 Rhaid i gŵr. Rhywbeth a'r ffordd o ymllun i gweithio'r ffordd am y 40th anu eu sefydlen a'n gweithio'r Ffyrdd Gros Bêl. Fel yna bryd i gweithio hynny i ddim yn gyfroedd yma, ac mae'n gweithio'n gwneud i gael â'u cynyddiolомau â'iwch yn Facebook ac yn ddiweddolol. Oni wedyn iawn, Olyfa Cynol. Mae'r ffordd i gael â'r Ffyrdd yn gweithio'n gweithio. Neud yr angen o gweithio hynny i gweithio'r unwyddiol, ynghylch o'r cwestiynau gwedig y gallwn amser o'r ystod, y ceisio y blefrau. Y ceisio'n ystod, mae'r angen ychynig. A'r ceisio eich gynhyrch? Yn ymwneud am y ffaith i ddechrau, mae'n mynd i'r ffaith ystod yn ei ddweud, y 30 minutu bobl, i'r gwneud o'n gwneud o'r cymryd o'r ffasgol, yn mynd i'n gwneud o'r hwyl i'r gweithiau. We have some questions online from those of you who have sent them in the past. We are going to try to answer as many as possible. We are going to have to try and have some fun as well, and maybe we will disagree over a couple of points. So, we have carefully constructed this panel to hopefully make it as abrasive and as combative as possible. Don't let me down, guys. Let me introduce my panel. I'm very glad to be joined by Corinne Vaughan-Hippel, the Director General of the Royal United Services Institute for Events and Security Studies based in London, United Kingdom. Jane Harmon, director, president a chief executive officer of the Woodrow Wilson International Centre for Scholars in the USA. Kishore Mababani, a good friend of this format. We joined for a session last year on corruption, I believe. You're the senior advisor and professor in the practice of policy at the National University of Singapore. So we have a lot of bases covered here. Let's get to the question. What is a fractured world? Corinne, can we start with you please? You're a geopolitical expert. You're worried about defence and security. Keeps you up at night. Are we really living in a fractured world compared to other times in history? OK, well thank you Oliver, and thanks for inviting me to join you today. I think we're all fairly familiar with the cleavages that we're talking about here, whether they're economic, cultural, religious, technological, within and between societies. So I don't think that's new, but what is perhaps new is the scale and the pace of change. And I don't think we understand as well as we should the interplay between these different forces. So just to give one example, the Syrian civil war has been festering now. It's going into its eighth year. I think many of us learned that you ignore unpleasant parts of the world at your peril because of course by not stopping the civil war in Syria, we ended up having ISIL incubated in the region. They went out and attacked throughout Europe. They caused a lot of chaos. The threat may not have been as big as it was perceived, but it was certainly of concern to European countries and North America. And then separately, the Syrian civil war also of course causes massive migration crisis that we saw in 2015, 2016. So we have millions of people on the move, and if you're an agile politician, you can of course exploit the fear of terror, the fear of migrants. And so we saw a rise in many of these populist parties. Now, most people wouldn't point to the Syrian civil war as one major factor for some of the cleavages we have. They point to globalization, the haves, the have nots, cheap money, all sorts of other things. But I think we have to be mindful that there are larger forces at play, and we may not understand how they interact with each other. So I guess I would advocate a bit of caution before coming to too many conclusions. OK. In terms of the geopolitical side at the moment, in our fractured world today, you've mentioned the Middle East as well. What else worries you? What else keeps you up at night? Well, I mean, of course, Russia, and not necessarily a conventional war with Russia, but rather Russia's use of cyber misinformation. Of course, we're all worried about North Korea and the nuclear threat and potential showdown with the United States. Even in the Middle East, let's not forget that the U.S. is very concerned about the role Iran plays. And Tillerson and President Trump and others have been saying, you know, Iran won't be allowed to do what it is doing in the region. And what might that mean? Could that bring us to war? I mean, Jane can tell us more about that. It's in her backyard. So and then, of course, cyber. So there are geographic threats and then there are virtual threats as well. And cyber, interestingly, on the global risk report, the forum published last week had cyber as the fastest growing risk in the 30 risks that we monitor every year. And it's spread from two years ago being regionally and just in North America to every single region in the world now to see cyber as in the top five threats they face. So possibly overplayed now or still underplayed? I mean, hard to tell, because we've all seen cyber attacks on even the most secure companies, networks, et cetera. The threat is extraordinary. And of course it comes from individuals, criminals and states. It's really a mixture. As we are moving into more AI and more advanced forms of technology, I think we also have to be incredibly mindful about the impact of cyber attacks on those systems. If you have robots dealing with other robots and somehow they get hacked, that's also, of course, very concerning. Yeah, of course. And the Fourth Industrial Revolution is