The Globalization of Our Discontent


December 8, 2017

The Globalization of Our Discontent

by
http://www.project-syndicate.org

Globalization, which was supposed to benefit developed and developing countries alike, is now reviled almost everywhere, as the political backlash in Europe and the US in recent years has shown. The challenge is to minimize the risk that the backlash will intensify, and that starts by understanding – and avoiding – past mistakes.

Image result for globalization and its discontents stiglitz

NEW YORK – Fifteen years ago, I published Globalization and Its Discontents, a book that sought to explain why there was so much dissatisfaction with globalization within the developing countries. Quite simply, many believed that the system was “rigged” against them, and global trade agreements were singled out for being particularly unfair.what’s come apart in the past year, and anticipate what will define the year ahead.

Now discontent with globalization has fueled a wave of populism in the United States and other advanced economies, led by politicians who claim that the system is unfair to their countries. In the US, President Donald Trump insists that America’s trade negotiators were snookered by those from Mexico and China.

So how could something that was supposed to benefit all, in developed and developing countries alike, now be reviled almost everywhere? How can a trade agreement be unfair to all parties?

Image result for joseph stiglitz

Columbia University’s Dr. Joseph E. Stiglitz, Nobel Laureate in Economics

To those in developing countries, Trump’s claims – like Trump himself – are laughable. The US basically wrote the rules and created the institutions of globalization. In some of these institutions – for example, the International Monetary Fund – the US still has veto power, despite America’s diminished role in the global economy (a role which Trump seems determined to diminish still further).

To someone like me, who has watched trade negotiations closely for more than a quarter-century, it is clear that US trade negotiators got most of what they wanted. The problem was with what they wanted. Their agenda was set, behind closed doors, by corporations. It was an agenda written by and for large multinational companies, at the expense of workers and ordinary citizens everywhere.

Indeed, it often seems that workers, who have seen their wages fall and jobs disappear, are just collateral damage – innocent but unavoidable victims in the inexorable march of economic progress. But there is another interpretation of what has happened: one of the objectives of globalization was to weaken workers’ bargaining power. What corporations wanted was cheaper labor, however they could get it.

This interpretation helps explain some puzzling aspects of trade agreements. Why is it, for example, that advanced countries gave away one of their biggest advantages, the rule of law? Indeed, provisions embedded in most recent trade agreements give foreign investors more rights than are provided to investors in the US. They are compensated, for example, should the government adopt a regulation that hurts their bottom line, no matter how desirable the regulation or how great the harm caused by the corporation in its absence.

There are three responses to globalized discontent with globalization. The first – call it the Las Vegas strategy – is to double down on the bet on globalization as it has been managed for the past quarter-century. This bet, like all bets on proven policy failures (such as trickle-down economics) is based on the hope that somehow it will succeed in the future.

Image result for trumpian economics

The second response is Trumpism: cut oneself off from globalization, in the hope that doing so will somehow bring back a bygone world. But protectionism won’t work. Globally, manufacturing jobs are on the decline, simply because productivity growth has outpaced growth in demand.

Even if manufacturing were to come back, the jobs won’t. Advanced manufacturing technology, including robots, means that the few jobs created will require higher skills and will be placed at different locations than the jobs that were lost. Like doubling down, this approach is doomed to fail, further increasing the discontent felt by those left behind.

Trump will fail even in his proclaimed goal of reducing the trade deficit, which is determined by the disparity between domestic savings and investment. Now that the Republicans have gotten their way and enacted a tax cut for billionaires, national savings will fall and the trade deficit will rise, owing to an increase in the value of the dollar. (Fiscal deficits and trade deficits normally move so closely together that they are called “twin” deficits.) Trump may not like it, but as he is slowly finding out, there are some things that even a person in the most powerful position in the world cannot control.

There is a third approach: social protection without protectionism, the kind of approach that the small Nordic countries took. They knew that as small countries they had to remain open. But they also knew that remaining open would expose workers to risk. Thus, they had to have a social contract that helped workers move from old jobs to new and provide some help in the interim.

The Nordic countries are deeply democratic societies, so they knew that unless most workers regarded globalization as benefiting them, it wouldn’t be sustained. And the wealthy in these countries recognized that if globalization worked as it should, there would be enough benefits to go around.

American capitalism in recent years has been marked by unbridled greed – the 2008 financial crisis provides ample confirmation of that. But, as some countries have shown, a market economy can take forms that temper the excesses of both capitalism and globalization, and deliver more sustainable growth and higher standards of living for most citizens.

