Thriving in the New Global Landscape

1. Thriving in the New Global Landscape New Normal, New Vision, New Action SuvitMaesincee Sasin Institute for Global Affairs (SIGA)

2. The New Normal • Underlying Forces • Action Agenda in Response to the New Global Landscape

3. Liquid Phase Modernity Country A B C Nation-State Company People Liquid Modernity Solid Modernity • Connectivity • Interactivity • Mobility • Virtuality

4. Multiple Realities Regional Society Local Economy Global Environment Economy Society Environment Local Regional Global

5. Hyper-Capitalism Hyper Consumption Nanosecond Culture Hyper Capitalism Culture of Immediacy Hyper Competition

6. Developmental Imbalance • Growth • World market share • Market penetration • International market control Economic Economic Wealth Environmental Wellness • Resource/ energy use • Waste management practices • Water & air quality • Integrity of supply chain • Compliance with standards Environmental • Labor practices • Maintenance of human rights • Impact on the communities • Taking responsibilities for products Social Human Wisdom Social Well-being • Human value • Human creativity & value creation • Intellectual independence • Individual autonomy • Free culture Human

7. Global Imbalance • Nature’s Extremes • Climate Change Physical Sphere • Climate Change • Environmental • Degradation Global Imbalance Human Sphere • Financial Crisis • Extreme Poverty • Terrorism • Refugee

8. Global Commons • Financial Turmoil • Economic Crisis • Pandemics • Climate Change Global • Terrorism • Mass Production • of Refugee • Extreme Poverty • Genocide • Civil War Local Local Global

9. Perpetual Crises are a Normal State of Being The Commodity Price Bubble The Global Economic Crisis European Sovereign Debt Crisis The Dot Com Burst The Global Financial Turmoil The Asian Financial Crisis The Real Estate Bubble

10. Crisis in the Liquid Phase Modernity Security Nature of Crisis Stability Sustainability Number Severity Recurrence Scale Pace Breakthrough Crisis Breakdown Collapse Conflict

11. From the “Century of Prosperity” to the “Century of Security” National Security Freedom & Equality Human Security Security Construction & maintenance of social & political order Laissez-faire Management of uncertainty, risk & insecurity Precaution Security is the legal assurance of freedom

12. Leading Change in the Age of Security New Reality New Mind-Set New Skill-Set Global Dynamics New Mental Model New Operating Model • Global Imbalance • Global Common • Democratization of Power & Wealth • The New USA • The Non-Polar World • Philanthro-Capitalism • Global Financial Regime • Global Civic Society • Constitutive Governance • Free Culture • Sufficiency Economy Philosophy • Global Coordinating Mechanism • Global Standards • Public Private Partnership • Open Collaborative Platform • Carbon Minimization • Climate Resilience

13. The New Normal • Underlying Forces • Action Agenda in Response to the New Global Landscape

14. Challenges & Issues Facing the Global Economy Shortage of Fuels Shortage of Foods Shortage of Talent Shortage of Water New Global Middle Class Demographic Imbalance Consequences of Climate Change Nature ‘s Extremes

15. New Global Middle Class… Change in the World Economic Structure World Economic Structure Global GDP* % 75 Developed Countries The Rise of the Rest The Triad 50 Developing Countries The Rest of the World The Rise of Asia 25 1820 70 1913 50 73 2005 The Rest of Asia China/India Source: The Economist

16. New Global Middle Class… An Emergence of the New Middle Class 2000 2010 Euromonitor International World Bank estimates that global middle class will expand from 430 million people in 2000 to approximately 1.2 billion people in 2030

17. New Global Middle Class… The Rise of Asian Middle Class In 2000, middle class from East Asia and Pacific are estimated to be around one sixth of total global middle class (approx 72 million people) or around 1.4% of global population In 2030, World Bank projects that proportion of middle class from East Asia and Pacific will rise to nearly half of total global middle class (600 million) or 8.9% in 2030 accounting for 7.7% of global income Source: World Bank, Australian Government, Bussolo, Maurizio (2007)

