Mhm. You're listening to Kobe time, a podcast series on markets and economies from DBS group research. I'm tomorrow. Big chief economist, Welcome to our 66th episode. I first saw Danny Quah in action as a sharp and rigorous professor at the London School of Economics Way Back in 1993.
Well through various career advancement since then, Professor Quan now is the leak gushing professor in economics and dean at the lee Kwan Yew School of Public Policy, which resides in the National University of Singapore these days. His research focuses on inequality, income mobility, international systems of Trade and Finance and war order among superpowers.
Professor who is also a commissioner on the Spence Stiglitz Commission on Global Economic transformation and serves on the executive committee of the International Economic Association or I. E. A. He is also at the advisory board of LSE ideas is an in the imminent advisory council of the UNDP Bureau of Asia for Asia pacific and the World Economic Forum's Global Future Council for Geopolitics. Professor Danica, Welcome to Kobe time.
Hello, how are you
Create? It's been a long time coming. I'm so pleased that we have you on Kofi time today uh squad if I may, let's begin with the immediate juncture the global economy and the pandemic. A few of your thoughts please on how 2022 is shaping up.
Okay first it's a great honor to be part of your code. But yeah, you know, I followed the series and I'm glad that I managed to start in and number 66. Actually, it's great fun. Um Thinking about the global economy or the regional economy for 2022, I think that we are still at a point where we might be described as a situation of tentative contingency.
There's lots of uncertainties, the stages that we've got to look like there might be bright ways ahead, but there's still a long way to go before we're out of the woods. I think if I had to put my finger on three on a number of things or any number of things, I would say three things that are gonna matter that we need to watch. The first of these is great power rivalry china and the United States Russia entering the free in europe, the european union continuing to settle in as a global
force to be reckoned with. Great power rivalry hugely impactful for our part of the world, where so much of our livelihood, so much of our well being hinges on a stable international system, on international system with rules that benefit our economy. So first thing great power rivalry for us to look at and that as you and I and all, all your listeners know is in a state of turmoil. Every now and then we see a bright spot but still lots of things unsettled.
So that's the first part of the tentative contingency. The second I might say is the pandemic after vaccines came online. The world looked like it was also in a good place. There was a clear trajectory forwards. We were hit then by delta and now the only grown white variants. It's not at all clear where we're gonna go with this because the evidence is not in yet on how the vaccines will manage relative
to the omicron variant. And the only crown variant itself, it's not clear yet its impact on the things that matter serious illness, mortality. I see you take uptick hospital bed usage. None of these things is yet clear. But we do know it is a highly infectious variant and it's already in many, many parts of the world. And I suppose the last of the three legs that I am keeping an eye on as we look ahead to 2022 is what's happening to trade. The globalization system.
No, The 1990s that you were just harking back to a and I think myself to with great nostalgia and fondness Running into the 2000s was a period of rising hyper globalization. The ideal there was that very soon we could see for all of us that anything me anywhere on the planet would be available to everyone everywhere else on earth. There was an exciting time to be alive to think about how ideas, goods and services would disseminate across the world, bringing prosperity to everyone on the planet.
We're not in that situation. Now, Trade might be described as an attenuated trade Yes. Access abated by great power rivalry shaken by pandemic, but long before this, there were forces in play that would profoundly change the way we view trade among others. The impact of trade on the distribution of well being within all of our societies.
The impact of train as it continued to change in character from a situation where, you know, pretty much everything that you wanted to buy, you could see your new way it was made in one place on earth and from there it was then consumed everywhere else. Now there's practically nothing that's made in one single place. International trade is mostly about minimizing inventory holdings and maximizing the flow of value in intermediate inputs
across our planet. The great evolution of the global supply chain and pandemic fears of populism and nationalism and great power rivalry of all conspiring to make us worry about whether this system of globalized production and exchange can be sustained and where we go from here with that system we don't really know yet. So I come back to these three great forces, great power rivalry, pandemic and the new nature of a can you waited trade that we don't have a really good handle on.
So that's where I see 2022 and and the years to come.
So it seems like you see a convergence between the long term structural changes and the very near term. There isn't that much of a difference between these two now and more.
Absolutely. I think that is now, you know, the art going forward is a seamless narrative. One thing is going to lead to another and the things that are very far out Where, you know, our leaders, where our governments where international system sees as a convergence point way out in the future. They will have impacted in for 2022.
