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Asia Needs more Dialogue
Solutions to urban pollution may prove complex
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China’s B&R initiative leading a resurgence of Asia
Education is key - but long-term: Can we survive?
New wave of robots will be beneficial to all
China needs to continue with its ‘heavy lifting’
Time is right for Chinese firms to invest in Europe
Robots to the rescue for China?
Asian Multinationals are Going Global, But to Where?
China ratchets forward with energy efforts
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Bridging managerial gaps involves trust-building
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China's new 'springtime' is here
2016
China’s moves show it’s banking on the future
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Unlock talent by finding the right fit for a person
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2015
Can big oil go green and win?
Poorer Nations Could Sway Climate Talks
Combating Idleness and Deprivation
How China can be a model of food sustainability for the developing world
Kyoto II – Is it a Done Deal?
A meeting of the two largest economic powers
Why China will experience a 'soft' landing
Beware of superstitions
The Elephant and Dragon move ahead
G-7 target on fossil fuels raises many questions
Why Battle for Net Neutrality in the US Matters Globally
China’s resurgence – the ‘normal new’
Wanted: A managerial culture that embraces cultural differences
China's early education plan a smart investment in the future
The New Normal for China and India
2014
China's infrastructure push offers a sure track to better growth
US-China climate pact a good start, but not quite enough
Rethink the human’s place in the ‘digital revolution’
China springs a carbon surprise
Infrastructure - the invisible hand in full view
Dialogue vital for survival of Iraqi nation
China must nurture a new generation of beautiful minds
Great expectations in China and India
GM Cereals – The Pros and Corns
Time to be Honest about Our Energy Prospects
Weathering the Storm of Climate Change
Making a Big Decision? Beware of Your Biases
West Deserves Better Logistics Infrastructure
Digital Currencies do Represent the Future
From 'Printed' Houses to Wooden Skyscrapers
It’s time to bail out our schools, not our firms
Solution to India’s housing shortage – print new ones!
And the most promising green technologies of 2014 are ...
Transport infrastructure key to domestic, export growth
Oil stopgaps: Not worth risking
2013
Why the US should grant Edward Snowden amnesty
May we be more optimistic!
China headed for another massive social experiment?
A dialogue that worked
Yes, politicians deserve vacations - because we benefit
NPOs, NGOs invaluable as creators of dialogue
Look closer and ask: Is America reinventing itself?
Boston bombings case underlines need for dialogue
Millennium Development Goals or own goals?
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Chinese strategists make right moves for growth
2012
Preparing for tomorrow
Austerity or growth?
Japan in danger of becoming 'just a place to fly over'
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An inconvenient truth
Limited offer sale: Buy a country
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Leading from behind - a year of elections is almost over
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Preserve or Perish
Startlingly similar Asia policy for Obama, Romney
Globalisation remains an irresistible trend
Google has the edge in smartphone war
U.S. Braces for China's Rise
Mankind’s General Scourge
The summer holidays are over and nothing has changed!
Put the hidden trillions to work
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Storm in a teacup!
Let’s give bad bankers a venue to admit their sins
News is about depth, not puff or velocity
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Delayed Court decisions doesn't mean one may continue to play 'Great Game'
We need media to reflect on data and offer public a balanced view
Big polluters can lead in forging common purpose
The weighty issue of choosing a leader
EU-India Relations - Facing similar challenges
Educating with a goal
The Judicial Malaise
We are growing out, but not growing up
EU´s retrenchment enigma
Urbulence in the Eurozone and the effect on SMEs
Skolkovo May Help Russia to Diversify
Make things more effective
Tapping into the Commonwealth connection
Innovative models for public finance
Facebook revolution but Indian style
The feel-good factor
Asian investors - a private equity opportunity
India needs to be taller and stronger
China´s low sales volume...
Nations playing leapfrog
Shafts of sunlight
What webs we weave
As performers go to Davos, the circus steals the show
Can we control the politicians?
2011
Europe’s reminiscence
China firms should go for win-win in overseas ventures
Of procrastination...
Making sense of profiteering
Truth about financial mess must be laid bare
Small is also beautiful
China can help Europe with debt crisis
Excising the cancer of global corruption
Education, a critical asset
Arab uprisings set in motion forces of creative destruction
A new era of change
We must ensure better education for all
Beijing wary of bankrolling a lost cause
Asean's re-emergence as a local and global leader
Why India's Role in the Global Economy is Still Work in Progress
Its the leadership, stupid!
Reverse globalisation: The new buzzword
Small is also beautiful
By Frank-Jürgen Richter
Khaleej Times, October 29, 2011
 

We constantly find the media using 'sound bites' - little phrases beloved by sub-editors that fit small spaces which they hope will attract readers to their texts. Our friends and business colleagues also resort to talking in 'sound bites' which to the outsider may seem bizarre. But we are becoming attuned to this framework as we type abbreviated text into our mobiles when using social media sites. They don´t allow long conversations in flowing text - they demand 'R U OK' without even adding the grammatically correct '?' to end this question. Small is beautiful it seems.

