Susan Boyle: The Global Ambassador of Good Will

by Jamie Rhein on

If there ever was a Global Ambassador of Good Will, Susan Boyle, the woman who has wowed the world from her “Britain’s Got Talent” performance is it.

Ever since I saw the video, I’ve been enamored. First, there’s the song. Who hasn’t dreamed a dream of days gone by? The first time I saw “Les Miserables” I was living in Singapore. That musical seemed to seep into my pores. Hearing Susan Boyle sing reminded me of my first impressions, but more importantly, about what I think most world travelers know.

The world is filled with astounding people who surprise you when you have time to absorb the nuances of their lives. It might be the shopkeeper who puts fruit on a scale with a certain hand movement and a smile–or the way a woman sweeps a sidewalk in the early morning. It could be the way a group of school kids throw their arms around each other and tilt their heads back in laughter when they ask you your name. It could be that woman who could be age 40 to 80 who scoots over to make room for you to sit down on a bench. It’s hard to tell how old she is because her days are spent out in fields in the sun and wind. There’s something about the way she sits and how kind she behaves that is alluring.

Those people that attract us to them might be wearing threadbare clothes, have a tooth or two missing, and not have a decent pair of shoes, if any, but there is an essence about them that travel with us long after our taxi or bus has pulled away. When we go through our photos, we look for them–, and if we didn’t have our camera, wish that we had just in case the good feeling could be absorbed into a photograph so that we would have a prop to help us recall it at will.

Watching an inteview with Susan Boyle is a peek into a normal person’s life–the woman who might live in the house down the block or in the apartment on the third floor. She’s the one with the cat whose life seems to move through days like clockwork. If you stop by, she’ll invite you in for tea and you’ll feel comfortable and sane.

When we get busy about our days with billboards and TV commericals and the marketing of celebrity sameness, and stories about just what’s wrong, we can forget about what’s right. That a person like Susan Boyle can walk out on a stage, belt out a song with a triumphant lift of her arm during the high notes, and remind us just how great we can be. In today’s word, it’s also astounding that such a message can reach millions around the globe almost as soon as the magic begins. What better Global Ambassador of Goodwill is there?

Here’s a video I found with various shots of Susan Boyle in her world

And another one of her singing “Cry Me a River” that was published on a fundraising CD. Her performance wasn’t a fluke.

Sears Tower to be renamed “Willis Tower”

by Jeremy Kressmann on

Times have changed since Chicago’s Sears Tower was first built. Upon its completion in 1973, this 110-story Chicago monolith was proclaimed a modern marvel – a building that planted a massive stake in the ground for Chicago’s, and arguably America’s, architectural and economic dominance. Though the Sears Tower remains an important symbol in 2009, its preeminence in the “World’s Tallest Building” category has changed significantly.

Still, the news earlier this week that the building would soon be renamed as the Willis Tower comes as a surprise. Willis Holdings, a London-based insurance group that occupies more than 150,000 square feet of office space, will take over naming rights to the building in late 2009. This is in contrast to Chicago-based retailer Sears, which no longer leases space in the building and frankly, is struggling merely to stay relevant.

How is everyone reacting to the news? Chicago’s own Mayor Daley has feigned indifference. But coming from this Chicagoan by birth, I find the name change surprisingly affects me on a personal level, as if it was an affront to the pride of my hometown. Perhaps though the name is less important than what the building represents. To quote the great William Shakespeare, “What’s in a name?” Is anyone, tourist or local, likely to start calling the building the Willis Tower? I doubt it. Believe it or not, the Sears Tower is not the first Chicago landmark to be taken over by out-of-towners, and Chicagoans have learned to continue on with their lives.

Maybe it’s just a sign of the times – in an increasingly global world, it’s harder and harder for something truly “local” to remain that way. Whether it’s the authentic Japanese sushi you’re eating in New York or the London souvenir hoodie that was made in China. Travel is often more about your expectations of what a destination or landmark should be like, rather than taking it for what it truly is. For me at least, whether it’s called the Willis or Sears Tower, the next time I gaze up at that magnificent building I’ll see what I want: a landmark that continues to be truly one-of-a-kind.

