Bloody shovel

Don't call it a spade

QUANGO empire

What pushes Globalisation? Michael Pettis says that Globalisation is caused by inflation. Which is an interesting theory. But I’m not here to talk about economic theory. Let us say in more general terms that Globalisation has two vectors. One is economic; globalisation is pushed by money in search for yield. The other is ideological; globalisation is pushed by a faith in search for converts. Both can work together and add impulse to the process, but they don’t always do, and sometimes they work against each other.

I’ve been blogging for a while about the last addition to the Cathedral’s empire, Myanmar. What was until last year an isolationist military regime has in a very short time unconditionally surrendered to the US State Department. The US was ecstatic for having acquired a big vassal with 60 million people in China’s backyard. Clinton was there, Petraeus was there, Soros was there. The generals went home, elections were held, press controls abolished, the internet legalised.

I’m presently in the international trade business and I hear and read every day how the hype about Myanmar built up among the business community. Famous Soros disciple Jim Rogers is on the record for his excitement about a new virgin country ready to accept investment dollars. Asia Business has for two decades already meant almost exclusively China, the only place in the region where consistent profits could be made. But China has already grown a lot, salaries have been getting higher, and the government has stolen most of the foreign technology it wanted, so China is not as accommodating to foreign companies as it used to be. Many companies are looking for alternatives, and Myanmar’s surrender came just in the right time.

China Law Blog is a very good blog written by a team of lawyers in China. They especialise in working with foreign business in China, helping them with their legal problems there. Their position means that they have very good information on the general mood in the market in China and the whole East Asia region. As part of it they went to the first Myanmar Investment Summit that was opened in Rangoon earlier this month. The 1995 website design didn’t stop hundreds of foreign companies from attending the summit and listening to the Burmese government new policies.

The conference started well, with the new government clearly stating its new allegiance to Western values.

Stage 1: Transition to a stable, open political system. This stage includes at least the following factors:

a. Participation of all parties in the government. The recent participation of Aung San Suu Kyi’s New Democratic Party in the parliament is an example of this process.

b. Accommodation with all minority groups. The government has signed peace treaties will all the important minority groups (Karen, Kachin, Shan, Chin, Wa, Mon) and intends to bring these groups into a multi-ethnic union of Myanmar where their interests are respected.

c. Termination on restrictions of information. This will be manifested in several ways: free press (newspaper and magazines), open internet, general access to mobile phones and other forms of communication, free and uncensored publication of books, access to foreign newspapers, periodicals and books.

See? It seems like some American Political Science Professor drafted the whole thing. Elections! Multi-culturalism! Free Press! If Fukuyama were right, Myanmar would have jumped from the darkness into the pinnacle of history in just a semester.

Imagine the hundreds of new jobs for the Cathedral youth. Political advisors and marketing consultants for Aung San’s party and her friends’. Cultural anthropology grads and human right NGO activists flooding the country’s borderland to ’empower’ the tribes and document their victimisation by the Evil Racist Burmese Patriarchy. And foreign press agencies free to roam the country and report the crucial opinion of the activists mentioned above. All in a cultured and mild mannered Buddhist country where young girls from rich families won’t be gang-raped (though some might miss it).

The businessmen present were probably all smiles after seeing a foreign government give such profound reverence to their Values. These people are embracing human rights, like we do. This fellas get it. Let’s see what follows.

Stage 2: Reform of the financial system. The government is working with the IMF to entirely reform the domestic financial system. The first step was to unify exchange rate conversion. Myanmar until recently had five different exchange rates. These have been eliminated in favor of a single exchange rate that more closely reflects the value of the Myanmar currency. The next steps will be to modernize Myanmar’s banking system and integrate that system with the world system. Eventually, this will involve partial or complete convertibility of the Myanmar currency.  Finally, Myanmar plans to open a stock exchange within the next five years. The goal is to fully internationalize the Myanmar economy within a five-year period.

