 Cole. Hi, everyone. We're going to start. Sorry, we're running a few minutes late. Welcome to this session on the alleged transition from a rules-based to a deal-based global order. I'm Jonathan Tepperman. I'm the editor-in-chief of Foreign Policy Magazine. We might as well call this session what happens when the art of the deal becomes the charter for a new global era. The big question that we're tackling today really breaks down, I think, into three separate questions. The first is, have we truly entered a new reality, one defined more by deals than by rules? Two, if yes, what does that actually mean? And three, what can we actually do about it? Now, in the spirit of the new, more egalitarian Davos, I thought I would start the conversation by asking a question of all of you. So I want a show of hands to see who agrees with the basic idea that we really are witnessing a sort of ethical change, a paradigm shift, into a new era in which ad hoc and bilateral agreements, coalitions of the willing, what have you, are replacing the traditional institutions, conventions, and all the stuff that's bound the world together for the last 70 years. So let's take a vote. Who supports that proposition? Looks like the nays have it. What's interesting is the idea has very much become a consensus among at least pundits like me in the last year. And to be fair, there's plenty of evidence for that view from the Trump administration's America First policy to its incessant criticism of international organizations and agreements, to its preference for bilateral dealmaking, and so on. But what makes it more interesting, I think, is it's not just Washington's fault, because we've also seen Europe, which in its handling of the migration crisis, specifically its deal with Turkey, arguably violated the UN Convention on Refugees. There's the Brexit vote. There was Russia's violation of Ukraine sovereignty. There's the failure of the international community to do much of anything on Syria or on the Rohingya crisis, despite nice-sounding international nostrums like R2P. There's China's illegal island building in the South China Sea and so on. And yet, I think despite all of these developments, one could still argue that we make a very different argument, which is that the post-World War II international system, the supposed decline of which is now being bemoaned, never actually worked that well. Or at least it always had these major flaws and gaps that required all these ad hoc deals or unilateral actions by great powers to make the system work. And I think you could even argue that given the way that power has changed and diffused in recent years with an ever-growing group of global corporations, non-state actors, and citizen groups taking on roles that were once only played by nation states. And given that so many of these groups have very different values, that the idea today of trying to hold together an international consensus on major issues may be kind of pointless. And so perhaps ad hoc arrangements are the best that we can hope for. Now, trying to wrap your head around all of this can feel bewildering. I know it is for me. Fortunately, we have a fantastic panel here to help sort it out. And what makes this group, I think, so especially exciting is that they represent very different sectors and interests, former government officials, academics, and the corporate world. Let me introduce them starting from my far left. We have Ambassador John Negra Ponte for those of you who don't know if there are any of you. The ambassador is one of these superstar diplomats that the US government has used for about four decades to solve the kind of problems and take on the kind of jobs that nobody else in government wants to do. These have included serving as US envoy to the UN, to Iraq, to Mexico, to Honduras, to the Philippines. He was also the first director of national intelligence under President George W. Bush. To his right is Kishore Mamubani, who is Singapore's John Negra Ponte, or maybe we should say that Negra Ponte is- Wow, that's the biggest company in the entire country. Is Kishore Mamubani. Kishore's also held a long, long chain of diplomatic posts and these days he runs the Lee Kuan Yew School of Public Policy at Singapore National University. Next we have, we're very lucky to have Andrew Loveris, chairman and CEO of Dow Chemical, and then finally we have Nairi Woods right next to me, who's a world-renowned economist in dean of Oxford Levatnik School of Government. So to my questions, and I'm gonna ask some and then I'm gonna open it up to all of you. Now, Ambassador Negra Ponte, I'm gonna ask you a question, but I'm gonna give you a pass. So if you don't wanna take this on, just signal it to me and I'll move on to my next one for you. It's clear to everybody that you're not exactly one of President Trump's best friends. That said, because you're the token Republican on our panel, I wanna put you in the hot seat and ask you, if you can tell us a bit about what you think Trump's America first foreign policy actually means in this context, and how do you understand the administration's aversion to multilateral accords like NAFTA, TPPWTO, especially given that these have seemed to serve America's interests so well in years past. Okay, so I'm happy to take at least the first step down the path. And thank you for asking it. I also maybe later on can comment on your fundamental thesis, but I think Mr. Trump's foreign policy is work in progress, and I don't think we should necessarily rush to judgment about it. I remember in President Reagan's time, and don't forget he had six different national security advisors and confusion reigned in the White House for the first several years that he was in office. And yet historians are already marking him down as one of the great presidents in American history. I'm not making a prediction here. I'm just saying that it's not always that easy to tell when you're living through the events. Second point I would say, and maybe this goes to the question of, is there more disruption or is there more continuity in Mr. Trump's foreign policy? And I would say that's just a fundamental tension in the conduct of our foreign relations at this moment. I think there's probably more continuity than Mr. Trump himself would have liked or expected. I think he tried to disrupt a number of things and found that, well, may not be that hard to do. There