18. ASEAN Middle Class – Landscape and Trend New Global Middle Class… • ASEAN Middle Class: 156 million people (26% of ASEAN population) • Financial Times expects ASEAN to have middle class population at approximately 300 million people by 2015 • By 2030, the number of middle class segment in Indonesia could rise by more than 50 million, in Malaysia by 20 million and in Thailand by more than 25 million • Affluent: • Brunei, Singapore • Mainly Middle Class: • Malaysia, Thailand • Transitioning to Middle Class: • Indonesia, Philippines, Vietnam • Low Income: • Cambodia, Laos, Myanmar ASEAN Class Structure

19. As the middle class continues to balloon in the coming decade, what three major consequences do you foresee for the global food market? New Global Middle Class… Food prices will rise Demand for meat will increase Demand for grain, due largely to need for animal feed, will increase Source: Foreign Policy

20. New Global Middle Class… China Animal Production and Feed Use Million Metric Tons 1980 1990 2000 2008 Pork Production 11.3 22.8 39.7 46.2 Beef Production 0.3 1.3 5.1 6.1 Chicken Production n.a. 2.4 9.3 11.9 Milk Production 1.4 4.8 9.2 37.8 Corn Feed Use 27.1 53.4 92.0 110.0 Soybean Meal Use 1.1 1.0 15.0 31.8 Source: USDA’s PSD Online. Aug 2009.

21. New Global Middle Class… IEA predicts that energy demand would continue to rise further till year 2035 • Despite the fact that there will be more demand for renewable energy in the future, fossil fuel energy (coal, oil & gas) still be a major source of energy • Thus, the world might face a situation of having very high energy price as well as energy resource depletion IEA: World Energy Outlook 2010

22. Demographic Imbalance… World Population Growth 1950 1975 2000 2025 2050 2.5 bn 4.1bn 6.1bn 8.0bn 9.2bn The world will demand 70 percent more food by 2050, outstripping population growth Resource Wars Source: UN, FAO, BBC

23. Demographic Imbalance… Demographical Imbalance Developed Countries North America, Europe, and Asia’s Pacific Rim The First World Brazil, Iran, Mexico, Thailand, Turkey, and Vietnam The Second World The Third World The Rest of the World Developing Countries Aging Society Dynamic Young Society

24. Demographic Imbalance… The Third World of fast growing, young and increasingly urbanized countries with poorer economies and often weak governments • Today, roughly nine out of ten children under the age of 15 live in developing countries • Over 70% of the world’s population growth, between now and 2050, will be concentrated in 24 countries, all of which are classified by the World Bank as low income or lower-middle income • Most of them are food-deficit countries that are unable to produce or import enough food to feed their people

25. Demographic Imbalance… Global Hunger Index 2010 Source: Economist

26. Demographic Imbalance… At present, there are approximately 925 million hunger and undernourished people • Of this number, there are around 80 million hunger people are direct result of the high food price • Majority of these people live in Asia and the Pacific (578 million people) Source: FAO

27. Consequences of Climate Change… Ten major security threats posed by global warming • More frequent and lengthy heat-waves • More frequent droughts • Coastal flooding due to sea level rises • Reduced crop yields due to reduced rainfall • Spread of tropical diseases North & South • Increased rate of water-borne diseases in flood areas • Ocean acidification due to carbon dioxide affecting fish stocks • More frequent and stronger riverine flooding in wet seasons • due to glaciers melting/ reduced water supply in dry season • Increased incidences of wildfires • More frequent and stronger windstorms Source: Understanding Global Security

28. Consequences of Climate Change… Asean countries are likely to face more severe consequences of the climate change than the global average due to limited adaptive capabilities

