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Navigating Asia’s Tricky Inflection Points

Fall 2012 Tête À Tête

Navigating Asia’s Tricky Inflection Points

GB explores the rising continent’s transformations, contradictions, risks and opportunities with one of Asia-Pacific’s most charismatic strategistsGB explores the rising continent’s transformations, contradictions, risks and opportunities with one of Asia-Pacific’s most charismatic strategists

GB: Are we seeing a convergence or a divergence of interests and values between the West and Asia?

KM: There is a convergence of interests and, to some extent, also a convergence of perspectives on the state of the world as a whole. In terms of the convergence of interests, we might offer a very simple image: until the current era, people living in separate countries – or on separate boats, as it were – needed rules and global order to make sure that the countries or boats did not collide. Today, the seven billion people in the world no longer live on separate boats. Rather, they live in separate cabins on the same boat, but with no captain or crew to care for the boat as a whole. So the convergence of interests lies clearly in the seven billion people realizing that they are on the very same boat, and that they have to work together in order to survive and prosper. You want proof? Just look at the current financial crisis. In the past, when Greece fell, the world did not care. Today, when Greece is on the brink, the whole global economy gets extremely nervous. So we are all deeply interconnected – we are on the same boat. If you look at global warming or climate change or pandemics, no one country can solve these issues, as they are all borderless.

GB: Is this more a convergence of circumstances than a real convergence of interests?

KM: It is a convergence of interests. As we saw at the G20 meeting in London in April 2009, all of the leaders realized that, unless they all chipped in together, the global boat would collapse and founder. That is a very clear convergence of interests. Of course, as one digs deeper, one sees that while most countries do believe this, sovereign national interests still come first. Over three and a half centuries have passed, and countries are still operating on the European Westphalian model of sovereignty. We need to change the thinking of leaders and states.

GB: But some parts of the world seem to have concluded that they either do not wish to be part of a global project, or simply see the endgame of the global project in different terms. Would you agree?

KM: More and more people in the world today are actually embracing globalization. The great paradox is that the one society that has preached the virtues of globalization the most – the US – is now the least prepared to deal with the consequences of globalization. America’s population is among the least educated populations in the world in terms of how the world has changed and transformed itself. On the other hand, China has opened up quite significantly, signed treaties, and is prepared to engage in a global order.

GB: So you are more impressed by up-and-coming generations of Chinese leaders than American leaders?

KM: Obama is himself a very impressive figure, but his hands are tied by a political situation at home that makes it impossible for him to do anything. On climate change, for instance, he went to Copenhagen empty-handed. He could not make any kind of concessions to increase the price of greenhouse gas emissions, because that would have been political suicide for him back in the US. So individual American leaders may be impressive, but the political circumstances in America make it impossible for the US to make the necessary compromises for success. Overall, the environmental record of the US is definitely better than that of China – let us be clear about that. However, from a long-term perspective, the Chinese government realizes that climate change and the environment in general are major challenges for the country. China is therefore actually working more seriously toward a long-term plan to deal with reductions in its increasing greenhouse gas emissions. Beijing is investing heavily in solar technology, in wind turbines, and so on. So the Chinese deeds actually speak louder than the American deeds.

GB: Asia is clearly far from a monolith. What is your mental map of Asia?

KM: Geographically, Asia extends from Israel to Japan.

GB: In that case, East Asia would seem to be doing far better than West Asia. What are the ties that bind East Asia and West Asia?

KM: The best thing that the Arabs can do is to change their mental maps. When I speak in the Arab world, I say that if one wishes to see a city of the past, then go to Paris, because the Arabs love Paris – they love to go to Europe. And Europe, frankly, represents the past. Asia represents the future. And the Arabs cannot accept that. I do not know why. Arab governments should send young Arabs to study in Asian universities – to see how well young Asians are doing, and to try to compete with them and do as well as them. Unfortunately, if you look at the perceptions of today’s Americans toward, say, Indians, and that of the Arabs toward Indians, it is a case of exact opposites. The Arabs only see the Indian migrant workers who come to work for a few dollars a day in Dubai. For them, the Indians are a group that is below them. But when Americans in 2012 look at Indians – the highest per-capita income group in America, having recently overtaken even the Jewish community – they see Indians as super-smart, super-capable and highly successful. In this sense, the Arabs do not realize how much Asia has progressed over the last 20 to 30 years. They have to educate themselves really massively.

