The “global infrastructure fund” (GIF) concept

Techno&y In Socrety, Vol. 9, pp. 77-85 (1987) Prmted in the USA. All rights reserved.

0160-791X/87 $3.00 + .OO Copyright D 1987 Pergamon Journals Ltd

The “Global Infrastructure Fund” (GIF) Concept Musahi Nahajima

ABSTRACT.

Firstproposedby

the author in 1977, the “Global Infrastructure

Concept has attracted worldwide interest and support. Itsprecise corners&e a relatively new term, but aptly defined by Zbigniew Its philosophical

(GIF)

“post-internationalirm.

”

rationales are “‘Harmony, ” “Bal’ance” and “Tolerance. ” The GIF Initiative

is a series of high/y multinational

Brzezins&‘us

Fund’

is ‘g/obalism, ”

ambitious

infrastructure

“engineers’

building,

dreams”

or ‘Super-projzts,

” designed

for

mainly on the part of the Third War/d. It draws on a

globalapplication ofKeynesian policies to create effective worldwide demand, or a “GlobaL New Deal’. ” GIF is aLsopresented as a most persuasive alternative to “overarmament, ” today? accelerating

excessive military spending race. GIF offers a realirtic remedy

to the

adverse impacts of disarmament on demand and employment. Fzfteen “exemplary” superprojects have been tabled by the author for worLd forum, as enumerated herein, each attesting to the significance

of peucefuL construction

on earth.

Throughout the world today, society faces numerous predicaments of a global nature. Confrontation between the East and the West, stagnation of the world economy, friction between North and South, the misery of hunger and famine in the Third World-these and many other issues that are derived from them are a constant concern. The Global Infrastructure Fund (“GIF”) concept was born in such a situation, and is primarily based on the philosophy of “globalism.” Nine years have passed since the concept of the Global Infrastructure Fund was first proposed in 1977. This proposal was a faint and distant call at first, but the concept has gradually gathered momentum and attracted a worldwide range of interest and support. The Meaning

of GLobalism

The cornerstone of the GIF concept is, of course, “globalism,” but what is globalism? The word is a relative newcomer to the English lexicon, apparently coined in the mid-1940s and first recorded in the 1961 edition of Webster’s Dictionary. The seemingly synonymous “internationalism” has, of course, been in use for many, many years, but globalism can more appropriately be described as “postMasahi Nakajima, former Chaihnan and now Director and Senior Adviser of the Mitsubishi Research Institute, Inc., is one ofJapan S most active senior business leaders. He is we/l’ known internationally as a banker-turned-founder of a Japanese “thini tank ” Mr. Nakajima concurrently serves in a number of key governmenta/ and industtial organizations. 77

Masaki Nakajima

78

to borrow an apt definition from Zbigniew Brzezinski. “Globe” internationalism,” in globalism represents the earth as a sphere - Spaceship Earth in its magnificent blue splendor as seen by the astronauts. Progress in the areas of transportation and technological innovation have had a great deal to do with the emergence of the global perspective. To the primitive man who could travel only on foot, the world ended at the perimeter of his village. Then warriors rode in on horseback to build their feudal fiefdoms only to be replaced in due course by modern nation-states conquering distances with steam-driven ships and trains. Enter now the airplanes of the 20th century and the supersonic Concorde which put the major cities of the world within a one- or one-half-day’s traveling distance of one another. Now there is a real awareness of the “one-day sphere ,” reinforced by developments in television and space communications technology. Until the beginning of the present century, peace on earth was thought of in terms of international peace, and represented an awareness of the need for peaceful cooperation among nations and peaceful resolution of international conflicts. The ideals upon which the United Nations was built, however, lacked the larger perspective of a global view. Turning

Points in Htiman History

Mankind has passed through a number of crucial turning points in the course of its history, but the 20th century has seen by far the most rapid and profuse changes. With a little over a dozen years to go until the close of the Second Millennium, now is an appropriate time to look back over the events and achievements of the 20th century. Each of the two World Wars in the first half of this century gave birth to an international organization designed to deal with war’s aftermath - the Genevabased League of Nations after World War I and the New York-based United Nations after World War II. American influence on the United Nations began to wane, however, despite its geographical location, as the Cold War began to cloud international affairs and pit a horizontal union of NATO countries against a vertical combination of countries aligned under the Warsaw Pact. The international situation today is as unstable as it was during the Age of Warring States in China more than 2,000 years ago, when an East-West alliance of six states faced a North-South alliance of another six states, historically known as the “Gassho-Renko.” This expression means horizontal and vertical alliance and collaboration of the nation-states. In the shadows of the present confrontation of superpowers, scores of international disputes have been waged in different parts of the world since the end of World War II. Only the threat of nuclear destruction, so tragically demonstrated at the end of the war, has so far prevented localized hostilities from erupting into World War III. Worldwide military expenditures today amount to nearly $1,000billion, more than double that of the early 1970s. The fiscal crises plaguing the arms race participants are largely responsible for the current impasse in the advanced economies of the world as most observers realize. A current term for the situation is “overarmament

.”

The GIF Concept

79

Starting the GIF Initiative and Changing Its Gears The world situation today has changed since nine years ago when a handful of senior staff at the Mitsubishi Research Institute started work on the GIF Initiative. During the 19% and 196Os, the world had experienced “the Golden Age” that Daniel Bell narrated. In Kondratieff’s terms, the trough of the war years was followed by a cyclical upswing- with years of post-war revival and growth - as wartime technological developments became available to serve the cause of peacetime well being and prosperity. Penicillin conquered tuberculosis, polyethylene changed the fabric of the textile industry, and the jet engine ushered in a new age of commercial aviation. But this exuberance was short-lived. In 20 short years, countries with advanced economies had to face the consequences of overproduction, while the Third World suffered the consequences of limited access to advanced technology and crop shortfalls which brought with them hunger and starvation. Stagflation was followed by the oil crises of 1973 and 1979, which saw a massive accumulation of petrodollars on the one hand and-as the Club of Rome warned-set severe limitations to growth on the other. Dark clouds hung heavily all over the world. It was during those dark years that members of the Mitsubishi Research Institute were inspired by the dreams of engineers to propose the GIF initiative-a series of ambitious investment projects designed to go beyond the traditional framework of nation-states and stimulate effective demand, The first concern of the founding group was rectifying the imbalance caused by the massive reserves of petrodollars. There already had been some discussion among the OPEC leaders about how to operate an OPEC fund to effectively recycle surplus petrodollars back into the world economy, so the GIF study group contacted them to see if they might be interested in the GIF idea. OPEC Fund President and Kuwait Finance Minister Al Mahad, Oil Minister Ali Kalifa al-Sabah, and others met with a group of concerned Europeans andJapanese, known as the Paris group, and laid plans to invite Saudi Oil Minister Yamani and Indonesian Oil Minister Suburto to join the enterprise. They showed a great deal of enthusiasm for the concept, but-before anything substantial could be achieved-the reverse oil shock of 1982 aborted the plans. Basic Orientation The basic orientation of the GIF Initiative was Keynesian, but they intended to go beyond the New Deal policies adopted in the wake of the 1929 Depression. They suggested that the financial and technological aspects of the advanced industrial economies should be mobilized beyond the narrow boundaries of nation-states in order to carry out multinational projects in areas where they could effectively contribute to the development of the Third World. This suggestion was proposed as a global application of Keynesian policies, or a “Global New Deal.” At about the same time, MIT Professor Frank Davidson and others began promoting an American Society for Macro-Engineering, and the Japan Project Industry Council (JAPIC) began considering opportunities and possibilities abroad. Lately Volvo Chairman Gylenhammer and other members of the Round Table of

80

Masaki Nahajima

European Industrialists were searching for a new “modus operandi.” Anti-nuclear movements were beginning to take shape in different countries of the world. All these trends converged to lead to the GIF concept. GIF As an Alternative

to Overarmament

Despite stagnant growth rates in advanced technical economies that tend only to add to higher levels of chronic unemployment, there are virtually no signs of deescalating the arms build-ups that have spread like a cancer throughout the world. Some progress toward gradual disarmament is badly needed if the financial burdens such build-ups impose are to be reduced. But the UN disarmament talks-initiated in 1978-have so far produced very few tangible results. Military-industrial complexes, of course, benefit greatly from the arms build-up, which not only feeds the munitions industry, but contributes to its technological development as well. Armaments are an extremely lucrative enterprise because they face less competition than do market-oriented manufacturers in the nonmilitary sector. The recent growth of the computer hardware and software industries also has important implications in virtually all advanced industrial economies. Unlike ordinary industries, arms production systems are not, as a rule, subject to managerial restraints and have, in principle, no built-in ceilings. Japan has managed to keep a small 1 %-of-GNP ceiling on its defense outlays, but the rates elsewhere range from the supposed 10% or more in the USSR, 8% in the US, and 2.5 to 4% in the other Western countries. Increased military expenditures directly and adversely affect a nation’s fiscal position. The United States, for example, is now spending far more on arms than it did during World War II, and this - indisputably-may be one of the foremost causes of the current US fiscal and balance-ofpayments deficits. The Russians presumably are in no better position. It is to be hoped, indeed, that a Reagan-Gorbachev summit will reach agreement on controlling overarmament and nuclear weapons. The GIF Initiative offers a realistic remedy to the adverse impacts of disarmament on demand and employment. Leading economists agree that the multiplier effect of infrastructure spending on the economy can be about two times higher than military spending. GIF, then, represents a viable alternative to overarmament, a view that has been endorsed by a great number of people. GIF and the Dawn of a Global Age

Less than two years after the GIF Initiative was first proposed, Dr. Geoffrey Baraclough, who succeeded Arnold Toynbee as President of the British Historical Association, published a new atlas of the world in cooperation with a number of other distinguished scholars. In Chapter 7 of this very readable work, he cogently argues that the world in the latter half of the 20th century is moving into an Age of Global Civilization. The long-held European leadership in world affairs was shaken by two World Wars, and, while the nations of Europe faltered in their efforts to develop their colonial

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holdings, two superstates - the US and the USSR - emerged to confront each other in ideological rivalry. The age of Western civilization, says Dr. Baraclough, has almost run its course; now China, India, East Asia andJapan are offering their contributions to a new order of global harmony. Despite signs of progress toward global harmony, the confrontation of the two superstates and conflicts among their satellites have resulted in nuclear proliferation. The recent Chernobyl disaster painfully demonstrated that radiation pays no heed to territorial boundaries, since its effects were detected over almost all of the Northern Hemisphere. Considering, however, that the effects of that reactor accident were less than l/ 10,00&h of an atomic bomb, an accidental outbreak of nuclear war would be armageddon - a holocaust before which the tragedies at Hiroshima and Nagasaki would pale into insignificance. Mankind would find itself adrift in Noah’s Ark again, and all the blood-curdling scenes from the movie, “The Day After,” would be acknowledged as gross understatements. The human race is now faced with a crisis of monumental proportions: the selfdestruction, no less, of the species. Nuclear war must be averted at all costs. While there is no doubt at all about the good intentions of the anti-nuclear movements throughout the world at the present time, they have a tendency to turn the issue into an ideological debate. But what we need now is not an ideological issue, but a concrete and widely acceptable alternative to the escalating arms race and arms sales that keep alive the threat of nuclear war.

The GIF for the Third World The second most important merit of the GIF Initiative is its contribution to the elevation of the economies of the Third World. It is imperative today that a solution is found to the problems of the Third World, where - annually - it is reported that 20 to 30 million people are dying of hunger due to famine. If the per-capita income of the Third World (which has a population of four billion people, or three-quarters of the world’s total) can be increased by $1,000, then a market economy could be created that would be the equivalent of $4 trillion, which is competitive to that of the United States. This could be realized by the large-scale, massive transfer of technology, based on the spirit of North-South coexistence and East-West partnership. It is, of course, essential to be sure that the technologies transferred are suitable to the Third World and that the recipient countries are capable of absorbing them. The GIF projects could be utilized to make the technologies of advanced countries available for economic and industrial development in the Third World, thus effectively elevating its economies, while creating procurement markets in the advanced countries which are troubled by stagnant economic conditions. To realize such economic elevation in the Third World, both the advanced countries and the developing countries must be on equal footing, and such projects must not be undertaken in terms of benevolence or charity. Rather, the emphasis should be placed on “co-existence” and on the “mutual prosperity” of all the participants on both sides of the transfer. One of the precepts of Buddhism is co-

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existence,

treating

North and South as equal partners for global project develop-

ment .

So far the Third World has sent many young and eager students to the advanced countries for higher education in civil engineering and related disciplines. These students have attended MIT, Ecole Nationale des Ponts at Chaussees, and many other professional engineering schools and mastered the skills necessary for building up a country’s infrastructure. No matter how hard or how much they studied, however, they have been unable to contribute to the building up of their countries when they returned home, since there are no projects available through which they can make effective technology transfer themselves. The GIF projects are precisely projects that will enable them to fully utilize their expertise for long periods of time (10 to 20 years until completion in most cases) toward the goal of nation-building through infrastructure. The GIF Initiative is just such an alternative. Best described as a colossal peacetime building program, it will offer opportunities for everyone, everywhere-including the Third World-to see for himself or herself the benefits of global infrastructure projects. As each individual project is completed, the GIF Initiative will generate a tremendous “seeing is believing” effect. As the GIF list of superprojects gets underway and the projects are completed in different locations throughout the world, people will begin to see-through specific examples-that the realities of peaceful construction make far more sense than the potential for military destruction, which can only lead to an awareness of global peace. U Thant, former Secretary-General of the United Nations, once said that modern man has two citizenships: one to his native country and the other to the world community. This view underscores the possibilities and the hopes generated by the GIF Initiative. Model GIF Superprojects The GIF founding group has done a great deal of soul-searching in the process of formulating and revising the blueprint for GIF, and has often been criticized for opbeing too optimistic or even quixotic. But acts of apparently unwarranted timism are sometimes vindicated by subsequent turns of events. Viscomte Ferdinand de Lesseps braved much criticism and even derision as he created the Suez Canal to link East and West. The GIF group feels that commitment to long-term, ambitious goals will ultimately contribute to the happiness and well being of mankind. The 15 projects that have been discussed so far in the GIF Initiative are: Greening of the deserts in the Sahara, the Sinai, and the Arabian peninsula. Erection of a large-scale collection station for solar heat in a remote part of the world. Construction of a second Panama Canal, as well as a large canal in Nicaragua, which would link the Atlantic and Pacific Oceans. A 17%kilometer-long canal through the Kra Isthmus, linking Phang-nga Bay to the Gulf of Siam.

The GIF Concept

83

Installations using oceanic energy for electric power generation along undeveloped ocean shores, using oceanic thermal energy conversion and tidal electric power generation. Damming of the Sanpo River between China and the Indian province of Assam to make it flow into India through a tunnel across the Himalayas. Constructing a dam across the Bering Strait to control sea currents from the Arctic Ocean, which would alter atmospheric conditions. Controlling the flow of the Congo River by building a dam to create a vast lake in the Congo and Chad regions of Central Africa to improve natural conditions. Constructing nine dams and seven artificial lakes across the Amazon and the Oricono and the Paraguay for purposes of hydraulic power generation. Constructing a canal between El Dabaa and El Seira in Egypt for electric power generation. Constructing a superhighway, a new “Silk Road,” across the Eurasian continent from Central Europe to China. Constructing a bridge/tunnel between Morocco and Spain to connect the European and African continents for surface transport. Constructing a global network of seaports including those in Brazil, Japan, Seattle, Rotterdam and Indonesia. Constructing a global communications network by the use of communications satellites and ground stations for various media. Constructing a TransEuropean north-south motorway from Gdansk to Athens. Not all of the 15 projects on this list have been thoroughly studied, and there are many uncertainties to be clarified in the months and years ahead. In the proposed superproject on oceanic thermal energy conversion (OTEC), for example, some problems remain to be solved before the project can be implemented. As its chief advocate, Professor Haruo Uehara of Saga University, says, however, its relatively modest scale of operation, the clean energy that it is expected to supply, and its dependence upon a renewable energy source make the OTEC project attractive. About 40 countries in the Third World have indicated a high level of interest in it. A three-way classification of GIF superprojects has been set up as follows: 0 0

0

Prima7y Stiperprojects: Energy and resource development, improvement and use of swamplands, greening of deserts, etc. Secondary S@erpro~&25: Large-scale construction of transportation systems, canals and tunnels, utilizing state-of-the-art industrial and engineering technologies. Tertiary or Information Projects: Global cooperation on telecommunications satellites, and a global network of superports.

