George Yeo & Mato Njavro: How Small Countries Can Make Sense of the Global Realignment of Powers

Good afternoon, ladies and gentlemen. Welcome to Zagreb School of Economics and Management. It is a true privilege to have you here for today's special event.

With great pleasure, I extend my greetings to the dean, vice deans, professors, as well as staff, esteemed alumni, dear colleagues, students, and friends of the Zagreb School of Economics and Management. It is a particular honor for me to extend a warm welcome to the distinguished guests joining us today.

Former President of the Republic of Croatia, Her Excellency Kolinda Grabar-Kitarović, Special Adviser to the Dean for International Projects. His Excellency Mr. Richard Rogers, Ambassador of Australia. His Excellency Mr. Jose Ramon Garcia Hernandez, Ambassador of Spain. His Excellency Mr. Chi Chenzhen, Ambassador of China, as well as diplomatic staff from the Embassy of Germany, Embassy of Qatar, Embassy of Indonesia, and Embassy of Slovenia. Professor Vedran Velagic, Dean of the Faculty of Electrical Engineering and Computing in Zagreb. Members of the Advisory Board of ZSEM, representatives of the Ministry of Foreign and European Affairs and the Ministry of Defense, and representatives of the business community, government institutions, and the academic community.

Finally, it is my great pleasure to introduce the highlight of today's gathering, a fireside chat with our extraordinary guest, Mr. George Yö on the theme: "How Small Countries Can Make Sense of the Global Realignment of Powers." In today's fast-changing world, with shifting alliances and new economic challenges, it's especially valuable for us here in Croatia and at ZSEM to hear directly from Mr. Yö on how smaller countries can navigate these global changes.

Allow me to briefly introduce our guest. Mr. George Yö has had a truly remarkable career. He served the government of Singapore for more than two decades, holding key ministerial positions in Information and the Arts, Health, Trade and Industry, and finally as Minister for Foreign Affairs from 2004 to 2011. Before entering politics, he had a distinguished military career in the Singapore Armed Forces, reaching the rank of Brigadier General. After leaving the government, he continued to contribute to global business and policy, serving as CEO of Kerry Logistics Network and advising numerous international institutions. He also served the Vatican as a member of the Pontifical Commission for Reference on the Economic Administrative Structure of the Holy See and later on the Vatican Council for the Economy from 2014 to 2020. Mr. Yö is a graduate of the University of Cambridge in Engineering and holds an MBA from Harvard Business School. Beyond these achievements, he is recognized as one of the most thoughtful voices on geopolitics, globalization, and the role of smaller states in the international order.

Leading today's conversation will be our Dean, Mato Njavro, who will guide us through this dialogue and open the floor for questions later on. So, without further ado, please join me in giving a warm welcome to Mr. George Yö and Dean Mato Njavro.

[Applause]

Ladies and gentlemen, it's really great to see so many of you have joined our very special session today. And I don't mean just my students, who are really in for a treat when we discuss what's about to happen next. But I also mean our friends from the Zagreb School of Economics and Management, members of the advisory board, the diplomatic corps. Just by listening to which countries have sent representatives here today, you understand that the topic is of interest to anyone, any country in the world. It's my great privilege to be able to host this event today.

Just a couple of days ago, I was speaking to George and reminiscing of his first time when he visited Croatia. This happened exactly 10 years ago. 10 years ago, we got connected by a mutual friend. We invited him to join and come to Zagreb School of Economics and Management to deliver a lecture, and we were in luck because he was just on the way to Rome as a member of the Vatican Economic Council. So, we made it work. George has been to Croatia 10 years ago, he's been 3 years ago, and now this is already his third time. He's a big fan of the country. I don't think I'm lying if I say that. He's a big fan of Central Europe. In fact, we had a big tour before coming to Croatia where he first visited Luxembourg, Prague, Bratislava, Budapest, and finally concluding in Zagreb. Tomorrow, he will have the pleasure of going to Rovinj. So, you are really in for a treat.

Those of you who know a little bit the story of Zagreb School of Economics and Management, you also know that we have a strong publishing arm. And our publishing arm some years ago have translated and published two books related to Singapore. And those books are "One Man's View of the World" by Lee Kuan Yew, and also "The Singapore Story" by Lee Kuan Yew. And it's a great honor that today here with us we have one of the closest partners of the legendary Singaporean Prime Minister, father of the country, who together with his team, with Mr. George and the rest of the team, have really built within one generation Singapore from a very undeveloped place to one of the most innovative, developed countries in the world. George is a very sought-after speaker all over the world. So it was a very difficult kind of to get him. But we're very happy that you're here with that you're here today with us. And without further ado, I'd like to invite you to deliver a kind of an opening address, after which I will moderate the Q&A session. So start thinking about the questions that you want to ask. Thank you, George, for coming to Zagreb. Thank you for coming to Zagreb School of Economics and Management. And please, the floor is yours.

[Applause]

I thank Mato for this invitation to come and address you here. When I addressed the school 10 years ago, it was a much smaller school and in a smaller campus, and I'm glad to see the way the school has developed and taken shape.

During that first visit, after Lake District, we flew to Dubrovnik. And I had not learned much about Dubrovnik except the images in 1991 of a beautiful city being bombed. When I went to Dubrovnik 10 years ago, most of the damage had been repaired and the city looked attractive. And I was told that unlike Venice, which had always been an inspiration to Singapore, Dubrovnik looked after security by paying off the Sultan. So it didn't have to build a navy. Venice at its peak in Arsenale built one warship a day. So Venice was naval power. Dubrovnik deciding that well, another way of providing security is to get the Sultan to protect you, and so had to pay him off handsomely every year. And I found out that the reason why Bosnia has a small outlet to the sea is because Dubrovnik decided that to create a buffer between itself and Venice, which he always feared, is good to have the Sultan in between. And so today we have this interesting geography along the Adriatic coast.

Now, for us in Singapore, we are a small city-state. Venice has always been an inspiration, but Dubrovnik is also an inspiration. We don't have a big navy like Venice, although we do have a substantial armed force, but neither are we helplessly dependent on one superpower the way Dubrovnik was. We interpolate. And small countries have to live by guile and hard choices. We cannot be emotional about the world. We can't change the world. We have to accept it for what it is and ask ourselves, what is the reality? How is it changing? What will it be 10 years from now, 20 years from now? And where do I want to be 10 years from now, 20 years from now?

