? Shifting Power Blocs: A Conversation with José Manuel Barroso
Sam Gyimah
Founder, SG& | Board Director, Goldman Sachs International| Former UK Government Minister
?? Welcome to the Geopolitics of Business Newsletter, where I'll be sharing frank discussions with the world’s leading investors, CEOs and politicians about navigating our ever-changing global landscape.?
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Insights from a Global Leader: José Manuel Barroso, former President of the European Commission
Geopolitical risk is increasingly important in today's world. In the past, discussions around risk in business focused more on market, operational and reputational risk, but geopolitical risk has now taken on a crucial dimension.?
This is according to José Manuel Barroso, current Chair of Gavi, the Global Vaccine Alliance, and formerly President of the European Commission and Prime Minister of Portugal.?
José and I have been discussing political and business trends for years. He has been in many of the rooms where the decisions that have shaped our world have been made, negotiating with Xi Jinping, Vladimir Putin, US Presidents, and European leaders.That's why I invited him for a wide-ranging conversation to help put trends we’re seeing today into context for business.
We delved into:
?I hope you enjoy the conversation.?
?? Here are four insights from José Manuel Barroso:
1?? Power Blocs are shifting and business needs to respond:
We delved into Barroso's tenure as President of the European Commission to bring to life how the personalities and decisions of leaders shape policy.? Barroso oversaw events including the financial and sovereign debt crisis, invasion of Crimea by Vladimir Putin and establishment of the G20 Summit, all of which are relevant to the issues we face today.
The most significant shift since his tenure, according to Barroso, is the strategic rivalry between the US and China which is forcing a realignment of national strategic interests. Global business must reorient to these new political realities, and can also play a role in constructive dialogue. Efforts made by the Biden Administration to ease tensions have include multiple diplomatic visits to China by leading members of the Administration such as Janet Yellen, Anthony Blinken, Gina Raimondo, and business leaders including Elon Musk, Jamie Dimon and Bill Gates.??
2?? Vaccine Nationalism and Cultivating Cooperation:
As the Chair of @Gavi, the Vaccine Alliance, José reflected on the successes and failings of the global response to the COVID-19 Pandemic. We explored the concept of vaccine nationalism, its impact on equitable vaccine distribution and why a cooperative approach is critical for the inevitable “next time”.
Barroso also believes that the pandemic triggered a shift in how the West valued its supply chains, citing the fact that “the European Union is the number one producer and exporter of vaccines”, which he says was not the case prior to the crisis. José presents this as evidence that Europe is moving towards shorter, more localised supply chains in preparation for the stresses of another worldwide emergency.
3??? The Limits of Global Fragmentation:
José discussed the trend towards regionalisation in a post-pandemic world. He analysed the thinking of leaders in Russia, China, Europe and the US, and explained the factors that motivate nations to remain interconnected.?
He acknowledges that whilst political forums like the G20 are relevant and important, a number of the rising powers will seek other ways and fora to exert their influence. And the BRICS summit is a good example of this.? India, Brazil and Saudia Arabia for example are realigning with new allies on different issues, which raises the question whether it is possible for business to have one global strategy or whether strategy now has to be on a region-by-region basis.? Whilst José does not expect complete fragmentation, and therefore the need to decouple all supply chains, business has to think of new ways of engaging with this reality.
4?? The Future of Business:
José's optimistic outlook on the future of business left me inspired. We discussed the ongoing technological and scientific revolution, including advancements in artificial intelligence, biotechnology, gene editing, and quantum computing, saying “we are in the middle of a technological and scientific revolution… we are entering a completely different world.”?
Such changes bring both risk and opportunity. Attempting to understand how to seize those opportunities, while navigating the risks, is what I find so fascinating about the geopolitics of business.
You can listen to our chat on The Geopolitics of Business Podcast, or scroll down if you’d prefer to read the full conversation.
I'd love to hear your thoughts about these topics. Feel free to share your key takeaways or any questions you may have in the comments below. Let's keep the conversation going! ?????
To get in touch with comments or requests for future newsletters, email [email protected]. Thank you for your support and wishing a Happy Thanksgiving to all those celebrating this week.?
Sam
Q&A with José Manuel Barroso?
Sam Gyimah: José Manuel, you have a long storied career as a politician. Briefly tell me why you got into this line of work.
