G-8: RIP?

Re: # 59 ["........the aggregate tenor (not sure what that exactly means, but it sounds nice) is decided by many factors..."]

What I mean by aggregate tenor is the 'general direction of the flow' in which civilization moves, the 'resultant vector' if you want to borrow a term from mechanics, the 'net effect' of the various forces that move something.

Yes, you did list several things, but you seem to emphasize on population more than on anything else. I was not discounting population. I wanted to say that (1) the genetic make up of the population (ie skin color or XYZ) is not important... the culture and values are. And (2) that what may determine tomorrow's culture and values may have less to do with our various ancient traditions and much more to do with the consequences of things like urbanization, automation, telecommunication, pharmacology, nanotechnology and other technological intrusions upon our primitive biological apparatus.

So when Black Hussein O'Bama becomes president of the US, (or when Romair VIII, in 2104, becomes chief commissioner of the North American Union) the people of Kenya and Indonesia (or Romairistan in 2104) can feel proud all they want, but it will mean nothing, except symbolism.

What will matter in 2009 is how he (O'Bama) thinks, what he believes in and how he acts. And those things might have a lot more to do with the "software" O'Bama was loaded up with at LA, Columbia and Chicago than the Y chromosome passed on to him. His genetic endowment may count for relatively little, so the joyous pride of the scrawny Africans in BHO's remote ancestral village in Kenya may be a bit misplaced.

Nation States, as we know them today, are a relatively recent historic phenomenon. Their days are numbered just as are the days of distinct ethnicities.

The world is going to be more and more of a melting pot -- cooking haleem. And if what you are trying to say is this then I agree.

Since there is much, much more daal in this haleem than there is going to be gosht obviously it may appear that it is all daal or that daal has won out hands down. But the haleem of tomorrow might superficially appear very much like daal, yet it will not be the same. There will be a lot of texture and nutrition in it that had its origin in the gosht. But I agree, there may not be much gosht left intact.

BTW, read the following well-written article... I'm sure you'll enjoy it as it might reinforce some of your opinions.

http://www.vanityfair.com/politics/features/2006/10/empire200610





...SR

Just 63 years ago China was in the middle of a civil war. Now China nearly leading the world's economy and holding the weight, along with Japan, of the largest currency reserves, the balance of economic power has shifted.
China is already an indispensable actor of world politics and the world economy. China, the world's second-largest economy in purchasing-power parity terms, now holds the world biggest currency reserves, amounting to $1.8 trillion. John J Mearsheimer, the US political scientist, is not alone in arguing that "the rise of China will not be peaceful".

The changes in China will not be peaceful but mostly the problems would be internal. Economic progress and dictatorial style of governance cannot live together. There are going to be clashes and some say they have already started. The whole world underwent major changes after the Bretton woods and with in 15 years of Bretton Woods and Dumbarton Oaks most of the Asian and African countries had attained their independence. However, Bretton Woods also led to the cold war. I don’t know how to read this but the cold war era was the longest period of prosperity in the Western World. Since 1987, we have seen four financial crises already and the capitalist contractions continue.

The "Milton Friedman model" of globalization is coming to an end. The first Bretton Woods took two and a half years to prepare and was dominated by the United States. China and Japan are poised to dominate the next Bretton woods.

Professor Jagdish N. Bhagwati
University Professor Columbia University
While discussing the four economic crises since 1987 said:

“What is the common theme? In each case, the problem was that we succumbed to the euphoria that surrounds each "innovation" in financial policy or financial instruments, rather than simple "deregulation". Thus, during the Asian financial crisis, the IMF pushed for capital account convertibility, thinking it was clearly a major innovation in policymaking. But, when disaster struck even though these countries had sound fundamentals, the reason was that the banking systems were fragile and not ready to support the convertibility. No one had considered this downside. Again, when the LTCM crisis happened, a good friend of mine in the Bank for International Settlements told me that they had convened a Conference of leading central and commercial bankers, and it turned out that most of them did not know what a "derivative" was! The innovation had gone beyond the comprehension of the players and the regulators. Similarly, in the current crisis, I was told by a leading German banker that when the sub-prime mortgages were securitized, they thought they were spreading risks and instead they were growing a crisis that happened now. Besides, flexible interest rate mortgages extended massively to low-income families by Freddie Mac and Fannie Mae, an increase in interest rates would be fatal to these families, leading them into default: flexible rate mortgages were like poison pills that would start killing you eventually.
I often think of what Keynes once wrote to a friend once: "The inevitable never happens. It is always the unexpected". It is a typical Keynesian exaggeration; but it contains acute insight.�

Mr. Masadi: Greetings (when you rear your head on chowk, as you no doubt will at your daily allotted time). I present you the following evidence for your consideration (as the prophet said, "Fly Emirates Airlines even to China, America not being discovered as yet, in persuit of knowledge").

Once Denounced by Mao, Now at Rest in China
By DAVID BARBOZA
Published: November 19, 2008
SHANGHAI — On Aug. 2, 1949, with the Communists about to seize power in Beijing, the United States recalled its ambassador to China, John Leighton Stuart, a respected missionary, educator and diplomat.

A ceremony on Monday honored John Leighton Stuart,a missionary and educator whose ashes were laid to rest at a cemetery near the eastern city of Hangzhou, China.
Mao Zedong, the insurgent Communist leader who would take power two months later, quickly denounced Mr. Stuart as a symbol of failed American imperialism. ...
But on Monday, 46 years after his death and after years of sensitive negotiations about the political implications of such a burial, Mr. Stuart’s ashes were laid to rest at a cemetery near the eastern city of Hangzhou, about two hours south of Shanghai.

