US superpower status is shaken

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autumn child

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How am I prescribing the root cause of the problem? I am prescribing a remedy to the trade imbalance of Asia and US by rebalancing and moderating. Ofcourse the player have problems. Growing at more than 10% annually by relying on foreign investment is not healthy for china and growing 3-5% annually by over consuming is not healthy for the US. This is one of the root cause of the crisis. What they need is natural growth rather than inflated and unsustainable growth.

Furthermore, you cannot impose Islamic economic philosophy which is radically different than the current system. The system needs evolution not revolution. beside the islamic system is not mature enough to be adopted on a global scale. The world have not seen any major Islamic economy yet. What you are proposing is infact reducing the players, not increasing them. We have to be realistic to the situation, currently US still have the biggest economy along with EU and China (catching up fast). They are the main player in the coming decades. Countries have to prove that they are significant enough to have a voice in the global arena, crude but pragmatic. Of course, there will be more players in the future such as India, and maybe russia and brazil, further adding complexity and multipolarity in the system. I will be interesting what the power landscape balance look like in the future.

But onething I know that theses major players will increasingly integrate their economy to the world and hence making the word superpower irrelevant.
 

Feanor

Super Moderator
Staff member
Are you talking dollar amounts, as in gourmet' items, or tonnage?
You know, I recall seeing the article a little while ago. I did some googling and did not find anything very recent (though I'll admit it was a brief search). However it seems that it is by value. And that the US is losing ground in meat and grain products.
 

waraich

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  • #65
How am I prescribing the root cause of the problem? I am prescribing a remedy to the trade imbalance of Asia and US by rebalancing and moderating. Ofcourse the player have problems. Growing at more than 10% annually by relying on foreign investment is not healthy for china and growing 3-5% annually by over consuming is not healthy for the US. This is one of the root cause of the crisis. What they need is natural growth rather than inflated and unsustainable growth.

Furthermore, you cannot impose Islamic economic philosophy which is radically different than the current system. The system needs evolution not revolution. beside the islamic system is not mature enough to be adopted on a global scale. The world have not seen any major Islamic economy yet. What you are proposing is infact reducing the players, not increasing them. We have to be realistic to the situation, currently US still have the biggest economy along with EU and China (catching up fast). They are the main player in the coming decades. Countries have to prove that they are significant enough to have a voice in the global arena, crude but pragmatic. Of course, there will be more players in the future such as India, and maybe russia and brazil, further adding complexity and multipolarity in the system. I will be interesting what the power landscape balance look like in the future.

But onething I know that theses major players will increasingly integrate their economy to the world and hence making the word superpower irrelevant.
Impressed,great idealogy,but now players are reluctant to play in present field because every one afraid of great losses and economic gurus are talking about change in game rules,they prescribing new foundations to avoid same crunch in near future.Now suger coated piles will not work ,we have to take few concret steps.
We observed few economies islolated less effected for example still Saudia has 600BUSD excess money to spend for development projects have islamic finance system.:)
 

Waylander

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And you think SA is in this favourable position because of their excellent economic system and not because they sit on alot of oil which is dsitributed by a cartell?
Not that their way of using this huge wealth isn't debatable...

Just a quick look at how other systems enhanced the wealth of countries in the past.

There are not many examples were a communist or some sort of islamic system improved the wealth of a country as much as it did with a more open market system.

On the other hand we have examples like Singapore, Hong Kong, South Korea, Taiwan,and the whole western hemisphere were countries which adopted the relatively open markets of the west (surely with regional and cultural differences) prospered in way never seen before.
The same goes for some of the former WarPac countries like Poland and the Czech Republic which also increased their standard of lving by a wide margin.
And note that countries like China and Vietnam only began to jump onto the growth train when they adopted a capitalistic behaviour which often enough excells that of the west.
 

waraich

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And you think SA is in this favourable position because of their excellent economic system and not because they sit on alot of oil which is dsitributed by a cartell?
Not that their way of using this huge wealth isn't debatable...

Just a quick look at how other systems enhanced the wealth of countries in the past.

There are not many examples were a communist or some sort of islamic system improved the wealth of a country as much as it did with a more open market system.

On the other hand we have examples like Singapore, Hong Kong, South Korea, Taiwan,and the whole western hemisphere were countries which adopted the relatively open markets of the west (surely with regional and cultural differences) prospered in way never seen before.
The same goes for some of the former WarPac countries like Poland and the Czech Republic which also increased their standard of lving by a wide margin.
And note that countries like China and Vietnam only began to jump onto the growth train when they adopted a capitalistic behaviour which often enough excells that of the west.
This not first time the foundations of capitalist economy failed to sustain the loads also fail to provide the needs of poor nations,we observed poverty ,wars and bloodshed increased in last 50 years .

congestion in flow of wealth ,increase in poverty at global level and high curruption risks are major flaws in free economy and capitalism ,we have to redefine the rules of game for better and secure future .

