Catarina's World

Sixteen of the fastest growing countries in the world are in Africa. No you didn’t get it wrong. Seven are in South East Asia followed by three in Central Asia. So has Africa’s time finally come and the continent will now forge ahead?

Ethiopia is predicted to grow at least 8% per annum for the next few years. If so, it will be as normal for Eleni Gabre-Madhin, CEO of the Ethiopia Commodity Exchange, to take center stage globally as for her Western and Asian counterparts.

According to the IMF we will see more African countries with massive growth during the next few years. They also forecast that many African economies will outpace Asian countries, even China and India.

The shoe is on the other foot

Angola is now lending money to it’s former colonial master Portugal struggling in the Euro crisis. Not so long ago nobody would have thought such a development possible.

Many of us have worked extensively to further the interests of Africa and hence hope real progress has now started. But somehow can’t help wondering what will go wrong this time because something usually does. Really hope it is correct that Africa as a whole will grow 7% on a yearly basis over the next two decades?

Surging demand for raw materials and foreign investment driving progres

The continents changing fortunes seems to be, at least partly, based on China’s demand for raw materials, higher commodities prices and increased inflow of foreign investment. Africa’s rising middle class have also fuelled growth in domestic demand. There is global interdependence in respect of production and demand. Africa offers producers around the world a vast and growing market that will keep on expanding.

African governments improving

Government is improving in Africa and corruption is less than it used to be. Seems the NEPAD peer review mechanism have made a difference when it comes to implementing true democracy, good corporate governance, transparency and eradicate corruption. Nowhere else in the world has such a process ever taken place and its uniqueness was well illustrated by former President Bush’s remark, “We don’t do that in America”. More and more governments are being responsible and putting money aside to cushion their economies. Know-how is also improving. As a result of statisticians improving their data in Ghana their GDP was revised up by as much as 75%.

Trade not aid

Africa, the poorest continent, according to many analysts, bares the brunt of the continued rigging of trade rules in the WTO. And in order to prosper the continent needs to trade out of poverty, as opposed to relying on aid. According to the UN, just one percent of increase in exports from Africa is worth a staggering five times the amount it receives in aid and debt relief.

Africans recognises their responsibility to wipe out the gap between the continent and the rest of the world. Africa wants to improve its role in the world economy. Its contribution to world trade is hopelessly small. They want to get its house in order, but the rest of the world needs to play its part as well. For example, Africa is told it may not subsidise its agriculture, so the Western world shouldn’t be doing so either, but as we know both the EU and US does. Jean Chretien put it very well when he stated “we must realize that little progress will be made with investments and trade if Africans continue to be refused access to our markets”.

African media has a role to play

Can’t help thinking about what President Chissano told me in 2004. According to him a major obstacle to improving the image of Africa is that the African press, like it’s Western counterparts, focus on scandals to grab headlines. Naturally a free press is essential, but the down side of that is that far too many negative stories come out of Africa, deter foreign investors and hence have a detrimental affect on the progress of the continent. Maybe it would be a good idea for African media to also show case African success stories? That Angola is growing faster than China would be a start.

The world’s new manufacturing centre?

Unfortunately commodity driven growth doesn’t generate enough jobs. However, now with salaries increasing in Asia  Africa could become the new manufacturing centre. Kenya and Uganda have already increased their export sector. To make this reality the WTO need to facilitate market access for products made in Africa on the world market. If not, Africa may continue to be a scar on the the conscience of the West.

There are many obstacles to Africa continuing to progress. Political instability, weak rule of law, corruption, bad infrastructure as well as poor health and education. So without the political will to reform, the current growth rate will be difficult to sustain. However, for outside companies looking for new markets a whole continent almost sounds too good to be true. But that’s what a developing Africa, with a gradually burgeoning middle class and numbers of skilled workers constantly increasing would constitute. A vast and growing market for the world’s manufactured products, intermediate goods and services. Add to that UN figures showing that investments in Africa provide higher rates of return than anywhere else in the world. It has been said for more than a decade that Africa’s time has come. But maybe now with the changed world order due to the recent global crisis, will Africa finally be able to progress? What do you believe? Will Africa now be able to forge ahead or will the gap between Africa and the rest of the world remain as wide as it is?

