Thursday, January 27, 2011

India and China gaining on US, Obama warns

Jan 27, 2011

US President urges Americans to rise to challenge in new world

By Chua Chin Hon, US Bureau Chief

WASHINGTON: Flagging the competition from new economic powerhouses like China and India as a big challenge to United States primacy, President Barack Obama yesterday called on Americans to out-educate, out-innovate and out-build the rest of the world to 'win the future'.

In his annual State of the Union address on Tuesday night, Mr Obama repeatedly cited gains that the two countries - and others - have made at the expense of the US.

To compete in this new world, 'they started educating their children earlier and longer, with greater emphasis on maths and science', he said.

'They're investing in research and new technologies. Just recently, China became home to the world's largest private solar research facility, and the world's fastest computer,' he told a joint session of Congress.

The nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system has been bested in many areas in recent years by these rising Asian countries, he said.

'Our infrastructure used to be the best - but our lead has slipped. South Korean homes now have greater Internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a 'D',' said Mr Obama.

'We have to do better.'

While the world has changed, he said, the competition should not discourage Americans, but challenge them.

'Remember, for all the hits we've taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world,' he said.

'No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We're the home to the world's best colleges and universities.'

It is now up to this generation of Americans to meet the demands of a new age.

'We need to out-innovate, out-educate and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That's how our people will prosper. That's how we'll win the future,' Mr Obama said.

[This sounds so much like a speech our PM would give to Singaporeans.]

He plans to propose in his upcoming budget new investments in areas like biomedical research, information technology and clean energy technology, he said.

He outlined some major goals:

# Enable clean energy sources to supply 80 per cent of America's electricity by 2035.

# Provide 80 per cent of Americans with access to high-speed rail within 25 years.

# Expand coverage of high-speed wireless Internet to reach nearly all Americans by 2016.

# A 'Race to the Top' school reform programme to promote science and learning.

The President did not put a price tag on the package of proposed investments, but suggested that Washington could help pay for these initiatives by eliminating tax breaks to oil companies and streamlining the government bureaucracy.

In a nod to Republican concerns about the unsustainable levels of government debt, he proposed a five-year freeze in spending on some domestic programmes that would cut spending by more than US$400 billion (S$512 billion) over the next 10 years. But he warned that the cuts should be judicious and not end up hurting long-term US competitiveness.

'Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine,' he said. 'It may feel like you're flying high at first, but it won't take long before you'll feel the impact.'

But the opposition Republicans poured cold water on Mr Obama's vision and proposals. Republican lawmaker Paul Ryan, tasked with delivering a formal response, called attention to the runaway fiscal deficit and the need to return to limited government.

'Our debt is out of control. What was a fiscal challenge is now a fiscal crisis... Just take a look at what's happening to Greece, Ireland and other nations in Europe. Their day of reckoning has arrived. Ours is around the corner,' he said.

The contrasting visions of the two speeches will probably become a key theme for the 2012 presidential campaign. Many regard Mr Obama's remarks as the opening speech of his re-election campaign.

Striking a centrist tone that has helped revive some of his political fortunes in recent months, the President reminded the divided Congress that the economic challenges before the country are bigger than their political differences.

'This is our generation's Sputnik moment,' he said, referring to the launch of the first Earth-orbiting satellite in 1957 by the former Soviet Union. The event shocked the US into embarking on a major wave of space research and development.

The President said relatively little about US foreign policy goals and objectives. He made perfunctory references to Iraq, Pakistan and the fighting in Afghanistan, but gave no new assessment on the progress in these key hot spots.

'Foreign policy will play second fiddle to domestic policy when the administration talks about its agenda in the year to come,' wrote Mr James Lindsay of the Council on Foreign Relations. 'The mantra going forward will be opportunities, jobs and growth, not threats, war and diplomacy.'

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