There is a concept of perpetual bonds issued by Brazilian Banks. A perpetual bond never matures – you get interest on it whole life but you never get back the principal. Many finance wizards might be perplexed as to why such bonds sell, given the fact that interest rates are poised to dip lower in future. Brazilian banker's feel that it sells because banks have marketed these bonds on the basis of a theory that says Brazilian economy is poised for a makeover. This information is courtesy of my friend A , who visited Brazil recently and met some leading bankers there. He claims that this marketing of perpetual bonds is similar to 'India Shining' campaign unleashed by the previous BJP government. But while perpetual bonds are a success story in Brazil, the 'India Shining' campaign failed to get BJP back into power in India. Why? Here I draw from my previous post – the elite Indian finds infrastructure lacking and hence his faith in ‘India Shining’ is misty (he would r...

In the BRIC report by Roopa Purushotakhaman and Dominique Phillips of Goldman Sachs, India, Brazil, Russia and China have been touted as the economies of future. This comparison has caused many Indians to believe that we are at par with the other 3 nations. But all the other 3 BRIC nations are way beyond India as far as infrastructure is concerned. Also, if one compares the other 3 BRIC countries (referred to as BRC henceforth) with India, one would see some striking differences. Firstly, numbers of Diaspora are much larger for India than for any of these countries. Secondly, while the other three have relied for their current rise primarily on manufacturing outsourcing, India relies equally on services sector both primary services and outsourced services. Going a little deeper into the economic policies, one again notices a wide difference. India, in its initial years of development, did not invest in much on development of basic infrastructure like roads, water, and primary education...