New Edition of the Book Globalization: Opportunities and Implications Now Available

Last year we released the first edition of our book Globalization: Opportunities and Implications as a resource to college students and professors. This year we thoroughly revised and expanded the second edition, included sixteen additional countries—for a grand total of 75 nations covered in our in-depth country analysis—along with updated statistics.

globalization

Globalization takes students by the hand to understand the complex yet fascinating globalization phenomena from a multidisciplinary standpoint:

  • Historical
  • Geopolitical
  • Social
  • Strategic
  • Philosophical
  • Economic
  • Financial

ForeWord Reviews awarded 5 stars to GlobalizationHere’s a highlight:

Martin Marmolejo has done a masterful job of collecting, organizing, and distilling information in a volume that is easy to navigate. The breadth and depth of Globalization suggests this book could be the single reference required for the reader who needs to know more about any aspect of the global economy.

The new book is available on Amazon.

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The “Globalization” of Globalization

Statistics, as well as good record-keeping, can provide invaluable insights.

In the fourteen months since this website was launched, we have had over 14,000 visits, literally from all over the world. Naturally, the great majority of our website’s visitors come from major cities and nations capitals, mainly from the US and Canada, most countries in Europe (not only English speaking locations), developed Asia, China, India, Russia, Australia and New Zealand.

globalization

Today we will share with you some very interesting and unusual non-English-speaking places of visitors to our website. This list has been compiled from visits during the recent weeks:

 

  1. Kathmandu, Nepal

  2. Phnom Penh, Cambodia

  3. Port-au-prince, Haiti

  4. Lomé,Togo

  5. Addis Ababa, Ethiopia

  6. Tehran, Iran

  7. Cairo, and Alexandria, Egypt

  8. Aleppo, Syria

  9. Amman, Jordania

  10. Muscat, Oman

  11. Jeddah, Saudi Arabia

  12. Ashgabat, Turkmenistan

  13. Timisoara, Iasi, and Bucharest, Romania

  14. Chisinau, Moldova

  15. Tirana, Albania

  16. Tallinn, Estonia

  17. Riga, Latvia

  18. Vilnius, LIthuania

  19. Zagreb, Croatia

  20. Slovenj Gradec, Slovenia

  21. Lvov, Kiev, and Kiselëv, Ukraine

  22. Sofia, Bulgaria

  23. Thessaloniki, Greece

  24. Istanbul, and Ankara, Turkey

  25. Hanoi, Vietnam

  26. Pantai, Butterworth Penang, Batu Caves, and Petaling Jaya, Malaysia

  27. Nonthaburi,Thailand

  28. Bandung, and Jakarta, Indonesia

  29. Wonju, South Korea

  30. Cotai, Macau

  31. Caracas, Venezuela

  32. Paysandú, Montevideo, Uruguay

  33. Valdivia, Chile

  34. Acassuso, Argentina

  35. Ezequiel Montes, Saltillo, Querétaro, Culiacán, and Mexicali, Mexico

  36. Chapecó, Fortaleza, and Campinas, Brazil

  37. Porto, Portugal

  38. Castelldefels, Spain

  39. Dubna, and Belgorod, Russia

  40. Haifa, Tel Aviv-Yafo, Israel

  41. Sarpsborg, Stavanger, and Trondheim, Norway

globalization

A second list of eighteen English speaking jurisdictions, yet with very low population and/or very poor nations, round up this most interesting analysis:

  1. Saint-Denis, Port Louis, Mauritius

  2. Valletta, Malta

  3. Suva, Fiji

  4. Port Moresby, Papua New Guinea

  5. Bandar Seri Begawan, Brunei

  6. Kingstown, Saint Vincent and the Grenadines

  7. Valsayn, San Fernando, Port of Spain, Trinidad & Tobago

  8. Paramaribo, Suriname

  9. Castries, Saint Lucia

  10. Dehiwala, and Colombo, Sri Lanka

  11. Dhaka, Bangladesh

  12. Cebu City, Makati, Quezon City, Sucat, and Davao, Philippines

  13. Faisalabad, and Lahore, Pakistan

  14. Dar Es Salaam, Tanzania

  15. Gweru, Zimbabwe

  16. Douala, Cameroon

  17. Port Harcourt, Lagos, Nigeria

  18. Nairobi, Kenya

The information provided only refers to visits from those places, not about the nationality of the visitor who, in turn, might be a person on a business and/or vacation trip, on a temporary stay, or a relocated corporate officer of a multinational -or diplomat- for a long stay. Still, some of the visitors from unusual places must be local citizens of the country where the digital visits are originated, a true mosaic of geographic diversity across the whole planet.

