Global Economies

China-US relations may dominate news coverage this week as the country's presumptive next leader - Xi Jinping - visits the United States. The two countries have conflicting interests and ideologies in currency valuation, military developments in East Asia, and how to deal with the violence in Syria. In an election year, US politicians from both parties can be expected to heighten criticism of China. But as discussions begin between US President Barack Obama and Chinese Vice President Xi Jinping, there are important areas of agreement between the two countries

Differences are real, as should be expected between two large countries with large economies, separated by large differences in development and history. The notion of simple competition between a powerful United States and a rising China, however, does not withstand scrutiny in view of the broad and important areas of agreement and common interest. In an era of global trade and increasingly pervasive digital connectivity, peoples and economies are not so easy to divide along geographic lines.

Three areas of agreement - Iran, clean energy, and cybersecurity - might not get much attention during Xi Jinping’s US tour and the coming political season, but they reveal a change of mindset needed to maintain peaceful ties across the Pacific.

Read the full article at Al Jazeera English.

Image credit: Creative Commons photo via nznationalparty.

The Boston Globe's Erin Ailworth quoted EWI's Greg Austin in a story about opportunities and challenges in the clean energy industry in China. The relevant passage:

"At the same time, China is trying to wean itself from fossil fuels such as coal - the country’s main power source - to reduce the choking air pollution that leads many to wear surgical masks on city streets. China has set aggressive goals for renewable, nonpolluting sources, such as installing 150 gigawatts of wind power capacity by 2020 - enough to power nearly a third of US homes.

"'Strategically, this is a desperately high priority for the Chinese leadership,' said Greg Austin, of the EastWest Institute, a New York think tank specializing in Asian affairs. 'They will ravenously devour any type of clean technology to help them manage their problems.'"

Read the full story.

Two decades ago, Bill Clinton famously kept himself on message in his successful bid to unseat President George H.W. Bush by repeatedly invoking the phrase: “It’s the economy, stupid.” It was Clinton’s ability to convince voters that he could do a better job than Bush in addressing their economic hopes and fears that propelled him to victory. With voters more nervous than ever about their economic future, you’d think the same mantra applies now. Not exactly, though. The phrase simply doesn’t pack the same punch that it did in 1992.

The reason: whether you’re talking about the United States or Europe, the economic crisis is only part of a much larger angst. What’s on people’s minds is leadership—or, more accurately, the lack of leadership. Current political leaders on both sides of the Atlantic inspire less and less confidence and respect just when they need more of both to confront the daunting economic challenges posed by sluggish growth,  ballooning public debt, the tottering euro and the breathtaking pace of technological changes that can be both exhilarating and frightening.

Barack Obama’s approval ratings continue to be stuck below 50 per cent, while the divided results in Iowa demonstrate that no Republican challenger has captured the imagination of voters, even if New Hampshire nearly anoints Mitt Romney as the party’s nominee. German Chancellor Angela Merkel has come closest to seizing the mantle of leadership in Europe, warning in her New Year’s address that the continent was facing its “harshest test in decades.”  But she is the subject of dismissive comparisons to her towering predecessors like Helmut Kohl and Konrad Adenauer, with Europeans complaining that they have a historic crisis but no leaders of historic stature to meet it.

Merkel and French President Nicholas Sarkozy—or, as some Europeans joke, “Merkozy”—are leading the effort to impose tough new EU budget discipline. This would apply not only to the most troubled economies like Greece, Spain and Italy but also to the other EU members, except for Britain which is increasingly going its own way. But while such steps are clearly merited, there’s a double danger: harsh austerity measures may not go far enough to get public debt under control, but may go too far in stifling growth. Already, there are predictions that Europe will be mired in another recession this year.

Some economists are concluding that the real culprit is the entire push for a common currency. “The euro should now be recognized as an experiment that failed,” Martin Feldstein, Chair of the Council of Economic Advisors under President Reagan, writes in the current issue of Foreign Affairs. While rejecting that verdict, even some of the staunchest advocates of European integration concede that failure is a possibility. Noting that China and the U.S. have a lock on the gold and silver medals when it comes to economic performance, former Polish President Aleksander Kwasniewski warns the EU has to prove it still deserves the bronze. Without major internal reforms, he told Newsweek’s Polish edition, “we’ll fall off the podium.”

