Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. He's one of Asia's grand visionaries and believes the continent's global preeminence is just a matter of time as the dominance of the USA and Europe declines. He began by discussing how Asia can continue to grow and eventually lead the world this century despite the dangers that industrialization poses for the environment.
Transcript
Title: The Asian Century
Description: Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. He's one of Asia's grand visionaries and believes the continent's global preeminence is just a matter of time as the dominance of the USA and Europe declines. He began by discussing how Asia can continue to grow and eventually lead the world this century despite the dangers that industrialization poses for the environment.
Kishore Mahbubani
Dean, Lee Kuan Yew School of Public Policy
National University of Singapore
I see the return of Asia has been unstoppable because clearly from the year 1 to the year 1820 the two largest economies in the world always those of China and India, and only in the last 200 years that Europe took off, North America took off. So if China and India become the largest economies in the world is the return to the natural place in history. But clearly the challenge they face is to grow and develop and still take care of the global environment. The challenge is to find a global agreement whereby the west, which as you know caused the first stock of green house gas emissions to invest on the industrial revolution will take the responsibility for the stock they’ve put up in the atmosphere and then China and India can also be taxed for the new flows of green house gas emissions that they are contributing to the planet. So, what we need is a global deal within the west and the emerging economies, if we are going to make sure our planet doesn’t fry as a result of China and India and other Asian countries industrializing now.
Q: Given the majority of the world’s poor live in Asia, what factors underpin your confidence that this century the continent will deliver better lives for all?
A: You see a great variety of models of development in Asia. As you know, China has become the factory of the world and India has become the back office of the world, Philippines is also trying to become the back office of the world. So, I think it’s a mistake to think that there’s one model that will fit all the Asian countries. The critical thing is that you will see as a result of development in Asia is the explosion of the Asian middle classes and to give you one statistic – in 2010, in all of Asia, the total size of Asian middle class was 500 million people but by 2020, which is only 6 years from now, that number is going to explode to 1.75 billion people, an increase of 3 ½ times in 10 years. And this means by the way, that the new demand for products is going to come from Asia. And that in itself will also fuel growth in Asia.
Q: What indicators are you using to demonstrate the rise of the middle classes that you believe will drive the continent’s growth?
A: Growth of the middle class is happening and it’s amazing how few people know that it is happening. And if you want a leading indicator, in 1990, India had zero cellphones, now there’s close to a billion cellphones. In 1990, China had a few thousands cellphones now China’s got 1.2 billion cellphones. And by the way, look at the sales of smartphones in Asia and how rapidly they’re growing and that gives you an indication how Asian chemistry is changing dramatically. So, when people talk of Asia they have this old map of this downtrodden, poor, poverty-stricken Asia that’s not what’s emerging in the new Asia.
Q: When do you predict Asia will overtake the USA and Europe and become a global economic leader?
A: What many people fail to understand is how far Asia has come in the last 30 years. And already, if I’ll give you just one statistic, in 1980 the United States shared the global GNP in PPP terms and according to IMF statistics was 25% and China’s share was only 2.2%. Come 2016 or 2017, United States share is going to decline to 17.6% and China is going to rise to 18%. Now believe me, we have never before in human history ever seen such a major transformation of a human condition as the way it is happening now. So, I think it’s important to understand that you’re dealing with a whole new Asia on the world’s stage and that’s what the world got to deal with.
Q: Should Asian nations be putting significant resources into education to underpin the growth you say is inevitable?
A: I certainly agree that the Asians should pay more attention to education but I’ll give you the signs of the time – the world’s leading institution that looks at progress and higher education is the Institute for International Education in New York and guess what, they’re coming out with a book called ‘Asia as the Next Higher Education Superpower’, and they’ve asked to do the foreword for the book. And if you read the foreword, it’s actually stunning how much Asia has invested in its universities, its institutions of higher education. But the most remarkable thing that most people haven’t noticed is that Western education is clearly designed for the Western mind but when you combine the Western education with the Asian mind you get remarkable results and you find Asians outperforming Westerners in all leading universities.
Q: Influential books such as ‘Why Nations Fail’ argue that unless there is governance reform leading to inclusive institutions, economic growth in Asia is unsustainable. Do you agree?
A: I think that books like ‘Why Nations Fail’ reflect a peculiar Western mental handicap. It’s the incapability to understand a multi-civilizational world that is emerging, why you have many different kinds of political systems succeeding. There was this sort of curious Western belief as you know captured in Francis Fukuyama’s famous phrase – at the end of history, at the end of cold war, there’s only one destination for all societies in the world. There all supposed to become liberal democracy at the end of political evolution. Now, the good news is that even Francis Fukuyama has walked away from his thesis and acknowledged that maybe he was wrong. And now, when it comes to institutions of governing, it is striking how the West, both European societies and American societies are struggling with governance challenges. And if you want models of good governance in the world, if you want societies that actually improving the living standards of the people you no longer go to Europe, you no longer go to America, you come to Asia.
Q: How critical is regional trade and integration in Asia’s rise?
A: One little known fact that many people are not aware of is that intra-East Asian trade is much higher that intra-European trade and much higher than intra-North American trade. And as you know already cross-Pacific, trans-Pacific trade has far exceeded trans-Atlantic trade for a long time. And those who are looking for the growth of trade flows in the future are looking at East Asia and not into Europe or in America. And by 2030 or earlier, by the way, the total economic weight of Asia will be larger than Europe and America combined.
