The Sovereign Economic Model. A manifesto for rising nations. Stefan Demetz

Чтение книги онлайн.

СКАЧАТЬ long-term view of economic well-being in terms of independence, self-sufficiency, and stability. Simultaneously, it tries to capture and keep the wealth created in the country. Increased competition is not a welcome concept for many of the largest international industry players and for countries with such industries. Thus, a country that follows this path faces very intense pressure. It is therefore criticized, despised, and ostracized in both the media and academia by most economic experts and stakeholders. It is sad to see that only a few countries, such as China, Russia, India (partially), and Iran, have sovereign economic policies. Others, willingly or unwillingly, have given up economic control of their country. This negatively affects their economies in the longer term.

      The political implications of the Sovereign Economic Model also have an unintended political angle for countries that want to retake the reins of their economies to organize amended mechanisms suitable for local conditions. Some countries have more «socialist» inclinations. Russian President Vladimir Putin has several times mentioned the «social obligations» of businesses; in China, President Xi Jinping and the Chinese Communist Party created the concept of «common prosperity» in 2021. Both of these leaders want to remove their economies from the «liberal order» -defined status quo and its economic modus operandi. Both want to create their own flavor that is more beneficial to their own country and its citizens.

      In countries like the US, economic nationalism, with mottoes such as «Made in USA,» «Buy American,» and «American jobs» still stir up a sort of nationalistic, patriotic sentiment in some people. It is comparable to the Palestinian Boycott, Divestment, and Sanctions (BDS) Movement, but generalized against any foreign brands or goods.

      Many think that import substitution is economic isolation, that it means blocking off all imports and becoming an economic hermit. This is not true unless complete sanctions or an embargo are involved. Sometimes there are sectoral sanctions, in which case that delimited part of the economy struggles. The import substitution relies on established supply chains and slowly starts to «indigenize» the supply chains into domestic ones. So, an industry begins with low-level economic activity and assembly of parts and only slowly, at a later stage, replaces the entire stack of suppliers with local companies. Also, usually imports are still allowed, but with high custom excises.

      For some countries, especially those in Africa, a sovereign economy with import substitution was part of the plan to gain economic independence in the 1960s. So, after they achieved independence, political emancipation gave way to certain policies. These were decided upon and implemented, but without planning and foreign interference, they produced little progress.

      A political will to improve the national economy is needed, and many reasons and slogans are declared, but generally no real changes occur because the status quo is convenient to most. That needs to change.

      What Is Economic Sovereignty?

      In a business context, sovereignty is the concept that a state or country is fully in charge of its largest businesses and business policies. To be sovereign, it needs to be free of resistance or interference from external (or externally controlled) actors who act for ideological or geopolitical reasons or sabotage business processes out of «pure greed.» Consequently, a country must firmly control its largest companies, its economic infrastructure, and its main economic driving mechanisms. With that said, often the participation of several market actors and external minority shareholders is useful for governance. It acts as a counterweight to the bureaucratic and political nature of state companies and as a benchmark for quality and product innovation.

      The sovereignty, including the economic sovereignty, of a country is equivalent to the human rights that belong to a human being. It is the right of a country to have equal standing with other countries, to choose a certain path, and to make independent decisions for smoother economic growth.

      Socioeconomic Implications and Influences

      Several countries are trying to put forward unique visions of different variants of capitalism • trying to smooth the edges, remove the poor traits, and make it increasingly sustainable. Their visions are strikingly similar, but with different terminology coming from different perspectives and ideologies. China and Russia are ahead in implementing parts of this vision, while the West is sorely lacking.

      Western stakeholder capitalism is a form of capitalism that considers the interests and needs of employers, suppliers, the local community, and others. Its goal is to create long-term value for all stakeholders. It is an idea for a gentler kind of capitalism. Some, like McKinsey & Company, strongly endorse it, while others strongly criticize it. This vision is much like the Chinese and Russian views of the role of business in society, albeit using different terminology.

      In 2021, China introduced and began preaching the concept of «common prosperity.» It is derived both from communist ideology and from Confucian and East Asian philosophies. It aims to remove all «imbalances» and «excesses» from the economy, specifically the poor habits of liberal capitalism: speculation, asset bubbles, profiteering, and over-intrusion by tech companies into government business. This new philosophy will provide stronger stability in financial markets and a wider distribution of investments into more «suitable» forms of business. It reestablishes the sovereignty and primacy of the state in the economy.

      Putin, in his speeches, has often said the primary priority of business is to create jobs, the second is to contribute to state coffers, and only if both of the first two conditions are satisfied can businesses enjoy their profits. In Russia, businesses are required to be team players contributing to the overall system, or they are not welcome. It makes sense in that every business must give a proportional «cut» to the larger community.

      In summary, the socioeconomic implications of the Sovereign Economic Model are that a country and its people must get a more significant share of wealth from business.

      Hidden Power Struggles

      Economic conquest is a game the Big Powers have always practiced through their trading companies, and so it continues today. Money is power; therefore, the control of business and money translates into the political sphere of a country in the following ways.

      WTO and trade agreements. The World Trade Organization (WTO) is an international organization that regulates trade between nations. It provides a framework to reconcile trading rules for countries with disparate types and levels of economic activity. While it should be independent and neutral, it is not impartial. It is strongly biased toward wealthier nations and their large transnational organizations. It favors them over developing countries by reducing access to technologies (intellectual property, IP), food, and pharmaceuticals. Since its inception, it has been highly negative for poor countries because it allows richer nations to use non-tariff barriers to block imports from developing nations. Infant industries in developing countries are affected particularly by WTO policies and politics. Similar to the global WTO, other regional trade agreements, especially where major differences exist between participant countries, are similarly tilted toward the wealthiest nations, who impose their rules on smaller, weaker countries.

      International division of labor is a concept of globalization. Labor is carried out in the most «convenient» places. Some countries are «assigned» many industries, and others are excluded. It is a sort of modern feudalistic vassalage system not in the interest of a sovereign country, a theory and modus operandi pushed by international companies. They are interested in profitability due to reduced labor costs, taxes, and manufacturing and transport costs.

      IMF, World Bank, and other international institutions. International financial institutions like the International Monetary СКАЧАТЬ