Right uh protocol. I was traveling last week and was in the in a discussion and a large companies boardroom and they were outside advisers were speaking and some of their view, I mean, mostly Western observers. However, the view is that if things progress the way they are, the way the dominant are falling, it will inevitably lead to war. And therefore we need course corrections because we can let the status quo, sort of, you know, take us to that unfortunate or you know, very, very
undesirable situation. I want to talk to you about some of your recent writings uh and I know that you are very concerned about worker welfare inequality among the haves and between the haves and the have nots and so on. Um and so I want to start with the one narrow area which is sort of the The the rights and the privileges enjoyed or not by
workers in the gig economy. So this trend began well before the pandemic, but of course has accelerated substantially since then in the us we keep hearing about the great resignation, but I think what we don't appreciate is that some of the great resignation is manifesting into people leaving formal 9-5 jobs into becoming a contractor for amazon or just doing things out of home operating in the economy. So you are the vice chair of a committee in Singapore, tasked to look into
the protections for Cape workers here. So, your thoughts on this place.
Okay. Um, thank you. Let's dive into that. But if I may, can I just take take a minute to reflect on on what you described as the views of many Western observers. The war is inevitable. There's there's been this this hypothesis that the world is in the so called facilities trap, that the international system that we've had for seven decades, if not longer is not capable of managing with the rise of a new superpower china.
And that the incumbent hegemony of the United States for whatever reason, structural reasons or reasons of bragging rights or reasons of actual inability to just to deal with the competition or really out of the feeling of benevolence towards the rest of the world, keep the world safe as it were, needs to take on this rising challenges the
whole slew of narratives on this. I think that is quite important that, you know, even as the West worries about this inevitable drive towards war, we have to you and I and and all of all of the listeners to your program and everyone around us. We need to realize that actually 80% of the world lives in neither the United States nor china, the overwhelming majority of the world stands outside
the competition between number one and number two. If indeed, that's all it is a great power rivalries between number one and number two. And somehow this 80% of the world, which is the democratic majority, we are the ones who need to have the legitimate say on how the international system evolves. We need to convince the great powers That heading into heading into a one on one competition that will lead to violent conflagration is not good for
them and it's terrible for the world. It has no legitimacy for the rest of us who are just watching the 80% of us who are the great democratic majority and how that needs to unpack is something that I'm sure will occupy our conversation for a long time. So I could probably take a whole other topic, Let's correct you the word you wanted to to ask me about which is the gig workers,
the gig economy on the platform workers. And like you said, I'm lucky enough to to serve the nation on this committee. To look at the well being of the platform workers, the platform workers advisory committee constituted under the Ministry of manpower. And it seems like is it very special isn't very complicated. I'd like to remember the following. We the will has always had in different parts, a gig economy side to it. Well as therefore always had platform workers who work in the gig economy.
Uh And it's simply the case that today technology, information technology, data networks algorithms have all brought us to a point where there will be more and more of us involved in the gig economy, involved in in
platform working. So the issues that we're trying to deal with in this committee, although for now they reflect on a relatively small part of the Singapore workforce, they reflect on a much larger portion of the global economy's labor force and I suspect will become more and more important for all of us. You know, there's actually In the early 20th century paul, Erdos sh Is one of was one of the world's greatest mathematicians
worked in the 20th century. And and I don't know if you remember this from your days at LSE he had no permanent home, he had no permanent contract with any university. He would travel around the world living out of a suitcase working to solve mathematical problems with collaborators everywhere. He went around the planet. He wrote over 1500 mathematical papers. Still a record. He was a gig worker.
He was using a gig economy that worked around the production of mathematics that could be chopped up into chunks solving mathematical theorems, proving mathematical theorems everywhere he went. And what we see today is that information technology, data networks algorithms have made that kind of work both available and indeed necessary for many of us around the world.
