Why it is a good idea for India to have a Temasek Holdings of its own?

Recently there has been talk of India having its own Sovereign Wealth Fund. The idea espoused by TV 18 Founder Raghav Bahl has attained additional intellectual fuel by Economic Thinker Arun Shourie’s backing of the idea. A Sovereign Wealth Fund for India will be a holding company for the profitable public sector enterprises, and will be a ‘National Champion’ in French parlons extrapolating National Power overseas such as an Alstorm or a Arcelor. According to policy research, the locus of the corporate headquarters helps the organization to leverage national assets in a globalized marketplace of ideas and assets. In short it is an extension of foreign policy and state capitalism. Temasek Holdings and GIC, the Sovereign Wealth Funds of the Republic of Singapore have been vehicles of this meritocratic City-State to help it punch above its weight class in the international financial community. Singaporean Sovereign Wealth Fund’s were one of the biggest investors in the 2008 financial depression. The Changi Naval Base in Singapore regularly hosts US Navy ships.  Financial and Economic might go hand in hand. Recently, Singapore has emerged as the largest offshore trading hub for the Chinese Yuan.

Qatar Holdings is one of the world’s most aggressive sovereign wealth funds snapping up assets across the globe. Although Qataris are incredibly affluent with an absolute monarchy, its prominence in the domain of state craft is a case in point.  A country such as India should not compare with these islands of affluence. China, Brazil, Indonesia and Mexico are probably better examples to draw a comparative. As a prominent media commentator from Singapore quipped on my Facebook discussion thread on the same theme as this post,  that India missed the competitive resource nationalism bus vis-a-vis China long time back but an ONGC Videsh would have found it much easier to compete with a CNOOC if India had an over-arching SWF to back it in the international financial markets.

A muscular foreign policy needs the cash of an SWF to enforce its talk. The ability to raise capital and acquire assets at will is crucial towards projecting strength. A good idea whose time is ripe, actually long over due.

 


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