The crisis in the United States doesn’t look quite as dramatic, which is both good and bad news. The bad news is that, short of the feeling of impending doom, America’s politicians on both sides of the aisle look all too happy to consider 2012 to be a typical election year, where scoring points against each other trumps any impulse to come up with genuine solutions that require bipartisan cooperation.

Europeans traditionally admired the United States for its can-do spirit. Luigi Barzini, Italy’s elegant essayist, wrote in his 1983 book The Europeans that the continent’s inhabitants were always amazed by American attitudes. While Europeans expect to live with problems, he noted, Americans, by contrast, believe “that all problems not only must be solved, but also they can be solved, and that in fact the main purpose of man’s life is the solution of problems.”

Today Europeans bemoan the paralysis in Washington, wondering why that spirit has disappeared. They accurately point out that the U.S. faces many of the same challenges they do—and seems even less capable of deciding what to do about them. On a per capita basis, U.S. public debt ($33,555 in 2011) is higher than that of Germany ($27,750) and France ($33,083) and is only a bit below that of Italy ($37,313) and even Greece ($34,304).

Of course, debt—whether it’s per capita or as a percentage of GDP, where the U.S. still does better than most European countries—is only one measure of where things stand. And the Europeans are the first to admit that the U. S. still has the economic edge for all sorts of reasons—it’s more dynamic and entrepreneurial, less constrained by bureaucracy, and derives the benefits of continued demographic growth that stands in stark contrast to Europe’s unremitting demographic decline. But they have no confidence that they can look to the U.S. for genuine leadership by example when it comes to solving the big economic problems.

Still, there are grounds for guarded optimism. Because Europeans now recognize they are they are standing at the edge of a precipice, they may finally focus their energies on getting things right—finding a way to control runaway debt while promoting growth. Germany has done well within its borders on that score, but now needs to help others do so. Because Americans are more aware than ever that they now face many of the woes that they once ascribed only to Europe and other distant lands, they may demand more from their politicians in this election year—serious proposals about serious issues in a period when rapid technological changes are redefining everyone’s lives, livelihoods and capabilities. In a variety of new forums, like the Affordable World Security Conference that is scheduled for March in Washington, those discussions are already beginning.

As for the politicians, both the incumbents and those seeking to replace them, they’d do well to begin to engage in those discussions rather than merely scoring points against each other. And to take the lead in the search for new strategies and new solutions. Or, to put it bluntly, they should ponder a new mantra: “It’s leadership, stupid.”

Andrew Nagorski is vice president and director of public policy at the EastWest Institute. He is the author of the forthcoming book Hitlerland: American Eyewitnesses to the Nazi Rise to Power.

 

Viktor Ivanov, director of the Federal Drug Control Service (FSKN) of the Russian Federation, discussed the global drug trade and the key role of poppy production in Afghanistan with a diverse audience representing numerous U.S. federal agencies, uniformed and civilian military officials, civil society, industry and diplomatic missions.

Ivanov argued that the global drug trade is closely tied to the world financial system, where drug money represents a “at least half” of global criminal flows. These funds, he said, in some cases provide much-needed liquidity in the financial system at a time of crisis.

“In order to develop adequate solutions, we need to have a better picture of global drug flows,” Ivanov said. He added, “Two obvious drug flows are Latin American cocaine and Afghan heroin.”

Ivanov was in the United States for meetings in Chicago of the U.S.–Russia Bilateral Presidential Commission's Drug Trafficking Working Group, of which he is co-chair. FSKN and EWI, as part of an ongoing collaboration, worked with the Chicago Tribune to produce an infographic and interview with Ivanov exploring the complex dynamics of "Afghanistan’s heroin pipeline" (PDF).

Speaking with the Tribune, Ivanov underlined the role of international civil society in confronting the issue of drug production in Afghanistan during a time of conflict.

