Thursday, June 24, 2010

Isner-Mahut Liveblog

Xan Brooks liveblogs Wimbledon:

Wimbledon 2010 live blog: 2.15pm: Let's pause for some updates from around the ground. Florian Mayer has now scooped the third set from Queens runner-up Mardy Fish and now leads 6-7, 6-3, 6-4. Kim Clijsters leads Karolina Sprem 6-3, 4-1 on Court One, while Nicolas Mahut and big-serving John Isner are locked at two sets all on Court 18....

3.30pm: OK, am now back from my lunch-break tour of the grounds, where I walked the walkways and cafes, peered into outside courts and shamelessly eavesdropped on snatches of passing conversations. These seemed to run as follows... "Are they showing the football anywhere?" "When he came out, we shouted 'We love you, Roger!' He didn't say anything." "Where can we watch the England game?" "Two salads? That's £34!" (this delivered with the bright, happy air of someone breaking extremely good news) "Who's the one with the funny serve? You know - the REALLY funny serve." "Is there nowhere that we can watch the football?" So far as I can work out, there is nowhere they can watch the football. I assumed they might show it on the big screen by Henman Hill, but it wasn't playing when I walked by 15-minutes ago (perhaps it's on now). However, it does play on the screens in the press area, where most of the journalists seem to have briefly forgotten the tennis. England, in case you didn't know, are currently 1-0 up.

3.45pm: Shall we catch up on some tennis results (I'm guessing the football is being tackled elsewhere)? I stood out by Court 14 and caught the closing stages of Jurgen Melzer's impressive fightback against Viktor Troicki, the 16th seed winning through 6-7, 4-6, 6-3, 7-6, 6-3.... Andy Roddick wins through 4-6, 6-4, 6-1, 7-6 to send gifted, febrile Michael Llodra out of the tournament.... The drama has now moved, lock, stock and barrel, to Court 18. There John Isner and Nicolas Mahut are locked in a deadlock that shows no sign of ending. The pair are tied at 15 games all in the final set of a mountainous struggle.

4.05pm: The Isner-Mahut battle is a bizarre mix of the gripping and the deadly dull. It's tennis's equivalent of Waiting For Godot, in which two lowly journeymen comedians are forced to remain on an outside court until hell freezes over and the sun falls from the sky. Isner and Mahut are dying a thousand deaths out there on Court 18 and yet nobody cares, because they're watching the football. So the players stand out on their baseline and belt aces past each-other in a fifth set that has already crawled past two hours. They are now tied at 18-games apiece. On and on they go. Soon they will sprout beards and their hair will grow down their backs, and their tennis whites will yellow and then rot off their bodies. And still they will stand out there on Court 18, belting aces and listening as the umpire calls the score. Finally, I suppose, one of them will die. Ooh, I can see the football out of the corner of my eye. England still 1-0 up!

4.25pm: News from all-around. Venus Williams is galloping towards the first set against Ekaterina Makarova on Centre Court. Monfils and Beck are into a fourth set.... But none of this means a thing to the Everlasting Zombie Tennis Players on Court 18. They hear nothing but the thud of the ball off their racket and the sonorous tones of their Zombie Umpire. They can think of nothing beyond their next trudge to the chair for a short sit down before the ordeal begins again anew. They have forgotten all about Wimbledon and the world beyond the backstop. John Isner's serving arm has fallen off. Nicolas Mahut's head is loose and rolling bonelessly on his neck. And yet still they play on. The score is now 21-21 in the fifth and final set. This is now, officially, the longest final set in Wimbledon history.

4.45pm: It's ace number 62 for John Isner in the Never-Ending Story of Court 18, a tournament record. But, incredibly, Mahut seems to be coming back at him. He forges his way to the first deuce of the set thanks to a backhand lob that somehow gets over the head of the American, who stands six-foot-nine in his stockinged feet. Both men, as has been established, are now dead on their feet, although the Frenchman looks the marginally less rotten (a few less worms wriggling from his eye sockets). Naturally Isner holds on, He staggers, sightless, to the net and scrapes off a desperate drop volley for a winner. The American now leads 24-23. But inevitably we are still on serve....

