0:08

It's Monday, the 22nd of May, 2023. I'm

0:11

Kenneth Kukie, the

0:13

Economist Deputy Executive Editor, and

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welcome to Editor's Picks, where

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you can hear three highlights from the weekly

0:19

edition of The Economist read aloud.

0:22

This week's cover story follows a discussion

0:25

that our editors recently had with Henry

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Kissinger. Mr. Kissinger

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oversaw some of the most controversial

0:31

and consequential foreign policy decisions

0:34

of the 20th century. Nobody

0:36

alive has more experience in international affairs.

0:40

Since stepping down as America's national security

0:43

advisor and Secretary of State 46 years

0:45

ago, he has been a consultant and emissary

0:48

to monarchs, presidents, and prime ministers.

0:51

In our discussion with Mr. Kissinger and

0:53

our cover story, we look at America's

0:55

foreign policy and argue

0:58

that Joe Biden's global vision is

1:00

too timid and too pessimistic.

1:03

Next, this week we also published a special

1:06

report on the fight over the future of payments.

1:09

Digital payments have transformed domestic

1:11

finance. Now the competition

1:14

is going global.

1:16

And finally, we turn to Afghanistan,

1:18

where the Taliban seem to be emphasizing

1:21

animal welfare. The

1:24

stories you're about to hear are just a sample

1:26

of what's on offer in the weekly edition of The Economist.

1:29

With a subscription, you can read and listen

1:31

to all our journalism. To

1:33

get a month of our digital content for free

1:36

and a trial offer, go to economist.com

1:39

slash podcast offer. The link

1:41

is in the show notes.

1:48

First up, a new world

1:50

order. In the

1:53

1940s and early 1950s, America

1:56

built a new world order out

1:58

of the chaos of war.

2:00

For all its shortcomings, it kept

2:02

the peace between superpowers and

2:04

underpinned decades of growth that

2:06

lifted billions out of poverty.

2:09

Today, that order, based on global

2:11

rules, free markets, and an American

2:14

promise to uphold both, is

2:16

fraying.

2:17

Toxic partisanship at home has

2:20

corroded confidence in America's government.

2:22

The financial crisis of 2007-9 dented faith in

2:27

markets. America's failures

2:30

in Iraq and Afghanistan undermined

2:32

its claim to spread democracy.

2:35

Today, most countries refuse to

2:37

heed its call to enforce sanctions

2:40

on Russia, and China's rise

2:42

has spurred American politicians to

2:44

take a more selfish, zero-sum

2:47

approach to geopolitics. China's

2:50

rise has also increased the

2:52

threat of war. In a conversation

2:54

with the economist, Henry Kissinger,

2:57

who will be one hundred this month, warns

2:59

that China and America are on

3:02

the path to confrontation.

3:04

Both sides have convinced themselves

3:07

that the other represents a strategic

3:09

danger, he says.

3:11

The stakes could not be higher. Both

3:13

are nuclear-armed. Both are

3:15

also dabbling with unpredictable

3:18

artificial intelligence, or AI.

3:21

The elder statesman's eldest statesman

3:24

worries that, just as before the First

3:26

World War, the superpowers will

3:28

stumble into catastrophe.

3:32

Since arriving in the Oval Office in 2021,

3:34

Joe Biden has

3:36

developed a new strategy to preserve

3:39

American preeminence and reduce

3:41

the risk of conflict.

3:43

Jake Sullivan, the latest of Mr

3:45

Kissinger's successors as National

3:47

Security Advisor, recently

3:50

gave the fullest account yet of this

3:52

Biden doctrine.

3:54

His narrative weaves together middle-class

3:56

prosperity, defense, and

3:58

climate change.

4:00

He repudiates the free market Washington

4:03

consensus and calls for the

4:05

government to play a muscular role

4:07

in society with a strong emphasis

4:10

on national security.

4:12

This means hyperactive industrial

4:15

policy. Big subsidies

4:17

will catalyze private investment in

4:20

semiconductors and clean energy.

4:23

Export controls will create a

4:25

small yard and high fence to

4:27

keep selected technology with potential

4:30

military uses out of unfriendly

4:32

hands. At the same time,

4:34

the administration is softening

4:37

its rhetoric.

