Most of us would not have been that old to remember the global economic conditions that were prevailing in the 1990s. Especially, the present generation that grew up later in the decade would not be conversant with the turbulence that the global economy experienced in during those times.

For those who are in their thirties, it would be pertinent to compare the situation prevailing now with that of the 90s when then, like now, countries around the world were transitioning from socialist economies to capitalist economies.

For starters, India experienced severe economic stress during 1990-91 when it had to mortgage a portion of its gold reserves to meet the requirements for foreign exchange. In a country like India where culturally, mortgaging the family gold and silver is akin to humiliation, this act by the then government did not go down well with the general populace. No wonder, that the subsequent government immediately undertook a massive liberalization of the Indian economy to prevent the recurrence of such circumstances.

Likewise, the erstwhile communist countries in Eastern Europe and the USSR were transitioning from socialism to capitalism and this entailed severe adjustment for the people in those countries.

Given the present situation across the world, where growth is faltering and revenues for the government are dwindling, we can expect similar “shock therapy” across the world in the months to come.

Already India is pushing for economic reforms despite opposition and Iran, China, Russia, and Europe are proposing new taxes and cuts in welfare spending. The net result of all these measures would be increased pain and suffering of the people and naturally, protests would follow from the disgruntled populace.

Of course, if there is a game changer like globalization was during that time, then these negative effects can be avoided. A possible game changer in the present times would be innovation and investment in clean energy technologies that have the potential to drastically cut the costs associated with traditional energy sources and by creating value for the people through innovative solutions.

Further, an emphasis on sustainable economics as opposed to conspicuous consumption can be proposed to deal with the present situation. It would also not hurt to raise taxes on the wealthy and the super rich to ensure that there is growth that is more equitable. All these measures require tough choices and adjustments that have to be made.

Without drastic measures, the countries of the world that are affected would flounder leading to unrest and other unwanted effects. If the economy cannot grow by traditional means, then out of the box solutions must be proposed as a way out of the mess. This is a challenge for the present generation and it needs to be seen as to how effective the solutions proposed would be.

In conclusion, the party is over and the sooner all stakeholders realize that we cannot continue on the same path that we have been taking, the better for everyone concerned.