In 1989, June, no, in 1989 September, I was a junior minister in the Singapore cabinet and I represented Singapore at the Non-Aligned meeting in Belgrade. Tito had already passed away. Slovenia was in the rotating chair of the presidency. The president chaired the meeting, but he looked very awkward because in the audience there was Muammar Gaddafi, there was Yasser Arafat, there was Mubarak, and other great leaders of the Non-Aligned Movement. I kind of gawked at them. And you know, I had a cough, so I, someone bought for me a bottle of cough mixture from a Yugoslav pharmacy. It was green in color. My staff said, you know, Arafat has a cough. Would you give that bottle to him? I said, of course, you do these things for your country. So I was without cough mixture, and Arafat had my cough mixture. I wasn't keen to meet Arafat, but my officials thought that having a link to him was useful diplomatically. All over town, there were flags hanging about the Battle of Kosovo. So I wondered, what is this Battle of Kosovo which took place 600 years earlier? And started reading up the history. Then the Berlin Wall fell, and you had this war in the Balkans, and then later on, NATO decided that Kosovo should be broken off from Serbia. I asked myself, if one had known in 1989 September what the world will be like 10 years hence, 1999, when Belgrade was bombed by NATO, including the Chinese embassy, how would one have played the game better? It's useful for small countries to play and replay these scenarios because if you make a wrong choice, that choice will have fateful consequences for your people for generations to come.

We are now in a great transition to a multipolar world. What is happening in the Middle East, the war in Ukraine, are all manifestations of the transition that we're going through. When the Berlin Wall fell, I remember Lee Kuan Yew's comment. He said, "The ice is cracking." It was a great glacier during the Cold War, and now that ice was cracking. Understanding how the ice was cracking and what it will all lead to is life and death for a small state. Because if you read the future wrongly and you're on the wrong piece of ice, you are in trouble. But if you anticipate what might happen, skip on to a stable part, and then the ice flows, you'll be taken far ahead safely and soundly. But of course, no one has a crystal ball. I mean, we might have a sense of the climate. We know winter is coming, but what the weather will be like tomorrow, a week from now, a month from now, we cannot be sure. And we cannot depend on crystal balls that this is how the future will be, because that is an illusion. One instead has to ask, when the situation is stable again, what will it look like? And this gives us an intimation of how the ice will crack and the direction in which it will move. Then construct the possible scenarios and say, look, well, how do I diversify risk? If this happens, I'll be here. If that happens, I'll be there. Maybe I can be a Venice. Maybe I should be a Dubrovnik. This intellectual exercise is vital for small countries. We can't change the world, but we can observe clinically what is happening.

You take, for example, the war in Ukraine today, which has created so much anger and hatred in Europe to a point where conversation is sometimes impossible. Mato got me to visit to Trier. I wanted to visit the birthplace of Karl Marx and also to see the Porta Nigra. And then he had someone for lunch. And at lunch, I expressed certain views, and this professor decided not to talk to me. He said, "Your premise is wrong." I was astounded. I thought, we are here for a conversation. If we disagree, let us discuss it. But in his mind, he had written me off because he felt that I had some sympathies for Russia. My views were much more complicated than that. I thought, yes, this is a phase Europe is going through. After Russia invaded Ukraine, there was a mobilization and the re-strengthening of the transatlantic alliance. And so the media, I used to joke that the BBC became the ZBC, because every day the headlines was about Zelensky. I thought, what's happening? But it was a campaign to mobilize large numbers. So now we are stuck in a situation where everyone is exhausted, and we need emotions to come down, and a certain clarity in the mind to be re-established. Then we decide how to move into the future. But whatever that future, Russia is not going to disappear. It's going to be around.

My old friend is a young friend, my old young friend, Alexander Stubb, President of Finland, whom I knew when he was Foreign Minister. A very athletic guy, you know, we're in the same hotel, in the same gym, and he was skipping from machine to machine. I was there resting, watching him, and we struck up a conversation. Trump invited him to the White House because he, he plays good golf and Trump liked him. And then he said, "Except 1944, when Finland deciding that it could not change the future, had a peace agreement with the Soviet Union for which he had to give up Karelia and large chunks of territory and agreed to be 'Finlandized', to be neutral." Now, let's play back. Imagine if Finland had decided to fight to the end and got occupied by the Red Army. Where would Finland be today? So, was that sacrifice made in 1944 worthwhile? Of course, it was. But at that time, it was a tough decision. And for him to say it about Ukraine was very brave. If I prod him, I said, "Alex, I salute your courage in this period of high emotion. You have to live with Russia." And the Americans are pushing for NATO countries to up defense spending to 5%. Let us say they do that. I'm not sure they would, but let's say they do that. After 10 years, when they are more muscular, and the US said, well, this is how NATO should behave, they may say, no, I don't think so. When Europe is better armed, the nature of the transatlantic alliance will change. And Europe, having different interests vis-à-vis China, Russia, Middle East, Africa, will then begin to tell the Americans, wait a minute, we understand your position, but we have a different point of view. Then Europe will gradually emerge as a separate pole, allied to the US, but separate. China will, of course, be a separate pole, as it has always been in human history. And Trump, now faced with the prospect of China playing the trump card of rare earths, we have to find an agreement. And I think between the two, they will reach an agreement not only on TikTok, on magnets, on chips, or many other things. I'm not worried about war breaking out over Taiwan because, I mean, to begin with, in a conventional war over Taiwan, I don't think the US is assured of victory. It's too close to China, and the US aircraft carriers will be will all be at risk. Furthermore, if there's war over Taiwan, TSMC will be destroyed. Then America and Europe will not have the chips that they need for the industries. But China can survive without TSMC, not 100%, but maybe 80%, 70%. So I'm not worried about Taiwan in the shorter term.

