The bleak economic scenario in 2008 and 2009 can be labeled as "Cash to Crash". Just two years before that the world was flush with high liquidity and cash was in plenty and flying all around.
However, in 2009 cash was rare to find. It was a crash for the cash.
This was a result of lack of focus on long-term vision and action. The focus on short-term excessive greed of some in the business world led to the "Cash to Crash" situation and resulted in excessive bleeding for many.
Consideration to all aspects while doing business is paramount and essential for our survival. And it means due respect and care of all the three P's - Planet, People and Profits. And strictly in the order in which they appear.
If there's no planet, there will be no people and then profit will be meaningless.
One action that can be taken to ensure the chances of the recurrence of such a global crisis of gargantuan proportions is minimized is to put in place better economic governance. Statutory and regulatory frameworks must ensure businesses are made answerable to the first two Ps.
Here it is important to acknowledge why we need businesses in the first place. Speaking from the perspective of first principle we need businesses to:
Lack of political will among nations is also a cause for desired improvement in economic governance mechanisms not to take stronger roots.
In that sense the financial crisis of 2008 and 2009 was as much a political problem as it was an economic problem.
However, in 2009 cash was rare to find. It was a crash for the cash.
This was a result of lack of focus on long-term vision and action. The focus on short-term excessive greed of some in the business world led to the "Cash to Crash" situation and resulted in excessive bleeding for many.
Consideration to all aspects while doing business is paramount and essential for our survival. And it means due respect and care of all the three P's - Planet, People and Profits. And strictly in the order in which they appear.
If there's no planet, there will be no people and then profit will be meaningless.
One action that can be taken to ensure the chances of the recurrence of such a global crisis of gargantuan proportions is minimized is to put in place better economic governance. Statutory and regulatory frameworks must ensure businesses are made answerable to the first two Ps.
Here it is important to acknowledge why we need businesses in the first place. Speaking from the perspective of first principle we need businesses to:
- Foster economic development
- Create employment opportunities
- Provide revenue to the government to fund social welfare and other schemes
- Protect the profit margins of the promoters and investors (at the cost of the other two Ps - Planet and People)
- Channelize deployment of excessive wealth of rich promoters to create more wealth for these already-rich promoters
Lack of political will among nations is also a cause for desired improvement in economic governance mechanisms not to take stronger roots.
In that sense the financial crisis of 2008 and 2009 was as much a political problem as it was an economic problem.
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