So when I heard that Financial Times Chief Economics Commentator Martin Wolf was in town to give a speech at the Garanti Future Summit, I was quick to sign up. At the IMF-World Bank Meetings in Istanbul, he had shared deep insights, not only during my interview with him and in the roundtables he was moderating, but also in the seminars where he was in the audience. Dr. Wolf was as brilliant and captivating as ever, but it was the second speaker who really stirred up the floor.
A charismatic speaker himself, Prof. Kishore Mahbubani, Dean of the National University of Singapore’s Lee Kuan Yew School of Public Policy, explained the reasons behind “The Irresistible Shift of Global Power to the East,” as his latest book is aptly titled. According to Prof. Mahbubani, Asia is finally on the rise again because Asian countries are implementing the seven pillars of Western wisdom: free markets, science & technology, pragmatism, meritocracy, culture of peace, rule of law and education.
As Profs. Asaf Savas Akat and Fuat Keyman, two of the designated discussants in the conference, noted, it was interesting that democracy was not one of Prof. Mahbubani’s seven pillars, especially given that recent empirical research has found a robust relationship between democracy and growth & development. When I asked him about this point during our interview, Prof. Mahbubani seemed to question the direction of causality, noting that all developing countries would eventually become democratic. As countries prospered, the booming middle classes would ensure a transition to democracy in his view.
Prof. Mahbubani also elaborated on the significance of his seven pillars for Turkey, underlining free markets, pragmatism and education as the most important ones. Having managed a year-long World Bank project on higher education and authored a report on university-industry relations, I find it impossible not to agree with his third pillar, but I am not sure his prescription of sending more students abroad is the right one, as Turks are already flocking to graduate programs in the U.S. As for his other two pillars, based on recent work on Turkey’s binding constraints, in which I participated as well, rule of law and science & technology could have been better picks.
…For the West doesn’t want you
Martin Wolf shared Prof. Mahbubani’s optimism of Asia and pessimism of Europe, both of which came under heavy fire from most of the discussants. But, as a Beşiktas fan, I tend to see the world in black and white rather than black or white. While the East is definitely rising, as Morgan Stanley’s Stephen Roach, who will soon join the faculty at my alma mater, underlines in the excellent essays in his recent book, Asia has quite a bit of challenges ahead. To his credit, Prof. Mahbubani is well aware of those challenges, which he discusses in his latest book as well.
Dr. Wolf also reinforced his long-running theme of correcting global imbalances during his presentation. Despite some recent research questioning his savings glut hypothesis as their cause, I, adopting Prof. Mahbunani’s pragmatism pillar, am more interested in policy implications of correcting the imbalances. In other words, how do we get the Germans and Chinese to consume more? This question is of vital importance for Turkey as well, as increasing the savings rate is often given as a panacea-for-all. I have yet to find a convincing answer, not only for Turkey, but also for the world economy.
Last but not the least, Martin Wolf thinks the EU will never get Turkey in, but you’d have to get into my blog to learn why...
Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at http://emredeliveli.blogspot.com.