Chapter 7 - American Purpose

We begin this chapter by once again emphasizing the United States' power and its influence in a unipolar world. Fareed uses the example, when in the summer of 2002 a few Moroccan soldiers sailed to the tiny island of Leila and planted a Moroccan flag there. Spain reacted quickly and sent their soldiers and forced out the Moroccan soldiers. They planted an Spanish flag and stationed their warships in the area. It is worth mentioning that the island of Leila is uninhabited and does not possess any political or logistical significance. At this point Moroccans called this an act of war and in demonstrations, they expressed their desire to die for their land. This situation may seem absurd to an outsider, but other nations realized if something is not done quickly, the situation can escalate out of control. Finally the United States had to step in and resolve the situation. The United States has no interests in the straight of Gibraltar. Unlike the E.U. it has no special leverage over either countries. Unlike the UN, it can not speak for the international community, however it proved again that in a unipolar world, it is the single superpower.
America remains a superpower in spite of recent declines in their economy. Its economy is troubled and it faces long term problems, partially caused by low savings and soaring entitlements.

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This is a very smart cartoon by Tom Tomorrow about American policies during the Bush administration.
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The most notable shift between the 1990s and now, has mostly to do with the rest of the world rather than America. In 1990s, Russia was completely dependent on American loans and grants, and now they pump out surplus every year in their annual budget. Then, East Asian countries were also heavily dependent on IMF funds to help them out of their crisis, and now they have massive foreign-exchange reserves. This growth led to China contributing more to the global growth than the United States in 2007. The first time any nation has done so since at least the 1930s. This power shift can be beneficial. It is a product of economic growth and stability in the world, and it can even be good for America. Fareed argues that as long as we keep the forces of modernization, global interaction, democracy, and human rights we can all move forward. This global growth provides the United States an opportunity to remain the pivotal player in a richer, more dynamic, and more exciting world.
Some Americans believe that we should not learn from the past and only copy what we have done before and everything will work out. America's influence in the world is slipping and it does not have the influence it had after World War 2 or even a decade ago, however it still has the strongest and most influential hands than any other nation. Fareed believes that the international order that was established by the United States after World War 2 is in urgent need of expansion and repair, but not re-conception. The rise of the rest is a long and slow process, which ensures America a vital role in this change. As other countries grow, new points of tension will emerge between them. Many of these rising countries have historical conflicts and border disputes with one another, and usually nationalism grows along with economic and geopolitical stature. America, being a distant power, has historically been a convenient partner for many growing nations, and American influence is strengthen by the growth of dominant regional powers. So when one neighbor grows economically, it will unbalance the dynamics of the regions, so the neighboring countries have to seek alliances with powerful nations (the United States.) This can be in terms of consultation, cooperation, and compromises. It shifts powers and form coalitions, rather than the traditional way of the super power making decisions for the weaker ally.
The American multinationals are the ones that figured out how to best thrive in a post American world. They conquer new markets by changing their old ways. General Electric is a great example that used to believe in closed markets and owning a 100% of the company itself. Over the past decade, however, it has watched the growing skills in the developing countries and realized they need to change their approach. They now partner with many companies rather than buying smaller companies and turn then into big GE companies. There is still a strong market for the American ideology everywhere in the world. The role, as the country that can define universal ideals, remains one that only the United States can play.
Fareed describes what operating in this new world looks like through six simple guidelines:

Choose:

American believe they have to have it all. It is very crucial that the Americans be disciplined about their priorities. An example is in the case of Iran. The Bush administration could not make up their mind whether the want a policy change or a regime change. The two objectives are opposite, because if you try to remove a ruler, you can not encourage him to stop his military programs at the same time. Iran is surrounded by countries who all have nuclear weapons, and the two countries that do not have it, are occupied by hundreds of thousands of American soldiers. Bush has repeatedly said that he does not recognize the regime in Tehran, and threatened to overthrow it and funds the anti Iranian organizations. So the question to the readers is, even if such programs exists in Iran, why would the Iranian leader on their right mind, abandon the program?

An Indian cartoonist's Perspective
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American policies in the Middle East
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Build broad rules, not narrow interested:

In an age of rising powers, the United States needs to create a structure of rules and values for the world to follow. Then even as the countries grow, they remain within the framework of the proper international system. This ensures that the rise of the rest does not become a downward competitive spiral, with powers freelancing for their advantage in such a way as to destabilize the whole system. For this system to work, we should all follow and adhere to the rule. If we do not follow the rules, then why should the Chinese or the Indians follow them?
An example of that is the instability in Burma or Tibet. They are both small countries and seem like remote problems for the United States. But they share borders with India and China, and their instability translates into millions of refugees. Washington should recognize that if it has its own exceptions, so do other countries. Or else the United States should drop its own exceptions. But to do neither, and preach one thing and do another is hypocrisy, which will undermine American credibility.
On that concept I found this video on YouTube that I think neatly ties in with the above argument:

