4 Mar, 2007

The world is not flat, and never will be!

Imtiaz Muqbil

Originally Published: 04 Mar 2007

The shocks that reverberated through the global stock markets last week yielded yet another example of the 21st century economic pandemics that can spread faster than bird flu, and the threats of the aptly-named “problems without passports” in an age of globalisation.

Globalisation, and its economic first-cousins liberalisation, privatisation and deregulation, are all in one way or another pegged to the concept of “open-markets” and “free-trade” which are marketed as panacea for economic growth.

But if those concepts of freedom and openness, which have many undeniable virtues, do not have commensurately appropriate check-and-balance mechanisms with clear rules, methods of enforcement and channels of accountability, then the result is anarchy.

Like all dwellings, countries need to keep their windows open in order to let in some fresh air but if a storm begins to swell, they have every right to seal off all doors and windows. At the same time, the dwellings need to be built on firm foundations so as to avoid being entirely blown away in the first place.

In the old days, all of Thailand’s infrastructure-related facilities – water, electricity, telecommunications, transportation, energy — were directly related to the country’s national security. Hence, the state enterprises that oversaw these utilities were always controlled by the military.

Today, in an age of globalisation, it is considered fashionable to “privatise” these utilities on the grounds that they will bring costs down, make their operations more efficient and drive economic growth.

While that may be true to some extent, it does not deter from the fact that national infrastructure is, and will always remain, of paramount importance to national security. If it falls entirely into private hands, the companies that control its various components effectively begin to control national security, too.

If these companies are located offshore, such as private equity funds and investment banking conglomerates, that makes matters even worse.

If a country loses control of its infrastructure, it loses control of its national sovereignty.

If that happens, it ceases to be an independent country at all but rather a neo-colonised entity at the mercy of “foreign investors” who must be appeased and satisfied at all times if economies are to keep growing.

These days, many governments are being whipped up into a frenzy of deregulation, liberalisation and privatisation by the rallying cry of the globalisation crusaders, “The World is Flat.”

But it isn’t flat, and never will be.

At the same time, the definition of ‘security’ has changed. Currency attacks, and instability in commodity prices, exchange rates, stock markets are all capable of triggering economic tsunamis which can be as devastating as the real thing.

“Security’ is also the primary objective of the so-called “war on terror” behind which the entire world is having to rally, and spend huge amounts on buying anti-terror equipment.

When DP World, a Dubai company, sought to buy a port in the US, Americans politicians rose up against it on the grounds of national security, so that those evil Arabs do not gain control of what goes through American ports.

However, in Indonesia, US security companies are freely operating in the ports, supposedly as part of the ‘War on Terror’. That many of these companies are run by intelligence agents does not seem to matter to the Indonesians.

In the last decade, Thailand has experienced all the downsides of the globalisation pandemic. Why? What has it done wrong?

How could a country that managed to avoid falling victim to the two most significant political national security threats of the 20th century, communism and colonialism, become among the first to fall victim to the economic national security threats of the 21st century?

In the rush to blindly follow that other rallying cry, “Think Global, Act Local”, many mistakes were made.

Listening excessively to one-sided, self-serving advice saw policies being changed only because it attracted foreign investment, pumped up the GDP and drove up stock markets. “Brand-name” international banking groups, consultants and the embedded journalists in the once-independent western media all were part of the effort.

That’s how it begins.

The history of colonialism began with adventurers who embarked upon global journeys either to explore or trade. Eventually, they metamorphosed into preachers spreading the faith and/or conquerors exercising political control.

While the former colonialists could be removed through a combination of civil disobedience campaigns or military tactics, legally-binding economic control is exceedingly difficult to undo.

One thing the former colonialists did very well indeed, however, was to perfect the policy of divide-and-rule. Today’s colonisers call it “promoting competitiveness.”

Countries become nothing more than models on a catwalk – strutting their stuff before a panel of judges in anticipation of being bestowed the very temporary reward of a crown that will be gone in a year.

The actual and permanent winners are not the contestants at all but the pageant sponsors, mainly the cosmetics companies, whose products continue to sell year after year regardless of who gets crowned.

But the increasing insecurities, also known as “external shocks”, are exposing globalisation for what it really is – countries fed artificially on steroids so that they appear to look healthy, plump and juicy, like poultry and cattle.

The countervailing theory of sufficiency economics provides a more durable, holistic and equitable foundation for nation-building that allows a country to remain in control of its own destiny, not be forced to bow to the whims and fancies of “foreign investors.”

That is precisely why many of the right-wing media outlets are baying against it. If the sufficiency economy theory can be made to succeed, many other countries will follow suit, reassert their independence, and not fall, like ripe apples, one by one into the hands of private equity funds.

Either way, Thailand is again at yet another crossroads in its history, caught in the quandary of deciding between short-term pain vs long-term gain, or vice versa.

Over time, however, Nature’s way will prevail. Blood will always remain thicker than water, and the world will never be flat.

Never.