Chapter-13 Developing Countries and the Flat World
The World Bank reported that in 1990 there were roughly 375 million people in China living in extreme poverty, on less than $ 1 per day. By 2001, there were 212 million Chinese living in extreme poverty, and by 2015, if current trends hold, there will be only 16 million living on less than $1 a day. In South Asia-primarily India, Pakistan, and Bangladesh-the numbers go from 462 million in 1990 living on less than $1 a day down to 431 million by 2001 and down to 216 million in 2015. In sub-Saharan Africa, by contrast, where globalization has been slow to take hold, there were 227 million people living on less than $1 a day in 1990, 313 million in 2001, and an expected 340 million by 2015.
Many of the key elements of reform retail were best defined by the research done by the World Bank's International Finance Corporation (IFC) and its economic analysis team led by its chief economist, Michael Klein. What do we learn from their work? To begin with, you don't grow your country out of poverty by guaranteeing everyone a job. Egypt guarantees all college graduates a job each year, and it has been mired in poverty with a slow-growing economy for fifty years.
"If it were just a matter of the number of jobs, solutions would be easy, for example, state-owned enterprises could absorb all those in need of employment. The real issue is not just employment, but increasingly productive employment that allows living standards to rise." State-owned enterprises and state-subsidized private firms usually have not delivered sustainable productivity growth, and neither have a lot of other approaches that people assume are elixirs of growth, they add. Just attracting more foreign investment into a country also doesn't automatically do it. And even massive investments in education won't guarantee it. More important, it is a matter of using resources well." In other words, countries grow out of poverty not only when they manage their fiscal and monetary policies responsibly from above They grow out of poverty when they also create an environment below that makes it very easy for their people to start businesses, raise capital, and become entrepreneurs, and when they subject their people to at least some competition from beyond-because companies and countries with competitors always innovate more and faster.
The IFC drove home this point with a comprehensive study of more than 130 countries, called Doing Business in 2004. The IFC asked five basic questions about doing business in each of these countries, questions about how easy or difficult it is to
1) Start a business in terms of local rules, regulations, and license fees,
2) Hire and fireworkers.
3) Enforce a contract,
4) Get credit, and 5) close a business that goes bankrupt or is failing.
The IFC's criteria were inspired by the brilliant and innovative work of Hernando de Soto, who has demonstrated in Peru and other developing nations that if you change the regulatory and business environment for the poor, and give them the tools to collaborate, they will do the rest.Doing Business in 2004 tries to explain each of its points with a few colorful examples:
"Teuku, an entreprenuer in Jakarta, wants to open a textile factory. He has customers lined up, imported machinery, and a promising business plan. Teuku's first encounter with the government is when registering his business. He gets the standard forms from the Ministry of Justice, and completes and notarizes them. Teuku proves that he is a local resident and does not have a criminal record. He obtains a tax number, applies for a business license, and deposits the minimum capital (three times national income per capita) in the bank. He then publishes the articles of association in the official gazette, pays a stamp fee, registers at the Ministry of Justice, and waits 90 days before filing for social security. One hundred sixty-eight days after he commences the process, Teuku can legally start operations. In the meantime, his customers have contracted with another business.
"In Panama, another entrepreneur, Ina, registers her construction company in only 19 days. Business is booming and Ina wants to hire someone for a two-year appointment. But the employment law only allows fixed-term appointments for specific tasks, and even then requires a maximum term of one year. At the same time, one of her current workers often leaves early, with no excuse, and makes costly mistakes. To replace him, Ina needs to notify and get approval from the union, and pay five months' severance pay. Ina rejects the more qualified applicant she would like to hire and keeps the underperforming worker on staff. "
Ali, a trader in the United Arab Emirates, can hire and fire with ease. But one of his customers refuses to pay for equipment delivered three months earlier. It takes 27 procedures and more than 550 days to resolve the payment dispute in court. Almost all procedures must be made in writing, and require extensive legal justification and the use of lawyers. After this experience, Ali decides to deal only with customers he knows well.
"Timnit, a young entrepreneur in Ethiopia, wants to expand her successful consulting business by taking a loan. But she has no proof of good credit history because there are no credit information registries. Although her business has substantial assets in accounts receivable, laws restrict her bank from using these as collateral. The bank knows it cannot recover the debt if Timnit defaults, because courts are inefficient and laws give creditors few powers. Credit is denied. The business stays small. "
Having registered, hired workers, enforced contracts, and obtained credit, Avik, a businessman in India, cannot make a profit and goes out of business. Faced with a 10-year-long process of going through bankruptcy, Avik absconds, leaving his workers, the bank, and the tax agency with nothing."
If you want to know why two decades of macroeconomic reform wholesale at the top have not slowed the spread of poverty and produced enough new jobs in key countries of Latin America, Africa, the Arab world, and the former Soviet Empire, it is because there has been too little reform retail. According to the IFC report, if you want to create productive jobs (the kind that lead to rising standards of living), and if you want to stimulate the growth of new businesses (the kind that innovate, compete, and create wealth), you need a regulatory environment that makes it easy to start a business, easy to adjust a business to changing market circumstances and opportunities, and easy to close a business that goes bankrupt, so that the capital can be freed up for more productive uses.
"It takes two days to start a business in Australia, but 203 days in Haiti and 215 days in the Democratic Republic of Congo," the IFC study found. "There are no monetary costs to start a new business in Denmark, but it costs more than five times income per capita in Cambodia and over thirteen times in Sierra Leone. Hong Kong, Singapore, Thailand and more than three dozen other economies require no minimum capital from start-ups. In contrast, in Syria the capital requirement is equivalent to fifty-six times income per capita . . . Businesses in the Czech Republic and Denmark can hire workers on part-time or fixed-term contracts for any job, without specifying maximum duration of the contract. In contrast, employment laws in El Salvador allow fixed-term contracts only for specific jobs, and set their duration to be at most one year ... A simple commercial contract is enforced in seven days in Tunisia and thirty-nine days in the Netherlands, but takes almost 1,500 days in Guatemala. The cost of enforcement is less than 1 percent of the disputed amount in Austria, Canada and the United Kingdom, but more than 100 percent in Burkina Faso, the Dominican Republic,
Indonesia . .. and the Philippines. Credit bureaus contain credit histories on almost every adult in New Zealand, Norway and the United States. But the credit registries in Cameroon, Ghana, Pakistan, Nigeria and Serbia and Montenegro have credit histories for less than 1 percent of adults. In the United Kingdom, laws on collateral and bankruptcy give creditors strong powers to recover their money if a debtor defaults. In Colombia, the Republic of Congo, Mexico, Oman and Tunisia, a creditor has no such rights. It takes less than six months to go through bankruptcy proceedings in Ireland
and Japan, but more than ten years in Brazil and India. It costs less than 1 percent of the value of the estate to resolve insolvency in Finland, the Netherlands, Norway and Singapore-and nearly half the estate value in Chad, Panama, Macedonia, Venezuela, Serbia and Montenegro, and Sierra Leone."
Cultural Bottlenecks
In a world where the single greatest advantage a culture can have is the ability to foster adaptability and adoptability, the Muslim world today is dominated by a religious clergy that literally bans ijtihad, reinterpretation of the principles of Islam in light of current circumstances.
Think about the whole mind-set of bin Ladenism. It is to "purge" Saudi Arabia of all foreigners and foreign influences. That is exactly the opposite of glocalizing and collaborating.
Tribal culture and thinking still dominate in many Arab countries, and the tribal mind-set is also anathema to collaboration. What is the motto of the tribalist? "Me and my brother against my cousin; me, my brother, and my cousin against the outsider." And what is the motto of the globalists, those who build collaborative supply chains? "Me and my brother and my cousin, three friends from childhood, four people in Australia, two in Beijing, six in Bangalore, three from Germany, and four people we've met only over the Internet all make up a single global supply chain."
The Arab-Muslim world's resistance to glocalization is something that some liberal Arab commentators are now focusing on. Consider a May 5, 2004, article in the Saudi English-language daily Arab News by liberal Saudi journalist Raid Qusti, titled "How Long Before the First Step?"
"Terrorist incidents in Saudi Arabia are more or less becoming everyday news. Every time I hope and pray that it ends, it only seems to get worse," Qusti wrote. "One explanation to why all of this is happening was brought up by the editor in chief of Al-Riyadh newspaper, Turki Al-Sudairi, on a program about determining the roots of the terrorist acts. He said that the people carrying out these attacks shared the ideology of the Juhaiman movement that seized the Grand Mosque in the seventies. They had an ideology of accusing others of being infidels and giving themselves a free
hand to kill them, be it Westerners-who, according to them, ought to be kicked out of the Arabian Peninsula-or the Muslim believer who does not follow their path. They disappeared in the eighties and nineties from the public eye and have again emerged with their destructive ideology. The question Al-Sudairi forgot to bring up was: What are we Saudis going to do about it? If we as a nation decline to look at the root causes, as we have for the past two decades, it will only be a matter of time before another group of people with the same ideology spring up. Have we helped create these monsters? Our education system, which does not stress tolerance of other faiths-let alone tolerance of followers of other Islamic schools of thought-is one thing that needs to be re-evaluated from top to bottom. Saudi culture itself and the fact that the majorities of us do not accept other lifestyles and impose our own on other people is another. And the fact that from fourth to 12th grade we do not teach our children that there are other civilizations in the world and that we are part of the global community and only stress the Islamic empires over and over is also worth re-evaluating."
Chapter-14 Companies and the Flat World
How Companies Cope
Rule #1: When the world goes flat-and you are feeling flattened- reach for a shovel and dig inside yourself. Don't try to build walls.
Rule #2: And the small shall act big. . .
One way small companies flourish in the flat world is by learning to act really big. And the key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther, faster, wider, and deeper.
Story of another friend, Fadi Ghandour, the cofounder and CEO of Aramex, the first home-grown package delivery service in the Arab world and the first and only Arab company to be listed on the Nasdaq.
Rule #3: And the big shall act small...
One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big.
Rule #4: The best companies are the best collaborators.
In the flat world, more and more business will be done through collaborations within and between companies, for a very simple reason: The next layers of value creation-whether in technology, marketing, biomedicine, or manufacturing-are becoming so complex that no single firm or department is going to be able to master them alone.
Rolls-Royce. When you hear the word "Rolls-Royce," what immediately comes to mind is a shiny handmade car, with a uniformed chauffeur sitting in the driver's seat and a perfectly tailored couple in the back on their way to Ascot or Wimbledon. Rolls-Royce, the quintessential stodgy British company, right? What if I told you, though, that Rolls-Royce doesn't even make cars anymore (that business was sold in 1972 and the brand was licensed to BMW in 1998), that 50 percent of its income comes from services, and that in 1990 all of its employees were in Great Britain and today
40 percent are based outside of the United Kingdom, integrated into a global operation that stretches from China to Singapore to India to Italy to Spain to Germany to Japan and up to Scandinavia.
Rule #5: In a flat world, the best companies stay healthy by getting regular chest X-rays and then selling the results to their clients.
Rule #6: The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists-not to save money by firing more people.
Rule #7: Outsourcing isn't just for Benedict Arnolds. It's also for idealists.
One of the newest figures to emerge on the world stage in recent years is the social entrepreneur. This is usually someone who burns with desire to make a positive social impact on the world, but believes that the best way of doing it is, as the saying goes, not by giving poor people a fish and feeding them for a day, but by teaching them to fish, in hopes of feeding them for a lifetime.
Chapter-15 The Unflat World
You have to read the entire chapter :)
Mark Steyn, writing in the National Review (October 25, 2004), related a story from the London Arabic newspaper paper Al-Quds al-Arabi about a panic that broke out in Khartoum, Sudan, after a crazy rumor swept the city, claiming that if an infidel shook a man's hand, that man could lose his manhood. "What struck me about the story," wrote Steyn, "was a detail: The hysteria was spread by cell phones and text messaging. Think about that: You can own a cell phone yet still believe a foreigner's handshake can melt away your penis. What happens when that kind of technologically advanced primitivism advances beyond text messaging?"
Chapter-16
Free Trade is God's diplomacy. There is no other certain way of uniting people in the bonds of peace. -British politician Richard Cobden, 1857
“The history of economic development teaches this over and over: If you can do it, you must do it, otherwise your competitors will.”
What is "demand shaping"? It works like this: At 10 a.m. Austin time, Dell discovers that so many customers have ordered notebooks with 40-gigabyte hard drives since the morning that its supply chain will run short in two hours. That signal is automatically relayed to Dell's marketing department and to Dell.com and to all the Dell phone operators taking orders. If you happen to call to place your Dell order at 10:30 a.m., the Dell representative will say to you, "Tom, it's your lucky day! For the next hour we are offering 60-gigabyte hard drives with the notebook you want-for only $10 more than the 40-gig drive. And if you act now, Dell will throw in a carrying case along with your purchase, because we so value you as a customer." In an hour or two, using such promotions, Dell can reshape the demand for any part of any notebook or desktop to correspond with the projected supply in its global supply chain. Today memory might be on sale, tomorrow it might be CD-ROMs.
Golden Arches Theory of Conflict Prevention
After confirming this with McDonald's, I offered what I called the Golden Arches Theory of Conflict Prevention. The Golden Arches Theory stipulated that when a country reached the level of economic development where it had a middle class big enough to support a network of McDonald's, it became a McDonald's country. And people in McDonald's countries didn't like to fight wars anymore. They preferred to wait in line for burgers. While this was offered slightly tongue in cheek, the serious point I was trying to make was that as countries got woven into the fabric of global trade and rising living standards, which having a network of McDonald's franchises had come to symbolize, the cost of war for victor and vanquished became prohibitively high.
