We need to move from an economy built on distrust towards a Trust Economy.

Governments increasingly use AI to tackle policy challenges. To preserve the public’s trust, we need
better communication and greater transparency.

As monetary stability is no longer the first priority for central banks, trust and economic prosperity are
at risk.

Rebuilding Trust Between London and

Brussels Will Not Be Easy

“Real Leaders Accept Risking

Unpopularity by Taking Decisions They
Believe to Be Right”

Shaping the Development of Trustworthy

AI

Three Ways to Strengthen Citizen Trust

in Technology

“There Is Worse Than the Failure of

Intelligence: The Failure of Imagination”

Topic Brief 1: Oct 15  How the Trust Economy

Could Benefit Us All
We need to move from an economy built on distrust towards a Trust Economy.
Everybody has a plan – until they don’t. In a hypercomplex and equally
connected world, expecting the unexpected is prudent. Except that politically,
environmentally and now epidemiologically, we didn’t see global issues coming
until they were all too real. As a Trust Futurist, I believe our choices reveal what
we value and trust. Psychologists will tell you that this is often short-term gain at
the expense of our long-term future, but the last thing you and I need right now is
a pessimist stance. We need a plan.
We seem to have learned from the global financial crisis in 2007/2008 that
waiting out a crisis by looking the other way is about the worst posture we can
assume. Currently, some airlines and hotels are issuing refunds they don’t have
to, retailers in many places are donating items they could sell, and news
publications are lifting their paywalls to keep us informed. Tough times like these
call upon us to set aside individual differences and do what is right for the greater
good. Every initiative we take to help will ease our shared global burden. It
means relying on governments alone to bail us out of the situation isn’t going to
do the job. We should embrace the unifying power of a common enemy to
proactively come up with creative solutions in our fight against this pandemic. 

Why Exiting This Crisis Will Require a New Mindset Centered Around Trust

Many societies rely too heavily on distrust-driven measures to regulate

behaviour, i.e. constraining people with penalties or prohibitions. Self-control and
following rules aren’t one and the same, because the former requires that we
care. Until recently, the distrust economy got away with the notion that rules are
all we need – i.e. if we acted selfishly in the market, that would suffice to create
collective gain.

The courage to embrace something new and willingness to collaborate will

require us to trust each other and our shared contribution to the solution. Using
sharing economy platforms to do business with each other has helped us
discover hidden value and purpose, build relationships and get stuff done more
effectively. When we look at the sharing mindset that this Trust Economy has
inspired us to adopt in recent years, the benefits are obvious. Many digital
platforms we use facilitate interhuman trust very frictionlessly. Peer ratings,
community rules and smart algorithms take care of the distrusting for us, so we
can focus on trusting each other. We can use digital to inspire people
to adopt the right behaviour with joy and ease, beyond those
cumbersome compliance forms.

  Airbnb ratings; Hotel ratings; Shopping website ratings before buying the
product
o But these have also been MANIPULATED, WITH FAKE REVIEWS (ex: the fake resto that trended
in tripadvisor—experiment)
o Fake trolls
o THOUGH: Look at Airbnb still booking the place despite not being as strict as in hotels

The Promise of the Trust Economy

I’m not just a Trust Futurist, I’m also an eternal optimist, and I believe nobody
enjoys distrusting or being distrusted. One of the biggest trends we’re seeing
right now is that the Trust Economy is driving a relationship renaissance, re-
humanising our mostly transactional global economy. Transparency, provenance
and sustainability (knowing where things come from, and that they are made
consciously) are demanded more than ever. They will ensure a fairer distribution
of value, too. If you knew the person that made your T-Shirt, you’d probably
agree that they deserve a fair compensation for their work. Win-win situations are
more satisfying than win-lose dynamics. 
As humans we’re deeply wired to trust, bond together and treat each other fairly,
but this gets complicated once financial capital and global markets enter the
picture, allowing us to trade with anyone often even in the absence of a
relationship. The less visible the individual, the less we are inclined to care about
their end of the bargain. Say you put a dozen people that don’t know each other
in a room, hand them twelve 10-dollar-notes and ask them to share among the
group. How much do you think everyone gets? In the global economy, all value
distribution is inherently skewed. It’s not sustainable, and it hardly feels great,
even if you’re in the power position. Perhaps that’s why our incremental
happiness gained through economic prosperity plateaus at middle-income level.
Deep down we know others may have suffered for this prosperity of ours more
than we’d like to know.

Bringing trust back into business in a big way is but one of the achievements of
the Trust Economy, and it’s done us a big favour with it. We are born to trust
and care for our tribes. Digital trust intermediaries enable us to scale that
dynamic at virtually no cost. This should technically enable us to create a global
village of inclusive socioeconomic progress, and create a future in which default
mutual trust creates a streamlined and fairer global economic system. In fact, we
already know that high-trust environments make us feel amazing – mutual
trust stimulates our brain to synthesise the kind of hormones that makes us feel
good. No wonder the world’s highest-performing teams operate on principles of
high-trust.

 On the contrary: people are WIRED to lie. In a day, it’s estimated people
will lie x times.
 SO PERHAPS, instead of being too “idealitis”, it’s better if we accept this
reality –and thus, BETTER REGULATE OUR EXPECTATIONS OF
PEOPLE.

But before we get carried away in that dream, reality will hit.

The Generational Divide on Digital Trust

We live in a world accustomed to inflationary, pathological distrust. Think security

checks, contracts, compliance and so on. It’s necessary, but it wastes time and
annoys most of us. All this bureaucracy effectively prevents important change,
because its job is to protect the status quo. Global productivity gains per year
have essentially been on the decline since the 1950s. While technology is
advancing exponentially, we’re unable to do the same with productivity. 

So, distrust is creating a productivity and innovation ceiling. I call this the distrust

epidemic. It’s ineffective and on top of that nobody really likes to distrust, we just
got used to it. 

Encouragingly, we see the complete opposite across the digital economy. But all
is not well. We all too willingly place our trust in digital interfaces, platforms and
the data and technology powering them. Marketplaces and peer-to-peer business
models have changed our behaviour and we nowadays easily trust strangers
online. This caused a wave of over-trust in the digital economy. I mean, do
you ever read website terms and conditions before clicking accept? 
I see two major problems with this. Our younger generations, meaning Gen Y, Z
and whoever comes after this, increasingly and indiscriminately trust technology
because it makes life easier to do so. Meanwhile Baby Boomers and Gen
X are more sceptical and resist this somewhat. That disconnect between
generations is likely to escalate. More senior generations expect trust to be
earned, young folks trust fast and want to be trusted by default (until or unless
they screw up.) This already causes lots of frustration inside organisations,
because different generations have these different attitudes to trust and
therefore data, technology and leadership. It’s a constant, dysfunctional blame
game of ‘why don’t you trust me’ versus ‘why don’t you work towards earning my
trust.’

Where to Go From Here?

Ironically, the distrust epidemic is currently being replaced by a digital trust

epidemic. The trust-first camp will over trust and take far too high risks until (in
the worst case) everything comes crashing down. This might lead them to lose
everything and even cause major disasters (just think of the Cybersecurity issues
we already have today!) Meanwhile, people and companies who embrace
distrust as a first principle will keep adding more rules until it becomes impossible
to compete. As the world gets ever more complex, they will eventually grind to a
halt, suffocated by all that distrust.

