The current geopolitical scene today is dominated by two
elephants, namely the USA and China. The USA remains the world’s largest
economy and the American military remains the only military force on the planet
that can fight two wars in the world at any given time. The other elephant is
China, which in the last four decades has grown its economy to being able to
challenge that of the USA (even American policy makers admit that it’s a
question of when China becomes the larger economy) and with growing prosperity,
its invested in its military, so much so that American military planners don’t
take assume that they’ll automatically win any potential war with China.
Unfortunately for the rest of the world, both elephants have
character flaw. China, under President Xi has become especially mean, nasty and
secretive. Whatever growing rights that China’s citizens enjoyed under his
predecessors have since vanished. In the handling of the Covid-19 outbreak,
scientist in China who tried to warn the world ended up vanishing, which was
something that didn’t happen during the SARS outbreak of 2003. Mr. Xi has used
anti-corruption drives to consolidate power to such a point that he has decided
that he’ll do away with the tradition of leaders handing over power after a
decade.
While the USA under Trump isn’t nasty, it become something
of an incompetent buffoon, which has become particularly noticeable in its
handling of Covid-19. America, which used to be a donor nation in any disaster
has needed to get mask from elsewhere and the world has been transfixed by
images of American doctors begging for basic protective equipment. As this
happens, you get daily scenes of the President bragging about the great job
he’s doing. Even before the outbreak of Covid-19, the Trump Administration was
unashamedly transactional in its foreign policy and its high staff turnover
suggested that it could barely get its act together.
So, what can the rest of the world do? How do you choose
between a nasty elephant and an unpredictable and stupid one? I’ve previously
argued that small nations need to work more closely together, as in the case of
the European Union. There’s another solution, which my favourite litigator reminded
me of in a recent article that he shared on Linkedin:
The answer is to remember that while the elephants are by
far and away the most dominant animals in the jungle of geopolitics, there are
other large animals who can help small insects. For my favourite litigator, the
two animals are the United Kingdom (the dominant global power before the USA)
and Japan (the dominant power in Asia, before China). You could say that if the
USA and China are elephants, the UK and Japan are hippos.
Hippos may not be as domineering as elephants but they have
the potential to offer the world. Britain may not have the firepower of the
USA; the British armed forces have been an invaluable ally in America’s
conflicts. The British Armed forces are considered to be amongst the world’s
most professional and experienced, so much so that I remember one of my
favourite Englishmen reminding a group of Singaporeans that American Navy Seals
go to the UK for training by the SAS and SBS. British Armed forces have
defended British citizens in troubled spots and have shown themselves more than
capable of defending their interest.
The economy of the UK isn’t something to be sniffed at
either. London remains New York’s only competitor as the world’s main financial
centre, even with the loss of unfettered access to Europe through Brexit. The
UK remains the sixth largest economy in the world with a nominal Gross Domestic
Product (“GDP”) of US$2.83 trillion and a Purchasing Power Parity (“PPP”) of
US$10.4 trillion. It’s not the largest economy or largest market but it is
still in the top ten places of markets to be.
The United Kingdom has serval key strengths which cannot be
rivalled. It is the home of the English language; the language used in global
commerce and has strengths in soft power exports like music and sport (90 percent
of Manchester United Fans have never been to Old Trafford). The UK has the
Oxbridge Universities, which are consistently in the top ten of the world’s
best and British Universities have trained many global leaders. The
Commonwealth of Nations, which was formed from the empire provides the UK with relationships
to a quarter of the known world. Furthermore the “Common Law” Jurisdiction
allows British Entrepreneurs to operate in a wide variety of familiar legal
jurisdictions, a fact that my favourite liquidator is banking on. Britain is in
many ways incredibly flexible and friendly for entrepreneurs.
In Asia, the forgotten player is Japan, which is the world’s
third largest economy with a nominal GDP of US$5.1 trillion. While this is dwarfed
by the US$14.1 trillion of China, the average Japanese remains wealthier and
Japan has advantages in high technology manufacturing. Japan is in many ways a
very futuristic society that has embraced technology in ways that no one else
has done, as this video from Drew Binsky explains:
Japan may lack the sheer mass that China has, it has one
crucial advantage, stronger soft power. While Japan has yet to atone for many
of its crimes in the Second World War (which is a source of tension with its
neighbours), it is perceived as a more benign force that China. Everyone in the
ASEAN region worries about China swallowing their territory in the South China seas.
There are no corresponding fears about Japan.
Furthermore, the most obvious friendship in Japan’s favour is
India, the only country that competes with China for sheer mass. India is what
you’d call the proverbial third elephant that never quite lives up to its
potential because of its schizoid politics. Like Japan, India has a rivalry
with China and as Bloomberg Columnist Andy Mukherjee said many years ago, Japan’s
most obvious bet is to build India up. Japan has the money and technology but
does not have the size to compete, whereas India has size but remains poorer
and more backwards than China. Hence, Japanese-Indian cooperation seems like
the most obvious course to follow and the warm relationship between Prime Minister
Narendra Modi and Shinzo Abe can only speed up this process.
Both Japan and the UK are in many ways, “sunset” powers that
once occupied top spot and are now forced to find their global relevance by playing
second fiddle to the American elephant.
However, the fact remains that both the UK and Japan are
countries that play a role on the global stage. The British in particular had
to build their global empire by learning how to operate as small units
cooperating, have certain skill sets that the rest of us can learn from.
Working with elephants is important, even if one of them is stupid and the other one is nasty. However, they aren’t the only animals in the proverbial jungle and working with other large animals can also be a way of securing ones future.
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