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  • Thank you very much.

  • It's delightful to be here I can't really see any of you

  • in the brightness of lights.

  • I'll just focus on these guys, that will work for me.

  • I haven't given a speech with slides in fifteen years.

  • So one, these are really old slides.

  • More relevantly we'll see how it goes.

  • The name of my talk is "The rise of the different".

  • Why the global order doesn't work and what we can do about it.

  • The global order doesn't work. I think that's obvious.

  • We live in what I call a G-0 world, not a G-7, not a G-20.

  • you look around the world today, look at Europe

  • it is very clear that while United States is prepared to send secretary Geithner

  • over and over to dispense advice

  • he is not writing any checks.

  • And when french president Sarkozy went to China

  • and said "How about some support?"

  • the response from the Chinese was "Not no, but hell no''

  • if the Europeans are going to get through this crisis,

  • as I believe they ultimately will,

  • they will get through it themselves.

  • Afghanistan, the United States is leaving Afghanistan.

  • by 2014, the country will fall apart.

  • When I spoke to some Chinese officials recently and I asked them

  • "You know, the Brits have done Afghanistan,

  • the Soviets, the Americans. Isn't it your turn?"

  • The response was "No, we don't want to get involved".

  • Look at Syria, it has been over eighteen months

  • we have up to 30.000 dead and the likelihood of any resolution,

  • from anyone, is really not in front of us.

  • If Putin really wanted to make

  • Obama's day, he could say

  • "You know I've had a change of heart,

  • we have real problems on the ground in Syria,

  • I see the humanitarian devastation.

  • I'll tell you what I'm going to do: I'm going to change my mind,

  • I will support anything you want to do in the Security Council.

  • So what would you like to do?"

  • And then Obama would say

  • "I wanted to blame you.''

  • (Laughter)

  • But it's very clear

  • we're not going to see a resolution of Syria either,

  • and if you look at global institutions:

  • the Doha round on trade is dead,

  • climate, we have had now

  • Copenhagen and Durban, Rio plus 20,

  • how many more failed global summits on climate do we need to have

  • before we understand we should stop having

  • global summits on climate?

  • I was at Columbia University

  • I was with my students the other day and I asked them this question

  • and one of my students raised his hand and said "Seven".

  • Which I thought was a pretty good answer,

  • I mean two or three is probably not enough

  • but by the time you get to ten it gets a little silly,

  • seven seems like enough failed additional global climate summits

  • before we should probably stop.

  • So, we are in this environment, it's very clear.

  • And it's a very different world order from the one we had over the past decades,

  • the old world order was led by the United States.

  • When we came out of World War II we had Bretton Woods on currency,

  • we had the World Bank, we had the I.M.F.

  • we had the United Nations.

  • They sound global, the World Bank sounds global.

  • The World Series, sounds global, right?

  • There is a Canadian team?

  • It's not global, and this is the point,

  • all of these institutions were created by the United States

  • with American allies, American values,

  • American priorities, American capital.

  • And that was the order you can call it a G-7 or a G-20

  • but in reality was a G-1 plus.

  • That order is gone.

  • What replaces it?

  • Why have we lost it?

  • I think that there are three reasons

  • I'm going to focus on one in particular today.

  • The first is that the U.S doesn't want to do as much as they have historically.

  • Had any of you seen the foreign policy debate

  • of the U.S. presidential candidates a week ago?

  • I apologize, you'll never get those ninety minutes back,

  • they are just gone.

  • But, of course, what they agreed on

  • was that they didn't want to respond on foreign policy questions

  • what they agreed on was

  • that they wanted to do nation building at home.

  • The average American is less interested in being a global policeman,

  • they're less interested in being the lender of last resort,

  • they are less interested

  • in leading and directing globalization.

  • Second major [reason] is that Europe and Japan,

  • America's major allies,

  • don't want to do this either, they are busy, they are distracted.

  • It's very clear that for the last three years the Europeans

  • have been maximally distracted by crisis, that is not going to change.

  • Japan had now eighteen governments in twentytwo years.

  • Modern day Asian record,

  • it's about to be 19 in 23.

  • They had the Fukushima crisis.

  • The Japanese aren't going to do it.

  • That is the reason number two.

  • Reason number three,

  • are all of these new countries.

  • The rise of the rest or, more relevantely, the rise of the different.

  • So, if you look back to 1980

  • and you look at where the world was in 1980,

  • it is very clear and it's the old order that we all know.

  • The United States is number 1, and going along the top ten economies

  • you have all those G-7 countries.

  • Look at Japan, Germany, France, U.K., Italy, Canada,

  • and then, when you get to 8 to 10, you have countries that are really close.

  • Mexico, taking advantage of the American economy

  • just across the border,

  • driven completely by the U.S. economy: trade, remittances, tourism, drugs

  • it's all U.S.

  • Spain, part of Europe,

  • Argentina, the most europeanized of the Latin American countries.

  • That is where we were in 1980. Where are we today?

  • Top ten economies today.

  • Look at the change.

  • Look at how China is number 2, look at Brazil, Russia, look at India:

  • we've got the BRICs.

  • Where is Canada? Gone.

  • Sorry Canada, Canada is off the list.

  • So, it happens. You know, data driven Canada is gone.

  • So, that is where we are today.

  • But, I said, this is not just a rise of the rest,

  • it is the rise of the different.

  • The fact that they are different makes life harder.

