Leaders of Tomorrow | Season 9 | Exclusive with Peter Zeihan

[Music] [Music] hello and welcome to leaders of tomorrow's largest platform for entrepreneurs anything and everything that matters to you the entrepreneur we cover it here on the show i'm sunanda jai sealin we bring you the biggest expert voices not just from india but across the globe to guide and mentor and handhold you the small business owners speaking of worldwide leaders we're bringing you a very special conversation tonight mihir bhatt is in conversation with peter zahan geopolitical strategist founder zahan on geopolitics [Music] welcome to this exclusive interview that i'm doing with one of the most noted geopolitical analyst and author i have with us mr peter zahan joining us straight across from us uh peter thank you so much it's a pleasure having you on times network as always it's great to be back absolutely uh peter i'm actually going to uh you know uh jog back your memory a bit because as you remember and all of us do you know you were one of the star speakers at india economic conclave this year and uh in fact the whole theme of your session was very interesting it was india's golden decade because as you as you know we have entered a new decade and then we had bit of a wobbly start because india ran into major second wave which by the way you had very rightly predicted because at that point india was still sort of in a confused state of mind that are we into a second wave is there going to be a second wave etc etc and we ran into in fact the worst possible second wave across the globe now as we come out of it up you know the numbers in terms of cases have dwindled and in fact it's almost at one tenth of what it was at its peak uh are we out of good the short version is absolutely not coronavirus has shown that it's among the more mutable of the coronavirus strains that are out there so it's more capable of doing some sort of minor modifications to its genome in order to adapt to circumstances and we're actually not just for india but for the world we're large entering the dangers on right now because we have portions of the world like the united states that are now majority vaccinated and we have strains like say the uh the beta strain out of south africa or the gamma strain out of brazil that either allow for partial bypassing of natural gain immunity or allow for reinfection uh under multiple steps uh so you can get the gamma strain out of uh brazil three four times um in that sort of environment the virus is now being presented with a mixed sort of legacy it's got half the population that is just flat out vulnerable and it's got half the population that has a degree of resistance and that is what is going to mutate it so i would expect the next significant globally significant strain to come out of the developed world where we also we already have a degree of this immunization complete uh i'm most concerned about places where the cinevac vaccine is in place uh because it's proven to not be very effective against any of the variants but very effective against the original variant and that sort of mixed environment is kind of the perfect situation for generating another generation of this bug that can once again go global which means that if you're in india and you've caught coronavirus even if you've got the delta variant you're very likely to be able to get it again until you can get vaccinated now the bright spot there is india is the world power when it comes to immunization manufacturing capacity but starting next year once india starts cranking these out first millions a month and then tens of millions a month we are looking at a significantly different picture for india specifically as compared to the rest of the developing world and i can very easily imagine a scenario that we get to the third quarter of next year and the rich world is immunized and india is mostly immunized uh but then everyone who is dependent by the chinese vaccine is dealing with things that just rip through it like tissue paper that's likely where we're going to be a year from now but which means india needs to be fully prepared for a third wave because currently you know uh i mean there are two camps and one camp believes that there is going to be a third wave and we need to be fully prepared for it the other camp believes that yes there will be a third wave is going to be relatively softer compared to second wave now what's your take on that it's like it's really difficult to know the we know there's going to be a third way that that's undeniable uh the vaccine is sufficiently mutable we will have it uh the question is whether or not it's going to put more people in hospital and there is no way to know that ahead of time the vaccine will do what makes sense for the vaccine and in a partially immunized environment that we have in portions of portions of the world that means it will focus on transmissibility and it will focus on breaking through pre-existing immunity specifically that is that the sort that is granted from having coronavirus the first time which means that if you've had it the first time you can count on getting it again you're still vulnerable um but we can't necessarily that's going to kill more people we should plan for it though right now peter in that context and i think this is a very important point that we are making that we are actually now entering a danger zone uh the developed world the west seems to be a little over confident we saw what happened at euro cup and the amount of crowd that was allowed in stadiums and the way us has also mentioned officially on record that you know people who are fully vaccinated can go without mask in open spaces and all now when we put all of that together and look at it from economic prism are we looking at a false sort of optimism or recovery that's currently i would say happening across the globe including india well i i really hesitate to condemn public policy makers because they're they're making policy with a series of guesses based on guesses uh there's a reason why i'm not in government it's like i don't have the mental fortitude to make decisions like that uh there are two ways that epidemics end number one everyone becomes immune some way or the other if that's the path we choose for cobid we are in this for at least another five years just that's how long it's going to take the world to be able to make enough vaccine every year to get everybody shot up and boosted that's just that's just what it's going to be which means that uh probably this whole optimism about you know economy coming back on track u.s leading the revival china already uh you know up and running and india not getting impacted to the extent that it was feared in the second wave it might actually go out of the window and we might be looking at another major full-blown economic crisis in the united states in mexico in canada we're going to have mass vaccination completed very shortly or at least sufficiently in the centers of economic activity so you know in the united states we've got this weird duality right now where california and new york and chicago and miami are pretty much all vaccinated but there's a lot of places in more rural regions that are not this is going to sound harsh but from an economic point of view that's fine because if missouri chooses to have a mass epidemic in half their population that really doesn't move the needle for the united states very much in terms of gdp and so that's our normal now we can live with the degree of infection that we have and it's not impacting america's bottom line for the most part we can adapt around it so north america is already firing on all cylinders and the united states specifically is likely to have 10 percent annualized growth in the last half of this year which is the fastest in honor in our history right that for developing work for a developed country that's unheard of uh but just wow you know there's inflation in that but it's something we can live with for india it's more of a mixed picture um india how do i phrase this your tolerance for public health crises is a lot higher than it is in the united states and because your population is so much closer together that what you would need to do in terms of lockdown to actually stop something like delta is just extreme and i'm not sure democracy can handle it i'm not sure china can handle it i mean this is the most communicable public health threat that we have dealt with as a species since measles um this is not something where you just like go inside for two weeks and you're done this is like a multi-month lockdown and australia is kind of the outlier for showing us just how extreme it has to be if you actually want to make progress so in india if you know the vaccines are coming there is definitely a temptation just to declare it over for the time being suck up a third wave and move on that is a decision that can only be made at the top here to take a quick commercial break on that note back in just a moment [Music] welcome back with us here leaders of tomorrow icons our icon today is worldren lounge geopolitical strategist and founder zahan on geopolitics peter zahan [Music] you know peter my concern is uh here we were talking about the golden decade for india maybe um you know like uh three months before from now and now we are in a situation where uh you have china and i'm sure you would have gone through the statement that uh the chinese president made on the 100th anniversary of the ccc you know i mean and then uh there are people who believe that joe biden is actually more trump-like than trump himself when it comes to dealing with china absolutely i'm one of them exactly so you know uh when you look at the current situation from that lens or from that prism uh should we be more prepared uh especially india because of the borders that it shares with china for a much more hot border i would say with china and with pakistan on one hand and at the same time deal with this developing uh situation between us and china if we want to call it a trade war i mean it's much more than that but still well the situation between the united states and china is going to get significantly worse uh it's not going to get better ever we're at the beginning of the end of the trans-pacific partnership or whatever you want to call it in the united states there there's now legal links at the u.s level at the nato level at the eu level between chinese state authorities and chinese cyber criminals basically saying that they're working hand in glove and there is no way that decisions like that are made and proclamations like that are made without policy follow-up so you should count on all supply chains across the pacific shattering over the course of the next few years based on decisions that are made in beijing or washington it could happen in the next few months so for example if the administration chooses to boycott the chinese olympics that's it it's over because every american sponsor would then have to pull the plug which means that the chinese would have no choice in their mind but to confiscate every asset they have so you're talking about things like united airlines nike you know big companies and any american firm that is then still operating in china would be enthusiastically labeled by their competitors as active sponsors of the genocide games i mean this this is the end of this relationship for india that's a glorious opportunity india manufacturing has its flaws but even if all india does is expand its manufacturing capacity to displace chinese imports you know that it would increase your base by like 40 percent that assumes you don't go after any supply chain or any integration with any of china's former partners i mean the opera the upside opportunity for india here is just impossible to overstate and that assumes the security situation doesn't bubble up if that happens there can't be a conventional war anymore between india and china or india and pakistan the nuclear deterrent prevents that but there's nothing to say that india can't start you know being the the power of the indian ocean which would make it impossible for the chinese to integrate with europe would make it impossible for the chinese to get oil i mean if you want to talk about a death blow that's how you would do it uh there's some risk here of course but the upside on almost every economic sector is just glorious so my biggest uh disagreement what you said there is that it's not going to be an indian golden decade it's going to be like three or four i hope that happens uh coming back to india and the indian economy if you were and since you sound uh pretty optimistic about uh you know india's future from economy or country point of view and like you rightly said that it's going to be three or four decades minimum and not one golden decade for india now if that has to translate into some growth for indian companies indian population if you are running let's say a firm in india or