Transcription
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. And furthermore, if there's war over Taiwan, TSMC will be destroyed. Then America and Europe will not have the chips that they need 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.
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.
The Western world has has been so used to being dominant and of 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.
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. So, without further ado, please join me in giving a warm welcome to Mr. Giorgio and Dean Matonyaoro.
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. Matto got me to visit to Trier. I wanted to visit the birthplace of Karl Marx. And also to see the Porta. 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 conversation. If we disagree, let us discuss it." But, in this man's head, he'd 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 Zelenskyy. 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 calm down. And a certain clarity in the mind to be reestablished. 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, well, he's a young friend. My old young friend, Alexander Stubb, president of Finland, who 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 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 the Ukraine was very brave. So, I I said to 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, "Hey, 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 always been in human history. And Trump, now faced with the prospect of China playing the Trump card of rare earths, will have to find an agreement. And I think between the two, they will reach an agreement not only on TikTok, on magnets, on chips, on 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. And furthermore, if there's war over Taiwan, TSMC will be destroyed. Then America and Europe will not have the chips that they need that they need for the industries. But China can survive without the SMC. 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 a one of the last few unsolved problems from physics. When you have three celestial bodies uh orbiting around one another, it's basically impossible to 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 software? How does it look from Asian perspective?
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. A betrayal, maybe like Cyprus, one part of Ukraine can join the EU, but you 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 it will take time to take it out. So, during this period, my own sense is Europe will go through a wrenching period of introspection. Where 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.
[snorts] 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 said, "In the same way, if Ukraine is winning on the front, and Ukraine had at that time entered course." 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, the technologies that we now have, we can destroy one another many times over. We 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 is is is largely Catholic. I think the Catholic Church may play a role. Pope Francis, whom I worked for for 7 years, from the outset he made a special outreach to the Islamic world. The Vatican always had a good relationship with the Shiite in Iran. But the Sunnis were more suspicious. I followed the relationship between Francis and the Grand Imam of Al-Azhar, Ahmad 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 "As-salamu alaykum." And ended with the same "Peace upon you." And the camera pan zoomed in on the Grand Imam's face. His eyes glistened. And they met again and again. And finally, about 4 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 keep on going back to the to see that this trap and the old thinking, then what you said about three-body problem and in the multiple hour will be even more complicated. There there never be peace. And one day when we decide to colonize us, we'll be carrying weapons, not against Martians, but against one another. Then you'll be repeat of the European colonization of the new world, which led to new wars.
Uh Europe is currently in the midst of a uh defining its future with future process, future relationship with China. And if I were to ask you a very simple question, and there's a lot of fear associated with it uh in various European industries, whether it's the the car industries of Germany that are certainly looking at the very competitive innovative Chinese company EV companies. Uh they're looking at Chinese EV cars popping up on the streets of European cities, and they're very uncomfortable about that. Uh so there's a lot of as I said, fear. Usually they would say, you know, the typical European uh word would be over China's overcapacity. Uh what do what do you think China wants uh in in this relationship?
The Western world has has been so used to being dominant and of 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 are closed-loop systems, so the industries continue 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're 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 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. I mean, 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.
>> [snorts] >> And it's wrenching. So, suddenly Europe 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 a email exchange with Pascal Lamy, whom I work 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 Changchun, the way Tesla was in Shanghai. Joint venture. Talk. We learn. And one day we'll 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 is will improve you. But of course, if a joint venture leads to protection of the market, increased tariffs, and it's 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? In 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.
Uh let's talk about another poll. 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 US today as a player, the second Trump administration, how do you read uh the administration and and what is it that the I asked you what China wants, what does US want? I think the US is in the is going through a very difficult period. We've all followed the the murder of Charlie Kirk and
>> [clears throat] >> 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 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 beyond 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.
Uh one thing I'd like to ask you, and by the way, I I I will soon open the floor for questions from the audience. So, uh there's going to be a person with the microphone, so start thinking about it. But, uh since we have quite a lot of students uh in this room today, uh you've had a very illustrious career across public service, private sector, and then also uh in service of uh His Holiness Pope Francis. What would be one of the key leadership, uh let's say, lessons from your career for young people today?
