Ms Minouche Shafik, President of Columbia University
Ms Keren Yarhi-Milo, Dean of the School of International and Public Affairs
Ms Merit Janow, Dean Emerita of SIPA
Mr Fareed Zakaria
Ladies and gentlemen
Thank you for your very kind introduction President Minouche.
Minouche spoke about her knowing me in her different incarnations over the last 15 years or more, beginning in her role as DMD of the IMF. I should add that one thing was constant in Minouche through all her roles, and that was her persuasive power. She had the ability to get people to come together to address issues. And I'm sure that's going to be the case at Columbia.
I was glad to be invited to speak to you some time ago, but am especially glad to be here at this time. Let me make a few remarks, before sitting down with Fareed.
The world we knew is gradually unravelling, and there's no telling where this will end.
We first have to recognise where we are going wrong, so as to rebuild, and provide new bases for optimism.
It doesn't fundamentally have to do with the major crises we are seeing - the wars and offenses against humanity, the unprecedented floods and droughts around the world. They are each tragic for their human costs, and for their economic costs. They also make further dents in the global order.
But it's not just about bad events and bad actors. We have to look deeper. Look at the powerful destabilising undercurrents in the world we are in – geopolitical, ecological and even the domestic undercurrents within our societies. They are often slow-moving undercurrents. But if we keep ignoring those undercurrents, we're just waiting for the next crisis to come. We will be responding to one crisis after another - at great cost to human life, to livelihoods and to the credibility of both democracies and the global order.
Globally, we are seeing the ebbing of a rules-based order. It shows up in many ways. In more intense, more frequent and longer conflicts in the world. In the greater threat to sovereignty, particularly for smaller nations. And in the progressive fragmentation of what is a highly integrated global economy. And I emphasise highly integrated, because the fragmentation of a highly integrated economy comes at much greater cost than the economic bifurcation of the old Cold War era, in a world which wasn't particularly integrated. This time it will come at great cost.
We also see a loss of faith in multilateralism, particularly on the part of the developing world.
And we have to recognise what's happening within societies themselves. Many of them have become more polarised than they were. It used to be regarded as a developing country problem. It's now a problem across a whole range of mature democracies - that pulling apart of people, whether by different education levels, the different regions in which they live, different senses of identity, different ethnicities. That pulling apart is very troubling.
And we have to recognise the ultimate existential threat we face - the undercurrents that are leading to accelerated global warming, the loss of biodiversity, and least recognised, a global water crisis, or the destabilisation of the global water cycle. The three together - global warming, the loss of biodiversity and the global water crisis are leading to extremities on a scale that we haven't seen before. We had last year, the worst drought in human history, and some of the worst floods and wildfires.
Dangerously, each of these undercurrents – geopolitical and geoeconomic fragmentation, domestic polarisation, and destabilisation of the world’s ecology, are at risk of crossing tipping points – leading to irreversible and self-amplifying changes, with a very high degree of unpredictability as to where we end up.
That's why we are now in an era of radical uncertainty. Not just high risk, not just something you can model or say, well, this is a bad scenario, and we'll have to find a way of hedging against it. We face profound uncertainty, deep unpredictability, and we do not know where this will end.
And the undercurrents are compounding each other - the geopolitical fragmentation, the domestic polarisation, social and political, and the ecological shifts. They are compounding each other in ways which make this a more complex problem that we have seen in decades.
Our central task has to be to build resilience and optimism at this time of radical uncertainty, and to address and rollback these undercurrents. There are no perfect solutions, but there are bold actions which are still within our reach, to prevent us crossing these tipping points, and to roll back the forces that have led us into a radically uncertain world.
Geopolitically, the US-China relationship is central. That's the central axis of tension that will determine whether we spiral down or stabilise. We know we're not in a unipolar world anymore, but we are not yet in a truly multipolar world. And we are certainly not yet in a world of stable multipolarity. It may take some time to get there.
But in the meantime, the US-China relationship does require stability. The recent meeting between President Biden and President Xi hints at a thaw and is at very least a pause in what has been a trajectory of a worsening relationship. But the fundamental sources of tension, that technological and economic competition between the US and China, remain. Some new accommodation will have to be found between the US and China, some new basis for strategic trust even as they compete.