We should endeavour to find a balanced middle way. Smart organisations are

starting to realise that less rules can result in more compliance, and many
innovative companies are showing that trust-first does not necessarily equal
naive. A solution is for all camps to come to the table, understand each other’s
different sentiments, find a healthy balance between too much and too little
trust and establish common ground for a brighter future. 
Author

Image

Philipp Kristian Diekhöner is a Trust Futurist, Innovation Strategist and Author of

The Trust Economy. The TEDx speaker was pivotal to shaping innovation
activities for several of the fastest-growing technology disruptors and Fortune
500s in Asia. His pivotal industry transformation work had him recognised as a
WEF Global Shaper, KAIROS fellow and SGS Leader of Tomorrow. Leaving
corporate and start-up worlds behind mid-2018, he gained representation by the
world’s leading speaker bureaus as a global top voice on trust and digital
innovation. He teaches a flagship executive education course on corporate
innovation and transformation for one of Asia’s top business schools and
is currently writing on a second book, about the reset we’re about to experience
post COVID-19. When not giving (virtual) keynotes, you’ll find him on a yoga mat,
in the mountains, or both. Reach him via pk@philippkristian.com

How Can Governments Build Trust in AI-Driven

Public Services?
 | Reading time: 6 minutes
Image

Governments increasingly use AI to tackle policy challenges. To preserve the public’s trust, we need better
communication and greater transparency.
Why do you not trust your government? Only 45% of citizens in OECD countries
trusted their government in 2019. Based on this finding, some of you reading this
article may be reluctant to trust your government to respond to crises such as
economic inequality, racial injustice, climate change, and a widespread
pandemic. One has to wonder – how are government responses to the Covid-19
pandemic going to influence public trust in 2020? 

AI-Driven Public Services Often Come at the Expense of Data Privacy

Study after study has shown that a government’s values, such as

responsiveness, integrity, and the fairness and openness of institutions
are drivers of public trust in government. That more than half of citizens question
their trust in governments is a telling metric of the delivery of public services – or
the communication of the delivery of these services. Often, entrenched
processes make it difficult for institutions to deliver the services – and above all,
security – demanded by their citizens. From contact tracing in Switzerland, South
Korea, and Australia to ensuring social distancing in Belgium and Singapore, the
increased use of artificial intelligence in various government responses to Covid-
19 raises the question of whether AI can be a vehicle through which to rebuild
trust in government – or completely tear it down. 

In a recent study I conducted during confinement earlier this year, I found that
security, public, industry, non-profit, and academic professionals all agreed on
the risk of not using AI placing their nation at a competitive disadvantage to
others. Whether the technology is to be used for offensive, defensive – or
paradoxically, as a classic deterrence mechanism, citizens seem to agree that AI
comprises an important set of technologies that nations need to build to protect
their systems – and themselves. The problem however, arises with the misuse of
these emerging technologies, that can be used to disrupt our current systems. 

Data is the food that drives all AI-driven algorithms. With the default currently set
to policy instruments working to retroactively catch up with the economic
incentivization of the development of these technologies, the privacy of our
citizens seems to be constantly undermined as we aim to deliver better products
for our citizens. In developing solutions to better protect our citizens –
through managing cyber risk, contact tracing, and innovations in healthcare, we
are at the same time undermining the privacy concerns and protections of our
citizens. We are misidentifying marginalised populations in the training datasets
fed into AI-driven systems and skewing outcomes. We are sharing our data with
companies that sell this precious and deeply personal commodity to those who
run influence campaigns, build conspiracy theories, and sow disinformation. 

Should We Have to Read the Fine Print?

A few days ago, my friend bought a toaster oven. She was excited – she said
that it was a state-of-the-art toaster oven, with several built-in capabilities to
deliver what she promised was perfectly toasted bread. It was innovative – it had
various settings for the different ingredients you planned to use on the sandwich,
so that your end result wouldn’t be too soggy etc. It was supposed to make my
friend’s life easier – she often made sandwiches to go, and this was supposed to
require minimal effort. A few days into taking the toaster for a spin, my friend
complained to me, “I will never trust this brand again. They were supposed
to deliver good products but – my bread is burned too quickly. I also saw
somewhere that this toaster is not very good for your health – something
about oils in the toaster that can be poisonous over time.” 

“Did you read the manual?” I asked her. I thought it may be a technical problem,
something with regard to the various, fancy settings. “Where did you read about
the oil issue?” 

“I was frustrated and was looking up problems with this toaster online. I saw a
few reviews by people who were frustrated too. Funny – I only saw positive
things when I first looked it up. I didn’t read the manual. Too long and boring!”

What do we do when the manual for our AI products is too long and boring – or
simply not there? 

AI-driven technologies, like most other products, have assistive capacities that
are already revolutionising our ways of life. However, it is very easy to erode our
trust in these technologies if the default is to deliver convoluted, opaque
statements on the purpose and functionality of the technologies. The ways in
which our data is protected should be clearly communicated, keeping human
biases in mind. We don’t like to read the fine print. Companies should not be
taking advantage of this fact – leading to an erosion of our trust in automated
products used by governments to keep our citizens safe, fuel innovation, and
maximize productivity. 

Trust in Governments’ Use of AI Builds on Transparency and Information

The classic 5W “Who is doing what, where, when, and why?” when it comes to

these technologies should not require a doctoral dissertation to unpack.
Regulations to protect citizen data in the aftermath of electoral influence
campaigns should make use of nudges for good – setting up a choice
architecture that doesn’t set the default to share all, but share the basics
only. Citizens should not have to opt-in to actively learn about where their data is
going – if it’s possible at all – but opt-out only if they do not wish to do so. The
default matters – it can determine whether you are targeted by far-right extremist
groups if you are a swing voter and whether you see fact or fiction. 

So, why do we not trust our governments? Why do we trust our public services
sometimes more than the governments that enact and fund these services? Is it
because it’s difficult to understand – a legislative black box that keeps the non-
experienced professional out, much like AI algorithms and technologies
themselves? Humans find things that are difficult to understand aversive. Classic
studies have demonstrated how a lack of information can lead to rumours and
exploitation by those working this information deficit, confusion, instinctive dislike,
and gossip to their advantage. In the same way, governments ill-communicating
their use of AI, where the data is going, and how purpose-limited this data is, can
cause rampant speculation and an erosion of trust in the initiatives they build to
serve the interests of their own citizens. Trust is built on transparency and
information. The harder it is to read the toaster manual, the more likely it will be
thrown away.

 Information deficit
 Lack of access to info  leaving people in the dark 
 PEOPLE DISTRUST what THEY do NOT UNDERSTAND/DO NOT KNOW.
 SIDE NOTE: FOI BIIL?

Author

Image

Kulani Abendroth-Dias is currently a Strategic Business Analyst with the

Organization for Economic Development and Co-operation (OECD) in Paris,
France, and a Graduate Professional with the Security and Technology
Programme at the United Nations Institute for Disarmament Research (UNIDIR)
in Geneva, Switzerland. Kulani is also pursuing her PhD in International
Relations/Political Science at the Graduate Institute for International and
Development Studies (IHEID) in Geneva, Switzerland. She works at the
intersection between social psychology, economics, and emerging
technologies. Kulani previously worked as a behavioural scientist for the United
Nations. She has an M.A. in Social Psychology from Princeton University (USA)
and a MSc. in European Integration specializing in Economics, Security, and
External Relations from the Institute for European Studies (VUB) in Brussels,
Belgium.

Today’s Central Banks Are Dangerously

Behind the Curve
| Reading time: 5 minutes
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Author: Prof. Klaus Wellershoff

Public trust in stable money lies at the heart of robust economic development. As monetary stability is no
longer the first priority for central banks, trust and economic prosperity are at risk.

 Japan: new currency? They are asking their CB to look at regulating new currency
 PH Laws regarding new currencies? Like crypto?

Without trust in society’s institutions and in the rule of law, economic prosperity is
impossible. All of us, as economic actors, must feel confident that our property
and the rewards of our labour are protected by a legal framework that is fair,
impartial and transparent. Without this guarantee, economic development will
simply stagnate.