something which we're going to be hearing a lot about. And cyber indeed, we're going to be launching our own centre later this week, which we'll hear more about again. Jane, let's move over to you. Of course, you're from the United States. It's had its fair share of partisan politics of late. How is this contributing to the fractures that we're seeing? And maybe if you could talk in the context of the USA, but maybe if there's international relevance to the experiences that you're uniquely experiencing. Well, I think we had fractured US government on full display over the weekend when we stopped paying federal employees and stopped some important services like military testing because our Congress could not agree on funding the government. The good news is, it's open again as of late yesterday, but it could over the next crisis, which is, will there be a way for the so-called dreamers, those who've come to the US illegally at a young age and have never known the countries from which they came, will there be a fix for them to stay in the US? So we've seen that. I'm a recovering politician. I spent nine terms in the United States Congress before heading the Wilson Centre, which is a bastion of non-partisanship and a great relief to be part of. But I see US politics fractured over a long time as our political parties move further apart as our election system has a primary system where the most noise is made from the extreme left and the extreme right and candidates are pulled apart. There's little room in the center. I'm one of the last five remaining centrists on the planet Earth and I should be in a dinosaur museum. But here are some of the factors, and I don't think they just affect the US. You were asking about that. I think that power is diffused. It's now much more bottom up than top down. That makes it much harder for governments to exert authority over citizens. I think it is much easier to tear down governments than to stand up anything better. I think the Arab Spring. I think that the nation state, to the extent it's still relevant in a globalized economy, is increasingly a source of repression, not inclusion. Think about it. And I also think that tribalism has been inadequately understood in the world, and it's breaking out all over, not just in our political parties, but certainly in Syria, Iraq, countries that are barely countries, that are more, if they survive as countries, more confederations. I'm sure this is quite possibly a situation of fractured world that you're not witnessing in Asia. We all know Asia is growing, is outstripping the rest of the world in terms of growth, social living standards are on the rise. Is this a western construct, this idea of a fractured world? Yes. I have a simple theory. The world is fracturing, but I have a simple theory as to why the world is breaking up. Because we are actually passing through one of the greatest moments in world history. It's a completely new era is being born and the old era is collapsing every day. That's why the world looks fractured. Now, one important statistic to bear in mind is that from the year 1 to the year 1820 for 1800, the last 2,000 years, the two largest economies were always those of China and India. So it's only in the last 200 years that Europe took off and North America took off, but if you view the past 200 years of world history against the backdrop, the past 2,000 years of world history, the past 200 years have been a major historical aberration. Now, all aberrations come to a natural end, and therefore a price waterhouse Coupers has predicted that by 2050 or possibly earlier the number one economy in the world will be China, number two will be India, number three United States of America, number four Japan, number five Indonesia, four to the top five will be Asia. So it's a completely, how do you say, transformation away from the 19th and 20th century to the 21st century. The 21st century will bear no resemblance. By 2050 the world will look so different. You'll bear no resemblance whatsoever to the 19th and 20th centuries, and that's why you feel this sense of somehow the feeling loss. And I'm glad you mentioned the point about what the mood is like in Asia, because if you lived in Asia for 69 years as I have lived and I have lived through all kinds of wars, conflicts, depressions and so on and so forth, I have never seen the young people in Asia as optimistic as they are today. You just have to go to China, you go to India, and you see the remarkable amount of hope that these young people have. They don't share the pessimism that you find in the West, and many of them actually believe, and by the way just look at it objectively statistically, the living conditions of the one billion Chinese people have never been better than in human history. They've taken away, they've rescued 800 million people from absolute poverty. That's the largest transformation in the world that we have seen, so there's a lot of good news that's also coming as the world is fracturing, but there's absolutely no doubt that you need a rebalancing within East and West, within Asia and America and so on and so forth. That process of rebalancing will be painful, will be difficult and will create tensions. Jane, to what degree is this rise of Asia contributing to instability in the rise of populism in the United States and to a degree Europe as well, where things aren't going as well, let's be honest? Well, I agree things are not going as well, and I think that's a fascinating way to think about the problem. 