America's Power Equation

At the closing plenary session of the World Economic Forum's Annual Meeting 2007 in Davos, US Senator (and probable candidate for president) John McCain offered an American perspective on the current global geopolitical situation. He was reacting to critics who refer to "failed American leadership," he said. Americans are sometimes frustrated when North Korea continues to build nuclear weapons, when China fails to act responsibly even when in its own interest, when little action is taken by the international community to put the brakes on Iran's nuclear programme, when UN 'blue helmets' stand idle as defenseless people are ethnically cleansed, when Russia and China vote against a Security Council resolution to highlight Myanmar's continued detention of political dissidents including Aung San Suu Kyi. "Perhaps maybe some of this we have to do alone," said McCain. "We don't do that very often. We understand the importance of multilateral action and there is nothing we wouldn't like better than to join together to stop another genocide. America's first choice will always be to have an alliance of existing like-minded institutions."

The makings of a foreign-policy doctrine for a McCain presidency? Maybe so. But can we wait two years? Read Maureen Dowd's column today (28 January 2007) and perhaps you might agree that two years of the current Bush-Cheney approach may not be such a good thing. We would bet that many of America's allies and friends, particularly in the Middle East, are wondering - in the privacy of their own minds - what more might go wrong before the new president takes office in Washington in January 2009. (Could they be pining for a return of Bill Clinton to the White House on the arms of the new commander-in-chief?)

All this illustrates how important good governance is. We were reminded of a talk Larry Summers gave in Singapore a few months ago at the Raffles Forum, a meeting organized by the Lee Kuan Yew School of Public Policy at the National University of Singapore. Globalization, Summers said, has meant that "the leverage that comes from successful governance is greater today than it has ever been. Prosperity can be created more rapidly than ever before." Successful governance can really help, bad governance can really cause a mess. At the global level, he added, the stakes are high. "Leadership by a large nation, great power, even a hegemony, depends crucially on competence and a perception of competence - and so these questions of global governance loom larger than they have ever before." Summers, one of Bill Clinton's treasury secretaries, smiled wryly as he spoke those words.

(At Davos, it seemed at times that everybody was calling into question the competence of the current occupant of the White House. David Gergen, a former adviser to several presidents, bemoaned the lack of diplomatic efforts to resolve differences between the US and Iran. "Any halfway competent administration," he said, would pursue diplomacy before even floating the idea of military action. He recalled travelling to Syria with President Nixon to talk to Syrian strongman Assad. Competence...Will Americans vote for it in 2008? More to the point, in this age of spin-of-the-day and image-building, can Americans pick the competent leader they need from the inept featherweight who should never be allowed into the Oval Office?)

So Much Unfairness of Things

In the session "A Business Manifesto for Globalization" at the World Economic Forum's Annual Meeting in Davos, economist Joseph Stiglitz said that as a result of globalization "countries as a whole have gained more than they have lost but that doesn't mean that individuals as a whole are better off." Renault and Nissan chief Carlos Ghosn remarked: "Most people who are hurt or think they are hurt by globalization know it; most people who benefit do not know it."

So who are the winners and losers in this age of rapid and merciless globalization? There are the impoverished of course, but many of the poor particularly in Africa are losing out because they remain untouched by globalization and have not yet benefited from the advantages that it can bring. What about those people whose lives have been humming along nicely but are now finding themselves outsourced or outfought in the competition for jobs or customers? One panelist yesterday said that more people are appreciating the unfairness of globalization because it is hitting skilled workers in the knowledge-based and service industries - middle-class folks in uncompetitive sectors or without niche skills that keep their jobs secure. These are the persons whom globalization is bringing down or at least tripping up. They see the rich get richer, while they stay still or even fall back.

On the first day of the meeting, Arianna Huffington spoke at the US update session of how middle-class Americans are using credit card debt to buy basic necessities. From our own experience in journalism over the years, we know of many professionals our age (40s) and older who have been "globalized" out of their jobs and have struggled to find new employment, full employment or new careers. Many knowledge workers who thought that their education and skill sets had set them up for life have suddenly found themselves sliding off the globalization wave. We're guessing that the erosion of the middle class is so shocking in many countries where upward mobility has become the norm if not part of the culture. If whole groups of people fall back and have to moderate their expectations, that will only create more divides in this divided world.

So it was quite refreshing to hear Larry Summers, the former Harvard President and ex-US treasury secretary, speak about the unfairness of things and the elitism - intended or unintended - that even the most enlightened may be party to. When a participant at the session on freedom suggested that the "spirit of Davos" might be the basis for a framework of global governance, Summers said: "There is a great and profound concern about the cosmopolitization of elites. There is a deep concern that this networking of the elite is not something that is fundamentally directed at the interests of regular working people - people who work hard and play by the rules."

