Monday, November 19, 2007

NYC vs. London : Global Financial Capital ?

A very interesting piece by Ken Livingstone, Mayor of London in the Times of India. Ken is somewhat of a maverick, however what he says here makes a lot of sense.

As a New Yorker, what struck me most about the piece was Ken reaching out and writing a piece in India about the long term role of India as a growing economic superpower in the future of his own city : London. A manifestation of long term strategic vision and acceptance of ground level realities while not getting bogged down in talk about a hoary past. Can't visualize Mayor Bloomberg (NYC) doing something like that. NYC ( like rest of the US) seems to have become internally focused since 9/11 and risks losing it's position as the Global Economic Capital.

This should serve as a wake up call to the political and economic leaders here in the US. The world is surging ahead and we seem to have been caught up in a single point agenda : "War". While that may be important, losing the focus on the other balls in the air : Economy, Trade, Global Competitiveness etc. will make us weaker in the long run. Need of the hour is for leadership that has the ability to "multi task". Let's hope 2009 has that in store for us.

Ken Livingstone's piece. I have added some highlights to the points which piqued my interest as a New Yorker. :

Britain As India's Colony

19 Nov 2007, 0000 hrs IST,Ken Livingstone

India and Britain inhabit a world changing so rapidly that to bring out its character let's deliberately put it in stark, even 'provocative', terms. In 20 years time, only three people are guaranteed a place at the top table of the world's affairs - the presidents of the US and China and the prime minister of India. By then, the world will have shifted so much that if there were to be war between Britain and India, Britain would be more likely to end up as a colony of India than the other way round. Fortunately, for everybody concerned with humanity, has progressed to the point where colonies no longer exist and war, while not eliminated, has diminished. But such facts show the intensity of current transformations.

Globalisation, which is the framework for these shifts, cannot be conceived purely as an economic process. Those who believe that we will trade with, and invest in, each other’s countries more but everything else will stay the same are in for a severe shock.

Economic interaction is certainly accelerating. In London, it is a striking indicator that India now has the largest number of foreign inward investment projects after the US, and the spend of Indian tourists coming to London exceeds Japan’s. But overall London’s huge success, with studies showing it pulling ahead of even New York as an international business centre, is primarily due to its understanding of the shifts produced by globalisation.

New York’s dominance as the 20th century’s international financial centre was based on the US generating the overwhelming share of the world’s capital — accessing which was only possible in New York. This is no longer true.

Today, the greatest sources of world growth and capital are India, Russia and China. As recently as 2001, 54 per cent of IPOs of more than $1 billion were in New York.

Last year that fell to 17 per cent. Onerous and protectionist US restrictions need no longer be accepted. Economically the current problems in the US financial system, and the dollar’s, will further increase the attractiveness of London compared to New York.

The ramifications of globalisation socially are equally clear, and most pronounced in the most advanced international business centres. A third of London’s population was born abroad and 40 per cent of New York’s.

No one will solve the problem of having an international city without a very large number of foreigners. This reinforces the cultural, educational, policing and other consequences flowing from globalisation.

Trade always produced cultural influence but in the age of the internet and mass communications the speed of such influence is amplified greatly. Globalisation has not only an economic but also a profound cultural dimension. In the world’s great cities this mutual influence is the greatest.

Young people in London, Mumbai, Delhi, New York, or Paris have lives that are converging rapidly. They use the same technologies to make their lifestyle and have many similar aspirations. That in some cases they cannot yet directly talk to each other is merely a technical translation problem computers will solve during the first half of this century.

Two years ago, a commentator remarked that the lived experience of someone in London is already in many ways more similar to that of someone in Paris than life in London is to that in a small English village. Naturally this does not mean we will all change and become the same.

Culture changes more slowly than economy or politics. Leaving behind eras of conquest and colonialism means that culture change is now voluntary with people integrating from many societies to make their lifestyle - the iPod dominates everywhere while Chak de! India recently became the first Indian film to enter London’s top 10 most watched films.

The most fundamental shift of all is that current transformations mean 500 years of ‘West European’ cultural dominance, linked to its expansion across the world, is ending.

India is not merely a huge economy but one of the world’s greatest cultures. I constantly repeat in speeches in London that if people think the cultural impact of the India in our city is already great, which of course it is, in reality it has hardly begun.

This is the real basis of the new relations of London and India. The pre-eminent position to which India is heading is naturally not determined by the relative worth of individuals in Britain and India - which is entirely equal. It is determined by India’s rapid economic growth and that only partition obscures the fact that the Indian subcontinent already has a greater population than China.

Britain will never again be the world’s largest economy. However, London is the world’s most international city - a reality, not a boast. That internationalisation, in turn, makes London not only the world’s leading international financial centre but simultaneously a powerhouse of creative industries, of design, marketing, advertising and public relations - the best single stop most things Indian companies need to go global.

That equation - India is a rising economic superpower, London is the world’s leading international business centre - indicates the real common interests of both. Mutual interest for the future, not reminiscences about the past, is the firmest basis for friendship. (The writer is mayor of London.)

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