Fareed Zakaria: The Rise of the Rest One Year After the Election of Obama

by Jackie Ogburn

The fall of the Berlin Wall was the beginning of a period that Newsweek International Editor and CNN host Fareed Zakaria calls “stunningly peaceful by historical standards.” Zakaria spoke on Nov. 9, the twentieth anniversary of that pivotal event, at Duke University’s Page Auditorium.

When the current global financial crisis began a year ago, many declaimed that the world would never be the same. Yet now, Zakaria noted, it looks much the same. In several other economic downturns, such as the 1992 U.S. recession, the Asia recession of 1994 and the collapse of the tech bubble, the system rebounded. Zakaria asserted this is because of “deep roots of stability,” both political and economic, in the current global system.

During the 1960s and 70s, there were two competing political and economic models: the American and the Soviet. Very few were on the American side; most followed the Soviet model, including India and China. After the fall of the Berlin Wall, only the U.S. model remained, and most nations learned to position themselves within that model, opening markets and creating more open societies.

The result has been more widespread economic growth and a period of “extraordinary stability,” Zakaria said. In 1979, 35 countries had economies growing at a rate of 3 percent a year, while in 2007, 125 countries were growing at that rate.

Technological advancements also support stabilization by enhancing the flow of information, Zakaria said. He used the first Iraq war in 1990 as an example. When Iraq invaded Kuwait, the king of Saudi Arabia wanted time to think, so the Saudi people were not told of the invasion for nine days.

“How long could they keep that secret today?” Zakaria asked. “About five minutes with Twitter.” Cell phone technology in particular has democratized social networking in a way that regimes can’t control, he said, except by shutting down the entire phone system.

When the most recent financial crisis hit, most countries were invested in this new stability. “No one said, let’s create a socialist workers utopia now,” Zakaria said. Money flowed to the safe investments, into U.S. Treasury bonds.

The U.S. is still the largest economy in the world, and a leader in biotechnology and education, but that could change. He used the example of California, a center of innovation in technology and entertainment. In the 1950s and 60s, California invested in education and had the best educational system in the country, from elementary to the university level. But in the last 30 years, the University of California built only one new campus, while the state built eight new prisons.

The rise of China could be unsettling, particularly to neighboring Pacific nations. Zakaria pointed to “the bad track record of the rise of great powers,” but noted some differences today. China wants to exercise financial power, but doesn’t want a proxy war with the United States. China is using money to gain influence in the developing world, especially through aid grants in Africa.

At the same time, the United States is not making the necessary investments in science, especially energy technology, he said. He attributes this partially to political changes in the U.S., especially at the federal level.

“Many of our problems are fixable,” he said. “They are intellectually trivial, but politically impossible.” The current political climate discourages compromise and favors ideological purity. Zakaria sees the U.S. political inability to compromise as a weakness, caused by structural changes such as redistricting. Congress now has a higher re-election rate than the Soviet system at its height, he said.

 “It’s great for fund-raising, but a terrible way to run a country.” In closing, Zakaria said, “This is the world we wanted to create, with open markets and open systems. The world has said “yes” and we don’t know what to do. Our job now is to globalize ourselves.”

 

Fareed Zakaria’s talk, “The Rise of the Rest: The Post-American World One Year after the Election of Obama,” was part of the Sanford School Inaugural Series. It was made possible by the Ambassador S. Davis Phillips Endowment and was co-sponsored by the Sanford School, Duke American Grand Strategy Program and the Triangle Institute for Security Studies.

Fareed Zakaria

Fareed Zakaria
Editor of Newsweek International, columnist and CNN Host