Tycoons

Globalisation has brought with it its breed of new super-rich. Forbes recently released its new rich list. The richest man in the world now is a Mexican telecoms magnate, Carlos Slim, worth US$ 59bn. He just overtook so far unbeatable Bill Gates. The new super-rich appear in the world’s booming emerging markets. Mexico. China. Russia. The Middle East. India. The existence of such super-rich and powerful men (yes, they are generally male) feeds into the debate about inequality: is the appearance of such a class of billionaires normal, morally and socially acceptable, …. and economically sound?

An excellent book by the Swedish economist Anders Aslund takes stock of transition to the capitalist system in Central and Eastern Europe and Eurasia. One chapter analyses “The Role of Oligarchs”:

Quote of the day

“The fall of the dollar is not the fall of the dollar, it’s the fall of the North American Empire; we have to be prepared for that”.

Happy joy ride, Hugo!

(For more background)

Oh, Belgium

A tiny country of 10 million inhabitants at the heart of Europe. It hosts the EU’s capital, Brussels: a mere 1 million inhabitants. The country can be crossed in a couple of hours by car or train. It hasn’t had a government for about five months, due to infighting between two native tribes: the Flemish and the Walloons. Everywhere there is talk of a split. The country was founded in 1830 after a revolution uniting two Catholic groups that felt uneasy under Dutch hegemony. Today, apart from religion not much seems to be uniting both parts of the country. In the past the French-speaking Walloons were the richer and culturally dominant group in the country. Belgium was one of the first and most dynamic economies in the 19th century, a pioneer of European industrialization. Now, the Flemish are the richer majority of the country – one just needs to take a 30-minute train ride from run-down Brussels to flourishing Antwerp, and the difference blows into one’s face.

Europe’s free trade agreement strategy: the road to nowhere?

In November 2006, the EU launched a new project entitled “Global Europe” which aims at linking external trade policy with the so-called Lisbon Agenda, a programme designed to turn Europe into “the world’s most competitive economy” by 2010. Fundamentally Global Europe announces a shift towards negotiating more bilateral free trade agreements – FTAs - directly with partners in Asia: South Korea, ASEAN, India. It is also about getting more hands-on with China, now the EU’s second trading partner in goods after the US, and integrating other ongoing bilateral trade negotiations with, say the Gulf countries and Mercosur into the broader picture of a shining new Europe in an Era of Globalisation. [Or rather: "as a protector, a life-enhancer, as a magnifier of strength, and as a shining cultural and political example”, as Mr Sarkozy put it?.]

In fact Europe’s practice of signing bilateral agreements is not new, by far. But so far it has concentrated on: countries in the European periphery with potential prospect of joining the EU (Neighbourhood Policy – today enlargement is in crisis, however); or countries with special interests in linking up economically with the EU and where the EU has big political stakes (Mediterranean, or “Euromed” countries). So-called EPAs with African, Pacific and Caribbean countries are trade-and-aid agreements that need to become reciprocal on trade issues to be compatible with WTO requirements: let’s call them post-colonial political beasts. What is new

Turning point?

I have been blogging on “globalisation” for almost a year now. I intended to somehow get to the essence of the process, grasp it, explain it, pin it down. I have ended blogging about individual countries, France, Europe, Russia, China. I have made short inroads into energy, development, WTO and trade issues, immigration. I realised how much I became a promoter of global economic integration. I oppose every type of politics that stops people from plugging into the buzzing stream of international interaction.

What am I saying now, taking stock after a small year?

A fresh look at China

Back in 2004, Martin Wolf wrote, in a chapter dedicated to multinationals in his book on globalisation, :

“It is right to say that transnational companies exploit their Chinese workers in the hope of making profits. It is equally right to say that Chinese workers are exploiting transnationals in the almost universally fulfilled hope of attaining better pay, better training and more opportunities than would otherwise been available to them.”

A forthcoming paper (upload here: acer_messerlinwang_nv6final.pdf) by Patrick Messerlin and Jinghui Wang at Sciences Po gives us a new perspective on China. China is not a monolith. Parts of China will be like the EU in not too long a time. Some provinces have per capita income levels (in purchasing powerparity terms) that have reached those of several EU member countries. Shanghaians are richer than Greeks. The paper highlights 9 provinces, all on the country’s eastern coast that will soon enter the world’s high income bracket: that is roughly 400 000 million people – almost as much as the EU. Unnerved about job losses in low-skilled sectors of the economy? Well: think of all the good jobs a thirsty market almost equivalent in size to the EU will create for Europe! The Chinese story is not static. The country’s economy is progressively climbing up the ladder of more sophisticated production, and it is becoming a new hub for production chains reaching out into South East Asia. This means it is becoming more expensive to produce in China! Of course, at the other end, 13 Chinese provinces are at the level of the world’s most poor countries. Shanghai’s inhabitants are more than ten times richer then Chinese citizens from the country’s poorest province, Guizhou. Yet Luxemburgers are eight times richer than Bulgaria: so lots of work to do here as well….

Please see this table: