An article written by Ambassador M Humayun Kabir, President, Bangladesh Enterprise Institute on President Biden's State of the Union address: Big ideas with huge strategic importance, The Financial Express, 11 May 2021

An article written by Ambassador M Humayun Kabir, President, Bangladesh Enterprise Institute on President Biden's State of the Union address: Big ideas with huge strategic importance, The Financial Express, 11 May 2021

President Biden's State of the Union address: Big ideas with huge strategic importance

M Humayun Kabir | Published: May 11, 2021 21:20:54

Traditionally, the State of the Union address is a domestic affair of the United States. It can however transcend the domestic boundary when the United States considers itself under severe pressure from outside on certain issues or when it feels that its interests have been challenged by certain actors in the international community. Massive devastation caused by the Covid-19 pandemic has clearly set an unusual backdrop calling for uncommon solutions. There is no denying the fact that during the last forty years the US economy has seen spectacular growth riding on the visible success of market based economic management strategy, which was essentially driven by the search for maximizing profit. Unfortunately, the social cohesion has become an unintended victim of this economic model causing rapid escalation in inequality, division, tension and conflict in society.  During the last decade and a half, many countries, including the United States have seen an ugly face of this hard reality.

The initial expansionary economic model unleashed by President Biden since day one in his office and his first State of the Union address to the Congress on April 28, 2021 has indicated a clear movement to a new direction in terms of designing a new economic model, including an effort to redress the social ills plaguing the United States. Such an indication is significant for the fact that it was the United States, which had provided leadership in conceptualising, designing and delivering on the current global economic and social model, known as the new liberal economic model. Driven by two forces -- market and profit -- this model has been replicated around the world almost as a panacea for economic problems. And now the alternative model is being proposed by the United States itself and it looks like such an initiative will find many takers, particularly in the context of depressing anomalies appearing in many societies following the Covid-19 shock. Indeed, many governments around the world have mounted significant financial stimulus operations to reduce the negative impact of Covid-19 pandemic. 

THE IDEAS: Despite their domestic nature, some of the priorities outlined by President Biden in his State of the Union address could have serious and long term multiplier effect on the outside world, and may indeed mark a major shift in the way the world has been organised during the last 40 years.  Let us look at some of the issues he has flagged as the priority of his administration.

First, President Biden has clearly disowned the trickle-down economic practices and wanted to engage the government more directly and deeply in public life. Indeed, his remarks were very powerful when he said, 'trickle-down economics has never worked. It's time to grow the economy from the bottom up and middle-out. A broad consensus of economists - left, right, center - agree that what I am proposing will help create millions of jobs and generate historic economic growth.' To back up his thesis, he has proposed a number of social safety initiatives, such as the affordable child care, tax credits, as well as some major policy initiatives, including adjustment in tax rate for the rich people, upgradation of the quality and duration of school and college education, and investment in scientific research to boost the US economy in a much more competitive way.

Second, his plan to invest trillions of dollars as stimulus in the name of American Rescue Plan, American Job Plan, massive investment in infrastructure, subject to the approval by the Congress, is likely to change the face of the United States. Third, looking at a larger context, he has articulated his thoughts in this way, 'We're in a competition with China and other countries to win the 21st century. We have to do more than just build back. We have to build back better. Throughout our history, public investments and infrastructure have transformed America.' Indeed, the proposed massive public investment will have a huge impact of the creation of jobs, competitiveness, innovations, and efficiency in the US economy, and perhaps address some of the divisions created within the US society due to unequal distribution of resources over the last four decades. In a way, he has proposed to reorganise the process of globalisation where US middle class will be able to compete and thrive. In this context, some of his new ideas are noteworthy. He has proposed, 'Congress to pass the Protecting the Right to Organise Act - the PRO Act - and send it to my desk to support the right to unionize, pass the $15 minimum wage and ensure greater equity and opportunity for women, and suggested that Paycheck Fairness Act should come to his desk for signature.'

Fourth, keeping an eye on the fast evolving competitive world, he has also proposed, 'America will stand up to unfair trade practices that undercut American workers and industries, like subsidies for state-owned enterprises and the theft of American technologies and intellectual property.' He has also talked about the human rights issues saying, 'No responsible American president can remain silent when basic human rights are violated. A president has to represent the essence of our country. America is an idea- unique in the world.' These are a clear indication about where does the heart of President Biden lies and also a clear signal about the shape of policy line emerging from Washington, DC in the coming months.

All these initiatives, if passed by the Congress, will have a deep impact on the outside world in at least two ways. On the one hand, they will create a new normative template for economic management possibly in a new way, and on the other hand, act as a guide for practice in interstate relations and transactions. Some sceptics will definitely raise the question on the capacity of President Biden to pursue his ambitious ideas given the fact that his administration is walking on a thin ice in the Congress and the existence of cultural and racial divisions in the US society is too open. At the same time, President Biden has to reassure the international community that his initiatives would survive in the wake of two upcoming election cycles, one in 2022 for the Congress and another in 2024 for the Presidency.

