Rappler Talk: Parag Khanna on the pandemic's impact on globalization
MANILA, Philippines – Futurist Parag Khanna is the founder and managing partner of FutureMap, a data-driven strategic advisory firm. He has also written several books about international relations, globalization, and technology, such as The Future is Asian: Commerce, Conflict and Culture in the 21st Century, Technocracy in America: Rise of the Info-State, and Connectography: Mapping the Future of Global Civilization.
In this interview, Khanna sits down with Rappler’s Maria Ressa to talk about the possible geopolitical trends and repercussions of this pandemic, such as increased regionalism and localization, but migration as well. He considers the coronavirus crisis a reset point, and imagines how the world – specifically Asia – may change post-COVID-19.
“Fast forward now one or two years, when the pandemic lifts, people are going to be voting with their feet again,” he says in this Rappler Talk. “They'll be saying, ‘I just suffered through one year, two years locked down in a red zone - a place that has proven to be just incapable of providing for my welfare. I'm going to spend whatever money I have left, whatever savings I have in my pocket, and I'm going to get a one-way ticket to get out of here.’ And so we're going to have this total reset moment and see what the next phase of globalization is going to look like.”
Khanna discusses the similarities and differences between Asian countries, and how these feed into varying pandemic responses. He also touches on the possible roles data and technology can play in governance and democracy.
MR: Hello, everybody. Welcome to Rappler Talk. Joining us today is Parag Khanna, who is an author, a futurist. He is also one of the best thinkers we have in our region and in the world today in terms of trying to figure out what's going to happen next. Parag, it is really good to talk to you.
PK: It's so good to speak with you again, Maria.
MR: So how would you describe our world today?
PK: Well, that's a big, big question. And maybe it's something that we don't often have to think about. But I guess you might say we are mid-pandemic, right? If people have started to measure time pre and post pandemic, we're certainly not at post. So I would say we're mid-pandemic, that would be one description. Others would say, you know, of course, fragmenting, in the sense that what we're seeing is this incredible simultaneous lockdown. You know, what's so interesting is the fact that we have come this close to really having a simultaneous global lockdown where all the countries in the world, all the people of the world, effectively at the same time, in a synchronized but uncoordinated way. No one country has dictated to another country, ‘You must lock down.’
And yet all of mankind doing the same thing at the same time, which is basically nothing - is really amazing, right? We've never had anything like it. So what's interesting though, is that's a reset point. So another word to describe where we are right now is reset. You know, one of the things I study the most is migration. When can you point to a period, an exact moment in history where there was exactly zero migration, net zero migration? Everyone is going home. Now what's so fascinating is that if we're in this mid-pandemic point, imagine fast forward now one or two years, when the pandemic lifts, people are going to be voting with their feet again. They'll be saying, ‘I just suffered through one year, two years locked down in a red zone - a place that has proven to be just incapable of providing for my welfare. I'm going to spend whatever money I have left, whatever savings I have in my pocket, and I'm going to get a one-way ticket to get out of here.’ And so we're going to have this total reset moment and see what the next phase of globalization is going to look like - what trade patterns, what migration patterns, what geopolitical alignments, and so forth. So in that sense, it is totally fascinating.
And it's not unlike, you might say, other pandemic moments. We got the Black Death, which I wrote about recently. You know, looking at what that did to the Mongol Empire in the 14th century, and I made some analogies to what it means for Belt and Road today. It feels like it’s amazing how synchronized activity is right now across governments and states, but it also feels like this suspension of reality. And when we start again, it will be a new and different reality.
MR: That's a great way of putting it. When we start again, what would our global economies look like?
PK: That is an area where interestingly, there's continuity, as well as big disruption. The disruption is obvious, right? People are going to save, save, save. You know, you even hear interviews with Chinese people, those who are upwardly mobile, middle or middle-upper class, don't even have large obligations financially or dependencies, and they're saying, ‘I'm going to save, save, save.’ That's what I've learned from this, right? So whether one is rich or poor, precautionary savings, as it's known, is really going to be the order of the day. Business investment will be lower, people will be looking for sort of how to make do with less. Businesses will also be emphasizing efficiency, obviously, and that means perhaps investing more in automation. I think supply chains will become much more regional. And this is something that was really underway before the pandemic - it really has more to do with the trade war, the rise of emerging markets, the rising cost of labor in China, and various other factors like lower energy prices. All of those things have pushed us towards more regional supply chains. So North America making for North America, Europe making for Europe, Asians making for Asians. We were more or less getting towards that world already. Obviously, not in the category of medical devices, right? But again, when you recognize an error of that magnitude, you immediately correct for it. So one can’t imagine that five years from now, we'll be saying that America is not going to have any ventilators or surgical masks. Of course it will have more than enough. It'll have enough to fight the last battle, right? We always have to think though about what comes next and what disruption is next.
