Parag Khanna has worked as an analyst for the Council on Foreign Relations, the World Economic Forum, and the Brookings Institution.
In 2007, he was a Geopolitical Advisor to the United States Special Operations Forces in Iraq and Afghanistan.
Domestically, he was an advisor to Barack Obama’s presidential campaign.
He is the author of the books “How to Run the World: Charting the Course to the Next Renaissance” and “The Second World: Empires and Influence in the New Global Order”. He has also been a TED Global speaker.
Let’s hear Parag’s insights for a generation facing a rapidly changing world.
Career Hack: We’re thrilled to be interviewing Parag Khanna, Indian-American author and international agents expert. He’s worked as an analyst at the Council of Foreign Relations, the World Economic Forum, and the Brookings Institution. Parag, welcome to the podcast.
Parag: Thank you.
Career Hack: You originally hail from India, have accumulated your advanced degrees from Europe and the US, worked in international roles and you’re currently based in Singapore. Why have you ended up in Singapore specifically?
Parag: Well, “ended up” is a very definitive term. I’m just constantly on the move but Singapore is a fantastic place to be at this stage and it could be a long stage actually. I am hoping that it will be. We’ve only been here a couple of months but I think Singapore is in many ways the capital of Asia. Of course, there’s no official capital of Asia but it is certainly the unofficial capital for a variety of reasons that deal with how multinational it is, how cosmopolitan it is, its geography. It’s not in China the way Hong Kong is, it really services the Asian market. It‘s strategically positioned in an array of sectors. If you want to be in the heart of Asia, Singapore is the place to be. That’s one reason why we are here. We’re really enjoying it immensely but we’ve also enjoyed living in London and New York and other places as well.
Career Hack: It’s certainly physically the right spot, certainly in the heart.
Parag: Absolutely! That’s exactly right and since being here, I’ve taken a lot of trips and plan to revisit places that I’ve written about in my first book, Second World like Indonesia, Malaysia, Thailand, Vietnam and also to newer places that I’ve never visited before.
Michael: Right. So we want to hit on an argument that you made in your New York Times article. In our blog’s manifesto, we make the argument that an exodus of thousands of young unemployed Americans to high-growth emerging markets would be a good thing for the United States. Our justification is that this would:
1. Reduce unemployment and provide strong opportunities for demographic groups desperately needing to gain work experience.
2. Produce a more international workforce of Americans who have gained a critical “boots on the ground” experience abroad and can later act as informal private sector ambassadors.
3. Forge independent business and trade links that will be mutually beneficial to the US and emerging markets, thus creating more wealth as we vie for a piece of those consumer markets.
As someone with extensive experience in this area, how do feel about this argument? What would you add or take away from it?
Parag: I don’t think you could’ve said it better but I think it is important to step back and remember that even before the financial crisis, this was an important argument to make. I have an invisible sign on my door that reads “Don’t come talk to me or seek career advice unless you plan to travel abroad.” Irrespective of the health of the American economy, I have always felt that there are huge tangible and intangible benefits to Americans spending time abroad, learning languages, studying and/or working overseas, and so forth. This is because these create interdependencies and linkages that can most definitely benefit American society and the American economy.
That happens to be more the case now with the financial crisis or afterwards because we do have a substantial pool of… perhaps one can say listless college graduates or even advanced degree graduates like MBAs who aren’t finding work in the US. They could either live at home as many of them are doing, a very high percentage, or they might be able to find work in places with lower costs of living and gain valuable experience at the same time.