GB: Is Russia in Asia?

KM: I actually do not understand Russia. It seems to me that every time that the Russians come to a fork in the road, they take the wrong path. At the beginning of the last century, when the tsar fell, they were the first to experiment with communism. The communists consulted Karl Marx’s works and asked, “Can we go straight from feudalism to communism?” Marx would have admonished, “You cannot, because you have to first become capitalist.” But the Russians did not listen to Marx, and they tried going straight from feudalism to communism – unsuccessfully. It was a 70-year experiment that failed.

As for the Chinese, after 30 years, they corrected themselves. They made and have continued to make very quick, pragmatic adjustments. What the Russians should have realized is that, before trying to fix a political system, the first thing to do is to change the economy. After communism failed, the Russians again got this ordering wrong: they went from communism to democracy overnight, and the economy imploded. Their GDP became smaller than that of Belgium. Russian infant mortality rates went up. Life expectancy went down. So once again, the Russians chose the wrong path. And the Russians became very bitter toward the West. Now it is this bitterness that keeps Putin in power. I can understand this Russian anger toward the West.

Consider this: even though Russia became a member of the G8, while China did not, it was nevertheless China that joined the WTO before Russia. This is just remarkable: joining the WTO is far more important than joining the G8. That Russia did not understand this sequencing is puzzling. The Russians must in some ways learn more from China, if they can. Beijing, which in the 1970s was so far behind Moscow, is today well ahead.

GB: What would you recommend if you were to brief Vladimir Putin?

KM: If one looks at the statistics coming out of the Institute for International Education (IIE) in New York, China now sends over 150,000 students per annum to American universities. India sends over 100,000. And then I think that there are other Asian states, like Korea, Taiwan and so on that are doing the same. Russia is way down there. Russia should begin by sending 100,000 young Russians each year to study in American universities. That will expose them to a different mindset, and make them aware and open up. That way Russia can open up and compete with the rest of the world. Number two, Russia should move away from its present heavy reliance on oil and gas and commodities, and try to develop the kind of modern economy that the Soviet Union in many ways had for a good number of years. In addition, Russia should become a champion for a more open world. The Russians should not allow their anger toward the West to dominate Russia’s interests. Moscow can play a wonderful balancing game between China and Europe and America. It is in an ideal geopolitical position to do so. But to play that balancing game, it has to develop good relations with everyone.

GB: What are the key fault lines in Asia in the coming years and decades?

KM: There are many, many fault lines in Asia. Start with the Korean peninsula; then move to the Taiwan Straits; and, of course, the South China Sea. One can see fault lines among Southeast Asian states; between India and Pakistan; and in West Asia – in the Arab world, Iran and Israel. All of these fault lines have been around and will continue to be around for a long time. The only question is: how will Asia manage them? In the past, there would have been a propensity toward war. As you know, Asia saw four of the biggest military conflicts of the post-WW2 period: the Korean war, the Vietnam war, the Sino-Vietnamese war and also the Iran-Iraq war. But today, the guns are silent. This silence speaks very powerfully. No Asian country wants to get involved in any kind of major war today. That is partly because war is itself a sunset industry. Steven Pinker writes about this in The Better Angels of Our Nature (see the Tête à Tête interview with Steven Pinker in GB’s Fall 2011 issue).

GB: How do you see Asia managing its relationships with major powers on other continents – especially the US and Russia?

KM: The most difficult relationship is always the one between the world’s number one power and the world’s number one emerging power. The world’s number one power today is the US. The world’s number one emerging power is China. We have to watch that relationship carefully. Clearly, there should be rising tension between these two. What is remarkable is that the level of tension is at present not rising. In fact, the Chinese have in many ways wisely created a very high degree of interdependence between the two countries, such that China relies on America to buy its exports, and America relies on China to buy its US treasury bills.