We can learn from such successes what to do, just as we can learn from past mistakes what not to do. As has become evident, if we do not manage globalization so that it benefits all, the backlash – from the New Discontents in the North and the Old Discontents in the South – is at risk of intensifying.

President Xi trumps Donald Trump in Global Leadership Race–Globalisation Wins


November 11, 2017

President Xi trumps Donald Trump in Global Leadership Race–Globalisation Wins

by Anthony J.Blinken

“While Mr. Trump shuns multilateralism and global governance, Mr. Xi increasingly embraces them… If the Trump-led retreat into nationalism, protectionism, unilateralism and xenophobia continues, China’s model could carry the day”.–A J Blinken

BEIJING — Amid the pomp that President Xi Jinping of China is bestowing upon his visiting American counterpart, President Trump, it’s hard not to see two leaders — and two countries — heading in very different directions.

Mr. Xi emerged from last month’s Communist Party Congress the undisputed master of the Middle Kingdom. “Xi Jinping Thought” was enshrined in the party constitution — an honor previously granted only to Mao Zedong and Deng Xiaoping. Breaking with precedent, Mr. Xi neglected to anoint a successor — a big hint that he feels emboldened to extend his rule beyond the second five-year term he has just begun. The Economist heralded Mr. Xi with an honorific usually reserved for America’s president: the world’s most powerful man.

Mr. Trump stepped off Air Force One in Beijing on Wednesday with historically low job-approval ratings, just hours after suffering a shellacking in off-year elections. His credibility is cratering abroad — polls have shown a drop in confidence in American leadership.

Image result for Xi trumps Donald TrumpWith lavish pageantry and an uncharacteristic personal flourish, Chinese President Xi Jinping rolled out a red carpet welcome for U.S President Donald Trump at the Forbidden City, the ancient home of China’s emperors. The Chinese Leaders knows that flattery works on Trump who craves for acclaim.

As the personal trajectories of Mr. Trump and Mr. Xi diverge, so too does the focus of their leadership. While Mr. Trump is obsessed with building walls, Mr. Xi is busy building bridges.

At the World Economic Forum in January, Mr. Xi proclaimed China the new champion of free trade and globalization. His “One Belt, One Road” initiative — with funding from the made-in-Beijing Asia Infrastructure Investment Bank — will invest $1 trillion in linking Asia with Europe through a network of sea routes, roads, railways and, yes, bridges. China will gain access to resources, export its excess industrial capacity and peacefully secure strategic footholds from which to project power.

While Mr. Trump shuns multilateralism and global governance, Mr. Xi increasingly embraces them.

The Trump administration has belittled the United Nations, withdrawn from the Trans-Pacific Partnership trade agreement, jettisoned America’s commitment to the Paris climate accord, tried to renege on the nuclear deal with Iran, questioned America’s core alliances in Europe and Asia, disparaged the World Trade Organization and multicountry trade deals, and sought to shut the door on immigrants.

Mr. Xi? He has grabbed leadership of the climate-change agenda, embraced the World Trade Organization’s dispute-resolution system and increased China’s voting shares at the World Bank and International Monetary Fund. Beijing is forging ahead with a trade pact that would include the major Asian economies plus Australia and New Zealand, but not the United States. China is now one of the leading contributors to the United Nations budget and peacekeeping operations. And Mr. Xi is making a determined play to attract the world’s cutting-edge scientists and innovators to China.

At home, Mr. Xi is making strategic investments that could allow China to dominate the 21st-century global economy, including in information technology and artificial intelligence — where, Eric Schmidt of Google has warned, China is poised to overtake the United States in the next decade. Mr. Xi is all-in on robotics, aerospace, high-speed rail, new-energy vehicles and advanced medical products.

Mr. Trump’s “strategic” investments — in coal and a quixotic effort to bring back manufacturing lost to automation — would make the United States the champion of the 20th-century economy.

All of this positions China to become, in Mr. Xi’s words, “a new choice for other countries” and the principal arbiter of something long associated with the United States: the international order. China has a profound stake in that order and a globalized world: It needs access to advanced technology and the export markets upon which its growth depends.

The contradictions at the heart of China’s enterprise could still prove to be its undoing. Beijing continues to fence off key sectors of its economy to foreign investment. It imposes draconian requirements on foreign companies — like requiring them to take on a Chinese partner and hand over their technology and intellectual property — that other countries do not impose on Chinese companies.