José Manuel Barroso: First of all, my country, Portugal, was not a democracy until 1974 when we had the revolution and afterwards the transition to democracy, pluralist democracy. And so I was already, before the revolution, I was 16 years old, engaged in, as you call it, the revolutionary movement. Immediately after the revolution I became leader of the student union at the law school in Lisbon, which was an extremely politicised school. So that's the reason why I started in the far left, let's put it like that, because we had an authoritarian regime from the far right.? And afterwards, of course, with age, I became more moderate. I consider myself someone from the centre, centre-right, if you wish, in, let's say, in the normal European landscape terms. I think in the U.S. probably I will not be considered to the right, but in Europe, I'm a centre-right person. And afterwards, of course, I have a passion for Europe. After having twelve years in my government, in my country, including as Foreign Minister and Prime Minister, my colleagues at the European Council, the European Summit, they asked me to become president of the European Commission. I had to go through a vote, a secret vote in the European Parliament, and I was ten years president of the European Commission, so two mandates.
Sam Gyimah: That's two mandates, and I think only two Presidents have had two mandates.
José Manuel Barroso: Yes, only Jacques Delors and myself. So it means ten years leading the European Commission in a very, very challenging period, as you remember. Financial crisis, sovereign debt crisis, but also the invasion of Crimea by Putin happened at the end of my mandate and also the launch of the G20 at heads of state and heads of government level. So yes, I have a very diversified experience.
Sam Gyimah: Can you take me back to one crisis that you dealt with that was particularly difficult in a deal that you were struck in the European Union?
José Manuel Barroso: I mean, the most important during my period in terms of at least the impact it had in Europe was by far the financial and sovereign debt crisis.?
So all the speculation that we had about the end of the euro, Greece leaving the euro, all this I was at the centre of it, negotiating of course with the European countries, the euro area countries, but also with the IMF, with the Central Bank, and promoting a response to that. And I remember very well at that time, it's a story I like to share. In 2012, I invited the chief economists of the most important banks operating in Europe, and I asked them to a brainstorm dinner. And I asked them, how many of you believe that Greece will remain in the euro? At that time, the consensus, the so-called market consensus was that there will be a Grexit. In fact, Grexit is a word that came before Brexit. It was possible Greece leaving the euro or even the European Union. And all of those chief economists, except one, all of them said, Mr. President, by the end of the year, it's impossible that Greece will be in the euro. It's impossible in terms of debt stability analysis and so on. And now Greece is still in the euro. And in fact, the euro is now bigger than before. We had other countries joining.? So it shows the resilience of the European Union and Europe that was, I think, very much underestimated by many analysts in Europe and outside Europe.?
So this was a crisis that took many, many hours. I mean, it was, you remember those summits, the European Union summits until 2, 3, 4 a.m with Nicolas Sarkozy pushing for something, because the journalists were outside. So Sarkozy, president of France, Angela Merkel, always much more, let's say, measured. But negotiations between the so-called frugal countries, the more austere, and the more the countries of the so-called periphery that wanted to have some support, it was extremely challenging as a negotiation. But at the end of the day, we've got it.? We could avoid the default of all our countries and so today, I think the euro is in a much better footing than it was before, even if I believe some reforms are still needed.
Sam Gyimah: So fast forward, it's now nearly a decade since you were president of the EU. And we are clearly moving from globalisation to regionalisation.? And you, in our various conversations over the years, have talked about a number of different factors, like the pandemic and the war in Ukraine. Can you characterise how the world has changed since your time in office?
José Manuel Barroso: Some of the trends were already there. The most important issue is the competition between the United States and China.? This was already present, but now it's much more clear. And all the other developments have accelerated this trend. Namely, the Ukraine invasion by Russia, of course, has polarised the world. And now we are seeing politically, increasingly, we are seeing Europe and the United States on one side, and some allies from Japan to Australia and others, and China and Russia on the other side. And the Global South that is being, in a way, there's some competition to win the hearts of minds of Global South. And some of those countries, including some medium powers that before were much more aligned, let's say the case of Saudi Arabia, for instance, now are looking for several ways.
Sam Gyimah: So... Would you call those the swing states? Countries that feel empowered to play both sides of the power divide.