are all sorts of forces that work constraining and restrating you. And I have particular reference to some of the rather pejorative comments he made about alliances both during and after the election with respect to Japan and Korea. Well, maybe they ought to get nuclear weapons so they're better able to defend themselves and then not willing to reaffirm our commitment to NATO and the attack on one is attack on all under Article 5. He's pulled back from that. He's reaffirmed it. So I think there's real tension. He's disrupted some areas, but not others. And I think there are a couple of them that are really just very much up in the air. And I'll finish on this note. The one that bothers me the most, having been ambassador to Mexico and been there for that negotiation. And I think that would be a terrible pity if the disruptive view prevailed. And I think at the moment we're in some doubt as to what the outcome of the NAFTA discussions are gonna be. Nairi, I wanna turn to you next. Have we actually lost anything? Or was the international system always more aspirational than actual? Well, look, cooperation among governments is always going to be difficult. And so what do you need to make that cooperation work? You need a forum that governments trust to go to and the United States after the war has done that. It's brought countries together. You need some rules that countries agree to be bound by. You need some monitoring and enforcement to back up those rules. That's what you need to help governments do something very difficult, which is to cooperate with one another. But so when we ask this, I agree with Ambassador Negroponte's point that every US president comes to power with a certain bluster about setting a new America first strategy, even if they don't use those words. And within a year or so, it becomes very tempered. Reagan made a hugely anti-United Nations speech before he came to power and then a remarkably 180 degree turn a year later. But I think that doesn't mean that we shouldn't focus on a new kind of diplomacy. And to me, it's not deal-making or cooperation. It's how you go about understanding how to make a deal. Now in 1980, an American political scientist, Robert Axelrod, ran a tournament. He said, look, to cooperate, you don't just need what I just said about rules, et cetera. You need a strategy. So what's the strategy of cooperation which is most likely to help you win? So think about this in your private life, right? Because when they ran this huge competition, 200 entries, computer programmers, game theorists from all over the world, remarkably, the strategy that won was by Father Simplest and it was called TIT for TAT. And what that means is providing the first move is a nice move. It's something that is generous and gives something to the other side. The strategy of reciprocating behavior always ends up with the best result. And that's important to consider because there were all these other strategies saying, hey, but try and make a move on the other side that puts you in an advantageous position. Envy the other side's outcome. Try to underplay the agreement. Try to be sneaky. Try to be clever. And none of those strategies worked to get a better outcome than pure first move cooperate TIT for TAT after that. So why do I say that? In the Blavatnik School of Government at Oxford, we have 120 current and future leaders sitting in our classroom from 60 different countries. Some of them have got a lot of experience. We have them play a very simple cooperation game with Xs and Ys. Now the absolute winning strategy is for each group simply to cooperate and agree all to put down an X or all to put down a Y and stack up maximal money. But nine out of 10 of the students doing that, nine out of 10 of the leaders doing that, instead try right from the beginning to undercut their opponents, to beat them, to win more. They calculate that if they get a deduction of that amount and they gain on that. And it's fascinating for me because three weeks after the exercise, students are still coming up to me going, we lost, like how could we have lost, right? So when we talk about the deal, it's not just the deal or cooperation. It's how we make deals. And the simple rule that comes out of this huge Axelrod tournament is be nice, don't be envious and TIT for TAT cooperate. And that's how you get the best deal, whether you're doing it deal by deal or whether you're doing it within a cooperative institution. So is the implication that even if we are moving to a more deals based order, it could be a benign and mutually advantageous one. So it's not something necessarily to be feared. Well, you see, I think what is signaled from the top by the United States president, who is a communicator in chief for the world, is actually very important. Because first it sends a signal about whether the first move the United States is gonna make is gonna be a nice move or an undercutting move. And that's very important for the reason I just spelt out. Otherwise you end up in a downward spiral where you always, all parties always end up with less. And second, the United States does need and has helped provide a stability and predictability about global rules. Lots of countries have not liked those rules, but at least there's been a certain stability and predictability about them. And I think the tweeting president disrupts that. The fact that the United States courts are using the president's tweets as evidence on some of the immigration cases is telling us that what's destabilizing here is communications which seem to undercut the stability and predictability that the United States has conferred on global order. And that's why other countries and other regions are starting to just organize themselves and start building sub-orders and regional orders so that they don't have to be beholden to the unpredictability of Washington DC. Kishor, bring us the view from Asia. First of all, on whether from your vantage point in Singapore, you see a paradigm shift underway. And if you do, whether, A, this is actually going to play to the advantage of China, which will step in as Xi Jinping promised to do last year here at Davos, to play the role of the global guarantor, the world trading system if the United States won't. Whether the old system, in fact, disadvantaged Asia, many emerging markets there and elsewhere. And so if we are seeing a shift, maybe it's not such a bad