Transcript: Commisars and Capitalists: Politics, Business and New World Order at Raisina Dialogue

When the payload is the most important part of the total, then we can be still relevant. So this is this new era.

We believe that this know-how in technology-driven shipbuilding is the way to think of the future shipbuilding. So that’s why we are very interested in joining forces through a common geopolitical platform, but joining forces in order to go for a kind of renaissance of shipbuilding in a way that is instrumental to this new geopolitical order. So this is our focus, and we believe this is the way ahead.

SWIFT and Financial Neutrality

Palki Sharma: I’ll come to shipbuilding in particular in a bit. Let me get Marianne Demarchi in the conversation. SWIFT describes itself as a neutral entity with a global character. So I would say this model is based on trust and consistency. Yet SWIFT has become a tool of Western foreign policy, as seen in the war in Ukraine with Russian banks being cut off. Would you say that undermines your claims of neutrality?

Marianne Demarchi: Well, thank you. Good morning to all, and thanks for your question. Well, indeed, SWIFT is a global cooperative. We are headquartered in Belgium, so under EU law, but we are present in more than 200 countries.

We are connecting the world, the economic and financial world, actually, through more than 1,500 financial institutions all across the world, including, of course, in India. And we are also completely currency agnostic, supporting 150 currencies and so forth. So this is our global nature.

We are really keen on being seen as digital infrastructure, as a public good. Indeed, we are based in Europe. There have been sanctions imposed on us and other companies, which we had to apply.

But we are really committed to maintain and to show to the world our global nature. We are evolving also our corporate governance to make it more inclusive. And we are, as I said, we are here, we are a non-profit company.

And as a non-profit company, we are not maximizing on revenue. What we are maximizing on is to ensure that we maximize the value of what we offer to the global ecosystem. We are here to try to resolve some complex challenges, so building the future of tomorrow or the future of finance of tomorrow.

Palki Sharma: You know, given what you just said, I mean, geopolitical tensions, the global growth of digitization, the embracement of digitization, which all these can have pros and cons, but can also increase fragmentation. But can you still claim to be neutral, was my question.

Marianne Demarchi: Yeah, we are. I mean, we are a neutral company, but we have to be headquartered somewhere. And, you know, so we are incorporated in Europe. You know, it’s the, all the banks in the world have decided, it was 100 banks at the time, now it’s 11,500, have decided to incorporate this organization in Europe.

And we have to follow European law. But as a company, we have a board which is very representative of many different regions. We are evolving that corporate governance to be even more neutral and representative of all parts of the world.

We are present in all the world. And what is really important is that we really need in these geopolitical tensions, new proliferation of payment systems here and there, be it instant payment systems, central bank digital currencies, other systems that want to be built, fine.

I mean, it’s good and it gives opportunity. But if they are not connected and interoperable, you risk financial fragmentation. And financial fragmentation is really impacting global growth.

There’s many research. The last one is from the economist that has measured that if financial fragmentation accelerates, it can hit the global growth, global GDP, up to 6% of GDP in 2030, 280 million jobs would not materialize because of this, and no single country would benefit from it, in particular those that rely on financial flows.

And why is that? Because we need to realize that the economy is not just policies and stuff. It’s just also pipelines, systems that are interconnected, that are the backbone of the economy, the arteries of economy. And if this is not functioning well, the economy suffers.

India’s Perspective on Economic Weaponization

Palki Sharma: I would have asked you, Dr. Jaishankar, if we’ll help Swift find a new headquarters. But on a more serious note, I want to ask you, historically, India has shied away from weaponizing trade and financial institutions, and you yourself have said that we are not in favor of national sanctions. But with the way the landscape is changing, and you’ve heard all the other players speak, do you think that trade barriers and tariffs and tech sanctions or tech restrictions have a place in our foreign policy or should have a place in our foreign policy?

S. Jaishankar: Before I come to that, I just want to say, you know, I can see there are clearly three capitalists sitting on this side, but I’m impressed to be seen as a commissar. It’s a term from my youth, and I was quite amused to see it being used in this age, but I take it as a compliment.

