Session I Report – “Volatility is the new stability”

The decline of the West and the de-westernisation of Europe were key themes spotlighted by Joschka Fischer and Virginie Raisson at the 4th Forum de la Haute Horlogerie. The former vice chancellor and foreign minister of Germany, and the director of Lépac, an independent laboratory for foresight and cartographic analysis, each delivered their views on “A Shifting World”. The Forum whose theme was “Time to Share”, organised by the Fondation de la Haute Horlogerie at the IMD in Lausanne on November 14th, welcomed seven international speakers and an audience of 400 people.

A little history

“We are in a transitional period.” A member of the German government from 1998 to 2005, Joschka Fischer was the first representative of the Green Party to hold a ministerial portfolio. Born in 1948, he recalled growing up in a bipolar world with the USA on one side, the USSR on the other. The fall of the Berlin Wall on November 9th 1989 would put an end to the political stalemate between these two superpowers. It also hastened events, leading to the dissolution, a year later, of the USSR. But as Joschka Fischer told the audience, “in politics, victory is always fragile. It is even fraught with danger as this is when decline can set in.”

To illustrate his words, the politician gave the example of the United States, then the only remaining superpower which misdirected its might into three wars and tax cuts. Asia, on the other hand, experienced the start of the “Chinese miracle” in the 1970s; a miracle that grows stronger by the day. “Globalisation was deemed a conspiracy between Wall Street and the United States, when in reality it was the acceleration of industrial growth in the developing economies.”

The all-important USA

Today, it seems no one can stop, or even slow, the “paper tigers” in their determination to outgrow poverty. The majority of people aspire to a western lifestyle, and a new form of competition – bringing with it a new form of instability – has emerged. Unfortunately, the kind of structures that were put in place after the Second World War to prevent further conflict in the West have no equivalent in Asia. Trouble could flare up at any time in the Korean peninsula, Taiwan or the Chinese islands disputed by Japan.

In this light, the United States is more important than ever to maintaining order in the world in general, and in Asia in particular, said Fischer, who immediately asked “who else could play this role?” China is focused on domestic issues following recent nominations to the CPC, and must contend with heightened social tensions. As for India, Brazil, Russia and even the European Union, they aren’t ready!

Where do revolutions lead?

In the former minister’s view, the United States will concentrate on the Pacific more than the Atlantic, the Middle East being one region from which the US cannot disengage itself. “It’s a common misconception that revolutions bring about a better world,” Fischer declared. “Modernisation is a tough process!” Syria and even more so the Iranian nuclear programme raise concern. Their economies are under heavy international pressure. “Nobody wants to ban Iran from having nuclear power plants for civilian use, but in that case there is no need to enrich uranium to military levels! It’s like driving a tank and claiming it’s not a threat.”

The Arab Spring, meanwhile, has introduced profound changes in the region with an important religious element. “This isn’t something I’m too concerned about,” said Fischer. “Religion is also very much present in Europe, including at political level. It remains to be seen whether or not Islam drives change towards greater democracy.” He then gave the example of Turkey, a secular republic with a moderate Islamist at its head. “The EU made a big mistake in distancing itself from Turkey. I believe everyone stands to gain from reinstating trust.”

And Europe?

What about Europe in all that? Where does its future lie? “For us, unity is of the essence. I say ‘us’ because Switzerland is also dependent on the EU. Like it or not, Europe’s decisions inevitably have repercussions in Switzerland! Ditto the United Kingdom which depends on the euro. If the single currency collapses, the single market won’t come out of it alive.”

The European Union has no other choice than sink or swim. Next steps will be banking union, fiscal union, then debt mutualisation… all this against a backdrop of growing global insecurity. “West Africa, the Middle East and Russia will all have a role to play. I believe we are in a transitional period. Volatility is a new form of stability and we will have to get used to this.”

Looking ahead

“Europe is de-westernising!” Picking up from the ex-vice chancellor, Virginie Raisson rubbed salt in the wound. In her book 2033, Atlas des Futurs du Monde, she uses current elements to examine the future, analyses trends and suggests possible scenarios for tomorrow’s world. She backed her theory with the example of the American elections, immediately replaced on our TV screens by nominations at the head of the Communist Party of China. “Previously, appointments at the CPC would never have taken up so much room in our media,” she observed. “There is clearly a new world order and Europe is no longer at the centre of the game.” And not just China has grown in importance. The tiny Arab state of Qatar is constantly extending its sphere of influence by investing billions of dollars around the world, and particularly in Europe.

This de-westernisation has only just started. One of its driving forces is the balance of global demographics, which will shift from north to south by 2030.

Continental Europe, which in 1950 accounted for 17.6% of the world’s population, will be home to just 7% in twenty years’ time. The same is true of North America and Russia, slipping respectively from 6.8% to 4.9% and from 4.1% to 1.5%. Tipping the scales the other way are Africa, South America and Central, South and South-East Asia which together will grow by 21.4 percentage points.

Depleted reserves

The redeployment of global wealth is another indicator of what lies ahead. In 2010, the three wealthiest regions in terms of GDP were the USA, China and the EU. In 2050, China will claim first place, followed by India and the United States. The regions that were once immense labour pools are becoming the world’s consumers. Currently, the United States and Europe account for half the global middle classes. Come 2050, this half will have moved to China and India.

This paradigm shift is making primary energy the sinew of war. China, which already takes up 40% of increased demand for energy, will consume 23% of available resources by 2030, followed by the USA (16.8%) and Europe (13.6%).

Energy costs are set to grow by 33% in 20 years. The supply of petrol, gas and raw materials will lead to ever increasing tension. Based on reserves at December 31st 2011, diamond deposits will be depleted by 2020, gold by 2030, iron by 2040 and copper by 2053.

“The environment won’t survive”, concluded Virginie Raisson. “We must rethink our way of life and our economic development. This isn’t environmental reasoning but an incitation to adapt!”

Going with the flow

After two substantial contributions from Joschka Fischer and Virginie Raisson, the philosopher and expert in social communications Francesca Rigotti brought a lighter touch to proceedings at the first session of the 4th Forum de la Haute Horlogerie with her suggestion that the most precious elements in life share a common metaphor: fluidity. Rigotti, who also lectures at the University of Lugano (USI) in Switzerland and the University of Göttingen in Germany, put together an amusing inventory of expressions that make reference to liquids.

First money. We have current accounts, capital can be frozen, currency is put into circulation and we carry liquid cash. Time, another precious asset, is a river that flows into the sea of history. We communicate with a torrent of words. Power, that hard-won battle, is an ocean. These four notions of money, time, speech and power all use metaphors of fluidity. They are also linked one to the other by their intrinsic value: the power of speech, time is money, money breeds power…

“Metaphors are not empty shells”, Francesca Rigotti was quick to point out. “They help bring about concepts and intelligible structures. They cannot be substituted and are not interchangeable.” She ended with a few words on the notion of luxury, from the adjective luxus meaning “bent” or “twisted”. Hence why a dislocated joint is referred to as a luxation. A distortion of the soul and a desire for vanity until around 1700, luxury became a consequence of demand with the emergence of trade in the 18th century, and ultimately something superfluous… the drop of liquid that overflows and, in doing so, benefits society as a whole.

Article published in WtheJournal.com