thing, but it doesn't mean the decline of rules per se, but a shift to a more, or differently balanced rules-based system. I think I'm going to be the good news guy. Because everyone is thinking that the world is falling apart. The good news for you is that the world is not falling apart. And certainly from, if you live in Asia, you don't understand all this pessimism that is sort of draining on you from the West, because from Asia's point of view, the last three decades of Asian history have been the best decades of Asian history in 300 years. So what is that a cry for? And there's also a recognition that a lot of Asia's rise has been due to the rules-based order. And then this, frankly, at the end of the day, the rules-based order that the United States and the West created after World War II was a gift to the rest of the world. And certainly, if you take, for example, United Nations, is the UN working? There's a very simple test of whether UN is working. Look at the long-term trend of conflicts. Is it going like this? Or is it going like this? Just read Stephen Pinker from Harvard. Long-term trend of conflicts is going like this. What is the long-term trend for trade? Like this. What is the long-term trend for global poverty reduction? Like this. What is the long-term trend for life expectancy? Like this. I mean, all the long-term trends tell you that the human condition, actually, has never been better. And from the point of view of the two big winners, certainly China and India, they recognize that it is this rules-based order that has got them to where they are today. And that's why it's very striking that Davos has become the forum where both Xi Jinping and a few minutes ago, Narendra Modi, made it very clear that they want to see the continuation of this cooperative world order, which has actually worked very well for large segments of humanity. And as you know, the timing of Xi Jinping's visit to Davos was very interesting. He saw that with Donald Trump getting elected, pushing an America-first policy, someone had to step up the plate, say, hey, let's not give up the rules-based order. And that was the trust of his speech last year. This morning, you just heard Narendra Modi said, very, very clearly and very categorically, India believes that we live in one world and we have to cooperate in this one world. He said, treat Mother Earth as your mother and treat her with respect and so on and so forth, form a trustee-ship. So all these sort of commitment to a better world is there. But of course, I must emphasize as someone like John, and we were colleagues together in the UN Security Council. We weren't playing it as an exercise either. That's good to hear. And you were also saying it better, right? And the world has never been a perfect place in any dimension. And the rules-based order has never been a perfect rules-based order. And even in the rules-based order, you had to make exceptions and make deals. I'm going to give you a classic example of everyone thinking about trade issues. People forget in the 1980s, the big devil in the trade world was not China, but Japan. And so at the end of the day, when Japanese car exports became too many, you formed a deal. You created a deal. Slow down, guys, slow down. You'll take this many cars and the rest please manufacture in the US and so on and so forth. So in theory, it was a violation of the open markets and so on and so forth. In practice, it was a recognition of a political reality that you have to live with. And so in the real world, as long as the, I would say, for most of the spectrum, the rules-based order works. And I would say even roughly 70 to 80 percent the rules-based order works. And then there are the exceptions where you make deals and you say, okay, I cannot play by the rules. I've got to suspend the rules here and so on and so forth. But the final point I'm going to make, of course, is an important one. At the same time, the China and India also want to see some changes to the rules-based order. And I'll give a very simple, easy example for you to remember. We still have a rule that says that to become the head of the IMF, you must be a European. To become the head of the World Bank, you must be American. And that rule hasn't changed in 50, 60 years. Now, please, there are 3.5 billion Asians. They're reasonably smart people. Surely one Asian can run the IMF or one Asian can run the World Bank. That time has come. So those sorts of things you have to change. Create more space for China and India. And in the process, if you create more space for China, India and ASEAN or so, then they become the principal stakeholders in this rules-based order, which was a gift from the West to the world. But we want to be part of it. Let me just push you on one point you made about India and China. It's true that there's been this remarkable shift in rhetoric from the leaders of both countries in the last few years on their role in sustaining the international order. You know, if you had gone to China just five years ago, as I did, and asked people about the international system, you traditionally, you generally heard two things, which is, one, the system is very unfair to China. The deck is stacked against us. But when you then asked, okay, is China ready to play the role of a global guarantor, they would say, no, no, no, no. We're a poor country. We can't be expected to do it. Now we've had the rhetorical shift, but are China and India, do you think, ready to start putting their money where their mouth is to actually prop up the system if the United States does indeed withdraw? Well, I'm glad you said you were there five years ago because the lot has changed in the last five years. And to give you the most dramatic example, and this is actually, I'm very surprised that China and India did this, okay? Technically, there's absolutely no reason for China and India to take on obligation to deal with climate change because they can say, climate change is not just due to flows of greenhouse gas emissions, but to the stock of greenhouse gas emissions that the West put in the atmosphere since the Industrial Revolution. So you pay for the stock, we pay for the flows. That could have been a zero-sum game within China, India, and the West. Which was an argument they made. But the fact that China and India change significantly, and the fact that both China and India have now agreed to take on significant