[Via Buzzfeed]

What the financial meltdown means for the future of globalization

by Jerry Guo on

There’s been a lot of chatter recently over what the global financial crisis and impending recession means for the future of globalization. You see, critics have latched onto the recent failures of markets as the perfect argument for why we need to curb international economic integration.

Although many economists strongly argued for the impending dominance of emerging economies, I think the ongoing global financial crisis has really shown us that these developing countries have not decoupled from the developed ones. We haven’t seen an unwinding of the US current account deficit, for instance, and in fact, in the last month, there has been a flight to safety to the dollar.

Thus, one detail to keep in mind is that while the relative growth of these emerging economies is quite impressive, their absolute economic power still does not yet rival that of the US, Japan, EU, etc for dominance. Furthermore, the spread of the global financial crisis to emerging economies (salient examples include Russia and China) signal that these markets have not achieved a degree of magnitude large enough to have decoupled from developed markets.

So what’s really at stake here? It’s pretty much accepted science that globalization, taken as a whole, has helped mankind to an unimaginable extent. That’s not really being debated now. But that doesn’t mean there aren’t losers.
For me, one salient question is whether globalization helps or hurts the poor. But what makes this debate so difficult is that both sides tend to pick and choose their evidence. For instance, depending on whether the poverty line is set at $1/day or $2/day, income inequality can be made to appear like it is shrinking (using the former) or expanding (using the latter). The same goes for calculating income distribution using household surveys (increasing income gap) versus national accounts (decreasing income gap).

Thus, there is this ever-shifting line in the sand for determining when globalization helps and when it hurts. So I think this debate really becomes a framing problem. That is, are we talking about a Rawlsian “veil of ignorance”, a bottoms-up view where gains for the majority must not come from losses to the minority, or a Millsian utilitarian approach to social welfare, a top-down view where the greatest good to the greatest number of people is what counts.

What we find from behavioral economists is that the Rawlsian paradigm (anti-globalization in this context) may be hard to fight, as “people are reluctant to harm some people in order to help others, even when the harm is less than the forgone help. Although there were certainly authors who championed the all-powerful forces of free markets to do good, I tend to side with the critics who say we need to move beyond utter reliance on markets.

“Most academic agree that markets, by themselves, do not lead to efficiency; the question is whether government can improve matters,” said Economics Nobel Laureate Joseph Stiglitz. When it comes to alleviating poverty and income inequality, I believe the government must be a force greater than the invisible hand.

Now, with any discussion on globalization, we can’t help but talk about China. As I read the gushing hyperboles on China, one big question I keep asking myself is “Can anyone compete with China?” They have an enviously high savings rate, a huge foreign reserves warchest, and the world’s largest population. Obviously, they do not hold a comparative advantage in everything (especially in industries requiring heavy skilled labor), but, some economic models indicate China’s growth will lead to some global losers, such as Singapore, the Phillipines, much of South Asia, and Europe.

We also know from recent research that Africa hasn’t been able to compete with China. Yet the only recipe for growth for many of these lower-end third-world countries, such as India, is an export model based on labor-intensive manufacturing. Ironically, China’s wild success with this model may remove it as a long-term competitor, as we’ve already seen wage rates on the coast skyrocket. Thus, there just may be hope yet for other countries looking for a piece of the pie.

A related question is if China’s rise detract investment elsewhere? Would Vietnam be more seeing higher growth if it wasn’t so close to such a global star? Upon closer introspection, I would argue this is not the case if global savings is liquid and we do not presume there is only X dollars to go around. Now that China is moving into more skilled industries, textiles may move to Vietnam, and thus, investors may move capital (that they may not have invested at all otherwise) there to seek higher returns. One caveat that many of the author failed to explore, furthermore, is that China’s growth means a burgeoning middle class (45% of its population by 2020 some estimate) that will stimulate global demand and consumption.