And for some time, India thought it could use the US against China. The US thought it could use India against China. But when the Ukraine war happened, India was not going to disavow Russia. And after the air war between India and Pakistan took place, India found out that the US was not going to support India against Pakistan. In fact, Trump invited the Pakistani army chief to the White House, who agreed to nominate Trump for the Nobel Prize. So India stood firm. So yesterday, Trump, realizing that you can't bully India, sent him birthday greetings, and Modi replied, "My friend, thank you for your kind felicitations." So we are seeing now a multipolar world reconfiguring. And for small countries like us, Croatia, Singapore, how do we triangulate our path into the future?

Thank you.

[Applause]

Thank you for this very interesting introduction. And may I take it where you left it? One of the most interesting books I've read in the last several years is this Chinese "Three-Body Problem." And if we look at the world today as a kind of a this three-body mathematical problem, which is one of the last few unsolved problems from physics, when you have three celestial bodies orbiting around one another, it's basically impossible to calculate their routes. From your perspective of Singapore or Southeast Asia, when you look at today, let's say, okay, we talked about China, US, and let's take Europe as a pole here. In Croatia, everybody is obviously very concerned and invested in Europe. How does Europe today look to you? Have we found that strategic sovereignty, or how does it look from an Asian perspective?

Now, when Trump met Putin, they agreed that they should work immediately for a peace agreement without a ceasefire. I don't think it's realistic because when emotions are so high, you will not be able to achieve enough trust to have a peace agreement. What you want is some kind of a ceasefire. Then normalcy can return to the lives of ordinary people. There'll be trade. Maybe like Cyprus, one part of Ukraine can join the EU, but you'll still be tense like the Korean Peninsula or Kashmir, and give time for memories to gradually fade, a new generation coming forth, hearing stories from their parents, but not feeling the same pain. Then you can begin to work on something more enduring. Too much poison, with so many deaths and so much suffering, too much poison has seeped into the ground, into the underground water, and you'll take time to take it out.

So during this period, my own sense is Europe will go through a wrenching period of introspection, when domestic politics will be in upheaval, where the right will gain ascendancy to a point, then a new equilibrium. Is the European construction dead? Has it gone too far? Is Europe condemned to its own history of constant tribal infighting? Or can we find a new way into the future where, respecting individual differences, we find more civilized ways of resolving conflict, where everyone accepts that there's a limit to how much you can push your advantage?

Last year, the Russian ambassador visited me in my office because I made a speech about multipolarity, and he liked it. I told him, I said, if Russia is winning on the front, I hope Russia knows when to stop. I say, in the same way, if Ukraine is winning on the front, and Ukraine had it by that time entered Kursk, I said, I hope Ukraine knows when to stop. Because when we press beyond what is reasonable, there will be a rebound. So between the US and China, between Europe and the US, between China and India, we have to respect limits. That in this world, with the technologies that we now have, we can destroy one another many times over. We need to think beyond our differences to find reasons not to kill one another, to find the basis of a common humanity.

I kind of suspect that the, I'm a Roman Catholic. So let me declare my position. And I know that Croatia is largely Catholic. I think the Catholic Church may play a role. Pope Francis, whom I worked for for seven years, from the outset, he made a special outreach to the Islamic world. The Vatican always had a good relationship with the Shiites in Iran. But the Sunnis were more suspicious. I followed the relationship between Francis and the Grand Imam of Al-Azhar, Al-Tayeb, closely. Pope Francis, when you meet him, he likes to say, "Pray for me." Even a child will say, "Pray for me." But I knew when he met the Grand Imam of Al-Azhar, that if he were to ask him to pray for him, from a theological perspective, the Grand Imam might not say yes. So I watched. It was a little tense. Then the Grand Imam invited the Holy Father to Al-Azhar, and Francis began by "Assalamu alaykum" and ended with the same, "Peace be upon you." And the camera panned, zoomed in on the Grand Imam's face. His eyes glistened. And they met again and again. And finally, about four years ago, they met in Abu Dhabi, where they signed a common statement on our common humanity. And the Grand Imam passed a fatwa that henceforth Christians will not be treated as minorities, but as one of us. And both got the UN to declare February the 4th or 24th as World Humanity Day. Now, if we cannot move our hearts in that direction, and we keep on going back to the, you see this trap and the old thinking, then what you said about the three-body problem and in a multipolar world, it will be even more complicated. There will never be peace. And one day, when we decide to colonize Mars, we'll be carrying weapons, not against Martians, but against one another. Then it'll be a repeat of the European colonization of the New World, which led to new wars.

Europe is currently in the midst of a, defining its future with future process, future relationship with China. If I were to ask you a very simple question, and there's a lot of fear associated with it in various European industries, whether it's the car industries of Germany that are certainly looking at the very competitive, innovative Chinese companies, EV companies. They're looking at Chinese EV cars popping up on the streets of European cities, and they are very uncomfortable about that. So there's a lot of, as I said, fear. Usually, they would say, you know, the typical European word would be "overcapacity." Chinese overcapacity. What do you think China wants in this relationship?

The Western world has been so used to being dominant and patronizing the non-Western world that when China made rapid strides, it found it psychologically difficult to accept. And there was an information campaign to kind of diminish China. The trouble is, when you do that, you deceive your own people. And for too long a period, there was a serious underestimation of what was happening in China. Even during the COVID years, all of us went through a difficult period, and China was very tough. But within China itself, they had closed-loop systems. So the industries continued to function. And during that period, when most of us were at home working, or pretending to work, behind our screens and waiting for the parcels to arrive, who made the stuff in those parcels? They all made in China. But China had COVID. So how is it they were able to make those stuff while we were at home behind our screens? There is a lack of information about China. And suddenly, when the statistics break through the information war, people got angry. And I hear European leaders describing China as an enemy. I said, "Wait a minute. How can China be an enemy to Europe? I mean, China is far away. China, an enemy? China is going to send airplanes and aircraft carriers and fire missiles at Europe? It's not going to happen. China threatens American dominance. That's for sure. China threatens Western dominance. That's for sure. But the period of American dominance and the period of Western dominance was an aberration in world history. In most of world history, the world was diverse. China, however big, was never the dominant power because it's always inward-looking."