But a world of more regional supply chains and regional self-sufficiency is not a bad world, Maria. Let's remember, if you think about global energy markets, should we be putting oil on tankers and sailing it all over the world? Is that really healthy for the planet? No. You know, I'm known as someone who champions globalization, but I do not champion globalization for its own sake. I do not say it is a good thing - for the sake of boosting globalization statistics - that we have these far-flung global supply chains when there's no need to have them. And when, in a way, it's morally perverse to have them. So having more localized agriculture and more local renewable energy, those would be wonderful things. And that would actually mean less globalization. And I would be the first person to say we should aspire to that.
MR: When you're talking about globalization, and in terms of values and growth... What will it look like, once a vaccine has been found and the world normalizes again? How difficult will it be to get where we are today? How long will it take?
PK: Well, you know, for one thing, it'll be a very bumpy road. Because even if you have a vaccine, even if people are able to normalize in terms of their social behavior, you still have the debt that has been piled on from this moment going forward. 85 countries already going to the IMF for emergency lending, significant drawdowns of currency reserves. And this is just the beginning. Huge fiscal deficits in order to simply backstop businesses and households to keep food on the table. So this accumulated debt is massive. We have to think again about what disruption could help if we wanted to return to normal, if we wanted to return to that normal that was itself considered so unsustainable. So again, we have to ask that moral question, why would you want to return to a system that so many people believed at the time was broken? But even if you wanted to, it could only be done by way of some radical measures that other people have also been talking about for a while, which are things like debt relief, a large scale debt relief, and other kinds of measures. Otherwise, economies are fundamentally crippled or have one hand tied behind their back for a long time to come.
So I really don't think that we will... You know, first of all, history is not linear, right? The progress of human civilization is not linear. It has all sorts of zigs and zags, so to speak, and this is one of them. So I really don't think that there was some premeditated, predetermined destination that we would have been headed towards were it not for the pandemic. So let's not pretend that there is a normal to go back to.
MR: In terms of value, in terms of wealth creation, people will have lost a lot or maybe not. At one point, you gave an estimate of how long it would take to be able to give back the value… What is that number and, you know, where do you think it'll be?
PK: Well, I wouldn't measure things necessarily in say GDP output, right? Again, that's another term and metric that has, you know, been increasingly discredited, right? So, if global GDP slumps, if we have a depression, right? People will say, OK, well let's forecast whether it takes three years, five years, seven years to return. We can look at analogies like the global financial crisis and say, you know, it took four or five years for the jobs that were destroyed to be regained. Perhaps something similar would happen again, right? And how long did it take for the stock market and so forth to recover? Whether one is accurate or close on those things is far less relevant than what the economic model is. Do we have a stable housing market? How many people are gainfully employed?
We can't talk about these things also as if it is a fixed, contained system without other variables like, you know, labor automation, digitization, shifting towards the services economy, the fact that the world population is actually plateauing, right? In the past, you could generate growth just by increasing the population size. I mean, the Philippines still does. India still does. But that's not the world we're really moving into anymore. We're moving into a world with almost a flat population, much of which is aging, a large and underemployed youth bulge. What we have to think about is optimizing the existing stock - to refer to humans as if they're widgets for just a second - we have to optimize the stock of human beings that exists in the world because so many are underutilized. That's 1,000 times, from a moral standpoint, such an infinitely more important question than ‘when do we return to X percent growth or y percent growth?’ We have a limited number of human beings in the world, and many of them are under-appreciated, underutilized, and I think that that is a waste of our human potential and talent.
MR: That's incredible. We're also seeing something that is pretty much the same through every country around the world, which is, in democracies - whatever the system is - greater centralized power, greater powers to leaders. In the Philippines, we just passed an Emergency Powers Act into law in 24 hours, right? What impact will this have on democracy as we used to know it?
PK: Well, you know, I've always felt that no two democracies are alike. And we certainly should never generalize the quality of democracy simply by stating that a country is a democracy. You know, I always say, hypothetically, let's imagine that every country is a democracy. Then suddenly, we would really have to be much more refined and nuanced in conversations like this. Are you a good democracy or a bad democracy? Are you a liberal democracy? Do you have an effective state? Does it operate in the public interest? Do you have, you know, a welfare state, those characteristics that we are accustomed to seeing really just in Western Europe and Northern Europe and places like Japan? Or is it really just a free market, free for all kind of system as we sadly have in the US?