So where is shown up now? Uh, the platform workers that this this committee is looking at, which are right hailing drivers, taxi drivers, delivery workers, but included in platform workers in the gig economy. Also, software engineers and designers who seek not a permanent contract with google, but who want to be like Paula dash traveled the world, lived out of a suitcase, pop up
their notebook, solve a problem. They to our platform workers, music teachers in Singapore, we're taking on gigs in different places for temporary for for short, for short time periods are also
platform workers in the gig economy. The reason that this committee and the Ministry of Manpower is concerned about, about this is that the workers that were looking at uh, on the lower wage end of the income spectrum, software designers, engineers make a lot of money, many of them doesn't bother the rest of society that they're traveling or living out of a suitcase for the platform workers that we're looking at again, delivery writers, write hailing taxi drivers, delivery writers, these workers
loki They're below the 20th percentile of the Singapore workforce and we need to think about their long term well being by, we I mean, they uh, you know, concerned social observers and the platforms themselves, the companies themselves because that these workers do okay in the long run is important for the sustainability of the platforms and ultimately for the well being of the Singapore consumer for everybody involved in this, this new
ever expanding gig economy. So, to come around to how we began, I said that, you know, although it seems like this is something terribly new and exciting, it is terribly new and exciting its roots, the fundamentals were thinking about it our longstanding, they go all the way back to when academics travel the world solving problems we can think about is like, it's like a Marie condo decluttering
of our production process. Instead of having like you and me books on our shelves, sitting in one place, working on problems, we declutter, we get rid of all of this, we focus on essentials and we become platform workers in the gig economy, you in a very lucrative financial service industry, being the much lesser paid epidemics and then all the way through to delivery writers, uh and and taxi drivers. So that's the, that's the set
of issues. You're looking at the well being of all of us who are involved in this decluttering of the production process and the well being includes
retirement. Now, what happens now with platform workers, once you if you and I decided to leave our workplace and worked in a platform working kind of way, you and I will no longer be considered employees, we would be workers, but we don't employees now for economists, that distinction doesn't make any sense in our models, we use these terms interchangeably, but in the law in and in reality workers are one category and employees attract coverage and protection under the Employment Act
variants of that in Singapore and elsewhere in the world. And the Employment Act looked at retirement benefits, health care, housing, the protection bargaining power, the stress and fragility of work. The things that, as economists, we would say the long term president value considerations that everyone should be mindful of and the worry is that in the gig economy platform workers were daily on the run from, you know, from on on food delivery or goods delivery or going from
one taxi right to another. Haven't had the space to think about their long term, longer run welfare considerations. And so this committee attempts to solve that problem of externality of where people haven't had time to think about these issues will have long run implications for the well being of themselves, but also the platforms they work for and for the customers that all the rest of society is
indeed. Uh, the fiscal nerd in me wants to ask some follow up questions to that Professor Quad. So we are used to paying income taxes in the area we reside because the activity we do there seems to be economically linked to that geography, but my son who is eight years old and takes quoting lessons from a service provider in India. Uh, this gentleman, we don't know where in India he lives, but he's a friend of my son. Now they meet
each other on zoom twice a week. They share a screen and he learned scratch uh uh, through the scratch platform. He learns quoting from him. The gentleman is providing a service for Singapore. We pay him but his earning is in India. So is it the responsibility of the government of India to charge income tax or as a service provider to activity in Singapore. Should there be a way of Singapore and government to take a pie? A piece of that pie, which is I think impossible in today's day and age.
But that's sort of challenges we have coming
Absolutely. You know, when we were learning economics, we thought it was complicated enough to remember the difference between gross national product and gross domestic product because you know, was it, was it earnings owned by citizens or was it learning by earnings and by residents? Where exactly does that transaction occur? That Help know that stood us in good stead for decades.
This distinction between GNP or GDP within the last 10 years, the movement of transactions and services into cyberspace where there is no physical location to speak of has compounded these complications many times over. And I think, you know, we, we all need to
be fiscal nerds. We all need to think about where these tax considerations go because ultimately they are what drive the way in which our, our policy makers and our leaders look after our well being to take care of the externalities and the the public goods that all our societies will still need.
It's going to be hugely important. And I hope that, you know, the work on platform workers, uh it's small, is focused on just a small part of labels for now, but we'll give us insights into these larger, more, more, more consequential considerations as the global economy continues to evolve. Absolutely, I am talking with you
and earlier this year, we saw after a very long time, one tangible progress in global taxation in the form of the minimum corporate income tax and lots of countries which frankly, I thought it was unthinkable that would sign up did sign up on this initiative. Does it give you a glimmer of hope that we could have more progress at the multilateral level of taxation of gig workers?
