Editorial: Today’s Globalized World and Business.

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drjohn11aDr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, and Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation.

Several republics of the collapsed Soviet Union became independent nations. These nations suddenly realized that they must be responsible for their own road ahead. The global spread of democracy intensified yet further this realization.

The rapid advancement of technological developments, globalization, and the “free” movement of goods, services and capital, has created a new geopolitical world with “free market” economic development taking “front seat” in the “Halls of Power and Policy making” of our world. Though we are witnessing, still, wars fought with advanced technology weapons these wars have been regional.

It has become ever so more clear that economically weak states become dependent on economic blocks for their future wellbeing. Though ideologies still are influential in policy formulation, economic strength has become a principal objective and “free market” economic systems are being adopted, not withstanding their flaws. Until an economics Einstein comes up with a new system in the future it is the best system we’ve got! It is the System that creates opportunities for enterprise creation that provides employment and economic advancement of the individual and the State. Naturally regulations and controls are necessary for checks and balances so that within human limitations the system operates fairly for all.

The above fundamental global changes have created further opportunities for entrepreneurs and existing corporations to look at a large world market, albeit with local considerations and cultural constrains. Nevertheless, opportunities for economic growth and expansion via vehicle of the business enterprise in relatively “free” less constrained from the recent past markets have increased significantly if the USA does not withdraw from world economic leadership.

Over the recent years President Obama’s foreign policy statements have been interpreted as, and renewed the argument of, neo-isolationism in America. We all know that 25 years ago the USA, by default, became the only Super-Power in the world. However, in recent times there has been an intensive argument throughout the Halls of foreign policy centers that China has risen to challenge that. Also a “recovering” Russia is becoming a challenger as well. Let’s see if that can be supported by facts, at least at this point in time. For example: The U.S. GDP for this year is estimated to be around 17 trillion in US$ is over double that of the Chinese and their per capita income is barely12% that of the U.S.; Russian GDP is only about 15% of the U.S.; For Defense the US spends over $700 billion which is about is seven times of Chinese Defense expenditures. Correspondingly the US defense expenditure are, approximately 40% of the entire world’s expenditures. It is hard if not impossible to argue that the US is not the only super-power, economically, technologically and militarily.

We should not, however, disregard the role that regional powers such as Russia, China and India play – and the emerging other regional powers such as Brazil, Nigeria or South Africa as well – when we consider business strategies and formulate economic policies, particularly when we must integrate in our thinking and strategy formulation the threat of terrorism.

Under no circumstances will the US be displaced from her leadership position for several decades. However, the balance of power around the world will require flexible and adoptable policies dealing with the peculiarities of the region at hand.

Though indisputably the US is the only Super Power, we now have a complex global system with critical and asymmetric challenges from many parts of the world in economic and strategic issues that that make the conduct of business very challenging with high risks. However, the Global interconnection opens up a multiple of “doors” of opportunity for enterprise creation and economic growth.

The broad problem is the regional instabilities: tensions, crises and conflicts that occur in the “second” and “third” world countries – in Asia , in Africa , and Latin America ; , but also in the vicinity of “post cold war Russia’s borders, as evidenced recently in Georgia, and the ongoing Ukrainian crisis. This kind of volatility affects economic and business development as well as trade exchange interests.

The leading USA presence in the Atlantic Alliance, the close cooperation with the European Union, and bilateral ties with strategic partners such as Japan, South Korea, or Israel , must continue to be the U.S.’ high priorities . The American diplomacy must continue the efforts in smoothening the differences and tensions between states friendly to the U.S.: for example, between Israel and Saudi Arabia; Turkey and Israel; Japan and South Korea; Turkey and Greece.

On the other hand, a major challenge for the post-Cold War Washington is handling two major regional powers with global ambitions, Russia and – especially – China.

The U.S. side maintains close trade and financial relations with the Chinese while seek China’s cooperation in solving international problems of great importance, and most especially regarding North Koreans, and at the same time attempting to set up a barrier to emerging hegemonic aspirations Beijing might have.

Fluctuations of U.S. policy have occurred with respect to the control of regional instability and related terrorism. Public opinion has led the American leadership in adopting more realistic targets and to a more limited but selective use of military means.

The notion, therefore, that the U.S. is returning to the pre- World War II isolationism is inaccurate. It is also wrong to assume that the increased interest in Asia it means turning our backs on Europe and the Middle East. Both President Obama and his Secretary of State John Kerry are convincing with their public statement that the USA is not moving in that direction.

In conclusion: Under the pressure of events, the guidelines of U.S. foreign policy approach increasingly moves along the thinking of veteran-advocates of geopolitical realism, i.e. former Secretaries of State Henry Kissinger and James Baker and former presidential advisers Brent Scowcroft and Zbigniew Brzezinski. The ideological barriers to “Free Market” economies have been practically eliminated. The world has entered a new epoch of economic competition and growth that the proliferation and thriving free market business enterprises bring about in societies / nations that have achieved / establishing economic freedom.

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