(Photo copyright World Economic Forum (www.weforum.org)/Photo by Zahur Ramji / Mediapix)

Criminal syndicates are increasingly turning from smuggling drugs to human cargo, and governments and law-enforcement agencies are, despite huge efforts, not able to do much about it. Watch Angelina Jolie talk about the desperation of refugees that make them turn to people smugglers:

Unfortunately it's not just between Africa and the Arabian peninsula people are being smuggled. And lamentably there is only so much humanitarian organisations can do to alleviate suffering. 

Who benefits apart from the smugglers?

Frequently Africans are then smuggled from the Middle East to Europe at the cost of approximately $10,000 per person. The most popular destinations are Scandinavia and Britain. But once there some immigrants fail to integrate into society because they they really do not want to be in Europe, but because they can't make a living back home they felt they had no choice. Can't help thinking that all this is so unnecessary and the only ones benefiting are some vested interests and the gangsters making money smuggling them. The latter charge hefty fees of $10,000 per person but many migrants still die en route. Or remain in debt to the people smugglers with all that entails. 

So how can we enable poor people to support themselves in their home countries hence depriving people smugglers of their lucrative income? Aid doesn't seem to do the trick, at least not so far. So why should more foreign aid suddenly be able to remedy the current situation?

Trade instead of aid

Am a firm believer of replacing aid with trade by helping developing countries trade themselves out of poverty. And the swiftest and easiest way of doing so would be to enable them to sell their agricultural produce on the international market.

The EU spends almost two fifths of its entire budget (EU budget for 2010 around 139bn Euros) on the Common Agricultural Program, CAP, and even pay European farmers to overproduce. Those products are then dumped at ultra low prises in developing countries, whose farmers are not able to produce at such low costs. Result – poor farmers become even poorer and developing countries even more dependent on imports to feed their population.

Scrap CAP and US farm subsidies

Scrapping CAP as well as US farm subsidies would thus go a long way towards improving the lives of poor people in developing countries and hence reduce people smugglers income. But chances of that happening are slim, unfortunately, since farmers are a strong lobby group in the US and out of 27 EU member countries only four are interested in gradually getting rid of CAP. 

All consumers in the world would benefit from abolition of EU & US agricultural subsidies since agricultural products would suddenly become much cheaper. Less immigrants would would be forced to use the services of people smugglers since more of them would be able to support themselves back home. Less Westerners become farmers anyway, so why don't we press fast forward and make this world a better place for all, apart from people smugglers?

What's the point in depriving developing countries of their ability to trade themselves out of poverty? The only thing Western Agricultural subsidies achieve is preserving a profession that is in decline in the West anyway? Wouldn't it be better to take a more holistic view and find solutions that are beneficial to all, instead of just a few? We also have to improve the global trade regime that has been crafted over the years by the WTO to benefit not only multinationals in the North but also the poor in the South. But abolishing Western agricultural subsidies would make an excellent start.

(Video –  AngelinaJolieUNHCR) 

Even in the West, inequality and poverty are on the rise. Poverty has, in fact, reached the levels of 1933. Devote 4 minutes to watching Thomas Pogge, professor of Yale University, talking about the current international system that allows a large part of the world's population to live in abject poverty:  

The global economic downturn has been pushing millions of people into poverty, or worse, extreme poverty. Add to that the fact that people all over the world are moving into urban areas to seek their fortune and we have a danger of slums increasing tremendously. 

How do we keep them safe in urban areas?

There hence is a huge need to reduce vulnerability in urban settings. Half the world's people now live in cities, a share that will rise to 70 percent by 2050.  

So what are we going to do to give more people in the world a decent life? If we don't do anything the amount of people living in shantytowns will rise, everywhere. Or call them homeless, if you wish. 

Extreme poverty leads to crime – or worse

Countries with a lot of poverty easily gets trapped in crime or worse, become failed states. And I don't need to tell you how easily failed states can follow in the steps of Afghanistan and Somalia, do I? So it's in the interest of all of us to start eradicating poverty in the world. 

And let's not forget poverty in the developed world

Frankly find it unbelievable that child poverty is on the increase even in a country like Sweden. So is poverty in all age groups, for that matter. And the same applies to Europe as a whole and the United States. Like South Koreans a decade ago, people are starting to committ suicide in Europe due to being wiped out financially. Isn't it, like Thomas Pogge put it, a crime against humanity? 