http://www.youtube.com/watch?v=h0Y6DNfBgiY

When it comes to terrorism, America has been very narrow-minded. Rather than having a global set of regulations for customs an immigrations by using the same standards and sharing databases, Americans have invented their own. This causes inefficiency and negative consequences for the American economy and image in the world. That is why, in the midst of a worldwide terrorism boom, travel only to the United States has been sluggish and choked up at border crossings.
Another example is again, the nuclear issue. The United States expect Iran, along with every other country, with exception of Israel, to adhere to the Nuclear Nonproliferation Treaty. The treaty basically explains that countries that developed nuclear weapons by 1968 are permitted to keep them, and those who didn't are not. The United States and other power have taken no steps in reducing their nuclear arsenal, yet they are interfering in Iran's peaceful nuclear program. America holds 85 percent of all nuclear weapons, and they need to start moving them off alert status and reduce the numbers of weapons. The United States would gain much credibility in talks with Iran, if they work towards reducing their nuclear arsenal and pressured Israel also to follow the Nuclear Nonproliferation Treaty.

No title
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mordechai vanunu, Blew the whistle on Israel's Nuclear program
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Americans protest the existence of nuclear weapons
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Be Bismarck not Britain:

Fareed argues that the United States should not keep a low profile against the rising powers. The United States should get involved and establish great relations with them. They have played a big role in the past against the Soviet Union and Nazi Germany, but today such strategies are unwise. The world is more connected and the traditional "balancing" against rising powers can be destabilizing and dangerous. America should over play its power and supremacy, because then other rising powers much do the same and the consequences will be very costly. Washington is ideally suited to play a Bismarckian role in the current global system, because they have better relation with almost all major powers than they do with each other. The have strengthened their relationships with Japan, Australia, South Korea, and India and are trying to do the same with China and Russia too. Fareed concludes this point by saying that: " the virtue of the Bismarckian approach is that it gives the United States the greatest leverage with all parties, maximizing its ability to shape a peaceful and stable world. And if things do not work out, it also gives the United States legitimacy and leeway to move into a balancing role."

President Bush on an official trip to India with the Indian PM
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Order à la carte:

Within the international relation there has always been one theory on how international peace can endure. That theory explains that the most stable system is one with a single dominant power. For several century the Great Britain and the United States have played that role and kept everything in order for the most part. Now, the American hegemony is waning. So the readers now wonder, what will that lead to?
The dollar is weakening and it is very unlikely that it will retain its totemic position forever as the reserve currency, moving towards a basket composed of euros, and other currencies as well. In some Asian territories, the U.S. military is less influential than the Chinese and the American now have to compromise in their negotiations (compared to decades ago when everything they asked was done.) Fareed's readers might wonder if this decline in the U.S. influence will lead to instability and disorder!
He does not think that it would. A couple of centuries of Anglo-American control has created this system that is quite stable. Most countries are familiar with it and are cooperating with each other in an open market. Fareed expresses that " the search for a superpower solution to every problem may be futile and unnecessary. Smaller work-arounds might be just as effective."
America needs to realize that no institution is always right and no framework is always ideal. The UN might work for one problem and NATO for another, and NAFTA for the third. When approaching new issues such as global warming or climate change, then a new coalition may need to be formed. Such international issues will only become more complicated and to get the best results we have to be flexible and accommodating rather than insisting on the old methods.
Establishing order in the world is not only an American problem. The rise of the rest causes a rise in nationalism which can bring disorders and instability with it, and solving these problem needs a global system of organizors and moderators.

Removing Saddam Hussein was a great example of the UN's inability is such matters
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Think asymmetrically:

America has the strongest military in the world, yet they are struggling in Iraq. The Israelis have a much better than Hezbollah in Lebanon but not able to win. Fareed explains that is "because the current era is one in which asymmetrical responses have become easier to execute and difficult to defeat." This is also true in case of the drug cartels, money laundering operations, illegal immigration, and terrorist cells. The most important lesson here is not to get sucked into the trap and stay focused. In perspective, the Americans and NATO countries suffered many more lives and loss of capital that any terrorist attack in the history of mankind. Al-Qaida's trap was to get Americans in the Middle East and fight them in their own territories, rather than having to plan attacks in America or Europe. This is a scary scenario where thousands of lives were lost and left many permanently injured. This situation also takes the focus off terrorism and places it on American imperialism.
The U.S. needs to start thinking creatively and asymmetrically. Thinking that way allows them to capitalize on their key advantages, which are more than just military. Helping countries modernize and building diplomatic corps are much more effective in the long run than any possible military technique. Still the military received over one hundred times in funding to fight terrorism, than funding for diplomatic and civilian activities. Rather than harassing Muslim Americans, they should enlist them in the effort to understand Islam and the appeal of fundamentalism. I think America's core advantage is its diverse civil society, which has been ignored for the most part by the U.S. administration.

America's secret weapon
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Legitimacy in power:

Today America has every kind of power except for legitimacy, which in today's world is a critical deficiency. Legitimacy allows one to set agenda, mobilize support, and even change policies. Fareed used the singer Bono, as an example, who was able to change government policies on critical issues. Former president is a great example of legitimacy as well. His used his influence in Bosnia, Haiti, Kosovo, and recently in North Korea to diffuse tense situations, without having to resort to military actions or UN security Council. On that same note, former president George W. Bush is an opposite example where leaders of many nations simply shrug off his opinion. On his last formal visit to Asia and also South America, absolutely nothing was achieved and no one seemed interested in what he had to offer.