Each project has its own special features, and must be examined carefully in terms of both safety and feasibility, and of the social and economic needs of the host countries concerned. A successful precedent for the third category, Information Projects, is the Universal Postal Union which was consolidated in the second half of the 19th cen-

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tury. If the Universal Postal Union had been as parochially conceived and organized along East-West lines as so many institutions are today, it could not have served the world half so well. Information-related projects are to be formulated differently from conventional engineering projects. Communications satellite projects, for example, needalmost by definitionto be globally designed at their very inception. Pbilosophica/

Rationale of Globahm

In the coming age of global civilization, following set of philosophical principles: 0 0 0

GIF projects have to be based on the

Harmony Balance Tolerance

Harmony. The word “harmony” has pleasant connotations. A symphony orchestra, for example, thrives on the harmony produced by the strings, winds and the percussion instruments, each playing its own melodic line under the baton of a skilled conductor. The GIF Initiative can be instrumental in creating just such symphonic harmony among nations and ethnic groups, allowing each to make its own distinctive contribution to global harmony and blending the competing motifs of capitalism and socialism under the baton of the superconductor, a carefully designed GIF project. Balance.

In addition to harmony, there is need for a sense of balance between freedom and equality on the one hand, and efficiency and equity on the other. Allout pursuit of capitalism has always been an option open only to the most advanced and resourceful nations. Developing countries and newly independent nations have their own range of options dictated by history. The Japanese economy is not entirely capitalistic; administrative controls help inject a measure of socialistic equity. A model of revised capitalism, envisaged as a scenario for postwar rehabilitation by the Japan Committee for Economic Development (Keizai Doyukai) has taken root in Japanese society and encouraged a system of social organization which has steered a successful course between the evils of excessive efficiency and perverted equality. Both capitalism and socialism have their own merits and their own drawbacks, and there is no reason why an appropriate balance cannot be struck between the two. But this does not mean that everything has to be 50-50. It will differ according to the historical and socio-economic stage of each participating nation. GIF projects - if sufficiently well balanced in concept and design -can be jointly carried out by nations which differ ideologically. Tolerance.

The third necessary ingredient is tolerance, meaning mutual tolerance. Through history, religious intolerance-of one monotheistic religion for another or of warring factions within the same religious system-have led to bloodshed and

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war. From the St. Bartholomew’s Day Massacre to the ongoing conflicts in Ireland, Iran and Iraq, there seems to be no end to the tragedies that are caused by religious intolerance. Similarly, the confrontation of the two superstates boils down to mutual distrust, to lack of tolerance of both sides. The Sermon on the Mount admonishes us to love our enemies, to practice tolerance unilaterally. If nations can learn to divest themselves of self-righteousness and intolerance, the nationalism of the 19th and 20th centuries can give way to internationalism, which - in turn-will usher in an age of globalism. In 1986, the Prince and Princess of Wales honored the Japanese people with a royal visit, and captivated the entire nation with their dignity, grace and charm. Prince Charles’s speech to the Japanese Diet was of a high caliber - indeed, of a kind that is not usually associated with royalty on a state visit. In a brief presentation, the Prince of Wales noted that-with religious, racial and ideological conflicts plaguing the world today-mankind is in dire need of a mutual tolerance. He was making a case-one would presume-for the ideal of globalism. The Prince also expressed the hope that Japan would act as a mediator between East and West. Japan is not powerful or influential enough to act singlehandedly as an arbitrator between the two superpowers, but if European nations with the momentum of modern history and civilization behind them would join with Japan in such an effort, this sort of coalition might be able to help. About six months before the unfortunate assassination of Indian Prime Minister Indira Gandhi, this author was invited to visit her at her residence in New Dehli. Following her greeting to me, she said, “Mr. Nakajima, I want no detailed explanation of your GIF concept. I have already studied a lot about it. I want to know how you came to such an idea.” I answered her with an explanation of the GIF philosophy, and commented that, of course, there have been criticisms of the concept from those who feel that it is too idealistic. The Prime Minister’s comment was. “Idealism is needed now.”