This McDonald's theory has held up pretty well, but now that almost every country has acquired a McDonald's, except the worst rogues like North Korea, Iran, and Iraq under Saddam Hussein, it seemed to me that this theory needed updating for the flat world.
The Dell Theory of Conflict Prevention
The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell's, will ever fight a war against each other as long as they are both part of the same global supply chain. Because people embedded in major global supply chains don't want to fight old-time wars anymore. They want to make just-in-time deliveries of goods and services -and enjoy the rising standards of living that come with that.
"These countries understand the risk premium that they have," said Dell of the countries in his Asian supply chain. "They are pretty careful to protect the equity that they have built up or tell us why we should not worry [about their doing anything adventurous]. My belief after visiting China is that the change that has occurred there is in the best interest of the world and China. Once people get a taste for whatever you want to call it-economic independence, a better lifestyle, and a better life for their child or children-they grab on to that and don't want to give it up."
The Dell Theory had its first real test in December 2004, when Taiwan held parliamentary elections. President Chen Shui-bian's pro-independence Democratic Progressive Party was expected to win the legislative runoff over the main opposition Nationalist Party, which favored closer ties with Beijing. Chen framed the election as a popular referendum on his proposal to write a new constitution that would formally enshrine Taiwan's independence, ending the purposely ambiguous status quo. Had Chen won and moved ahead on his agenda to make Taiwan its own motherland, as opposed to maintaining the status quo fiction that it is a province of the mainland, it could have led to a Chinese military assault on Taiwan. Everyone in the region was holding his or her breath. And what happened? Motherboards won over motherland. A majority of Taiwanese voted against the pro-independence governing party legislative candidates, ensuring that the DPP would not have a majority in parliament. I believe the message Taiwanese voters were sending was not that they never want Taiwan to be independent. It was that they do not want to upset the status quo right now, which has been so beneficial to so many Taiwanese. The voters seemed to understand clearly how interwoven they had become with the mainland, and they wisely opted to maintain their de facto independence rather than force de jure independence, which might have triggered a Chinese invasion and a very uncertain future.
While the biggest test case of the Dell Theory is China versus Taiwan, the fact is that the Dell Theory has already proved itself to some degree in the case of India and Pakistan, the context in which I first started to think about it. I happened to be in India in 2002, when its just-in-time services supply chains ran into some very old-time geopolitics-and the supply chain won. In the case of India and Pakistan, the Dell Theory was working on only one party-India-but it still had a major impact. India is to the world's knowledge and service supply chain what China and Taiwan are to the manufacturing ones. By now readers of this book know all the highlights: General Electric's biggest research center outside the United States is in Bangalore, with seventeen hundred Indian engineers, designers, and scientists. The brain chips for many brand-name cell phones are designed in Bangalore. Renting a car from Avis online? It's managed in Bangalore. Tracing your lost luggage on Delta or British Airways is done from Bangalore, and the backroom accounting and computer maintenance for scores of global firms are done from Bangalore, Mumbai, Chennai, and other major Indian cities. Here's what happened: On May 31, 2002, State Department spokesman Richard Boucher issued a travel advisory saying, "We urge American citizens currently in India to depart the country," because the prospect of a nuclear exchange with Pakistan was becoming very real. Both nations were massing troops on their borders, intelligence reports were suggesting that they both might be dusting off their nuclear warheads, and CNN was flashing images of people flooding out of India. The global American firms that had moved their back rooms and R & D operations to Bangalore were deeply unnerved.
"I was actually surfing on the Web, and I saw a travel advisory come up on India on a Friday evening/' said Vivek Paul, president of Wipro, which manages backroom operations from India of many American multinationals. "As soon as I saw that, I said, 'Oh my gosh, every customer that we have is going to have a million questions on this.' It was the Friday before a long weekend, so over the weekend we at Wipro developed a fail-safe business continuity plan for all of our customers." While Wipro's customers were pleased to see how on top of things the company was, many of them were nevertheless rattled. This was not in the plan when they decided to outsource mission-critical research and operations to India. Said Paul, "I had a CIO from one of our big American clients send me an e-mail saying, 1 am now spending a lot of time looking for alternative sources to India. I don't think you want me doing that, and I don't want to be doing it.' I immediately forwarded his message to the Indian ambassador in Washington and told him to get it to the right person."
While not trying to meddle in foreign affairs, he added, "What we explained to our government, through the Confederation of Indian Industry, is that providing a stable, predictable operating environment is now the key to India's development." This was a real education for India's elderly leaders in New Delhi, who had not fully absorbed how critical India had become to the world's knowledge supply chain. When you are managing vital backroom operations for American Express or General Electric or Avis, or are responsible for tracing all the lost luggage on British Airways or Delta, you cannot take a month, a week, or even a day off for war without causing major disruptions for those companies. The Indian government also looked around and realized that the vast majority of India's billion people were saying, "I want a better future, not more territory." Over and over again, when I asked young Indians working at call centers how they felt about Kashmir or a war with Pakistan, they waved me off with the same answer: "We have better things to do." And they do. The example of the 2002 India-Pakistan nuclear crisis at least gives us some hope. That cease-fire was brought to us not by General Powell but by General Electric. We bring good things to life.
The fact that terrorists themselves have direct control over the content of their websites offers further opportunities to shape how they are perceived by different target audiences and to manipulate their image and the images of their enemies. Most terrorist sites do not celebrate their violent activities. Instead- regardless of their nature, motives, or location-most terrorist sites emphasize two issues: the restrictions placed on freedom of expression; and the plight of their comrades who are now political prisoners. These issues resonate powerfully with their own supporters and are also calculated to elicit sympathy from Western audiences that cherish freedom of expression and frown on measures to silence political opposition . . .
Story of the Tower of Babel.
How so? I asked. "The reason God banished all the people from the Tower of Babel and made them all speak different languages was not because he did not want them to collaborate per se," answered Rabbi Marx. "It was because he was enraged at what they were collaborating on-an effort to build a tower to the heavens so they could become God." This was a distortion of the human capacity, so God broke their union and their ability to communicate with one another.
Now, all these years later, humankind has again created a new platform for more people from more places to communicate and collaborate with less friction and more ease than ever: the Internet. Would God see the Internet as heresy? "Absolutely not," said Marx. "The heresy is not that mankind works together-it is to what ends. It is essential that we use this new ability to communicate and collaborate for the right ends-for constructive human aims and not megalomaniacal ends. Building a tower was megalo-maniacal. Bin Laden's insistence that he has the truth and can flatten anyone else's tower who doesn't heed him is megalomaniacal. Collaborating so mankind can achieve its full potential is God's hope."
Chapter-17: 11/9 versus 9/11
Imagination is more important than knowledge. -Albert Einstein
On the Internet, nobody knows you're a dog.-Two dogs talking to each other
There are two ways to flatten the world. One is to use your imagination to bring everyone up to the same level, and the other is to use your imagination to bring everyone down to the same level.
I had a friend in Beirut who used to joke that every time she flew on an airplane she packed a bomb in her suitcase, because the odds of two people carrying a bomb on the same plane were so much higher. Do whatever it takes, but get out the door.
America's role in the world, from its inception, has been to be the country that looks forward, not back. One of the most dangerous things that has happened to America since 9/11, under the Bush administration, is that we have gone from exporting hope to exporting fear. We have gone from trying to coax the best out of the world to snarling at it way too often. And when you export fear, you end up importing everyone else's fears. Yes, we need people who can imagine the worst, because the worst did happen on 9/11 and it could happen again. But, as I said, there is a fine line between precaution and paranoia, and at times we have crossed it. I believe that history will make very clear that President Bush shamelessly exploited the emotions around 9/11 for political purposes. He used those 9/11 emotions to take a far-right Republican domestic agenda on taxes, the environment, and social issues from 9/10-an agenda for which he had no popular mandate-and drive it into a 9/12 world. In doing so, Mr.Bush not only drove a wedge between Americans, and between Americans and the world, he drove a wedge between America and its own history and identity. His administration transformed the United States into "The United States of Fighting Terrorism." This is the real reason, in my view, that so many people in the world dislike President Bush so intensely. They feel that he has taken away something very dear to them-an America that exports hope, not fear.
Analysts have always tended to measure a society by classical economic and social statistics: its deficit-to-GDP ratio, or its unemployment rate, or the rate of literacy among its adult women. Such statistics are important and revealing. But there is another statistic, much harder to measure, that I think is even more important and revealing: Does your society have more memories than dreams or more dreams than memories? By dreams I mean the positive, life-affirming variety. The business organization consultant Michael Hammer once remarked, "One thing that tells me a company is in trouble is when they tell me how good they were in the past. Same with countries. You don't want to forget your identity. I am glad you were great in the fourteenth century, but that was then and this is now. When memories exceed dreams, the end is near. The hallmark of a truly successful organization is the willingness to abandon what made it successful and start fresh."
Meg Whitman, the CEO of eBay, once told me a wonderful story that went like this: Whitman recalled that one day she got an e-mail from a couple in Orlando who were coming to an "eBay Live" event at which she was speaking. These are big revival meeting-conventions of eBay sellers. They asked if they could come backstage to meet Whitman after her speech. "So after the keynote," she recalled, "they come back to my green room, and in comes mom and dad and a seventeen-year-old boy in a wheelchair-very disabled with cerebral palsy. They tell me, 'Kyle is very disabled and can't go to school, [but] he built an eBay business and last year my husband and I quit our jobs, and now we help him -we have made more money on eBay than we ever made on our jobs.' And then they added the most incredible thing. They said, 'On eBay, Kyle is not disabled.'"
Different context, different narrative, different imagination
With some 150 million Muslims, India has more Muslims than Pakistan. But here is an interesting statistic from 9/11: There are no Indian Muslims that we know of in al-Qaeda and there are no Indian Muslims in America's Guantanamo Bay post-9/11 prison camp. And no Indian Muslims have been found fighting alongside the jihadists in Iraq. Why is that? Why do we not read about Indian Muslims, who are a minority in a vast Hindu-dominated land, blaming America for all their problems and wanting to fly airplanes into the Taj Mahal or the British embassy? Lord knows, Indian Muslims have their grievances about access to capital and political representation. And inter-religious violence has occasionally flared up in India, with disastrous consequences. I am certain that out of 150 million Muslims in India, a few will one day find their way to al-Qaeda-if it can happen with some American Muslims, it can happen with Indian Muslims. But this is not the norm. Why?
The answer is context-and in particular the secular, free-market, democratic context of India, heavily influenced by a tradition of nonviolence and Hindu tolerance. M. J. Akbar, the Muslim editor of the Asian Age, a national Indian English-language daily primarily funded by non-Muslim Indians, put it to me this way: "I'll give you a quiz question: Which is the only large Muslim community to enjoy sustained democracy for the last fifty years? The Muslims of India. I am not going to exaggerate Muslim good fortune in India. There are tensions, economic discrimination, and provocations, like the destruction of the mosque at Ayodhya [by Hindu nationalists in 1992]. But the fact is, the Indian Constitution is secular and provides a real opportunity for economic advancement of any community that can offer talent. That's why a growing Muslim middle class here is moving up and generally doesn't manifest the strands of deep anger you find in many Non-democratic Muslim states."
On November 15, 2003, the two main synagogues of Istanbul were hit by some fringe suicide bombers. I happened to be in Istanbul a few months later, when they were reopened. Several things struck me. To begin with, the chief rabbi appeared at the ceremony, hand in hand with the top Muslim cleric of Istanbul and the local mayor, while crowds in the street threw red carnations on them both. Second, the prime minister of Turkey, Recep Tayyip Erdogan, who comes from an Islamic party, paid a visit to the chief rabbi in his office-the first time a Turkish prime minister had ever called on the chief rabbi. Lastly, the father of one of the suicide bombers told the Turkish newspaper Xaman, "We cannot understand why this child had done the thing he had done . . . First let us meet with the chief rabbi of our Jewish brothers. Let me hug him. Let me kiss his hands and flowing robe. Let me apologize in the name of my son and offer my condolences for the deaths. . . We will be damned if we do not reconcile with them."
I am keenly aware of the imperfections of Indian democracy, starting with the oppressive caste system. Nevertheless, to have sustained a functioning democracy with all its flaws for more than fifty years in a country of over 1 billion people, who speak scores of different languages, is something of a miracle and a great source of stability for the world. Two of India's presidents have been Muslims, and its current president, A.P.J. Abdul Kalam, is both a Muslim and the father of the Indian nuclear missile program. While a Muslim woman sits on India's Supreme Court, no Muslim woman is allowed even to drive a car in Saudi Arabia. Indian Muslims, including women, have been governors of many Indian states, and the wealthiest man in India today, high on the Forbes list of global billionaires, is an Indian Muslim: Azim Premji, the chairman of Wipro, one of India's most important technology companies. I was in India shortly after the United States invaded Afghanistan in late 2001, when Indian television carried a debate between the country's leading female movie star and parliamentarian-Shabana Azmi, a Muslim woman - and the imam of New Delhi's biggest mosque. The imam had called on Indian Muslims to go to Afghanistan and join the jihad against America, and Azmi ripped into him, live on Indian TV, basically telling the cleric to go take a hike. She told him to go to Kandahar and join the Taliban and leave the rest of India's Muslims alone. How did she get away with that? Easy. As a Muslim woman she lived in a context that empowered and protected her to speak her mind -even to a leading cleric.