Restructuring in present world economic system is need of future global economy.
 

autumn child

New Member
The curent economic system is not perfect, but so far it is the best humanity has put into use globally. Poor nations and poverty may not be a direct product of the curent systems. These poor country could become wealthier if they adopt the rule of law and have political stability. Corruption have nothing to do with economic system, but rather have more to do with the rule of law. Economy is also not the major source of war. Greed and Ideology (mainly politic and religion) are the major source of war. It can happen with any economic system that you can think of including open economy, planned economy or Islamic economy.

If you want to change the rule of the game start by reducing oil based economy and rely on renewable energy sources and reduce unecessary consumption. It will shift alot of nation's fundamental economy...and reduce global warming :) This is a whole new theory of growth without relying on stored energy source such as fossil fuel.
 

black shark

New Member
The curent economic system is not perfect, but so far it is the best humanity has put into use globally. Poor nations and poverty may not be a direct product of the curent systems. These poor country could become wealthier if they adopt the rule of law and have political stability. Corruption have nothing to do with economic system, but rather have more to do with the rule of law. Economy is also not the major source of war. Greed and Ideology (mainly politic and religion) are the major source of war. It can happen with any economic system that you can think of including open economy, planned economy or Islamic economy.

If you want to change the rule of the game start by reducing oil based economy and rely on renewable energy sources and reduce unecessary consumption. It will shift alot of nation's fundamental economy...and reduce global warming :) This is a whole new theory of growth without relying on stored energy source such as fossil fuel.
Well said.
Another criticism I often hear leveled at western economies is that the gap between rich and poor is getting wider and wider. I think this is misleading. A more accurate statement would be the following:

"The rich are getting richer faster than the poor are getting richer"

Insecurity also causes war.
 

Feanor

Super Moderator
Staff member
Communism as an economic model never existed. All that existed were socialist and pseudo-socialist countries.
 

autumn child

New Member
Yes it does, even if it is not efficient. Its called centrally planned economy. As long as there is a system that redistribute resources there is an economy.
 

Waylander

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Communism as an economic model never existed. All that existed were socialist and pseudo-socialist countries.
And that's because pure communism doesn't work on state level.
The same way a fully free capitalistic market doesn't work and doesn't exists.

Both extreme sides are just not feasible and always need to be adjusted at the direction of the middle.
Be it for example a social market economy or a socialist economy.
 

waraich

Banned Member
  • Thread Starter Thread Starter
  • #73
The curent economic system is not perfect, but so far it is the best humanity has put into use globally. Poor nations and poverty may not be a direct product of the curent systems. These poor country could become wealthier if they adopt the rule of law and have political stability. Corruption have nothing to do with economic system, but rather have more to do with the rule of law. Economy is also not the major source of war. Greed and Ideology (mainly politic and religion) are the major source of war. It can happen with any economic system that you can think of including open economy, planned economy or Islamic economy.

If you want to change the rule of the game start by reducing oil based economy and rely on renewable energy sources and reduce unecessary consumption. It will shift alot of nation's fundamental economy...and reduce global warming :) This is a whole new theory of growth without relying on stored energy source such as fossil fuel.

Stable economic system need conducive environment free from corruption ,lawlessness,greed etc.

Please read below article give us idea of root causes of frequent failure of existing capitalist economy.

"During its history of about 30 years no major Islamic bank failed; on the contrary, these banks proved to be as efficient and profitable as their conventional counterpart. Those cases of Islamic bank failures were caused by, and attributed to, bad governance (people-management risk) and lack of risk management (operational-management risk). But none of the failed bank was the issue of financial products or the design of financial intermediation questioned. This has increased the trust and removed the doubts of sceptics." (Words in brackets added.)


The Conventional Western banking-financial system and practice is "profit motivation" based rather than "socio-religious" based. This "profit motivation" based is only answerable — accountable to the secular regulatory authorities. The spate of 1990s frauds such as the "junk bond" fraud committed by very enterprising Michael Milken caused a widespread uproar in the US. Since this uproar, there was a sudden onrush of US Universities offering courses on "Ethics"! Whereas in the Islamic system "Socio-religious obligation", hence the everpresent "retribution" in the Hereafter, is built-in plus the accountability to the government regulatory authorities.

Islam is clearly against the capitalism game of "privatisation of profits" and "socialisation of losses". In the words of the Economist (August 30-September 5, 2008), this is capitalism at its worst: it means shareholders and executives reap the profits, but the taxpayer bears the losses.


http://www.bt.com.bn/en/opinion/2009/02/25/essence_of_islamic_finance
 

Marc 1

Defense Professional
Verified Defense Pro
Non muslim have total freedom and protection in muslim society much better then capitalism and socialism but because at the moment there is no state fully comply shariah and islamic financial system it would be difficult to develop confidence of western world.
Really? Tell me, what would happen if I try to sell christian publications in a street market in Tehran? Or Aghanistan under the Taleban? Or Saudi Arabia? How are those freedoms stacking up now? I know here in Australia that Muslim publications can be and are sold in shops and markets here.

Incidentally before you write me off as anti muslim, I'm an athiest - no faith 'owns' me, I just enjoy pointing out the howlers spread by anybody claiming untruthful things in the name of religeon. IMHO, religeon has been responsible for more wars and conflict than any other reason, so religeon, regardless whether you are Hindu, Mslim, Christian, Jewish, or Calathumpian really is poison.
 
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Marc 1

Defense Professional
Verified Defense Pro
During its history of about 30 years no major Islamic bank failed; on the contrary, these banks proved to be as efficient and profitable as their conventional counterpart.
Very impressive. Now consider that many european banks have been going for much longer than 200 years without any issues prior to the credit crunch that occurred last year. I'd call that pretty impressive too. And if it hadn't been for a government meddling in the market to try and encourage people who couldn't afford loans into the market - then the market that had worked fine up until then for the previous 100 plus years would have been fine thanks. The financial crisis wasn't caused by the capitalist system and the free market economy, it was caused by government interferance in the process - much as you are advocating (a centrally controlled banking system).
 

Ananda

The Bunker Group
"During its history of about 30 years no major Islamic bank failed; on the contrary, these banks proved to be as efficient and profitable as their conventional counterpart. Those cases of Islamic bank failures were caused by, and attributed to, bad governance (people-management risk) and lack of risk management (operational-management risk). But none of the failed bank was the issue of financial products or the design of financial intermediation questioned. This has increased the trust and removed the doubts of sceptics." (Words in brackets added.)
Waraich, currently in Indonesia, the percentage of Non Performing Loans (NPL) between Conventional Banks and Islamic/Syariah Banks are about in similar level. In Fact in some area the average of Syariah Banks NPL is slighly higher than conven banks. Also the Syariah banks fails to delivered better loan-credit price/costs, thus many potential customers go to conven banks when they decided to get new credit or mortgage. This is just show that what's the matter in here not between conventional or islamic banks, but it's more on credit/risk prudence. When you can show you're operating in highly Risk Managed oprations, the result will be same wheter you are operating Syaria or Conventional banking..
Remember Greed can happen in both institutions..
 
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Feanor

Super Moderator
Staff member
And that's because pure communism doesn't work on state level.
The same way a fully free capitalistic market doesn't work and doesn't exists.

Both extreme sides are just not feasible and always need to be adjusted at the direction of the middle.
Be it for example a social market economy or a socialist economy.
Do you recognize that there were distinct modes of production throughout history? And while the shift from one to the next wasn't instantaneous, it was relatively short compared to the time spent within each mode of production.
 

waraich

Banned Member
  • Thread Starter Thread Starter
  • #79
Waraich, currently in Indonesia, the percentage of Non Performing Loans (NPL) between Conventional Banks and Islamic/Syariah Banks are about in similar level. In Fact in some area the average of Syariah Banks NPL is slighly higher than conven banks. Also the Syariah banks fails to delivered better loan-credit price/costs, thus many potential customers go to conven banks when they decided to get new credit or mortgage. This is just show that what's the matter in here not between conventional or islamic banks, but it's more on credit/risk prudence. When you can show you're operating in highly Risk Managed oprations, the result will be same wheter you are operating Syaria or Conventional banking..
Remember Greed can happen in both institutions..
I dont agree with you,please read below article

http://www.usnews.com/articles/news...ng-in-a-time-of-economic-crisis.html?PageNr=2

The Rise of Islamic Banking in a Time of Economic Crisis
How some financial institutions avoid trouble by following the strict rules of the Koran
By Thomas K. Grose
Posted December 10, 2008
Shopping for a business loan during a global credit crisis is tough work even if you're a fast-growing start-up like Ireland's Blue Ocean Wireless. And the scrutiny can cut both ways. Blue Ocean, which supplies wireless communications for merchant shipping, was giving a closer-than-normal look at whether possible lenders could be counted on amid the ongoing financial shakeout.


