Ministry of External Affairs of the Republic of India
Ministry of External Affairs of the Republic of India
10/22/2023 | Press release | Distributed by Public on 10/22/2023 11:28
Remarks by EAM, Dr. S. Jaishankar at the closing plenary session of the Kautilya Forum
Mr NK Singh,
My colleagues on the Dias,
Ladies and Gentlemen,
I welcome the opportunity today to share with you all my thoughts on the state of the world, which this conference apparently thinks is on fire. Now, you know, on fire has many connotations. But in this case I do appreciate that the fire is actually almost literal and that we are meeting in an exceptionally difficult time. Let me begin by thanking the organizers for crystallizing my own thinking for this panel by asking me to reflect on the three interconnected concepts: geopolitics, geoeconomics and the polycrisis.
2. The nature of my business is such that challenges will always be at the centre of the conversation. This is not to say that we don't have outcomes, advancements or even progress. On the contrary, that has been a lot of evidence to show and there is no question, whether we are speaking from the perspective of India or of the world, that we are far better off today than a decade or two or five before. Yet, precisely because every set of solutions throws up a new generation of problems, we constantly dissect, analyze, debate, and sometimes even agonize. The really good people my business however also imagine, anticipate and foresee. So today, we need both the evolutionary approach as well as the audacious thinking, however contradictory that might seem. And the reason for that is the churning on multiple fronts that the world is going through. Not merely simultaneous stresses, but many with a clear potential for structural change. And at the same time, the overwhelming compulsion to ensure stability, or at least mitigate catastrophes, as the process of change unfolds.
3. So let us then contemplate the major stress factors of our times. The most obvious is the devastation caused by the Covid-19 pandemic. Long Covid is not just a medical condition; it is even more an economic and social damage to so many societies whose rectification, to the extent possible, will take enormous effort. It has rolled back SDG progress in many countries and in quite a few cases, revived basic challenges of nutrition, health and gender divides that we were putting behind us. In some cases, the nature and effectiveness of governance came into question. Moreover, as supply chains started fraying, national insecurities emerged sharply and have actually continued to influence our thinking even after the pandemic. And not least, the inequities of globalization were on starkly display during the pandemic. Vaccine apartheid was its most graphic manifestation, when some nations had eight times the stock of their population while others just next door waited for their first vial.
4. A second contributor to volatility is conflict in a globalized world, where the consequences spread far beyond the immediate geography. We have already experienced this in Ukraine. The ripple impact of what is now taking place in the Middle-East is not entirely clear. These particular cases may be the headline news, but in different regions, there are smaller happenings whose impact is not inconsequential. In the domain of violence, there is also the less formal version that is very pervasive. I speak here of terrorism which has long been honed and practiced as a tool of statecraft. The basic takeaway for all of us is that given the seamlessness of our existence, any expectation that conflicts and terrorism can be contained in their impact is not tenable. A big part of this is clearly economic. But do not underestimate the danger of metastasis when it comes to radicalism and extremism. No danger is too distant anymore.
5. Speaking of dangers, it is necessary now to also look at the directly disruptive impact of climate events on the international economy. We have long debated that climate challenges as a trend undermines the well-being of our planet. However, as weather patterns shift, and often catastrophically s, they can affect the nodes of production as well as disrupt the supply chains that emanate from them. Given the increasing frequency of such weather happenings, this is now a risk that we need to build into our calculations.
6. The workings of the global economy has itself added to the concerning side of the ledger. The last few years have witnessed rising debt, often resulting from a combination of imprudent choices, unwise borrowings and opaque projects. Market volatility has been difficult for smaller economies with a narrow trade basket to handle. Those highly exposed to tourism or remittances have experienced the consequences of slowdowns very strongly. International financial institutions have not been able to respond adequately, whether due to paucity of resources or lack of priority.
