Posts Tagged ‘Globalization’
Gordon Brown’s TED talk
Book: China’s new place in a world in crisis
Found this through our horizon scanning colleagues, a book by ANU on China’s new place in a world lurching from crisis to crisis. Makes me think of the unfinished conversations we are having on a China-centered Asia (ChiAsia) and the different flows and how the hell Singapore should be placed on these new flows. Anyway, here’s a brief grab on what the book is about:
The world and China’s place in it have been transformed over the past year. The pressures for change have come from the most severe global financial crisis ever. The crisis has accelerated China’s emergence as a great power. But China and its global partners have yet to think or work through the consequences of its new position for the governance of world affairs. China’s New Place in a World in Crisis discusses and provides in-depth analysis of the following questions. How have China’s growth prospects been affected by the global crisis? How will the crisis and China’s response to it impact China’s major domestic issues, such as industrialisation, urbanisation and the reform of the state-owned sector of the economy? How will the crisis and the international community’s response to it affect the rapidly emerging new international order? What will be China’s, and other major developing countries’, new role? Can China and the world find a way of breaking the nexus between economic growth and environmental sustainability — especially on the issue of climate change?
You can download the entire book here.
World Bank: World Development Report notes
h/t to Ruimin. Dr Shahid Yusuf, economic adviser at the World Bank, spoke at the LKYSPP last Friday on his recent publication, “Development Economics through the decades” – which reviewed the World Development Report series. The presentation slides, and the transcript of a similar speech he gave in Thailand, are here and here.
Here’s a summary of his most relevant points.
On productivity
- TFP has hovered around 2-3% in many countries. While many have tried, it’s not clear how to raise TFP.
- Focusing on “domestic demand” for growth is a cry of desperation, and cannot be a long-term strategy. Domestic demand tends to be focused on the non-tradables in the economy, which experience lower rates of productivity increase compared to the tradables. Additionally, one should be cautious about getting countries to spend more – according to Yusuf, no country has raised saving rates after they have dropped. [maybe the current US phenomena presents a counter-point].
- Productivity growth is far lower in the Services than in Manufacturing. The only exception is Financial Services, whose contribution to GDP has doubled in recent years in countries like the US and Singapore. However Yusuf thinks that post-crisis, productivity in the financial services is unlikely to continue growing fast. On the flip side, manufacturing isn’t going to be employing lots of people in future.
On industrial policy
- The World Bank has traditionally not promoted active Industrial Policy. The trade off is between government failure (corruption, lack of business expertise) versus market failure (coordination failure ala Rodrik, discovery failure ala Haussman) . Industrial Policy worked in Singapore because government failure < market failure, but this balance may differ across countries. However guidelines on the practical implementation of industrial policy remain absent.
- Every country is asking the same “what to do next” question, and everyone is attempting to do clean tech, but the reality is that not everyone will be a clean tech champion.
On poverty
- Growth remains the best way to get people out of poverty. Interventions, like micro-finance, education, and health, can only reinforce growth. Without growth, and consequently fiscal resources, these interventions cannot occur.
On entrepreneurship
- Lots of countries have business schools that “teach” entrepreneurship, and even take on the role of VCs to share some of the start-up risks. Yet the entrepreneurship rate remains low. Yusuf said he was “not sure of what to say” about entrepreneurship – theoretically the stigma of failure should disappear as countries develop and mature. He related the example of Shanghai’s Microsoft Research centre, which experiences a sizeable (but not excessive) turnover, in spite of rather good salaries. But surprisingly, few of those who left (conceivably these people were in the best position to establish tech start-ups) went on to be entrepreneurs. Instead they pursued “high security” jobs.
Writing the Web’s Future
More infoporn here. h/t to Thomas Barnett’s blog on the Core-Gap map. More of the Net to go into native languages like Mandarin, Hindi and so on.
BUSINESS DAY: “Writing the Web’s Future in Numerous Languages,” by Daniel Sorid, New York Times, 31 December 2008.
Agricultural lands up for grabs
Looks like it’s time to do an update of the future of food. Increasingly more agricultural lands in poorer nations are being leased or bought up by developing nations facing a food crunch domestically. Spanish NGO GRAIN has published a list of ‘land grabbers’ and their activities here. You can get the large map as a download.
China’s land buys are close to its domestic market, more of a food supply security play. China is also buying land in Africa, and sending farmers there, so we might see China’s footprint in Africa increasing in the future? Japan’s land buys are more directed along her food traders. But S Korea is the eye popper here, operating stealthily, buying up more land than China, and being the largest land buyer so far.