Leaders around the world will also have to view peace as essential to the interests of their own people. And to recognise that peace is only possible if you acknowledge and respect what the other side needs. There will be no peace without an end to terrorism and extremism. But there will also be no peace without solutions which are equitable and provide hope for all sides in a conflict.
Second, on the crisis of the environment. Even up till two decades ago, it was thought that dealing with the environmental crisis and climate change involved a trade-off - you pay a cost today in order to have a better future. Sustainability required sacrificing something today, sacrificing some growth. That was the old thinking.
But we now know that there is no real trade-off, if we invest in new technologies, and invest in new models of growth. That transition story requires higher levels of investment over a long period of time, but it can be done. It means we can keep growing, particularly in the developing world, whilst we decarbonise the global economy. We have to move into this mindset of investing in the solutions that will allow us to have sustainable growth. And remember, most of that investment is in the sectors of the economy that must now make a transition from brown to grey, and from grey to green.
There is no lack of resources in the global financial system for these investments. Mobilising the resources requires organisation, reforming multilateralism, and a new approach to risk-taking, with an equitable sharing of risks and rewards between the public, private and philanthropic sectors. It can be done.
Next, addressing the domestic undercurrents. Our core problems globally are really in domestic social and political dynamics.
Angela Merkel said in 2010 that we had utterly failed in multiculturalism. What it meant was not that multiculturalism failed, but that integration had failed. Indeed, across too many societies, we have utterly failed in integration.
Too many societies have failed in ethnic integration and immigrant integration. And are seeing a growing unfamiliarity between people with different educational levels, people in different professions or walks of life, or who live in different parts of the country – the cities, suburbs, rural areas - a growing distance between people, and a gradual loss of trust amongst each other, and trust in the institutions of democracy, including government.
We have to move away in many cases from a concept of multiculturalism that was about a quilt, with patches of different colours and threads, stitched together to form the fabric of society. Separate patches, that over time, are vulnerable to fraying at each of their seams, and the fabric is pulled apart. We've got to weave the entire fabric with the different threads within our societies, so that our lives are interwoven with one another, and we do not have different patches that can be easily pulled apart.
Most broadly, we have to reorient the ways in which both multilateralism and democracies function, to rebuild optimism and resilience.
We must find ways for multilateralism to work in an imperfect world. In a world that is no longer unipolar, and not yet in a stable multipolarity.
Multilateralism was never ideal, and never truly constructed to be strong. But the demands on multilateralism today are greater than ever before. And the supply is weaker. We have to build coalitions of the willing to address the most urgent challenges of the global commons, and to preserve rules of the game in global competition. And keep the coalitions open to new members.
Finally, we have to reorient our democracies, so that our politics is less short-term and less insular, and so that democracy is less divisive in practice.
It must surely be possible for each society to recognise that it is in its own interests, to invest in the global commons, because we're all going to be affected by its erosion. It must be possible to recognise that it's in each societies’ interests to invest in the long-term today, rather than pile up an even larger burden in the decades to come. And it must be in our own interests to find ways in which democracy bridges differences, rather than widens them.
And we have to do this remembering that we are in a world where we can be very easily pulled apart, within our own societies and internationally.
I'll stop there. And I look forward to unpacking some of this with Fareed. Thank you.
*****
Dialogue with Fareed Zakaria
Fareed: I think it’s about 25 years ago now that I was in Singapore, and I had begun a practice, came out of a long interview I did in Foreign Affairs. Every time I was there spending a few hours with Lee Kuan Yew, who was at that time the Senior Minister. And he says to me at one point, we're talking about education and he says, We've got this bright young Indian Minister of Education you have to meet up. And I thought okay, I will do my homework and I asked my friend Kishore Mahbubani if he would set up a meeting with the then-young, bright Minister of Education Tharman Shanmugaratnam who has of course ascended to higher and higher stratospheres ever since. And it has been an enormous pleasure to see both in Singapore but in the world, the way that you have been able to establish yourself as a genuine statesman intellectual which is very rare. You described very well the fraying of the international order. You can look at Russia-Ukraine, and you can look at what's going on in the Middle East. You can look at China's challenges.