Pope [clears throat] Francis never came to the Zagreb school.
>> [snorts] >> But, but he he has a sure 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 problem is? You must meet. Then when you meet, you must 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 he said, "You must pray. Because if you don't pray, you will not find commonality. Then you must decide." Pope Francis has five points of management, which I think the Zagreb school should at some point in time codify. codify into a into a course, you know.
I was in Tsinghua University 2 months ago. Our partner. For it was called Peace Forum. So, I'm sorry. Our partner university. 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?" They said, "We did, but they didn't want to come because they were afraid of coming. They would be criticized at home. So, they'd 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.
>> [laughter] >> Then you're in trouble. So, 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 you see each other in zero-sum games, that you win, I lose. You die, I live. Then you'll be a ugly war. And I think all leadership programs, all management programs, is how do we achieve win-win outcomes? You cannot not be realistic. And I was attending this meeting in the Vatican, and you know, 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, the meals are good. And even cheap, the 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 said, "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's what, and decide accordingly. I was not impressed by that remark. A few years later, after a similar dinner, he said, "But this man is holy. He's genuinely holy." Now, normally when you know a person, you're impressed by that person. After a while, you can be jaded and listen to go, "This is not true." 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 things are 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's spiritual." That was his concession to spirituality. Then he was asked, "Is it not good to meditate before negotiations?" He said, "I think so. Although you will seem corny to the other party that we pause and meditate before we decide. But even if you can't pray publicly, we can pray silently. And if we all do that, we get better outcomes." That's very So, a little bit of Machiavelli, a little bit of holiness uh is what's required for for good leadership. Did I understand that correctly? Yes.
>> [laughter] >> Excellent. Uh remember this students, please write it down. Do we have any questions uh from the audience for for George? Uh yes, His Excellency Australian Ambassador to Croatia here in the first row. Yes, please. Thank you. Uh a question, uh a comment and a question if I may. Uh so, one of the key things I tell my staff about diplomacy is uh 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 uh Mr. Oh. Uh I was a very young diplomat in Singapore, and he was the trade minister at that time. And um he was he was very much a part of building uh a very strong bilateral relationship with Australia. So, thank you very much for that. Uh a question. Uh when I tell people I'm the Australian Ambassador, one of the common reactions is, "Oh, it's so far away." And and in in a sense, it is. Uh 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. Uh why is Singapore, why is Southeast Asia, why is uh the Indo-Pacific important to Croatia?
When we look at Asia, we see three big realities. There's China. We have been 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 the 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're Buddhist, we're 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 is 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 believed 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 the 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 a couple of Well, it was just very recently, maybe last week, there was a big parade in Beijing on the occasion of 80 year of end of the uh Sino-Japanese War. Uh from Europe, I think only a couple of leaders were present there, President Vučić of Serbia and Fico from uh Slovakia. Uh it seemed What What is your I mean, how do you read that event? What was the message behind the 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 the next dynasty, the Han dynasty, which was contemporary with Rome, the republic and the and the and the empire, they they adopted protocol, ritual, li as the basis of organizing large numbers. How you deal with one another, the title, 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 his position. This is how China has been governed. So, big parades are part of the way China governs a vast realm. That Chinese do this good march research, astonishing precision, is 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, that they they can fight. What is interesting is not the ritual, which you must expect in China. What's 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 their stronger cards are hidden. In the Pentagon, you must have read the pizza sales went up for for for Papa Joe and Dominic because all those in the book in the Pentagon were busily watching, counting weapons, looking at who's who and what's what. Because China was sending a signal. And what's 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, there is a 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 is so tedious. You are fresh. Then you enter the space hours in advance. The sun was beating mercilessly. But you enjoy the parade. So, when I watched on television this time, I said, "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. It'll be lose-lose. The world will lose. That's the real meaning of that parade. And to reinforce it, you have Putin, Kim Jong-un, who 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, uh show you Xi Jinping, Putin, and Kim Jong-un. 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 in 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. Uh 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, I'm Luca, first-year student, and I would like to ask you how crucial is it for Singapore to balance the ties with major powers, and what risk does the country face if the balance is lost? Thank you.
