BA 447 – day 6, 7, 8

Overview: Governance, corruption, terrorism

• Review ch 11 – Discussion • Review ch 12 – Discussion • Raise questions raised

Ch 11: Other side of “flat world”

• Technological optimist or historical determinist: the brave new world and its dark side • The reality of poverty and efforts reduce it – Too sick – disease and underdevelopment – Too disempowered - marginalized – Too frustrated – ideological, religious – Too many Toyotas – what if we did succeed in making people well-off?

Poverty statistics

• Poverty rates in selected countries – http://www.worldbank.org/data/countrydata/countrydat a.html

• Poor are most vulnerable to natural disasters: tsunamis; typhoons; hurricanes; earth quakes • Poor most vulnerable to disease outbreaks – Sanitation – Access to health centers

Poverty

• Poverty alleviation: decades-long goal – http://web.worldbank.org/WBSITE/EXTERNA L/TOPICS/EXTPOVERTY/0,,contentMDK:201 53855~menuPK:373757~pagePK:148956~pi PK:216618~theSitePK:336992,00.html

– – http://www.makepovertyhistory.org/ http://www.globalissues.org/TradeRelated/De bt/USAid.asp

Poverty and prosperity

• Mansions, high rises, and slums • Benefits to elite (Philippine rates) – Caddies: $10 a game – Household helps: $55 a month – Driver (stay-in): $130 a month – Secretaries starting pay: $300 a month – Call center pay: $300 a month • Living wage and minimum wage

Too disempowered

• The rural vote: in developing countries, to the extent that elections are honest, elections are dictated by the masses.

• Economic growth often does not trickle down.

• What are the arguments?

– Global populists argue that the poor do not stand a chance

Anti-globalization

• Western-driven movement composed of: – Upper-middle class with guilt complex – Rear-guard push by the old left – An amorphous group: neo ludites?

– Anti-americanism (power is a magnet for criticism) – Serious groups focused on “how we globalize”

Response to anti-globalization

• Reform retail - • Local government focus, actually he means national government.

• Village by village effort • Role of multinationals – HP’s efforts to help villagers articulate what they needed – Microsoft program providing computers – “Community relations” projects

Another view of poverty reduction

• Targetted approaches, for example – – http://www.usaid.gov/ http://abcnews.go.com/International/wireStory?id=120 5776 • The World Bank shifted to reducing corruption. – Corruption = lack of or poor governance – Poor governance perpetuates poverty

Day 7

• If not enough time, finish Ch 11 on day 7 – Too frustrated – Too many toyotas • Continue with Ch 12 • Issues – Terrorism – Islam – Traditional conflicts – Internal conflicts – Governance and corruption & relation to previous four

Islam and terrorism

• Frustration due to authoritarian regimes and lack of economic opportunities • Islamist fringe and its supporters – Terrorist acts as directed against “trust” – The “West,” particularly the US, as a convenient target for dissatisfied Muslims – Establish an Islamist state – Feed on frustration due to humiliation - if Islam is that great, why are we poor

“Muslim Problem”

• Centuries old issue of dealing with Muslim population in the Philippines - through Spanish, US, Japanese occupation • 10% of the population, mainly in South • Secessionist? Anti-Christian?

• Factions within the population – MILF, MNLF, Abu Sayaf as splinter group – Families and clans also fought each other • Terrorist acts - kidnappings, bombings – Attract attention to their cause – Collect “taxes”

Bin Laden’s Cause

• Well before Sept 11 – http://news.bbc.co.uk/1/hi/world/south_asia/15 5236.stm

• Western infidels on sacred ground - foreign troops in Saudi Arabia during Kuwait war • Corrupt Saudi Arabian government • US support for Saudi Arabian government • Depletion of natural resources - oil • Why conduct attacks on US soil?

• Al- quaeda as a loose confederation

Terrorism in general

• Objectives: – Attract attention/support for a cause – Destabilization of status quo • Methods – A small bomb, big bang in the press – Guerilla-style efforts, including suicide bombers, can tie up a whole army. Therefore, cost – benefit is in their favor – Harassment=leverage for whatever ends they may be working for, e.g. extortion, support, etc.

Islam

• Shares common “tradition” with Judaism and Christianity. Qur’an as correcting Jewish and Christian scriptures – One God – Abrahamic roots • http://en.wikipedia.org/wiki/Islam

Religion and Government

• Separation of church and state – People are free to worship – Government can not dictate/interfere • Some democracies have informal relationships between church and state • Other governments have closer ties

Growth and natural resources

• What if China’s middle class actually grew? Or India’s? What type of lifestyle would they emulate?

• Rise in crude oil prices in 2004 partly attributed to unexpected growth in Chinese demand for oil. • The growth of Chinese requirements for oil (and commodities) may subside a bit in next few years.

• But who remains the biggest consumer?

Ch 12: The Dell Theory of Conflict Prevention

• Supply chain management means that production in different countries are linked • For a particular country, this means foreign direct investments, jobs, etc.

• War or any violent conflict that disrupts economic activity can disrupt supply chain • Such a conflict can also cause investments to move to more peaceful locations

Back to terrorism

• Destabilization or terrorist acts may be targeted at “discouraging” investments • If the economics are right, a company may opt to deal with “terrorists” by paying “taxes” • In some areas, terrorists often does enough damage to increase uncertainty and extract rent. This is good “business.”

Historical Conflicts

• China (People’s Republic of China) and Taiwan (Republic of China) • India and Pakistan • Japan and China, and Korea • UK and Ireland • Eastern European “hotspots” • South America??

Roots of Conflict

• Religion as in the case of India and Pakistan – Was one country and broke up after independence • Ideology – China and Taiwan • Economic (capture resources) – Japan in World War II • Political with religious undertones (Ireland)

Internal conflicts

• Tribal/ethnic conflict • Religion – “Frustration” – Control of the country

Governance & Corruption

• This portion has been changed. For day 8 the basis for discussion will be in file labeled governance and corruption and reference will be made to assigned reading on ruling family in Saudi Arabia.