5.05pm: In the world beyond Court 18, the Wimbledon matches are won and lost. There are victories for Feliciano Lopez and Nadia Petrova, Venus Williams andGael Monfils. Federer is 2-2 against his qualifier on Court One, while Novak Djokovic and Taylor Dent are limbering up on Centre. On Court 18 it is very different. On Court 18 a match is not won and lost; it is just played out infinitely, deeper and deeper into a fifth and final set as the numbers rack up and the terrain turns uncharted. Under the feet of John Isner and Nicolas Mahut, the grass is growing. Before long they will be playing in a jungle and when they sit down at the change of ends, a crocodile will come to menace them. They are poised at 25 games apiece in a deciding set that is now nudging three hours. I don't know who's going to win this one. Mahut looks slightly more alert and industrious, but Isner (flat-footed, grey about the gills) has a thunderous serve to fall back on. Time and again he falls back on it. Time and again it gets him out of trouble. It keeps thumping against the turf and splatting against the backstop. Mahut is now serving to stay in the match at 25-26.

5.25pm: Isner and Mahut are currently level at 28 games apiece in what people are now telling me is the longest match in Wimbledon history. Over on Court 14, Thiemo De Bakker and Santiago Giraldo are locked at 14-14. This suggests that the curse of Court 18 has started to infect the other courts too. What happens if they just keep going? What happens if, from here on in, every single match at Wimbledon heads into a decider and then decides to stay there, with neither player ever reaching an advantage; with the scoreline simply sailing off the map and into the wide blue yonder?...

5.45pm: False dawns and shimmering mirages out on the jungle Congo of Court 18. For a moment there, I thought Isner was cracking. The man can barely move his feet any more and Mahut still has some bounce, lashing a backhand return for a clean winner. But what John Isner still has is his serve. It is a brutal serve, heavy and reliable. He totters to the baseline, fires some aces and goes ahead 32-31, leaving Mahut to serve to stay in the match for what I am reliably informed is the 2,362nd time. This he duly does and so we go merrily on through the jungle. The score stands at 32-games apiece; the clock at six hours and thirty-odd minutes. It is now the longest match in Grand Slam history....

5.55pm: Is it a dream, a lie, or is John Isner really about to triumph in the longest match in tennis history? The American flicks a backhand return up the line to reach 15-40, with two match points.... So yes, it was a dream, it was a lie. The Amazing Zombie Tennis Pros are not through with us yet. Ha ha ha ha! Ha ha ha!

6pm: The score stands at 34-34. In order to stay upright and keep their strength, John Isner and Nicolas Mahut have now started eating members of the audience. They trudge back to the baseline, gnawing on thigh-bones and sucking intestines. They have decided that they will stay on Court 18 until every spectator is eaten. Only then, they say, will they consider ending their contest.

6.10pm: Let us pause for a brief detour to the land of the living....

6.25pm: The scoreboard is barely visible through the grass and weeds and trails of Spanish moss. It shows that John Isner and Nicolas Mahut are locked at 37 games each in the final set. I'm wondering if maybe an angel will come and set them free. Is this too much to ask? Just one slender angel, with white wings and a wise smile.... [T]he Zombie Umpire has lost his voice and now calls the score in the croak of a crone. Zombie Mahut double faults to allow Zombie Isner a glimmer of hope at deuce. It is merely a glimmer. Mahut comes through and we stand at 39-all.

6.48pm: The sun is sinking and the court is a blur. It is at this stage that Zombie Isner starts to look like Zombie Mahut and the Zombie Umpire stops croaking and starts to chirrup like a grasshopper. In other words, we're here but we're gone. Is anyone still alive up in the stands or have they now all been eaten? It's 40-40. And that's games, not points....

7.10pm: It's 43-43 and John Isner is serving to make it 44-43, after which Nicolas Mahut will serve to make it 44-44. I'm indebted to the commenter who explained that Nicolas Mahut recently knocked the sensor of the net and that this is why the umpire climbed down off his chair and started slapping the cord with his hand, with his mouth hanging open and vomit all down the front of his shirt. For a moment I had hoped the slapping might have been his way of summoning the angel we've all been talking about, the one that will come down and usher the contestants up to their Eternal Rest. But no. Turns out it was just something to do with the net sensor. Isner moves to 44-43. Mahut now serving to make it 44-44. Fingers crossed he makes it!