Thank you, Luca. So, I cited example of the profaning and Venice. You're a small power. You You are facing pressure from the US, from Japan, from China, from India, from Europe. So, [snorts] 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 the big guys are around. Then it's okay. Then 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. Then, you 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, they 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 nine 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 uh a complex legal construction. Ours is a loose unity of camaraderie, of common perceptions. 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 are 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 Malaysian, 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.
I'm Uh are you listening to me? Yes.
>> Okay. I'm Alexi from France and I had a question for you. Have you noticed any like differences in term of international relations um about like trades since COVID. Like have you seen or observed any deteriorations of international relationship since COVID due to the competition of the reborn of reborning from COVID? Thank you. Is it clear? Yes.
The The ice started to crack with the end of the Cold War. And it's 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, it 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.
Thank you very much. Another question over there, Tony. Thank you. My name is Antonio. I'm from Croatia. 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 um the author gives many good examples of South and North North Korea, and also the Spanish colonies in Latin America. And today you mentioned a couple of times China. And one of the biggest chapters in the book is about China, where author explains that although the economy is inclusive and we have seen the growth over last 50 years in China, because of its exclusive institutions, they predict that in a long-term the China will not see um let's say the status that US has today in the world. What are your thoughts on that? Thank you.
That's an excellent question. Governance is complex business. It's part of what some philosophers uh describe as what is justice. Why do we have civilization? If we are if if you are alone on an island, a Robinson Crusoe, this 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. There'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 cleverer. 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 the masters of the universe, people like uh Bezos and Zuckerberg and all these big billionaires. If this were in the village and this was the income inequality within the village, I think the knives would 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, then 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 had ruled that there's no limit to super PAC funding. Which means there is $1 one vote for election campaigning. Is that fair? If you own the main media and I don't but we are 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 the 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's wrong. Regardless whether you're a democracy or an autocracy, you cannot be corrupt. If you as a duke gets land, gets 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, sitting ping 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. That is 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 say, "No, don't 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 a 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? This is a is like a Big Mac test, you know. In China, he gave up. He says, "It's [laughter] not disappearing." Now, if you are 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 say, "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 your 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 one question over there, yeah. Uh Greek colleague. Tony. Okay, quick question. And we'll take a few and then George will answer concisely.
>> 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 their own homes and apartments.
This is a very good question actually and this is not just relevant for Croatia, but whole of European Union at the time. You probably saw that EU now has a I think uh very much in focus of this new commission is the the housing issue that is uh not present only in Croatia, but across the board in European countries. So, thank you for the question. Well, uh 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. It's open source. And we use it as a form of diplomacy to help other people and gain some good will 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 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 have 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 uh first of all to uh to have you here. Uh my name is Mihalis. I come from uh Greece. And I will um address you as I guess a proponent of a political pragmatism. And the question is about political pragmatism. As it I would say it requires uh sacrifice to break uh sometimes idealistic uh standards, to to take unpopular uh opin- um decisions, and to have the orientation towards the long-term game with a short-term sacrifice. Um in democracies uh like that we have in uh Europe, where um politicians have a short-term orientation towards getting reelected, how can these uh decisions be properly communicated and uh justified towards the people so that they more democracies can go towards this kind of uh orientation, long-term orientation. Thank you.
Thank you very much. I- 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 its sense of democracy, whether it's because of politics or because of massive in-migration, 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, their democracies were direct. It worked well. Till today in Switzerland, where democracy is at the 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 the 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. Uh okay, first the lady and then we'll go there. Yes. I I'm Khulan. I'm coming from Mongolia, also an exchange student here. Um and
>> Not an exchange student. MA student here. There you go.
>> different.
>> Uh 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 do you especially like you being, you know, a former trade uh minister, like 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 km away, a similar opportunity arises in Bosnia. You say, "Mm, 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 you should take smaller steps and build smaller structures in structures which can flex. But if you're on bedrock, they say, "Okay, I'll build a 30-year structure, a 100-year structure." 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
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. There's a good luck. But be careful about making long-term investments in such a situation. Thank you.
There's a question over there. Anton.