29. Thailand: Extreme Risk

30. Environmental Climate Dimension (+) Consequences of Climate Change… Climate Change is affecting or will affect a wide range of industry sectors, some more than others Double Winners Beneficiaries from Climate Change under Government Control Construction& Associated Sector Tourism Chemical Industry Mechanical & Electrical Engineering Renewable Energies Building Materials, Paper Industry Metal Industry Auto- motive Regulatory Market Economy Condition (+) Energy Sector (Fossil Fuels) Textile & Clothing Agriculture & Forestry Finance (-) Transportation Food Industry Beneficiaries from Government Measures with Climate Risks Double Losers (-) Source: DB Research

31. Consequences of Climate Change… An emergence of the Northern Rim Countries • Canada • Northern US • Greenland • Norway • Sweden • Iceland • Finland • Russia The eight nations will become increasingly prosperous, powerful and essential to the world reshaped by crowded megacity, coastal flooding and scarcer resources

32. Nature ‘s Extremes… The Ten Worst Natural Disasters in History Place Date Type Fatalities • Huang Ho River, China’ • China • Upper Egypt and Syria • Huang Ho River, China • Shaanxi, Shanxi and Henan • Huang Ho River, China • China • Bangladesh • Tang-shan, china • Indian Ocean 1931 1959 1201 1887 1556 1938 1939 1970 1976 2004 Flood Flood Earthquake Flood Earthquake Flood Flood Cyclone Earthquake Tsunami 3.7 million 2 million 1.1 million 900,000 830,000 500,000 500,000 300,000 242,000 235,000

33. Nature ‘s Extremes… The path of social welfare with and without a disaster event Social Welfare (No Disaster Event) Aggregate Social Welfare Social Welfare (With Disaster Event) Loss Time Disaster Event Source: Learning from Catastrophes

34. Nature ‘s Extremes… Risk Assessment Mapping Likelihood of Occurrence • Seven Successive days • warmer than 30 c in Geneva High Medium Low A • One-in-twenty year flood • in the Rhine River B • Land-falling hurricane • in the Gulf of Mexico C Low Medium High Impact Source: Learning from Catastrophes

35. Global Food & Fuel Security New Global Middle Class • Availability • Accessibility • Acceptability • Affordability Demographic Imbalance Climate Change Nature ‘s Extremes Market Inefficiency & Poor Management

36. Demand-Supply Mismatch • Between 1960 and 1990 world cereal production more than doubled, food production increased by one-third per head, daily intake of calories increased by one-third, and real food prices fell by almost half • There is enough food in the world for everyone to have enough to eat, but it is unevenly distributed Source: www.worldwatch.org

37. As energy is one of the major factors of production for food, rising energy price would result in rising food price Food and Energy Price (2000 – 2010) Source: OXFAM

38. As the price of the fossil fuel rising, bio/agro energy seems to be one of the interesting options for alternative source of energy Since this bio/agro energy can be obtained from crops and agricultural products that people normally eat, thus some of our food supply must be diverted for energy consumption

39. The New Normal • Underlying Forces • Action Agenda in Response to the New Global Landscape

40. Food is the New Oil The ability to grow food is fast becoming a new form of geopolitical leverage, and countries are scrambling to secure their own parochial interests at the expense of the common goods Foreign Policy

41. Japan’s New Growth Strategy 2010 – 2020 Green Innovation Life Innovation Financial Sector Strategic Areas Employment & Human Resources Asia Science and Technology IT Oriented Nation Tourism-Oriented Nation & Local Revitalization

42. Korea 3.0 New Growth Engines Green Technologies High-Tech Convergence Value Added Service • Renewable energy • technologies • Water treatment • technologies • Low carbon energy • technologies • IT convergence • citywide • LEDs • Broadcast & • Communications media • Intelligent robots • Biopharmaceuticals • & Medical Devices • Information Technology • Food Industry • Nano-Convergence • Healthcare • Green Financing • Education • Mice & Tourism- • Related Industries • Cultural Content • & Software