 IN THE PH: How do we fair in terms of financial protection and

guarantees? That our property (money) isn’t just taken away?
o Bank secrecy laws?
o Do we have LEGAL FRAMEWORK IN PLACE?
 WHAT ARE THEY?
  Are they transparent enough? Robust enough?
 How about implementation? Accountability?
 WHY RELEVANT?
o Being able to compete with other countries that are progressing
o Attracting investors in the PH – for them to feel safe that we have
stable systems in place

 SHIFT TO A CASHLESS ECONOMY?

o How to BUILD TRUST? REPAIR TRUST?
o COVID 19—has pushed us to accept this system further (minimize
personal handling)
o How is the Philippines fairing?
o What laws are in place to PROTECT consumers/sellers/the overall
financial market?
 Taxation purposes of new players? How to monitor sales?
 GSIS
o Current cashless modes:
 Gcash? Paymaya?
 How about CONDITIONAL CASH TRANSFERS via cards
 WHY IS THIS TOPIC IMPORTANT? (remember the WHYS)
o This is the future
o Can help cut down bureaucracy and corruption
o Better data aggregation + EVALUATION (and ajudstment if needed)
o Ex: pdaf disbursement in the age of AI?

But there is another requirement for a society’s robust economic development—a
stable, equable means of exchange, namely, money. Only when we trust that we
can fairly exchange our property or our labour for the goods and services of
others, both today and tomorrow, will we strive to do our best and thus advance
society’s standard of living across the board.

Trusted, Stable Money Creates a Virtuous Circle

Stable money is not only necessary for the exchanges we make in our daily lives
today but also incentivises us to save for the future. Saving for retirement only
makes sense if we can feel confident that the money we put aside will retain its
real purchasing power in the future. Collectively, our savings provide the pool of
funds that finances others’ investments. And these investments increase
productivity. Stable money, as such, generates a virtuous circle that improves all
our lives.

This is not theory. Economic history teaches us the value of stable money over
and over again. From Aristotle’s observation that money is anything that is
generally accepted as payment for goods and services and repayment of debts
— that is, that money is a convention or institution of a society — to today’s
efforts by independent central banks to retain the purchasing power of their
currencies, examples of the importance of stable money are legion, as are the
lessons of what happens when people cannot trust their money. 

There have been many experiments with money over the centuries. The first
largescale experiment with paper money was made in France by John Law after
the death of Louis the 14th. Government debt, which was vast, was financed by
the printing press, ultimately creating the first stock market bubble, which was
followed by a mighty crash and runaway inflation. Later, in the nineteenth
century, another approach to assure the stability of money was tried, linking it to
precious metals. This also yielded dismal results, with periodic episodes of
deflation suffocating economic production, wages and demand and contributing
to the Great Depression of the 1930s.

One thing we have learned is that the responsibility for creating monetary stability
should not be in the hands of politicians. Rather, this task should be
overseen by independent institutions whose only concern is the stability of
our money.

For decades now we have enjoyed the benefits of such independent central

banks. Trust in institutions like the Federal Reserve, the Bundesbank and the
Swiss National Bank has allowed us to build a dynamic, global economic system.
For over 40 years inflation has been steadily declining. And price stability has
also been achieved. Economic development around the world has been thriving
—until recently.

When Central Banks Ignore Their Mandate, Public Trust Erodes

Ironically, we observe, this monetary stability appears to have come with the
heavy price of undermining the stability of the financial system itself. Low inflation
and low interest rates have led to massive asset price increases. This has
occasionally led to extremely high volatility on financial markets. Nowhere was
this more evident than in the 2007-8 financial crisis. Low interest rates and easy
monetary policies had led to enormous real estate bubbles in most industrialised
countries. And when those property bubbles burst, they threatened to take down
the entire global banking system. Stock prices quickly tumbled after the first
tremors were felt and fears of a global depression were rampant.

The only institutions that could prevent utter economic collapse were the
central banks, ignoring the fact that they themselves were at least partly
responsible for creating the mess in the first place.

Responding to the traumatised banking system, central banks recklessly

lowered interest rates ever further and printed ever more money, flooding
the shaken economy with cash to prevent a total economic meltdown.

Their apparent success at meeting the crisis left central bankers brimming with
self-confidence. In the months and years that followed, the world’s central
bankers enjoyed near-universal admiration. After all, they saved us, didn’t they?

But only a very fine line separates self-confidence from hubris. Globally, the
money supply simply exploded. Stable money was no longer a priority for central
banks; a stable financial system was the paramount goal. Prudent forward-
looking central banking was discarded, replaced with an attitude of “whatever it
takes.” Why worry when you can walk on water?

Unfortunately, this was still the attitude when the covid-19 pandemic struck.

 Superheroes to the rescue! And the remedy was the same: the money
supply was again wildly inflated;
  this time not to finance the banking system, but to staunch the bleeding
from enormous public deficits.

In short, central banks are fighting yesterday’s war with yesterday’s

weapons and the outlook for today’s battle is not good. Any student of
economic history knows how this will end: John Law 2.0.

Independent central banks were created to break the link between political
expedience and monetary policy.

 When central bank ignore their mandate to provide society with

stable money, our trust in these institutions will deteriorate.
 Once inflation raises its ugly head, as surely it will, our trust in our central
banks and in their money will evaporate. 

We urgently need to rethink the institutions tasked with assuring the

stability of our money. Otherwise, the next economic crisis will shatter our
highly evolved economies and with it our prosperity. 
Author

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Prof. Klaus Wellershoff is the President of the Board of Wellershoff & Partners

Ltd., an international consultancy firm that focuses on global economics, financial
markets and comprehensive risk management. Since 2011 he is Honorary
Professor of applied economics and President of the Institute of Economics at
the University of St. Gallen. From 1995 to 2009, Klaus Wellershoff worked for
UBS and from 2003 to 2009 he was Member of the Group Management Board of
UBS.

Can Technology Succeed Without Trust?

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Author: Markus Stäblein
The increasing use of technology in all areas of life makes it all the more important to focus on security as an
essential part of innovation.

We all enjoy the benefits of innovation and are quick to embrace new ways of
making life better. Our world is increasingly filled with technology, as we
make mobile phones a central part of daily life, do business in the
cloud, and rely on intelligent cars to keep us safe, comfortable, and entertained. 

Despite all the ways we’ve welcomed technology, though, we are still slow to
trust. If a new product or service doesn’t perform the way we expect it to, even in
small ways that might impact security or convenience or quality, we can lose faith
and look elsewhere. 

Building Trust Takes Time

Recent trends in the smart-home market are a good example of how trust can
take time to develop. New, cloud-connected appliances make it easier than ever
to experience entertainment, stay informed, and control our living
environments. Consumers saw the benefits early on and rushed in,
but growing concerns over security, with smart speakers and TVs that
might listen in on our conversations and smart thermostats that might be
hacked, have slowed adoption and made people wary. We may crave
convenience, but only if we can trust it to protect our privacy and security.

In automotive, on the other hand, time and careful evaluation have helped
establish trust. Each new addition to the car – airbags, anti-lock brakes (ABS),
anti-theft immobilizers, electronic stability programs (ESPs) – is
introduced only after extensive study. What were once new concepts have now
become indispensable features, because we trust what has proven itself reliable
and safe. In fact, the automotive industry has so effectively gained our
confidence that we now allow vehicles to intervene on our
behalf, letting automation take over in moments of inattention that can put lives at
risk. 

 How to build trust in tech/cosmetics/pharmaceutical:

o Aka: dengvaxia—aftermath
o How about covid vaccine?
 HOW WE APPROACHED COVID:
 Don’t know the source lots of misinformation
 Simple mask wearing  a debate for some countries; while
others just comply
 Politicians themselves making apolitical game out of it: Trump
blaming china
 Scientific community’s role in informing public
 Social media and spread of misinformation: “my dad showing to
me breathing techniques supposedly”
 Fears over the vaccine
 AI services + data protection/security/surveillance
 Contact tracing?
 REPEATED TRANSPARENT & REPLICABLE STUDIES + LEGAL
FRAMEWORK & REGULATION

Maintaining Trust is an Ongoing Challenge

The challenge of establishing trust starts as a simple problem of numbers,

because the more technologies we use, the greater the chances that something
will fail. The increasing use of technology makes it all the more important to focus
on building and maintaining trust.

How we deliver technology has a role to play. The pace of innovation, spurred on
by growing competition in every technology arena, places pressure on
companies and raises the risk that development teams will take shortcuts or miss
a potential problem. It’s hard to be both rigorous and fast.

Big data has an impact on trust as well. Today’s technology can yield an
astonishing amount of information about the world and our lives in it. We’re still
exploring how best to use that information in positive ways, without violating
privacy or damaging the trust of those who provide the data.

Any number of things can trigger a loss of trust. It might be something you,
yourself, experienced while using a technology, or it could be learning about
someone else’s bad experience. History can influence perceptions about security
and quality, whether it’s a particular company that delivered a poorly made
product or an entire country that, as a whole, is thought to be less concerned with
standards for safety and reliability. A questionable move by one company can
endanger the reputation of an entire market segment. News from the hacker
community, whether it’s a story about ethical hackers uncovering a security flaw
or unethical ones exploiting a loophole, can influence opinion, too. 

Trust Starts at the Core

The tight connection between technology and trust is making trust a key
differentiator for products and services, and that creates a compelling reason for
companies and brands to focus on security and quality at every point, whether
it’s in the supply chain or as part of the consumer experience. 

This is something that we, in the semiconductor industry, know well. Innovation

is at the heart of our business. We are keenly aware that our products are
essential building blocks for technological advances of all kinds, and that
means trust is, by necessity, a vital part of what we do.

When we look to the future of driving, for example, we see opportunities to add

innovation throughout the vehicle. We know that features like
higher processing power, improved connectivity, and increased energy efficiency
are all things that Tier-1 companies are interested in having. But we also know
that car manufacturers won’t move ahead with new features unless they are
trustworthy. 

To ensure trust, we as engineers must ask ourselves, at every point of

development, if we’ve done all we can to meet industry requirements, protect
information, and keep people safe. That means putting tighter controls on
processes such as product design, qualification, and manufacturing, and striving
for continual improvement. 

It’s also important to identify areas that need protection and implement tested,
certified security mechanisms that prevent attacks in the virtual and physical
worlds. Being proactive, with customer education along the supply chain,
participation in regulatory initiatives, and clear communication with government
agencies, is another aspect of building trust in our products.

  cyberattacks of technology: how deadly?

 With cars being automated—can national hackers/foreign hackers infiltrate
systems and cause “block-outs” in other countries?
 IS THIS THE NEW “NUCLEAR WEAPON”?

Perhaps most important, though, is creating a company culture where every

employee feels responsible for the products the company provides. When
everyone makes trust a top priority, our customers can be confident that we’re
delivering the highest levels of security, quality, and reliability – and that helps
spur innovation.

The Future Depends on Us

The pace of innovation will continue to accelerate, which means the future is not
as far away as we might think. Those of us in the semiconductor industry can
already see the day when the car is the driver, the cloud is where we keep all our
digital keys, and our homes are more intuitive and efficient while being more
personal and sustainable. We have the ability to bring these systems to life – but
we will only succeed in doing so if we can prove to everyone that technology-
driven innovations deserve our trust.
Author

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Markus Stäblein is Vice President and General Manager of Secure Car Access at

NXP Semiconductors and CEO of NXP Semiconductors Austria. He has more
than 20 years of experience in the semiconductor industry with
senior management roles in the Automotive, Industrial & IoT markets. He holds a
diploma in Engineering from the FH Wiesbaden and a Master of Business
Administration (MBA) from The Open University. In 2016, he and his wife and
two children moved from the USA to Austria to kick-off his career at NXP. Since
2019, he is also a board member of the Industrial Association of Styria
(IV Steiermark).

Rebuilding Trust Between London and

Brussels Will Not Be Easy
Having reached a deal with the EU on Christmas Eve, the UK will want to make use of its new-found freedom
through deregulation. The agreement might also prompt Switzerland to reconsider its finalised, but unsigned,
Framework Agreement with the EU.

The British people’s narrow “yes” to Brexit in the referendum of 23 June 2016
was initially not understood in Brussels. The EU’s leadership was too hurt
and anxious about imitators. According to the Berlin daily
“Der Tagesspiegel”, Commission President Jean-Claude Juncker und Parliament
President Martin Schulz behaved like cuckolded husbands. The Brexiteers were
accused of having deceived voters, and many in the EU hoped for a
second referendum.

Voting until the ‘right’ outcome is achieved is a tried and tested EU method.

However, the problems lie deeper. For a long time, the British had felt
abandoned in the EU Council. When it came to regulating the financial and
labour markets, France led the pack with its centralist and interventionist ideas
and Germany agreed. Over time, the EU came to terms with the British
leaving, and on Christmas Eve 2020, at the last possible moment, a deal was
struck. The St. Gallen Symposium’s theme for 2021 is “Trust Matters”. The
following considerations should be seen in the light of this maxim.

After Serious Upheavals Between Brussels and London, Rebuilding Trust

Will Not Be Easy

The UK-EU Trade and Cooperation Agreement (“TCA”) is structured on a WTO

basis. It includes provisions on free trade, investment, intellectual property,
competition, energy, public procurement, subsidies, transport and logistics,
fisheries and judicial cooperation in criminal matters. In addition, there are joint
declarations on areas such as taxes or data protection. A Joint Partnership
Council oversees the monitoring of the treaty. 

The basic principle of the EU’s Single Market is that competition may only be

conducted with parameters such as price, quality, business conditions or sources
of supply. The EU fears that the independent UK will rely on regulatory, i.e.
systemic competition to attract business. In the TCA, the UK committed itself to
safeguarding a robust level playing field by maintaining a high degree of
protection in areas such as the environment, including combating climate change
and carbon pricing, social and labour rights, tax transparency and state aid.
The British also made a pledge to respect fundamental rights. Enforcement will
occur on the domestic level. 

However, unlike the EU Member States and the EEA/EFTA States, the UK has
the right to deviate from said standards in the future. That is the crucial
point: the UK will want to make use of its new-found freedom through
deregulation. However, if it goes too far and breaches its obligations, the
agreement provides for the possibility of retaliation through the imposition of
rebalancing, remedial, compensatory and safeguard measures. Given that the
EU is continually issuing new regulations, a conflict may also arise if the UK does
not follow suit. After the serious upheavals between Brussels and London, it will
not be easy to rebuild trust. Perhaps on both sides of the Channel, the motto of a
certain Vladimir Ilyich Ulyanov, better known by his alias Lenin, will be
followed, according to which trust is good but control is better.  

Arbitration Could Be Decisive

Disputes will certainly arise between the parties, prompting the question of who
will decide such cases. Theresa May’s government in summer
2018 accepted the so-called Ukraine mechanism which foresees
that conflicts are decided by an “arbitration panel” undeserving of its name as it
must ask the ECJ for a binding ruling whenever EU law or treaty law identical in
substance to EU law is affected. This mechanism, which is found in the EU’s
association agreements with four post-Soviet republics, is reminiscent of the
unequal treaties that the Great Powers imposed on China, Japan and the
Ottoman Empire in the 19th century. The Ukraine mechanism is part of the EU-
UK Withdrawal Agreement. The EU insisted on it also for the TCA and only gave
in after fierce British resistance. Now a genuine three-member arbitration tribunal
has jurisdiction to settle disputes. 