7.20pm: And so this match goes on and on, on and on. Somewhere along the way, the players have mislaid their names. The man who was once Mahut is now a string-bag of offal. The man who was Isner is a parched piece of cow-hide. The surviving members of the audience don't seem to care who wins. They just cheer and applaud whoever looks likely to make a breakthrough and bring this nightmare to a close. Invariably they are disappointed. The offal looks fresher, possesses a piercing backhand and still throws itself about the court on occasion. But the cow-hide can serve and has the advantage of going ahead by one game and forcing the offal to catch-up. This the offal is only too happy to do. It hits a backhand down the line and then follows that up with an ace, and the score now stands at 45 games apiece.

7.30pm: Let it end, let it end, it's 46-all. It was funny when it was 16-all and it was creepy when it was 26-all. But this is pure purgatory and there is still no end in sight....

7.45pm: What happens if we steal their rackets? If we steal their rackets, the zombies can no longer hit their aces and thump their backhands and keep us all prisoner on Court 18. I'm shocked that this is only occurring to me now. Will nobody run onto the court and steal their rackets? Are they all too scared of the zombies' clutching claws and gore-stained teeth? Steal their rackets and we can all go home. Who's with me? Steal their rackets and then run for the tube. It's 48-48. What further incentive do you need?

8pm: Don't look now but I think the cow-hide has officially expired. John Isner stands at the baseline. He is facing the right way but he is no longer moving and the string-bag of offal peppers him with aces left and right to bring the score to 50-50. But Cow Hide is still facing the right way and that says something. And he is still vertical, and that says something too. What it says, unfortunately, is that the match is not quite over yet.

8.05pm: In the stands, a woman is laughing. She laughs long and hard and her laugh is the sort of ghastly yodel you normally hear in antique horror movies about Victorian insane asylums. "Wa-la-ha-la-wah," she goes. "Wa-la-ha-la-ha-la!" Will nobody drag her out? Call in the goons in white coats. Get this woman to a lobotomy! Mahut is serving to make it 51-51. Wouldn't you know it, he does. He makes it to 51-51, finishing up with an ace.

8.20pm: Wow, is that really the time? I must go home; can't think what's kept me. Wa-ha-la-ha-la-ha-la! Oh yes, just remembered. The tennis. The tennis. Out there on Court 18, our two white-clad derelicts dig deep into the reserve tanks and remember to run again. They move along the baseline, coaxing the ball back and forth, back and forth until Mahut falls over. Is he ever going to get up? Astonishingly, he does. At game point, he pushes Isner into his backhand corner, staggers in to the net and dinks a drop volley. It's 53-53.

8.30pm: "John!" chants the crowd. "John! John! John!" They're either calling for Isner or calling for a bathroom break, or possibly both. I'm still not convinced they want Isner to win any more than they want Mahut to win. They just want someone to win; anyone to win. They just long to be released and to go back home. Possibly via the bathroom. They are chanting "John!" because Isner gets to 0-30 on Mahut's serve and is therefore just two points from victory. Chant all you like, it won't change a thing. Mahut fights back and the score is tied again, at 54 games apiece.

8.40pm: It's 56 games all and darkness is falling. This, needless to say, is not a good development, because everybody knows that zombies like the dark. So far in this match they've been comparatively puny and manageable, only eating a few of the spectators in between bashing their serves. But come night-fall the world is their oyster. They will play on, play on, right through until dawn. Perhaps they will even leave the court during the change-overs to munch on other people. Has Roger Federer left the grounds? Perhaps they will munch on him, hounding him down as he runs for his car, disembowelling him in the parking lot and leaving Wimbledon without its reigning champion. Maybe they will even eat the trophy too. Growing darker, darker all the while.

8.45pm: A tweet, a tweet from Mr Andy Murray. "This," he says, "is why tennis is one of the toughest sports in the world." Thanks for that Andy: wise words indeed. Actually we were hoping you were tweeting to say when the angel was coming to rescue us all. Instead we get that. You sit comfortably, and eat your nice dinner, and spare us the tweets. Unless they're about the angel, that is. We still have hopes for the angel. And ooh look, it's 57-games all.

8.55pm: Yet again, Mahut wobbles on the brink of defeat. Yet again he steadies himself. One minute Isner has him at 30-30. The next he's through again and we're tied at 58 games apiece. But wait! An official has stepped out on the court. Is it an official, or is it the angel? Is this endless, epic Battle of the Zombies finally going to be brought to a close?

8.59pm: No. It's not. At least not just yet. An exhausted Isner is serving to make it 59-58. An exhausted Mahut runs for a volley and falls flat on his face. An exhausted umpire calls the score in a dreadful, reedy croak. An exhausted Isner takes the game. It's 59-58.