Isn't it time to put Milton Friedmans theories on the shelf and, again, start implementing what Keynes ordered? Or do we really want a world where poverty is increasing and the middle classes are in decline? By now we know the side effects of Friedman's ideas as mentioned in do you concur with Joseph Stiglitz on market fundamentalism? Just look at what has happened the last few decades in Latin America, Africa, Asia and Russia. And since 2007 the American middle class has been severely affected by the same side effects of his policies. The Euro zone is currently being hit which has an impact on Europe as a whole. China has been spared to some extent since it implemented Friedman's ideas but never completely opened up their markets. And Iraq failed miserably because the shock theraphies implemented there went too far.

Negative for much of the world's population

One hundred faculty members at University of Chicago wrote a letter of protest when university president Robert ZImmer announced the creation of a $200m Milton Friedman Institute stating that "The effects of the neoliberal global order … strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive. Many would argue that they have been negative for much of the world's population." Since the time when Reagan was president the Chicago boys have dominated not only Washington but the world, not least through the IMF. So now when the recession keeps on causing substantial increases in misery isn't it time to stop implementing policies that favour multinational companies at the expense of the majority of people in the world?

Do you agree with Pogge that many of the people who support the current international system are like passive Germans during the Nazi era? Do we really want the world's middle classes and poor to be worse off? Is it really a good idea to have more people across the globe living in shantytowns? Or being homeless? No wonder Occupy Wall Street swiftly spread to 1,500 cities all over the world. Is it the beginning of a new era where 99% of the world's population say enough is enough and demand to get a share of what now goes to the top one percent? Is equality only justified if it benefits all human beings? What's your opinion? Is it time to put market fundamentalism aside and start stimulating economies in order to grow again and give more people a decent life? The Euro zone would make a good start.  Or are you of the opinion that Friedman's version of capitalism is the way forward?

(Video: carnegiecouncil – You Tube)

We have all heard about how officials and companies are making the money assigned to rebuild Iraq disappear. But did you know that recently there’s also been a record number of US soldiers convicted of such theft and bribery? Devote 2 minutes to watching Gayane Chichakyan reporting:

Isn’t it interesting how little coverage the issue of the missing billions have had in the media? The US military promised they would help rebuild war torn Iraq. Sure, there has been some aid, but unfortunately war contractors are getting away with billions of dollars in profits. In some parts of Iraq there is still no running water,even though someone has been paid to arrange that.

War profiteers steal billions

What amazes me even more is that many war time contractors have been given money to build hospitals that never opened and jails that will never hold any prisoners. On top of it these contractors that have stolen billions from US tax payers have complete impunity from the justice system. Congress has cut the funding to these contractors, but their report will be sealed until 2031. For more in-debth coverage of the problem  watch this interesting video:

Only going after petty thiefs

Isn’t it amazing that soldiers stealing a few thousand dollars are taken to court while US contractors pocketing billions have immunity? Makes you wonder what the US congress is doing, doesn’t it? Can’t help wondering if they will honour their promise to rebuild Iraq? It’s worth remembering that Iraq is still paying Kuwait for the damage they caused when they invaded.

If it wasn’t so critical to rebuild Iraq we could just say that we were not surprised. But the UNHCR  is concerned about almost 2 million people inside Iraq and about 3,4 million originating from Iraq. In other words more than five million people are yet to be able return home to a safe and sound environment. Many of them live in deplorable conditions in camps and it’s actually these people’s lives the people stealing the funds are ruining.

So how can Iraq be rebuilt? Not only are corrupt officials bagging the money but contractors and US soldiers as well. The longer we wait the more problematic the situation in Iraq will be. It’s already the Wild West and the sooner it’s rebuilt the better for not only Iraq but the world. We don’t need another failed state. One solution would be for Saudi Arabia and the Gulf states to coordinate an effort. But that’s unlikely considering the role Iran is playing in Iraq. Is it likely that Iran will rebuild it? Or does it serve their interest to keep Iraq the way it is? Maybe The Arab League could be in charge of rebuilding it? After what happened to the UN in the country, is it likely the United Nations would be prepared to coordinate the effort? Or should the US take its responsibility and find new funds to rebuild the country? What’s your opinion? And how can we assure that money allocated will be used to rebuild Iraq and not end up in someone’s pocket?

