The unprecedented coverage on Prime Minister Narendra Modi’s demonetisation announcement wasn’t just confined to Indian media. The move to ban Rs 500 and Rs 1,000 notes also dominated the media coverage around the world.
TV channels extensively covered, while the newspapers in London, New York and Washington wrote hard-hitting editorials.
London The Guardian dubbed the moved as the failed experiments of dictatorships, while Bloomberg called it a grave miscalculation by Modi.
Here’s a snapshot of commentaries/editorials carried by some of these foreign media.
London’s The Guardian
The rich will not suffer, as corruptly acquired fortunes have almost all been converted to shares, gold and real estate. But the poor, who make up the bulk of the nation’s 1.3 billion people, will lose out. They don’t generally have bank accounts and are often paid in cash. For them, getting to a bank and queueing for hours will cost money and time they don’t have. In less than a week the policy has reportedly claimed more than a dozen lives. The government says that it will take weeks to sort out the problems.
Mr Modi’s scheme has more in common with the failed experiments of dictatorships which led to runaway inflation, currency collapse and mass protests. While Mr Modi campaigned to end corruption, it would have been better if the government had updated its antiquated tax system to realise such a task.”
New York Times
Cash is king in India. It is used in an estimated 78 percent of transactions, compared with 20 percent to 25 percent in industrialized countries like Britain and the United States. Many people do not have bank accounts or credit cards, and even those who do often must use cash because many businesses don’t accept other forms of payment.
At least, that was the plan. The change, however, has thrown the economy into turmoil, with many millions of people forced to line up at banks to deposit or exchange their old bills. One man told The Times that a bank turned him away because he didn’t have a government-issued identification card, which is required to swap or deposit old bills. He was hoping a charity would feed him and his family while he waited to convert his stack of 500-rupee notes, worth about $148. Meanwhile, many traders have established lucrative money-laundering services to help the cash-rich get rid of their old bills.
Bloomberg- Grave miscalculation by PM Modi
What seemed at first to be a masterstroke by Prime Minister Narendra Modi now looks like a grave miscalculation.
Modi is beginning to sound like he may agree. His recent speeches on the subject have been frankly bizarre. In one, he seemed to laugh at those inconvenienced by the ban; in another, he broke down while speaking of the “sacrifices” he’d made for India, and warned that he might be assassinated by “forces” desperate to protect their “loot.”
What’s changed in a week? Well, for one, it’s become clear that the government was simply too cavalier in its planning. Now that 86 percent of India’s currency is no longer valid, the central bank has struggled to print replacement denominations — and the new notes are the wrong size for existing ATMs.
A research report this week from the banking giant HSBC predicted that imports of consumer goods would fall, but added that could be offset by a spike in demand for gold, as unsettled Indians look for ways to store their wealth.
In worst-case scenarios, the effects of demonetization could last for years, driving the country into recession and pushing Indians to keep their wealth in more stable currencies, such as the euro or U.S. dollar.