A South Asian Muslim friend of mine once told me this story: His Indian Muslim family split in 1948, with half going to Pakistan and half staying in Mumbai. When he got older, he asked his father one day why the Indian half of the family seemed to be doing better than the Pakistani half. His father said to him, "Son, when a Muslim grows up in India and he sees a man living in a big mansion high on a hill, he says, 'Father, one day, I will be that man.' And when a Muslim grows up in Pakistan and sees a man living in a big mansion high on a hill, he says, 'Father, one day I will kill that man.'" When you have a pathway to be the Man or the Woman, you tend to focus on the path and on achieving your dreams. When you have no pathway, you tend to focus on your wrath and on nursing your memories.
The Fall of Berlin Wall - How 11/9 happened?
In July 1989, hundreds of East Germans sought refuge at the West German embassy in Hungary. In September 1989, Hungary decided to remove its border restrictions with Austria. That meant that any East German who got into Hungary could pass through to Austria and the free world. Sure enough, more than thirteen thousand East Germans escaped through Hungary's back door. Pressure built up on the East German government. When in November it announced plans to ease travel restrictions, tens of thousands of East Germans converged on the Berlin Wall, where, on 11/9/89, border guards just opened the gates.
The dismantling of the Berlin Wall on 11/9 was brought about by people who dared to imagine a different, more open world-one where every human being would be free to realize his or her full potential - and who then summoned the courage to act on that imagination.
The Fall of World-Trade-Center - How 9/11 occurred?
At a meeting in Kandahar, Afghanistan, in March or April 1999, Bin-Laden accepted a proposal initially drawn up by Khalid Sheikh Mohammed, the Pakistan-born mechanical engineer who was the architect of the 9/11 plot. Bin Laden summoned KSM to Kandahar in March or April 1999 to tell him that al-Qaeda would support his proposal. The plot was now referred to within al-Qaeda as the 'Planes Operation.' He outsourced the overall design and blueprint for 9/11 to KSM and overall financial management to KSM's nephew, Ali Abdul Aziz Ali, who coordinated the dispersal of funds to the hijackers through wire transfer cash, traveler's checks, and credit and debit cards from overseas bank accounts. Bin Laden recruited from the al-Qaeda roster just the right muscle guys from Asir Province, in Saudi Arabia, just the right pilots from Europe, just the right team leader from Hamburg, and just the right support staff from Pakistan. He outsourced the pilot training to flight schools in America, raised the necessary capital for training pilots on all these different aircraft from a syndicate of pro-al-Qaeda Islamic charities and other Muslim adventure capitalists ready to fund anti-American operations. In the case of 9/11, the total budget was around $400,000.
Once the team was assembled, bin Laden focused on his own core competency-overall leadership and ideological inspiration of his suicide supply chain, with assistance from his deputies Mohammed Atef and Ayman Zawahiri "On or about September 29, 2000, Zacarias Moussaoui contacted Airman Flight School in Norman, Oklahoma, using an e-mail account he set up on September 6 with an Internet service provider in Malaysia. In or about October 2000, Zacarias Moussaoui received letters from Infocus Tech, a Malaysian company, stating that Moussaoui was appointed Infocus Tech's marketing consultant in the United States, the United Kingdom and Europe, and that he would receive, among other things, an allowance of $2,500 per month . . . On or about December 11, 2000, Mohammed Atta purchased flight deck videos for the Boeing 767 Model 300ER and the Airbus A320 Model 200 from the Ohio Pilot Store ... In or about June 2001, in Norman, Oklahoma, Zacarias Moussaoui made inquiries about starting a crop dusting company . . . On or about August 16, 2001, Zacarias Moussaoui, possessed, among other things: two knives; a pair of binoculars; flight manuals for the Boeing 747 Model 400; a flight simulator computer program; fighting gloves and shin guards; a piece of paper referring to a handheld Global Positioning System receiver and a camcorder; software that could be used to review pilot procedures for the Boeing 747 Model 400; letters indicating that Moussaoui is a marketing consultant in the United States for Infocus Tech; a computer disk containing information related to the aerial application of pesticides; and a hand-held aviation radio."
A recent six-year-long study shows that terrorist organizations and their supporters have been using all of the tools that the Internet offers to recruit supporters, raise funds, and launch a worldwide campaign of fear. It is also clear that to combat terrorism effectively, mere suppression of their Internet tools is not enough. Our scan of the Internet in 2003-04 revealed the existence of hundreds of websites serving terrorists in different, albeit sometimes overlapping, ways. . . There are countless examples of how [terrorists] use this uncensored medium to spread disinformation, to deliver threats intended to instill fear and helplessness, and to disseminate horrific images of recent actions. Since September 11, 2001, al-Qaeda has festooned its websites with a string of announcements of an impending "large attack" on US targets. These warnings have received considerable media coverage, which has helped to generate a widespread sense of dread and insecurity among audiences throughout the world and especially within the United States . . .
The World Bank reported that in 1990 there were roughly 375 million people in China living in extreme poverty, on less than $ 1 per day. By 2001, there were 212 million Chinese living in extreme poverty, and by 2015, if current trends hold, there will be only 16 million living on less than $1 a day. In South Asia-primarily India, Pakistan, and Bangladesh-the numbers go from 462 million in 1990 living on less than $1 a day down to 431 million by 2001 and down to 216 million in 2015. In sub-Saharan Africa, by contrast, where globalization has been slow to take hold, there were 227 million people living on less than $1 a day in 1990, 313 million in 2001, and an expected 340 million by 2015.
Many of the key elements of reform retail were best defined by the research done by the World Bank's International Finance Corporation (IFC) and its economic analysis team led by its chief economist, Michael Klein. What do we learn from their work? To begin with, you don't grow your country out of poverty by guaranteeing everyone a job. Egypt guarantees all college graduates a job each year, and it has been mired in poverty with a slow-growing economy for fifty years.
"If it were just a matter of the number of jobs, solutions would be easy, for example, state-owned enterprises could absorb all those in need of employment. The real issue is not just employment, but increasingly productive employment that allows living standards to rise." State-owned enterprises and state-subsidized private firms usually have not delivered sustainable productivity growth, and neither have a lot of other approaches that people assume are elixirs of growth, they add. Just attracting more foreign investment into a country also doesn't automatically do it. And even massive investments in education won't guarantee it. More important, it is a matter of using resources well." In other words, countries grow out of poverty not only when they manage their fiscal and monetary policies responsibly from above They grow out of poverty when they also create an environment below that makes it very easy for their people to start businesses, raise capital, and become entrepreneurs, and when they subject their people to at least some competition from beyond-because companies and countries with competitors always innovate more and faster.
