Can’t help but feel the sense of déjà vu as we read the newspaper, watch the news, surf the internet or track social media pages. All through last year, the global pandemic has grabbed headlines and all main stories that are invariably talking about recessionary trends, shrinking economies, weakening demand and low sentiments. For the new-kid-on-the-block, it can be a bit overwhelming but for mature business leaders, they know better. Tough, tricky but temporary, established business leaders have seen several cycles of boom and slump over the years and have learned to cultivate a positive mindset that- ‘This too shall pass. Here is a trip in retrospection when the world, particularly India suffered harsh climates of recession, negativity and low morale.
1. 9/11 Terrorist Attack – Deemed as the global ‘Super Power’ America shook to its roots after the audacious 9/11 terrorist attack. It caused significant economic damage in the immediate aftermath, rippling through world financial markets. Insurance and airlines took an instant hit, while the domino effect could be felt on every other business. Stock markets crashed and fear and insecurity gripped global minds. Yet, in a matter of months with the support from the federal government America was back on its feet in full glory.
2. Subprime Mortgage Crisis – Interestingly, the subprime mortgage crisis in the USA between 2007 and 2010 resulted in a global meltdown. Triggered by the burst of the housing bubble by a large decline in US home prices it resulted in mortgage crimes, foreclosures, and the devaluation of housing-related securities. As home prices fell, it snowballed into a Bank crisis. Bankers stopped lending internally with the fear to receive mortgage-backed securities as collateral resulting in the most severe global recession in decades.
3. 2008 Business Crisis – Stemming from the subprime mortgage crisis was the epic 2007-2008 business crisis. Also known as the Global Financial Crisis (GFC), economists believe this to be the most critical financial upheavals since the Great Depression until the 2020 pandemic. The instability of the banking sector caused damage across all industries and sparked a period of global recession, an increased rate of unemployment, suicides and a looming period of mistrust in the banking institutions.
4. 2G & Coal Scam– Boosting the telecom sector the 2G spectrum allocation in 2008 marked a new era in the telecom sector, doubling the total number of companies offering service from 7 to 14 and leading to a 50 per cent drop in telecom rates. But the exposure of the 2G scam followed by the 2012 judgment changed the fate of several telecom companies involved. Supposedly, independent India’s biggest corruption case valued at Rs 1.76 lakh crore this political scheme of bribery, treachery and chaos added to a recession. Moreover, the irregularities around the Commonwealth Games-related at same time triggered the powerful anti-corruption movement resulting in the economy slipping, inflation rising and policy paralysis setting in. in 2014, the historic coal blocks judgment by the apex court, public sector banks bore undue pressure due to the cancellation of coal blocks, as they had extended credit to power plants that expected coal supply from some of the mines cancelled by the court. This too prompted crippling times as the banking sector remains the backbone of any economy.
5. The 2020 Pandemic – Undoubtedly the most complex and glum cause of a global lockdown is the ongoing 2020 pandemic well into its second year. Transforming life into a ‘new normal’ the pandemic has introduced new terminology including social distancing, masking a novel category called “The New Poor”. It has pushed an additional 88 million people into abject poverty and negatively impacted global economies. From health crisis to debt rises, decreasing demand and consumption to companies bordering on critical survival, the pandemic has taught us the hardest lessons of life so far.
With the state of affairs still unclear the road to recovery looks dotted with difficulties. Yet, this test of perseverance and resilience remains just another roadblock for the seasoned and astute business leader. Are you one of them?