Since my last blog there have been some interesting and historic political drama and intrigue in both Canada and the United States. In Canada, Stephen Harper's Conservative minority government has avoided defeat on a confidence motion - the budget. They have Michael Ignatieff, the new Liberal leader, to thank for that. Ignatieff prudently (and predictably) decided to support a deficit budget which will see Canada spend over $60 billion dollars (that we don't have!) over the next couple of years. Political analysts say that the budget is actually more of a Liberal than Conservative budget anyway, reflecting the view that we must "spend our way" out of the current financial instability and recession. Seems a bit counter-intuitive to me - especially given current concers for environmental degradation, but I'm not an economist...
South of the border, Barack Obama has been duly inaugurated as the 44th President of the United States of America. In a fairy tale-like story of epic proportions, Obama has captured the hearts and hopes, not only of many Americans, but of people of assorted nationalities around the world. He is, I suppose, the great BLACK hope - the first African American President and a man of apparent integrity with a refreshing grasp of the unpleasant realities of the challenges facing his administration.
However, a proposed $800 Billion stimulus package which is tied to "buy American" protectionism, has drawn criticism from economists and politicians from around the world. It seems to me that this is a critical moment for a global economy which has produced an enormous gap between the rich and poor of the world. If the United States slips into a protectionist mode - well - the results could be beyond catastrophic for the poor. And, desperate people are prone to do desperate things. Of course there are many, MANY variables involved, but I believe it's more realism than alarmism to say that any hope of global stability will be lost if protectionist policies are adopted in the US.
I've been reading a book by Paul Collier (a Professor of Economics and Director of the Center for the Study of African Economies at Oxford University) entitled The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. Collier identifies four poverty traps which characterize the 58 or so countries that comprise the bottom billion of the world's population: the conflict trap, the natural resource trap, being landlocked with bad neighbours, and bad governance in a small country. He then goes on to identify components of a global approach to rescue the bottom billion and reverse the marginalization that has occurred through globalization. Trade policy is a key component of this strategy, along with aid, military intervention and laws and charters.
Protectionism - especially from within the US - is a clear and present danger to world peace and to any hope that the bottom billion might one day enjoy such things as adequate food, clean water, universal primary education, basic health care and the opportunity to dream and plan for a future. The challenges before President Obama are enormous. Is he a man - THE man - for such a time as this? I sure hope so!!!