200 years is a very short spot in history. 2000 or 4000 years is a better landscape, and the US, for all our noise and visibility, is not very old. I would say that the US has made some strategic mistakes in Asia. We would have a bigger role if we had not done that. I think abandoning TPP was a mistake early in the Trump administration, and I think a lot of hot rhetoric about North Korea is also a mistake. There's a risk of accidental nuclear war, which would be catastrophic for everybody, not just Asia. With respect to TPP, there is certainly the obvious truth, which is there is now the TPP-11, which is moving ahead without us, and China is filling a big vacuum created by our withdrawal from TPP. I would say that the US is losing influence in Asia for the wrong reasons, a lot of reasons that we have sadly inflicted on ourselves. Can I just add a footnote? I want to emphasise that you're right that the US is losing influence, but there are many countries in East Asia that still want the US to remain. As you know, many of the TPP countries actually went over backwards and made all kinds of economic sacrifices in an effort to try and anchor the United States in a very fundamental economic sense in East Asia. Of course, walking away, as you said, was a huge disaster, but the door is actually still open. I think that's the important thing to remember that it is not a case that there's a lot of anti-Americanism everywhere, that actually if America comes back and plays a constructive role, lots of doors would open to America. President Trump will speak here on Friday. I think he's still slated to speak. He has an opportunity to say that, which I think would be very well received. There is a new defense strategy released last week, and it has three prongs. One is building lethality for US defense. There is a lot of conversation there about cyber and about space. We haven't mentioned space vulnerability as a huge calamity that could happen. But that's one piece. The second piece is building alliances, and Secretary of Defense Jim Mattis knows very well that some of our new and best allies, or at least alignments, are with countries in Asia. If President Trump talks about that, I think that would be a huge plus. The third is rationalizing our defense spending. We are never going to have unlimited money for defense, so we should spend it more wisely away from legacy systems and on things like cyber defense, cyber offense, and protecting our assets in space. Can I ask a question to Q-Short, because one thing I'm struck is that your assumptions about where the world will go in the next 50 or so years don't consider the fact that a third of the world's population live right now in two countries, and those two countries may not stay intact. What are the implications for global security if India and China break up? We all just assume they're going to stay one country, but it's incredibly challenging without many people to do so. You're right. If China and India break up, the whole story of the return of Asia also breaks up. But I think if you're a betting person on these two countries, it's important to remember that China went through 140 years of hell from 1842, the Opium Revolution to, I would say, the end of the Cultural Revolution, 1976 or whatever it is. That's a long period of hell, and there were times when China could have broken up, would have been doing this 140 years of hell. Then, after that, after the Cultural Revolution, when Deng Xiaoping launched the Four Modernisations from 1978, and we are now celebrating the 40th anniversary of that, the Chinese have gone through 40 years of heaven. They have never seen as dramatic an improvement in the lives of the Chinese. And so, at a time when the Chinese have tasted in a very profound way how their lives have changed fundamentally, I think their desire to stay together and continue this path is very, very strong. I mean, if you want to meet the most self-confident people in the world today, go to Beijing, go to Shanghai. I go there regularly, I tell the same. By the way, the same story is also true of India. As you know, the British got nice India for a long time. The Indians suffered even in some ways quite much worse because as an Indian scholar, Ashish Nandi pointed out, that while the Indians were physically colonised until 1947, actually they remained mentally colonised for many decades after that. And the mental decolonisation I would say ended in the 80s and especially at the opening of the Indian economy in the 1990s. And today, if you go to India, the Indian entrepreneurs are amazingly confident about the future. And one amazing accident of history that has happened is, it should not have happened, that both China and India today have exceptionally strong leaders. Xi Jinping and Modi are off the charts in terms of the capability, drive, determination, everything you make. And I think the fundamental changes that both Xi and Modi will put in place in the next, I would say, five to ten years will keep them going easily to 2050. So, I would say, if you want to make a bet on China and India, and you won't go wrong. You're betting on China and India. You mentioned leaders and that's a really important point. Jane, you mentioned Paris Diffuse and it's too much bottom down. But people are voting for strong leaders and bottom up, bottom up. People are choosing