The world must relearn lessons of geopolitics forgotten during an “abnormal” period of relative peace, according to Bilahari Kausikan, Former Permanent Secretary, Ministry of Foreign Affairs of Singapore.
Speaking to ANZ’s Cameron Mitchell at the 2022 ANZ Finance & Treasury Forum in Singapore, Kausikan said competition between major global powers was a natural state of affairs, despite being largely missing from the post-Cold-War order.
The global community has been left unprepared for such a reality as these skills were left to “atrophy”, he said.
“I think we will have to relearn those things we forgot - whether you are a corporate or whether you are a government,” Kausikan said. “Because that abnormal period when geopolitical competition seemed to have faded away is over and I don't think will be repeated.
“Competition amongst major powers is normal, and we are now back to normalcy. And this is a long-term structural feature of international relations.”
You can watch an edited version of the conversation at the forum on video below.
Kausikan said the key drivers of the current uncertainty were the conflict in Europe and increasing strategic competition between the United States of America and China. The latter in particular is far from approaching “some magic solution,” he said.
“You can try to stabilise the competition and sometimes it will be at a high intensity, sometimes at a lower intensity,” Kausikan said. “But that is the new reality.
“It is therefore very important we understand the nature of the competition precisely. And I don't think we have.”
The ANZ Finance & Treasury Forum is back in 2022 – and back in person. Held in Singapore on October 20, the forum will bring together some of the region’s most compelling thought leaders to discuss how organisations are making the future count together on the path to net-zero carbon.
As the threat to natural capital and biodiversity becomes ever clearer in a post-pandemic world, the forum will explore key topics of global importance across geopolitics, sustainability, and the technology that will help bring your business into the future.
ANZ Institutional Insights will provide coverage and insights into the key themes from the forum in the lead up to the event - and beyond.
All sessions from the forum are now available on demand. Please click HERE to register if you did not attend and would like to experience the event in full.
The academic and diplomat said it was wrong to frame the US-China competition as a new ‘cold war’, given the inexorable links between the two economies. The last major cold war featured a US and Soviet Union “connected only very tangentially at their margins”, Kausikan said.
“By contrast, the US and China are both vital components of a single global system, and they are connected to each other - and to the rest of us - by what I see as a historically new phenomenon,” he said.
That would be “supply chains of a complexity [and] scope that I don't see having existed in previous periods of history,” according to Kausikan.
While supply chains have existed as long as trade has, nothing has come close to the complexities linking modern China with the US, he said – and it’s unlikely the benefits of any split would ever outweigh the costs.
“I don't think the single system, despite the strategic competition, is likely to completely bifurcate into two systems,” Kausikan said. “It's just too costly for the principals.”
This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.