So my observation is this, that Europe is still going through a period where the reality stares it in the face, but the emotions still can't accept it, and it is wrenching. So suddenly, European Chinese electric vehicles have arrived, and Mercedes-Benz, Volkswagen, BMW, Renault, they're all in trouble. So the instinct is to protect. I once had an email exchange with Pascal Lamy, whom I worked with on trade. He said, "Europe should do what China did: which is, you want my market, you set up joint ventures." The way Volkswagen was in Tangshan, the way Tesla was in Shanghai. Joint venture talk, we learn, and one day we will compete against you. America should do that too. But in the end, the key is yourself. Because if you are strong and willing to learn and work hard, then that joint venture will improve you. But of course, if a joint venture leads to protection of the market, increased tariffs, and is just a reason for collecting rent, then it will do you no good. So this is not a dilemma, but a challenge which European countries have to address. Point blank. China is good in certain sectors. It cannot be good in all sectors, and Europe has deep strengths. So how do you play it? And the technologies that you want? Well, China, you want my market, you invest here, and you must have a joint venture partner. But it requires clarity and objective thinking in Brussels and in the major European countries.

Let's talk about another pole. In a couple of weeks, I think you're going to the US to give a lecture at Harvard Kennedy School. When you look at the US today as a player, the second Trump administration, how do you read the administration? And what is it that, I ask you, what China wants, what does the US want?

I think the US is in a, going through a very difficult period. We've all followed the murder of Charlie Kirk, and it triggered off a reaction which has engaged the emotions of millions of people. Millions of people, you know. And one wonders what's going to happen. America is, is divided. Can the divisions heal? America has gone through many periods of division in its history. The Civil War, the Vietnam War. So, you, it's common in Asia for people to feel that the US is on the decline. But those of us who work, live in the US, know that the country has an enormous capacity to renew itself and to surprise us. It may be on the decline, but it may not be on the decline. It may be able to recover. We don't know. And you cannot base your future on one outcome or the other. The future must be based upon either possibility, and therefore a diversification of risk. China is rising. For how long will China rise? For the next 20 years? Yes. Beyond that, who knows? So again, anticipate different possibilities and place your bets accordingly. Never pile all your chips on one number.

One thing I'd like to ask you, and by the way, I will soon open the floor for questions from the audience. So there's going to be a person with the microphone, so start thinking about it. But since we have quite a lot of students in this room today, you've had a very illustrious career across public service, private sector, and then also in service of His Holiness Pope Francis. What would be one of the key leadership, let's say, lessons from your career for young people today?

Pope Francis never came to the Zagreb School, but he had a true understanding of management. You know, he said, to achieve good outcomes in management, he said, first, you must meet. You must meet. If you don't meet, how do you know what the problems are? So you must meet. Then, when you meet, you must listen, because if meeting is a monologue by you onto the other, it's not a real meeting. So he said, you must meet, then you must listen. And having listened, then you must debate. There must be a clash of ideas, and for the truths to emerge. Then they said, you must pray, because if you don't pray, you will not find commonality. Then you must decide. Pope Francis's five points of management, which I think the Zagreb School should at some point in time codify into a course. You know, I was in Tongji University two months ago, our partner, for it was called Peace Forum. Sorry, our partner university. So I, I didn't see any senior American. So I asked my Chinese host, I said, "Did you not invite them?" I thought we did, but they didn't want to come because they were afraid of coming. They will be criticized at home. So they rather not come. You must meet, and you must listen before you debate. But if you refuse to meet and you shut your ears, then you're listening only to yourself. Then you don't pray. Then you're in trouble. No, prayer is a moment where you calm yourself and think of win-win outcomes. How do I achieve an agreement where you benefit, you become bigger, I become bigger, and therefore even more reason for us to meet in the future? But if in the encounter, you diminish me, and I diminish you, and we see each other in zero-sum games, then you win, I lose, you die, I live, then it will be an ugly world. And I think all leadership programs, all management programs, is how do we achieve win-win outcomes? You cannot not be realistic. You know, I was attending this meeting in the Vatican, and you know, the Vatican is very political. And after the meeting, we would have a dinner in Rome, cheap dinner, because we were on a budget. But in Rome, even cheap meals are good, and even cheap wines are good, so it's okay. So we were chatting, and we had a secretary, a Scotsman, the world expert on medieval canon law. And he, you know, George, the Pope is cunning. He's unbelievably cunning. So I thought, if you're not cunning, how can you be the Pope in Italy? This complex environment, you must know who's who, what, and decide accordingly. I was not impressed by that remark. A few years later, after a similar dinner, he said, "This man is holy. He's genuinely holy." Now, normally, when you know a person, you are impressed by that person. After a while, you come a bit jaded, a little cynical. That's natural. But it's rare that when you know a person, your view of him improves over time. But so, I, it's not fashionable nowadays to talk about prayer and meditation and so on, but I think it's important. Lee Kuan Yew, before he died, started taking on meditation. He never had a religion, but the person teaching him was a Benedictine monk. So the monk asked him, "Did you have a spiritual experience?" He said, "I'm not religious, but if you call this spiritual, then I suppose it is spiritual." That was his concession to spirituality. Then he was asked, "Is it not good to meditate before negotiations?" You see, I think so. Although it will seem corny to the other party that we pause and meditate before we decide. But even if we can't pray publicly, we can pray silently. And if we all do that, we'll get better outcomes. That's a very...

So a little bit of Machiavelli, a little bit of holiness is what's required for good leadership. Did I understand that correctly?

Yes.

Excellent. Remember these students, please write it down. Do we have any questions from the audience for George?

Yes, His Excellency, the Australian Ambassador to Croatia, here in the first row.

Yes, please.

Thank you. A question, a comment, and a question, if I may. So, one of the key things I tell my staff about diplomacy is never burn bridges, because you never know when someone's going to turn up in your timeline again. And so I just really want to acknowledge Mr. Yö. I was a very young diplomat in Singapore, and he was the Trade Minister at that time, and he was very much a part of building a very strong bilateral relationship with Australia. So, thank you very much for that. A question. When I tell people I'm the Australian Ambassador, one of the common reactions is, "Oh, it's so far away." And, and in a sense, it is. And so part of my job here is to say why my part of the world is important to Croatia. So I just want to enlist your voice, if I could. Why is Singapore? Why is Southeast Asia? Why is the Indo-Pacific important to Croatia?

