Note to investors

Change or change will visit you and it will be painful

By GIFT

Click here to find a summary of the conference. 

Chandran Nair, CEO and founder of GIFT, was invited to speak at the Emerging Markets Investors Roundtable Conference held on 27th January 2009 in Zurich as a prelude to Davos. The conference brought together top private investors, business leaders, experts and policy makers for a candid and engaging dialogue to shed light on how emerging markets will respond to the current global crisis and to assess the potential investment opportunities during these uncertain times. Mr. Nair was invited to speak on the subject of “The geopolitical and societal outlooks for emerging markets.”

Mr. Nair spoke on a number of pressing topics such as the limitations of the current thinking on the root causes of the financial crisis and how other factors such as the push for rampant consumption to maintain economic growth thrives as market failures are ignored and continue to arise from inadequate pricing of social and environmental externalities. Challenging the conventional belief that countries or regions are all facing similar geopolitical risks during this financial crisis, Mr. Nair urged investors and business leaders present at the roundtable to recognize that there are differences which can be attributed to regional and local conditions. Therefore, he cautioned against the tendency of speaking about the crisis in terms of “the West and the rest” and the use of western-centric solutions as a fix-all remedy for all countries.

Mr. Nair also brought the issue of climate change to the forefront as another example of the failure of the markets and its geo-political implications. He pointed to over-consumption patterns and the low value that markets have traditionally placed on public resources (the Commons) as key factors which have encouraged unsustainable exploitation of the world’s resources. With increasing numbers of wealthier households in India and China eager to imitate Western spending habits and lifestyles, Mr. Nair stated in his concluding comments the need for policymakers to work together in managing the world’s resources, as they seek to deliver on the economic growth aspirations of their societies. He called for tough regulations to protect public good against private interests.

His remarks about the great threat posed by the intellectual dishonesty to be found in major forums (including Davos) was surprisingly very well received by the audience. He cited several examples in making his remarks including:

• That the root causes of the current crisis in the financial world are not something new and that a cartel of international banks who have written the rules for far too long have profited at the expense of others. Yet, until now, no one dared challenge them.

• The belief that has held fast for so long by market fundamentalists that there are no limits to growth in a resource constrained planet. He stated that understanding the need to live within limits would be the bigger responsibility of this generation.

• That climate change can be tackled by trading emissions rather than dramatically reducing emissions. In a world where 3 billion people have yet to engage in the consumption binge that the more privileged have indulged in, it should be clear that meeting their needs through traditional economic growth strategies will only result in increased carbon dioxide emissions and therefore speed up climate change.

• The media love affair with Barack Obama which therefore continues to promote American exceptionalism, at a time when the world needs to look at other models.

• The conflict between the West and Iran with regard to nuclear energy is riddled with double standards and that the majority of the world is not willing to put up with it.

Other participants at the conference included: Ulrich Becker, Managing Director, Credit Suisse; Francois Barrault, CEO, BT Global Services; Eric Berglof, Chief Economist, European Bank for Reconstruction and Development; and Penny Low, Member of Parliament, Singapore Government.

Mr. Nair is a frequent speaker at conferences and other corporate events around the world.