Economic size matters

There was too much talk on whether bilateral or multilateral is better. What everybody failed to see is that economic size makes the difference. Trump is right when he prefers bilateral from USA’s and China’s point of view. Even economic isolationism makes sense for those two huge economies. They could very easily have relative autakry and not deal with the rest of the World. We are not suggesting that but it is possible and it would not create any problems to these two countries.

It makes sense for Slovenia, the birth place of Melania Trump, to group with other Balkan and East Med countries to form a bigger economy. Slovenia’s economy is 387 times smaller than USA’s. To put it in other words 387 Slovenias make USA. 

Russia is a vast country with most part in Asia. Their traditional allies were in Eastern Europe. Ethnic Russians are Slavs and Orthodox. Slavs and Orthodox are in Eastern Europe. Some blame Russians for oppressive behavior. Nevertheless, they are all Slavs, Christians and ex-allies.

In Asia there are mostly Muslims, Hinduists and Buddhists. Russia had to turn to Central Europe for allies where Turkic and Muslim people live that should have been Turkey’s allies. So, Turkey turned to the Arab World for allies and tried to take advantage of a small part that is European to align with Europeans. Russians, Turkish, Arabs, Iranians, Westerners clashed furiously in Syria.

Israel is in Asia but it is surrounded by Arab Islamic countries, mostly hostile. The vast majority of Jews lived in Eastern Europe and they have mixed and also have cultural influences. Most Israelis have come from Eastern Europe to Israel. These are only two examples. There are many more cases where ultraglobalists' childish division into continents have caused problems.

It makes sense to group together countries with small GDP’s and make a bigger economy. That is what we did in A Pentarhcy. First is the Triarchy (USA, China, WEU) with 55% of World output. Then we have 12 Regions with GDP’s ranging from 1,5 to 3,5 trillion dollars. There is also Japan and a small group of 4 countries in Northern Atlantic (UK, Ireland, Canada, Norway) that have GDP equal to Japan’s.

Japan is the only country that is by itself and not grouped with others to form a region or a division. It is the same logic with USA and China at a different level. USA and China are like economic blocs and Japan like a region or a division of an economic bloc. So, we have 12 + 2 = 14 building blocks that can be combined to form 2 - 4 economic blocs. The regions do not necessary have to be one next to the other.

There has been much talk whether the relations should be multilateral or bilateral. We do not see it this way. We see that small economies should group to form bigger economies. The first level is the region and the second the economic bloc. Relations among economic blocs should be bilateral. This could even be the case for divisions/regions within the bloc. We have 3-6 regions in an economic bloc. Even within the blocs relations could be bilateral, especially when the number of divisions is closer to 3. Technology allows to have multi-bilateral relations within regions but it could probably be preferable to have multilateral at this level.

Spending too much time on the bilateral-multilateral debate is something that university professors should do. We repeat that what everybody failed to see is that economic size makes the difference. What really matters is to have some coordination and cooperation at all levels. There are three levels economic blocs, division or regions of economic blocs, countries.

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