Parag Khanna: Connectography

Parag Khanna on March 16 visitied the Corvinus University and held his lecture on his newest book Connectography.

We were discussing earlier who are the voices in geopolitics that we read and who we are learning from; from the new generation, our generation, hopefully from your generation because there are not enough new approaches to geopolitics, people think of it in as they has studying in history. But it’s not only history, it’s as dynamic, as changing and fluid as ever in history. So I hope I can contribute to encouraging you to stay with this field to develop, to put the ideas into practice. Let me begin by presenting some of the major ideas that relate to the idea of Connectography. Connectography is not a world that you will find in the dictionary, maybe next year, but not last year because I’ve invented it. I did so precisely because I think that the younger generation has to have a new approach in which geography is not sort of a static thing. When we think of geography we think of forces that are immovable, like continents and oceans… We think of time in this geological scale and those changes are driven by the past. I think today’s world is changing very rapidly so I want to show you some maps and images that can lead the line of reasoning.

The first is a map of the world’s infrastructure networks. This is all of the world’s transportation networks like highways, railways, bridges, tunnels and so for. It is also all of the energy system, the oil and gas pipelines, and the electricity grids. And it’s also the communication system, the internet cables and so for. If you take this three layers of infrastructure these are the physical embodiments of connectivity. To connect from one place to the other place, from one person to another person require some physical infrastructure. But most of our maps don’t show us that. Most of our maps show the countries and the boarders. They show us the dividing lines but they don’t show us connecting lines. But these lines are real, they’re more real than most boarders are. Most boarders are actually invisible whereas these lines (the connecting lines) are real, physical, tangible lines that we built. Your government, all the governments and the companies in the world built them. They use to connect us but most of our maps only show us the lines that divide us. I think it’s a big mistake, not just intellectual or normative mistake but it’s an actual physical mistake. If you map over the time, especially the last one hundred, fifty years or just the last twenty-five years there has been an enormous acceleration of the building of this connective infrastructure. I believe it is literally reorganizing human society. We think of human society as being an inherently divided into nations and boundaries and thw basic unit of the world is the nation unit. I believe that in this world that we’re moving into the natural unit, the most effective and important unit will not be the bordered country but the connected city. And that is coming about as a result of all the investment in connectivity across our geography and it is that fusion of connectivity and geography that gives us connectography. In my opinion it is the most powerful and revolutionary force in the world today.

Again, it requires us to rethink our maps. Traditionally you can see maps of natural geography and maps of political geography. In the classrooms of the universities I bet that most of the maps like the above mentioned ones. Can you see other maps in your classroom? No? That is the problem. I am on a mission that I want every map in the world will replaced with maps of connectivity rather the maps of the vision. Or, to be more fair, I believe that if you want to properly understand the world in the 21st century you cannot look only at the political maps because these only show you the legal relationship between two countries and their size, that’s it. It doesn’t tell you how the world works. If you look at the maps of natural geography it shows you the nature. It doesn’t shows you how we use nature. And if you look at only the infrastructure it shows you what we’ve built but it doesn’t show you what impacts it’s having on the rest of the world. So I believe that in the 21st century you have to learn all three kinds of geography – natural, political and functional geography – if you want to properly understand what’s happening.

Another kind of map I think is much more useful on understanding the 21st century’s world than other traditional maps. This map captures a few different things in the same time. The first is demographics. Do you have a map in your classrooms that shows you all of the people in the world are? I guess no. But do you think it’s important to know where the people are? Yes. So, this is a map that actually shows you something very useful, since every one of you is on this map as a pixel. There are eight billion pixels on this map and every one of you is one of these pixels. So now, for the first time you can actually see where the people are. Let me tell you some very important things. The most important thing about how we organize ourselves in the world is not whether you live in a country within your national boundaries, in a sensitive national identity. The most important thing for all people in the world, for all the eight billion people is to live near to the water. That’s the way we always did it. For thousands of years the most important thing has been that we, human beings need to be near to water. We don’t have to live in countries, we don’t have to have national sovereignty or boundaries, and we don’t have to have armies. We need water. And the most of the world lives near bodies of water, oceans, rivers, lakes and so for. The other thing which is very important is that most of the world’s population now lives in Asia, not in the Western world. We’ve been in a custom to thinking of the world is being dominated by Europe or by the United States. But for the rest of your lives, for the next hundred years upon to the world’s population will peak, it will probably reach its maximum, ten billion people. In one year, around the year 2040 -2045 on the front page of the newspaper there will be an article what will say that the world population has peaked and now will begin to decline. But even if it will be in decline, the most of the population will live Asia.