4:38

Instead of decoupling from

4:40

China's economy, it talks of de-risking.

4:44

It wants to find common ground

4:46

on climate change, African debt, and

4:48

even Ukraine.

4:50

On May 10th and 11th, Mr.

4:52

Sullivan spent eight hours with his

4:54

Chinese counterpart, the first high-level

4:57

contact for months.

4:59

Behind the doctrine is a belief

5:02

that a virtuous circle can make

5:04

America and the world safer.

5:06

State intervention and protectionism

5:09

will boost industry, helping the middle

5:11

class and cooling America's populist

5:14

fevers. Less erratic

5:16

leadership, after Donald Trump's, will

5:19

restore America's authority abroad, even

5:21

if the Biden team breaks a few

5:24

global economic rules.

5:26

Your relationship with China will be managed

5:28

with strategic maturity.

5:31

As a precaution, America will

5:33

keep spending large sums on its military

5:35

forces to deter China from

5:37

aggression.

5:39

Will the new doctrine work?

5:41

After the chaos of the Trump years, Mr.

5:44

Biden's commitment to diplomacy is

5:46

welcome.

5:47

It will be on display at the G7 summit

5:49

this week.

5:50

He is right that American foreign policy

5:53

must deal with new challenges from

5:56

Chinese coercion to climate change.

5:59

However, Especially when compared

6:01

with the post-1945 order,

6:04

the Biden Doctrine is flawed.

6:06

Its diagnosis of America's problems

6:09

is too pessimistic,

6:11

and some of its prescriptions would

6:13

make America weaker.

6:15

Start with the economy. Despite

6:18

what many believe, America's economic

6:20

power is not declining.

6:23

With 4% of the world's people, it

6:25

generates 25% of global output, a

6:29

share unchanged since 1980.

6:32

No other big country is as

6:34

prosperous or innovative.

6:37

As we noted last week, the size

6:39

of China's economy is unlikely

6:41

ever to surpass America's by much.

6:44

The main source of America's strength

6:46

is creative destruction and

6:48

open markets in a rules-based

6:50

global economy. So although Mr.

6:53

Biden is right to reinforce the social

6:55

safety net, his state-led,

6:57

insular economic vision may

7:00

ultimately erode living standards

7:02

and American clout.

7:05

The Biden Doctrine seeks to stabilize

7:07

relations with an autocratic and

7:10

paranoid China. In this

7:12

task, it is hampered by a second

7:14

floor.

7:15

It muddles legitimate policies with

7:18

America-first rule-bending.

7:20

Mr. Sullivan wants to combine export

7:22

controls with cooperative trade

7:25

and an arms race with collaboration.

7:28

But China's leaders think this

7:30

strategy is meant to keep China

7:32

down.

7:33

America's case would be stronger if

7:36

export controls didn't keep expanding,

7:39

if Trump-era tariffs were not still

7:41

in place, and if its politicians

7:44

were not vying to out-hawk each

7:46

other on China. The lack

7:48

of agreement on trade makes everything

7:51

harder.

7:52

Never mind rules on AI,

7:54

America and China have no system

7:57

for nuclear arms control. China's

7:59

our system.

7:59

national, will almost quadruple

8:02

by 2035.

8:05

The final floor concerns allies.

8:08

Mr. Biden has backed Ukraine and

8:10

revived NATO and alliances

8:12

in Asia.

8:13

Yet America's unpredictable economic

8:16

nationalism and unwillingness to

8:18

offer access to its markets undermines

8:20

its influence. Europe fears

8:23

a subsidy race and worries

8:25

escalating tensions with China will

8:27

cause it severe damage.

8:29

Our calculations show Germany's economy

8:32

is twice as exposed to China as

8:35

America's is.

8:36

The decay of global rules is

8:39

accelerating the embrace of a transactional

8:41

approach to foreign policy by emerging

8:44

economies.

8:46

The post-1945 order rested

8:48

on American constancy. Each

8:50

administration was guided by

8:53

predictable interests.