In Singapore’s perspective, we do not have large-scale food traders like Japan’s Itochu, Sumitomo etc that can move up the value chain and own large tracts of land in China etc. Neither do we have large-scale plantation owners like the Wilmars of the world. Yet we sit close to some of the world’s most fertile and yet agriculturally unproductive lands. Money itself is not enough. Land itself is not enough. Management best-in-class practices is needed. Technology itself as I said in earlier posts is tempting but also not enough. It is the mixture of all four.
Update (8 Jan 09): Long overdue, here’s a clever graphic show of the Future of Food from Wired Magazine.
Future Sense – Global Trends 2025: A Transformed World
Future Sense – Global Trends 2025: A Transformed World
The US National Intelligence Council (NIC) recently published “Global Trends 2025: A Transformed World”, the 4th unclassified report in a series that provides US decision-makers with medium- and long-term assessments of critical global drivers and scenarios. Previous reports dealt with global prospects for 2020, 2015 and 2010. The report utilises the scenario planning methodology and draws upon the views of numerous think-tanks, consulting firms, academic institutions, and hundreds of experts inside and outside of the US Government.
We are pleased to share with you a summary of key report findings, courtesy of our colleagues at the Strategic Policy Office, PSD. The full report, a 33.4MB file, is available here.
Key Findings of “Global Trends 2025: A Transformed World”
Multipolar World
The international system constructed after WWII will be almost unrecognisable by 2025. This development is likely to be caused by both the decline of the United States, exacerbated by the current financial crisis and the costly wars in Afghanistan and Iraq, and the concurrent rise of China, India and other emerging powers such as Russia.
As greater diffusion of authority and power in the international arena is likely to continue with a globalising economy and advanced communications technologies, non-state actors (e.g. businesses, religious organisations, criminal networks) will become increasingly influential and replace ineffective institutions.
The growing multiplicity of actors could strengthen the international system by filling gaps left by ageing post-WWII institutions. However, historically, multipolar systems also tend to be more unstable. Hence, the 2025 order is projected to be more fragmented and chaotic. Multiple actors pursuing diverse interests on the global stage would constrain multilateral cooperation and undercut the United States’ ability to demonstrate global leadership even as it remains the single most powerful country.
Developing countries may look to China’s state-centric model of development, rather than emulate Western models of democracy and free-markets, and erode at the United States’ legitimacy as the world’s leading nation.
Rise of the Rest
The magnitude and velocity at which global wealth and economic power is being transferred from the West to the East is unprecedented in modern history; fueled by the windfall profits generated from increases in oil and commodity prices and the shifting locus of manufacturing and more service industries to Asia due to lower operating costs and enlightened Government policies.
Should current trends persist, Brazil, Russia, India and China (the BRICs) will collectively match the orignal G-7′s share of global GDP by 2040 – 2050. By 2025, China is projected to overtake Japan as the world’s second largest economy and not only become the largest importer of natural resources, but also the biggest polluter in the world. India and Russia are likely to increase its economic clout as much as China.
However, it is likely that India, Russia and China’s rise will not be straightforward. India must safeguard itself from terrorist threats / insurgencies and Russia needs to diversify its economy away from oil and gas. China will need to cope with domestic expectations of high growth and restructure key sectors to be less reliant on the US and EU economies.
Complex Transnational Challenges
As the global economy continues to grow, there will be greater competition for strategic resources such as energy, food and water. Demand is projected to outstrip available supplies over the next decade or so. Already, the oil and gas production of many traditional energy producers is declining. The World Bank estimates that demand for food will rise by 50% by 2030, as a result of growing world population and rising affluence, and the lack of water for agricultural purposes reaching critical proportions makes this situation even more challenging.
Climate change is expected to exacerbate these resource scarcities, particularly water and agricultural output. Such a complex and unprecendented syndrome of problems could overload decisionmakers, making it difficult for them to take action in time to enhance good outcomes or avoid bad ones.
New technologies could provide solutions to viable alternatives to these strategic resources, but there is often an “adoption lag” for major technologies. The best hope for a relatively quick and economical “energy transition” comes from better renewable generation sources (photovoltaic and wind) and improvements in battery technology.
Security Threats
The multipolar world is likely to be threatened by terrorism and competition for scarce strategic resources. Although terrorism is unlikely to disappear by 2025, the rise of unemployment and the lack of legal means for political expression will precipitate greater radicalism, particularly amongst youth.
Terrorist groups existing in 2025 will likely be a mix of descendants from more established organisations (e.g. Al-Qaeda and Jemaah Islamiah) and newly emergent collections of angry and disenfranchised groups that become self-radicalised.
Due to the greater proliferation of technologies and scientific knowledge, terrorist groups are likely to have bio-chemical weapons in their hands – a situation which will stress a multipolar world even more. Already, Iran’s acquisition of nuclear weapons and ongoing clashes between Pakistan and India suggest that the possibility of nuclear war in the future cannot be foreclosed.
