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Ho Kwon Ping | Navigating the geopolitical divide

LiveMint logoLiveMint 22-09-2017 Preeti Dawra

As the ancient blessing, or curse, goes, may you live in interesting times. To admit these are interesting times is the understatement of the year, says Ho Kwon Ping, chairman of the recently concluded sixth Singapore Summit and executive chairman of luxury hotel chain Banyan Tree Holdings.

“Just as climate change has unleashed monster hurricanes recently, thunderstorms of populism and unbalanced globalisation have wreaked political maelstroms across the developed world,” he said.

He added: “First came Brexit, then ‘America First’. Before, there was the threat of potential missile bases on reclaimed islands in South China Sea. Now, intercontinental missiles possibly raining down on Guam. The rare black swan has become commonplace as ducks in a pond. Thinking the unthinkable has become cocktail chat.”

Ho says that with increasing polarization between extremist forces in almost every continent, the proverbial fence-sitting business executive, uncomfortable with taking sides and trying to please everyone, is increasingly untenable. “Whether it be issues of climate change or white supremacy, American business leaders recently have had to take sides.”

He suggests the trend may now carry to Asia, too. Critical issues as disparate as the plight of Rohingya refugees in Myanmar, or the culprits causing the pollution haze in Indonesia, or legal boundaries in South China Sea, are just a few random examples he cites of increasingly polarizing views on which it is increasingly difficult for business leaders to be neutral.

He would know as one of Asia’s most well-known business leaders in the luxury hotel business. He says Banyan Tree Holdings is regularly affected by regional economics and geopolitics. A journalist-turned-hotelier, he is also executive chairman of Thai Wah Public Co. and chairman of the board of trustees of Singapore Management University. Educated at Tunghai University, Taiwan; Stanford University, California; and the University of Singapore, Ho worked as a broadcast and financial journalist and was economics editor of the Far Eastern Economic Review in Hong Kong before joining the Thai Wah family business in 1981. He founded Laguna Phuket in 1987 and Banyan Tree Hotels and Resorts in 1994.

As the new chairman of Singapore Summit, the charismatic 65-year-old is trying to bridge a meaningful conversation between the world’s leading political and business leaders.

The Singapore Summit, held last week, is supported by the Singapore Economic Development Board, the Monetary Authority of Singapore, GIC Pte. Ltd and Temasek Holdings Pte. Ltd. Singapore’s emeritus senior minister Goh Chok Tong is patron of the summit. Ho takes over as conference chairman this year from George Yeo, former foreign minister of Singapore and current chairman of Kerry Logistics Network. Yeo is credited with making the summit one of the most influential gathering of business and political leaders in Asia for the last five years.

Under Ho’s leadership this year, the summit built on its past track record, and brought together newsmakers and leaders including Bhutanese Prime Minister Dasho Tshering Tobgay; Indonesian finance minister Sri Mulyani Indrawati; Singapore’s deputy prime minister and coordinating minister for national security Teo Chee Hean, Unilever CEO Paul Polman, JPMorgan Chase International chairman Jacob A. Frenkel, Mitsubishi Corp. chairman Ken Kobayashi and Alibaba Group’s executive vice-chairman Joseph Tsai.

Ho says these global leaders gathered here to discuss three critical issues. The first, was how to navigate a new world order with unprecedented uncertainties. Citing Francis Fukuyama, he points out that the end of the cold war was supposed to usher in the end of history. Western liberal democracy should have become the sole political system, with its superiority unchallenged. The opposite, of course, has come about.

“The new world order has ironically become the new world dis-order,” Ho points out. “The legitimacy of Western liberal democracy and its handmaiden, economic globalization, has been seriously undermined by numerous reactionary, populist movements which have come to power, particularly in the United States of America. The ‘America First’ doctrine of the Trump administration, with its isolationist overtones, has created a vacuum in global affairs which other countries may in due course fill. On the other hand, China’s increasing assertiveness in South China Sea is blunted by its open inability to rein in North Korea’s belligerence.”

Another theme hotly debated at the summit was the critical importance of the West and the East staying interconnected and interdependent. “In the face of uncertainties about American foreign and trade policies, China has emerged as an unexpected champion of globalization, free trade and global connectivity,” notes Ho.

Ho points to initiatives such as the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative (BRI) brought about with Chinese leadership which may partially fill the gap left by the collapse of the Trans-Pacific Partnership, or TPP. But he admits that with the 19th National Congress soon to be convened in China, there are questions as to whether the country’s domestic local issues will inhibit its rise to global pre-eminence.

