The Asia-Pacific Century Explained w/ Jeffrey Sachs (Transcript)

And he said, I asked him a question: “Does the future belong to Asia?”

So he said, “If I were giving this lecture 100 years ago in 1925, I would say that Asia was the past, that Europe was the present, and that America was the future. But now it’s 2025 and things have changed a little bit in the world. And now I can say that Europe is the past and that America is the present and that Asia is the future.” This is what a hundred years makes.

So I’m going to start off by asking you whether you agree with Kishore and whether you’d agree also with our subtitle, which is “Ready to Go: Asia-Pacific Century.” “Ready to Go” referring to an ancient and complex Asian game of Go, which is more complex than chess and which is all about strategic patience and long-term vision rather than aiming at decapitating the enemy’s king, the way chess works.

The End of a 500-Year Cycle

JEFFREY SACHS: Well, I agree in part, but not entirely. But what I do think is very important for all of us to understand—I think we all feel it also almost every day in some sense—is that we are at a watershed moment in history. I don’t think it’s exactly passing the baton, say from the United States to China, which is how it’s often discussed. What I do think is true is that we’re at the end of a 500-year cycle in history.

500 years ago was the beginning of Europe’s ascent to global power. And it came basically when one looks back because of two decisive voyages. At the end of the 15th century, Christopher Columbus thought he was going to India and he ended up in the Americas instead. Vasco da Gama was aiming to go to Asia. He circled the Cape of Good Hope, the southern tip of Africa, and with the help of Arab sailors, made it to India.

So within 10 years—1492 for Columbus and 1498 for Vasco da Gama’s voyage—suddenly Europe had sea routes to the whole world. And part of the world was not even known, of course, to the Europeans up to that point: the Americas. This, in my view, changed human history for the next five centuries.

It’s a long story, of course, exactly what happened. But basically, Europe’s control over the Americas was a decisive change of relative power in the world. Even that story of Europe’s control over the Americas needs a footnote that’s interesting because a few European conquerors conquered a continent that had about 100 million people in it in the year 1492, when Christopher Columbus arrived.

And so you might ask, how did Europe conquer the Americas, which had native populations all through the Americas? And the answer was not military conquest. Primarily they brought diseases which the New World populations didn’t know. So the New World was conquered by yellow fever, by typhus, by plague, by malaria, by other diseases brought by the Europeans.

But the point is that within a century, the native population had been reduced by 95%, and the Europeans had two giant continents for minerals, for gold, for silver, for agriculture, for colonization. And this was a change of human history. And I raise this point because to my mind, this is the start of a 500-year period.

Europe’s Colonial Expansion into Asia and Africa

By around 1750, the European global empires—the Spanish, the Portuguese, the Dutch, the British, which were the ocean empires—had enough power now to start conquering Asia and Africa. They actually couldn’t make it into Africa yet because malaria was a protective barrier for Africa. In fact, every time the Europeans went to Africa to try to conquer, they were defeated by the mosquito more than the local populations.

What enabled Africa to be colonized, which only happened at the end of the 19th century, was gin and tonic, because tonic is quinine, and quinine is an ancient Peruvian cure for fever. And it was studied by the British. The seeds were stolen and brought back to Kew Gardens. It was cultivated, it was introduced into gin and tonic. And then the British could sit on their verandas and rule over Africa by the end of the 19th century, protected from malaria.

In Asia, where the disease burden didn’t protect, by the end of the 18th century, Europe really started to beat up the Asians, because by then Europe was militarily dominant. It had better technology for many reasons of the story that I’m telling. A scientific revolution accompanied by this age of globalism. And Europe, basically, from around 1750 onward, started to colonize Asia.

And India, for example, by the end of the 18th century, was substantially in British hands and fell completely to British hands in 1857. And when it came to China, China was the most powerful empire in the world, the most populous country in the world, and it hadn’t really been bothered by the outside, and it hadn’t bothered the outside for many centuries, in fact.

So when the British arrived in what’s called the McCartney mission to China in 1795 and met Qianlong, the emperor of the Qing dynasty, the emperor said, “We don’t want to trade with you. You have nothing we want,” and sent the mission away.

The Opium Wars and China’s Century of Humiliation

And the British came back 44 years later, this time with gunboats in the Pearl River Delta. And that was the First Opium War, telling the Chinese, “You’re going to buy our opium whether you want it or not.” And in fact the Chinese did not want the opium. I’m thinking as Donald Trump talks about narco trafficking, he wouldn’t like actually narcotics traffickers saying you have to open up your borders to our trade. But that’s what the British did to the Chinese in 1839.

And what ensued was the First Opium War from 1839 to 1842. And then the next decade, the Second Opium War, joined by the French, this time burning down the Summer Palace. If you know the Summer Palace in Beijing, it’s one of the most beautiful places and historic places. It should not be burned down. But this was European empires showing their dominance of Asia.

And then China went into civil war. Perhaps the most devastating civil war in history, the Taiping Rebellion it’s called. But it was really essentially a civil war. But the point is that by 1900 Europe completely dominated the world. And that was the world that was expected to last forever.

Eleven years ago, Vuk held a very wonderful conference here on the hundredth anniversary of World War I. That’s notable because that was the beginning of the end of the European-led world. Because as of 1900, there was almost no way for Asian or for African or for Latin American countries to have a chance in this world. Britain basically controlled almost everything. And the parts that Britain didn’t control were controlled by France or controlled by a few other powers.

The United States was still not even barely present because it had spent the 19th century not on international empires, but on creating a continental-scale empire in North America because it had to defeat all of the native population still.

