The Fix: How Nations Survive and Thrive in a World in Decline

285 Pages·2016·3.07 MB·English

by  Jonathan Tepperman

To Alexis, Gerome, and Novi, who were with me from the start.
And to Leo, who joined us by the end.
Politics is the art of looking for trouble, finding it, misdiagnosing it, and then
misapplying the wrong remedies.
—GROUCHO MARX
Cover
Title Page
Copyright
Dedication
Epigraph
INTRODUCTION
LEGENDS OF THE FALL
1. PROFITS TO THE PEOPLE
HOW BRAZIL SPREADS ITS WEALTH
2. LET THE RIGHT ONES IN
CANADA’S IMMIGRATION REVOLUTION
3. KILL THEM WITH KINDNESS
HOW INDONESIA CRUSHED AND CO-OPTED ITS ISLAMIC EXTREMISTS
4. LEARN TO LIVE WITH IT
RWANDA’S WRENCHING RECONCILIATION
5. ASSUME THE WORST
HOW SINGAPORE CONQUERS CORRUPTION
6. DIAMONDS AREN’T FOREVER
HOW BOTSWANA DEFEATED THE RESOURCE CURSE
7. THIS LAND IS MY LAND
WHY THE SHALE REVOLUTION COULD ONLY HAPPEN IN THE USA
8. MANUFACTURE YOUR MIRACLE
HOW SOUTH KOREA KEEPS ITS ECONOMY GROWING. AND GROWING. AND
GROWING.
9. GIVE TO GET
HOW MEXICO GOT ITS GOVERNMENT GOING AGAIN
10. DIY DEFENSE
NEW YORK CITY AND THE ART OF THE WORK-AROUND
CONCLUSION
HOW TO SURVIVE AND THRIVE IN A WORLD IN DECLINE
NOTES
REFERENCES
ACKNOWLEDGMENTS
This is a good news book. What follows is a collection of success stories
gathered over several years I spent traveling around the world in search of
solutions to the great problems of our day—and the leaders who figured them
out. In the ten chapters ahead, I’m going to introduce them to you and take you
on a tour of their laboratories, which also happen to be some of the most
successful (or at least most interesting) countries on the planet. Along the way,
I’ll weave in leadership lessons and practical advice on problem solving distilled
from their experiences. And I’ll make an argument for hope in this time of
overpowering gloom. More than anything else, this book is meant as a testament
to the power of people to get things done. At a time when most of us have
glumly concluded that our governments are broken and our domestic and
international problems are insurmountable, I aim to show how the right
individuals can overcome the most intimidating obstacles—if they follow the
right strategies. This book makes a data-driven case for optimism at a moment of
gathering darkness.
Before we can get to the good news, however, we need to start with the bad—
as so many other conversations do these days.
We’re living, after all, in an era of unprecedented decline—or so, at least,
we’re constantly being told. Open a newspaper or a magazine, browse the
nonfiction titles at your bookstore, or click on cable news, and the black tide can
easily overwhelm you.
Welcome, as The New Yorker’s George Packer has put it, to the great
“unwinding.”
Of course, most of us don’t need anyone to tell us that things are falling apart;
we feel it every day. We hear about terrorists murdering innocents and fear for
our own families. We sense the trouble in our gut when we tear open our
stubbornly flat paychecks. If you live in a big city like New York, as I do, you
feel the dysfunction in the soles of your feet as you rumble homeward, bouncing
along pitted roads or jostling for space on overcrowded subways. Once you do
make it home, you confront more ill omens when your bills and bank statements
arrive; according to a recent study by the Federal Reserve, 47 percent of
Americans now have so little in savings that they couldn’t cover an emergency
outlay of just $400. You’re reminded of the problems yet again when your kids
walk in the door, having valiantly navigated their underresourced schools. And if
they’re lucky enough to get into college, you’ll confront the troubles one more
time when their skyrocketing tuition comes due. (Don’t count on them being
able to pay you back, either; unlike previous generations, few young Americans
today can reasonably expect to make more money in their lifetimes than their
parents did.)
Feeling anxious? If so, you’re not alone: 72 percent of Americans still think
we are in a recession, and according to a poll taken in December 2015, just a
quarter of US citizens think their country is headed in the right direction. Such
pessimism is not just an American phenomenon either; another recent survey
found that only 47 percent of Israelis, 38 percent of Russians, 35 percent of
Turks, and 20 percent of Frenchmen expect their economic outlook to improve
in the next year.
What adds to our dismay is that many of us are still in shock. It wasn’t that
long ago that experts and politicians were assuring us that the good times were
here to stay. Remember the Aughts, that golden age of progress, progress, and
more progress? Fueled by innovation, higher education, and a red-hot real-estate
market, America’s economic engine—the world’s mightiest—roared ahead. So
did the economies of virtually every other country; during the 1999–2008 boom
years, it seemed like your economy was guaranteed to thrive so long as your
president or prime minister had a pulse. By the middle of the last decade,
emerging markets were growing by an average of more than 7 percent a year,
and the developing world had begun to enjoy undreamt-of prosperity. Some 440
million people were lifted out of poverty in just ten years. By 2007, as the
emerging-market growth rate hit a scorching 8.7 percent, the global middle class
topped 1.8 billion people, and even normally staid economists began declaring
that we’d entered an era of “convergence”—a long-prophesied moment when the
