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India at 66% of a centennial

Just over 25 years ago, I remember my teacher pointing out to the class the bicentennial of the US constitution.  “Then in another 100 years in 2087”, he continued, “will be the tricentennial, marking 300 years since the constitution was written.”  Being the shamelessly curious student I was at the time, I raised my hand and asked “how do you know the US constitution will last another 100 years?”  Even then, the US constitution was already the 2nd oldest in the world, and according to the personal insignificance principle, should let us expect it to outlast all constitutions except San Marino’s. Despite having been downgraded by S&P to AA+ just over 2 years ago, bond buyers seem quite confident that the US will be a stable bet until at least 2043.  I’m not sure if the downgrade is the main reason I haven’t heard anything since then about a long-awaited 100-year US T-bond, despite an issuance just after the downgrade by Mexico and another one this year by JC Penney (bringing IFR’s list of 100-year bonds to 65).

Today India celebrates 66 years of independence, one day after Pakistan celebrated 66 years of Mountbatten leaving Karachi for Delhi.  2 1/2 years later the partitioned Union of India enacted its constitution for the Republic of India.  India remains the only investment-grade country in South Asia, although the sagging rupee and increasing levels of corruption (in contrast to the US having the shortest written constitution in the world, India has the longest) seem to be putting its borderline BBB- rating at risk.  Despite many of its states splitting up on an almost regular basis, few India watchers give any hint that India might split up, reunite, or change in any other fundamental way in the next 34 years.  In many ways the hardest part of its first 100 years may be behind it, having survived partition, a few wars, and the past 20 years’ experiment with liberalizing its economy.  Even over the past 10 years, the country seems to be changing so quickly I can hardly recognize it from one visit to the next, but still not in a way that I can really invest here with any confidence.  Meanwhile, India will continue to be one of the most fascinating of the world’s billions to watch, slightly simplified with the veneer of it being a single country, for now at least.

India pre-partition

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