Now, your point, you know, tariffs, sanctions, you know, what’s happening, export controls. I think whether we would like it or not, they are a reality. Countries use them. In fact, if one looks at the last decade, I would say we have seen a much greater weaponization of pretty much any kind of capability or any kind of economic activity. You know, it could be financial flows. It could be energy supplies. It could be technology. This is a reality of the world.

So, since I take the world as it is, we have to negotiate our way through that and see how best we can do for our own country, because at the end of the day, for a government, for a commissar of the government, you fight for your business. You fight for your business because you’re fighting for your employment. You’re fighting for your comprehensive national power of which business makes a very important contribution, and I think today the lines dividing different domains have eroded, and I think overall, if you see in international relations, I think it’s a less restrained culture today than it was, say, a decade ago, and that’s something we all need to factor in.

Palki Sharma: Does it bother you, the blurring lines?

S. Jaishankar: I’m not, you know, I wouldn’t say it would bother me because I’ve seen its evolution. I mean, I just accept it as part of the playing conditions. So, it’s part of the assumptions. It’s part of the challenge, and, you know, I would deal with it, ideally even leverage it where I can.

The Future of the Internet

Palki Sharma: Joel Kaplan, the internet was supposed to be borderless, a utopian free space where ideas and thoughts flowed freely, but now there are more and more firewalls being imposed by various regimes. Is that the future we should brace for, for a fragmented space divided by geopolitical lines?

Joel Kaplan: Well, I don’t think that that’s a future that we should accept, and I think there are real opportunities, even as we speak, to make progress in ensuring that’s not the case, and let me give an example of an area that we’re quite focused on, as is the government of India.

# Commisars and Capitalists: Politics, Business and New World Order

Joel Kaplan on Open Source AI and Democratic Values

At the Paris AI Summit a month or so ago, Prime Minister Modi very vocally embraced the idea of open source AI, and that was very gratifying for a company like ours. META’s going to spend in 2025 something on the order of 60 to 65 billion dollars investing in AI to build foundational models, the most powerful advanced performative foundational models, which we will then make available for free to developers around the world to build on top of, to fine-tune, to modify, to customize, to apply their local language data sets.

A country that is really thriving in taking advantage of that opportunity is India. This is the way in which we can ensure that our shared values of the great democracies in the world are embedded in the technology of the future. We know that it’s not just American tech companies like META that are making these kind of investments, and that have the ability to develop these sort of open source technologies in AI.

We saw a month or so ago with the release of DeepSeek out of China that the Chinese are fierce competitors in this area, and they understand that this is one of the technological battlefields of the future. It’s really important that the decision be made as to whether there’s going to be an open source standard, a global open source standard that emerges.

If you think about past technological advances, you had an open source model in Linux and in Android, and I think we can all be grateful that Linux was a Finnish company, and Android was out of an American company, and that the American values of openness and shared Western values and democratic values of openness and transparency are embedded in that technology.

That’s a choice that we get to make, and the regulatory environment that countries like India and the United States decide on will determine whether the future is built on these shared democratic values or on a different alternative that’s emanating out of China. I’m really optimistic about what I see when I come to India, and it makes me think we can avoid the kind of future that you described.

Debate on Data Sharing Practices

Palki Sharma: I see how China has emerged as a villain, and TikTok is an example of that. The allegation is that TikTok shares data with the Chinese regime, as I’m sure a lot of other Chinese companies do, but here’s my issue. American companies do the exact same thing. In the last 10 years, Meta, Apple, and Google handed over data from 3.1 million accounts to the U.S. government. Meta’s data sharing is up by 675 percent in this time, so basically American companies get away with doing the very same thing by virtue of being American.

Joel Kaplan: I mean, respectfully, that’s just not remotely the same thing. Of course, companies like our companies reply to lawful orders to protect people from child sexual exploitation, from sex trafficking, from terrorism. I don’t think that’s inconsistent with democratic values. I don’t think that’s what we see in China, and honestly, I’d be surprised if that’s a shared view.

