Good morning. I extend my greetings to fellow members and associate members of the InterAction Council and to the impressive array of experts in attendance, and to all others who are attending this conference.
On behalf of the Council I extend our thanks to our Chinese hosts who have in so many ways helped the Council hold this gathering here in Beijing.
On a personal basis I am delighted to be back in Beijing and to see again this remarkable city whose changes over recent decades are truly impressive.
My remarks address the traditional opening topic; ‘The Present State of the World’. In addressing that issue I will note that many of today’s issues have legacies 100 years old.
Beijing is a long way by all measures from where Joan and I live a few minutes’ walk from a long black sand beach on the West Coast of the North Island of New Zealand. Joan and I walk on the beach often.
A few days back, on a beautiful early spring morning I walked along that beach with a gentle tide flowing peacefully back and forth and all was at peace as I looked out across the gentle tide to a beautiful nature reserve on Kapiti Island a little way off shore.
Yet, if I turned my head a little towards the land I walk beside I would note that the sea was moving further inland with every passing storm and how the fence that was at the old high tide mark now lies forlornly on the beach with neither use nor purpose.
I was reflecting as I walked along enjoying the gentle swish of the tide with the world almost to myself, how similar the mood on the Waikanae beach was to the world at large. If we only look in one direction we see little other than progress and prosperity, but if we look elsewhere we see terrible conditions of destitution and poverty.
If we look again we see the hopelessness and utter despair of the 65 million refugees who have nowhere to go and remain locked up in camps because no country offers them a home. I reflect often on how far the world has moved on from the beautiful and humane words carved on the Statue of Liberty overlooking New York harbour.
“Give me your tired, your poor, your huddled masses yearning to breathe free. The wretched refuse of your teeming shore. Send these, the homeless, tempest tossed to me, I lift my lamp beside the golden door.”
I reflect on those words as I walk along and have no convincing answer, other than selfishness, as to why that Golden Door has effectively closed across much of the world.
I reflect on the climate change as I walk along and know that if I was able to see further northwest I would see the great but desperately dry lands of New Zealand’s closest neighbour Australia, suffering its worst winter drought in decades.
And lifting my eyes a little higher looking south I theoretically would see the great white continent of Antarctic, twice the size of Australia – where I have visited twice. Antarctica’s vast ice fields hold the great majority – 70% - of the world’s fresh water, but its ice is melting and sea levels are rising.
A recent article I read (Dom Post 1.9.18) gave the world a stark reminder that the time for action is now by noting that:
“The amount of CO2 in the earth’s atmosphere is about the same as it was 3 million years ago when sea levels were about 17 metres higher than they are now”. Scientists don’t know how quickly sea levels will rise now the atmosphere has reached that level of CO2.
The article went on to say that “according to the latest research results, the more severe sea levels rise predictions look much more accurate than the more optimistic ones.”
Secretary General Antonio Guterres of the UN said this month, (11.9.18), referring to the forthcoming report from the Intergovernmental Panel on Climate Change that;
“We are careering towards the edge of the abyss.”
The Guardian Columnist (6.9.18) George Monbiot puts it equally bluntly: “Defending the planet means changing the world.” A big call, but the facts are known so to achieve the required change means changing our thinking. That is a most difficult challenge, but it is happening.
Any current political leaders who deny the science are in the minority, and will be left on the side-lines of history.
\A good example of progress is the decision of major car manufacturers to set a firm date to stop producing polluting diesel and petrol powered vehicles and move to electric powered models.
A key decision to changing our thinking and attitudes to polluting activities and endless growth is to dump Gross Domestic Product (GDP) as the universal measure of progress. GDP, which we have inherited from the 1930’s only measures money transactions and is a totally inadequate measure of societal progress. I will come back to that later.
2018 is the tenth anniversary of the last global financial crisis when taxpayers across the world had to spend untold billions to rescue the banking and the underlying financial system.
Despite that catastrophe, big money has a big voice and little has changed.
Local and international media a few times every day tell us somewhat breathlessly what the markets are doing.
And only occasionally what our throwaway society, which in part drives markets and GDP, is doing to the environment.
Remember all that plastic and other junk that has now gathered at what is described as the ‘Great Pacific Garbage Patch’. This floating rubbish dump is 1.6 million square kilometres in size, which is three times the size of France.
We must face the fact “that climate change is no longer some far off problem. It is happening now. Climate change is already disrupting agriculture and ecosystems, our water and food supplies, our energy, our infrastructure, our human health, human safety – now. Today.
And climate change is a trend that affects all trends- economic trends, security trends. Everything will be impacted. And it becomes more dramatic with each passing year.”
That quote came from the US president’s address to the Glacier Conference in Alaska, September 2015 – 3 short years ago.
Yes, a different President, and while the political whims of the voters can change leaders, that does not change the science or reality of climate change. The science is the same today as it was in 2015.
As always history casts a long shadow over today’s world and while to some extent, we work under that shadow, earlier generations worked together to escape from its more virulent legacies like the wholescale confiscation of land from indigenous people. With today’s many issues we forget that subjugation and slavery were the normal and accepted construct of earlier societies. We have made progress.