A small ceremony honoring Mr. Stuart on Monday was attended by Chinese and American officials, including the mayor of Hangzhou and the United States ambassador, Clark Randt Jr., as well as several alumni of Yenching University in Beijing, the institution Mr. Stuart helped found...

http://www.nytimes.com/2008/11/20/world/asia/20china.html?_r=1&h p

#80 DM: This is indeed the fundamental point. Things they teach in Kindergarten in the US, and in homes, are things that they dont teach in Harvard. And so we have PhDs in Pakistan (I dont know about India) who never permit a single original thought cross their mind...

DM sahib, it is not just the manner in which learning is offered. Take a look at Indian entreprenuers in America for example. It is also a systemic push towards capitalization and monetization of ideas. access to capital, legal protection of ideas, and avenues in which to monetize your innovation is what makes US like no other place in the world. No one even comes close and won't for a very very long time.

nkg#79:

R&D does not bring innovation. Facebook, ebay or amazon did not require R&D, they required certain spirit and mindset. The difference between India/China/Korea and the US/West is the difference between learning by rote and encouraging the spirit of exploration which is inculcated in the West beginning at the kindergarten stage. It is that difference which leads to a proliferation of computer engineers in one place and the nobel prize winners in the other.

Re: # 74
dm...
the tide is turning back...
the gap between usa and india/china is so huge now, you may not visualise the change...
with US based MNCs and their R&D centres operating in India, india should get it's own operating system, search engine etc. etc.... but english being the dominant official language in india, the r & d efforts are now shared (may be 10% in india and 90% rest) and the share of indian engineers are increasing day by day...
IT industry in india started with doing clerical work of Y2K bug fixes...within 8/9 years, what india achieved is not very bad (china may be doing very good).....
I am seeing rapid change for last 2/3 years...only area of concern is we need to have better industry-academics interface and good faculty in top engineering colleges...the engineering graduate we produce are 100% bookish....

bubba mian,

"Can someone explain, why should a country horde so much of foreign reserves anyway?"

.... it is very simple: the us is still by far the most stable system of government and business .... the rest of the world is still experimenting with all sorts of silly things like islam and socialism and nobody, except captain clueless, knows how all that is going to work out ..... it is the same reason individuals - from arab sheiks to pakistani drug dealers - put their money in dollars ........

Re: # 54
majumder....
rise of china and india was supposed to be and may be another 20/30 years, both should be in dominant position in world affairs.....only area of concern is huge population burden...india is housing at least 20 crores extra people...
otherwise...

Re: # 73

DM / hamid mian,


"Indeed, China may have already begun to do so by announcing a $586 billion stimulus plan of public investment in housing, transportation, and infrastructure. If China plows its trade surplus back into its domestic economy, it will increase demand for imports and put upward pressure on the yuan, reducing China's trade surplus with the West."

http://www.tnr.com/politics/story.html?id=16872fed-798c-476b-a6c4 -303923cd6388&p=6

Some of my thoughts are expressed in this long article.

arjun#55;

"now it turns out that the KSE has effectively been closed for more than 80 days..."

Closed for more than 80 days and you are telling us now? You must be asleep on the job.:)

majumdar#54:

I agree with your post. The west will continue to lead for some decades. The US, in particular, will continue to be the top dog as long as it retains its capacity to innovate and attract the best possible talents from the rest of the world. India has not developed a Yahoo or an Amazon or a Youtube or Google despite probably having more computer scientists and engineers than anywhere else.

bubba#53:

The article you referred to is no longer available on the net.

You may be right that China may have to increase the $400B expenditure. My question is how much of it would require imports from the US and other countries, because that would be the amount by which China's foreign reserves will come down?

"Can someone explain, why should a country horde so much of foreign reserves anyway?"

I do not think that it was a deliberate Chinese policy to horde this much of reserves. The policy is one of exports-led growth by keeping the value of the Chinese currency low to encourage exports, foreign exchange accumulation is the consequence of that export-support policy. South Koreans and other Asian tigers followed a similar policy earlier.

delhiwala#44:

The US is indeed at the top of the vortex, but it is no longer in a position to call all the shots and has to share the limelight with others. Even in a military sense, it needs the help of others, and fortunately so, otherwise it would have opened another battle front in Iran by now.

One of the major problems facing world commerce now is the piracy of merchant ships; of the G8, only US and Russia have the naval strength to curb this menace. Indian navy, in particular, will be important in guarding the sea lanes of the Indian ocean.

beywakoof bulleya,

... calm down and let's take one thing at a time ..... first let me assure you that we HAVE won the war in iraq even though it took us longer than it should have and there were many mistakes made along the way ..... a dictator has been removed and the the first democracy in the arab world is taking shape ..... as long as obama doesn't do anything stupid like pulling out the troops too quickly, iraq will be just fine with a few american bases like qatar, bahrain, kuwait, uae and ksa ...... for now american presence is essential to keep the bedouins from killing each other and disrupting the world's oil supplies .......

.... your logic on demographics is totally stupid - india and china had huge populations for centuries and didn't do diddly and both of them got their brown and yellow butts whopped by a tiny population living on a tiny island ..... quantity is no substitute for quality ........

..... and please stop embarassing us pakis in front of these horrible hindoos .....

Re: # 69
bull...
you mean to say, Jinnah was representing deprived section of indian society? or he was representing deprived regions of india (east and west)? or he was representing regional identity?