Consequences for Switzerland’s Framework Agreement With the EU

The Swiss Federal Council has politically accepted the Ukraine mechanism for
the finalised, but unsigned, Framework Agreement with the EU. Originally, it even
wanted to give the competence to decide disputes directly to the
ECJ. Berne was not concerned with achieving a solution for Switzerland
that respects sovereignty, but sought instead to create a “point of no return” on
the road to EU membership. To achieve that goal, the Federal Council allowed
the Foreign Ministry to run duplicitous campaigns. At the core were grotesque
contentions, including that the ECJ could not “sentence” Switzerland but would
only issue “advisory opinions”, and that judgments of the EFTA Court are not
binding on EU States. The Commission had proposed Switzerland dock to the
EFTA Surveillance Authority and the EFTA Court and to negotiate the right to
nominate a member of these institutions for cases concerning the country – an
idea rejected by the forces in the Swiss administration seeking EU accession. 

The Ukraine mechanism was created for post-Soviet and North African states. In
the face of growing opposition, in the meantime the Federal Council has likely
second thoughts. In October 2020, it made it clear that it does not want to take
up the issue with the EU again. The question is whether the Government is
prepared to reconsider this position in the light of the British success. Or
whether it prefers to pass the hot potato to parliament and the people. One way
or another, it cannot be ruled out that, as in “Monopoly”, the game will end with
the order: Back to start. 

 
Author

Image

Prof. Dr. Dr. h.c. Carl Baudenbacher is a member of Monckton Chambers,

Visiting Professor at the London School of Economics and former President of
the EFTA Court. A Swiss national, Prof. Baudenbacher was the Liechtenstein
Judge of the Court from 1995 and served as its President from 15 January 2003
to 31 December 2017. From 1987 to 2013, he held the Chair of Private,
Commercial and Economic Law at the University of St. Gallen. He is the author
or editor of over 40 books and has written over 250 articles. His research
activities encompass Swiss, European and International business and economic
law and politics. 

“Real Leaders Accept Risking Unpopularity by

Taking Decisions They Believe to Be Right”

An In-depth, Cross-Generational Conversation with Frederik Willem de Klerk

In this exclusive interview with Leader of Tomorrow Grégoire Roos, President

Frederik de Klerk, former South African President, Nobel Peace laureate and
one of Africa’s most senior statesmen, talks about his fight to put an end to the
apartheid regime in South Africa. He also discusses his close relationship, both
personal and political, with Nelson Mandela, and stresses the importance of
mutual trust to successfully conduct complex political negotiations and why trust
is instrumental to enable national reconciliation.
Grégoire Roos: You were awarded the Nobel Peace Prize in 1993, jointly with
Nelson Mandela, for your efforts in bringing apartheid down in South Africa, after
300 years of segregation. When asked about how you felt about winning the
Prize, you humbly said that you were not expecting it, as serving in cabinets
(1978-1989) under the presidency of two staunch supporters of apartheid (John
Vorster and Pieter Botha) may have disqualified you. What signal did the Nobel
Peace Committee want to send the world? That the courage of the present could
outweigh the choices of the past?

Frederik de Klerk: Good question. I think the Nobel Committee wanted to send

a message that peace making very often involves parties that are not
internationally popular, but that their active involvement in the peace process,
however, is essential in the resolution of disputes. The Nobel Committee also
wished to give recognition to the indisputable steps that we had already taken to
achieve a negotiated solution to the problems that had divided us for so many
years.

Roos: On 2 February 1990, exactly 1 year after your election as leader of the
ruling National Party, and less than 5 months after being sworn in as State
President of South Africa, you announced a series of historic measures, including
the rescinding of the notorious 1953 Reservation of Separate Amenities Act
(which provided for racial segregation in public premises and services) and the
liberation of political prisoners (first amongst whom Nelson Mandela).
While some in your own camp voiced their concerns for the speed with which you
wanted to proceed (if not their complete opposition), the black leaders (especially
influential clerics like Alan Boesak, Frank Chikane and Desmond Tutu) doubted
the truth of your convictions ("it's just musical chairs" Tutu said on
your election)... How much of a challenge was it to push for such historic, bold
and courageous change with so little trust and support from both your majority
and the opposition? 

De Klerk: Well to be honest it is not true that my party and my broader

constituency did not support my initiative to promote the constitutional
transformation. I was elected leader of the National Party (NP) on 2 February
1989 by an NP caucus that clearly wanted change. We fought the September
1989 election on a broadly transformationist platform. The steps that I announced
on 2 February 1990 had been discussed in broad terms with our caucus and had
been agreed to by the cabinet. When I asked the white electorate for a mandate
to continue with the negotiations in March 1992, I received the support of almost
70% of the voters.  It is true, however, that throughout this period, about 30% of
the white electorate opposed our policies. But they had already broken away
from the National Party in 1982 – a development that actually greatly assisted
those of us in the NP who wanted a new constitutional dispensation. As for the
rest, to be frank, the initial sceptical response of our opponents arose primarily
from the distorted perspectives of the NP that had been developed by
their own propaganda. 

Roos:  Some said you surrendered. Others that you converted... Is it the fate of
great leaders to have to suffer from an antagonising legacy -having to endure the
mistrust of those who feel betrayed?

De Klerk: Today I am criticised bitterly and unfairly by the right for having ‘‘sold

out” white South Africans… and from the ANC [African National Congress, South
Africa’s ruling party] and EFF [Economic Freedom Fighters, radical left
movement and South Africa’s third largest party] for having committed crimes
against humanity and for never having had genuine motives for initiating the
transformation process.  They claim that I had no alternative and was forced to
do so by the ANC’s armed struggle and sanctions.  This is nonsense.  In my
view, if you are criticised by extremists on both sides it is probably a sign that you
did the right thing.

Roos: You rank on the short list of world leaders who enabled a peaceful political
transition without bloodshed... What is power without moral leadership?

De Klerk: I would say it is critically important for leaders to assess their own
situations from a moral perspective as honestly and dispassionately as possible. 
By the mid-1980s, my colleagues and I had concluded that the policies we had
inherited from the past had caused unacceptable injustices to the Black,
Coloured and Indian populations of South Africa. We also had to admit that the
solutions that we originally supported had no chance whatsoever of leading to a
just solution for all our people. It was the awareness of the moral imperative of
adopting an approach that would bring justice to all our people that was the
driving force behind our decision to transform South Africa. So what is power
without moral leadership? Leading without compass, therefore leading without
direction. In other words, not leading at all…

Roos: What part of loneliness and solitude should one be willing to accept to

defend what one believes to be right and just?

De Klerk: As I mentioned earlier, I had broad support from the cabinet, the
caucus and my electoral base for the transformation policies on which we had
embarked. In this sense I was not alone, at least from a political
standpoint. However, ultimately all leaders are confronted by the very lonely
challenge of risking unpopularity by taking decisions they believe to be right. 
Real leaders accept this challenge, yes.

 
Image

Frederic de Klerk and Nelson Mandela receive the Nobel Peace Prize in Oslo in
1993.
Roos: Your relationship with Mandela turned into a sincere friendship of mutual
respect, although it didn't go without lows and strains (about the Truth &
Reconciliation Commission for instance): what kept you together (until 1996) in
spite of the disagreements and of the pressure of the political context of the
time?

