Opinion

Ian Bremmer

Bangladesh and the cost of doing nothing

Ian Bremmer
Apr 30, 2013 20:12 UTC

In Bangladesh, the search for survivors has become an effort to recover the dead. After a garment factory building collapsed in the Dhaka suburb of Savar last week, residents and rescue workers spent days digging through the rubble hoping to save the lives of people caught in yet another Bangladeshi industrial accident. At least 390 people are thought to have died.

This type of accident is all too common in Bangladesh. In November, more than 100 people died in a garment factory fire when workers could not easily escape the building. In 2006, 84 people were killed in a blaze because fire exits were locked.

This is what happens when a $20 billion industry accounts for 3.2 million jobs and 80 percent of a country’s exports. It needs the industry too much, especially when those jobs have helped push female participation in the workplace from 26.1 percent in 2002-03 to a still-insufficient 36 percent in 2010. The globalized economy demands that Bangladesh provide cheap goods, and cheap goods are easier to manufacture when there aren’t strict rules to follow — or at least when they’re not enforced.

It also helps when those rules are set by the same people who own the factory buildings. A sector that is too big to fail can repel government-induced regulation. Mohammed Sohel Rana, who owned the building that collapsed, was escorted to court yesterday in body armor and a helmet. But the factory wasn’t his only project — he was also a local leader of the ruling party’s youth wing. This is partly why it’s so hard for developing countries to bite the hand that feeds: It would require the powerful to bite themselves.

A groundswell of protest might change things, and we’re seeing the beginnings of that. Bangladeshis have burned factories to the ground to make clear that the garment industry is not as invincible as it seems. Citizens want action, and with an election coming later this year, they’ll have the government’s attention.

Goodbye Department of Commerce, hello Department of Economic Statecraft

Ian Bremmer
Aug 22, 2012 16:03 UTC

Whether it’s Barack Obama or Mitt Romney who wins the next election, there is already a vacancy to fill in the president’s Cabinet. With the resignation of John Bryson in June, thanks to a hit-and-run accident apparently caused by a medical issue, the Department of Commerce is being led by an acting secretary, Rebecca Blank. Yet after the initial scandalmongering about Bryson’s departure died down, nary a peep has been uttered in the media about the department’s fate or future.

In other words, the Department of Commerce’s real problem is not a lack of leadership, but a lack of mission-a weakness that means Commerce isn’t making the most of its roughly $10 billion budget. In today’s world, everything – geopolitics, national security, foreign policy – is increasingly being viewed through the lens of our economic interests. The United States has a powerful bureaucracy devoted to international diplomacy and a gargantuan one devoted to national defense, but a near-total vacuum when it comes to global economics.

For a long time now, as conservatives have tried to scale back the size of the government, they’ve also argued that America’s businesses need to be unencumbered from government regulation. They worry about how the government’s intrusion into business will harm our competitiveness abroad. However, the idea that’s been neglected is that the government, through industrial policy, can protect and advance the interests of the private sector abroad, too. The global, U.S.-led economic institutions that arose from the ashes of World War Two have truly become global. Thus they’ve stopped protecting America’s interests abroad. Structurally, our business sector has little to no support from the government when it comes to finding customers outside of our borders. To remain competitive, especially with the state-run economy of China, that has to change.

Chinese capitalism is just another knockoff

Ian Bremmer
Mar 21, 2012 19:12 UTC

Is China’s system of capitalism better than that of the United States? That depends — do pigs fly? While I have no question in my mind that the U.S. is still the paragon of success when it comes to the capitalist system, lately a strange coalition of think-tankers, investors and politicians have been advancing the idea that China is eating our lunch when it comes to deploying capitalism.

More specifically, this bunch claims that China’s unique brand of centrally planned capitalism is working better than the U.S.’s overregulated, bloated, inefficient and slow-growing economy. They say that our capitalism has been so bogged down by our developed-nation cost structure that we’ll never again be a competitive center of investment for the great global pools of money in search of a safe investment out of which to make a parking spot.

Baloney.

China has indeed grown by leaps and bounds over the past decade. That’s a huge credit to a country that has modernized and industrialized on a previously unseen scale. And because of its 1.3 billion citizens, China has quite a bit of growth (read: catching up) still to come. China’s style of governance leaves the country light on regulation. However, it’s also light on rule of law, transparency, freedom of speech and several other key features that make the U.S. economy go ’round. Just because the Chinese government can move a village and build a road without holding a single hearing doesn’t mean the free market has taken hold. Indeed, it shows the opposite: China’s economy is largely state-planned, state-owned and state-run. The government uses capitalism only as a tool to reach its ends, not as a true expression of a free market.

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