But what is the solution? Because, on the one hand, the solution seems to be that the United States essentially use hard power to deter, combat, reverse these efforts to fray the international order. But of course in doing that, it divides the world more, it forces countries to pick sides. It makes it more difficult to imagine a kind of consensual world in which everyone comes together and sings Kumbaya. But if you don't do that, the Russian aggression stands, Iran's efforts to unravel a Middle East order continue. And China's efforts to frankly, bully a lot of Asian countries continue. How do you thread this needle, which is in order to sustain a world of law and economic commerce and the kinds of things you're talking about, it seems like you need some very tough hard military power or at least hard power at the back of it.
President: Let me take this angle in responding to Fareed’s very thoughtful question. First, it's very hard to summon up trust within the international community only when you need it most. It's very hard for the US to summon up enough support from the developing world only when you need a vote in the UN on Russia-Ukraine. Very hard to summon up support for everyone to both condemn Hamas’ terrorist acts, as well as to express umbrage against the indiscriminate bombing of civilians in Gaza.
It's very hard to just summon up trust in the global community when you need it most. You've got to do it by addressing the needs of nations in normal times. Everyone in the developing world remembers what happened during COVID-19 - the gross inequity in the distribution of vaccines, the vast over-stocking in the wealthiest countries. Everyone remembers the fact that the world has under-invested in the basics of development. Everyone remembers that the World Bank and other development banks have been under-capitalised, mainly because the largest shareholders don't want to see a change in shareholding which will come about when you increase capital, don’t want to see China and the emerging world take on larger shares.
Trust doesn't get built that way. So I would say, start from where countries are, look at their needs, and find ways of organising ourselves multilaterally or through coalitions, to help them address those needs. And the point is, it's not actually expensive. It's not as if these resources can't be mobilised, they can be mobilised. There's no lack of financial resources and expertise in the world to address the needs of the large bloc of developing nations. It's been a matter of neglect.
Fareed: We are almost certainly not going to have a kind of perfect world of international cooperation around things like climate change. Some of the other ecological challenges you describe, I would argue, are regulation of something like artificial intelligence. We're just not in a moment of US-China, let alone US-Russia accord where we are going to say we're all going to sit around the table and decide, these are the things we will do in AI, these are the things we won't do. We're going to sit around the table and come up with an agreement on carbon emissions. Is there a viable Plan B that is actually not too bad? And the reason I ask this because let's face it, this is the world we're going to live in, not Plan A. It is Plan B when China does what it needs to on climate because it feels it wants to reduce emissions, because it doesn't want to have pollution. It also wants to build up the green energy sector. Others do the same - India trying to do that with solar, China reining in AI for its own reasons, the US and Europe do it. And there's a certain kind of unspoken, what I would call stealth global collaboration. Nobody will admit that they're cooperating, but that is in fact what's happening. Is there a world there that we can imagine? Because it does feel to me, that's the best we're gonna get.
President: One way of addressing Fareed’s question is, what's the alternative to Plan B? Plan A doesn't exist for all the reasons you prescribed. Multilateralism is not functioning very well. The US and China still don't see eye to eye on the fundamentals, on technological and economic supremacy, and there are many other reasons. The real alternative is Plan C, where we carry on as we are, and at some point, which I think will happen even before 2030, at the very latest 2035 - the situation would have gotten so grave because we have crossed certain tipping points - that governments will have to get together and say let's stop fooling around, we're going to have to do something now. And it's going to be far more expensive then. It’ll be a situation where some countries have much higher carbon taxes than others, some have much larger subsidies than others, but either way it's going to be much more expensive and probably quite unfair.
So Plan B, which is what you were talking about, when we don't wait till 2030 or 2035, is where we accept now that realistically, under any scenario of who wins the next elections in the United States or the one the next time round, you're not going to get a system of carbon taxes introduced in the US. But the subsidies that are part of the Inflation Reduction Act, the IRA, the very large subsidies for green technologies – the things which economists don't like, and don’t think are the first-best solution - they are going to help build scale in new technologies. The subsidies are unfair to other countries, it even looks protectionist, but it's going to build scale in new technologies. And you need that scale of investment to get these new technologies down the cost abatement curve and make them viable, which the rest of the world eventually benefits from.
