Penang Monthly, January 2023
One of the most influential academics and economists in the world today is Penang boy, Danny Quah. A citation impact study done in 2020 by Stanford University placed him in the top 1% of scientists in the world, in effect recognising him to be among the 100 most influential academics in government in the world. That is an achievement to write home about. And so, appropriately and proudly, here in his old home of Penang, we are writing about it – in Penang Monthly.
Presently, Danny Quah is Li Ka Shing Professor in Economics and Dean at the School – an important position indeed. What makes him really interesting is his academic focus. As he introduces it on his own website, his work focuses on “economic principles for world order and empirics for a shifting global economy”. More concretely, he studies “the supply and demand of world order, i.e. on the one hand, what international system the world’s superpowers provide, and on the other, what world order the global community needs”. (For more details about his exciting career and body of writings, visit http://www.dannyquah.com/writings/ or Google Scholar, for that matter).
One can see why such an approach gains this renowned thinker huge global recognition today. But who is Danny Quah? He was back in Penang on 20 October 2022 to speak on a panel together with Penang Chief Minister, Chow Kon Yeow, and Nungsari Radhi from Yayasan Rahimah bt Yusof, at the Penang Economic Summit organised by Enterprise Asia and Penang Institute. He kindly agreed to talk to Penang Monthly on the sidelines of the event – about himself, Penang and geopolitics.
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Ooi Kee Beng: Welcome home to Penang, Danny. Let’s introduce you to our readers with some early history.
Danny Quah: OK. Yeah. It’s no secret. I was born in Penang and lived here until my mid-teens. I went to school at Francis Light School in Dato Keramat, and then Penang Free School for secondary school. But then, before I finished sixth form, I was lucky enough to go to the US on a scholarship. That was really the only way to go. At that time, you know, the standard of living on average between the West and the East was vastly different. Today, of course, Malaysia, Singapore and a few Southeast Asian nations have come along quite a bit.
OKB: What year was this?
DQ: I left Malaysia in August 1976 to go to Princeton University in New Jersey. Back then, you got on the flight carrying all kinds of things – like a rice cooker. Everybody had a rice cooker. And you took along plenty of food; your parents gave you all these bags of instant noodles to take with you. You didn’t know what kind of food you’d have to eat to survive otherwise. And you packed along these aerograms, you know, the thinnest paper possible to write on and to send. Today, all you have to do is go on WhatsApp. And a phone call via WhatsApp costs nothing. Back then, you had to plan when to call home, you know, months ahead of time. And if you’re lucky, you got through. Otherwise, you wrote aerograms. It’s a completely different world today – people studying at university overseas today who are 20 years old or so have only ever known a world with the internet. And it’s difficult to understand living in a world with not just a slow internet, but no internet.
And you saved and saved so that you could come back once in four years. And that was such an event. Today, I am sometimes on flights with Southeast Asians around me who are 20-year-olds, and they are on their monthly trip back, flying business class. The world is so different now. This is something that is not always appreciated by the young today.
OKB: Since you mentioned the young, I’ll jump to what I intended to be the last question, which is, how would you advise young Penang people today, given your life experience?
DQ: That’s a really good question. Back then, you could study to be an engineer, a doctor or a teacher. And that was about it. Today, people can have interesting careers in finance, government service, civil society, NGOs, or become social entrepreneurs. It is a world of difference between the things that people can do now and the things that my generation thought they were capable of doing. So I would tell young people that they’ve got amazing prospects. They are not guaranteed a job for life anymore, but in exchange for that, they’ve got the widest variety of choices imaginable. I would say, “You only get one go at this. And you want to have as broad an experience as you can and do as many different things as you can.”
And then, out of that, I hope people feel that they can give back to society. And I don’t mean through donating money to charities or anything, but work in such a way that it’s clear to them how they are contributing to making the lives of those around them better. They’ve got all these amazing opportunities. They have choices to a degree unimaginable for people like me.
OKB: Don’t think small, as it were. But despite what you just said – that young people have many choices – if I look back on your time, on our time, despite the very few choices, your career has been excellent.
DQ: Well, I’ve been very lucky. I was very lucky to get into Princeton, one of the top US universities. It was a different world; a world of opulence, customs, traditions, history and intellectual achievement, and to a degree a young boy growing up here never could have imagined. Yeah, I was very lucky to become filled with passion about economics – I was at one of the best, if not the best, graduate programmes in the world. My PhD advisor, Tom Sargent, was on his way to winning a Nobel Prize, and he was transforming the field. I travelled with him just to study at his feet. And it’s just one thing after another, Kee Beng, one lucky thing after another.
OKB: Well, like they say, you make your own luck.
DQ: [Laughs] After I got my degree from Harvard, I went to MIT to be an assistant professor. And that was, again, amazing. MIT, like the University of Chicago, seemed to have more Nobel Prize winners than non-Nobel Prize winners in the department. It was really an amazing experience.
After that, I moved to London; someone asked me if I was just making a trek back East. Let me just say upfront that when I went from Cambridge, Massachusetts to London, I thought that was as far east as I was going to go, to the zero-degree meridian. That was it, I was never going to go further than that. At the time, the UK was transforming out of the gray post-IMF bailout era of the 1970s to what would, within five years of my getting there, become Cool Britannia. The Labour Party had come to power, and it had completely rewritten its narrative. Tony Blair was the new prime minister, making government “cool” again, just as Bill Clinton was doing.