De Klerk: Both of us realised at critical stages in the transformation process that

we would have to work together if we wished to keep constitutional negotiations
on track.  Such occasions arose in September 1992 when the ANC’s decision to
boycott the negotiations was leading to serious and unmanageable levels of
confrontation.  Again, in April 1993, after the assassination of Chris
Hani [Secretary general of the South African Communist Party and one of the
leaders of the ANC’s armed branch], we had to work together to restore calm,
which was essential to prevent an eruption of mass violence. In the final stages
of the negotiations, we came together once again to resolve seemingly
intractable logjams in the talks. So I would say that our common concern to
prevent further division within society and prevent South
Africa from falling into the abyss of violence was instrumental in keeping Mandela
and me united.

Roos: On the day of your first (secret) encounter, in December 1989, Mandela
spoke of his admiration for the Boer generals who had fought the British 100
years earlier. Was this a determinant factor in how trust started to grow between
you?

De Klerk: Yes, I think you’re right. The fact that Nelson Mandela had taken the
trouble to study our history and showed respect for our heroes undoubtedly
helped to promote mutual trust.

Roos: The most extremist fringe of your supporters got close to outflanking you
both. What made you keep trust in one another over the years? 

De Klerk: We both realised that we could not allow extremists of any kind to
sabotage the negotiations. Nelson Mandela realised that I was the only leader
who would be able to secure majority support for constitutional transformation
among white South Africans. And on our end, we realised that Mandela was the
only leader on the ANC side who had the moral authority to persuade his
widely diverse coalition of the need to make the compromises that peace always
requires.

Roos: What was more challenging: keeping Mandela's and the ANC's trust or
your own party's and that of the State apparatus?

De Klerk: Let’s put it this way: the first task of any leader is to ensure that his
support base is secure. Without this he will simply not enjoy the trust of his
opponents. You need to convey the feeling that you’re relying on two
solid feet; otherwise you’ll have no credibility, and will never give
your opponents arguments and reasons to trust you. 

Roos: We all remember this historic image of Mandela, then President of South
Africa, entering Ellis Park Stadium wearing the Springboks Rugby shirt No. 6
during the Rugby World Cup final in 1995: is this what true reconciliation is
about? Making a bit of the culture of the enemy of yesterday your own, so as
to make one? Is this what it takes to be "lifted out of the silent grief of our past"
(in the words of Afrikaner poet N.P. van Wyk Louw, whom you quoted in your
Nobel acceptance speech)?

De Klerk: Indeed. Nelson Mandela’s greatest contribution to the new South

Africa is the manner in which he worked for national reconciliation. I should
stress, however, that relationships between communities – like any relationships
between human beings - require constant attention, communication and
consideration.  Without these factors they can quickly unravel.  Unfortunately,
recent leaders of the ANC have done very little to follow Mandela’s example.

Roos: Why does this seem so difficult today, in the US and Europe in particular,
who seem more socially and politically divided than ever? Have we renounced
the price of trust?

De Klerk: I would say that it is mostly due –and we go back to a point I stressed
earlier- to the distorted vision we have of our opponents. In Europe, the United
States and South Africa, the perspectives of too many people have
become distorted by the ideological stereotypes they have developed of their
opponents – stereotypes that are too often reinforced by the echo chambers
of social and mainline media. The stereotypes that the ANC has developed of
white South Africans for instance - that are rooted in widely different perceptions
of our history - are deepening divisions between us. The same is true of visceral
divisions in the United States between supporters and opponents of President
Trump – and in the UK between supporters and opponents of BREXIT. Does
trust have a price? Perhaps. That of looking the other with honest eyes.

Roos: "Peace is a frame of mind", you said in your Nobel acceptance

speech... At a time when global peace seems wobblier than ever since the end of
the Cold War, what does it take for our minds to keep this frame?

De Klerk: In my view, we must return to a more multilateral approach to

international politics. Many of the situations that confront mankind – such as
climate change, pandemics and equitable international trade – cannot be solved
unilaterally even by the greatest powers. We need much closer international
cooperation in these areas.  However, we also need to move toward a global
consensus on common norms for international behaviour and, in particular,
a genuine prohibition against the use of force by states and non-state actors, in
the pursuit of their objectives.

Roos: Great leaders and peacemakers are often misjudged by their

contemporaries. Do you trust posterity and the judgment of History?

De Klerk: Well… All leaders hope that they will be treated fairly by History

– but as always, this will depend on who writes it! 
During his presidency from September 1989 until May 1994, President Frederik
Willem de Klerk dismantled apartheid and initiated and presided over the
inclusive negotiations that led to the adoption of South Africa’s first fully
democratic Constitution in December 1993. In 1993, together with Nelson
Mandela, he was awarded the Nobel Peace Prize “for their work for the peaceful
termination of the apartheid regime, and for laying the foundations for a new
democratic South Africa”. After the election on 27 April 1994, Mr De Klerk served
as one of South Africa’s two Executive Deputy Presidents until 1996, when his
party withdrew from the Government of National Unity. He retired from active
politics in September 1997. In 1999 he published his autobiography, The Last
Trek - A New Beginning, and established the FW de Klerk Foundation.

The Foundation upholds the Constitution through the work of its Centre for
Constitutional Rights and promotes unity in diversity by working for cordial inter-
community relations and national unity. Mr De Klerk is also the Chairman of the
Global Leadership Foundation, established in 2004, whose panel of former
presidents, prime ministers and statesmen provides discreet advice to heads of
government on issues that concern them.

Grégoire Roos is a French geopolitical analyst, currently Visiting Fellow at

Shaping the Development of Trustworthy AI

As various artificial intelligence systems developed so far carry significant risks, the EU has emerged as a key
player to define and shape trustworthy AI.
Trust in technology is a precarious topic. While the goal is to encourage the
development and deployment of trustworthy technology broadly speaking, trust in
the sense most people use it must be earned by living up to expectations and
commitments over time. The question as to whether technology can be
trustworthy is a nuanced one and answers from various scholars differ starkly.  
 
More apt may be questions as to whether technology fulfills the requirements we
expect it to fulfil, thus becoming deserving to form part of our broader societal
construct. Those requirements form the core threshold and vital research of
those involved in working on artificial intelligence (AI) governance today.

Trustworthy AI has recently become the non plus ultra as the ‘type’ of AI we, as a

society, should aim for. And rightly so, as AI that interacts with us and our
environment ought to be deployed in a manner that makes the process and its
existence worthy of our trust, broadly speaking. Unlike many other aspirational
‘types’ of AI, be that for example ‘AI for good’ or ‘beneficial AI’, ‘trustworthy AI’
looks as if it is here to stay. Especially in the European Union (EU) where it is a
red thread through the European Commission’s policy making and grounded in
the clear conceptual definition of an AI system that is "lawful, complying with all
applicable laws and regulations; ethical, ensuring adherence to ethical principles
and values; and robust, both from a technical and social perspective, since, even
with good intentions, AI systems can cause unintentional harm (AI HLEG, 2018)."

The EU is emerging as a key player when it comes to developing a framework

and governance mechanism to encourage the development and deployment of
ethical and human-centric AI. Indeed, the legislative proposal, in the form of a
White Paper on AI, published beginning of 2020, follows in these footsteps and
tries to elevate trustworthy AI from a conceptual idea towards the building block
of a legal mechanism.

The current proposal defines “high risk” AI systems as those that fall under the
cumulative criteria of being deployed in a high-risk area and those that are a
high-risk application (for example AI systems analysing medical imaging in a
hospital environment). It requires them to fulfill a range of legal obligations which
are largely grounded in the seven key requirements of the European
Commission’s High Level Expert Group on AI published in their Ethics Guidelines
for Trustworthy AI. 