responsibilities in climate change, is actually quite surprising to me. Well, that's a result of the recognition that, hey, we have to do something too. Andrew, President Trump has defended and justified his approach to international affairs by arguing that the conduct of interstate relations should be done more like business. And that business is about deals not about rules. And that business leaders can in fact get all this work done in a more efficient fashion. Do you think actually his characterization is right? And that the world of politics has a lot to learn from the way things are done in the world of business? So the qualifier the Ambassador put in on in terms of interpreting President Trump from a geopolitical point of view, I'd also put on from a business point of view, President Trump's entire regime is family business. It's not corporations. And it's certainly not operating internationally. So he's in a steep learn as you go type environment. And the good news about this presidency and his key members, he's got an incredible team. This team is very open to learning from the business community on what makes business tick on a multinational international level. So that also from an optimistic point of view, and I've certainly been part of many, many sessions where I now see a game changing attitude in terms of how global American based corporations can look to their government to play a role in conversations that were they were previously absent in. Now I call that deals of a different type. And if I wanna dial back to post World War II, I've spent 42 years at my institution. So most of the last 70 years, the 42 years I've spent in the global world order. I wanna remind everyone when I started the world, the whole globe had a lot of pink on it. That was the British Empire. We evolved from that. And then suddenly we've got... You're not that old. Well, I'm just letting everyone know that what is a global order? It's changed three or four times just in my career lifetime. Even the term multinational, what does that mean versus global? There was a period of time where every presentation made in every boardroom, you had the USA, maybe North America, you had Europe, and then you had ROW, rest of world. And that's how we categorized the China's and the India's. And so I just wanna remind everyone that the lens here, if you're looking at lens, this new global order of ours is not all that old. And frankly, the topic that hasn't come up yet that we in the business community understand very well is the commoditization of everything, except for human talent. And so with the digital world arriving, the commoditization of information, the downside risks of cyber, this has created a whole new type of competitor out there. And when you throw on top of that, that we're operating in jurisdictions which aren't necessarily capitalist democracies where the rules are not coming from the heart of capitalism, then frankly, global multinationals or global companies like ours are the best equipped to help answer the question of whether this is rules-based or deals-based. I would venture to say to you, we're at a tipping point that the world is moving to this incredible world where we're all connected and we have to work together. We have to master this incredible speed of life that we're all living in and use it without official intelligence arriving, use it so the benefit of all humankind. Yet, our political systems of which people here on this panel are much better equipped than I am to comment on when you look at capitalist democracies, it's created income inequality that has led to populism that's led to this pushback. And so this collision, this collision of these forces is causing all of us to back away and say, well, just a second, is the market model that the US created post World War II where the US is the market for all and everyone can benefit from that market and the jobs get created everywhere else. Whether the jobs get created in the United States or not is a consequence, it's not a need. We've just upended that with this election where I was chairman of the business council not long ago where I had chaired a meeting and I said, we all in the room, 100 CEOs of companies like Dow, may we'll have to answer the question for the first time that we've never had to answer. Are we a global company based in the United States or are we an American company that operates globally? We've never had to think about that before and why not? Well, because we allocate capital to wherever capital gives us the biggest return. We haven't had to think about what the jobs are in the US versus Mexico or China. I mean, we create jobs, period. Two thirds of Dow when I started was in the United States in terms of revenue and assets. Two thirds of Dow is now outside the United States in terms of revenue and assets thanks to the growth of these wonderful economies on that model. Are we really moving from a rules-based order to a deal-based, I don't think that's the question. I think we're moving from a rules-based order to a new set of rules-based order and I think we're all gonna be part of formulating what those rules are like. Well, so that was the question I was gonna ask which is as we move through this paradigm shift that you're discussing and multinational corporations face these challenges, how are they best addressed? Is it on an individual corporate by corporate basis or do you see a new collaborative model emerging where these answers can be addressed cooperatively? Well, right now, we're being forced into our various tribes. So we're being forced into our nation's capitals, whatever our company is, and we're being forced to answer from a tribal point of view. I venture to say to you that question you just asked has not been answered and global business communities actually starting to address it through connecting our various business councils and roundtables, because we are all connected and companies like Dow where everywhere, so we're members of every council, but a state or an enterprise in China or an emerging company out of India only belongs to their various entities. We aren't even connected in the business community yet on your question. I do think it is an unanswered question. What's the institution that can help broker this new world-based order, that rules-based order that we're talking about? I'll finish with this one statement. I have now witnessed