When the new millennium started, the futurologists predicted and painted a picture of everything going hitech and rosy. Some of them even predicted that poverty would be eradicated by the globalization. In the fag end of 2008, let us review the situation. How have things changed over the last 8 years ?
Dotcoms went bust.
Housing mortgage business has gone bust and it has taken down millions of people along with it.
Fannie Mae and Freddie Mac have been taken over by the US Government. Strange when everybody concerned with the above companies are losing, the ousted CEOs of the companies, who drove them into the ground by giving false figures in their statements, will collect millions in severance pay. There is no justice in this world. It is a mockery and travesty of justice. If socialism as a concept failed because of corruption and inefficiency, capitalism is not too far behind.
We are facing the second global recession within 8 years.
Food prices have shot up because of global shortage.
Prices of other essential goods have also gone up.
The single biggest culprit is the oil industry followed by executive greed. The average price of crude oil per barrel was around USD 25 at the beginning of this millennium and even that was felt high. It shot upto 150 and now hovering around 100 per barrel. The prices have increased 300% in 7 years averaging 45% increase per year approximately. We will assume a price increase of just 15 % per year over the next 12 years. This means the price of oil per barrel would be USD 535 per barrel at the beginning of year 2020. This also means price of gasoline will be sold around USD 7.5 (INR 300) per liter. I have not taken average yearly inflation into account. What will be the impact of this grim scenario ?
Cars, Buses, Trucks and Planes may disappear. You will see only Rolls Royce's, Bentleys, Jaguars, Porsches, Audis, BMWs, Cadillac's and Lexus's on the roads. People may not use cars to commute. People may not fly. The present rapid mass transit systems are inadequate and overloaded already. The excessive demand will make them collapse.
People may stop using room heaters in winter and use thicker clothing. Poor people may start using dried hides and skins of slaughtered animals to keep the cold away like the stone age.
Fresh fruits, vegetables and flowers cannot be easily imported due to high costs of transportation.
Industries depending on oil may go bust.
People will try to switch to electricity but the cost of power will also be high. Hydel power is just not available because of global warming and the rivers running dry. Thermal power using coal may pick up but will add to pollution and global warming. Nuclear power is an option but very few countries have the technology and capable people to run it safely and maintain it. It takes 20 years to build a nuclear power plant.
Impact of the above.
Everybody gets affected except people in the oil industry and those associated with it. They will make more money but rest of the people will suffer and misery in poor nations will further go up. I will not be surprised if the globalization as a concept fails and it is back to protectionism. If it does, you all know who will be responsible for that. What is surprising and sad is that no government seems to be anticipating and taking proactive action.
© Copyright, Sep 08-08 . Without prejudice. All rights reserved
The world after 2020 - To learn more about this author, visit Madhavan T Gopalachary's Website.
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Madhavan T Gopalachary
(Visit Madhavan's Website)
Madhavan Gopalachary, nick name "madgopes"
(g pronounced as in go) given by IIT
classmates, is a Mechanical Engineer and
an alumnus of Indian Institute of
Technology, Madras having passed out
specializing in IC Engines &
Thermodynamics.
He has nearly 35 years of experience in
the Corporate World. He started off as a
trainee and handled sales, marketing,
manufacturing, product management, profit
center management, strategic planning and
corporate development including R & D in
various organizations and at various
levels before becoming a CEO. His last two
professional assignments were at CEO level
before embarking to start management
consultancy business on January 01, 1998.
He has worked for British, Swedish MNCs as
well as very large Indian business houses.
He has spent a large portion of his time
from June 1998 till date in East African
Countries practicing as an independent
Management Consultant.
More details can be obtained at the
following web sites:
mmg.name
/mtg.html;
mmgconsu
lting.biz/
Madhavan's articles can be accessed at www.madgopes.com
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