8:54

Today, allies and enemies

8:57

know chaos may follow the election

8:59

in 2024. Trumpian

9:01

dysfunction is not

9:03

Mr. Biden's fault, but it makes

9:05

it vital to be predictable and open

9:08

now.

9:10

Americans need to be persuaded that

9:12

a more optimistic, positive-some approach

9:15

is in their interests.

9:17

This is the key that will keep their country

9:19

strong and unlock a better foreign

9:21

policy by allowing it to

9:23

help forge new global rules

9:25

on trade, climate, AI,

9:28

and more that old allies and new ones

9:30

can rely on.

9:31

Such a revived global order

9:34

would be the best defense against an autocratic

9:37

one led by China.

9:38

Unfortunately, the Biden doctrine

9:41

fails to rebut the narrative of American

9:43

decline, and so has not

9:46

resolved the tension between the country's

9:48

toxic politics and its role

9:50

as the linchpin of a liberal order.

9:54

Unless America looks out at the world with

9:56

self-confidence,

9:57

it will struggle to lead

9:59

it. it.

10:05

On May 27th, Henry Kissinger will turn 100.

10:08

These days, he is slightly stooped and walks

10:10

with difficulty, but his mind is

10:13

needle sharp.

10:14

Russia's invasion of Ukraine and the rise

10:16

of China mean that Mr. Kissinger's great

10:18

power theories are circling back into

10:21

relevancy. Whether you like

10:23

him or not, it is worth hearing what he has to

10:25

say. And you can do just that

10:27

by listening to our special podcast with Mr.

10:29

Kissinger. Find that by searching

10:32

for The Economist on your podcast app

10:34

or at economist.com slash

10:37

Kissinger dash podcast.

10:50

Next, the fight over the future

10:53

of global payments. Over

10:58

the past two decades, the ways people

11:00

pay, receive and transfer

11:02

money have changed beyond recognition.

11:06

The revolution began in 2007 when

11:09

M-Pesa made it possible for Kenyans

11:11

to make payments with a text message.

11:14

In 2011, Alipay

11:16

launched Payment by QR Code

11:19

in China, a system that has all

11:21

but replaced cash in cities. Since

11:24

then, India's state-led Unified

11:27

Payments Interface, or UPI,

11:30

and Brazil's PIX have vastly

11:33

widened access to the financial system

11:35

among the poor.

11:36

As our special report explains,

11:39

globally, the use of notes and coins

11:41

has been cut by a third,

11:43

e-commerce has boomed and

11:45

life without digital payments has

11:47

become unimaginable. Having

11:50

transformed how people use money at home,

11:53

the race to transform payments is now

11:55

going global. Cross-border

11:58

retail spending, including tourist

13:59

of Ukraine.

14:01

Volumes on C.I.P.S.

14:04

have surged since 2020, helped

14:06

by Russia being mostly cut out of

14:08

swift.

14:10

But building a sanctions work-around

14:12

is not the only goal.

14:14

Countries also crave for themselves

14:17

the clout that comes with control

14:19

over the world's financial infrastructure, as

14:21

well as seeking more convenience for their people

14:24

when they transact internationally. The

14:28

West might fear a fragmentation of the

14:30

global financial infrastructure that allows

14:32

wrongdoers to escape future sanctions,

14:35

yet a more open landscape for global

14:37

payments will benefit its consumers

14:39

and businesses.

14:41

Under competitive pressure, Swift

14:43

has already upgraded its once clunky

14:46

system and has nearly halved the

14:48

cost of messaging.

14:50

The average cost of a remittance has been

14:52

cut by a third in the past decade,

14:55

partly because of new fintechs. The

14:58

Western card networks are overdue

15:00

a shakeup, the typical 1% cross-border

15:03

fee they charge, on top of a 1-3% levy on

15:05

merchants, supports

15:08

company-wide net margins of around 50%

15:12

among the highest in the world for listed firms.

15:15

The spread of Alipay, UPI,

15:18

and even other newcomers like GrabPay

15:21

in Southeast Asia, or WhatsAppPay,

15:24

which just launched in Singapore and Brazil,

15:27

will give consumers other options.

15:31

Domestic payments markets have tended

15:33

to be winner-takes-most because

15:35

people like using a big network

15:38

with lots of other users.