While reflecting on historic legacies, recall that after the unspeakable horror of WWI, which cost 40 million lives, the Sykes-Picot agreement, engineered by Britain and France carved up the Arab regions formerly controlled by the Ottoman Empire.
The conflicts and wars in that region still dominate much of the news cycle and foreign powers still claim the right to try and influence the politics and progress of those ancient lands and people to suit their purposes. Tragic.
Move forward 2 years from the Sykes-Picot deal we next have the Bolshevik Revolution.
This ushered in the doctrine and philosophy of Communism which caused massive disruption and the implications of that revolution are still with us today.
WWI was followed a short 21 years later by WWII which ended when the world witnessed the frightening power of nuclear weapons with the destruction of the Japanese cities Hiroshima and Nagasaki.
The other defining aftermath of WWI was the election of Hitler in 1933 who with his enthusiastic supporters, and driven by xenophobic hatred of the Jews and other minorities led to the slaughter of 6 million Jews in Concentration Camps and gas chambers of Nazi Germany. Xenophobic hatred of others is not without relevance today.
The important fact to remember is that at the end of WWII, leaders knew that radical new thinking and new approaches were needed to prevent a repeat of the horrors of two World Wars, a devastating world economic crash in the 1930s and the slaughter of the innocents in WWII. Those events all happened over a short 31 year period, and so horrified leaders that they were prepared to adopt radical new approaches based broadly on the philosophy that we needed to work together as a world community if we were to achieve the twin goals of peace and prosperity.
A first step was to establish the United Nations in 1945 and within the UN to establish the powerful Security Council. And I observe the membership of the Security Council should be changed to better reflect today’s world.
Following the Bretton Woods Agreement in 1944 it was agreed that a new framework was needed to facilitate open and fair trade between nations so the World Bank and the International Monetary Fund (IMF) were established and alongside that the General Agreement on Trade and Tariffs (GATT) to establish fair rules for international trade.
The GATT became the World Trade Organisation (WTO) in 1995 and continues the journey to open up trade between nations. Trade is often unequal but still benefits both sides.
To help feed a hungry world the Food and Agricultural Organisation was also set up in 1945 and the World Health Organisation was established in 1948.
The period between 1845 and 1948 can only be described as frenetic in terms of creating a new international order. The activity and diplomacy required should be studied by those who believe that the market alone can solve all issues.
The other movement that spread with relentless energy in country after country was the legitimate demand for independence from colonial masters that also occurred from 1945 onwards.
In addition farsighted leaders, especially in Germany and France, set about uniting the economies of Europe, first through establishing the European Economic Commission (EEC) which became the European Union (EU) in 1992 and ended up with 28 Member countries and 510 million people – a huge trading block.
The twin goals of bringing Europe together were to prevent further wars which has been common down the centuries in Europe, and to bring the economies together to promote the rebuilding and growth of Europe.
The integration went an important step further than just lowering barriers to goods by also allowing the free movements of citizens. This was brave but in my view an important step in breaking down political barriers between people.
I know it is this free movement of people that has caused friction and anger and unfounded fear in some countries. Fanned by unscrupulous leaders it is causing difficulties, but the movement of people will continue as it always has and with brave leadership current emotions will subside and pass.
The next big shift in world politics came with the end of the Cold War which symbolically happened with the fall of the Berlin Wall in 1989 and then the reunification of Germany. An air of optimism spread across the world and countries talked of a peace dividend and reducing arms expenditure.
The foregoing is a crude overview of how the world has evolved after the horror and destruction of the first half of the 20thcentury. Despite the horror there is much that is positive in the last 100 years, especially in the field of science, technology and food production.
Consider the remarkable fact that the world’s population grew from 2 billion in 1918 to today’s 7.7 billion and despite that huge increase in population 1.1 billion people moved out of extreme poverty. Thinking of the present state of the world its remarkable what can be achieved when leaders are prepared to lead.
The reality now is that in the first quarter of the 21stcentury some current leaders seem to have forgotten, wilfully or otherwise, the compelling reasons why their earlier compatriots saw the necessity for a rules based and collaborative international structure and order.
An example is the decision, by a small margin, of the British voters to leave the EU without any semblance of a plan has created uncertainty not only in Britain, but elsewhere.
In the US trade wars are discussed, threatened and implemented as if they were of no consequence. The promotion of contempt and hatred of people from other ethnicities, beliefs and colour are considered by some as the cornerstone of modern politics.
Truth has been discarded and lies, no matter how farcical and absurd are promoted as alternative facts. Truth is described as fake news and integrity ridiculed. Much media coverage is given to the above stories and while most of the world is not following these angry political developments, the question remains as to what has brought about this ‘Age of Anger’. By most accounts today’s generation has more wealth, options and opportunities than any previous generation. People can do more, see more and achieve more than any other time in human history and yet many somehow feel cheated.
