“Your country’s problems are affecting us,” complained my cousin, who is a senior executive with a vehicle component manufacturing factory in Chennai. He added that their factories are now operating at 10 percent to 15 percent capacity, and that he was not sure if they will be in business for long if demand does not pick up.
The global economic slowdown is revealing itself in India in many ways. News reports here are not that different from those in America. For instance, Honda not only has postponed an expansion of its manufacturing operations in India, but also is trimming production in its existing plant.
I met a businessman who owns a factory where about 60 are employed. A little more than a year ago, he made additional investments in his factory, importing newer machines from Japan. After all, it was a time when talk was about economic growth and not about a meltdown.
Now, this businessman is worried about the high levels of uncertainty and fear: “For the first time in my life, I don’t know what to do.”
Airline traffic is down significantly. Passengers frustrated with airline companies engaging in last-minute cancellations under the umbrella of “technical difficulties” suspect that perhaps the real reason is that they don’t want to operate money-losing flights with very few passengers. The financial liquidity crisis has left everyone scrambling for hard cash, which has led banks and investment firms to pay high interest rates of more than 11 percent for deposits for two or more years. Naturally, interest rates on loans have shot up as well.
Senior-year students in engineering and computer science who were looking forward to flashy employment contracts only a few months ago are now wondering whether they will be able to find any job.
The state of the economy is reflected even in “arranged marriages,” which are quite the norm in this part of India. (No, mine was not arranged!) Apparently, parents of girls are shying away from potential grooms who are in the information technology field because of concerns over economic security.
In all these situations, there seems to be an underlying frustration — sometimes explicitly articulated in conversations and news reports — that America has let the world down. In her column, spiced with humor and sarcasm, the editor of a leading weekly financial magazine notes that the pizza parlors her daughter loves are quite empty these days. She goes on to explain how it is connected to, you guessed it, the mortgage mess in America.
Against such a background, it did not help that television news stations seemed to have on endless loop footage of an Iraqi journalist hurling his shoes at President Bush. While the journalist who flung his shoes was making a statement strictly about U.S. involvement in Iraq, here, those same shoes flying toward Bush also are seen as a statement about everything that has gone wrong under U.S. leadership, both on Pennsylvania Avenue and on Wall Street.
I am now worried way more than before that it might take the rest of the world quite a few years to once again have trust and confidence in anything American, given how much America is viewed as the source of this financial pandemic.
There is not much of a hope that the new president would be able to turn things around any time soon. One person compared it to the typical joke about the common cold: it lasts a week if untreated, and for a full seven days if treated with medicines. I should note that this pessimism about the capability of an American president to overcome an economic crisis of such a magnitude is separate from the overwhelming support for Barack Obama himself.
One of the toughest questions about the economic meltdown — and a very simple one at the same time — came from my mother: “If this problem is so severe, then how come nobody saw it coming?” I simply shrugged my shoulders because I had no answer. So, I chose to focus on something easier — the delicious breakfast she had cooked.
Published in the Register Guard Dec 16, 2008
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