a paradigm shift in terms of negotiation with foreign states, whereas on a global American company operating in some foreign jurisdiction before had no leverage, we suddenly have leverage and I didn't ask for it because people are now worried about the United States. People are worried that if we don't give an American company a shot, my company won't get a shot in the U.S. It's had an unintended consequence, which is actually amazing. And maybe that at the end of the day is President Trump's strategy. Can I pick up on two things that Andrew has said that I think are very powerful and important, because there are two things that are changing international cooperation very quickly. And one is, as you say, the kind of populist politics where Kishore's right that so many things are going up and that's how the world looks at Davos, but there's a whole group of white middle-class Americans for whom their life expectancy is actually now turning down. There are a large portion of Americans saying, why has it become as dangerous to give birth on average in America as it is in some developing countries? So that story of up, up, up is not working and we're seeing whether it's in the Philippines or Brazil or the United States or Britain or Germany or France, a huge backlash to that, a sense put in caricature that the establishment have been ruling for themselves and for their own benefit and leaving out the mass of people and therefore they're not trusted as legitimate. And so let's go to the new populists who are promising salvation of a new kind. And that makes international cooperation, I think, more difficult. But there's another force that Andrew touched on that's also happening and that's the digital revolution, the revolution in data, the commoditization of data, which is separating governments very quickly. There are some governments for whom this is an instrument of complete control of the population because they have access to all of that data, they can know what time their citizens are getting up, where they bought their coffee, which bus they took to work. Literally, if you're using WeChat for every transaction you're making or if the government is managing to digitize every transaction of its citizens and it has access to all of that information, suddenly the power of the government becomes almost absolute. We're almost in a kind of Orwellian state. Whereas for others, we're seeing the digitization create in Estonia a kind of different utopia of no government at all but just a platform. And somewhere in the middle there, our government's struggling to work out what a digital transformation means. And that's gonna make international cooperation, it's gonna take us back to the basics of what makes international cooperation work. We can't have this cozy 1990s vision of every country in the world heading in some way towards democracy and free market policies, which was very much the paradigm we had. We've now got to deal in a world where countries actually have very different models and I would say even more than ever, we need forums for those countries to come up with rules which they agree on and to use for tax strategies positively to cooperate. Right, and you're making a very interesting point about an important one about inequality, which is not just that it's expanding within countries, but by some measures it's expanding between countries. Now, in a GDP sense we're, I think, still seeing convergence, but we're seeing major differences opening up on the digital divide, for example. Not just countries where people have broad-based digital access, but on how technology is used in countries, some countries versus the way it's used in others, right? Which will have vast implications both for the citizens of the countries and how their countries perform against others. We're already more than halfway through the session, so I wanna open questions up to the floor if we have any. If not, we still have plenty to talk about, but we'd love to bring you into the conversation if anyone has anything to ask or add. Yeah, please, Ishan. And if you just mind, stand up and identify yourself, please. Hi there, Ishan, the ruler of the Washington Post. Thank you so much for your remarks. Just a quick question to pin on to the discussion. Does the fact or do aspirations toward democracy have any more of a role in conceiving the new world order that is emerging? Is this another divide between... I mean, the obvious exception to the democratization of the world is China. And I can safely say that China is not gonna become a democracy in the next 10, 20, maybe 30 years. There was a time, I would say, when the sort of more thoughtful intellectuals in China actually thought that as we grow, as we progress, of course, our natural destination in one form or another is to also become a democracy. But something has changed in China. And now I think clearly the attraction of democracy has gone down and the problems of the democratic world, clearly, you know, the populist backlash, the emergence of Donald Trump has made them aware that actually, if you open up the, I would say, the political environment in China, the likelihood of a populist nationalist figure emerging in China is far greater than anywhere else because there's a lot of burning nationalism, as you know, in China. And sometimes I say that actually President Xi Jinping is actually delivering a global public good by restraining nationalism in China and making sure that China is more or less trying to play by the rules as much as possible. But if you had a democracy in China, you actually end up with a much stronger, more populist, more nationalist leader. But this doesn't mean that the long-term direction changes. I think most societies in most parts of the world still obviously, that's very clear, aspire to become democracies because most of us really want to live in societies where we have a say in the political outcome of that society. That long-term trend is true, but it's no longer a simple straight line. There'll be lots of detours now in history. And just to add one little important qualification to where we are in terms of the point of history, there was also a time, I would say, let's say in the 70s and 80s, where you said essentially there was modernization, men, westernization. And they were sort of, they were hand in glove together. Now clearly what you're seeing in Asia, you're seeing modernization