“[O]ur group and I personally are engaged in extensive cooperation with leading U.S. think tanks, especially the EastWest Institute, and also such as the Center for Strategic and International Studies, the Nixon Center (now the Center for the National Interest), the Institute for Democracy and Cooperation,” and others, Ivanov told the Tribune.

Ivanov noted that drug production is a consistent source of income for some, and said fundamental changes in the economy of Afghanistan are necessary to undermine the rationale for cultivation.

“The key way to liquidate global drug trafficking is to reformat the existing economy and to shift to the economy that excludes criminal money and provides reproduction of net liquid assets, [that is], to the economy of development, where decisions are based on development projects and special-purpose credits,” Ivanov said.

Recently the authors of this piece participated in an Atlantic Council program for young emerging Turkish and American foreign policy leaders, during which we met with former U.S. Ambassador to Turkey Jim Holmes of the American Turkish Council. To signify the surprisingly low volume of bilateral trade, Ambassador Holmes removed one M&M candy from a three pound (1.4 kilogram) bag and held it in front of us. The point was clear: if this bag of M&Ms represents the volume of all U.S. global trade, this sole M&M represents the volume of U.S.–Turkey trade.

This relationship has historically been one-sided, with the United States leading. However, since the 2008 financial crisis, this dynamic has started to change. The United  States is struggling economically, with high unemployment, stagnant economic growth, and political in-fighting. Turkey, on the other hand, has a booming economy and an increasingly independent foreign policy. Prime Minister Erdoğan coasted to reelection in June 2011 and has bold plans to make Turkey a top-10 global economy in terms of size by 2023, the 100th anniversary of the Turkish Republic. Turkey is aggressively reaching into foreign markets. Relations with Iran are underpinned by economics and imports of Iran’s natural gas. Turkey is taking the lead in investing in northern Iraq and driving economic growth there as a result. Likewise in much of Africa, in places such as Sudan, Ethiopia, and Kenya, Turkey’s investment in infrastructure bolsters economic development in a way that only China can rival. Prime Minister Erdoğan recently visited lawless Somalia to highlight famine relief, something no foreign leader had done in nearly 20 years. Turkey is developing soft power in regions of the world where American influence is decreasing.

In broad strokes, these two allies are moving down different paths: one looking inward after a rough period, the other looking outward amidst a boom period. This misalignment more than anything explains the occasional disruptions that occur in the relationship. However, there is one important area where increased emphasis would be mutually beneficial and underpin the relationship in a way that would likely realign the alliance moving forward and supersede all else: increased trade.

Just as Turkey’s foreign policy stock is rising because of increased soft power facilitated by an extended global business reach, so the United States has an opportunity to increase soft power in the critical Middle East region on the back of improved business ties with Turkey. Turkey shares borders with and has reach into Iran and Syria, and it increasingly has clout with these nations – likely greater than the United States. While this sounds frustrating from an American perspective, perhaps, in this era of revitalized coalitions following NATO’s intervention in Libya, Turkey’s regional influence can help the United States regain influence. To get to something that more closely resembles that sort of partnership, however, the United States has to bring more to the table. The United States should aggressively incentivize trade with Turkey and encourage entrepreneurs to look to Turkey.

It is bizarre that, between these two powers that are also NATO allies, bilateral trade was a paltry $14.8 billion in 2010, despite the fact that Turkey is the 17th largest economy in the world, and the United States is the largest. In 2010 the U.S. bilateral trade with China was $457 billion, compared with $178 billion with Germany, and $49 billion with India. Turkey’s unusual status as one of the few economies of note with which the United States enjoys a trade surplus ($6.3 billion in 2010), driven by three-fold growth in U.S. exports to Turkey, during which Turkey exports to the United States have remained constant, adds to the lopsided nature of this relationship. Traditionally underpinned by defense industry trade, this surplus reflects the degree to which security concerns over the past half century eclipsed economic interests and Turkey’s potential as a trading partner. As a result, Turkey is finding new markets and potentially new allies elsewhere on the back of capitalism. Analysis by the authors shows that both the United States and Turkey are expanding trade relations around the globe.  

