I try my best to understand international affairs, economics and foreign policies but sometimes I simply don’t get it. Are policies formed and strategies built to make life easier for people or what?
Take a look at the latest global oil crisis. Oil prices are at an all time high. People all over the world are suffering (except probably the people in OPEC). Within and amongst countries the blame game is on about increasing demand, falling supply, declining production initiatives, and so on.
Saudi Arabia (which is the largest producer) says it will increase the production to meet higher demand; US blames its oil companies for making windfall profits and still not doing anything about the prices; the companies in turn say they are reinvesting the profits for exploration. Meanwhile US imports of oil have risen to 65% of its total consumption (witness yet another George Bush-ism – “It is clear our nation is reliant upon big foreign oil. More and more of our imports come from overseas”)J ; India, China and other developing countries are being pointed at for their outrageously (!) high quantities of oil consumption; suddenly press and people of the developed nations are accusing Governments for not being concerned about developing other sources of energy.
Interestingly, the story in India goes like this – In spite of the record oil prices abroad, Indian oil companies in the public sector are on the verge of bankruptcy. The Government decides to subsidize fuel prices, which means that the petrol sold by the likes of IOL and BP in India, is much cheaper than the petrol sold by Chevron in the US; meaning, IOL makes a loss every time it sells fuel to the Indian public.
When oil prices went up further, the Government had no choice but to hike the prices by an average of 13% at one go which came under sharp protests by the Opposition. Between soaring prices and subsidies from PSUs, the private players like Reliance are having a tough time too because if they don’t lower prices, they remain uncompetitive. With oil prices still soaring, the Government’s lack of nerve (in view of coming elections) to remove subsidies, the PSU oil companies road to bankruptcy and the private players not able to do anything, there is no doubt that the economy is in turmoil. Rate of inflation will soar, stock markets will suffer and the dream run part II of the sensex will become more and more elusive.
All said and done, the fact still remains that there is no short term solution for high oil prices and at least 90% of the world’s population is suffering from it. Given this, I can’t help wondering, “Why can’t we just lower the prices? I mean, what’s the big deal? If everyone faces the problem, nobody would not want to see the prices go down, right? So let’s just bring them down!”
Alas, if only it were that simple.
When such crises occur, I think Governments everywhere can(rather, should) learn some lessons – about making compromises, about understanding the importance of being interdependent, about reminding them that they are representatives of a large population and that there needs to be a human aspect to everything.