Yitzhak Rabin, Bill Clinton, and Yasser Arafat during the Oslo Accords on 13 September 1993.
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The author, Fareed, expresses that the United States still has a lot of power and thereby confer legitimacy with regards to what constitutes a problem. The ideas still domminatedebates over Darfur, and Iran's nuclear program. However, Washington needs realize that generating public support for its view of the world is an element of power, not just an exercise in public relations. Nations are not going to sit quietly and accept what Version of events America hands down to them. As mentioned above, the Bush administration never understood the importance of legitimacy, especially in the run-up to the Iraq war. Bush kept insisting that his allies in Europe and Asia support his war efforts and approve of the Iraq invasion. The point worth mentioning here is that in many of those countries, the governments do not fully represent the people's opinion. Countries like Poland or Romania only supported the war, hoping America will approve financial help for their crippled economies. When the Turkish government approves Bush's plans to invade Iraq, is because they are hoping that the U.S. will support them in joining the European Union. The United States misunderstood that as support. The government of Turkey wanted to back the U.S., but more than 90 percent of the Turkish population opposed it.

Iraq Invasion check list
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America has transformed the world with its ideals. When the Chinese pro-democracy protestors gathered in Tinanmen Square, they made a makeshift figure of the statue of liberty. United States's image may not be as benign as Americans think, but it is still much better than the alternatives and that is what has made its power tolerable to the rest of the world for so long.

In the war on terror American politician are making the same mistake they made during the cold war by putting together all their adversaries. The call all muslim's terrorist and bunch them all together, calling them Al-Daida or muslim brotherhood where in fact they are all very different. Iranian Shiite government actually helped the U.S., topple Sunni Al-Qaida regime in Afganistan. In Iraq, the Sunni radicals slaughhter Shitte and the list goes on. Shittes and Sunnis are historical enemies, mostly because Shittes are mostly Persian and Sunnis are mostly Arabs. 9/11 gave Bush an excuse to take out Al-Qaida, but he did not wipe out terrorism. Terrorist attacks still happen in places like Turkey, Iran, Israel, Spain, and Great Britain - most of which are also very tough on terrorism. Unlike European Muslims, American Muslims are mostly middle class, highly educated, and very assimilated. If American leaders start insuating that Muslim population should be viwed with suspecion, then that will change the community's relationship with the United States. Democrats are much more sensible with such issues and hopefully the Obama administration will be able to repair the damage done during 8 years of Bush's presidency.
We can never stop a small group of misfit from causing trouble and planning terrorist attacks, no matter how good the intelligence network is. What we can do is to understand each other better, and try to understand why certain acts are done by the terrorist. By understanding each other we may be able to bridge that gap and prevent such senseless plans.

In 1972 my family arrived in the United States, from a land far away. My parents attended school in this magnificent country and thrived. They witnessed the Watergate scandal, end of Vietnam war, gas crisis of 1976, the Iranian hostage Crisis, and many more similar event. Yet America was always able to pull itself up, continue, and expand. Everywhere they visited, people were welcoming and warm, and this seemed like a land of unlimited opportunities and growth. I certainly hope, as does Fareed, that this land stays the amazing and inviting place that is for years to come for new comers entering the United States of America.

Chapter 6 - American Power

The British Grand Fleet sails for Scapa Flow in 1914

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Fareed begins this chapter by looking back at Great Britain. Near the end of the 19th century, the British Empire controlled approximately a quarter of all the land and associated population. They created the first truly global market and thanks to their massive navy, they were able to hold that control for centuries. The English language became the dominant language spoken in the world, as well as the English values. At the same time, the Spanish also tried to export there ideas and values, however Britain's ideas proved more universal. To the rest of the world Great Britain seemed invincible and unassailable until history repeated itself and their peak finally declined.

Fareed raised the question, will the same story happen to America? He explains that no analogy is exact, but Great Britain in its heyday is the closest any nation in the modern age has come to the American position today. America shows many echoes and symptoms of Britain's dilemmas. The one slight difference may be that as Britain tried to maintain its superpower status, the largest challenge was economics rather than politics. In the United States, it is the other way around.

Boers in action (1881).

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Some believe that the British war against the Boers in South Africa was the start of their decline. To gain better access to the South African gold, under the excuse of protection the English speaking people, the British started a war in 1899. The Boers however launched a preemptive strike to protect their land and then had the support of most white people in South Africa. The British had a disadvantage, because the Boers knew the land well and adopted successful guerilla tactics. The British in return resorted to brutal tactics, such as burning down villages and moving the people into concentration camps. The British military was ten times larger in terms of men, and they eventually won the war but at the high cost. They suffered heavy casualties and spent nearly half a million pounds and lost many of their supporters. Many friendly nations opposed their actions and left Britain "friendless."

