What It Takes For Southeast Asia To Rise - Gita Wirjawan

Gita Wirjawan is an Indonesian entrepreneur, investment banker, and philanthropist. He is the Founder and Chairman of Ancora Group, a business group with investments spanning private equity, natural resources, real estate, and sports.

Before founding Ancora in 2008, Gita held senior roles in global finance — including Vice President at Citibank Indonesia, Vice President at Goldman Sachs Singapore, and President Director at JP Morgan Indonesia.

Mr Wirjawan also served as the Indonesian’s Minister of Trade from October 2011 to January 2014. During this time, he also led the ninth World Trade Organisation Ministerial Conference held in Bali, December 2013. Where he chaired 159 WTO member countries in consenting to a set of policies to ease international trade barriers.

Today, he is the host of Endgame with Gita Wirjawan, a podcast by the School of Government and Public Policy (SGPP) Indonesia, co-produced with Visinema Pictures. Through Endgame, Gita explores ideas and conversations with visionary leaders, uncovering the stories shaping Indonesia and Southeast Asia's bright future.

TIMESTAMPS:
00:00 Trailer & Intro
01:02 Gita's Entry Into Governance
07:16 Revolut Ad
08:40 What It Took To 4X Indonesia's FDI
18:00 Southeast Asia's Place in Global Consciousness
23:45 The Importance of STEM Education for Southeast Asia
34:38 The Intellectual Gap Between China And Southeast Asia
36:23 Why China Is More Democratic Than We Think
40:13 Is Technology Undermining Democracy?
44:00 Shifts in Global World Order
49:30 How Polarization Happens in the Digital Age
51:30 Southeast Asia's Economic Future
56:38 Building ASEAN Consciousness
01:01:51 Advice for Future Leaders and Young Southeast Asians

This is the 58th episode Of The Front Row Podcast

Keith 00:00:55

I want to take us back to maybe one of your first few conversations with President Yudhoyono when he first approached you to serve in Indonesian public service. This was when you were at the Investment Coordinating Board, the Indonesian equivalent of Singapore's EDB. What were the conversations like?

Gita 00:01:15

The conversations were quite numerous over a period of four years, from 2005 until 2009. They grew more intimate and allowed me to understand him better as a person, as a leader, as a nation builder. It made me much more comfortable when he asked me to serve.

At that time, I was already mulling over the possibility of being a public servant. It wasn't very difficult for me to say yes to him because I had grown to understand his thinking and his aspiration about Indonesia and the world. I just thought that it would click. By October 2009, the formal request came about and I was there.

Ever since, it's been a blast.

Keith 00:02:36

Can you speak more about your understanding of his thinking and aspiration for Indonesia?

Gita 00:02:43

His main economic narrative would have been pro-growth, pro-equity, and pro-poor. Lots of politicians say things like that, but I was able to assess over two to three years before I made that decision to join that it was really serious. Within the first term, between 2004 and 2009, he actually implemented a bunch of initiatives that really resonated and clicked with his pro-poor, pro-equity, pro-growth narrative. It's empirically manifested.

During his ten-year period, the stock market went up by more than 500%. GDP per capita went up by more than 200%. Tax revenues went up by more than 300%. He was able to bring about a much larger middle class. He was able to lower the Gini coefficient ratio quite meaningfully and uplift the many by lowering the poverty rate to single digits from double digits. He was able to lower the debt-to-GDP ratio.

Keep in mind that at the peak of the Asian financial crisis, the debt-to-GDP ratio, the public debt-to-GDP ratio, would have been near 100%. At the end of his term, the debt-to-GDP ratio dwindled down to 24%.

The economic performance during his ten-year period was undoubtedly meaningfully good, not just for the middle class but for the lower echelon and the upper echelon of the economy.

Keith 00:04:38

You spoke a lot about the outcomes, the performance he was able to bring to the table. I'd like for you to peel back a little to talk about the thinking. What was different about his thinking that separated him from other policymakers?

Gita 00:04:51

Becoming a head of state is a manifestation of how good that person is in many respects. I'm not here to discount anybody else, but I think the market differentiation with other leaders would have been his internationalism, an internationalism that would help bring about multilateralism. Not just for the sake of being heard, not just for the sake of being listened to, but for the sake of being able to be collaborative.

This was reflected in how we were able to usher quite a number of bilateral, plurilateral, and multilateral arrangements during my five years as a minister, but also more importantly during his ten years as head of state. That's the first identifiable distinguishing characteristic vis-a-vis all the other leaders of Indonesia.

Coming from a military background, he was highly different in the sense that he was highly in favour of democratising the military. He was actually at the forefront of reforming the military. He's always been with the ideology that there's not going to be any political reform without any meaningful military reform, and he meant it word by word.

In 1998, he was there in Parliament and he stood up in favour of relinquishing the pre-existing authority and presence of military personnel in Parliament. It's highly paradoxical for somebody coming from a military background to actually urge the military to step out of politics.

Those would be the two distinguishing factors vis-a-vis the other heads of state of Indonesia, from the days of Sukarno and Suharto until today with Prabowo.