Europe’s Self-Destruction and the Rise of the Non-Western World

So 1900, Europe dominated. 1914, for reasons that are so tragic, absurd, stupid, without any justification that you could think of in a deep way, Europe went into a cataclysmic civil war. Started nearby here in Sarajevo. Of course, for absolutely no reason. I would say no deep reason, no justification, no fundamental conflicts, no struggle for survival. It was a booming period in history. But Europe thought it would be a glorious one-month war. And it turned out to be a four-year bloodbath followed by a great depression followed by another bloodbath.

I mentioned all of this basic history because Europe defeated itself. So that by 1950 this European-led world would undergo a fundamental change and that was the rise of the non-Western world, suddenly permissible, allowed because European empires had destroyed each other in the process.

So the People’s Republic of China finally escaped from a century of outside depredation. First the British, the British, the French, the British, the French, the Americans, then the Japanese, then the Japanese, then the Japanese and then finally peace and the People’s Republic of China, established in 1949. And India gained its independence in 1947.

And Indochina would have gained its independence around the same time in the early 1950s. But when the French decided to leave, the United States decided to come in and try to maintain imperial rule, but US imperial rule. And of course that led to 15 years of bloodshed in the Vietnam, Cambodia, Laos war.

So Vuk, from my point of view, what happened basically in history is Europe came to dominate the world. Europe destroyed its own dominance in a 50-year period from 19—well, in a 30-year period from 1914 to 1945, in two bloodbaths that were European bloody-mindedness.

The US took over the British Empire in 1945, almost like handing the baton in a relay race. The Soviet Union, mainly Russia, became—it was a dominant empire for Eurasia already, but it became one of the two world’s superpowers in 1945 and onward.

And what began in 1950, but it wasn’t really understood, was the opening for the rest of the world to find its place in a world that had been controlled by Europe. And the control is interesting. What did the European empires do? They did three things. They extracted anything they could of value, so minerals and agriculture products and everything else. Second, they prevented the local populations from getting a decent education or having even the basic infrastructure. And they prevented industrialization from taking place because that was for the European empires.

There was only one exception to that in Asia and that was Japan, for a lot of very interesting reasons. But other than that, basically Europe stopped the progress outside. And the end of the European empires allowed a natural process because there are smart people everywhere, there are entrepreneurs everywhere, there’s business energy everywhere, there’s experience everywhere. But it was bottled up by European dominance. That was ended. The US wasn’t exactly the same kind of empire. I’m sure we’ll talk about that.

VUK JEREMIĆ: We’re going to talk about that.

A Multipolar World, Not Just an Asian Century

JEFFREY SACHS: But just to say we arrived in the year 2000 in a new, really a new world. And what is this new world? The new world is that China did such a good job that it had become already, I would say 25 years ago, a superpower. And now it is a peer of the United States in technology and in its military might and in every other way. And that’s something different.

Russia, the same way. Russia was regarded by the United States first as an enemy during the Cold War and then as a has-been after 1991. And that was also delusional by the US and Europe that Russia, we don’t have to care. We can do whatever we want. We can expand NATO, we can try to topple regimes around Russia, we can surround Russia, we can defeat Russia, we can bring down Russia. So that was another delusion.

So now we have a multipolar world. That’s the fundamental point. And just to finish, because I want to say why I partly disagree with the title. I don’t think it’s really the Asian century. I think it’s the world century now. Because I think that, yes, Asia in the sense, China a major power, absolutely wonderful. In my view, India will be a major power in the 21st century and a very important and positive one.

But when we come back and do this event in 2050, Vuk, which we will—promise me—we’ll say, “Look what Africa did during that 25-year period.” And you’ll say, “And Jeff, you said so.”

VUK JEREMIĆ: Yeah, I mean, and I’m sure we’re going to get to that. But I want to pick on this particular historical parallel. You talked about the European empire as reaching out. And America, in a way, like an offspring, like an offshoot of the European empire, is dealing with certain parts of the world in a way that you just described.

How do you contrast it with China’s historical characteristics and presence? China has been around for arguably longer than any of the Western empires. And what is the contrast of a historical experience of China in comparison to the conquerors of the West and what it tells us about the future?

Because you read the press, you are watching the news, and there is a lot of talk that you should be scared of the rise of China, that China is somehow dangerous, that it is rising so hard that we should all be worried about the rise of China. Should we be worried about the rise of China and what history is telling us in this regard?

China’s Rise: A Cause for Celebration, Not Fear

JEFFREY SACHS: Yeah. First the answer is no, we should not be worried. We should be pleased because this is good news for everybody. The world is better off when there’s prosperity in as much of the world as possible. We are not in a zero-sum struggle in the world. This is the most important point about economics.

Unlike some primitive thinking that has lasted throughout actually centuries and became very popular in the 19th and 20th century, the idea that life is inevitably a struggle and it’s either them or us is not true.

VUK JEREMIĆ: But that’s very Western philosophy, right?

The Struggle for Survival: A Flawed Economic Theory

JEFFREY SACHS: Yes. And it also has—there’s a biological analogy, and it was even named after that. Darwin said we have a struggle of natural selection. And he got the idea how that worked from a British economist named Thomas Robert Malthus, who wrote in 1798 that there will always be more people than the earth can sustain, and so life will always be near subsistence level and there will always be some kind of struggle.

And when Darwin read that, he said, “Aha, that’s how natural selection works.” And he credits Malthus in the Origin of Species with that insight.

Then some very bad economists and social thinkers took scientific Darwinism and said, “That applies to society. Society is a struggle for survival.” And so by the end of the 19th century, there were two variants of that idea in Europe, very widespread. One was the national struggle for survival, and the other was the race struggle for survival.

And Hitler combined the two. Nazism was a theory of a national race struggle for survival. And Hitler’s theory specifically was we need living room and so we have to defeat the Slavs so that we have living room. Lebensraum. And that was a Darwinian, Malthusian, terrible economics, because we are not struggling for survival.