From 1990 to 2010, with the rise of the Turkish middle class, Turkey’s number of export partners increased, and the share for each of the top 10 trading partners decreased as Turkey exported to more and more markets. Likewise, Turkish industries imported goods from more countries. As a result, even though trade growth with Turkey’s main trading partners, such as the United States, has remained flat, the cumulative effect for Turkey regardless has been one of economic growth because of Turkey’s entrance into new markets. Turkey has diversified its reach.

Turkey’s exports should be finding their way onto more American retail racks. This is where policymakers come in and need to continue to aggressively work together, as the White House’s Framework for Strategic Economic and Commercial Cooperation and its private sector counterpart, the U.S.–Turkey Business Council, have begun doing. On both sides, regulations that lead to protectionism should be eliminated. The United States should reexamine preferential trade terms for Turkey in textiles (currently only 0.6% of U.S. textile imports come from Turkey). Turkey is a member of the WTO, and the United States should investigate the further elimination of duties wherever possible. Visa procedures for Turkish business people should be loosened. Technology and know-how transfers should be aggressively promoted, as these play an essential role in strengthening strategic partnerships and stimulating joint technological projects. Young entrepreneurs should look to Turkey.

The logic is simple and straightforward. From a macro perspective, trade can underpin diplomacy. It is clear that the time has come for U.S.–Turkey relations to adapt to changing realities with respect to both countries and the global economy they are part of. A valuable market for American goods at a time when the world’s superpower seeks to recover its economic health, Turkey too stands to benefit through capitalizing on the as yet unrealized potential of American export markets. Even as the nature of Turkey’s relations change in the region where it sits and around the world, its longstanding friendship with the United States is one both governments have a vital stake in deepening. The time is right to increase trade.

Nathan Wendt is an Associate and D.C. Representative at the EastWest Institute. Idil Bilgic Alpaslan is a PhD candidate at Brandeis University, IBS and R&D Coordinator at TOBB University of Economics and Technology. Rennie A. Silva is a Researcher at the University of Maryland Laboratory for Computational Cultural Dynamics. U. Baris Urhan is a Research Associate at the Economic Policy Research Foundation of Turkey, TEPAV and the Middle East Technical University Department of Economics.

“The success of the Institute’s work depends on the valuable experience of its board members to enable its unique convening role among key policy communities worldwide. These additions to our board reflect our growth in 21st century issue areas and our commitment to private-public partnership,” EWI President and CEO John Edwin Mroz said.

The new board members are: Angela Chen, Anurag Jain, Kevin McGovern, Ronald P. O’Hanley, William A. Owens, and John Rogers.

EWI also thanks departing board members Thor Bjorgolfsson, Don Kendall, Jr., Mike Maples, Frank Neuman, and Hilton J. Smith for their service to the institute and its goals of international cooperation.

Get to know EWI’s new board members by reading their full biographies below.

 

Angela Chen (U.S./China)
Founder and Managing Director, Global Alliance Associates
Director, China Arts Foundation International

Angela Chen’s career spans three decades of global corporate finance and cross-cultural management. She is the Founder of Global Alliance Associates and is a Partner of Epoch Fund, a pioneer private equity fund with sizeable equity investments in Chinese companies. Previously, she was Vice President, Investments at Prudential Securities in New York where she established its International Private Banking Group and developed and managed the Group’s high net worth private client base. Ms. Chen was also Vice President at Merrill Lynch. She launched its China Futures Department and worked with Chinese government officials in establishing the first Securities and Exchange Commission in China.

Ms. Chen was the sole United States representative sent to China by the U.N. Development Program to set forth the first Securities Law and Stock Exchange Law in China. She is a dedicated philanthropist and a Founder of China Arts Foundation whose mission is to improve communication and understanding between the United States and China through cultural exchange programs. Ms. Chen is also a Board Member of the Shanghai Science and Technology Museum where she advises on strategy funding and management. She is currently a member of the National Committee on United States – China Relations and an active member of the Asia Society.

 

Anurag Jain (India)
Chairman, Laurus Edutech Pvt. Ltd.

Anurag Jain has founded Viziniti Global, LLC, which is a social entrepreneurship incubator based in the United States and India. Its first incubated venture, Laurus Edutech, trains over 30,000 students in India  in vocational skills using over 35 locations and is scaling a for profit model to train over 250,000 students a year in Asia and Africa. Viziniti is also in the process of incubating models to provide a $1,500 house for the homeless and provide primary health care to rural India.

