Bahrain Hosts Iiss Geo-economics And Strategy Seminar

April 2, 2012 - PRLog -- Bahrain played host to a high-level seminar exploring theinterplay of economic and political risk this week, which brought together participants from a broad range of opinion-forming institutions including from the private sector, academia and government. The two-day event in Manama, which took place 24-25th March and was hosted by the International Institute for Strategic Studies (IISS),was entitled “A New Era of Geo-economics: Assessing the Interplay of Economic and Political Risk”, and saw contributions from IISS Director for Geo-economics and Strategy and former spokesman and media adviser to the Prime Minister of India,Dr. Sanjaya Baru, leading economist Lord Skidelsky, and former editor of The Economist, Bill Emmott,amongst others.

The aim of the seminar was to shed light on how to understand the interaction of economic and political risk, so that governments and businesses can develop more sophisticated methods to identify prospective geo-economic and geo-strategic shifts.

Commenting on the seminar, Dr. John Chipman CMG, Director-General and Chief Executive, IISS, said: “The IISS is organising from its splendid Middle East headquarters in Bahrain a major international research and conference programme on Geo-economics and Strategy. This seminar, the second of many to come, brought together some 46 personalities from 18 countries drawn from business, government and the analytical community to examine the interplay between economic and political risk in this increasingly diversified world. The Institute was able to attract to Bahrain for this purpose some of the world's top minds, and the seminar made great strides in helping to define better techniques for coping with international political and economic risk. The participants greatly enjoyed their time here, and we look forward to strengthening our office as a major hub for first class work on these vital issues.”

Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the Bahrain Economic Development Board (EDB), said: “Bahrain’s location at the heart of the energy-rich Gulf Cooperation Council means that the Kingdom is particularly well suited as a location for seminars like this. The global economy has seen drastic shifts in a number of ways over the last five years and we are delighted to host some of the foremost thinkers on what these changes mean for governments and businesses.”

Commenting on the conference, ArvindVirmani, Executive Director, IMF, said: “This was a highly thought-provoking debate. Our world is ever more interlinked and with interdependence comes risk. We are witnessing shifts in power and shifts in spheres of influence which have an undeniable effect on how we should view the world and the positioning of different countries and regions within this framework – issues certainly relevant to the IMF and its policies. India as an example is continuing to support and encourage the development of regional dialogue and cooperation with the Gulf and the entire region, from Turkey to South and Central Asia. I welcome Bahrain hosting this event”.

While the exact exchanges at the event were confidential, a summary of some of the main points made are included below:

In his opening remarks Dr. Sanjaya Baru, Director of the IISS Geo-economics and Strategy Programme and former Spokesman and Media Adviser to the Prime Minister of India, outlined the history of geo-economics. He argued that: “There are four long-term factors contributing to the more enduring structural shifts in the global economy… Firstly, knowledge power and demographic transition; secondly, agrarian transformation and search for resources; thirdly, social and political transformation, especially the rise of a middle class and of entrepreneurial classes; finally, fiscal capacity to fund military capability.”

In the first session, ParagKhanna, Senior Research Fellow, New America Foundation, argued that policy-makers need to understand the complexity of risk in the modern world, saying that: “The paradox of the twenty-first century economy is that while it is more inter-connected and interdependent than ever, it is increasingly multi-speed and decoupled. Perceptions of risk and advantage will thus continue to differ vastly across different regions and markets, which itself can be a cause of misperception and miscalculation.”

In the second session, Lord Skidelsky, Member of the House of Lords, UK and Emeritus Professor of Political Economy at the University of Warwick, steered the debate towards economics and finance. His argument, which he described as “partly influenced by Keynes, but also by political and international relations theory”, was that “the achievement of peace and prosperity requires more government, not less.”He said that more, not less, government is needed in order to avoid reliving what has happened in the 1930s. However, he warned that while international cooperation was necessary: “There either has to be a quantum leap in the ability of the great powers to cooperate and implement cooperative solutions, or the political economy of globalisation will start to fragment.”

Following on from this, Bill Emmott, former Editor of The Economist, made the case that, in theory as well as in practice, the strategic influence of different countries and regions is extremely hard to measure and depends on a variety of variables. As such, “psychology and expectations about future trends, attitudes and capabilities are vital ingredients of strategic influence alongside more conventional issues such as geography, military assets, economic weight and international legal status. We need to blend all of these aspects if we are truly to improve our understanding of strategic influence and especially of the political and economic risks that arise from it”.

Closing the first day of the conference, Andrew Erdmann, Associate Principal at McKinsey & Company, argued that “we are living at a historic inflection point” as growth over the next decade is fuelled by ‘developing’ countries - in large part in Asia. This increases uncertainty and makes the job of a strategist today more challenging. However, he argued,through careful scenario planning “built upon robust economic modelling foundation and then layered with political and geopolitical implications”, this uncertainty can be managed.

In the first of two sessions on Sunday,Dr Jeffrey Frankel, James W. Harpel Professor of Capital Formation and Growth at the Kennedy School of Government, Harvard University, looked ahead at potential shocks to the global economic system in 2012 and historical responses to these sorts of issues. He concluded with the hope that: “we can get more of our policies right in the coming decade than we did in the last decade. This includes rising to the challenge of whatever new shocks come along.”

In the final session, DrLinda Yueh, Fellow in Economics at Oxford and EconomicsEditor for Bloomberg TV, took China as a key example of a country that has been particularly successful in utilising policy to attract FDI in order to develop its manufacturing and export capacity. While noting the successes of China’s ‘Going out, Bringing in’ Policy, she warned that: “To avoid a backlash against state-led investment, China will need to carefully consider reforms to help its firms become multinational corporations, and how to manage the impact that its state-funded acquisitions is likely to have around the world”.

For more information on the Bahrain EDB visit www.bahrainedb.com; for information about Bahrain visit www.bahrain.com