15:40

For cross-border payments, consumers

15:43

and businesses will tend to favour the payment

15:45

system they use in their respective

15:47

home countries.

15:49

Since it is increasingly easy

15:51

for merchants to accept many

15:53

different payment options, change

15:56

seems likely.

15:57

A system where people can use their domestic

16:00

networks to pay abroad promises

16:02

to be more convenient as well

16:04

as cheaper.

16:06

The countries that benefit most will be

16:08

those that stay open to all platforms

16:11

and let them overlap rather than

16:13

forcing people to use national champions.

16:16

And though the West will lose some power

16:19

as a result of the proliferation of alternatives

16:21

to its payment systems,

16:23

it will maintain the ability to levy

16:25

the most effective forms of sanctions

16:28

on flows of trade and technology.

16:31

The digitization of finance has already

16:33

made billions of lives better.

16:36

The new global race promises

16:38

to enhance those gains.

16:43

Now before we continue, you've been hearing

16:45

a lot from us. We want to hear from

16:48

you and specifically what you

16:50

think about our podcasts. So please take

16:52

our short listener survey at economist.com

16:56

slash epsurvey. That's

16:58

like editor's pick survey, but it's all one

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word, epsurvey.

17:02

It won't take too long and it'll be really helpful

17:04

for us to be sure that we're delivering the sort of

17:07

thing that you want. Thank you very

17:09

much.

17:13

And finally, the pooches

17:16

of pan shear. Global

17:18

welfare was not considered a big priority

17:21

for the Taliban when they rolled back into

17:23

Kabul in August, 2021. A

17:26

Kabul based animal rescue charity

17:28

called nowzad run by a

17:31

former British soldier created

17:33

such a fuss in the British press that

17:35

Boris Johnson, the then prime minister,

17:38

permitted it to load 94 stray

17:41

dogs and 68 cats

17:43

onto one of the last flights out of the country.

17:47

They were the lucky ones. Kabul's

17:49

street dog population ballooned

17:51

as Afghans abandoned their pooches

17:53

before fleeing the country.

17:55

We found lots of well-trained rare breeds

17:58

in the early days, says...

17:59

Mohammed Ismail, a vet

18:02

with another British animal charity called

18:04

Mayhew. When Kabul

18:06

fell, Mayhew told its Afghan

18:09

staff to stay at home. As a

18:11

British organisation, it feared reprisals.

18:14

It also assumed the Taliban hated

18:16

dogs, which pious Muslims consider

18:18

impure. But it was not long

18:21

before Mayhew was asked by the Taliban

18:23

to get back to work. Every

18:26

day at dawn, the charity sends its vets

18:28

out with dog catchers from Kabul's Taliban-controlled

18:31

administration. Armed

18:33

with giant nets, most days they

18:35

nab about 60 strays which they

18:37

neuter and inoculate against rabies.

18:41

After a few days' recuperation at the charity's

18:43

facilities, the Kurds are returned

18:45

to the streets. The Taliban

18:48

mayor of Kabul is said to be delighted

18:50

with this work. The administration

18:52

recently chalked up Mayhew's vaccination

18:55

of around 30,000 stray

18:57

dogs as one of its successes.

19:01

Nausad has also now returned to

19:03

Kabul, where its activities

19:05

include running a small animal clinic.

19:08

The Taliban have permitted the NGO

19:10

to continue with our mission objectives,

19:13

says Nausad's founder, Pen Farthing,

19:15

a former royal marine. During

19:18

his five recent visits to Kabul,

19:20

he found the Taliban amenable and

19:23

always polite and friendly. He

19:25

thinks the international community should

19:27

stop shunning them. They are back

19:29

in power because we put them back in power,

19:32

he suggests, a tad cynically.

19:35

Mayhew says it fully complies

19:38

with the Taliban's rules, including

19:40

an order banning NGOs from employing

19:42

women. It's awful, says Caroline

19:45

Yates of Mayhew, but we are

19:47

first and foremost an animal

19:49

welfare organisation.

19:54

I'm

20:00

Kenneth Kukier, and in London, this

20:02

is The Economist.