G7
summit in Japan is coinciding with China-Central Asia summit in Xi’an.
The two perfectly encapsulate low weight of global South on most
economic, military or technology metrics. Excluding EU, countries
invited to Hiroshima control ~39% of global GDP, rising to 44% if Japan
is included. By contrast, Central Asian countries that occupy a
strategically important centre of Eurasia, have economic weight which is
only slightly larger than the state of Michigan. Why is it important?
1.
Depending on one’s definition of global South, it houses over 50% of
global population but its weight in GDP terms is not much more than 20%.
On the other hand, a broadly defined West (ie, US, Canada, UK, EU,
Swiss/EEA, Australia, Japan and Korea) have ~15% of global population
but ~60% of GDP, ~70% of R&D and ~80% of internationally recognized
patents. China is the only partial counter balance
2. Unlike West
that broadly agrees on a number of basics (ie importance of democracy,
human rights, rule of law, institutional independence etc), global South
does not have the same coherence. It is not to say that there are no
disagreements in the west (there are plenty) but there is a cohesion on
key issues. Global South on the other hand is in transition. Some reside
in pre-modern Malthusian settings, others are passing through 19th-20th
centuries while some are closer to our time. Why would you bother with
Russia’s violation of the UN charter when warlords are redrawing borders
in your neighborhood, without anyone doing anything about it? Why would
you bother about many issues when you can’t even feed your population?
Why would you support policies that go against the grind of still highly
conservative culture that permeates your societies? The view of
corruption is different – it is a lubricant that allows at least
something to get done
3. These differences are key to
productivity and the extent to which geopolitical pressures will keep
flaring up, with bad societal and economic implications. Neither
meaningless acronyms (BRICS), nor ‘debt colonialism’ by either west or
China, nor the counter productive debates about past mistakes and blind
alleys, nor suspect arguments of giving countries freedom from the
‘dominance by the elites’ (freedom from what and to do what?), nor
China’s ‘indivisible security’ are helpful. Only Marshall Plan (greater
than 10% of global GDP) rolled out systematically and accompanied by
institutional building, sustained for several decades, can make a
difference. Alas, chances of that happening, in the absence of greater
conflagration, is zero
What does it mean for investors? No easy
or even palatable answers. We are dividing into spheres of interest and
Balkanizing. It is driven as much by the East as it is by the West. It
is difficult to find a common ground between societies that inhabit
different eras.
Anonymous
5 comments:
Wagner Declares Full Capture Of Bakhmut After 224 Days Of Fighting
'Head of the Russian private military group Wagner, Yevgeny Prigozhin, has announced Saturday that after months of grinding warfare and heavy casualties, Russia has now taken full control of the strategic city of Bakhmut.
Prigozhin is announcing final victory and that Bakhmut has finally fallen. "The operation to capture Bakhmut lasted 224 days" he said in a video posted to Wagner's Telegram channel. "Today at noon, Bakhmut was fully captured," he declared.'
Link to article:
https://www.zerohedge.com/geopolitical/wagner-declares-full-capture-bakhmut-after-224-days-fighting
PS...Russian gangsters beat the crap outta NATO-trained Ukraine, US , UK & EU special forces. Wah lau..so lousy..have not meet up with Russian police or military already run road from Ukraine.
If GDP defines overall global power and control, then Russia should have been destroyed long ago by the combined GDP of the USA and EU. What is equally important is the possession of resources and how important they are, that also measures a country's ability to stand up against any threats. Russia's energy resources alone, gives it more than what its meagre GDP could ever do, to counter the USA and Nato. Food and energy are essential needs of humans since time immemorial. The USA and Nato thinks that based on their combined GDP they could step on Russia like an ant.
Deng Xiaoping said, as early as 1987, that 'the Middle East has oil and China has rare earths'. What importance is attached to that statement is clear to all today. Then the Middle East oil producers were all close allies of the USA, but Deng realised early the importance of oil and rare earths in the future of things. Now the Middle East is potentially, in the Global South camp, and this is important. Who controls the oil also has leverage, not just the bragging rights of the high GDP countries.
The Global South controls the bulk of rare earth reserves, with China alone controlling 38%, with Brazil and Vietnam among the top three, making up about more than two thirds of global reserves. Rare earth is a very essential element for the military, semiconductor and EV sectors, among others. Moreover, China also controls 85% of rare earth refining globally, which speaks for itself. Even the USA needs China to refine their rare earth, said to be the best refiner in purity. China has yet to play its card with its rare earth controlling hand.
As for the Global South being not coherent and in transition, that is very true. But just look at Africa, which is slowly coming together and being brought together under the guidance of many well educated and dynamic leaders. There is so much potential for investments in Africa, resources to be exploited and the USA and the West failed to capitalise on the potential earlier, and are now scrambling to return (probably the objective is to exploit the essential resources). They let Russia and China cement their relations with African leaders for decades, while they concentrated on fighting wars in the Middle East and chasing terrorists. Now they USA and the West are not even welcomed by Africans.
The same scenario is being played out in Latin and Central America. Why are countries lining up to join BRICS, even Mexico? And these are countries rich in food production as well as mineral resources yet to be exploited. The future of their power lies underground, though they may lag in GDP growth at present. But their potential for growth is huge.
And Central Asia may be dirt poor today, looking at their GDP, but do not forget they hold massive resources underground. The old adage repeated by many historians - 'Central Asia holds the key to Global Supremacy' cannot be taken just as a passing footnote. What is so important in that dry, poor region that is so important in Geopolitics? I suspect China knows the answer and is now engaging with them in a big way. China will invest in the long term, not hit and run, building relations and forging co-operation, not war or countering countries.
Sure, for Western investors they can dilly dally, but China is not waiting and will undoubtedly be pouring more into Africa, Latin and Central America and Central Asia, with huge potentials already surfacing in Africa especially in housing, water resources, ports, railways, airports and other infrastructures. The fact that Western investors are sitting tight with investments shows they are just short term investors with 'grab and run' mentality, compared to long term investors like China, whose timeline is 20 to 30 years, as what former Greek Foreign Minister, economist and academic, Yanis Varoufakis said.
Xi is in trouble...gonna earn as much as 4 - 6 trillion USD this year according to unofficial Chinese economic estimates..even after lending out loads of USD to BRICS and 1B1R.
Big headache ..gotta spend all these USDs before they lose all purchasing powers..
Link to utube:
https://www.youtube.com/watch?v=b2pnGqLTJhw
Ahhh
Does the China Central Asia meeting have any relation to China wishing to spend more of its massive reserves?
It looks timely for China, geopolitically advantageous, economically strategic with jobs following investments especially in infrastructures in Central Asia. Thousands of Chinese engineers are working on infrastructure projects all over the world.
Thumbs up for that meeting. Recycling those accumulated US$ is so strategic and more so with winding down investments in the West. Too bad it is not fast enough and China should move faster in de-dollarisation, like the Russians.
I thought earning money is a big headache, not spending money. Spending money is a breeze for any Tom, Dick and Harry. Sure as hell, it applies to me.
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