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I’m quite intrigued
by this Russia, Europe, Israel connection, especially since
Russia is close to the middle eastern countries and Israel
isn’t exactly very gung ho about the middle east. And that
you think Israel will move away from the USA, in spite of so
much investment by both countries in each other? And what
about the Indo-Israel relationship then, since India is
forging such strong ties with USA?
Let’s talk about Russia first. I think one of the most
powerful leaders in the world today is Vladimir Putin, and
Russia has become a very important entity. Under Gorbachev,
Russia had aligned with USA and Britain. But Yeltzin began to
steer the Russian economy towards the European Union and Putin
continues executing what Yeltzin had orchestrated. The Russian
trade with Europe has reached 90 billion dollars and is likely
to cross 100 billion dollars by next year. This has happened
only in the last decade.
Europe cannot survive on its own energy resources and
therefore is turning to Russia for both gas and oil. Russia is
also a very strong military power and as America’s influence
over European union begins to decline, Russia’s involvement
deepens.
Again Russia has an enormous potential market which is also an
educated one. As Europeans are aging they will turn to Russia
just as USA is turning to Mexico.
As far as India is concerned, India will become multi-lateral
and will have a partnership with Japan and China. In fact
already there is a massive capital investment from Japan in
eastern India, while Americans are concentrating on the IT
markets in South India. India will also have a strong
relationship with Israel and especially Russia because of its
past history with the Russians.
In fact last May when Congress came to power the political
pundits were predicting that India-China and Russia will unite
against the western world, but it didn’t happen, because
India felt it would limit them.
Russia’s influence on the middle east has been tremendous
and that relationship will be leveraged from an economic
viewpoint rather than from an ideology point of view.
India’s relationship with the middle east will remain
friendly.
Israel will distance itself slowly from America because it
will believe that it will be better off if it remains
independent of America. The alliance with America had gained
strength when Ariel Sharon came to power but now that he is
incapacitated, the Russian Jews who form a large number of the
Israeli population are leaning towards Europe, since they have
family and businesses all over Europe. Also as you can see,
while politically, the Taiwanese don’t see eye to eye with
mainland China, their capital investment and factories are all
being moved there. It’s the same with Hong Kong. So I feel
Israel too will become part of the middle east architecture
and the Middle east will become part of the European
architecture
You painted a pretty dismal picture of the US post George W
Bush. What is going to keep USA afloat and still a power to
reckon with?
America’s market power is already declining as China and the
European union markets are becoming bigger than the American
market. The only area where USA remains an undisputed leader
is in military power.
Politically we have lost a lot in terms of public opinion,
partly due to Bush’s ruling style in the past 5 years and
partly due to our invasion of Iraq. However there are several
reasons why America will continue to do well. US has the
largest number of research oriented universities and
philanthropists donating millions to them so new technology
and new innovations will keep coming out from there.
This is also a knowledge based economy and due to continuing
immigration, the economy has grown 4-5 percent each year and
that is a huge jump in an 11 and a half trillion dollars
economy.
Also American families are outsourcing home making activities
as two income families becomes more the norm than an exception
and you cannot outsource these out of the country-they have to
be done here at home. Today 75 percent of women with young
children work full time, so household chores like cooking,
cleaning, baby sitting, laundry etc are all being outsourced.
When you buy these services commercially the GDP grows,
creating new industries pertaining to these needs.
America is also the only country where the average family is
rich. Home ownership has always been a key asset building
mechanism for Americans. Sixty fiver percent of the average
Americans own homes worth 200,000 dollars, 50 percent of which
is in equity, $110,000 in pension plans, an additional
accumulated value of life insurance policies and these days
the trinkets their ancestors left them have a retail value on
eBay and the PBS channel. Also lottery has become very big. We
have created many millionaires through it and today even the
well educated and rich play it. Wealth generates more wealth,
so I see America continue to thrive.
So what do you think of the word globalization?
It’s a buzz word used to describe an approach to more
liberalization of markets, but except for the British economic
power in the 1800s we never really saw a globalized world-it
was always a fragmented world. Today it is reorganizing into
regional blocs and I will go beyond the book and make a
prediction that the middle east may become a stand alone bloc.
If you look at its 1.5 plus billion population, it is obvious
they can integrate and create their own bloc. It may not
happen soon and for now the Islamic nations will integrate
with the European union.
How do the three blocs thrive without treading on each
others toes?
They have to make themselves self sufficient and successful
internally. Within the bloc, each country must look at its
resources and specialize in 2-3 things and serve the entire
bloc. Like Finland can take over the entire pulp and paper
industry and serve the entire region. Encourage free mobility
of all the resources-products, people and culture should move
freely within the bloc.
I think the most pragmatic bloc will be Asia-there is no deep
rooted belief here, and the only religion is money. TECTONIC
SHIFT REVIEWED BY KAVITA CHHIBBER
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