THE US CAN STILL LEAD: There is no denying the fact that the United States still has a strong convening power, which has just been demonstrated by the success of the Climate Summit held last week. It not only highlighted the renewed commitment of the United States to actively participate and lead the global climate initiatives, it also demonstrated the willingness of Biden administration to lead the process from the front. 'I have often said that our greatest strength is the power of our example - not just the example of our power,' he added in his State of the Union address.  The big question is how the United States can become an example in a fast changing global context. A few ideas may perhaps create a smooth landing for the US and restore its credibility.

First, President Biden has claimed that 'America is an idea-unique in the world.' In order to translate such an idea into reality, the United States will have to actively support the efforts for building an inclusive, free, peaceful and safe human society with its enabling infrastructure. In this context, the entry point could be saving the world from the raging Covid-19 pandemic. President Biden deserves kudos for successfully controlling the spread of virus in the United States through administering extensive vaccination campaign and helping the United States economy to return to normalcy. We all acknowledge the fact that nobody is safe until everybody is safe. In practical terms, it would mean that President Biden should take the leadership to mobilise the international community, including its competitors, to tackle this pandemic through launching a global vaccination drive, alongside other relevant initiatives, which could perhaps obviate the negative impact of vaccine nationalism practiced by many countries around the world.

The starting point for this purpose could begin with the launching of an inclusive global vaccine campaign under the leadership of President Biden. Under this campaign, the United States could work with the World Trade Organisation(WTO) to coordinate the accelerated production of vaccines in various countries on an urgent basis and support the World Health Organisation (WHO) COVAX mechanism for distributing them to all countries, with particular focus on the most vulnerable countries. The decision by the Biden administration to waive the intellectual property protection for Covid-19 vaccines is a welcome move, but it has to carry the idea through at the WTO process. While negotiating such a deal at WTO, it would be important to ensure that the most vulnerable countries can also benefit from this process in terms of easy and timely access to vaccines. The unpleasant truth is that the vaccine nationalism not only remains limited to the developed world alone, it has also been practised by some countries in the developing world. Indeed, taking the leadership in this field may not be a new experience for the United States. It has successfully led the war against cholera, malaria and Ebola and HIV AIDS. The question is why not now? Unfortunately, US' recent dithering with regard to releasing of Oxford-Astra Zeneca vaccines for India amid its worst time in recent history did not inspire much confidence. Yet, this offers a new opportunity for President Biden to show his leadership in creating a new global public good, which would carry his and US brand with it.

Second, power politics and myopic policies have practically affected all institutions, both nationally and internationally, including the United Nations badly affecting its effectiveness. Against this backdrop, one would perhaps be not out of line to think that the United States could come forward to strengthen the United Nations, alongside the regional organisations for implementing the commonly agreed ideas and programmes. Regardless of the fact that strategic interest would be pursued by various nations, it may not be difficult to find a common ground where competing interests could provide converge for catering to common goals. The United States has a unique opportunity to take the leadership to bring the countries to a common platform with a view to decisively confronting the common global challenges, such as pandemic, poverty, climate, corruption, among others. In this context, President Biden's initiative to convene a Climate Summit was a commendable step in the right direction. 

Such kind of initiatives could also be explored in other areas, which would bring immediate outcomes for changing the lives of common people, and at the same time reset the global narrative from confrontation to collaboration. One such area where the leadership of the United States would make a huge difference is the implementation of SDGs which has acquired extra salience with the deepening of poverty in many parts of the world in the wake of the ongoing pandemic. Alongside, the authoritarian streaks have also gained additional degree of legitimacy at the cost of depletion of human rights and the growing trend toward suppression of rights of the common people, particularly of women, young, under privileged and the media. They are looking out for a ray of hope! Showing the genuine commitment of the United States to the centrality of the United Nations as a universal and legitimate body and its active leadership in pursuing the implementing of SDGs could be a good way to reestablishing the United States as a credible global leader once again.

Third, many of the developing countries are suffering from problems of flight of capital. While President Biden has announced several initiatives to streamline transparency in the United States financial system, leadership in plugging the gaps in international financial transactions would be much appreciated. In recent years, a great deal of advance has been made to control the illegal transfer of funds under the terror financing rules. It would be helpful if the Biden administration could take the leadership in terms of mobilising the global efforts to stop the flight of capital, particularly from the developing countries. It is now well documented that such a process robs huge amount of resources that could be used for fighting poverty, building public services and strengthening the social safety net works in many of the developing and least developed countries.

The world is thus looking up to President Biden to create new example of inclusiveness, equity, fairness and democratic partnership on a global scale. Some of these ideas could perhaps serve as a useful recipe for a new global compact for the 21st century putting the people at the centre and not the profit! 

M Humayun Kabir is a former Ambassador to the United States, and currently he is the President of Bangladesh Enterprise Institute (BEI), Dhaka.


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