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: