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

US Sends US$100m Worth Covid-19 Aid to India

The Biden administration has committed to delivering more than US$100m worth of supplies to support India, battling one of the worst outbreaks of Covid-19, including oxygen and related equipment, PPE and support for frontline health care workers, testing and vaccine manufacturing supplies, therapeutics, and public health assistance.

World Health Organization (WHO) to Set Up Mobile Hospitals to Help India Tackle Covid-19 Crisis

In the midst of the current shortage of hospital beds, testing equipment, oxygen and medicines across India, the WHO is procuring mobile field hospitals for most affected areas and bringing in oxygen concentrators to help meet the increased demand.

India to Waive Customs Duty on Covid-19 Vaccine Imports

Amid the outbreak of the second wave across the country, the Indian government will provide expedited approval pathway and waive customs duty for several foreign vaccine makers, to ramp up the mass vaccination drive for all citizens over 18 years of age.

India Launches Phase Three Vaccination Drive

India launched the third phase of the Covid-19 vaccination drive for all adults above the age of 18 years with an aim to expand the inoculation programme amidst the second wave of the pandemic.

India and UK Announce US$1.4bn Trade Deal

India and UK announced a new trade deal worth US$1.4bn private-sector trade and investment, including a c.US$340m investment by the Serum Institute of India ahead of the virtual summit between Prime Minister Boris Johnson and Prime Minister Narendra Modi.

US-India Launch Climate and Clean Energy Agenda 2030 Partnership

A new US-India Climate and Clean Energy Agenda 2030 partnership launched by the two countries to mobilise investments, demonstrate clean technologies and enable green collaborations in India and create templates of sustainable development for other developing countries.

India’s Slow Economic Activity in April May Impact Quarterly Gross Domestic Product (GDP)

As per UBS, economic activity in India decelerated in April with most states extending mobility restrictions to flatten the curve of Covid-19 infections, which is expected to adversely impact GDP growth in the June quarter.

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

Media coverage in India this month largest focused on the deadly second wave of Covid-19 across the country and the subsequent lockdowns enforced by various state governments to control the outbreak along with also focusing on the implications of the various state election results.

 

Daily New Covid-19 Cases Cross 400,000 Threatening Breakdown of Healthcare Infrastructure Across Country 

 

India’s second wave of Covid-19 infections crossed 400,000 daily cases in the country on the last day of April, the world’s highest single-day total, to take its total tally of infections to over 19 million. This massive surge in the outbreak, driven by a new double mutant variant, has continued to overwhelm hospitals and doctors and resulted in shortages of hospital beds and several crucial supplies such as oxygen and medicines in many parts of the country. Media publications focused on the impact of this second wave on the healthcare system and the economy.

 

An op-ed in Hindustan Times outlined why leaders across the country needed to synergise on resources, energies and mindshare to minimise the damage of the pandemic, both to curb the rising number of cases and to reduce the potential economic impact.  “We are facing a war on three major fronts — medical, financial, and a strained internal and external environment, which predates the pandemic and persists… Though belated, a sense of national emergency is kicking in among citizens. We have an excellent communication system with deep penetration of mobile phones, which is useful for planning. Aadhaar is a robust mechanism to coordinate and control vaccination and lifesaving drug delivery.... The first principle is the selection and maintenance of a singular unambiguous aim. We must have the aim of fighting the health and financial crisis, and maintain it throughout…  Second, the maintenance of morale. This has three elements. Citizens have to be given the true picture, no matter how grim; shown the roadmap for the way out; and demonstrated quick wins... The last principle, sustainability, is to generate the means by which fighting power is sustained and freedom of action maintained. Which is where the larger issue of the economic front kicks in. Without that engine grinding back, the war against the pandemic will start sputtering.. It is not the absolute lack of resources or knowledge that defeats nations but hubris of past victories, underestimating the adversary, and not altering strategy when required.”