Let us take this 'small' argument back to the atomic family: they would be nomadic living off vegetables, cereals and meats. Of course, their bodily inputs create outputs - exhaled CO2 and other discharges - but their foods yield energy to mend and grow the body; and any excess is used to walk onwards to new sites leaving nature to recover from its abuse as lesser organisms feed on the detritus. Once we move from this atomic world we need specialists and to live in large non-nomadic groups; there is the temptation to initiate 'economies of scale'.

We have seen over the past decades a mass movement from working the land to living in cities where we think we might make our fortune. For a few that is the case, but millions are trapped almost in slavery. There are said to be 20-30 such megacities: 14 are in Asia, each home to over 10 million people. Cities need infrastructures to survive, yet many support micro-communities within which many people are born and live out their lives, never seeing the other parts of the city, let alone the outside world. These micro-communities exist because of a natural break-down in the larger infrastructure as the city grew over the years - so the people went back to nature, as it were, living off whatever the nearby parts of the city could offer as inputs, and could receive back as trade or detritus in return. Tradable goods may be carried but rubbish can rarely be carried off hygienically, so all live in squalor. Yet, in passing through some of these ghettoes, one might be surprised at the pride the locals possess and how they aspire to live more cleanly: small might be beautiful. If only we could give them more potable water, and sewers to make the roadways clean we would be doing some good.

The obvious way would be to turn to the free-market and ask construction firms to install new infrastructure. Of course, we will not be surprised that globally respected firms will pull down parts of the old city fabric to expose solid earth within which to place their new pipe work - that this disrupts the micro-communities is regretted, they will say, but it is for the good of all. In this case small is assumed to be unbeautiful, and economies of scale win out.

At the Global Arab Business Meeting held recently in Ras al Khaimah, UAE, there was intertwined discussion of the global financial crises and how it may be affecting the Arab community. The meeting noted that almost everywhere nations depended on their Small and Medium Enterprises (SMEs) to create 95 per cent or more of their wealth, and that the managers of those firms needed to know that their local financial background was stable - so they could plan to buy resources or machines and hire the staff to create the outputs needed by their local value chain. If the financial systems were unsteady then the SME performance in general would be hampered and unduly restrained. Above all, the meeting noted, trust between parties was to be applauded. Trust is the lubricant of politics and commerce - but as Transparency International has noted, globally we trust less.

This is bad, as we need to be able to trust in the Big as well as the Small. In the latter we are close to the other people of our circle; but in the Big we have no idea who is managing our lives. And is the manager really human? In the globally connected digitally managed financial system we rely on computer software - not only for simple cash transfers, but also in micro-managing investments by the millisecond: can we really trust computers or the humans who created and tested the software? As Kurt Godel said in 1929 '... in any formal system of axioms there exists statements for which it is not possible to prove them true or false'. Thus we insist, we have to trust... And so we really need free-market capitalism that puts consumers and small businesses in charge. This allows them to plan their future; it encourages investment as well as spending, and it rejects debt piled on debt.

Presently, we observe both the continuation of the Arab Spring, and a growing global disgust of Big Government and the 'too-large' salaries of bankers even in countries that do not readily allow demonstrations - in South America, the Middle East and in Asia; and also in developed nations such as the US, the UK and across Europe. The demonstrators against 'Big' are an eclectic mix of students and professors, housewives and businessmen who protest at the level of taxes demanded by their governments, against the austerity inflicted on the people by their governments, or against the loss of jobs in the private and public sector. We all see the failure of investments by government on our behalf and what we are close to demanding is less, even zero, direct taxation. We would then, as individuals, assess the risk we might be willing to take in self-managing our money - we could save (and private investors might do our risk management for us), we could spend it (so enhancing growth everywhere), or we could keep it as cash (under the bed, which may not be too bad an idea sometimes). Even so, we must accept that globally we are all interconnected though Big and Small infrastructures, and we must also accept that some managers will receive large salaries. But they too must be transparent, respectful and not greedy.

We believe we cannot return absolutely to 'Small is Beautiful' as that won´t work for the masses in our megacities; we have to accept a mix of Big and Small infrastructures. What we need is a speedy return to low taxes and to educate all how to work in a free-market economy so individuals take on the responsibility for their own risk management. It may come as no surprise that the poor in the megacity microcosms work in a free-market economy, often by bartering their skills as they have little money to enter the real market. They have never left the 'Small' but it is local, and sadly for them it is not beautiful.

 

Frank-Jürgen Richter is founder and chairman of Horasis that hosts the annual Global Arab Business Meeting.

 


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