Tuesday, March 6, 2012

Obama in Dilemma

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(This is an old article published in 2008 by a local newspapers in KL).

A lot of us worldwide and the majority of Americans in the States were delighted when BarackObama won the Presidential election. Everybody in all corners of the world celebrated this “universal victory”. Simultaneously, this raised the hopes and expectations on this young man whose father is an African, whose mother worked in Indonesia and who was the first black to become the President of Law Society in Harvard Law School.

The next president of the United States was first a community leader before becoming politician. He was a teacher before becoming a lawyer. He was not privy to the “born with the silver spoon” syndrome. It would be an understatement to say that he is knowledgeable of the problems of the common man.

What does this momentous occasion mean to the US? Obama’s fate is such that has ascended the highest political position in his country when not only the US, but the rest of the world as well, is grappling with the worst economic crisis ever to strike us.He hit the proverbial nail right on the head, when he said it’s time for change not just for the US but also the entire watching world.

More than the credit and economic problems, he has to create employment for 2.5 million unemployed Americans almost immediately. Also, he’s confronted with a battered image of the US worldwide.
On top of all this, he has to solve the education and health problems at home, the mishaps in the housing industry and the need to improve the infrastructure of the US.

His slogan of ‘Yes We Can” should ring throughout to put his tenure in the White House, to ensure all these objectives are achieved. The Americans were great after the Second World War helping the Europeans to liberate themselves from Hitler. In the Far East, the Japanese made the biggest mistake of bombing Pearl Harbour. The Americans became heroes in the Far East as well. Thereafter, they got involved in the Korean War. They then had to withdraw from Vietnam with a destroyed image and tattered pride.
Lately, as a reaction to Sept 11, they not only went to Afghanistan but also got involved in getting rid of Saddam Hussein in Iraq.

On top of that, the term “Axis of Evil” has become more a symbol of the arrogance of the US than the intended fear to be instilled in nations such as Iran and North Korea. Somehow, the Americans image turned from heroes after World War 11 to becoming the Ugly American at the turn of this century.
Suffice to say the preceding president has played a big part in the negative perception of the US with policies often in conflict with the expectations of the rest of the world. Obama has promised to withdraw from Iraq within 18 months and will begin to look at the US problems instead of the world’s problems.

For the rest of us in the world, not only Iraq needs super power involvement but probably the African states including Darfur and Congo; the problems in Myanmar need solutions as well. Perhaps if the US could pay as much attention to problems in all regions and not just the economically justifiable ones, they would shed the image of self-importance disguised as liberators of the world. With all countries embroiled in their own economic problems, there would be no solution in sight for a lot of smaller countries with massive problems. For decades, the US has pumped into many parts of the world to the tune of US$70bil per annum.

With the anti-American feeling generated worldwide, the Americans may wonder whether their assistance is required, especially if it’s not appreciated. Economically, the US threw the Marshall Plan in 1949 and was magnanimous enough to oversee and contribute to the rebuilding of Japan within two decades.
Japan emerged as a super efficient country, culminating in the Olympics in 1964. Until the 1980s, many books were written on the productivity, quality and management systems of the Land of The Rising Sun.

Then they favored Taiwan because of its problems with China and they gave a helping hand to South Korea because of Communist problems in North Korea. All these nations were known as the Dragons of the Far East.In the last two decades, the free market system in the US allowed their companies to source for cheaper goods from China, which soon became the factory of the world. The resulting influx of investment into China and demand for Chinese goods resulted in the significant growth of the manufacturing output of that county. As evidence of China’s major role in today’s trade, out of the 450 million containers in the world, China accounts for 125 million.

This free market principle also saw the Americans initially outsourcing a lot of their back office services, especially in IT, to India. This was merely a stepping stone to the outsourcing of even more of their businesses to “third world” countries. And it is no secret that 30% of lecturers in most American universities are from Asia, mainly India. Given this scenario of helping many nations worldwide, politically and economically, the Americans suddenly find themselves as a besieged nation with massive economic and social problems.
This is not an easy task for any president and one wonders whether Obama will have time for the rest of the world.

Fortunately at the last APEC conference held over the week in Peru, the world leaders promised not to put any inhibition on the world trade. This means the massive globalized world of the last three decades has hope of continuing to be inter-dependent on nations. The advantage of globilasation is reflected in world trade which has grown 10% per annum over the last 20 years. In the world of containers as a measure of world trade, the US accounts for only 10% whilst Intra-Asia accounts for 45% and Europe for 15%.

In terms of infrastructure, the rest of the world seems to have moved ahead of the US. The French discovered the last train at 200 miles an hour, the Japanese with bullet train at 300 miles an hour and the Chinese have anti-gravitational trains at 450 miles an hour. But in the US, the train system is still based on the original form.
In terms of ports, there is massive congestion and shipping lines have claimed that they lost US$200bil in terms of waiting time. The US was a tourist haven for many Asians, especially Indians, most of the Middle East but all this was hampered after Sept 11, 2001.

No doubt, Obama will be good for the US. But will the Americans be able to discard the ugly American image to one of the handsome Obama? Whilst taking the US to embrace the policies of other nations is rather far fetched at this juncture, merely respecting the rights of other countries to champion their causes would shed much needed favorable light on them.

Does finding jobs for Americans mean the implementation of protectionist measures to safeguard their companies and provide massive incentives to Americans produce at home instead of outsourcing this to India or Chinas? It is surprising that one in ten Americans is involved in the automotive industry but US has only 40% market share in the industry. Does giving jobs to Americans mean more manufacturing at home and a larger share of the US automotive industry?

Similarly, will Americans want to produce everything themselves again and spend billions reviving their industries and infrastructure? What will this mean for free trade globalisation? By 2010, we will know whether the Americans will revert to the Monroe doctrine and America for the Americans.

Writer: Gnanalingam is executive chairman of Wesport, Malaysia.
Source:  Starbizweek, Saturday 6 December 2008.

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