look news india
World’s leading tech investor and Microsoft co-founder Bill Gates has raised tough questions on the new economic methodology of the Trump administration. Bill Gates believes that the government buying equity stake in private American companies and frequently changing tariff plans (import duties) have created an environment of uncertainty in the business world. Gates has clearly stated that ‘the rules of the game are still very unclear’, which could prove fatal for America’s innovation and industrial development in the long run.
Uncertainty in tariff plan may spoil the mathematics of investment
Bill Gates, in a conversation with a leading business channel, emphasized that companies need visionary stability to set up large manufacturing factories. He said, ‘If a company invests billions of dollars in setting up a plant, it should know the tariff rules for the next 20 years.’ According to Gates, if government policies change at every step, it will become impossible to determine the value of investment and investors will be afraid to invest their money.
From Intel to IBM, government becomes big shareholder
Washington’s ‘shareholder list’ is getting longer. In August last year, the US Federal Government bought a major stake of 9.9% in chip maker Intel, for which $8.9 billion was paid. Due to the historic rise in Intel’s shares, today the value of this investment by the government has reached close to 36 billion dollars. Apart from Intel, the government’s presence is also increasing in big companies like IBM, about which Bill Gates has expressed concern.
When government is both ‘regulator’ and ‘shareholder’
Gates has pointed out the most dangerous aspect of this whole matter—Conflict of Interest. Bill Gates questioned that how can a government which owns the stock of a company impartially look at anti-trust cases, defense contracts or export control rules related to that company? Gates says that the government’s selection of a few ‘winning companies’ and then buying shares in them creates a major problem for other competing companies trying to move into chip manufacturing or other areas.
There is a strong need for clear rules
Bill Gates has suggested that the US government should clarify its policy as to what its real objective is. Is the government doing the country a favor by promoting new technology, or is it building a portfolio that it can change market rules to protect in the future? In the end, Gates said that factories are not run by political decisions, but by predictability. If the US government does not draw a clear line between its regulatory and investor roles, it will have a negative impact on the competitiveness of the US market.