When we look at Asia, we see three big realities. There's China, where most of its history, a self-sufficient civilization. The people are homogeneous. So when they are organized, they always had the biggest internal market in the world. And the Chinese, if the rest of the world were to disappear, China can continue because it's big enough. Then there's the reality of India, which is noisy, confusing, but which is spiritual, always invaded, never invading, or hardly invading. It will become the world's second biggest economy because of large numbers. Then there's Southeast Asia in between. And Southeast Asia is half Muslim. And Islam will be a growing theme in world history because by 2050, and many of you will be in your prime then, by 2050, half the world's babies will be Muslim, more or less. Half the world's babies. Which means in whatever you do, you have to understand Islam. It's so easy to say that Islam is a problem. That Islam is this and that. The first thing is not to judge, but to understand it in itself, in its history, in its achievements, in its strengths and weaknesses. In Southeast Asia, we are Buddhists, we are Christian, we are Hindu, we are Muslim, and we live with that. And because we have a sense of all the other big powers, I describe it as a place where the mandalas, the aura of China, of India, of the West, overlap to different intensities in each of the 10 countries.

When I was Trade Minister and Foreign Minister, I worked to make Australia a deep partner of ASEAN. Geographically, it's at the tail end of a great archipelago. Its past was Western, but its future is Asian. I never miss a single meeting of the Asia-Australia Institute convened by Steve Fitzgerald and Gareth Evans, because I believe in this passionately. But Australia oscillates between being a member of ASEAN and being the 51st state of the US. It kind of swings back and forth. But I believe the pendulum, in the end, will swing closer towards Asia. And from that perspective, ASEAN and Australia, which means that that whole string of peninsulas and archipelago leading all the way to Antarctica, this will be a very important region in the world, which threatens nobody, but which incorporates everybody. And therefore, in some way, shining a light into the future. That's how I would describe our joint destiny.

Maybe one question for me, and then again back to the audience. But recently, couple of, well, it was just very recent, maybe last week, there was a big parade in Beijing on the occasion of the 80th anniversary of the end of the Sino-Japanese War. From Europe, I think only a couple of leaders were present there, President Vučić of Serbia and Fico from Slovakia. What is your, I mean, how do you read that event? What was the message behind the so meticulously planned and executed parade?

No, in Chinese culture, ritual is important. When China was unified 2,000 years ago, the first emperor ruled by law. It was so tough. People were killed, tortured. And when he died, his son could not hold the empire together. It was too tough. So the next dynasty, the Han Dynasty, which was contemporaneous with Rome, the Republic and the Empire, they adopted protocol, ritual, li, as a basis of organizing large numbers, how you deal with one another, the titles, positioning. Today, if you go to China, before an official photograph, you don't just stand where you wish, you stand where you're supposed to stand, because that photograph will be studied by hundreds of millions of people as to who is standing where and what is its position. This is how China has been governed. So big parades are part of the way China governs a vast realm. Chinese soldiers could march with such astonishing precision. It's no indication of fighting ability. When I was in the armed forces, I trained with the US Army. I visited Israel many times. The Israelis and Americans can't march for nuts, but they can fight. So there's no guarantee that because the Chinese march well, they can fight. What is interesting is not the ritual, which you must expect in China. What is interesting is in the weapons they were displaying, especially the new ones. And this is a poker game, because the Chinese know they're getting stronger. So they don't want the US to miscalculate. So in a poker game, you show some cards. Of course, the stronger cards are hidden. I don't think the Chinese are bluffing. So I think the stronger cards are hidden. In the Pentagon, you must have read the pizza sales went up four-fold. Papa Joe and Dominic, because all those in the working at the Pentagon were busily watching, counting weapons, looking at who's who and what's what, because China was sending a signal. And what is the signal they want to send? You may have secret weapons. I have secret weapons, but these are the cards I open to you. So think carefully before you push me too hard, because you may regret it. I don't want it because it's lose-lose, but think carefully. So that is the true implication. And then the participation of Putin, who's always been a favorite at these Chinese parades. I attended the same parade 10 years ago. I was a member of the Hong Kong delegation as an advisor to the Hong Kong Chief Executive. You wake up early in the morning, security check, it's so tedious. You are freezed. Then you enter the space hours in advance. The sun was beating mercilessly. But you enjoy the parade. So when I watch it on television this time, say, "Well, it's more or less the same parade." But okay, this is this is China. But what are they telling the Americans? It's better we don't fight, because if we fight, you may not win. I may not win. You may lose-lose. The world will lose. That is the real meaning of that parade. And to reinforce it, you have Putin, Kim Jong-un, who came by train, because in this multipolar world, the Western blockade of North Korea and Iran is broken. It's broken. Then a further remove, which most news agencies clip out, because they only show you Trump, show you Xi Jinping, Putin, and Kim. Next was Tokayev from Kazakhstan and Prabowo from Indonesia. Why Tokayev and Prabowo? Because in 2013, Xi Jinping announced the Belt and Road Initiative. He did it in Astana, in August 2013, at Nazarbayev University, and a month later, he did it in Jakarta to the DPR. This Belt and Road is a huge initiative. It's not a plan. It is it is a phase of history where China's economy will power the development of hundreds of millions of people. And to have them all coming out together was a signal to the G7. Please do not, in your decision-making, think that you are the sole master of the universe. We are also here. That was the message.

Thank you very much. Do we have a question from the audience? Uh, there's a student over there in the, and then later on we'll go up. Yeah.

And just briefly introduce yourself.

Yeah. Hello. Oh, I'm Luka, a first-year student. And I would like to ask you, how crucial is it for Singapore to balance its ties with major powers, and what risks does the country face if the balance is lost? Thank you.

Thank you.