So, you know, there's many different kinds of democracies. Are some countries today - irrespective of whether they are formal procedural electoral democracies or not - is there a power grab going on by the executive branch to justify emergency measures, sidelining opposition, sidelining the courts, muzzling the media? As you know - you truly do know this better than any human being in the world today - we've had that prior to the pandemic, right? So if there is a tendency in a country, in a society, amongst the leadership, or if the constitution is so malleable that they can be manipulated in that way, then one shouldn't be surprised when leaders come along and are opportunistic and take any advantage. Whether it is an external invasion or a pandemic or a natural disaster, they will take that excuse. So the real work has to be done around the clock really, pre, during and post-pandemic, to strengthen constitutional procedures and rules and norms, so that you can prevent this kind of power grab. And of course, you know, we've been watching this in America, and in other countries now - Hungary and elsewhere, Israel, Philippines, and so forth. So again, all democracies on paper, right? But we all operate differently. You don't see this kind of behavior in Western European parliamentary democracies, where the executive is not as strong, or you have multiple competing parties, where you could have no confidence votes in government, where you don't have private capital or private money shaping elections and this kind of thing. So you know, the real protections against the kind of power grabs that we should not be surprised at seeing right now, is restructuring government.
MR: Fantastic. Asia. You live in Singapore, which is basically our gold standard right now, it seems to me, in terms of Southeast Asia, particularly in detecting, dealing and even communication of what to do to its citizens. How would you gauge the way Asia has reacted to coronavirus, to COVID-19?
PK: You know, the hardest thing in the world to do is to generalize about Asia, right? Our region is the most dizzyingly diverse region of the entire world culturally, also in terms of the range of regimes that we have, the composition of our economies, our income levels, and so forth are all very, very different country to country. However, what one does see is a trust in the state, right? Even if the state, even if the executive is overreaching, that doesn't mean necessarily that the citizens don't still trust that the government as a whole is trying to do things in their best interest, even if embedded within that is self-serving behavior.
So Singapore, as you say, is the gold standard for this. It is this balance between democracy and technocracy, you know, as I like to say. The key difference between all the different kinds of democracies out there in terms of how it translates on the ground is, is there an effective civil service? Is there an independent bureaucracy of professionally-trained, staffed, well-resourced individuals whose loyalty is to the state and not to the government of the moment? And that's something that other countries used to do better than they do now. Singapore has continuously improved the caliber of civil service at the Lee Kuan Yew School. Here in Singapore, we train officials and up and coming ministers and so forth from all over the region and the world in how to replicate this model, because it's not contingent on culture. It's not about, you know, you don't have to have a Lee Kuan Yew. You can start at this point at zero, and you can build a better civil service. In the last 20 years that I've been traveling around the world, I've watched countries genuinely improve that capacity.
So what is it about Asia that's different? Well, we don't have all the same types of government. But what I do see - and this is not a matter of opinion, quite frankly, because the worldwide governance indicators and other rankings that are done and studies that are done do underscore that the quality of Asian governance, the inclusiveness of governments, by and large the effectiveness of the state in delivering welfare, has improved. And it's improved even in countries where we've seen backsliding in democracy. It's really about Asians saying, ‘We want a strong government, we want a strong state that provides.’ And that's part of what I would call the new Asian values.
I tried, and this was the hardest thing in my most recent book to figure out - if I could generalize about Israelis and Russians and Indians and Kazakhs and Filipinos and Japanese and Australians and Singaporeans, what would they possibly have in common? And I actually came up with three things. One was, you know, we have a certain desire for technocratic government. We don't want to sacrifice democracy, but we have trust in a strong executive branch that has a long term modernization vision. The second was mixed capitalism. We are comfortable with a strong role for the state in the economy. And the third is a certain degree of social conservatism that favors national solidarity over, you know, individual rights to the extent that individualism could potentially be damaging to that national solidarity. And I think that's relatively common. There are exceptions, obviously. But you actually find that… You're even finding it in geographically Asian countries that aren't part of the traditional sphere of Asian values, like, you know, in Australia. You're starting to see conversations that push in this direction of, ‘What about the collective will?’ And I think that that is something that the world can learn from Asia, and to a certain degree, that's not a bad thing.
MR: When you talked about the migration after this, you know, looking at governments now… How would you describe what we're looking for now? Because certainly, it's changed what I look for in my government. You know all of the things we've gone through, but I know where President Duterte goes, all of the Philippines will go right now, right? So what are we looking for post [pandemic]?
