WEST MARKETS SHRINK, ASIANS’ RISE AND
OVERTAKE WEST SOON
Erle Frayne D. Argonza
Good
evening from the Pearl
of the Orient!
The
International Monetary Fund or IMF has been quite bullish lately about Asian
growth. It had forecast East Asia’s average
growth at past 7% for this year, and shares an equally positive growth trend
for RP at 5.5%-6%. Just what could be the implications of the growth trends on
the global economy and the West?
As
Asia expands, the West (Europe, USA,
Canada, Japan) contracts. The trend will
not change much over the next five (5) years, so let’s see where the East and
West are headed for in the foreseeable future.
In
early 2008 yet, the economists and financial analysts of the West (or North)
were of the opinion that the technological cutting edge of the West was already
breached by Asia by the end of 2007 yet.
Remember that 2007 was the beginning of a new cycle of recession for the West
which began in the USA
with the implosion of the realty bubble.
Given
that the Western economies are flat on their back growth-wise, and their toxic
bubble economies have given them only virtual economy results (read: inflated
values not based on real production but on speculation), there is ample reason
to forecast that they will be mired in problems of saving their ailing banks,
financial-monetary systems, and providing sovereign guarantees to their
capitalists at the expense of taxpayers and infusing investments in the
physical economy. This is now matter of fact, as we can clearly see.
Western
economies have suffered from the ill effects of continuous de-industrialization
for decades, of being remiss in their own infrastructures (USA seems to be
the worst in infrastructure decay), and deteriorating investments in science
& technology. From being a producer economy, Western economy generally has
become a parasitical ‘eater economy’ that stands on no clear foundation other
than financial quicksand.
In
contrast, the Eastern economies have steadily built their strategic industries
across the decades, reinforced their infrastructure expenditures and projects,
and invested in science & technology. The Eastern economy generally has
therefore been role-playing as ‘producer economy’ worth the emulation of other
developing economies worldwide.
Result:
by 2007, at the downspin year of a recessionary West, the East overtook the
West in terms of cutting-edge technologies. To qualify, the technologies we
refer to are those life-inducing technologies, not those death &
destruction technologies that the West has clear edge till these days.
I
still remember what my nationalist colleagues in the Sunday Kapihan that we
then held every Sunday at the Sulo Hotel in Manila: the West knows nothing but perfect
its Armaments. Dr. Emmanuel Yap, an
economist who finished his PhD at Harvard
University, was the most
vocal about that emphasis on the death & destruction focus of Western innovations.
To
continue, the added forecast that I’d share at this moment is this: from the
years 2007 through 2015, Western markets will contract by at least 30%. That
means their own consuming public will spend less and less across a 9-year
stretch, until the consumption pattern will settle down by 2016 or so. Real GDP
(gross domestic product) will radically decline during the period, shrinking by
as much as 30%-40% contrasted to their 2006 levels (the last of the best years
of the West).
In
contrast, the Eastern markets will expand by at least 100% during the period.
The giants China and India will go farther than that, with China expanding
by as much as 200% during the same period. That means the middle income earners
in the East will continue to rise by the year and consume more products by the
year, even travel more overseas year by year.
Result:
China will clearly overtake
the shrunken economies of EU and USA by end of 2015. India may
follow suit, at around the years 2020-2025. The last would be ASEAN, which will
overtake the West by 2025-2030 period.
Once
a region overtakes others technology-wise, it will just be a matter of time
before the same innovator region will overtake the rest wealth-wise. Technologies—physical
technologies, biotechnologies, social technologies, medical technologies—are
precisely the cutting edge practices that will enable one region to overtake
others across the globe.
The
bad news for the West is this: if their own states and markets will fail to
solve their ailing problems in infrastructures and reverse
de-industrialization, they will pathetically go down as 3rd world or
‘developing economies’ past 2020. No less than their own economists warned of
this possibility in the early 1990s yet, and sadly no one paid attention to
them in their own backyards. City after city in the USA and EU will immerse in urban
decay, becoming 3rd world cities in the process.
My
mother just retired from New York
where she migrated since the 80s yet. She decided to come home back to the Philippines,
and visited the Libis & Cubao areas of Quezon City/Manila suburb pronto
upon her arrival. She was so deeply enchanted by the esthetic beauty of the
architectures and planning in those mixed land use zones, while she complained
of the dilapidated buildings and nauseating smells of cinema theatres in
downtown Manhattan.
Those
observations are signs of the times indeed. In just a year from now, the Pagcor City
will rise in Manila,
housing the world’s tallest tower. Burj Dubai, Petronas
Twin Towers,
and Taipei 101
are already similar hallmarks in other Asian cities, signifying the power shift
from East to West.
The
message is hereby brought to the West’s peoples: shift back from virtual
reality to physical reality, from the virtual economy to the real economy. We
Asians will help you along the way, as we’ve already been doing through our colossal
treasuries investments, direct foreign investments, and quality Asian
expatriates in your backyards that have been saving your collapsing economies
from rapid decay.
[Philippines,
13 July 2012]
