Forbes.com | February 21, 2011
By Elmira Bayrasli
In How To Run the World, Parag Khanna envisions a new world order. Business and entrepreneurship are no longer the maligned enemy of social good, but an “indispensable” public partner. In fact, Khanna, a fellow on American strategy at the New America Foundation, says, boardrooms are the new diplomatic outposts and military bases. Hence it is necessary for “CEOs to know as much as diplomats about the world and its various elements – they can’t rely on embassies to act on its behalf anymore – and those that know this are those that are succeeding.”
The idea of business being involved in foreign policy isn’t new. Sugar interests in Hawaii prompted Washington in 1893 to oust the island nation’s monarchy for subsequent annexation. United Fruit’s operations in Central America culminated in the CIA’s overthrow of Guatemalan President Jacobo Arbenz in 1954. And multi-trillion dollar assets and investments in the Middle East have kept the White House involved in the region for decades. The difference, as Khanna points out, is that those businesses were built at a time when diplomacy was practiced almost exclusively by governments.
Today there is nothing “governmental” about diplomacy. The continued conflicts, violence, hunger, disease and poverty around the globe have become too overwhelming for governments, even as a collective, to handle. When it comes to foreign affairs, “all hands on deck” is the order of the day. Khanna calls this “Mega Diplomacy.”
Mega Diplomacy isn’t foreign policy amplified. It is an entirely new way of thinking about international relations. To start, Khanna says there’s no longer such as thing as “international.” Unlike most books that look at the “new world order,” How To Run the World rejects the premise that “globalization” equals the globe, much less a flat world. For Khanna, it doesn’t even equal the nation. “The age of nations is over,” he says. Today’s world equals the city. “In an age that appears increasingly unmanageable, cities rather than states are becoming the islands of governance on which the future world will be built,” he says.
Interestingly, Khanna envisions that it will be a future that will lead to the next Renaissance. Renaissance is a tiresome term. That is no less true here. Khanna saves it by coupling it with resilience and practically. That means that “Africans don’t have to wait for the United Nations to approve military interventions or for the World Bank to provide them loans; it means Europeans and Australians don’t wait for the United States to sign climate treaties before turning global warming into a commercial opportunity; and it means emerging markets don’t wait for G-20 meetings to launch stimulus packages or issue local-currency bonds. Resilience is how the local thrives amid the global.”
Local amid the global is what makes this book relevant to the business world, especially entrepreneurs. It is an important point. Local growth, that is the emergence of vibrant city-states such as Shanghai, Hong Kong, Singapore, Sao Paolo and Istanbul, Khanna argues, is what has shown us that the global economy is “very much still unchartered territory.” It is territory he believes that “can only be managed if the public and private sectors see each other as partners not competitors.”
Khanna sketches several ways for the public and private sectors to build a partnership. A few, such as his call for regional blocs such as the EU to replace countries such as Britain and France on the U.N. Security Council are impractical and, more importantly, moot. The United Nations, as Khanna would readily admit, isn’t the future.
Fortunately his other examples are persuasive. Chapter Nine “The Case Against Poverty,” is his best. Shelving feel-good development hyperbole, Khanna tells us, point blank, “pretending the world should be equal – or even can be equal – harms development.” He proposes, “rather than even talk about poverty, we should focus on need. Poverty is amorphous and sounds incurable, but needs are specific: food, water, shelter, medical care and education.”
This makes How To Run the World a compelling read, one that CEOs and MBAs in particular will appreciate. Divided into thematic chapters that reflect on areas such as poverty, technology, the environment and security, it is also one that is well organized and thought through.
Ultimately, what gives Parag Khanna’s How To Run the World an edge over other books on foreign policy, global economics and globalization is it ability to touch on all these matters. Whether it’s solving our global climate change challenge, building roads in Africa or developing supply and distribution chains in Latin America, Khanna reminds us what we already know, that our intended goals, whether on a spread sheet or a demarche, can only be achieved when a variety of elements are not only thriving, but working in synchronicity. At a time when the lines between government and business are blurring and most pundits are quick to color them over with the promise of technology, Khanna has given us an important guide that will help us run the world into the future. A perfect President’s Day read.