Recent times have taught individuals and democratic society alike that the AI
developed so far is not worthy of blind trust. We are in the middle of an urgent
and crucial time to meaningfully shape the current ecosystem fostering
appropriate certification, standardisation, forecasting measures, regulatory or
other suitable governance efforts at European and international level without
further increasing the pacing gap between technology policy and the technology
itself.

There need to be clear and agreed upon boundaries denoting which AI systems
are fulfilling the requirements we as a society have set out for them and which
ones do not. Otherwise, the proverbial silver bullet may quickly turn out to be the
emperor shrouded in his new clothes.  
Author

Image
Charlotte Stix is an experienced technology policy expert with a specialisation in
AI governance. Her PhD research at the Eindhoven University of Technology
critically examines ethical, governance and regulatory considerations around
artificial intelligence. In that context, she serves as Fellow to the Leverhulme
Centre for the Future of Intelligence, University of Cambridge and as Expert to
the World Economic Forum’s Global Future Council on Neurotechnologies. Most
recently, Charlotte was the Coordinator of the European Commission’s High-
Level Expert Group on Artificial Intelligence.

Three Ways to Strengthen Citizen Trust in

Technology
As greater volumes of data are generated, stored, and analysed, there are a range of methods public sector
institutions can employ to strengthen trust through responsible data collection.

To build technology responsibly, data must be collected responsibly. 

Responsible data collection and handling is transparent and focused on privacy

protection. As greater volumes of data are generated, stored, and analysed,
there is a greater risk of data mishandling, and data storage breaches or hacks.

A core tenet of responsible data collection is the building and maintenance of

trust with people. Consumers need assurance their information is being used
properly; they should have confidence their information is secure, and provide
consent for its collection, storage, and analysis. This is no simple feat; trust is
difficult to build, easy to destroy, and even more challenging to restore. 

The importance of building trust through responsible data practices extends to

both the private and public sectors. However, it can be both more challenging
and necessary for the state to develop trust with its citizens. As the OECD writes,
‘Trust is the foundation upon which the legitimacy of public institutions is built and
is crucial for maintaining social cohesion’. Public institutions exist to
serve citizens, and have greater potential to exert power over them than private
organizations. Civil servants building data collecting and handling tools should be
conscious that with great power comes great responsibility.

Citizens have many reasons to be sceptical of personal data collection and use,
as data breaches affecting millions of users have become a common
occurrence. Sensitive financial information, passport numbers, and even discreet
information from dating platforms have all been the targets of recent hacks.
Beyond breaches in data security, personal data can be misused to manipulate
individuals and distort economic offerings.

There are a range of methods public sector institutions can use to build and
protect citizen trust:

Adopt the Open Government Data Movement: This movement focuses on

accountability and transparency of government collected data. Open Government
teams focus on increasing the accessibility of government and building civic
trust. These initiatives are aligned with open source movement based on a
created high quality software whose development and use are guaranteed to be
public. 

Prioritise Independent Auditing Agencies to hold Public (and Private)

Institutions Accountable: Concentrated power can be dangerous.
Establishing independently-appointed offices and agencies to oversee and police
data handling guidelines protects the interest of the public. In Canada for
example, the Office of the Privacy Commissioner of Canada audits personal
information handling practices and acts independently of the public and private
sector. It cannot be overstated how important it is for these agencies to operate
independently of the government and private sector and avoid regulatory capture
in order to maintain integrity and public trust. 

Invest in Privacy-Enhancing Processes: Information collecting systems can be

created with a focus on protecting individual privacy at the core. Restructuring
processes to prioritise privacy is an investment in greater service delivery and
public trust. Privacy by Design, a principle-based framework is an example of
systems engineering with privacy at the centre. Privacy by design has been
incorporated into the European General Data Protection Regulation (GDPR) and
adopted as a globally recognized ISO Standard (ISO 31700, Consumer
Protection: Privacy by Design for Consumer Goods and Services). 

While data collection may be a first instinct in developing public sector digital
tools, creative solutions that minimise personal information collection can offer
alternative approaches that largely avoid aforementioned challenges. In Canada
the COVID Alert exposure notification application does not log the user’s name,
location or phone contacts. The application uses Bluetooth technology to
exchange random codes with nearby phones, and alerts users that have come
into contact with individuals who have tested positive for Covid-19 and have
alerted the system, keeping their identity anonymous.

Trust in public institutions enables civil servants to deliver high quality services to
the public. It is important to continue investing in open government data
practices, independent agencies that hold the government accountable, and
privacy-enhancing processes. Responsible data handling practices are integral to
build and maintain trust in public services.

Trust in public institutions matters. 

Author

Image

Heather Evans launched the Technology Diplomacy portfolio as Director of

Frontier Technology Research at Asia Society. She studied as a Schwarzman
Scholar at Tsinghua University in Beijing. Her research has focused on evolving
data governance and privacy policies, opportunities for bi-lateral consensus on AI
related governance challenges and best practices for public sector adoption of
technology. Heather has worked as an entrepreneur and civil servant. She
served as the first Artificial Intelligence Senior Advisor to the Provincial
Government of Ontario, helping to establish the Vector Institute of Deep
Learning. She also started two businesses, in the spaces of Natural Language
Processing and 3D Printing. Heather joined the St Gallen Symposium
Community as a Leader of Tomorrow in 2018
 “There Is Worse Than the Failure of
Intelligence: The Failure of Imagination”
An In-depth Conversation with Admiral James G. Stavridis (Part 1 of 2)

In an exclusive cross-generational conversation, Leader of

Tomorrow Grégoire Roos talks to Admiral James G. Stavridis, a retired 4-
star general officer in the U.S. Navy and former Supreme Allied Commander of
NATO, now an Operating Executive at The Carlyle Group, about the role of trust
in international affairs, his foreign policy expectations for a Biden presidency, and
the prospects and limitations of “smart power” at a time of resurging great powers
competition. 
This is the first part of this interview. You can find the second part here.
Grégoire Roos: Starting with a somewhat very unoriginal question…
What can America’s allies, and Europe in particular, expect from the next US
administration under President Biden? Trust between the two shores of the
Atlantic seems to have suffered significantly lately… 

James Stavridis: The first change to expect is atmospheric but nonetheless

important: it is simply the tone of the conversation. I think you will
immediately begin to hear from the Biden foreign policy team and the President-
elect himself a sense that our allies matter, that we respect them, and that we
want to work with them. So first of all, you’ll hear a much more collegial tone.
Secondly, as there will need to be actions to go along with deeds, I believe you’ll
see the US send its top leadership towards NATO: you’ll see a new
US ambassador to NATO and overtime a series of very high-ranking military
officials. You’ll see a new Secretary of State committed to working more closely
with Europe. And I think you’ll see all these people coming and spending time
with our European colleagues, because there will be a keen appreciation in the
Biden Administration that our greatest pool of partners in the world is in Europe:
NATO, the EU, and nations that are long-time friends and partners of the US
although not members of either of those organisations, like Switzerland. 

That basket of European nations strongly shares our values. And you will
therefore see concrete physical outreach by the leadership of this Biden
Administration. And then lastly and perhaps more importantly, there will be
changes in policy that I think will be well received in Europe. For example, you’ll
see the US go back to the negotiation table with Iran. I think we’ll begin by
collaborating with our European partners to craft a strategy; we’ll want to
renegotiate and perhaps rejoin the deal. But it might be some hybrid of the two of
those. A second obviously policy decision that I believe will happen the very day
President Biden is inaugurated is that the US will rejoin the Paris Climate Accord,
which enjoys, appropriately, a high degree of popularity, if you will, in Europe. I
could go on and on, but the point is that you’ll see a difference in tone, you’ll see
physical presence of Americans coming to sit and talk in Europe with our allies,
partners and friends, and you’ll see policy changes. All three of those things will, I
think, unfold rapidly. 