In economics, economic well-being comes from technology and skills. It’s not limited by our physical resources. If we’re clever on how we use them—of course we can be stupid how we use them—but if we’re clever, it’s not that either the Chinese get it or we get it. This is ridiculous. It takes someone as primitive as the President of the United States to think that way.

So excuse me, I can say that. You shouldn’t say that. But in any event, the point is we are not in a zero-sum struggle. So I’m not at all afraid of China. I rather like the food, the culture, the sightseeing, the people, the friends, the students, the colleagues, the ideas, the good governance, the BYD vehicles. I like it all. Why should I be worried about it? That’s not a threat. Any of it is not a threat. I can’t see what the threat could possibly be.

And then I see these lists: “Who’s number one, who’s number two?” And I said, your competitor journal, every article is to reassure Americans we’re number one. China’s about to collapse. No, it isn’t. Not even remotely about to collapse.

But the idea that there’s a ranking of countries, it doesn’t even make sense to think about it in those terms.

China’s Planning System: A Model of Effective Governance

Now, having said all of that, China’s doing extremely well because actually the Chinese governance system has turned out to be extremely effective. The planning system, which I learned as a student “don’t do.” So believe me, we don’t have any planning in the United States. It’s just what the President tweets every 15 minutes is our plan right now.

But China is in a meticulous process right now. It’s been going on for well over a year at a detailed level to complete the 15th plan. And the 15th plan, which I’ve read a number of drafts, has a very detailed discussion of particular sectors, industries, technologies that China will now work on over the next 10 years.

Because even though it’s a five-year plan, it’s a 10-year horizon that it will work on to develop. And that’s why China actually is the world leader in so many of the current technologies that we have, because China’s been working on it from a long-term point of view. So that’s been a very, very successful process. But a threat? No, just quite.

VUK JEREMIĆ: Can I interrupt you for a second? Because you and I did this simulation in September at Columbia University. I mean, obviously this can all be interrupted if somebody provokes a conflict. And we’re going to get to talk about the war in Ukraine in a minute.

But you and I made this simulation with the students simulating the Taiwan crisis situation, which, if I remember well, led us dangerously close to a conflict which could be the end of everything. So how worried are you about a particular potential conflict in East Asia interrupting the natural processes, the peaceful rise, the harmonious cooperation and so on and so forth?

The Danger of Conflict in the Nuclear Age

JEFFREY SACHS: I’m very worried all the time about a conflict. And the reason is that we’ve had several of them in human history. We’ve had several of them in—as I mentioned, we had two complete, massive, suicidal wars that had no, certainly no legitimate reason. And at least the first war had no even clear reason except a lot of ricochet effects of different countries worrying about their position vis-à-vis other countries.

Germany worried about Russia on one side and Britain on the other side, and the Austrians worried about what was happening in the Balkans and so forth, but no deep reason to destroy Europe. So we know that we can do things that are terribly stupid.

When I look at European leaders right now, I’m very worried. They make no sense to me. I don’t understand one word of what Mrs. von der Leyen is thinking of, what Kaja Kallas is thinking of, what Chancellor Merz is thinking of, what Macron is thinking. None of it makes sense to me. What are they talking about?

And if they’re so worried about Russia, why don’t they pick up the phone and have a talk? Because if you’re really worried about your neighbor, meet your neighbor. But no, they can’t meet their neighbor. That would be wrong. That would be appeasement. So there’s so many crazy ideas right now. How could you not be worried?

And in the United States, there is a drumbeat of China being an enemy, of course, by people who have never been to China, who will never go to China. My general advice to the US Congress is get a passport, go see the world and stop talking just for a moment to look at how things really are.

So I’m very worried. But I’m worried, Vuk, because in the nuclear age, it all just goes much faster and much more dangerously. We have hypersonic missiles everywhere. We have space warfare, cyber warfare, massive potential for unconstrained disaster. And I don’t think our leadership is up to it in this world. So that’s a general matter.

I see in recent weeks maybe a little bit of toning down by the US actually in this so-called national security strategy, which is an absurd document in many ways, but it’s not an anti-China document and it’s not an anti-Russia document. It’s an anti-all-small-countries document that we will go beat you up because we are the greatest country in the world. So says the United States.

But to large countries, it’s actually not posing the large countries as a big threat. This may be a glint of insight actually in the midst of a lot of confusion, but the insight level is very, very low.

And we were talking earlier, the newspaper that I’ve been reading for 60 years at least, the New York Times, ran two stories this week. One about the need to prepare for war and one about the need to confront the authoritarianism of China and Russia. Kind of a simple-minded foolishness of rhetoric, but that’s a leading newspaper. It’s not actually Trump’s policy. I’m no fan of Trump, as you can imagine, but I have to say I’ve been no fan of any American president for the last 40 years. So this is just a general—

The War in Ukraine: Origins and Context

VUK JEREMIĆ: Let’s then talk about the war that is still going on, which is the war in Ukraine. And of course, as you might imagine, it takes a lot of interest here. And there are direct repercussions from that war, including economic repercussions on this country through the sanctions regime and how it affects our politics and our relations with the world.

So this war is usually described in the Western media as an unprovoked aggression, the first time that there is a change, a forceful change of borders or attempted forcefully changing borders in Europe after the end of the Second World War.

In Serbia, for us, this sounds a little bit hollow because we, as you know, we were an object of a military campaign that was driven with an explicit aim of changing borders. So this is not the first time, for sure. I’m not talking about the legitimacy of this idea, but I’m talking about whether or not this is a precedent. It’s certainly not a precedent, at least not from the perspective of somebody who was suffering under bombs.

But you were here in—you mentioned in 2014, and you were sitting on the podium. I was moderating the panel. You just came from Kiev. It was 2014. It was late May 2014. It was just after the overthrow of the government in Kiev. You came from Kyiv, you met with some of the leaders of the new government there.