Of course, this does not at all mean that there will be no trouble and no competition between China and the US. In the South China Sea, the US is quite happy to see China having problems with its neighbours. But there is no danger of a war breaking out in the immediate future between the US and China. There is no danger of a breakdown in relations. There will just be friction from time to time. For now, the frictions are manageable.

GB: Surely it is impossible to foresee a century-long Chinese rise or resurgence without some sort of conflict?

KM: The rise of China will not go in a straight line; it will certainly be up and down. But the trajectory will be upward. There will be challenges, to be sure. In fact, one reason for which the Chinese government is trying to carefully stay away from international adventurism is that it knows that it has a lot to do at home. China will become the world’s biggest economy in purchasing power parity terms in 2016 – only a little over three years from now. Still, China’s leaders realize that their entire legitimacy comes from being able to deliver economic development at home. That is what they are going to focus on. Remember, the number one test for China is how it transforms its political system. The Chinese Communist Party cannot run China forever. At some point, it too has to become democratic. That will happen.

I would add that the US, which preached the idea of the equality of all people in 1776, took 89 years to abolish slavery – which is the exact opposite of said equality. It took 144 years to give women the right to vote. It took 189 years to give blacks the effective right to vote. If America – a country with zero historical baggage – takes some 200 years to achieve full democracy, then for China, which has some 3,000 years’ worth of historical baggage, democracy in 100 years would be nothing short of a miracle.

GB: What are the key internal challenges for China over the next 10 or 15 years?

KM: The first one is political, because China is going to have the world’s largest middle class very soon – if it does not already have it. And managing an established middle class is much harder than managing people who are rising from poverty and moving toward the middle class. The second challenge, of course, is to deal with inequality and corruption in the country. As corruption continues to grow in China, and as the gap between the wealthy and the non-wealthy becomes greater and greater, there will certainly be increased pressures on Beijing for corrective action. The third great challenge is probably the environment. On some days, in some Chinese cities, one can look out of one’s hotel room window and not see the building next door. No one wants to live with that kind of air quality. The problem needs to be addressed urgently. So the Chinese have incredible internal challenges to worry about.

GB: What will be the endgame in the current South China Sea impasse?

KM: No one can predict the endgame. The endgame that the Chinese fancy is to delay resolving the South China Sea dispute for as long as possible, because time is on China’s side. So the Chinese want to wait and wait, and when they become more and more powerful, and there are no other great powers in the region, they will be in a better position to negotiate the outcome. From the other countries’ point of view, they would prefer to try to use international law to resolve the impasse.

Nothing is going to happen in the immediate future, because China is so focussed on its domestic transition this fall. As such, no Chinese leader is in a position to make any kind of concessions. When a new leadership emerges, and if the new Chinese president feels strong enough, then I think that the Chinese will revert to their traditional method of finding very pragmatic solutions. They will say, “Let’s try not to resolve who’s right and who’s wrong. Let’s just agree that you allow me to fish here, I’ll allow you to explore for oil, and we’ll carry on.”

GB: Do you see Vietnam or the Philippines acceding to that type of Chinese pragmatism?

KM: Vietnam is more careful than the Philippines. The Vietnamese are much tougher and harder people than the Filipinos. As Vietnam moves closer to the US, it has preserved and protected its relationship with China. It tries not to confront China in the way that the Philippines did recently over the Scarborough Shoal.

GB: Are you seriously worried about the recent ASEAN split on the communiqué regarding a code of conduct for the South China Sea?

KM: Yes, it was a major setback for ASEAN. But the setback happened because ASEAN was getting too complacent. Just because the organization succeeded in issuing joint communiqués for 45 years does not mean that it could expect to do the same for the next 45 years. This was a big wakeup call for ASEAN leaders. They now have to pay much more careful attention to developing ASEAN unity in this early century.

GB: Is Cambodia a problem for the future of ASEAN unity?