There are many factors behind what I call ‘the disillusioned society’ but greed and fear, two of the ancient enemies of human kind are the big drivers.
That said there is no cause for despair as the economic model based on individualism and greed, and the pursuit of endless growth is being seriously questioned; the grossly uneven distribution of wealth is being seriously questioned. The whole structure of today’s world, much of it inherited from an earlier era, is up for serious discussion.
That is a healthy development as it is recognition that change has happened. China is now the big world player, and presumable feeling on the fringes of Western aligned World Bank and IMF, has established the Asian Infrastructure Investment Bank (AIIB) and established the Shanghai Cooperation Organisation.
And why not, as so far this decade China has produced almost half of the global GDP growth. China’s growth creates another Italy every two years – and Italy is a member of the ‘big country club’ the G7 but China is not. Another example of current world organisations being legacies of a different era. (Project Syndicate report 27.9.18)
The other big development is China’s ambitious Belt and Road initiative spanning much of Eurasia. To me the big message out of today’s world is that while some leaders and some countries are turning inwards, other more farsighted leaders see a different and more inclusive world.
Yesterday’s world is fading and we should encourage the revolution in thinking that is happening now in Governments, industry and across society. The past is not coming back.
New Zealand started one such revolution 125 years back when we became the first country in the world to give women the vote. Even now that revolution has yet to reach all corners of the world, so that battle continues.
It is more than just the vote, it is about the role that women can and should play in leadership and in senior levels of all aspects of society. This revolution still has a long way to go to achieve equality between women and men.
I mentioned earlier that the world needed to move away from using GDP as a measure of progress as it takes no account of how the economic growth that was measured was created and what purpose was served by the measured growth. The destruction of the environment for example by cutting down virgin rain forests, or building nuclear bombs, would lead to stronger GDP growth.
There are many ways to get growth, but many are totally destructive and like massive investments in nuclear deterrence, lack any moral principles.
With GDP crime is good because large police forces add to GDP and repairing the damage caused by criminals and assorted thugs all add to GDP. A ‘Human Development Index’ (HDI) has been developed to capture a broader range of indices, broadly including life expectancy, education opportunities and economic opportunities.
A move in the right direction, but from perspective a comprehensive index must include inequality, gender disparity and importantly the impact of growth on the environment. Yes, more complex but far more valuable in measuring genuine progress.
And in the space of community anger it is worth noting that all the good work done by generous loving people hardly registers in GDP measures. But borrowing money to purchase goods that have little or no value is great for GDP.
That brings up the scary monster of the level of world debt.
Ten years on from the collapse of Lehman Brothers and the start of the 2008 financial crash that destroyed the dreams of millions across the world, we are still playing the same growth song but this time the borrowing to keep the music going is so much larger than in 2008.
The McKinsey Global Institute this month, (Washington Post 4.9.18) notes that total debt now is ‘a whopping US$169 Trillion, up from US$97 Trillion on the eve of the Great Recession’. I am not going to speculate what the full implications of such a debt mountain are; you can work that out yourself.
I have in general been talking about the world as it is and some of the events that brought the world to this place. Where some see only uncertainty and fear and want to build walls, others see unbelievable opportunities.
Fortunately, modern technology is not constrained by an old fashioned wall.
To achieve the maximum benefits from the extraordinary possibilities that artificial intelligence (AI) and Robots will usher in tomorrow will require that we start now to challenge old thinking, stretch old boundaries and think of new possibilities.
The near universal 40 hour working week only emerged after the industrial revolution and was bedded about 100 years ago. It was hotly contested by the old guard at the time.
With the extraordinary possibilities of AI at our collective fingertips, a 35 hour day or 4 day working week should already be in the planning stages in advances economies.
The concept of a Universal Basic Income (UBI) should also be in the planning stage, and likewise universal 24 hour accident cover and universal health care should be an accepted part of all developed societies and a work in progress for all others.
These are not fanciful dreams but realities in many countries now. In New Zealand we have had 24 hour no fault accident cover since the 1970’s as well as universal health care.
My point is simple, that while there is much from the past that needs to be remedied and we must continue and complete that effort, we must likewise set out in clear lights why todays gloom is misplaced.
Let me conclude by saying that Leaders must set out the great possibilities of the 21stcentury and explain their commitment and plans to achieve new exciting goals. Consider how the vision of a free trade agreement encompassing 1.2 billion people, twice the size of the EU, stretching from Cape Town to Cairo would greatly enhance the lives of millions. But this time in the 21stcentury, let us make sure that all benefit from Globalisation.
AI and robotics are not to be feared but to be seen as today’s tools to reduce the drudgery of boring repetitive work.
With machines doing more and more work we humans can plan for a different and more simulating lifestyle. Instead of bemoaning past failures of policy, let us commit to a new order where all are treated fairly irrespective of ethnicity, colour or religion.
Going forward “You have to be able to hold two ideas in your head at once: the world is getting better and it’s not good enough”. (Dr. Hans Rosling.) But we must keep trying.
Thank you for your attention.