And then you were sitting on a panel with Nina Khrushcheva, if I remember. She is the granddaughter of Nikita Khrushchev. And the two of you had a very heated argument about what was going to happen in Ukraine. Turned out that unfortunately you were right and that things were going to deteriorate.

So what do you think about the origins of this conflict, 2014, or perhaps even before 2014? Because you were a witness from a close distance, you were following the implosion of the Soviet Union and what followed after the implosion of the Soviet Union in terms of trying to rebuild the economies of the former Soviet satellite states like Poland and the Russian Federation itself.

A Ringside Seat to History: The End of the Cold War

JEFFREY SACHS: I happened to see all of this very, very close up over the last 35 years. I had a ringside seat, as you could say, and even a participant’s role in part of this history.

I was here 36 years ago because then President of the Presidency Janez Drnovšek asked me to come because Yugoslavia was experiencing a hyperinflation, which was something that I knew something about. But it was in the waning moments of the Cold War. And actually when we first arrived here, it was just—actually when we came the second time in November, it was just at the time of the revolution, the Velvet Revolution in Sonia’s hometown of Prague. So it was that decisive moment.

And in that period, I was already Poland’s main economic adviser for the new post-communist government of 1989. And so I was watching very close up, and I was having close discussions with the Soviet economic team then, led by a wonderful person whom we have known very well since then, Grigory Yavlinsky, who was Gorbachev’s economic adviser.

And he was watching what I was advising in Poland, and he said, “Could the same thing be done in the Soviet Union, and could we make reforms in the same way?” And so I got to work for President Gorbachev in 1991, in particular, 1990, 1991.

And the main point, which everyone here should know and I’m sure does know, but we had the chance for peace for a century in Europe at that point, if we had taken it. Because what Gorbachev envisioned, as he called it, was a common European home from Rotterdam to Vladivostok, and he meant it, and he was acting on it.

And I was watching day by day how he was literally acting on it, helping all the transformations in Central and Eastern Europe, for example, saying, “We don’t have blocks anymore. We don’t have the Warsaw Pact military alliance. We stop all of that because we want a common European home.” It wasn’t rhetoric, it was real.

And I happened to sit in one of the most shocking moments of my life. Not shocking, but amazing moments of my life in December 1991, when Boris Yeltsin was right across the table from me, and I was leading a delegation of economists, and President Yeltsin of Russia said, “Gentlemen, I would like to tell you the Soviet Union is over.”

And I was in the Kremlin that moment. And he pointed to the door in the back of the room, and he said, “You see that door where I just came from? I was meeting the head of the Soviet military, and they have agreed to the dissolution of the Soviet Union, which will take place next week.” So I heard all of this to my face.

And then President Yeltsin launched into a long, very eloquent statement. “We want peace. We want normalcy. We want to end exclusion. We want to be partners with Europe and the United States.”

And then the floor was given to me, and I said to President Yeltsin, “I can assure you, President Yeltsin, at this historic moment, the United States will support you, because this is the great history we have been waiting for. Peace can now come. The Cold War is over, and peace can come.”

Boy, was I wrong.

VUK JEREMIĆ: So why were you wrong? Why did the peace not come?

The Pursuit of Dominance Over Peace

JEFFREY SACHS: Because the United States didn’t want peace. It wanted dominance, which is something different. Peace is, we respect you, you respect us. We live together. We invest where you are. You invest where we are. We come as tourists, you come as tourists. That’s peace.

But what the United States wanted was something else. We run the show. Now you get it. We’re the big boy on the block now.

And how did that manifest itself? Well, what we didn’t know then, but it was already in the works in February 1990 when the Berlin Wall came down, Helmut Kohl said, we reunify Germany. Well, there was one problem with that. That had to be an agreement of the four powers at the end of World War II. World War II was never ended by a treaty for a lot of interesting reasons, but basically Cold War mentality.

And so you needed a four plus two treaty. The two were the two parts of Germany, and the four were, in this case, the United States, Britain, France, and the Soviet Union. And there needed to be an agreement.

So what did the Germans tell President Gorbachev on February 9, 1990? They said, we will not take advantage of the Soviet Union through unification of Germany. NATO will not expand one inch eastward. And Hans Dietrich Genscher came out and made a press conference about this.

And James Baker III, our Secretary of State, said to President Gorbachev, actually, on February 7th, “Mr. President, I guarantee you NATO will not move one inch eastward.” That’s peace. It would have been even better to say, you disbanded the Warsaw Pact. We’re ending NATO. NATO was to defend against the Soviet invasion. There is not going to be a Soviet invasion. We disband NATO.

But what happened, as we all know what happened by 1992 with the end of the Soviet Union. In December 1991, the geniuses in the White House said, now we expand NATO. In other words, they cheated. And why did they cheat? Because they said, we are all powerful. We can get away with it. Who’s going to stop us? What’s the problem? What could go wrong?

And then our most senior diplomats, for example, George Kennan, said, don’t do this. This will restart the Cold War. And they said, you’re an old man. Go away.

And then our final ambassador in Moscow to the Soviet Union, a really fine gentleman named Jack Matlock, said, don’t do this. This will inflame the situation. And he debated Kissinger on television in 1994. And he said, why should we expand NATO? Because this will just make the Russians mad.

And so the interviewer asked Kissinger, should we expand NATO? And he said, yes. And he said, well, why? Is Russia a threat? No. Well, why would we expand then? Won’t that annoy the Russians? Yes. Well, why would you annoy the Russians if you’re not a threat, Mr. Kissinger?

And he said, “Well, if you can’t annoy them when they’re weak, what are you going to do when they’re strong?” So Kissinger’s philosophy was always annoy the other side. And that’s what they decided to do, start NATO enlargement.

