The World is Flat - Friedman Thomas (мир бесплатных книг .TXT) 📗

The Intangible Things

You can tell a lot by just comparing skylines. Like many Indian Americans, Dinakar Singh, the hedge fund manager, regularly goes back to India to visit family. In the winter of 2004, he went back to New Delhi for a visit. When I saw him a few months later, he told me about the moment when he realized why India's economy, as a whole, still had not taken off as much as it should have-outside of the high-tech sector. “I was on the sixth floor of a hotel in New Delhi,” he recalled, “and when I looked out the window I could see for miles. How come? Because you do not have assured power in Delhi for elevators, so there are not many tall buildings.” No sensible investor would want to build a tall building in a city where the power could go out at any moment and you might have to walk up twenty flights of stairs. The result is more urban sprawl and an inefficient use of space. I told Singh that his story reminded me of a trip I had just taken to Dalian, China. I had been to Dalian in 1998, and when I went back in 2004,1 did not recognize the city. There were so many new buildings, including modern glass-and-steel towers, that I began to question whether I had actually visited there in 1998. Then I added another recollection. I went to school in Cairo in the summer of 1974. The three most prominent buildings in the city then were the Nile Hilton, the Cairo Tower, and the Egyptian TV building. Thirty years later, in 2004, they are still the most prominent buildings there; the Cairo skyline has barely changed. Whenever I go back to Cairo, I know exactly where I am. I visited Mexico City shortly before Dalian, where I had not visited in five years. I found it much cleaner than I had remembered, thanks to a citywide campaign by the mayor. There were also a few new buildings up, but not as many as I expected after a decade of NAFTA. Inside the buildings, though, I found my Mexican friends a little depressed. They told me that Mexico had lost its groove—it just wasn't growing like it had been, and people's self-confidence was waning.

So in Delhi, you can see forever. In Cairo, the skyline seems forever the same. In China, if you miss visiting a city for a year, it's like you haven't been there in forever. And in Mexico City, just when Mexicans thought they had turned the corner forever, they ran smack into China, coming the other way and running much faster.

What explains these differences? We know the basic formula for economic success-reform wholesale, followed by reform retail, plus good governance, education, infrastructure, and the ability to glocalize. What we don't know, though, and what I would bottle and sell if I did, is the answer to the question of why one country gets its act together to do all these things in a sustained manner and why another one doesn't. Why does one country's skyline change overnight and another's doesn't change over half a century? The only answer I have been able to find is something that cannot be defined: I call it the intangible things. These are primarily two qualities: a society's ability and willingness to pull together and sacrifice for the sake of economic development and the presence in a society of leaders with the vision to see what needs to be done in terms of development and the willingness to use power to push for change rather than to enrich themselves and preserve the status quo. Some countries (such as Korea and Taiwan) seem to be able to focus their energies on the priority of economic development, and others (such as Egypt and Syria) get distracted by ideology or local feuds. Some countries have leaders who use their time in office to try to drive modernization rather than personally enrich themselves. And some countries simply have venal elites, who use their time in office to line their pockets and then invest those riches in Swiss real estate. Why India had leaders who built institutes of technology and Pakistan had leaders who did not is a product of history, geography, and culture that I can only summarize as one of those intangible things. But even though these intangibles are not easily measured, they really do matter.

The best way I know to illustrate this is by comparing Mexico and China. Mexico, on paper, seemed perfectly positioned to thrive in a flat world. It was right next door to the biggest, most powerful economy in the world. It signed a free-trade agreement with the United States and Canada in the 1990s and was poised to be a springboard to Latin America for both these huge economies. And it had a valuable natural resource in oil, which accounted for more than a third of government income. China, by contrast, was thousands of miles away, burdened by overpopulation, with few natural resources, with its best labor crowded onto a coastal plain, and with a burdensome debt legacy from fifty years of Communist rule. Ten years ago, if you took the names off these two countries and just gave someone their profiles, he surely would have bet on Mexico. And yet China has replaced Mexico as the second-largest exporter of goods into the United States. And there is a general sense, even among Mexicans, that even though China is thousands of miles away from America, it is growing closer to America economically, while Mexico, right on America's border, is becoming thousands of miles away.

I am by no means writing Mexico off. Mexico, in the fullness of time, may turn out to be the slow-but-sure tortoise to China's hare. China still has a huge political transition to get through, which could derail it at any moment. Moreover, Mexico has many entrepreneurs who are as Chinese as the most entrepreneurial Chinese. Mexico would not have exported $138 billion worth of goods to the United States in 2003 if that were not the case. And you have many rural Chinese who are no more advanced or productive than rural Mexicans. But on balance, when you add it all up, the fact is that China has become the hare and Mexico has not, even though Mexico seemed to start with so many more natural advantages when the world went flat. Why?

This is a question Mexicans themselves are asking. When you go to Mexico City these days, Mexicans will tell you that they are hearing that “giant sucking sound” in stereo. “We are caught between India and China,” Jorge Castaneda, Mexico's former foreign minister, told me in 2004. “It is very difficult for us to compete with the Chinese, except with high-value-added industries. Where we should be competing, the services area, we are hit by the Indians with their back offices and call centers.”

No doubt China is benefiting to some degree from the fact that it still has an authoritarian system that can steamroll vested interests and archaic practices. Beijing's leadership can order many reforms from the top down, whether it is a new road or accession to the World Trade Organization. But China today also has better intangibles-an ability to summon and focus local energies on reform retail. China may be an authoritarian state, but it nevertheless has strong state institutions and a bureaucracy that manages to promote a lot of people on merit to key decision-making positions, and it has a certain public-spiritedness. The Mandarin tradition of promoting bureaucrats who see their role as promoting and protecting the interests of the state is still alive and well in China. “China has a tradition of meritocracy-a tradition that is also carried on in Korea and Japan,” said Francis Fukuyama, author of the classic The End of History and the Last Man. “All of them also have a basic sense of'stateness' where [public servants] are expected to look to the long-term interests of the state” and are rewarded by the system for doing so.

Mexico, by contrast, moved during the 1990s from a basically one-party authoritarian state to a multiparty democracy. So just when Mexico needs to summon all its will and energy for reform retail on the micro level, it has to go through the much slower, albeit more legitimate, democratic process of constituency building. In other words, any Mexican president who wants to make changes has to aggregate so many more interest groups-like herding cats-to implement a reform than his autocratic predecessors, who could have done it by fiat. A lot of these interest groups, whether unions or oligarchs, have powerful vested interests in the status quo and the power to strangle reforms. And Mexico's state system, like that of so many of its Latin American neighbors, has a long history of simply being an instrument of patronage for the ruling party or local interests, not the national interest.