1. Good evening. I will set the context for tonight’s discussion by setting out what I see as the two biggest global challenges in the coming years – connectivity and coherence in governance. Let me state two propositions.
2. First, connectivity. Global connectivity has uplifted the world’s economic development for the past few decades, enabling improvements to the lives of millions of people.
3. But global connectivity is under stress. If global connectivity regresses, the world will move towards a much lower growth trajectory, threatening the continued economic progress of millions.
a. We risk repeating what happened in the 1920s where we started off with a recession, moving into the Great Depression of the 1930s.
4. However, in the spirit of Industry 4.0, connectivity today is no longer just about trade connectivity in the physical dimensions of air, land and sea. It must also encompass the non-physical dimensions of data, finance, talent, technology and regulatory systems.
a. Why and how did we end up in the current situation where trade and technologies are being seen more as challenges rather than opportunities?
5. The flow of trade and exchange of ideas allow our production and distribution systems to be optimised at the global level. A fragmented global system means all of us sub-optimise at the local or regional level.
6. But a global system requires all of us to play our part to uphold and update the rules. It also requires every country to muster its political will and resources to help its businesses and workers make the consequential adjustments that comes with trade and technological changes.
7. The fruits of trade must not only be distributed, it must be mustered to help businesses and workers disrupted to keep pace, thereby enabling businesses and workers to embrace changes and seize the new opportunities in a positive virtuous cycle.
8. On the other hand,
a. failure to uphold our individual responsibilities to the global system through beggar-thy-neighbour policies;
b. adoption of politically expedient policies for short term or partisan gains;
c. and failure to use the gains from trade to help businesses and workers adapt and adjust will all contribute to the local pushback against trade and technology with global consequences.
9. Connectivity once broken, will lead us down a slippery downhill slope.
10. Let me move on to the second proposition. The world increasingly needs but lacks coherence in governance – regardless of the diverse political models.
11. The greater the lack of coherence and confidence at the domestic level in respective economies especially within the major ones, the higher the chances of incoherence at the global level.
12. On the other hand, there is also a “feedback loop” from the global to the local. The greater the incoherence at the global level, the more emboldened the calls at the domestic level for partisan and short-term interests to precede any international considerations.
a. Why and how did we get here? Policy-making in too many political systems are fractured today by sectoral, partisan and short-term political interests with little coherence and with even less weight given for the long- term interests of the people and system.
13. One contributing factor will be the increasing ability for opportunist politicians to narrowcast their appeal through diverse channels without the need to bring people together towards a common good.
14. A second contributing factor will be acceleration of the political cycles, contributed by the demand for quick fixes and results.
a. Sometimes, political leaders may feel like they are English Premier League managers or CEOs trying to meet their quarterly reporting targets, where their survival is constantly threatened by fickle fans and inconsistent results.
b. Paradoxically, the more we put out the immediate short-term fires, the less attention we pay to long-term structural issues and consequently, the more fires we have to fight, in the longer term.
c. In extremis, we may all be spending all our time fighting the short term local fires, rather than thinking how to prevent more fires from happening in the future.
15. Ultimately, there is no easy cure. It boils down to leadership. Will there be more politicians or will there be more political leaders?
16. Politicians are those who believe that their job is only to “reflect” the ground desire or as someone put it in a pithy manner– see where the crowd is running, sprint ahead and shout “follow me”.
17. Political leaders, on the other hand, must be upfront with their people on both the long and short-term goals, the opportunities and constraints, and the trade-offs that need courage and leadership to execute.
a. That we are all accountable, not just to this generation but the many that will come after.
18. Let me say that “trade-offs” are different from pork-barrel politics where everyone gets something as compromise.
a. “Policy trade-offs” means choosing competing but internally coherent paths. Having done so, it means carrying the ground to assure all that the chosen path best optimise the overall welfare of our people, and that we have a plan to share the gains fairly with all, including those who have sacrificed their personal interests for the greater good.
19. Let me conclude by bringing the 2 hypotheses together.
a. Ultimately connectivity at the global level and coherence at the domestic level have positive feedback loops with one another.
b. A positive feedback loop means the two can either be a virtuous positive cycle or a vicious negative cycle –but always self-reinforcing one other. May we have the wisdom to distinguish between the two and may we have the courage to choose the correct path, so that we do not regress to where we were 100 years ago.
20. I will stop here and will be happy to hear your views and continue the discussion that while we may strive towards technology 4.0, connectivity 4.0, it is high time that we move past beyond coherence at the governance level 1.0. Thank you very much.