The 'Big Circus' of economy and sovereignty of fading states

How can giant economic interests, linked to political models, shape or bend the will of small or middle-sized states? There is a long tradition that views lobbyists as paid persuaders whose job is to influence the decisions of governments. “Typically, they operate behind closed doors, through quiet negotiation with politicians.” And the influence they enjoy is built very consciously, using a whole array of tactics. But we are talking about something bigger, wider and powerful. It is a system that we can call the “Big Circus” that starts with diplomatic support, passing through advising firms and could conclude with the movie industry. Something that, sooner or later, even China will follow and, in some cases, already did. How can this heterogeneous supply chain to big business-building endanger democracy and sovereignty? There is not an instant coffee answer. First of all, we have to divide globalization into two frames. The first is the booming period after the “Mauer Fall” era. The U.S. won a war and for a decade shaped the world economic system. It built new markets and new middle classes around the world and pushed regime changes where local dictators or the establishment stopped development projects led by international actors (inside the U.S. network). The concerns for “locals” were mainly about loss of political power control due to high standards requested by those kinds of projects. They needed a new, local category of elites. There were few procedure differences among Europe, the Middle East or South East Asia. The concept was the same -- the mighty U.S. system was a gear too perfect and skilled to allow anyone to stop it. At least in theory. The list of failures could be long, but basically - after the end of the Cold War – U.S. elites had the feeling they could shape the world in the “American image.” It didn’t last too long.

In the Middle East, the model was the JETCOR agreement for Saudi Arabia: Riyadh had to buy a huge amount of Treasury bonds; the rate yield was used to fund infrastructural projects, implemented by American companies; Saudi TB yields were in the hands of the U.S. secretary of treasure that directly paid U.S. firms. It was a zero-risk business. In a few years Riyadh changed face and landscape, Garbage was not anymore a task for goats. Shiny and modern buildings, airports, highways and power plants dotted Arabia Felix. During the 80s, Washington believed it could even work with Iraq’s leader. Saddam Hussein was too suspicious and culturally not fitted to deal with such a kind of complex development model, where you gain a spectacular forward leap– that you can turn into electoral support – but it could be even a medicine that could “kill” you if you are not skilled enough and ethically strong to say “no” when needed, in the interest of your people. It wasn’t the case in the Middle East, but sometimes it wasn’t even the case in Europe. In the EU the system was just a bit more complex, but the problem was always the same. “The big Circus” has no soul or “morality” but just a mission: to serve U.S. interests, sharing wealth with partners as much as possible. In the 90s it worked, rising the income of the middle class in underdeveloped countries, and building new markets to of course sell goods. From 1998, globalization started to show problems with lagging salaries performance in the U.S. The U.S. establishment asked for the help of financial lobbies, because the system had to show an increasing performance rate to promote itself. But it was close to a steep downgrade. The Sept. 11 attacks justified an economic slowdown that was going happen anyway (that does not, however, mean any intentional connection). The help of the financial apparatus determined a further downgrading of the global project that started to badly hit large social layers in Europe as well in the U.S., planting the seed of social and political backlash that we now call “populism” and “sovereign-ism”. A second unintended outcome of this marriage has been the loss of a political direction to smooth the odds of the system, especially since Donald Trump won the last U.S. election.

There are some small examples of “bad practice” that can help understand how not to deal with this economic “partnership.” And that shows as even the new rising power of China uses the same model like a powerful pupil. The small Montenegro has built an oversized highway through its territory, to link the port of Bar to Serbia, spending a huge amount of its already thin state budget. A Chinese loan for the first phase has sent Montenegro's debt soaring and forced the government to raise taxes, to partially freeze public sector wages, and to end a benefit for mothers, in order to get its finances straight. This is a clear example how not to deal with this kind of “doped” development.

In 2015, Iraq bought some second-hand F-16 fighters from the Pentagon, very expensive and not fitted for the real emergency at that time: fighting Daesh with Close Air Support missions. The Sukhoi Su 25 Frogfoot or even old North American OV-10 Bronco could be more useful for the task and drastically cheaper for the exhausted Iraqi military budget.

There are even more pessimistic images of the “Big Circus” and its team. “They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign "aid" organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder.” This is the John Perkins narrative, an insider that decided to speak out about his former job as the “hitman” of the economy. Most probably the system had an upgrading during the time to avoid so called “collateral” damages as social riot, famine or political instability. But it was too little, too late.

Let’s follow the list of “good practice.” In 2000-2010, the hospitality industry was a key of the system. Easy to implement and lower eco-impact than other aged industries. Work-power is easy to get and train. It needs a preparatory basis for “cultural” mediation between local administrations and entrepreneurs and large U.S. companies, from advising to investment funds. Perhaps learning from the past, the “Big Circus” joined a lower-impact performance: no bribes, no strong pushing, less political blackmail, and more social responsibility. But problems persist. In the past, local powers were bent under the pressure of mighty economic, military and political forces. With the new approach, local grey interests saw the arrival of new investments that require public administration efficiency, transparency and local politicians’ better performance as a danger. That was and still is a problem in mid-size countries, like Italy for instance (even if the new “populist” government seems to have the will to change this attitude). Where politicians and public administrators are corrupt, there are low chances to have “good investments” and higher chances to get the “predatory” version of the economy. It works like that almost all over the world. After the preparatory stage, there will be the implementation of the project, followed by the promotion phase in the final stage. Hollywood and the movie industry do this job best. It happened with the launch of a touristic plan with Phuket as a landmark in Thailand. The James Bond 007 movie with Roger Moore in a famous frame showed Phuket beach. It was the official launch. It happened in a different way for Italian Salento project, and now that part of Puglia is crowded with VIPs, from Madonna to George Clooney. So there is a pay-off in joining the system, but the new “Big Circus” needs an open mind and good quality/uncorrupt politicians and local elites, which is not easy to achieve. Without this kind of quality, greed and wrong-doing could cause very serious local economic and social damages.