Fast forward to today, where we see another superpower with a strong military, and losing its influence slowly. The American war has become unpopular even at home, and many countries, once U.S. allies, are now turning their back and condemning the U.S. actions. Just like the British war against the Boers, American expected the war in Iraq would be a quick military victory. The war has lasted for over seven years, thousands of American and Iraqi casualties, cost the American tax payers billions of dollars, nothing significant has been achieved and Iraq is more chaotic that before the war started. America's outcome in Iraq looks bleak and it's been met with heavy international opposition.

March opposing the Iraq occupation, 15 Sep 2007, Washington, DC.
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Britain has been a rich country for centuries, but it only became an economic superpower a few decades ago. London has become the most influential city during the Great War, and the British acquired an empire before the onset of nationalism. Its sea power was unrivaled for over a century. As a result of the empire, the British remained dominant in banking, insurance, shipping, and investments. In reality though the British economy was sliding. Many scholars have debated the causes of Britain's decline. Some focused on geopolitics, and some others on economic factors like low investments in new plants, poor labor relations, and loss of marketing skills.

Fareed argues that perhaps none of these failings were crucial. Paul Kennedy points out that Britain's dominance in the 19th century could have been a product of a series of highly unusual circumstances. Fareed tells the story about when the British statesman Leo Amery saw this clearly in 1905. "How can these little islands hold their own in the long run against such great and rich empires as the United States and Germany are rapidly becoming?" he asked. "How can we with forty million people compete with states nearly double our size?" It is a question that many Americans are now asking about the United States in the face of China's ascent."
After World War I, Britain gained a lot of new land. However, unlike before this was not profitable anymore and had become a drain on the Royal treasury. World War I had left Britain tens of billions of dollars in debt and the interest was growing. World War II was the last nail on the British economy's coffin. They still remained remarkably influential, but their economy was suffering and they were near bankruptcy. The United States loaned money to Britain, but in return they took many of the British bases around the world.

Sir Winston Churchill inspecting air raid damage in Battersea in September 1940
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London east end 1943 American WACs (Women's Army Corps)
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When talking about the British decline relative to the American decline, Fareed point out one major difference. The key concept he is pointing out is that the central feature of Britain's decline,"irreversible economic deterioration", does not really apply to the United States today. Britain's economic status lasted only a few decades, whereas America's has lasted for over a century. It has been the world's largest economy since the late 1800 and still remains to this day. The difference can also be seen in their military. The British rules the seas but never the land, and the Americans, in contrast, dominate at every level. Their military power is not the cause of their strength, but a consequence of it.

Back to the original argument, America's advantages are rapidly eroding. Americans are losing interest in sciences and China and India are graduating far more engineers than the United States (however another argument is that a large fraction of those graduates move to North America for work anyways, and this also does not address the issue of the quality of the foreign education). Higher education has become America's best industry. Eight of the top ten universities are in the United States. Even if we looked at the top fifty universities, most of them are in the United States, and America has a competitive advantage in that field. They spend much more than any country in R&D and hence produce a much better environment as well as opportunities for the university students in America. I mention "university student" above, so the readers will not confuse that with the American school system. American school system is a mess and ironically the students do very poorly in math and science. The do things differently in American schools and do not force the students to memorize and do vigorous exams. On another hand one might even argue that while in other countries they teach you to memorize and take exams, the American way teaches you to think.

Harvard University, a very prestigious American University
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Fareed adds one that another advantage America has to Europe is its population. America is vibrant with a growing population, where Europe stays "virtually stagnant." In the U.S. children are outnumbering the elders, but in Europe it is the opposite, which means more workers for the United States. The Europeans have almost stopped replacing themselves and their population is on the decline and the only way is to take in more immigrants. However, unlike North America, European do not seem as welcoming to strangers. There are far more opportunities available to an immigrant to North America that there are for immigrants to Europe, especially Muslim immigrants. The same story also applies to many Asian countries, where they simply do not produce enough children to replace their work force. Fareed estimates that they will face a major problem in the next half century due to their aging work force. The effects of an aging population are quite considerable. There is the pension problem - fewer workers paying into the program- , fewer workers also mean fewer scientific breakthroughs. The last issue is as workers age they seem to spend and not save, which can really lower the investment rate in a country. Immigration has mostly offset this problem in the U.S., foreign students account for half of the scientific researcher in the United States, and are enrolled in more PHD programs than American students. Immigration has given America an advantage to constantly revitalize itself by people who can work long hours and are looking for a better life. America has been able to tap this energy and diversity, and assimilate the newcomers, people who are hungry for success and are willing to work hard to achieve that for themselves and their children, I believe that is America's secret weapon.

Ellis Island, NY - My mum's uncle walked through those gates in 1904
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The author, once again, mentions that the United States as well as it has done in the past, but could be worse. It works as it always has, except that other nations are doing better than they did before. Americans rarely ever refer to global standards, mostly because the global standard has been the American standard for at least a few generations now. Even in business they never bother find out how other nations do business mainly because they were the ones teaching the world how to conduct business and be capitalistic. Now, however, everyone is playing America's game, and they are in it to win. America used to have the lowest corporate tax rates in the world, but now they have the second highest. They did not increase the rates; others watched American example and lowered theirs. Even in regulating the markets, America used to be more flexible than any other country, and it is no longer the case. Regulators in Europe, Asia, and the Middle East are working hard to make their system more attractive and simpler to investors and manufacturers all over the world. One advantage the foreign nations gain is that they are familiar with the American system. That allows them to penetrate their own local markets, as well as the North American (English speaking markets), and America by contrast lacks that competitive advantage and ability to move into other people's world.