The IFC drove home this point with a comprehensive study of more than 130 countries, called Doing Business in 2004. The IFC asked five basic questions about doing business in each of these countries, questions about how easy or difficult it is to
1) Start a business in terms of local rules, regulations, and license fees,
2) Hire and fireworkers.
3) Enforce a contract,
4) Get credit, and 5) close a business that goes bankrupt or is failing.
The IFC's criteria were inspired by the brilliant and innovative work of Hernando de Soto, who has demonstrated in Peru and other developing nations that if you change the regulatory and business environment for the poor, and give them the tools to collaborate, they will do the rest.Doing Business in 2004 tries to explain each of its points with a few colorful examples:
"Teuku, an entreprenuer in Jakarta, wants to open a textile factory. He has customers lined up, imported machinery, and a promising business plan. Teuku's first encounter with the government is when registering his business. He gets the standard forms from the Ministry of Justice, and completes and notarizes them. Teuku proves that he is a local resident and does not have a criminal record. He obtains a tax number, applies for a business license, and deposits the minimum capital (three times national income per capita) in the bank. He then publishes the articles of association in the official gazette, pays a stamp fee, registers at the Ministry of Justice, and waits 90 days before filing for social security. One hundred sixty-eight days after he commences the process, Teuku can legally start operations. In the meantime, his customers have contracted with another business.
"In Panama, another entrepreneur, Ina, registers her construction company in only 19 days. Business is booming and Ina wants to hire someone for a two-year appointment. But the employment law only allows fixed-term appointments for specific tasks, and even then requires a maximum term of one year. At the same time, one of her current workers often leaves early, with no excuse, and makes costly mistakes. To replace him, Ina needs to notify and get approval from the union, and pay five months' severance pay. Ina rejects the more qualified applicant she would like to hire and keeps the underperforming worker on staff. "
Ali, a trader in the United Arab Emirates, can hire and fire with ease. But one of his customers refuses to pay for equipment delivered three months earlier. It takes 27 procedures and more than 550 days to resolve the payment dispute in court. Almost all procedures must be made in writing, and require extensive legal justification and the use of lawyers. After this experience, Ali decides to deal only with customers he knows well.
"Timnit, a young entrepreneur in Ethiopia, wants to expand her successful consulting business by taking a loan. But she has no proof of good credit history because there are no credit information registries. Although her business has substantial assets in accounts receivable, laws restrict her bank from using these as collateral. The bank knows it cannot recover the debt if Timnit defaults, because courts are inefficient and laws give creditors few powers. Credit is denied. The business stays small. "
Having registered, hired workers, enforced contracts, and obtained credit, Avik, a businessman in India, cannot make a profit and goes out of business. Faced with a 10-year-long process of going through bankruptcy, Avik absconds, leaving his workers, the bank, and the tax agency with nothing."
If you want to know why two decades of macroeconomic reform wholesale at the top have not slowed the spread of poverty and produced enough new jobs in key countries of Latin America, Africa, the Arab world, and the former Soviet Empire, it is because there has been too little reform retail. According to the IFC report, if you want to create productive jobs (the kind that lead to rising standards of living), and if you want to stimulate the growth of new businesses (the kind that innovate, compete, and create wealth), you need a regulatory environment that makes it easy to start a business, easy to adjust a business to changing market circumstances and opportunities, and easy to close a business that goes bankrupt, so that the capital can be freed up for more productive uses.
"It takes two days to start a business in Australia, but 203 days in Haiti and 215 days in the Democratic Republic of Congo," the IFC study found. "There are no monetary costs to start a new business in Denmark, but it costs more than five times income per capita in Cambodia and over thirteen times in Sierra Leone. Hong Kong, Singapore, Thailand and more than three dozen other economies require no minimum capital from start-ups. In contrast, in Syria the capital requirement is equivalent to fifty-six times income per capita . . . Businesses in the Czech Republic and Denmark can hire workers on part-time or fixed-term contracts for any job, without specifying maximum duration of the contract. In contrast, employment laws in El Salvador allow fixed-term contracts only for specific jobs, and set their duration to be at most one year ... A simple commercial contract is enforced in seven days in Tunisia and thirty-nine days in the Netherlands, but takes almost 1,500 days in Guatemala. The cost of enforcement is less than 1 percent of the disputed amount in Austria, Canada and the United Kingdom, but more than 100 percent in Burkina Faso, the Dominican Republic,
Indonesia . .. and the Philippines. Credit bureaus contain credit histories on almost every adult in New Zealand, Norway and the United States. But the credit registries in Cameroon, Ghana, Pakistan, Nigeria and Serbia and Montenegro have credit histories for less than 1 percent of adults. In the United Kingdom, laws on collateral and bankruptcy give creditors strong powers to recover their money if a debtor defaults. In Colombia, the Republic of Congo, Mexico, Oman and Tunisia, a creditor has no such rights. It takes less than six months to go through bankruptcy proceedings in Ireland
and Japan, but more than ten years in Brazil and India. It costs less than 1 percent of the value of the estate to resolve insolvency in Finland, the Netherlands, Norway and Singapore-and nearly half the estate value in Chad, Panama, Macedonia, Venezuela, Serbia and Montenegro, and Sierra Leone."
Cultural Bottlenecks
In a world where the single greatest advantage a culture can have is the ability to foster adaptability and adoptability, the Muslim world today is dominated by a religious clergy that literally bans ijtihad, reinterpretation of the principles of Islam in light of current circumstances.
Think about the whole mind-set of bin Ladenism. It is to "purge" Saudi Arabia of all foreigners and foreign influences. That is exactly the opposite of glocalizing and collaborating.
Tribal culture and thinking still dominate in many Arab countries, and the tribal mind-set is also anathema to collaboration. What is the motto of the tribalist? "Me and my brother against my cousin; me, my brother, and my cousin against the outsider." And what is the motto of the globalists, those who build collaborative supply chains? "Me and my brother and my cousin, three friends from childhood, four people in Australia, two in Beijing, six in Bangalore, three from Germany, and four people we've met only over the Internet all make up a single global supply chain."
The Arab-Muslim world's resistance to glocalization is something that some liberal Arab commentators are now focusing on. Consider a May 5, 2004, article in the Saudi English-language daily Arab News by liberal Saudi journalist Raid Qusti, titled "How Long Before the First Step?"
