Ideas

Peace

In a world set to reach nearly 10 billion inter-connected people, power will come from creating peace, prosperity and freedom so that we can make breakthroughs in how we live together, and this requires a transformation in the very definition of power, and the purpose and principles by which it is exercised

GPC’s Macro Thought Leadership

GPC’s research focuses on the geostrategic changes in the world and the implications of for peace, prosperity and freedom. Our analysis seeks to find the patterns and identify the new forces that are the signs of our times and will determine the future of the world


The world is in a historic transition of great power hegemony, world order, population and resources which will change the very nature of civilisation. These transformations create discontinuities and a dynamic canvas on which the world’s future will be written

The 21st Century has been widely predicted to be the Asian Century, in which the continent, home to 60% of the world’s population, will become the world’s dominant economic, political and even cultural force. Within this continent of 49 countries, two will disproportionately impact the trajectory of the 21st Century on account of their scale and growth potential: China and India. The relationship between these two countries as well as the trialogue with the world’s current hegemon, the United States, will will be critical to shaping global economic and political trends for generations to come.

 

A modern India lifting a billion people out of poverty will need a large, modern and diversified economy to not only realize the aspirations of people but also to clothe, feed, employ and educate what will become the world’s largest population within the next five years and this will require an India that is open to the world and dedicated to unlocking the potential of its people and its assets

 

We bring our network of business leaders, entrepreneurs, influencers and thinkers who are at the frontline of change across to provide insights into the global issues that are rapidly changing the world and how they see an impact being made for good

 

We recognise the complex and rapidly changing nature of India’s markets and economy as it grows and expands internationally and have focused the firm’s thought leadership on detailed research to generate insights into the macro-environment, market strategy, investment opportunities and challenges to generate attractive risk adjusted returns

We live in revolutionary times. Increasingly political, economic and social volatility is driving change on a global level, creating both risks and opportunities for international investors. Greater Pacific Capital’s thought leadership and investing strategy placed it at the forefront of global change

Selected news that makes the difference

RBI May Raise Key Policy Rate by 25-35 bps to Battle Inflation.

Following, a 90-basis points rate hike in the past two policies, Reserve Bank of India (RBI) may go for its third consecutive rate hike by 25-35 basis points to keep inflation in check as inflation stayed over its comfort limit of 6%.

Modi Government Gives Major Push to Free Trade Pacts as Exports, Job Creation Become Critical.

The Modi government is giving a renewed push to conclude some of the pending FTAs and finalise some new ones, with the aim to achieve the US$2 trillion export target by 2030and address disruptions in global supply chains created by the pandemic and the ongoing Russia-Ukraine war.

Rupee Hits Historic Low, Crosses 80/US$.

Continued interest rate hikes expected from the USA’s Federal Reserve Bank, withdrawal of portfolio investments from India, prospects of a global recession dampening demand, continuing high inflation and a prolonged Russia-Ukraine war has seen the rupee value slide down to over 80/US$ and is further expected to move to 82-83 levels.

PEs, VCs Investment in Domestic Companies Rises 28% To US$34 Billion In First Half Of 2022.

Despite global headwinds of tightening liquidity and rising inflation, the PE/VC investment flow into India has remained robust, recording US$34 billion, 28% higher than the investments in H12021.

India Gets US$1.75bn World Bank Loan for Health and Private Investment.

Out of the total loan, US$1 billion will go towards the health sector, while the rest US$750 million will be in the form of development policy loan (DPL) to fill the financing gaps through private sector investment in the economy.

India Plans to Set Up US$5 Billion Fund for EV Adoption.

The Indian government has set up a US$5 billion fund for the adoption of electric vehicles (EV) in the country by reducing the high upfront capital expenditure for EV ownership, with the US agency for international development (USAID) to provide technical assistance in setting up the fund.

Spotlight on the key monthly news events shaping media coverage in India

This month we look at the world through Indian eyes. Media coverage in India this month covered Prime Minister Modi’s visit to Munich to attend the G7 Summit, Reserve Bank of India’s New Regulations for the Fintech Industry and Correction in the Indian Ed-tech Sector

 

Prime Minister Narendra Modi Attends G7 Summit 2022 in Munich, Germany

 

Prime Minister Narendra Modi recently attended the G7 summit conducted in Germany. During this summit, he held discussions with the G7 leaders and its partners on issues like energy, food security, counterterrorism, environment, and democracy. India is among the five partner countries that have been invited to attend the G7 summit. Various media publications covered how Prime Minister Narendra Modi’s decision to accept Germany’s invitation to attend the G7 meeting was vital in view of the prevalent geopolitical complexities and the top developments during the summit.