It may lead to a subsidy race. Developing countries aren't going to be able to engage in it, even Europe is probably not going to be able to engage in this on the same scale as the US. But it's better than Plan C because Plan C is a waiting game. It’s better to go down that cost abatement curve now, invest now in getting new technologies scaled, the way that it was done in solar. If you look at what China did in solar, to bring the cost down significantly through initial subsidies and going for scale investments.
Look at what's necessary to get technologies viable. We are not going to get there globally the way economists would like, where everyone goes up to a $150 carbon tax as soon as possible. That's theoretically the most efficient solution, but it's just not going to happen. So we've got to find some ways in which countries that can afford it move ahead. At some point the US is going to need a new fiscal strategy and a revenue strategy to sustain the subsidies. But it's doing the right thing now and the world will benefit for it.
Fareed: So let me outline what I think is quite plausible in terms of the kind of world we're going into, which is a world in which there is an even greater, and you think you've seen inequality, you ain't seen nothing yet. Because between AI and computing power and access to the kind of scale of energy you need, the US is going to be in a league of its own, China is going to be second, there are going to be few other countries. Frankly, I think Europe gets left behind in in many ways, Europe is de- industrialising as industries moved to the US because they get not only subsidies, they get lower taxes, they get lower regulatory structure. And as you say, global warming is already upon us. The cost of adjustment is one that will only be able to be borne by a rich society, so that New York City will be able to build dykes - I mean, the Dutch did it in the 16th century - Bangladesh will not. And for those who think we cannot sustain the kind of human tragedy that this involves, I have news for you, the Syrian civil war, you'd be surprised at the extent to which the world can sustain all this.
President: Or Sudan.
Fareed: Sudan right now. Or you know, Ethiopia, Yemen. Why is that not the most plausible scenario? A world of much starker inequality, and that we might look back on the 20th century as actually a kind of golden age where the late 20th, early 21st century, you saw a narrowing of global inequality, but it's about to turn pretty sharply.
President: I think it’s not plausible when it comes to the global commons. Because whether it is global warming or all the other consequences coming about from deforestation, loss of biodiversity, and the imbalance in the global water cycle, everyone is going to be affected by it. What happens in Bangladesh, what happens in Sub-Saharan Africa, what happens in parts of the world that are very far away from Seattle and Washington, are eventually going to affect the global climate. And that is the fortunate part of it, that the crises are coming everywhere in the world - droughts, floods, wildfires - all caused by the global ecosystem going out of balance.
Now the challenge is for democracies to recognise that solving it isn't just a matter of picking up the pieces each time there's a wildfire in our own neighbourhood, but also a matter of helping say Sub-Saharan Africa. And that's a real challenge in democracies - to recognise that something happening far away is in your interests to try to address and to remedy. And something that's a little further out in the future - five years from now, 10 years from now, even 50 years from now, it’s in our interest now to start preparing for it, and trying to avoid the worst.
Democracies were never wired that way. They were never wired to look at the long term, and they were never wired to look at the global. They were always about finding some consensus or balance domestically, for a relatively short period of time. So rewiring democracies for the long term, and for the global challenges that we all face, is a central challenge around the world.
Fareed: You look at one piece of polling data out of Europe that I've always thought is so telling, which is when you ask people, whether they are comfortable with higher and higher levels of welfare spending, it relates inversely with the degree of heterogeneity of the population. In other words, the more people look like you, the more comfortable you are with higher levels of welfare spending. The more people don't look like you, you don't like the idea of welfare spending. And it gets to exactly your point, which is that democracy and liberal democracy is much easier in a circumstance where the community is one that is very easy to identify and identify yourself with and empathise with. And it relates to the last thing I want to ask you before I open it up - you said something very interesting about multiculturalism and how it failed. And I want to ask you to think about the way to make multiculturalism work, because you said Merkel's version was integration and it didn't work.
President: It didn't have enough integration. It was basically a diverse quilt.
Fareed: Now, when I would ask Lee Kuan Yew what made multiculturalism work in Singapore, he would always say, look, we have these communities, but we let them be, we want them to retain their old traditions. We don't want them to feel that they have been forced into it. They have to live together. They have to learn how to live together and in the housing projects, but we want them to continue to learn their languages. We want them to continue to have their traditions and we want them to meet in a civic space. What you are saying is you want a fabric that's woven with the threads of each of these traditions. I happen to think you're right in the sense that that old model is not really available anymore. Modernity is pushing everyone forward to an extent that you can’t have these communities staying completely (apart), intermarriage rates even in Singapore are rising much higher. You yourself have a multicultural marriage. The old model for Singapore seems to be one that isn't going to be applicable if you have 30, 40 per cent inter-marriage.