PK: It’s a really, really good question. I think that again, to me, effectiveness at the end of the day is the one thing that government cannot escape merely by rhetoric, call to arms, and rallying national pride, populism. Again in the Philippines, going back decades, we've seen that that only takes you so far before the people say, ‘Wait a minute. Price of food’s still too high. Roads are not built. Unstable electricity supply. You're out.’ And there’s people power. And again, I always emphasize that more people in Asia live in democracies than in non-democracies. More people in Asia live in democracies than the rest of the planet Earth has people living in democracies, right? So Asia is not just one homogenous authoritarian block that circles around China - not at all.
So we have educated people, we have a vibrant civil society. We have agitating media. We already have democratic culture even if our institutions are not as modern as they could be. And I see it again as a struggle in which we are progressing, not necessarily regressing. And we're progressing in the direction... Even if there are blips in terms of one regime or the other doing a very poor job or backsliding in democracy, there is still this underlying awakening of the people - that they want, they are demanding results more than ever. They are focused on outcomes. And that's the difference between inputs. You know, in western democratic culture, we've tended to be satisfied with input legitimacy, right? Well, we had a free and fair election, therefore he or she is the boss, they're in charge. And with little regard for, well - did they get anything done? Did they improve welfare? Can we measure that, right? So in Asia, there's also the output legitimacy. It’s like, ‘I want to see the improvement. I want it measured.’ It's sort of a KPI kind of culture. It’s very Singaporean, obviously. But it's really maybe the most important thing to export. This is not about rhetoric. You know, governing a country is not the Oxford Union, right? I'd much rather have KPIs - obviously utilitarian ones that are focused on general welfare and an overall improvement in standards of living. I'd rather be ruled by that than by whoever is the slickest debater, and draws the biggest crowds. And we're seeing this tension.
In India, Modi was very popular, branded himself as a technocrat. But some of his decisions clearly show that he's not thinking or acting in the interest of the overall, aggregate, utilitarian welfare. And I'll tell you one thing, it's not very hard to sit down and write down what those KPIs are, to actually measure whether or not your government is benefiting the people as a whole. It's not an abstract conversation, Maria, as you know. It's a very concrete thing. If we don't take the time to do that, I don't care if the government's a democracy or not. It's a failure if it doesn't have clear goals that the people buy into.
MR: Fantastic, fantastic as always. It's great to talk to you because you put everything concisely. So my last question is really about how the problems that we're facing are not within the nation states. They can't solve these. The three that I can think of right now in the last four years since the Duterte administration took office... There's the climate battle. There’s the battle for truth, right, which was really enabled by social media technology platforms uniting all of us globally on one platform or two. And then finally, this coronavirus. And in each one of those, no matter what each nation does, it's still a global problem. What do you see will happen to deal with these? How can we effectively deal with global issues when we are splintering further into nation states?
PK: I'm really glad you mentioned this because we have tended to talk about the pandemic in isolation. And suddenly, we're not talking about climate change much, other than to pretend that a little bit less pollution for a few weeks is suddenly going to save us from climate change. I mean, sure, it's indicative of what a post-carbon economy could look like. But we know that we also have this instinct to go back to business as usual. So you know, we cannot treat these things in isolation. The next droughts and heat waves and typhoons are right around the corner for our countries here in Asia and around the world. So you don't get to pick the whammy that hits you, right? You do actually get hit by all of them at roughly the same time.
So when it comes to the battle for the truth… Those who deny climate change, those who treat these issues in isolation, those who are focused just on the short term political gain, taken from forces that are far beyond their control... I have some bad news for them and sadly for their countries. Because the world will bypass those countries that ultimately make themselves outliers to the rest that are in earnest struggling to cope with a complex world. So again, if you're a climate denier, if you're a pandemic denier, if you're saying ‘It's okay, let's go business as usual, we have herd immunity,’ you yourself become the party, the country that suffers the most. And I think history proves that time and time again. You know, so many times. I could really bombard you with examples. We've so often heard about the centrality of oil producing countries and geopolitics and so forth, and not diversifying their economies, not investing in human capital. Do they really have the world by the throat? I mean, no, not at all, right? Oil prices have collapsed and basically, for lack of a better term, they're screwed for a long time to come.
So no one should ever be holier than thou, right? We have to get our house in order, we have to focus on domestic resilience. Again, we have to realize that connectivity... We shouldn't just be denouncing globalization and connectivity, realizing that for every problem that we blame globalization as having created or exacerbated, the solution at the same time is some degree of additional globalization, right? Knowledge and so on. So, you know, complexity is the order of the day. The pandemic proves that there are all these feedback loops. And I personally don't have patience for those who don't want to embrace complexity and don't want to elevate themselves towards more sophisticated thinking, as hard as it is. And again, my faith ultimately rests with Asian citizens who feel that there's too much at stake in their own personal lives as they aspire for more, for better, for stability. They shouldn't have tolerance or patience for one minute longer than is absolutely necessary when their lives and their children's lives are on the line.