Another topic definitely worth addressing is the rise of multinationals from emerging markets. An Economist “special report” on globalization from this Sept said that 62 of the global Fortune 500 are from emerging markets this year, up from 31 in 2003, and expected to “rise rapidly.” Here’s why this trend is significant: we are no longer seeing globalization as a one-way street from the developed to the developing world. Rather, these emerging markets are actually investing and expanding into the US and Europe. Take Lenovo, which bought out IBM and discarded the IBM logo last year, confident that its Chinese-brewed brand was good enough to go global.

One surprising study from a couple months ago is turning the idea that China’s growth harms American workers (by depressing wages or even shuttering jobs) on its head. A must read!

I would say globalization, either through trade or capital flows, cannot pull a country out of poverty. Two-thirds of India’s children drop out of school before 8th grade. And thus, social improvements (such as education and healthcare) and physical infrastructure improvements (roads, telecom, energy grid, etc) need to be prioritized by the government, and this in turn enables globalization to power the engines.

I think an interesting lens to examining globalization’s impact on emerging markets is to look at the differences behind China and India, where China’s recent growth has been doubled that of India. Before doing the readings, I had thought it was mainly due to the greater trade liberalization of China. But China has fundamentally better infrastructure, not just socially and physically, but also in regulatory and financial aspects. Other reasons for why China has achieved greater success include the lack of protectionism for small-scale industries, looser labor laws, and the most intellectually-surprising possibility, a more homogeneous society (Sweden and Japan are similar models).

So what’s up with Iceland’s ‘national bankruptcy’? A possible explanation

by Jerry Guo on

Hidden far away in the North Atlantic, Iceland may seem like one of the last outposts for globalization to reach. One economist stressed that a century ago, Iceland was essentially Ghana in terms of economic development. And even as late as the 1970s, Iceland still remained one of the poorest countries in Western Europe, with a major portion of its economy reliant on fishing. Yet today, Iceland is, according to the United Nations Human Development Index, the most developed country in the world, with one of the highest rates of life expectancy, literacy, and per capita GDP.

So how has Iceland gotten where it is today and what exactly went wrong in the last month?

The answer to both is financial globalization. The very forces of global integration, which led to deregulation of the banking sector and creation of a national stock exchange, nearly pushed this distinctly first-world country a few weeks ago into “national bankruptcy,” in the words of Prime Minister Geir Haarde.

What’s really scary is that the on-going Icelandic crisis has been in large parts an external crisis of confidence. Its three major banks were quite well-behaved, with little exposure to the “toxic” subprime loans we’ve all heard so much about. But ultimately foreign lenders to Iceland’s banks did not see the government as a credible lender of last resort. In other words, although the banks were too big to fail, they were also too big to bail (out).
On many fronts, Iceland’s economic report card is sparkling clean: the country boasts of a fully-funded pension, a strong financial regulatory agency, low unemployment, and high growth. In particular, Iceland’s banks have become a success story for financial integration, having fueled much of the country’s economic growth in the past decade. While the fishing industry’s share of GDP declined from 16% in 1980 to 6% in 2006, the finance, insurance, and real estate industries together saw an increase from 17% of GDP to 26% in the same period.

However, with a population of 300,000, or roughly one-fifth the population of Manhattan, this tiny island did not have the internal capital to support growth in the financial sector-they had to seek financial integration with the global system. Thus, these newly privatized banks quickly began to access foreign credit (and customers) in Scandinavia, the US, Japan, Canada, Australia, and the UK. One now-infamous Icelandic bank, Landsbanki, started IceSave, an UK-based Internet bank, in October 2006, which accumulated £7.3 billion deposits from 300,000 British and Dutch accounts. By the first quarter of 2008, assets of Icelandic banks had ballooned to 14,069 billion ISK (Icelandic krona) or $176 billion, roughly eleven times the size of the country’s 2007 GDP.

Though financial liberalization enabled capital to flow easily into the country, capital was able to flow out just as easily. Investors saw the country, even with its strong financial fundamentals, as the weakest link of the ongoing global financial crisis.

The most dramatic consequence of the collapse and subsequent nationalization of the big three Icelandic banks could be seen in the UK, where the British government had to resort to anti-terrorism laws to freeze $6.8 billion in Icelandic assets.