All in all, the speed and extent at which the world geography is covered in a topic as globalization is truly astonishing; the universality of interest in the globalization topic, from the geographical perspective, is utterly evident; that is our experience. An unquestionable testimony on the strong interest in the dynamic, increasingly complex, yet fascinating world around us.

 

Globalization: Controversial?

“It has been said that arguing against globalization is like arguing against the laws of gravity”. 

––Kofi Annan, former UN Secretary-General.

globalization controversialIt is impossible to understand where something is headed, without first understanding where it comes from. So the first question is: What is globalization? Read about it here.

Globalization has six very important attributes (as stated in What is Globalization?):

  • It is permanent and irreversible. Given its profound roots in human nature.
  • It is omnipresent. There isn’t an instance or place untouched by globalization.
  • It is multidisciplinary. It needs to be analyzed from multiple perspectives, in a holistic way.
  • It is not optional. The choice is not in whether we embrace it or not. It is in how we embrace it.
  • It cannot be controlled. Nobody controls the process of globalization for an extended period of time, regardless of the size and influence they may have, since globalisation is the collective interaction of individuals, organizations, and nations evolving through time.
  • It is meritocratic. The natural selection process is highly applicable to the way globalization works (survival of the fittest).

Yet, globalization means a lot of different things to different people.

When dealing with globalization, like in all human endeavors, if common foundations and premises aren’t shared, a proper analysis is virtually impossible.

In fact, that was the major idea behind writing the book GLOBALIZATION: Opportunities and Implications, to define and document the major premises of globalization. It is an attempt to unify the basic context for further analysis.

What are the major foundations and premises that have to be shared for a meaningful analysis or debate? In other words, what are the desirable common denominators from where to take off?

There are several. Probably the most basic one is a proper use of metrics. Lord Kelvin very wisely stated “What is not measured cannot be improved”. Indeed, that is a fundamental truth.

country direction

So, the starting point should be to have an adequate grasp of who’s who in the world. That means to share a common knowledge of the major features and traits of most nations on Earth. For that purpose to be meaningful, it is necessary to have a balanced, objective, reasonably comprehensive overview of:

  • Each country’s size (population, geographical extension, GDP, total exports, and so on), the per capita figures are of a particular importance. because they provide sound metrics for comparisons among nations (and also for meaningful comparisons within nations themselves along time).

  • A balanced overview about each nation (and region) history and geopolitics.

The second indispensable element is to have a clear understanding of the cause/effect relationships concerning wealth and poverty. Wealth and poverty are clear effects of present and past causes. There are a handful of currently very wealthy nations that just a few decades ago (3 to 5) were among the poorest countries on earth (Singapore, South Korea, Taiwan) or among the poor ones (Czech Republic, Chile, Israel, New Zealand) and nowadays are already developed nations, some of them extremely wealthy, like Singapore.

China is in the midst of a profound transformation in that direction: although China is still a poor nation (per capita basis), the speed of economic growth of the past three decades has already catapulted it from the low tier among the poor to the middle range. If China is able to maintain a growth rate substantially higher than the rest of the world, as has been the case during the past three decades, the Chinese economic miracle will continue.

So, economic solvency is a result of how a society organizes its production of goods and services. The better organized a society is, the wealthier it becomes. A nation’s economic solvency only indirectly has to do with political ideology. It mostly has to do with management capabilities (or lack thereof), particularly in the political arena.

Once that common ground on globalization has been laid out and shared, relevant analysis (and debates) can take place.