without westernization. And this is not just true of China, but I mean, as you know, if you watch Narendra Modi, watch how he dresses, what language he speaks. You know, any other Prime Minister of India before now would have spoken in English in Davos. He said, no, I will speak in Hindi. So that distinction between modernization and westernization is growing by leaps and bounds in Asia. And therefore, the difficult thing for the West now is that you've got to deal with modernized people who are not westernized. And they may look like you, speak like you, but they don't think like you. So how do you deal with them? That's a new challenge. But I think just to your point about Xi Jinping wanting to sort of keep the lid on things so that they can cooperate with the international community. All you have to do is look at what they have at stake, the size of their economy, the degree of its integration with the global economic system, the level of exports. I think that is one of the fundamental points that we have in common. And I think the reverse, if you think about Russia and one of the reasons it seems to feel like it can behave more disruptively, it doesn't have as much stake in the international system. Its level of trade with the United States is one-tenth, order of magnitude less than what we have with China. And who's being disruptive of the global world order? I would say Russia more so than China. Kishore, please, Nae. No, I just think coming back to your question about the aspiration to democracy. To me, I guess we're seeing the results of democracies being very complacent, not just about their values, but about representative democracy itself, where in every region of the world, people are looking at a government that's supposed to be representative and saying, I can't see anyone in government that looks like me, that sounds like me, and that's offering me something better. Which is Kishore's point about Prime Minister Narendra Modi. And I think there are really powerful lessons that democracies are now gonna have to learn in order to innovate. They've got to become more representative, right? Otherwise, they simply won't be permitted to rule. They've got to think about the distribution issues that Andrew was mentioning. They've got to, we've got to move from this very restrained pragmatic politics where we think about politics as restraints on government to a politics which responds much more to represent and to mobilize and to give people hope. And so I think the aspiration to democracy is there in every part of the world. And it's in the process of being reinvented. And the exciting thing is that we're seeing, and I see this in my day job every day at the School of Government, we're seeing brilliant leaders from the private sector, from the not-for-profit sector, and from the public sector say, I now want to serve. I wanna serve my community. I want to serve the public interest. I want to be part of this exciting moment rebuilding a politics that answers to communities. One of the interesting and potentially disturbing implications of the failure of representative democracy is not just the rise in populism, but as a recent cube poll shows, a burgeoning of support throughout Western and emerging democracies for democracy by direct plebiscite for referendums instead of representative democracy. And you don't have to look far, and you can just point to Brexit to acknowledge, recognize the challenges and the threats that those kind of plebiscites which sound, ultimately democratic in theory, but can actually be extremely problematic in practice. Yeah, and in Switzerland is an interesting place to talk about that, of course, because Switzerland is one of the countries which is arguably the most democratic in the world in the sense that it's a country ruled by plebiscite and referendum, and the Swiss will argue that it prevents them from doing a lot of things, but the state nonetheless functions fairly well, but whether that could work so well in countries like the United States or Britain or France or Germany is not at all clear. I mean, I think the thing we have to be aware of is in any leadership role, whether it's in the private sector or in the public sector in government, we should be wary of leaders who try to shrug off responsibility, and my problem with direct democracy, and the reason why Mrs. Thatcher called it the tool of demagogues and dictators, is that it's a way of avoiding taking responsibility for decisions. Now, the Swiss government is quite special. It took a referendum and then decided that was not in the national interest, and that's giving, that's the role the representative government should play, because government decisions are really difficult. One professor at UCLA worked out that the 51 balloted issues that the citizens of California were asked in the last presidential election, like this is direct democracy, that it would take a senior professor from Berkeley a couple of years to get enough information to vote on just a dozen of those issues, right? That's why over the last 2000 years, human beings have created representative democracy, because every decision a government makes creates winners and losers and trade-offs, and you need information. So we appoint representatives to work with specialists to weigh out those trade-offs and make decisions. So beware of the politician that says, ooh, I don't wanna take responsibility for the outcome of this decision, so let me use a referendum or a plebiscite so that I can blame it on the people. But ask yourself, what do the people then do if it's a really bad decision? Who do they blame for it? You can't vote the people out, you can't get rid of the people. Hi, I must say I want to agree with Gary that beware of plebiscite democracy, because I mean, for governments actually, actually I was gonna mention Jonathan, I stepped down as dean of the Lee Kuan Yee School of Public Policy three weeks ago, but I was dean for 13 years, and I can tell you there's a dean of a school of public policy, challenges of governance today are getting more difficult, more complex, and harder to deal with. And so the idea that you can give the man in the street an instant decision to make on some issues that which have significant long-term implications, you know, like healthcare and so on and so forth, so it's actually better to go back to the old balance of representative democracy