Beijing’s foreign investments can be coercive and exploitative — using Chinese laborers and contractors instead of local ones, saddling poorer countries with enormous debts, leaving behind shoddy workmanship and fueling corruption.

Mr. Xi’s ability to sustain the outward projection of Chinese influence is also challenged by his country’s systemic weaknesses. A mountain of debt. Rising inequality. Slowing growth, dragged down by an aging population, lower productivity and inefficient state-owned enterprises. Poisonous air and scarce water. And an increasingly repressive system that may appeal to fellow authoritarians but not to Chinese citizens.

But China’s shortcomings may not matter in the absence of a compelling alternative. I’d never bet against the United States, but if the Trump-led retreat into nationalism, protectionism, unilateralism and xenophobia continues, China’s model could carry the day.

The world is not self-organizing. And American stewardship of the international order advanced liberal values and progressive norms — democracy, human rights, freedom of speech and assembly, protections for workers, the environment and intellectual property. By abdicating the leadership role it has played since World War II, the United States is giving the terrain to others who will do the organizing on the basis of their values, not America’s.

Mr. Xi is not shy about who that someone else will be. With Mr. Trump ceding ground to China, the liberal international order that defined the second half of the 20th century could give way to an illiberal one.

Correction: November 10, 2017
 

An earlier version of this article misidentified the the document that was revised to reflect President Xi Jinping’s increased power. It was the Communist Party’s constitution, not the country’s.

Here’s Fareed Zakaria–Wither Trump’s America


November 2, 2017

Here’s Fareed Zakaria–Wither Trump’s America

Engage the World says Thinker Fareed Zakaria, not retreat into your shell, my American friends. Embrace globalisation and open rule-based trading environment, and together, we can prosper.  Your economy and what you do matters to us in Asia and the rest of the world.–Din Merican

Be Prepared–An Assertive China Ahead


November 2, 2017

Be Prepared–An Assertive China Ahead

by  Yu Tao

https://thediplomat.com

Image result for The Assertive President Xi

The Assertive Globalist– Chinese President Xi Jinping’s assertive defence of globalisation in his address to world economic and political leaders at the World Economic Forum in Davos, Switzerland in early 2017 surprised many. Few expected the Chinese President and head of the Communist Party to attend the spiritual home of global capitalism for the first time, and fewer still to hear such a forthright speech.

The Chinese Communist Party(CCP) concluded its 19th National Congress on October 24, and announced its new leadership on Wednesday morning. Unsurprisingly, this new central leadership team is headed by Xi Jinping, who has been China’s most powerful politician since the CCP’s last National Congress in 2012. After being re-elected as the general secretary of China’s only ruling political party and the chair of its Central Military Commission, Xi will lead the 89 million members of the Chinese Communist Party – and the 1.3 billion citizens of the People’s Republic of China – for the next five years, and possibly beyond.

The Assertive Dragon under Xi Jinging embraces globalisation and win win partnerships

Image result for The New China
Image result for The Retreating American Eagle

The America First Eagle under Donald Trump surrenders global leadership and antagonizes the rest of the world.

Xi’s public speeches during and after the Party Congress were not merely a summary of what has been done in the last five years. Instead, through these speeches, Xi not only ambitiously set the tone for the politics of China in the next five years and even beyond, but also confidently declared that China had entered a “new era” under his leadership. One of the major policy shifts that we can expect to see in Xi’s China is that the country will become much more outward-looking in international politics, asserting more proactive roles in major global issues that go beyond the immediate relevance to China’s national and regional interests.

Related image

“Observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership.” Deng Xiaoping

For decades, China has been intending to become a “quiet achiever” in the arena of global politics. In the late 1980s, Deng Xiaoping instructed Chinese diplomats to keep a low profile, and this strategy is often translated into English as “hide our capabilities and bide our time.” Back then, the Chinese leadership believed that their priority was developing China’s domestic economy, and they were unwilling to get involved with international politics that had little direct relevance to China.

 

However, as China’s economy grows bigger, China’s weight on the international arena has increased extensively. China has demonstrated that it has the capacity to mobilize its military and economic resources to evacuate its nationals from Libya and Yemen, places that are not traditionally considered as within the reach of China’s sphere of influence. In the first six months of 2017, over 62 million Chinese citizens traveled to other countries as tourists – to illustrate, this figure is larger than the combined total populations of Australia and Canada. Since 2016, China has also been holding second place in the Elcano Global Presence Index, a widely-accepted measure that ranks 100 countries according to their economic performance, military capacity, and soft power.