Hehe. Convertible currency. Stock exchange. Integrated bank system. Did I mention that George Soros has already set up shop in the country? Bankstas around the globe rejoice. They are going to have fun.

All this is nice and good, but what about talking some business? We’re here to invest and make money.

Oops, not so fast.

foreign invested enterprises are treated dramatically differently than domestic enterprises. For example, a foreign invested enterprise cannot lease a building for a period greater than one year. For longer periods, foreign invested enterprises must rent land and build the related buildings at their own expense. The resulting lease is limited to an overall term of 60 years, at which time the building and land revert back to the government. Second, all foreign investment projects must be approved by the central government. Local governments are not permitted to grant such approvals. Many business terms such as the price of leased land must be approved by the central government, preventing private business people from negotiating their own terms.

The central theme is that the government desires to increase GDP and to allow the benefits of such increase to accrue to the people rather than to government officials. Though FDI will be a part of such GDP growth, the government is still concerned about preventing foreign investors from obtaining an unfair advantage over the local people. For this reason, the government still insists on restrictive terms for foreign investment and still insists on remaining actively involved in investment decisions to “protect” the people and the assets of the country. In this way, the opening to foreign investment on the part of the government can at best be termed half-hearted.

China Law Blog’s lawyer elaborates here. It seems obvious that the Burmese government is not interested in letting foreigners profit from their investments in the country. All projects must go through the central bureaucracy, which at present, is taking 6 months to decide on anything. And that’s now when not much activity has started. Myanmar is choosing democracy before development, it has surrendered to the Cathedral, but not to global corporations. You could say that Myanmar is the private fief of the State Department, instead of most American satellites which were conquered by the Pentagon and colonised by Big Business.

Cui bono? The Cathedral priesthood and Wall Street. In 1840 the business community was so strong that they commanded the Royal Navy and forced China to buy their opium. Missionaries also went through, but failed to achieve much impact. The tides have changed now though, the zealots have got their upper hand, and the fight for progressive souls has become more important than profits.

Look at one comment in the article, which as I said is focused on business in China:

What was your experience with the repression of the Rohingya?

Now that’s important!

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14 responses to “QUANGO empire

  1. thrasymachus33308 July 9, 2012 at 21:00

    Big profits in the East is a very old dream of Puritan/Quaker businessmen. My dad used to talk about a book from the 30’s, “600 Million Customers”. A commenter on my blog said it was published by the Union for Democratic Control, a Quaker anti-war group. I suspect the reason Quakers don’t like wars is that it interferes with business.

    But this dream is a chimera. Read “Poorly Made in China” for the reality of doing business there. The Chinese are not eager to help you get rich by making products for next to nothing that you can sell at a big markup in your first world country. They are out to make all the money themselves, and will screw you blue to achieve that. But you can see that businessmen are in love with the idea of making a fortune with Chinese-made products- they have given up on selling stuff in China- and even bitter experience doesn’t shake them from this dream.

    • spandrell July 10, 2012 at 10:51

      I’ve done business there. It’s not that bad, the government was extremely helpful on the early days. But of course the game is rigged to in the long term leech foreigners of their capital and tech for the natives’ profit.
      I don’t blame them.

  2. asdf July 10, 2012 at 14:23

    I respect what the Chinese are doing. If they played the game any different they would be pussies or fools.

  3. bbanner July 11, 2012 at 11:39

    How do you explain that Japan has been mostly spared?

    • spandrell July 11, 2012 at 12:26

      They’re smart. The McArthur administration saw shitloads of Cathedral minions in Japan, setting up trade unions, establishing women suffrage, abolishing nobility titles, giving land to the peasants. The 1948 Constitution is their finest work.

      But once they left the old, pre-war bureaucratic elite just worked hard to reestablish the old system. What could anyone do? The US was tied in Korea and the cold war, and Japan bought much goodwill by being friends with the Pentagon.
      If the US started to send again missionaries and meddle in Japanese society, they would kick out the Marines and sell out to China in no time.

