Saturday, January 29, 2011

Why is the West declining?

This question is not often asked.

When it is asked, the answer is usually framed in technical economic terms - forgetting that economc results come from a complex interaction between policies, technology, money, and indeed social and personal values and efforts.

For a deeper exploration of these issues, I recommned, Dr Vishal Mangalwadi's THE BOOK THAT MADE YOUR WORLD (to be published by Thomas Nelson in April 2011).

Dr Mangalwadi explores whether the modern world has a soul, and why the sun is setting on the West.

You can preorder your copy at Sphere: Related Content

Friday, January 28, 2011

Response to my post re IATA

A reader, who wiehes to remain anonymous, has written to me as follows:


You are justified to protest. I am glad you are naming specific airlines that you plan to avoid in the future because of their ludicrous baggage policies.

Apart from the super-cheap and cramped budget carriers like Ryan, I find AirBaltic the chief of offenders. I must fly this carrier many times each year. All hand baggage is limited (1 piece, including purses and small computer bags) and weighed. Even when flying transAtlantic routes with major international carriers, AirBaltic restricts check-in bags. ALL OF THIS IS DONE WITHOUT FLEXIBILITY OR RESPECT FOR THEIR PASSENGERS.

I have learned to stuff the pockets of my jacket and overcoat with books to avoid outlandish fees This is simply crazy.

There needs to be a Bill of Rights for Air Passengers that articulates clear baggage allowances and standardizes costs for overages." Sphere: Related Content

My letter to IATA on baggage rules - please send similar letters to IATA to start a campaign

Sirs/ Mesdames

In a world of international air travel, which IATA co-ordinates so well, why is there no co-ordination of baggage allowances?

This makes travel unnecessarily stressful for passengers.

Is there anything that passengers can do to strengthen your hands in achieving co-ordination of baggage allowances?

Many thanks

Prabhu Guptara Sphere: Related Content

Thursday, January 27, 2011

Idiocies in an international world

I realised a long time ago that airlines have not coordinated the amount of luggage that a passenger may take without extra charge.

In my experience so far, it has varied from 20kg to 32 kg to unlimited weight but limited number of pieces.

This makes it very complicated to fly using different airlines, as one has to check each airline and adjust one's luggage accordingly.

Today I have discovered an airline (FlyBe, on which I am booked!) that allows only 15Kg in one piece of luggage!

So, even though it claims to have "the UK's most generous frequent flyer programme", I will certainly avoid that airline in the future, and recommend that you do so too.

I also recommend that we lobby IATA to coordinate international luggage rules to make travel more convenient for everyone. Sphere: Related Content

This week's Economist's main forecasts for 2011

"...the most pressing issue the world will face will be the ever
growing volatility of the overheating currency market.

"Indeed, 2011 may very well be defined as a year filled with ever
changing landscapes in business, science, and technology. However, what
will remain certain is the uncertainty of a muddled future."


However, as equity and commodity markets shoot up in the immediate future (till there is the next catastrophe) while gold declines, you might want to keep a weather eye out for that. Sphere: Related Content

Thursday, January 20, 2011

So Volcker has been kicked out

President Obama's announcement, that Paul Volcker is to step down as Head of the Economic Recovery Advisory Board, is a sad one.

Volcker has struggled hard to bring at least some sanity into the environment for the financial system.

I take his departure, and his apparently imminent replacement with Jeffrey Immelt of GE, as a sign that the irrationalists are winning, and that the environment for the financial system is now nearly back to what it was just before the crisis.

In other words, we should get ready for a new crisis - and any new crisis will be worse than the last one. Sphere: Related Content

Wednesday, January 19, 2011

Obama vs. Hu

It will be most interesting to see how this plays out.

Obama has apparently challenged Hu to consider that Beijing's prosperity is based on free trade. Obama has not spelt out that Beinjing's prosperity is based on free trade based on a playing field tilted in favour of China due to China's non-observance of ecological and human considerations.

Obama has also apparently put the argument that China's prosperity has been based on he stability provided by the presence of the US military in Asia. It will be fascinating to see how Hu responds to this, seeing that Taiwan is able to keep its independence from the clutches of the Communist Party principally because of the protection provided by the USA.

