Chart of the day: Cinema B.O. reflects globalization of mass media

Per my many past posts on the subject, a great chart showing how flat domestic US box office is (hovering around $10B mark), while DVD sales have come and gone and Blu-Rays aren't filling the gap as Internet- and cable-delivered (virtually indistinguishable when it comes to the home) take over with their much-thinner margins (none of that being shown on this Economist chart).

Thus, why it's so crucial to Hollywood that foreign B.O. has more than doubled in last decade, and shows all signs of taking off even more.

Why?  As with most things, it's the emergence of the global middle class.  Think to when movies took off in America (1920s) and then realize how sustaining they were even during the Great Depression (escapism), thus all bottom-of-the-pyramid logic plays here too.

WPR's The New Rules: America Need Not Fear Connectivity Revolutions

A lot of international relations theories are being stress-tested by events in the Arab world right now, with some emerging better than others. Two in particular that are worth mentioning are Ian Bremmer's 2006 book, "The J Curve," which predicts a dangerous dip into instability when closed, authoritarian states attempt to open up to the world; and Evgeny Morozov's new book, "The Net Delusion," which critiques the notion that Internet connectivity is inherently democratizing. (In the interests of transparency, I work as a consultant for Bremmer's political risk consultancy, Eurasia Group, and penned a pre-publication blurb for Morozov's book.)

Read the entire column at World Politics Review.

Africa: a place NOT to leave alone

George Friedman's new book, "The Next Decade," presents his usual shtick that looks suspiciously like a rerun of WWII (as all his stuff does).  We are made to believe the Japanese threat is still there (Friedman is still trying to justify his early 1990s book that said war with Japan was inevitable), that China will fragment (oh so InterWar), and that Russia and Germany will ally in a frightening Molotov-Ribbentrop way (no kidding!  that's why we must quickly ally with Poland!).

But the bit that got me was his chapter on Africa, which he entitled, "A place to leave alone."  Why?  By his geopol standards, it isn't coherent enough to create a dominating challenger to US global empire, so no reason for US to go there whatsoever.

Interesting perspective.

I would tell you that Africa is going to be the ground zero for globalization's economic and network integration over the next 2-3 decades, as in, a very happening and increasingly coherent place.  But no, no hegemonic dragons for the US to slay.

And you have to ask yourself: is that all there is to US grand strategy?  Preventing the rise of challengers and asserting primacy?  Because I thought that path got explored fairly aggressively in Bush-Cheney to almost nobody's satisfaction.  And are we, on the basis of such thinking, simply supposed to ignore major chunks of the world?

Again, brilliant stuff if your goal is to shape Eurasia prior to, during and following WWIII there (read Friedman's hilarious "Moonraker" war between Japan and the US on the dark side of that celestial body in his "Next 100 Years"), but my reading of US grand strategy since around 1900 is all about creating that open door-cum-post WWII international liberal trade order-cum-the West-cum-the global economy-cum-globalization.  To me, the goal of primacy (deflecting all rising would-be competing great powers) is entirely unAmerican. It's simply not who we are as a people or what we've done these last several decades as a superpower.

But Friedman completely ignores the concept and reality of globalization, preferring his stated dream that Americans finally realize they're running a world empire (honestly! he's sticking with this fantasy after the Global Financial Crisis revealed a world a bit more balanced than he cares to admit).  Check out either book and you will see virtually no references to globalization (albeit one on globalization in the 16th century in "Next 100 Years") - as if he simply doesn't "do" globalization.  And that's why his books have a weird, back-to-the-future feel whereby we're still worried about Russo-German schemes to rule the world!

Better than reading Friedman's WWII redux material, check out the WSJ's running serial on the emergence of the middle class in Africa, hence my chart of the day:

This is why Wal-Mart doesn't consider Africa "a place to leave alone," nor should any serious global corporation.

Nor, frankly, should the US.

We have to be able to see a world for what it is, not for what we're conditioned to look for.  Friedman still sees the world in terms of great powers balancing each other out of the 1920s-1930s, because that's what he was classically trained to see.  But I ask you, how is his persistence in spotting what he wants to spot any different from a religious type who keeps seeing "clear evidence" of the Book of Revelations in events in the Middle East?  Both of these characters have their preferred storyline from the past, and by God, they ain't swapping it out for anything!

To me, that's not teaching people how to think strategically, but the exact opposite.  It's providing a familiar, fixed box and then encouraging readers to lop off those limbs of the world body that do not fit this Procrustean bed - like Africa.