      • asdf July 12, 2012 at 14:42

        Exactely. Having an ally in the cold war trumped cathedral goals when it came to Japan.

      • Vladimir July 13, 2012 at 18:45

        This can’t be the complete reason, because it would also apply to a bunch of other countries. Why didn’t the same thing happen in West Germany, for one? And even those overtly non-Cathedral regimes that were tolerated for a while because they were useful for the Cold War (Spain and Portugal) eventually went ultra-Universalist.

        The key to the spread and hegemony of Universalism is that it co-opts the domestic elites with irresistible force. Once the elites of a country are exposed to overt Universalist influences, it typically takes only one generation (or even less) for them to transform the country into a Universalist satrapy, driven by the sheer desire for status (and, to a lesser extent, the Cathedral money and patronage). This mechanism is far more important than any threat of U.S. armed intervention. (Consider a country like, say, Poland that is still fairly traditionalist, so much that open borders, gay marriage, etc. are still unimaginable there. The Cathedral won’t bomb then into submission just for that — but it is, as we speak, indoctrinating their elites to be ashamed of living in such a backward and unenlightened country.)

        The key question is why the Japanese elites are largely immune to such influences, even though the Cathedral seems to be trying hard. It’s a striking contrast with all the European elites after WW2.

        • spandrell July 13, 2012 at 19:09

          They are in no way immune, Japan has extensive welfare, porn, homosexuals on TV, teacher unions, marriage 2.0, and feminism is slowly getting track. Japan has the most typical progressive disease: low fertility.

          Really the only thing that Japan doesn’t have is large scale tropical immigration. They have some, but very controlled.

          Thing is Japan is mostly rational about what parts of the progressive creed they adopt. They can be coerced into playing game, but they can’t be ashamed into it. Why would they be ashamed of not being white? They aren’t white.

  4. fnn July 11, 2012 at 17:51

    “But once they left the old, pre-war bureaucratic elite just worked hard to reestablish the old system. What could anyone do? ”

    Do the Japanese have a “group evolutionary strategy ?” I’ll have to ask KMAC about that.

  5. RS July 12, 2012 at 16:07

    > How do you explain that Japan has been mostly spared?

    NYT op-ed types aren’t exactly pleased about the failure of ethnomasochism there. And of course the game isn’t over quite yet.

    Some say Japan is slightly fortified against Western decadence by its history of hostilities with the US…. not least, the psychological spectacularity of the a-bombing. Whereas Korea (South only I think) was liberated from Japan by the US, and then SKorea was protected from DPRK, a force we can call ‘imperfect’ at the very least. Were they then simply incorporated into the empire of the liberators? I suppose the answer is yes, more or less — but they got decent terms for a long time in a lot of ways. For all I know the West has been vectoring some lousy memes in their direction since 1945, but at least they weren’t subjected to mass foreign colonization until a good ways later than that. So it’s not hard to see why SKoreans could be stronger occiphiles than the Japs: they’ve simply benefited a lot from us in certain senses, even though I realize DPRK or (perhaps somewhat more doubtfully) EAsian Co-Prosperity might have effected their long term preservation where we effect a sort of thousand-cuts narcogenocide on them.

  6. Mark July 15, 2012 at 03:13

    Here’s a good article on how China’s financial system is structured to not reward capital as much. I suspect it’s what drives much of the hostility and criticism of China by globalist elites and the calls for it to reform its political economy and financial system:

    http://ftalphaville.ft.com/blog/2012/07/12/1080091/china-as-a-post-capital-economy/

    In the developed world, the economy is generally seen through the prism of capital; the stronger the outcome for capital, traditionally, the stronger the perception of the entire economy. Falling or negative returns on capital are a sure sign of economic weakness reflecting the end of a period of over-investment, which is naturally followed by a period of under-investment. This is the business cycle.

