The CFO in a (B)orderless World

2016 was forecast to be a challenging and difficult year for the global economy.The events prove it. India cannot stay immune and the Finance leadership must deconstruct to maintain a steady course in these choppy waters.

- Anuradha Das Mathur with Malini Bose

“The global economy is at a disconcerting juncture. It is as challenging a moment as it gets for economic forecasting” - ominous words from KaushikBasu, the World Bank’s chief economist and India’s former Chief Economic Adviser in January 2015. It was a time when the world was staring at a recession-plagued Europe, slowing growth across emerging economies, and currency wars – all of them were primarily economic challenges. In the middle of 2016, yet again, the worry holds true – except that it is as much about the world economy as it is about global politics. The risks are wider and more unpredictable – a terrorist-plagued Europe, post-Brexit anxiety and gloom, the fear of a Trump victory, the economics of the Eurozone, and China’s slowdown. Against this backdrop, India looks pretty – but we aren’t ring-fenced any longer, and therefore the concerns are contagious. The VUCA world – volatile, uncertain, complex, and ambiguous, seems here to stay. Can we, as CFOs, afford not to know, or care? To answer this question it is important to understand some of the implications of these recent developments. The terror strikes in Europe have been frequent, unexpected and brutal. They have attacked a sense of safety of a people and a region. Typical reactions to these events are heightened spends on security, cumbersome business and leisure travel, loss of revenue related to tourism, questions around overseas students, and overall enhanced political and business risk. There is limited insurance cover for ‘unknown risks’ – and ‘keepers of risk’ must find answers to these prickly, new problems.