José Manuel Barroso:
Exactly. That's a very important and interesting debate. It's not only the development. It's not only the BRIC countries. It's also Saudi Arabia, even a country like Turkey, who is a member of NATO, but also tries to play some role in the region beyond NATO, and sometimes apparently in contradiction with our NATO goals. So it's a very, very complex system, and I believe probably the most important part has to do with the competition between the United States and China. So the so-called decoupling, or at least de-risking that now we are speaking of, and that we saw coming, in fact. And that explains, during the pandemic, and as you mentioned, Sam, I'm chairman of Gavi, the Global Alliance for Vaccines. So I follow this directly, and I have a direct experience of seeing vaccine nationalism, and how the supply chains were put in stress. And so what's happening??
In the beginning of the pandemic, one commissioner, the French commissioner Breton said there is not a single paracetamol made in Europe. So what is happening in Europe is Europe is bringing closer its supply chain. By the way, now Europe, the European Union is the number one producer and exporter of vaccines. It was not before this crisis. Precisely because many of the capacities that were put outside, namely in Asia, now are coming back to Europe. So yes, I think regionalisation is the new name of globalisation.
Sam Gyimah: But then the question is, amidst all this regionalisation, I mean, you are a believer in big institutions and that you achieve meaningful change through big institutions and you can solve complex problems that way. As you said earlier on, when you were leading the EU, you championed the G20 as a global forum. You've mentioned in the past this meeting you had with George W. Bush in 2008 about elevating the G20. So can you just take us back to that discussion with Bush along with Nicolas Sarkozy, the President of France and tell us how you would have seen the G20 actually dealing with some of these big challenges?
José Manuel Barroso: Yes, that's very interesting. In fact, at the time, as you remember, Sam, we had the G8, including Russia. It was before the annexation of Crimea by Russia. But when we had the financial and sovereign debt crisis, started by the Lehman Brothers episode and others, but also that we had in Europe and all over. Our decision was to organise a strong response globally, to avoid also returning to full-scale protectionism, as we had in the 1930s. And so, together, Sarkozy was then the resident of France. And we went to see George W. Bush, that I knew already before, when I was prime minister. And what was your pitch? We asked him, it was at Camp David, we asked him to organise a meeting? beyond the G8. We said, G8 is not sufficient. We need China. We need India. We need Brazil. We need Saudi Arabia. I mean, we need to send a message. And in fact, the G20 already existed more or less at the level of finance ministers. It never met at the level of heads of state and government. And so it was the first, organised with George W. Bush in Washington. The second was in London with Gordon Brown, the third was already with Obama in Pittsburgh, and afterwards it became now, I think you can say it's the most important global political forum today for decision. At that time it was very useful. Today I'm afraid there is not the same kind of…
Sam Gyimah: Can you just tell me how your pitch was received by George W. Bush???
José Manuel Barroso: In a very, very nice way because I remember well that he was very proud because he was giving us chicken wings prepared by his wife, Laura. By the way, he was so kind. But in fact, if there is something I don't like, it's chicken wings. Anyhow…He was extremely kind, but he was a bit sceptical because at that time the financial crisis he was still very much focused on the US and Wall Street and so on. He was there with Condoleezza Rice, for instance, and he feared that organising a G20 on the financial crisis could put some kind of focus on the U.S. and draw criticism of the U.S. We explained that it was not at all our initiative. Our idea was, in fact, to organise something more structured as a response, and then eventually he accepted. And afterwards, by the way, it was very important that he launched that process, because without the United States, of course, we would not be doing that.??
And today I think it's the main feature, where people discuss not only economy, but in fact politics. And we had very important G20 summits, like the one in St. Petersburg, for instance, when we discussed Syria, where geopolitical issues come to the first line. And today what we see, in fact, to summarise, and we have discussed this several times, Sam, as you remember,? Today, what we have is the geopolitical risk is becoming probably the most important. So before, in banking and in financial institutions, people were discussing market risk, reputational risk, but not so much geopolitical risk. And today, this in fact, a very important dimension.
Sam Gyimah: I mean, as we know, it's a boardroom issue now, and many of the people who are leading businesses, making big decisions around investment, are thinking of new ways to evaluate this geopolitical risk. But in terms of addressing it, if the G20? was what you saw as a key forum in 2008, and now we have Xi Jinping skipping the G20 in India, but he was at the BRIC summit. How do you look at multilateralism in the context of fragmentation?