9.10pm: Is it over? It is not over. For a brief moment back then, I thought it was over. Isner clambers to match point on Mahut's serve. Mahut steps forward and saves it with his 95th ace. It's 59-59. Mahut wants to come off now; the light is almost gone. But the official orders the pair to play two more games. "We want more! We want more!" chant the survivors on Court 18. I'm taking this as proof that they have gone insane.

9.12pm: Mahut prevails! Mahut wins! This is not to say he wins the match, of course. Nobody is winning this match; not now and not ever. But he prevails in his complaint and his wish is granted. Play is suspended. They will come back tomorrow and duke it out all over again. The scoreboard will be re-set at 0-0 first set and Isner and Mahut will take it from there. OK, so they won't do that, exactly. Instead, they will pick it up where they left off, at 59-59 in the final set. Apparently the last set of this match has now lasted longer than any match in tennis history. Can this really be true? Nothing would surprise me anymore.

9.25pm: Last thoughts before I ring me a hearse. That was beyond tennis. I think it was even beyond survival, because there is a strong suggestion (soon to be confirmed by doctors) that John Isner actually expired at about the 20-20 mark, and Mahut went soon afterwards, and the remainder of the match was contested by Undead Zombies who ate the spectators during the change of ends (again, this is pending a police investigation). Still, if you're going to watch a pair of zombies go at each other for eleventy-billion hours, far into the night, it might as well be these zombies. They were incredible, astonishing, indefatigable. They fell over frequently but they never stayed down. My hat goes off to these zombies. Possibly my head goes off to them too. It's a crying shame that someone has to lose this match but hey-ho, that's tennis. The historic duel between John Isner and Nicolas Mahut will resume tomorrow and play out to its conclusion. Possibly. Maybe they'll just keep going into Friday and Saturday, Sunday and Monday; belting their aces and waiting for that angel to come and lead them home. As the woman in the stands might say, "Wa-ha-la-wa-ha-la-la-la!" Thanks so much for sticking with me; for your comments and tweets and your emails too. It was very much appreciated. If you're going to liveblog a tennis match in Necropolis, it's reassuring to have someone there to hold your hand. I'm off tomorrow, possibly lying in a ditch somewhere. But the legend that is Paolo Bandino will be here to cover the action. I'm back on Friday, by which time this contest will probably be into quadruple figures in the final set. We'll simply pick it up and take it from there.

The “threat” from austerity

If one were to read blogs and columns of, well, pretty eminent US economists, one would be forgiven for thinking that the next major threat to global recovery was Germany. When Angela Merkel announced that the German Government would strive to achieve a fiscal balance through austerity measures, Dani Rodrik, Paul Krugman, Brad DeLong, Mark Thoma et all yelped in shock and disbelief. They believe that the global economy needs all the demand that it can get right now, even if this demand comes from governments spending more than they earn.

And they are partly correct. The global economy is short of demand at the moment and additional demand won’t hurt. But that’s where it ends. The global economy also needs stable governments. And with Germany’s debt inching closer to 80% of GDP, the Germans want to tighten their belt. Despite the high debt-GDP ratio, Germany has been extremely disciplined in recent years. It has generated a primary surplus for 6 of the last 12 years and its average fiscal deficit over the same period was 2.3% of GDP. In 4 of these 12 years it has ended the year with lower relative debt than the previous year.

But the “progressive” group believes that this is wrong. They use Germany’s current account surplus to assert their belief that Germany isn’t ready to pull its weight in inducing a global recovery. Germany is third on the list of nations ranked by their current account balance. The first two are China & Japan. But there are critical differences between them. China is a known currency manipulator and suppresses domestic demand as a matter of policy. By making imports more expensive and exports cheaper, it lends systemic support to the continuation of its trade support. This policy is at the root of the world’s consternation with China.

At its peak, Japan openly intervened in the currency market to intentionally weaken its currency. But since 1990, Japan has been going downhill with fiscal woes of a magnitude not imagined earlier. No one, can ask the Japanese Government to do more than it is already. Which brings us to Germany. Germany doesn’t own its currency anymore and cannot manipulate its value unilaterally. It has managed to achieve its current account surplus, not through low wages and currency manipulation, but through innovation and productivity. It has remained fiscally disciplined through good times which gave it the ability to exert countercyclical support to its economy in bad times. Which it did, but if you take Dani Rodrik’s logic, it didn’t do enough.