And we had a very inconsequential president named Bill Clinton, who had been a governor of a small state, did not know what he was doing, and he said, sure, we expand NATO.

VUK JEREMIĆ: Yeah, well, he did some quite consequential things, especially when it comes to the Balkans. I mean, negative.

JEFFREY SACHS: Yeah, he did some negative things.

VUK JEREMIĆ: He did some consequential things from our perspective. But what I’m really at is you and I had this conversation about the immediate prelude to the 2022 February escalation, when it was looking like it was going to be a war. It was when the Russian Federation sent out the two proposals to the Europeans and to the United States regarded Ukraine’s neutrality.

And you had a conversation with the national security advisor at that time. So Joe Biden’s national security advisor and Jake Sullivan, and you spoke over the phone. It was a long conversation. And could you share with us the content of this conversation? It was just prior to the big commencement of the hostilities in February.

The Ukraine War: Origins and Missed Opportunities

JEFFREY SACHS: So first, the actual war started in February 2014. We should remember that the Ukraine war started with the overthrow of Yanukovych, which was a coup. And it was a coup that the United States actively promoted.

And interestingly, the day before the coup, which was February 22, 2014, on February 21, the French, German and Polish foreign ministers negotiated with the president of Ukraine an arrangement whereby the president of Ukraine would stay president in a unity government and there would be elections later in 2014.

Then that night, the government buildings were violently stormed, and the United States immediately recognized the next government. A coup. And then the Europeans went silent. They didn’t say, that’s a coup. We recognize the constitutional government. They just said, okay, we recognize the new government because they always follow what the United States said.

So the war broke out then because the ethnically Russian provinces in the East, Luhansk and Donetsk, immediately broke away. Said, this is a coup. We don’t support the government in Kiev in this regime. That’s when the war started.

In 2015, Russia tried to bring the fighting to a stop by the Minsk 2 agreement, which said, give autonomy to these two oblasts in eastern Ukraine. Very interesting story about this. Just a quick footnote. Where did that idea come from? It actually came from Mrs. Merkel because she knew about the autonomy of the German region in Northern Italy, South Tyrol.

So she would go visit the German politicians there in Bolzano. And she liked that model because here was an ethnically German region in Italy, thriving, everybody peaceful, thriving, based on autonomy of this enclave of ethnic Germans. So she said, okay, that’s a good model for Ukraine. So she really supported it.

I don’t believe her now when she said she didn’t mean it, because we spoke to the governor and the leaders in Bolzano and they explained, yes, of course she knew all about this and she liked the model.

Anyway, the point is there was a political settlement. What did the Europeans and Americans and Ukrainians do about Minsk 2, which was unanimously backed by the UN Security Council? They ignored it. They decided, we don’t want to give autonomy to Luhansk and Donetsk. We want to reconquer it.

And so Trump in his first term, built up a one million person army in Ukraine. He said, it wouldn’t happen under my watch. He built up the army. He was no peacenik. He built up Ukraine’s capacity to attack the Donbas.

So the point that you’re making is that Ukraine was amassing a million person army and the Russians made one final attempt in December 19, 2021, to find a peaceful way out. President Putin tabled two draft agreements, one with the Europeans, one with the United States. It’s called a draft Russia-US Security agreement.

Very reasonable document. I don’t think the Americans had to accept all of it. There were parts I wouldn’t have accepted, but the core of it was neutrality for Ukraine. Stop the eastward enlargement of NATO.

So I called the White House, which once in a while takes my call. Not anymore, but they used to. And so I called the White House and I spoke to Jake Sullivan for an hour. And I said, “Jake, take the agreement. Negotiate. Stop the NATO expansion.”

And he said, “Jeff, no, don’t worry, NATO’s not going to expand to Ukraine.” He says to me, said, “Yeah, is that right, Jake? Why don’t you say that publicly?” “No, we can’t say that publicly, Jeff. We have an open door policy.”

So I say, “Jake, you’re going to have a war over something that’s not even going to happen.” And he says, “Jeff, don’t worry, there’s not going to be a war.” Brilliant, right? So brilliant.

What do you get if you lead your country into a war like that? You become a professor at Harvard, which is where he is today. Sorry for all us Harvard.

VUK JEREMIĆ: No, no, Jake. Also, Jake famously wrote a piece in the Foreign Affairs one week before October 7, saying that the Middle East is…

JEFFREY SACHS: The quietest ever, ever.

VUK JEREMIĆ: And then it went to print. And then a few days later there was October 7th attack. So Jake was not a great forecaster of events.

The Grand Chessboard and American Strategy

JEFFREY SACHS: But my interpretation is that, and the best verification of this interpretation is to read the articles and books by Zbigniew Brzezinski, who was a very influential American advisor to Presidents in the 1970s, 80s and 90s.

And in 1997 he wrote a book called “The Grand Chessboard” about reshaping the world. And his proposition was a famous proposition, that he who controls Eurasia controls the world and he who controls Ukraine controls Eurasia. That was the model and it had its roots back in 1904, a geographer named Mackinder who came up with this theory of land power.

So Brzezinski’s idea was we will control Ukraine and Russia will be a second rate or third rate or fourth rate power. That was the core of the idea. And the book is very interesting because it’s a reasoned book, all wrong, but reasoned.

And what it says, there’s a whole chapter that explains what will Russia do as Europe and NATO push eastward. And it says, well, there’s one thing that you could consider that Russia and China would become allies as I speak in front of the two ambassadors.

And Brzezinski says, ridiculous, ridiculous. But he says, no, it can’t happen, will never happen. And he says America would never be so stupid as to allow that to happen anyway.

So he predicts that Russia can do nothing but just make way to this Eastern push of Europe and NATO. It’s all in the text. If you want to understand American thinking, to my mind, that’s the best place to go.

