Monday, May 02, 2005

The Shifting Sands



The US doesn't get it.

What they helped to innovate, to invent, to conceive ‚– the business use of technology, has brought down the pan-global barriers of distance. That is why India has become an outsourcing and IT powerhouse. Available network and information bandwidth, using technologies such as MPLS with the ability to deliver QoS, tying in all developed world economies translates directly into their ability to deliver software to mainframes in the US, Canada, Europe instantly. The same is true for call centres and telecommunications networks. English has become the language of business around the world due almost exclusively to the US. Now, countries that have had to develop their English-language ability can do business directly with US corporations.

Future economic power will come through collaboration. The super power concept is fast becoming an obsolete one. Economies that obtain their power through the monopolies and through the spending power of their own citizens will be dwarfed by the new economic super-states. Not states in a political but an economic sense. As developing economies with billions of citizens become developed economies, they will have the buying power to influence the rest of the world. They also have the passion and drive of growing economies. These qualities come from the socio-economic pressures created by newly injected wealth after decades of subsistence-level living. They will not stop. Europe is also coming into her own. The formation of the EU is the beginning of a new economic power that may outstrip the US.

The US continues her foreign policy of unilateral action and self-interestedness. This is not popular and does not win her the future allies she needs (For an example read, ‚“How to Lose Friends and Alienate People”). As dependence on trade with the US weakens, as it already has, world economic powers will be less concerned with her policies and directives and will be less willing to deliver concessions. This includes security concerns but I think, especially, economic ones. Look at how America reacted to France's criticism of her involvement in Iraq - with hostility (albeit verbal). The US will not benefit from the trade deals between members of the EU and will suffer an increasing trade deficit, as it is already experiencing with China.

All of this will result in reduced US competitiveness world-wide and the reduced viability of the US socio-economic model. Individual Americans will be less wealthy. It is not hard to imagine the collapse of a heavily indebted society. US citizens carry a fairly large amount of debt. Once their ability to finance it is removed, due to lost jobs and lowered salaries, the society will tend towards bankruptcy and collapse.

Not just Americans but their country as well is heavily indebted. The country's current hundred-billion-dollar deficits show this. Who is financing her? How long will 'they' continue to finance her via foreign investments? In an article from TIME entitled, "Hey, Big Spender ..." of Jan. 2, 2006 they write:
"The $236 billion Clinton surplus of 2000 has become a $400 billion annual deficit. Setting aside Social Security, about a quarter of what the government has spent since Bush became President has been borrowed. And estimates from the nonpartisan Congressional Budget Office (CBO) show that if his tax cuts are made permanent--as he is advocating--deficits will persist for at least 10 years."



Canada needs to develop stronger political and economic ties with European and Eastern nations like Japan, China, and India if our's is to remain a viable economy in the coming 30-50 years.