Global economics

/10/jonathanpower2.jpg”> Economically Ukraine continues to go down the chute. No other East European has messed up its economic potential, as has Ukraine. During Soviet times Ukraine with its industrial prowess and wonderful fertile soil, making it the Soviet Union’s breadbasket, was a success (by communist standards). Now 25 years of political upheaval, economic mismanagement and greed by the oligarchs have taken a dreadful tool on living standards. The stoicism of ordinary people is to be wondered at. One reason why many easterners want to return to Russia is because they think they will have higher living standards. In an essay in the December, 2014, issue of Foreign Affairs Andrei Shleifer, a professor of economics at Harvard and Daniel Treisman, a professor of political science at the university of California have presented an analysis of what went right in the other east European countries, and, a for a time, in Russia...

2 February 2015 at the Penang Institute, Penang A theory serves comprehension, prediction and identification of conditions for change. Seven such historical-cultural pointers will be indicated for China; using the West in general, and the USA in particular, for comparisons. The presentation draws on countless dialogues in China over 40 years, since 1973. * China: in time, as dynasties; West: in space as empires. Look at a histomap combining world history and geography, time and space: China shows up through 4,000 years as relatively coherent dynasties with complex transitions – and the West as empires–birth-growth-peaking-decline-fall, like the Roman, UK and now US empires – duration vs bubbles that burst; as China-centric vs hegemonic.

Three, maybe four dramatic, global processes are unfolding. First, the West–particularly USA, Israel, France – fighting very violently and counter-productively to keep their grip on the world. Second, Eurasia, spearheaded by Russia-India-China in BRICS (Brazil, Russia, India, China, South Africa) expanding and consolidating, successfully and nonviolently. Third, Islam expanding and consolidating, partly by conversion to Islam, partly through the dream of a new caliphate, partly violently. Fourth, Latin America and Africa in the old Third World expanding and consolidating, spearheaded by Brazil-South Africa in BRICS. If you want to live drama, you have chosen the right year. The basic conflict is the first against the other three; the declining against the emerging. After some time conflicts among the three will show up, particularly Islam with the other two. Economically right now

To: Prof. Klaus Schwab, Founder and Executive Chairman, World Economic Forum Switzerland Dear Prof. Schwab, I notice that you hope the 2015 WEF meeting will be a “starting point for a renaissance of global trust”. This is a noble aim, very important and timely. Thus, as the Founder of Globalisation for the Common Good Initiative (GCGI) I wish to endorse and support you in this aim. Today in many parts of the world, the so-called market, and the values of consumerism, underpinned by the “Black Friday” values, have become increasingly dominant and are now seriously threatening our global future, both in terms of our care of the planet and in increasing societal rivarly and conflict. In the process we have lost trust in everything. This is why I believe your aim is so important. In the global society in which we now all live, it is essential for our common...

The immediate reaction to Obama’s Executive Order of 17 December 2014 – re-establishing diplomatic relations, easing travel, swapping prisoners – was a sense of relief: finally correcting a more than 50-year old stupidity. But why now? Later. First, back to June 1960. We drove from New York to Key West, then a ferry – the captain was Norwegian – to La Habana; we wanted to drive all over, talk with everybody to understand. And the social picture was very clear: black, woman, low class overwhelmingly in favor of the revolution; white, man, middle-upper class ended up in Miami. Why gender? US imperialism was obvious but in addition Cuba was one big brothel for “puritan” US men. And one of the first acts of the revolution was to stop that, liberate the dirt poor girls, organize vocational training – give them dignity.

“They can choose to focus on the worst in others, criticizing, building on paranoia and worst case analysis, “security”. Or choose to focus on the best, with cooperation as dominant mode, conflict as recessive. They can cooperate for mutual and equal benefit like in good trade, exploring each others’ comparative political-cultural advantages. They can do it.” Read this unusual global analysis here.

