Suit, Boot ki Sarkaars at Davos? - The Honest Truth By Ajit Dayal

Suit, Boot ki Sarkaars at Davos?

22 JANUARY 2018

Prime Minister Modi has the distinct honour of addressing the 48th World Economic Forum in Davos, Switzerland on January 23rd at 3.45 pm IST. Prime Minister Modi's 45-minute talk is labelled as the "Opening Plenary". As an aside, the Prime Minister of Pakistan will host a press conference on January 25th and President Donald Trump will give a Special Address on January 26th.

I tried to attend Davos - a lame, last-minute try, I must admit - as a representative of Equitymaster. No one responded to my email, but that really may be a function of the last-minute email from me or the fact that Equitymaster did not pay the USD 600,000 to be a main sponsor and the USD 60,000 price of a ticket to attend Davos!

Given the prices to buy a ticket to attend Davos (hotel and air fares not included), the topic "Creating a Shared Future in a Fractured World" is pretty apt. And, given the use of technology and web casts (not live, I think) I feel less fractured and more shared in the future of the world, as it will be defined by the 2,500 Heads of Governments, CEOs, and movers and shakers who will attend the Woodstock of the Powerful at Davos.

The carefully curated sector participation has the largest contingent from public sector, civil society, arts, and academia - so any suggestion that it is an "exclusive club" is met with this statistic. And, in keeping with the times of perceptocracy, 7 of the 7 co-chairs at the WEF 2018 are all women. Each of the 7 women members are distinguished, very accomplished and deserving - but should one male have been included to help repair the fracture in the gender wars? Maybe Donald Trump? Or someone from the RSS? That would have been really interesting!

Capitalism gone wrong?

Maggie Thatcher, the Iron Lady of UK who led the transformation of the country from a union-bled economy to a more capitalist one, made famous the contempt for socialism with her classic and accurate remark, "The trouble with socialism is that eventually you run out of other people's money".

The mantra of free markets as a cure has been used by every leader in the US and UK since then and willingly followed by every emerging leader. Well, that free market stuff has only worked for a few. 10 years after the Great Scams By Crooked Financial Companies (wrongly referred to as the Great Financial Crisis) heralded by the collapse of Lehman Brothers on September 15, 2008 the results of economic development have been skewed to favor a few.

This is the direct result of the globally-adopted policy by central banks to print more money to keep interest rates low. The stated logic for this was to ensure that economies did not collapse after the Great Scam that imploded in 2008. The real reason was to rescue the financial firms that created and participated in the Great Scam. Not only did the tax payers pay the bill for the rescue of the Scam Artistes, but the low interest rate environment generated a huge surge in asset prices, mostly of equity shares, which has disproportionately benefitted the wealthier class more than the working class.

Oxfam, which describes itself as "an international confederation of 20 NGOs working with partners in over 90 countries to end the injustices that cause poverty", has an uphill battle scaling the fortresses of the rich in Davos. It's not the snipers on the rooftops they have to worry about or the 1,700 Swiss Army and Police personnel who are on duty to provide security at Davos. Rather, Oxfam has to pierce the politicians and the bureaucrats who are the protectors of the Club. For those who need an education on who guards the Club and how it works, the documentary "Saving Capitalism" is a must-see.

Rahul Gandhi, on one his rare "I-can-make-sense" moments immortalized the phrase "Boot-suit-ki-sarkaar". The "of the people, for the people, by the people" idealism has been replaced by "the man in the suit just bought a new cop from the profit he made on your jeans" realism recognized by the rock group, Traffic.

Table 1: Oxfam says the rich got really richer in 2017!
Calendar Year Richest 1% Rest
2017 India 73% of wealth generated in 2017 670 mn Indians, 50% of population, wealth rose by 1%
2016 India Held 58% of total wealth in 2016  
 2017 World 82% of wealth generated in 2017 3.7 billion people, 50% of population; wealth rose by 0%
2016 World Held 50% of total wealth
Source: Business-Standard report on Oxfam

As Prime Minister Modi welcomes foreign investment into India with references to the very credible work of raising India's ranking in the Ease of Doing Business Index, he will have to tackle two main issues within India which are not likely to be asked by the very polite and "I-need-a-favour-so-cannot-ask" audience at the WEF. But these questions will be asked within India as the national election nears:

  1. The rising inequality under his regime, and
  2. The rising levels of reported incidents against minorities, women, and journalists.

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Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is Founder of Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site.

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9 Responses to "Suit, Boot ki Sarkaars at Davos?"