And unfortunately, that sort of approach yields a solid 2-3% capture of globalization's fascinatingly dynamic and complex reality.  Get smart at viewing that holistically and you've got a grip on the world as we know it.

Or you can fantasize that America's grand strategy of this decade is thwarting Japan's resurrected militarism and Russo-German schemes to dominate the heartland of Europe!  

Achtung baby!

Friedman's memo to China:  you're conquering the world all wrong!

China to Friedman: very true, and completely irrelevant.

WPR's The New Rules: "The Battle for Islam's Soul"

Beginning with the Iranian Revolution in 1979, the West has viewed the Middle East and North Africa primarily through the lens of radical fundamentalist political movements. That perspective has narrowed our strategic vision ever since, conflating Shiite with Sunni, evangelicals with fundamentalists, Persians with Arabs, Islamists with autocrats, and so on. But recent events in Tunisia and Algeria remind us that the vast bulk of history's revolutions are fueled by economics, not politics. In this, the struggle for Islam's soul is no different than that of any other civilization in this age of globalization's rapid expansion.

Read the entire column at World Politics Review.

WPR's The New Rules: Globalization, Air Hubs and the City of Tomorrow

H.G. Wells’ futuristic 1933 classic, “The Shape of Things of Come,” predicted a post-apocalyptic world in which humanity’s recovery would depend on the airplane as the primary mechanism for both travel and political rule -- the benevolent “dictatorship of the air.”  The book reflected Wells’ prescient fears of catastrophic world war and his faith in technology’s capacity to tame mankind’s worst instincts.  

A book due out in March entitled, “Aerotropolis: The Way We’ll Live Next,” is the closest thing to a real-world vision to rival that of Wells. The book, written by journalist Greg Lindsay, is based on the visionary ideas of business professor John Kasarda, a latter-day Wells who dreams of building future cities around airports instead of the other way around.

Read the entire column at World Politics Review.

On food, Asia can't keep pace with rising middle class demand

WSJ story on how Asia's food demand continues to rise while the amount of land devoted to food production is pretty much capped this decade due to urbanization and planned investments just aren't happening as envisioned (so yield per acre not rising enough to cover the delta in demand).

The plan was to dramatically boost farm investment in Asia's developing countries after the scary price spikes in 2007-08, which may be remembered in the same way as the original OPEC price spikes of the early and late 1970s--a harbinger of a permanently tight market where any de-synching of demand and supply leads to real and perceived crises of the highest order (as in, governments fear for their regime stability).  

Examples of the investment:  opening up land previously considered marginal and improving farm-to-processor infrastructure (mostly roads and storage facilities).  The big hold-up, unsurprisingly, is the financial crisis.  Then there's the usual uncertainty on land ownership and fears of environmental ruin.  

Why things won't get so bad globally this time around:  grain stores are up and the economy is weaker, but these are temporary conditions that do not obviate the strong underlying trends.  As one researcher on rice puts it in the piece, "2008 was not just a blip, this is the way things will be, with repeated shocks."

The financial crisis, in my mind, caught Asia about a decade too early--not enough rules and not enough positive evolution on politics (especially the talent level of leadership) and not enough development of financial markets (in terms of being more fluid and responsive).  Asia in general is still burdened by rules and leadership and mindsets better attuned to extensive growth (throw in more stuff!) and the ag scene calls for intensive-growth answers (much higher yields on same amount of land).  The Philippines, as the piece notes, produced 92% of its rice in 2000, but is already down below 80% today.  That gap will only grow, because most dreams of getting access to unused land won't come true (the urbanization going on is likewise intense) and even if access is had, yields won't be so high without serious investment.

In the end, all the brave talk about food self-sufficiency in Asia is just nonsense; ain't never gonna happen. But Asia certainly could do better, so that the demand doesn't outstrip local supply too intensely too fast.  We've seen more than a few Asian states move into that outsourcing trend of renting or buying up nice farmland overseas (in Africa, for example), but that only buys you a whole new load of responsibilities that I think a lot of these countries--especially China--are ill-prepared to follow through on.

I remember driving from Addis Ababa down to Awassa in southern Ethiopia and seeing huge chunks of the best farmland sort of tarp'd off--as in, covered on all sides and seemingly roofed with simple metal skeletons wrapped in this thin but opaque poly skin (I assumed the topsides where clear enough to let in the bulk of the sunlight).    It was a stunning sight to behold:  all this open, rich farmland still operated in very early 20th century terms and then these huge, fenced off and covered up tracts where--apparently--a whole new level of effort was being made.  Unsurprisingly, I saw labor barracks nearby with a Chinese flag flying out front.

