Sree Iyer: Hello and welcome to episode 74 of Daily Global Insights. I’m your host Sree Iyer joining me is Sridhar Chityalaji. A very happy Sankranti to every one of you. Sridharji, Namaskar and welcome PGurus Channel.
Sridhar Chityala: Namaskar, Happy Sankranti, Happy Pongal, Happy Lohri and happy festivity day today.
Sree Iyer: Yes, indeed. And today is also the beginning of Uttarayan and think of like a new beginning and hopefully 2021 dawns better than 2020 did. We will see how that plays out in the course of weeks and month. First, off Sridharji, what is the latest on impeachment 2.0 yesterday the House did vote for impeachment and the interesting thing I noticed was that there were ten Republican Congressman/women who voted for impeachment looks like this is being led by Dick Cheney’s daughter Liz Cheney and does this mean officially that there could be a split in the Republican Party, Sir?
Sridhar Chityala: Well, I think first and foremost, yes, President Trump was impeached yesterday. It’s one of the most amazing in the history of impeachment ever conducted decision was made, conclusions were drawn. There was no debate. There was no discussion, you know brief statements were made, conclusions were drawn that he is too dangerous to be a president and yet there was no precedent anything to indicate that there’s no danger. I’m here stating quite candidly my personal opinion in terms of the precedent here. So anyway, so I think they went through the process and they had determined and issued an ultimate, 25th amendment was not accepted and then they said, okay, we’ll hold impeachment hearings in less than half a day, the hearings had no evidence except perceived statement. And 222 Democrats and 10 Republicans making it to 232 and I think it’s 197 and 5 abstained on the Republican side. Yes, there was a bunch of people from the Republican side led by Liz Cheney who said the President deserves an impeachment. So immediately the left-wing press said, oh it’s a bipartisan impeachment.
So, there was a bipartisan, if 10 is a bipartisan impeachment then I don’t know what 100 would be but, never mind, setting that aside the impeachment was done and knowing fully well that the impeachment now is reliant on the Senate to process, vote and conduct a trial for conviction and there is no time window available, Mitch McConnell came back and said, the earliest that I can take it up is only after President Biden takes office and Trump leaves. So, Arkansas Senator, Mr Cotton has raised an issue which is to say you only impeach sitting Presidents and then you get him out of the office. You’re not going to impeach a private citizen that means we are opening up your whole gamut of issues and the law and Constitution is very clear and specific. So where this is heading after this particular step is a very interesting point. Nancy Pelosi was asked to comment after this by the press and she refused to comment and she basically said impeachment is done, now it is going to the Senate, it’s up to the Senate to act on it.
Sree Iyer: I can tell you that should the Republicans get back the majority in 2024 and act to impeach whoever is the president at that time will be very high on their list of agenda. I think this is going to be a tit-for-tat response and it’ll be a waste of taxpayer money. If, should that happen? This is really really sad, the way politics in the United States is sinking but then I am just an average citizen expressing my thoughts. Let’s move on to the next set of things here.
Sridhar Chityala: Well, CBS has conducted polls, 80% of the people Republicans, don’t agree with this impeachment. Okay, this is CBS, by the way.
Sree Iyer: Yes, yes.
Sridhar Chityala: This is not Epoch times or Newsmax or even Fox which has turned center-left rather than Cente-right, so, this is CBS. So, therefore, the very well worth the left-wing people should be satisfied that it is CBS and they said 80% and then again, John McLaughlin has conducted a poll over 73% of the Republicans went on to stay they are unlikely to vote for those people, who voted for impeachment. So, clearly, these 10 people who are sitting to answer to your first question when you framed it. I have a feeling that they’re going to have people challenging their nomination as a first step, eventually, they being displaced by people who are with the conservative values and move forward. And so that’s very much is looming on the cards.
Sree Iyer: And it’s interesting isn’t it, that we used to have this thing called the Tea Party Movement tax enough already that was the TTA stands for taxed enough already, that movement suddenly seems so petered out in the Republican Camp after Trump came to power. This is off-script here, I’m going but, what are your thoughts? Where do those guys stand?