José Manuel Barroso: There is a real risk of fragmentation, of multilateralism. Of course, I have no illusions. I lost my naivety. I know that countries always put their own national interests first, but at the same time, I'm a strong believer in the need for international multilateral cooperation.?
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By its very nature, some issues require that. So we mentioned vaccines and global public health. Of course, the virus does not need a visa to travel. We need to have a combined approach. Fighting climate change requires, of course, because pollution, by definition, and the threats to the climate, they are, by definition, transnational.? it's important to have some level of cooperation in the multilateral system in spite of or precisely because of the divergences we have in ideological or political terms. Today I think the quality is going down and there are real threats and divide by the fact that Xi Jinping does not come to the G20 in India, it's quite interesting, because it's the first time that the president of China does not come. He sends there his premier, Li Jiang, whom by the way I’ve met. But it's a signal, because the Chinese on those matters are always very, very, let's say, intentional.
Sam Gyimah: And is it the agenda, or is it India? What do you think is driving that?
José Manuel Barroso: I think maybe it's India, I think.? Because of the situation there of India being part of a kind of a coalition to some extent to contain China in that region, maybe that's the reason. Because to be frank, the Chinese, they have been making the case for multilateralism. And it's a very complicated situation because, of course, they are opposing the multilateral order that has been created basically by the United States after the Second World War and the West. So for some reason, the United Nations headquarters are in New York or the IMF or World Bank headquarters are in Washington. They are not in Beijing or in Moscow or not even in Europe. And there is a global order that is now being questioned. The BRICS is part of it, at least that's the way some see it, is a way of challenging the so-called Western powers, the G7, but also questioning the world order. But in terms of the United Nations, China has been keeping a, let's call it, conservative position of defending multilateralism.? because they also use this as against the so-called hegemony of the US. So for me, the fact that Xi Jinping does not go to India, it's very, very important.
Sam Gyimah: And of course, I mean, you have been working with China in an official capacity for decades now, you were the one who helped negotiate the return of Macau back to China from Portugal all the way back in 1999. So are you surprised by how China is playing its hand in these multilateral institutions?
José Manuel Barroso: I've been working with China for many, many years, since the 80s, in fact. And by the way, Xi Jinping, I met him several times, even before he was president, when he was vice president. And in fact, Xi Jinping was the first ever president of the People's Republic of China to officially visit European institutions in Brussels.?
Sam Gyimah: And has he turned out to be what you expected then??
José Manuel Barroso: We immediately understood, myself and my colleagues from the European Commission and the European Union, that he was a different kind of leader, much more assertive than the previous presidents, and for some signals that were quite interesting. For instance, the role played by his wife when he came. Also, the fact that he was, usually the Chinese in those meetings are very formal, everything is very choreographed, very scripted. But Xi Jinping, very often he went out of the papers and he was having, for instance, in the first time I went to see him in Beijing in the summit. It was in 2013. There was a format that was agreed before, but then he said, no, no, let's have a lunch, only the three of us. It was himself, myself, and my colleague from the European Council. So that was completely unusual by Chinese standards, because you keep the protocol. And by the way, that was the first time he spoke to us about what was going to become known as the One Belt, One Road initiative. So President Xi, we understood immediately that was a different kind of leader.? But for me, the evolution of China is not a surprise because I've been following that country for many years. And so the balance between China and the U.S. is going to be one of the defining elements of the future. It already is now.
Sam Gyimah: I want to take you back to a comment you made earlier around fragmentation, security of supply chains, nationalist policies. In the context of business, should businesses be looking at regional rather than global strategies, especially in a context where some sectors have become so politically contentious?
José Manuel Barroso: What is happening in practice is that some form of regionalisation is already happening, and the so-called on-shoring or friendly-shoring is already happening. And so we should understand it. And of course, for businesses, they have to navigate that situation that is more complex. By the way, I believe that's part of the inflation we have now. Some people say energy. Okay, there are problems with energy. But the inflation, from my point of view, is structural.? And I've been saying that, as you know, Sam, well before the latest developments. When some people were saying inflation is temporary, I said everything in life is temporary. The question is for how long? And the point is that if we have some form of declaration, by definition, it increases the costs because it's less efficient and so on. So having said that, I think it depends also on the sectors. It's more complex. It depends on each business seeing the possibilities of its own development.?