Iceland’s meltdown presents potential consequences beyond the global financial sector. Many of its domestic companies are now multinational corporations that depend on a viable currency regime and access to foreign credit for continued operation. Two particularly prominent businesses are Actavis and the Baugur Group. In the 1990s, Actavis, a generic-producing pharmaceutical, had less than 100 employees and served only the Icelandic market.

Now the company is active in 40 countries and employees 11,000 people. Its collapse would produce a spillover effect that could cause other associated businesses to go bankrupt. The greatest possibility of this domino theory at work is with Baugur Group, which directly owns a large number of UK retail conglomerates, including Woolworth’s and Somerfield (as well as an equity stake in Saks Fifth Avenue).

Ultimately, on October 25, Iceland became the first Western country since 1976 to accept an International Monetary Fund (IMF) bailout. Discussions are now on-going for an additional $4 billion loan by Norway, Sweden, Finland, and Denmark (after initial talks with Russia came under harsh fire).

Paradoxically, greater financial liberalization must be pursued to salvage Iceland’s economy. With its banking sector’s sheer size in comparison to the national economy, Iceland must abandon the krona in favor of the euro, as the EU is a much more credible lender-of-last-resort than the government of a small Scandinavian island.

One hedge fund manager earlier this year described the almost sure-fire profit of shorting Iceland as the “second coming of Christ.” Ironically, through the financial integration of the 1990s, the island’s banking sector had itself turned into a sort of bizarre hedge fund, with an enormous asset-liability mismatch to the size of the underlying economy.

Granted, although the three banks’ fundamentals were relatively strong, with little exposure to subprime securities, they were ultimately early victims of the global credit crunch. With no wholesale credit to roll over their loans, they had to be nationalized, which set off a chain-reaction of events that impacted the UK, Germany, and several other nations across the globe. Now, paradoxically, more financial integration, in the form of Iceland moving from the krona to the Euro, is needed in order to stave off another banking crisis and for long-term stability and growth of the Icelandic economy.

So what does all this mean to a seasoned traveler like you?

  • Book yourself on the next flight to Iceland. The krona has fallen in value by half over the last couple months. That means a national 50% off sale.
  • But this joyride may be over soon. The IMF $2 billion bailout is designed to stabilize their currency. Translation: things will cost more.
  • Set your net wider. Other European countries, particularly Hungary, Ukraine, Spain, and Germany, are financially weak right now.
  • And whatever you do, don’t put your money in an Icelandic bank. Even if they offer you a small village as collateral.

Airplane safety: Is globalization a bad thing?

by Jeffrey White on

Still catching up on the Sunday papers, I just stumbled onto a piece in the Washington Post’s business section reporting that the U.S. Dept. of Transportation is taking the Federal Aviation Administration to task for using shoddy parts in some of today’s biggest plane models.

The folks over at Transportation are taking umbrage with the fact that many of these parts used to be made exclusively in the U.S., but now happen to be made overseas, since – ah, the fact of globalization – it is often cheaper to make things in foreign countries than at home.

The government says the FAA “lacks an adequate system for checking the quality of airplane components,” the Post reports.

What are the plane models in question? Parts of Boeing’s 777 (and its planned 787) are made abroad, in places like China, Brazil and Australia.

The Post quotes from the report: “Neither manufacturers nor FAA inspectors have provided effective oversight of suppliers; this has allowed substandard parts to enter the aviation supply chain.”

Apparently the report is citing engine failures in 2003 – a total of four, including one in flight – that can be traced back to questionable, foreign-manufactured parts.

It is of course ironic when you consider the role the airplane has played in making this world a smaller (not to say, pace Thomas Friedman, flatter) place and how the free flow of goods and services from one corner of the globe to the other wouldn’t be possible without them. Globalization owes a lot to the airplane (among other things), and now the very phenomenon planes helped wrought might be undermining their safety (and ours)?

FAA spokeswoman Alison Duquette tells the Post, “There are absolutely no imminent safety issues raised by the report.”

But we’ve been warned…