Investments in emerging nations to revive global eco: Hinduja

New York, Mar 29 (PTI) Viewing the economic crisis as
just a "trailer to the real movie", Non-Resident Indian
industrialist S P Hinduja has said the billions in bailouts by
governments were more like a stop-gap oxygen therapy, whereas
the situation requires investments in emerging economies.

"Giving large sums of money to the very people who caused
the problems in the first place seems very unwise, to put it
mildly," said Srichand P Hinduja, Chairman of the diversified
Hinduja Group.

In a commentary written for US business publication
Forbes ahead of next week's G-20 leaders meeting in London, he
said: "What we are witnessing is the trailer to the real
movie.

"The recession could last anywhere between 3 and 5 years,
possibly even longer. The worst pain is, I fear, yet to come."

"What governments are offering by bailout of financial
institutions and industrial manufacturers is temporary oxygen
in an attempt to stave off the worst effects of the deepening
recession. As nature seeks to correct the imbalance, we have
to recognise that both socialism and capitalism have failed,"
Hinduja wrote in the article.

In comparison, directing attention to the need of
emerging economies would produce immediate results and "enable
the developed world to enjoy the benefits of expanding
economies to create a new consumer market share among the
billions on low incomes and the unemployed throughout the
world."

"The main message is that the developed and developing
worlds have to work together in the present crisis. Only in
this way can the increasing wealth gap between rich and poor
nations, with its fateful consequences of conflict and
terrorism, be avoided," Hinduja said listing out the proposals
that the world leaders should consider at G-20 summit.

Hinduja Group is present across a number of countries in
sectors ranging from financial services, automobiles and IT to
infrastructure.

"Such an approach would reduce present political
conflicts, create better understanding between nations and
bring about global political and economic stability," he said.

Governments in the US and many other developed countries
have taken steps to bailout companies from financial and
industrial sectors to avoid bankruptcies and stave off job
losses, Hinduja noted.

"However, bailing them out by pouring in billions of
taxpayers' money into the system is not the answer for an
immediate revival of the global economy.

"At a purely pragmatic level, what guarantee is there
that the money will not be misused again, particularly when
greed and fear continue to determine human actions? What is
there to ensure that some of the money does not disappear
again through corporate mis-judgement or through undeserved
incentives and bonuses?" he opined.

"Nothing quite like the current economic crisis has
happened before, with financial systems the world over all
failing in tandem... the regulatory bodies, auditors and
rating companies -- in fact, the whole system -- failed,"
Hinduja wrote.

"Chairmen and members of the board of directors failed
too; so have the management and compliance officers. Add to
that the failure of many 'rank and file' employees."

Agreeing that certain banking and other institutions
should be rescued to avoid bankruptcy and job losses, Hinduja
said it has to be ensured that the right teams are in place
and they do not fail just as their predecessors.

Hinduja also called for the revision of the statutes of
the International Monetary Fund and the World Bank on a top-
priority basis to ensure deployment of greater resources from
them to meet the needs of developing nations, which in turn
would fuel US technology exports to advance their economics.

"Nonetheless, industrialised countries should take the
lead by assuring that they will not resort to protectionist
measures. The G-8 leaders should make commitments to this
effect and urge others to cooperate." PTI BJ
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