jump to navigation

Globalization – Root cause of the financial problem April 29, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Quality of Living.
trackback

Last few decades countries have created financial success by exporting their problem. Look at Japan, Korea, China, Middle east, USSR. We all know it looked good for some time, it has not been sustainable. This has been all done in the name of globalization.

Every country want to outsmart all other country by growing their export. Sounds great on paper, go little deeper and we will realize that it is not a sustainable solution in the long run and will cause enormous disruption.

My prediction is that the country that is in a best position to accelerate Glocalization will emerge from this financial turmoil. China, US, Europe (as a block) are in a strong position in that order.

Economy should be local for every country. I am not advocating socialist agenda, I am advocating a real solution to this financial chaos.

Simple rule to create a long term viable economy.

WTO (World trade organization) should mandate that trade gap between the countries should be zero (export = import).

or

Create a uniform single world currency and economy will adjust itself to reality of the world.

Alternative energy firm announced in UK that they will close their plant because government is not giving incentive. They can manufacture the wind turbine in China for 10 cents on dollar and send it to UK. Good business decision, bad decision for UK. It is fine to engage in such trade, if China will import from UK the goods or services of equal amount. If UK government does not bail out the Land Rover, TATA will shut plant there and take it low cost place. Great for TATA, bad for UK. should not be allowed to happen.

There should be pressure on each county to work hard, live within their means, and create a long term viable economy. If it is so simple, why do not people do it?

Every county thinks they are smarter then rest. Let us look at China, US and France. US can sell one F-18 to a country, provide them the loan for financing it. Now rest of people in that country can work hard for their life to pay for that F-18 which has no value for them. Why do politician in these country accept that, well that is how they become rich.

Business are obsessed with supply chain optimization by co-locating all the manufacturing into one location. Wrong focus. That is how justify producing a can of beans in a plant in China,  and waste three time the resources to deliver it to consumer. This destryes the local economy and kills job. Let there will simplification of supply chain. Is there really a reason for baby food to be consumed in US should be produced in China? none, what so ever.

Has anybody asked a question, why politician are always so rich? They do not get money by digging hole. They get money by mortgaging the future of the fellow country man. Sounds Harsh, Truth is not always pleasant.

Long run, Glocalization is where the world is headed. We will be in denial until this change has happened.

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it. Check out the following link.

Glocalization will Kill Globalization

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Advertisements

Comments»

1. Mukund Toro - April 30, 2009

Bipin,
I do not know much of economics. So I cannot comment on whether globalisation is good or not good.
But isn’t ***greed*** or rather instant gratification the root cause of the crisis? Is it only politicians who are mortgaging their country’s future? Aren’t people like you and me equally guilty of mortgaging our futures by taking loans and buying things which we can do without, just because someone is prepared to lend us?
Regards,
Mukund

2. Bipin Agarwal - May 1, 2009

Dear Toro

This is a great observation.

Yes, we are all responsible and are participating in the process in some way.

Responsibility at the top is high. They need to be role model. Political leadership defines the culture of the country. Regulation put in place by the politician has allowed for the system to be corrupt. System will get better if a common person get involved in the political process. Country has a value system based on human values and responsibility. We all have seen the power of politics. One Mahatma Gandhi, inspired the country to be free. One Nelson Mandela made inspired south Africa to be free.

Thank you.

Bipin Agawal

3. sadaf fatima - May 3, 2009

i am a university student, i have been given an assignment to find out what are four Tendencies of globalization and how can we economically implement glocalization ? can u please help me ?

Bipin Agarwal - May 3, 2009

Dear Student

I am glad you are interested in Globalization and Glocalization. There is lot of information I have posted on my blog regarding this subject. https://twentyminutelifestyle.wordpress.com

If you have specific question, please do let me know. Please do let me know your background including your university, area of specialization, year.

Thank you
Bipin Agarwal


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: