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Asiazilla, Bolivarzilla and Bearzilla: The Rise of the Developmental State in the World Semi-periphery 1999-2009 July 2009 by Dennis Redmond Any analysis of the 21st century developmental state must begin not with economics, but with the seemingly unrelated field of the transnational media. One of the most important innovations of 20th Japanese science fiction was to create the first compelling symbol of the developmental state – an entity defined as the ensemble of non-market institutions, stat
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  Asiazilla, Bolivarzilla and Bearzilla: The Rise of theDevelopmental State in the World Semi-periphery 1999-2009 July 2009 by Dennis RedmondAny analysis of the 21 st century developmental state must begin not with economics, butwith the seemingly unrelated field of the transnational media. One of the most importantinnovations of 20 th Japanese science fiction was to create the first compelling symbol of thedevelopmental state – an entity defined as the ensemble of non-market institutions, stateagencies, egalitarian social policies and long-term accumulation structures which transformedCentral Europe and East Asia from bombed-out wrecks into workshops of the world. Thissymbol is, of course, Godzilla.In its srcinal incarnation, Godzilla was a multilayered cinematic parable of the atomic bombings, Japan's war-time trauma, and Japan's postwar outrage over a controversial UShydrogen-bomb test at Bikini atoll in 1954 (fallout from the explosion killed several Japanesefisherman aboard a vessel called The Lucky Dragon ). However, the Big Lizard was later refunctioned by Japan's globalizing media culture into something far more interesting. Godzilla became a slightly comic but unmistakably benevolent behemoth, whose main occupation wasrepelling the onslaught of monstrous space aliens, anagrams of an increasingly ruthlessneoliberalism. 1  In Godzilla's latest outing, Godzilla: Final Wars (2004), the aliens follow the IMF-WorldBank playbook to the letter. By secretly provoking local crises, they seize the commandingheights of the world-economy, promising a reign of prosperity for all. Instead, they unleash theequivalent of structural adjustment on the entire planet – ravaging humanity's cities, while preserving the survivors as docile cattle to be harvested. Fortunately, a rag-tag resistance front of humans, mutants and giant lizards rises up to save the day.Yet what might seem to be just another over-the-top science fiction film turns out, oncloser examination, to have a profound kernel of truth. There has indeed been a massive,enormously successful but largely invisible resistance movement against neoliberalism. Whether conscious of the fact or not, the writers of the movie's script drew upon the contours of thatresistance for their narrative material. Consider the four main characters of   Final Wars : there isOzaki, the hero with mutant powers (Masahiro Matsuoka), there is the veteran militarycommander and ship's captain Gordon (the national security administrator, wonderfully played by Don Frye), there is the inimitable Godzilla (cast as the absent-minded but fiercely loyal parentof Minilla, its wayward offspring), and finally there is the villainous Controller (KazukiKitamura), whose main weapon is the instant-replay duplication of Earth-monsters.Each of these characters is an allegory of anti-neoliberal struggle. Ozaki does personal battle with the Controller on the bridge of the alien mothership, suggesting a struggle over whocontrols the broadcasting rights and information-flows of the transnational culture-industry.Gordon provides the logistical support for the resistance, hinting at the sphere of nationaldevelopmental institutions, ranging from Venezuela's participatory planning to Russia's national projects. Meanwhile, Godzilla must not only face down the reconstructions of all its pastcinematic enemies, it must also rein in its own destructive potential, and accept Minizilla's pleato coexist with its human and mutant allies – a plea, in short, for a multipolar world-system.What needs to be explained here is just how it was possible for a blockbuster sciencefiction film to provide a more accurate reading of contemporary geopolitics than the vast bulk of contemporary journalism, commentary, cultural theory and political activism. How could atalented group of media artists get the history right, precisely where so many informed observers(myself included) got it so very wrong?  The first step in answering this question is to reflect upon one of the central issues of theimmediate post-Cold War epoch, namely the question of imperial succession. Since the 1970s,the absolute economic, military and cultural hegemony of the US Empire had been slowlyeroding. However, it wasn't clear just what would take its place.In the late 1980s, some observers crowned Japan and the East Asian tigers as the logicalsuccessor, until Japan's busted financial bubble and the 1997-1998 Southeast Asian crisisexposed the weaknesses of the region's export-dependent economies. In the 1990s, other observers (including myself) argued an enlarged and expanded European Union would take thereins from the US, and bring social democracy to the world. In reality, continental Europe was inthe process of spawning a euroliberalism every bit as pitiless and predatory as its US analogue,though slightly more constrained by the EU's powerful unions and Left traditions. By the early2000s, the consensus was that the US Empire would retain the status of first-among-equals for atleast another twenty years.From our vantage-point here in 2009, it's painfully obvious where the consensus wentastray. The social force which would push back against neoliberalism was not, as everyoneassumed, located in the EU or Japan. It was not a social movement or a specific organization. Nor was it a one-party state or a charismatic leader. Rather, it was the collective might of a newhistorical subject: the developmental states of the global semi-periphery. We will see in just amoment just how powerful these states have become.For now, however, we need to ask a simple but by no means rhetorical question: how canthis be? Wasn't the entire neoliberal era predicated on privatization, oligarchic greed, thedemolition of the state, and the posthaste immiseration of three billion low-wage workers inLatin America, the former Soviet Union, South and Southeast Asia, and Africa? Were the prophets of neoliberalism deceiving themselves, when they proclaimed the end of history and thedisappearance of the state?To be sure, the death of the nation-state was always greatly exaggerated. Neoliberalismconstantly deployed the power of the state to plunder financial markets, slash welfare states, bustunions, subsidize oligarchs and reward speculators. Still, how could so many of us overlook oneof the most important social developments of the transnational era?A brief flashback to the world of 1999 may help explain why both the neoliberals andtheir critics failed to see what was coming. In that year, the US still had the largest economy, thedeepest capital markets, the largest consumer base, and the most influential media culture of anycountry in the world. To be sure, it had been running chronic trade and current account deficitsfor fifteen years, but its challengers had not yet become systemic rivals. The post-MaastrichtEuropean social democracies were following the neoliberal mantra of deregulation and welfarecutbacks, while the euro would not exist as a paper currency until 2001. For its part, Japan wasimmobilized by a busted banking system and a decade of paltry growth. Nor was the rest of the world teeming with counter-hegemonic tendencies. China was afast-growing but still extremely poor country, with mostly balanced trade and limited financialassets. Latin America had been bled dry by two decades of neoliberal austerity, while hugecountries like Indonesia, Thailand, Russia and South Korea went bust in 1997-1998, triggering painful and destructive IMF bailouts. Other large nations such as Brazil and India narrowlyavoided meltdowns, but were growing slowly, if at all. Low energy prices meant slow growth for the oil exporting countries of the Middle East, while much of Africa was in a state of economicmeltdown. The situation was most dire in the countries of the former Soviet Union, whichendured the worst economic collapse in peacetime history (Russia's GDP shrank by 40% from1990-1998).Ten years later, the world has utterly changed. Brazil and India have become trilliondollar economies; China has become the workshop of the world; Latin America has voted out  neoliberal governments and started to rebuild; and Russia has returned to world power status.One of the most striking expressions of this transformation is the rejection of IMF-World Bank structural adjustment policies. From 1980 to 1998, these institutions imposed austerity policieson ninety-six countries, which collectively comprised 3.7 billion people, or 57% of humanity.After 1999, about a third of these particular countries (with a total population of 2.3 billion)openly rejected neoliberalism. Together with other developing nations such as China andVietnam, they implemented a range of pragmatic, heterodox economic policies.One of the most important of those policies was the decision to avoid financing