"Terrorist incidents in Saudi Arabia are more or less becoming everyday news. Every time I hope and pray that it ends, it only seems to get worse," Qusti wrote. "One explanation to why all of this is happening was brought up by the editor in chief of Al-Riyadh newspaper, Turki Al-Sudairi, on a program about determining the roots of the terrorist acts. He said that the people carrying out these attacks shared the ideology of the Juhaiman movement that seized the Grand Mosque in the seventies. They had an ideology of accusing others of being infidels and giving themselves a free
hand to kill them, be it Westerners-who, according to them, ought to be kicked out of the Arabian Peninsula-or the Muslim believer who does not follow their path. They disappeared in the eighties and nineties from the public eye and have again emerged with their destructive ideology. The question Al-Sudairi forgot to bring up was: What are we Saudis going to do about it? If we as a nation decline to look at the root causes, as we have for the past two decades, it will only be a matter of time before another group of people with the same ideology spring up. Have we helped create these monsters? Our education system, which does not stress tolerance of other faiths-let alone tolerance of followers of other Islamic schools of thought-is one thing that needs to be re-evaluated from top to bottom. Saudi culture itself and the fact that the majorities of us do not accept other lifestyles and impose our own on other people is another. And the fact that from fourth to 12th grade we do not teach our children that there are other civilizations in the world and that we are part of the global community and only stress the Islamic empires over and over is also worth re-evaluating."
Chapter-14 Companies and the Flat World
How Companies Cope
Rule #1: When the world goes flat-and you are feeling flattened- reach for a shovel and dig inside yourself. Don't try to build walls.
Rule #2: And the small shall act big. . .
One way small companies flourish in the flat world is by learning to act really big. And the key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther, faster, wider, and deeper.
Story of another friend, Fadi Ghandour, the cofounder and CEO of Aramex, the first home-grown package delivery service in the Arab world and the first and only Arab company to be listed on the Nasdaq.
Rule #3: And the big shall act small...
One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big.
Rule #4: The best companies are the best collaborators.
In the flat world, more and more business will be done through collaborations within and between companies, for a very simple reason: The next layers of value creation-whether in technology, marketing, biomedicine, or manufacturing-are becoming so complex that no single firm or department is going to be able to master them alone.
Rolls-Royce. When you hear the word "Rolls-Royce," what immediately comes to mind is a shiny handmade car, with a uniformed chauffeur sitting in the driver's seat and a perfectly tailored couple in the back on their way to Ascot or Wimbledon. Rolls-Royce, the quintessential stodgy British company, right? What if I told you, though, that Rolls-Royce doesn't even make cars anymore (that business was sold in 1972 and the brand was licensed to BMW in 1998), that 50 percent of its income comes from services, and that in 1990 all of its employees were in Great Britain and today
40 percent are based outside of the United Kingdom, integrated into a global operation that stretches from China to Singapore to India to Italy to Spain to Germany to Japan and up to Scandinavia.
Rule #5: In a flat world, the best companies stay healthy by getting regular chest X-rays and then selling the results to their clients.
Rule #6: The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists-not to save money by firing more people.
Rule #7: Outsourcing isn't just for Benedict Arnolds. It's also for idealists.
One of the newest figures to emerge on the world stage in recent years is the social entrepreneur. This is usually someone who burns with desire to make a positive social impact on the world, but believes that the best way of doing it is, as the saying goes, not by giving poor people a fish and feeding them for a day, but by teaching them to fish, in hopes of feeding them for a lifetime.
Chapter-15 The Unflat World
You have to read the entire chapter :)
Mark Steyn, writing in the National Review (October 25, 2004), related a story from the London Arabic newspaper paper Al-Quds al-Arabi about a panic that broke out in Khartoum, Sudan, after a crazy rumor swept the city, claiming that if an infidel shook a man's hand, that man could lose his manhood. "What struck me about the story," wrote Steyn, "was a detail: The hysteria was spread by cell phones and text messaging. Think about that: You can own a cell phone yet still believe a foreigner's handshake can melt away your penis. What happens when that kind of technologically advanced primitivism advances beyond text messaging?"
Chapter-16
Free Trade is God's diplomacy. There is no other certain way of uniting people in the bonds of peace. -British politician Richard Cobden, 1857
“The history of economic development teaches this over and over: If you can do it, you must do it, otherwise your competitors will.”
What is "demand shaping"? It works like this: At 10 a.m. Austin time, Dell discovers that so many customers have ordered notebooks with 40-gigabyte hard drives since the morning that its supply chain will run short in two hours. That signal is automatically relayed to Dell's marketing department and to Dell.com and to all the Dell phone operators taking orders. If you happen to call to place your Dell order at 10:30 a.m., the Dell representative will say to you, "Tom, it's your lucky day! For the next hour we are offering 60-gigabyte hard drives with the notebook you want-for only $10 more than the 40-gig drive. And if you act now, Dell will throw in a carrying case along with your purchase, because we so value you as a customer." In an hour or two, using such promotions, Dell can reshape the demand for any part of any notebook or desktop to correspond with the projected supply in its global supply chain. Today memory might be on sale, tomorrow it might be CD-ROMs.
Golden Arches Theory of Conflict Prevention
After confirming this with McDonald's, I offered what I called the Golden Arches Theory of Conflict Prevention. The Golden Arches Theory stipulated that when a country reached the level of economic development where it had a middle class big enough to support a network of McDonald's, it became a McDonald's country. And people in McDonald's countries didn't like to fight wars anymore. They preferred to wait in line for burgers. While this was offered slightly tongue in cheek, the serious point I was trying to make was that as countries got woven into the fabric of global trade and rising living standards, which having a network of McDonald's franchises had come to symbolize, the cost of war for victor and vanquished became prohibitively high.
This McDonald's theory has held up pretty well, but now that almost every country has acquired a McDonald's, except the worst rogues like North Korea, Iran, and Iraq under Saddam Hussein, it seemed to me that this theory needed updating for the flat world.
The Dell Theory of Conflict Prevention
The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell's, will ever fight a war against each other as long as they are both part of the same global supply chain. Because people embedded in major global supply chains don't want to fight old-time wars anymore. They want to make just-in-time deliveries of goods and services -and enjoy the rising standards of living that come with that.
"These countries understand the risk premium that they have," said Dell of the countries in his Asian supply chain. "They are pretty careful to protect the equity that they have built up or tell us why we should not worry [about their doing anything adventurous]. My belief after visiting China is that the change that has occurred there is in the best interest of the world and China. Once people get a taste for whatever you want to call it-economic independence, a better lifestyle, and a better life for their child or children-they grab on to that and don't want to give it up."
The Dell Theory had its first real test in December 2004, when Taiwan held parliamentary elections. President Chen Shui-bian's pro-independence Democratic Progressive Party was expected to win the legislative runoff over the main opposition Nationalist Party, which favored closer ties with Beijing. Chen framed the election as a popular referendum on his proposal to write a new constitution that would formally enshrine Taiwan's independence, ending the purposely ambiguous status quo. Had Chen won and moved ahead on his agenda to make Taiwan its own motherland, as opposed to maintaining the status quo fiction that it is a province of the mainland, it could have led to a Chinese military assault on Taiwan. Everyone in the region was holding his or her breath. And what happened? Motherboards won over motherland. A majority of Taiwanese voted against the pro-independence governing party legislative candidates, ensuring that the DPP would not have a majority in parliament. I believe the message Taiwanese voters were sending was not that they never want Taiwan to be independent. It was that they do not want to upset the status quo right now, which has been so beneficial to so many Taiwanese. The voters seemed to understand clearly how interwoven they had become with the mainland, and they wisely opted to maintain their de facto independence rather than force de jure independence, which might have triggered a Chinese invasion and a very uncertain future.
