On 28 November, Corrs Partner and CEO John W.H. Denton AO spoke at the Horasis Asia Meeting on how the region’s many cultural differences can be faced, understood and acknowledged to derive a better future for all.
Read John’s speech notes below:
We need effective leadership at all levels of government more than ever, because now we are in a period of global geopolitical insecurity.
We face the prospect that a period of alliance-based international relations reverts to the old great power rivalries.
In its 2015 end-of-year survey of the key issues worrying the C-suite, McKinsey and Co identified geo-political risk and its consequences as the number one concern.
1. Globalisation is at a turning point
The economic benefits of globalisation have been unevenly distributed, and the 99% are angry and frustrated – look no further than Brexit and Donald Trump
Meanwhile from an average of five per cent annual growth in global trade since 1990, global trade growth has actually slumped to below three per cent for the past five years. By one estimate, 2015 saw a 40% rise in protectionist activity, the worst result since the GFC.
2. Post-WW2 arrangements are in decline
The UN and its various institutions have reduced credibility and power.
The EU is in trouble.
The post-war economic model and institutions like the IMF and World Banks have lost credibility.
3. Some say starkly that we are entering the post-America world, but certainly America’s global role has changed
The US has lost supreme power as the guarantor of global security.
We don’t know how President-elect Donald Trump will govern, but we do know that his tone suggests a pivot away from internationalism and towards isolationism.
The US faces challenges to the post-WW2 model it created, notably from China and also Russia.
It’s not clear that recent efforts at international cooperation will be successful.
The global trend towards bilateral and regional trade arrangements, from the China-sponsored Shanghai Cooperation Organisation to Russia’s Eurasian Economic Union, could easily turn into bloc-style protectionism.
The international consensus on climate change could dissipate quickly (if President-elect Donald Trump’s campaign rhetoric is anything to go by).
This all means significant challenges for our Asian REGION.
China is key:
China is huge, extremely diverse and complex – it is a one country EU of ethnicities and cultures.
A great deal of governing is delegated to regional authorities out of necessity (too hard to manage from the centre) and pragmatism (ie, a new national banking strategy is being rolled out in regions as a test).
China’s One Belt One Road strategy is well underway and will be transformative:
One belt is the roads, trains and pipelines through Central Asia to Europe and Russia.
One road is a plan to connect China with Europe along a maritime route through South China Sea, Suez and the Mediterranean (including Darwin as a key South Pacific gateway).
So it’s a complex world. Geo-political tensions are playing out in various ways:
The so-called ‘weaponisation of finance’ (Ian Bremmer’s term) refers to nations using financial incentives and penalties as tools of geo-political power.
Cyber attacks are a major challenge (North Korea and China have both been named by the US as responsible for cyber-attacks on corporations)
Trade sanctions are another tool of geo-political manoeuvres.
And in the South China Sea, we are seeing old fashioned military chest-beating.
We need to be aware that the old post WW2 paradigm is coming to the end of its useful life, but we do not yet have a new architecture.
One possibility is that we move from the alliance based model that has served the world very well post world war two, to a more antagonistic and risk-prone great power construct. In this context, shocks and surprises can spook markets and change politics very fast.
We need more and better leadership at all levels, from governments, private sector and civil society. We must keep arguing the benefits of engagement and openness.
We will all need to work towards a revised global architecture that leads to a new global consensus one that includes citizens in the process and ensures that benefits are more fairly distributed
Citizens need to be heard and brought into the process. In this new era, sustainable solutions can’t be imposed from above.
We will need to be patient and ready for change. Those who try to hang on to the past will get left behind.
Genuine Asian engagement means:
focusing on relationships;
engaging point-to-point and person-to-person;
recognising and celebrating Asia’s diverse cultures and societies from sub-national to local levels; and
building up and out from targeted local relationships and achievements.
Our region needs to take more of a global leadership role.
We are more than capable of contributing ideas and energy to reshaped global arrangements.
We will need to be brave: doing nothing is not an option in a complex world.
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