7. Underlying all these concerns are, however, structural deficiencies about which we cannot really be in denial. Since the Second World War ended and de-colonization proceeded, we have actually seen a broadening of economic production and consumption across geographies. Obviously, this was bound to be uneven and non-linear but overall, few would dispute that the trendline was positive. This was especially so if one looked at it generation by generation, while of course making provision for some anomalies. As globalization in the incarnation that we know currently got underway, much stronger economic improvements became visible. Entire countries, in fact entire regions saw dramatic reductions in poverty and impressive improvements in living standards. We, in India have experienced this in our own lifetimes.
8. However, what has been inadequately recognised is that this whole exercise has had both winners and losers. They can be individual countries or broader regions. They can also be constituencies within societies. And they can even be those who have been bypassed altogether. Assessments about benefits and losses may be absolute, relative or comparative; but any which way, they eventually translated into politics. In the international discourse, for two and a half decades, the conversation was largely dominated by globalization advocates who were clearly themselves beneficiaries. They portrayed those unhappy as outliers, if not worse. The mantra of 'opening up' became so powerful that its social consequences was completely dismissed. And then, one day, all of this has caught up with us. The last decade has therefore witnessed what were read as political earthquakes. If they took us off guard, it was because we didn't listen the earlier tremors for so long. My intention is not so much to dwell on the past as to caution that this is a continuing, possibly even intensifying process. Addressing the over-concentration of production has become a strategic necessity today. And recognizing the concentration of dissatisfaction is equally a political imperative. Those charged with responsibilities for international economic negotiations cannot disregard either.
9. Part of the problem that we are all grappling with is the reality that a substantial segment of the global economy is no longer market-based. Not just that, also the realization that large market shares, either as producer or consumer, can be leveraged for non-economic goods. As the knowledge economy advanced and the embedding of data became more pervasive, concerns of privacy, reliability and security have all fused together. This has not happened overnight and the truth is that the world sought to keep international economics to business as usual, as long as possible. As the last few years have brought home, and Covid has clearly been a wake-up call in this regard, that is no longer tenable. We are rapidly entering the era of Artificial Intelligence and must think beyond Westphalian economics and factor in the political sociology of production. This means for all of us now a sharp focus on how to create more resilient and reliable supply chains. It also mandates a greater emphasis on trust and transparency in all facets of the digital domain.
10. Important and admittedly difficult as both endeavors are, they are still only the building blocks of a larger re-globalization that must be attempted for our common good. We are all aware of the animated debate in the last years about decoupling, including its merits and its viability. Given the enormity and intensity of globalized production today, the viability issue itself sets to rest the question of merit. The conversation has therefore shifted to derisking, where the focus is narrower and the goal presumably more achievable. Much of this discourse takes place against the larger backdrop of big power strategic competition. And therefore, does not do justice to the interests of the rest of the world. Even if we put politics aside, there is a powerful case for derisking simply because the current levels of economic concentration are just too high to be relied upon in difficult times. After all, we saw that during the Covid pandemic. Additional engines of growth will not only provide multiple options but also expand the zones of prosperity, and of demand. The democratization of globalization would help grow its support constituency and accelerate the economic rebalancing that has come such a long way already. It would work in tandem with our larger objectives on SDG and green growth. We may therefore think of it as a kind of portfolio management rather than imbue the entire process with unnecessary geopolitical connotations.
11. Apart from our collective commitment to enhancing global economic stability, it is also necessary that we take into account the imperatives of strategic autonomy. The Covid experience essentially challenged many beliefs and assumptions about the working of the international community. National behavior, with rare exceptions, turned out to be far more self-centered than we thought we were. Our first discovery was in the domain of health, starting with masks, PPEs, medicines and finally with vaccines. Certain regions understandably were deeply anxious when it came to ensuring food availability. Logistics and travel emerged as issues of contention and outcomes were more an assertion of capability rather than an expression of fairness. The larger implications of the Ukraine conflict had now actually added new layers of insecurity. When it came to the 3Fs of fuel, food and fertilizer, the power of the market was used to substitute, divert and deny. In interesting ways, we are also in the process of creating new vulnerabilities. Fossil fuel exposure, for example, may end up replaced by renewable technology concentration. Even as we deal with current and future worries, the fact is that most of us now are planning to go the extra mile just to be sure. Globalization has to take into account that 'just in time' is today being hedged by 'just in case'.
