The person of the year

There were several contenders.

2014 is the silver jubilee of the fall of the Berlin Wall. This year, we saw the US and Cuba coming closer. Online war games may be popular but compared to our history, the present times may be termed the most peaceful ever.

Yes, there are reasons to cheer but several to be cautious. Meltdowns in oil and the rouble haven’t yet drowned the ambitions of Russia’s Vladimir Putin. The volcanic rise of Islamic State (ISIS) will go down as the worst intelligence failure since the attack on Pearl Harbour. The world is underestimating their network, influence and ambitions.

The sight of thousands of refugees fleeing their African homeland, the shooting down of Malaysia Airlines’ MH17 and the Sydney siege scare me. The hacking following Sony Pictures’ The Interview exposes new dangers — that of cyber warfare.

We cheered Pakistan’s Malala Yousafzai and India’s Kailash Satyarthi on winning the Nobel Peace Prize but the blood in Peshawar has stained humanity’s soul. Fragility lurks beneath the veneer of a calm world.

Destiny’s child In a world devoid of strong leaders, Narendra Modi stands tall. He was a rock star in the US and Australia and got us a ‘World Yoga Day’. He played the drums in Kyoto and charmed the Japanese while getting the Russian and Chinese premiers to savour Gujarati dishes in India. Marketers have much to learn from the Abki Baar, Modi Sarkar campaign and his smart use of radio, social media and technology. A broom now reminds us of his ‘Clean India movement’ and not the Aam Aadmi party (AAP). They say, the stars have aligned for him. I say, destiny favours the determined.

The BJP swept Haryana, Maharashtra and Jharkhand. State chief ministers are competing for investments and their reforms for ‘Make in my State’ should lead to the success of ‘Make in India’. I salute the people of Jammu and Kashmir for bravely combating nature’s fury and fighting bullets with ballots.

We saw the mightiest of politicians and businessmen being put behind bars. The courts may not get back India’s black money stashed abroad but they have ensured that the days of milking money from black gold (coal) are over.

The referendums in Crimea, Scotland and Switzerland were interesting. The Scots decided to remain “better together” with the UK. The Swiss thumbed down a proposal that gold should form at least a fifth of the Swiss National Bank’s assets. Investors should look at precious metals again to hedge global left tail risks. Yes, despite the strong dollar and weaker commodities.

End of the super-cycle The commodity ‘super-cycle’ is ending as seen in the prices of crude oil to milk products, iron ore to thermal coal, cotton to copper, sugar to grains. Whether it is the terms of trade or political power structure, flow of savings or investments, a fall in commodity prices will alter the world structurally. Countries joined by the acronym Brics will be impacted so differently. The “turn of tables in the commodities market” was a strong contender.

The Chinese government is dealing decisively with issues of corruption, pollution, property bubble and shadow banking. Global investors are worried about risks like protests in Hong Kong but are buoyed by rate cuts; retail investors truly looked like “bulls in a china shop” pushing the Shanghai index 40 per cent higher. In the Year of the Horse, Alibaba made giant strides and the Jack (Ma) of all things e-commerce is a master contender.

I thought of the US dollar as the mighty greenback rocked this year. We entered a period of divergent central bank policies. Shinzo Abe’s Japan unleashed a liquidity bazooka and the ECB is concocting a QE arsenal while the US Fed is on a path of policy normalisation. My fear is that central banks have become slaves to the diktats of financial markets while real economies are not responding in the desired manner. No wonder, the debate on inequality is gaining a lot of “capital in the 21st century”.

I admire ‘Bond king’ Bill Gross for starting afresh at Janus fund at the age of 70. Those passionate about managing money can never live without the adrenaline that markets provide.

Hunger for change The fall in inflation in India was matched only by the downslide in the Congress Party’s fortunes. Calls for rate cuts are always inflated in India. Everyone proposed but Rajan disposed. He knows the importance of anchoring inflationary expectations, positive real rates and fire-proofing our house to deal with a world that has potential ‘fault lines’. Foreigners maintained the faith while domestic investors are returning to our financial markets. Governor Raghuram Rajan was a strong contender.

We love our Anand but in the world of chess, Magnus Carlsen is the new ‘Vishwa Nath’ (lord of the world). The home turf couldn’t save the Brazilian team from a terrible defeat while the Germans played flawlessly to lift the FIFA cup. If Neymar’s injury fractured the pleasure of football aficionados, a bouncer claiming cricketer Philip Hughes’s life crossed the boundaries of shock.

Movies like Interstellar liberate our minds and push us towards unexplored frontiers. We are proud of Indian scientists for the Mangalyaan that cost less than a Hollywood movie. I hope they can also find a cheaper cure for Ebola that claimed thousands of lives.

What was missed in the unprecedented verdict in the 2014 general election was the hunger for change in “young India”. Youth is changing the narrative across politics, business and society at large. Venture capital investment in startups tripled this year with investors betting on young Indian talent. One may abhor the addiction to Whatsapp or Candy Crush, but the fact is that rising internet penetration is throwing up exciting opportunities.

It’s not about the soaring valuations of FlipKart, Zomato or InMobi; there is a pervasive revolution under way. This generation has a different DNA with a favourable eco-system to boot. Look at the renaissance in literature with the arrival of many young authors.

Generations that never looked beyond cricket are surprised at the shooting popularity of several other sports. There are outstanding examples of young social entrepreneurs whose “spirit of doing good” is making a visible impact. Stories abound. This is just the beginning. The “awakened young Indian” is my person of the year.

The writer is the chief investment officer at SBI Funds Management. The views are personal

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