KM: If you were interviewing me three years ago, all of the focus would have been on Myanmar – that is, whether Myanmar is a problem for ASEAN. For 10 years, I got that question. Look at Myanmar now – it is opening up nicely. So things will change. I see most Southeast Asian countries as being very careful and pragmatic in their behaviour. And I am personally very bullish on the ASEAN region.

GB: Has China done a good job at seducing certain players – like Cambodia – in a way that hinders ASEAN solidarity?

KM: The seduction process will continue. Right now, it is China. But America, as you know, is coming back to the region. India will also become increasingly important. Japan will continue to play an active role in the region. And I hope that the Europeans will come here, too.

GB: What about Indonesia and Australia? Do you see a shift in that bilateral relationship as Indonesia grows wealthier, and as Asia as a whole becomes a much more important continent?

KM: Australia’s existential problem in the Asian century is going to be quite huge. The last 200 years of Western domination of world history have been a major historical aberration. Australia is a Western outpost surrounded by some four billion Asians. So it is very important that Australians wake up to this new reality, and begin to make geopolitical, economic and cultural adjustments. Just taking the economic adjustment, Australia’s economic future is clearly tied to Asia – but Australian leaders have not actually told their population that the world has changed. So I think that Australia badly needs a wakeup call. Australians must realize that their geographic position is not the same as that of, say, Canada.

GB: Are you impressed by the quality of leaders coming out of India?

KM: I cannot speak about individuals, but the Indian middle class is amazing. It is very vibrant. It is producing millions of interesting minds – look at how many Indians are in top positions at the world’s leading universities – and in due course I think that it will also produce interesting leaders. That said, the Indian political system is caught in an incredible state of gridlock because of coalition governments. The centre in New Delhi seems almost incapable of making the right long-term decisions for the country. What is interesting, though, is that, at the state level, India is seeing the emergence of very good leaders – in Gujarat, Bihar, Uttar Pradesh and other states.

GB: What about Japanese leaders?

KM: I am literally in the middle of writing an essay on Japan’s future in the 21st century. The Japanese essentially made the right decision in the 1860s, when Yukichi Fukuzawa said that Japan should leave Asia to join the West. This was right when Asia was completely down: India had fallen, and China had fallen. It made perfect sense for Japan to hitch its wagon to the West. But now that China and India are rising, Japan has to focus once again on Asia. To refocus a country, one needs good leadership, and so far Japan has not had the leaders that they need to change course.

GB: Why is that?

KM: I am not sure. It may have something to do with Japanese culture. The Japanese are very conservative, and very reluctant to change. That is why I always encourage the Japanese to stop sending their best ambassadors to Paris and London. These are the cities of the past. If you want to go to the cities of the future, then come to Shanghai or Singapore. The Japanese should be sending their best ambassadors to Asia. But that obviously requires a change in mindset.

GB: What are the key immediate decision points for the next president of the US?

KM: Number one, to quote Bill Clinton, “It’s the economy, stupid.” Beyond the economy, globally, there is still a tremendous reservoir of goodwill toward America. Let us start here in Southeast Asia. If Obama is the next president, then there remains a tremendous reservoir of goodwill for him personally in Indonesia. He should make his first overseas visit to Southeast Asia. This is important symbolically, because the president will have to educate the American population about the future being in Asia – that this is going to be the Asian century. Again, if it is Obama, then he could well go down in history as America’s first ‘Asian president.’ But in Asia, the new president has to try to avoid getting locked into an adversarial arrangement with China. That means that America has to make some compromises. Right now, the American navy still patrols relatively aggressively 12 nautical miles off Chinese shores, which is its right under international law. Remember, though, that 20 to 30 years from now, this behaviour opens the door for Chinese naval vessels to patrol 12 nautical miles off the coast of California and British Columbia. This would be a silly outcome, and one that the American president should strive to avoid.


Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy, National University of Singapore. His new book is The Great Convergence: Asia, the West and the Logic of One World.

(Photograph: Courtesy of Kishore Mahbubani)

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