Kopi Time podcast with Taimur Baig

All about India’s financial markets with Ashish Gupta, CIO of Axis Mutual Fund, one of the largest and fastest growing asset management companies in India. Ashish digs into his multi-decade experience on covering Indian banks and nonbank financial companies to lay out a comprehensive picture of the current state of affairs. We go over the factors underlying the buoyancy of India’s public and private capital markets, investor sentiment and behaviour on equities, RBI’s regulatory role, and bank balance sheets and earnings outlook. Ashish provides excellent insights into the dynamic of successful exits by foreign investors laying the ground for the next round of inflows. Financialisation of India’s economy has gone from strength to strength in recent decades; Ashish explains why this story has legs.

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We dive into the implications of Donald Trump’s emphatic win at the US presidential elections. Angela Mancini, partner at Control Risks, a global specialist risk consultancy, discusses the factors underlying the outcome, its implication for US policy, especially with regards to Asia. We talk about business strategies under Trump 2.0, and the key issue--risks around China-US relations. We also talk about where the Democratic Party goes from here. The podcast was recorded at our annual macro and markets outlook event. Here is the publication that goes with it. Defying the trend: Economic Outlook and Market Strategy for 2025.

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What is the current state of fintech? Varun Mittal, founder of Fintech Nation, returns to Kopi Time after nearly 100 episodes to comment on the changes in the last four years. We discuss the depth and breadth of the sector, its profitability and investor returns across geographies, and the competition/collaboration relationship between banks and nonbank financial companies. We discuss fintech’s role in wealth planning and financial inclusion, the proliferation of payments solutions, and the state of development in the worlds of cryptos, stablecoins, and CBDCs. Discussions then move on to the impact of AI/GenAI on the financial sector and likely forthcoming regulation.  

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This podcast is an 11-minute reflection on the recently concluded IMF annual meetings, held at Washington DC. The meetings were characterised by relief over global economic resiliency, juxtaposed by heightened concerns about a variety of risks. Global growth is expected to remain stable between 2024 and 2025. Concerns about inflation have receded, but we caution against a victory lap. USD weaponisation and trade wars are causing investor strategies to shift. EM resilience would be tested by the outcome of the US elections. Intersection of AI and capital markets is generating interest from regulators. We discuss a chapter in the IMF’s Global Financial Stability Report on this theme.

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Shai Akabas, Executive Director of the Bipartisan Policy Center’s Economic Policy Program, joins Kopi Time to discuss all things US fiscal. There is no silver lining in this conversation, the outlook is gloomy, period. We begin with the US fiscal position over the past 25 years, going from balanced budget to deficits of around 7% of GDP, from net debt/GDP of 35% to 100%. Shai walks us through the various unfunded tax cuts and emergency spending outlays, with no consensus on dealing with the ballooning fiscal obligations, that led to today’s situation. And the outlook, with funding for various entitlement programs getting stretched precisely when spending needs are rising due to aging, is even gloomier. Tax increases, even if not through policy but by better enforcement of current laws could help, but that requires a well-funded tax authority. Tariffs, as disruptive as they are to the global economy, make up for a tiny part of total revenues. Bold bipartisan legislation to deal with entitlements is long overdue. Spending more on interest costs than national defence or healthcare is simply not tenable for the medium term; reforms are needed urgently. Shai’s warnings are loud and clear; hopefully they are heeded at some point in this decade.

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Drew Thompson, Senior Fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University, brings his deep China and Taiwan expertise to Kopi Time. Taiwan stands at the crossroads of tech manufacturing excellence and geopolitical tension. How does its recent political developments look from the perspective of its local population, mainland China, and the US administration? How will its politics and economic policies evolve in the coming years? Beyond the superpowers, how is Taiwan’s relationship evolving vis-à-vis SE Asia, India, S Korea, and Japan? What are the risk scenarios ahead? Drew provides unvarnished perspectives and analysis.

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Writer and academic Alexander Capri returns to Kopi Time after nearly 5 years, but the issues we discussed then and now remain relevant, if not even more so. In this engaging chat, Alex walks us through the expanding notion of techno-nationalism, its impact on trade patterns and flows, and corporate strategies around geopolitical fragmentation. We touch upon the innovation race between China and the US, China’s digital belt-and-road strategy, and the trans-Atlantic tech alliance. We consider the implication of all this for South-East Asia, as well as India.

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Vasuki Shastry, Senior Advisor at Gatehouse Advisory Partners, returns to Kopi Time to talk about the decade-old “Make in India” initiative. From Production Linked Incentives (PLI) to splashy marketing campaigns, this has been a signature initiative by the Indian government under Prime Minister Modi. What has been the accomplishment of this effort to usher in a new era of manufacturing in India? Vasuki’s report card is blunt—"it has been a qualified failure.” We go through the data on investment, job creation, technology transfer, and competition to assess his claim. We also discuss India’s complex regional heterogeneity, centre-state relationship, women’s participation in the labour force, the ultra-competitiveness of China, the difficulty—and perhaps the futility—of building an entire home-grown electronics supply chain, and the pull from emerging manufacturing powerhouses like Vietnam. Vasuki would like to see three key improvements ahead to convince him that manufacturing value added would rise substantially in the coming years—(i) a level playing field for businesses, with no perception of favouritism, (ii) stability of regulation, particularly tax laws, and (iii) political cohesion between the states and centre. He may not be impressed with Make in India so far, but Vasuki sees it as “an honourable aspiration to retain.” 

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Jennifer Sciubba, PhD, President and CEO of Population Reference Bureau, joins Kopi Time to discuss the science and policy dimensions of demographics. She begins by explaining the various ways of looking at population projections, pointing out that for most cases in recent decades, forecasts have ended up erring on the side of higher fertility. With fertility surprising on the downside and life expectancy rising, there is an overwhelming dynamic of rising median age the population around the world. Aging is pervasive and largely impervious to policy intervention. As people get wealthier and more educated, they tend to have less children, period. However, very low fertility rates likely reveal something not quite right with a society, from anxiety about cost of raising a child to a lack of societal purpose. Nonetheless, Dr. Sciubba is not pessimistic about a future with many more older people than today. The key is to strive for a society that ages without remaining ageist. Lower productivity and subdued economic growth may well be inevitable, but that doesn’t need to come with a burdensome social construct. Accepting the forthcoming aging dynamic, building a dignified and resilient society with provisions for health, shelter, and requisite skills is the way to go. 

You can watch Jennifer’s Ted talk for a shorter version of her views: The Truth About Human Population Decline | Jennifer D. Sciubba | TED - YouTube.

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Prakash Kannan, Chief Economist and Director of the Economics & Investment Strategy department at GIC, returns to Kopi Time to talk about evolving macro developments and implications for asset allocation. We cover it all in this discussion, from Fed outlook to EM resiliency, global liquidity to China policy, yen carry trade to gold, and how a portfolio suitable for the past decade is unlikely to bear similar fruit going forward. Lots of insights.

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