The American President Barack Obama gave a speech on May 19, 2011 on the Middle East and North Africa. It is a comprehensive speech that touches on many subjects, most of which I shall take up and discuss in the days and weeks ahead. For now, there is one sentence in the speech that I would like to discuss in depth. It is this: “If you take out oil exports, this region of over 400 million people exports roughly the same amount as Switzerland.” The reason why I wish to do this is because the mere uttering of this sentence by the President of the United Sates at this time in a speech that is as important as this carries a meaning that stands tall and apart from what the words of the sentence convey.
Divorced from everything else and standing alone, the sentence surprises me because it is an utterance that is not meant to convey meaningful information but is meant to shock the audience. More than that, it is part of a destructive pattern intended to convey a false image of the Arabs, something that the President must have been unaware of since he said he wants to build bridges and reach out to these people. Here is a description of how the destructive pattern comes about and how it looks when it has run its course: The Arabs initiate an internal debate or they issue a report in which they make comparisons to illustrate a point. The ever opportunistic Jewish propaganda machine of perpetual hate and incitement picks up some of the Arab ideas and mentions them out of context to show “in the words of the Arabs themselves” that they lag behind in some area. To have an even bigger impact on audiences in America and elsewhere, the propaganda machine that is also in charge of the White House speech writers gets the President of the United States to utter the words in a context that is designed to deliver maximum shock and paralyze whatever dialogue may exist between the Arabs and America. One notorious example along this line came about in the past when George the W was made to say that Spain had a GDP larger than the combined GDPs of all the Arab nations. It was a falsehood that would have been useless and meaningless even if it were true; and in fact, it realized no immediate gain but squandered plenty of potential gains because people were misled about the situation on the ground.
The sentence uttered by the current President is also false, meaningless and useless. And you can see this when you juxtapose it with another sentence that came in the same speech. It is this: “Satellite television and the Internet provide a window into ... a world of astonishing progress in places like India...” This is significant because Switzerland has a population of 7.5 million people and the country exports goods and services to the tune of 250 billion dollars. This is comparable to the exports of India which has a population 160 times larger standing at 1,200 million people and is, according to Mr. Obama, a place of astonishing progress. Now, the Middle East has a population that stands at 400 million people, a third that of India. And this is where comes the mind boggling part. If the region exports as much as Switzerland, it means that it exports as much as India which makes it so that on a per capita basis, the region exports 3 times as much as India. Should this suggest that the Middle East performance is 3 times better than astonishingly progressive India? Is that it, Mr. President? Well, we already know the answer to this question: It is no, this is not it. The reality is that this part of the speech was stuck in there to convey the message that the Arabs lag behind both Switzerland and India therefore America must and probably will try to let the Jewish lobby pilot it to the Middle East where it will attempt to fix the Arab world and make it as astonishingly progressive as India and Switzerland. Well, I have news: This kind of talk has never served a useful purpose because the Arabs cannot be motivated to welcome the Americans with open arms following a fantasy talk of this kind.
And guess who or what is missing in this artificial, meaningless and useless talk. Two things are missing. The first is the fundamental understanding of a simple truth based on mathematics. It is this: If A equals C; and if B equals C, therefore A equals B. The second missing thing is the mention of China. And this is because the way that the Jewish propaganda machine (led by Tom Friedman of the New York Times) originally presented the argument was to compare the Arab world with China and India among others, not just India. Apparently, incapable of seeing the irony in the fact that he has been leading the cries of lamentation about a China that is powering ahead of America, Friedman missed the logical consequence of him asserting that the Arab progress was inferior to that of China while at the same time lamenting that the American progress was inferior to that of China. The logically challenged columnist could not see that in doing this, he was equating the progress of America with that of the Arabs. He still does not know it but he made himself look like the self appointed emperor who wore a crown and no clothes. But do not despair, my friend, because the image of the naked emperor is one that Mr. Obama has avoided when he omitted to mention China in the speech. In fact, it looks like he deliberately avoided mentioning that country because he knows that he too has lamented America's lag behind China on a number of occasions. But the thing is that he is logical enough to avoid falling into the trap where Friedman has fallen. Next time, however, he should completely avoid getting involved in this kind of talk because it leads nowhere and serves only to strip the imperial clothes off its participants.
We came to these conclusions by looking at the different parts of the President's speech and analyzing them. We now look at the context in which the Arabs are having their internal debates where we find a goldmine of ideas. It is that some Arab countries have oil and some don't. Those that have it worry about the day when the resource that is giving them a high standard of living will be depleted. To prepare for this day, they use the wealth generated by the sale of oil to industrialize and thus have something to fall back on when the oil will be gone. To measure the progress they make in this regard, they frequently compare their non-oil exports with the totality of their exports. They do this separately for each country that depends on oil then add up the numbers and generate one set of figures to represent the entire Arab world as if it were a single economic region modeled after the European Union, a group that the Arabs hope to emulate someday. As of now, however, the Arabs have a population of about 330 million people which is less than the 400 million mentioned in the President's speech. For a reason that remains a mystery to me, it looks like someone has included the population of non-Arab Iran in that figure.
What is refreshing about the internal Arab debate with regard to the matter of making a choice in economics and governance is that the debate touches solely on economics and governance and remains devoid of politics and political gamesmanship. What I find most interesting about it is the part where the merits and demerits are laid out with regard to the growth that is generated through export as opposed to the growth that is generated by internal consumption. I have had views on this matter for a long time and had the opportunity to add to them by being exposed to the internal debate of the Arabs. I shall present both sides of the argument the best way that I can while making the situation in Egypt the backdrop of my presentation.