Krishna Kumar

Jan 24, 2018

Off late, Mr. Dayal has been influenced by Mr. Kaul in interpreting statistics. Income inequality is a reality in any human economic system - be it socialism, capitalism, Religious fundamentalism, Autocracy. But using Oxfarm data to exaggerate the point is unfair. Especially when Mr. Dayal knows that when the market cap of companies are going with the exuberance in stock market, paper wealth will increase and using that as a denominator to say 1% hold 73% of wealth is misleading. One sided write ups, Loud and unethical marketing material, luring retail investors by selling of dubious products like Bit coin advisory as a unique opportunity to make billions - sorry to see the decline of Equity Master.

Like (3)


Jan 23, 2018

The article is full of biases. The author is simply trying to pass on his opinion as truth. Unsubstantiated and unsupported statements, so typical of paid journalism which we see day in and day out these days. Sad to see, equitumaster's ethical standards falling like a pack of cards.

Like (4)


Jan 23, 2018

You have indeed stated the honest truth. Suit Boot are basically symbols of disparities. The common man has been hit badly in the last two years. GDP measured growth has many questions. Government websites have practically blanked out most data so Government performance can not be measured properly. Already reports indicate that inclusive growth many smaller neighbors have done better. Growth of large caps is because of world economic dynamics and investments made. Soaring sensex has nothing to do with Government.Man on the street can have no hope of of even one bedroom house in Metro towns ever.

Like (2)

Sambaran Mitra

Jan 23, 2018

Oxfam reports create a negative vibe against free-market-economics. Rich getting richer is perfect if poor is not getting any poorer. If the rich is making his/her money by free-trade, it is good for humanity. Inequality is welcome. If you have time, I will recommend 'Mind the gap' by 'Paul Graham'. The weblink is: paulgraham dot com slash gap dot html

Like (3)

Vishwas Sahasrabuddhe

Jan 23, 2018

Your Article has political undertones ! When Industrialist grow wealth it can generate Pvt. employment. You have no comments to offer on reduced corruption , Use of Technology, Transparency in Systems, GST

Like (6)

Shivakumar Adiseshan

Jan 23, 2018

This is with reference to the 2 queries you have listed out for PM Modi as the most likely he would be facing in India before the elections:

a) The rising inequality under his regime
b) The rising levels of reported incidents against minorities, women, and journalists

Perhaps I am not as well informed as you are, so please enlighten me on, when if at all there has been equality in India or for that matter anywhere in the world. This is a delicious query designed much on lines of 'when did you stop beating your wife'. A politically charged query designed to entrap - the answer should be an elaborate word salad which should not make any sense - worthy of the question itself

Minorities is yet another classification that is politically charged - a terminology created for maximum political mileage and which in its definition is deliciously vague and designed to elicit political rhetoric. A nation with the 2nd largest muslim population in the world classifying them as minority just because the rest follow another set of religious values is a laughable concept- again designed for political blackmail and leverage. A concept all the more laughable because there is no clear definition for Hindu- a word created by the Britisher - what in the world is Hinduism ? its not a religion except in the Britisher's book which our fathers of the nation foolishly or knowingly adopted.The fact of life is that the majority of India does not follow a common set of religious values /sentiments. Where in the world are women 100% safe? in the US of A - the so called land of the free? surely you don't believe that! The brutal truth is that no one is safe anywhere in the world - Crime cannot be prevented 100% - the law can only try and ensure that the guilty are punished- again following the letter of the law. India is the land of Jaichand and mir jafar- dishonesty and treachery runs in our DNA as it does in people of all countries - all have their own versions of jaichand and mir jafar. The Radia tapes provided enough and more evidence of the total lack of journalistic integrity

Like (6)


Jan 22, 2018

Understand your frustration at not being able to get invitation. In fact, that has been equity master's main grouse against current dispensation, looks like. Your conferences (Which are paid by innocent investors like me) are always full of virulent criticism against Modi government rather discussing economic matters. Last year's was a particular disappointment when Sh.Vivek kaul was talking about UP elections rather than about markets. Wonder why anybody should pay for such conferences? Further, your conferences are exorbitantly priced. SH.Vivek kaul goes one step forward and uses these paid conferences for marketing his books. Nothing can be more nonsensical than this. I think, you have no moral right to criticise world class events like the one at Davos, where pretentious intellectuals are obviously not invited.

Like (5)


Jan 22, 2018

Does the author have data to back up how inequality behaved ex-marketcap of stock market between 2003-2013 under UPA and 2014-17. I suspect considering the Real estate driven black money generation, I wonder what he would all the UPA govt
2. Can he also share how riots, attacks on minorities (Real not fake please), etc has occurred under successive governments for the last 20-30 years. I saw data that did not reveal any statistical difference unless you had a certain bias/axe to grind against either one of the political orgs

Like (3)


Jan 22, 2018

The only way the BJP government can even hope to redeem themselves,for their authorotarianistic attitude to managing the country,will be by generating a massive amount of jobs,or we will have a country,that's not only much below par in it'economy but is also headed straight for trouble .

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