Die Neue Zeit
17th March 2008, 01:52
http://www.boston.com/bostonglobe/ideas/articles/2008/03/16/state_inc/?p1
The most important new forces in global business are aggressive, wealthy, and entrepreneurial. But they aren't corporations: they're authoritarian governments.
...
IT WAS THE biggest corporate deal in the history of sub-Saharan Africa: Last October, a foreign firm spent nearly $6 billion for a chunk of Standard Bank, the South African company that has long dominated finance on the continent.
more stories like this
Yet the foreign suitor was not Citigroup, or UBS, or some other titan of private commerce. It was the Industrial and Commercial Bank of China, a company owned wholly by the Chinese government.
On a business level, the deal gave ICBC's Chinese customers access to banking across Africa, and set the stage for closer relations between Chinese companies and African nations. In a bigger sense, it embodies a change that is reshaping the dynamics of global business.
In the past five years, governments around the world have been transforming themselves into deal makers and business players on a scale never seen in the modern era. In China, state-owned oil giant PetroChina has become the largest company in the world, worth more than $1 trillion. In Russia, state-owned Gazprom has grown into the world's largest gas company. States are also wielding influence by directly buying into major private firms: The investment fund run by the Arab emirate of Abu Dhabi is now the world's largest, and recently spent $7.5 billion to become the top shareholder of the American financial giant Citigroup. Singapore's state-controlled wealth fund, Temasek Holdings, sank $5 billion into Merrill Lynch, the largest US brokerage. By 2015, according to an estimate by Morgan Stanley, such state-owned funds will control a staggering $12 trillion, far outpacing any private investors.
The rise of states as global economic players marks a sharp reversal from decades in which private enterprise seemed an unstoppable force in global finance, commerce, and culture. It represents a new and unexpected fusion of state control with the business principles of capitalism. And it is already causing a significant shift in global power.
...
In Syria, the government of Bashar Assad has launched plans to emulate China, while in Iran both reformers and conservatives have discussed how to copy China. Raul Castro, who has visited China several times, reportedly wants to emulate Beijing in revamping Cuba's economy.
Other nations are building their own powerhouse companies. In Russia, Vladimir Putin essentially has shut down most of Russia's privately held natural resources companies in order to build up the national gas firm Gazprom and other state companies. Gazprom alone controls roughly one-fifth of all gas production in the world, far larger than any private sector rival. (And its financial power translates into political power: Presumptive next Russian president Dmitry Medvedev, anointed by Putin, previously ran Gazprom.) Under Putin, the Kremlin also has extended its reach into industries from titanium manufacturing to aviation.
Across Latin America and Central Asia, governments like Bolivia, Venezuela, and Kazakhstan also have reasserted state control over their oil and gas resources.Already, many of these national companies dwarf any rivals. State-owned oil companies around the world now control nearly five times the reserves of their private rivals; Saudi Aramco, the Saudi government's oil company, can pump roughly three times as much oil as any other firm, and has launched a massive $50 billion expansion program that will make it even more powerful. Corporate behemoths such as ExxonMobil and Shell may be among the largest private corporations in the world, but they are no longer the biggest players in their own industry.
In aviation, an industry that requires vast amounts of capital, state-linked airlines now dominate private firms. From virtually nothing two decades ago, Dubai has built Emirates airlines, backed by the state, into a world leader and the second-most profitable airline in the world. The most profitable, Singapore Airlines, also enjoys state support - Singapore's state-owned fund owns nearly half the airline, as well as six of the country's other largest corporations.
...
The state capitalists also are gaining influence through their power in global finance. As firms like Merrill Lynch and Citigroup have found out, state funds provide a vital new source of investment across a world in need of capital. The funds are increasingly bailing out American banks, giving them significant leverage over the US financial sector.
They also are forcing the financial world, accustomed to a tight circle of power concentrated in places like New York and London, to woo developing nations. As shown by this winter's deals, leading banks have begun aggressively courting Middle Eastern and Asian state funds. Global institutions, too, understand the power shift: Recognizing China's growing economic might, the International Monetary Fund has revamped its voting structure to give Beijing more power.
What about the words of one William Liebknecht (http://en.wikipedia.org/wiki/State_capitalism):
"Nobody has combated State Socialism more than we German Socialists; nobody has shown more distinctively than I, that State Socialism is really State capitalism!"
???