Unfortunately when we measure the impact of overseas American citizens on the economy, we tend to think just in terms of the tax base but there’s a whole lot more going on if you consider the dependence of American exports on American multinationals in emerging markets themselves. If you don’t have Americans representing American businesses abroad then those businesses obviously are not going to sell very well. Every emerging market is an extremely competitive environment. The question is not simply “Will it be the US or Europe that gets to sell there?” As you all know, emerging market multinationals from China, India, the Arab world, Singapore and everywhere else are competing for every possible goods and services contract — construction, retail, you name it, all over the world. America has perhaps the lowest proportion of its population living abroad. That, of course, has a lot to do with our geography, but it still can’t be taken for granted that American products will sell themselves, nor those from any other advanced country. Americans have to go and do it. After the financial crisis, you’re making the right argument that there’s a silver lining and clear advantage present.
Career Hack: In “Waving Goodbye to Hegemony” you coined the interesting term “geopolitical marketplace” in which first world superpowers like the US, Europe, and China all compete for influence in the second world – countries that simultaneously have both first and third world characteristics, those like Columbia, Brazil, India, Russia, Vietnam and Malaysia. Much has changed since you wrote that article in 2008. Can you elaborate on the different models of influence that the US, the EU, and China are using in the second world so we can get a better idea of what’s going on there?
Parag: Actually, almost nothing has changed. It’s just accelerated. Obviously we’ve had an economic crisis but I wrote a lot about the state capitalist model of Chinese economic expansion, something that predates the financial crisis. It is something that people have begun to analyze more closely and some people even admire after the financial crisis. But be that as it may, it was very prominent prior to. I was doing my research for this book in 2004, 2005, 2006 and 2007 and so all of these trends were quite visible. Even the weakness within the European economic space and the imbalances within were visible. The fiscal health of the United States was certainly by no means assured. Our debt was sky rocketing prior to the crisis as well.
So a lot of things are actually similar. We should obviously treat the financial crisis as a seminal event but not believe that it is the one and only cause of America’s relative decline of influence in the world. That’s a process that began even in the late cold war stages decades ago. These things move in very long cycles.
In terms of models of influence in emerging markets and the second world countries, again, you continue to see the United States push with political ties whether it’s military, diplomatic or otherwise, and certainly with financial and economic as well. One example of that is the TPP [Trans Pacific Partnership] which is meant to be America’s contribution to the APEC process. That’s about deepening commercial relations with allied countries as a way of gaining or maintaining a strong foothold in Asian economies despite the rapid rise of China. China’s approach has been commercial expansion as well, aid and military relationships, a full spectrum of things that is now offered to client states or potential allies.
Europe has always focused on its own periphery and offering membership to the European Union. What I’ve written about is what happens when it can no longer extend geographically because it reaches a sort of outer limits of what constitutes European geography. It has to be much bolder in terms of what economic and political levers it can apply with its clients. There are clear differences in what I’ve called the American coalition model, European consensus model and Asian consultative model. But you continue to see that those are the three approaches that these superpowers take to their diplomacy.
Career Hack: Speaking of diplomacy, you speak English, German, Hindi, French, Spanish and basic Arabic. As an international relations expert, this would be an advantage to you and probably a necessity. We’ve noticed that far more Europeans and Asians compared to North Americans speak at least two languages fluently. As the world becomes more multipolar, do you think that it is important for young Americans to learn other languages and experience other cultures or do you think English will continue to reign supreme?
Parag: I think it is very important for Americans to learn different languages for sure and they’re starting to do so more and more. You can see it happening even in New York City’s public schools where Chinese is being taught more and more frequently and widely.
Now I think it’s not just a numerical arms race, the thing is we do speak English. English is a kind of sine qua non of global commerce. We have an inherent advantage. It’s not really about if you speak four languages because you’re Swiss versus if you’re an average American. It’s really about how well you speak that language and what you’re really using it for. Asked to qualify, I think the imbalance is once again in our geography, history, and the inherent advantage of speaking English. These should all be factors in making any serious statement or criticism.
