Admissions Day speech
August 21, 2016
Aloha Kakou,
I was asked to speak for a few minutes about the economic viability of an independent Hawaii.
This can be a very wide topic and I think often confusing because as a whole, we are working off of different imaginary frames. And I don’t want to say that there are any wrong frames, but I do want to focus on—at the very least—a frame that is operable in the 21st century. And for better or worse, that is globalization
In a remark about World Peace, after the atomic bomb was dropped on Hiroshima and Nagasaki, Einstein said that World War 4 would be fought with sticks and stones.
I would argue the same applies to economics.
Currently, we live in a globalized economy, no going back—or if we do go back, it will be because we have found ourselves in WW3, and hence the global economy would likely collapse under nuclear war.
Since the UN—since internationalism—the shaping of the world has been predicated on state recognition, nuclear weapons as an end-game deterrent, trade, finance, development, ecological sustainability, and a lot of global regulatory agencies trying to impose sanity on what has become a unipolar free market economy.
The global market economy is a juggernaut, for pure adherents of free trade, the philosophy is to let the juggernaut—that is the market—be free. On the other side, and I put myself there, there is regulatory coherence, laying down a track for this juggernaut to move.
So this is kind of a roundabout way of dismissing the notion that when de-occupation occurs all treaties and investment agreements conducted under statehood or by the US will be null and void. I think many think that an independent Hawaii suggests that we’d have the ability to reinvent our economy to how it may have been during the Kingdom era and bring it up to date in the modern world.
1) I’m going to be speaking about regional integration and self-determination in the Pacific Island region in the context of both States and Territories. It may sound strange to speak about a kind of self-determination in this context because it usually just applies to territories that are still bound by the tethers of administering powers. But after yesterday’s conference on the changing landscape of negotiation and dialogue—a discussion that looked at Boko Haram and ISIS as being examples of the changing state and strategic landscape, I’m afraid that what I may be discussing is too banal and boring for the World Bank.
6) Most of the independent Pacific Islands gained their independence after 1970, and many of the territories with strong decolonization campaigns are seeking routes away from the various special administrative status that they’re in. Some campaigners are seeking to be relisted onto the UN decolonization list, and some territories that are already on the list, are seeking full independence.
7) But regardless of their status, all Pacific Islands share in the fragility of the region. Issues over the loss of fresh water, land, ocean acidification, fisheries depletion, radioactive waste, militarization, and a slew of other degradations that many of the larger economies refuse to take responsibility for, add to the disparities unique to Pacific Islands. I would argue that the survival of Oceania is dependent on regional self-determination and that inequitable trade agreements, occupations, and whatever special statuses that the Administrating Powers maintain will be better addressed when regional ecological and economic integration is attained.
Hawaii will only be independent if it can have a viable economy that operates within the international community.
Pacific Island Forum, Pacific Island Development Forum, Melanesian Spearhead Group, Polynesian Leaders Group.
We’re on an interesting cusp in the world right now, nation-states vs trade integrations. It’s unlikely, we’ll return to the world of sovereign nation-states as there are two fists fighting over the rules of globalization: market forces and regulations. The TPP/TTIP/TISA is about corporate governance influencing market forces. We need to be the force voicing regulatory governance over labor, environment and ecological rights, consumer rights, health, etc… good regulatory governance will control the juggernaut called globalization.
It’s important, however, to frame the discussion, and although it may be a fun exercise to expand the scope of what we mean by economics, I do want to remain focused on:
a Hawaii that will be independently recognized by UN members;
a Hawaii that will participate in the global economy;
It’s important to understand that there are multilateral rules determining what it means to be an independent country and part of the global economy, which is not to say that countries have zero say in how those rules are interpreted, but simply, to be recognized as an independent country, there are rules that we have to abide by. To be clear, these rules are not written in stone, but to turn a phrase of one of Einstein’s remarks on world peace: World War 4 will be fought with sticks and stones… which is to say that according to the rules that currently govern the world, World War 3 will put an end to globalization as we know it.
Hawaii is economically viable, and the conditions for that viability are inextricably linked to our land and resources.
One way of looking at viability—which is not how I’d define viability—is that Hawaii can make a tremendous amount of money by selling its land, oceans, and fisheries, charging the military more money to park their battleships and aircraft carriers in our ports and charge market value for the use of our lands for military practice, Hawaii is absolutely viable, selling our fisheries to other markets, charging more money for renting Mauna Kea to put an observatory up there, who’s to say that whatever government is in charge could bring in much greater revenue than the paltry sum that we get these days as a result of our occupation.
An independent Hawaii- to be viable—has to do two things, create a strong ecological framework at the constitutional level, but one that works within UN mandates, and
Hawaii has to join an integrated Pasifika—Small Island economies—that can protect its ocean resources and begin to trade on both the regional level and the international level.
One of the things that Pacific lacks is a strong regulatory presence that is coherent, with due diligence and due process, and a legal system that has access to strong enforcement and compliance mechanisms. Very few small independent countries have that because the various enforcement and compliance mechanisms and infrastructure are too costly to maintain, but I would say one of the benefits of having been part of the US, is that the US has strong regulatory coherence due to enforceable compliance mechanisms.
Gutter with pukas.
Hawaii is the physical, economic, and cultural center of the North Pacific and we are the environmental stewards of a huge chunk of ocean.
I’d like to expand upon this because there are a couple of things that put Europe at a huge disadvantage against the US– one is the Marshall Plan or the rules that administered the European Recovery Program by pegging it to the U.S. And specific to that, the free-trade or tariff-reduction policy that created huge advantages (and an over-inflated economic baseline) for the U.S. The only way for European countries to advance was to integrate as the United States had in the 1800s, reduce tariffs and put the burden of government revenue on taxing income and consumption.
We’re on an interesting cusp in the world right now, nation-states vs trade integrations. It’s unlikely, we’ll return to the world of sovereign nation-states as there are two fists fighting over the rules of globalization: market forces and regulations. The TPP/TTIP/TISA is about corporate governance influencing market forces. We need to be the force voicing regulatory governance over labor, environment and ecological rights, consumer rights, health, etc… good regulatory governance will control the juggernaut called globalization.
UN Permanent Sovereignty over natural resources 1952
Small economies should be the drivers of globalization. They may not be the leaders in financialization, where all roads lead back to investment markets. Small economies can be the leaders in a regulatory approach that raises the value of biodiversity as a value-added indicator in the global economy. This is where new propositions in the Statistical Division can help to achieve the ideals of the SDGs. Rather than centralizing economies, the development of new routes and markets will spur investment to encourage small developing economies with new opportunities for participating in global markets, and the Pacific with its beautiful deep blue economy needs to have an equitable place at the table.
On Tuesday’s Governance and Law session, one of the speakers argued that a Good Governance agenda was built upon this structure of security, growth, and equity. Strong credible states, would create better governance with more prosperity following this structure, and the speaker concluded that this would be accomplished through Cooperation and Capacity Building.
But what happens when there are nested and overlapping forms of authority and conflicting narratives? Is good governance predicated on state-sanctioned violence and authoritarianism? In the examples I gave above, the Administering Powers would offer conflicting narratives to this data, despite the evidence of reporting on social media by people on the ground, which is often the only way information is disseminated.
The biggest problem for little countries is not growth that is reliant on resource commodities. The biggest problems are the biggest economies using statistical data that measures the weaknesses of island economies rather than the strengths of island economies.
If the statistical data measured equity per capita, (food, water, housing, customary land ownership) they would find little countries surpassing big countries where food, water, housing, and customary land ownership are dependent on debt and not equity.
After the punishing collapse of the Wall St. investment banks in 2008, which needs to be seen as a failure of the neoliberal system, the emerging economies were only mildly impacted. This is what led to the formal creation of Brazil, Russia, India, China, and South Africa cooperation (BRICS), the New Development Bank (NDB), the Asian Infrastructure Investment Bank (AIIB), and Contingency Reserve Arrangement (CRA)– new global institutions that seek an alternative development and financial arrangement to the Organization or Economic Cooperation and Development (OECD), the World Bank, the Asian Development Bank (ADB) and the International Monetary Fund (IMF), respectively.
Since the creation of these new alternative global institutions, the US has been struggling to reassert the Wall St. neoliberal process, however, both international investment and the developing countries have been nurturing closer relations with BRICS. What this means for US investment is that the debt that was leveraged off the equity and resources of developing countries is no longer as accessible as it once was. Because this impacts Wall St. BRICS is considered a threat to National Security, and involves the military, hence the Cold War rhetoric that is part of the Pacific Pivot.
Data assembled from the 2007 OECD Statistical Extracts: Main Aggregates for GDP (Current) and the 2007 State of Hawaii Data Book, concludes that the current figures of our combined economies approximate $218.3 billion. The 2007 world estimate is measured at $54.6 trillion dollars, and the percentage of the Moana Nui GDP is 0.39% of the world estimate, which places an integrated Moana Nui at current economic figures, between the economies of Portugal ($222.9 billion) and the United Arab Emirates ($191.4 billion). This does not include any figures from the U.S., Canada, Chile, Peru, Mexico, Australia, Singapore, Thailand, Japan, China, Korea, or any of the other countries exploiting Pacific Island resources for their own economic gain, whether from mining or fishing.
Using the population figures and the GDP estimates, the GDP per capita estimates (2007) arrive at $14,295, which is between the per capita estimates of Hungary ($13,777) and Saudi Arabia ($15,255). The world average for per capita GDP is $8,190.
Developed Countries at $38,330,
Transitional Countries at $5,960,
and Developing Countries at $2710.
Considering these per capita estimates, an integrated Moana Nui certainly has the potential for raising the standards of our economically deprived island nations, allowing developing island economies to engage alternative aid strategies rather than relying upon IMF or development aid stratagems that opens the door for privatization.
With a total population of 15.2 million, the greatest economic burden resulting from economic integration rests upon New Zealand and Hawaii. This burden however, does not take into account the greater environmental costs that are sadly unaccounted for in the measurement of GDP, which one could argue may provide for a greater accounting of assets if the system is revised to include depletion of resources and degradation of the environment, which has been under growing consideration by alternative economic indicator think-tanks.