The potential conflict over increasingly scarce strategic resources could interact with growing multipolarity to create further international stresses. China and India have already been building up naval capabilities due to maritime security concerns. Such pre-emptive moves and counterbalancing acts will create increased tension or, possibly, opportunities for multilateral cooperation. However, as water scarcity is a growing problem in Asia and the Middle East, the prospects of cooperation to manage water resources is likely to be increasingly difficult within and between states.
The threats of terrorism and scarce resources suggest that the US’ role as the security enforcer and regional balancer in Asia will be of greater importance, even as its power declines.
There is no independent ‘Rise of the Rest’
Call centers in India are badly hit with cancelled contracts. Exports from China have plummeted. It is wishful thinking that a rise of China and India will allow Asia to decouple from the G3, as you can see below, about 61% of Asia’s exports are eventually consumed in the G3 (figure from Asian Development Bank).
A glance at the Singapore Business Times shows how Japan’s exports to China plunged 25% due to drop in demand from the US and Europe. There wasn’t really that much real domestic demand in China for Japanese goods after all. Intra-Asian trade did rapidly expand in the past few years, but it didn’t create an autonomous Asian market. It was more really centered around China as the world’s assembly floor, exporting to the G3.
So talk on decoupling is premature today, but maybe China can help Asia decouple from the US in the medium future?
Good question to ask is what is the nature of future China and India demand?
Is it mainly public investment driven (hence infrastructure)? What are the different business opportunities opening up for consumer demand centered in the cities (tier 1, tier 2) versus the no-frills consumer demand centered in the tier 3 cities and townships? Which opportunities play to Singapore’s strengths?
For now, here’s a recent Times article “Wanted: A New Miracle” on the path a post-American China can take. Namely, boost its services sector, create a social security net, become a technological power … in other words, like Japan. Interesting… I think the path described is targeted at tier 1, 2 cities. It would be interesting to hear what a tier 3 + township path would be like. More thoughts and updates to come on this …
Global Trends 2025: A Transformed World
The US National Intelligence Council (NIC) recently published “Global Trends 2025: A Transformed World“, the 4th unclassified report in a series that provides US decision-makers with medium- and long-term assessments of critical global drivers and scenarios. Previous reports dealt with global prospects for 2020, 2015 and 2010. The report utilises the scenario planning methodology and draws upon the views of numerous think-tanks, consulting firms, academic institutions, and hundreds of experts inside and outside of the US Government. One of our colleagues helpfully summarized the key report findings.
Key Findings of “Global Trends 2025: A Transformed World”
1. Multi-polar World
The international system constructed after WWII will be almost unrecognisable by 2025. This development is likely to be caused by both the decline of the United States, exacerbated by the current financial crisis and the costly wars in Afghanistan and Iraq, and the concurrent rise of China, India and other emerging powers such as Russia.
As greater diffusion of authority and power in the international arena is likely to continue with a globalising economy and advanced communications technologies, non-state actors (e.g. businesses, religious organisations, criminal networks) will become increasingly influential and replace ineffective institutions.
The growing multiplicity of actors could strengthen the international system by filling gaps left by ageing post-WWII institutions. However, historically, multipolar systems also tend to be more unstable. Hence, the 2025 order is projected to be more fragmented and chaotic. Multiple actors pursuing diverse interests on the global stage would constrain multilateral cooperation and undercut the United States’ ability to demonstrate global leadership even as it remains the single most powerful country.
Developing countries may look to China’s state-centric model of development, rather than emulate Western models of democracy and free-markets, and erode at the United States’ legitimacy as the world’s leading nation.
2. Rise of the Rest
The magnitude and velocity at which global wealth and economic power is being transferred from the West to the East is unprecedented in modern history; fueled by the windfall profits generated from increases in oil and commodity prices and the shifting locus of manufacturing and more service industries to Asia due to lower operating costs and enlightened Government policies.
Should current trends persist, Brazil, Russia, India and China (the BRICs) will collectively match the orignal G-7′s share of global GDP by 2040 – 2050. By 2025, China is projected to overtake Japan as the world’s second largest economy and not only become the largest importer of natural resources, but also the biggest polluter in the world. India and Russia are likely to increase its economic clout as much as China.
However, it is likely that India, Russia and China’s rise will not be straightforward. India must safeguard itself from terrorist threats / insurgencies and Russia needs to diversify its economy away from oil and gas. China will need to cope with domestic expectations of high growth and restructure key sectors to be less reliant on the US and EU economies.
