All waiting for Putin
Near the VIP entrance of the congress hall here in the World Economic Forum in Davos, scores of delegates, press, aids, security guards are all waiting for the imminent arrival of Russian Prime Minister Vladimir Putin.
It’s extremely cramped here with a constant stream of people squeezing past those who are standing here to catch a glimpse of Putin.
Former UN secretary Kofi Anan was nearly hit by a TV camera while financier George Soros asked the press “Who’s coming?” When someone said it was Putin, his aide said: “Say hello to him!”
The shift in power from West to East
One news theme I’ve asked our journalists to be alert to this year is the shift in power and emphasis from est to East.
The rise of China’s economic power during 30 years of reform and opening to the world is just one manifestation of this; the knowledge and service powerhouse that India has come in a globalised world is another. At Davos this year I’m moderating a panel on Asian innovation that will surely highlight software advances in Japan, Korea and Thailand as well.
I’m convinced the current global economic crisis must lead to a fundamental reassessment of how power and influence is expressed through the world, from manufacturing and service oriented Asia through the oil-rich Gulf.
This isn’t because of “decoupling” – that notion so prominent in discussion circles a year or so ago that said things like China’s economic boom could make up for any economic weakness in the U.S. That idea has been well and truly discredited as trade and money flows have caused bank after bank, nation after nation and economy after economy to buckle and bend in the current crisis.
No, it’s precisely because of “coupling” that the world will have to rethink radically its governance and regulatory and influence structures.
I see today’s opening session at the World Economic Forum as emblematic of this shift. The two world leaders taking centre stage at Davos today are not from the United States or from the United Kingdom or from France or Germany or Italy or Japan or Canada.
The only power shift of any meaning and consequences is between US and China. Because of size and the nature of that shift.
While many East-West countries have traded during the past 20 years, these trades have benefited all fairly equitably when summed over this period. Except US-China.
The so-called globalized trades between US-China have benefited the principally the big corporations (i.e. their balance sheets and executives) in the US, and the state in China. Because that’s the way each country wanted.
When you sum up 20 years of massive US-China trade, the balance sheet shows:
a) Giant net benefits to major US corporations. US consumers also benefited, in the short term. But over a 20 year period, they actually lost much of value, except perhaps a very good time.
b) The Chinese state has gained tremendous net benefits, and since the state dominates so much, Chinese infrastructure, consumer and industries have also shared the very large net gain.
In short, globalization has produced reasonably good net gains to world countries. But the US comes out a loser and China the winner over the long term.