That said, it is extraordinarily important — whether it is Chinese, Spanish, French, Arabic, or Russian — that you speak the language well. Some of the languages I speak, I don’t speak particularly well. My French is very rusty. My Spanish is very rusty. I haven’t used them. I started speaking German after I had initially learned those languages and did a deep dive into German. So I am very bilingual with German, but now as a result, some of the others have been neglected — not Hindi, my native language, but these are still very important to me. It’s important for people to pick one or two and be very good at them rather than dabbling in a whole bunch.
Career Hack: Great! Thank you so much for that. On the topic of globalization, as the world becomes increasingly globalized and interdependent, we are noticing that competition is rising from places we wouldn’t have necessarily expected – not only in manufacturing but also in high value added areas. For generation Y, what skills and abilities do you think will be most valuable for us to survive in this century?
Parag: I mean, it is a very broad question, the skills that gen Y and gen Z require. I think we’ve been talking about language skills, adaptability, and different cultures that one learns from traveling. There’s a lot of research going into the kind of educational inputs that will help kids in the future and to some extent it’s helpful; to another extent, it’s not. Let me explain why. Depending on who you’re talking to, some will say we need to have math skills and programming skills and other computer related skills. No doubt it’s true. Others say those industries will be automated or that the Chinese are going to do them better so we really need to have creative skills, artistic skills, team building skills, and character and leadership skills which have been the traditional strengths in American education.
So what are you left with? You’re left with the whole spectrum of possible skills, all which one needs to succeed. You have to know how to program but you also need to know how to lead… you have to be good at math but you also have to be flexible and have a nimble mind. It’s very hard to say there’s one thing that you need to do to get ahead in the world.
My answer to this question tends to be somewhat different and askance. I say you have to pick one discipline and you have be really, really good at it. Being average is not going to get you far which is exactly what I’ve said about languages. Speaking Spanish half well is not exactly going to make you a tycoon in Latin America. So similarly, just being a decent programmer is not going to get you a job at Facebook or Google. Whatever it is that you decide to do, you should be extraordinarily good at it and that’s how you’re going to compete. Specialization, I think, is still very, very important as is developing expertise in an area in which you can be predictably marketable for the long term.
Career Hack: On the gen Y question again, you brought up an interesting point in your New York Times article about the “diplomatic industrial complex” and that the Peace Corps will be ten times larger. Specifically how do you think this will help? Why would this be good for our generation to have the Peace Corps or similarly international volunteer based institutions out there?
Parag: Well let’s step back and revisit the term “diplomatic industrial complex.” The diplomatic industrial complex is meant to be a counterpoint or antidote to the military industrial complex which President Eisenhower called the Iron Triangle. We should think about what the different segments or forces in American society are that can contribute to America’s international objectives… and not just the State Department, the Pentagon, or the CIA. It’s also America’s companies, whether in energy or consulting. It’s also America’s universities. It’s also the civic institutions and organizations like the Peace Corps, the Gates Foundation, and many hundreds, if not thousands, of others.
In that sense, I believe all of these elements in American society actually have a foreign policy role and as quasi diplomatic actors. Within that, I’ve mentioned that increasing the size of the Peace Corps is one way of going about this because you always hear around the world, whether from locals or ambassadors, people say “well America’s Peace Corps volunteers are the best ambassadors we have”. That’s really true but the general principle with respect to the Peace Corps is that those American citizens who have the closest contact to populations abroad, and really present tangible benefits through education or agricultural training and so forth, are the ones who are most respected and prized.
Today, you can see that American diplomacy is not just the extent of technical cooperation, nor just going to give speeches about human rights. It’s also bringing in CEOs who can set up factories, technology companies, or computer centers. These are the things that foreign governments, foreign societies, and foreign audiences want from the United States. To provide the things that foreigners want — things that constitute good diplomacy and good business for the US — requires non-state and informal diplomats because these are not things that the State Department is trained to do. These are the things that technology companies are trained to do, things that engineering and construction firms are trained to do. I think we have to bring in all these different dimensions into a diplomatic industrial complex.
