by C. Raja Mohan

For nearly five hundred years, Asia has been a passive adjunct to the geopolitics of Europe. It was European technology and military power that shaped the evolution of modern Asia. To be sure, Asian resources and markets contributed to the rise of modern Europe. Asian troops significantly contributed to the outcomes in the wars between European powers.

The tables are turning today. It was perhaps inevitable; the shifting economic power from the west to the east in Eurasia was bound to alter the geopolitical balance within this vast region. Asian powers are now muscling into European wars as independent powers. A few of them now have the agency and capacity to shape the geopolitical evolution of Europe. Consider for example the Asian contribution to the war in Ukraine at the heart of Europe.

Goodwill for Moscow in Large Parts of Asia

Large-scale deliveries of drones, ammunition, and weapons components from Iran, North Korea, and China are helping Russia fight Ukrainian forces and rain death on civilians in Ukrainian cities. It is Beijing’s role, though, that is most significant. China provides Moscow a stable strategic rear, provides alternative markets to Germany and Europe, and lends the geopolitical heft to President Vladimir Putin’s confrontation with the ‘collective West’.

Many Asian nations are unwilling to condemn the Russian aggression against Ukraine, because of the historic goodwill for Moscow in Asia, inherited from the late colonial era when the Soviet Union presented itself as an opponent of European imperialism and supporter of Asian decolonisation. Asian reluctance to criticise Moscow and question the European double standards on Ukraine and Gaza gives much space for President Putin in Asia. Adding to the Russian room are some in Asia, like India and Vietnam that see Russia as a necessary part of balancing China. Even North Korea sees Moscow as giving it a measure of autonomy from Beijing.

Not all of Asia is with President Putin. Several important Asian powers are boosting the Western effort in Ukraine. South Korea, which has emerged as a major weapons producer, is already selling arms to NATO – and could increase its support for Ukraine in response to North Korea’s increasing involvement on the Russian side. Japan has emerged as a major political and diplomatic supporter of Kyiv and will have a key role in the reconstruction of Ukraine when it begins.

A Rising Role for Asia in Europe

The NATO summit in Washington in July revealed the extent to which European defence has become a concern of Asian and Pacific powers. The Biden administration has persuaded its four Asian allies – Australia, Japan, New Zealand, and South Korea – to become part of Europe’s security discourse. Leaders of the four countries, the so-called AP-4, have become regular participants at NATO summits.

A role for Asia in Europe is the flip side of Biden’s argument that Europe should do more to secure Asia against China. It is not clear if the Europeans have the capacity and strategic coherence to contribute to Asian security, but Asian leaders recognise their stakes in Europe.

‘Divide and rule’ was the European colonial powers’ old maxim for gaining control of Asia. Today, Asia’s great powers are learning the art of probing European fault lines – whether it’s Russia courting Hungarian President Viktor Orban or the Chinese continuing to tease the European capital. It is quite amusing to see some Europeans articulating the idea of ‘strategic autonomy’ in defying the US to protect their expansive commercial interests in China. Beijing, of course, loves the idea of European strategic autonomy. Besides exploiting the Trans-Atlantic divide on geopolitics, Moscow and Beijing have more than enough room to work with anti-Americanism on the left and right of the European political spectrum.

Some in the US are tempted to see Asia as a more urgent and important theatre than Europe. Many in the UK and Europe see Asia as too far away and that it must focus its strategic energies in countering Russia. They also do not see China as a threat to European security.

Yet, there is escaping the fact that Asian and European theatres are as interconnected today as in the past. Any long-term Western strategy in Eurasia must involve addressing the challenges on both fronts in a coordinated manner. Downgrading one in favour of the other could lead the west to lose on both fronts in a sequential manner.

Asia Has Its Own Divisions

Contrary to the pervasive Europessimism, the old continent has room to play in Asia. If it manages to shed its historic condescension to the East, Europe could find new and mutually beneficial ways of working with Asia. For one, Europe must recognise that Asia has its own divisions. Nationalist contradictions abound in Asia – between China and Japan, Korea and Japan, Vietnam and China, Cambodia and Vietnam, and India and China.

Europe has a long tradition of engaging with these contradictions during its colonial engagement with Asia. But the illusions about the rise of a post-modern world, an addiction of mercantilism, outsourcing its security thinking to the US, and self-deceptions about being an ‘empire of norms’, have driven into a long holiday from Asian geopolitics.

A Europe that actively engages with Asian geopolitics, with due respect to the rise and agency of Asian powers, will find it possible to modernise its relationship with the US as well as upgrade ties with Asia. Sharing’s America’s burdens in the East and treating Asia as geopolitical equal, Europe can regain its place in the new global chessboard.

Image Attribution: “Meeting with Xi Jinping (2023)” by Government.ru, licensed under CC BY 4.0 via Wikimedia Commons. Link to image.

Raja Mohan is a non resident distinguished fellow at the Asia Society Policy Institute and a visiting research professor at the Institute for South Asian Studies, National University of Singapore.

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Stakeholder capitalism provides an agenda for businesses to reimagine their role within their community, argues Michael Tang of SGX RegCo in his St. Gallen Symposium Brief.

Many conversations about business sustainability come back to a more fundamental question of the role of corporations. Are corporations pure money-making instruments, or do they serve a larger purpose?

The rise of corporations as a business vehicle enables mankind to pool different forms of capital together to achieve common objectives.

