Politicians, Bankers and Economists have been saying, “The fundamentals of our economy are strong”. We have heard this line so many times that I started to investigate the meaning of the ‘Economic Fundamentals’. Nobody seems to have a clear-cut answer to that question. What exactly are the fundamentals of an economy? The answer is very complicated and with all due respect, neither President Bush nor Senator McCain seem to have the brains to understand the ‘Fundamentals of an Economy’. I do not pretend to be an economist but I would try to take a crack at it!
Infrastructure should be on top of the list when you talk about the fundamentals of any economy. It is not just the depth and the breath of the infrastructure that we should talk about but also the quality of the infrastructure that the country depends upon so much. Age of the infrastructure is very important when you talk about the physical infrastructure. The investments in the infrastructure not only create jobs and opportunities but are also a big factor in the fundamentals of a modern economy. When we talk about the infrastructure, we must talk about not just the physical infrastructure but also the soft infrastructure like knowledge, research and development, banking and finance and much more. I would go one step further and add political diplomacy as part of the intellectual infrastructure. Are you still with us Senator McCain?
Energy security is the next item on my list of fundamentals of a sound economy. We are not talking about the price of gas at the station, we are talking about the comprehensive energy policy! What is the size of domestic production of oil and gas compared to the risky and expensive imports? How many refineries have been built in the last 10 to 15 years? What is the share of nuclear power in the total energy mix? What has been the level of investment in alternative fuel technologies? What is the impact of current energy policy on the environment?
My friends, the next item on my list of fundamentals is the ‘Food Security’. It is not just the availability of the food but the prices that are important to an average consumer. No country should ever be dependent on imports for its food requirements. But imports must be used to supplement the shortages and also encourage competition. Mechanization has greatly increased farm production but still farm labor is critical for the harvesting of crops and the total food supply chain. The cost of labor has a direct impact on food prices. Immigration of farm labor has always been a key component of any rural and agricultural economy. Sorry folks, the senator is sleeping!
Filed under: International | Tagged: Age of the infrastructure, Alternative fuel technologies, Bankers, Current energy policy, Economic Fundamentals, Economists, Energy security, Food Security, Fundamentals of an Economy, Infrastructure, Intellectual Infrastructure, Nuclear power, Physical infrastructure, Political diplomacy, Politicians, Soft infrastructure, Total energy mix | 1 Comment »
THINK! 