With China’s influence in the world becoming more obvious, the expectation that China should play a more proactive role in international politics has increased from both within and outside China. The Chinese leadership has also become more confident in their commercial and military capacity over the years.

Since Xi became China’s top leader in 2012, as well as becoming more assertive in defending China’s key interests in regions surrounding the country, China has also started creating a more comfortable international environment for itself through grand global projects such as the “Belt and Road Initiative,” an ambitious plan to link China with Central Asia, the Middle East, Russia, Europe, and Africa through physical infrastructure, financial arrangements, and cultural exchanges.

Judging from Xi’s speech at the Party Congress, it is obvious that the current Chinese leadership is very happy with, and confident in, their way of doing things. As stated in his speech at the opening ceremony, Xi believes that China has “blaz[ed] a new trial for other developing countries to achieve modernization. It offers a new option for other countries and nationals who want to speed up their development while preserving their independence.”

With such a level of confidence and optimism, under Xi’s leadership in the next five years, China will not be shy about – in Xi’s own words – offering “Chinese wisdom and a Chinese approach to solving the problems facing mankind.” China is likely to achieve this by further pushing its flagship international development project, the Belt and Road Initiative, which many observers believe marks China’s push to take a more influential role in international affairs.

China’s transition from a “quiet achiever” to an “assertive player” in the global arena is also likely to be reflected by its changing approach in international communication and soft-power construction. In his Party Congress speech, Xi called his comrades to build “stronger confidence” in the Chinese culture. He also said clearly that China will “enhance its cultural soft power” through presenting “a true, multi-dimensional, and panoramic view of China.” That is to say, China will not be shy about telling its stories to an international audience, and it is determined to tell these stories in effective ways.

Xi made it clear that China will prompt “the building a community with a shared future to mankind,” also known as a “community of common destiny.” This new strategy for China’s foreign policies aims at pursuing “open, innovative, and inclusive development that benefits everyone.” Of course, this does not mean the Chinese Communist Party will compromise on what it considers key national interests. For example, Xi set a strong tone on the Taiwan issue, stating that the CCP has “the resolve, the confidence, and the ability to defeat separatist attempts for ‘Taiwan independence’ in any form.” This part of the speech attracted much applause from the Congress delegates. Indeed, as many China watchers have pointed out, a considerable amount of people in China believe that the Communist Party will lose its legitimacy to rule China if it loses Taiwan.

The message that Xi sent through his speech indicates that the Chinese leadership is ready to look beyond the regions and issues that are immediately related to their country, to move their country “closer to the center stage” of the world, and to lead their country to “make greater contributions to mankind.” By stating that “no country can alone address the many challenges facing mankind and no country can afford to retreat into self-isolation,” Xi also sets a clear, albeit in explicit, contrast to Donald Trump’s isolationism, portraying China as a responsible power that committed itself to major global affairs including peace, development and climate change.

If the blueprints outlined by Xi in the last few days are to be faithfully implemented, the world will be expected to see a fundamental switch in China’s diplomacy and foreign policies in the next few years. Under the leadership of the new Central Committee of the CCP, with Xi at the top, China is likely to transfer itself from a quiet achiever into an outward-looking, proactive, and probably rather assertive player that is not shy about telling the world what it sees as more appropriate and justifiable international order.

China adopted such a strategy once before, under Mao Zedong’s leadership between the 1950s and 1970s, intending to make itself the leader of the “third world” outside United States, the Soviet Union, and their allies. At that time, China offered enormous international aid to its followers and launched extensive propaganda wars, but the world was predominately shaped by the bilateral relations between the two superpowers. However, the game in the global arena has changed fundamentally between then and now. As China already emerged as the world’s Number Two in many aspects, the shift in its style, attitude, and behavior in global affairs is likely to have a profound impact on the international order in the years to come.

Yu Tao is a lecturer in Chinese Studies in the University of Western Australia (UWA), where he teaches contemporary Chinese society and language, and coordinates the Chinese Studies major.

 

Book Review: No Is Not Enough by Naomi Klein


September 25, 2017

No Is Not Enough by Naomi Klein  Book Review – Trump the Master of Disaster

by Hari Kunzru

Klein’s new study in shock politics is a warning of the enormous toxic potential of the Trump presidency and a call to oppose it. Refusal needs to turn into resistance. In Trump world there are only two existential categories: winners and losers. Trump stands for winning, and if you oppose him, you are a loser.