An article in Money Control covered why it is important for the G7 to strengthen its partnership with India given major global targets related to green transition and Sustainable Development Goals cannot be met without robust and equitable Indian economic growth. “ India is going to take over the G20 presidency soon. It is also an important member of the BRICS grouping… Since India now has very strong economic and strategic ties with all of them, it does not see this group with distrust. It is negotiating an FTA with the United Kingdom and has re-started negotiations for trade and investment agreements with the EU. As the Indian economy is likely to be one of the fastest growing economies in the post-pandemic phase, partnership with India is attractive for the West… India also has the potential to scale up new emerging technologies, bringing costs down, and making it affordable to other developing countries. Some of the success stories of Indian development experiences can be replicated in other countries through triangular projects with the G7 nations.”

Key insights and forecasts that show us what is to come

A German Gas Crisis will Cause Jitters Across Europe.

Putin is using the threat of a gas cut-off to break Germany’s societal resilience and political will and what is needed now is an EU-wide energy security strategy.

What If the War in Ukraine Spins Out of Control?

The first step toward a good long-term policy is to recognize the novelty of this moment: a major war likely to last for years, festering at the heart of an international system drawing closer to anarchy.

Will the Next UK Prime Minister Disrupt or Cooperate?

With four of the eight contestants in the first ballot being of either Asian or African heritage, this has provided added texture to the debate over Britain’s place in the world, so-called culture wars, and immigration but whether this means a modern, diverse, and open new administration will prevail depends on the interpretation of those three terms.

Biden's Middle East Trip Shows the Long Game is his Aim.

This attempt by the US president at a reset of relations frames his efforts to manage tensions with Iran, support greater regional security cooperation, and manage geopolitical competition in the Middle East – all of which also benefit America’s British and European partners.

US Job Market Provides Hopeful Signs Against Recession and Inflation, but Other Data are Worrisome.

Employment is growing robustly, unemployment is low and stable, and nominal wage growth continues to slow, which should ease inflationary pressure, however the one discordant note in the June data was a decline in labor force participation.

Three Wishes for China-U.S. Relations.

First, normal diplomatic exchanges should be restored and increased. Second, the two sides should find ways to avoid war. Third, the countries should continue developing economic and trade ties, as well as scientific and technological exchanges.

China’s Collapsing Global Image.

China's slipping reputation provides challenges and opportunities for the US – collaboration on international issues is likely to suffer, however it can now more easily work together to create a range of informal coalitions against Beijing to limit China’s access to critical technology.

As the Indian Rupee Touches 80 Against the US Dollar, What Does This Mean for India’s Economy?

It is a sticky wicket to be on for too long and India’s macroeconomic policy response may warrant an immediate response with a medium-to-long term action plan and this would help in also calming down anxious investors, domestic and foreign, who seem to be worried about the rupee’s slide to a level never seen before.

The Rajapaksa Regime Is Gone. What Next for Sri Lanka?

The formation of an all-party government will be difficult because the parties in parliament are an extremely disparate lot, each in stiff competition with the other and given the instability, the IMF package will be delayed, foreign aid may cease, and foreign investment will not come.

Fighting Climate Change Through Trade.

The global arrangement could come to represent a trade deal that addresses some of the major shortcomings that have undermined the legitimacy of globalization in general: namely, the persistent inability of states and markets to resolve concerns about labour, equity, environmental degradation, and the corporate abuse of power.

How to Fix the Broken System for Alleviating Hunger.

These key points—safety nets, immediate action, limits on export bans, better research and development, and thoughtful investment—must guide public and private policy.

The Key Events Driving Global Instability & Opportunity

Big Picture TEST Metrics for the US, India and China, February 2022

India’s Manufacturing PMI was down to 55.5 in December 2021 from a tenth-month high of 57.6 in October, remaining in the growth territory, amid slower rise in sales and new orders, even as business sentiment was dampened by concerns surrounding supply-chain disruptions, COVID-19 and inflationary pressures. Exports and imports grew by 39% and 40% respectively as compared to the same period last year driven by rising international demand for Indian goods. No further rate cut was announced by the RBI during this month.

 

China’s Manufacturing PMI rose to 50.3 in December 2021 from 50.1 in November, slightly above market expectations of 50. The latest reading pointed to a modest growth rate in the manufacturing sector, which is expected to remain subdued at the start of the new year due to uncertainties brought by the pandemic outbreak in Xian and Omicron variant. Exports and imports grew by 21% and 20% respectively as compared to the same period last year.