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Thriving in the New Global Landscape . New Normal, New Vision, New Action. Suvit Maesincee Sasin Institute for Global Affairs (SIGA ). The New Normal Underlying Forces Action Agenda in Response to the New Global Landscape. Liquid Phase Modernity.

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slide1

Thriving

in the New Global Landscape

New Normal, New Vision, New Action

SuvitMaesincee

Sasin Institute for Global Affairs (SIGA)

slide2

The New Normal

  • Underlying Forces
  • Action Agenda in Response to the New Global Landscape
slide3

Liquid Phase Modernity

Country A B C

Nation-State

Company

People

Liquid Modernity

Solid Modernity

  • Connectivity
  • Interactivity
  • Mobility
  • Virtuality
slide4

Multiple Realities

Regional

Society

Local

Economy

Global

Environment

Economy

Society

Environment

Local

Regional

Global

slide5

Hyper-Capitalism

Hyper

Consumption

Nanosecond

Culture

Hyper

Capitalism

Culture of

Immediacy

Hyper

Competition

slide6

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

slide7

Global Imbalance

  • Nature’s Extremes
  • Climate Change

Physical

Sphere

  • Climate Change
  • Environmental
  • Degradation

Global

Imbalance

Human

Sphere

  • Financial Crisis
  • Extreme Poverty
  • Terrorism
  • Refugee
slide8

Global Commons

  • Financial Turmoil
  • Economic Crisis
  • Pandemics
  • Climate Change

Global

  • Terrorism
  • Mass Production
  • of Refugee
  • Extreme Poverty
  • Genocide
  • Civil War

Local

Local

Global

slide9

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

slide10

Crisis in the Liquid Phase Modernity

Security

Nature of Crisis

Stability

Sustainability

Number

Severity

Recurrence

Scale

Pace

Breakthrough

Crisis

Breakdown

Collapse

Conflict

slide11

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

slide12

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
slide13

The New Normal

  • Underlying Forces
  • Action Agenda in Response to the New Global Landscape
slide14

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

slide15

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

an emergence of the new middle class

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

slide17

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)

asean middle class landscape and trend
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

slide19
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

china animal production and feed use

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.

slide21

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

slide22

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

slide23

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

slide24

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
slide25

Demographic Imbalance…

Global Hunger Index 2010

Source: Economist

slide26

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

slide27

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

slide28

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

slide30

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

an emergence of the northern rim countries

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

slide32

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

slide33

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

slide34

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

slide35

Global Food & Fuel Security

New Global Middle Class

  • Availability
  • Accessibility
  • Acceptability
  • Affordability

Demographic Imbalance

Climate Change

Nature ‘s Extremes

Market Inefficiency &

Poor Management

slide36

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

slide37

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

slide38

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

slide39

The New Normal

  • Underlying Forces
  • Action Agenda in Response to the New Global Landscape
slide40

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

slide41

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

slide42

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
transforming towards a low carbon society
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.
offshore farming
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

vertical farming
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

policy responses to higher food prices in 2007 and 2008
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
oecd producer support estimates 2006 2008
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

effect of government policies on food prices
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

slide49

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

slide50

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

slide51

A country

which cannot afford art or agriculture

is

a country in which one cannot afford to live

John Maynard Keynes