John Kerry: "You cannot put the globalization genie back in the bottle"
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John Kerry: "You cannot put the globalization genie back in the bottle"

At the 19th Credit Suisse Salon in Dubai on May 09, 2017, former US Secretary John Kerry sat down in conversation with Sir John Major, former UK Prime Minister, on Living in times of uncertainty: the path ahead for the Middle East. They covered a wide range of topics: climate change, the Iran deal, Syria, the root causes for the surge in public dissatisfaction, and the roles of governments and the private sector.

In his opening speech, host Iqbal Khan, Chief Executive Officer, International Wealth Management, observed that the markets seem to be driven by sentiments rather than economic fundamentals, and that the developed world is going through as challenging a time as the Emerging Markets, including the Middle East.

Michael O'Sullivan, Chief Investment Officer, International Wealth Management, set the scene for the discussion, suggesting that the path ahead for the Middle East lies in intangible infrastructure e.g. technology, education, human development, rule of law, institution-building. He said that they form the backbone of a country, and "tend to create growth that is well-spread, stable and inclusive."

Considering diversification

Talking about climate change, Secretary Kerry made clear that "you cannot not factor in the importance of dealing with climate change and moving into a new energy paradigm." He acknowledged that it is a sensitive issue for the Middle East but welcomed the fact that most leaders are considering diversification. He also asserted that addressing the climate change challenge is one of the greatest opportunities the world has seen in terms of growth, development and "making money".

He felt that the complex situation in Syria, with so many players fighting so many proxy battles, calls for a political solution rather than a military one. And although he saw Russia as a part of the problem, he was certain that they would be part of the solution as well.

Reacting to felt needs

Secretary Kerry talked at length on what needs to be done in the next 25 years to address the underlying problems that can create greater public unrest, as exemplified by the Arab Spring in the Middle East. "All politics is a reaction to felt needs," he quoted his Yale professor. To Secretary Kerry, it is not a mystery that large segments of people are feeling increasingly disenfranchised, and victimized by globalization – they see an ever-widening wealth gap and feel the lack of opportunities, especially with modern day technology enabling them to clearly know what others have and they don't have.

But he was firm in his belief that no country can do better and get stronger, if it is not engaged in global commerce. "You cannot put the globalization genie back in the bottle. You have the ability to tame the worst parts of it." He made an impassioned argument for capitalism that is "sensitive, thoughtful, progressive and sustainable", as opposed to "robber baron capitalism".

More transparent and accountable governance

For Secretary Kerry, governance needs to get better a lot faster. The way forward, he said, lies in more agile, transparent and accountable governance, and leadership focused on the longer term. In a world where 200 million children don't even go to primary school, governments have to ensure education for all and create more opportunities. He noted with excitement that some leaders in the Middle East are already ahead of the curve in many ways.

He also emphasized the role of the private sector in managing the transition of dislocated workers where artificial intelligence and robotics have begun to displace existing jobs, and drew attention to the extraordinary opportunities out there in terms of what still needs to be done – building hospitals, schools, modern transportation, and health care, being some of them. Highlighting that the private sector has the greatest ability to have the greatest impact, he rued the fact that 12 to 13 trillion US $ are sitting in negative interest rate status. He exhorted the people in the audience, who "decide where capital goes", to push the political system to move faster and be more responsive.

Refereshingly optimistic

Overall, Secretary Kerry struck, as Sir John aptly described, a "refreshingly optimistic" note – he felt encouraged by the larger trends of poverty reduction (quantified by Sir John at a quarter of a million people come out of absolute poverty every day), the benefits from technology, increased longevity, and the achievements in improving health and curing diseases. His words "If you are a pregnant woman in any part of the world today, the likelihood that the child will live, and be fed, and go to school, is much higher than ever before" touched just the right chord in uncertain times.