Forbes India 15th Anniversary Special

'Modi will create more efficiency in economy': Mark Mobius

Mark Mobius, founder of Mobius Capital Partners, on why emerging markets will do well

Salil Panchal
Published: Sep 11, 2019 09:43:35 AM IST
Updated: Sep 11, 2019 09:47:35 AM IST

'Modi will create more efficiency in economy': Mark MobiusMark Mobius

Q. Your latest book Invest for Good starts by not speaking too kindly about passive investing…
We've seen so much money going into passive funds that it was important for someone to say that it’s not as good as it was set out to be. Active investing can take care of issues, particularly in the ESG (environment, social and governance) situation. The book does not condemn passive investing, though we don't have many kind things to say about it.

Q. You have focussed on millennials and why they are going to be a key universe for ESG investing…
This is a global phenomenon… a whole new generation of people who've had access to the internet, who are far more knowledgeable than I was at their age, and maybe more knowledgeable than I am now. You are seeing people communicating across borders and coming up with the same answers. There is great realisation among the young generation that something has to be done about climate change, the environment and social issues.

Q. How would you assess India's progress towards ESG investing?
India has somewhat of a head start because you have a population of business leaders who speak and understand English and have access to what's happening in the US. But it needs many improvements.

Q. It has been a tough year for emerging markets, falling by about 23 percent from their 2018 highs...
There's no question in my mind that emerging markets will do well because the growth rate of the economies is double that of the developed countries. Look at India… even with the decline, we're still talking about a high growth rate at 5 percent, double that of several other western countries.

Q. Despite a strong mandate to the BJP, reforms have not worked. Will things improve?
A lot of the policies that Narendra Modi is implementing take time to have an impact. For example, take infrastructure that's picking up now. A lot more money is going into that area that will create jobs; he’ll (Modi) create much more efficiency in the economy. The government is reforming the capital gains tax situation, which was a barrier to investment. And hopefully simplification of taxes will enable domestic investors to invest with confidence.

(This story appears in the 27 September, 2019 issue of Forbes India. To visit our Archives, click here.)