    In China, capital is just one piece on the board where the aim is to raise living standards of all households. As a result, capital is used and treated remarkably differently, often to the consternation of external observers and investors.

    At a macro-level, the higher allocation of capital in China has led to falling profit growth and lower returns for capital. Compared to its BRIC (the Brazilian share market, Russia, India and China) counterparts the Shanghai Composite has been staggeringly bad. Since 2004 Brazil is up 167%, Russia 176%, India 197% but China is up just 46%, despite higher growth rates.

    But, strong investment has a very positive macro corollary; it improves labour productivity and allows wages to rise. Chinese wage growth, in real terms, far out-strips wage gains in other BRIC markets. Since 2005, Chinese wages have doubled yet wages in Brazil and Russia are up just 26% and 48% respectively.

    By not using capital returns as a scorecard for economic progress, China improves the allocation of capital in its economy and raises living standards. Effectively, China takes a broader perspective to the value of capital in an economy.

    China through the prism of financial markets is not a welcoming economy for capital. Capital returns are low because of competition, a closed capital account that makes capital abundant and companies that have more than just financial motives in mind when they invest. It takes some skill to identify those opportunities in China that can offer a sustainable long- term return above the cost of capital. But this frosty welcome is positive for the broader economy.

  7. Mark July 15, 2012 at 06:25

    While China is relatively secure at this point, there’s lots of pressure from the globalist elites who wish to subjugate or incorporate China into the globalist control network, like it has with Myanmar and other places.

    The globalist elites still have lots of cards to play. There’s the US military which surrounds China along the Pacific Rim and on mainland Asia in Korea and SE Asia. There are American vassal states in Asia. There are the minority groups such as Tibetans, Uighurs, other Muslims, etc. that can be stirred and agitated into separatist movements, terrorism, etc. There’s of course influence transmitted via culture and education, and lots of Chinese study in American universities and look up to American academia. And the globalist elites cultivate Chinese who can promote their interests. Such as the artist Ai Weiwei, who’s only known not because of his art but because he’s a public, outspoken, political activist against the Chinese gov’t. Liu Xiabo, who was awarded the Nobel Peace Prize in 2010, is a political dissident who is promoted for the same reason. He wrote a manifesto called “Charter 08” (http://en.wikipedia.org/wiki/Charter_08) which has basically the same content as the statement by the new Myanmar gov’t posted above and is basically a pledge of allegiance to the Western Cathedral values. And there’s just good old fashioned bribery – Western globalist elites have made it very easy for foreign elites to pull capital out and settle in the West. There’s less incentive to do the hard work of the independent stewardship of a giant country if you can just get yours and get out.

    • spandrell July 15, 2012 at 11:52

      I think the only effective card is cultural influence with the Han youth, which is quite big. The present Chinese economy system is far from ideal, with corruption being BAD, and the fact that the CCP still pays lip service to ‘democracy’ and ‘serving the people’ means that people get uppity and loudly claim their “rights”.
      I always wonder if the US will succeed in corrupting Chinese politics, or China will stand when the US collapses first.

      • RS July 15, 2012 at 17:08

        Subject to technological advancement as an X factor, the US should decline noticeably from 2008, though it may not collapse for a long time. Even though we are way behind you Europeans proper in the insolvency game, I think we have the potential to pass you by and to lead you in general decline, at least until a time such as 2060 when you will be more apt than us to face open racial warfare. I think and hope that the attempt to ruin China will stall out long before 2060 ; I hope that general occidentalism over there may level off in the next few years, stay level for five years or so with one eyebrow raised as the West struggles, then crash ~2020 when it becomes clear that the West cannot resolve, or even make great progress on, setbacks dating from (at least) 2008, twelve years prior. It’s one thing to have a lost decade ; stuff happens. But at the end of the decade, you are written off. You obviously aren’t equal to whatever the challenge is or may be.

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