Category Archives: Economic

Business, Economic, Government, Politics, Society

Thesis: ‘Globalisation’…

GLOBALISATION: ‘PROBLEM & SOLUTION’

1. THE CRITICS’ VIEW

DEFINITION – Globalisation is defined as the ever-increasing integration of national economies into the global economy through trade and investment rules and privatisation, aided by technological advances. These reduce barriers to trade and investment and in the process reduce democratic controls by nation states and their communities over their economic affairs. The process is driven by the theory of comparative advantage, the goal of international competitiveness and the growth model. It is occurring increasingly at the expense of social, environmental and labour improvements and rising inequality for most of the world.

Or more bluntly:

Globalisation n.1. the process by which governments sign away the rights of their citizens in favour of speculative investors and transnational corporations. 2. The erosion of wages, social welfare standards and environmental regulations for the sake of international trade. 3. the imposition worldwide of a consumer monoculture. Widely but falsely believed to be irreversible. – See also financial meltdown, casino economy, Third World debt and race to the bottom (16th century: from colonialism, via development).

2. THE OFFICIAL VIEW

The former UK Minister for Trade, Richard Caborn, previously said:

…The government remains firmly behind a comprehensive new round of negotiations in the WTO as the best way forward for the UK, for developing countries in particular, and for the world economy as a whole. We are working for a more transparent WTO which promotes sustainable development and fosters the rule of law in international trade. [Richard Caborn MP (1999) Letters to the Editor, The Guardian, 11 October]

WTO = World Trade Organisation

In extracts of a letter to Alan Simpson MP, dated 19 February 1999, Brian Wilson MP, a former minister of trade, wrote:

Trade liberalisation is not the cause of the problem of the world’s economies, but the answer to them.

“By securing better access to overseas markets for producers, by reducing trade barriers, and maintaining and improving the supply of competitively priced goods and services to consumers, trade liberalisation brings widespread welfare benefits and helps to improve the efficiency with which the world’s resources are used. That is why the Government supports the EU’s call for a comprehensive new Round of trade liberalisation, which has already met with support from a number of developed and developing countries.”

Trade and environment:

“Our overall aim is to work towards sustainable development in accordance with the principles set out in the Rio Declaration adopted in 1992. The Government will work to ensure that trade liberalisation contributes to this aim, including action to safeguard the environment and the interests of developing countries. By enabling developing countries to derive more benefits from increased access to overseas markets and to inward investment, we can help them to increase prosperity which in turn has the potential to enable them to raise their standards of environmental and social protection.

…The Government believes that the evidence shows strongly that trade liberalisation is in the best interests of developing countries as well as developed countries. The OECD has found that in the last decade countries which have been more open to trade and investment have achieved twice the average annual growth of more closed economies. This is of particular importance to those countries which need to grow faster to deal with their greater infrastructure and capacity weaknesses.” [Brian Wilson MP, former Minister of Trade]

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Britain, China, Economic, Foreign Affairs, Hong Kong

China should honour its promise of free and democratic elections in Hong Kong…

HONG KONG

For more than two decades, China’s Communist Party rulers have relied on the rapidly rising prosperity of the masses in an economic boom that has been effective in marginalising any dissent there may have been over their dictatorial rule. Given this rising affluence, the Chinese people have appeared content to do without the need to fight for democracy and liberty.

But the tide has changed, as events in Hong Kong have shown. Sustained protest is being made against the determined approach of the Beijing government to control elections to Hong Kong’s 70-seat legislature by screening and vetting all candidates. This implies it will merely reject those candidates it does not like.

The disruption caused by the tens of thousands of protestors – who have blocked main roads and shut down parts of the business district – presents a challenging if not severe dilemma to Beijing.

The Chinese government could suppress the protests, but if it does so in the violent and intemperate way it suppressed the 1989 Tiananmen Square protests, it will not only draw worldwide condemnation but severely damage Hong Kong’s economy. Through trade and commerce Beijing earns a lot of money from Hong Kong and will be determined that this position is maintained.

If it allows the protests to continue, it risks the same pro-democracy movement spreading to its mainland and cities, a fear which has been countered by the government’s shutting down of social media networks.

For the moment, Beijing seems to be relying on Hong Kong’s police to contain the demonstrations and to gradually reduce them with mass arrests, while keeping the People’s Liberation Army and its tanks in their barracks.