Keith 00:07:15

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I want to take us back also to 2009, where it was under your leadership you managed to help Indonesia achieve more than four times in terms of FDI inflows from 2009 to 2012. In 2009, you're coming in during the financial crisis. This is where a lot of economies were suffering across the world, fallout from the global financial crisis. $4.9 billion USD FDI coming into Indonesia. Four years down the road, 2012, that number quadrupled, and it was the beginning of the rise of FDI in Indonesia.

Take me through that journey. What was it like to go in right at the heat of the financial crisis?

Gita 00:09:25

The measures that were taken by the Indonesian government predated my presence. I think the earlier government in 2008 reacted by implementing the right set of countercyclical measures, mainly from a fiscal standpoint. That predated me.

In October-November 2009, when I came in, the figure for FDI was low. It started from a very low base, and being able to quadruple the number is an achievement. But I just want to clarify that it quadrupled from a relatively low base.

I think what helped would have been the telling of the narrative that Indonesia was still at the front end of the trajectory. It was important, if not far more important, to tell the world that we're not painting an iguana. We're painting a story that was a work in progress where we took the necessary steps to invest a lot more in education.

Keep in mind that President SBY was the first head of state to mandate by law that 20% of the government budget be spent for educational purposes.

Number two, we explained that corruptibility was there, but we also explained that at the rate the government is going to be spending more and more money on education, there is a correlation between the investment in education and the decreasing of corruptibility.

Number three, we talked about the demographic bonuses that were prevalent and still are prevalent today. If you take a look at today's snapshot, 24% of the population is still aged 15 years or younger. That's roughly around 70 million people in Indonesia. It depends on the view you're taking with respect to what you're going to do with these massive numbers of people.

Currently at 70 million, if you educate them, if you invest in them, there's a clear likelihood that these people are going to be able to help the country move up the value chain, help the country move up the global geopolitical order. That was the day-to-day telling of the story of Indonesia.

People were out there wanting to bet on the directionality. I'd always presented the investment thesis of Indonesia as something that's not absolutist. It's not perfect today, but I think tomorrow it's likely to be better than today. The day after, it's going to be better than tomorrow. The week after is likely to be better than the day after. People sized up what we were saying.

I think there was credibility and, to some extent, accountability to the story, and that helped move the needle up quite a bit.

Keith 00:12:49

After that, you moved into this portfolio of being Minister of Trade. In Singapore, if you're running the investment board, that would be a pretty good gig to stay in for the long term. To take up a portfolio as contentious or as difficult as trade, I wanted to ask you what prompted you to do it, and then what were the priorities that you saw Indonesia needed to undertake to advance into the next phase of development?

Gita 00:13:15

I had no control over the fate of being shifted over to the portfolio of trade. It was the prerogative of my boss, and I had always been a public servant. As a public servant, you serve at the pleasure of the president.

But it's important to highlight that when you serve at the pleasure of the boss, you have to say what he has to hear as opposed to what he wants to hear. It's important to be able to tell what he has to hear.

The trade portfolio is a little bit different from other countries in the sense that you're in charge of both the domestic trade and the international trade. The tricky part was actually the domestic trade, where you're put on the spot if there is any inflationary pressure because you're supposed to be making sure that there's manageability with respect to inflationary pressure on the back of rising prices of chilli, sugar, rice, and things like that.

The more difficult part about that was the Ministry of Trade was not in charge of the supply side of the argument. The supply side was being handled by the technical ministries, for example, the Ministry of Agriculture. We had to deal with the relevant technical ministries so that we had a good understanding of the supply side of the game and how the supply side would ensure the manageability of rising prices.

With respect to international trade, I think the challenge would have been the rising tide of protectionism and bilateralism at best, plurilateralism. But we took a chance wanting to host the Ministerial Conference through the WTO. This happened in December 2013, and by the stroke of luck, we were able to get an agreement on three packages.

One was with respect to trade facilitation. Another was on the agriculture package. The third would have been with respect to developing economies. It was highly contentious because the Indians were highly rejecting the idea that was propagated by some of the developed economies, particularly the US at that time, that the Indians were not able to subsidise their rice sector on the back of concerns that there could be a distortion to the market dynamics or the international market dynamics.

Luckily, we were able to get not only the Indians and the Americans but all the other stakeholders. There were about 159 or 160 countries involved at that time to agree after four or five days worth of dialogues, sometimes debates, without any sleep in Bali.

The fact that it was hosted in Bali kind of helped. It brought about serenity, tranquillity, and peace to the negotiations. I thought that was watershed.

Since then, we've seen further decline in multilateralism. This is driven by so many factors, one of which is that inequalities in many places around the world are polarising conversations and discourses to the extent that they drive nations into a place where it's a lot easier to sound protectionist as opposed to multilateralist.

Keith 00:17:25

Indonesia's story is emblematic of the ASEAN story or Southeast Asia story. If Indonesia is able to achieve huge swathes of poverty elevation, that's a story for ASEAN as well.

One of the great paradoxes, and I think this is something that has been explored by many Southeast Asian intellectuals, is that Southeast Asia is the Nusantara, which is the place or the way to somewhere. It's always seen as somewhere peripheral, never at the forefront of global consciousness.

I wanted to ask you, from your point of view as a Southeast Asian and as an Indonesian, why is it that Southeast Asia, despite being big and maybe economically important, seems to be trivial and unimportant at times?

