Dr. Susmit Kumar, Ph.D.

The Modi administration should not choose another US-based economist as next Chief Economic Advisor (CEA). It is true that the education system in the US is far superior than that of India. There is no doubt that the US-based “imported” economists and management professors are brilliants and they are capable to guide Indian economy better than the most of their counter parts, barring few, in India.

 

In China, Liu He, a US-educated economist, is believed to be one of the primary architects of Chinese economic policy since late 2000s (please read Wikipedia page on him: Liu He). During 1990s, he studied at Seton Hall University (New Jersey, US) and then at the John F. Kennedy School of Government, Harvard University, US. But throughout his entire life he has worked in China (please read: Biography of Liu He).

 

The US-based economists come with a baggage. They are in India for just 3 or 5 years tenure and thereafter, they go back to the US and hence their ultimate allegiance is to the US and not to India. Therefore they would never teach India something which would negatively affect the US dollar and US economy otherwise their career would be finished in US. They will only teach you how you can work hard, competing with other exporting countries, to get a piece of the US consumer market.

 

As I have written in several papers in past (for an example please read: Niti Aayog: Why does it need new direction and a new leadership? - the paper which led to the resignation of Arvind Panagariya from the Vice-Chairman of Niti Aayog), if India wants to become a superpower, it first needs trade surplus for at least a decade or more to accumulate couple of trillions of dollars in FOREX so that it can make its currency rupee a global currency. But the US would never like to see because it would downgrade its own currency dollar. All the three economic super-powers, China, Japan and Germany, except the US, have had trade surplus for last three decades or more. When I talked to people in US that India should have trade surplus to become an economic superpower, nearly all of them say that the US, the superpower, has trade deficit for more than four decades and hence India also can become a superpower despite having a trade deficit. But once I show them the historical charts of the US trade and US foreign debts (please see the Chart 1 and Table 1 in my paper: Part IV – US Bogus Market-Driven Economy and RBI’s Functional Autonomy), then they immediately ask me how they can save themselves once the US economy goes down drastically.

 

Under the 1944 Bretton Woods Agreement, signed by 44 countries, the US enticed all other countries by claiming that it would keep its dollar pegged to gold at the rate of $35 for one ounce of gold. The US asked other countries to use the US dollar as reserve currency and also for conducting transactions between countries. As per the agreement, you could have asked the US government to give you one ounce of gold for $35. The US had trade surplus from the end of World War II till 1971, but since it has had trade deficit year after year. The reason for it is that Nixon de-linked the dollar from gold in 1971, after which the US has just continued to print dollars to fund its trade and budget deficits. This has been going on since the Reagan administration. Therefore the US-based economists would never give importance to trade surplus. Please write the name of any US-based economist with the words “Trade Surplus” or “Trade Deficit” in Google search and you will not get any search result in which the economist has said that India should give top priority to having trade surplus at the earliest.

 

The US-based “imported” economists are the Bhisma Pitamah of Mahabharat. Bhisma Pitamah was a very honest person, but had allegiance to the throne of Hastinapura. Hence in the Mahabharat war, he fought on behalf of Kauravas, who were ruling Hastinapura, against the righteous Pandavas despite knowing that the Kauravas were evil and doing injustice to Pandavas.