President of Brazil Luiz Inacio has put this way the current economic mess is the fault of “white people with blue eyes”. He means the greed of the rich people in the West is responsible. He later accused the US government officials of corruption especially as they facilitate the drug trafficking into the US. In 2010, the economy of Brazil is ahead of Canada's. China's is second to that of the US and ahead of Japan's. India's economy is matching that of Spain. By 2020, the US economy will perhaps slip to be number two after that of China. These changes are extraordinary. For the first time since the Second World War, the West will not be leading the world economy and dictating its financial policy. China is becoming the number one foreign investor in Africa. It does not show imperial tendency and respect culture differences. Now the three largest banks in the world by market capitalisation are Chinese. China is now calling for a switch from the American dollar to gold or another new international currency as the currency for international trade and as a reserve currency. China's call is made despite the fact it holds about $1 trillion in US government debt. India's Tata group is taking over the UK's Jaguar and Land Rover. China bought Volvo from Ford. The US is resisting the takeover of its car manufacturing giant GM by Japanese or Korean counterparts. Similarly, American financial institutions are resisting the takeover by their Chinese counterparts. Western management has failed and will not survive despite the massive bailout by tax payers unless a great deal of change occurs. The current crisis has demonstrated that the rich tend to get richer not only at the expense of the poor but at the expense of the system if a massive reform is not put into place sooner than later then the same will happen. The way the US market functions raises two major issues. One is the relation between individual desires and collective interests; and the second is the tension between optimum short-term adjustment and long-term development. The thesis that the first issue can be resolved by itself has been proven a failure as in order to work it assumes that honesty is a major force in the market. Similarly, short-term adjustment can threaten development for the long term. Americans have for long a dogmatic faith in the virtue of ‘the Market'. The current economical crisis is a wakeup call; as brutal and load as it can get. The end result of all this is what we have seen so far; nobody can put together a workable strategy for putting the US economy back on sound tracks, even the leaders at the recent G-20. The old model is still in operation; recession causes the massive layoffs, followed by rehiring when the time is right. This is at odds with other models where highly qualified workers are regarded as important human resources and treated as valuable assists. Protesters at the G-20 meeting in Toronto were demanding that the leaders pay attention to the masses, which are losing their jobs, their pensions and their savings, not only listening to the rich and powerful few. However, corporate media calls the protesters “anarchists” a term which should be reserved to those bankers who created this mess in the first place and on top of it all have rewarded themselves with genourse bonuses. The media has made the clashes with police the main story, not the protesters' demands. The fact that the leaders of 20 nations rather than the usual eight were attending the summit is significant. Now the Brics; Brazil, Russia, India and China will attend any economical summit. “We abolished slavery; we abolished Jim Crow laws; we abolished child labour; we abolished the exclusion of women from voting; we abolished the 60-hour work week,” said Kiven Danaher in his book 10 Reasons to Abolish the IMF and World Bank, “and we can abolish international banking institutions that do more to prevent (global) democracy than promote it”. His statement was true now as it was 10 years ago when he made it. What is the world needs now is a power shift from the corrupt greedy few to the needy masses who after all is the world majority. Elmasry is a Professor Emeritus of Computer Engineering, University of Waterloo. He can be reached at [email protected]