12. Another change that should be recognized is in the dispersal of power and the reordering of the global hierarchy. The most powerful nations are comparatively not as powerful as they used to be in the past. Middle powers have come into their own. At least in their particular region, they sometimes have more clout and definitely more skin in the game than those distant. We have seen this clearly in the Gulf and are now seeing it in the Middle-East. In different ways, it is happening too in Asia, Africa and Latin America. We, in South Asia, are also more aware that the solutions have to come from within. Whether it is the First Responder operations in the Indian Ocean, Covid-related assistance or the economic support that we gave to Sri Lanka, India is clearly adjusting to this emerging architecture.
13. Having presented this larger picture to all of you, allow me to share some examples of how India is responding to evolving geopolitics, geoeconomics and the polycrisis. I do this through five examples:
i. By refocusing the G20 on growth and development and highlighting the distress of the Global South. And this we did by also sponsoring the permanent membership of the African Union.
ii. By itself participating more intensively in global value chains. Make in India, and Make for the world, as well as Production Linked Incentives are notable features.
iii. Investing in critical and emerging technologies, including through transnational partnerships. A more vigorous indian presence in the semiconductor domain is one expression; the roll out of its own 5G stack another.
iv. Reimagining and redoing our global commitments to make them contemporary. The Quad stands out in the Indo-Pacific and I2U2 and IMEEC in the Middle-East. Even established relationships need refreshing; I have just been discussing that in the last few days in Singapore. We are looking at global hubs, more mutually beneficial FTAs, deeper engagement with Africa, greater development partnerships, currently with 78 countries and preparing for a larger footprint, and
v. Getting ready for the global workplace through stronger education, more skills, enhanced HR and mobility understandings. We believe that the combination of a knowledge economy, digital existence and demographic shifts provide an extraordinary opportunity.
14. Once again, I thank you for the opportunity to present my views and look forward to the discussion.
My colleagues on the Dias,
Ladies and Gentlemen,
I welcome the opportunity today to share with you all my thoughts on the state of the world, which this conference apparently thinks is on fire. Now, you know, on fire has many connotations. But in this case I do appreciate that the fire is actually almost literal and that we are meeting in an exceptionally difficult time. Let me begin by thanking the organizers for crystallizing my own thinking for this panel by asking me to reflect on the three interconnected concepts: geopolitics, geoeconomics and the polycrisis.
2. The nature of my business is such that challenges will always be at the centre of the conversation. This is not to say that we don't have outcomes, advancements or even progress. On the contrary, that has been a lot of evidence to show and there is no question, whether we are speaking from the perspective of India or of the world, that we are far better off today than a decade or two or five before. Yet, precisely because every set of solutions throws up a new generation of problems, we constantly dissect, analyze, debate, and sometimes even agonize. The really good people my business however also imagine, anticipate and foresee. So today, we need both the evolutionary approach as well as the audacious thinking, however contradictory that might seem. And the reason for that is the churning on multiple fronts that the world is going through. Not merely simultaneous stresses, but many with a clear potential for structural change. And at the same time, the overwhelming compulsion to ensure stability, or at least mitigate catastrophes, as the process of change unfolds.
3. So let us then contemplate the major stress factors of our times. The most obvious is the devastation caused by the Covid-19 pandemic. Long Covid is not just a medical condition; it is even more an economic and social damage to so many societies whose rectification, to the extent possible, will take enormous effort. It has rolled back SDG progress in many countries and in quite a few cases, revived basic challenges of nutrition, health and gender divides that we were putting behind us. In some cases, the nature and effectiveness of governance came into question. Moreover, as supply chains started fraying, national insecurities emerged sharply and have actually continued to influence our thinking even after the pandemic. And not least, the inequities of globalization were on starkly display during the pandemic. Vaccine apartheid was its most graphic manifestation, when some nations had eight times the stock of their population while others just next door waited for their first vial.