One example of the American disadvantage is their auto industry. For decades most American cars were made in Michigan, however it is being replaced by Ontario. The single reason for that transfer is health care costs. In the U.S. a car manufacturer has to pay over $6000 in health care cost, whereas in Canada because of the government system, the cost is just over $800 per worker. This situation brings with it a significant disadvantage to hiring American workers.
To solve this problem they used to go abroad and bring with them the much needed capital for a country, and used their abundant labor. But when they go abroad now, they discover that natives already have money and know-how and there is not really a third world anymore. So one might ask, what can they bring to those countries now? Fareed's answer is that the United States has been and can be the world's most important, continuing source of new ideas, big and small, economic and political. But to do that, they need to make some significant changes. The American economy and society, are capable of responding to the economic pressures and competition they face by others. They can adjust and preserve, as they have had before. The real test is their politics. Can Washington adapt to a world in which others have moved up? Can Washington truly embrace a world with diversity of voices and viewpoints? and most importantly, can it thrive in a world in cannot dominate?

The following link is a CNN video on you tube that shows a brief history of mass production of vehicle in America by Henry Ford, and how is has change to the shape it is in right now;

http://www.youtube.com/watch?v=LZIyGZ7N7bk&feature=PlayList&p=33A7EDC480A88464&playnext=1&playnext_from=PL&index=91

Picture was taken at the plant in Brampton, Ontario Canada
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Chapter 5 - The Ally

Taj Mahal

http://upload.wikimedia.org/wikipedia/commons/c/c8/Taj_Mahal_in_March_2004.jpg

In this chapter Fareed mostly focuses on India, and its rise to power and stability. In the early 1980s, India was a mess. There were many political protests, and the economy was not doing too well. The growth was slow and most of the Indian graduates left India for better opportunities.
The past decade, however, could not have been more different. India transformed itself into a very peaceful and prosperous nation. Relations with Pakistan are better and they managed to maintain a high rate of economic growth. The world is now courting India as never before. Foreign delegations are flocking to India to form deeper relations with the nation.
With this growth comes many questions and concern from other nations. Will India become the next China? Will they look at the United States as an ally?
The short answer to that is that no one knows yet. Indians are now mostly focused on advertising their country to foreign investors. They portray themselves a very friendly nation, not only to the west, but to everyone else also. Over the past fifteen years, India has been the second-fastest growing country in the world, behind only China.

Indian apartment buildings
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The key concept Fareed wants the readers to understand is that in spite of such fast growth, India still remains a very poor nation. The per capita GDP is still below $1000. The size of the economy is large and is growing very fast, however the large growing population of over a billion people is dragging the per capita figure down.

A very crowded Indian passenger train
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India has a very large youth population and the experts are making the assumption that the youth can speed up India's growth. Unlike China, who was very successful with the "child-policy", India faces a youth bulge because the past family planning policies had mostly failed. Fareed concludes his argument by going back to India's growth. The poverty rate is half of what it was two decades ago, which is very impressive. The private sector is thriving and they are posting double-digit gains. India has more billionaires than any Asian country, mostly self-made, and according to the author: " if demography is destiny, India's future is secure."

Mumbai Downtown.jpgDowntown Mumbai from Nariman Point
http://upload.wikimedia.org/wikipedia/commons/9/94/Mumbai_Downtown.jpg

India owes much of its political system to what the British left behind. Unlike the other Asian countries, the British stayed in India for centuries and built lasting institutions and agencies there. India has a very modern administrative structure. India did not need to invent a central bank or independent courts because they already had them. However, the main inference is that even though India has succeeded in some dimensions, it has failed on many others. During the 1950s, India tried to modernize by mixing economic models between capitalism and communism. The results were disastrous and kept India back for many decades.
Fareed put emphasis on India's poor score on the United Nations Human Development Index, which ranks countries not just by wealth, but also health.
The implications of India's neglect are quite sever, especially in the long run. India ranks behind Syria, Sri Lanka, and even Vietnam. Female literacy rate is at a shockingly low 48 percent. Despite much rhetoric about helping the less fortunate, the government has done very little for them.

Indian's protesting for their civil rights
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Can these problems be blamed on democracy? Not quite. Bad policies produce failure, no matter what kind of government is in power. Still, certain aspects of democracy can prove problematic, especially in a country with rampant poverty and illiteracy. Many of the politicians are corrupt and the minorities control most of the country's wealth and they like to keep it that way. At this rate the implications of this distribution of control over power can be catastrophic for the rest of the nation.

Slum dwellers in front of their shacks near the Victoria Memorial in Calcutta, India
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The author's point of view is that democracy is India's destiny. Fareed, being an Indian himself, believes that a country so vast and complex can not be governed any other way and the politicians have to use democracy in their advantage. The government has recently started investing in rural India's education and health. Village councils have to give a third of the seats to women, which has led to one million elected women in village councils. This gives them a platform and opportunity from which to demand better health, educations, and equal rights.