So then the great challenge that the Merkels of the world face is, how do you create a common culture? And the one country that has an answer here is the US, because we have no culture. We had a shared set of political ideas that you have to buy into. There is, to be fair (that) behind all that, there was a kind of Protestant English subculture that you had to buy into. We just went through things Thanksgiving - that is not a Greek Festival, that was a festival of Englishmen who came here - but there's largely a political culture that you're trying to get people to assimilate around. In Europe, that was not what made European countries - what made European countries was the idea “we, this tribe has lived here in these forests for age immemorial and by the way, killed the tribe that lived on the other side of this forest for age immemorial, and what you Algerians are doing in this in this forest I don't know”. And that has been the problem for the Europeans. So what's your solution?
President: So I half-agree with Fareed on this. Singapore never went for a melting pot concept of multiracialism. But neither did we go for the quilt of diversity in different patches, where we live and let live - live in your own neighbourhoods like they do in the banlieus in Paris, you grow up in different schools, and you have your own practices but you sing the same national anthem. We didn't go for that either. We actually went for a very intrusive model of integration. Combining the school systems into one national school system. Everyone attends the same schools. And most intrusively, everyone lives in the same neighbourhoods, same housing apartment blocks, visits the same markets, same bus stop that you wait at, same playgrounds your kids mess around in. That was a very intrusive system of integration. That was Lee Kuan Yew. So the fabric of Singapore society was woven by all our threads. But he recognised, and we recognise, that they are different threads, they are different colours, even different materials, but we want them all to form a common fabric of society.
Europe went for a quilt and it looked very good initially, because it was a vibrant quilt. The diversity was very apparent. But the moment you start getting pulls on that fabric, coming from outside your society or from within, the seams between each of the patches frays. Even Britain - more integrated than Europe - even in Britain, 50 per cent of all Muslims live in the bottom 10 per cent of neighbourhoods. It's not an integrated society. And then we come to the United States, seemingly integrated because it lacks a culture as you say, but there is segregation. There is segregation in housing, in neighbourhoods, that is systematic, and as a result there's effective segregation by schools. It’s socio-economic and its ethnic. And the rules deter housing integration.
We can't really lecture each other on what's necessary because we come from different histories - Singapore by force of an unusual start to nationhood went for a very intrusive approach of weaving those threads together into a common fabric but recognising that they were different threads. And people did want to retain their own sense of identity, their faith, a sense of their own culture. It gave you some meaning in life, but you were part of a common fabric of Singapore society. And more and more I do feel as we go forward as a country, we've got to make sure that people don't just see themselves as persons of different races and religions, not just see themselves are sharing a Singaporean nationality, but as sharing each other's cultures as well. Taking an interest in each other's cultures, speaking a bit of language. You don't need to be able to write, maybe not even read, but speak some of each other's languages. Most importantly, grow up together, make friends with each other. You might get married or not get married to each other. But you’re friends. And Singapore can do that. But it would not have been possible had we had not had that model of integration from the start – in schools, housing, at work.
Fareed: Very interestingly, this was the Johnson administration's effort during the fair housing policies. And it hit a wall of white resistance. And if you look at housing in America, it gets integrated till about 1971, 1972. When the white backlash becomes very strong, Nixon recognises it, plays on it, and we are at the same level of housing integration in this country. Since then, you know, since 1971, we are no more integrated today than we were then.
President: Even in the liberal leaning states.
*****
Question and Answer
President: On Taiwan, first of all as you know, Singapore believes in the One China policy and we have been consistent about that through the years. We are in the unusual position of having very good relations with both China and Taiwan, which are understood by both. Now, how we react if there were to be a conflict depends on how the conflict came about. But I would say more fundamentally that there's too much of a parlour game now of people trying to predict: “Is China going to attack Taiwan? Is it 2027 or 2035? What are President Xi Jinping’s real objectives?” There's too much of that parlour game. The fact of the matter is, every serious observer knows that neither China nor Taiwan nor the United States wants a conflict. That's very clear. And we have to do everything we can to prevent any provocation or accident that could provoke a conflict. That's the task, and it abides by the interests of both China and the US in not wanting a conflict to take place. And fundamentally, that means no move to Taiwan independence.
