Fr. Ivo Coelho sdb
NASHIK, AUGUST 13, 2010: It is commonly put around that the current economic crisis is due to easy credit and the large numbers of defaulters.
At the inauguration at August 10, 2010 of "First Choice", the Mahindra Service Station on the Divyadaan campus, Mr Rajeev Dubey, President HR, After-Market & Corporate Services (Mahindras), put forward an alternative point of view. He was drawing from Fault Lines, a book written by the well-known economist, Raghuram Rajan (currently at the Booth School of Business of the University of Chicago, and earlier chief economist at the IMF). Rajan says that the global economic crisis should not be attributed to the wrongdoings of a few individuals, or simplistically to a class of people who have defaulted on their loans. The root cause, he says, is the growing numbers of have-nots who are realizing that they are actually have-nevers. Politicians have tried to respond to this class of people by providing easy credit, and this had led to the sub-prime crisis.
Mr Allen Sequeira, Executive Vice President, Group HR and Leadership Development (Mahindras), added his own note to this. He said he had been advised by C.K. Prahlad to make his top management aware of the need to tackle seriously the problem of disparity, especially in the tribal areas of India. Prahlad suggested that he invite some Jesuit priest to address his people: they would know from first hand experience the problems of the tribals. Sequeira invited Fr John Misquitta, who spoke to his management people for 4 hours.
Dubey said the humanitarian angle has to be taken into account in all business. Solidarity is not merely a question of justice, it is a question today of survival. How to reach out to the have-nevers is our problem, all of us must put our minds to it.
I am not sure about the validity of Rajan's analysis - it merely takes a step backward from the current wisdom - but perhaps it will be matter to be discussed at the forthcoming Workshop at Divyadaan, Towards a New Economic Order, conducted by Philip McShane (Vancouver, Canada) (see http://divyadaan.org for more details).
NASHIK, AUGUST 13, 2010: It is commonly put around that the current economic crisis is due to easy credit and the large numbers of defaulters.
At the inauguration at August 10, 2010 of "First Choice", the Mahindra Service Station on the Divyadaan campus, Mr Rajeev Dubey, President HR, After-Market & Corporate Services (Mahindras), put forward an alternative point of view. He was drawing from Fault Lines, a book written by the well-known economist, Raghuram Rajan (currently at the Booth School of Business of the University of Chicago, and earlier chief economist at the IMF). Rajan says that the global economic crisis should not be attributed to the wrongdoings of a few individuals, or simplistically to a class of people who have defaulted on their loans. The root cause, he says, is the growing numbers of have-nots who are realizing that they are actually have-nevers. Politicians have tried to respond to this class of people by providing easy credit, and this had led to the sub-prime crisis.
Mr Allen Sequeira, Executive Vice President, Group HR and Leadership Development (Mahindras), added his own note to this. He said he had been advised by C.K. Prahlad to make his top management aware of the need to tackle seriously the problem of disparity, especially in the tribal areas of India. Prahlad suggested that he invite some Jesuit priest to address his people: they would know from first hand experience the problems of the tribals. Sequeira invited Fr John Misquitta, who spoke to his management people for 4 hours.
Dubey said the humanitarian angle has to be taken into account in all business. Solidarity is not merely a question of justice, it is a question today of survival. How to reach out to the have-nevers is our problem, all of us must put our minds to it.
I am not sure about the validity of Rajan's analysis - it merely takes a step backward from the current wisdom - but perhaps it will be matter to be discussed at the forthcoming Workshop at Divyadaan, Towards a New Economic Order, conducted by Philip McShane (Vancouver, Canada) (see http://divyadaan.org for more details).