As the undercurrents of globalization shift and the spirit of multilateralism starts to erode under the pressure of national and bilateral priorities, many markets are trying to find the right balance between serving the national need and cooperating on global priorities. Infrastructure participants should understand how these shifting currents will likely impact national and global markets going forward.
In this roundtable debate, KPMG's Global Infrastructure leadership asked four leading thinkers from business, civil society, academia and professional services to discuss and debate the growing tension between national need and global good.
Editor: Let’s start with the premise of the argument – Are you seeing a rise in tension between ‘national need’ and ‘global good’?
Sam Worthington: I equate global good to the public good. And that is something that is inherently designed around individuals, whether it is mitigating climate change and famine, defending individual rights and dignity, and so on. At the same time, many nation states are working to meet the needs of their citizens. Since the Second World War, I think nation states have generally been very much aligned with the global good. But more recently, we’ve seen a rise in populist nationalistic logic and that is putting stress between these two broad concepts.
Banning Garrett: I would absolutely agree. In the US, our national interest was very much intertwined with global interests right up until the last Administration. It was in our national interest to rebuild the global economy after the World Wars. It was in our interest to help countries develop. It was in our interest to defend the great global institutions and rules that we all agreed upon. More recently, however, it seemed that our policy agenda was in opposition to global interests. And I believe that put us – and humanity at large – in great peril.
Bill Thomas: I think this current health crisis is very illustrative of the tension between national need and global good. On the one hand, the crisis has exacerbated certain geopolitical tensions – for example, by impeding travel and trade – and countries and governments are very focused on protecting their people in this time of crisis. On the other hand, we have seen many different groups – including governments, businesses and international organizations – come together to develop solutions that not only bring relief to the health crisis, but will also help society emerge stronger and more resilient after the crisis.
Banmali Agrawala: I agree with Bill that there are strong signs of collaboration on the global health crisis. But I also feel that some of this tension is coming from the need to meet domestic expectations while operating in a global environment. And I worry that some of those great global institutions that ensured countries worked together to achieve a global good have vanished. I think we are seeing bilateralism replace multilateralism and it’s not a pretty picture. I fear that the world is becoming more protectionist, more self-centered and more inward looking than in the past.
Editor: How can markets find the right balance between national need and global good?
Banning Garrett: A balance needs to be found. But then the challenge is how to move to a place where you actually eliminate that distinction entirely. Borrowing from Bill’s vaccine example, how do you ramp up production and distribution to a point where you don’t have to choose between protecting your own people and doing what is right at a global level. Ultimately, it’s about being true to the goal you are trying to achieve rather than seeing it as a zero-sum game.
Sam Worthington: And I would argue that it is an evolution in the nature of nation states, both in terms of their accountability to citizens and in terms of their accountability to that global good. I suspect this is a tension we are going to be feeling in the 21st century. In fact, it will likely define how well we are able to recover from the setbacks we have experienced during this current economic and health crisis.
Bill Thomas: The strength of the recovery will certainly be driven by our ability to collaborate on key issues globally. But rather than a balance of the two, I think that it requires both working in harmony – the global good and the national need. Some issues, like climate change, are so big that global coordination is absolutely critical. But so, too, is local action. For example, we’re working under the guidance of the Sustainable Markets Initiative created by His Royal Highness The Prince of Wales to catalyze nationally-strategic sustainable development projects. Many times, global coordination is just as helpful as national action.
Banmali Agrawala: Clearly, these are difficult policy decisions to make and the context is very complex. What I will say is that no country can isolate themselves from the rest of the world. This health crisis has made this very clear. But it’s taken longer to find that common ground on issues like sustainability. For some markets, it wasn’t until climate change started to hurt us in our own back yards that we realized it was relevant to us. Now I feel there is more willingness to collaborate globally.
Editor: Are you seeing positive signs of increased collaboration today?