When democracies lose economic power democracy itself is weakened.

Hu Jintao may be shorter than Obama but China still makes the smartest moves on the geo-political global chess board.

This year China, the world’s largest dictatorship, overtook Japan to become the second largest economy in the world and replaced the United States as the world’s top manufacturing country.

The US on the other hand, as we all know, has a huge budget deficit and its credit rating has been down graded. China is the largest holder of US debt, so no wonder it’s showing its power.

Fiercely Chinese anti democracy rhetoric

Chinese state-owned media openly blasted the US and the failures of the West. Even warning Chinese citizens about the dangers of democracy.

Following the U.S. debt deal, Chinese newspapers provided some of the most biting anti-Western, anti-democratic commentary. For example:

“The West can no longer cover up its problems. The rise of emerging powers is challenging Western dominance. However, the West only tries to deal with these problems by highlighting past achievements. Political reform is unlikely to make any more progress in the U.S. than in other countries — despite the illusion of change that comes as parties rotate with elections … Western countries are losing the authority of their democratic system.”

Contrast that to statements supporting the US dollar coming out of Japan, the second largest holder of US debt.

China buying Europe at bargain prices?

Not only does China hold a lot of America’s debt. Chinese premier, Wen Jiabao, has also thrown the euro zone a vital lifeline and pledged to buy billions of euros of European debt to keep the single currency project alive.

And unless someone else, like Saudi Arabia or India, start buying continued Chinese purchases of U.S. and European government bonds will be essential to maintaining global financial stability.

“Stable Europe vital to China”

When Chinese Premier Wen Jiabao was on a tour of European capitals recently, he stressed that a stable euro zone is vital to China, Europe’s friend.

From Beijing’s perspective, when it comes to Europe, self-interest and altruism actually coincide.

If China were to buy, say, half of all outstanding Greek sovereign debt (for a bargain of around $220 billion), it would not only resolve the euro zone’s problems and add to Chinese prestige but it would contribute to giving Beijing the kind of reserve asset it needs to diversify its holdings out of dollars.

And it’s interesting to note that as a result of U.S. and European actions in financial markets, there is now the possibility that China could buy even sensitive assets from Europe, at bargain prices.

Money makes the world go round

China is today able to do what the US did yesterday i.e. sequence and prioritize policy objectives across a great number of sectors and focus on achieving them, ignoring distractions, and not allowing events or passions to hijack national attention.

China continues to produce and Westerners keep on consuming on borrowed money, not least from China, which is an equation that doesn’t add up. Soviet communism declined because the economy didn’t add up but that’s not the case with China whose economy is capitalistic while the government keeps a firm grip on power and its people. Most likely the majority of Chinese would like democracy, but for China to become a functioning democracy is nevertheless way into the future since their government will crush dissent.

What’s the strategy of the West?

Today America and Europe are suffering from lack of vision and strategy and seem unable to resist the next big battle in Washington or Brussels and the desire to take on yet another complex security challenge (maybe Syria) to distract from the more important geo-strategic challenges of the day.

China stays on track — and the West seems unable to come back

Not only is the Chinese economy performing very well, they are also partly bankrolling the West. And money talks.

The US, Europe and India are the worlds largest democracies and China is the world’s biggest dictatorship. It does matter who has the best performing economy in the world. To ignore that would be a fatal mistake. But for some reason it seems Western politicians are not able to make an effort to stop power slipping away. That the center of the world is moving East has been obvious for a long time, but what surprises me is that the West doesn’t seem to be able to come up with a strategy to stop, or at least delay, it. What’s your opinion? Is China’s geo-strategic policies making them the winner of the geo-political global chess game? Do you believe China is taking over the West? Or will Western politicians get their act together and, again, start start making intelligent moves on the global chess board that work? If not, it will be a set back for democracy.

(Photo: United States Government Services – Flickr)

The recent inability of US politicians to compromise have lead to US credit rating being downgraded. Add to that European politicians’ inadequate response to the debt crisis in the euro zone and it’s understandable markets are in turmoil.

