Finally, we are on the day of most awaited and talked about U S Presidential Election 2016; it will be 58th U.S. Presidential Election and will likely determine 45th President of US.
Technically, there are five major parties namely: Republican, Democratic, Green, Libertarian and Constitution, nominating their Representative Donald Trump, Hillary Clinton, Jill Stein, Gary Johnson, Darrell Castle respectively; for the Presidential election.
Must say, it’s a Voters day, so much wait, so much curiosity about succeeding U.S. President and why not, after all it’s the biggest economy and the result will impact the stock market, employment, economic, income, trade and industry, inflation, global warming, spending for defense and improvement, health care/Medicare, privacy & Data security, education, religion & social issues, etc.
There are a lot of expectations from the upcoming ruling party as there are many challenges and open issues which the succeeding party is expected to resolve. The upfront major challenging open issues the winning party will have to work on will be the ISIS issue followed by the other major issues like the economic crisis, education, employment, redundant/unfriendly policies, food safety issues, climate change, civil rights, real estate, immigration reforms, etc.
Election predictions are like earthquakes predictions. Today, all the issues are in voter’s hand who will elect a suitable leader to help resolve these issues. Generally a voter vote for a strong candidate or a strong party, many times a candidate may not seem to be so promising/strong but looking at his party’s reforms and achievements helps him to bag the win which happens in majority of cases; whereas in some cases party might not be so strong enough but the candidates charisma influence the voters. Few to name with such charismatic personality are John F. Kennedy, Ronald Reagan, Ulysses. S. Grant, Herbert Hoover, Here would like to name few Indian Charisma leaders – Indira Gandhi, Narendra Modi. However, there is a limitation, charisma may have followers but may not follow when it comes to the presidential election, hence, Charisma should be beyond win.
Looking at the list of past US presidential candidates one must say that America this time has failed to give strong nominees for 2016 presidential election leaving the voters confused as to whom to vote.
US constitution sets criteria for President : (1) Natural born Citizens of US; (2) at least 35 years old; and (3) Resident of US for at least 14 years and also prevents the incumbent president from being elected for a third term alike Obama who has already completed 2 terms, hence not eligible for third time.
There are many winning and losing factors which influence the election like present political environment, parties performance, the strength of the party currently holding the white house, scandals of the nominees, personal charges and or counter charges by nominees on each other which could be severe at times. After all the citizens/voters expect peace and prosperity from the elected candidate.
Let’s look at these issues from practical point as to which party and or candidate have favorably acted to this issue or have failed to be a good presidential candidate: (1) Presently political environment is unfavorable due to terrorism issue and links of formation of ISIS by Democratic Party (party holding the white house currently, represented by Clinton); (2) personal charges – email scam proving Clintons direct aid to ISIS, foreign actors donation to Clintons Foundation; (3) Democratic parties failure to response to economic crisis, terrorist attack; (4) unlike natural disasters and the competency of ensuring Government response to Hurricane Sandy which boosted Obama in 2012 and Hurricane Katrina which devasted Republican in 2005; Hillary detail-oriented nature projects a calming message to people and her disciplined, well-organized campaign gives her a positive back-up though the conventional campaigning will never work.
Other important factors to consider are the Voters behavioral pattern: like in past black voted for Obama, this time the women votes are expected for Hillary being the first ever women presidential candidate in America also resulting from the personal charges of Donald’s misbehavior/disrespect issue towards women.
Major failures of present party, holding white house (Democratic Party) are: (1) Unemployment not came down; (2) nothing for homeowners and housing market; (3) not meaningfully address global warming issue; (4) not passed immigration reform and not improved Veterans Affairs waiting times (its worst now).