Now, you can say, this all works so long as the local government makes it work, but if a food crisis really comes along and the local population is suffering in a way that's undeniable in terms of global news coverage, then that thin poly cover-up won't be enough to keep that food production secret and safe.  And China will find itself unusually responsible for what comes next in places like Ethiopia.

And that's when the whole "non-interference" things gets revealed as so much empty talk.  There is no way China rises and becomes what it is becoming without have huge interfering effect all over the planet, and people will hold it responsible for all that change--both the good and bad.  

Don't get me wrong:  I think China's impact will be overwhelmingly positive overall, as the sustained demand for resources does plenty to jump start and fuel development in places like Africa in ways that the boom-and-bust cycle previously offered by the West did not.  But with the good will come the bad, and that means China gets dragged into all sorts of uncomfortable dynamics it has previously sought to avoid.  

This is why I argue that serious strategic partnership with the U.S. is hardly just in America's short- and medium-term interest (due to its current straining to meet its global security obligations). Over the long term, it's far more in China's interest. Back in "Blueprint," I said America needed to "lock in China at today's prices," but the obverse is equally true now:  prices will never be lower and China will never find a more pragmatic leader than Obama, because if he loses in 2012, expect the usual "apres moi, le deluge!" reactions to kick in. 

This is another example of why I think the 2010s are a turning-point decade--as in, get it right and globalization's future is secured, but screw it up, and far different global pathways are made possible.  Inside all those dynamics, the US-Chinese relationship is the long pole in the tent:  get it right and nothing can go wrong, but get it wrong and nothing will likely go right. Why?  The rise of the global middle class means there will be so little slack in so many systems, that it'll feel like we're collectively in constant crisis.  This environment yields the "keeping all the balls in the air" mindset currently on display at State with Clinton (who needs to aspire to higher goals than just this).  The same is unfortunately true in Beijing.  All this kicking-the-cans-down-the-road lack-of-ambition serves the world poorly at this moment of great structural change: everybody of note seems to avoid leadership.

But there's no question about China becoming far more of a global leader; it has no choice.  The question is how much of this leadership emerges pro-actively from Beijing, and how much is teeth-pulling from the rest of the world.

China's JFK is yet to emerge, but he was one of the "heroes of the future" I cited at the end of "Blueprint for Action":  the leader who steps up and asks China to think less of what the world owes it (after all those decades of "humiliation" and the long slow climb back up from widespread poverty) and more about what China owes the world.  That moment/leader will be a defining dynamic for the 21st century and how the world evolves.

And food is more likely to drive that process than energy or anything else.

Wal-Mart moves into Africa big time

WSJ and FT pair of stories.  Scanned graphic from latter.

Apparently, Wal-Mart didn't get the "deglobalization" memo.

Wal-Mart bids $4.6B for Massmart Stores chain, a South African company.  The offer, if it goes through, would give Wal-Mart an instant presence of 290 stores in 13 countries.  

The offer is a good one--almost too high for the industry, indicating Wal-Mart's sense of urgency.  As the WSJ piece declares, it's an "aggressive and expensive bid to expand in Africa ahead of its international competitors."

Unlike in booming Brazil, where Wal-Mart has spent plenty and still trails Carrefour in sales share, the company is looking to springboard ahead in Africa.  Carrefour also holds the top international retail spot in China.  Clearly, Africa is a riskier bet/environment than either of those too, but with consumer spending in the trillion dollar range (aggregate), the continent is hard to ignore.  

Emerging/overseas markets now make up one quarter of Wal-Mart's $400B-plus annual revenue, and it is clearly the growth engine in the company.  Wal-Mart is said to be examining Russia and the Middle East as well.  

Places where this strategy of buying a local chain have failed for Wal-Mart tend to be more established markets--to wit, Germany and South Korea.

But when it comes to sub-Saharan Africa, the clear choice is to buy South African chains.  They draw neighboring states' consumers and typically reach back into those same states with satellite stores.

Wal-Mart is paying 13 times pre-tax earnings, which is a nice price for most industries but particularly good for a retail player in developing markets.

As usual, Wal-Mart's entry is expected to shake up the existing grocery oligopoly.

You want an example of how the Gap gets shrunk?  It doesn't much better than this.

Blast from my past: "The Rise of the Global Middle Class" (2009)

The Rise of the Global Middle Class

by

Thomas P.M. Barnett

Good magazine (Jan/Feb 2009), pp. 90-91.

