The New Connected

World OrderBy Parag Khanna

Complexity, Unpredictability, Risk

“Black Elephants”: Brexit, Trump, Currency Wars, Conflict Escalation

Economic

Converging Volatilities

● Ballooning debt

● Banking crises

● Protectionism

● Inequality

Environmental

Technological Geopolitical

● Climate change

● Eco-system stress

● Water scarcity

● Food security

● Disrupted business models

● Labor automation

● WMD proliferation

● Cyber-war

● Mideast collapse

● Terrorism’s global reach

● China/Asia tensions

● Western populism and unrest

Are we getting better at pricing risk, ringfencing volatility and mitigating long tails?

The Global

Connectivity

Revolution

Highways, railways, bridges, tunnels,

airports, seaports

Skeletal System Transportation

The Infrastructural Matrix: Exoskeleton on the

Planetary Body

Vascular System Energy

Nervous System Communication

Oil & gas pipelines and refineries,

electricity grids and power plants

Internet cables, satellites, data

centers

Geotechnology Drives Global Change

Mackinder, Luttwak …

Three reinforcing dimensions of power

Balance of innovation drives balance of power

Strategic industrial policy to capture value chains

Democracy versus authoritarianism old versus new

War b/w systems (capitalism versus communism) Tug-of-war within the collective supply chain matrix

Mackinder Modified: War over Territory War over Connectivity

TPP vs RCEP/FTAAP

Global trade is additive, not substitutive

Trade/investment/supply chain nexus

“Who Rules the Supply Chain, Rules the World”

Beyond Orwell’s 1984: Warring or fusing mega-continents?

China: Top Trading Partner for Twice as Many Countries as US

Dyads of leverage as well as dependence

Trade to investment to alliance?

From War or Tug-of-War: The New Geopolitics

China vs. Taiwan: Missiles or Mutual

Colonization

China vs. Japan: Senkaku/Diaoyu or

Softbank/Alibaba

West vs. Iran: Nukes or Great Emerging Market

West vs. Russia: Crimea or Gas Pipelines

US vs. China: Air-Sea Battle or TPP

China vs. ASEAN: Paracel Islands or RCEP

North vs. South Korea: Nukes or Supply Chains

China vs. India: Trade or Tibet

India vs. Pakistan: Fundos or MFN

Baltic Union: Shared

infrastructure and

governance services

European energy grid:

Integrated gas and

nuclear power

Europe-Russia: From

singular dependence to

reverse flows

Infrastructure as Authority: Reshaping Cross-Border Relations

East Meets West: Eurasia’s Iron Silk Roads

AIIB and the Compression of Eurasian Space: China Becomes a Two-Ocean Power

“Iron Silk Roads” win the “New Great Game”

Connectivity Fills the Power Vacuum

Infrastructure alliances: An equal global public good (that

can’t be deterred)

20th Century: NATO / Security 21st Century: AIIB /

Infrastructure

EU thinks like EPC not DoD: Connectivity across Eurasia

vs culture across Atlantic

Turkey: Member of both NATO and SCO?

The New Iron Age: Infrastructure as Extended Sovereignty

Grand Strategy: Avoid encirclement; control

infrastructure, trade routes, market access

overland and east of Malacca Strait

Post-ideological Geopolitics: Supply chain

complementarities > ideologies; Merkel: “No

eternal guarantee of EU-US close cooperation”

Realism > moralism: Engage and invest for

leverage in a post-sanctions world

Less connectivity, more belligerence: Russia,

Iran, North Korea

Competitive Connectivity: The Currency of Power

North America

South America

Europe Africa

Asia MiddleEast

The Geopolitical Marketplace: Connectivity and Resilience

Complementary Global Goods:

American security and Chinese

infrastructure

America the Global Utility: Security,

energy, finance, technology, language

From Hierarchy to Symmetry: Escape

the “Thucydides Trap” through

regionalism and reciprocity

From Grand Strategy to Global

Strategic Thought: Mutual connectivity,

Co-creation/Co-evolution

Global Evolution: From Connectivity to Resilience

No more chokepoints

Competitive connectivity builds

pathways for supply to meet demand

Ring-fencing volatility: Ukraine, Iraq,

Libya, South China Sea

Abundance and Stability

From “peak oil” to “gas glut”

US oil sales to China

Toward Antifragility (Taleb)

War is an event; networking building is

a process

THANK YOU!

paragkhanna@gmail.com

@paragkhanna

www.facebook.com/DrParagKhan

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