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:20153855~menuPK:373757~pagePK:148956~piPK:216618~theSitePK:336992,00.html

– http://www.makepovertyhistory.org/– http://

www.globalissues.org/TradeRelated/Debt/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

=1205776

• 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.