America has had the biggest demand in the global economy for so long that we can’t remember what it was like when that wasn’t the case. But that’s all about to change.

I’ll let you in on a little secret about globalization: It is demand that determines power, not supply. Consumption is king; everybody else serves at will. So it ain’t about who’s got the biggest military complex but who’s got the biggest middle class. Everybody’s got the dream. What matters is who can pay for it.

For as long as we can remember, that’s been America—the consumer around which the entire global economy revolved. What’s it like to be the global demand center? The world revolves around your needs, your desires, and your ambitions. Your favorite stories become the world’s most popular entertainment. Your fears become the dominant political issues. You are the E. F. Hutton of consumption: When you talk, everybody listens. That was the role the Boomers played for decades in America and—by extension—around the world through their unprecedented purchasing power. But that dominance is nearing an end.

In coming decades, it won’t belong to Americans, but to Asians. So say hello to your new master, corporate America: Mr. and Mrs. M. C. Chindia.

The rise of the Asian middle class, a binary system centered in China and India, alters the very gravity of the global economy. The vast sucking sound you hear is not American jobs going overseas, but damn near every natural resource being drawn into Asia’s yawning maw. Achieving middle-class status means shifting from needs to wants, so Asia’s rise means that Asia’s wants will determine our planet’s future—perhaps its very survival. And as any environmentalist with a calculator knows, it isn’t possible for China and India to replicate the West’s consumption model, so however this plays out, the world must learn to live with their translation of the American dream.

As for the new middle class’s relative size, think bread truck, not breadbasket: Over the next couple of decades, the percent of the world’s population that can be considered middle class, judging by purchasing power, will almost double, from just over a quarter of the population to more like half. The bulk of this increase will occur in China and India, where the percentage shifts will be similar. So if we round off China and India today as having 2.5 billion people, then their middle class will jump in numerical size from being roughly equivalent to the population of North America or the European Union to being their combined total.

The vast sucking sound you hear is not American jobs going overseas, but damn near every natural resource being drawn into Asia’s yawning maw.

No, it won’t be your father’s middle class—not at first. Much of that Asian wave now crests at a household income level that most Americans would associate with the working poor, but it will grow into solid middle-class status over the coming years through urbanization and job migration from manufacturing to services. And for global companies that thrive on selling to the middle class, this is already where all the sales growth is occurring, and it’s only going to get bigger. As far as global business is concerned, there is no sweeter spot than an emerging demand center, because we’re talking about an entire generation in need of branding—more than 500 million teenagers looking to forge consumer identities.

There are also essentially two unknowable wild cards associated with the rise of China’s and India’s middle classes: First, how can they achieve an acceptable standard of living without replicating the West’s resource-wasteful version? And second, what would happen if that middle-class lifestyle was suddenly threatened or even reversed? The planet must have an answer to the first question, even as it hopes to avoid ever addressing the second. Here’s where those two fears may converge: As their income rises, their diets change. Not just taking in more food, but far more resource-intensive food, like dairy and meat. Right now, China imports vast amounts of food and India is just barely self-sufficient in the all-important grains category. Both are likely to suffer losses in agricultural production in coming years and decades, thanks to global warming, just as internal demand balloons with that middle class. Meanwhile, roughly one-third of world’s advanced-lifestyle afflictions—like diabetes or cancer—will be found in China and India by 2030. Toss in the fact that much of the population lives along the low-lying coasts, and our notional middle-class couple could eventually cast the deciding global votes on the issue of whether or not global warming is worth addressing aggressively.

Whoever captures the middle-class flag in coming years will have to possess the soft power necessary to shape globalization’s soul in this century, because humanity’s very survival depends on our generation’s ability to channel today’s rising social anger into a lengthy period of social reform. This era’s global capitalism must first be shamed (populism) and then tamed (progressivism), just as America’s rapacious version was more than a century ago. Today’s global financial crisis simply marks the opening bell in a worldwide fight that is destined to go many rounds.

Industry stewardship of the genetic code

Reuters @ Yahoo via my spouse, Vonne.

An interesting public-private partnership here:

Candy maker Mars Inc., computer company IBM Corp. and the U.S. Department of Agriculture have mapped the cacao genome in an effort to improve cocoa crop quality and sustain the world's supply of the key ingredient for chocolate.

The companies and the USDA's Agricultural Research Service (USDA-ARS) on Wednesday released the preliminary genome sequence for the cacao tree, which produces cocoa beans used to make chocolate.