Pierroberto Folgiero on Reindustrialization and Shipbuilding

Palki Sharma: Every company is a product of the country it operates in, and that sometimes also creates an uneven playing field. You mentioned shipbuilding. China is said to give around $15 billion every year in subsidies, and I’m not even counting the steel subsidies, which is a significant and important component. Now, Western governments and companies are investigating this unfair practice. Would you say they were caught napping at the wheel? It’s been happening for many, many years.

Pierroberto Folgiero: First of all, let me tell you that I’m very happy to participate in this panel because I’m the only hardware guy, because now it’s time for software codes, writing. But you know, in order to host software, you need a hardware producer. So let me play the game of the heavy industry around the table.

Let me say that in this new geopolitical landscape, we need to go for a kind of reindustrialization. That’s what is expected to happen in Western countries. So shortening certain supply chain and go back to production. And we have to tell young people that production is a beautiful job.

In the old times, if you’re not good at school, you will go to the shipyard. Now we have to tell even our brilliant young people that production is back. And you need to go and cope with hardware, not only software.

Obviously, we need to modernize shipbuilding. In order to be attractive and in order to reindustrialize Western countries, we need to offer a job that is as robotized as possible, as automated as possible. That’s what we are doing in our shipyard. So yes, you need tariff in order to protect yourself. But at the same time, you need to reindustrialize yourself. And again, it comes from the culture of young people. It starts from there.

Then it’s a matter of rethinking industrial processes, injecting as much as new technologies as possible. Again, in terms of manufacturing, in terms of robotization. Basically, we have to implement in the shipbuilding something similar to what happened in the automotive sectors 20 years ago, 30 years ago.

Obviously, Mutatis Mutandis, because we work in open field, so we don’t work in chains, but there is a lot to do. I wouldn’t put only the accent on the regulatory framework. I would like also to put the accent on the reindustrialization, from the culture of young people, all the way to the processes, all the way to manufacturing scheme.

And I believe in this respect, India can play a very important role, simply because in this renaissance of shipbuilding, India can start from engineering capabilities, coupling engineering capabilities with manufacturing of components. So supply chain, fabrication and manufacturing of key systems that need to be installed in the ship. And third, availability of labor.

It’s very rare to have these three massive skills in the same geography. And on top of it, there is a big domestic demand. So these existing condition precedents are associated with a domestic demand.

This is a long journey, because every industry is not software. So you need to be slow by your rhythms. That’s the name of the game. But it’s a process that is starting. And we are more than happy being the biggest Western shipbuilder. We are more than happy to get along with this renaissance of shipbuilding and putting our technological expertise, because again, the ship of the future is not a hull made of steel. It’s a system of systems. That’s the concept of technological ships. So we are more than happy to take all these historical roots of the country and associate with our geopolitical block expertise and join forces.

Marianne Demarchi on SWIFT and Financial Systems

Palki Sharma: Russia and China are said to be exploring alternatives to SWIFT, and that is 24% of the global economy breaking away from your network. Do you think they can mount an effective challenge to SWIFT? Also, SWIFT was envisioned as part of a global financial infrastructure, and that was underpinned by a globalist U.S. and the near monopoly of the dollar, both of which cannot be assured anymore in the given circumstances. So do you think that they have a future, or do you think that the world will explore alternatives?

Marianne Demarchi: It’s a very important question. Well, actually, it’s what I was saying. You have geopolitical on one side, you have technological innovations on the other side, for instance, central bank digital currency, so a new way of moving value across the board. So you have different factors that drive fragmentation.

Fragmentation meaning, indeed, some financial systems that may at some point be completely disconnected. And that will happen. I mean, it’s already happening. And that’s a fact of life, I would say.

But what is our view is that global trade over the past has been a fundamental driver of growth. And how has it been? Because of and thanks to the integrated financial system we have built all together. So secure, trusted, really reliable, but also connected and interoperable, as I said, the arteries and backbones of the financial economy.

