Feb 28, 20236 min read

Sharp Critique of PM Modi by Fund Tycoon George Soros

Soros old, rich and dangerous: External Affairs Minister S Jaishankar

Critique of PM Modi by George Soros

In a speech at the World Economic Forum in Davos in 2020, George Soros called Modi "a dictator " and accused him of creating a "mafia state".

The critique of PM Modi by George Soros presented the Indian government as responsible for the erosion of democracy and human rights in India. He has spoken out against Modi's govt Citizenship Amendment Act, which according to him is a discriminating act against Muslims.

Soros has also been critical of Modi's economic policies, particularly his decision to demonetize high-value banknotes in 2016. Soros described the move as a "desperate" attempt to clamp down on corruption and tax evasion, but said it had a "catastrophic" effect on the Indian economy.

Who Is George Soros?

George Soros HonFBA (born György Schwartz) is a Hungarian-born American investor, philanthropist, and political activist. He was born in Budapest, Hungary in 1930, and survived the Nazi occupation of Hungary during World War II by hiding with his family and forging false identity papers. Soros later emigrated to the United Kingdom, where he studied at the London School of Economics and began his career in finance.

In early 50’s he started his financial career as Merchant Banker and then started to move up the ladder with a career shift to arbitrage dept. In 1956 he moved to New York City and worked as an arbitrage trader for F. M. Mayer (1956–59).

In 1969, Soros set up the Double Eagle hedge fund with $4m of investors' capital including $250,000 of his own money.

In 1973, the Double Eagle Fund had $12 million and formed the basis of the Soros Fund. That formed the path for the fund management company the Quantum Fund.

By early 80’s the fund house grew exponentially touching $400m.

In 2011, in a turn of event Soros declared that he is going to stop managing outside investor’s money and going to concentrate on $24.5 billion family fortune. This is predominantly due to the change in U.S. Securities and Exchange Commission disclosure rules. Soros wasn’t comfortable in sharing his details.

Reflexivity, financial markets, and economic theory

Reflexivity theory is a concept developed by George Soros that emphasizes the role of cognitive biases and subjective interpretations in shaping financial markets and economic outcomes. According to Soros, market participants and policymakers can influence market behavior and outcomes by acting on their beliefs and perceptions, which can in turn shape market outcomes and feed back into their own beliefs and perceptions in a self-reinforcing cycle. This concept has been influential in shaping debates about financial regulation and economic stability, and has been used to explain the role of speculation, bubbles, and crises in financial markets.

It received more attention after the 2008 crash including becoming the focus of an issue of the Journal of Economic Methodology.

Political Outlook

Soros has also been a prominent supporter of the Democratic Party in the United States, and has funded many campaigns. He has been a critic of conservative and right-wing politics, and has been known to fund organizations that oppose them.

For the 2022 United States elections , Soros was the country's largest donor. He donated $128.5 million to support the Democratic Party in the election cycle.

European Migrant Crisis

In 2018, Hungary passed a legislation called “STOP SOROS”, outlawed helping illegal immigrants claim asylum and apply for residence inside the country, with punishments of up to one year in prison for anyone charged with the offence.

The Bank of England crisis, 1992

The Bank of England crisis was a significant event in the history of modern finance. It began in the late 1980s, when the United Kingdom joined the European Exchange Rate Mechanism (ERM). The ERM was a system designed to stabilize exchange rates between European currencies in preparation for the creation of the Euro. The UK government committed to maintaining the value of the pound within a narrow band against the German Mark. However, the UK economy was struggling, and inflation was high.

George Soros had been building short position in pounds sterling. Soros had recognized the unfavorable position of the United Kingdom in the ERM. He saw the opportunity and believed that the UK government was committed to maintaining the value of the pound at all costs, even if it meant raising interest rates to unsustainable levels.

His bet was massive success and in September 16, 1992, the Bank of England was forced to withdraw the pound from the ERM, and the value of the pound plummeted. Soros's Quantum Fund made a profit of around $1 billion, and Soros himself became known as "the man who broke the Bank of England".

The Economic crisis of Thailand, 1997.

Soros saw an opportunity to profit from the overvalued Thai baht and began to sell the currency short, betting that it would fall in value. His actions, combined with those of other speculators, helped trigger a sharp devaluation of the baht and a wider economic crisis in Thailand and other Asian economies.

Many critics have accused Soros of exacerbating the crisis and causing unnecessary harm to the Thai economy and its people.

The devaluation of Yan, 1990s.

George Soros also played a role in the devaluation of the Yan in the early 1990s. Yan, which was also pegged to the US dollar at the time. He bet that the Chinese government would not be able to maintain the currency's peg and that it would eventually have to devalue. His actions, combined with those of other speculators, helped trigger a sharp devaluation of the Yan and a wider economic crisis in China.

Soros's role in the Yan devaluation is controversial, with some accusing him of destabilizing the Chinese economy and causing unnecessary harm to the Chinese people. Others argue that the underlying economic conditions in China at the time, including high inflation and a large trade deficit, were the primary drivers of the crisis.

Allegations & Convictions

In 1997, during the Asian financial crisis, the prime minister of Malaysia, Mahathir Mohamad, accused Soros of using the wealth under his control to punish the Association of Southeast Asian Nations (ASEAN) for welcoming Myanmar as a member.

Société Générale insider trading conviction

In 2006 French Supreme court convicted Soros of insider trading in Société Générale (following the investigation by COB, the French stock exchange regulatory authority).

In 2006, Soros appalled to European Court of Human Rights. But, lost it in the year 2011.

Ministry Reaction: “Old, rich opinionated, and dangerous...”

Addressing a session with Australian Minister Chris Brown at the Raisina @Sydney Dialogue India's External Affairs Minister, Dr. S. Jaishankar, stated that Soros's remarks were "unwarranted" and based on "limited understanding of India".

Jaishankar argued that Modi's policies were aimed at empowering the poor and marginalized in India, and that his government had made significant strides in areas such as healthcare, sanitation, and financial inclusion.

The External Affairs Minister also defended the Indian government's record on human rights and democracy, stating that India was a "vibrant democracy" with a "free and fair" electoral process.

Union minister Smriti Irani: “The man who broke the Bank of England, and is designated by the nation an economic war criminal, has now pronounced his desire to break Indian democracy. George Soros, an international entrepreneur, has declared his ill-intention to intervene in the democratic processes of India," the minister said on Friday (17th Feb 2023).

Conclusion

“Bharat” is the world's largest democracy and has a long history of democratic governance. Since gaining independence, India has established a robust system of constitutional democracy.

Following “Adani-Hindenburg issue”, “BBC Modi Documentary” and “George Soros on India”. Its high time to put on our thinking hats and start evaluating the merits and demerits of these incidents with an unbiased approach.

To facilitate this, we do heavily rely on unbiased and candid journalism to bring forth unfiltered facts.

Positive and constructive criticism should always be welcomed but, not at the cost of the national interest. Overall, Indian democracy is a work in progress, but it remains an important model for democratic governance in the developing world. The country's commitment to free and fair elections, civil liberties, and constitutional democracy provides a foundation for continued progress and development in the years ahead.

Moreover, I am of the belief that a democratic nation like India, has the fundamental rights and authority to have its own opinions and national law of governance. Mocking or poking isn’t a welcome approach by any external entity be it a foreign institution, an organization, an individual or even other any other fellow nations.

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