The globalization phenomenon provides an unsurpassable opportunity to learn from the best managed nations on Earth, in benefit of the rest. Most fortunately, globalization has within itself the key to massively decrease world poverty, in a consistent, self-sustainable basis. Read about the Turbo-charged Global Project.

As previously stated, unmistakable cause/effect relationships are at work  behind the world’s best governed and prosperous nations; that is also the case behind the most undeveloped countries in the globe. Widespread poverty, along with its multiple most pernicious byproducts does not have to be the norm among most nations in the globe, as it already has been since the beginning of mankind.

In no way does this post pretend to suggest that globalization is not surrounded by controversy. Not at all! However, if the common ground previously referred to is set as a starting point, most of the subsequent analysis and debates will surely be more meaningful and fruitful.

In conclusion, probably more often than not, the globalization subject tends to be controversial for the wrong reasons. Ideally, many legitimate controversies should be on the table of discussion, but only once the fundamental common denominators have been established and shared. Otherwise, this fascinating subject can easily become a Tower of Babel, as has often been the case.

From Hydra to Phoenix. The Transformation of Developing Nations

Indeed, occasionally it is both amazing and truly ironic how the global socio-economic cycle evolves.

Not so many years ago, during the late 80s and early 90s, most of the underdeveloped world was in shambles, overburdened with debt, high levels of inflation, and frequent recessions and currency crises. Developing nations were, at that time, a basket-case.

globalization and economic development

The typical –understandable– reaction of most of the developed countries to those frequent and severe crisis was to admonish the troubled and disorganized countries to put their affairs in order, learn to behave prudently and to live within their means.

What a difference a few years can make!

Around two decades later, both the EU and the US are now the ones experiencing the aftershocks of highly uncontrolled public finances which have resulted in incredibly high levels of debt. As a group, most western economies are still struggling to overcome unusually sluggish growth combined with persistent high levels of unemployment.

The irony resides in the fact that fortunes have made a 180 degree turn and the two largest economic blocks on earth, the EU and the US, are in a situation (in many respects) very similar to the one the developing nations were in during the late 80s and early 90s.

globalization and economic developmentConversely, most of the developing nations currently hold an enviable fiscal and debt position. Nowadays, most of the developing world has a relatively low (and very low in some cases) debt level, manageable fiscal deficits and are growing at rates normal for their nature, consistently outperforming the developed nations’ growth rate in a significant way. In the past two decades, most of the developing nations have managed to behead the mythical multi-headed hydra that held them captive, and have been transforming themselves into a phoenix that is rising from the ashes.

How can such a dramatic turn of events have occurred in such a relatively short time?

globalization and economic development

There are several reasons for it.

First, contrary to a common belief, the level of political development of the developed nations, in many respects, is an unfinished business. To the contrary, it is safe to state that contemporary political systems are highly dysfunctional, trapped within their worn-out way of doing business. Hence, in many respects, the current dire situation of the two largest economic blocks on Earth is a patent manifestation of the insufficiencies and limitations of contemporary political systems. That is the major reason behind the “new normal” of unusually sluggish growth and persistently high unemployment in most Western, developed economies.

Second, parallel to the previous point, on a relative basis, during the last couple of decades most of the developing world has made a substantial catching-up effort. Developing nations have been rapidly closing the political gap versus the developed world. Granted, without disregarding the merit this progress implies, it has to be acknowledged that what has been done to date, in many ways, is the easy part. So, the misalignment in political systems between both groups of nations has been substantially diminished. It is fair to state that the day-to-day functioning of most developing nations’ political systems are highly comparable, in essence, to their developed brethren.

A superficial reasoning would lead us to conclude that the developing world now seems to be a role model for developed nations. Not so! Most of the progress achieved during the last decade of the XX century and the first decade of the present one, as substantial as it is, is not necessarily irreversible. Not at all.