The second question, a broad question about technological advancement. AI is going to be transformative in ways that go well beyond previous waves of technological advancement. AI can be very empowering for the small enterprise, for the individual, anywhere in the world, including the developing world. But the challenge we face with AI is that a significant part of the cognitive class, people doing auditing work, legal drafting, a whole set of white-collar jobs - can have their jobs done much more easily, faster and cheaper by AI. And that that's happening today at an accelerating pace.
So we've got to find ways in which we re-empower every individual - first to be able to use AI as a tool, but second, if they do lose their jobs, because some will lose their jobs, to be able to move on to something else. And the societies that succeed in an AI era are those that are going to have the ability to invest continually in people including in the middle of their career, or even at the later stages of their career. That's what we've embarked on in Singapore. We called it SkillsFuture. But it requires continuous investment, and not just leaving it to enterprises and individuals to sort this out. It requires a national approach, and some public investment. And it requires constant niftiness, as you move from one job to another, retaining some of the skills you built before and trying to apply it to a new area.
There will be a premium on the intrinsic human skills - EQ and some forms of creativity that are still beyond the most intelligent machines. There will still be that human premium. But I believe a more large-scale adjustment in workforces and societies is going to be necessary with AI; it goes well beyond what happened with computers and the Internet revolution.
Fareed: In a sense what you're saying is these kids won't lose their jobs to AI. They lose their jobs to somebody who knows how to use AI better than they do.
President: That’s quite right. But it has profound implications because it means as you grow up from young, you’ve got to develop in every possible way that very human activity of interacting, understanding, sensing each other emotively, associating ourselves with each other –because it's that EQ that the machines can't do. And if they do it, they'll do it in a more robotic fashion.
Third question on globalisation and regional cooperation. In this imperfect world, one of the ways in which we keep global integration alive is through regional initiatives. We're doing it in Asia, and in fact Singapore is very much at the forefront of that. Within
ASEAN, and through the RCEP - a very large trade alliance, although not as deep as the CPTPP - and of course through the CPTPP, which is a high standard free trade agreement. So we are pushing very hard in Asia, more than in most other regions, but we are keeping the boundaries open. Keeping the geometry open and not fixed. The UK is joining the CPTPP very likely by the middle of next year. It is not a closed regionalism but open regionalism, and is a way to keep global integration afloat.
President: On the first question about the developing world and how we build consensus – consensus in favor of multilateralism, consensus in favor of let's say market-based economic development. First, the whole world has to recognise that what happens in Sub Saharan Africa is in all our interests. We're going to see a very large increase in the world's population in the next 30 years, and most of it is going to come from Sub Saharan Africa. Most people don't realise that. A huge bulge of young population that is coming up there. If they get jobs and decent jobs, then the world remains a peaceful place and a prosperous place. If they don't, then you get a new element of the radical uncertainty I was talking about - forced migration, outbreaks of global health disorders, and a whole set of other problems. So, we've got to invest in Africa, using the World Bank, using the African Development Bank, using the private sector, to ensure that this large part of humanity is able to get on a ladder of prosperity. And if we don't do it, it's very hard to expect them to have a consensus in favour of tackling global challenges. If you don't provide basic electricity, which is now lacking for large numbers of people in Africa, you can't really talk about decarbonisation the economy. You've got to first electrify the villages, you got to deal with the basics. Helping every country get on its feet, get on that ladder of prosperity, that’s still the basis for global prosperity and there are ways of organizing it. It requires a willingness to recognise that this is an investment the global community makes, and it’s not simply about aid, but about investment.
On the next question about Singapore becoming a super-aged society, the role of immigration. We will have to continue to rely on immigration, but we will have to do it at the right pace and bring in the right quantity of immigrants. No society can simply open its borders to people. It's different from goods, it’s different from services, as Fareed was hinting at earlier, no society can be completely open to people from all over the world. You've got to do it at a measured pace. And critically, you've got to integrate people. And if you're unable to integrate people well, you just have to stop. You can't keep taking in more and more people.
