US AMBASSADOR TO MALAYSIA SPEAKS ON 'WINDS OF CHANGE.'
By Mathew Maavak
Nov 20, 2008, Kuala Lumpur
There is a change we can believe in. It will not pass us by.
The year 2009 may be one of seismic shifts worldwide. With just another 40-odd days left in the current year, the exsanguinations of our financial markets continue, and our billion-dollar tourniquets have failed us thus far.
We will reach point where our responses will have to be reworked. It will not be all gloom and doom.
On the contrary, it is within unprecedented times that societies produce it best solutions, its finest minds and a new generation to place our hope on.
The recent US Presidential elections did bring about some unprecedented changes. For the first time ever, an African-American got elected to the highest office in a land, where, segregation was the law only 40 years back.
The emergence of Barrack Hussein Obama as the 44th President of the United States sparked an overload of euphoria throughout the world. The popular perception was that the old hard power order of George W. Bush would be making way to a softer, gentler United States.
It was now time to put things in their proper perspective.
The US Ambassador to Malaysia, Mr James R. Keith was invited by the Institute of Strategic and International Studies (ISIS) on Nov 19, 2008 to talk on the Potential and Promise of US-Malaysia Relations in an Obama Administration.
The event was chaired by ISIS CEO Tan Sri Mohamed Jawhar Hassan and was attended by members of the foreign diplomatic corp, captains of the industry, and the local intelligentsia, among others.
Ambassador Keith began with a brilliant conspectus of the challenges facing the United States in all its complexities. Within 45 minutes, there was hardly a “hot spot” issue he had not touched on. Neither did he tread on a single minefield. It was trighrope walking at its best.
An Orientalist fluent in Mandarin and Malay, Keith was the consummate diplomat. Armed with the perfect demeanor, he appealed to reason while appearing mildly apologetic.
His words also carried authority as he flitted from the current financial crisis to terrorism; healthcare; Palestine; Iraq and Iran; nuclear non-proliferation; smuggling, piracy and criminal syndicates; and the dilatory Malaysia-USA Free Trade talks.
It was little wonder that at the end of his preamble, only six or seven questions were posed. Two of them came from me.
Ambassador Keith had earlier warned the audience: “Be careful of what you wish for.”
It was my contention that under extreme circumstances, the incoming Obama administration may re-float the US financial Titanic in line with the “Country First” slogan of the President Elect’s vanquished rival Senator John McCain.
I posed the question. It was what the French called a problematique: The global funds market -- according to a recent BIS report -- was worth one quadrillion dollars (yes, that is one thousand trillion dollars) and this was incredibly propped by a global GDP worth US$53-57 trillion, depending on the latest monthly report and currency fluctuation. Was this situation tenable? The ratio between the real and speculative economy is 1:20 and could be a lot, lot more. (No one knows for sure).
What happens if the stock markets tank further? A deepening erosion in Western consumerism would translate to a string of factory closures across Asia’s Tiger Economies and a cascade of socio-political tensions, accompanied by virulent anti-Americanism. Under these circumstances, will the Obama administration shift manufacturing bases back to the United States for domestic stability, and compound the misery of Tiger Economies? It was a strand out of many possibilities.
It was a very mouthy set of questions indeed and Keith deflected the sting with a superb repartee.
“I think only George Soros can answer that question.” The audience laughed. I loved it. Unfortunately, it was true. In fact, I doubt even Soros has an answer.
Keith acknowledged the perils and consequential fallouts of the ongoing stock and liquidity debacle, and pressed the need for an interconnected solution. In effect, to use my trademark paraphrase, no economy was an island.
However, here my mind began to drift like a surviving flotsam atop a sea of red ink. Who was George Soros?
The tides of history may be savage, but they do carry an important message in a bottle: When societies are faced with an existential threat, some literally rise to the occasion like a solitary island of rock solid granite. A few historical exceptions had even managed to reconstruct their pulverized building blocks.
The Germans had built their Wirtschaftswunder (Economic Miracle) out of the debris of 14 billion cubic feet of rubble in the immediate aftermath of the Second World War. The trick was to optimize internal human resource as there was little physical infrastructure left intact.
The greatest resource in a crisis is human resource! Money, markets and munitions come later.
Societies that fail to identity new talent, introduce fresh ideas, and apply radical solutions may be in a bad fix next year. Even the former US Federal Reserve chairman Alan Greenspan, whose methods were either copiously quoted or emulated worldwide, admits that the financial world has not faced a crisis of this complexity and gravity.
It is a lesson for Malaysia.
It is also time for the intelligentsia to initiate dialogues, exchange fresh ideas, and keep the lines of communications open. The goal would be to have an appropriate set of crisis response templates to deal with any scenario.
The choice may turn out to be stark -- across the globe. Decisions taken today may lead to a Germany of the 50s, or the Rwanda of the 90s.
The first decision in this saga was the vote for change in the United States.
Addenda:
My second question was over regional trafficking networks. Keith's deft response was one of the most interesting I had ever encountered.