 

An op-ed in Livemint focused on why reducing costs and increasing capacity of testing for mass accessibility has become important for the country to identify new infections and contain the spread of covid, given the signs of vaccine shortage and the large number of daily cases in the second wave. “Complete vaccination coverage could take many more months at the current rate of around 2 million per day. Also, vaccine efficacy against new mutations is not known, nor the duration of immunity afforded by jabs… Therefore, widespread, efficient and equitable testing remains a critical aspect of our overall response to the pandemic. The current testing rate in India is lower than what it needs to be. For better pandemic control, the testing dynamics should be such that anyone who wishes to get tested is able to get one. In low-to-middle-income countries like India, affordability is a key determinant of testing uptake…. A careful cost-benefit evaluation of healthcare innovations, such as novel testing strategies, methods and technologies, will play a key role… The ongoing second wave has shown that our fight against covid is far from over. Establishing an affordable, equitable and sustainable system for testing is crucial in tackling the current pandemic. Moreover, the improvements we make now in India’s testing framework will hold us in good stead for a long time to come.”

 

Finally, another op-ed in Hindustan Times detailed how unless a robust data system is designed, built and maintained to accurately track a patient from testing positive up to the outcome of the infection, it will not be possible for India to ascertain realistic projections for the coming weeks and months, which will result in preparation of infrastructure, provisions, equipment, drugs, manpower and capacity being reactionary and, therefore, falling short of the requirements for the current situation. “India is witnessing a second wave of Covid-19 that neither the country nor the government was prepared for… One of the many reasons and certainly one of the most important ones behind this chaos and crisis is the failure to build an adequate data system that is transparent, evolves as per developments and is flexible enough to be moulded according to varying requirements across different states.… Deaths in many states are still counted on the basis of reporting from hospitals. This suggests that the deaths of patients while under home quarantine or while waiting outside a hospital for a bed, with or without a Covid-19 test report, are never included in official statistics… Neither the pattern of spread nor the behaviour of the virus has remained the same as last year when the pandemic started. The system designed to capture this evolution objectively needs to adapt to these changes. Different states are witnessing different patterns of this spread… The governments and the people need to realise that it is only through transparent, open, accessible and accurate data systems that accountability and responsibility can be established for pre-emptive and timely action. It is also the only means that remains to rebuild trust and hope in the government, going forward.”

 

State Governments Enforce Lockdowns to Combat Outbreak of Second Wave of Covid-19 

 

Amid the resurge in the Covid-19 cases in India, several states including those of Maharashtra, Delhi, Kerala, Tamil Nadu, Madhya Pradesh and Uttar Pradesh, have imposed restrictions, including full lockdown and night curfew to contain the spread of the virus. Media publications focused on potential impact of these lockdowns on the economy.

An op-ed in Livemint focused on why the current lockdowns imposed by the states is unlikely to a catastrophic repeat of last year both in terms of economic activity and impact on employment, unless there is a national lockdown of the same severity. “The rapid spread of inflections during the second wave of the pandemic has overwhelmed the health system in many parts of India. State governments have been forced to impose restrictions so that the health crisis does not get worse... The lockdown index from Oxford University shows that the current restrictions in India are nowhere as stringent as the national lockdown imposed last year… Last year’s experience shows that household savings spike during lockdowns, but then are quickly spent down once restrictions are lifted… Second, governments as well as the private sector now have experience of managing during lockdowns. The most important lesson is that the movement of goods should not be hindered even if the movement of people is... Third, there may not be a synchronized global economic downturn this time around. The two largest economies in the world seem to be recovering well... Right now, vaccination is the policy response with the highest positive externalities. There is a strong case to prioritize vaccination above other containment policies, because these jabs will protect both the health of citizens as well as their incomes.”

 

An article in Indian Express covered how governments may have to respond by providing greater support to the economy than has been visible so far given they may end up imposing even stricter and extended restrictions on activities to curb the spread of the virus in the second wave. “Several states have, in response to the spurt in cases, begun to impose restrictions on economic activities. While the restrictions being imposed are, as of now, less severe than those imposed last year, their impact has begun to be felt in the broader economy. Nomura’s India Business Resumption Index fell to 83.8 in the week ending April 18, down from 99.3 a month ago… With the pace at which cases are rising, the worry is that governments may end up imposing even stricter and extended restrictions on activities to curb the spread of the virus. This will further depress economic activities and cause disruptions in supply chains, which coupled with higher commodity prices, will exert upward pressure on inflation… Ratings agency, Fitch, which recently affirmed India’s “BBB-” sovereign rating, has warned that the outlook is negative, as there continues to be uncertainty over the country’s debt trajectory following the deterioration in public finances.”