Globalization is now a personal matter. Many ordinary, earnest people who expected to live comfortable lives in clean, well-lighted places have found that even if they play by the rules and work hard, they might not get on; they may even go backwards. Life is no longer so simple.

Too Little Fear?

On the front page of today's (25 Jan. 2007) Wall Street Journal, Marcus Walker writes from Davos that "this year, many of the business and political leaders who gather ever year at the World Economic Forum [Annual Meeting] are questioning whether globalization is good for the ordinary wage-earning people they employ - or in many cases, no longer employ - at their companies." Adds Walker: "A new refrain is emerging in Davos this year: Globalization isn't working for everyone."

Nonsense! That globalization doesn't help everybody is certainly nothing new to the Davos community. The global fellowship or elite, if you prefer, who gather here every January would be remote (and dense) indeed if only now - seven years after anti-globalization activists disrupted the World Trade Organization ministerial conference in Seattle - they grasped that globalization is not fair. Everybody knows there are winners and losers. The real issue is whether there has been, to paraphrase Larry Summers at last year's Annual Meeting, "too much hope and too little fear" about globalization.

It may be that 2007 is the year that fear overtook hope in Davos. That may not necessarily be a good thing. But more prominent voices are articulating what we (the working stiffs) all know to be true – that globalization has a dark side.

With this in mind, my vote for star panellist at yesterday's sessions goes to US pundit and blogger Arianna Huffington. In the US update session, she spoke of the economic hardships confronting middle-class Americans. The pressures are so hard that many are using credit cards to pay for the basics of living. Yet the US is such a consumptive society, that Americans don't have enough space in their homes to keep all their stuff. Self-storage is apparently one of the fastest growing businesses in the US. (Globophobe can believe it, being ourselves frequent users of self-storage facilities in three countries.)

People are looking for moral leadership, Huffington said. "There is a longing for a fundamentally moral discussion about poverty and injustice." People are sick and tired of spin; what they want is authenticity from their leaders. That is a plea that should go to all participants. There is a Davos spirit, but no single Davos view. The idea that suddenly the Davos Man has discovered that globalization can burn is ridiculous. A more pertinent question in this non-flat world is whether what we hear here in the Magic Mountain is authentic, the views not just from those inhabiting the peaks that globalization has pushed up but from those driven into the valleys of despair that globalization has also created.

What is Globophobe?

Nobody has yet asked us this question but we'll answer it anyway. No, it's not a fear of spheres. We are talking about the fear of globalization and its impact. The globalization wave we are experiencing today is so intense and the pressures so heavy that the effects are felt not just at the macro level but also at the micro level - by small and medium-sized companies, by entrepreneurs, by cities, towns, and villages, and by households and individuals. Whether you are a big fish or a small fry, you have to deal with the sometimes jarring effects of the greater interconnectedness of regions and economies and the swifter flow of information, data and capital. The forces of globalization are relentless; they can offer great advantages and they can tear you down without prejudice.

In Asia, the turbulence is particularly strong because in many we ways we are at globalization ground zero. The emergence of China and India, as well as other large emerging markets such as Brazil and Russia, is driving many of the structural changes happening in the world today, in particular, the rise in competition on the cost and quality of both goods and services - and not just at the low end. China and India are both threat and opportunity to everybody from their immediate Asian neighbors to small commodities producers in faraway Africa.

Whether you are a wheat farmer in Kansas or a street sweeper in Bamako, you are not immune to the pressures of globalization or the impact of the rise of China and India. And it is not so much that the world is getting flat; on the contrary, it is getting more uneven and inequitable. Globalization is creating peaks of excellence, where an economy, company, group or individual masters a particular niche, that connect somewhow or interact with other peaks of excellence, leaving the valleys to the laggards, the uneducated, the impoverished, the uncompetitive, the recalcitrant, the elderly, those untouched by modern communications, the uninsured, the illegal, the discriminated, the sick, the infected, the refugee, and others who are not somehow able to avail of the advantages of globalization. We should all work to somehow help those in the valleys move up to the peaks or at least higher up the competitiveness slope.

We feel that there is altogether too much optimism about globalization and not enough healthy skepticism. Everybody - from your elderly aunt to the newest infant born today - will have to learn about what is going on, about the impact of the rise of China and India, about the consequences of shifting competitive advantages. It may be trite to say, but it really boils down to education. And that is what Globophobe hopes to do - to educate ourselves and others by observing our world, particularly Asia, and writing about what works and what doesn't. We have no answers. Like everybody else, we have a lot to learn.