I didn’t put boarders on this particular maps, instead I put these ovals. On political maps you can see that every city is only a dot with the same size. Budapest, New York, Mexico City, London is one dot and all of it has got the same size. In the real world cities haven’t got all the same size. Some cities have tens of millions of people. For example this is the Pearl River Delta of Southern China. This is where a cluster of cities are together. It starts in Guangdong and goes down to Hong Kong. It’s one integrated region with trains and highways, with very intensive connecting. By 2025-2030 the population of this cluster will be around 80 million people what is the population of Germany, the largest country in Europe. The economy of this area will be about 2 trillion dollars what is the economy of all India with its more than 1 billion people. So what matters in this world? Is it just how big your country is, how many people you have or is it how much economic activity in your city, what is the skill set of the people in your city and how connected is your city? What matters more? The truth is there is a degree of connectivity, the kind of density, the quality of the economy that matters a lot more in today’s world than just being big. Congo is also big, is Congo important? Sudan is big, is Sudan important? No. So these other factor matter a lot more.
There are about fifty of these urban clusters that are more important than other ones. These are the places with the most people, the most economic activity, and the real hubs for entire regions. Again, as you can see most of world’s megacities are in the Asian space, particularly in China, in India and in South-East Asia. Once I showed this map in Australia and people said: “Oh no, where is Australia?”. I said don’t worry, it’s not a bad thing if you’re not a megacity with a fifty million people. But Sydney is one of the most important economic hub in the world anyway. So it’s not just about size, it’s about density and connectivity. But these fifty cities are definitely the economic centers of gravity in the world. If you think in traditionally geopolitics and if I ask you how a country thinks, how did the Soviet Union or an empires think historically, you would say they want grow bigger. They want to conquer their neighbors, they want more territory and they want more resources. But cities think differently. If you ask the major of New York, London, Dubai or Budapest what do they want, they would say “I need more connectivity, I need more flights to connect from here to other countries”, then they would say “we need a stock market to merge and to connect to other countries’ stock markets and get more investment” or “we need more railways so we can export more”. So in traditional geopolitics a country says I want to expand, I want conquer. In the view of the world where cities are making big decisions what shape national policies we don’t want territory just for the sake of territory, we want connectivity to enhance our economic position, to bring in money, to bring in education, to create opportunities and so for.

So, the future is about an interurban civilization and geopolitics looks very different. The conflict in the 21st century is much less about territory. Obviously there are still wars on territory, in the case of Ukraine for example territory still matters. But how many wars or international conflict are there in the world today? Just a couple and those conflicts matter, but don’t tell you everything about how the world works. But what is happening every day, every week, and every month is that countries and cities are competing for connectivity. That is what matters every single day. You don’t need to worry every day that your country will be conquered, but you have to worry every day that a city nearby or a country next door is going to lower its tax rates, it’s going to steal jobs and supply chains, that manufacturing will ship over there, investments will move over there. That is what a country has to worry every day. And that is war. It’s not military war, but economic war. As I call it: tug-a-war. It is a tug-a-war to control supply chains and value chains because if you control supply chains if you are the center for the production of oil and gas, the center for manufacturing, for the development of digital goods and software then you are powerful and rich. And if you look at some the trade negotiations there are going on, you may have been hearing that the trans-Pacific partnership between the Western Hemisphere, the United States, Canada and Asian countries fall apart because Donald Trump said he doesn’t want to be a part of the TTP. But what was happened on yesterday and today in Chile, in Santiago is that all of the trade ministers got together. All of that countries who were the parts of this earlier negotiation got together, but the United States didn’t come. Instead China came. America said “we don’t want to be connected in this trade agreement any more”, and China said “if America is not coming, we will go”. There is an irony that this was an agreement created by America and the purpose of the agreement was to isolate China. Instead, three years later, America didn’t show up but China did. So did America win? Obviously not. You can only win in this world if you are connected. The most connected powers win, not the one who doesn’t show up. You can’t isolate anyone any more, you can only influence by being connected.

There is another negotiation of the Regional Comprehensive Economic Partnership with a lot of Asian countries. America thought that it can convince some of these countries to join the TPP and exclude China. But in fact all of these countries are simultaneously negotiating with China on RCEP. What’s the moral of this story? Smart countries, like New-Zealand, Australia, Singapore, Thailand, etc., always play both sides and never pick just one side. In a world which is getting more connected this is how you can win.