Gita 00:18:04

It's been a question in my mind for a long time. Despite the fact that if you take a look at the longitudinal poles from Tanintharyi to Merauke, that's 5,000 kilometres. If you take a look at the latitudinal poles between Myanmarung and Papua, that's 4,000 kilometres. The former being the equivalent of the distance between LA and Boston. The latter being equivalent to the distance between Tehran and London.

The immensity and diversity of this massive region oftentimes gets obfuscated with our inability to tell stories. There is empirical evidence to support this. If you take a look at all the books that would have been written about Southeast Asia, they number no more than about 375,000 books. You take a look at all the books that would have been published globally, roughly around 140 million books.

Just mathematically, the documents with respect to Southeast Asia represent only 0.26% of all the documents available, whereas the population of Southeast Asia represents about 9% of the global population. It speaks to the lack of degree to which we embrace literacy and numeracy.

Despite the immensity and diversity, we can talk about diversity in terms of ethnicities, religions, other cultural variables, and not to mention biodiversity, but we're just not great storytellers. That is one big reason as to why we keep staying at the periphery as opposed to the core of global consciousness.

Keith 00:20:06

Can this be remedied?

Gita 00:20:08

I'm a big believer that this can be remedied to the extent that we can document our stories better, to the extent that we can tell our stories better with higher quality and higher quantity. I think we're going to be able to get there.

The problem is education. We are seeing a relatively high degree of divergence of educational attainment amongst all the ten countries in Southeast Asia. Singapore being at the top, it's manifested in how you've scored in PISA, which is the measurement of 15-year-olds' lingual proficiency and STEM proficiency. You've taken over China's spot as number one in the world.

Vietnam is number two in Southeast Asia but still number 30-something in the world, whereas Cambodia is number 81 out of 81 countries. Indonesia is number 69 out of 81 countries.

The remedy going forward is to ensure that these demographically youthful elements of the society score better in numeracy and literacy. Then the next step is to ensure that the tertiary educational attainment gets to the level where Singapore has embraced for a long time.

Singapore has got one or two universities in the top 20 in the world. Southeast Asia has 8,000 universities. Only one or two places in the top 20 of the world. China has 2,600 universities. They've got two universities in the top 20 in the world. China has got 39 million students. Southeast Asia has got 19 million students. It's very clear in terms of where we are non-tertiarily and tertiarily.

To the extent that we take the right steps moving forward, there's no reason for us not to be able to shift from the periphery to the core of global consciousness. It's opportune geopolitically speaking because I think it's safe to assume that China and the West are going to be indispensable inevitabilities for a long time.

We're a swing state. We can swing to China and the West because of our geopolitical, geoeconomic, and geostrategic importance. That is key to recognise for and by all Southeast Asians that we can go to China. I'm in the camp that believes that China is much more going to be for technological capital allocation purposes as opposed to the West, more for economic capital allocation purposes.

It may sound ironic, but despite the fact that our collective economic relations with China are just much more humongous than that of Southeast Asia with the US, Chinese technology is just much cheaper, much better. At the rate that some countries in Southeast Asia earn less than $2,000 per capita per year, they can't afford an iPhone. They can only afford an Oppo. That will be like that for a long time.

I do believe that the shift from the periphery to the core will be driven by the degree to which we take the necessary pills to remedy the pre-existing educational divergence.

Keith 00:23:33

In your book, you wrote about this idea of the rise of China. Interestingly, you said that for the world, and especially Southeast Asia, it should be a wake-up call to reflect and invest more deliberately and strategically in education.

It's interesting because in the West, the rise of China is not a wake-up call. It's a threat. It's not seen as something that should motivate me to do better. It's often seen as I need to suppress China's rise.

I wanted to get your thoughts on how does China's rise affect the way in which we should rethink education in our part of the world?

Gita 00:24:16

China produces about 4.5 million STEM graduates in science, technology, engineering, and mathematics every year. India produces 2 to 2.5 million. Southeast Asia only 750,000.

For a population that's third largest in the world after India and China at 700 million in Southeast Asia, for a collective economy that's number six in the world at $4 trillion of goods and services after the US, EU, China, India, and Japan, I think we've got to think of ourselves as a region that can compete with the great powers of the world, namely China and the US.

But if we're only producing 750,000 STEM graduates on a yearly basis as compared to 2.5 million in India and 4.5 million in China, I'm not just about STEM, but I think if the aspiration is to move up the value chain and to move up the global geopolitical order, the relevance of STEM needs to be underlined here.

In Southeast Asia, there's one country that converts at about 40%. That's Malaysia. Meaning if 100 students enter university, 40 out of the 100 will pick STEM. Singapore is at about 36%. Indonesia at 20-something percent. Most Southeast Asian countries are below 30%. That's not going to cut it.

I think we need to be at least at the 40% conversion rate for STEM, and Southeast Asia needs to be producing at least 1 to 1.5 million STEM graduates on a yearly basis in order to contemplate competing with the Indias and the Chinas of the world. This is healthy, competitive-type thinking. This is not a zero-sum game type of thinking.