I think there is a big effort now to avoid a full decoupling. Just recently, I was now, as I told you, in Beijing, and the same day I was there, Gina Raimondo, the U.S. Commerce Secretary, was there. In fact, we received one after the other in the same room by the premier. But just recently, besides Gina Raimondo from the U.S., we had Janet Yellen, we had John Kerry, we had Anthony Blinken.? And also from the business sector, from Elon Musk to Bill Gates to Tim Cook to Jamie Dimon, I mean, and many, many others that are less known. So there is an effort on both sides to avoid full, let's say, decoupling, including by the Europeans. Europeans are very worried with the prospect of the decoupling, because in fact Europe depends much more on trade than the US, I mean the external trade, I mean international trade.
Sam Gyimah: How much decoupling are we going to see?
José Manuel Barroso: Some decoupling is unavoidable because it's linked to technology. We are in the middle of a scientific and technological revolution. And the problem is that some of these technologies are dual use technologies. They have an impact from a national security point of view. So decoupling is already happening. Now, at the same time, both sides, I mean both, in fact there are more than two sides, but on one side the United States and Europe, on the other side China want to avoid a full decoupling and I believe it would be not good from a global point of view for the economy. So I'm one of those that of course politically you know where I am. I’m pro-European, I'm an Atlanticist, and all my life I've shown that very strongly. But now, if you have divisions with China, we have to be clear where we are, but at the same time we have to engage, we have to keep some lines open, namely in terms of the flow of trade. It will not be good for us in Europe and in the Western world if we have fragmentation. China is more than 20% of the global economy. It's not the same as taking sanctions against Russia. It's a completely different championship or league, if you want.
Sam Gyimah: I just wondered when you mentioned the concerted US effort vis-a-vis China, whether we're going to see something similar to what we saw under Nixon and Kissinger, where diplomatic effort bought, say, fifty years of some kind of economic detente.? So there is a difference between what's happening in the foreign policy side of this and what is happening in the US domestic policy argument, which is very much about decoupling and China being on the other side of the spectrum to the US.
José Manuel Barroso: There is a debate going on. By the way, Kissinger, I met him recently. In fact, it was his 100th anniversary. And by the way, he was also recently in China, where he was received almost as a hero, because he's one of those who believes that we should keep the dialogue with China, even if he's of course critical, namely because of the position regarding Ukraine and the invasion of Ukraine by Russia. Yes, there is a debate. I would say that in the corporate world, more people are in favor of keeping the doors open than in the political world.
Sam Gyimah: US and China are the two of the world's largest economies and nearly everyone is clambering to do business in both countries.
José Manuel Barroso: Exactly. So that there's very far-reaching consequences if there will be a decoupling.
Sam Gyimah: I mean pharmaceuticals is one sector greatly affected by shifting powers across the world. You are the head of Gavi, the Vaccine Alliance, and the largest purchaser of vaccines in the world. You took the job, I think, at the end of 2020, the year the pandemic began. How did the change in power blocks affect the organisation's ability to manage vaccine distribution?
José Manuel Barroso: We saw firsthand, of course, vaccine nationalism, but it was not necessarily related to the blocks, sometimes it was in the same block. So in terms of the emergency, all countries started to put their interests first. One example was India. India is one of the biggest suppliers. And when India was itself affected by the pandemic, they put an end to the export of vaccines, which by the way, is legal from WHO point of view when there is a national emergency, but it was very much affecting us. So we saw this kind of vaccine nationalism. By the way, Europeans, quite interestingly, they decided, it is not in the treaties because the European Union has almost no competence in public health matters, but the twenty-seven governments of Europe decided to ask the Commission to buy on their behalf the vaccines, which is very intelligent, because can you imagine now the richest countries of Europe competing with the poorest countries of Europe or the less rich countries in the markets? So it was difficult.?
That's why I believe it is important to have a cooperative approach next time, and now we are trying to create that, a kind of a pandemic fund, so that next time, because it's sure that we're having more pandemics, and probably more frequently than before because of many ecological developments, that we have the sufficient funds to help the most vulnerable countries. Because once again, the poorest countries were much behind in the line. So we saw the richest countries buying four or five times more vaccines than they needed. At the same time, for instance, some countries in Africa were asking desperately for vaccines. And afterwards, to be fair, those richest countries were generous in donations. But at the same time, during that time, there were very important trade restrictions and even embargoes, including by the US, on export of vaccines or materials.
