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Global Crisis/Innovation Management

What in the World Is Going On?

By Shlomo Maital


      Are you as baffled as I am by the unfolding chain of events in the world, each one improbable and trouble? 

     What in the world is going on?

    Here is my take, based in part on the keen-eyed observations of a friend, a senior Asian diplomat. 

  • The Arab Spring.  Whoever called it “spring”? It feels more like fall, or a fall.  It is not, as the media romantically portray it, a democratic uprising, but rather, soft coups, take-overs by the armed forces, especially in Egypt.  The only forces organized enough in Egypt to gain control are the Army and the Muslim Brotherhood and in the end they will share power.  For this crucial nation, the future is not bright, nor is it bright for their neighbors.  Chaos never helps anyone. 
  • American debt ceiling:  The damage has already been done, whatever the intransigent Republicans and the indecisive Democrats do.  America should be stood in the corner, like a naughty child. Here is the simple reason why.  America built the current global system, built around the US dollar as the key global currency, and in doing so, back in 1944 (at Bretton Woods), promised to run its money responsibly, with the interests of the world in mind.  But, as former Texas Governor John Connolly once said, “it’s our money and your (the world’s) problem”.  So America has flooded the world with cheap bucks, and the result is to endanger world stability.  The U.S. debt ceiling crisis has been managed, as if America alone existed.  And the ‘collateral damage’ Obama referred to is not the American people, but innocent bystanders, 7 billion of them, around the world.  This is immoral and irresponsible behavior, unforgiveably bad behavior by America, and the damage is permanent. America will not regain the trust and credibility it once had, in the eyes of the world. 
  • Europe:  No, it’s not about Greece. It’s about wealthy northern economies doing well, and poor southern Europe economies doing badly, and the rich in the North doing nothing to help them, except hassle them to pay their bills.  Europe is now a mixture of competitive economies doing well and uncompetitive economies doing badly. For the latter to do well, they will have to undertake painful structural changes, which none of them are equipped to do.  The only result can be a split, because the current situation is unstable and will bounce from crisis to crisis.  No-one is addressing the question: How will the southern economies build a winning global competitive strategy?  How will they rebuild some sort of strategic competitive advantage?  No it is not about debt – it is about how people will make a living. 

Mideast, America, Europe.  About half the world’s economy is in deep trouble, and the source is all the same – political mis-governance, and in some cases, too much democracy rather than too little.  (If the system is democratic, what group of people will ever vote to impose serious pain on themselves, in the short run, even if long run gain is assured?).    

   This may all seem very pessimistic, but it is not.  There are huge opportunities in this mess for creative clever people who want to do good, who know how to run organizations and build ideas, and act to create value and meet needs.  Don’t wait for the politicians.  It’s up to you and to me. 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
July 2011