The academic concept of globalization creates challenges to the thinkers of philosophical politics and economics from then and now. The constant changes of market behavior and the general public reactions to the overall economic landscape creates dilemma in global political congruency. The academic insights of Joseph Stiglitz give a perspective both as diplomats and as world citizens. His experience in IMF during the Clinton administration gives more relevance to his opinions as to how IMF and the economies around the world are interacting with all the variables that affect both international and domestic economies. The first thought of Stiglitz that gives importance to the concept of financial economics of today is the promise of institutions around the world to achieve a harmonious world order or the globalization.
The congruences of civilization around the world are but so challenging given the fact that our political philosophies vary from our cultural background. As the economic landscape reveals its evolution from more concrete material things to a more data driven economy, it is but obvious that the challenge of IMF and other global institutions are in a dilemma of a slow upgrade of diplomacy mechanism compared to the rapid change of world culture. Many known Anthropologist and Sociologist are hastening their hypothetical concepts in their findings in terms of the evolution of social science and the effect in social engineering. Thus, social engineers are finding the right functions to make the concepts in a useful way in this material world using the tools in calculus and geometry. Just like the old days when the thinkers are trying to measure the cosmic theories and conceptualize in the material world. Moreover, the recent massive flow of data on the internet that will shape the future of hastening the dream of fast mobilization in economics will eventually jive with the variance of international governance and diplomacy. Likewise, in IMF as J. Stiglitz emphasized, challenges that are faced by IMF today are the countries or civilizations that are less educated in general and are not receptive to the new scientific and technological finding that are deem in contrast to the old and ineffective ideological beliefs. As a general scientific belief that scientific concepts and ideas are only helpful when it is materialized creating concrete mathematical functions like calculus and geometry.
Indeed, Philosophers are getting crazy in creating their wild academic imagination while the engineers are “rolling their eye balls” in proving the concepts from philosophy to the material world of calculus and geometry. Logic through deductive and inductive reasoning will prove a conclusive theory but the challenge of todays world diplomacy is the rapid change of social behavior around the world that governance needs the aid of the modern computing in terms of the exact policy implementation. Take for example in the world of business, most of the stock markets around the world today are using the aid of computing to help investors in managing their financial capitals around the world. Indeed, IMF and WTO has the higher probability to predict the right conclusive forecast in any given empirical observation from the countries of the Africas, Asia, Europe and the world. Furthermore, the redundant problem of IMF today are those national governments that has huge debt to the world bank that in a relative manner the allocation of the said financial assistance from the World Bank are not utilized in a productive manner. Many studies and observation in the website both IMF and the World Bank that these countries that are having a lot of challenges in governance of their domestic economies are also the countries who are having a “PERPETUAL DEBT” dilemma towards the world bank.
The awkward diplomatic format that I can conceived in this matter is that, when a country or a leader of a country is eager to borrow money from world bank but has a huge record of cash deficit that the fundamental concept of the role of GDP to the capital market is below zero. But then again IMF has a task to fuel cash through world bank regardless of the financial status of the country. Unlike private investments, financially well-off international investors will always have a team of financial analysts and researchers to analyze the company if the given company is worth for the investment. But on the contrary IMF has no way out of not financing the third world countries given the task that IMF is part of the global institution to normalize the variance of rich and poor nations around the globe. Thus, the mind of the discontented will fuel hatred to the country with governance handicap that will lead to radicalism in terms of nation diplomatic understanding that to some third world countries it will extremely lead to terrorism. Thus, the concept of digitalization of government entities of today will help greatly in managing political governance with accurate scientific data analysis output.