Now let’s go back to Asia. After the collapse of the Soviet Union, in the last 25-27 years this counties are getting more and more connected. Hungary joined to the European Union in 2004, but ever since 1989 Europe and the European Union has been gradually expanding from west to east. Countries receive structural funds and investments from Brussels, they’ve been modernizing their infrastructure. Romania, Bulgaria, the Balkan countries are all joining or have already joined to the EU, are all modernizing their economies, and now there are better railways, better connecting from west to east. In the last 25 years China has been doing the same things not form west to east, but from east to west. An interesting things that China has got more neighbors than any other country in the world, 14 neighbors. That’s a lot of potential conflicts. Any country you share a border with, potentially you can have a conflict with. China has a very powerful military but it doesn’t want to fight wars with all of its neighbors. Instead what it is doing is the same thing that Europe has been doing, it is building infrastructure. It’s doing that because instead of having wars with them it wants to control their supply chains, wants to import raw materials from Myanmar, resources from Pakistan, from the Middle-East and so on. China is investing to all of these things so it can not only import but also can export more rapidly to Europe. Couple of years ago China announced the creation of the Asia Infrastructure Investment Bank, the AIIB. And in the time the United States under Barack Obama did not like this institution. They said it is a very bad idea, it will undermine the World Bank, will not follow global standards, and the Obama administration called up all of the European leaders and urged them not to join this Chinese bank. And, of course, European countries joined to the AIIB. Now it has got 70 members in two years, because the purpose of this bank is to connect Europe and Asia, which actually the world’s biggest landmass, where most of the world’s population lives. It is natural that they want to be more connected. That is how they can maximize the opportunity of growing economic relations across this space. The countries of South-Asia are poor and under developed post-colonial countries. The countries of central Asia are poor and former Soviet republics. They all of them want this infrastructure. Why wouldn’t they join to a bank what is going to finance it. But this is also a geopolitical plan, this is how China shapes and even dominates some countries without having to use any tanks, war planes or bombs. Instead it send tractors and trains and construction workers. And step by step, month by month, project by project electricity grids, hydro canals, highways, bridges will born and shape these countries supply chains. It doesn’t change the governments, it doesn’t invade on the way than America invaded to Iraq. It just reshapes their supply chains, their economies and uses them as a passage way to export everything that it’s producing more efficiently to Europe. And that is ultimately mutually beneficial.

Right now there is a lot of talk about protectionism, the Trump administration wants to put up walls, it wants to raise tariffs, introduces border adjustment taxes, and taxes imports coming into the country. Some people believe that it is going to be very bad for globalization, globalization could reverse, there could be trade wars and so on. I would like to show you some data which contradicts that because I think it is a false analysis. The truth is that because all of this connectivity, all of the continents, every parts of the world are getting much more connected, physically connected with new trade agreements, institutions, flow of people, goods, money and data. In the entirely new patters of trade developing the United States isn’t at the center, instead China is already the number one trading partner of 124 countries. For only 52 countries in the world the Unites States is the top trading partner. So no matter what Trump does, it won’t undermine or change how the other countries trade with each other. If he raises taxes the countries which used to export to America then will export to other countries. And this exactly what’s happening now. The United States and Europe trade across to the Atlantic-Ocean 1 trillion dollars per year. From many years the United States and Europe have been in the most tight and largest trade relationship in the world. But now look what’s happening across the Silk Road: EU-China trade is 400 billion dollars per year, ASEAN-EU trade is 200 billion dollars per year, EU-Japan trade is 150 billion dollars per year, EU-India trade is 100 billion dollars per year… I haven’t mentioned several countries but we can see that it’s also around 1 trillion dollars or more trade with Asia. Already it is the same amount of money and the most of developments of the Silk Road haven’t built yet, there haven’t been any free trade agreement yet. So it’s with good reason that for example Hungary as a country is very enthusiastic about connectivity, about getting on the Silk Road, about having the transportation corridors from here to Hamburg, down to Greece, across the Black Sea and so for. More connected your country is more able to be the part of these flows. And the way to be succeed, the way to become wealthy is to be more and more connected. And same thing is happening with the other parts of the world. Africa and South-America didn’t use to do a lot of trade before, now they do. Asia and Africa used to do a very little trade, just China and Africa trade will reach the 400 billion dollars by 2020. Asia trades with Africa more than the US does and maybe in ten years Asia will trade more with Africa than Europe will. Who knows? It is possible because they have complementarities. Africa has resources, Asia is building a lot of things. Geopolitics is driven by these complementarities. If you came from my generation you would have the thought that geopolitics and alliances are these bounds between countries that are shaped by western values, certain civilization values. And that is partially true but that alliances are not the same than geopolitics. Alliances are the actors within geopolitics but at deeper level geopolitics are shaped by complementarities, the main point is who has supply and who has demand. And that what is changing the entirely world into this multipolar direction.