Thank you. Uh thank you very much for your interesting and thought-provoking uh thoughts about management and political decision-making diplomacy. I'm from the Croatian Ministry of Foreign 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 to reality. That to love God and to love man. If you love man, you love God. You can love God without loving man. And if you really love man, in effect, you're loving God. So, prayer is a period when we see each other as human beings with legitimate interest 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 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 is always a struggle.
Now, say Russians and Ukrainians, they meet, they talk, they hate each other. Then they pause and relax and say, "Okay, what was the history? What is 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 start.
You know, between uh 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 5th century went to China. And when Xi Jinping visited hosted Modi, it 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 freeze, hundreds of Indian deities, But in the middle, one with a Chinese face. And they believed that in the 4th or 5th 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 comes to them. 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 Alexandre Lanfer, I'm from Brazil. I would like to ask you how do you see the recent uprising of BRICS and the tentative of dedollarization 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 the 20 countries agreed to coordinate fiscal and monetary policy. China uh introduced a budget, 4 trillion RMB. And then global demand. You bring the enormous distortion in the Chinese economy. But it helped to get the world out from the crisis. With the Ukraine war, the G 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 is even a 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's 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 it'll begin to have a small secretariat. Then it'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 dollar de-dollarization or dollar issue, do you have a a view? Well, from a climatic viewpoint, the the the exorbitant privilege enjoyed by US dollar is 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 even to Maduro's gold being kept in the 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 parties may change and they may take your your 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. You see, the cookie will crumble. When will it crumble? How will it crumble? You don't know, but you will crumble.
Okay. Unfortunately, we're running out of time, so we have time for only one more question from the audience. Anybody? Uh Yes, who is Okay, please stand up. Introduce yourself, please.
Good morning. And thank you so much for such an interesting discussion. I'm Adela 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 and security, agriculture, um governance, etc. What do you think there is to learn um in terms of innovation from our nations?
We we like each other. We're good friends. [laughter] New Zealand and Singapore. And New Zealand was the first free trade agreement I negotiated as a trade minister. Um kindred spirit. 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 bit far apart geographically, so it's 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 relationship. And we are learning from each other. We wish we had your natural beauty and 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 [snorts] 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 I hope it was helpful. So, let's give a warm uh welcome and applause to our dear guest. >> [applause] >> Thank you very much. Thank you.
Come on, ship it out. You are wrong when they tell my auntie should have to change the general. Just say tongue weight and then jump make a whole move forward. They shouldn't do more than make a whole ship be bad. Can I just say you should make a whole move forward with the Taiwan agenda? You don't have to change that. So, yeah, we're putting on your hand or Taiwan agenda. So, we should shout out and wait make a whole move forward with the Taiwan agenda. I don't know what you call your Taiwan agenda. Make a whole ship move forward with the Taiwan agenda. Can we just say you should make a whole ship move forward with the Taiwan agenda? So, yeah, make a whole ship move forward with the Taiwan agenda. You shouldn't do more than make a whole ship move forward with the Taiwan agenda. Make a whole ship move forward with Make a whole ship Make a whole ship move forward with the Taiwan Make a whole ship move forward with the Taiwan Make a whole ship move forward World War Taiwan Strait Crisis World War World War II World War World War II World War World War II World War World War II World War World War II World War II World World War II World War World War II World War World War II World War World War II World War II World War World War II World War II World War II World War II World War II World War World War II World War II World World War II World War II World War II World War II World War World War II World War II World War World War II World War II World War World War II World War II World War World War II World War II World War II World War World War II World War World War II World War II World War World War II World World War II World World War II World War II World War World War II World War II World War World War II World War II World War II World War II World World War II World War II World War II World War II World War II World War World War II World War II World World War II World War I will not mince words. Western countries have been slandering Chinese leaders in every possible way. dictatorial, and even emperors. But I have to ask you a question. Can slander help you continue to improve? Can it make your society more efficient and advanced? Ideological prejudice will only blind Europe. They can't see China, and they can't see themselves. The consequence is that Europe's decisions or strategies are all wrong. Okay, that's all for this episode. It's just a simple comment. See you next time.