Roos: If we pay honest attention to some of President Trump’s criticism of

Europe’s lack of commitment to NATO (and mostly their lagging behind in terms
of defence spending and respect the 2014 pledge to spend at least 2%
of one’s GDP on defence), which has provoked an uproar in many European
capitals, the truth compels us to recognise he was right: Europe clearly hasn’t
done enough. As trust only lasts if it is mutual, what would Europe need to deliver
to be seen as a credible partner for the US? 

Stavridis: It will be along the entire spectrum of cooperation. And let’s start with
that 2% requirement that all of us, the 30 member States of NATO, have agreed
on. Let’s be clear here: that predates the Trump Administration by quite a period
of time. And as SACEUR, I was very forceful with our European colleagues about
the need to meet that 2%-rule. That was under President Obama, and there can’t
be two more different presidents than Barack Obama and Donald Trump. So let’s
face it: the US will continue to make significant pressure to make that 2%-cap,
and I hope our European friends will continue to strive to do so and get there
sooner rather than later. I also think there will be a higher demand signal for
cooperation in some key technical areas. One will be cyber and cyber security.
Another one will be Special Forces, particularly using the relatively new NATO
Special Forces Command. A third one will be unmanned vehicles, continuing to
build on the success of the new NATO acquisition of the long-range drone
aircraft now operating out of Italy. I think those are examples of the areas
on which there will be a hunger on the part of the US for more technical
cooperation. And then, third and finally, the US will look for Europe and NATO to
stand with us as we face emerging challenges, for example from China, from
Iran, from North Korea, and most obviously from Russia. NATO and the EU have
been, I think, reasonably good partners, particularly given the frustrations of
dealing with the Trump Administration. But I believe a Biden Administration will
feel as though “We, the US, are reaching back out in positive ways, those are
some of the areas that we’ll look for return signals”… 

Roos: Talking of Russia, I remember your op-ed in Time Magazine, in the

summer of 2016, in which you called for a “new grand bargain with Russia”. Four
years later, is there enough trust left between Russia and the US to still consider
such a grand bargain?  

Stavridis: What we have learnt in four years is that, first of all, it is highly unlikely

that Vladimir Putin will leave power. Secondly we’ve learnt that Mr Putin will
continue to try to attack and disrupt the US as he did in 2016 in our elections.
And thirdly, I think we’ve learnt that the only thing Russia fundamentally responds
to is its own self-interest. There is no value set in Russia that we can appeal to.
So that’s the difference, in 2020, to 2016. And therefore, going forward with
Russia, I think the idea of a grand bargain, a big basket of changes that kind of
come together, is unrealistic. So today I would advocate for a policy that goes as
follows: we should confront the Russian Federation where we must, where
Vladimir Putin’s actions are so deleterious to the international
system. Examples would be his support for the war criminal Assad in Syria, his
invasion and occupation of Ukraine, his continuing military probes around the
edges of the Alliance [NATO], his use of cyber and social networks to attack
democracy in the US and in other ally countries… We must confront Russia on
those issues.  

Roos: But if we want a minimum level of trust to remain, cooperation, however

limited, is needed… 
Stavridis: Yes. But we should confront where we must and cooperate wherever
we can. So what are the zones of cooperation with the Russian Federation?
Hopefully we can cooperate on strategic arms limitation. The Strategic Arms
Limitation Talks (SALT) [a flagship treaty of the Cold War signed by Richard
Nixon and Leonid Brejnev in 1972, limiting anti-ballistic missiles] expires next
February, and I think it would put the world in a much more dangerous and
precarious situation if we can’t renegotiate a strategic arms limitation treaty. We
can definitely cooperate there. We can also, I think, cooperate on climate, on
counter-piracy operations, on counter-narcotics, on counter-terrorism. We may
even be able to cooperate with Russia to help solve future conflicts like the
war between Armenia and Azerbaijan for example. So rather than trying to
construct a grand bargain, today our strategy with Russia ought to be confront
where we must on those issues that deeply matter and are consubstantial with
our values, and cooperate where we can in hope that, overtime, Russia will
change its position, change its attitude, and want even greater levels of
cooperation – only then may be the time for a grand bargain, but not now.

 
Image

As NATO supreme commander, Stavridis, left, joined in a Helsinki defense

conference in October 2012. Photo: British Army Staff Sgt. Ian Houlding
Roos: Regarding relationships amongst allies, Turkey has been at the centre of
the attention lately, especially in Europe, where confrontations between the
Turkish and other NATO allies’ navies (the Greek and the French ones in
particular) in the Eastern Mediterranean have intensified. This comes a few
years after another NATO crisis, triggered by the decision of Turkey to buy the S-
400 anti-aircraft weapon system from Russia. To a certain extent, you have a
very personal relation to Turkey, as your paternal grandparents fled the
Ottoman Empire in the 1920s when others in their family were not as lucky and
got killed during what is now called by some historians the “Pontic
Genocide” [the systematic killing of the Christian Greek minority in Anatolia in
1914-1922]. As SACEUR, you worked very closely with high-ranking Turkish
officials. How does a leader manage to separate one’s own personal feelings
from one’s duty? And how can we keep trust between partners and allies in spite
of all the trauma of History? 

Stavridis: Indeed, my grandparents were refugees from the Ottoman Empire. In

1922 they were driven out of what was then called Smyrna -which is today Izmir,
and barely escaped with their lives. My grandmother stood on a burning quay
wall in the city of Smyrna and was rescued by a Greek fisherman who brought
her to Athens and then she and my grandfather took ship and came to
America through Ellis Island. So yes, you’re right, I have personal family
history that binds me with Turkey, and technically I’m of Turkish descent in the
sense that my grandparents were citizens of the Ottoman Empire; they spoke
Turkish, French, English and Greek obviously. And the way I approached this
was to go immediately to Turkey when I became SACEUR.

My very first official visit as SACEUR was to Ankara. And I met and worked very
closely with the Minister of Defence and the Minister of Foreign Affairs. I also
became very close, over those years, with Ahmet Davutoğlu, who went on to
become Prime Minister and with whom I’ve remained in contact and friendship to
this day. I worked also very closely with the former Chief of Defence, currently
Minister of National Defence, General Hulusi Akar. So my point is: we have
to respect the past, understand our history, but we can’t be imprisoned by it. And
that was the message I took to Ankara. And by the way, during my four years as
SACEUR, Turkey was an extremely productive and positive force in the Alliance,
sending troops, ships and aircrafts on every single mission, including Libya,
which back then was controversial. 

I’ll close here by sharing an anecdote: after four years of working closely with
Turkey, I went to Ankara to say farewell, meeting with President Erdoğan
and Prime Minister Davutoğlu. And as is traditional, they presented me with a gift
as I was leaving; and instead of what you would normally expect, a fountain pen
or a beautiful vase or local piece of art, they presented me with a book of vintage
postcards about the Greek community in Smyrna a hundred years earlier. It was
very moving! And the Minister said to me: “you have showed us that we must
remember the past but not be imprisoned by it.” And so, that’s a long way of
saying you can build trust, personal relationships do matter, you have to
understand History but be able to move beyond it. A good example at a macro
level is what is happening today in Colombia, or South Africa, or Rwanda, in all
these nations where there have been horrific and terrible levels of violence. But,
as difficult as it is, all these nations are working hard to try and move beyond
that, and they exact accountability but they also recognise that what matters is
the truth and the ability of a society to move forward, to remember the past but
not be imprisoned by it. |That is the essence of trust.