Business Today awards for the most powerful women in Indian
http://www.tribuneindia.com/2006/20060224/biz2.jpg

Fareed ends this argument by emphasizing that government does matter. Even India's great success, its efficient private companies, could not thrive without a well regulated financial system that has transparency and enforcement. India's central paradox today, according to Fareed, is that its society is open, eager and ready to take on the world, where its state is hesitant, cautious, and suspicious of the change that is happening.

After gaining independence, Indians were eager to play a role on the world stage. They inherited this from the British. The British controlled the Middle East during WWI from India, and Indian soldiers fought and carried out Britain's wars. They learned from that tradition and were quite comfortable with it. India's first prime minister, Nehru, had been educated like an English Gentleman at Cambridge and Harrow and his grasp on history was extraordinary. Nehru became a towering figure in Indian politics, and because of his extensive knowledge, even during his own term in the office, he was his own foreign minister. He was an idealist , " An eye for an eye, a tooth for a tooth," and his mentor Ghandi used to say, " and soon the world will be blind and toothless." Ghandi was revered in India like a god, and his nonviolent style, brought down the British empire.

Nehru was determined to bring new courses in international affairs and lived up to his ideals. He did not want military personnel to serve in the ministry and if they did, they wanted them to dress like civilians. He placed hope over calculation in some cases, and his foreign policy was full of rhetoric about peace and goodwill. This policy backfired when China invaded India in 1962, settling the of border dispute in their favor. This shattered his idealistic view of the world and he realized he is getting out of touch with reality, and he was not the same after that.

Mohandas Karamchand Gandhi, pictured in the 1930s

http://upload.wikimedia.org/wikipedia/commons/d/d1/Portrait_Gandhi.jpg

Standing (L to R) Jawaharlal Nehru, Vijaya Lakshmi Pandit, Krishna Hutheesing, Indira GandhiRanjit Pandit; Seated: Swaroop Rani, Motilal Nehru and Kamala Nehru (circa 1927). and

http://upload.wikimedia.org/wikipedia/commons/3/34/Nehru_family.jpg

India by some measure is the most pro-American country in the world. One reason could be that for decades, the Indian government had tried to blame India's misery on the CIA and the Americans. They also tried to spread anti-Americanism in India, which today has backfired for the most part.

The Indian American community has been bridging the two cultures. Americans and Indians understand each other. The Americans may be puzzled by how the Chinese government conducts its business, or the Iranian Guardian Council, but has understood India. Their relationship is not only between the governments like many countries, but there is also a bond between the societies.

The Indian government is also changing its policies. They are moving from Nehru's self-righteous and Ghandi's hostile approach, to one that benefits the Indian people. Manmahon Singh's policy is that peace and stability can develop a market as well as its society.

Also similar to the Chinese, Indian Hindu's do not believe in a god. The have many gods and each branch of it has its own gods and goddesses. Because there are no core set of beliefs or doctrines you can do what you like and follow whichever one of the teachings that you desire.
This ease has allowed them to flourish and be an easy going nation. Even though India has a very large Muslim population, the Indian identity has always stopped them from joining the fundamental terrorist groups, and no Indian has ever been affiliated with Al-Qaida or other such groups.

Indian Flag
http://www.earthtimes.org/newsimage/nuclear_case_15017.jpg

India is the only country that has nuclear arsenal and is not a member of the Nuclear Nonproliferation Treaty. Fareed has also talked about this issue on his CNN program, GPS. The United States and the International Atomic Energy Agency (IAEA) have been trying hard to get India to join the treaty. It may be a difficult task considering the United States still have over two thousand nuclear warhead of his own, argues Fareed. Sanctions have proved fruitless in almost every case. India, even though it was a much poorer country back then, their growth went on for three decades and finally developed an active nuclear weapons program under U.S. sanctions. Iran also has been developing peaceful nuclear program and the U.S. sanctions seem to have hardly done anything to stop it. I believe as long as there are greedy businessmen and arms dealers, such sanctions are completely useless because the regimes can continue to purchase the needed parts and technology only at a higher cost.

Fareed argues that India's nuclear plans, however, are for national pride. Many Indians resent the fact that India will always have second class status compared to Russia, China, and other major countries. None of those countries are supervised by IAEA as much as Indian facilities are. India's argument is that they are surrounded by Pakistan and China, whom have nuclear weapons and have been in wars with India before. Neither have accepted a mandatory cap on their productions, and India sees that as only a one sided freeze on India's developments.

http://www.cnn.com/ALLPOLITICS/analysis/toons/2000/03/23/lang/lang.jpg

India is a growing country. Povery rates are down, and they have sustained an eight percent growth for the past three years. India's diversity is four thousand years old and deeply rooted in their culture, language, and traditions. It's a country so vast and diverse that when the British were leaving, in 1947, the new government had to negotiate individual agreements with almost 500 rulers. The Hindu-Muslim divide may be important in one state, but not the other. This diversity and division has many advantages for India. It adds to India's variety and prevents the country from giving in to a dictator. Because of this diversity, usually only coalition governments success and even Ghandi with his popularity could not form an authoritarian and centralized government.