Perhaps President Obama forgets that without the presence of the US military, there would be another sort of stability in the region, based on Chinese hegemony. Sphere: Related Content

The myth of post-American globalization?

A friend draws my attention to: American globalization/4129580/story.html

The piece above leans on an article by Wang Peizhl, an economist at Shandong University of Finance in Jinan, China, which found that "China imports parts and semi-finished products from East Asia and, after processing and assembling, exports the finished products to Europe and the United States. Processed goods account for almost half of China's massive exports, and 85% of the companies producing the exports are foreign owned, compared with 64% in 1995". On that basis, Wang concludes that China's participation in international trade is "still based on low-skilled, labour-intensive products" and China's trade remains dominated by foreign firms that are "basically cut off from the domestic industry."

The argument above is correct, as far as it goes.

But the fact is that the Chinese economy is now based on production and profit, while the US economy is based on printing money and shuffling money. That is why China is able to buy so much around the world and why its influence is increasing, while the US and its allies are buying so little, with declining influence. The US is still the dominant global military and economic power, but it is much less dominant than it used to be, and its influence and power will continue to decline as long as it remains committed to following its current path.

If the USA wants to recover its power and influence, it needs not only spiritual revival and moral transformation, but also sane monetary, financial and economic policies, combined with reforming or withdrawing from the WTO. Sphere: Related Content

Saturday, January 15, 2011

What's the solution to soaring food prices?

In a global market, the only real solution is global.


If you don't have time to read all 35 pages, read just the Conclusion which is on pages 29 and 30. Sphere: Related Content

Wednesday, January 12, 2011

The World Economic Forum's Global Risks Report

Just published, summarises the most crucial current global risks as:

- two "cross-cutting" ones (economic disparity and global governance failures);

- three "important" ones (“macroeconomic imbalances” - including not only savings and trade imbalances within and between countries, but also unfunded liabilities in developed countries, currency volatility, fiscal crises and asset price collapse arise from the tension between the increasing wealth and influence of emerging economies and high levels of debt in advanced economies; the “illegal economy” nexus - including state fragility, illicit trade, organized crime and corruption; and the “water-food-energy” nexus - due to rapidly rising global population and growing prosperity, demand for water, food and energy is expected to rise by 30-50% in the next two decades, while economic disparities incentivize short-term responses in production and consumption that undermine long-term sustainability. Shortages could cause social and political instability, geopolitical conflict and irreparable environmental damage; and

- Five risks "to watch":
• Cyber-security issues (ranging from the growing prevalence of cyber theft to the little-understood possibility of all-out cyber warfare)
• Demographic challenges adding to fiscal pressures in advanced economies and creating severe risks to social stability in emerging economies
• Resource security issues causing extreme price volatility and sustained price increases over the long run
• Retrenchment from globalization through populist responses to economic disparities, if emerging economies do not take up a leadership role
• Weapons of mass destruction, especially the possibility of renewed nuclear proliferation.

So, avoiding the question of duplication involved, if those are the issues, what are possible responses?

Well, the Report does not propose any response beyone referring readers to WEF's Risk Response Network.

The Report does, however, helpfully define the new capacities required to address global risks in terms of analysis as well as formal and informal response mechanisms:

First, interconnections between risks require us to better understand the systems behind risks as well as the risk context. It is no longer sufficient to simply assess operational risks in the corporate context or national security challenges in the government context. Identifying the central nodes in risk interconnections is crucial.

• Second, with global risks playing out both at the global and national levels and different stakeholders being affected in different ways, the world faces a significant challenge in coordinating national and global responses. Continued efforts are needed to create a common framework for assessing risks in a multistakeholder, collaborative environment.

• Third, while in an increasingly turbulent global environment there is the temptation to focus on the most recent risk event, it is important to take a long-term perspective to risk assessment and response. Long-term commitment is required to ensure that the effectiveness of the response matches the magnitude of global risks.

The Report concludes that addressing the two central risks in this report – economic disparity and global governance failures – could go a long way towards improving both
the effectiveness of risk response and overall resilience at the global level.

All that underlines that what the world lacks is not the intellectual resources, but rather the cultural and spiritual resources, with which to address the issues raised. Sphere: Related Content