I want to talk a little more about the role of China, because the way a country can become a superpower is through this connectivity. China wasn’t always a super power, much of China is still very poor. 40 or 50 years ago China had got a very poor peasant society. Only in 1979 they started to establish this little special economic zones for trade and for to attract investment so they could start to manufacture things. The first was Shenzhen in 1979. We’re coming up the 40th anniversary of Shenzhen and exactly in this 40 years China went from coming a poor and peasant society to being a super power and the world’s largest economy. How did they do it? Did they do it because they built 10.000 nuclear weapons? No. Did they do it by building 15 aircraft carriers that are sailing around the world and control the oceans? No, China has got only one, they just bought it a couple of years ago. So that’s not how China became a super power. China became a super power because in 1979 they created a little special economic zone called Shenzhen and then created more and more of them. Then more companies started to invest there, they started to make more products and eventually instead of having to import everything they started to export a lot of things. Suddenly people started saying by the 1980s-1990s that China is the world’s factory floor and nowadays everyone has a trade deficit with China. China take these trade surpluses every year and start saving it in their currency reserves. They have built 4 trillion dollars currency reserves and now what they’re doing is exporting this money and building pipelines, highways and canals to feed their economy. Now they can invest this money into countries like France, Germany, Britain, Luxemburg and Hungary. One of the biggest beneficiary of this is Germany since Germany has got one the most high-tech economy in the world. Chine started with low-techs such as toys, mechanical things but now China makes semiconductors, solar panels, high speed railways, wind turbines, airplanes and the world’s fastest computers. They’re getting rid from the low-tech staffs, they’re giving it to Bangladesh, to Indonesia, to Africa and they’re trying to keep the high-tech staffs. So what would you do if you got 4 trillion dollars and you wanted to control the expensive value chain, if you wanted to compete with Apple? You would have to start buying German companies. From 2014-2015 China said lets starting to spend money in the most sophisticated economy in the world, in Germany.

All is about by moving up the value chain. What does a country want? Does it want to conquer its neighbors or want to become a sophisticated economy with wealthy and productive people? I think most country want the latter. Most of the world’s border disputes are settled. It’s really about moving up the value chain and using industrial policy and investment leverage in the sake of it.
The world is becoming so thoroughly connected infrastructurally but it doesn’t mean that geopolitics is going away. Infrastructure corridors can be the pathways for conquest. One day I could imagine that there will be Chinese troops where they have got their investments since some of these countries are instable and in the sake of stabilize your supply chain you need to stabilize the country. So it’s not necessary argument that connectivity is leading to peace. It can be the pathway to conquest. But on some ways connectivity creates a world that I think it’s a much better world. And that is because when you have multiple pathways you have got more options. There are three choke points in the world of shipping. Three areas where if there is a blockade, terrorist attack, a war or a closure the goods stop flowing. This three maritime choke points are the Suez Canal, the Strait of Hormuz and Strait of Malacca. We’ve always feared in geopolitics if there is any disruption here there will be a conflict. But in a world with total connectivity if there is a disruption in any of the choke points what about just going over the artic routes? Because of the climate change now the shipping lanes are open on the artic for increasing number of days of the year. Moreover this lane is faster. Or another option is going through the Silk Roads to get East-Asia. One more specific example, 10 years ago there was a lot of concern that the United States and China would fight a war to control the oil over the Middle-East. But ever since that time two things happened. First, the United States of America discovered the shale gas and oil and just become the largest oil and gas producer in the whole world. Second, the US exports oil and gas not just to Europe but one year ago it started to export oil to China so they don’t need to fight for it. Instead of fighting America is just selling oil to China. Isn’t it a better solution? In geopolitics we always concern of wars over resources but why fight if you can trade? That’s why I think connectivity is the source of resilience.

If you put together all of the factors that I’ve been talking about you could see the following. First of all, every region in the world matters. We didn’t know we’re living that kind of world. Think about the European colonial area, the world was hierarchical, Europe controlled everything. Some parts of the world didn’t matter at all for decades and decades. Today is different, every region is the part of the network. Secondly, they are not only parts of the network but every part of the world is connecting to every part of the world. There is no one power in the center. In the 1990s we asked ourselves “the Soviet Union is gone, the United States is the only super power, what system will come next”? I think this network is how the world will work in the future. Every continent matters, every region matters. In the regions some countries matter more than others. For example America is not in the middle, it can’t dictate everything but it is the most important power in North-America and has got strong linkages to other regions but so do the other regions to each other. The world doesn’t look like a pyramid, it looks like a spider web, a network structure because every region matters, every region is negotiating and making their own deals. And that means actually a very stable structure. A structure with one super power is maybe easier and simple, it’s is easier to understand it. But the world is not simple, it’s very complicated and complex. The world will become more complex and we have to appreciate that connectivity, regionalism and other forces which are shaping the world much more than our traditional geopolitical theories what were built on just territory, size and military power. I think this is a more stable world. This is the way the world is becoming. No matter what some countries do or don’t do because it’s connectivity that making the world this way and connectivity is that revolutionary force that we all want, want as people, as cities and as countries. And the more you invest in connectivity the more inevitably build the world that looks like this. We often worry about one event as if it is going to cause a World War III. I don’t think it’s actually going to happen. There’ll be a lot of conflicts and struggles in the world to control resources, economic power and so on. But connectivity is the reason why it is much more complex but ultimately also much more stable.