New global line-up lists India as 3rd most powerful nation

Washington: Recognising India's growing clout in the world, an official US report on global governance has declared the country the third most powerful nation after the United States and China, reports PTI.

The new global power line-up for 2010 compiling the world's most powerful countries/regions recognised India as the third most powerful country behind the US and China, and predicted that its clout as well as that of China and Brazil would further rise by 2025.

"Global Governance 2025" — a follow-on to the NIC's 2008 report — was jointly issued by the National Intelligence Council (NIC) of the powerful Office of the Director of National Intelligence and the European Union's Institute for Security Studies (EUISS).

In 2010, the US tops the list of powerful countries/regions, accounting for nearly 22% of the global power.

The US is followed by China (more than 12%), European Union (more than 16%), India (nearly 8%), and less than 5% each for Japan, Russia and Brazil.

According to this international futures model, by 2025 the power of the US, EU, Japan and Russia would decline while that of China, India and Brazil would increase, even though there would be no change in this listing.

By 2025, the United States would still be the most powerful country of the world, but it would have a little over 18% of the global power.

The US would be closely followed by China (nearly 16%), European Union (14%) and India (10%).

The report concludes that three effects of rapid globalisation are driving demands for more effective global governance — economic interdependence, the interconnected nature of the challenges on the international agenda, and interwoven domestic and foreign challenges.

According to the 82-page report, more effective global governance is critical to addressing "threats such as ethnic conflicts, infectious diseases, and terrorism as well as a new generation of global challenges including climate change, energy security, food and water scarcity, international migration flows and new technologies," which are increasingly taking centre stage.

Complicating the prospects for effective global governance over the next 15 years, however, is the shift to a multi-polar world, particularly the shift in power towards non-state actors, it says.



Shadi Katyal

7 years ago

It is very heart warming to read such stories like magic lamp.
India has 40% poverty,no potable water power,schools, and infrastructure and depends on west for her military equipment . Bundhs, Nakabundi and strikes with no working ethics and yet it is being considered as 3rd power.
Why because she has more than Billion people with minimum education and ethics .
If India is so great why is GDP so low why is after 64 year still dependent on other nations and have no innovations except IT services.
Yes I sound very negative because it is written to make fool of us

Will IT services make a lousy investment going into 2011?

In a recently released report, leading Asia brokerage CLSA said that out of the 65 investment funds at its recently concluded forum in Hong Kong, over 80% believed IT services may not be a great investment idea going into 2011. However, the brokerage firm disagrees

Along with the rest of the market, the BSE IT Index has got a lift but the index seems to be flattening out now. With most investors at the CLSA conference indicating that they don't believe this would be a great investment area, could we see this index actually falling off from here? Let us explore arguments both for and against.

One of the key arguments against IT services as an investment going into 2011 is expensive valuations based on optimistic growth forecasts. On CLSA's estimates, Infosys trades at a P/E of 23x and TCS follows closely at 22x. Current forecasts for leading companies such as Infosys and TCS factor in a 10% and 4% compounded quarterly growth rate (respectively), which investors believe is optimistic. But CLSA feels these forecasts are not bullish and therefore, valuations are not expensive. It believes that 2Q growth will be so strong that the expected CQGR will come down and margins will also be strong (since they have already taken a hit in the first two quarters of this year and no more margin headwinds exist). It must be said that the report does not delve into why revenue growth is expected to be so strong in 2Q for both these companies.

The second argument against IT services is that additional earnings upgrades are unlikely. This is possible because Infosys disappointed in the June quarter while TCS had already disappointed in the March one. CLSA actually believes that the September quarter will kick-start earnings upgrades based on - stronger demand growth, discretionary spending picking up, attrition peaking out, wage impact on margins already factored in, and favourable currency movement.

Another argument against IT services is that the growth we saw in FY11 cannot follow through in FY12 mainly because FY11 growth was a result of pent-up demand from FY09-10 and also because of the building up of adverse macro data in the US increasing the chances of a double dip in the US economy (even if markets seem to be steadily pointing in the other direction for now). CLSA seems to believe these concerns are overdone.

The last reason against IT that CLSA points out in its report is the political environment against outsourcing reflected in the recent decision to double visa fees for Indian IT companies and a ban on offshore outsourcing by Ohio. CLSA counters, "In our view, protectionism is real, but not malignant, yet. We suspect that the noise will continue, but so will outsourcing. We also see the noise around outsourcing going down post the mid-term election in (the) US."

While CLSA's arguments are good, history has shown that when collective thinking is against a particular sector, that sector tends to underperform. In this case, the future will be clear sooner rather than later with Infosys results usually in the first 15 days of October. Let's wait and watch.

(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife).


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