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September 28, 2011

Munk SchoolCREATING NEW VALUE

IN THE GLOBAL ECONOMY

TURKISH PRESIDENT VISITS SOMALIA: “Pax Turkana”.   KOREAN CORPORATE PURCHASE OF ARABLE LAND IN MADAGASCAR

TRIGGERS POLITICAL CHANGE: Daewoo’s investment in Madagascar.   MALAYSIAN FOREIGN INVESTMENT IN EAST AFRICA AND MADAGASCAR

DICTATES A NEW ROLE: PETRONAS investment in Ethiopia.   ECUDORIAN OIL MINISTER CALLS FOR AN EMBARGO ON OIL

PRODUCTION IN AMAZON RAINFOREST: Acosta on valorizing Ecuadorian rain forest.

  MANDATE OF EBRD MAY EXPAND TO NORTH AFRICA:

EBRD as a player in North Africa.   MALAYSIAN SOVEREIGN WEALTH FUND INCREASES INVESTMENT IN

TURKEY: Khazanah expands in healthcare investment.  

TRENDS THAT DEFINE THE 2010s

At one level, the development of a new perspective on global public affairs, whether by Parag Khanna with his unique and strategic discussion of SECOND WORLD, or Kishore Mahbubani on THE NEW ASIAN HEMISPHERE or even Nicholas Taleb’s reformulation of capital market strategies in BLACK SWAN is simply the replacement of what north Europeans call the “Anglo-Saxon” view of economic liberalism and the era where U.S. centred thinking dominated foreign policy discussions with a “Nordic model”.

GLOBAL REALIGNMENT THINKING

Why is there so relatively little attention in North American universities and B-Schools to the development of new capital markets strategies in the Indian Ocean zone (try Googling the topic)?

Where are the theoretical assessments of how a North African equivalent of the EBRD and the strategic plans for a North African Bank of Reconstruction and Development? Who is teaching the business strategies of the EBRD and their implications for global political economy?

Where are the discussions of the new sources of value: the appropriate pricing of arable lands or the conversion of environmental assets into newly formed capital?

Sociology of knowledge – questions we don’t always focus on

Dialogue between Qatar and Quito

There are people in Bangladesh and Dubai thinking about the first, people in Tunis and Qatar thinking about the second and people in Jakarta and Quito thinking about the third. The restructuring of Greek banks involves Qatari and Emirati financial decision-makers just as the 2007 recapitalization of Citicorp (a financial canary in a dangerous coalmine if there ever was one) required a phone call to Abu Dhabi.

INDIAN OCEAN ZONE from Mombasa to Malaysia

The Indian Ocean zone has been approached from a number of geostrategic perspectives. Robert Kaplan has pointed out in his book MONSOON many aspects of these new naval and military trends and expands to the rivalries developing between India and China. The Indian ocean zone (the Zanzibar International Film Festival is known as the festival of the Dhow for the seagoing Omani capabilities which led to the Indian ocean zone being integrated into a trading network) has now many characteristics of a new global pattern of trade: Malaysian investments via PETRONAS in Sudan and Ethiopia, the significant Chinese presence in Ethiopia and Somaliland, the Canadian presence in Madagascar through mining company foreign investments in a francophone country, the unique capital market of Dubai fusing Pakistani, Indian, Iranian and Arab investment, the impact of the Chinese “string of pearls” strategy on internal Sri Lankan politics, the network of investments through the ASEAN zone which creates new dynamic capital market drawing Bengali and Tamil investors.

EBRD FOR North AfricaThe Indian Ocean zone has been approached from a number of geostrategic perspectives. Robert Kaplan has pointed out in his book MONSOON many aspects of these new naval and military trends and expands to the rivalries developing between India and China. The Indian ocean zone (the Zanzibar International Film Festival is known as the festival of the Dhow for the seagoing Omani capabilities which led to the Indian ocean zone being integrated into a trading network) has now many characteristics of a new global pattern of trade: Malaysian investments via PETRONAS in Sudan and Ethiopia, the significant Chinese presence in Ethiopia and Somaliland, the Canadian presence in Madagascar through mining company foreign investments in a francophone country, the unique capital market of Dubai fusing Pakistani, Indian, Iranian and Arab investment, the impact of the Chinese “string of pearls” strategy on internal Sri Lankan politics, the network of investments through the ASEAN zone which creates new dynamic capital market drawing Bengali and Tamil investors.

New sources of value in the post economic realignment

Finally, we have seen the creation of new sources of value in the global economy. Developed real estate has always created value and this underpins much global finance. Now, we are seeing new sources of value: property rights of rural agricultural workers newly irrigated or fertilized arable land, and environmental rights such as valorizing the Borneo or Ecuadorian rain forests as a way to create capital without the environmental degradation of resource development. The current global economic realignment has created new sources of value and will become a new kind of standard just as petroleum reserves and gold have been in previous eras. It is part of an emerging political economy which is being forged in places like Quito and Jakarta, not Washington and Tokyo.

A new political frameworkDevelop a Canadian perspective on global affairs which look at what is really happening and develops a liberal market approach to sustainable development and new property rights

Define a post-colonial (we still haven’t come up with a better word) approach to the rule of law, “border” disputes and the development of efficient, i.e. non-corrupt capital markets

Design an approach to global capital markets based on the realities of the new politics of capital formation.

MUNK School BrandFor the Munk School to have the global impact we all want it to have, it must define a brand around the fusion of liberal capitalist theory with what is coming to be called a SECOND WORLD perspective. Above all, we have to be developing the frameworks of the future and having a bonfire with out-of-date paradigms and the private agendas of academic clubs. Sociology of knowledge provides perspective and the new world being defined by billions of market decisions in Hyderabad and Recife today looks at the questions of the past differently.

If we do that, we may not generate all the answers about 21st Century politics, but we will not be surprised when in 2016 we are discussing the equivalent of the rise of Turkey in Arab and Somali politics. We won’t be surprised because some of the ideas that give rise to those next trends will have been invented here.