From high inflation and tanking markets to seesawing oil prices and growing layoffs, 2008 proved to be a year of great learning for most of us. Overnight, terms that only the financial suits used in boardrooms or over trading terminals — sub-prime, decoupling, Lehman Brothers — came into our bedrooms, threatening our economic foundations. We learnt who the Reserve Bank of India (RBI) governor was and why he is an important man. We met and cursed former Fed chief Alan Greenspan for lowering US interest rates. On the tickers, suddenly company performances were given the go by and the Sensex shivered to the tune of markets in Tokyo, Hong Kong, Singapore, London, New York.
As the fall of giants like Merrill Lynch and the nationalisation of Freddie Mac gave Indian policymakers and politicians a new moral strength (we did this all the way back in 1975, Congress leaders said), we understood how in the new capitalist system the government is the lender, investor and philanthropist of not only the last but the first resort. “Give us tax breaks, lower interest rates,” shouted the various captains of industry. But when these were handed out, the reluctance cutting of airfares by airlines and houses by realtors was an education.
In the year that opens out before us, this is going to continue. Experts term 2009 as the “lost year”, that is, one where we will see a possible global contraction of economic growth. This will affect us here, but only to a slowing down, not doomsday. I believe that while the tract is not the smoothest for India on the highway to growth, there is an element of irrational depression, just as there was irrational exuberance in the three years to 2008. We need to guard ourselves against this depression and move, in silence, towards opportunity — a sweet spot that lies between fear and greed — that 2009 is going to present.