The Future or rather the present is Asian
Beatrice E. Rangel
In his brilliantly written book “The Future is Asian” Parag Khanna makes the case on the leadership role that Asia is about to take in the world as a result from its economic growth and public policy decisions that aim at creating and nurturing a thriving middle class that trough its consumption acts as growth engine. But for the middle class to grow, trade needs to come into the equation and trade not only is energized by differences in resource endowment among nations, but on the quality of infrastructure.
Asian nations thus gathered in 2017 to set the foundations of the Asian age when they came to Beijing to participate in the first Belt and Road Initiative. On the occasion the Asian European and African nations came together to launch the greatest infrastructure development initiative ever launched by mankind. Trillions of dollars were pledged to create the infrastructure bridges to unite the worlds largest populated centers into a powerful economic web connecting two thirds of the world population and half its GDP.
The Belt and Road Initiative will most probably be remembered as the most significant diplomatic achievement of the 21st century which was built outside the institutional framework created in Bretton Woods and that for forty years had effectively promoted infrastructure building through the Marshall Plan and trans-Atlantic trade through GATT and the World Bank while maintaining economic stability through the IMF.
Today the trans-Atlantic trade corridor has lost energy and liveliness. This can be easily ascertained by just looking at the projections for middle class consumption worldwide. For the period 2013-2030 middle class consumption worldwide is expected to reach US $ 30 trillion with US$ 1 trillion coming from Western countries. The Trans-Pacific corridor on the other hand has grown by 26% between 1991 and 2010 and is expected to grow by 54% through 2050. The Belt and Road Initiative will certainly nurture this growth while promoting a brisk cultural exchange that will most probably trigger a worldwide renaissance as the Silk Road exchanges produced back in Marco Polo’s times.
Meanwhile, our hemisphere seems to be obstinately trying to miss the train of progress. The USA has lost its leadership position regarding trade infrastructure. Yes, there still are very modern ports and airports in the US but they are the exception rather than the rule. Ronald Reagan and Laguardia the airports serving the most important cities in the US are inferior to any airport serving any capital city in the Americas . They can only compete with those serving a handful of nations in the Caribbean.
Not to speak about trains, bridges and ports that have been serving for 70 years without updating. This gives anyone that flies from Singapore to the US the feeling that has left the 21st century to be pushed back into the 20th century. And while the US stills has the most vibrant middle class in the world its number is shrinking thanks to the lac of understanding of political leaders of the social consequences of technology waves unleashed by the US.
In Latin America, the situation is truly sad. Not only infrastructure is appallingly inadequate, middle classes are small weak and dwindling but political thinking completely inadequate. Take for instance the horrific human tragedy that the people of Venezuela are suffering on account of the deployment of socialist public policies for over two decades. After suffering the death of about 400,000 Venezuela’s to crime, disease and more recently famine, one would think that socialism would be a nauseating thought.
Well, after careful analysis of the statutes of all acting political parties in Venezuela that claim to be opposition to the ruling gang one surprisingly finds that they proclaim themselves to be socialist. In Mexico president Lopez Obrador touts every single day the thought that wealth needs to be distributed not created. In Argentina Mrs Kirchner seems to be ready for another try at government while President Bolsonaro in Brasil has failed to lead an economic take off. In the whole region corruption reigns with impunity except for Brasil where the Odebrecht scandal sent to prison half the business and political community.
Add poor or inexistent infrastructure; distributive economic policy which penalize middle class growth, rampant corruption and wrong ideology and guess where Latin America is going to look like in the world of the Belt Road Initiative. Something to keep us all with insomnia!!!!!
Published by LAHT.com on Monday, June 10th, 2019
“The opinions published herein are the sole responsibility of its author”
Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies. For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O’Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador. You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.