where you elect a government for five years and then you hold them accountable five years later. That, I think, is a better model because that gives them the time then in the first two years to actually make some of the unpopular decisions that they have to make, you know, give up some subsidies, you know, maybe cut them expenses and so on and so forth, which they have to do otherwise, you know. So that five-year cycle or four-year cycle, I think, is a better way of democracy, and Brexit really shows us the danger of plebiscite democracy because at the end of the day, most of the thoughtful British people I speak to say, this is actually like committing national suicide, but you can't reverse costs. Can I just pile on maybe a practical example of why this topic is so critical to this deals question versus rules? During the TPP conversations under President Obama, many of us went through our factories and talked to the people on the shop floor about why trade at a trade deal like that was good for their jobs, okay? You'd be stunned, maybe you wouldn't be, the how absent of knowledge the voter is on what it means for them, okay? Not the big headline in the Wall Street Journal, a lot of the stuff we're all reading, what it means for them on the shop floor. So we have disconnected, okay, and made more complex topics for the well-being of humanity, like job creation, okay? Societal benefits and how we can help people through great education systems. We've disconnected it from the people who voted the last president in, and I think that maybe in the other countries that you all referenced. I think I would notice that on the shop floor, and I'm based in the Midwest of the US, so many of the people who voted President Trump in, many of my employees, and I would tell you, I was doing my own straw poll through that whole cycle of the 16 becoming, 14 becoming, all the way down to his election, and it was very obvious in around September, October, that he was gonna make it. Really? Very obvious. If you just listen to them. Now I, like all of you, probably was reading other things and saying, no, it can't be. But if you were just listening to that constituency, okay, my employees, it was an inevitability that he would make it. Wow. And it does speak to this connectivity that we need to find in representative democracy, and Nari, I totally support what you said. This next generation who is generating the value of the digital economy as we speak, we need to give them a chance to come in, and I'm encouraged, I was with President Macron last night in Paris. I mean, you know, that's, a new type of politician needs to emerge to help connect the dots between that person on the shop floor, okay, and topics that we have here at Davos. But do we need a new paradigm and a new type of politician? Because after all, if governments had, take the U.S. government, if governments since the Clinton administration, the Bill Clinton administration, had simply done what they'd promised to do all along, which is to help buffet American workers from these de-stabilizing trends, changes coming from globalization and technology. If they had simply delivered on all of those problems, wouldn't we be in much better shape than we are today? If you take a CEO's viewpoint, we have delivered, we're the same size today workforce-wise in the U.S. as we were 15 years ago, and we're five times our size, revenue-speaking. We have used technology incredibly well, but we haven't created the jobs that the school system is producing. We have a mismatch between the education system and the jobs we've created. That's right. That is the biggest chasm that's sitting out there. But that's arguably a failure of government. That is a failure of the system, which includes the private. We all need to put together our minds on this one, because there are 500,000 open STEM jobs in the United States right now, and the system is producing 50,000 a year. But I also think it's very important to remember that in a world where there's so much information and much of it is confusing, for a voter, a citizen, to work out whether a government has delivered on its promise or not is difficult. And that's why, actually for the last several decades, voters, a lot of voting takes place on the basis of identity. In other words, swamped by the possibilities of whether a politician's doing a good job or not, voters just simply ask themselves, which one can I trust the most or which one can I distrust the least to look after my interests? And very often the answer to that is the one I can identify with or the one that is speaking a language I can identify with. And I think that's what we have to capture. Otherwise we get lost in this technocratic, if we just report our GDP figures, then we'll get the votes. We have to remember that people will vote on the basis of trust. And as the Edelman results that were reported this morning show, trust in government is hugely declining. And so is trust in CEOs and such like. But you're not making an argument for candidates that I'd like to have a beer with, are you? It's, look, I'd like to have a beer with. That's in the school of government, I think we have a duty to teach future leaders to really listen. And that's very different to what professional schools were doing a decade ago, which is credentialing people. And there's still the occasional student that comes, I can remember an Indian student last year saying, I want to come and do it at this degree because if I've got a Harvard degree and Oxford degree, you know, et cetera, then I'll stand more chance in politics in India, right? And thinking maybe not, right? Maybe not. Maybe that's not the times that you're living in. So, but teaching people listens hard. You know, a lot of people think listening is simply stopping talking until you're gonna speak or that the job of the listener is to translate what this person is saying into the technocratic language that you and your colleagues understand. And then you've lost the game because what that person wants to know is you've heard their concern and can voice it in their language. And that's where politicians like Narendra Modi get it right. Can I jump in on your question about the impact on society and the frustration with globalization and all of that? A very wealthy European gentleman wants to, I mean, he is really wealthy. I don't know how the tax system never found him but that