It’s a kind of arrogance that came from the end of the Soviet period and the American idea of primacy or unipolarity or hegemony, we will dominate. And the idea that Russia, what can they do?

Interestingly, in 2015, Obama was smarter. He actually said in an interview correctly, Russia has escalatory dominance. If things get out of hand, we go up, they go up, we go up, they go up. Eventually they’re going to resort to nuclear weapons if they need to. Why? Because for them, this war is existential. It’s not just a choice. But for us, it’s a game. For us it’s just to put a piece on the board. But for Russia, it’s existential.

So Obama sensed in 2015, maybe I won’t escalate, but the rest of our leadership is ridiculous.

The Future of Europe

VUK JEREMIĆ: So can I ask you one last question before I give the floor to the audience. It’s really of a great interest for us here. And this is to do with the future of Europe. This country is in the accession process to the European Union. And the European Union has officially an open door policy for the countries of the Western Balkans, for other countries as well.

What are your thoughts and projections of the current situation in Europe and of what future brings to Europe amidst all these uncertainties related to the transatlantic relationship, related to the unknown future of relations with Russia and of course related to the technological and other cooperation with China?

JEFFREY SACHS: My own idea of what I would like is a world of cooperating regions. So you would have different regions of the world, but they would not be closed and hostile to each other.

So you would have, say, North America, perhaps US, Canada, Mexico. You’d have Latin America or just the…

VUK JEREMIĆ: US and Mexico after Canada’s conquered.

JEFFREY SACHS: Yeah, they are 51st state, no problem. Or U.S., Canada, Mexico, Greenland.

VUK JEREMIĆ: Yeah, Greenland.

JEFFREY SACHS: Greenland’s coming, which the U.S. wants as well. So in any event, you’d have a region, you’d have Europe, you’d have Russia as 17 million square kilometers, by far the largest nation in the world and one that is going to be actually quite advantaged in the next 40 years. Climate change, because the northern route is going to open up and that’s going to be a lot of strategic advantage and economic advantages for Russia.

You’d have China, you’d have Southeast Asia, you’d have India, you’d have Western Asia, you’d have Africa. So to my mind, regional integration makes sense. Regions that build walls against the other regions or think that the most interesting thing in the world is who owns Ukraine, are going to end up destroying each other.

So I would like to see, of course, Serbia as part of an effective Europe. It’s the geography, it makes sense. But I would not like to see it as an effective Europe that says Russia, we never talk to again for the rest of the century, which is the way that European leaders talk right now.

I cannot recall worse political leadership in Europe than now. Certainly not in my lifetime. There’s not one single figure in the major countries of the European Union or Britain that has any intellectual stature or honesty or some combination of the two that I know. And this is amazing.

You had people like Helmut Schmidt, you had Helmut Kohl, you had Mitterrand. These were substantial people. They could think, they could talk, they could act, they could oppose the United States sometimes, they could be with the US at other times, but they had something real. You had Willy Brandt and Ostpolitik. These were really interesting, thoughtful people.

So, of course, this is how it should be. Now there’s Kaja Kallas. Are you kidding? Von der Leyen. Are you kidding? Merz? Oh, my God. Come on. It goes from bad to worse.

Questions from the Floor

VUK JEREMIĆ: I would mention another person, but I’m teaching in Paris, so I won’t be mentioning another person. So thank you very much, Jeff. Now we are going to allow the questions from the floor. And the first question is by a journalist. And another question is going to be also by a journalist. Please.

JEFFREY SACHS: Hello. Hello. It’s okay.

VUK JEREMIĆ: Yes, hello.

JEFFREY SACHS: Dear Minister Vuk Jeremić and dear Professor Jeffrey Sachs. And I am Shi Dongyu, the journalist from Tsinghua Review City. I have three short questions.

VUK JEREMIĆ: Can you ask one, please?

JEFFREY SACHS: The first one will be, the new US National Security strategy portrays Europe as facing migration and economic challenges and increasingly as a burden to defense. Does this signal a fundamental shift in how the US now views Europe as an ally or more as a liability or even strategic? And how might this reshape the future US-Europe relations?

VUK JEREMIĆ: Please, Jeff.

Trump’s National Security Strategy

JEFFREY SACHS: So Trump is not the United States and he’s also not the future of the US. So don’t—of course, the short run matters a lot because as I’ve been saying, accidents can have catastrophic effect. So I don’t want to brush off the current moment, but the national security strategy that just came out is not an intelligent document. It is not a considered document. It is not a statement of American consensus. It’s a very idiosyncratic Trump document.

And Trump will be in power, assuming normal path of things, until January 20, 2029. So we have a few years to go, but not that many years to go. And then there will be another president. And Trump is a very particular personality and not a very effective one, in my view. And I think he, as I said, maybe has a glimmer. There’s a glimmer of hope that maybe he respects Russian and Chinese power more actually than Biden, who was seemingly a little bit—well, I won’t even make the comparisons, but turned out to be absolutely incapable of any kind of cooperation.

But Trump also believes he’s very corrupt, his family’s very corrupt. Everything is outside of any kind of norm that would be acceptable. And what he’s doing, just to add in trade policy, of the tariffs here, the tariffs there, it’s all blatantly illegal and unconstitutional from the American political system point of view. But we await to see whether the U.S. Supreme Court will actually try to hold the Constitution in place or just give it up to this wannabe tyrant.

But to my mind, nothing that Trump is doing is putting in place anything long term in the United States. So I refuse to see this as a US Strategy, but it is a Trump administration statement and Trump is capable of all sorts of bizarre.

VUK JEREMIĆ: And what do you think if he’s around for the next three years? I know that. And then there could be a successor, his vice president. I can remember his speech in Munich. It rhymes very well with what is in the national security strategy. And if there is a young president of the United States as of 2029 for eight more years who kind of sticks with the strategy, with that particular strategy, then we’re no longer talking about that one-off document. Talking about a game changer.