Singapore's emphasis is on both a measured pace of immigration for people who are able to contribute to the economy, and to find ways in which they can be integrated. And for those who can settle down to help them settle down. It must remain a country where Singaporeans feel, this is their own country, with a Singaporean ethos, Singaporean ways of going about things in a certain Singaporean egalitarianism in the social sense. We’ve got to stay that way.
On the next question, I think the way to think about it, is that we're in a world where the central challenge is not about economic cycles. Central banks and ministries of finance will try to manage the cycles - you have a boom that's getting too hot, you tighten monetary policy, you contract fiscal policy, and things come back down to normal. If you're in a depression, you find ways to boost government spending, lower interest rates or pump in more money. That was a cyclical game. But the challenges we face in the world today are not about cycles. They're not about macroeconomic cycles.
They're about what the economists call supply side shocks, but even that sounds like an abstraction. What they're really about are conflicts and wars, pandemics, floods, droughts, and other things that are quite separate from macroeconomics. But economic policy has to respond, and in a way that is more long-term. Don't wait for crises to come. Invest early to prevent and prepare for crises. Because if you just keep waiting for crises to come, they're extremely expensive. And secondly, they exact an unacceptable cost to human life and livelihoods.
So the progressive and financially prudent thing to do is to invest early to prevent and prepare for crises. We know the next pandemic is coming in. We’re still flying blind into it by the way – a proper system of global surveillance hasn't been set up; Africa and many other parts of the developing world are still lacking the basic infrastructure and primary health care required so that when the time comes, you know you can ship the vaccine in cold storage into every village and get it into someone's arm. We still don't have the infrastructure. It's not expensive. We just need to get down to it.
President: My sense is that AI will be a big, net plus for Singapore. First, going back to that challenge about enabling everyone in the workforce to be able to adjust, we are a small society, and we've got a way of organising ourselves between government businesses, unions, and individuals in the community, such that you can reach every individual. You can make available to them courses or modules that give them new skills, and help them keep moving in their careers. So we can organise the skills of the future and in fact, we intend to do so.
Second, Singapore’s short on people. And AI is actually an enabler because it replaces some jobs that Singaporeans are not particularly keen on doing. We don't have enough people doing programming, for instance, and AI is taking over the world of coding and programming. Just to give you an example.
Thirdly, I think the pace of innovation is going to increase in every sector because of AI. And what Singapore's real strength has to be that it is one of the places in the world where you can very quickly adopt the latest innovations. You don't need to be there at the frontier creating the breakthrough technologies. A lot of it is going to come from Silicon Valley and other major hubs, an some of it will come from Singapore. But Singapore has to be very quick off the mark as a place where you can adopt new technologies and make an interesting concept commercially viable.
On Africa, I would say, a major opportunity is in agrifood. The world is going to run into a food crisis. And it requires rethinking agriculture in both Africa and South Asia, where it has been left largely unchanged, remarkably, for decades now. If you look at levels of productivity in agriculture, or the yields for the same crops in South Asia or Sub- Saharan Africa, compared to say the United States, it's just a vast difference. Even systems of irrigation are centuries old. The way in which we grow staples like rice are centuries old. So this is an opportunity to revolutionise agriculture, so that it becomes a cash crop and an export crop, farmers’ incomes are improved, and we address the challenges of the global commons at the same time by not wasting so much water and disposing of polluted water. So it's a real opportunity in Africa, and I'm just talking about the agrifood industry. There are other opportunities as well, but Africa is still not integrated. The African Continental Free Trade Area (AfCFTA) has been slow in the uptake and it really needs to be given a lot more attention.
On India. India and Southeast Asia have deep cultural commonalities. Singapore’s economic relationship with India is booming. It is one of the largest investors in India, It's a country that you want to be in.
So Singapore is strategically, and because of the natural market of entrepreneurial activity, deeply plugged into China, India, Southeast Asia, and the United States and Europe. We are plugged into each of these major regions and we intend to keep it that way. And it means constant engagement in India, in China and in the rest of the world.
Singapore has to work hard at that, keep looking outward, and keep understanding the needs and the mores of the societies that we're operating in.