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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?


To: IQBAL LATIF who wrote (48906)8/19/2005 8:29:51 AM
From: IQBAL LATIF  Respond to of 50167
 
Threat from China May Be Empty
Print Mail

By Desmond Lachman
Posted: Tuesday, July 5, 2005
ARTICLES
Australian Financial Review
Publication Date: July 4, 2005

Every few decades, the United States manages to worry itself about a supposed threat to its global economic leadership. In the 1950s and 1960s, there was fear that the Russians, with their planning approach to economic development, might pose a serious challenge to US economic hegemony. In the 1970s and 1980s, it was the Japanese whom we feared for their supposedly superior corporate model for the economy.

Today it seems to be the turn of the Chinese to worry us with their very large population and their enviably high rates of domestic saving and investment. However, a closer look at the Chinese economy would suggest that China’s economic threat to US economic dominance could prove to be as ephemeral as did the earlier Russian and Japanese threats.

The consensus view on China’s inevitable economic emergence is perhaps best encapsulated by the following quote from Martin Wolf of the London Financial Times. Earlier this year, he wrote: “Almost two out of every five people on the planet are either Chinese or Indian. China alone has more people than Latin America and sub-Saharan Africa combined. The economic rise of Asia’s giants is therefore the most important story of our age. It heralds the end, in the not too distant future, of as much as five centuries of domination by the Europeans and their colonial offshoots.”

On the surface, Martin Wolf’s assertion about China’s inevitable rise has certain plausibility. After all, with more than 1.3 billion people, China’s population is around five times that of the United States. Moreover, since Deng Xiaoping’s opening up of the Chinese economy in 1979, China’s real GDP has grown at an average rate of 9.5 percent a year. This growth has resulted in a more than ten-fold increase in the Chinese economy since 1979 to its present level of around $1,600 billion. As a result, the Chinese economy is now already around one eighth of the size of that of the United States.

China’s impressive narrowing of the economic gap between itself and the United States over the past twenty five years has paralleled in many ways the earlier economic miracles of countries like South Korea, Singapore, Hong Kong, and Taiwan. Like these Asian economic tigers, China too has based its economic strategy on export-led growth. This is reflected in the increase in the relative size of China’s export sector from 10 percent of its economy in 1990 to around 35 percent at present. At the same time, like the Asian tigers China’s economic growth has been fueled by a domestic savings rate in excess of 40 percent of its GDP.

Impressive as China’s economic growth to date might have been, the question needs to be asked whether China might not share some of the vulnerabilities that led to the Asian crisis of 1997-98. Might not China’s increase in its investment to GDP ratio, from around 38 percent in 2000 to a staggering 50 percent at present, expose China to a more severe investment bust than that which it experienced in the early 1990s? Or might not China’s excessive investment, especially in the speculative real estate sector, be compounding the serious bad loan problem in its banking sector? Already prior to the latest round of lending excesses, China’s banks were estimated to have non-performing loans on their books in excess of 50 percent of GDP.

At a deeper level, one also has to question whether China’s export-led model of development can be sustained in a world which is becoming increasingly resistant to globalization. Can China still really expect its economy to be fueled by the 30 percent a year type of export growth that it has experienced over the past decade? Is not the U.S. Senate, with its proposed 27.5 percent import tariff on China unless it revalues its exchange rate, sending China a clear message that it should no longer expect the United States to be China’s buyer of last resort?

Experience with all too many emerging market economic crises should have sensitized us to the folly of simply extrapolating China’s past impressive economic performance into the indefinite future. Indeed, China’s very large macroeconomic imbalances should be alerting us to the very real risk of a major reversal in China’s economic growth performance within the next couple of years. When that happens, the weak underbelly of China’s mixed economy will be exposed and we will be asking ourselves how we ever could have been worried about a Chinese economic threat.

Desmond Lachman is a resident fellow at AEI.



To: IQBAL LATIF who wrote (48906)8/19/2005 8:31:15 AM
From: IQBAL LATIF  Read Replies (1) | Respond to of 50167
 
Put Security Dollars Where It Counts
By Veronique de Rugy
Posted: Thursday, August 18, 2005

The surest way for a mode of transportation to get a boost in federal funding is for it to suffer a terrorist attack, anywhere in the world. When coordinated bombings on the Madrid train system killed 191 people in March 2004, the U.S. Congress immediately created a $150 million grant program for transit and rail security. Now, in the aftermath of the recent attacks on the London subway system, lawmakers are pushing for more. Sen. Judd Gregg, Republican of New Hampshire, proposes an increase of $100 million. Other senators want more: New York Democrat Chuck Schumer talks of $200 million, Alabama Republican Richard Shelby has called for $1.2 billion, and New York Democrat Hillary Clinton wants $1.3 billion. Of course, all of those numbers pale in comparison with the $6 billion sought by William Millar, president of the American Public Transportation Association.

Advocates of such proposals often point to the gap between spending on aviation security and transit security, but that is the wrong way of looking at the problem. Since the number of possible attacks is unlimited, while the resources we can devote to preventing them are very limited, spending decisions should involve careful cost-benefit analysis. Not every preventive measure is worth funding, and the greatest risks must be addressed first and most intensively.

While members of Congress often overlook this common-sense principle, homeland-security secretary Michael Chertoff has made it the foundation of his department’s philosophy. On July 14, he explained why he wouldn’t change his transit-security policy based on a single event, telling a reporter: “The truth of the matter is that a fully loaded airplane with jet fuel, a commercial airliner, has the capacity to kill 3,000 people. A bomb in a subway car may kill 30 people. When you start to think about priorities, you are going to think about making sure you don’t have a catastrophic thing first.”