 

Another op-ed in Hindustan Times detailed why different states need to be incentivised to adopt a proactive approach in dealing with the pandemic until the second wave recedes, which can include additional grants tied to better testing and contact tracing or targeted hand-outs to sectors worst affected by the lockdown and wage support to companies to ensure last year’s large-scale layoffs are not repeated.  “India imposed one of the strictest lockdowns in the world when the Covid-19 pandemic struck last year. This took a heavy toll on the economy. Gross Domestic Product (GDP) contracted by a massive 24.4% — the largest among major economies in the world — in the quarter ending June 2020. … The surge in new infections has resulted in states and cities imposing localised partial lockdowns, which will hurt the economic recovery that was underway… The pandemic has exposed fault lines in India’s fiscal federalism structure like never before. State governments did most of the heavy lifting during the pandemic. It is déjà vu for them as cases are surging. Unlike the Centre, which has been able to compensate for its revenue loss through routes such as increased taxes on petrol-diesel, states have taken a beating in terms of revenue… The government hopes to vaccinate 300 million people (two doses) by the end of August. Even if it were to take till September, this is a substantial number which, along with non-pharmaceutical interventions, will crush the curve of infections. But for these five or six months, both companies and individuals will need help — and preferably direct fiscal help.”

 

Election Results Announced in West Bengal, Assam, Kerala, Tamil Nadu and Puducherry

 

The four states of West Bengal, Tamil Nadu, Assam and Kerala along with Puducherry, a union territory announced results following voting over March and April.  In West Bengal, which was viewed as a key battleground for the BJP-led National Democratic Alliance (NDA), the Mamata Banerjee-led Trinamool Congress (TMC) won 213 of the 292 seats despite the substantial gains made by the NDA from the previous state election. In Tamil Nadu, the DMK (Dravida Munnetra Kazhagam) beat arch-rival AIADMK (All India Anna Dravida Munnetra Kazhagam) after a decade in opposition. The ruling Communist Party of India (M)-led Left Democratic Front (LDF) is set to retain power in Kerala winning 98 out of the 140 seats, becoming the first government to get a second term in four decades. The NDA is set to form the government in both Assam, the largest state in the North East of India and Puducherry. Media publications focused on the implications of these results for the national political landscape and other upcoming state elections.

 

An op-ed in Livemint covered how the victory for the TMC in particular, exposes the limits of the BJP’s strategy of over-relying on Prime Minister Narendra Modi’s campaigns, without presenting a credible state-level face and why it will now galvanize other local parties all over the country against the BJP. “We must also note the subterranean factors that enabled these outcomes. Here’s what we know. One, local leadership matters. The BJP did not have one. The state voted for Banerjee after mauling her party in the 2019 Lok Sabha elections. Unless national parties have credible local leaders, parties with stronger local faces have an advantage… For the BJP, the dilemma is simple: Will it do better by literally adopting a more centrist political position, or by moving more strongly to the right to embrace its Hindu identity? Its failure in Bengal may be the result of not ensuring a higher level of Hindu consolidation in Bengal, where a fear of demographic change is high among some sections of people… Polarization and other such factors can’t be wished away, but performance also matters. Mamata, Vijayan and Sarma did well because they delivered benefits to people, especially in a crisis.”

 

An op-ed in Hindustan Times outlined that while these election results was not a referendum on mismanagement of the Covid-19 situation in the country given polling in states was over prior to the deepening of the second wave crises, the BJP needs to deliver on minimizing the impact of Covid-19 if it wants to win upcoming state elections in Uttar Pradesh and Gujarat and the general elections in 2024. “Election results in India are often considered indicative of future politics. But, not this time, as it hides, more than it reveals. This is because there is no national mood connecting the results of elections to the assemblies of four states and one Union Territory… First, it would be a mistake to read the results as a verdict against the Bharatiya Janata Party (BJP)-led Centre owing to its failure in handling the Covid-19 crisis. Polling in states, other than Bengal, were over before the situation turned from bad to worse… What all of this means is that nationally, the BJP will continue to remain the dominant player. The fulcrum of politics in states too will now have the BJP (and its allies) on one side and the principal state-level competitor (which could be the Congress in few states but will be primarily regional forces in most states)… The second wave has opened up this furnace, which has the potential to re-mould political equations, but its ultimate political fallout will depend on the response of different political parties in the coming months.”

