Watch the Asia takes the Lead session from the World Economic Forum's Annual Meeting 2017 here.
The big question of our time is a simple one: should we feel optimistic or pessimistic for the future of humanity, all 7 billion of us?
The world’s response is divided. Many Western societies are drowning in pessimism. By contrast, the rest have never been more optimistic. This represents a reversal of previous centuries’ pattern, where the West was always more optimistic. What happened? And what do the facts tell us?
The facts are clear. The human condition has never been better. Global poverty is declining steadily. In 2015, we far exceeded the UN’s Millennium Development Goal of halving global poverty. According to the NIC, extreme poverty could halve again by 2030.
The global middle classes are exploding, from 1.8 billion in 2010 to 3.2 billion in 2020 and 4.9 billion in 2030. The world’s infant mortality rate has decreased from an estimated 60 deaths per thousand live births in 1990 to 32 in 2015. This translates to more than 4 million fewer infant deaths per year. If we were rational and objective, we would be celebrating the current human condition.
Why are we not? One simple answer is that Western intellectuals who dominate the global intellectual discourse are only aware of their societies’ short-term challenges, not the long-term global promises. Francis Fukuyama illustrates this well. In an essay written after the election of Donald Trump, he says, “Donald Trump’s stunning electoral defeat of Hillary Clinton marks a watershed, not just for American politics, but for the entire world order. We appear to be entering a new age of populist nationalism, in which the dominant liberal order that has been constructed since the 1950s has come under attack from angry and energized democratic majorities. The risk of sliding into a world of competitive and equally angry nationalisms is huge, and if this happens it would mark as momentous a juncture as the fall of the Berlin Wall in 1989.” [Note: emphasis added.]
Please study his words carefully. He is conflating the condition of the West with the condition of the world. It’s true that populism has risen in the West. That explains Trump and Brexit (and possibly Le Pen). But it hasn’t emerged in the more populous regions of Asia and Africa.
More importantly, the West only represents 12% of the world’s population. 88% live outside the West. And their living conditions (with the exception of a few Arab countries and North Korea) have never been better.
Take three of the most populous countries in Asia: China, India and Indonesia. The lives of the almost 3 billion people in these countries have never been better. And they will get much better in the coming decades, as this figure shows.
The decade of 2010 to 2020 is probably the best decade Asia has ever experienced. The Asian middle class population is going to jump from 500 million in 2010 to 1.75 billion in 2020. In short, Asia is going to add 1.5 times the total population of the West to the global middle class population in one decade.
Why is this happening? One simple answer is the triumph of reason. The spread of Western science and technology demonstrates this most clearly. At the most basic level, humans around the world can see the benefits of modern Western medicine. As a result, reason is replacing superstition. In all spheres of human life, from economic policies to environmental management, from education to urban planning, Western best practices are being almost universally adopted by all societies.
So what’s with all the pessimism?
If the world is getting better, why is the West becoming more pessimistic? The simple answer is that the West has pursued a deeply flawed strategy since the collapse of the Soviet Union in 1991. Like the British defenders of Singapore in World War II, they had their guns pointed out to the sea in the South when the Japanese came by land from the North.
To put this point even more starkly, the West thought it had won a colossal and epic struggle with its dramatic victory in the Cold War. As a result, it didn’t notice that an even bigger struggle had begun with the “return” of Asia at the same time. China decided to re-join the world economy in the 1980s. India did so in the 1990s. The return of 3 billion Asians was obviously going to shake up the global economy. The West didn’t notice.
It didn’t notice because Western minds were intoxicated with an unhealthy opiate of triumphalism. Francis Fukuyama’s famous essay “The End of History” captured this well. As a result, the West developed a flawed interventionist strategy towards the rest. Many of the interventions led to disaster. Michael Mandelbaum notes that “the Clinton administration’s track record was not encouraging: it has promised order in Somalia and left chaos. It had gone to Haiti to restore democracy and had left anarchy. It had bombed in Bosnia for the sake of national unity but presided over a de facto partition.”
And 9/11 made things worse. It seduced the Neo-Con advisers of George W Bush to invade Iraq, after invading Afghanistan. A decade later, Europeans saw two-thirds of their refugees coming from three countries: Iraq, Afghanistan and Syria.
But that was not where the real disaster was. As Western strategic thinkers were distracted, they didn’t see that the most important event in 2001 was not 9/11. It was China’s entry into the World Trade Organization. The entry of almost a billion workers into the global trading system would obviously result in massive “creative destruction” and the loss of many jobs.
Trump and Brexit are therefore the natural and logical results of a flawed Western strategy of not dealing with the real economic challenges to the West. While the West was distracted, China emerged. According to IMF statistics, in 1980, in PPP terms, America’s share of global GDP was 25% while that of China was 2.2%. In 2016, America’s share has shrunk to 15.5% while that of China has risen to 17.9%.
The relative decline of the West
There are therefore sound strategic reasons for Western pessimism: From 1820 to roughly 1980, Western economic power either grew steadily or maintained a huge globally dominant position. In the past three decades, the combined GDP of North America and Western Europe has shrunk from 51.5% in 1990 to 33.45% in 2014.
An even more destructive strategic change happened at the same time. While the workers in the West suffered job losses and deteriorating incomes, the Western elite became super rich from accelerated globalization and the return of Asia.
RW Johnson describes well how American workers suffered: “Between 1948 and 1973, productivity rose by 96.7% and real wages by 91.3%, almost exactly in step. Those were the days of plentiful hard-hat jobs in steel and the auto industry when workers could afford to send their children to college and see them rise into the middle class. But from 1973 to 2015 – the era of globalization, when many of those jobs vanished abroad – productivity rose 73.4% while wages rose by only 11.1%. Since 2000 the wages paid to college graduates have fallen.”
A reason to be optimistic
The existential questions that the West faces today are quite simple. Is everything lost? Will Western power and influence steadily decline? Or is there hope for the West? Can the West also benefit from the resurgence of the rest?
The simple answer is that the West can benefit from the surge of the rest. 12% of the world’s population can be pulled along by the remaining 88%. To achieve this, Western leaders and pundits need to make many significant psychological adjustments.
Instead of constantly trying to retain control of the world, the West should learn to share power. Asians should be allowed to run the IMF and World Bank. Equally importantly, Western pundits must drop their traditional condescension when speaking about the rest. Emerging Asian entities, like China, India and ASEAN, should be treated with more respect. India should be immediately given a seat on the UN Security Council, with the UK and France stepping aside.
All this sounds inconceivable to many Western minds. But until recently, it was also inconceivable that the rest could be more optimistic than the West. The West must now do the inconceivable to prepare for the inevitable inconceivable world.
Kishore Mahbubani is the author of The Great Convergence: Asia, the West and the Logic of One World. His forthcoming book, The ASEAN Miracle: A Catalyst for Peace will be published by NUS Press in early 2017.