JEFFREY SACHS: It’s possible that Trump followed by Vance changes America. But the reasons for some caution about that are Trump’s approval rating is about 37%. He’s not a popular figure. He’s a showman. He is a populist. He is very, very intelligent at beating up people that don’t have power. He’s a bully, but he’s not a popular person.

And just to say his policies will not improve the situation for Americans economically. So we will not see, oh, you may hate them, but the economy is booming. This is not going to happen. Trade policy is not going to re-industrialize America. It’s haphazard, it’s mixed up. It is not oriented towards any long term strategy. There’s no plan, there’s no consistency. So there’s no way that the American public is going to say, well, I don’t like him personally, but look what a great job he’s done.

VUK JEREMIĆ: But maybe J.D. Vance is going to come in the way to win. But Boris Molagorski has a question. I can also count you as a journalist.

JEFFREY SACHS: Yeah, it’s coming around. Yep.

Serbia and US Relations

VUK JEREMIĆ: You need a mic because everybody else needs to hear you. We can hear you, but everybody else also needs to hear you. Thank you very much, Professor Sachs.

JEFFREY SACHS: Thank you so much for speaking tonight. We talked about the national security strategy to quite an extent tonight. And you mentioned that it was anti-small countries coming from a small country. That’s very worrying. A lot of Serbs who live in the United States voted for Donald Trump. And even those who dislike him in Serbia were probably rooting for him to win, considering him a better alternative than the successive Democratic administrations which have been very hostile towards Serbia.

Do you think that it is possible for Serbia to redefine its relations with the United States through the Trump administration to any extent? And do you think that instead of that, Serbs should focus more on their relations with Eastern countries? And if that is the case, is it at all possible? And to what extent is this possible considering that we are surrounded by NATO states, some of which are very hostile to us?

JEFFREY SACHS: No. The United States is of no significance for Serbia. It isn’t. It’s not of any significance for Serbia’s security, economy, development, infrastructure, partnership, technology. Sorry. Of course, there may be some American companies that want to do business. That’s wonderful, but not strategically. Americans do not know where Serbia is. The president of the United States has no idea. He doesn’t spend any time thinking about it. And there’s no deal to be made. If you have a great place for a golf course, you could try, but it’s not even going to work. And they did try, I guess.

So, no. Now, I don’t have an easy answer for Serbia in general because you’re in a difficult neighborhood. And European leadership is so bad that I don’t really know what to do. Except, honestly, the only good leadership in Europe now is the Habsburg Empire. So Slovakia, Czech Republic and Hungary are the only three governments that are making sense in Europe right now. And I actually always liked the Habsburg Empire, I have to say, so I have a certain fondness for it. That’s a different issue. I know it doesn’t play to the home turf, but just to say, find partners locally at least to have reasonable discussion.

Do not let—please try as hard as possible—don’t cut off from Russia. Don’t cut off from China. Don’t cut off from India. Don’t listen to the foolishness of Europe. Don’t say, oh, to join Europe, we need sanctions against Russia. This is nonsense. Europe will have to grow up a little bit anyway. So this is my basic point, but I can tell you, all over the world, I’m meeting governments that think the United States is going to save them somehow. The United States can’t even save itself right now.

VUK JEREMIĆ: Yeah, but the United States can do a lot of damage to you, so it’s not—

JEFFREY SACHS: Yeah, of course.

VUK JEREMIĆ: So you’ve got to be very careful.

JEFFREY SACHS: I’m not saying to be obnoxious. I’m just saying don’t regard that as strategic.

Lessons from Past Policy Advice

VUK JEREMIĆ: We have a guest from Turkey who joined us from Turkey for this event.

JEFFREY SACHS: Thank you, Jeremić. Professor Sachs, I’m very proud to listen to you tonight and I shared with a friend, common friend, Dimitris Avromopoulos, and he wrote to me for you. Very accurate, reliable, visionary, and objective. So, therefore, I would like to ask you a question, looking back. Which of your policies, propositions did you change your mind about and why?

JEFFREY SACHS: Yeah. If I’m very objective about it, basically, I’ve given good advice, but not perfect advice by any means, and I’ve learned a lot of things. But the biggest mistake that I made by far was believing that the United States would help Russia, because what I recommended was based on that idea. And it was based on the idea that Russia would escape from its financial crisis through financial help from the United States and Europe.

And by the way, I also made that same mistake vis-à-vis federal Yugoslavia, because I advised Ante Marković in the end of 1989 and early 1990 about how to stabilize the Yugoslav economy. And the advice I gave was good advice, but it said the first thing that had to happen was that the Europeans would stop demanding debt repayment from federal Yugoslavia. And who turned that down? The Germans. Because the Germans, I believe, were more interested in breaking up federal Yugoslavia. They wanted to support Croatia. They were not interested in the Marković plan. They were not interested in saving Yugoslavia.

And so I thought, that’s the best chance. And it turned out to be not accepted. In the case of Russia and the Soviet Union, I thought that the biggest prize in the world was peace. And I had learned from good economics, trade, that the way you make peace is you help the counterpart to stabilize and to recover from a crisis. And that was the recommendation that I made.

And if I may just two minutes, explanation of something. I became an advisor to Poland in the middle of 1989, and I told them, you can get out of your crisis. They said, but we’re broke. We’re bankrupt. We owe so much debt to the west, we don’t have reserves. And I said, none of that’s a problem. Your debt’s going to be canceled. They said, what? Yeah, it’s going to be canceled. That’s from the old period. Now we need to look forward. What about reserves? They’ll give you the reserves.