strong leaders and we see that in lots of large countries around the world. So, why is that? People just like having, they like, they need strong leaders that we're moving towards and they offer security. I mean, I think that there's a lot of insecurity right now and so strong leaders give people reassurance. But strong leaders don't always deliver. So, I mean, I'm going back to the three points Jane raised in the national defense strategy. I mean, number two and number three, Trump is already not doing either of those. He's not building alliances. In fact, he's destroying alliances. He's not trying to rationalize defense spending. He went to Congress months ago to ask for $53 billion for defense. And without even saying what the strategy was, right? So, I mean, it's, you know, it's a good strategy. These are the right things to do on paper, just like the national security strategy that was released in December. But what he does in practice is very different. And so this is the concern I have about strong leaders or some strong leaders anyway. Not all of them. I mean, I think it's very different. I actually don't know how over time, I'm very interested in your longer horizons, how important political leadership is going to be. Except as a force for repression. And I'm not criticizing either of the leaders you mentioned. But I said that I think the nation state is increasingly shrinking and it doesn't provide pluralism anymore. It provides empowerment for the people who head the nation state. And I can mention a couple of countries, but I don't want to offend anyone unnecessarily. But I think the people who have more power first are the, you know, this atomized group of young people. I think the youth bulge around the world and I hope they're tuning in and learning more about this. But the other group are those who had the major tech companies who have basically unregulated power, certainly by governments, and incredible access for good or bad. And, you know, sadly we've learned that major, that a country like Russia can manipulate our technology base. And something I worry about, I think Karen said it too, is over time whether information will be so corrupted that we won't be able to rely on it at all. How do you feel about the nation state being in decline and becoming less relevant, less able to control the narrative and control the world affairs? People still need nation states to provide services, to provide defence, et cetera, et cetera. Well, I think it depends on what comes next. If we have global agreements on climate, for example, which doesn't respect barriers, and we have global agreements, we have some global approach to the incredible income divide, and on what to do with this mass migration that's affected the world, I think those may be better ways to deal with issues than individual nation states. The other thing is, you say defence. Well, I mean, if we could reduce the number of conflicts between nations, maybe we would put that money into something a lot more constructive than building barricades or walls. But Oliver, you do, you can also get paradoxical results. I agree the key word you use, Jane, is empowerment. And I would say definitely the digital world has empowered the individual in a very profound way. What you can do with your smartphone is amazing. You can go fishing off the coast of India, and in the past you could only go to one port to sell your fish, but now you look at your phone, you can know where the price of fish in three different ports, and you choose the port where the price of fish is higher. Is that empowerment? Now, in the case of China, what's surprising is that the Chinese have entered the digital world faster than anyone else. Cash is absolutely absolute in many Chinese cities. Is that worth more than Facebook? Walk around with your phone and you can get everything done in China. But that sense of empowerment has not in any way, in China at least, eroded the powers of the state. And that's where sometimes you've got to look at the cultural dimension in these things too. Because the Chinese actually, and this of course is a controversial statement, and even some Chinese would beat me up for saying this. But the sense I have is that the Chinese actually like to have a strong leader. By the way, I'm ethnically Indian. Indians are not so certain that we're having a strong leader. So that's the question, and since I live in both the Indian world and the Chinese world in Singapore, you can see the cultural differences, and they're going to play a very critical role in the 21st century. We're going to hear the word for a multi-conceptual world used quite a lot at this meeting. I have a feeling it's not just multi-polar, it's several poles with different values and different belief systems. I always groan internally at this stage in this session because it's getting on and we haven't very much time left. Quick scan of the room for questions. Gentleman in the second row please. Remind us where you're from. I know who you are. Yes, I'm Thomas Henricksson from the Danish Business News paper, a portion of Copenhagen. Just two questions. One question is that yesterday we came out with a report from IMF about extreme optimism actually. It was also the same measures we had from the PVC in their survey of business leaders. How does that relate to what you described today about the fractured world? That we're actually seeing strong growth at the same