So our role in this will be due to the fact that fragmentation hurts badly the global economy. Our role will be to maintain the glue of the ecosystem.

Okay, we are interoperating, we are interconnecting the financial ecosystem, we want to continue to do it with potentially the systems that, okay, there may be the Russian system, there’s the Chinese system, which is not a competitor, by the way, it’s just relying on the international part of the UNB. But there will be other platforms like central bank digital currencies, how do you want a business to send payment to another business or another person in a country with a central bank digital currency, which is natively created, but we’re not connected.

So our role will be to make sure that we interconnect to the different systems, if the systems want it, and to ensure that the global trade, global flows continue to happen, and that we support global growth. So that will be important in the future.

S. Jaishankar on Weaponization of Global Systems

Palki Sharma: Dr. Jaishankar, how do you see the weaponization of things that were intended to be global goods like Swift or social media or telecom? Do you think that undermines trust in these institutions? And does it push India then to explore alternatives, perhaps homegrown ones?

S. Jaishankar: Well, there are different ways of dealing with weaponization. One is to stay on the right side of the weapon. So, you know, you don’t get hit. Others do.

But here’s the reality. The world today makes business decisions, factoring in national security in a manner in which it did not do so before, especially in the digital era. And two of them in fact, all of them here, in some way, are deeply involved in that.

In the digital era, I think it’s not just about cost. It is about comfort. It is about trust. So if you are today looking at this serious, at a strategic level, the business conversations, you keep hearing resilience, reliability, trust, transparency. So you want to do business more and more with those with whom you are secure.

And your earlier point that everybody has, every partner offers some risks, yes. But you would rather take the risks with those where your interests are not contradictory than the risks are not that great, rather than those with whom your interests could clash or do clash.

So I would argue today that countries in a way need a kind of a macro business strategy. And certainly, when you look at India, when we look at the world today, we see, we are involved right now in three big trade negotiations with the EU, with the UK, and now with the United States.

These are our growth markets. These are our technology partners. This is where people go for education. This is where people go for tourism. These are, in many ways, our connectivity partners. They are our strategic partners.

So when we make choices, it’s no longer just efficiency and cost. I think there are non-economic factors, which I think increasingly influence business decisions. Sometimes you can be put in a situation where we say, you know, let me devise something alternative, because that is a compulsion of the day.

But I would argue that’s an aberration, rather than some kind of strategic desire to replace a particular system. I mean, if we can make the current system work for us, it’s the smarter thing to do.

Foreign Policy and Corporate Power

Palki Sharma: Before I open it to the audience, I want to ask you one last question, and this is something that we’ve discussed internally as well. You see, foreign policy was designed to deal with countries, but today companies are sometimes more powerful than countries. For instance, you have Elon Musk and Starlink. With one flip of the switch, they can change the course of the war in Ukraine. Do you think foreign policy then needs to evolve, or do you leave it to regulators and financial institutions?

S. Jaishankar: One, historically, that’s not entirely the case. I would remind you of a company called East India Company, which became so big. But it’s a valid point. I mean, the market cap of many companies today would probably entitle some of them, I don’t know, maybe even to be part of the G20.

So this is, again, a reality we have to deal with. So sometimes, you know, you deal with them in tandem with the government. Sometimes, you deal with them directly. But you have to deal with them. I mean, this is the necessity in my business.

Q&A Session

Palki Sharma: We’ll open it to the audience. We can take a couple of questions, I suppose. Ma’am, here. Ma’am, this side. Ma’am, this side.

Bhavna: Greetings. I am Bhavna, here, at the left side. My question is to Dr. S. Jaishankar, sir. Sir, as economic warfare reshapes global power structure, how is India leveraging its diplomatic and economic strengths to not only mitigate the strategies and pressures, but also emerge as a key architect of a more balanced and a resilient global order? Thank you.

S. Jaishankar: You know, in a way, I had addressed some of that, which is, we have global interest today. If you look at our key trade partners, they’re spread all over the world. They are very diverse. So just like we have a way of working with different countries politically, we obviously do the same economically.