This is similar to the U.S. in the late 1800s, when they were trying to get rid of the British in America. They slowly fought them off, then civil wars, and slowly led to centralizing the government, large domestic changes, and deep international crises, which transferred America from a weak state in the late 19 century, to America as a super power now.
Fareed ends his argument by mentioning "This tension between society and the state persists in American to this day. In fact, it's worth keeping in mind as we turn to the single most important player in the twenty-first century and ask how America itself will react to the post-American world."

The USS Constitution defeats the HMS Guerriere, a significant event during the war.
http://upload.wikimedia.org/wikipedia/commons/d/d4/USS_Constitution_vs_Guerriere.jpg


Sakawarton (Smoke Johnson), John Tutela, and Young Warner, 3 Six Nations veterans of the War of 1812.
http://upload.wikimedia.org/wikipedia/commons/c/ce/Six_Nations_survivors_of_War_of_1812.jpg

Chapter 4 - The Challenger

From top: Tiananmen, the Bird's Nest stadium, the Temple of Heaven, and the Beijing CBD
http://en.wikipedia.org/wiki/File:Beijing_montage.png

The beginning of this chapter focuses on China and its rapid growth in the past three decades. During the industrialization of Europe, China went backwards in terms of growth, mostly due to poor government policies. After WWII, China was slowly becoming a Western ally and even obtained a seat in the security council until Mao Zedong proclaimed China as a communist state with close ties to the Soviet Union in 1949. That decision, once again put a damper on the Chinese growth and retarded its pace.

On October 1, 1949 at grand ceremony in Beijing's Tiananmen Square, Mao Zedong, chairman of the Central People's Government, solemnly proclaimed the founding of the People's Republic of China (PRC).
http://upload.wikimedia.org/wikipedia/commons/3/3e/PRCFounding.jpg

Mao Zedong pulled China through a series of catastrophic events, which eventually destroyed its economy, technology and intellectual capital. Finally in 1979 globalization reached China. They slowly started launching economic reforms and realizing the communist ideologies and models can not feed and shelter 1.3 billion Chinese people. Data shows that such reforms led to an astonishing growth of over 9 percent a year, for over three decades. In that same time line, this growth lifted nearly 400 million Chinese people out of poverty. Fareed explains that the magnitude of change in China is unimaginable. He uses Shanghai and Beijing as examples of the urban growth. The financial district in Shanghai, and the growth of public transit in Beijing are just a few examples of how fast China is growing. He identifies this concept of growth by giving us an example that involves most of his readers. Almost everyone living in North America is familiar with Wal-Mart. Wal-Mart is the biggest company in North America and it employs more than 1.4 million people. The company imports about $18 billions worth of goods from China each year (2006 figures). This figure shows us how our biggest corporation's global supply chain is basically a Chinese supply chain.

Fareed believes that China was able to achieve this rate of growth because they pursued a distinctly open trade and investment policy, unlike Japan or South Korea. They opened their markets to foreign goods and China has become one of the most open economies in the world. In spite of the rapid growth, Fareed concludes his argument by stating that China is not going to replace the United States as the world super power. China has become the second-most-important country in the world, but it is unlikely to surpass the U.S. on any dimension for many decades.

http://www.stephentaylor.ca/archives/communist-china.jpg

China is considered to be a communist regime, however they accept capitalism with open arms. They believe in the concept of letting the markets do their work of balance the economy. The Chinese worked slowly in fixing the economy and rather than getting rid of the inefficient industries, they let the markets wipe them out. They use central planning which has its advantages and disadvantages. One big disadvantage is the government share of tax receipts (around 50% in China) shows a lack of coordination between the center and the regions. Fareed's point of view is that the problem of spiraling decentralization will be China's greatest challenge. I point out one advantage of this centralization, which is that the government can go ahead with developments and need not to worry about the voters. They do not have to spend billions of dollars on useless or inefficient projects only to satisfy their voters to assure their seat. That is one problem that can really slow down a countries growth.

The following link is a video from you tube on the growth of India and China

http://www.youtube.com/watch?v=4z9yap8ml54

Indian officials like that their Chinese counterparts do not need to worry about voters. In India the politicians have to conduct certain projects that are popular but foolish to ensure their re-election, where the Chinese are able to make many decisions that are far-sighted. Although that is mostly the case in China, people are slowly rising up against the leaders. Globalization brings awareness with it and connects people all over the world. They learn from other country's struggles for freedom and change the model to suit their purpose. In China, regional differences are rising and inequality is skyrocketing. This may also be due to the fact that China compressed their growth into three decades, whereas an equivalent growth in the West took two centuries. It is hardly a surprise that the Chinese state is struggling to keep up with this social upheaval. The most famous was Tiananmen Square protests of 1989.

Tank Man — This famous photo, taken on 5 June 1989 by photographer Jeff Widener
http://upload.wikimedia.org/wikipedia/en/d/d8/Tianasquare.jpg

Fareed also brings up the concept of pollution. There is a high environmental consequence to China's growth. Over a quarter of water in Chinese rivers are completely polluted. Air pollution is widespread and according to Fareed, only about 1% of the urban population breathe air considered safe by the EU standards.