In addition to serving on the board of the EastWest Institute, Jain serves on the board of the North Texas Food Bank.

Jain was the chairman of the Skill Development Forum for the Federation of Indian Chambers of Commerce and Industry (FICCI). He also served on the Board of the National Skills Development Corporation, a first-of-its-kind public–private partnership in India. He is also chairman of the board of Laurus Institute, a premier not-for-profit skills development think tank in India.

Jain left Dell in 2011, where he used to lead the Services Delivery unit, a global team of more than 18,000 professionals who deliver leading-edge technology solutions to Dell customers around the world. The Services Delivery unit includes Dell’s technology service functions of Infrastructure and Managed Technology Services, Applications, and Business Process Solutions. The organization also included Dell’s Innovation group, which was pioneering technological advancements in areas such as cloud computing, mobility, virtual data services, technology delivery and optimization, and others.

Jain previously led the Perot Systems (now Dell) Applications, Business Process Solutions, Financial Services and Insurance organizations, where he directed global operations and sales to enhance growth and business results. He also served as managing director of the company’s Asia Pacific region.

Jain also previously founded 3 highly successful, large-scale, India-based IT services outsourcing businesses. He co-founded and served as head of operations for Brigade Corporation, a customer support company with employees across centers in the United States, Europe, and India. He then founded Vision Healthsource, a business focused on providing IT services outsourcing to health care providers and payers that was acquired by Perot Systems in 2003. He also co-founded a successful finance and accounting outsourcing business, IQ Backoffice, which was bought by LiveIT based in the Philippines, earlier this year.

In addition, he serves on the board of Asia (Chennai) Engineering, a leading commercial, industrial civil engineering firm in India for more than 40 years.

Jain holds an MBA from the University of Michigan and a Bachelor of Science degree in electrical and electronics engineering from the Birla Institute of Technology and Sciences, Pilani, India.

 

Kevin McGovern (U.S.)
Chairman, The Water Initiative

Kevin M. McGovern is the Chairman and CEO of McGovern Capital, LLC, which provides investments and business strategy to emerging companies, particularly those engaged in consumer technologies and holders of Intellectual Property Rights. He has founded over a dozen companies, seven of which have become world and/or category leaders, including SoBe Beverages, Tristrata (AHA skincare technology), and KX Industries (home-based water purification).

McGovern founded and serves as Chairman and CEO of The Water Initiative (TWI), which develops and markets home-based water purification systems, particularly in developing countries. TWI has worked with the Mexican government and the people of Mexico as its first pilot project. In less than 2 ½ years, TWI has formulated technological solutions to Mexico’s most severe unclean water conditions and has launched product distribution through the government and through those people most impacted.

He has served as Co-Chair of the Advisory Board and Board Member of the USA Pavilion and as the only foreign Senior Advisor to the Development Committee of the 2010 Shanghai World’s Expo.

McGovern co-published the pioneering Forbes/Wolfe Nanotech Report, which is currently the Forbes/Wolfe Emerging Tech Report.

He created and directs the worldwide licensing program for Tristrata Inc., which owns the rights (over 100 patents) to Alpha Hydroxy Acids (AHAs), a successful skin restoration and wrinkle reduction technology. Tristrata licenses over 70 companies and is the leading seller of skincare products to dermatologists and plastic surgeons in over 80 countries.

McGovern is a principal and strategist for Clean Coal Technologies, Inc., which has created proprietary technologies to clean coal; for EnviroFuels Manufacturing, Inc., which markets and distributes proprietary smokeless stoves; and for Aquea Scientific, which developed and markets proprietary nanotechnology to “wash-on” additives to the skin, such as sunscreens.

A graduate of Cornell University (B.A.) and St. John’s University School of Law (J.D.), he is a Presidential Councilor (highest honor to alumni) and Trustee Emeritus of Cornell University, having chaired its IP and Tech Transfer Committees. He also serves on Cornell’s Joint Venture (CNI) in Singapore, Chairs Entrepreneurship at Cornell, and was named Cornell’s “Entrepreneur of the Year” in 2007. He teaches each spring at the Johnson Graduate Business School (Global Innovation and Commercialization) and recently donated and founded the McGovern Family Venture Development Center, Cornell’s first on campus science-business incubator.