A separate legal personality means that the corporation can enter into contracts and sue in its own right, while perpetual succession means that the corporation can long outlive any of its initial subscribers. Limited liability allows for more calculated risk-taking – an entrepreneur can segregate the liabilities of the corporation from his or her own, and have more confidence in taking business risks.

As businesses become more complex, corporations become more sophisticated and a specialised model for governance emerges. There arises the segregation of the roles of the board of directors and management, to achieve bigger endeavours.

In many jurisdictions, the board of directors works for the best interest of the corporation. But the corporation is an inanimate legal fiction – ultimately, people and lives stand behind the corporate form. To paraphrase Hemingway, for whom does the corporation toil?

As Klaus Schwab and Peter Vanham elaborate in their book “Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet”, there are two prevailing economic systems in the world today: shareholder capitalism and state capitalism.

Shareholder capitalism places shareholders’ interests at the centre of the economic endeavours, as the driving force for the allocation of factors of production. It has as its mantra the maximisation of shareholder value, and Milton Friedman as its key proponent.

State capitalism, on the other hand, considers the state as the dominant force, which controls the distribution of resources. What this means is that the interests of individual entities are subservient to the greater good of the state.

In recent times, a third form has gained prominence – that of stakeholder capitalism.

This refers to a system which places attention on all private actors in society. It seeks to protect and guide their economic activities to ensure that the overall direction of economic development is beneficial to society, and no actor can freeride on the efforts of others.

A key proponent is the Business Roundtable, a group comprising of 200 chief executives of the largest corporations. In 2019, the Business Roundtable called on corporates to embrace the goal of managing companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.

But stakeholder capitalism is not itself a new idea. Adolf Berle and Gardiner Means, in their 1932 seminal text “The Modern Corporation and Private Property”, advocated that public companies should have professional managers who would balance the needs of different stakeholders, taking into account public policy considerations.

Further, managers need to watch how such needs and considerations change over time.

Take climate change as an example. The understanding of its impact on businesses has evolved tremendously in the last five years. In addition to the physical risks of climate change, the business community is also asked to consider transition risks. For example, changing consumer preferences, emerging new technologies, and new regulatory policies on companies to take responsibility for climate impacts.

Notably, a legal opinion commissioned by the Commonwealth Climate and Law Institute opined that directors must understand what climate change entails and how it would impact on their corporation’s activities, strategies and financial planning. Directors must also consider steps to prevent legal challenges to business practices, especially given the risk of climate litigation. In New Zealand, for example, a court has raised the possibility of expanding the existing law of torts, to include an inchoate duty to minimise greenhouse gas emissions.

The best interests of a corporation, properly understood, naturally extend beyond just shareholders’ interest. it also encompasses the interests of stakeholders in the communities in which the corporation operates. The duty of the director therefore involves the balance in serving all of a corporation’s stakeholders, to reach a suitable compromise.

Many of today’s problems – including climate change – are seemingly intractable, with critics on all sides of the debate. Part of the problem lies in existing entrenched power dynamics, which prevent or restrict us from changing the status quo. Another part lies in how some view the tactics of change advocates as provocative and radical.

The better way is to engage in conversation with all stakeholders about our respective interests and focus on how we can transform the common good.

Michael Tang

Executive Director and Head, Listing Policy & Product Admission and Sustainable Development Office, Singapore Exchange Regulation

Michael Tang is the Head of Listing Policy & Product Admission at Singapore Exchange Regulation (SGX RegCo), a subsidiary of Singapore Exchange (SGX Group) that undertakes frontline regulatory functions. He also heads the Sustainable Development Office at SGX RegCo. In his two roles Michael oversees listing policy and rules development, administers the admission of securities products, coordinates sustainability-related issues on the regulatory front as well as leads efforts to promote sustainability across stakeholder groups. Michael graduated from the National University of Singapore (NUS) with a Bachelor of Laws degree and is admitted to the Singapore bar. He is a member of the Advisory Board of the NUS Business School’s Centre for Governance and Sustainability (CGS), a Management Committee member of Global Compact Network Singapore (GCNS) and a member of the Environmental, Social and Governance Committee of the Singapore Institute of Directors (SID).

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On Tuesday, 25 January 2022, a group of former visitors to the St. Gallen Symposium, members of the St. Gallen Symposium’s Singapore community and students from various universities were invited to NUS Shaw Foundation Alumni House. Enabled by the National Youth Achievement Award (NYAA) Council of Singapore, the National University of Singapore and the Swiss Embassy the St. Gallen Symposium was able to hold the St. Gallen Symposium Singapore Forum, one of the first physical events within its year-round initiative.

Starting with a keynote speech by Ms Grace Fu, Minister for Sustainability and the Environment the audience got an overview of Singapore’s efforts to become more sustainable and the important role of collaboration within it. In particular, Minister Fu described how grants funded by a carbon tax will help to decarbonise companies and how Singapore partners with companies and researchers to leverage emerging low-carbon technologies.

In the following panel discussion, the topic “Collaborative Advantage” was discussed from a broader perspective. With Ms Jacqueline Poh, Managing Director of Singapore’s Economic Development Board, Mr Wong Kee Joo, chief executive officer of HSBC Singapore and Mr Warren Fernandez, editor-in-chief of SPH Media Trust’s English, Malay and Tamil Media Group, representatives from the public sector, the private sector and the media were present, allowing the panel to explore collaborations within as well as between these domains. By providing multiple examples where their organisations collaborate, the panel was able to again underline the importance of working together to create economic and social value and left the audience with inspiration to collaborate on their own.

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