Monday, December 22, 2008



What kind of world do you have in mind for us, Mr. Obama?

The world perspires in cold sweat as Barrack Hussein Obama readies to become US president on the sleight of possibly the worst financial hand since King Solomon overspent on his hundreds of wives and on their commemorative temples to slump Jerusalem into a wild hyperinflation nearing the end of the 10th century BC.

American New Age financial wizardry, striking rot, is estimated to have dug a hole in banking and in financĂ© that’s about USD 62 trillion deep.

When the multiplier effect is applied to that, the number may run to USD 620 trillion some say.

Even if the numbers given are somewhat exaggerated, the simple effects of the current malady will write into history the worst economic meltdown since the Great Depression of the 30s.

Obama’s pin-up status as the first colored American president is wearing out. What’s appearing before the new world he is destined to herald is a giant depression that tells a story of inebriate greed sown into the flag-bearer of capitalism that’s now a pall-bearer.

America was spending way beyond her means, using mathematical models to issue bundles of credit to stretch money into what has finally caused the bankruptcy of American banking and finance, with the spillover suggesting loudly the failure of poorly regulated free-market capitalism.

With the world’s largest economies in deepening recession, it is the emerging market economies that are now keeping trade alive, for a while. These economies are themselves weakening.

China already growing at less than eight percent from 11.9 percent in 2007, is facing workers’ protests demanding wages and salaries owed to them by foreign-owned factories that closed down.

The Gulf States, the other strong performer, having lost more than 200 billion following the oil price slide, may be posting only 2.2 percent growth in 2009.

Labor unrest will sweep through the world. This would be an explosive mix with riots in 40 countries that have run short of food in the midst of plenty, their food supply exported for cash.

About two billion of the world’s 6.5 billion inhabitants are strapped below the poverty line with half of the number abject, and a swath of the world is hamstrung on asymmetric war nobody wants, apart from those that swarmed the White House to remove Saddam Hussein by the might of mayhem, unilaterally.

Change is clearly begging swift address. In the given circumstances, it is looking likely that the flag-bearer of capitalism will have to herself apply tariff barriers to protect what’s left of her physical economy if she is to at all recover within a decade without having to resort to war.

But the automobile, electrical and electronic industries have lost essential market segments and have begun to retrench. In the case of Japan, her markets in Europe, the US and in Asia have contracted so severely the country, already in recession, has become a net importer.

In Germany the car producers are all down, the country herself, the third largest economy, is also in recession.

Expecting Obama to single-handedly will away the dread is merely a hysteria. Obama should quickly squeeze into the US and the world real remedial policies and structural changes.

Change takes time to settle. Remedy for this financial and economic ills will need at least a decade.

Post America

It is simple to conclude we are looking straight into the prospects of a post-America era, the facts saying loudly the world cannot be wishing for a superpower such as America has been, to continue.

America decided on her own to fatally wound Iraq and to restructure the Middle East, to forcibly throw Islam out of fashion, to spring a surprisingly fragile financial system for a world she wished to hold under her hegemony in a free-market system, while she controls the IMF and World Bank as she has done.

The world would be obviously looking for a means to peaceably resolve conflicts, not for a tight Missile Defense System Mr. Bush had wanted to hoist over and above the decided advantages America already has in firepower, war machines/technologies and strategic balance of power.

Russia has only a fleet of four leftover aircraft-carriers we are told, while China has none, meaning America remains uncontested in the oceans. But there are now surface-to-sea missiles.

Over Western Europe the US is reported to have more than 560 middleweight nuclear warheads (excluding those in Israel) ready to act against any contestant, which could have been one reason for the European Union to militarize under the stalled Lisbon Treaty that Ireland has refused to accept.

Since America will continue to keep her technological edge in various fields for a while yet, and she is certainly remaining the sole superpower even if she is a bankrupt individual, the world will continue to be depressed by the prospects of having to live with a not-so-competent Sheriff and Big Brother who has made the globe much less fortunate under Mr. Bush, “The Shoe Man”.

There are definitely more “Muslim terrorists” now than could have been imagined before the US quest for glory struck Iraq, and then, the defenseless Afghanistan, where reconstruction is hopelessly obscure.

The troubles in Afghanistan have now overflowed the border into Waziristan and Pakistan, proclaiming American policy, method and outlook in the containment of “Muslim Terrorism” have failed.

In Asia people have begun to turn aside from the US’s containment of China and are looking forward to having Asian IMF and Asian mega-infrastructural development banks to prosper the continent and the trade-blocs within.

New Bretton Woods

M. Obama must know going back to Bretton Woods is merely a route to stabilize currency and trade.

Going back to Franklin Delano Roosevelt’s freedom from wants, freedom from fear and freedom from tyranny is more substantial than the simple equation of Bretton Woods, IMF and the World Bank, especially when the idea had become monetary control rather than of a credit scheme for mutual development between sovereign countries they were meant to serve.

A growing number of countries in the world now want an ethical standard and an economy of mutual assistance (ta’awuni in Islam) within the context of the trade and economic blocs.

The beacons for these are not with America at all. Instead it has been the Latin American countries that have inspired ethical statecraft and diplomacy with mutual aid as a basis for the new social and international reality, leading to a grand infrastructural development covering the whole of South America.

The Latin American example has become a new existential springboard to redeem humanity from the greed of the “new economics”.

In the same passage for redemption, though less dramatic in impact just yet, are the Islamic ethical financial institutions and the Islamic securities crafted from it – the Shariah-compliant financial regime that has been spared from the frightful reverses we read of everyday inside the laissez-faire banking and finance.

Islamic securities have only surpassed USD 1 trillion, a little drop in the ocean, but stable and expanding at a rate of more than 20 percent per annum just before the economies shuddered in the current crises.

Islamic banking have been unscathed and should begin to broaden its scope to pursue the ethical economy and society internationally as an alternative to the ideological variance deemed viable by the world before.

It is not about being different. It is rather of an ideological and cultural pluralism that fit with the wishes for a multi-polar world that shall encourage healthy competition between the economic blocs and also share in seeking for the best imaging of the human collective that we can possibly call a world soul – a human personality that is good. ---a. ghani ismail, 23 December 2008

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