Amit's Blog

  Part 1 – What are Sovereign Wealth Funds   “In life’s journey, having the ability to predict the future gives us an unfair advantage. If we can understand the laws of cause and effect, anyone can predict the future. What we do today leads us to tomorrow’s destination. Why does this simple truth seem to be difficult for most people to understand?” ― Celso Cukierkorn Sovereign Wealth Funds (SWFs) are not understood very widely, although they aren’t new. Several funds have been operating at a global level for more than fifty years. However, the big thrust came during the early years of this century. The number of funds created during this century represents the majority of the total in existence. Earlier, these funds (state-run), operated under the radar, maintaining a low profile in the public eye. Very broadly, SWFs have been regarded as investment vehicles established in order to manage, in a profit-oriented way, surplus national wealth for future generations. The la...

  Part 6 – India’s Challenges   Demographic dividend refers to the growth in an economy that is the result of a change in the age structure of a country's population. The change in age structure is typically brought on by a decline in fertility and mortality rates. Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy. In essence, there’s a period in nation’s progress when longevity is increasing and working age population is large in proportion to the old age population. The median age is low. This is when the nation is best positioned to move forward. India has 62.5% of its population in the age group of 15-59 years which is ever increasing and will be at the peak around 2036 when it will reach approximately 65%. These population parameters indicate an availability of demographic dividend in India, which started...

  Part 5 – Continental Europe   Continental Europe, as an economy is second only to The United States, at par with China. The four largest economies are Germany, France, Italy and Spain. Their respective economies in terms of size are - USD 4 trillion, 2.8 trillion, 2 trillion, and 1.4 trillion respectively – a total of over USD 10 trillion. Their respective populations are - 83 million, 67 million, 60 million, and 47 million – a total of about 260 million. These four countries have a combined per capita income around USD 40,000. The other smaller EU countries also have similar levels. Europe has been relatively rich. However, compared to The UK, they have been slower in accepting immigration. Lately, these countries have seen a large influx of immigrants, so they haven’t been as insular as Japan and China. Europe has aged far more than The UK or The USA. It’s not too far behind Japan. At present, the proportions of the elderly (over 65 years) are estimated to be Germany...

  Part 4 – The two dominant economies of the world over the last 150 years In this, the fourth part of this series we take a look at The UK and The USA. The former was the dominant world economy for a whole century, up until the first world war. Even now, The UK ranks among the top 6 economies of the world and enjoys a per capita income level of USD 40,000. The United States has been the dominant power for the last 100 years. Both these countries have stark differences from Japan and Asia in the way their demography has developed. Both have taken in a lot of immigrants over the past 100 years (The USA for even longer. It’s a country that was built by immigrants). This is in sharp contrast to the Asian giants who have a unidimensional character. The UK The fertility trajectory for The UK is significantly different from that of the Asian Economies. To start with, it was much lower at around 3.5 during 1900 and dropped rapidly to 2 by the end of WW1. Post the great war, it quick...