Biggest achievements of present party holding white house (Democratic Party) are: (1) ended the Iraq war; (2) Saved Auto Industry; (3) Eliminated Osama Bin Laden and (4) passed Health Care Reforms Other accomplishments are: significant advancements in civil rights, secured loose Nuclear Material in various Countries, Doubled fuel efficiency standards, Reinstated SCHIP (insuring 4 million children), reformed student loans and credit cards, passed wall street Reforms and created Consumer Financial Protection Beauroe, helped topple Gaddafi/liberate Libya without losing any American Lives, ended Bush Torture Policies, signed a new START Treaty with Russia, secured the border, improved American image abroad, reform education policy, implemented major sanctions, passed the Lilly Ledbetter Fair Py Act, passed the food safety modernization Act , passed fair sentencing Act, appointed 2 highly qualified SC Justices, invested more in green energy than ever before.
As off now the most talked about presidential candidates are Hillary Clinton from Democratic Party (Party presently holding the white house) and Donald Trump from Republican Party, Nevertheless, Jill Stein from Green Party seems to be a strong candidate.
In all of the political rallies, speeches, media appearances, and the presidential debates, Trump has not managed to outline a clear policy. He has complained about bad trade deals and illegal immigrants, failing to provide a clear policy to resolve the issues. With Tump’s presidency, it’s uncertain for the business houses across the world to predict the economic climate anon.
Clinton, on the other hand, is expected to work along the system and is clear about her stand on other issues, which allows businesses to plan irrespective of the policies.
Now, let’s see how this election is going to affect India. There are two important issues which will harm India due to the U.S. presidential election:
Trade/Investment:
Trump proposes to engage in trade wars by implementing tariffs and quotas. While much of his attention has been reserved for China and their cheap exports. He expressed displeasure about American companies outsourcing work to India, while the U.S. has a high unemployment rate.
Clinton also has raised this issue, providing the solution to implement tax breaks instead of eliminating. Also, she is of the view that the businesses will go to the place that provides them with the lowest cost of production which is encouraging outsourcing.
One definite area of concern is that the Indian software industry is disproportionately dependent on the U.S. for its exports. India’s software services accounted for $82 billion worth of exports in 2014-15 and the bulk of it was from the U.S. Though it is much tougher to levy tariffs on a piece of code than on physical shipments from China, it is largely expected to negatively affect the Indian software industry.
Bloomberg says any tariff that Trump proposes to either China or Mexico will affect India as well. With the U.S. being an important member of the World Trade Organization, Trump cannot be selective in his trade policy. The U.S. would have to have a similar tariff rate for similar goods irrespective of its origins. Thus, a tariff on auto imports from Mexico or Japan would similarly harm India’s plans to “Make in India” and export to the U.S. This would hamper, for example, Ford’s plans to triple the number of car exports out of India.
The Economist magazine rates Trump winning the U.S. elections as the third biggest source of global risk and gives the event the same impact score as that of the rise of jihadi terrorism, currency depreciation, and a clash of arms in the South China Sea. However, Trump’s statements deflect to the fact that free trade will get affected.
In contrast, Clinton is largely expected to strengthen trade relations with India. Have to consider her speech made in Chennai in 2011, where she remarked that the U.S. is “betting on India’s future”.
Immigration Issues
Trump was quoted saying that he would want to scrap H-1Bvisa. Experts say they can’t scrap but could hike the visa fees. Clinton has also called for a “hard look” at the H-1B visa process, but anything that she would propose would definitely be of a less severe nature than what Trump could introduce.
H-1B visas is a non-immigration visa which allows U.S. companies to hire highly talented professionals temporarily which is extremely important to the Indian software industry as these companies send their staff to work on-site with their clients in the U.S. through the H-1B visas. Any immigration action will affect the Indian remittance and also its personnel.
Altogether, this 2016 U.S. Presidential election is uncertain. Everybody is making all kinds of promises and declarations, as they say, voters are like chicken in the pot for every season where everybody is promising the moon but at the end, it’s only about resolving the issues and providing peace and prosperity to the people. It’s better for all not to expect something extraordinary from Clinton or Trump.
And the investors instead of focusing on the short-term benefit from this election better focus on broader economic trends in international markets. After all, it’s hard earned money for our lifetime.
Sajjala Patil
sajjalapatil@rediffmail.com
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