At LSE, Tony Giddens, the director, was very much in the midst of The Third Way. I was very lucky to get involved with that, to be in regular conversations with people in the UK Government. I got to see how 10 Downing Street became a hangout spot for pop stars – you may be at 10 Downing Street for a meeting with Gordon Brown, and the Spice Girls would suddenly walk in. And there were parties. I got to meet people who were the minds behind Lara Croft. Also, the Bank of England was given independence by the Labour Party within a month of its coming into government. I was actually sitting in the Bank of England, as a consultant to the economics team there, when the announcement was made. There was a very exciting, intellectual atmosphere.
At that time, I also became known as someone who was writing about economics and the transformation of technology, something I called “The Weightless Economy”. Today, that’s what the economy is – the digital economy, the information technology economy. But I was early in on that, and the UK Department of Trade and Industry was very keen to see how these ideas could be carried forward. So, for many different reasons, almost all of them accidental, Kee Beng, I managed to become part of the conversation – in the UK, in academics and globally.
By 2010, I began to hear investment bankers, policymakers, international states – everyone – talking about the shift in the global economy and the rise of the East. And I thought, “OK, people talk about that but there’s no formal work in economics on this.” So I said, let me calculate the world’s economic centre of gravity as a sixth-form mathematics problem. So I looked at 1,000 or so cities around the world, figured out how much economic value they were generating, put them on a grid of the Earth’s surface, then calculated the world’s economic centre of gravity, and I tracked it over time.
That work showed, to nobody’s surprise in the 1980s, that the world’s centre of gravity was between the two places where I spent the most time – in the US, the UK and Western Europe. But from 1989 onwards, it lifted itself off the bottom of the Atlantic Ocean, and steadily moved east – through the rise of China, notably, but also through the continued strength of Japan even after the Plaza Accord, and the emergence of Southeast Asia. That was picked up by CNN and The Economist. Everybody was already talking about it, but I showed them the graphs. Some places, including Singapore, then reached out to me and said: “Look, you’re Asian, you’re born in Asia, you know the place. In addition, you know people in the West; you’re trusted. You can tell our story in ways others cannot.” So, I said: “OK, I’ll get on this huge rollercoaster ride.”
Again, let me be very clear, it was completely accidental. I wrote a paper, which became something of interest; it was the mood of the time.
About a year ago, Singapore’s Minister of Manpower asked if I could work on gig workers. They are trying to figure out new regulations to protect platform workers; these people are not employees, they have no Provident Fund, no representation, but they enjoy good flexibility. How do we do this trade off? And that’s what I’m beginning to work on now. As technology becomes ever more entrenched, all of us are going to become gig workers. How do we balance the flexibility with worker protection?
Now, Kee Beng, again this has nothing to do with my own research interests, which continue to be income inequality, great power politics and geopolitics. But I do think the subject is extremely interesting and consequential.
OKB: But it’s about you being in the right place intellectually, isn’t it? I mean, it is creative to always have something cutting-edge in what you do.
DQ: Maybe, but I don’t feel that I’m wedded to the subject as such.
OKB: You went to Harvard when you were 17.
DQ: Yeah, and then I went with my advisor to the Midwest. Everything that I did there was about macroeconomics and econometrics. There are many colleagues of mine who are hugely successful, who’ve remained tied to macro and econometrics. And there’s a sense in traditional academia that someone who moves around the way I have done… that’s not the way to win a Nobel Prize. You win a Nobel Prize by staying in one field. But I have felt that there’s a social imperative in the things that I do, whether it’s economic growth and the divergence of the world into twin peaks, or income inequality and how it is not the culprit for many of today’s social ills. I think, instead, that it needs to be unpacked in much more creative and careful ways.
But economists just weren’t interested in the world’s shifting economic centre of gravity; this wasn’t something in our economic models. But I certainly gained a new audience in international relations scholars. So I’m stumbling from one accidental turn to another, and I’m very grateful and fortunate that all of these twists and turns have led to interesting conversations.
Before coming back to the region, when I was in London, I was getting very stuck doing different things. I wanted to build an institution within LSE that could be more global, and part of that involved fundraising and getting the school to go along with it. So you see, I felt that institution-building aligned with my interest in the shift of the world’s economic centre of gravity.
But then Kishore Mahbubani and others afforded me this opportunity and said: “You can do this here. You don’t have to spend your time trying to fundraise because we’re very well off. You can just devote your time to research. And I did. I came back thinking that I was going to write two books in the first year-and-a-half and work on research papers all built around this idea, I planned for my continuing journey integrating economics and international relations. That plan is still there, but it’s held in abeyance, because I’ve also got all these other duties, whether it’s fundraising for the school or making sure that the school is a robust academic institution.
But you know – and I think we probably both share this experience when we were younger, fresh out of PhD – you could set aside entire weeks and say, “OK, I’m not going to leave my desk, and this is what I’m going to work on.” Now, it’s like, “Oh, I’ve got 20 minutes while waiting for a flight. What can I scribble down in these 20 minutes?” You’re constantly trying to shoehorn things into ever tighter circles of time, and you’re having to do a lot of firefighting.
[….to be continued. Watch out for Part Two in our March issue!]
Wikibeng 
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