Multi-polar Power-play and Primary Commodity based Economies
By: Amit Bhushan Date: 24th Sept. 2016
Except for Norway, there has generally been a lack of globalized economy for countries endowed with Primary Commodities or mineral resources (commensurate to size; nearly all commodity nations would have a degree of globalization but the same may not be anywhere close to comparison with Norway for complexity and sophistication). Globalization of manufacturing economies proceeded rather well because there was a compulsion to globalize the market for wares so that wages can be supported. So the elaborate financing arrangements were evolved in order that countries can sell their wares. That has been the case of the USA followed by most of Europe & Japan and subsequently for Korea, Taiwan and now with China/AEC. The corporate in these countries also easily evolve into globalized conglomerates relatively more easily by ensuring that they are doing things efficiently at the right ‘locations’. Curiously they are also the ones funding infrastructure like shipping, ports, roadways, railways and telecoms. This might be due to twin strength to support sales of capital goods as well as on back of sophistication achieved in financial sectors.
The commodity centric economies have rather persisted with the concerns about the boom and bust cycle management wherein the production of commodities can be scaled up or down to optimize upon the pricing. Often the surplus of commodities would be parked in most secured manner as wealth hoard of the ‘nation’ rather than in market development. The result of this lack of risk taking has usually held up the efforts of globalization of the corporate in these commodity surplus nations. Not only there been a lack of corporate in globalized banking and infra-plays, but also their own infrastructure companies seem to be struck with inefficient technologies and processes. This is true about the rich as well as poor commodity surplus nations and there seem to be little exception.
So while the nations and entrepreneurs seem that they want to compete in global markets, however the policies and mindset prevalent in these countries including lack of experience to have a handle on the latest developments seem to have held back the entrepreneurs in these nations. This may also include lack of capital availability for the purpose. In fact curiously the manufacturing set ups in some of these countries might rather be more open to new customer acquisition in race to compete with other global players keeping the hopes of being a globalized power alive. Usually the demand is for far more predictable environs even as they are made to cope domestically with the near perilous commodity cycles.
The above partly explains lack of investments in shore based logistics segment, metro or railways or even food processing (many commodity nations import food in a big way) etc. from these countries or a lack of progress for the economic relationship. This might be true about not only with commodity power who may have minor political stakes but also those with a global or regional aspirations. It may not have helped that many commodity nation are run by rather dictatorial set ups with lower level of devolution of powers and lack of evolution of sophistication in management of complex globalized set ups. This is because the focus here is to conserve and save wealth, rather than to evolve a robust multi-dimensional economy and/or globalization of the economic canvass. Managing such complex structures would require devolution of power to competent professionals with their own political sound organizational structures and who would manage (often a clutch of inter-related) economic vehicles in line with global practices and feel comfortable in charting the course in a dynamic ever evolving economy.
It is also ironical that hold on commodity as a wealth generating tool is cynosure for greed with many competing powers vying with each other for influence over such wealth. The manufacturing oriented wealth generation with its inherent complexity has actually proven to be better managed and the competition here is basis professional qualifications. While there may be quite a few exceptions, however the line generally hold true except that even managing commodity based set up require at least some degree of qualification even if not cutting edge of skills. With the current rummaging of commodities and continued onslaught, let’s see if this ‘game’ changeth…
By: Amit Bhushan Date: 24th Sept. 2016
Except for Norway, there has generally been a lack of globalized economy for countries endowed with Primary Commodities or mineral resources (commensurate to size; nearly all commodity nations would have a degree of globalization but the same may not be anywhere close to comparison with Norway for complexity and sophistication). Globalization of manufacturing economies proceeded rather well because there was a compulsion to globalize the market for wares so that wages can be supported. So the elaborate financing arrangements were evolved in order that countries can sell their wares. That has been the case of the USA followed by most of Europe & Japan and subsequently for Korea, Taiwan and now with China/AEC. The corporate in these countries also easily evolve into globalized conglomerates relatively more easily by ensuring that they are doing things efficiently at the right ‘locations’. Curiously they are also the ones funding infrastructure like shipping, ports, roadways, railways and telecoms. This might be due to twin strength to support sales of capital goods as well as on back of sophistication achieved in financial sectors.
The commodity centric economies have rather persisted with the concerns about the boom and bust cycle management wherein the production of commodities can be scaled up or down to optimize upon the pricing. Often the surplus of commodities would be parked in most secured manner as wealth hoard of the ‘nation’ rather than in market development. The result of this lack of risk taking has usually held up the efforts of globalization of the corporate in these commodity surplus nations. Not only there been a lack of corporate in globalized banking and infra-plays, but also their own infrastructure companies seem to be struck with inefficient technologies and processes. This is true about the rich as well as poor commodity surplus nations and there seem to be little exception.
So while the nations and entrepreneurs seem that they want to compete in global markets, however the policies and mindset prevalent in these countries including lack of experience to have a handle on the latest developments seem to have held back the entrepreneurs in these nations. This may also include lack of capital availability for the purpose. In fact curiously the manufacturing set ups in some of these countries might rather be more open to new customer acquisition in race to compete with other global players keeping the hopes of being a globalized power alive. Usually the demand is for far more predictable environs even as they are made to cope domestically with the near perilous commodity cycles.
The above partly explains lack of investments in shore based logistics segment, metro or railways or even food processing (many commodity nations import food in a big way) etc. from these countries or a lack of progress for the economic relationship. This might be true about not only with commodity power who may have minor political stakes but also those with a global or regional aspirations. It may not have helped that many commodity nation are run by rather dictatorial set ups with lower level of devolution of powers and lack of evolution of sophistication in management of complex globalized set ups. This is because the focus here is to conserve and save wealth, rather than to evolve a robust multi-dimensional economy and/or globalization of the economic canvass. Managing such complex structures would require devolution of power to competent professionals with their own political sound organizational structures and who would manage (often a clutch of inter-related) economic vehicles in line with global practices and feel comfortable in charting the course in a dynamic ever evolving economy.
It is also ironical that hold on commodity as a wealth generating tool is cynosure for greed with many competing powers vying with each other for influence over such wealth. The manufacturing oriented wealth generation with its inherent complexity has actually proven to be better managed and the competition here is basis professional qualifications. While there may be quite a few exceptions, however the line generally hold true except that even managing commodity based set up require at least some degree of qualification even if not cutting edge of skills. With the current rummaging of commodities and continued onslaught, let’s see if this ‘game’ changeth…