So, I cited the example of Dubrovnik and Venice. You're a small power. You are facing pressure from the US, from Japan, from China, from India, from Europe. So you've got to be skillful, you know, try not to be in a room alone with somebody who's much bigger than you. That's a bit dangerous. So always go to an open space where there are big guys all around. Then it's okay. You can be yourself. So our international diplomacy is based upon inclusiveness and friendship with all the major powers. Now, from time to time, one of them will try to bully you, and then you've got to say, okay, you're a big guy, so I move away to where the other big guys are. Then the bully, looking at where you are, then we say, okay, I understand. This is how a small country survives. Now, it's easier for us to do this if the region as a whole is united, which is ASEAN, because all the other ASEAN countries, including the biggest, Indonesia, are small compared to the major powers. And they also do not want to be in a room with nobody else but a major power. So in this common fear, we find unity. Not a European unity, which is a complex legal construction. Ours is a loose unity of camaraderie, of common perceptions. You know, in Europe, you vote all the time. In ASEAN, we never vote. But our approach is, we know we are small. We know we are non-threatening. We turn that into a strength by being friendly to everybody, and therefore providing a platform where people feel that they are okay. They are treated equally. So you're Croatian, you come to Singapore, you feel at home. You're American, you come to Singapore, you feel at home. You're Chinese, you come to Singapore, you feel at home. You're a Martian, you come to Singapore, I think you still feel at home. This is what we try to be.

Thank you very much. Uh, another question up there in the back. Yes, first in the back, and then Tony. Just briefly introduce yourself.

Hi, are you listening to me?

Yes.

Okay. Uh, I'm Alexi from France, and I had a question for you. Uh, have you noticed any, like, differences in terms of international relations, um, about like trades, since COVID? Like, have you seen or observed any deteriorations of international relationships since COVID, um, due to the competition of the re-borning, re-borning from COVID? Thank you. Is it clear?

Yes. The ice started to crack with the end of the Cold War and is still cracking. COVID saw the ice cracking much more quickly, and in some ways, President Trump is putting a blowtorch to the ice to melt it more quickly, fast-forwarding the future. But the general trend, the ice cracking into a world which is multipolar, that is like climate. It is almost a given. But trying to predict the weather day by day, week by week, month by month, requires an attention to detail and careful tactical movements.

Yeah. Thank you very much. Another question over there, Tony.

Thank you. Uh, my name is Antonio. I'm from Croatia. Uh, first, I would like to thank you for being here today because it's a real pleasure to listen to you speaking. And I was not planning to have a question, but the opportunity is too good to miss it today. So, there's a very famous book called "Why Nations Fail" by James Robinson. I'm not sure if you know it, but I guess you do. And the point of the book is that the main thing that makes nations fail or rise is the institutions, which can be inclusive or exclusive. And the author gives many good examples of South and North Korea, and also the Spanish colonies in Latin America. And today, you mentioned a couple of times China. Um, one of the biggest chapters in the book is about China, where the author explains that although the economy is inclusive, and we have seen the growth over the last 50 years in China, because of its exclusive institutions, they predict that in the long term, that China will not see, let's say, the status that the US has today in the world. What are your thoughts on that?

Thank you. That's an excellent question. Governance is a complex business. It's part of what some philosophers describe as what is justice? Why do we have civilization? If we are, if you are alone on an island, or Robinson Crusoe, it's not possible to live. Everything requires a division of labor. If you look at it from an accounting viewpoint, on the left-hand side is assets. That's a division of labor. You apply capital, land, labor, technology, people work together, you create a bigger pie. The right-hand side is how you divide up the pie. Who gets what? Who holds the equity? Who holds the debentures? Who holds the, whatever, you know? Inherent in the right-hand side is a sense of justice. Why should you get more than me? When we work together to bake the pie? Oh, because I'm clever. No, I'm because I have more capital. Yes. But does it mean that you should have this share? You imagine if the billionaires in the world, the masters of the universe, people like Bezos and Zuckerberg and all these big billionaires, if this were in the village, and this was an income inequality within the village, I think the knives will be out because it is not fair. So in a community, how much should the king get? How much should the peasant get? It depends on what is the historical sense of justice between husband and wife, between ministers and citizens, between priests and laity, who should get what. So a society where the distribution is in accord with tradition and the sense of justice, then people say, yes, this is fair. I'm happy. I'm happy, therefore we cooperate, therefore the pie grows bigger. But if many of us are not happy, they say, forget it, I'm leaving the kitchen, then the pie shrinks. In other words, what is right for society depends a lot on its history, its culture, its value system. If the value system tells you that things should be shared in a certain way, but in the reality, you don't, then there's tension. The problem with governance, to reduce it to a struggle between autocracy and democracy, to me is childish, because democracies can be captured by vested interests, the voting system manipulated, and the income inequality getting worse. In the US, the Supreme Court has ruled that there's no limit to Super PAC funding, which means that it's $1,1 vote for election campaigning. Is that fair? If you own the main media, and

I don't, but we have one man, one vote. Is that fair?

In Australia and Singapore, voting is compulsory. You have to vote. Imagine applying it to America. Is that fair? Well, what is your history? What are the expectations? So when we judge China and see that China is autocratic. Yes, it is. Is there democracy in China? There is also democracy because there are levels of governance all the way down. Is China productive sometimes? Is it sometimes unproductive? Many times. And for China, to me, the key is corruption because corruption is rent collection outside the value system. Everyone knows that if you are corrupt, it is wrong. Regardless whether a democracy or an autocracy, you cannot be corrupt. If you, as a duke, get land, get gold from the king, it's okay. But if you steal that land or steal that gold, that's wrong.

So it's common now in the West to see Xi Jinping as a kind of a bad figure, you know, because he's authoritarian, this and that. But to me, Xi Jinping has done something remarkable. He has reversed the tendency towards corruption in China, and he has been so relentless in tackling corruption that sometimes it seizes up the Chinese administrative machinery. But I think it's more important to tackle corruption because corruption causes people to lose faith in the institutions. It's not right, it's not fair. Corruption led to the reformation of the Catholic Church. Corruption brings down monarchies. Corruption brings down democracies. So, to me, good governance has as a precondition corruption, which is a detraction from what is considered fair in the distribution of rewards in the society.

>> In Singapore, you were quite successful in rooting out corruption. How? I mean, how did you do it?