It didn’t do enough because it didn’t allow its fiscal deficit to rise as much as the US. But Germany doesn’t own the Euro and doesn’t have the ability to monetize its way out of fiscal hell like the US. So while the US can spend merrily, secure in the knowledge that it can monetize its way out of any debt service and current account deficit, Germany has to think of earning its way out. Or would Mr. Rodrik rather see Germany in Greece’s position in a few years just so that it can help Greece recover? Does that make sense at all?

And Dani Rodrik isn’t alone. Paul Krugman has this to say about China & Germany.

Really? Time to get tough with what, Prof. Krugman?

If everyone is counting on the US to become the consumer of the last resort, then what steps is the US taking to protect itself? The US’s ability to run sustained current account deficits is because, unlike other lesser nations, it owns the global currency and cannot face a balance of payments crisis. What these economists want is a continuation of the system with other nations adjusting their economic policies and costs so that the US current account balances. But why should they? Is the US doing them any favor by owning the world’s reserve currency?

If the US wants its current account deficit to shrink, the US dollar will have to stop being the world’s reserve currency. Once capital flows to the US slow down, or are denominated in another currency, the US’s ability to pay for its imports will shrink, causing the currency to depreciate and the US will be a few steps closer to a current account balance. And it doesn’t take much for that to happen. All the US has to do is institute capital controls.

But rather than take this route, which will require it to change it’s ways, the US wants its trading partners to change theirs.Rather than act to weaken the US Dollar,  the US wants its trading partners to act to strengthen theirs? While the end effect will be the same, the responsibility of action changes completely.

The US is completely and totally responsible for the position it is in. It wants the US dollar to continue as a reserve currency because it suits its profligate ways, not as a favor to other nations. Changing this is in its hands and yet, it want others to compensate for its inaction.

Awesome.

A version of this post appeared on my Business Standard Blog on June 23, 2010

Friday, June 18, 2010

The Economics of Plenty - II

In my previous post, I argued for India discarding its existing economic policies formulated in times of shortages. India’s problems have changed and we now face a problem of plenty, especially when it comes to foreign exchange inflows.

Capital inflows, have outstripped our trade deficit over the last few years. However, India’s polices remain rooted in a time when capital inflows were miniscule and India was subject to a full blown balance of payments crisis. In continuing with these policies, India is ignoring its changed position in the world and its changed circumstances. It isn’t accounting for it’s strengths, overemphasizing its weaknesses, ignoring opportunities and losing sleep over threats.

India’s strength today is its population. After years of fearing India’s population problem, we are now in a beneficial demographic period. The rising middle class and its capacity to consume positions India firmly as one of the largest markets in the world. So why does this not show in our GDP? We need to look no further than our currency. India’s weak currency policy has many repercussions and an understatement of our GDP in terms of other currencies is just one of them.

A weak currency makes all products more expensive for the domestic population. Its futile to say that it affects only imported goods. In an economy which imports most of it’s fuel, currency related inflation is all pervasive. In addition, India’s domestic market for commodities is closely linked to international markets and a weak currency also causes domestic prices of locally produced commodities to rise. If it weren’t so, most of India’s domestic commodities would be exported. These increased prices reduce the ability of our domestic population to consume, reducing domestic growth.

A weak currency also makes it more expensive for Indian companies to buy foreign companies. While this is not an end in itself, it is a means to a very important goal; the ownership of Intellectual Property. When Tata bought Corus and Jaguar-Land Rover, it didn’t just but their capacity to produce steel and cars. It bought the technology which allowed production of superior quality steel and cars. Profits follow technology. Tata Steel and Tata Motors will show that to be true.  And there is no better example of this than Apple. The iPhone says its designed by Apple in California and assembled in China. Guess where the profits reside. India’s technological disadvantage can only be overcome by buying technology and then developing it further. If we start from scratch, by the time we reach where the world is today, the world would have moved on.

Looking at our conundrum from another angle, the capital needs of India’s infrastructure sector cannot be met domestically. We need global savings. Our policies should reflect our need to attract savings and the strength of our domestic market. Our current policy framework, in contrast, is making a case for capital controls which will stop global savings from reaching us, to allow us to continue exporting goods and services to other markets. Infrastructure is key to ensuring that our rural population benefits from growth. In most parts of the country rural connectivity is atrocious. Rather than taking our prosperity to our villages, we have succeeded in bringing our rural population to our cities. In a distorted understanding of urbanization in growing economies, we believe it is normal for our cities to grow and our villages to shrink. We seem to ignore the possibility of basic urban comforts reaching the villages instead. If we persist with our current policies, India will always remain an infrastructure starved nation which can only dream of inclusive growth, not achieve it.