 

Ronald P. O’Hanley, III (U.S.)
President, Asset Management and Corporate Services, Fidelity Investments

Mr. O’Hanley is a leading executive in the financial services and mutual fund industry. He spent more than 12 years with BNY Mellon, where he helped the Asset Management division more than double in size and assisted in the substantial growth of the company as a whole.

In 2010, Mr. O’Hanley moved to Fidelity Investments, and now serves in the number-two position to the firm’s CEO, Edward Johnson III, as President of Asset Management and Corporate Services.

Mr. O’Hanley is highly involved in philanthropy and serves on the boards of directors of many organizations in Boston.

Mr. O’Hanley has served previously as the President at Boston Company Asset Management, LLC. After leaving Boston Company Asset Management in 1987, Mr. O’Hanley worked at McKinsey & Company Inc., global management consulting firm, until 1997 where he served as a Partner and Leader of the firm’s worldwide Investment Management division, and co-Leader of its North American Personal Financial Services. During his 10 years with McKinsey, Mr. O'Hanley was based in Boston and Stockholm, focusing on financial services and heath care payers throughout North America, Latin America, Europe and Asia.

From 1997 to 2001, he served as a Senior Vice President at Mellon Bank, N.A. Prior to the merger of The Bank of New York and Mellon Financial Corporation in July of 2007, Mr. O’Hanley was Vice Chairman of Mellon Financial Corporation and President and Chief Executive Officer of Mellon Asset Management. Following the merger, he became Vice Chairman of The Bank of New York Mellon Corporation, and a member of the Executive Committee.

Ronald O’Hanley is a graduate of Harvard Business School and Syracuse University. He also attended Vanderbilt University School of Law.

 

Admiral William A. Owens (U.S.)
Chairman, AEA Holdings Asia
Former Vice Chairman, U.S. Joint Chiefs of Staff

Admiral William Owens is the managing director of AEA Investors in Hong Kong.

Prior to joining AEA, he was Chief Executive Officer and Vice Chairman of Nortel. Mr. Owens had served on the board of directors of Nortel and took the helm of Nortel following the disclosure of accounting issues in April 2004. Under his leadership, Nortel was reestablished as a strong, stable, ethical Fortune 500 company growing strongly and on the path to leadership in the telecommunications and enterprise IT global marketplace.

Prior to joining Nortel, Mr. Owens was chief executive officer and chairman of Teledesic LLC and before that, he was the president, chief operating officer and vice chairman of Science Applications International Corporation (SAIC), the largest employee-owned high-technology company in the U.S. Prior to joining SAIC, Mr. Owens was vice chairman of the Joint Chiefs of Staff, the second-ranking military officer in the United States. He had responsibility for the reorganization and restructuring of the armed forces in the post-Cold War era.

From 1991 to 1993, Mr. Owens was the deputy chief of Naval Operations for Resources, Warfare Requirements and Assessments. He served as commander of the U.S. Sixth Fleet in 1990 and 1991 during Operation Desert Storm in Iraq. Between 1988 and 1991, Mr. Owens served as senior military assistant to Secretaries of Defense Frank Carlucci and Dick Cheney, the senior military position in the Office of the Secretary of Defense.

Mr. Owens has served on the board of directors of 19 public companies and has founded two technology companies, Lumera and Extend America. He is on the board of Daimler Chrysler AG, Polycom, Wipro, Embarq and AEA Investors LP. Mr. Owens is a member of several philanthropic boards including the Carnegie Foundation, Brookings Institution and the Fred Hutchinson Cancer Research Center. He is a member of the Council on Foreign Relations.

Mr. Owens has a B.A. and M.S. in politics, philosophy and economics from Oxford University and an M.S. in management from George Washington University.

 

John Rogers (U.S.)
Managing Director, Goldman Sachs & Co.

