Prosperity is a great teacher; adversity a greater!

During the pleasant times anybody and everybody can do well but those who surpass the hard knocks should be praised. Creativity and innovativeness are factors of competitive advantage that cannot be easily replicated. But they should be updated on a continuous basis. The most profitable time to foster the talents is when calamities cause the most gifted people to worry about their present and future. This saying that “Prosperity is a great teacher; adversity a greater,” is as genuine and pertinent today as it was years ago. During The recent time the greatest economic calamity which the world faced was the recession during the latter years of this decade. Much can be drawn out from this crisis which would help us in understanding the primary causes and factors which lead to and aggravated this crisis. A recession is a decline in a country’s gross domestic product (GDP) growth rate for two or more consecutive quarters of a year. The beginning of the disaster started due to American banks sanctioning housing loans to sub- prime borrowers. Who are sub-prime borrowers? They are people who have already defaulted in paying back the loans and were given least rating by the credit rating agencies of America. In spite of knowing their ratings, American banks granted them loans in order to earn more interest and American government allowed them to do so in order to get praise for enhancing the standard of living of its citizens. Let alone making profits, the banks could not even the principal amount. The loans were granted without any security kept as mortgage and the gravest ramification for having defaulted on loan would be to return the house or property for which the loans was taken without any further legal or corporal consequence facing the defaulter. The primary cause of the customer resorting to default was the crashing of property prices due to over supply of property. This way Subprime crisis of 2007, ended history of many banks in United States of America starting from Lehman Brothers, JP Morgan, Bear Sterns, to name a few.Bailout packages were given by American Government in order to minify the effect but it was too late. The meltdown had already started to disseminate around the globe. Globalization despite having numerous pros had caused havoc in the economies of the US dependent world. Countries which used to trade maximum with US were affected the most. In China,for instance,the combination of slower growth rate, shrinking import, rising unemployment, contraction of the manufacturing sector, rising bankruptcies had cumulative negative effect on forecasts of China’s annual GDP growth. The most optimistic forecast as of the present hovers between 5.5% to 6.5%, a significant fall from the double digit which China had enjoyed for over decade and half. India on the other hand, in spite of having the most conservative and restrictive policies drowned in the flood of the meltdown. The vast corpus of (FII) fund which was invested in the Indian market had found its way back into the pockets of its owners. Layoffs became the most preferred word for nearly all the Multinationals and domestic companies. Stock market crashed deep down leading to huge loss of valuation and resulted in reduced market cap for the companies. One time industry leader had reduced to minnows. The real estate firm such as Unitech and DLF, which on top of the valuation chart once, had lost considerable value and were now facing huge shortage of capital to continue their operations. Banking system faced liquidity crunch. Fall in GDP from 9.7% (2006-07), to 9.2% (2007-08) and 6.7% (20008-09) was cause of pain too. In his speech, President Barack H. Obama pressed out his desire to bring his country out of the crisis. He proposed to pass a bill restricting giving outsourcing work to other countries. This news sent shivers in software industry. Countries such as India whose principal trade partner was US especially in the IT domain, which is a significant contributor to India’s GDP, were badly hit. Forget career progression and job satisfaction. For a workforce beaten-up by recession, the new reality is reduced expectations, increased anxiety and a desire for job security and stability. The recession may now be coming to an end, but its impact on the economies of the countries on the global will be deep and long-lasting. The finance minister, Mr. Pranab Mukherjee, expressed the hope that economy will reach 10% growth in not too distant a future. The minister explains in this budget (2009-10) that after a fall in GDP growth in 2008-09 to 6.7% the growth has built up and 7.2% is expected in 2009-10. There was a significant fall in the unemployment rate of India too. Therefore, Training & Development of human resources should be seen as an investment of tremendous economic value. Organisations must focus on nurturing talent if they are to survive, grow and succeed. In the long run we can say that “Money has no memory. Experience has”. You probably will not be able to remember the total investment on your education but you will always cherish the memories of school and college and the knowledge you have got.Life has always been a roller-coaster ride for everyone. Sometimes the wallet was full but sometimes even the pocket was empty. One must always be optimistic in his thoughts. What if it’s recession? Let there be recession in the economy but any recession should not affect the quality of your life. If you are not able to take your parents to a tirth yaatra, you can at least take them to a nearest temple. Time will pass, economies will revive and currency will soon regain its value. But let no recession make you lose out on your experience….