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Last Updated : Jan 23, 2018 04:12 PM IST | Source: CNBC-TV18

Davos 2018: Will have to evaluate Narendra Modi on a 10-yr basis, says John Studzinski

In an interview with CNBC-TV18’s Shereen Bhan, John Studzinski, VC-Investor Relations at Blackstone shared his views and outlook on the Indian economy. He was speaking from the side-lines of World Economic Forum (WEF) 2018 in Davos.

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In an interview with CNBC-TV18’s Shereen Bhan, John Studzinski, VC-Investor Relations at Blackstone shared his views and outlook on the Indian economy. He was speaking from the side-lines of World Economic Forum (WEF) 2018 in Davos.

Prime Minister (PM) Narendra Modi has extraordinary expectations. When you evaluate a Chief Executive Officer (CEO), you cannot evaluate over 4-6 years, they need at least 10 years, so we are going to have evaluate Narendra Modi over this term and then he will be re-elected over the next term, he said.

I think India should give him the benefit of letting him work on transforming India. He has already put in place a number of building blocks with demonetisation, anti-corruption, transparency, doing international business in India has become easier, he added.

Below is the verbatim transcript of the interview.

Q: You have looked at looked at India for years now. You have been evaluating and assessing 'Modinomics', if I could call it that. What is your take on what the Prime Minister has been able to deliver on and what the expectations are now from him?

A: Modi has extraordinary expectations. Remember, he is someone who people see as the great story. He is someone who is aspiring to be, what I call, a transformational leader. By transformational, I mean really to take India to the next level of its status on the global economic front. And that of course, is not something that can be done in three or five years. It is something, when you evaluate a Chief Executive Officer, you cannot evaluate him or her over 4-6 years. They need at least 10 years. So we are going to have to evaluate Modi over this term and then of course, he will be re-elected.

Q: You are certain about that?

A: I think India should give him the benefit of letting him work at transforming India. He has already put in place a number of building blocks with demonetisation, anti-corruption, transparency, doing international business in India, has become easier. Now I know that domestic market is always going to be more cynical. Lots of people's short-term lives have been possibly disrupted by the demonetisation. People love to criticise the demonetisation process and how it was handled.

And perhaps, some of the logistics of that could have been more efficient, but having said that, he has a vision and he has got to balance the long-term vision with the interim vision with the short-term logistics. And I think where he has to oversee focus more is making sure the short-term communication with these constituencies across all of India has continued to focus on. He has got to balance today, this whole juxtaposition of being an identity populist leader, which he is, with being a long-term transformational leader. And is he going to be the next Nehru of his time? Who knows?

Q: Is he going to be the next Nehru of his time; is that the expectation? What is it that you would like to hear from him this morning?

A: I think he probably wants to tell everybody where he sees India. Last year, people are going to look at this alongside the discussion that President Xi had about the vision of China. And last year, President Xi's speech really re-anchored China. It almost turned the world on its head and made the world focus on China. I think people want to see is India going to play a prominent role in the World Economy going forward. The growth is there, the potential is there, the talent is there particularly in the areas of technology. The question is can Modi put a much bigger, sustainable team in place in order to accomplish that growth on a prolonged level.

Q: Last year about China. This year, it is about India and it is also going to be about President Trump and the US. What is the expectation there?

A: It is unprecedented there that almost the entire cabinet will come to Davos. So from Klaus Schwab's point of view, it is a great kudos for him for getting all of them here. And I think it is important for the Cabinet to be engaged in international dialogue and I think it is good. I think Trump is still an enigma to all international leaders, certainly to the Indian press. So to have Trump here is a good thing.

Q: What is the outlook as far as global growth is concerned, global economy? And the fact that we are seeing crazy valuations whether it is India or it is the US, global equity markets continue to see momentum, continue to rally. What is your outlook on where things are headed?

A: I do not really see, there is no indication whatsoever in 2018 that there is going to be any change other than continued sustained performance of the US stock market and the global stock markets. We are looking at growth this year, globally of between 3.5 and 4 percent. We still have low interest rates, low probability of recession, low volatility and profit margins and earnings are in a very stable, sustainable levels. There is always the chance of a shock.

Q: What could that be and where could it come from?

A: I like to think about the fact that we are going to have more cyber shocks, which is going to be a new form of war or tactics. Different types of groups around the world trying to shut down financial institutions to cause short-term panic among consumers. But people are spending enormous amount of money on cyber security right now and that is going to continue.

Q: What is going to be the one thing which you would watch out for in 2018? You believe that the bull market is here to stay, but what is going to be the one thing that you would watch out for specifically?

A: I think the world, this is the first time where you probably have not just one or two geopolitical risks, but you probably have 4-6 substantial geopolitical risks. So from that standpoint, the thing I would look at for, is which one of those geopolitical risks would actually materialise and shock the world. We all know there is a whole list of them, but there is no question that this is the first time in a long time that we have so many.
First Published on Jan 23, 2018 02:16 pm

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