Sridhar Chityala: Well, I think they generally were pro-market sentiments because at that point of time, when Obama came in lots of things were going on, which they were totally against. The main street was going after Wall Street as the single source of culprits and not recognizing the whole thing. Look the mortgage crisis is not one way, there’s a lot of beneficiaries, who are the retail, so, the tea party was around the whole economic kind of flavour and they said, we oppose the kind of steps being taken. Much of those regime has dissipated because of the pro-market based business architecture and policies that came under Trump, basically the pro-business fewer taxes, more small business focus, more flavour for you know, those types of programs.Bond Market has had historical challenges, but they agree that the interest rates cannot be hiked in an environment where you have less than 2% inflation. You really need an instrument, monetary instruments to ensure that the economy is sustained. So, that proved to be in hindsight, the right decision the only period if you can see I think we discussed it in one of the sessions is in 2018-19 they attempted to hike the rates the market reacted adversely. That’s one year the markets were down and then it was back up again during these four years of president’s tenure. So, I think the Tea Party to answer to your question there seemed satisfied and they kind of mainstream integrated into the Trump regiment.
Sree Iyer: Thank you for that update, Sir. So let’s take a look at events around the United States. Trump has clearly told his supporters, no violence, no law-breaking and no vandalism and there seem to be some interesting revelations that are coming out especially the Gateway pundit story saying that now, it looks like the violence for January 6 was planned a lot earlier. We’ll talk more about it probably maybe tomorrow, but you can see that this is not something that was an instantaneous response.
Sridhar Chityala: Well, it could not have been, because all of these guys who came that day, you know could not have come in to climb the walls Etc. But, as you rightly said, you know will give us separate attention to this specific topic since you raised that point. We will also cover tomorrow’s Jack Dorsey’s Nirvana, you know, as I always said you have to feel the pain in the belly for your brain to resonate. So, you feel the pain when many of the left writers, don’t feel the pain so they can write anything and they can advocate anything that they please because the reason is everything is done by the government whereas in the case of Twitter if he does such a certain action its stock tanks, investors run as you have seen in the case of President Trump. President Trump’s action resulted in many state local governments cancelling his contracts with his business, many sponsors or funders basically backing out, corporate sponsorship going out. So, therefore, I think that there is a calibration model here, so we can we’ll discuss that again, what his statement is and why it suddenly he has changed his tune.
Sree Iyer: Yes, indeed on Liz Cheney, now, there is pressure building Jim Jordan has called for the House GOP vote to remove Liz Cheney as a conference chair. So, this is going to have low back within the party, also isn’t it?
Sridhar Chityala: Well, I think that is a consolidation that is going on within the party. I think that’s what you’re going to witness, which is namely you know, it’s not out of context that there are 74 million people who voted for President Trump. How much are some of these actions may be justifiable/unjustifiable in by way of these tweets, sometimes, he has a tendency as well to overshoot his mouth? But, the story is you don’t change the positions based on those but, look everything, look at data, Look at the policies. And the policies, we have a very clear three-tier government House and Senate and then the executive and then if it is incorrect the judicial branch to validating. So, by and large, the policies of President Trump, notwithstanding his utterances have toed the line of the House and Senate. Of course, you can assume that there will not be a bipartisan. It will be partisans, be it on censors, be it on stimulus, be it on many facets, you will see but, at the end of the day, you have you toe the line. So to your point, there is definitely a movement just as there’s a movement emerging on the Democratic side, which we should say to ban or to put them on the no-fly list because they could be a danger to the fellow passengers. They should be on the no-fly list, at least three members have been listed. And leading that list is Ran Paul and George Holly, these are two guys should be no-fly list as they pose an imminent and clear danger to fellow passengers, so they should not be.
Sree Iyer: Sounds a little ridiculous. But, then that’s what you have voted and that’s what we have to live with for the next four years. So let’s move on quickly the US declassifies Asia strategy showing Trump Administration to start allies to contain China. Let’s just move on to the Global things, sir, we can touch on that because it really leads to my next question. Also, I just want to tell our viewers that Obama era veteran Kurt Campbell is going to be heading Biden’s Asia policy. This is sounding more and more like Obama 2.0. It’s all being orchestrated from behind the scenes by Mr Obama, Biden seems to be a figurehead. That’s how I see it. I could be wrong unless the Democrats can prove me wrong. I’m going to stick to my statement. I don’t know what you’re thinking sir. I’ll let you respond to that.