Hopefully politicians all over the world will now get their act together and coordinate efforts to start dealing constructively with the world economy. There is no avoiding sorting out the main problem of excessive sovereign debt. Until that’s done, any relief will be short lived.

Politicians all over the world really need to step up to the plate and do something drastic to reduce the risks to the global economy.

Is another time bomb ticking somewhere in the world?

The global system is now faced with having to adjust to the many implications and uncertainties of the once unthinkable loss of America’s AAA. US treasury bonds are actually rated lower than bonds issued by countries such as Britain, Germany and France.

China, the world’s largest holder of US debt, has condemned the “short-sighted” political wrangling in the US and are of the opinion the world needs a new and stable global reserve currency. Understandable considering the circumstances.

And I can’t help wondering if there is another time bomb waiting to explode somewhere in the world?

Politicians postponing the problems

There are economic solutions to economic problems, but so far politicians have just postponed dealing with the problems. Presumably hoping they will go away? Which, as we all know is unlikely. If anything they will, just like the US debt problem just did, get worse.

Hopefully politicians all over the world will now get their act together and coordinate efforts to start dealing constructively with the world economy. There is no avoiding sorting out the main problem of excessive sovereign debt. Until that’s done, any relief will be short lived.

S&P considering US politicians not able to govern properly

It’s interesting to note that credit rating agencies are still regarded as capable of judging credit worthiness despite their role in the sub prime crisis. Seems a bit like having drunk drivers policing the roads. Not least since their initial calculations were wrong by 2 trillion. But for some reason they are, and Moody’s will review US credit rating end of this month.

S&P are of the opinion that US policy making and political institutions have weakened and that it will have a negative impact of America’s sovereign debt and budget. They are for instance worried that the Bush tax cut will not expire end of 2012 because of Republican opposition to raise revenues.

Americans & Europeans tired of political games

Voters in both the US and Europe are unhappy with their elected leaders’ failures. But voters are part of the problem too. On both sides of the Atlantic voters want debt levels reduced but no raised taxes or cuts in government programs such as pensions and health care.

Understandable since it’s the fault of bankers and politicians rather than voters. But unfortunately all belts now have to be tightened. Otherwise the huge sovereign debts will not be reduced.

Personally I used to think the main reason for the US debt was the wars in Iraq and Afghanistan. But according to The New York Times the main reason is loss of revenue due to the Bush tax cut, followed by the costs of those wars.

Unfortunately US voters will most likely be affected by S&P’s cut of US credit rating since borrowing costs will increase not only for the American government but US companies and consumers as well.

Could the EU rescue both Spain & Italy?

Looking at recent predictions about where the Chinese and US economies are heading really echoes the cold war. But the arguments are valid and if either, or both of them, crash it would, as we all know, badly destabilize the entire global economy.

Are the presidents of China and America presiding over economies that will crash?

China today – the US in 2007?

More and more investors and analysts recently seem to be focusing on potential problems facing the Chinese economy, and they’re worried, to put it mildly.The reason for their concern sounds like a description of the US in 2007, a destabilizing property price bubble and rising bad loans at its banks. All due to China’s recent recession-busting credit boom and even cautious IMF is warning of the consequences of the Chinese economy over heating.

Stock markets worried

The stock markets actually seem to believe the Chinese economy is in trouble. Experts are worried that Chinese growth during the last two years based on enormous government stimulus and unconstrained lending from banks offer only a shaky foundation for further growth. The Shanghai Composite, have hence steadily declined since late 2009.

Boom and bust?

The Chinese economy used to rely on exports to the US, but that changed with the recent recession. Over-investments and over-building has hence driven it for the last few years.

As a result inflation increased and the Chinese government had to curb lending as well as raising interest rates. The slowing down of such rampant lending could actually crash the economy, or at least slow it down.

The good news however is that there are differences between the current troubles in China and the US bank and sub-prime mess. One is that Chinese home owners are not as heavily mortgaged as the Americans were. And another that the Chinese government sits on a 3,000 billion dollar surplus that can be used to prop up sick banks.

Chinese economist predict the US economy will crash

On the other hand, Chinese economists are predicting the US economy will, again, crash. Maybe as early as this year due to the explosive increase of the use of financial derivatives that took place between 2005 and 2007.

