How to Prepare for an Increasingly Fragmented World Trade Turmoil and Trust 1080p

Hi, it's Lesley Mertens at Red Polk Events and Media here in Rotterdam. And I have our keynote speaker for this morning, Ron Miller, who is a former Dutch ambassador and geopolitical expert. Welcome, Ron. It's so lovely to have you here. Thank you so much. It's an honor to be here and a pleasure too. What a vibrant and lively event this is. I've seen so many enthusiastic businessmen and women, and you've organized a fantastic gathering. Thank you so much. Thank you so much. We love being here in Rotterdam. It's a wonderful experience. And it's so exciting to have you here with us. Thank you. So tell me, what was your key message this morning to our audience? I think the key message was that the world is changing fundamentally. The world's political situation is changing fundamentally, long term. And therefore also the world economy, the globalizing economy that we saw over the last 35 years, is in that shape of being one economy, which goods can travel freely, fairly freely. That world ceased to exist. And we enter a new phase of decades of more fragmentation, of uncertainties. And I think all the companies here should be aware of that, because you better be prepared to be surprised. So how might that impact, you know, our Breakvolt community? You say people should be aware of that. What kinds of things should they be thinking about now, and even what actions should they be taking? Yeah, that depends from country to country and from company to company and from sector to sector. It's very difficult to make a general statement on it. But if you know that the world will be for many years to come full of conflicts and tensions instead of cooperation, if you know that the World Trade Organization rules have almost ceased to exist and it will not be repaired quickly, if you know that there are, I'm talking, 10,000s of trade barriers, not only those of Mr. Trump, but also from other countries, including us here in Europe, if you know that the world's economy is fragmented, you have to take action. You have to revisit your supply chains. There's a lot of talk about nearshoring. That's kind of a buzzword. But you need to look at your supply chains. Can I continue the way I'm doing? Sometimes you can. Sometimes you say there is no problem. I can still buy my blueberries in Peru and have them shipped to the Amsterdam supermarket without any problem. Some of the supply chains are fine, but others you might want to revisit. If you say, well, there are some potential conflicts or bottlenecks underway, we might look for other suppliers that are closer to my home market. That means that transport routes will change and the volume of trade in general will be less growing without all these conflicts and uncertainties and fragmentation. So less business and more risky business is, in summary, what all companies should be on the lookout for. Interesting. Do you think that there will be how can I say a realignment of countries and competition for certain countries that perhaps have a particular resource that different players want? That could be. That is hard for me in general to answer. But there will surely be a rearrangement that is already taking place of trade and investment patterns. And obviously if you have natural resources, you're in demand. And if you need to import them, you are in this uncertain fragmenting world and you may have to look more carefully to am I still safe with what I'm doing now. So it depends a little bit whether you're an exporter or an importer of those specific materials. In general terms, I think companies with these uncertainties because you asked me earlier, what can companies do? Well, looking at shorter supply chains, looking at diversification. And in this case, if you can buy the raw material that you need or that your customers need, you can find them elsewhere. Maybe more expensive, but closer by, less geopolitical risks underway in terms of transportation routes, in terms of trade barriers. Then diversification of your supply chain is the second advice which I should give. And my third advice is, and that is what this is already about, but every company should do that also probably in its own network, that is to invest. Companies, please invest in your supply chain partners. I mean, not financially, but also in terms of bonding. Build a good relationship with your supplier and you have less risk that you're affected by those fragmentation uncertainties. It doesn't take away all the political risks and all the economic risks, but you come a long way if you have a reliable bond. And in particular, business people in Western countries, we are very much speaking for the Netherlands, we're always looking at, you know, I have a good product, I have a reliable partner, I have a good contract, I keep my word. It's all true, all these standards are there. And that is enough for my supply chain partners to sign up for it. But sometimes you need to go out for a dinner, spend some time, do a bit of bonding with your partners. And to some extent, this is also taking place already here. But reach out also to all your supply chain partners and see whether you can further strengthen the bonding and you also mitigate risks. And finally, look for more financial benefits and for more securities. And maybe not for the break-bill companies so much, but in general, you know, the multilateral banks that we have, the World Bank, the European Investment Bank, they all provide comfort through guarantees or through their reputation, their AAA status. All of this comfort, companies can benefit from national export credit insurance schemes or national investment schemes, but in the case of break-bill, more export insurance. All of these, let's say, official instruments that maybe were not used to the full extent because in this globalizing world, not needed. But now in this uncertain world, these type of comfort from governments, from public sources, can also mitigate risk. That's good advice. I want to ask you one more question. Based on your experience, your diplomatic experience, how do you approach a difficult conversation, Bas? Yeah? How do you approach difficult conversation? Difficult conversation? When you're at odds, say, with someone you've been doing business with and you want to reconcile the situation. Oh, dear. How might you approach that? Yeah, that's it. I always ask my marriage counselor to help me out, and now I really... Then it's a general question of, you know, again, I mentioned the relationship with your partners, with your business partners. The more you invest on a personal basis, the less likely you run into this type of disagreements or, let's say, miscommunications that you might have. So you do advocate social interaction sort of outside a meeting room. Yeah, and just expand on that. I mean, it's not only just let's have a dinner, but also try to understand where your partner is coming from. I mean, at first glance, you say it's a man or a woman with two eyes and two arms and two legs. That's a product that I want to have. But people in other cultures, in other countries and other cultures, they look differently at the same world, and they... So there is a lot of cultural awareness that we may have ignored in this globalizing world when price and quality were the two factors. In this globalizing market, these were the predominant factors. Now I think all business people should look much more into understanding how does India exactly relate, if you want to do business. You say, well, let's go to India. But try to read about India, read about the history, read about the culture, try to understand the diversity, try to understand how India works or how Africa works or how China works, how the Netherlands works. They all work in a different way. And business people too often think I'm going to sell something, I'm going to buy something with all these cultural differences not needed. And in this world where relationships are so important, uncertainties and risks are so on the doormat, you need to understand better different cultures in order not to be surprised, in order to create a bond that I was talking about, to create common ground, but also to make sure that your partner understands what you're doing. So intercultural awareness is deeply important to coming decades to come. Well, thank you so much. You're most welcome. Really wonderful advice and insight. Practical enough, I hope, yeah. Thank you for having me.