But without that dogged recognition of the problem and dogged determination to remedy that pre-existing problem, I think we're just going to end up being consumptive as opposed to being productive. It's all about increasing your marginal productivity. You can only increase your marginal productivity by investing more in STEM so that you can move up the value chain and the global geopolitical order.

Education is one key differentiating factor for Southeast Asia. We've got a great example in Singapore, and I've been quietly advocating for copycatting the great system of education in Singapore. Singapore is not perfect, but I think it's got a lot of good examples that other countries in Southeast Asia could emulate.

It may dovetail to the possibility of revising the pre-existing principle of subsidiarity in ASEAN. I'm not suggesting a supranationalism within ASEAN, but I do believe that at the rate that there is some degree of political neurosis in many countries in Southeast Asia, we may need some regional organisation to tell member countries, how about you copycat the best practice of this particular country with respect to education?

I do sense that Singapore has got a great educational narrative to offer to all the other nine countries.

Keith 00:28:22

Copycatting is something that's no different from open-sourcing. Maybe open-sourcing is the right word to use because if you look at it, the Chinese model of development is the same thing. If we were to want to become a technological powerhouse, what do we do? We don't just isolate ourselves from competition. We import foreign technology. We try to learn from it.

I really like the point that you make about increasing STEM graduates coming out of the universities. Maybe that should be something that's bigger emphasis for Southeast Asia.

The follow-on question would then be, if you think about ASEAN, a huge part of our miracle of peace, as someone like Kishore would put it, is that you had Indonesia champion this idea of the musyawarah and mufakat, the two principles of consultation and consensus. In a sense, it allows that kind of free-spirited dialogue as opposed to something that's much more supranational or imposing.

My question to you would then be, how would you see that tension between really advocating for a stronger sense of regionalism but at the same time retaining that consultation and consensus building in ASEAN?

Gita 00:29:39

I think peace and stability is a real gift for Southeast Asia. If you take a look at the empirical evidence in terms of the number of casualties in the last 2,000 years, this is to further solidify Kishore's point. In the last 2,000 years, the number of casualties with respect to any differences of opinions or views that relate to sovereignty, ethnicity, religion, or race don't number any more than 9 million lives in Southeast Asia, including those that were massacred in Cambodia and in Indonesia in the 1960s.

Compare that with Europe. During the same period for 2,000 years, Europe, you're looking at about 180 to 190 million lives lost. Just in the first two World Wars, in a span of 30 to 40 years, you're looking at more than 100 million lives lost. You add to that what happened during the Napoleonic Wars, the medieval wars during the Byzantine period.

I think Southeast Asians have this really deep-rooted DNA that embraces peace and stability. Peace and stability is sine qua non. For anybody to move up the value chain, for anybody to move up the global geopolitical order, you just need to learn how to put food on the table better, faster. How do you do that? You educate yourself better.

I do believe that despite the economic divergence within Southeast Asia, we're still able to produce 4% to 6% growth rate trajectory. Imagine the upside. Let me put this in a more concrete context. People ask me, is it realistic for Indonesia to achieve an 8% growth rate?

It's not impossible. If you take the baseline of 5%, the delta of 3% in a context of a $1.5 trillion economy is only about $45 billion. If you take the economic formula and just focus on the letter I, investment, we've only been getting about $30 to $40 billion worth of FDI. If you increase that by $45 billion, you're home. You get the FDI up to $75 billion or $85 billion, you're there producing 8% growth.

$85 billion is still a lot less than what Singapore has been getting in terms of FDI. Southeast Asia gets about $200 to $230 billion worth of FDI. Singapore gets about $100 to $140 billion. Indonesia gets about $30 to $40 billion. Malaysia, Philippines, Thailand each gets about $10 to $20 billion.

The reason why Singapore is the LeBron James when it comes to FDI is Singapore is resolute in delivering rule of law, resolute in being able to translate from uncertainties to risks. Uncertainties are unknown unknowns, and risks are known unknowns.

Can the other countries outside Singapore get as much, if not more, than what Singapore gets? Yes, if they deliver on those two accounts. There's enough liquidity. If you take a look at the global liquidity right now, there's about $140 trillion that's waiting to be diversified out.

But it's not being diversified out despite the fact that it's on the back of rising risk premium in the developed economies because they do not see many destinations as being destination-worthy.

We can actually shift from what's available to what's possible by focusing on certain things that are structural. One of which, if not the first one, is really education. The second is being able to distribute cognitive capacity better. Then the third is really to just be able to enforce whatever needs to be enforced. We call that rule of law.

The last bit is to be able to translate from uncertainties to risks because risks can be priced. They can be predicted. They can be quantified. They can be measured. Whereas uncertainties, you can't price them.

This is where Singapore has done much better than all the other nine countries. This is something that can be emulated by the other countries, not today or tomorrow, but over differentiated timelines.

Keith 00:34:29

As a young Singaporean, I actually appreciate a lot of the work that's been done in the previous generations on not just translating uncertainties into risk but de-risking as well. If you think about the kind of work that goes into attracting FDI, if a multinational needs a plot of land to set up a factory, back in the day, we'll hear stories of these civil servants that will hunt down a plot of land that was not being used, and then there'll be some form of interministry negotiation, and then finally that plot of land will be available at the behest of the multinational.