According to their calculations, the derivatives that are coming due this and next year are worth ten times as much as the ones that caused the latest downturn and will deal a catastrophic blow to not only the US but the global economy.

Another problem experts see is the loss of faith in US treasury bonds.

Dire predictions for the world economy with its fast growing developing countries and stagnating Western nations. So who’s right and who’s wrong? Will the Chinese or US economy crash? What’s your opinion? Are we heading for a deep depression? Maybe the most important question is that if the Chinese economy slows down, or worse crash, how prepared is the rest of the world to cope? Important because even a small decline in China’s growth can, unfortunately, cause massive problems all over the world.

Photo: The White House – Flickr

Just days after President Barack Obama voiced willingness to talk to Iran, Iranian President Mahmoud Ahmadinejad claimed 9/11 had been trumped up as an excuse for the United States to invade Afghanistan and Iraq.

If necessary, could the Saudis, again, in the interest of the world succeed in making Teheran opt for peace?

He said there was no evidence that the death toll at New York’s World Trade Center, destroyed in the attacks, was as high as reported. “They created and prepared public opinion so that everyone considered an attack on Afghanistan and Iraq as (their) right,” he said in a televised speech.

No “Zionists” were killed in the World Trade Center, according to him, because “one day earlier they were told not go to their workplace.” That there is a published list of Sept. 11 dead from more than 90 countries available online, was conveniently ignored.

Ahmadinejad accused the US government of exercising more media censorship than anywhere in the world. And, again, talked about the Holocaust never happening. Obviously having a go at Israel again.

The Iranian president leaves a lot to be desired but no matter how much we disapprove of him he is not an idiot. If he was, he wouldn’t have succeeded to get elected the first time (unlike the last election which was obviously rigged). He knows what he is doing and he has the Mullahs approval. Considering that Iranian elections are rigged they don’t need to show Iranians that he is capable of standing up to the West. They already know that.

What does the Iranian regime gain from sable rattling?

Begs the question of why they keep on provoking Israel and the US with his statements? Maybe the timing is not a coincidence since only 50,000 US soldiers will soon be left in Iraq? The current Israeli government is also more likely to be provoked to strike Iran than the previous one. Maybe he and the Mullahs would like that to happen to give them an excuse to strike back? Or worse, start a war with Iraq that could lead to an all out war in the Middle East? The Mullahs would love to control Makkah and Medina and Iran has caused trouble there in the past which the Saudis luckily managed to handle.

Tehran says it is refining uranium only for electricity and medical treatments. But it’s not out of the question that they already have been supplied with enough uranium for a few missiles from North Korea or Pakistan? Whatever their reason they are hiding something when it comes to their nuclear capacity.

Iran has already caused enough problems in Iraq, Lebanon, Palestine and Afghanistan. That the current regime would like to be more prominent in the Middle East is no secret. So is Ahmadinejad, just like he accused the US of doing, trumping up an excuse to invade Iraq or attack Israel? After all the best thing an unpopular regime can do is unite the people behind an outside enemy.

Doubt that Teheran would attack Iraq unless the US were involved in a strike against them. But then again Israel would be using US equipment and that might be enough of a provocation?Do believe that it’s questionable if the Iranian regime would dare to attack Israel or Iraq without having an excuse to do so. So hopefully no strike on Iran will take place?

Saudi Arabia and the other Gulf states have for years been worried about Iran’s behavior because a strike against Iranian nuclear sites would spread radiation across the whole region. Or worse lead to an all out war in the Gulf between Shias and Sunnis. Don’t need to tell you what that would do not only to the region but the world economy.

So maybe it’s time for the Saudis to, again, make Teheran opt for peace? King Abdullah sent Prince Bandar to Teheran in 2006. The result was that Teheran ordered Hezbollah to stop fighting Israel in Lebanon, which effectively ended that war. Considering King Abdullah’s effort recently regarding Lebanon, maybe it’s no coincidence that the Hezbollah isn’t yet playing an active part in the border incidents?

When it comes to Iran the US, Saudi Arabia, Israel and, most likely, the majority of the Iranian population are on the same side. Actually most of the citizens of the world is. If we all need to unite against Ahmadinejad and the Mullhas probably depends on how badly the Mullas and Ahmadinejad need to unite the Iranians against an outside enemy. Hopefully it will not come to that, but if it does it wouldn’t be the first time the West has been wrong about Iranian intentions.

