When the recession ends, it will not be business as before – or rather it will not be business where it was before.
While most “Third World” countries have been relatively prudent, the governments of the USA and UK have contracted levels of debt that will impose a crippling burden on their taxpayers – including business taxpayers – for years to come. At the same time, the legislative programmes of the old Western powers seem designed to discourage business.
So when the day comes – as it will – when business starts expanding again, the expansion may not be where it was before.
International entrepreneurs have been looking favourably at India for some time, and there are good reasons to suspect that India’s competitive advantage will be increased by her refusal to follow the West’s panic borrowing in response to the recession.
Of course, the current general election in India – basically a street fight between the leftists and the religious – is an unedifying sight.
However, there is more to India that its central government. Indeed, there are many Indias.
Some of her 28 states are indeed Third World, but others could give lessons to the West.
The western state of Gujarat, for example, was one of the first to adopt unashamedly pro-free market policies. It is not surprising that it was also one of the first to enjoy substantial economic development – with such success that this one state now contributes over a quarter of India’s total tax revenue.
Even in a global recession, there are still places where free enterprise can flourish – and those are the places to be when things begin to recover.