It's not just what you said earlier about translating uncertainties into risk but also de-risking a lot.

Gita 00:35:15

Absolutely.

Keith 00:35:16

You talked a little bit about the education aspect and making Southeast Asia much more attractive for FDI. We'll revisit this, but if you look at the China-Southeast Asia gap, and you talked about it, that Southeast Asia's consistently underperforming vis-a-vis China, what is your diagnosis of the problems now? What are the roadblocks? Why are we not achieving the kind of educational outcomes that we want?

Gita 00:35:47

The leadership of China since 1978 was dogged about technocratising decision-making, and technocratisation would require greater distribution of cognitive capacities around the country.

A number of experts have dissected and highlighted the fact that China, paradoxically as an autocracy, has been much better in democratising talent. Paradoxically, has been much better in democratising the economy, whereas many democracies around the world, they're politically decentralised but economically much more centralised, which is highly paradoxical.

This is what I think needs to be recognised by, and I'm with the presumption that most countries in Southeast Asia are on a democratic path here. We've got four monarchies. One is an absolute monarchy, but the other three monarchies are embracing constitutional democracy. We've got two single-party states, Vietnam and Laos. They're probably not ready to be called democracies, but all the rest, plus the three monarchies that are embracing constitutional democracy, they represent about 83% to 84% of the population and the economy.

I think Southeast Asia is already on that path of democratisation with episodic stresses here and there. If you want to exist as a democracy, you've got to be resolute in democratising public goods. You can't just brag about being a democracy by the sheer distribution of power, but it's got to be the distribution of public goods, including intellect, healthcare, welfare, social value, moral value.

Some of these attributes are not yet manifested in some countries in Southeast Asia that proclaim to be democracies yet.

China, on the other hand, as an autocracy, I think has done a much better job in democratising public goods. They've been able to do that because they've been very resolute in increasing the educational attainment of those at the non-tertiary level and at the tertiary level. They've shown tremendous open-mindedness with respect to the world. They would bring in talents from all over the world the way Singapore has.

You go to some countries in Southeast Asia, you'd be surprised how difficult it is to bring about a physics teacher from somewhere to teach at a province just because of that pre-existing resistance.

Being focused on democratising public goods, including talent and all the rest, number two, being focused on being open-minded is key because I'm in a camp that truly believes that open-mindedness is sine qua non to being able to combine the force of innovation and the force of preservation.

If we want to move on as a nation, as a state, as a civilisation, then I think we need to make sure that we're open-minded about how much more exponential the evolution of a number of attributes, including ecology, climate, geopolitics, economics, and technology. Without such degree of open-mindedness, I think we could be exposed.

Keith 00:39:28

One of the points you made earlier, which is really interesting, is that when you talk about democracies, there's been maybe an overfixation on the distribution of the right to choose a leader but not necessarily the right to other aspects of a quality life, a standard of living, as one would suppose.

Within Southeast Asia, why do we not see it manifest itself more clearly where public servants, maybe political leaders, are more obsessed with distributing these public goods, as you call it, down to the masses?

Gita 00:40:08

It's difficult because we live in an era that's bombarded by technological platforms that seem to cleverly equate algorithmic amplification with democracy. That is a discount because many of these platforms are simply in the business of attaining clickbait. They're not democratising conversations. They're actually polarising conversations.

We live in an era where, at the rate that the young generation spends 8 to 10 hours a day on their mobile phones, they can't seem to differentiate between opinion and facts. In the absence of facts, they tend to more easily opine. In the absence of facts, beyond opining, they tend to be judgmental.

This is a discount to the ability of any nation state to usher good-quality politicians, good-quality policymakers. Until and unless such impediments are remedied or managed, I think we're going to see a continuation of this tendency to sensationalise, festivalise, as opposed to intellectualise.

You have no control over these technological platforms. These are platforms that are being viewed by billions of people around the world without any kind of editorialisation. Singapore has done a good job in editorialising content for the stability of the people and all that, but I would argue that we have no control over what our kids are looking at on the mobile phones.

It's amazing. My generation, when we grew up, my parents were under-protective with respect to physical activities or offline activities. They didn't really care whenever I would cross the street when there's a bus or a truck streaming by. But now parents are much more protective with respect to offline activities. "Be careful, kid. Don't cross the road." But they don't say anything about online activities.

It's kind of ironic that there is over-protection with respect to offline activities, way less protectionism with respect to online activities, when we know that there is no adequate editorialisation of content. That will entail some sort of a discount in the way we're seeing leaders of different domains coming up.

Keith 00:43:03

In essence, you think of a lot of these social media platforms as creating incentives or perverse incentives for politicians, especially in democracies, to not necessarily focus on the right policy decisions but to be more popular as opposed to effective.

Gita 00:43:14

Absolutely. I think those that can create better sensation are likely to get the votes as opposed to those that appeal through their intellectualisation because of the way these social media platforms are set up. I don't think the social media platforms are interested at all in promoting intellectualisation.

There is some good intellectual content like yours and some others, but I think the overwhelming majority of content out there is not leading to the betterment of intellectualisation.