  • How are they different?

  • Here is one way: they are poor.

  • If you add the combined per-capita incomes

  • of Brazil, Russia, India and China

  • you are still lower than the per-capita income of the U.S.A.

  • The Chinese would be the first to tell you,

  • "Yes we are going to became the largest economy in the world,

  • but when we do, we will still be a poor country".

  • Their priorities will be different,

  • they will be much more internally focused.

  • Their levels of political stability are necessarily lower,

  • the volatility that they are impacted by when shocks

  • hit their countries are necessarily greater.

  • The fact that all of these new countries around the table

  • have fundamentally different qualities of life

  • and fundamentally different priorities for the citizens, does not make them bad,

  • it makes them different.

  • And we have a harder time politically integrating

  • and cooperating with different.

  • It is one of the biggest challenges in the world today.

  • What else?

  • Let's look at capabilities - Foreign aid.

  • Look how extraordinarily different.

  • If you want to look at them from a planetary perspective,

  • the USA is the Sun and the BRICs are Neptune, Pluto?

  • I mean 214 billion dollars: Ok the U.S. is still the biggest game out there

  • but Great Britain 26; the BRICs combined 3 billion dollars in foreign aid.

  • Does that mean they are bad?

  • No, it means they haven't done this before.

  • So, here is a statistic for you.

  • India has 1.1 billion people,

  • New Zealand has 4 million.

  • Their numbers of diplomats, foreign service officers, are the same.

  • Now, we don't look to New Zealand for a lot of support on global trade,

  • we don't look to them for a lot of support on climate,

  • we don't look to them to really help move the needle on nuclear nonproliferation

  • and yet we expect India to do this. Why?

  • Because they are so big.

  • But they are not.

  • Their capabilities when you look at how long they have been global

  • and how much time they have had to develop the institutions and the bureaucracies,

  • it is not just that they don't want to agree on many of these issues

  • it is not that they have different priorities and different systems

  • but it is also that they don't have the capacity.

  • How long has there been active international philanthropy in Britain,

  • or in Canada, or across Europe or in United States?

  • Does Russia have that yet?

  • The answer is no.

  • How long have we had multinational corporations

  • that know how to work globally in the advanced industrial economies?

  • The Indians aren't there yet, nor the Brazilians, nor the Chinese.

  • They're getting there, it's incredibly impressive to look at how much

  • they've grown but we have to understand how radically different in capacity

  • and interest the other countries that matter around the world are today.

  • Look at share of global military expenditure.

  • The U.S. of course is number 1.

  • What a lot of you may not know is that the U.S.A. spends more on defense

  • than the world's ten next economies added up.

  • Now, I'm not suggesting that's sustainable.

  • I am not suggesting that it is right and proper for the United States

  • to keep spending that amount on defence globally.

  • I think a lot of Americans are having that discussion right now.

  • But what is very clear is that if you want to really burden share and say

  • "Well, the world order is changing

  • so many other countries should be providing

  • that level of security that the U.S. used to"

  • you look at the numbers and you realize that it is not happening.

  • It looks more like a G-0.

  • Global competitiveness.

  • Look at the ease of doing business in different countries

  • U.S.A. is 4, U.K. is 7, look at the BRICs: 91 China

  • and they are the best of the BRICs in terms of doing business ranking.

  • How about the "Brain Drain"?

  • U.K. is 4, U.S. is 5.

  • Of course, you know, it was 4 and 5 in the other direction

  • and TED started organizing in Oxford

  • and now that just tipped it to the other direction.

  • (Laughter)

  • But even here: Brazil 27, Russia 111

  • the best universities in the world ovewhelmingly in the U.S.A.

  • and in the advanced industrial economies.

  • Yes, it is starting to change

  • there are three Chinese institutions now in the top hundred.

  • There were none, there are none from India.

  • It is changing, it is changing slowly,

  • we need to recognize where we are today.

  • Ok. So, I think I have made the point

  • that the new emerging markets

  • that are sitting with us around the table

  • and are critical to understanding how the world will or will not be led,

  • are fundamentally different from the advanced industrial democracies.

  • At least can we say that the emerging markets themselves have a lot in common?

  • That they will become more coherent as a group?

  • The answer is no.

  • Let's compare the BRICs.

  • Let's look first of all at systems of government.

  • The Brazilians and the Indians are democracies,

  • the Russians and the Chinese not so much.

  • How about energy?

  • The Russians and the Brazilians are energy exporters,

  • the Indians and the Chinese not so much.

  • How about the economy?

  • Well, Brazil, India and China have fairly diversified economies

  • you see that in terms of what they manufacture,

  • the consumers sectors, levels of import.

  • Russia is a petrostate, not so much diversity.

  • Demographics.

  • China, Russia and Brazil: urbanized, strongly urbanizing.

  • India: 31% of the population is in cities.

  • That is compared to up 50% in Africa.

  • Not so much.

  • Finally, neighborood.

  • India, China, Russia: all being buffeted by difficult

  • - and getting worse - geopolitical conflicts.

  • Brazil is in a geopolitical neighborood where they don't have to deal

  • with this stuff - they have got Chavez in Venezuela, who is near death.

  • That's about it.

  • I say this because fundamentally if you look at the kinds of things

  • that might create shared interest

  • you look at how the world order went from Great Britain

  • to the United States and how similar those countries are.

  • How similar our countries are in terms of all of these kinds of points.