But again, I stress that all countries are not the same. And the digital era will bring out that differential more sharply. You know, at the end of the day, it does matter where our data goes. You know, who looks at our data, who processes it, who develops the AI based on our data. We can’t be agnostic in the digital era.

So it’s not the same as the manufacturing era. In the manufacturing era, beyond a point, it didn’t matter where the product came from. You can’t extrapolate that proposition into the digital era. So I would argue that the answer to your question would be like portfolio management, you diversify it as much as you can.

# Commisars and Capitalists: Politics, Business and New World Order

Panel Discussion (continued)

But at the end of the day, there will be comforts, there will be the reliability factor, there will be issues of trust. And that is why some of these FTAs we are engaged with today with the EU, with UK, USA matter so much.

Shreyas, Business Analyst at Deloitte: Considering the fact that the United States is pulling out of organizations like WHO, Paris Agreement, do you think they’re trying to establish a new world order? And if yes, what role can India play in being the leader of Global South?

S. Jaishankar: I think if your question is what the US is doing, you should ask the Americans, not me. If you ask me what we should be doing, we should be doing many things, including engaging the Americans and engaging the Global South. Our strategy is pretty obvious. Our effort is really to maximize our options, to increase our turnover, to improve our technology.

We are on a strong growth trajectory. And as a country which has decades of growth ahead, that’s what we should be planning for. Now, different countries will make decisions, that’s their prerogative. We have to factor it in while making our calculations. I can’t tell some other country that don’t do this because it’s not convenient to me. That’s their call, not mine.

Question from Raisina Young Fellow: I’m from China and I’m working for a European think tank. I have one question for Mr. Kaplan. Meta CEO like Mark Zuckerberg has reportedly shown interest in assessing the Chinese market for many years. And what makes news headlines lately is that in 2015, the company developed system that would accommodate Chinese content regulations, including features to restrict certain content and potentially share user data. Does this mean that for global tech companies like Meta, the state’s democratic value and the user privacy could be compromised for market assets?

Joel Kaplan: Thanks for the question. Mark has been pretty clear for a number of years, starting about a decade ago, that for a company whose mission was to connect the world, you couldn’t really accomplish that mission and leave out a country with over a billion people. And so, he was very interested in being able to offer our services in China.

We did spend a couple of years discussing with the Chinese government what it would take for us to be allowed to offer our services. And as Mark explained in a speech at Georgetown University in 2019, we ultimately were not able to come to agreement in doing the things that would be necessary for us to offer our services in China, the things that are demanded of companies that do offer their services in China, many of which are sort of well-known household names.

What Mark said in 2019 is that that actually freed us up to be less encumbered in defending and talking about freedom of expression. And so, at the end of the day, that’s a better position for us to be in, one where we can continue to defend and talk about the values that Facebook was founded on and its roots in free expression.

Final Question from Student: The panel has established the close relation between innovation, competitiveness, and national security. The cornerstone connecting all that is national data, which for innovation needs to be leveraged in the cloud, but for national security needs to be protected as good as possible. Hosting such data on a cloud on foreign hyperscalers appears to make nations at least a bit prone to geopolitical threats. So, I was wondering how does the Indian government plan to expand state security in the digital realm, or put it differently, how do you define digital sovereignty in the current geopolitical context?

S. Jaishankar: Well, look, I think people realize today the value of data, and yes, ideally there’s business or innovation at a global level, which looks, again, very neutral, but the reality is very different. There is national competition in a way. There are businesses which profit from access to data.

So, I think India must play to its strength. And what are its strengths? A huge amount of data, because there’s a large population, an enormously diverse society. So, even within those numbers, you get actually a great, very wide spectrum of data, and innovation culture. So, we have to make the most of it.

And at the end of the day, both as a commissar and potentially as a capitalist, I would say I’m in it for me. I would max it for myself. I’m not here to develop global business. I’m here to develop Indian business.

Palki Sharma (Moderator): I think that’s a good note to end on. The time’s up. Thank you very much. Thank you all for your thoughts, and thank you for being such a wonderful audience.

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