>> It's a constant struggle. We have laws. We pay civil servants good salaries, even ministers. But the temptation to take is always there. So you must have laws. And if you get your hand in a cookie jar, well, you get smacked. And if enough hands are smacked, people will say, "No, don't, don't, don't fool around." You know, if you go to China today, it's very safe. It's very safe. You leave your... Someone did a survey, you know, they left a notebook on the table in Paris, in London, in New York, in Rome, in Beijing to see how many minutes before it disappears, right? It's like a big map test. You know, in China, it gave up. It's not disappearing. Now, if you're cynical, you say, "Yes, it's because there are so many cameras around. No one dares to steal." That's true. But it's also because after a while, people said, "Look, this is the way to behave." The state of public toilets is always interesting. It's very difficult to find a dirty toilet in Japan because in the toilets, there are no cameras, right? So it's between you and the toilet bowl. What is a value system? If you see something which you can put right, do you make it worse or you put it right? For the Japanese, it's internally driven. They feel a conscience. But in many places, no one is looking. Who cares? To me, that is one indicator of the quality of a society, of the quality of the social contract.

>> So look at the toilets next time you think about the country. There's one question over there. Yeah. Uh, Greek colleague.

>> Tony. Okay, quick question.

>> And we'll take a few and then George will answer.

>> So I'm Tony. I'm a fourth-year student, and I just wanted to ask you, do you think that the Croatian government can replicate the success that the Singaporean um housing development board had with providing its citizens with like affordable housing? And like, if I'm not mistaken, 80% of Singaporeans are like homeowners. They own their own homes and apartments.

>> This is a very good question, actually, and this is not just relevant for Croatia but the whole of the European Union at the time. You probably saw that the EU now has, I think, very much in focus of this new commission is the housing issue, that is not present only in Croatia but across the board in European countries. So thank you for the question. Well, uh, there is no secret formula for public housing, and Singapore's public housing structure is, is, is, is easily codified and reduced into a textbook.

>> Open source.

>> Is open source, and we use it as a form of diplomacy to help other people and gain some goodwill for ourselves. So every city in China has studied the public housing system in Singapore, and increasingly India too. It is never a problem of engineering and organization. It's always a problem of politics, and the politics in every country is different. So you ask me about the housing problem in Croatia. I don't understand enough about the policies of Croatia to give you an answer. But if Croatians want to come to Singapore to study a public housing program, to study where we have done right, where we've gone wrong, you're welcome.

>> Thank you very much. Yes. Uh, ME student from Greece. Just briefly introduce yourself. Nice shirt, by the way.

>> It's a great university, great shirt. Uh, thank you, first of all, to have you here. Uh, my name is Mihalis. I come from Greece, and I will, um, address you as I guess a proponent of political pragmatism. And the question is about political pragmatism, as it, I would say, requires a sacrifice to break, uh, sometimes idealistic standards, to take unpopular, um, decisions, and to have the orientation towards the long-term game with a short-term sacrifice. Um, in democracies like that we have in Europe, where, um, politicians have a short-term orientation towards getting reelected, how can these, uh, decisions be properly communicated and justified towards the people so that more democracies can go towards this kind of orientation, long-term orientation? Thank you.

>> Thank you very much. In the, in the Greek city-states where democracy started, they knew one another and they cared for one another and they fought to help each other. Good democracies must have that direct nexus that we all feel that we are part of one community. In the same way, when we read The Wealth of Nations by Adam Smith, and we're celebrating a big anniversary next year, the market works well when you have a sense of community. If you don't have a sense of community, then a liberal democracy, a free market is a way of playing a game to get more for yourself. And in a society which has lost a sense of democracy, whether it's because of politics or because of massive immigration, where people are only interested in themselves, their families, and their friends, then I think democracy breaks down. So for a long time, the Scandinavians, the democracies were direct, it worked well till today in Switzerland, where democracy is at a canton level, there's a strong sense of community. And it doesn't mean in the democracy that you don't think long-term. If you have a sense of community, you will think long-term. But if you don't have a sense of community, then you just grab what you can. So my answer to your question is, look at a society and has it still got a strong sense of community? I think in Croatia, you have, and therefore it should work well for you. But in many countries now, it's just a game.

>> Thank you. Okay. First the lady, and then we'll go there. Yes.

>> Hi. Uh, I'm Holland. I'm coming from Mongolia and also an exchange student here. Um, and...

>> Not an exchange student.

>> Emmy student here. There you go. That's different.

>> Okay, cool. Um...

>> Full-time student.

>> I'm also interested in, I think, like seeing it from more of a business perspective, right? Especially I feel like a lot of the talks are more like political or like policy related, but then when you look at like smaller, you know, like structure like a business, it's like, how do I actually navigate these things such as the global realignment of powers when you're a business and you can't really, like, you know, influence the government? What is your advice on that?

>> If you're a company, you have to be aware of the weather and the climate. Um, otherwise, you will not make the right decisions. You can't change the weather, you can't change the climate, but you must be aware of geopolitical trends. If you're investing in Croatia, you ask yourself, what will Croatia be 10 years from now? Yeah, it's stable. The politics may be interesting, but it's basically stable. So I will make a long-term investment. 200 kilometers away, a similar opportunity arises in Bosnia. You say, 10 years from now, what will Bosnia be? Maybe not so simple. So I better not make 10-year decisions. So if you're entering a geologically active part of the world where the ground shakes and earthquakes are either big or small, then you should take smaller steps and build smaller structures and structures which can flex. But if you're on bedrock, they say, okay, I'll build a 30-year structure, 100-year structure. See, and in any business, you must be aware of the geology, which is geopolitical conditions. Is there going to be stability? Then you make your assessment. It may be that even though it's geologically active, there's such a wonderful opportunity. I go in, I make a deal, I make my pile. The earthquake can take place tomorrow. I'm safe home. It's okay. That's your good luck. But be careful about making long-term investments in such a situation.

>> Thank you. There's a question over there.

>> Thank you. Uh, thank you very much for your interesting and thought-provoking, uh, thoughts about management, political decision-making, diplomacy. I'm from the Croatian Ministry on Foreign Affairs, Director for Policy Planning. Not any longer a student, but hopefully maybe one day again. Um, I was very, uh, struck by your openness talking about prayer as part of your method of your decision-making process, and then you gave an interpretation what prayer would be for you, and you said it's after meeting, listening, discussing, it's calming down and thinking about the best outcome, something like that, you said. So, is prayer for you just an act of reason trying to look for the best outcome, or is it truly a way of trying to listen what God tells you for that moment to do, because that would be the right way of prayer from my Croatian Catholic point of view?