To a great degree the substantial progress accomplished to date is a hard-earned dividend for the great pain and suffering the late 80s and early 90s crises inflicted upon them. A great deal of fiscal adjustments were made, their central banks became independent, their currencies were finally left to float like major currencies do, a good deal of markets liberalization and deregulations flooded these countries. In short, the ongoing stability and prosperity of most of the developing world seems to be a one-in-a-lifetime phenomena.

Once the temporary part of those virtuous changes runs its course, developing nations will have to face the harsh realities of the many limitations and insufficiencies of contemporary political systems.

The breadth and depth of the challenges ahead require a profound transformation of contemporary political systems. The incentives structure has to experience deep changes. Statesmanship and the common good should be rewarded. Winning elections should not stand on the way of the two major objectives just pinpointed, as it currently does. The current status quo of political dysfunctionality should not be tolerated any longer.

The world has been increasingly moving further away from its long/term potential economic growth rate. The opportunity cost of the current state of stagnation and mediocre growth is immeasurable –in the trillions of dollars a year. Imaginative solutions have to be implemented ASAP to rectify this monumental misalignment. Click here to read more.

Profound, lasting transformations in contemporary political systems are required, to avoid falling into the otherwise inevitable case of beheading the hydra, only to realize than shortly thereafter a new one, as pernicious as the one cut, has grown.

 

The World’s Inability of Managing Debt

debt bomb

The ongoing debt crisis problem is both, very real and extremely dangerous, with potentially devastating effects if not adequately handled.

The plain and sad truth is that, with very few quite remarkable exceptions, it is very evident that at one time or another, most countries on Earth have consistently proved their inability to appropriately manage debt. Mankind transferred from the barter system, to money many centuries ago. Unfortunately, credit –the inseparable byproduct of money– has not yet been properly harnessed by most modern societies; that is, an adroit credit management by nations has been badly missing.

Interestingly enough, there are plenty of corporations, SME (small and medium enterprises) and individuals that do appropriately manage debt. And by contrast, how come most governments haven’t reached that level of proficiency in such an utmost matter? The major explanation seems to reside in structural deficiencies and how political systems’ incentives/punishments have been functioned until now.

 There are several approaches to truly and once and for all, solving the menacing World debt crisis (the EU, the US and Japan, are among the most outstanding current transgressors). One of the most logical solutions resides in reverse-engineering the causes that have produced that most undesirable effect (the massive debt bomb). Probably contributing in over 50% of the problem is the indispensable, yet very costly social net known as entitlements. There is no doubt about how vital the social net is to deal with the most pressing human needs: mainly health, unemployment and retirement benefits. However, in order for any system to be solid, high-quality, and effective, it has to be self-sustainable. Self-sustainability, in turn, means self-financing.

 That’s exactly how the World has gotten into the big debt mess we are now in. The social net systems, by and large, have been operating below their break-even level for decades.

Very few political groups in the world have shown the wisdom, the depth and guts to stop the financial hemorrhage caused by the imbalance produced when the costs of providing a set of services has been consistently exceeding the revenues collected for that purpose. The easy way out has been to finance those deficits with debt, which has been accumulating and compounding throughout the years. The favorite solution resorted to, up to now, has been to kick-the-can into the future. The big problem is that the future finally arrived. There doesn’t seem to be much further room to maneuver, as in the past. The system is structurally flawed.

banking systemOn a parallel angle, equally important, lies the extremely low capital base on which the banking system has been operating probably since inception. It does not make any logical sense at all for that state of affairs. It could be thought that operating with a meager capital base enhances profitability (along with risk). Most unfortunately, however, the world banking system is stuck in the worst of all possible worlds: extremely low profitability ratios with an extremely high risk profile. The extremely low profitability can be easily verified by checking the average ROA (return on assets), which compares profitability against total assets (including debt), not only versus equity (ROE).

The banking business is as correlated to the economic cycle as the construction and the automotive sectors, if not more. Thus, it stands to reason that it should, at the very least, adhere to the same capitalization rules of those other two sectors –roughly a 1 to 1 debt to equity, no more that that.

 Going back-to-basics has proven, most of the time, to be very helpful, as a means to understanding the roots of any complex situation and how to solve it. The ongoing World debt crisis is no exception.

 

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