43. Transforming towards a Low Carbon Society Environmentally Awareness / Go Green Health Concern Citizens Government Business • Improvement of energy • efficiency to reduce costs • Voluntary emission reduction • for “green” image • Low Carbon, Technology- • driven • Green Growth as a new economic growth engine • Stricter rules on “less green” imports & provision of adaptation support to maintain competitive edge of domestic industries. Change in Consumers’ Preferences - “Eco-buying” Manufacturing  Services Carbon Leakage/Off-shoring to Developing Countries?? Examples • Korea  To become the World 7th Green Power by 2010 and 5th by 2050 • Japan  Carbon minimization in all sectors • Toward a simpler life style that realizes richer quality of life • Coexistence with nature • The US, the UK, China, India etc.

44. Offshore Farming The 1st Wave The 2nd Wave The 3rd Wave Manufacturing Services Food & Agriculture Cash-rich Arab and Asian governments are buying up arable farmland all over developing world - Chinese businesses are investing in South America and Africa, not only to gain access to commodities, but to get in position to profit from sales to the emerging middle class - China is also buying up large tracks of land throughout Africa to produce biofuels and to produce food - India's companies have formed a consortium to invest in corporate farming of oilseeds in Latin America, most notably Uruguay and Paraguay

45. Vertical Farming Advantages • Year-round crop production • No weather-related crop failure • No agricultural runoff • Allowance for ecosystem restoration • No use of pesticides, herbicides, or fertilizers • Us of 70-95 % less water • Greatly reduced food miles • More control of food safety and security • New employment opportunities • Purification of grey water to drinking water • Animal feed from postharvest plant • materials Sources: Dickson Despommier

46. Policy Responses to Higher Food Prices in 2007 and 2008 Country Policy Changes India • Banned export of wheat and non-basmati rice • Reduced import tariffs on wheat flour China • Imposed a tax on grain exports EU • Suspended export subsidies on dairy products • Reduced grain import tariffs Russia • Raised export taxes on wheat Indonesia • Imposed export taxes on palm oil • Reduced import tariffs on soybeans and wheat Vietnam • Banned rice exports Argentina • Raised export taxes on grains and oilseeds Urkaine • Banned wheat exports

47. OECD Producer Support Estimates (2006-2008) Percent Share of Farm Receipts Country South Korea Japan EU OECD Average Canada The US Australia New Zealand 61 49 27 23 18 10 6 1 Source: The Economic of Food

48. Effect of Government Policies on Food Prices Domestic Food Prices Other Countries’ Food Prices • Tariffs and other import restriction • Export subsidies • Payments to farmers • - Criteria tied to current production • - Not tied to current production • Farm input subsidies • Land retirement programs • Public stock management • Biofuel mandates and subsidies • Food price ceilings • Domestic food assistance subsidies • - Effect on beneficiaries • - Effect on rest of population • Research & Education Higher Lower Higher Lower Lower Lower Small Small Lower Lower Higher Higher More Stable More Stable Lower Higher Lower Not Relevant Higher Higher Depends Depends Source: The Economic of Food

49. Food and Fuel Security: Policy Implications • Focus on climate change mitigation or resilience plan • Improve farm productivity through education and other supportive measure i.e. land utilization, irrigation system, infrastructure and technology etc. • Offer incentive to attract more investment on food production • Form a collaborative network with other countries to do R&D on food security issue Food • Improve energy efficiency • Encourage on renewable energy • Classify and separate type of food base on purpose i.e. food for hunger and food for energy and formulate plan focusing on the purpose of each type of food • Form a collaborative network with other countries to do R&D on energy issue Fuel

50. Individual nation-state can no longer deal with food & fuel security on its own • Global Governance • Global Collaboration • Global Coordination • Global Standards • Global Ethics Government Failure Not-OK System Failure Government Contestable Market Market Failure Not-OK OK Nation-State OK OK Not-OK Market Global problems have only global solutions--on a globalizing planet, human problems can be tackled and resolved only by solidary humanity