Among old IMF triaging for its loanee countries, ws a pet notion of local development being a hindrance ( the way india sa it) and before the currency crisis of the 90s in South East Asia, infact propeled the ASEAN region to higher growth at the expense of those creating both production and consumption domestically. Today ofcourse, we have the dichotomy betweem Resource ( Exporteers) economies and Producers ( Importers ) economies with the share of manufacturing in Global GDP uniformluy down across the board and China trying to globalise its production and generate domestic consumption at multiple levels to survive the change, while IMF is busy with funding Europe and surviving as funds also come from the same bloc of nations to support the ESM
Why this comment is part of the morning report, is mostly because the regular chain is so obvious and traceable thru the 2- reports of this week and some from last week. However, the requirement of investors to focus on execution after policy reform actually hinges on such philosophical choices as above as and when liquidity from Spanish bailouts and expansion of European Banks ( to $40Tln in assets this June 2012 a growth of 30%) despite the stricture of new Capital regulation keep pouring in.
Whatever be the cultural reasons most of the new liquidity may chase deals and High yield/Corporate Debt in China, Indonesia , Malaysia and other Asian markets outside India as Deal flow also tackles interesting propostitions for China’s Banks and consumption plays like F&N or healthcare denizens
India inc as i sknon , will keep an even pace print good Q2 numbers fall on being asked to groww more till December but easily deserve to take local indices including th eNifty to nearly 6000 given that these differences underscore their own ignorance and eventual realisation that the 5% growth ( earlier Hindu rate of growth) is indeed the magic of India as an Economy and it does not require a depreciating currency to achieve that 5% or a nominal 12-14% rate of growth on the GDP