Teach America's History in the Philippines

When Globophobe was much younger, we spent ten years studying in the United States - from seventh grade through to university. We had grown up in the Philippines so it was not unusual for us to go to America to study. At the schools we attended in Massachusetts, we took two full years of American history, first in the seventh grade and again in the eleventh. Both times, we were surprised that the courses and the textbooks devoted little time to the American colonial experience in the Philippines. Our teachers were generally unaware that Filipinos who had launched a revolution for their Independence from Spain shifted their efforts to battle the American occupiers for about three years from 1898 when the Spanish-American War ended. Some 12,000 US soldiers were sent to the Philippines to subdue the local militias and insurgents who were waging what is known as the the Philippine Insurrection against the United States. Even though the war wound down by the end of 1901, limited conflicts on some islands continued until 1913.

Except for the three-plus years of the Japanese Occupation of the Philippines, the United States armed forces remained in the country until 1992, when Washington closed its major air and naval bases after the Philippine Senate rejected the treaty extending the American lease of its facilities and negotiations between the two governments broke down. The US military presence in the Philippines for nearly a century was an important factor in maintaining the stability of the country through the Commonwealth period before World War II and after Independence in 1946. The US bases were also crucial in ensuring regional security, notably during the Korean and Vietnam Wars. It could be argued that the Philippine Senate's 1992 vote against the bases treaty marked the maturing of the Filipino nation. While Filipino governments have been rocked by coup attempts since then, Filipinos have sought to resolve their problems themselves, without the American military hovering.

If American schoolchildren in the past including George W. Bush at his exclusive New England boarding school had been taught about the US experience in the Philippines, particularly about the Filipino insurgency and how long it took to build the Philippine nation and a working, independent government which even today is still hardly a paragon of stability and good governance, perhaps the debacle in Iraq might have been avoided - or at least the potential for chaos post-Saddam better understood and anticipated. Consider Brent Scowcroft's essay in today's New York Times. Once the US got into Iraq, it landed itself into a messy situation that makes the Philippines seem like Singapore. There is no easy way out. And as in the Philippines, the US may be in for a century of military engagement in Iraq, particularly if it wants to keep the Middle East from blowing up. As John Kerry was trying to say when he botched that election campaign joke, those who haven't learned their history at school get stuck in a quagmire like Iraq.

Bullying the Philippines: For Want of a Nail, the Kingdom was Lost

Philippine President Gloria Macapagal Arroyo's decision to remove convicted rapist Daniel Smith, a 21-year-old US Marine, from the Makati City jail and place him back in American custody was inevitable. Unpopular as the move was bound to be, Arroyo had no choice. The Americans bullied her into taking "executive" action and overriding the judiciary, which had ordered Smith held in the local prison and not in the more comfortable confines of the US Embassy. Washington had cancelled the annual "Balikatan" joint military exercises to show its disapproval of Smith's incarceration. Once Arroyo had returned Smith, who is appealing his conviction and sentencing to 40 years imprisonment, the Americans said the exercises were back on, but did not set a date for them to begin.

The message the Americans are sending is that the comfort of a single convicted American is worth more than the security of the Philippines and the surrounding region. An exaggeration? Maybe so, but tell that to the many Filipinos who are rightly outraged by Arroyo's action. Washington was willing to put on hold useful military cooperation between the US and Philippine armed forces just because one stupid American kid, who was convicted for raping a young Filipino woman and sentenced to 40 years in prison, had been sent to a local jail. We have to conclude that the US is willing to compromise Philippine and regional security just so that Mr Smith can have a private bath and shower, a decent bed and better food for the weeks or months that his appeal may take to be heard. So much for the global war on terror! Smith should be thankful he wasn't in the US-run stockade at Guantanamo Bay!

The US says that it is a matter of adhering to the Visiting Forces Agreement between the US and the Philippines. Smith's legal case is still alive so until his appeals are heard, he must remain in American custody, Washington argues. But what's right or wrong, legal or illegal, doesn't matter. The US has gotten its way, Smith can have his comforts, and now protesters are calling Arroyo a traitor. Yet again, for want of a horseshoe nail, the kingdom was lost. The US sure knows how to win friends across the world. Even in the countries whose citizens are mostly supportive of America, the US will find a way to turn people against them. The ghastly hanging of Saddam Hussein was yet another reminder of how inept the US is at winning the hearts and minds of those who would normally be pro-American. Will they ever learn?