Recession -- Past, Present and Future

Now now.. I can not feel more sad hearing news from my friends fearing Job cuts, and I myself is a part of this whole state of affairs. A global recession means lower earnings for most businesses and industrial sectors. Many of the businesses, especially those that are dependent on exports, may even suffer losses just as it happened during the last recession, which began in 2000 (after the “tech bubble” burst) and ended around May 2003. Today, we’re seeing a replay. Now a days we are also seeing salary and job cuts, and even if someone is securely employed, chances are that one’s next increment may not be as good as last year’s. :(



The chart above compares the job loss so far in this recession in USA, to job losses in the 1990 recession and the 2001 recession. This clearly shows how unprecedented the job losses over the last 13 months have been.
On comparing we see, US lost a total of 1.6 million jobs in the 1990-1991 recession, before the economy began turning around and jobs began increasing; and it lost a total of 2.7 million jobs in the 2001 recession. Over the last 13 months, US economy has already lost a total of 3.6 million jobs and more losses in the next few months are predicted. Shit!!!

Although the facts talk of US economy, but they aren’t different for Indian scenario. It is rightly said "When the Wall Street sneezes, the rest of the world catches a cold ". The US comprises of 30% of the world GDP and if there is a slowdown in that 30%, surely other markets are directly or indirectly affected.
Just 8 months back, some people in India thought that the country will be free from the negative impact of ongoing global economic recession. However, it is now clear that India is suffering from the same problem too. So, many fresh graduates and even highly skilled and experienced educated workers are worried about their future prospects.
But, as an Expert Analyst working in MCkinsey said “I’ve seen several slowdowns, and there’s nothing abnormal about these ups and downs. The reports surely scare everone. Pick up old newspapers from 2001 and you’ll read the same kind of doomsday stories. Yet we saw the best of times after that. Without downturns like these, you can’t make really great profits.”

Taking out the Positives

Our Indian banking system is overall very good. So we didn't face any mortgage related issues. Imagine a similar situation that happened in USA happening in India, say ICICI, or Standard Charted going bankrupt would trigger huge losses in many corporates, and the Markets would have gone crashing to rock bottom levels. But that didn’t happen for good. :)
Even our IT companies are changing their focus to European countries to reduce their exposure to the US markets. I heard few days back that TCS bagged a major project in European Market. Similarly with Wipro.. Well that's great.
Indian Govt is also trying to negotiate with other countries and increase our exports. Even US Govt and Fed reserve are trying their best to avoid recession and control the inflation in US. But this all will take some time to settle. Till then we have to bear the brunt.

Things where we should Improve

One of the things that is absent among most students and educated people in India is lack of entrepreneurship mentality. They are too obsessed with doing jobs rather than taking a risk and setting up a venture. I think that this is a very good time for Indian government to address this issue (ofcourse the Govt. won’t do so as it’s already quite busy in the forging alliances and chalking out campaigning strategies). Indian Mentality will not change overnight but there should be a concerted effort among the government, universities and the media to motivate fresh graduates about this matter. The students need to have a change in mind set too.

Thus although the situation does seem bleak, we should not lose hope, and should work harder. One should not lose out on any opportunity, and create or grab as many opportunities as one can. Networking, by talking to friends, alumni and even your own relatives may bring even better opportunities. Recessions are by definition temporary, so do not overreact, keep it cool and let God do the rest.
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