His comments drew sharp criticism, mainly from Senate Democrats representing metropolitan areas with mass-transit systems. They argue that such systems are vulnerable to terrorists, as demonstrated by the Madrid and London bombings. But all transportation systems have inherent weaknesses; if the justification for federal intervention were vulnerability, every mode of transportation would qualify, and we would quickly run out of funds.

The truth that most people ignore is that not all terrorist attacks have the same consequences. The September 11 attacks claimed close to 3,000 lives in New York City. In comparison, a successful attack on the Washington, D.C., subway might kill 60 people; and, at the other end of the spectrum, the detonation of a less-than-perfect one-kiloton nuclear bomb in lower Manhattan would--in the estimate of the Federation of American Scientists--kill at least 200,000 people.

A glance at these numbers makes it clear where our priorities should be--but federal priorities have a way of defying logic. In the last four years, the Department of Homeland Security has spent $250 million on transit security and $18 billion on aviation security, suggesting that these priorities have been ranked roughly as they should be. During the same period, however, total spending on nuclear-threat reduction by the Department of Homeland Security, the Department of Energy, the Department of State, and the Department of Defense was just $4 billion, despite the fact that a nuclear bombing would be worse by several orders of magnitude than even the worst September 11-style attack.

Our homeland-security strategy should be altered to reflect the true dimensions of the different types of threat. Furthermore, we should assign the responsibility for addressing a particular threat to the entity most able to reduce it, and most likely to benefit from its reduction. Espionage, intelligence, and border protection benefit all of the states, so the federal government should invest in them. But the benefits of protecting subways and buses are enjoyed by the residents of a particular state, so these investments should be made at the state level. (That is not to deny the possibility that the entire economy might suffer if the subway in Washington, D.C., were hit by a terrorist strike, but rather that the principal economic impact of such an unfortunate event would be felt locally.) Moreover, most transit systems are regulated and supervised by state and local authorities, and it is local law-enforcement officers who understand their unique design characteristics. They are therefore more qualified than federal agents to protect them.

It’s noteworthy that state and local authorities dedicate little of the billions of dollars in federal grants they receive to mass-transit security. If they really think protecting mass transit should be a higher priority, they can begin by allocating more funding to that goal. In any case, throwing money at transit security is unlikely to help much. The London subway system is considered one of the best-protected in the world, required as it was to endure the threat of bombings by Irish Republican Army terrorists. Yet it was attacked twice in recent weeks, and the second attempted bombing--foiled only by a malfunction of the bombs’ detonators--took place while the subway system was in maximum-alert mode.

It isn’t surprising, then, that many analysts think options for preventing such attacks are limited. The difficulty of safeguarding subway stations follows from the fact that they are designed to be very open and give people quick access. You simply cannot install airport-style security screening in them without rendering them unable to perform their intended function.

So what is the solution? The attacker always has the advantage of choosing where to attack, and terrorists will look for weaknesses in our defenses just as Hitler’s army sidestepped the Maginot Line. Consequently, intelligence gathering and counterintelligence are often the most cost-effective defense. The federal government should accordingly devote a large portion of its homeland-security funds toward preempting attacks before they are set in motion.

The second-best solution is to mitigate the damage caused by an attack. Without knowing where or how an attack will occur, authorities can lower expected damage by developing plans to manage the attack’s aftermath. In the case of a subway bombing, for instance, such plans might include developing effective means of evacuation, placing emergency equipment within easy reach, and training personnel to respond to emergencies.

Sen. Jeff Sessions, Republican of Alabama, has also made a helpful proposal: He would toughen penalties--and allow the death penalty--for attacks on mass-transit systems. While it is true that suicide bombers have little fear of execution, it is not necessarily the case that everyone who might attack a subway intends to die in the process. Such people can be deterred at little cost.

The surest way to obstruct the development of a successful defense against terrorist attack is to let our policy be guided by a series of knee-jerk reactions. Unfortunately, that is precisely what Congress is engaging in today. Until money is allocated on the basis of sound cost-benefit analysis, we will become poorer, but no safer.

Veronique de Rugy is a research fellow at AEI.



To: IQBAL LATIF who wrote (48906)8/19/2005 6:36:28 PM
From: IQBAL LATIF  Read Replies (1) | Respond to of 50167
 
From my sons blog..Travails of a signle day..

Friday, August 19, 2005
I was sparring with my father last night and persisted in my argument for sometime until I realised... dad is right; if, as my brothers and I believe, the fire of greatness burns then we should suceed in whatever endeavour we embark rather than merely fantasise.

I am nearly 21 with so many options, ideas and so forth but the discipline and consistency to pull them off isn't exactly there yet...

As my father's (by Sivanda, Indian Physician and Sage b 1887) quote of the day ; we have to conquer our minds and channel our ambition to become great... The full quote:

Make no violent effort to control the mind, but rather allow it to run along for a while, and exhaust its efforts. It will take advantage of the opportunity and will jump around like an unchained monkey at first, until it gradually slows down and looks to you for orders. It may take some time to tame the mind, but each time you try it will come round to you in a shorter time.

One doesn't become great when the flashlight of celebrity or notoriety hovers rather it is a constant even when brushing against triviality..

This is what the fellowship is alway about; a great enterprise run by people who have not committed great deeds but see in themselve a budding potential..

I dream of the person that Iwill become when successful but I must understand that person is me and I am just as capable now as I am in the hazy future. The same determination that I show towards my dreams I must show towards what I do now and the results will be self-evident. It is a belief that should be shared by more men.

Stay Hungry. Stay Foolish.

Zack out.

Zachary Latif 15:39