/10/janoberg.jpg”>[/caption] No matter what you may think of Putin and Russia this is simply not the way international politics should be conducted, particularly not at the personal level. If it wasn’t an offence to children, one would aptly characterise it as childish behaviour. Western leaders ignored a brilliant opportunity to meet face-to-face with Vladimir Putin and move forward towards mutual understanding instead of signalling that they want a new Cold War. Western leaders tell us that Russia is a ”threat to the world”. That obviously serves other purposes because you don’t bully someone you genuinely fear. The G20 Brisbane should be remembered for its show of Western leaders’ personal display of weakness and conflict illiteracy. Pummelled Putin punching bag CNN reports that, during the meeting, Putin took ”pummelling” and was treated as a ”punching bag” by Western leaders from he set foot on Australian soil where his Australian host had...

Protestant Liechtenstein recently held a conference on making banking shariah compatible, to attract capital from Muslim countries. And no doubt also because the big survivors of the 2008 crisis were China and Muslim countries; China because the focus is not only growth but lifting the bottom up – increasing domestic demand and less dependence on trade in 1991-2004 – Muslim countries because of Islamic banking. A common Western misunderstanding is that Islam forbids interest; what is forbidden are relations that are only monetary; they should be economic, social, more human, in a broad sense. Just to make money available against interest is out. Purely financial deals selling and buying financial objects–derivatives at any level–for commissions are also out. Banks and other companies have to be in it together. There is more to it. A bank has to be trustworthy, not at the brink of collapse. A leading Islamic banker in...

It should never have come to this horrible situation in Ukraine. The local population of Donetsk, Lugansk, Slavyansk and other eastern Ukrainian cities is living through a true nightmare. Residential areas are being bombed, shelled and burned. Non-combatants i.e. elder, women and children are lying dead in the streets. We’re talking about thousands of deaths. No water supply, no heating, no security – this is the grim reality for the population. 700.000 Eastern Ukrainians have already escaped from the war scene, most of them are living in refugee camps in Russia. It is worth noting that they have not fled to Kiev or elsewhere to the west. Surprisingly the Western media hardly pay any attention to the horrors in Eastern Ukraine. But that is not all. Ukraine is in total disruption socially, politically and not least economically and financially. Furthermore, the mental scars in Ukraine will continue for at least...

They made it, with constructive alternatives – the New Development Bank and the Contingency Reserve Agreement–to the US-dominated World Bank and International Monetary Fund. Those two parts of Bretton Woods were basic pillars in the economic infra-structure of the US Empire in the hands of the US Congress. Loans were disbursed in return for “structural adjustment” –privatization, budget cuts, devaluation, repatriation of profit, also against BRICS countries. US companies were commissioned for huge jobs serving local elites. Untold damage was done in spite of some recent changes in rhetoric. The USA used them to export the US economic–and with it the social, political, cultural, military–order through loans, grafting it upon social bodies that after some time rejected the implants as foreign and incompatible. Even a decaying order however brilliant it may have looked to the untrained eye as late as the 1990s. What remains today of that US “order” is...

/10/jonathanpower2.jpg”> The Nobel-prize winning economist, Robert Fogel, believes that China will grow at an average rate of 8% until 2040, by which time it will be twice as rich as Europe in per capita terms. His model is based partly on so-called geometric growth. An example: If my ancestors had invested a penny in 1800 at a compound interest rate of 6% a year above inflation it would now be worth $280,000. Sounds good, but it isn’t. The chances of this happening are nil. Indeed I would go as far as to say that China remains a classic case of hope over experience, reminiscent of de Gaulle’s famous comment about Brazil: ”It has a great potential and always will”. In the 1970s it was Brazil,

/10/jonathanpower2.jpg”> In recent months the scare-mongers have been at it again – Russia’s foray into Ukraine and China’s behaviour in the South China Sea have set their alarm bells ringing. But why? Big power politics is not back. Indeed in the round it is rather subdued. Take the Russian-EU-US fracas over Ukraine at the moment. Does this compare with the Cold War when the West prepared itself for a Russian invasion of Europe, nuclear missiles were targeted on each other, and when the Soviet Union along with the US stirred up proxy civil wars in Central America and Africa? Do the US and NATO fear such threats as these today? Of course not. Critics of President Barack Obama and denigrators of President Vladimir Putin badly need a sense of perspective.