It is a glimmer of hope, because on many other multilateral considerations, we have been abysmal getting any kind of cooperation collaboration, the global pandemic, global climate crisis, international terrorism, uh you know, Yeah. The way in which very well off people are able to manipulate the international financial system in a way, so that many of them end up paying less tax than the poorer uh fellows in whichever society they live in all of these are
hugely important. The corporation part of it is one relatively easy win. But I hope we're gonna we're gonna need to do a lot more in terms of keeping the global economy together.
I want to switch gear to really, you know, excellent piece of opinion editorial piece you wrote for a Singaporean newspaper recently. It was entitled Building Back Better with trampolines. I want to talk about the trampoline metaphor later. Um but in the very beginning you portray a post pandemic world that is a need for resilience and social cohesion.
Words that you know economists didn't talk a lot about in the past but you know now you're bringing them into the core of discussions and thoughts that economists must have. So let's unpack those two words start with resilience. Um Is it the same as a robust society that has internal financial buffer support for the poor? Or do you have something bigger than that in mind?
Okay. I think financial buffers, support systems for the poor all those are steps in the right direction. Um and Brazilians could be viewed as one natural end point as we continue this. But the important distinction to be made here is that sometimes when they are conventionally or historically implemented financial buffers, support systems for the poor are viewed as ways to to simply strengthen society.
And there's an interesting difference conceptually and I think for formulating policy in terms of strengthening society and making society more resilient now in english uh in most sort of natural language and verbal language. He's not clear clear what that means what the distinction is. But the visual metaphor might help we strengthen social systems when we make them like an oak tree we make them like a redwood tree that is strong and is able to do keep upright even against strong winds.
An oak tree that is a strong system. If we're building financial performance and support systems for the poor because we want to try and mix this again, oak tree then what we're doing is strengthening the system, resilience is not about an oak tree, it's about bamboo or is about willow trees, structures that are soft and pliable and bend with the wind. Why is it important to have this well? And oak tree does well against the kinds of forces that historically we have seen. Yeah the known knowns
they are the things that we can imagine happening. We can build a crease sufficiently strong against them. If we build financial buffers, support systems for the poor against the kinds of risks that we can imagine. Even even black swan kind of risk if you can imagine and describe it then we're making system stronger.
The idea of resilience is too say yes let's make some strong when we can but we should pay attention to unknown unknowns, things that we can't even imagine things that could be potentially overwhelming called the covid pandemic set on the boundary between unknown unknowns and unknown unknown because we we've had pandemics in the past. We didn't know how devastating would be, Who knew that for over two years we will be sitting speaking like this on to having our entire world transform.
I think that would have been very difficult for people to imagine this. We can put on the boundary of an unknown unknown. So we build a system that was resilient against this like a willow or bamboo shoot that can bend with this force and then in a resilient way bounce back. Is this bouncing back? That is the critical difference between simply building strong robust systems and building systems of resilience. So you had referred to trampoline as a valuable metaphor
for this. Indeed contrast strong table made of hardwood versus a trampoline, the hardwood will stand up against most things we want to put on it. But at some point you could see that the force will hit it and it would creak and crumble. Trampoline absorbs the force and bounces back. The more the systems that we can build that are like trampolines, the more resilient with our society's b
in a nutshell. That's that's kind of how I would think about how uh it is different from the systems that we have traditionally built and and to give credit where credit is due. Many people have talked about resilience and in a way as you saw the commentary that I wrote was a riff and take off on something that a brilliant economists at Princeton Marcus Bruno meier had written, He's written a whole book on the resilient society. I took parts of what he had written and expanded
on them. Um he mentions trampoline, a lot of ideas about resilience, his, but he doesn't develop more the trampoline metaphor. And I've tried I've tried to do that. Yeah, sorry, go ahead. Well, I was going to turn to social cohesion because you had mentioned that I'm happy to wait if you want to come back to it. After we we talked a little bit more about resilience. Well,
I was just struck by your redwood versus bamboo tree metaphor. A few weeks ago, I was traveling at a different part of the world. I was in California and the great Mirror woods in northern California, which has these great redwood trees.
And and to your
point that very strong institutions or structures of nature uh
over time
have a track record of dealing with past shocks by
survival bias. They are the ones that are standing, but that does not guarantee that the next bout of climate change that is affecting northern California substantially is going to keep these 1000 year old trees intact because the soil erosion that you're seeing in that area of northern California and the plethora of forest fires now are making the nature specialist over there very worried that these trees which have survived through basically the entire history of the United States and more
may not survive the next 100 years or 200 years. So to your point that you can't just say that Something has worked for the last 23, 400 years means that it's going to last forever. That's just a survival bias. That doesn't mean that it's going to be lasting in the future.