People walk past the first Islamic Bank of Britain in London, England.
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When the company got a $25 million loan this fall, it came from what might seem an unusual source: the Bank of London and the Middle East, or BLME, which strictly follows Islamic sharia law rather than conventional western banking practices. Islamic banking requires transactions be structured in alternative ways since the rules ban interest and trading in debt. Blue Ocean is one of many European companies benefiting from a surge in Islamic financing that's pushing sharia-compliant banking into the mainstream and extending its appeal to non-Muslims. The sector's growth comes at a time when the western banking system is caught in a liquidity crisis. Blue Ocean took comfort in the fact that BLME draws on the petrodollar surpluses of Persian Gulf oil producers. "The liquidity was there," says Blue Ocean's chief financial officer, Tariq Aslam.

The boom in Islamic banking is providing a crescent-shaped sliver of good news for the City, London's beleaguered financial district. It's fast becoming the main hub of Islamic banking outside the Middle East, a development encouraged by Britain's Labor government, which laid out the welcome mat to sharia-compliant banks several years ago. "The government sees it as another way to draw business to London, to bring investors to the U.K.," says Duncan McKenzie, director of economics at International Financial Services London.

Growth field. London now is home to 25 companies offering some form of Islamic financing. BLME is the largest of five wholly sharia-compliant banks operating in Britain. The first, the Islamic Bank of Britain, opened in 2004, and the number is expected to double within five years. Moreover, most of Britain's conventional banks also have established "Islamic windows," units that offer sharia-compliant products. Globally, the sector's total assets are pegged at between $500 billion and $1 trillion and growing at a rate of 10 to 15 percent a year.

Certainly, business is brisk at Kuwaiti-owned BLME, which is somewhat ironic, given that it opened its doors in July 2007, on the eve of the banking crisis. It is just completing a big leasing project for a major transportation company, and other deals it has sealed this year include financing for apartment buildings and a language school in London. It also provided an $11 million loan to RecovCo, a British aluminum reprocessor that is expanding its operations in France. For the first six months of this year, BLME reported pretax profits of $2.7 million and its assets more than doubled, to $931 million.

The basic concepts of Islamic banking go back 1,400 years, but the world's first modern Islamic bank didn't open until 1975. And the sector didn't really blossom until five years ago, when it was buoyed by rising oil prices and the strengthening economies of Asia's Muslim countries. Sharia law prohibits investing in certain industries or products, including alcohol, tobacco, pork, and pornography. The Koran also forbids usury, so financial transactions are structured to rely on income in the form of rents or profits from the loan, technically not interest. Sukuks, for instance, are a type of Islamic bond backed by ownership of a tangible asset that produces a financial return. Another popular instrument is the commodity murabaha, essentially cost-plus financing, which involves the sale and repurchase of a commodity to fund a loan.

The financing BLME arranged for Blue Ocean, for example, was a commodity murabaha. Here's how it worked: The amount of the first portion that Blue Ocean wanted from its $25 million loan arrangement was relatively small. So an appropriate, low-cost commodity was selected to accommodate the transaction, in this case special high-grade zinc. The bank purchased the commodity—an amount equal to the cash Blue Ocean wanted to withdraw—then sold it at a small profit to the company for the same price on a deferred payment basis. Blue Ocean, with the bank's assistance, then resold the metal at the original purchase price, thus raising the cash it wanted. All transactions occurred nearly simultaneously so that the deal wasn't whipsawed by market price fluctuations
Conservative approach. Islamic banks have avoided the subprime fiasco. "There are no toxic assets," says Natalie Schoon, BLME's head of product development. "As a result, there are no problems with big write-offs. One of the advantages that the Islamic sector has as a whole is that there is still liquidity." That, as well as the conservative nature of its business model, is a big reason that it's attracting more non-Muslim clients. Middle Eastern investors have amassed so many petrodollars they have no choice but to look for opportunities beyond the Persian Gulf region, particularly in the politically stable environments of the United Kingdom and Europe. That's why Islamic banks are setting up operations there. Also, London is attracting those outposts because of Britain's historical links to the region and the strong financial talent pool to draw on. In fact, most of the top executives at the Islamic banks in London are British or European, and they are old hands in City banking. The government's concerted wooing efforts have also helped. "The government is actually supporting Islamic finance," Schoon says. "It's not seen as a threat; it's seen as an opportunity."

As with traditional banks, the Islamic banks in London must meet levels of transparency sometimes lacking in other parts of the world. "Regulation is important," Schoon explains. "Investors like the fact that you are regulated." The London Stock Exchange began listing sukuks this year, and 18 are now trading there, a useful increase of liquidity. The British government, as early as next year, is expected to make the country the first in the West to issue its own sovereign sukuks to raise as much as $3 billion. That should help set a benchmark price and encourage more banks to issue the bonds.