Keith 00:43:58

You highlighted technological disruption as one of the key major changes we're seeing now. We're also seeing a transition into a multipolar world. Many scholars will call it, depends on how you slice and dice it. Some may call it asymmetric, where maybe the US is still the strongest pole, but China would come in as a secondary or competing pole.

I wanted to ask you, what do you see are the major shifts in the past decade that maybe not enough people are talking about, not enough people are understanding, in the coming world we're entering?

Gita 00:44:29

I think it's really interesting how China and the West, particularly the US, are diverging or divorcing when it comes to AI. China seems resolute on open-sourcing, whether it's through DeepSeek or some other platforms that we're yet to know. DeepSeek still insists upon it being open-source and not-for-profit. That will resonate much better to the Global South, which represents about 84% of the planet, including most parts of Southeast Asia.

In Southeast Asia, out of the ten countries, only two countries earn more than $13,845 per capita per year. Those are Brunei and Singapore. Whereas the rest, including Malaysia, Indonesia, Thailand, their earnings still less than that threshold for the developed economy.

At the rate that they're not yet a developed economy, I think they're going to embrace things that are much more open-source because they're cheaper, things that are not-for-profit because they're cheaper, easier.

Whereas the US, most of the AI platforms have two characteristics about them. Number one, they tend to be more centralised. They tend to be closed-source, and they tend to be for-profit.

This will serve as a bias for themselves and the rest of the world at the rate that they're not going to be able to democratise content the way the Chinese capability has and will.

I do foresee the Global South resonating to the capabilities of China technologically speaking. Now I say this with full cognisance of the fact that democratisation of any platform will help bring about more shared prosperity.

If you read that book, "Power and Progress," written by Daron Acemoglu and James Robinson, they basically came up with empirical evidence that throughout the last century, whenever there was an outbreak of technological innovation, it really didn't lead up to shared prosperity. The median wage of the US from 1945 until 1973 went up by 2.5%. Thereafter, since it went up by a lot less than 1% on a yearly basis.

That just shows that shared prosperity is not the tail of any kind of technological innovation. Call it the internet, which was supposed to be the democratiser of information, but it didn't become the democratiser of ideas.

Now we're looking at AI that I think runs a risk of further elitising the pre-existing elitised economic order. Technologically, I think there needs to be more wisdom in looking at how public goods could better be distributed.

Keith 00:47:53

It's interesting that you say that because if you think about a platform economy, the promise is democratisation, increased access, but the downside is that the platform concentrates power onto itself. If you're like Google, the idea is that you want to democratise access to information, but the downside for the country or the world is that Google now concentrates power, technological power, onto itself because now it's become the default platform, which is another paradox.

Gita 00:48:22

I mean, it comes from a democratic country, but it doesn't necessarily decentralise. It centralises because they're much more keen on centralising power. Time will tell as to whether whatever platforms there are, they will actually become democratisers of ideas.

Empirically, I can say with high degree of confidence, the internet has disseminated information very liberally, but for some reason, it has not democratised ideas. Why is it that ideas are polarised? Why is it that we're seeing echo chambers that are not able to interact, intersect, communicate with each other between the far left and the far right?

Something has got to be iffy about that. It needs to be re-looked at if we want to learn to better distribute public goods.

Keith 00:49:26

In a sense, there hasn't been a deepening of understanding, but it's a deepening of misunderstanding or a certain sense of divide, a division that's emerged.

Gita 00:49:35

Because of that commercial interest, the pre-existing overwhelming commercial interest in seeking clickbait. Getting those clickbaits doesn't necessarily warrant moderation of content. Doesn't necessarily involve democratisation of ideas. Doesn't necessarily involve democratisation of public goods.

Keith 00:50:04

What are other major structural trends that you're seeing that you think more people should be paying attention to, technologically or otherwise?

Gita 00:50:10

I think the structural relationship between China and the West. If we look at history, China always claims to have suffered the century of humiliation from the mid-19th century until the mid-20th century. I would argue that Southeast Asia suffered three-and-a-half centuries of humiliation ever since the 17th century.

This was largely because of the decline of that countervailing force from China onto the European forces that were coming to Southeast Asia. At the transition from the Ming dynasty to the Qing dynasty, they decided to basically internalise more as opposed to externalise. As a result, there was no countervailing force against the European powers that came here.

The Europeans were basically supported by advancements in technology, military capabilities to some degree, economics. That vacuum of countervailing force caused the region to slip into colonisation.

Going forward, there's going to be inevitable countervailing forces between China and the West that Southeast Asia will be able to remain stable and even benefit from being able to swing between China and the West.

Again, I would say that looking at China for technological capital allocation just makes a lot of sense for countries that earn less than $2,000 per capita per year. But keep in mind that in order to buy that technology, you cannot solely rely on the economic capital allocation from China. You need to also diversify your destinations.

The West could offer that opportunity because they sit on top of massive amounts of liquidity on the back of this long period of quantitative easing that they've exercised for decades.

In order to capitalise upon this shift or watershed moment, we need to improve upon our pre-existing cognitive capacity and improve upon our ability to distribute cognitive capacity. I think we could do that in the mid-term and long-term.

Keith 00:52:50

Southeast Asia would benefit from just being at the intersection of maybe US-China competition. You talk about how we can benefit from adopting China's technology but at the same time benefiting from maybe US investments.