Sridhar Chityala: It might think that it is and if people don’t know, I’m one of the Global Security Council Members of the Carnegie Foundation. The former CEO of Carnegie Foundation is Will Burns or William Burns will now be heading the CIA. So, he is a career Diplomat. He was assistant secretary. He was the one who did the nuclear deal between the US and India. So this gentleman is one of the fine diplomats but the story is that he is another Obama appointee. So it’s very much an Obama team and I tend to agree with you that effectively what we are seeing is Obama policy 3. With regards to Asia, Asia is in a fine spot with all the policies put together by Trump. So he is really getting a cakewalk as far as Asia is concerned.
Sree Iyer: The USA has broken new ground to build a new Embassy in India. Can you share a little bit more thought? Is it still going to be in the Chanakyapuri area?
Sridhar Chityala: Oh, yeah. So I don’t think I can comment on which specific area, but I think they’re trying to beef up the security after some incidents that occurred in the embassy. There are also expanding the footprint. So I think that’s where the new Embassy is going to be. It is also expanding as the trade and business have expanded in there so they feel that time has come for them to not only expand the footprint but also the security apparatus around the embassy.
Sree Iyer: Let’s take a look at Global update now. Rafael Grossie, the IAEA person has said that the renegotiation of the Iran nuclear deal is out of the question because now more and more people are finding out that Iran is probably closer to building nuclear weapons more than ever before. So now, those of us including myself, at one point two-three years ago was questioning Trump for reneging a sovereign agreement between country to country. Now, all of a sudden we see that Iran has been enriching uranium all along and that’s valid grounds for Trump to have broken the Iran Accord. Any thoughts on that, sir?
Sridhar Chityala: No, I endorse those sentiments. I think Trump got it right there. Three essential things that we have spoken about one, the presence of Al-Qaeda in Iran. Number two is the continued enrichment of uranium. Number three is, now the news which always Israel and the US suspected which is the creation of the nuclear weapons and forth if I have to add, they have also found some tunnels and underground bunkers for launching the surface-to-air type of missiles. So the story is that Iran is a very big story and I think Trump has got it, right.
Sree Iyer: Japan and India’s defence chiefs have voiced solidarity on Maritime status quo. Now you are seeing that the quad pieces that were planned and put together the things are beginning to start taking shape and moving there, isn’t it?
Sridhar Chityala: Well, rest of the world thinks that they have to toe the line of Biden and what Biden is thinking. Clearly, the Quad States especially Australia, Japan and India more specifically Japan and India, which is leading that effort have made it very clear to the incoming Mr Biden, ‘We are not going to toe your line as far as combating China is concerned.’ So the Quad strategy is in place for you whether you want to call it Quad, whether you want to call it Indo-Pacific that is in place. Britain, Germany and France had toed the line whether they’ll continue to do so we will know shortly. As far as the actual Quad is concerned that seems to be in place. Quad minus 1, what the US does, remains to be seen.
Sree Iyer: Yes indeed, we’ll have to wait and see of course we will be encouraging the United States to do the right thing these are inter-country agreements one more time and we’ll hope for the best, we don’t have to take a call right now. Indian army is now getting Made in India drones for Ladakh, that’s a new development.
Sridhar Chityala: Well I think that our defence has been identified and established by the Modi government as one of the sectors in which they will bring in the capital. 51% was the original expense. I think it is increased close to 70% or greater if my numbers are correct. In terms of the capital coming in, the capital is coming in with know-how so the Indian capabilities particularly on the engineering side can be leveraged. So they are starting to produce everything including the guns, besides these BrahMos missiles. They have also placed an order for I think 87 or a hundred more Tejas light combat Jets and then you have got the drones clearly sending a message that India is going to be a big domestic manufacturer and exporter. It is starting to export to the southeast, the South China Sea countries as well as to the nearby, the Russian Republics. But the most important feature of all is that India is ready to combat China. It’s all revolved around China. So effectively everything encircles Ladakh, so they’re not going to repeat so they feel that they are not going to be reliant on anybody in the world and they have all the capabilities within the Indian ecosystem.
Sree Iyer: India’s real GDP. It is set to expand 11.1% after a 7.75% contraction in 2021. I think the fiscal year in India is starting to get moved up. I could be wrong about this but I think it is no longer April or they’re trying to read the budget at least on 28th of February. So that is coming up soon. So we will know more about this. So any insights on how this Expansion is going to come about?
