Tuesday, March 9, 2010
By Philip Shaw M.Sc. With Dr. A.K. Enamul Haque Ph.D In Canada last month we were all focused on the Vancouver Olympics. It's natural for Canadians to be watching winter sports at this time of year. However one of my favorite pastimes every two years is watching the opening ceremonies of the winter and Summer Olympics. I like to watch because I enjoy seeing the people of the world getting together in one place all at the same time. For whatever reason, I've always felt that was a very good thing. Interestingly enough my focus is always on the athletes from Asia. With Asia being one of the most dynamic places on earth both with population and increased economic activity, I'm always watching for the countries from Asia to take their place on the medal stand. Regrettably, other than China, I think the cultural differences in sport don't lend themselves to Asian athletes. What other reason could we explain the Indian team showing up in Vancouver and not having any uniforms for the opening ceremonies? I hope that a certain point that cultural chasm between Asia and the Olympic movement gets some attention. Of course China does not take a back seat to anybody at the Olympic games, having won the most medals at the 2008 Beijing Olympics. They have a smaller contingent in Vancouver and they do not expect to win the medal count, but it's pretty obvious in a few years they might be taking their place in the Winter Olympics too. In many ways, China's ascendance to large Olympic dreams mirrors the whole Asian region. We have all had and some of us have experienced the economic explosion "on the other side of the world ". China's economic growth rates have continually been in the double digits with only a few hiccups over the last 10 years. What this means of course is increased wealth per capita, increased trade and at the end of the day increased influence in the world. When I have traveled into East Asia and Australia, China is like the big brother in the neighborhood. Everybody is either trying to trade with them or keep them happy in some other way. I read one study where the Chinese economy will reach $123 trillion in 2040. By that time the per capita income in China will be higher than many major countries in Western Europe. The thrust of the study had to do with the differing standards of living. It was pointed out that Western society was resting on their laurels and Asian society works harder and had a brighter future. Sitting here in Canada and traveling across the United States, it's somewhat difficult to truly fathom what all this means. For instance as many of you know I give presentations across Canada on grain markets. There are some fundamental economic benchmarks that I've always believed in. Many of them have to do with the perceived wealth of Western society now and in the future. So when you see the statistics regarding China and the influence that will give them, increasingly in 2010 that is making me pause. What's this mean for the world in the next 5 to 10 years and how can we thrive within that? The short answer is everything should be turning up roses. For instance doesn't increased wealth in the world mean everybody's doing better? The point being it is not as simple as that as old prejudices combined with scarce economic resources and ethnic tensions always seem to get in the way. China and much of South Asia surely has its share of that. So simply stating that China and Asia are going to increasingly be the world's leading power center does not necessarily ring true. However, when this simple Canadian rides through the streets of Asia in a place like Bangladesh I cannot see how it can be avoided. In other words, when I look at Bangladesh's youth, work ethic and population and extrapolate that across Asia, I can only see good economic things. I see at a certain point that these Asian nations take a leading role in world economic affairs and at some point in the future maybe my grandchildren or great-grandchildren here in Canada will take direction from there. At the present time the Western world continues to deal with global economic recession. Our American friends have particular troubles, as their government spending has been so high there is much conjecture on how they will pay it all back. Our Chinese friends hold much of that debt in Asia. I believe we will learn much from how the Chinese and Americans work out this problem in the next few years. There are a myriad of options, not necessarily friendly to each side. Nobody likes the specter of disappearing money. The challenge will be to coexist peacefully as our world changes. I see it as a fundamental shift of world power. However, I don't think everybody sees it that way especially on this side of the world. So sure, that my friends, maybe a problem. I just hope it doesn't get too messy. Changing world, Asia and its challenges A.K. Enamul Haque PhD As the Winter Olympics was lifted in Canada, my wife, my son and I were glued to the TV screen to watch the opening ceremony from Canada. With full enthusiasm I was showing it to them because it is being held in Canada where I spent about 6 years of my life. In few minutes time, my son asked me a question to which I did not have a full answer. The question was "When Bangladesh would be able to participate in Winter Olympic?" I told him, unless we are able to deal with poverty, I don’t think we should even think of participating in it. It is still a club where rich nations can only afford to play. I agree with Phil that Asia is changing rapidly. With China growing, Asian economies are also integrating in terms of trade and investment. In 2003, the Wharton Business School published a book called "the Chinese Century". I have been teaching this book in my class on international business. The book narrates how this century is likely to be the Chinese century. However, I see the rise of Asia as a result of the consequences of the failures of the economic super powers. What we see today is a sequel of a drama. Asia was an economic superpower until the nineteenth century. In 1820, India and China produced more than 50% of the world’s GDP. These two countries were at the center of attraction for all. At that time, all voyages were coming to Asia. Many European countries floated companies like the East India Company to trade with India only. However, it has all changed since then. Asia was colonized by Europe and it gradually lost its economic power. Europe emerged as the new center of the universe in terms of economic activities. By 1920, Europe reached its peak. The economic growth of Europe also led to migration of people and migration of capital. But by the 1940s Europe lost its power to the USA. How? Europeans got themselves into trouble when they initiated the wars- one in 1919 and other one in 1939. The war eroded their economic power. By the end of the WWII, the USA emerged as a new center of economic power. The free world began to assemble around USA. Many now believe that its economic power is also coming to an end. Unfortunately this is also due to several wars. This time, however, the wars are fought far away from its own territory – in the Middle East. The current prediction is that by 2050, China and India will be the center of all economic activities in the world. However, I still think that this is far from true. The fundamental challenge of Asian nations is not religious extremism, not freedom of speech, not capitalism, not socialism, not democracy; the challenge is how to deal with its huge scale of poverty. Unless and until they can successfully deal with poverty Asian economies will not be able to stand on their feet. Unfortunately, except China others including India seemed to be less worried about it.