That's an excellent, excellent metaphor. Uh dinosaurs would be another example 650 million years ago. There was one group, one species that that rule the earth. They had done so for millions of years. They were the most powerful beings, the dinosaurs. And there were little rats that scurried around beneath their field who didn't, that didn't amount to very much in the order of things, But 650 million years ago and unknown unknown did hit our planet. And it's the little mice animals, they have
survived and became you and me. The theory of evolution is one that says that, you know, it is this, it's not necessarily the strongest they have emerged. Whether through design or through survival bias, it is those that have the resilience to continue to hold together against the shocks that are historically unprecedented.
So would you say when the government of Singapore sets out a plan for the rest of the century in terms of dealing with rising sea levels and and creating seawalls and that's not going to be something that you and I will be around to see it. It is for our grandchildren, their grandchildren. So on, that is one of those resilience building exercises.
Absolutely. I mean the government, you know, just as you know, there's a lot of looking back and looking forward uh scans horizons and it constructs scenarios and so the best that anyone can imagine any human mind can imagine it does try to to do exactly as you say, look forward to the circumstances that are emerging. But we will always need to be constantly on the watch for new things that we will need to adapt to.
Having a plan means that we will sometimes need to deviate from that plan when you are No, no, no. It's actually uh changes
right. I want to talk about social question a second, but maybe this question will bridge us in that direction. It is one thing to talk about the importance of preparing for these unknown unknowns and and having systems of buffer in place that are not just about dealing with shocks of the past but trucks that may come.
Um, but you need a really forward thinking society, not a society where every four or five years you have rather contentious elections, lot of society where there is a lot of strife over race and ethnicity and left of center political beliefs and the right of center political beliefs. So, so how do societies that are of democratic by nature but are not necessarily capable of forming very long term planning horizons survives the test of resilience.
Well, one thing that I remember from my time in the United Kingdom was how in government or in parliament, that would be a debate between whoever the government was and the opposition by the opposition.
When it did things right, always referred to itself as her majesty's loyal opposition was an opposition, not against the nation, not against society was for the nation and society, but I was trying to make sure the best ideas emerged from debate with whichever party was in government at that time.
Now, that's that's the, you know, that that for me is uh uh it's a singular moment of when all different people come together realized that although they're arguing quite heatedly, there's a greater goal that they're trying to move towards. Unfortunately, in many democratic societies, and in many non democratic societies, that vision is not always helped. It's not always clearly communicate.
We're lucky that in Singapore we do have a consistent narrative of where the nation is going and then people can rally around that in Britain the story that I just told, although royalty is is, you know, it's a figurehead, royalty
has no powers to speak of. But it does provide that kind of rallying point around which people feel the nation needs to organize itself and I think all human societies need that human nature is such that how many economists, young economists, we we we we subscribe to the idea that human nature is at the end of it all, ultimately self seeking. It is purposeful, but it's self seeking
and the job of government. The job of political leadership is to see how to align that self seeking nature with the greater good. Some societies do it successfully and well, other societies don't, and it's not always the most obvious societies that that do it well, uh you know, if I may, you know, I I can turn this maybe to a little bit of discussion about social cohesion, because social cohesion is a natural freezing. That comes into the conversation here.
There are many observers to say, I've only read a socially cohesive society, then of course, individual incentives would be aligned with the greater good. I don't think it's as transparent, I think social cohesion is building something deeper, that just the obvious manifestation that everybody uh seems to be aligned in the right way.
Casino, about 100 years ago, when social scientists started talking about social cohesion, and like you say, it was an economist with sociologists and others, and one of their key hypothesis was that the way he had social cohesion, which is, you know, really about the good things from groups in society coming together, there being a sense of community and belonging people helping one another. Well, the early viewings of sociology was that, well, you got that by making sure society was all alike,
society was homogeneous. Everybody looked the same. And that's how, in the early sociological perspective, That's how you got societies to be cohesive by making all members of society as much like each other as you could and you and I know that in the modern world of the 21st century, that's a disaster.