Fareed states that the Marx model of economy explains how when an economy becomes market oriented, they tend to turn to democracy, and by looking at a few countries over decades of development, the pattern is obvious. China is still controlled by a communist party, however many of the leaders understand that dilemma.

He concludes this arguement by stating that China is hungry for success, which is the most likely reason for its rapid rise. They have overcome war, poverty, and isolation and are now finally moving forward. Today, China's leader, the elites, and everyone else in the country have one common desire to move forward and they are unlikely to cast aside three decades of growth and prosperity.

China's growth internally also affects its international relations. Countries with such capacity are not born everyday so this event grabed everyone's attention. The first step, Fareed argues, was to get closer to America and guarantee an entrance to the world's largest consumer market. They archived that by going along with America in the 1980s and for the most part, supported the American agenda in the UN council.

The Chinese have a relatively similar approach to dealing with the rest of the world. The one notable difference is existence of god. The Chinese, along with many East Asian countries, do not believe that one needs god, to be moral in dealings with others. They do not believe in a creator and his set of moral laws that must be followed. The Chinese have their own ways of spirituality such as Confucianism. They celebrate Confucianism for its reliance on reason rather than on divinity as a guide to human affairs.

Statue of Confucius on Chongming Island in Shanghai
http://upload.wikimedia.org/wikipedia/en/8/85/Confuciusstatue.jpg

In the early days when Europe was far ahead in technological advancments, China had more advanced ethics and a better civil organization. Fareed explains that the concept of god and religion in the East, is hard for Westerners to understand. One example was the Portugese missionary, Matteo Ricci, who traveled to China in the 1580s. He shaved his head and dressed in the traditional buddist ropes to present himself as an honored fugure, not realizing that holy men were not held high in East Asia. His assumption of a universal respect for religious figures was far misguided and Fareed point that out well.

Historically god has been quite involved with foreign policy looking back at the Muslims and Christian conqurers. To this date, the missionary spirit is very present in the foriegn policy of many countries. China in contrast may never acquire such sense of destiny. Fareed argues that the Chinese see such issues differently, not with an abstract set of rights and wrongs, but with a sense of practicality that serves as a guiding philosophy.

China views itself as a nation intent on rising peacefully, its behaviour marked by humility, non-interference, and friendly relations with all. Fareed then explains that the peaceful rise of China will be determined by a combination of Chinese actions, and the other coutries' reactions. China is too big of a nation and economy to slip onto the world stage unnoticed. They operate on such a large scale that it cannot help changing the nature of the game. The new generation of the Chinese diplomats are well aware of China's new power.

The question is, will that power go to their head? For now the Chinese foreign policy remains entirely commercially focused. But as mentioned above, China is growing very rapidly. They have economic ties all over the world, invested in some of the biggest American corporations, and have plants and refinaries all over Africa and the Middle East and growing in numbers everyday. One might ask, what could be wrong with building such ties? The answer is nothing for now. Except that when China moves into these countries, it is taking up economic, political, and military space that was occupied by Britain, France or the United States, which has the possibility of causing friction in the future.

Absence of political strings makes Chinese investment attractive for African governments
http://www.international.ucla.edu/cms/images/africa_china.jpg

The Chinese deal directly with the governments because they always control the natural resources that the Chinese need. The transactions are much easier with one centralized authority, especially if it is an outcast regime. An example of that is Zimbabwe, where China buys their minerals and sell weapons and radio technology in return. Despite a ban, China remains Mugabe's main supporter on the UN Security Council. Some believe that Beijing has been slow to recognize its responsibility in the region, however China has been more responsible in Asia. By 2007, they renewed relations with almost all the Asian countries in the region, which is a big step forward for China. Taiwan remains an issue, where China persists that Taiwan remaining attached to the mainland. They consider this an internal issue for China and do not welcome meddling by other, mostly Western, countries. In recent years they have chosen a smarter way regarding Taiwan. One, Fareed explains, is increasing Taiwan's dependence on the mainland, most significantly the reduction of tariffs on farm roducts that come from the most indepent-minded parts of Taiwan. Fareed concluded by saying that all the economic growth and globalization have made China plan for integration and yet have given it the power for military and political confrontation.

http://www.mapsofworld.com/taiwan/maps/taiwan-location-map.jpg

The importance of China's relation with every country in the world is heavily dependent on its relations with the United States. Historically, when the world's leading power is challenged by a rising power, the two have a very difficult relationship. Even though they might not admit it, they are both worried and plan for the worst. For three decades China has been acting in accordance with the U.S. interest, but increasingly, China's younger elite think that their country should think of itself as a competitor with the United States.

For now both China and the U.S. seem to depend on each other and cooperate on many world issues, but there are also disagreements. Some Pentagon officials have been blowing the whistle for a while, warning of the Chinese threat. Fareed argues that the Chinese understand how lopsided the military balance is. They are not as strong as the Soviet Union, so he thinks China will remain an "asymmetrical superpower."

Fareed concludes his arguement by raising another issue, which we will discuss in the next chapeter: "In thinking through how to approach China, American political elites have fixed their gaze on another rising power, close to, and close on the heels of, China-India."