Indeed, from smart cities to smart agriculture program all are in the system of the new world of data that it is easier for government management to decide any given diplomatic scenarios even based on real time data output. In the aspect of IMF and WTO it is a huge challenge for data analytics to conclude the real time effect of a nation to the international economy. Take for example the recent effect of the war in Ukraine and the food crisis and inflation. Countries around the globe has different economic reactions towards the case in Ukraine and Russian War. In terms of the monetary funding, the flow of budget today specifically to the NATO countries are focused in supplying military tactical goods towards Ukraine. Direct or indirect it will affect the world that these economic imbalances will challenge the analytic capabilities both the IMF and the World Bank how to save the world in terms of inflation and eventually recession just like what happened during 1997. Moreover, the economic and financial tag of war between China and America must reach to an amicable settlement or else Asia and the world will suffer the economic and financial pressure given by the two giant economies in the pacific.
The science of money through the scientific mechanism of finance and accounting will balance the economic landscape of Asia and the world. Given the notion of Francis Fukuyama and Peter Frankopan that Central Asia is the future of world civilization or to some they say that “East is the new West”, IMF and the World Bank must double their scientific and empirical studies in central Asia given the fact that central Asia is the future driver of the world economy. Indeed, the effective economic diplomacy of China in the countries of Central Asia will reconnect the depressed economies of the East and the Africas using the concept of DIGITAL SILK ROAD program of China that will connect the huge pipeline of information data to the world specifically IMF and World Bank. With this concept world economic poverty can be at least lessen in terms of the variance of the rich and the poor countries.
Having said in my previous blog that “Asia is the new Rome” thus IMF and World Bank must create a way or reformat the policies in Asia that will secure the financial flow of liquid assets coming in and out from Asia to the world. A relative case that happened in US in the case of fannie mae and freddie financial mac (FannieMae and Freddie Mac: a case study in the politics of financial reform | EmeraldInsight) that the US government created the Sarbanes Oxley Bill to require every private companies specially huge companies that gives relevance to the economy of U.S. to submit financial report to the government. G.E. and other huge companies in Detroit are in a domino effect during the recession in the US. The thing with financial economics is that only the policies and revising those policies will secure the central bank of the country and the World Bank as a whole. The problem of the thriving third world countries is that when IMF will give the financial assistance, the domestic policies are not that accurate in evaluating the ROI or the Return of Investment that in the end the given country will have a problem of “PERPETUAL DEBT”.
DATA REVOLUTION (The New World Economy)
Thus, IMF and the World Bank has a huge part in evaluating the domestic projects of the country to make sure that the allocated financial assistance will not result to nothing. The verge of the global melt down during 1997 started from East Asian Crisis that affected all over the world. With the War in Ukraine I believe the IMF and the World Bank cannot afford more global financial shake that will inflate the prices of the basic commodities and lower the value of the various domestic currencies around the world. The global financial flow of assets is like liquid water inside a backet that even a small hole in any part of the backet will result to a problem. The good example of the 1997 crisis will show that any country that is having a problem of inflation could be a trigger point for a global financial crises. On the contrary, the financial crisis in Greece resulted to chaos of the public and bank run, that the effect of the financial crises rippled throughout Europe.
DATA Driven Economy
4th Industrial Revolution (next to my blog)
Note that the two world wars
from world war 1 to world war 2 all started with a crises. As a thought, maybe
those countries who are in a serious financial
crisis and inflation are the ones who
are initiating world war? Who knows. The old concept of “ORDER IN THE MIDS OF CHAOS”
is already ineffective in terms of governance.
Today, chaos is just plain chaos that will ruin the domestic economics. To prove, the case of the war in Ukraine are
both disturbing the society of Russia
and Ukraine and also the world at
large. Order, or what we all dream of
Global Order must be based from scientific reasoning in a rapid data algorithmic
sequencing driven by e-government and later AI will assist the leaders of
nation in managing civilization. In the
conclusive chapter of the book of Joseph Stiglitz emphasized the 1. REFORMING
THE IMF AND THE GLOBAL FINANCIAL SYSTEM 2. REFORMING THE WORLD BANK AND
DEVELOPMENT ASSISTANCE. Could it be that
this is the time for the AI program to be integrated in IMF and World Bank
operations around the world? From smart city to smart government and now we
have an AI driven IMF and World Bank.
Indeed, we are entering the era of DATA ECONOMY.
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