3. Complex Transnational Challenges
As the global economy continues to grow, there will be greater competition for strategic resources such as energy, food and water. Demand is projected to outstrip available supplies over the next decade or so. Already, the oil and gas production of many traditional energy producers is declining. The World Bank estimates that demand for food will rise by 50% by 2030, as a result of growing world population and rising affluence, and the lack of water for agricultural purposes reaching critical proportions makes this situation even more challenging.
Climate change is expected to exacerbate these resource scarcities, particularly water and agricultural output. Such a complex and unprecedented syndrome of problems could overload decision makers, making it difficult for them to take action in time to enhance good outcomes or avoid bad ones.
New technologies could provide solutions to viable alternatives to these strategic resources, but there is often an “adoption lag” for major technologies. The best hope for a relatively quick and economical “energy transition” comes from better renewable generation sources (photovoltaic and wind) and improvements in battery technology.
4. Security Threats
The multipolar world is likely to be threatened by terrorism and competition for scarce strategic resources. Although terrorism is unlikely to disappear by 2025, the rise of unemployment and the lack of legal means for political expression will precipitate greater radicalism, particularly amongst youth.
Terrorist groups existing in 2025 will likely be a mix of descendants from more established organisations (e.g. Al-Qaeda and Jemaiah Islamiah) and newly emergent collections of angry and disenfranchised groups that become self-radicalized.
Due to the greater proliferation of technologies and scientific knowledge, terrorist groups are likely to have bio-chemical weapons in their hands – a situation which will stress a multipolar world even more. Already, Iran’s acquisition of nuclear weapons and ongoing clashes between Pakistan and India suggest that the possibility of nuclear war in the future cannot be foreclosed.
The potential conflict over increasingly scarce strategic resources could interact with growing multipolarity to create further international stresses. China and India have already been building up naval capabilities due to maritime security concerns. Such pre-emptive moves and counterbalancing acts will create increased tension or, possibly, opportunities for multilateral cooperation. However, as water scarcity is a growing problem in Asia and the Middle East, the prospects of cooperation to manage water resources is likely to be increasingly difficult within and between states.
The threats of terrorism and scarce resources suggest that the US’ role as the security enforcer and regional balancer in Asia will be of greater importance, even as its power declines.
Brookings Top Ten Global Economic Challenges facing America’s 44th President
The Brookings Institution articulated in a recent report the need for America’s next President to exhibit clear leadership on 10 main economic challenges.
These are:
1. Restoring Financial Stability
With U.S. financial troubles at the center of the current global vortex, the U.S. has important obligations to strengthen the global financial system, including by enhancing financial regulation and diminishing reliance on foreign credit.
2. Setting the Right Green Agenda
For the U.S., it is time to muster the political will to act on climate change at the national level while also working to forge international agreement so that markets and regulatory policy will provide a consistent set of incentives to wean the economy from carbon foundations.
3. Exercising Smart Power
Investing in the education, health, livelihoods, and the security of the world’s poorest not only makes Americans feel good about themselves but also makes the world feel good about America. It is critical to increase not only resources but also the impact of each dollar spent.
4. Reimagining Global Trade
Americans feel most secure about global engagement when they are well equipped to compete and have insurance against economic risks. This requires vigorously enforcing the trade rules and investing in economic competitiveness.
5. Navigating China’s Rise
On issues such as climate change, enforcement of trade rules and exchange rate adjustment, where the stakes are simply too high to ignore, America should look for cooperative mechanisms to advance its goals where possible but continue to press bilaterally with China and better deploy regional and international mechanisms where necessary.
6. Deciphering “Russia, Inc.”
Difficult as it may be to accomplish, America nonetheless has significant interests in alternately coaxing and goading a resurgent, resource nationalist Russia toward international norms and cooperation on energy, trade, financial integration and security more broadly.
7. Engaging an Emerging India
America has enormous interests in India’s successful integration into the global economy as the world’s most populous democracy engages in the task of lifting hundreds of millions out of poverty. America must look for areas of cooperation where possible and deepen bilateral engagement broadly in order to make progress on its agenda.
8. Revitalizing Ties to Latin America
America must become a stronger partner to its neighbors and engage on issues of mutual concern, including on energy, environmental protection, economic competitiveness and social policies.
9. Supporting Africa’s Growth Turnaround
America can become a stronger and steadier partner to Africa as it navigates economic challenges by supporting global standards for natural resource management, opening markets to African products, supporting vibrant private enterprises, supporting African efforts to enhance regional security and build resilience to climate change, and both increasing and improving the quality of development assistance.
10. Pursuing a Positive Agenda for the Middle East
America can build partnerships in the Middle East based on trust and mutual respect if it aligns its agenda on economic and political reform with the aspirations of the majority of the region’s people: the young who are striving for opportunity and global integration.