I said, they thought I was a little crazy, but worth trying. It turned out what I recommended was accepted by the White House. And I was telling Vuk’s story earlier today. Within eight hours, I raised a billion dollars for Poland in early September 1989 by a suggestion that I wrote on one page of a piece of paper. So the US listened to me, and Poland stabilized its currency, and then within a year began economic growth and had a very, very good 30-year period.

VUK JEREMIĆ: So basically your recommendation to Russia was to do the same, but it was under the assumption that the United States was going to support in the same way that they decided to support Poland. And then this kind of support didn’t come.

The Rejected Plan for Russia

JEFFREY SACHS: Exactly. And there was a meeting at the White House on June 4, 1991, which I didn’t even know about, which until recently, until a few months ago. What was that meeting? I had made a plan for financial help to the Soviet Union. And that plan was made with a small group at Harvard, Graham Allison and myself, and Robert Blackwill and Stanley Fischer of MIT, and Grigor Yavlinsky, who was the advisor to Gorbachev. And I made the numbers on the aid to Russia.

And that plan was sent by Graham Allison, who was then head of the Kennedy School of Government, to George Bush to the White House. They rejected it completely. And I always felt that was one of the worst mistakes, certainly of economic policy that I know of in modern times, because it was a small amount of money. It was $15 billion for Russia, which was nothing for the United States and for Europe to bear. And they said, no, nothing.

So I received just about six months ago in the email a copy of the meeting minutes of June 4, 1991, where they rejected the plan. And these were released by a Freedom of Information Act that somebody had requested. And I read the minutes of all the statements and I said I could not believe how incompetent and stupid the American leadership was that you could read in the comments.

But the main point was no help could make any difference. And anyway, Gorbachev is a showman and we should give a public relations response. That’s the literal statement of a man named Richard Darman, who was my former colleague at Harvard, and at that time he was head of the Office of Management and Budget, the chief budget officer for the President. And he said, throw it away. Don’t help Gorbachev. Give some public relations statement, but don’t help.

To my mind, this is where I miscalculated because I thought, this is crazy. Of course they’ll help. Then when Gorbachev fell two months after that in the putsch and Yeltsin stood on the tank and became leader of the Soviet Union, then effectively, and then of Russia, and then asked me to help again, I was sure, well, there’s no excuse. They didn’t like the Soviet Union, but Russia, post-communist Russia, democratic Russia. What could the U.S. object to? And of course they said no once again.

So if I had known that, then I would have thought differently. I thought at the time, but there is no alternative. Now I see that I would have done things differently.

The Russian Economic Crisis vs. Chinese Reforms

VUK JEREMIĆ: But there was an alternative because I understood, because I recall roughly around the same time there was a great moment, transformational moment in China going on and Chinese reforms were being launched.

So if Gorbachev wanted to conduct a revolution, both political and economic revolution, that ended up failing, the Chinese government, at least this is my reading of the situation, did a different choice. They went for the economic reform and refused to accept those premises that you had in your mind. Oh, well, everybody’s going to help because this is a different world.

And the Chinese experiment, if you will, proved to be far more effective than the Russian one.

JEFFREY SACHS: Except it’s a very different situation. By 1991, Russia was trapped in foreign debt. China was not. Russia was financially destroyed, China was not.

So Russia was an urban industrial economy that was facing a kind of collapse. China was just an impoverished rural economy and not in a financial crisis. So the differences were very structural already.

And in China there was no urgent need to stabilize the economy, whereas in Russia and in Yugoslavia there was. So this was a very different circumstance. But still, if you had known, okay, there’s going to be no help, there are different things that could have been done.

Serbia’s Economic Policy and Relations with Russia

VUK JEREMIĆ: Any last but short question from a journalist again. Professor Sachs, thank you. It was a pleasure to listen to you this evening. I’m from Russian news agency Sputnik Serbia and I have a question concerning Serbian economic policy.

If you were advisor of Serbian government now, what would you advise? How can Serbia confront US attempts to force Serbia to expel Russia economically from the region? I believe you know about problems that our Serbian-Russian oil company has. Thank you.

JEFFREY SACHS: I mean, basically I hope that Trump perseveres against the US Deep State and against the European position right now and makes a settlement with President Putin. If he does persevere, this would make a big difference and he can.

But he faces all of the CIA and the Deep State opposition in the US and the opposition in Europe which says, “What are you doing? We’ve had a 30-year program to weaken Russia. Now you want to make Russia just a normal partner again?”

And of course my view is that 30 years was a completely wrong idea. So I’m hoping that he ends that wrong idea. But you can imagine the pressure in the Deep State. All of the US Congress hates Russia. All of the Deep State says, you know, “We just need to fight for five more years, kill another million Ukrainians, and then things will be okay.”

So Trump has to persevere. If he perseveres, and it could happen in the next week, if we’re lucky, or the next month, then this issue will go away because the US will be doing business with Russia, and then Serbia can say, “You’re doing business with Russia. So are we.” Thank you.

So I would just wait a moment to see how things pan out, because there’s a real chance on this. Trump is right, he’s surrounded by wrong, and he’s got lots of strange ideas. Maybe in other ideas we give up on Ukraine, but we just go bomb the hell out of Venezuela. This is quite possible. This is as strange as things are right now.

This is not a principled administration. This is a very tactical administration. But it could be that the US and Russia reach an agreement that includes economic trade, in which case Serbia could say, “We’re doing the same.”

If that doesn’t happen, I do really recommend talk with the Slovaks, talk with the Hungarians, talk with the Austrians, who are neutral, talk with—who am I forgetting? The Czechs. I can’t forget the Czechs. Talk with Mr. Babis because they want regular dealings with Russia. And so Serbia is not alone in this.

VUK JEREMIĆ: Thank you very much, Jeff. Thank you for this wonderful evening. Thank you, everybody, for coming and joining us. Everybody is invited to a cocktail to continue the conversation with our guests, but thank you very much for being with us.

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