Societies are now cohesive when instead we respect diversity and difference, that people are different with different skills, they look different, they speak different is by bringing all of this together than we get the bamboo shoe. The strong resilient societies that can adapt to unknown unknowns and social cohesion as a phrasing as an idea itself continues to evolve. But what you and I might say is it's clear what we need is to go back to the fundamentals where
people feel that they belong. People feel that they can help one another and the way to do that is by building an environment building institutions where We Trust one Another. But there's a there's a difficulty here as well because trust is an important part of social cohesion. But trust is not stable in economics language, trust is not a stable equilibrium. It's
not incentive compatible. If we try to build a situation of trust and we found ourselves in like a the prisoner's dilemma type situation or a situation that allow me to free. Right then that you trust me to do the right thing makes you do the right thing and that's wonderful. But when we are all doing the right thing, I will still see i as a member of this group, we'll still see gain by deviating from it.
I will try and do something different. I will free ride on all the good things that the rest of society is doing. If society rely only on trust to build social cohesion, it is not a stable outcome instead. What we have to do is to build institutions so that everybody continues to see again to themselves
from playing the game, that is the society's game. So what we need to do is we need to make sure that the poor, the weak and vulnerable, the deprived continue to gain, why they're sticking with the rest of society and they will not if they think the corporations businesses, the rich element, society permanently exclude them, no matter how much the poor trust the rich.
If the rich permanently exclude the poor from ever being able to become rich to be able to do the same kinds of things that the rich do, that, society is not going to be stable in social cohesion. Well, what we need to do is that we need to build systems so that the lower strata of the income distribution can continue to receive continuing improvement in their well being. They must feel that society continues to have space for them.
They must feel the society continues to be inclusive and that will align. I was thinking no matter how racially ethnically physically diverse, we are none of that matters because individual self gain will align with the social good provided that we can build these systems probably we can build systems with great social mobility, Social mobility. I feel it's the key to having social cohesion. It's not not just mouthing words like trust, cooperation.
What we want is that people actually see the game to themselves of being in the society of helping one another. That they see that by lifting those around them, they raised themselves. That is the critical thing for social cohesion.
So you would rather look at a database that looks at absolute gains as opposed to relative gains.
Absolutely. I fear that when we fall into a language of relative gains, that is simply the word we use to be the word we use in polite society for forcing society to a zero sum game. See if you and I are in a situation where I am constantly concerned about whether I've gained relative to you. The only way I can gain relative to you is if you lose relative to me, even if both of us are becoming richer,
it is a zero sum game. And once we get locked into a zero sum game, you know, there is no compromise, There's no alignment of incentives. Everything that each of us does is a slight against the other. Everything that we do, no matter how helpful to you yourself, to your neighbors, to everybody around you. Anything that helps you becomes a damage to me. That's the nature of the zero sum game that I feel we construct when we
say relative gains. And so while it sounds nice to some policymakers to say, oh, we can't let, even if the poor become richer, we can't let, can't let the rich become relatively too much richer. They are binding themselves. They're closing themselves into a zero sum game from which no good can emerge. My worry also is at the very largest level. The game of geopolitical rivalry has been shoehorned into a
zero sum game. Nothing that china does that benefits its people or its neighbors can be viewed as beneficial now By the # one incumbent Hegeman who've used any such game as being a relative loss to itself. It's a zero sum game. And it's a very dangerous position that for some reason humanity finds itself wanting to construct more and more of their natural situations where the world is not a zero
sum game. But we talk ourselves into it. We talk ourselves into worrying that, you know, we are not as well off because there are people who are richer than us who are becoming richer, becoming even richer and therefore that's a relative loss to us, even though we ourselves 10 years ago, could not afford the smart phones, the Internet, the enjoyment of netflix of so many things that we previously could not even imagine.
But we tell ourselves this is not as good because somebody else has something even better and that's a very dangerous game. We play with ourselves, ultimately is not good for humanity.
Absolutely. Um Professor Cole you've been very generous with your time. I want to ask you one final question. Before you know, we we conclude this podcast. So you you talked about Marcus Byrne Meyer's book, Brazilian society lessons from the pandemic and you talked about the sort of ways to build societies that are resilient and socially cohesive at the same time.
Um China in addition to being pushed around by the whole great for rivalry is also basically the the the, you know, the team of Asia for the next century or beyond. I mean, there it is, you loom on top of us for better for good for the rest of our lives and our Children's lives. So what is your sense of china in its sort of quest for resilience and social conditions?