John F.W. Rogers is the Executive Vice President and Chief of Staff and Secretary to the Board at Goldman Sachs. He has previously served at the White House for more than 10 years.

Mr. Rogers was Assistant to the President for Management and Administration from 1981 to 1985 and Assistant Secretary of the Treasury from 1985 to 1987.

From 1988 to 1991, he was Executive Vice President of the Oliver Carr Company.

From 1991 to 1993 he served as Under Secretary of State for Management at the U.S. Department of State.

In 1992 he helped to establish the James A. Baker III Institute for Public Policy at Rice University.

He joined Goldman Sachs in 1994 and has been the Chief of Staff and Secretary to the Board of Directors since November 2001.

As Executive Vice President, Mr. Rogers’ responsibilities include press and public relations, the firm’s government affairs office in Washington, and Goldman’s considerable philanthropic efforts.

Rogers is member of the Goldman Sachs Foundation and Goldman Sachs Gives, the Baker Institute at Rice University, the American Museum of Natural History, the International Republican Institute, the Ronald Reagan Presidential Foundation and Library, and the Smithsonian Institution.

John F.W. Rogers graduated from Georgetown University and was awarded the Presidential Citizens Medal in 1985.

Press contact: Graham Webster, gwebster@ewi.info, +1 212 842 4145

The Russell 20-20 Association received the inaugural George F. Russell, Jr., Economic Security Award, IEEE received the EWI Cybersecurity Award, and The Water Initiative received the "Game Changer" Award.

"International security challenges are moving from military problems to economic dilemmas," EWI President and CEO John Edwin Mroz said. "With the United States and Europe weakened by the financial crisis, only private–public, East–West cooperation will fill the gap."

EWI presented the awards at its 2011 Recognition Dinner at the Embassy of the United Arab Emirates in Washington.

U.S. Senator Robert P. Casey, Jr., in a speech at the dinner, said international collaboration is more important than ever.

"Members of Congress of both parties could learn from this good work of East–West partnering for so many years," Casey said.

George F. Russell, Jr., appeared by video from Washington State to honor Russell 20-20, a group of investors who work in the developing world.

Russell said EWI's focus on bridging divides and economic security produce value for investors. "To me, from an investor perspective, the EWI topics are completely aligned with what we need," he said.

The evening's second award went not to an individual but to IEEE, an international association of engineers, who EWI's Co-Chairman of the Board Francis Finlay called "the unsung heroes of cyberspace."

IEEE's Communications Society has partnered with EWI to study critical issues in cybersecurity, including a landmark 2010 report, "Reliability of Global Undersea Communications Cable Infrastructure" (ROGUCCI).

EWI presented its "game changer" award to The Water Initiative, which develops and provides point-of-drinking water filtration equipment to developing country communities.

"We see water as a key component of our economic security work, and The Water Initiative has been a trail blazer in this area," EWI Board Co-Chairman Ross Perot, Jr., said.

Kevin McGovern, President of The Water Initiative, accepted the award. "Working with local communities, we create community-specific, integrated, platform technology solutions to bring clean drinking water as close to the community as possible," McGovern said.

The awards dinner took place as part of EWI's board meeting to close its 30th anniversary year.

Back in the 1920s, American correspondents based in Europe were writing about a new phenomenon. "The Americanization of Europe proceeds merrily apace," Karl von Wiegand wrote in The Washington Herald on June 14, 1925. "Half in wonderment, half in protest this tired old group of nations is falling under the magic sway of that babulous 'dollar land' across the ocean." Edgar Ansel Mowrer of the Chicago Daily News added: "By the early twenties signs of Americanization were appearing all over Europe." He pointed to the introduction of mass production, mass entertainment and, in general, the opening up of the old continent to new economic and social trends pioneered by the United States.

What passed for Americanization then is, in effect, what is called "globalization" now -- the rapid spread of ideas across borders and oceans, often overwhelming national efforts to block them. But, as Americans like to say, what goes around comes around. Whatever the outcome of the political battles in Washington sparked by the current debt crisis, there is another story playing itself out here. Simply put, the United States is now as much on the receiving end of globalization as it is an initiator of that process -- and this will have profound implications for its future.