Career Hack: You’ve also raised the point that the US is geographically isolated from many other places in which it seeks influence while Europe and China are essentially the western and eastern portions of a giant Eurasian land mass. Historically, we can argue that this has been security benefit to the United States, but in the future, as the US vies for influence in the second world, this is a potential weakness. Can you explain to us why this is a point of concern to the US?
Parag: There are a lot of people who think that geography is dead, that there is no distance, that it no longer matters. But of course it matters because time zones matter a great deal. Right now, it is late night in the United States and it is the middle of the morning here in Asia. There is a tremendous volume of deal making going on — discussions, negotiations. But there are far fewer Americans on the ground here, so to speak, than there are Asians. So business and negotiations take place, yet Americans are nowhere to be found in them. Conversely, and specifically because of relative time zones i.e. geography, Europeans can talk to Asians during the same day.
It is hard to measure exactly what advantage this confers on people who are in similar geographic space or strictly based on the number of Europeans and Asians concentrated here versus Americans. Still, being on the other side of the world means that we are not simultaneously, all day long, transacting in real time with our antipodean counterparts. I do think that means one location is at certain disadvantage.
Part of the reason I bring this up is also to emphasize the western hemisphere. South and Latin America have been very neglected in American foreign policy and end up just being treated simply as America’s backyard. Yet there’s a huge opportunity there given the size of Latin America’s aggregate economy of about nine hundred million people — about the same as China. We think of China as a superpower, as the market of the future, and as a pillar of the global economy, yet we don’t think of Latin America in the same terms even though it manifestly, empirically, and economically is. Latin America is in our time zone, is a major provider of natural resources, and poses significant potential manufacturing strength given growing flows of infrastructure investment into the region. I say these things not to point out that we are on the wrong side of the world but to say that we need to concentrate as much on our side of the world as we do on trying to get ahead in Asia and the Middle East and so forth.
Career Hack: Fantastic! Our final question: in a recent interview, Jim Rogers seemed particularly enthusiastic about prospects in Myanmar for investors and private sector participants. How do you think this might play out?
Parag: There are a lot of scenarios on how Myanmar might play out but I’m certainly as cautiously optimistic as Jim. He is right to observe that political transition seems to be happening quickly. Of course on the top level, there’s still very strong control under the president but he’s taking steps towards political and economic globalization that are promising and that are changes that are difficult to reverse. Myanmar is a country that has a very large and underserved population. If you consider basics like health care and education and infrastructure, there’s a huge demand for these things. Countries like Singapore, Japan, and others have been moving in rapidly to provide these services.
I think there’s a very rapid shift towards integration going on. There are very good signs in resource-rich countries as well. China has largely been exploiting those resources but now others can too. But this is the tricky part as I obviously hope a race to the top rather than a race to the bottom is initiated in terms of sustainably harvesting those resources — obviously in contrast to how great powers have been going about it so far. But do I think it could become a really great case study in how a country comes out of the cold? Absolutely – it has that potential based on what is happening right now.
Career Hack: A point that you often hit on is that Myanmar is pretty much a “land bridge” between India and China. Do you think that’s particularly important to its rise?
Parag: Absolutely though I wouldn’t call it a rise because it’s not going to become a regional heavyweight even though it is a strategic passageway between India and China. In fact, one of the best recent books about it is titled Where India meets China. I think that more or less says it all. It has played that role since the colonial era or even going back to the precolonial era and will certainly continue to do so with the kind of infrastructure investment going on whether in oil or gas or resurrecting an old railroad and so forth. These will be extremely important for that country especially, as is often the case with emerging markets. The vast majority of investment often flows into the main city or capital city, leaving the rest of the country quite neglected and in order to correct that one has to expand infrastructure investment into other parts of the country.
Career Hack: Great! That’s all the time we have today with Parag Khanna. Thank you again so much for getting on our call. It was an honor.
Parag: Thank you Michael. I really enjoyed talking to you.