 

Finally, an article in NDTV focused on why the BJP needs good governance and an overarching political message to work well in combination if it is to expand its footprint in the country's east and south, where the party has struggled to gain traction. “Prime Minister Narendra Modi's party lost an election in a key state he visited frequently before the recent virus surge forced him off the campaign trail, adding to growing signs of a backlash over his government's handling of the world's worst Covid-19 outbreak visit... The focus now will be how well policymakers are able to minimize the socio-economic cost of Covid-19, said Madhavi Arora, economist at Emkay Global Financial Services Ltd. "It could also have implications for 2022 state elections," Arora said, including the major states BJP-held states of Uttar Pradesh and Gujarat… . “"As three strongly anti-BJP regional leaders have emerged victorious, they are likely to be the nucleus of the opposition challenge to PM Modi in the months ahead as he battles the backlash to his mismanagement of the Covid crisis," said Arati Jerath, a New Delhi-based author and political analyst who has written about Indian politics for nearly three decades… The victory for his party in Assam, where a religion-based citizenship act spurred protests, could further embolden the government to implement the controversial law across the country. Still, it failed to remove West Bengal's Ms Banerjee, one of the most outspoken critics of PM Modi's pro-Hindu agenda.”

Key insights and forecasts that show us what is to come

Joe Biden’s Infrastructure Plan Visualises a More Inclusive, Sustainable, and Competitive America

The infrastructure plan focuses on strengthening the value chain of infrastructure development through upgrades to R&D programmes and workforce development programs.

EU-U.S. Research and Innovation Cooperation - A Window of Opportunity

For Europe, a renewal of its alliance with US seems conceivable again after four years of transatlantic conflict, provided the doors to the Chinese market remain open to European companies and investors.

The Strategic Consequences of India’s COVID-19 Crisis

India’s crisis could extend to beyond its borders with new viral strains out of India posing a potential threat of a new global wave besides the country’s lost economic productivity impacting global trade and investment.

The European Union Needs a Clear and Credible Strategy for the Indo-Pacific

The EU’s Strategy for Cooperation in the Indo-Pacific needs reflects an awareness of the Indo-Pacific region’s growing strategic importance but needs To offer more strategic clarity.

Sectors Defined by Science and Technology to See High Growth in Post-Recovery Decade

Productivity growth in sectors driven by Science and Technology – such as biomedical science, green tech – is likely to drive the world economy over the next decade.

US Attempted Shortcut Undermines Peace in Afghanistan

The U.S. troop withdrawal and the air-lifted peace process doubles uncertainty over the possibility of success in formatting a political settlement between the Afghan government and the Taliban.

India’s Economic Diplomacy in South Asia Needs to Change

India needs to reform its institutional hurdles such as policy and bureaucratic delays, eliminate non-tariff barriers and other trade barriers and increase its investments and trade with neighboring countries to reap the benefits of greater regional and economic integration.

China-Germany Relations at the Crossroads

The political transition in Germany comes at a crucial moment for its approach to China and with China-German relations becoming a campaign issue, the next government might be less positively inclined toward Beijing than Merkel was.

Microfinance Can Play a Key Role in Building a Resilient India

Microfinance institutions has had a far-reaching impact on financial inclusion and have the ability to promote financial literacy and complement their operations with social development projects and community-connect initiatives for India to build a more resilient economy.

The Climate Change Battle Can’t be Won Without Industry Action

While the Indian industry has begun to take on new initiatives on renewable energy and electric mobility, the war against climate change cannot be won without deep decarbonization of industry and will require major shifts over the next 30 years and more.

The Key Events Driving Global Instability & Opportunity

Big Picture TEST Metrics for the US, India and China, May 2021

The Indian economy PMI reduced to 55.4 in March from 57.5 in February as renewed lockdowns curtailed a resurgence in COVID-19 cases and dampened both domestic demand and output. Both exports and imports grew by 81% and 54% respectively over the same period last year when the national lockdown was imposed driven by better demand conditions in the developed markets. No further rate cut was announced by the RBI during this month.

 

The official China manufacturing PMI grew in March to 51.9 from 50.6 in February indicating the overall manufacturing industry has continued to pick up. Additionally, trade metrics have continued to improve with improving global demand adding further momentum to a solid economic recovery, with China’s exports and imports increasing by 31% and 38% respectively over the same period last year.