Jakarta, CNBC Indonesia – The United States (US) is facing the fourth major turning point in history since the beginning of the 20th century. If world leaders take the wrong steps, the impact could be similar to what happened in the 1930s and ultimately lead to World War II.
This was stated by the CEO of the foreign policy think tank Atlantic Council, Frederick Kempe. According to him, this fear is the focus of attention of CEOs of large companies today.
“Every CEO, every bank I talk to, is taking geopolitics into their thinking in a way they didn’t five years ago,” Kempe said at the virtual summit CNBC Global Evolve on Thursday (2/11/2023).
Kempe said this shift did not happen suddenly, with the outbreak of war in the Middle East between Israel and Hamas. This has evolved over the past five years due to a series of external shocks that have changed the status quo in the market.
“(Russian President) Putin’s war in Ukraine is a wake-up call,” Kempe said.
“No one is saying it won’t impact business. … Geopolitics are starting to enter the boardroom in a way I’ve never experienced before,” he added.
He said this makes more and more members of the C-suite, that is executive ranks in a company with high positions, which incorporates geopolitical analysis into the government affairs team. Add relationships outsourcing with consultants on board and bringing more risk management to the position.
Kempe said it was reasonable for CEOs to conclude that things might get worse. JPMorgan CEO Jamie Dimon, for example, recently warned of the same thing.
“This is perhaps the most dangerous time the world has experienced in decades,” he said.
In detail, he explained, the first four years of the last decade had caused external shocks. Starting from the Covid-19 incident, the withdrawal of US troops in Afghanistan which then weakened the US position in the world.
Not to mention Putin’s decision to invade Ukraine and the US’s decision to “exit” Moscow. Finally, the outbreak of war between Israel and Hamas.
He then linked it to the last three major changing points in world history, namely World War I, World War II and the Cold War. Looking at this pattern, currently the world can also be classified as “tensions and risks are higher than before”.
“There is a world that is more interconnected than we have ever experienced, with the ability of technology to do more harm more quickly,” Kempe said.
Therefore, Kempe believes that America must ensure the global system remains intact. He gave an example of how the choices America made after World War I, led to isolationism, the Holocaust, and millions of deaths.
Meanwhile the country “did good” after World War II. Thus giving birth to international institutions such as the UN and NATO.
Meanwhile, increasing bilateral relations between US enemies, namely China, Russia, Iran and North Korea, also increases the level of risk for the US. Kempe advised companies to become less dependent on China in their supply chains, mitigate risks and build resilience.
“Because you may not be able to transfer the next risk. … You have to understand the risk first and be humble about it,” he concluded.
[Gambas:Video CNBC]
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