Sam Gyimah: And was there a clash between, say, science versus politics?
José Manuel Barroso: I mean, I would say, simplify this a little bit: science was great, politics not. Let's be honest, we were not ready. All governments of the world, namely those who are more sophisticated, they have in their list the risks. They have terrorist risks, nuclear risks, catastrophe risks, and pandemic is one of the most important risks. But when it came, even the richer countries in the world, they had not the sufficient, for instance, protective material. They had no masks. There was a lack of preparation. So it was very bad from a political point of view. Let's be honest about this and let's learn the lessons of it. So to avoid this happening again.?
Afterwards, of course, since there was an effort, and I believe at the end of the day, compared with previous pandemics, the level of cooperation was higher. So we could distribute all those vaccines, but with great costs and, of course, with a lot of human suffering that could have been avoided.
Sam Gyimah: But again, it's one of those moments that revealed the politics in a new world order that we're seeing today that has been accelerated.
José Manuel Barroso: Yes, for instance, let me give you an example. While the preference of Gavi and COVAX was to buy some of the more established vaccines, at some point we had no vaccines. We had the money. We were able to raise 20 billion US dollars. The problem was that we had money but no vaccines because of the embargoes.
So we bought vaccines from China, the Sinovac and Sinopharm, that according to our information was not probably so efficient as the other ones, but they were enough to avoid death and to avoid severe hospitalisation.?
Sam Gyimah: Better a vaccine than no vaccine at all.?
José Manuel Barroso: Exactly. And the countries were asking us, namely the developing countries. But I had some backlash coming from some sectors, from more conservative sectors in the US. And of course, as a humanitarian organisation, we are not going to take decisions on a geopolitical or ideological basis. But at the end of the day, people understood and okay, it was, I think, well handled. We made it clear that it was not with American taxpayers' money that we were buying those vaccines. And by the way, China that before was giving no money to this kind of organization, now China is becoming a donor, not at the level of the traditional donors, but it's becoming also a donor, which is important because China continues to say it's a developing country. I mean, okay, in terms of GDP per capita, it's lower than most European countries or even all European countries, but in terms of its economic and financial might and force it’s much stronger than most countries in the world. So we are also demanding from China a more proactive position in terms of supporting the efforts toward development.
Sam Gyimah: As a former president of the European Commission, I know that you've been keeping a very close eye on the war in Ukraine. You've met Vladimir Putin, you've talked to him face to face.
José Manuel Barroso: What was that like? Oh my God, I met him many, many times. Because at the time we had meetings at least twice a year, the summits with Russia. Now all this is like, for me Putin is a product of resentment. For me Putin is someone who wants to keep power. So first of all, he's an autocrat.? But he has a resentment, a deep resentment, and I think he’s sincere about the power of Russia. I remember in the G20, for instance, just to give that example, I once said this to Angela Merkel. When everybody was in the G20, all leaders wanted to have selfies with Obama, almost all, because Obama is a star power, okay? And most countries were coming to say hello to him. Putin, nobody cares about him. One day I remember, I noticed, I said to Angela Merkel, look, Putin reminds me of those boys or girls in the discotheque that nobody wants to dance with. So he felt this lack of status. So he felt that himself and Russia have been somehow humiliated. So I think that explains to a large extent this reaction. That is not justified, certainly. But I'm trying to explain what is behind that.
Sam Gyimah: But then when you look at his moves, are they rational?
José Manuel Barroso: Are they irrational? I think he's someone who makes cost-benefit analysis. So from that point of view, he's a rational person. But I believe he has become increasingly emotional and resentful. He's not a crazy person. He's not crazy. Of course, we can have this sometimes. We have some crazy people in politics in very important positions. But he's someone who makes that calculation, but he makes mistakes. I think, by the way, it was a huge mistake, also from his point of view. In the history of politics, the invasion of Ukraine by Russia is going to become one of the greatest, besides its moral points, that of course it's not acceptable, from a pure, let's say, point of view of power, it's a mistake for him. It's a mistake for Russia. Russia is now weaker than it was before, with very heavy consequences.