Donald Trump announces his candidacy for the presidency at Trump Tower.

Donald Trump announces his candidacy for the presidency at Trump Tower. Photograph: Christopher Gregory/Getty Images

Emigration as Liberation


September 25, 2017

Emigration as Liberation

by Dr. M. Bakri Musa, Morgan-Hill, California

http://www.bakrimusa.com

Image result for Bakri Musa

Dr. M Bakri Musa–A Prolific Author, Essayist and Public Intellectual

Many attribute America’s dynamism and openness to its tradition of accepting new immigrants, current Trump-stirred anti-immigrant hysteria notwithstanding. The hitch in that presumption is whether the very process of emigrating–the uprooting of oneself from one’s familiar surroundings to seek an uncertain future elsewhere–contributes to the opening up of one’s mind or whether it is the reverse? That is, only those who are already open-minded would consider immigration. In short, what is cause and what is effect?

This issue is complicated by the dynamics of immigration today being so much different from what they were a century ago. Ease of travel and communication has much to do with the change. Today someone from China immigrating to America does not face the same emotionally-wrenching decision as those “shanghaied” to work on American railroads of a century ago. Today’s immigrants could Skype or Facetime their relatives back in the village upon landing at San Francisco airport. They could also return for visits during the New Year and other holidays. Even those who had been forced to leave their native country, as with the Vietnamese refugees, are now able to return freely to their land of birth.

Image result for Liberation

This age of globalization is also referred to as the Age of Migration because of the unprecedented number of people moving across borders either individually or in groups as refugees.

There is angst in Malaysia today (and elsewhere in the developing world) over the “brain drain,” the emigration of its talented citizens. The mainstream media and blogosphere are filled with stories of individuals having to make supposedly heart-wrenching decisions to leave the country of their birth. Those personal dramas and emotions are contrived, and a bit of a stretch.

The experiences of today’s immigrants are in no way comparable to what their earlier counterparts had to endure. Unlike them, present-day immigrants are able to make many trips home or have face-to-face chats via Web camera, not to mention frequent phone calls. Many still hold on to their old passports and retain their properties in the old country. In short, the emotional trauma of immigration, if there is any, is nowhere on the same scale as what those who came before them had to endure. The experiences of the Vietnamese and Somalians should give comfort to current refugees from places like Syria and Afghanistan.

Image result for Mahathir, Badawi and Najib

Both Malaysian Prime Ministers–Abdullah Badawi and Najib Razak–were chosen by Dr. Mahathir to screw Malaysia to the ground so that he can look good. In doing so, Mahathir destroyed his own legacy. The lesson to learn is : Never be selfish. –Din Merican

This is especially true of immigrants under the “brain drain” category. Their relocation is akin to an extended sojourn abroad and an opportunity to earn a better income, as well as to widen their experiences and perspectives. Because today’s émigrés return home many times, those visits home become occasions for them to relate their new experiences. That in turn helps those at home to have similar “foreign” experiences, albeit vicariously. That too can be mind-liberating on both parties.

Again, modern technology comes to the rescue; it softens if not eliminates the trauma of migration.

The virtual reality that digital technology delivers may lack the sensory and physical components but it still delivers the essence. The images of the carnage perpetrated by a suicide bomber in London carried on your cellphone in the comfort and safety of your palm may not have the smell of burnt flesh, nonetheless the sight of blood, maimed bodies, and screaming victims captures the brute reality close enough.

Image result for Kerismuddin

The Prime Minister and his Deputy Zahid Hamidi –Quality of Leadership?

Digital technology is the transforming invention of our times. As such, access to it should be a basic public service, made free or affordable. It should be considered a public good in the same manner as highways, healthcare, and utilities.

Take for instance highways; it would be hard to consider a country developed without cars and roads. At the same time, both are major killers and destroyers of human life, as well as deleterious to the environment, but those are not reasons not to have cars and roads. Likewise, the digital highway; there are recognized dangers, the obvious being fraud, gambling, and pornography. Again, those are not reasons to ban or limit the Internet. Instead the focus should be on educating citizens on the dangers, just as we do with cars and highway users.

I venture that the broad-mindedness and increasing assertiveness of Malaysians in recent years, especially among the young, is attributable to the fact that Malaysia is an open society and its cyber world remains uncensored. That is one of the few enduring legacies of Mahathir despite his second thoughts lately on Internet freedom. Now that we have tasted freedom albeit only in the cyber world, there is no turning back.