internaleconomic growth via foreign borrowing, and to rely instead on domestic savings. Manycountries had borrowed heavily abroad during economic expansions, only to find themselvesunable to pay their debts during downturns or crises, due to fluctuations on the currency markets.This was the all-too-familiar cycle of neocolonial debt peonage or underdevelopment, which hasimmiserated the postcolonial African nations since the 1960s, Latin American nations since the1970s, and post-Soviet nations since the 1990s.In 1999, after twenty-five years of neoliberal despoliation, the semi-periphery began tofight back. Venezuela and Russia began to take back their energy resources from domesticoligarchies, Eastern Europe moved towards a local variety of social democracy, while most of Latin America, South Asia and Southeast Asia rejected neoliberal governments at the ballot box.According to IMF data, developing nations had $674 billion in foreign exchange reservesat the end of 1999. 2 Back then, the only sovereign wealth funds (SWFs) of significance werethose of the oil-exporting Gulf states (Saudi Arabia, Kuwait, Qatar, UAE). Economist RachelZiemba has estimated that these SWFs had roughly $300 billion in assets at the end of 1999. 3 Adding these two figures together, the global semi-periphery and true periphery owned $1.1trillion in 1999.In just ten years, the savings of the semi-periphery and true periphery increased sixfold,reaching $6.3 trillion in mid-2009. This is roughly 10% of the planet's $62 trillion in annualGDP, as measured in market exchange rates. Here are the assets and investment vehicles of thetwenty-five largest pools of these savings: Table 1. Largest 25 asset pools of the nations or regions of the periphery and semi-periphery. Data from most recent reported national data for foreign exchange reserves, plusSovereign Wealth Fund Institute (http://www.swfinstitute.org/funds.php)Country or RegionForex ReservesSovereign Wealth FundAssets by AgencyTotal AssetsChina (including HongKong)$1,333.6 trillion$347 billion (SAFE), $193 billion (HKMA), $190 billion(CIC), $82.4 (NSSF)$2,146 billionUAE---$621 billion (ADIA), $82 billion (ICD), $14.7 billion(MDC), $14 billion (IPIC),$1.2 billion (RAKIA)$732.9 billionSaudi Arabia---$431 billion (SAMA), $5.3 billion (PIF)$436.3 billionRussia$190 billion$220 billion (NWF)$410 billion  Taiwan$313 billion---$313 billionSouth Korea$227 billion$27 billion (KIC)$254 billionIndia$252 billion---$252 billionKuwait$19.6 billion$203 billion (KIA)$223.6 billionBrazil$203.1 billion$5.9 billion (SFB)$209 billionAlgeria$145 billion$47 billion (RRF)$192 billionLibya$79 billion$82 billion (LIA)$161 billionThailand$117 billion---$117 billionMalaysia$87 billion$23.1 billion (KN), $2.8 billion (TIA)$103.9 billionIran $81 billion$13 billion (OSF)$94 billionMexico$82 billion---$82 billionQatar$6.4 billion$62 billion (QIA)$68.4 billionTurkey$68 billion---$68 billionChile$45 billion$21.8 billion (SESF)$66.8 billionPoland$64 billion---$64 billionKazakhstan$19.5 billion$38 billion (KNF)$57.5 billionIndonesia$56.7 billion$0.30 billion (GIU)$57 billion Nigeria$45 billion$9.4 billion (ECA)$54.5 billionIraq$49 billion---$49 billionIsrael$48 billion---$48 billionArgentina$46 billion---$46 billionWhat these numbers mean is that the developing nations have been saving about half atrillion dollars each year over the past decade. Initially, these countries used these funds to freethemselves from the shackles of IMF loan programs. Later, they paid down their external debts.For example, the BRIC nations (Brazil, Russia, India and China) collectively owe $1 trillion inexternal debt, a tiny fraction of their $8.7 trillion annual GDP.The sheer magnitude of these numbers matters, because the fundamental problem facingthe world-economy today is the decline of the US as a source of final consumer demand. Sincethe dawn of neoliberalism in the mid-1970s, the US has consumed an outsized share of theglobal surplus by means of vast trade deficits and a gargantuan internal debt bubble. Accordingto Federal Reserve data, the US debt-to-GDP ratio (this includes all debts, public and private)exploded from 169% in 1980, to 375% in 2009.It should be stressed that high public debt levels are, in and of themselves, not necessarilya bad thing: it all depends on what those debts are spent on. If they are spent on civilian researchand development, or education and science, they can be productive. Unfortunately, much of the1980-2008 US debt expansion was spent on acquiring overpriced real estate and bubble-inflatedspeculative assets. Roughly two-thirds of this debt growth was created by US financial firms,
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