rest would finally catch up with the wealthy West.
And then came the crash. In September 2008, Lehman Brothers vaporized and
the US economy staggered. Soon Europe also caught the bug. Then, like a scene
from a zombie movie, the pandemic spread to the developing world. As cash-
strapped Westerners stopped buying so many foreign-made smartphones and
shoes, factories from Shenzhen to Saigon to San Salvador began shuttering their
doors. These closures diminished demand for raw materials—and so the world’s
commodity superstores also began to sicken. With fewer goods to transport and
cost-conscious drivers cutting back on fuel, the hydrocarbon giants started
ailing: Russia’s economic growth rate, for example, fell from 4.5 percent in 2010
to negative territory in 2015.
As the storm spread throughout the global economy, the geopolitical forecast
also darkened. The 2011 Arab Spring was soon snuffed out by icy winds as
autocrats reasserted control in Egypt, Bahrain, and elsewhere. Vicious civil wars
flared up from one end of the Middle East (Libya) to the other (Yemen). And
none burned hotter than the one at its core, in Syria.
Then came the terrible spring and summer of 2014. Beijing stepped up its
bullying in the South and East China Seas, positioning oil rigs, building airfields,
and stationing troops on disputed coral reefs and narrow strips of sand. Russia
surreptitiously sent commandos to join the civil war in eastern Ukraine, and then
formally annexed Crimea: Europe’s first such brazen land grab since World War
II. A formerly obscure offshoot of al-Qaeda known as Daesh or ISIS stormed out
of the Syrian badlands and into Iraq. Its fighters erased the 1918 border, seized a
third of the country—including Mosul, Iraq’s second-biggest city (along with oil
fields and hundreds of millions of dollars’ worth of US-supplied military
equipment)—declared themselves the Islamic State, and then began beating and
beheading Iraqi and Syrian civilians into submission. In West Africa,
meanwhile, Boko Haram—another Islamist death cult—slaughtered some ten
thousand victims. And a virulent strain of Ebola began to spread through the
region, claiming tens of thousands of victims in Liberia, Sierra Leone, Guinea,
and elsewhere.
Things were supposed to get better in 2015 and 2016, if only because it was
hard to imagine them getting worse. But with very few exceptions—most
notably the US-Iran nuclear deal—they have gotten worse. In January, Islamist
terrorists shot up a satirical Paris magazine, Charlie Hebdo. Seven years after the
Great Recession, economic growth remained lower than the precrisis average in
every major region of the world. Greece teetered on the edge of bankruptcy and,
by revealing deep schisms within the European Union, threatened to bring down
the whole European project. IS tightened its grip on its new domain, escalating
its atrocities, and then, when it began to lose ground, started lashing out abroad:
downing a civilian jet over Sinai in October, hitting Paris again in November,
inspiring two Californians to commit mass murder in December, and killing
more than thirty innocents in Brussels in March 2016. Iran and Russia increased
their meddling in Syria, intensifying the savagery. Saudi Arabia and its Gulf
allies blundered into Yemen’s civil war, killing thousands of innocents and
allowing the local Qaeda franchise to flourish. Millions of desperate refugees
fled the region—many headed for Europe, where they produced panic, nativist
backlashes, and still more squabbling within the EU. And China’s worsening
economic woes, along with the worldwide slump in commodity prices, took
whatever shine remained off most emerging markets. Apart from India and a few
other bright spots, the world seemed to be entering a dismal new era of slow
growth. Between 2010 and 2015, the average emerging-market growth rate fell
from 7.4 to 3.8 percent. And the whole planet seemed to be sliding toward
another crisis.
All these events, in isolation, would have been frightening enough; General
Martin Dempsey, a former chairman of the Joint Chiefs of Staff, captured the
prevailing mood well when he called it “the most dangerous time” in his life.
Yet what made these episodes even scarier was the way they seemed to expose
two more alarming trends. The first was the slow-motion disintegration of
Westphalian nation-states in multiple areas of the globe, including the Middle
East, the Sahel, and Russia’s periphery. Second, many of these incidents seemed
to underscore a growing weakness at the heart of the liberal, rules-based global
order. That order was established by Washington and its allies after World War
II, and was then reinforced and extended at the end of the Cold War. It has
brought unparalleled prosperity and peace to the world in the years since. And
yet it now seems to face more threats on more fronts than ever before.
—
I know I told you that this would be a good news book, and I know it doesn’t
seem like that so far. But bear with me—we’ll get to the good news soon. Before
we do, however, I need to say a few more things about the unhappy narrative
I’ve just recounted.
One of the basic premises of this book is that while the details of all the
troubles currently wracking the world vary, they share an underlying cause: the
failure of politicians to lead. More specifically, most of them stem from the
failure of our leaders to adequately address ten big problems—roughly half of
which are political and half of which are economic—that together represent