The government's sukuks, which would be the first in the world to be triple-A rated, would also give the United Kingdom an alternative route to raise money from the oil-rich Middle East. The plan is not without critics, however, who claim the government is giving religious-based sharia law official standing. Critics also raise concerns that sukuks could be used to finance terrorism. But Rodney Wilson, an expert on Islamic finance at Durham University, says that's an unlikely scenario. "Most Gulf banks do have fairly sophisticated monitoring systems in place" to ferret out money-laundering, terrorism, or other abuses, Wilson says. The 9/11 terrorists, he notes, used western banks to finance their operations.

A more practical problem is a lack of product standardization. Sharia-compliant financing relies on Islamic scholars to determine if products are in accordance with the Koran. But definitions of what is acceptable can vary greatly, not only from region to region but from bank to bank. Typically, Malaysian scholars tend to offer more flexible interpretations of sharia law than do their counterparts in the Gulf. Each bank has its own board of scholars, and even among the London banks there's no uniformity. Schoon says she's seen deals arranged by rival London banks that BLME's board—which comprises two scholars from the Gulf and two from Asia—would have vetoed.

BLME's toxic-free balance sheet helped convince Blue Ocean's board that, despite being a new bank, it was fundamentally strong. The company also liked the "shared-risk, shared-reward" ethos of Islamic banking, Aslam says. Essentially, each is making a vote of confidence in the other. If they're both right, that bodes well not only for the future of BLME but for the continued growth of Islamic banking in London. And that should give City burghers at least one thing to smile about.
 

autumn child

New Member
Stable economic system need conducive environment free from corruption ,lawlessness,greed etc.

Please read below article give us idea of root causes of frequent failure of existing capitalist economy.

"During its history of about 30 years no major Islamic bank failed; on the contrary, these banks proved to be as efficient and profitable as their conventional counterpart. Those cases of Islamic bank failures were caused by, and attributed to, bad governance (people-management risk) and lack of risk management (operational-management risk). But none of the failed bank was the issue of financial products or the design of financial intermediation questioned. This has increased the trust and removed the doubts of sceptics." (Words in brackets added.)


The Conventional Western banking-financial system and practice is "profit motivation" based rather than "socio-religious" based. This "profit motivation" based is only answerable — accountable to the secular regulatory authorities. The spate of 1990s frauds such as the "junk bond" fraud committed by very enterprising Michael Milken caused a widespread uproar in the US. Since this uproar, there was a sudden onrush of US Universities offering courses on "Ethics"! Whereas in the Islamic system "Socio-religious obligation", hence the everpresent "retribution" in the Hereafter, is built-in plus the accountability to the government regulatory authorities.

Islam is clearly against the capitalism game of "privatisation of profits" and "socialisation of losses". In the words of the Economist (August 30-September 5, 2008), this is capitalism at its worst: it means shareholders and executives reap the profits, but the taxpayer bears the losses.


http://www.bt.com.bn/en/opinion/2009/02/25/essence_of_islamic_finance
Chinese banks is porbably one of the healthiest bank in the world this time around...but are they superior to western banks? I do not understand much about Islamic banking but i do know the reason behind chinese banks this time around is the lack of complex financial products and its large reserves which is controled by the govt. So far its good idea to insulate against financial storm but are they efficient at promoting growth during normal times? I do not agree with the overly complex financial products that western bank sells but i also think that complex financial products can be useful to investors and the industry as a whole. I also agree that the executives at wallstreet are greedy and overpaid, but i do not think that Islamic banking can solve greed and corruptions. We just need a better regulatory systems. My point is not which bank are superiors compared to others, rather that different banks have different strength. Western banks are strong with innovation but relatively weak when crisis hit due to their low savings and risky assets, while chinese banks are strong against crisis, but is inefficient in promoting growth to SME. I am sure Islamic banks have their own strength and weakness, but i cannot comment to much on them.

It is very dangerous to promote a banking system that adheres to just one religious believe. It is not fair for people who believe in other religion. No religion in the world has actually successfuly contain man's greed. Religion has been the cause of war and has many times dissapoint humanity. I agree that business has social responsibilities but definitely not religious responsibilities. By the way, we also cannot blame western companies on ethics. All companies and govt are guilty at some point in this regard. Is selling Oil to western countries ethical? knowing what oil can do to earth, why does islamic countries still sell them to other countries? No one govt, companies or religions have absolute moral authority in our world because at one point they are guilty or prove unable to control human greed.

You are basing your arguments on religious superiority and not basic economics.
 
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