Thursday, March 20, 2014

A Change in Government is likely in India and Indonesia

According to the positive narrative about emerging markets, industrialization, urbanization, per capita income growth, and the rise of a middle-class consumer society were supposed to boost long-term economic and sociopolitical stability. But in many countries recently wracked by political unrest -- Brazil, Chile, Turkey, India, Venezuela, Argentina, Russia, Ukraine, and Thailand -- it is the urban middle classes that have been manning the barricades. Likewise, urban students and the middle classes spearheaded the Arab Spring, before losing authority to Islamist forces.

This is not a complete surprise: in many countries, working classes and rural farmers have benefited from per capita income increases and a broadening social safety net, while the middle classes feel the pinch from rising inflation, poor public services, corruption, and intrusive government. And now the middle classes tend to be more vocal and better politically organized than in the past, in large part because social media allow them to mobilize faster.

Not all of the recent political unrest is unwelcome; a lot of it may lead to better governance and greater commitment to growth-oriented economic policies. Among the Fragile Five, a change in government is likely in India and Indonesia.  - in todayszaman

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics
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