time as we're seeing a rise in these fractures, we're seeing more and more protectionism. So what is the relation between these fractures and the global economy? Just briefly to all of you also, if you could elaborate on the reason to being optimistic about India, which I think is one of the new things that I hear from Davos this year. Thank you. So Kishore, that one is strong and fractured. Is that for you? I think we can put an auto for that. Make a very important point. I mean, I said that Asia is doing very well and succeeding and all that, but the world order has got to change to adjust to the rise of Asia. And so that creates a process of fracturing. I mean, for example, you mentioned IMF, you can no longer have a rule that says to become the head of the IMF, you must be a European to become the head of the World Bank, you must be American. That rule has to go. I mean, how you disqualify 3.5 billion Asians from running IMF or World Bank, that's a process of fracturing. You've got to fracture the old order to create a new order, but the optimism is real. I mean, just maybe a quick word on protectionism, by the way. Everybody says in very sweepingly, protectionism is rising. Actually, protectionist sentiment is rising, but if you look at trade flows, trade flows haven't gone down. In fact, trade flows are still going up, and most economies are growing. So actually, the model of interdependence and interconnectivity, you look at the data, planes flying, tourists going, everything. The interconnectivity is still rising, and therefore in that sense, the old path of globalization is carrying on. Economic prosperity is not trickling down to everyone. Let's understand that. In fact, the top 1% is doing better and better and better, and the bottom 99%, I think this is true everywhere, is doing worse. That discontent, that anxiety is what fueled the election of Donald Trump in the United States. It's also fueled Brexit, so it's not just a US-only issue. I don't know how it affects Asia, because again, you said Asia culturally in many other ways is different. But I think it's something that this conference and others have to watch closely, because I think that calling this economic prosperity is perhaps a bit unfair. Calling it economic prosperity for the top is more accurate. I think if you listen to the headlines of our Global Risk Report last year, last week, and our inclusive development index, which we put out yesterday, the message from us as an institution is, let's not celebrate, let's not be cheering this good growth. It's going to be quality growth as well as volume, and that means a different set of measurements, not just GDP, but how do we actually raise living standards? How do we start measuring ourselves better? I think there are also new haves and new have nots, and so that shift is really counting for a lot of insecurity and discontent. If you look at Trump's election, the assumption by everyone was that it was blue-collar workers, it was out-of-work miners, et cetera, when in fact two-thirds of his supporters were in the upper half of the economy. There are lots of issues. I don't think we understand as well as we should. The tech revolution, I think Jane mentioned earlier, is accelerating so fast. Innovation is accelerating so fast. Yes, people are doing crazy things in India and China and America with their phones and with technology, but there are lots of negative ramifications that many people don't understand as well. And then we learn about them when this enormous crashes happen. And so we just need to be very mindful that innovation is accelerating, but it is a little bit out of all of our control to understand what it means. For me, that's a concern. Very, very quick short answer on India optimism from anybody in the panel that has any concern. You'll get a taste of it at 11.15 today when Prime Minister Modi speaks because what he brings to the table is a remarkable degree of energy and optimism. And as far as he's concerned, I mean his attitude is anything is possible and he will try anything. And last night he had a dinner and all the top CEOs of major multinational corporations went to have dinner with him because they said they're going to be part of the India story. And just to put it in a very simple way, if you're looking for a place to invest your money for a decent return over the next 10, 20 years, it's hard to beat India. I just want to close before we do and I'm keeping it slightly over. But I want to bring in a question from our audience. Heidi Arn from Los Angeles has written in. My question is, what do you feel is the one issue that needs to be addressed and resolved in our lifetime if you could choose only one? So, nice way to close this session on a fractured world. Can you choose one issue that really needs addressing? Climate change, I would choose climate change. You're not going to resolve it, but mitigate it at least. U.S.-China relationship, because if anything can bring the world down, you'll be the U.S. downtrend or disruption the U.S.-China relationship. I'm having a hard time. Empowerment of women, which I think is huge, where 50% of the talent pool but not 50% of the workforce or the political force is one and economic inclusiveness is the other. All topics will be covering in depth this week. Thank you very much for joining us. Thank you for joining us here in the room and thank you for joining us live online. This session is now over.