How does the region actually make ourselves more attractive to them? You pointed out education is one huge aspect, and to a certain extent, maybe open-sourcing or copying Singapore's model could work. Other than that, where else can Southeast Asia remain relevant and tell a compelling story that would allow us to not just be price-takers but actually, to a certain extent, influence or be price-setters in that situation?

Gita 00:53:33

The interest by multinational companies in reshoring from China to Southeast Asia is not to be underestimated, but the scale of reshoring is not happening at the rate that we would have hoped for because of that lack of marginal productivity, that lack of supply chain capability.

China has shifted from what used to be the cheap labour narrative to the supply chain narrative. They've got the best ports, the best airports, the best rail tracks. They're electrified to the hilt at 10,000 kilowatt-hours per capita. The US also 10,000. Singapore 10,000.

Southeast Asia, there's only two countries that are electrified at more than 6,000 kilowatt-hours per capita. Those are Singapore and Brunei. Both are at 10,000. Everybody else is less than 6,000.

I call 6,000 the threshold for modernity. Malaysia is at 5,000. Indonesia at 1,300. All the rest below 2,000 kilowatt-hours per capita.

For us to reach the first base camp of 6,000 kilowatt-hours per capita, Southeast Asia would have to build about a terawatt worth of power generation capabilities. That's going to cost about $2 to $3 trillion. At the rate that we don't have the necessary fiscal space, the necessary money supply, monetary space, we're going to have to depend on FDI.

Again, we're not attracting FDI at the kind of rate that we should be except for Singapore. The opportunity for reshoring is tremendous, but we've got to get our act together in terms of showing improvement in marginal productivity.

We don't have to have the kind of marginal productivity that China has today, but if we show to the world that we can actually get there, we can show directionality. We can tell the world that we're going to be able to power up to the level of 6,000 kilowatt-hours per capita. I think we're going to be able to get there.

But the problem is it goes back to those two fundamental issues. We're not enforcing rules and regulations the way we should. To borrow your phrase, we're not de-risking. We're not translating from uncertainties to risk. We're not de-risking as well as we should.

Economic capital allocation is not coming here. Without that necessary economic capital allocation, we're not going to be able to attract the technological capital. The narrative of reshoring is somewhat subdued because of those fundamental issues that I believe could still be fixed, if the region, or enough of a scale within the region, recognises that those are the things that need to be taken a view of positively.

Keith 00:56:29

To follow on that question, which would then be, if you think about creating that sense of learning from each other, which is something that you've been a champion of, say education, say learning the Singapore model, we need to first increase the sense of the ASEAN consciousness within the region. So the Indonesian or Singaporean cannot think of themselves purely as Singaporean or Indonesian. They think of themselves as Southeast Asians who are fellow travellers in the region. How do we actually do that?

Gita 00:57:00

Storytelling. People in Omaha, Nebraska, know where Singapore is because Singapore has good, if not great, storytellers. Does the region warrant the recognition because of its size and scale? Yes. But other parts of Southeast Asia do not tell stories the way Singaporeans do.

You go to any part of the UK, you ask where Penang is, they would have no idea. You ask them where Malang is. You ask them where Chiang Mai is. Nine out of ten, they're probably going to say no.

I think at the end of the day, the narrative of Southeast Asia will boil down to dogged investment in education. Number two, dogged determination to expand upon our pre-existing economic space. The third would be embracing literacy and numeracy so that we can tell stories better. The last bit is really being instrumental in re-multilateralising the global community.

I do believe we have a shot at this. If we take a 10-, 20-, 30-year view of Southeast Asia, if we invest in the first, second, third, and fourth, there's no reason for there not to be great Cambodian storytellers on behalf of Southeast Asia, Myanmarese, Laotian, Bruneian, Thai, Filipino, Vietnamese, Indonesian, in addition to the pre-existing Singaporean storytellers who can actually tell stories but also back up their stories with the necessary numeracy and literacy.

Can that happen tomorrow? No. But I think that's a possibility in the next decade or two. People will size up in terms of whether this thesis is one of directionality or one of absolutism. They prefer this thesis to be that of directionality. I do believe that if just enough of a scale in Southeast Asia takes the right set of steps, I think we've got what it takes to be relevant.

Keith 00:59:38

What explains your optimism?

Gita 00:59:40

Looking at my podcast, when I started about five years ago, my team was pretty resolute in telling me that we're not going to be able to get any more than 5,000 views because of my determination to make sure that we intellectualise. We don't necessarily have to copycat what the mainstream people are doing. We go long-form, an hour and a half to three hours. I said 5,000 is better than 4,999.

But after five years, we're seeing millions listening. I think it shows hunger and thirst for something that's different. They really are keen on moving up the value chain. They're keen on internationalising their narrative.

Somebody in Pampanga, he or she wants to understand the geopolitics of things. He or she wants to understand how Southeast Asia should be perceived by the international community. He or she is interested in what sort of steps need to be taken in order to better ourselves. It is clear in the commentary.

That gives me tremendous optimism. It's all about duration. If you ask me where my optimism sits, it really sits in a duration of 20 to 30 years. I'm pretty optimistic about that sort of duration that I think our region is going to be able to crawl into the core of global consciousness.

