Wednesday, May 14, 2008

The New Asian Hemisphere?

No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat
-Deng Xiaoping


After leading the world toward a period of spectacular economic growth in the second half of the twentieth century by promoting global free trade, the West has recently been faltering in its global economic leadership. Believing that low trade barriers and increasing trade interdependence would result in higher standards of living for all, European and U.S. economists and policymakers pushed for global economic liberalization. As a result, global trade grew from seven percent of the world's GDP in 1940 to 30 percent in 2005.

But a seismic shift has taken place in Western attitudes since the end of the Cold War. Suddenly, the United States and Europe no longer have a vested interest in the success of the East Asian economies, which they see less as allies and more as competitors. That change in Western interests was reflected in the fact that the West provided little real help to East Asia during the Asian financial crisis of 1997-98. The entry of China into the global marketplace, especially after its admission to the World Trade Organization, has made a huge difference in both economic and psychological terms. Many Europeans have lost confidence in their ability to compete with the Asians. And many Americans have lost confidence in the virtues of competition.

There are some knotty issues that need to be resolved in the current global trade talks, but fundamentally the negotiations are stalled because the conviction of the Western "champions" of free trade that free trade is good has begun to waver. When Americans and Europeans start to perceive themselves as losers in international trade, they also lose their drive to push for further trade liberalization. Unfortunately, on this front at least, neither China nor India (nor Brazil nor South Africa nor any other major developing country) is ready to take over the West's mantle. China, for example, is afraid that any effort to seek leadership in this area will stoke U.S. fears that it is striving for global hegemony. Hence, China is lying low. So, too, are the United States and Europe. Hence, the trade talks are stalled. The end of the West's promotion of global trade liberalization could well mean the end of the most spectacular economic growth the world has ever seen. Few in the West seem to be reflecting on the consequences of walking away from one of the West's most successful policies, which is what it will be doing if it allows the Doha Round to fail.

At the same time that the Western governments are relinquishing their stewardship of the global economy, they are also failing to take the lead on battling global warming. The awarding of the Nobel Peace Prize to former U.S. Vice President Al Gore, a longtime environmentalist, and the UN's Intergovernmental Panel on Climate Change confirms there is international consensus that global warning is a real threat. The most assertive advocates for tackling this problem come from the U.S. and European scientific communities, but the greatest resistance to any effective action is coming from the U.S. government. This has left the rest of the world confused and puzzled. Most people believe that the greenhouse effect is caused mostly by the flow of current emissions. Current emissions do aggravate the problem, but the fundamental cause is the stock of emissions that has accumulated since the Industrial Revolution. Finding a just and equitable solution to the problem of greenhouse gas emissions must begin with assigning responsibility both for the current flow and for the stock of greenhouse gases already accumulated. And on both counts the Western nations should bear a greater burden.

When it comes to addressing any problem pertaining to the global commons, such as the environment, it seems only fair that the wealthier members of the international community should shoulder more responsibility. This is a natural principle of justice. It is also fair in this particular case given the developed countries' primary role in releasing harmful gases into the atmosphere. R. K. Pachauri, chair of the Intergovernmental Panel on Climate Change, argued last year, "China and India are certainly increasing their share, but they are not increasing their per capita emissions anywhere close to the levels that you have in the developed world." Since 1850, China has contributed less than 8 percent of the world's total emissions of carbon dioxide, whereas the United States is responsible for 29 percent and western Europe is responsible for 27 percent. Today, India's per capita greenhouse gas emissions are equivalent to only 4 percent of those of the United States and 12 percent of those of the European Union. Still, the Western governments are not clearly acknowledging their responsibilities and are allowing many of their citizens to believe that China and India are the fundamental obstacles to any solution to global warming.

Washington might become more responsible on this front if a Democratic president replaces Bush in 2009. But people in the West will have to make some real concessions if they are to reduce significantly their per capita share of global emissions. A cap-and-trade program may do the trick. Western countries will probably have to make economic sacrifices. One option might be, as the journalist Thomas Friedman has suggested, to impose a dollar-per-gallon tax on Americans' gasoline consumption. Gore has proposed a carbon tax. So far, however, few U.S. politicians have dared to make such suggestions publicly.

-The Case Against the West by Kishore Mahbubani
The U.S. system may be too lax when it comes to rigor and memorization, but it is very good at developing the critical faculties of the mind. It is surely this quality that goes some way in explaining why the United States produces so many entrepreneurs, inventors, and risk takers. Tharman Shanmugaratnam, until recently Singapore's minister of education, explains the difference between his country's system and that of the United States: "We both have meritocracies," Shanmugaratnam says. "Yours is a talent meritocracy, ours is an exam meritocracy. We know how to train people to take exams. You know how to use people's talents to the fullest. Both are important, but there are some parts of the intellect that we are not able to test well -- like creativity, curiosity, a sense of adventure, ambition. Most of all, America has a culture of learning that challenges conventional wisdom, even if it means challenging authority." This is one reason that Singaporean officials recently visited U.S. schools to learn how to create a system that nurtures and rewards ingenuity, quick thinking, and problem solving. "Just by watching, you can see students are more engaged, instead of being spoon-fed all day," one Singaporean visitor told The Washington Post. While the United States marvels at Asia's test-taking skills, Asian governments come to the United States to figure out how to get their children to think.

-Fareed Zakaria

They call it the Industrial Revolution because for first time in all of human history standard of living rose at a rate where they were noticeable changes in standards of living in a human life span- changes of perhaps 50 percent. At current growth rates in Asia standards of living may rise 100 fold, 10,000 percent within a human life span. The rise of Asia and all that follows it will be the dominant story in history books written 300 years from now with the Cold War and rise of Islam as secondary stories.

-Larry Summers

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