The goal:

The results of this collaborative project -- delivered three years early due to Mars' scientific leadership, advances in genome technology and constant real-time collaboration -- marks a significant scientific milestone that is already starting to benefit millions of farmers, particularly in West Africa, where more than 70 percent of the world's cocoa crop is produced.

"The collaboration with Mars and the USDA-ARS leverages more than a decade of IBM Research's experience in computational biology, as well as the power of the Blue Gene supercomputer," said Ajay Royyuru, senior manager, IBM Computational Biology Center.

The kicker:

The results of the research will be made available to the public with permanent access via the Cacao Genome Database www.cacaogenomedb.org.

To me, that's a counter-intuitive choice by Mars, a privately held company.  I'll be curious to see if this precedent encourages other private sector gifts of this size to the scientific community, because, in my opinion, this is what sustainable resource utilization is all about.

A much bigger global middle class will want to consumer a whole lot more chocolate.  Mars will logically seek to capture as much of that growing market as possible, but it took the time and effort here to make this downpayment on our collective future.

And I admire that.

WPR's The New Rules: The Changing Food Security Equation

While the world doesn't yet face a food crisis on par with the summer of 2008, it's clear that the drought currently affecting the Black Sea trio of Russia, Ukraine and Kazakhstan -- all big-time global exporters of wheat and barley -- has suddenly made food inflation a primary threat to the somewhat fragile and decidedly uneven global economic recovery. At the very least, it reminds us just how tight global food markets are, due to the contradictory combination of rising middle-class demand and the enduring commitment by brittle governments around the world to keep prices low -- at whatever the cost.

Read the entire column at World Politics Review.

The end of the Third World?

A map of the world distorted to depict projected shares of global GDP in 2015.

Economist piece.

Bob Zoellick, World Bank pres., says "2009 saw the end of what was known as the third world"--meaning the end of a distinct, separate part of the world that is aid-dependent and unimportant.

Is this a plausible notion? asks The Economist:

While the rich world stumbles out of recession, Asia, Africa and Latin America are accelerating and contributing more than ever to world output. Two fast-growing countries, Turkey and Brazil (“powers of the future”, says Iran’s president), struck a deal in May that was intended to break the deadlock over Iran’s nuclear programme. Though less than meets the eye, the agreement was still an intriguing case of emerging-nation diplomacy. And the football World Cup gets under way this week in South Africa, arguably the poorest country to host the event.

Yet at the same time, Mr Zoellick’s bank is not in any danger of going out of business. 

The simpler argument, says the paper, is that the Third World dies when the division between First and Second Worlds ends in 1989 ("end of history").

But the world is still "binary," says the paper, noting that 1B ("bottom billion" live on less than $1.25 a day (basically one half of the one-third of the world's population in my Gap).

Can we at least still buy the dependency theory?  Not when south-south trade (and south-BRIC trade) rises twice as fast as global trade.

But aren't these nations hopelessly in debt?  Public debt in emerging economies is 40% of GDP and flat, while Old Core public debt was 75% of GDP in 2007 and rising toward 110% by 2015, says the IMF.  So South Africa has a better credit rating than Greece.

Nice conclusion:

In 1826 the British foreign secretary, George Canning, boasted that he had “called the new world into existence to redress the balance of the old.” Now the third world has come into its own to redress the imbalances of the old. Canning and others also helped to transform the diplomatic architecture of Europe after the end of Napoleon. Far less has been done—in international financial institutions, in patterns of aid-giving and in diplomatic habits—to reflect the reality of the third world’s end.

As I've long argued:  dependency theory turned on its head, and if that's not the end of history, then it's the end of Leninism.

As the New Core seeks food security, the Gap suffers less of the same

AP story via Vonne Barnett.

The basic problem persists:

Families from Pakistan to Argentina to Congo are being battered by surging food prices that are dragging more people into poverty, fueling political tensions and forcing some to give up eating meat, fruit and even tomatoes.

Scraping to afford the next meal is still a grim daily reality in the developing world even though the global food crisis that dominated headlines in 2008 quickly faded in the U.S. and other rich countries.

With food costing up to 70 percent of family income in the poorestcountries, rising prices are squeezing household budgets and threatening to worsen malnutrition, while inflation stays moderate in the United States and Europe. Compounding the problem in many countries: prices hardly fell from their peaks in 2008, when global food prices jumped in part due to a smaller U.S. wheat harvest and demand for crops to use in biofuels.

