Is the Elephant taking the Tigers` place in the Sick Bay?

Is the Elephant a Tiger today?

Is history repeating itself ? (Like its supposed to?)

Is the Elephant really a tiger?

Here’s an excerpt from an Economist article in 2007 analyzing the Asian Economic Crisis ten years after it unfolded in 1997. It begins with describing why the crisis happened in the first place :

“The financial crisis can be described as having been a “perfect storm”: a confluence of various conditions that not only created financial and economic turbulence but also greatly magnified its impact. Among the key conditions were the presence of fixed or semi-fixed exchange rates (1) in countries such as Thailand, Indonesia and South Korea; large current-account deficits (2) that created downward pressure on those countries’ currencies, encouraging speculative attacks; and high domestic interest rates(3) that had encouraged companies to borrow heavily offshore (at lower interest rates) in order to fund aggressive and poorly supervised investment(4). Weak oversight of domestic lending (5) and, in some cases, rising public debt(6) also contributed to the crisis and made its effects worse once the problems had begun. If factors such as exchange-rate policies had helped to precipitate the financial crisis, above all it was excessive and poorly supervised foreign borrowing (7) that made it so disastrous.“

To those of you, who cant already make the connection, let me use the numbers from above in one sentence for each.

1. India or the RBI has tried for long to ‘fix’ the rupee in a band.
2. India`s current-account deficit is at its highest point in modern times since 1991 (You remember what happened in 1991, dont you ?)
3. India`s domestic interest rates are sky high after 13 successive rate hikes and one Congress directed political rate cut.
4. Indian corporates have aggressively invested in both domestic and international buyouts that have turned sour due to a million reasons.
5. Domestic banks have lent at will to everyone from tottering wannabe airline tycoons, to grandiose palace hoteliers to dishonest real estate players.
6. MNREGA and a dozen other populist schemes have fed off the rapidly depleting treasury that has turned the RBI into a loan dalal for the Government of India, steadily crowding out private borrowing.
7. The RBI allowed companies to obtain great big amounts of FCCB funding without understanding the risks.

The parallels are eerie. And too real to fluff about. As such, members of the house, I can safely conclude that the Elephant, is infact in the Tigers` bed in the sick bay.