Yeah, we'll see. Okay. First thought on china, is that unlike all the rest of the world, it has chosen to pursue a zero covid strategy, right? It is it is intent on stepping out any sign of the of the pandemic re emerging in China is going through great pains, great cost to its economy and its people to do that. If I were to point to one thing among some others that we can talk about. It's not clear that that's going to be a resilient strategy.
Living with covid is something that seems to be much more in the nature of the okay, we'll let the shock hit and we will bounce back from them. So among all the other things that china does this Covid thing, it seems to be going in a completely different direction, putting that to one side, it has internal challenges to deal with are like all the rest of the world. It needs to be mindful of its carbon footprint
in terms of annual emissions. It is now the world's largest, uh, simply by sheer size, even though in total emissions, the United States is still well ahead. But internally is facing this challenge between part of the country wanting to continue development in a carbon intensive way and part of the country which is already rich seeing the benefits of blue skies,
clean environment and pushing for zero carbon strategy. So China is having to deal with an internal Conflict over the, over the global climate crisis that many of us don't fully get into. Because many of us feel that, you know, a nation sets down his line in the sand. This is what it's gonna do on the 1.5°C
achievement. And then it's either yes or no. But China is so large that society is having to face all these internal dissension is having to deal with corruption, something that's profoundly a fundamental to its history and the history of many of our asian uh, nations is having to deal with this in a very in a very consequential way is having to deal with uh challenges internally that it feels the rest of the world and pounces on as human rights violations.
And it doesn't completely understand why at this critical time in human history, global climate crisis pandemic, uh you know, so many challenges that we're having to deal with on the environment or natural resources, while all the rest of the world in Western society is jumping on it for its human rights violation, which it says, it says come and see what's actually going
on here is completely different from what you think. So. So there's a lot of uh there's a lot of texture and color in this conversation in Asia, we have a we have long held the view that for our economic progress dealing with china trading with it, hooking our wagon as it were onto the spectacular growth that the chinese economy continues to see is a good
way forwards for us. In Asean alone, we've still got scores of millions of people living in extreme poverty, for whom trade is a very reliable way to be lifted out of the state of deprivation. And and in ASia and china trade needs to continue to be a large part of our of our growth story. The west has gone mad on this is concerned about all the kinds of issues.
So in terms of resilience that we're going to build in Asia, the choices that we're going to have to make will come down to our own thinking about uh our economic future, our understanding, our own understanding of what our set of value systems is not subscribing to either America or the West or china's but developing our own narrative or values and then seeing a way forward that navigates between a security that the West sometimes offers. Not always
economic prosperity that trade will continue to deliver. And a narrative for ourselves that says, you know, this is our set of values. This is the way that we work towards and this is not Western values. It's not values with chinese characteristic. It's our own set of values. And
this is the way we're going to navigate the world. Now, If we're allowed to do that, it's not clear that we will because if the world becomes zero sum between the two great powers, there's very little room for navigation here. But if we're allowed to do that, it seems to me that that is the sensible way ahead for all the 80% of us not living in the US or China. In fact, even for the United States and China. So I hope that this would be an alignment of
individual incentives and the greater good. But my worry is that the world too easily wants to build zero sum games around practically every issue it narrates so in a very tricky state of tentative contingency going ahead.
I like that phrase very much protocol when I leave the U. S. Borders and cross over into Mexico. I immediately sensed a major decline in per capita income. Then once you pass Mexico and started exploring the other countries in Central Asia, you can't even believe that you're just you know, 500 miles away from the United States. So despite the incredible prosperity and gains in the U. S. Over the last 75 years or so, the positive spillover for its neighboring
nations has been extremely limited. Whereas you know, you go to Vietnam today, you already see the positive spillover of being proximate to China through a mix of good governance but also taking advantage of the Chinese tailwind and and hopefully we will see more in the Asian region as opposed to the contrast that we see in Central Asia.
Absolutely, absolutely.
It's been fantastic having you on the podcast. Kwaje thank you so much for your insights.
Thank you very much and look forward to seeing you again
by all means. I would also like to thank our listeners Kobe time was produced by martin Tuckey daisy Sharma and violently provided additional assistance. It is for information only and does not represent any trade recommendations. All 66 episodes of Kobe time are available on Youtube and on all major podcast platforms including apple google and Spotify as for our research publications, webinars and live streams. You can find them all by googling. Devious Research Library. Have a great Day.