[FYI: The context was the German economy under Bismarck, so hopefully nobody tries to misconstrue the quote as a pro-anarchist one.]
The most important new forces in global business are aggressive, wealthy, and entrepreneurial. But they aren't corporations: they're authoritarian governments.
...
IT WAS THE biggest corporate deal in the history of sub-Saharan Africa: Last October, a foreign firm spent nearly $6 billion for a chunk of Standard Bank, the South African company that has long dominated finance on the continent.
more stories like this
Yet the foreign suitor was not Citigroup, or UBS, or some other titan of private commerce. It was the Industrial and Commercial Bank of China, a company owned wholly by the Chinese government.
On a business level, the deal gave ICBC's Chinese customers access to banking across Africa, and set the stage for closer relations between Chinese companies and African nations. In a bigger sense, it embodies a change that is reshaping the dynamics of global business.
In the past five years, governments around the world have been transforming themselves into deal makers and business players on a scale never seen in the modern era. In China, state-owned oil giant PetroChina has become the largest company in the world, worth more than $1 trillion. In Russia, state-owned Gazprom has grown into the world's largest gas company. States are also wielding influence by directly buying into major private firms: The investment fund run by the Arab emirate of Abu Dhabi is now the world's largest, and recently spent $7.5 billion to become the top shareholder of the American financial giant Citigroup. Singapore's state-controlled wealth fund, Temasek Holdings, sank $5 billion into Merrill Lynch, the largest US brokerage. By 2015, according to an estimate by Morgan Stanley, such state-owned funds will control a staggering $12 trillion, far outpacing any private investors.
The rise of states as global economic players marks a sharp reversal from decades in which private enterprise seemed an unstoppable force in global finance, commerce, and culture. It represents a new and unexpected fusion of state control with the business principles of capitalism. And it is already causing a significant shift in global power.
...
In Syria, the government of Bashar Assad has launched plans to emulate China, while in Iran both reformers and conservatives have discussed how to copy China. Raul Castro, who has visited China several times, reportedly wants to emulate Beijing in revamping Cuba's economy.
Other nations are building their own powerhouse companies. In Russia, Vladimir Putin essentially has shut down most of Russia's privately held natural resources companies in order to build up the national gas firm Gazprom and other state companies. Gazprom alone controls roughly one-fifth of all gas production in the world, far larger than any private sector rival. (And its financial power translates into political power: Presumptive next Russian president Dmitry Medvedev, anointed by Putin, previously ran Gazprom.) Under Putin, the Kremlin also has extended its reach into industries from titanium manufacturing to aviation.
Across Latin America and Central Asia, governments like Bolivia, Venezuela, and Kazakhstan also have reasserted state control over their oil and gas resources.Already, many of these national companies dwarf any rivals. State-owned oil companies around the world now control nearly five times the reserves of their private rivals; Saudi Aramco, the Saudi government's oil company, can pump roughly three times as much oil as any other firm, and has launched a massive $50 billion expansion program that will make it even more powerful. Corporate behemoths such as ExxonMobil and Shell may be among the largest private corporations in the world, but they are no longer the biggest players in their own industry.
In aviation, an industry that requires vast amounts of capital, state-linked airlines now dominate private firms. From virtually nothing two decades ago, Dubai has built Emirates airlines, backed by the state, into a world leader and the second-most profitable airline in the world. The most profitable, Singapore Airlines, also enjoys state support - Singapore's state-owned fund owns nearly half the airline, as well as six of the country's other largest corporations.
...
The state capitalists also are gaining influence through their power in global finance. As firms like Merrill Lynch and Citigroup have found out, state funds provide a vital new source of investment across a world in need of capital. The funds are increasingly bailing out American banks, giving them significant leverage over the US financial sector.
They also are forcing the financial world, accustomed to a tight circle of power concentrated in places like New York and London, to woo developing nations. As shown by this winter's deals, leading banks have begun aggressively courting Middle Eastern and Asian state funds. Global institutions, too, understand the power shift: Recognizing China's growing economic might, the International Monetary Fund has revamped its voting structure to give Beijing more power.
What about the words of one William Liebknecht (http://en.wikipedia.org/wiki/State_capitalism):
"Nobody has combated State Socialism more than we German Socialists; nobody has shown more distinctively than I, that State Socialism is really State capitalism!"
???
[FYI: The context was the German economy under Bismarck, so hopefully nobody tries to misconstrue the quote as a pro-anarchist one.]