And why are capital flows inferior to trade flows? Is it because the ones we focus on are those which can be reversed easily? FII flows can be reversed at the push of a button. So we design policies to allow only those flows which are subject to substantial market costs  if reversed. If we were to look beyond these, its easy to recognize the impact of our weak currency policy on long term stable flows. Who will want to invest in a currency, or in assets denominated in a currency which is intentionally weakened by policy. Our currency policy increases targeted returns and reduces targeted time span. So rather than incentivizing investors to start new companies in India, we are content with allowing them to own our existing companies. A perversity, if the stated intention is to achieve growth, isn’t it?

Times have clearly changed and our minds have to keep pace. Its not India’s growth which is at risk. As mentioned in my earlier post, India will continue to grow regardless. But whether it’ll grow enough to satisfy the needs of a young nation will depend on what drives our policies. Fear or self-belief.

A version of this post appeared on my Business Standard Blog on June 16, 2010

Bhopal & the Gulf of Mexico

On a different note, I just read that the BP CEO Tony Hayward testified before a the US House Oversight & Investigations Committee which radiated anger at him before any court in the US has found him to be guilty of a crime.

And then I read everyday how Warren Anderson was escorted out of India by Arjun Singh and, in all probability, Rajiv Gandhi’s Government.

Its a shame.

Friday, June 11, 2010

The Economics of Plenty

Amongst other things, the Financial & Eurozone crises have  imparted a significant degree of clarity to economic beliefs, despite the profusion of over-simplified economic rules which surround them. Standard Debt-GDP ratios and requirements of fiscal discipline have given way to rules specific to each country's economic situation. They have proved, with some finality, that different rules apply to Europe, The US and countries like India.

Countries adopting the Euro face a particularly challenging environment. Being used to the luxury of owning their respective currencies, they failed to fathom their changed circumstances after adopting the Euro. Most of the PIIGS nations will default at some point. It's no longer if... Just when.

At the other extreme is the US. Despite borrowing & spending way beyond it's capacity to repay, the US will not default. Not on it's explicit debt and even on it's implicit debt, not for a decade or two. It's currency is desired by the rest of the world and is, for all practical purposes, it's primary export. Till such time that foreigners, including foreign governments, buy the US Dollar and invest it back in the US, there is no reason for the US to default. But only till such time... If this inflow of foreign funds stops and the US needs to earn a currency foreign to it, default would be a heartbeat away. Right now, the bigger fool theory is firmly in place. Everyone believes they will get out before getting splattered by the fan.

Which brings us to India. As one would expect, India's floundering somewhere between the two. We own our currency, but aren't really sure how much the world wants it. Capital account flows would suggest that demand exists, but we haven't yet reached a stage where the world wants our currency for itself and not for the assets it can buy. No one wants to own a weakening asset and we don't want an appreciating Rupee.

India has choices to make. It is at a point in it's existence when it can go any way it wishes to. It could continue with policies formed during times of shortage and tweak them to reflect our current surpluses. This positions India as a producer for goods and services demanded by other nations. It would necessitate a weak currency which would assist competitiveness, but deprive the local population of the purchasing power they desperately need.

Or we can discard these policies and adopt the Economics of Plenty. This would position us as a nation of 1.2 billion consumers, not 1.2 billion hungry mouths and necessitate a strong currency which increases our purchasing power. Yes, it would increase our current account deficit but, coupled with the right policies, increase demand for the rupee as an asset in itself.

In our current policy framework, India competes in other markets for a share of their business against players who have set the rules. True progress will lie in changing the rules. In becoming the market others want to compete for. In an environment where major markets are shrinking, or growing at a snail’s pace, India’s emergence as a market will be welcomed by the world. In changing its policies to favor domestic consumption over exports, India will have to change the way it thinks. And the first change will need to be our currency policy.

India's future lies in this choice. India will grow regardless, probably faster than most countries in the world. But, in the former we will need other markets to grant us our progress. In the latter, we will drive it ourselves.

A version of this post appeared on my Business Standard Blog on June 10, 2010