There was a time when Americans were firmly convinced that European problems -- especially their large public debts, unemployment rates that were routinely much higher than in the United States, and vastly overextended pension and social welfare systems -- were ones that they did not have to worry about. Or, at the very least, they were convinced that the scale of Europe's problems dwarfed any problems that the United States faces. But no more. Suddenly, Europe's problems don't look that remote or dissimilar, and some commentators are even warning that if Americans don't get their house in order they could end up like Greece.

To be sure, the United States, for all its worries, is still a long way from a Greek-style crisis. Its economy remains fundamentally more healthy and dynamic, and Americans can continue to take justifiable pride in their country's track record on entrepreneurship and technological innovation. Then, too, the continued growth of its population is in stark contrast to Europe's demographic decline. But even the fact that some Americans are using Greece and other ailing economies as examples of what their country should avoid marks a psychological shift. The underlying assumption is that Americans can't take for granted anymore that they are immune to the negative trends that are so evident elsewhere.

The positive side of that psychological shift is that Americans are now more open to looking to Europe for possible pointers on what they should be doing in their own country. That means examining what Europeans are doing right, and applying the lessons learned to the United States. Suddenly, Americans are openly acknowledging they don't have all the answers and aren't reluctant to search elsewhere for them.

Even looking to a place as small as Latvia. When Latvian Prime Minister Valdis Dombrovskis visited the U.S. recently, his story of how his country has worked its way back from near economic collapse by embarking on a bold mixture of drastic budget cuts and tax increases received serious attention. "Decisive action in Latvia helped restore confidence," wrote columnist Robert Samuelson in The Washington Post. "In the United States, government has drifted. Its inconsistencies and indecision have corroded confidence and compromised recovery."

Dombrovskis was careful not to preach, pointing out that the American fiscal crisis is "substantially smaller" than Latvia's and the specific remedies inevitably will be different. But at a lunch at the Council on Foreign Relations, he volunteered that he was struck by how much less the United States taxes energy use than Europe does. Higher energy taxes, he added, both generate substantial revenue and makes people focus on energy efficiency. While that's a message that many Americans still find hard to accept, preferring to push for greater exploitation of existing resources instead, attitudes towards what others have been doing are changing. Germany serves as one clear example. In the early days of the Obama Administration, officials were dismissive of the economic policies of Chancellor Angela Merkel, arguing that she was too timid in her stimulus efforts. But in the current issue of Foreign Affairs, Steven Rattner who served as Obama's "Car Czar" in that period, offers a glowing piece about how Germany has "reestablished its position as an economic juggernaut," relying on high-end manufacturing that fuels its exports. "Whatever its flaws, the German model shows that a developed country can remain competitive in a world where new economic giants, such as China, India, and others, are emerging," he concludes, encouraging the U.S. to learn from Germany's successes -- or risk losing out as globalization accelerates.

Whatever happens in the short-term with the debt limit, Americans recognize that much of what they took for granted about their economic future is now in jeopardy. It isn't just the federal budget that is in trouble: several state budgets have already sparked major crises -- and new austerity measures. Earlier this year, Wisconsin's Republican Governor Scott Walker mounted a major push to curtail the collective bargaining rights of trade unions, arguing that otherwise public expenditures could not be brought under control. Similar fights have erupted in Indiana and Ohio. In California, Democratic Governor Jerry Brown has so far failed to find a formula that Republicans will accept to plug his state's massive budget deficit. "Summertime, and the livin' is easy," proclaims the unforgettable opening line of the aria for George Gershwin's 1935 opera "Porgy and Bess." This very hot summer, Americans are in anything but that kind of carefree mood. No, life isn't catastrophic -- but the unease is all too prevalent. There's the growing realization that America's future well-being is tied to its ability -- or inability -- to forge political agreements that put its economy on a new firmer, more responsible footing, just like other countries that are facing similar challenges. And just like others, it must cope with globalization, or become its victim. It cannot wish any of this away.

If this means that Americans will do a better job of learning from both the positive and negative examples elsewhere, this summer of 2011 could yet prove to be a salutary one -- both for the United States, and for a world that still counts on its economic and political leadership.