This is an opportunity for the Chinese government to show that it is a mature country fit to play a leading role on the world stage. It can demonstrate this by treating the protestors with respect. The agreement signed when Britain handed the colony to China promised democratic and free elections. That pledge should be honoured.

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Britain, Economic, Europe, European Union, Government, National Security, NATO, Politics, Society

NATO, its purpose and the wider meaning of ‘security’…

QUESTION OF ‘SECURITY’

NATO’s main role during the Cold War was to counter Soviet expansionism. That stand-off ended 25 years ago. As military budgets started falling following the end of the Cold War, and with less political and public appetite for military confrontation, the organisation was beginning to look irrelevant in today’s world. Questions have been continually asked of its modern-day role and purpose.

NATO certainly faces a renewed challenge on its eastern European border from an increasingly hostile and belligerent Russia. In the long-term this may even herald a reboot in Russian expansionism. Further afield, the insidious threats of Islamic State terrorists and continuing instability in the Middle East cannot be ignored either.

Related:

When NATO talks in terms of security, it should be imperative that also includes the security of energy supplies. Currently, we depend on both Russia and the Middle East for much of our energy. Recent events serve to highlight the vulnerability of our energy supplies and the political constraints that results from our wholesale dependence on fuel imports from these volatile regions. Without political stability in those regions, there can be no energy security at home.

One immediate question that should come to mind is whether Russia might choose to use its energy exports to the EU as a political bargaining tool. The threat that it could happen is starting to be taken seriously. Reports that the EU is drafting emergency plans that would impose rationing on industry this winter, has serious economic repercussions.

Secure, sustainable and predictable supplies of energy are essential for economic growth and prosperity. A $20 rise in the price of oil for two economic quarters is likely to reduce global GDP by 0.5 per cent.

Stability in the price of oil is also important. Price volatility is an ongoing risk for all sectors of the economy. The armed forces, for example, consume large amounts of fuel. Rapid and unexpected increases in the price of oil can disrupt the capacity of our forces’ to operate effectively, be it through less time at sea for training or fewer hours flown in helicopters and jets.

The economic and supply disruption risks are especially acute in those countries with a high dependency on imported energy. The EU, for instance, imports 53 per cent of the energy that it consumes. The UK sources about 40 per cent of its coal imports from Russia.

The political corollary of dependence on energy from unstable and unsavoury regimes is that it constrains the response that the UK, Europe and NATO are able to give when faced with aggression. Whilst Germany has been more active of late in calling for sanctions, its stance towards Russia is partly determined by the continuing need to keep Russian gas flowing.

More troubling, though, and looking further ahead, how would we deal with a situation in which the Islamic State became established as a permanent presence, including control of oil and gas exports?

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The quickest and most effective form of energy security is to use less.

Lessons learned in Iraq and Afghanistan suggests that energy efficiency is embedded in military thinking on both sides of the Atlantic. Not only does it improve military effectiveness but it reduces risk and saves money.

The same needs to happen with national energy strategies. There needs to be a comprehensive programme of energy efficiency measures across all sectors – particularly across utility companies, transportation and the need to improve energy usage in both domestic and commercial buildings. The programme should be demanding, for only when the full benefits have been delivered can we be sure of relying less on energy imports. The wider gains from improved air quality and reduced greenhouse emissions would be presumptive in any such programme.

More important still is that it makes economic sense for Europe to be at the forefront of energy efficiency measures as this will improve competitiveness with the US and China, both of whom enjoy the benefits of scale and low cost energy.

EU ministers are currently debating whether to approve a target of improving energy efficiency by 30 per cent (from 2005 levels) by 2030. The Ukraine crisis has indicated that this has to happen. Some analysts believe that 40 per cent energy efficiency targets could be met without incurring any unnecessary economic penalties.

Alongside this, continuing to invest in domestic sources of energy, particularly established ones such as wind, solar and nuclear, and new entrants such as wave and tidal power, is crucial. We cannot always rely on imported energy, but the tide will always flow and ebb twice a day.

NATO should become a powerful platform for promoting this change, by explicitly articulating the threat that we face. Efficiency and diversity in domestic energy generation are not issues that should be seen as just part of the ‘green’ agenda. They are vital to our national and regional security.

The challenges posed by increasing geopolitical instability and the threats to our energy security are only like to grow. Reducing energy consumption and investing in new forms of energy is a strategy that simultaneously defends against international volatility, improves our economy and liberates our response to aggression from the stranglehold of dependency.

NATO has a role to play in reducing our vulnerability.

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