To what extent are recent events, whether in Europe, the US or Asia, immutable and permanent?

“There is already talk that a soft Brexit will morph over the long years of stalled negotiations, back to some form of face-saving non-exit,” he says. “Similarly, the American pendulum may well swing back after next year’s congressional elections and be reflected in the next presidential elections.”

The third theme debated at the summit was the innovation in technology and artificial intelligence in addressing global inequalities.

Ho thinks the next technology revolution will provide both the means to redress widening societal inequities, as well as to exacerbate the divide. “We all know but too often forget that technology is always simply an enabler without any inherent ethical proclivities, and it is people—their idealism as well as their selfishness—which give technology its moral or immoral impetus.”

“Whether robotics will enrich the lives of the elderly in demographically shrinking societies, or displace millions of third-world textile workers due to a process economists call “premature de-industrialization”, will be entirely dependent on policymakers and business leaders. Most likely, it will be a mix of both as we muddle towards progress, with two steps forward and one step backwards,” he predicts.

Edited excerpts from an interview:

What strategic, long-term trends do you envision going forward in global geopolitics and geoeconomics?

The first trend is what I call “back to the future”. We have to time travel into the past in order to see the future. Some people talk worriedly about the end of Pax Americana and the decline of Western civilization’s global dominance. The Asian triumphalists, on the other hand, crow about burying the West, in an ironic echo of Stalinist propaganda. Mostly, however, we forget that before the ascendancy of the West, starting about 300 years ago, the world consisted of regional civilizations—Christian, Islamic, Buddhist—all thriving and jostling under the sun. This past may well hold the key to understanding the future, which is that our world may consist of largely co-equal, competing civilizations, with all the attendant frictions but in the main, co-existing. In fact, the dominance by a single civilization—the broadly Judeo-Christian culture we call the West—for the past few centuries may have been more an aberration than the norm.

Another trend is what I call the “end of universalism and rise of contextualism”. Western civilizational dominance was due to the confluence of several factors which historians have variously identified as the rule of law, the scientific or empirical approach to intellectual inquiry, the separation of state and church, and a liberal democratic state. Because of this, Western liberal democracy has been seen as the universal norm towards which every political system should aspire.

Going back to the future, however, more societies will recognize that their own historical context should influence if not determine political institutions. A 5,000-year-old civilization where political legitimacy has depended more on delivering the fruits of good governance rather than the specific structures of parliamentary democracy, may hold the key to China’s political evolution. A contextualist approach to looking at the world recognizes, for example, that there has never been a universal form of capitalism. During the halcyon days of Wall Street exuberance before its near collapse with the Lehman Brothers bankruptcy, everyone thought Wall Street or American capitalism was and should be the universal norm. Now, of course, people recognize that there are other variants of capitalism, shaped by their own historical contexts. Whether it be Japanese, Korean, Scandinavian, or even a Singapore model of capitalism, each has its own paradoxes and permutations, and routes to pragmatic success.

Should there be an Asian model of capitalism which differs from the traditional Western model?

I think so. If Asian business leaders are to build their own model of capitalism within their own historical contexts, perhaps they should look back at the communitarian ethos which underpins our own societies, and not have to accept that the highly individualized ethos, the intentionally wide compensation disparities, and the extreme short-termism which has characterized American capitalism, need to be our norms. We can and should create our own variant of communitarian capitalism.

You have articulated a shift from the ‘shareholder to stakeholder’ as the future of capitalism. Please explain.

The very essence of communitarian capitalism is embedded in the replacement of the word shareholder by stakeholder—where the shareholder is undoubtedly one of the primary stakeholders, but where the interests of the community, the customer, the employees, the suppliers—are also critical. If we believe business is a fundamental force for good, and a critical change agent, then it follows that the most pressing issues of the future—education, inequality, climate change, to name a few—require a multi-stakeholder approach.

So, what will a more stakeholder-driven capitalism look like in the near future?

If we practised more stakeholder-driven capitalism and rewarded our executives by appropriate key performance indicators or balanced scorecards which can weigh the appropriate impact of each category of stakeholder, we can do away altogether with the futile, false dichotomy of corporate social responsibility versus total shareholder return. We can reframe the debate altogether on new terms, as creators of a new world and not beholden to the past

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