My view on the relationship that exists between industry and political governance started to take shape when I began to study the Industrial Revolution. I concentrated on Europe where that Revolution began and where the social revolutions were later triggered. I saw that the aim of the social revolutions was to bring political governance in line with the industrial progress that was being made and was accelerating. I also saw the two revolutions as having a symbiotic existence, each feeding the other and feeding on it in a relationship that was sometimes violent and sometimes quiet but one that helped both revolutions to grow organically over a long period of time. The end result has been that a system of quasi egalitarian justice was born to replace the system of serfdom that had been in existence for centuries. We now call what we see in Europe the liberal democracies of the West which -- for the purpose of this discussion – we can divorce from the period when colonialism played a role in shaping them.
Progress in those countries generally came about more or less evenly because it happened over a period of time that was long enough to allow for corrective measures to be introduced when distortions began to show up as they inevitably do where there is growth and there is change. When at times, the distortions became so exaggerated that something harsher needed to be done, it was done voluntarily by those who held the power and relinquished some of it; or the change was brought about by violent means when those who were voiceless staged a revolt and wrested the power. And this sort of thing happened on and off until a new system of governance was finally born. The system kept shaping and reshaping itself through decades of evolution which is a period I call: “The politico-industrial growth of liberal democracies.” To my surprise, I discovered that it was the primitive state of transportation at that time which gave the economic system the semblance of evenness that characterizes the liberal democracies of today. It happened because the early barons of industry developed a dependence on the local markets where they sold their products and thus helped generate the growth that their factories needed. With the production and the consumption done locally, what the workers wanted more than anything else was to share in the ownership of the means of production. They organized themselves and fought to secure gains in this area, and they won a few battles. The consequence has been that the masses came to share in the wealth that they produce but they also learned that when they organize they develop the means to participate in the governance of the country.
The way things stand now is that transportation is no longer a problem that is big enough to intimidate the industrialists of today. They produce in one place on the globe and sell in another place; they even produce parts and components in several places at the same time to assemble them in a different place altogether and sell the finished product in yet another place. And the reason why today's industrialists tend to do this is that they seek to produce in places where the cost of production is cheap and seek to sell in the places where the purchasing power is high. This means that the workers and the entire population can be kept poor in the places where the products are made and yet these same people are asked to enter into a bidding war to buy what they produce against people who live far away and have several times the purchasing power that they do. Unable to lead a dignified life under these conditions, the people in the poorer places learn to agitate -- not because they seek to participate in the ownership of the means of production as did their counterparts in Europe of old -- but to be paid higher wages and salaries. Besides, the capital markets of today are highly developed and those who wish to own the means of production can do so provided they have the money to buy stocks. And when you add to this the idea that people invest some of their earnings in securities to prepare for retirement, you can see why being paid more money becomes an important issue in modern times.
Well then, things look like they will work out nicely, do they not? Maybe. But let's look briefly at a piece of history after which you may judge for yourself. Several decades ago most countries in the world decided to open themselves to trade and investment, a move that came to be known as Globalization. It did not take long for the people of the world to theorize that the effect of this move was the coming together of the rich in the developed world and the newly enriched in the developing world. These people came together in a self serving alliance through a sinister sort of unspoken conspiracy. The coming together was seen as a way to exploit the poor in the poorer countries by making them work at subsistence levels; and it was seen as a way to fleece the middle class in the richer countries by sending them to the unemployment lines while sending their jobs abroad. The rich were seen as telling the first that they should live poorly now to live better tomorrow; and telling the second that whether or not they have a job, they can borrow against their home and live the good life by consuming the cheap products they import for them from abroad. When this situation became well understood, it caused the people of the world to riot every time they had the opportunity to do so. And the opportunities came about each time that a meeting of the World Bank or the IMF were held anywhere on the planet because the people saw these institutions along with the G-7, G-8 and G-20 as being complicit in the conspiracy to exploit and to fleece them for the benefit of the very rich.
Put in a nutshell, the inescapable conclusion is that globalization has led to an increase in exports which led to the widening of the gap between rich and poor. Some individuals in some countries became rich at the expense of others and bought their way into the corridors of power. The result has been that no improvement was allowed to take hold with regard to the system of governance. And while at first blush it looks like South Korea, Taiwan and Hong Kong -- who made undeniable and visible progress -- have avoided being swept by that trend, it is becoming increasingly clear that their progress came about because Britain and the United States propped them up like spoiled children to show their communist neighbors that capitalism was better than the system they followed. The gambit worked because shortly thereafter mainland China opened its own economy and began to benefit hugely when the industrial barons of Taiwan and Hong Kong moved to the mainland taking with them the know-how that the Britons and the Americans had brought to their provinces. Other than that, however, everyone else in South Asia and Latin America cursed the day they took the advice of the IMF and the World Bank and ran their economies accordingly because it was the advice that put them in debt and messed up their economies.
Drowning in a debt that cut them off from the rest of the world, those countries started to develop their local markets in order to realize the growth that the economy desperately needed. Contrary to what the IMF and the World Bank were preaching, the dependence on the local markets raised the standard of living for everyone because the workers were paid enough to buy the products they were making. Moreover, with a rising standard of living and more opportunities opening to them, the people were inclined to seek advancement by acquiring better training and more education. They also became more active in the political life of the country, a move that helped to put down roots for a new kind of democracy to flourish. Brazil is in the forefront of this movement.
In Egypt today a group of people is advocating reliance on the local market to grow the economy organically the way that Europe did in the early stages of its industrialization. Another group says that the country should take advantage of the many free trade agreements the previous regime has signed with the rest of the world to turn Egypt into the factory of the Middle East, Africa and Europe and boost export. These people want to see the Egyptian economy grow the way that the Chinese economy did.
You judge for yourself who is right and who is wrong then wait for the future to render its verdict.