a manufacturing facility in india or you were an entrepreneur in india right now what would be your strategy what would be you know your next step well those are three very different questions uh let's start with the easy one manufacturing uh because of india's infrastructure manufacturing opportunities are limited but there are a lot of new technologies that are coming up things like additive manufacturing that don't require a big gangly supply chain so if you start applying these things in india for your value added product i think that india can do very well with displacing a lot of the stuff out of the east asian room fairly quickly we know you have the educational base we know you have the skilled labor force it's an infrastructure issue and these new technologies allow you to get around some of that that's kind of piece one piece two manufacturing supply chains that don't use that technology uh the more problems that china has the the deeper their demographic crisis gets and it's already awful the less competitive the chinese are going to be able to uh the less competitive the chinese are at low and mid-range manufacturing they can't do the high at all now india's biggest problem is machinery you don't have the technical setup in order to do that at scale so you have to do what the chinese didn't import it but once that is done you do have the labor score force you do have the port capacity to protect to participate in supply chains with at least southeast asia now that's not going to generate a chinese style boom because that is so artificial and so juiced up with artificially cheap credit uh india has a much more stable financial system that wouldn't support that but you can still expand your manufacturing base by a third probably in five years that's and that's the low line fruit uh so it's about getting a medium friendly relationship uh and some brown or green field space uh and a port city uh really that's all it takes i i wouldn't think of india as india where you have multiple supply chain steps within this the country and i would still think of india as a series of um less advanced singapores where the ports are the ones who are the nodes and they integrate with southeast asia as much as they integrate with the rest of india it's a model that has worked in a lot of the world i think britain is probably the best historical example if you want to go way back it's certainly what the indonesians do now and there's no reason that india can't push into that one last question to you peter if you were leading india at this point in time you know three things that you would do to ensure that india achieves its true potential or destiny and obviously it's a long-term game it doesn't happen overnight and when i see overnight i mean 10-15 years it's a long-term play okay uh first of all i would prepare for the fall of china in terms of economic possibilities uh there are a lot of pieces that chinese are going to drop and india is picking up some of them and the fact that india is maybe picking up 10 of what china is losing without even trying i think gives you an idea of the upside potential here so that's a change to internal tariffs you basically need to do what the canadians finally got around to doing two years ago and have an internal free trade agreement you have too many barriers within your own provinces uh second um bank of lore is going to take care of itself high skilled labor always does you need to focus on getting people from basic education to the next step up in terms of technical skills one of the things that we've missed here in the united states is we made the decision back in the 60s that everybody wants a white collar job nobody wants a blue collar job and as a result blue collar jobs today pay more in their first month than a white collar job will years that sort of mismatch makes no sense so anything you can do to expand technical skill at the base level i think will really help you not just turn in the long term but especially in the short term in terms of going after some of this business and manufacturing capacity and then third you guys have got to bring agriculture into the 17th century that's just that that is arguably the single biggest security risk that you face moving forward and uh india's demography is not as young as you might think india is now one of the 20 fastest aging societies in the world the preference for boys and the dense urban clusters you have now have really slimmed down your demographic structure compared to 20 years ago that's good and that's bad on the good you have a lot of 20-somethings that now have small or no families which means that they're very value-added they're moving up the value-added scale their educational skill very quickly because they can afford to spend their money on themselves as opposed to their children you're going to have a consumption booth that means you should have a manufacturing boom and an education boom these are all good things but if you fast forward 15 years uh that moment starts to pass now you're not aging nearly as fast as germany or korea or china i'm not talking about demographic bomb here but the changing structure does mean that you will have fewer young people in the future so you need to take the most advantage of this aging demographic age roughly 15 to 30 right now and get them as skilled as you can so that as they age they can just blow all your expectations out of the water all right i think that's that's a very interesting uh observation on india and i would say at least a blueprint for india's rise thank you so much peter for joining us and i look forward to seeing you again sometimes later this year maybe in person hopefully thank you so much until next time until next time thank you so much all right completely out of time on this episode if you have any feedback for us we love hearing from you as always your comments your feedback your suggestions your thoughts welcome contact details are coming up as we speak thanks for watching [Music] you

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Keywords: Leaders of Tomorrow, Leaders of Tomorrow today, Leaders of Tomorrow show, Leaders of Tomorrow et now, Peter Zeihan, Peter Zeihan et now, Peter Zeihan Leaders of Tomorrow, business news, news today, economy, economic news, money, finance, financial news, stocks and shares, stocks today, investment, shares, stocks, et now, latest news, ET Now

Id: PA2Re30eTiI

Length: 21min 25sec (1285 seconds)

Published: Tue Jul 27 2021