seems to happen in Europe somehow. And it's all legit, it's all above board. But he said he could never tolerate, stand having that wealth if he didn't have as much confidence in the social welfare system of his country. And I think that's one of the big problems we have in the United States. And I read a fascinating book that was recommended to me by the chairman of Barclays a few months back called The Precariat. I don't know if you've heard of this book. It's a combination of the words precarious and proletariat. Guy standing, he's a British fellow. And he talks about this as a global problem of people living on sort of contract labor, not getting the benefits, having these jobs but none of the, and I don't know how many of my friends have children in the United States, at least one or two of whom don't have any benefits associated with the work that they do. And if the Congress had just decided instead, our debate is going in the completely wrong direction on this, but if we had just established a single payer universal healthcare system, I think we would have relieved a lot of anxiety in our society, a lot. Even to the point where people might be much more accepting of the entire system. I say this as a Republican. Can I just add something? And I hope I don't make myself a bit unpopular. Please do. You know, that is obviously, I would say the challenges that are being faced by democracies in both North America, United States and Europe are very significant. And I think you have to find a way of dealing with the anxieties of your working classes. They're very, very real. But I always add the qualification that the West makes up 12% of the world population. And 88% of the world lives outside the West. And so it's always important to nuance these discussions and say, talk also about different parts of the world and how their situation can be quite different. So by contrast, for example, with the kind of a pessimistic dialogue that you would find, let's say in Europe, for example, about the future, you will find a much more optimistic dialogue about the future when you talk to many of the society's nations. I'm gonna disagree with you so that we can provoke here. Because I simply... You know Asia better than I do. Well, I simply don't buy the argument about that this is a Western problem. When I look at the rise of Duterte in the Philippines of the opponents of Jokowi in Indonesia, when I look at the rise of Bolsonaro, who's now running top of the polls in Brazil. To me, these are issues. When I look at the problems which the Chinese government put at the top of their list to deal with, which are very much about trust in public officials, making sure that their public officials are less corrupt, more responsive, eventually better paid. Then I don't think there is this divide. And I know in the school, we encourage everyone coming into the school to try to stop believing that their one country is unique while all other countries are similar. Because I think we all start with that. We know our own country's history and social conditions and such like. Whereas I think this is a moment where the whole world can learn from each other. And the fact that we're seeing these populist reactions from the West of Africa, right across Asia, to Latin America and across Europe, I think there are real lessons there and they're powerful. Speaking of democracy, do we have any more questions from the audience? Right here, please. And we're running low on time, so I'll ask you to make it quick, please. Zhang Zhao running a private equity fund that is resummoning globally by investing Chinese economy in the last 10 years. I've noticed economists global, politics is more and more national. So there's obviously an old rule which is the advanced country established with all the good attention and for many years good result. We need a new rule. And India and China came here and saying, we're a rule binding citizen of a new order, but we need to be part of the rule making. How do we make that happen? And if there's another question, I'll take that now and then we'll let the panelists finish up. If not, yeah, please. My name is Anizan, I'm a Buja Global Shaper. So in this new world order where bilateral agreements are becoming more relevant, what happens to the countries that don't have that much to negotiate talking about Africa specifically? Two great questions. How do we bring China and India into the rule making process better and what do we do about the countries that get left behind because they don't have that much throw weight? China and India is actually easy to answer because they're simple things you can do. Like as you know, in the IMF and World Bank is the size of your voting shares that reflects how much decision making capacity you have in the IMF. And for a long time until a few years ago, China had less votes than Netherlands, Belgium, Luxembourg combined. That's been changed by the way. But the voting shares in the IMF must reflect the current share of global GNP. In theory, that's supposed to happen in practice, the time lag is enormous. Get rid of the time lag, change it now. So politically, it hasn't happened and that's one of the gripes particularly that India would have, for example, that it's not a permanent member of the UN Security Council. And that's not likely to happen because speaking of deals, Franklin Roosevelt made a deal with the US Congress in 1945 that the UN Charter wouldn't be ratified unless there was a veto and it's the permanent members of today who are keeping the council, the permanent membership from expanding. And doesn't this also speak to the other question about how we bring in countries that aren't able to muscle the rate of the table because they don't have that, the economic or other power. Well, I think you've got some surrogates for the Security Council now, like the group of the G20, I think has started to play a little bit of that role. But I think that's still a challenge before the international community and our leadership as to how to help emerging and growing economies, the rising powers, get a more equitable share, equitable place at the table. Well, I think that's an excellent place to end. And I was told we have to stop right on time because Kate Blanchett wants the room when we're done. And I'm not gonna argue with her. So please just join me in thanking this fabulous panel. Thanks, Bob. Thank you. Beautiful.