by
MirzaShahnawaz Agha
I. Introduction
If I had an option to define rape as a willing, desirable and welcome indulgence I would refer to it as the economic order of the day that the world upholds!
If we are not here to address global concerns that inflict the global population such that it can make and manage money and opportunity equitably then what the hell are we doing here!
A. The economic history of the world is a tale of usurpation of the basic factors of production. Land, Labor, Capital and Enterprise that are all tied down to a biased World Order that governs the freedom of managing the Natural Resources of the planet equitably for the Human Resource that exist on it, and owns it.
B. This article summarizes the features I hope to address:
1. The ideal model for interfacing Natural Resources with and for the benefit of the Human Resource on the planet;
2. The ‘Counter Balance Mechanism’ to the inequity in the Economic Order of the World;
3. The definition, control and regulation of money as a medium of exchange, once tied to the volume of labor and assetization of Natural Resources; and
4. Viewing from the above periscope, the assumption of risk, as it ought to be, for the near largest economy of the world – making ‘Going Global’ perhaps elusively contained.
II. First.Taking lessons from history and viewing the global population of7.5 Billion plus; the disparity is in the basic standards of sustenance; and the assuming of risk by standards of assessment that nail revenue streams (based on a volatile printed paper currency) in a captive direction like a monopoly,for the benefit of one beneficiary, warrants re-visiting the economic world order for all its features. From Empires to Nation States was a transition to only meet ‘administrative objectives’. The monetary controls were never decentralized or made autonomous. Global legislation backed by military supremacy retains that order to date. Land, Labor, Capital and Enterprise are all subject to a set of Rules determined by ‘debt’ inperpetuity. This is an order where parity between nations for all aspects of material justice is denied with a disparity pegged to respective currencies. The reserve currencies model for the world is, by design that retains forcefully colonialism for the benefit of some chosen fewand not others. The bottom line ironically remains the same, where a primitive order of force and military power determine the laws and their applicability all over the world. Going Global warrants greater civility, equity, material justice and human welfare rights equally applicable across the board. This statement is for the benefit of the Government of China more so than any other country because they are the biggest producers and innovators of raw material on the planet.
III. Next, in a scenario like this, ‘fiscal decentralization’ empowering populations to meet their sustenance levels, in very small economic constituencies, is perhaps the remedial way to adopt. (A sample of this is available in the thesis presented by me, available on www.liverostrum.com as a Reforms Package for Pakistan). I speak here of Municipal Companies managing populations quoted on the stock exchanges and the rest of the land in Nation States divided for corporate ownership only, for activities like industrial production, agriculture, mining and tourism.
IV. The Counter Balance Mechanism essentially evolves around the management of money. Now, this is not a commodity as is manifest. It is a measure of labor. By the most judicious yard-stick the volume, value and controls all rest on the definition of what the Medium of Exchange ought to be, meeting with the demands of material justice and global equity. In a transition, which is a given, for the economic managers changing hands, the re-definition of money is at the crux of change as all economic ailments and woes that inflict the globe stem from the present order.I dwell on this subject here as it is at the root of risk assessment and consequently the crying need of our times to prompt the Peoples Republic of China to introduce fresh thought into a decadent economic order of subservience. Political Risks and others like terrorism and those that stem from abject poverty are concerns that need a strong leadership and deliberate well intended political will. We need to climb out of stagnation and like civilization let the monetary order also evolve. The medium of exchange between Nation States has to be based on something tangible like gold in place of paper currencies.
V. I am encouraged here to walk with you through some statistics that matter to the underwriting world so that you can assess for yourselves where we are located and where we need to go and how: We will assume the population of the world at 7.4 billion divided over 198 countries/territories owning assets worth zero (as value is relative) insured at 4.7 trillion USD in premium (2014) and then reinsured. The reinsurance market is however receding for monetary size from 158 billion USD(2013) to 156 billion USD (2014). The known underwriters are 8,600 and final carriers or markets are 200. These players are governed by an un-written law of the industry where they need to get rated and regulated by a yardstick exclusive to a world (set of players) that define the rules of the game inducing the flow of money to themselves. This is economic apartheid, otherwise argued as the earthworm phenomenon where the head moves forward and the body catches on. This is the challenge that needs to be addressed in meeting a desire to Going Global. I must add here that CIRC, Dagong, China Chengxin, Sinosure and Jiangtai all in their individual right and collectively will need to address this.Tangible Securities, Rating Standards and decentralized economic units all contained within Nation States is the basic template. The cross-border investments are about the only exposures that warrant cross-border risk coverage. I may be shooting my foot in suggesting this and for China but friends the order that rules the industry globally is an unacceptable heist!
‘One Belt One Road’ as it has unfolded and moving forward comes with a distinction of developing the global infrastructure and thisis a radical departure from the captive hold over ‘client states’ as is. This is a paradigm shift from neo colonialism to live-and-let-live, based on each-to-his-own based on labor input.Pakistan is no exception to the quality of risk exposures as would be in any territory or region that is inflicted with ‘debt’ and acquired poverty. It is in the interest of the world to substitute armaments as a commodity of trade to a global legislation, seeking compulsively a common, minimum level of sustenance for all populations within Nation States. This legislation must address drinking water, education and health care at the least. We as bastion of human welfare, we the underwriters, through the said legislation will find a yardstick of securitization for man-made perils and disasters that stem from terrorism, war and war based economies that thrive on such economic models for their global validity. This is our obligation and should be our collective goal.
I wish the People’s Republic of China greater prosperity on this National Day Celebration with a hope that they will make the world a better place to live.
