Khazanah Megatrends Forum 2010
Reclaiming the Commons:
Collaborating and Competing in The New Economic Order

As it unfurled, the global financial crisis was most striking in revealing the weaknesses and vulnerabilities of the very institutions entrusted to guard against it, and demonstrated yet again the frailties in a globalized world where the decisions of private actors can have resounding effects on the wider “commons”. The European sovereign debt crisis as seen at its extremes in Greece, the Goldman Sachs trial and a change of government in the United Kingdom are some of the key shapers of 2010 where turbulence in developed economies are keenly felt across the globe in Asia, Middle East and Africa.

The governments of G-20 countries are considering the withdrawal of fiscal stimuli, and there are increasingly popular drives for fiscal austerity and re-regulation in the US and Europe which will bring about changes in the economic order as these countries are the traditional big markets for Asian exports. In Asia, China is facing the long awaited Yuan appreciation with other regional currencies fast rising at its heels, taking a cue from the East Asian behemoth. Juxtaposing the rising currencies in Asia and downturn in United States and Europe begs the question on whether higher purchasing power and capacities for domestic consumption in Asia will lessen the drive to export to developed economies and open new and bigger playing fields within Asia and Middle East. Will these increasingly interacting economies also now follow China’s large investment footsteps to Africa and elsewhere? Where China is spending its surplus and expanding its economic, and therefore, social and political reach will undoubtedly be shaping the investment climate.

The key attribute of what is typically described as globalization is almost certainly how the world has evolved into a system where the different parts are increasingly inter-linked and inter-dependent at various levels, environmentally, politically and of course, economically. This systemic view of the world whether it is the result of the flow of funds, mobility of people, diffusion of technology or the speed of information flows should be the departure point at understanding and resolving the crises we face today.

The crises we face today, the result of a combination of unbridled greed, regulatory failures, imbalances and marginalisation have their origins in the fact that the world is increasingly a closed system. The solutions to the global problems should therefore be predicated on the fact that increased globalization has resulted in a greater global commons. While new private domains emerge with increased interconnectedness, what is common to us has also grown bigger.

Thus the problem of the commons, first expounded by the professor of human ecology, Garett Hardin in 1968, is no longer a local or communal problem. The non-sustainability of the commons when individual private interests rationally and independently optimise their decisions extend to the global commons. Resolving the recent financial crisis through better regulations without due recognition of the totality of the interested parties globally will fail or at least be sub-optimal. Bringing back the equation of people, socio-political frameworks and the environment we live into economics seems inevitable. According to Hardin, every workable distribution system must meet the challenge of human interest. An unmanaged commons in a world of limited material wealth and unlimited desires inevitable ends in ruin and a tragedy of the commons. The global crisis and megatrends facing us such as climate change, water shortages, health epidemics, finite natural resources and environmental degradation are but some of the symptoms of this tragedy.

In a new economic order, perhaps there is a bigger place in the discussion for parties to collaborate in pursuing their interests and yet compete effectively. A collaborative approach can increase interactions between interested parties effectively lengthening the time horizon of decision-makers, and (hopefully) making a better collaborative solution possible (Axelrod). Collaboration and cooperation should not be misnomers for stagnation or uncompetitive behaviour however. The balance of keeping Keynes' "animal spirits" alive to induce creativity and innovation in the competition of new wealth creation and the need to collaborate to protect the increasing commons is at the heart of ensuring a more sustainable resolution to the crises we face and the environment we find ourselves operating in. How can we re-claim the commons by managing finite resources and competing interests in the new economic order without destroying the commons?

The KMF theme of "Reclaiming the Commons: Collaborating and Competing in the New Economic Order” reflects the interpretation of the times we live in today and aims to release a wealth of discussion on a variety of issues affecting the investment community.

Key Questions:
  • What are the trends and fault lines in the global economy that have emerged from the crisis and the relational aspects of the economy that we need to pay attention to? Is this the end of the emphasis on economics of markets?

  • What is the terrain of the new playing field for firms that have experienced the effects of the crisis? How ingrained is the need for transformation in preparing firms to compete and survive in this new environment?

  • How will countries locate themselves along the continuum of competitiveness in the aftermath of the crisis? What role do location and specialization have to play in this equation, and what collaborative models can be harnessed in boosting competitiveness?

  • What lessons has the crisis taught us on the type of leadership that is needed to effect change and depart from “business as usual”?

  • How do we make compatible economic growth and ecological concerns to pave the way for sustainable economic development?

In order to answer these questions, the Forum is organized around four sub themes: Macro & Markets, Firms & Transformation, Competitiveness & Development, and Leadership, Talent & Change.

About Khazanah Megatrends Forum

The Khazanah Megatrends Forum (KMF) has become one of the highlights of the year at Khazanah. Held annually preceding our strategy and business planning cycle, KMF brings together experts and thought leaders to discuss four main mega trends on Macro and Markets; Firms and Transformation; Competitiveness and Development; and Leadership, Talent & Change.

The Forum will be entering its sixth annual installment in 2010. It will continue to be a platform for the gathering of Malaysian corporate leaders, policy makers, think tanks and practitioners from the public and private sectors as well as civil society. It is well attended by about 400-500 senior leaders. It coincides with Khazanah’s year-end planning cycle and typically addresses topical matters of interest.

The Forum is organized around four themes: Macro & Markets, Firms & Transformation, Competitiveness & Development, and Leadership, Talent and Change.

Participation in the Khazanah Megatrends Forum is by invitation only.