4. A second contributor to volatility is conflict in a globalized world, where the consequences spread far beyond the immediate geography. We have already experienced this in Ukraine. The ripple impact of what is now taking place in the Middle-East is not entirely clear. These particular cases may be the headline news, but in different regions, there are smaller happenings whose impact is not inconsequential. In the domain of violence, there is also the less formal version that is very pervasive. I speak here of terrorism which has long been honed and practiced as a tool of statecraft. The basic takeaway for all of us is that given the seamlessness of our existence, any expectation that conflicts and terrorism can be contained in their impact is not tenable. A big part of this is clearly economic. But do not underestimate the danger of metastasis when it comes to radicalism and extremism. No danger is too distant anymore.
5. Speaking of dangers, it is necessary now to also look at the directly disruptive impact of climate events on the international economy. We have long debated that climate challenges as a trend undermines the well-being of our planet. However, as weather patterns shift, and often catastrophically s, they can affect the nodes of production as well as disrupt the supply chains that emanate from them. Given the increasing frequency of such weather happenings, this is now a risk that we need to build into our calculations.
6. The workings of the global economy has itself added to the concerning side of the ledger. The last few years have witnessed rising debt, often resulting from a combination of imprudent choices, unwise borrowings and opaque projects. Market volatility has been difficult for smaller economies with a narrow trade basket to handle. Those highly exposed to tourism or remittances have experienced the consequences of slowdowns very strongly. International financial institutions have not been able to respond adequately, whether due to paucity of resources or lack of priority.
7. Underlying all these concerns are, however, structural deficiencies about which we cannot really be in denial. Since the Second World War ended and de-colonization proceeded, we have actually seen a broadening of economic production and consumption across geographies. Obviously, this was bound to be uneven and non-linear but overall, few would dispute that the trendline was positive. This was especially so if one looked at it generation by generation, while of course making provision for some anomalies. As globalization in the incarnation that we know currently got underway, much stronger economic improvements became visible. Entire countries, in fact entire regions saw dramatic reductions in poverty and impressive improvements in living standards. We, in India have experienced this in our own lifetimes.
8. However, what has been inadequately recognised is that this whole exercise has had both winners and losers. They can be individual countries or broader regions. They can also be constituencies within societies. And they can even be those who have been bypassed altogether. Assessments about benefits and losses may be absolute, relative or comparative; but any which way, they eventually translated into politics. In the international discourse, for two and a half decades, the conversation was largely dominated by globalization advocates who were clearly themselves beneficiaries. They portrayed those unhappy as outliers, if not worse. The mantra of 'opening up' became so powerful that its social consequences was completely dismissed. And then, one day, all of this has caught up with us. The last decade has therefore witnessed what were read as political earthquakes. If they took us off guard, it was because we didn't listen the earlier tremors for so long. My intention is not so much to dwell on the past as to caution that this is a continuing, possibly even intensifying process. Addressing the over-concentration of production has become a strategic necessity today. And recognizing the concentration of dissatisfaction is equally a political imperative. Those charged with responsibilities for international economic negotiations cannot disregard either.
9. Part of the problem that we are all grappling with is the reality that a substantial segment of the global economy is no longer market-based. Not just that, also the realization that large market shares, either as producer or consumer, can be leveraged for non-economic goods. As the knowledge economy advanced and the embedding of data became more pervasive, concerns of privacy, reliability and security have all fused together. This has not happened overnight and the truth is that the world sought to keep international economics to business as usual, as long as possible. As the last few years have brought home, and Covid has clearly been a wake-up call in this regard, that is no longer tenable. We are rapidly entering the era of Artificial Intelligence and must think beyond Westphalian economics and factor in the political sociology of production. This means for all of us now a sharp focus on how to create more resilient and reliable supply chains. It also mandates a greater emphasis on trust and transparency in all facets of the digital domain.
