Briefing in economics: Strategy for the US to retain/regain its economic lead (Frank Owarish, Ph.D.)

In economics there is empirical evidence to show that the size of a country does matter and countries overcome setbacks by joining/forming economic grouping. Singapore is a small country/city but by leveraging ASEAN it has become an economic powerhouse. By the way ASEAN recently evolved into an even more powerful economic machine. The European Union is another case in point of successful economic grouping albeit with occasional agonies. How about Japan (country with the size of California)? How did it address the size question? Well in this case it operates with the world as its market with the so-called borderless world economic philosophy.

Africa: the regional entities will definitely be the stepping stones toward African Union. For the economy to progress there has to be investment of a significant magnitude and this will not happen without peace and a functioning law and order system; countries meeting these criteria are succeeding (examples: Mauritius, Angola, South Africa)..

Slowly but surely China is reaching out to Africa and Latin America in a way somewhat similar to that followed by Japan but in this case leveraging the private sector through the public sector with offers of better economic partnerships.

There are talks going on among Japan, China and South Korea. This is the economic powerhouse to watch. China and Taiwan already see the benefits of economic partnering.

Russia has size and resources and is an economic power by itself, managing large supply of oil and gas. The European Union is finally addressing the over-reliance question and attention is being devoted to the alternatives including Nabucco. Pipelining through Iraq and Afghanistan have proven to be more tricky. 

Now on to the strategic punch-line: the US achieved economic prominence post WW2 with a) the size of its market and b) with expansion overseas and c) with its competitiveness. Today, the European Union and ASEAN and China by its mere size and its expansion policy are bigger than the US. China won big on the US market and that of the European Union and any other parts of the world by its competitiveness. The US needs to rework on NAFTA and on CAFTA and LAFTA on the economic size problem (with win-win partnerships, economically and politically!); by working with Canada, Mexico, other Central American and the Latin American countries. In this context, the US would regain albeit enhance its competitiveness and obtain the products/services it needs from that new albeit revived/developed economic grouping instead of importing from other economic groups and countries; in this context also the US could then increase its export to other countries and economic groups by its regained competitiveness. The US should also work out an economic partnership with Africa, helping the continent out and helping itself (win-win formula again).

It is all about political economy. In countries doing well economically speaking, there is a close cooperation between the public and private sectors often nurturing needed technologies and building competitiveness (South Korea is an example to admire). Yet we also find in these cases stronger public oversight and checks and balances which in the end are mutually beneficial.