Luxembourg: reality check files

Luxembourg’s official name is the Grand Duchy of Luxembourg, a name that reflects its patrician origins. The country is one of the founding members of key international organizations such as the UN, NATO, and the European Union. Accordingly, it has its citizens well positioned in, for example, the IMF and the World Bank. It is a very prosperous country with a well-groomed multilingual population and one of the highest GDPs per capita in the world. Luxembourg’s Prime Minister, Jean-Claude Juncker, is currently the chairman of the group of countries that have the Euro as a currency. In this capacity, you will find his opinion on global finance quoted all over the papers -Google him. This week he has been telling all the major media outlets that Europeans are more concerned about the regulation of the global financial system than the US. He also likes to stress that regulation issues are more important than dealing with the immediate alleviation of the financial stress ordinary people are suffering, as the US, Japan, and emerging democracies rightly point out. Off course the security implications of the deteriorating global financial outlook do not figure in his analysis.

Reality check:
Luxembourg is a country in central Europe roughly two thirds the size of Rhode Island, the smallest US state. Its population is about the same as that living in Kansas City or Fresno. Its main industry is offshore banking, probably followed by the selling of souvenirs to American and Japanese tourists. Its security is guaranteed by NATO. I am sure the reader would agree that President Obama could do miracles with a country of that size. Yet Luxembourg (and other similar countries) plays a disproportionate role in the international scene making the rules of the game and dictating how the world needs to be run. Let’s remember the countries behind most of the world’s economic output: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Netherlands, the Republic of Korea, Russia, Saudi Arabia, South Africa, Spain, Turkey, and the United States; otherwise known as the G20. According to 2007 figures by the World Bank, Luxembourg ranks 63rd in the GDP ranking table, well behind countries such as Colombia, Pakistan, and Vietnam. Now that we are in the process of reinventing the world, perhaps it is time to correct imbalances like this.