A Schizophrenic Global Village.

See these 3 news items on two facing pages of Indian Express dated 8th June 2010.

First had the news about a country that is popularly described as the Workshop to the World : Changes in China Could raise prices worldwide.

One hears of unprecedented wealth creation and of fabulous infrastructure & real estate boom in China, especially in the coastal regions of South & East China. Yet the minimum wages in these very regions remain at an abysmal low of USD 125/- (INR 5,800) per month when compared to the majestic towers kissing the proud skyline of coastal cities. While this manufacturing powerhouse is described as the anchor for global (basically USA & Europe) disinflation (read low prices); a spate of suicide at the two complexes of Foxcom Company forced this Taiwanese entity employing 800,000 workers in China to double the salaries of its employees. Honda factory in the south too faced a two week strike forcing wage increases of 24% to 32%. Obviously these are not isolated incidents as the soaring food & housing prices are eroding living conditions and thereby causing discontent. But the worry of the news item was not the conditions of Chinese workers, but the expected rise in prices of manufactured goods shipped out of China due to rising wages coupled with appreciation in Renminbi that is artificially held down.
Stock Markets had risen for a short while in India in tandem with global cues followed by lows : Sensex Dips 337 points on Europe Woes. Behaviour of the stocks recently is marked by extreme volatility due to nervous panic followed by irrational exuberance. While Ben Bernanke & Obama do their best to talk markets up, fundamentals have remained weak in US economy. Two wars on terror foisted by US on Iraq & Afghanistan continue to suck it into the quagmire of its own making, while the unregulated, free run given to mighty Hydrocarbon industry has seen its first major disaster of a leaking deep sea well in the Gulf of Mexico. The most powerful office on earth is seen to be chewing its nails & dithering when not issuing some vague threats. Unfortunate, but true, US administration is impotent to do anything to stop the leak. Europe seems to have ridden the storm of ‘Greece failing’ for the moment, but there are trillion dollars worth of debts on the books of European banks that are said to be ticking bombs, which may explode at any unforeseen trigger. Hungarian officials last week admitted that Greece like debt-default may not be ruled out. IMF MD, Dominique Strauss-Kahn had to step in to assuage fears, which seems to be the main job of all Central Bankers or Multilateral Institutions now days.
Global capitalism seems to be in crisis with standards of living stagnating or even falling for the majority in most of the developed world. The Gini Index that measures income inequality has shown a rising trend in most economies thus showing that super rich are getting richer, poor poorer. What looked like unending prosperity, fueled by some 400 years of colonization, two world wars & new deal, sputtered; was then revived through neo-colonialism pushed through globalization and the promise of turning the whole world into USA or Europe, and was later followed by knowledge age; now appears to run out of steam. Unless the doors are opened firmly wide to global capital for nuclear energy, mining, retail, farming, bio-technology, in fact in all economic sectors in India and elsewhere, the dream of running the world economic system on business as usual basis are over. This conflict between Global Capital and People’s Resistance movements trying to protect their access to जल, जंगल और जमीन (water, forest, lands) is at its sharpest in those areas of the globe that have remained outside the reach of global capital – such as MOUist (Maoist – if one prefers government’s characterization) corridor in India, in forests of Latin America and South East Asia, in Africa, and elsewhere.

Contrast this upheaval & restless firmament with the news of demand for toys of the super rich surging unabated : Luxury Car Sales Back on Track.

The demand for luxury cars like Mercedes Benz, BMW, Audi, has shown a healthy appetite the world over and the market in India is expected to grow at more than 15% per annum. This is so when the inflation for food and other items that make up common man’s consumption basket, is hovering above 16.5% (week ending 22nd May 2010). Disconnect between the world of majority and the super rich is complete.  The Global Village has turned schizophrenic.

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