry economy with Russian gas. State-owned
Gazprom started pumping 38 billion cubic meters (bcm) of natural gas per year
to China from 2018 via the first pipeline between the world's largest producers
of conventional gas to the largest consumer. This deal marked another major
step away from the dollar in international trade as both countries sought to free
themselves from dollar wars or threats of same.
What is emerging is a tectonic shift in monetary relations with the largest
nations of Eurasia to conduct bilateral trade denominated in either Rubles or
Renminbi, or gold.

The explosive growth of internet will allow people to get sophisticated

information anywhere and anytime. It would dramatically change the way
education is delivered globally. Universities globally are looking into
incorporating online courses as part of their curriculum. Popularly known as
MOOC, the concept Massive Open Online Course has gained much popularity
among Ivy league universities globally. Universities have reviewed their
curriculum and agreed that 30% of the required courses could be delivered
through the online mode. This is a win - win situation for both students and
the University administration as it reduces the cost of delivery to students and
translates to lower university fees.
The spread of Internet will augur well for teams of individuals to collaborate.
The low cost and nearly instantaneous sharing of ideas, knowledge, and skills
has made collaborative work dramatically easier, with the help of collaborative
software. Not only can a group communicate cheaply and share ideas but the
wide reach of the Internet allows such groups more form more easily.
Messages can be exchanged even more quickly and conveniently than via

email. These systems may allow files to be exchanged, drawings and images to
be shared, or voice and video contact between team members.

governments. Additionally, the lack of workers will cause wages to inflate

further and industries would need to look into productivity as a solution.

per year. If this trend continues, the ocean may become ice-free during the
entire month of September till 2030s.

Electronic commerce, commonly known as e-commerce, refers to commercial

transactions conducted electronically over the internet will be prevalent.
Singapores e-commerce opportunities would flourish due to strong
investments in IT infrastructure and joint ventures with leading online retailers.

In Singapore, the government may use higher immigration rates as a potential

way to defuse the impact of an ageing population because immigration is often
from younger people. Additionally, retirement ages will set to increase and
could eventually be tied to longevity. Additionally industries (goods and
services) centered on the older populations such as retirement homes would be
much more common. The government in an attempt to cut health spending may
make people pay more for health care and nursing homes.

With the advent of the glacial melt, parts of Singapore would be submerged as
much of our nation lies only 15 m above the mean sea level, with about 30% of
the island being less than 5 m above the mean sea level. According to
Singapores, National Environmental Agency, an increase in the intensity of
weather variability could present significant challenges to the management of
water resources. Periods of drought can affect the reliability of Singapore's
water supply, while sudden episodes of intense rainfall could overwhelm the
drainage system and lead to flash floods which are more common these days.

The very nature of work would also change significantly as the virtual online
workplace becomes mainstream in 2020.
Historically the concept of knowledge work is driving each day to an office,
sitting in a cubicle for 8 hours and then driving home again. A survey by
Deloitte showed that telecommuting is second only to salary as the best way to
attract top talent. Better adoption of broadband, use of collaboration tools and
increased acceptance by management and higher transportation costs would
fueling the growth in telework.

Earths climate change

tipping point to start in 2020

Aging population

Amazon rainforest
The world's biggest rainforest is threatened not only by illegal deforestation,
but also the effects of drought and climate change. Under a "business as usual"

Aging has been evident in developed economies for some time, with Japan and
Russia seeing their populations decline. But the demographic deficit is now
spreading to China and will then sweep across Latin America. For the first
time in human history, the planets population could plateau in most of the
world and shrink in countries such as South Korea, Italy, and Germany. Onefifth and that the number of people of working age will fall to 36 million (from

scenario, nearly third of the jungle will be destroyed by 2020 and it could be
almost entirely gone by 2100. More than 2,000 native tree species face
extinction.

roughly 50 million in 2009).

Arctic sea ice (minimum volume)

With an aging population, there would be increased government spending on
health care and pensions globally. Also, those in retirement tend to pay lower
income taxes because they are not working. This combination of higher
spending commitments and lower tax revenue is a source of concern for many

Ongoing changes in the Arctic include rising temperatures, loss of sea ice, and
melting of the Greenland ice sheet. Projections of sea ice loss suggest that the
minimum 1-day volume is likely to reach zero within the next few years. In
other words, the Arctic ocean will have ice-free conditions for at least one day,

The effects of climate change, such as intense storms, flooding and prolonged
droughts, are one of the trends threatening global food security. Singapore is
particularly vulnerable to fluctuations in global food supply and prices, as 90%
of food products are imported.
Climate changes will accelerate the push towards clean and energy efficient
solutions. Renewable energy sources such as solar, wind, geothermal and
bioenergy are available around the world. Multiple studies have shown that
renewable energy has the technical potential to meet the vast majority of our
energy needs. Renewable technologies can be deployed quickly, are
increasingly cost-effective, and create jobs while reducing pollution.