Keith 01:01:19

Now, if I were to put you in the hot seat, let's say you were to one day maybe sit with all the prime ministers of the different countries, and you're at the table with them, serving coffee, and they're giving you a ten-minute or five-minute pitch for you to tell them, these are the policy prescriptions directionally we should pursue, practically how do we implement the policies that you want to help us reach those objectives that you've highlighted. What would you say to them?

Gita 01:01:46

I think copycat each other's best practices. I don't think we're listening to each other as much. We do a lot of ASEAN handshakes. We do a lot of meetings, but I don't think we listen to each other.

This is empirically manifested in how little our intra-trade is. That speaks of the lack of complementarity of goods and services being produced by all members. If one country makes motorcycles, let the other country make cars. If one country makes nuts, let the other country make bolts.

Why is it that the same country makes nuts and bolts as the other country? I think it requires some sort of leadership. The leadership could come from a place like Indonesia, but I think with the endorsement by a country like Singapore.

Singapore, like it or not, serves as the intellectual hub for Southeast Asia. This is where people go to. This is the go-to narrative for educational attainment purposes. This takes us to the next point where I've been arguing that if there is any best practice that Singapore can offer, which are many, one would be educational attainment. It's proven. It's empirical. You're number one in PISA, the Programme for International Student Assessment or whatever that measures lingual and STEM proficiencies for the 15-year-olds. You have great universities.

How about if we maybe encourage the ASEAN organisation to be somewhat propagating upon the member countries to copycat whatever Singapore has got to offer just from an educational attainment standpoint, not with respect to foreign policy, not with respect to local politics, not with respect to cultures and things like that, just on education.

How about if we try to copycat what's good coming out of the Philippines, what's good coming out of Cambodia onto each other? I think that could be the ten-minute pitch to people in a position of leadership.

Keith 01:04:11

We don't necessarily need to veer towards the direction of the EU, but we can take a more peer-learning approach.

Gita 01:04:16

I think the EU has got fallacies. Its supranationalism comes with problems. I'm not suggesting the kind of supranationalism that the EU has or embraces, but I do believe that the principle of subsidiarity cannot be for everything.

Given the fact that we've got tremendous peace and stability, given the fact that we want to put food on the table better and faster, we want to medicate our people better, we want to distribute public goods better as a region, that is going to be solidifying as we deal with much more exponential evolution of geopolitics, technology, economics, and ecology.

That is explained in the very charter of ASEAN. To the extent that there is a challenge that's global in nature, there is room for some sort of intervention so that there is a better collective force to deal with such global challenges.

I do believe that the exponential nature of evolution as it relates to ecology, economics, technology, and geopolitics will serve as a global challenge, and we need to be able to deal with that better. The only way to increase our wherewithal to deal with that is to actually make sure that there is a collective, if not a much more collective, educational attainment.

Keith 01:05:55

If you were to now give advice to someone who is maybe in Singapore and Indonesia to get them to think about ASEAN, to think about being Southeast Asian, how would you dispense that piece of advice?

Gita 01:06:04

People underestimate our peace and stability. It's okay to be redundant because you just need to keep knocking on people's heads that we are peaceful and stable. But we can't just be peaceful and stable. We've got to use that as a prerequisite to be better at projecting, mainly soft power collectively, but preferably hard power manifested in technological advancements that can be consumed and enjoyed by the international community.

If the international community puts in his pocket or consumes on a daily basis whatever gets produced by Southeast Asia, that would be awesome, the way we're seeing goods and services coming out of China in a highly efficient and effective manner.

I don't see any other, or many other, regions in the world that could serve as a swing state, honestly speaking. At the rate that this kind of unilateralism that's coming out of the US is refining multipolarity, it's much more structured now as opposed to the kind of multipolarity we might have witnessed 5 to 15 years ago.

At the rate that it's much more structured, you can better define and see who is a foe, who's a friend, and who's a swinger. I do believe with 700 million people, $4 trillion worth of goods and services produced, we can swing any which way. That has to be recognised and acted upon collectively, not just individually.

The individual part, I think there is a bit of a discount there because some are just not following suit with respect to others. But the collective part is where we may have hope, and that has to be involving some sort of propagation by ASEAN as an organisation.

Keith 01:08:19

The last question I have is, if you were to give a piece of advice to a fresh graduate entering the working world today, what would that piece of advice be?

Gita 01:08:26

I think being open-minded is key. I can speak for my own personal experience. Who would have thought that I would be a podcaster? Few years ago, I thought that professing at university would serve me and the people around me.

It's amazing how many people out there, fresh or unfresh coming out of schools, are just not as open-minded as they need to be. Open-mindedness is much more critical and needed now given that exponential evolution of things that we've talked about.

The only way to be able to embrace that force of innovation and combine that with the pre-existing orthodoxy—orthodoxy is important, history is important, customs are important—but being able to combine those with the force of innovation is a cool thing. That's only going to happen if you have open-mindedness.

Keith 01:09:30

With those timely words of advice, Gita, thank you for coming on.

Gita 01:09:33

Thanks, Keith.

Keith 01:09:34

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