The New Connected World Order By Parag Khanna
Converging Volatilities Economic Environmental ● Ballooning debt ● Climate change ● Banking crises ● Eco-system stress ● Protectionism ● Water scarcity ● Inequality ● Food security Complexity, Unpredictability, Risk “Black Elephants”: Brexit, Trump, Currency Wars, Conflict Escalation Technological Geopolitical ● Disrupted business models ● Mideast collapse ● Labor automation ● Terrorism’s global reach ● WMD proliferation ● China/Asia tensions ● Cyber-war ● Western populism and unrest Are we getting better at pricing risk, ringfencing volatility and mitigating long tails?
The Global Connectivity Revolution Skeletal System Transportation Highways, railways, bridges, tunnels, airports, seaports Vascular System Energy Oil & gas pipelines and refineries, electricity grids and power plants Nervous System Communication Internet cables, satellites, data The Infrastructural Matrix: Exoskeleton on the Planetary Body centers
Geotechnology Drives Global Change Mackinder, Luttwak … Three reinforcing dimensions of power Balance of innovation drives balance of power Strategic industrial policy to capture value chains Democracy versus authoritarianism old versus new
“Who Rules the Supply Chain, Rules the World” Beyond Orwell’s 1984 : Warring or fusing mega-continents? War b/w systems (capitalism versus communism) Tug-of-war within the collective supply chain matrix Mackinder Modified: War over Territory War over Connectivity TPP vs RCEP/FTAAP Global trade is additive, not substitutive Trade/investment/supply chain nexus
China: Top Trading Partner for Twice as Many Countries as US Dyads of leverage as well as dependence Trade to investment to alliance?
From War or Tug-of-War: The New Geopolitics China vs. Taiwan: Missiles or Mutual US vs. China: Air-Sea Battle or TPP Colonization China vs. ASEAN: Paracel Islands or RCEP China vs. Japan: Senkaku/Diaoyu or North vs. South Korea: Nukes or Supply Chains Softbank/Alibaba China vs. India: Trade or Tibet West vs. Iran: Nukes or Great Emerging Market India vs. Pakistan: Fundos or MFN West vs. Russia: Crimea or Gas Pipelines
Infrastructure as Authority: Reshaping Cross-Border Relations Baltic Union: Shared infrastructure and governance services European energy grid: Integrated gas and nuclear power Europe-Russia: From singular dependence to reverse flows
East Meets West: Eurasia’s Iron Silk Roads AIIB and the Compression of Eurasian Space: China Becomes a Two-Ocean Power “Iron Silk Roads” win the “New Great Game”
The New Iron Age: Infrastructure as Extended Sovereignty Connectivity Fills the Power Vacuum Infrastructure alliances: An equal global public good (that can’t be deterred) 20th Century: NATO / Security 21st Century: AIIB / Infrastructure EU thinks like EPC not DoD: Connectivity across Eurasia vs culture across Atlantic Turkey: Member of both NATO and SCO?
Competitive Connectivity: The Currency of Power Grand Strategy: Avoid encirclement; control infrastructure, trade routes, market access overland and east of Malacca Strait Post-ideological Geopolitics: Supply chain complementarities > ideologies; Merkel: “No eternal guarantee of EU- US close cooperation” Realism > moralism: Engage and invest for leverage in a post-sanctions world Less connectivity, more belligerence: Russia, Iran, North Korea
The Geopolitical Marketplace: Connectivity and Resilience Complementary Global Goods: Europe Africa American security and Chinese infrastructure America the Global Utility: Security, energy, finance, technology, language South North From Hierarchy to Symmetry: Escape America America the “Thucydides Trap” through regionalism and reciprocity From Grand Strategy to Global Strategic Thought: Mutual connectivity, Middle Asia East Co-creation/Co-evolution
Global Evolution: From Connectivity to Resilience No more chokepoints Competitive connectivity builds pathways for supply to meet demand Ring-fencing volatility: Ukraine, Iraq, Libya, South China Sea Abundance and Stability From “peak oil” to “gas glut” US oil sales to China Toward Antifragility ( Taleb ) War is an event; networking building is a process
THANK YOU! paragkhanna@gmail.com @paragkhanna www.facebook.com/DrParagKhan na
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