(photo: The White House – Flickr)

When democracies loose economic power democracy itself is weakened. Already now China has the third largest economy in the world and within 5-7 years it will be the main producer of goods globally.

Hu Jintao may be shorter but China has the upper hand

The US on the other hand, has a huge budget deficit and is already borrowing heavily, not least from China. So no wonder China is already starting to show its power.

At the Copenhagen climate summit Obama and many other leading heads of state took part. China however, sent an insignificant deputy foreign minister with no ability to take decisions without confirmation from Beijing. The Chinese government also protest against US actions with a new vigour and confidence.

China continues to produce and Westerners keep on consuming on borrowed money, not least from China, which is an equation that doesn’t add up. Soviet communism declined because the economy didn’t add up but that’s not the case with China whose economy is capitalistic while the government keeps a firm grip on power and its people.

According to the OECD, Western countries’ debts in 2008 were equivalent of to 100% of their GDP. China on the other hand has a deficit equivalent of 21 percent of GDP. So not only is the Chinese economy performing very well, they are also partly bankrolling the West. And money talks.

Unless the democratic part of the world, like the Chinese, start saving and stop consuming on borrowed credit, democracy as a whole will loose out. The US and Europe are the worlds largest democracies and China is the world’s biggest dictatorship. It does matter who has the best performing economy in the world. To ignore that would be a fatal mistake. But for some reason it seems the West can not be bothered to make an effort to stop power slipping away. That the center of the world is moving I have known for a long time, but what surprises me is that the West doesn’t seem to do anything to stop it from happening, or at least delay it. Where’s the fighting spirit?

photo: FlickrPhotosAccount

What was new about the “WikiLeak scoop” a few days ago? Anybody following international news have heard about alleged Pakistani involvement in Afghanistan from US officials.

Anybody following international news have heard about alleged Pakistani involvement in Afghanistan from Hillary Clinton and other US officials.

Last week Hillary Clinton actually said there must be someone in the Pakistani government that knows Osama bin Laden’s wheeabouts. Can you get more blunt than that?

So what was the point of making the trove of 90,000 classified military documents public? The only reason they got so much attention was by only released them to The New York Times, Guardian and Der Spiegel. They were no scope and I don’t understand why they caused so much consternation? The only difference they make is that now some Afghans lives are in danger.

WIkiLeaks goal in disclosing secret documents is to reveal “unethical behavior” by governments and corporations. Catch is since it was founded in 2006 it has only been able to disclose secrets from Western countries.

But what about secrets from inside the ISI or Pakistani government? If the 90,000 documents were from inside the ISI they would have been truly sensational. Or if WikiLeaks published classified information from say, the Iranian, North Korean, Russian or Chinese government.

But chances of that ever happen are next to none. Who inside such regimes would dare to take the risk? Pity since that kind of information would make WikiLeaks a worth while organisation. As it is they provide one sided information from the West without being able to deliver information that would really make a difference.

What does WikiLeaks want to accomplish?

Part of me likes what they are doing, but since they will only be able to reveal secrets from the West I don’t think they have a mission to fulfil. At least not if they continue leaking “scoops” that are common knowledge.

WikiLeaks and Julian Assange are a bit of a question mark. He says he’s a journalist but according to the New York Times he is not. They call him an activist but to what end isn’t clear. If it is his desire to promote peace I don’t think he has accomplished anything so far.

So what did he accomplish by bringing his organization into the debate on Afghanistan? WikiLeaks had to close some time ago due to lack of funding so presumably the aim was to get sponsors? Or just become famous? Some people go to extremes for fame and glory.

The pr coup he achieved was brilliant. He is now a household name and so is Wikileaks. Just a pity that by showing little regard for the hard moral choices and dearth of good policy options facing decision-makers, he is as reckless and destructive as soldier or soldiers who leaked the documents in the first place.

All WikiLeaks has achieved so far is, putting Afghans who provided leaks to the US in danger as well as – again – show us that technology has diminished our control over what the world knows. So now WikiLeaks needs to step up to the plate and deliver scoops of classified information from inside totalitarian states. That would justify their existence. If not, what can such an organisations accomplish?

(Photo: US Department of State – Flickr)