Here’s a case where the cause-and-effect looks pretty clear.
The Indian Stock Market soared a cool 17% after Prime Minister Manmohan Singh scored an overwhelming victory that will give his total control.
Bloomberg: “This is an absolute game changer,” said William Nobrega, the co-author of ‘Riding The Indian Tiger,’ who advises U.S. companies on investing in the world’s largest democracy. “It can truly move India in a much faster pace to where it deserves to be in the global economy.”
Political stability will make India a more attractive investment destination as Singh, 76, seeks the funds to stimulate Asia’s third-largest economy. It may also encourage President Barack Obama and his administration to seek greater cooperation in the fight against rising militancy in neighbouring Pakistan and Afghanistan.
Singh’s ruling Congress party will be able to form a government without needing the support of communist lawmakers who frustrated plans to entice foreign investment in his first five-year term. The ruling Congress party won its most seats since 1991 in the election, which concluded May 16.
Yeah, you could see how having to get the Communist Party to sign off on everything would be kind of a pain in the neck when dealing with stuff like trade liberalization and attracting foreign investment. That’s not really their bag, typically.