The New Connected World Order By Parag Khanna Converging - - PowerPoint PPT Presentation

The New Connected World Order

By Parag Khanna

Complexity, Unpredictability, Risk “Black Elephants”: Brexit, Trump, Currency Wars, Conflict Escalation

Economic

Converging Volatilities

• Ballooning debt
• Banking crises
• Protectionism
• Inequality

Environmental Technological Geopolitical

• Climate change
• Eco-system stress
• Water scarcity
• Food security
• Disrupted business models
• Labor automation
• WMD proliferation
• Cyber-war
• Mideast collapse
• Terrorism’s global reach
• China/Asia tensions
• Western populism and unrest

Are we getting better at pricing risk, ringfencing volatility and mitigating long tails?

The Global Connectivity Revolution

Highways, railways, bridges, tunnels, airports, seaports

Skeletal System Transportation

The Infrastructural Matrix: Exoskeleton on the Planetary Body

Vascular System Energy Nervous System Communication

Oil & gas pipelines and refineries, electricity grids and power plants Internet cables, satellites, data centers

Geotechnology Drives Global Change

Mackinder, Luttwak … Three reinforcing dimensions of power Balance of innovation drives balance of power Strategic industrial policy to capture value chains Democracy versus authoritarianism

• ld versus new

War b/w systems (capitalism versus communism) Tug-of-war within the collective supply chain matrix Mackinder Modified: War over Territory War over Connectivity TPP vs RCEP/FTAAP Global trade is additive, not substitutive Trade/investment/supply chain nexus

“Who Rules the Supply Chain, Rules the World”

Beyond Orwell’s 1984: Warring or fusing mega-continents?

China: Top Trading Partner for Twice as Many Countries as US

Dyads of leverage as well as dependence Trade to investment to alliance?

From War or Tug-of-War: The New Geopolitics

China vs. Taiwan: Missiles or Mutual Colonization China vs. Japan: Senkaku/Diaoyu or Softbank/Alibaba West vs. Iran: Nukes or Great Emerging Market West vs. Russia: Crimea or Gas Pipelines US vs. China: Air-Sea Battle or TPP China vs. ASEAN: Paracel Islands or RCEP North vs. South Korea: Nukes or Supply Chains China vs. India: Trade or Tibet India vs. Pakistan: Fundos or MFN

Baltic Union: Shared infrastructure and governance services European energy grid: Integrated gas and nuclear power Europe-Russia: From singular dependence to reverse flows

Infrastructure as Authority: Reshaping Cross-Border Relations

East Meets West: Eurasia’s Iron Silk Roads

AIIB and the Compression of Eurasian Space: China Becomes a Two-Ocean Power “Iron Silk Roads” win the “New Great Game”

Connectivity Fills the Power Vacuum

Infrastructure alliances: An equal global public good (that can’t be deterred) 20th Century: NATO / Security 21st Century: AIIB / Infrastructure EU thinks like EPC not DoD: Connectivity across Eurasia vs culture across Atlantic Turkey: Member of both NATO and SCO?

The New Iron Age: Infrastructure as Extended Sovereignty

Grand Strategy: Avoid encirclement; control infrastructure, trade routes, market access

• verland and east of Malacca Strait

Post-ideological Geopolitics: Supply chain complementarities > ideologies; Merkel: “No eternal guarantee of EU-US close cooperation” Realism > moralism: Engage and invest for leverage in a post-sanctions world Less connectivity, more belligerence: Russia, Iran, North Korea

Competitive Connectivity: The Currency of Power

North America South America Europe

Africa Asia

Middle East

The Geopolitical Marketplace: Connectivity and Resilience

Complementary Global Goods: American security and Chinese infrastructure America the Global Utility: Security, energy, finance, technology, language From Hierarchy to Symmetry: Escape the “Thucydides Trap” through regionalism and reciprocity From Grand Strategy to Global Strategic Thought: Mutual connectivity, Co-creation/Co-evolution

Global Evolution: From Connectivity to Resilience

No more chokepoints

Competitive connectivity builds pathways for supply to meet demand Ring-fencing volatility: Ukraine, Iraq, Libya, South China Sea

Abundance and Stability

From “peak oil” to “gas glut” US oil sales to China

Toward Antifragility (Taleb)

War is an event; networking building is a process

THANK YOU!

paragkhanna@gmail.com @paragkhanna www.facebook.com/DrParagKhan na