10. Important and admittedly difficult as both endeavors are, they are still only the building blocks of a larger re-globalization that must be attempted for our common good. We are all aware of the animated debate in the last years about decoupling, including its merits and its viability. Given the enormity and intensity of globalized production today, the viability issue itself sets to rest the question of merit. The conversation has therefore shifted to derisking, where the focus is narrower and the goal presumably more achievable. Much of this discourse takes place against the larger backdrop of big power strategic competition. And therefore, does not do justice to the interests of the rest of the world. Even if we put politics aside, there is a powerful case for derisking simply because the current levels of economic concentration are just too high to be relied upon in difficult times. After all, we saw that during the Covid pandemic. Additional engines of growth will not only provide multiple options but also expand the zones of prosperity, and of demand. The democratization of globalization would help grow its support constituency and accelerate the economic rebalancing that has come such a long way already. It would work in tandem with our larger objectives on SDG and green growth. We may therefore think of it as a kind of portfolio management rather than imbue the entire process with unnecessary geopolitical connotations.
11. Apart from our collective commitment to enhancing global economic stability, it is also necessary that we take into account the imperatives of strategic autonomy. The Covid experience essentially challenged many beliefs and assumptions about the working of the international community. National behavior, with rare exceptions, turned out to be far more self-centered than we thought we were. Our first discovery was in the domain of health, starting with masks, PPEs, medicines and finally with vaccines. Certain regions understandably were deeply anxious when it came to ensuring food availability. Logistics and travel emerged as issues of contention and outcomes were more an assertion of capability rather than an expression of fairness. The larger implications of the Ukraine conflict had now actually added new layers of insecurity. When it came to the 3Fs of fuel, food and fertilizer, the power of the market was used to substitute, divert and deny. In interesting ways, we are also in the process of creating new vulnerabilities. Fossil fuel exposure, for example, may end up replaced by renewable technology concentration. Even as we deal with current and future worries, the fact is that most of us now are planning to go the extra mile just to be sure. Globalization has to take into account that 'just in time' is today being hedged by 'just in case'.
12. Another change that should be recognized is in the dispersal of power and the reordering of the global hierarchy. The most powerful nations are comparatively not as powerful as they used to be in the past. Middle powers have come into their own. At least in their particular region, they sometimes have more clout and definitely more skin in the game than those distant. We have seen this clearly in the Gulf and are now seeing it in the Middle-East. In different ways, it is happening too in Asia, Africa and Latin America. We, in South Asia, are also more aware that the solutions have to come from within. Whether it is the First Responder operations in the Indian Ocean, Covid-related assistance or the economic support that we gave to Sri Lanka, India is clearly adjusting to this emerging architecture.
13. Having presented this larger picture to all of you, allow me to share some examples of how India is responding to evolving geopolitics, geoeconomics and the polycrisis. I do this through five examples:
i. By refocusing the G20 on growth and development and highlighting the distress of the Global South. And this we did by also sponsoring the permanent membership of the African Union.
ii. By itself participating more intensively in global value chains. Make in India, and Make for the world, as well as Production Linked Incentives are notable features.
iii. Investing in critical and emerging technologies, including through transnational partnerships. A more vigorous indian presence in the semiconductor domain is one expression; the roll out of its own 5G stack another.
iv. Reimagining and redoing our global commitments to make them contemporary. The Quad stands out in the Indo-Pacific and I2U2 and IMEEC in the Middle-East. Even established relationships need refreshing; I have just been discussing that in the last few days in Singapore. We are looking at global hubs, more mutually beneficial FTAs, deeper engagement with Africa, greater development partnerships, currently with 78 countries and preparing for a larger footprint, and
v. Getting ready for the global workplace through stronger education, more skills, enhanced HR and mobility understandings. We believe that the combination of a knowledge economy, digital existence and demographic shifts provide an extraordinary opportunity.
14. Once again, I thank you for the opportunity to present my views and look forward to the discussion.