Sridhar Chityala: The expansion is coming out from three, one is the pent-up demand which has built-in, so you will see the harmonization in outer years. I think it goes back to some 8 or 8.6% for the following year. So 11.1% is driven by pent-up demand as well as tremendous investments that have come into various sectors. Also the export, the pharma exports, it could be a big number, factoring in. So exports are one, the agricultural growth which typically hangs around 3.5 to 4 – 4.5%. If I remember the number correctly they are expecting about 14.5 or 15% growth next year. So there’s a combination of drivers which is helping this big momentum in the GDP output.
Sree Iyer: Let’s take a look at covid. We have not touched upon it for the last couple of days. Now the covid cases in the world are about 92.6 million, 1.9 million dead and 66 million have recovered and 24.5 million still active. We are now seeing like I predicted yesterday, that there are new strains of covid are showing up in Ohio. Now we talked about this two days ago, sir.
Maybe you can touch upon as general coverage of covid. We’re also having vaccines. Johnson & Johnson has come out with a single shot vaccine that has not been FDA approved yet. So there’s a lot of stuff to cover on covid. So please update us on where things stand.
Sridhar Chityala: I think the vaccination programs have commenced. Every country in the world has more or less decided what the source of what type of vaccine they would be initially going with. They have some initial results. Many countries have also imposed lockdowns. They’ve seen rising cases, but there’s a general feeling that this can be combated with a combination of vaccine, lockdowns and flexibility to change the vaccines as the vaccine production shoots up. The Silver Lining here is that India is going to be the second-largest producer of vaccines in 2021 and second only to the United States, so which implies that a lot of the vaccines are going to be also for export purposes besides the domestic consumption. But this new variant viruses, new categories of viruses are now beginning to come out. There is a report that from one of the doctors which basically states that we probably have to live with this for, maybe for a few years it is just not going to dissipate. We also have a report on the covid that the team of WHO has landed in China two of them were sent back or quarantined and may have to go back because they tested positive for covid when they landed in China.
Sree Iyer: So this is again the thing, one can never say that this is all done and eradicated. There is always some strain, some surprise. In fact, even testing we noticed that people who left the United Kingdom as covid free – covid negative and when they landed in India and retested suddenly, they turn out to be covid positive. So it could be due to the testing procedures that are being adopted those could be different. It could be different strains. So there is a bit of a settling-down time that is needed before things start becoming more normal. The United States has cross 30 million individuals who are vaccinated and I think these are primarily Pfizer and AstraZeneca with perhaps now Johnson & Johnson will probably take the front stage because it’s a very compelling alternative if you just have to take one shot. Why would you not take that out? Isn’t it?
Sridhar Chityala: Yeah, Moderna has also been approved for contingent use in the United States. Biden asked Alex Azar to step down and for the new guy to take over, it’s always the political spectrum to accelerate or relook or revisit etc. So I think that in the United States will get its act together. Now everywhere we are getting reports that vaccine is available for you to enrol yourself for the program.
Sree Iyer: So let’s take a look at the Budget, again has hit a record deficit of 144 billion last month. And this is driven up mostly by covid-19 spending and or benefits and I think it is going to shoot up even more because Biden has promised that he will have his own round of stimulus. Isn’t it?
Sridhar Chityala: Yes, he does. So I think the expenses were around for 90 billion and the taxes revenue was around 360 billion. So the stories are 344 billion. So that made 144 number predominantly for two reasons, one is the covid program stimulus and the second is the extension of the unemployment benefits. We are already indicated that budget we started was 4.14 trillion as expenses with about 3.75 trillion as of the revenue with about 560 billion as the deficit. But now we have well well past, we had a 2.1 trillion initial stimulus. We covered that separately. Then we have 900 billion stimulus that has kind of kicked in right now and more to come. So the story is that it is a significant number and the US being the base currency they can either print notes or there are ready buyers but this is going to be added to the total debt with the interest rates being low they’re able to service it, only when interest rates go up it will post an interesting fiscal risk in terms of the cost and the deficit even blow out further.
Sree Iyer: Well inflation has also been very low right now, and that helps the whole story along. Sridharji, I think that’s a wrap for us now we’ll be back again tomorrow, same time, same channels and thanks for joining. Please subscribe to our channel, please donate to our channel. It’s been my pleasure to have Sridharji come up to the 75th episode tomorrow. We’ll be talking a lot of new things that have not been covered before so stay tuned. Join us, support us and Namaskar.
Sridhar Chityala: Namaskar and have a wonderful day.