Banning Garrett: The obvious one is the collaboration that has happened around COVID-19 vaccine development. It’s interesting that it’s almost always scientists that are the ones focusing us on the real threats like pandemics, climate change, water scarcity and so on. We should remember that huge swaths of our global order still run on networks of global cooperation. Just think about international air travel. Or international banking and payment systems. Or the internet. There are billions of non-zero sum connections at play out there.
Sam Worthington: I am also an optimist. We have seen – even in the absence of leadership by nation states on certain agendas – that there is still broad global engagement by different structures across civil society and the private sector. As Banning noted, I have seen more collaboration between organizations like the UN, different forms of civil society, NGOs, the private sector, scientific enterprises, and academics during this health crisis than at any other time in my career. We need to keep that momentum and spirit of collaboration alive.
Bill Thomas: I absolutely agree. There are a lot of great examples right now of different organizations coming together to solve big global problems. The speed of not just one – but several – COVID-19 vaccines being designed, tested and readied for market in record time is a great example. That alone is an incredible testament to global collaboration. I am also seeing great progress in the corporate world around the ESG agenda. In fact, in a recent pulse survey of CEOs conducted by KPMG, corporate leaders were almost unanimous in their support of ESG criteria. It’s an encouraging sign, and I think we’ll see more and more appetite for collaboration on these big issues.
Banmali Agrawala: Then I will be the pessimist of the group. I do see strong signs of continued collaboration and coordination on key issues. But I also believe we need to rethink the global platforms we have historically relied upon for resolving global differences. When we are all working together to fight a common enemy – like the COVID-19 pandemic – it’s all good. But the moment our interests clash, we now lack the institutions or global governance bodies to help settle those disagreements.
Editor: How can infrastructure participants navigate this changing global environment?
Sam Worthington: For the infrastructure sector, I think it is about balancing the obvious impacts around cost, return on investment and risk against the need to deliver from a public good perspective. How sustainable is that investment in the long run? To what extent is it centered on the welfare of human beings? And to what extent is it equitably available? These are the types of questions infrastructure participants need to be thinking about alongside the traditional financial equations.
Banmali Agrawala: I absolutely agree. I think we need to spend more time thinking about how our activities impact the populations we serve. If we start from a place where the well-being of the planet is the focus of all our activities, we’d be far better off. I also think we need to be more innovative as a sector, adopting new technologies and taking up new approaches that could accentuate the impact we have on these global issues. We have massive room to innovate, particularly in traditional infrastructure sectors, and I believe we need to double down on innovation if we want to see different results from our investments.
Bill Thomas: There is no doubt that the infrastructure sector will play a massive role in helping address many of the big global issues we are facing today. I believe the sector must embrace this opportunity head-on. We need the innovation and scale to boost and strengthen our economies. And with more companies and actors on board, we can start to harness our collective power to start building solutions to the many big challenges society faces.
Banning Garrett: And I’d just conclude by encouraging everyone to keep their eyes on the prize – an environmentally, economically and socially sustainable and just world. It’s far too easy to become consumed by all the geopolitical rivalries and short-term zero-sum projects. But I would argue that viewing the world through a lens of nationalism and pure national interests is the road to perdition for the human race. We must avoid it at all costs.
The views and opinions of external contributors expressed herein are those of the interviewees and do not necessarily represent the views and opinions of KPMG International Limited or any KPMG member firm.
Meet our panel:
Bill Thomas is the Global Chairman and CEO of KPMG where he leads and supports almost 227,000 remarkable people focused on delivering exceptional services to clients throughout the world in 146 countries.
Banmali Agrawala is the President of Infrastructure, Defence & Aerospace and Global Corporate Affairs for Tata Sons Pvt Limited based in Mumbai, India.
Dr. Banning Garrett is a Washington-based strategic thinker with more than four decades of experience in national security, US-China relations and global trends.
Sam Worthington is the CEO of InterAction, the largest US alliance of international non-governmental organizations focused on people around the world.