Majeedan Begum, a Pakistani mother of five, said a bag of flour for bread, the staple of her family's diet, costs three times what it did two years ago in her hometown of Multan. She can no longer afford meat or fruit.

"My domestic budget has been ruined," said Begum, 35.

The U.N. Food and Agriculture Organization's food price index — which includes grains, meat, dairy and other items in 90 countries — was up 22 percent in March from a year earlier though still below 2008 levels. In some Asian markets, rice and wheat prices are 20 to 70 percent above 2008 levels, it says.

Many governments blame dry weather and high fuel costs but critics in countries such as India, Argentina and Egypt say misguided policies are making shortages worse and collusion by suppliers might be pushing up prices.

No single factor explains the inflation gap between developing and developed countries but poorer economies are more vulnerable to an array of problems that can push up prices, and many are cropping up this year.

Farmers with less land and irrigation are hit harder by drought and floods. Civil war and other conflicts can disrupt supplies. Prices in import-dependent economies spike up when the local currency weakens, as Pakistan's rupee has this year.

Costs also have been pushed up by a rebound in global commodity prices, especially for soy destined for Asian consumption. That has prompted a shift in Argentina and elsewhere to produce more for export, which has led to local shortages of beef and other food. The global financial crisis hurt food production in some countries by making it harder for farmers to get credit for seed and supplies.

An old paradigm approach (developed versus developing) hides the underlying reality: the price rises aren't a West-versus-rest dynamic, but a New Core-versus-Gap dynamic.  An emerging middle class in the New Core eats better--and more--and that demand for commodities drives up prices for everybody (to the extent that government subsidies are overwhelmed).

Yes, amidst that compelling dynamic, you can cite all the usual suspects in developing and underdeveloped economies, but you're missing the new forest for the usual trees.

Clearest evidence are New Core pillars and rich Arab petrocracies buying up farmland across the Gap.  The West isn't doing that.

So understand this as a problem of globalization's success, and stop defining it in old-speak.

A post-American Wal-Mart

Chart comes from Wal-Mart itself.

The top of the pyramid is crammed with stores, the bottom awaits, and the middle is filling up fast.  I will never forget my first time in a gigantic, 6-floor Wal-Mart in Nanchang, Jiangxi, China, and the fabulous escalators for carts!

A WAPO story that explores, from within via interviews, how Wal-Mart sees its future growth lying overwhelmingly beyond US borders.

The opening says it all:

The company that began as a five-and-dime in rural northwest Arkansas opened its annual shareholder meeting last week with Bollywood-style dancers, Asian balancing acts and Brazilian martial artists representing some of the 14 foreign countries in which Wal-Mart operates. Last year, its international division topped $100 billion in sales for the first time and this year it is expected to surpass the United States in number of stores.

This is the next phase of Wal-Mart domination. It built its business in small towns and suburbs across the United States, but now international sales are growing at almost nine times the rate of domestic sales.

Wal-Mart already was facing stalled growth at home after saturating the market, and that has been exacerbated by the weak labor market and high gas prices, which have battered the chain's core customers and depressed sales. That means the company has become increasingly reliant on the appetites of international shoppers to pick up the slack and drive growth, mirroring a broader global shift in purchasing power.

"The U.S. consumer is tired," said Dean Junkans, chief investment officer for PNC Wealth Management. "I think it's very possible that you can kind of have the global consumer kind of take the baton."

But dethroning the American shopper can be a risky proposition, as no one country has the replacements quite ready.

Have no doubt, Wal-Mart's arrival is even more of a socio-economic revolution in developing markets than it was/is in rural American markets: all of the local mom-and-pops either adapt to their newfound niche, somehow winning customer loyalty in ways that justify the higher prices, or they are gone.

And Wal-Mart's penchant for revolutionizing the local landscape extends far beyond the competition.  There's all the suppliers, shippers, the local ag industry--damn near everything is impacted even if only peripherally.  Just the experience of working for Wal-Mart will change the attitudes of local labor.  Even just working with Wal-Mart will alter how governments view their roles and responsibilities.

So yeah, this is a sign of globalization's next phase, and it likely to be just as tumultuous or more so than the recent decade.

"When we want cheap, we go for China"

pic here

Yet another FT on Africa.

From the explosion of mobile telephony to bulging profits of beer companies, evidence of expanding consumer markets in Africa abounds.

Nice.

Hear the African middle-class consumer speak:  “When we want cheap, we go for China.”  Estimates are that 90% of appliances in the major local retail shops are from China, because their prices are about 75% cheaper than the foreign competion and 50% cheaper than the local producers’ stuff.