>> Well, Jesus Christ said that all the commandments can be reduced or duality, that to love God and to love men. And if you love man, you love God. You can't love God without loving men, and if you really love men, in effect, you're loving God. So prayer is a period when we see each other as human beings with legitimate interests and seeing how we can help each other to achieve a better joint outcome. And invariably, why should I see you as a brother? You look different. You have a different history. I may not like what you do, but are you still a brother? So it's a struggle. I'm not saying it's easy. What I'm saying is that period when we pray, it's always a struggle. Now, say Russians and Ukraine, as they meet, they talk, they hate each other. Then they pause, they relax, they say, "Okay, what is the history? Where's the future? Maybe we can find a way. Maybe today is too difficult. Let's meet in a month's time, in a year's time." Yeah. So that if we don't even make that effort, there's very little hope. So it's important when negotiators meet to prepare the ground, you know, where you talk about periods when they work together, when they help each other, the things they love in common, the things which bind them. Yes, there are differences, but there's always a... You know, between India and China, whenever they meet, they talk about how India gave Buddhism to China. When Xi Jinping first visited Modi in India, they went to Gujarat, to Ahmedabad, because from there, a Gujarati Buddhist monk in the fifth century went to China. And when Xi Jinping visited, hosted Modi, he was in Xi'an, where the great monk Xuanzang, after spending more than 10 years in India, went back and was given a temple by the emperor to translate the sutras. Xi Jinping hosted Modi there, and later on, they met again in South India, where there's a seaside temple called Mahabalipuram. And on the temple frieze, hundreds of Indian deities, but in the middle, one with a Chinese face. And they believe that in the fourth or fifth century, there was a Chinese monk who went to India, who went to Kanchipuram. And that was probably that person. So before they talk about the border and all the unhappiness, all the unhappinesses, they talk about how in history they have learned from one another. And that calms you down, and you begin to think more positively about each other. That's always worth doing. Try not to meet cold. Begin with dinner. Begin with common friends, and then layer by layer, build up a basis for better negotiations.

>> Thank you. One question over there.

>> Mr. George, very pleased to meet you. My name is Alicia Lenford from Brazil. I would like to ask you how do you see the recent uprising of BRICS and the tentative of dollarization of the world, and how do you think the world will respond to that? Thank you.

>> Thank you very much. You know, in 2008, when you had the GFC, the Global Financial Crisis, the G7 countries did not have the ability to pull the world out from a deep hole. So George Bush convened the first summit. The second summit in 2009 in London, Gordon Brown chaired it, and the 20 countries agreed to coordinate fiscal and monetary policy. China introduced a budget of 4 trillion renminbi to generate global demand. It created enormous distortion to the Chinese economy, but it helped to get the world out from that crisis. With the Ukraine war, the G20 has broken down. It's no longer effective. And the G7, for the Western countries, has recovered its old primacy. But there's a danger that compared to 2008, the G7 today has an even smaller share of the global economy than at that time. And if the world goes into another hole, there's no way the G7 can get us out of it. It requires coordination with many more countries. BRICS is not to counter the G7 because you still need the G7. BRICS is a way, a deterrent to the G7 not to ignore other countries. It is to keep the G7 honest. Russia may want the G7 to be anti-West because of what it's facing, but neither China nor India nor Brazil nor South Africa want it to be an anti-Western organization. For this reason, till today, the G7 has not even got a secretariat. It only has a steering committee because slowly, slowly, let's play it and see how the G7 reacts. If the G7 doesn't learn, then you'll begin to have a small secretariat. Then you'll begin to develop legs and wings. Then it'll be a different world. But for the time being, it is to keep the G7 honest. And on the dollarization of the dollar issue, do you have a view?

>> Well, from a climatic viewpoint, the exorbitant privilege enjoyed by the US dollar is an aberration. It cannot continue forever. Um, so the question is when and how. And the weaponization of the dollar and of the financial system, the confiscation of Russian, uh, Maduro's gold being kept in the Bank of England and given to his opponent, not really, but in name. All this would have convinced wealthy people and governments to say, "Look, be careful about Western financial institutions. The politics may change, and they may take your assets." So I see Western action accelerating the decline of the US dollar. But for the time being, it's very important, and many of us need the US dollar. He said the cookie will crumble. When will it crumble? How will it crumble? You don't know, but you will crumble.

>> Okay. Uh, unfortunately, we're running out of time, so we have time for only one more question from the audience. Anybody, uh, yes, who, yes, okay, stand up.

>> Introduce yourself, please.

>> Good morning. Uh, thank you so much for such an interesting discussion. I'm Adella, and I originally come from New Zealand. And in fact, I see many synergies between Singapore and New Zealand about our diversity and in fact about our innovation. So I wanted to ask a question, I guess, about our place in time right now, where we are, um, we're at Zagreb School of Economics, a hub for innovation. And I guess, what do you think there is to learn about both Singapore and countries like New Zealand, which are such fertile breeding grounds for emerging technologies across food security, agriculture, um, governance, etcetera. What do you think there is to learn, um, in terms of innovation from our nations?

>> We like each other. We're good friends.

>> New Zealand and Singapore. And New Zealand was the first free trade agreement I negotiated as a trade minister. Kindred spirits. And sometimes I think that there should be a condominium of small countries in the world who don't judge others, who don't try to dominate others, but who believe in working for mutual benefit. But unfortunately, we are a bit far apart geographically. So communication is not always the easiest. But nevertheless, on many issues, New Zealand and Singapore in the UN and other international forums, we're on the same side, and there is a very easy, deep, uh, relationship, and we're learning from each other. We wish we had your natural beauty and the open space and the blue skies, um, and you wish you had a better location. So, so I'm sure we can help each other. Yeah. And if we don't spend time trying to judge each other, I think there's almost no limit to the ways in which we can work together for mutual benefit.

>> And on that wonderful note, I really want to, first of all, I want to thank all of you for joining us here today, taking the time out of your busy days to be with us. I want to extend a big thank you to George for visiting again the Zagreb School of Economics and Management for sharing your super interesting insights. I hope it was interesting. I hope it was helpful. So let's give a warm welcome and applause to our dear guest.

>> Thank you very much. Thank you.

>> And, uh, I will see you soon in the same room for a different but exciting, uh, session that we'll be communicating soon. So have a great day and all the best.

>> Thank you. [Music]