MR: Do you see the formation of new global structures, or not so much? I mean, are we going to limp forward without... You know, each nation is talking about this leadership, to lead. But in the battle for truth, we've certainly needed something like that. In climate, we've needed something like that. And it's always faltered. Do you see anything? Are we going to learn anything out of this?
PK: We can learn the lessons, whether it's from climate change or from the pandemic. And the response though, or the measurement of whether we've learned is not whether we've built a new global architecture of institutions. The truth is that that's quite a 20th century approach to global problems. And what we do need is more networks, more rapid response, more local resources.
I've said this for many, many years, we really have the knowledge that we need about climate change being real, and we have the technological solutions to help reduce the need for coal burning, coal fired power plants and things like this. So I would take all the money that goes into these United Nations summits, and I would spend it into clean technology transfer funds to help countries adapt to reduce their emissions - countries rich and poor. Because we have built the knowledge. So you know, the expression, the articulation of whether or not we've learned anything is not ‘Let's just have lots of meetings and spend lots of money in those meetings.’ That may appear like we're doing something, but we're not. So I would like to see less talk and more action. To me, that would symbolize real learning. And so, you know, it's not a critique of the United Nations per se. It's a call for far more rapid response and far more local capacity building. And that, to me, is the far more mathematically sound approach to achieving resilience after all. So that would be a much more sophisticated approach.
MR: Sorry, I know I said last question, but this truly is now. Facebook, Twitter, they now are doing things in the pandemic that they weren't when it was information warfare, when it was Russian disinformation, or increasingly Chinese disinformation coming in. They've taken down tweets of both Giuliani and Brazil's President, Prime Minister. I guess with something like that, which does require a global response, and people, nations were looking for legislative responses... But where do you see this going? Silicon Valley kind of hijacking the information ecosystems in countries all around the world.
PK: It is really interesting. So you know, on the one hand, they would obviously bristle at the notion of the term ‘hijacking’ because they've been…. That they are now, as you rightly pointed out, they can do it if they have to do it, right? They're training artificial intelligence to find sort of fake content, deep fakes, this kind of stuff, and to take it down. So they can do it. However, it's a very valid point, as I'm sure you would agree, in response should the private sector be the “independent and neutral and definitive arbiter” of what truth is? Or should we not be legislating it or creating independent authorities against which we fact check, and that determines what content gets taken down, right?
So right now, it's actually just a reactive, rapid response kind of mode to these things. But I think that, you know, the role of social media and the digital information environment is more than actually just sharing tweets and posts and things like that. They actually have a profoundly and potentially positive role in governance. And this is the thing that's extremely important moving forward. We, again, still live by this 20th century - actually more like a 17th and 18th century model - where democracy consists of you go and you cast your ballot every few years, and you vote for a candidate based on a wide range of issues. And when that person is elected, there's a rough sense of what that mandate is. But there isn't this specific sense of, ‘On this issue, we need to do this, let's measure in this way, and so forth.’ And what about all the people who didn't vote? And what about all of the months and years in between our elections?
Social media has a profoundly important role in having a real time, constant conversation, and turning our opinions into data points that help us to figure out what policies we need to undertake. And to me, for all of the controversies that are live and are not going to be resolved anytime soon, that should not hold us back from taking advantage of these technologies. And I do genuinely think there's two kinds of societies, right? Those that are going to use democracy and data together, in tandem to improve their governance, and those that are going to pit the two against each other as if having data is a bad thing. And obviously there's issues around privacy and access to information. I take those things extremely seriously. But there is already off the shelf, you know. And the TraceTogether app that Singapore has right now, by the way, for the pandemic, is a good example of this. The government can be given, in an emergency situation, access to a person's data of their movements in order to help anonymously inform people who may have been exposed to the virus that they should potentially isolate themselves. Without anyone's privacy being compromised. So again, let's not pretend that this is some eternal duality that cannot be resolved. That is nonsense. So right now today, based on today's technology, there are those countries that are going to be democratic and use the power of data to improve governance, and those that are going to pretend, usually for selfish, self-serving and dishonest purposes, that these are in opposition. Because they do not have to be.
MR: Fantastic. Thank you, Parag. As always, such a joy to talk to you.
PK: Keep up the great work.
MR: You too. Talk to you soon.