The Stalemate

We know that if all the entrants are in a win-win situation, the net sum of the synergies is positive rather than zero. It is quite similar to an open economy or a near-perfect competition.
India has so many industries getting the push of FDIs in several sectors, and they are in the path to development. Let us assume that for one of the sectors, e.g. telecom, the sector has seen steady growth for two players. Now an entrant comes to the picture, what could be the strategy of the other horses to let not to do this new one running?
Probably the answers are:
  1. LBO: Leverage Buy-Out
  2. Differentiation from the other types of players
  3. Aggressive marketing
  4. Forceful Acquisition technique
  5. Stalemate Position
We are talking of this new technique called stalemate. Just as in chess, even if you have all the powers as opposed to none of the rival player, you do not keep the king in a position without checking it through a power, and hence keep a movement feasible for the king. Imagine this, in the world of liberalization and open economy, any movement in terms of the country to dilute or indulge its stake in the free trade world would actually create different strategy checks in place. Now let us get that in a big picture.
The “Invisible War” is on in the post-Cold War era. The war for financial reign in the world. With the Big Brother going into a 3 trillion debt in its coiffures, and an Asian country buying most of the stock bonds issued to keep dollar ticking, we are living in the world of a nearing crisis, through the invisible war. Now, who can survive at the end is the question of counter strategy, and pro-thinking strategy.
Let us assume that after 10-15 years, when everyone has a job in China owing to the growth of its economy, it strengthens its currency by:
  1. Valuating it
  2. Flooding the market with the release of the Dollar Bonds
What happens next?
The Big Brother goes towards bankruptcy, the Purchasing Power Parity of the emerging and less developed economies go down, people cannot afford any more retails products, and there is an asset and income difference in the classes of the masses, finally leading to a global turmoil with a weakening Dollar, causing the Chinese currency to establish its position in the global market as an alternative to the Dollar for trading. Now India cannot do a re-valuation of its currency owing to the labor arbitrage option still happening to create jobs in the market in the form of IT, telecom, and infrastructure. There will be a fight against Euro with Chinese currency, and hence China will find a way to re-value its currency, and go to the top of the league. And Yes, China emerges as the winner of this financial war, by doing the right thing in the right way, by establishing itself.
Will the Big Brother pull the trigger then saying that there is a chance of a war before the bonds are released inthe market? I do not think so. It cannot release the Big Red Dragon.
The moral of the story is that India needs to create more jobs in its own “maidan” or playground. Get masses involved in bringing up its own villages and the rural infrastructure. Again, this should run for many years to go as the saturation would allow India not to survive the competition of bringing the rural masses to a developed zone. Also, as much as different projects that India runs in China’s playground, there will be a balance in nature, even if the Big Brother notices that there is a hole in its own bucket. But, that I guess would be too late.

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