Sam Gyimah: But at the start of the interview, you mentioned that the annexation of Crimea happened right at the end of your term as President of the European Commission, and that was Putin. So what's the difference between the Putin then, and the Putin now?
José Manuel Barroso: Very good question, Sam. In fact, I spoke at that time with him, asking, what's happening? It shows how cynical he can be and how many lies he can make. He said, no, this is not an invasion of the Crimea by the armed forces of Russia. I can tell you, he said, if it was, we would be able to take Kiev in less than two weeks. In fact, afterwards, I informed my colleagues at the European Council about it, and it was published at that time. And the Kremlin made a protest saying that the statements of Putin were taken out of context, but he said it. So the question is, why? For me, there are three main reasons. One, after Afghanistan, he believes the United States is weaker, and after Syria, he believes Russia is stronger. That is a very important development. Secondly, also, he has much more control of the situation internally. Now Russia is almost a totalitarian state. It was authoritarian, but with some space for freedom. Now it's no longer. I mean, the main opposition leader is in prison, and so there is no freedom of press. So it's really a very negative evolution. And certainly, meanwhile, they have invested a lot in terms of nuclear capabilities.? Of course, nuclear, hopefully, is not going to be part of the equation. But in fact, they are now more prepared from a nuclear point of view than they were. But the fact that he said it, if it was us, we could take Kiev in less than two weeks, according to Freud, for those who like psychoanalysis, this is a Freudian slip. It's a case of when unintentionally you show a hidden desire. The desire was to have Ukraine.?
Sam Gyimah: He revealed his real intentions in that Freudian slip.
José Manuel Barroso: Exactly. Because look, and that I know from my contact with Putin, he emotionally, psychologically, and I even would say probably intellectually, he does not accept the idea of a sovereign Ukraine, independent Ukraine. For him, that is part of the great Russia.? Probably it could be formally independent, like Belarus, by the way. Belarus is formally a state, a member, but it's in fact part of a complement of Russia today. So this is the reality and he does not accept it.
Sam Gyimah: And there is a big discussion and another debate to be had about Ukraine and its future in the EU. But I want to wrap up. And now that we're coming out of the pandemic and major blocks of power coming to sharper focus, are investors and businesses following suit from your discussions? Are they becoming more regionally focused? Should they be more regionally focused?
José Manuel Barroso: I think, as I said before, it depends. I think, of course, they should be very attentive to these geopolitical risks. I mean, that's what you said. I mean, I know in any responsible financial or economic institution, there is an issue of risk management. At least from a risk management point of view, people have to be prepared for some form of further decoupling. So, of course, we have to be more original on that side. At the same time, there will be great opportunities globally. And at the same time, there are efforts to keep things still open. So it's a matter of evaluation.
If I'm the leader of a pension fund, I will not recommend not to invest massively in China. Now, by the way, have you seen how they are going out? Most of the endowment and funds, American, Canadian, are going out of China.? But in terms of some opportunities in business, if there are still opportunities for the short, medium term, with sufficient guarantees, why not to keep…
Sam Gyimah: Are there any areas where you see opportunity??
José Manuel Barroso: Oh yeah, of course there are. I mean, everything that is happening now in science and technology is huge. By the way, health is huge. There are many, also because of the aging of our populations in the West, and in Europe in particular. So I believe there are opportunities, but sometimes it's not just about the sector. It's about a small cluster. So it's a niche opportunities. It's not for us. I mean, it's certainly not for the governments, and I'm no longer in a government capacity. But it is for the businesses themselves to see and for the entrepreneurs to create the opportunities for the future because there will certainly be great opportunities and we see some very successful companies every day. We see them also here in Europe and in the world in general.
Sam Gyimah: So from your decades and breadth of experience, is it better or worse to be in business right now than it was, say, when you started out?
José Manuel Barroso: I'm usually optimistic. I believe it's always better now than before because, I mean, now there are great things happening. We are in the middle of a technological and scientific revolution, not only artificial intelligence, machine learning, super intelligence, but what's going on in biotechnology, what's going on in gene editing, what's going on in quantum computing.? I mean, we are entering a completely different world, so many opportunities are there. The question is who is going to take advantage of those opportunities, and those who are going to miss them.
Sam Gyimah: José Manuel Barroso, thank you for taking the time.
José Manuel Barroso: Thank you. My pleasure, Sam.?
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