While the biggest test case of the Dell Theory is China versus Taiwan, the fact is that the Dell Theory has already proved itself to some degree in the case of India and Pakistan, the context in which I first started to think about it. I happened to be in India in 2002, when its just-in-time services supply chains ran into some very old-time geopolitics-and the supply chain won. In the case of India and Pakistan, the Dell Theory was working on only one party-India-but it still had a major impact. India is to the world's knowledge and service supply chain what China and Taiwan are to the manufacturing ones. By now readers of this book know all the highlights: General Electric's biggest research center outside the United States is in Bangalore, with seventeen hundred Indian engineers, designers, and scientists. The brain chips for many brand-name cell phones are designed in Bangalore. Renting a car from Avis online? It's managed in Bangalore. Tracing your lost luggage on Delta or British Airways is done from Bangalore, and the backroom accounting and computer maintenance for scores of global firms are done from Bangalore, Mumbai, Chennai, and other major Indian cities. Here's what happened: On May 31, 2002, State Department spokesman Richard Boucher issued a travel advisory saying, "We urge American citizens currently in India to depart the country," because the prospect of a nuclear exchange with Pakistan was becoming very real. Both nations were massing troops on their borders, intelligence reports were suggesting that they both might be dusting off their nuclear warheads, and CNN was flashing images of people flooding out of India. The global American firms that had moved their back rooms and R & D operations to Bangalore were deeply unnerved.
"I was actually surfing on the Web, and I saw a travel advisory come up on India on a Friday evening/' said Vivek Paul, president of Wipro, which manages backroom operations from India of many American multinationals. "As soon as I saw that, I said, 'Oh my gosh, every customer that we have is going to have a million questions on this.' It was the Friday before a long weekend, so over the weekend we at Wipro developed a fail-safe business continuity plan for all of our customers." While Wipro's customers were pleased to see how on top of things the company was, many of them were nevertheless rattled. This was not in the plan when they decided to outsource mission-critical research and operations to India. Said Paul, "I had a CIO from one of our big American clients send me an e-mail saying, 1 am now spending a lot of time looking for alternative sources to India. I don't think you want me doing that, and I don't want to be doing it.' I immediately forwarded his message to the Indian ambassador in Washington and told him to get it to the right person."
While not trying to meddle in foreign affairs, he added, "What we explained to our government, through the Confederation of Indian Industry, is that providing a stable, predictable operating environment is now the key to India's development." This was a real education for India's elderly leaders in New Delhi, who had not fully absorbed how critical India had become to the world's knowledge supply chain. When you are managing vital backroom operations for American Express or General Electric or Avis, or are responsible for tracing all the lost luggage on British Airways or Delta, you cannot take a month, a week, or even a day off for war without causing major disruptions for those companies. The Indian government also looked around and realized that the vast majority of India's billion people were saying, "I want a better future, not more territory." Over and over again, when I asked young Indians working at call centers how they felt about Kashmir or a war with Pakistan, they waved me off with the same answer: "We have better things to do." And they do. The example of the 2002 India-Pakistan nuclear crisis at least gives us some hope. That cease-fire was brought to us not by General Powell but by General Electric. We bring good things to life.
The fact that terrorists themselves have direct control over the content of their websites offers further opportunities to shape how they are perceived by different target audiences and to manipulate their image and the images of their enemies. Most terrorist sites do not celebrate their violent activities. Instead- regardless of their nature, motives, or location-most terrorist sites emphasize two issues: the restrictions placed on freedom of expression; and the plight of their comrades who are now political prisoners. These issues resonate powerfully with their own supporters and are also calculated to elicit sympathy from Western audiences that cherish freedom of expression and frown on measures to silence political opposition . . .
Story of the Tower of Babel.
How so? I asked. "The reason God banished all the people from the Tower of Babel and made them all speak different languages was not because he did not want them to collaborate per se," answered Rabbi Marx. "It was because he was enraged at what they were collaborating on-an effort to build a tower to the heavens so they could become God." This was a distortion of the human capacity, so God broke their union and their ability to communicate with one another.
Now, all these years later, humankind has again created a new platform for more people from more places to communicate and collaborate with less friction and more ease than ever: the Internet. Would God see the Internet as heresy? "Absolutely not," said Marx. "The heresy is not that mankind works together-it is to what ends. It is essential that we use this new ability to communicate and collaborate for the right ends-for constructive human aims and not megalomaniacal ends. Building a tower was megalo-maniacal. Bin Laden's insistence that he has the truth and can flatten anyone else's tower who doesn't heed him is megalomaniacal. Collaborating so mankind can achieve its full potential is God's hope."
Chapter-17: 11/9 versus 9/11
Imagination is more important than knowledge. -Albert Einstein
On the Internet, nobody knows you're a dog.-Two dogs talking to each other
There are two ways to flatten the world. One is to use your imagination to bring everyone up to the same level, and the other is to use your imagination to bring everyone down to the same level.
I had a friend in Beirut who used to joke that every time she flew on an airplane she packed a bomb in her suitcase, because the odds of two people carrying a bomb on the same plane were so much higher. Do whatever it takes, but get out the door.
America's role in the world, from its inception, has been to be the country that looks forward, not back. One of the most dangerous things that has happened to America since 9/11, under the Bush administration, is that we have gone from exporting hope to exporting fear. We have gone from trying to coax the best out of the world to snarling at it way too often. And when you export fear, you end up importing everyone else's fears. Yes, we need people who can imagine the worst, because the worst did happen on 9/11 and it could happen again. But, as I said, there is a fine line between precaution and paranoia, and at times we have crossed it. I believe that history will make very clear that President Bush shamelessly exploited the emotions around 9/11 for political purposes. He used those 9/11 emotions to take a far-right Republican domestic agenda on taxes, the environment, and social issues from 9/10-an agenda for which he had no popular mandate-and drive it into a 9/12 world. In doing so, Mr.Bush not only drove a wedge between Americans, and between Americans and the world, he drove a wedge between America and its own history and identity. His administration transformed the United States into "The United States of Fighting Terrorism." This is the real reason, in my view, that so many people in the world dislike President Bush so intensely. They feel that he has taken away something very dear to them-an America that exports hope, not fear.
Analysts have always tended to measure a society by classical economic and social statistics: its deficit-to-GDP ratio, or its unemployment rate, or the rate of literacy among its adult women. Such statistics are important and revealing. But there is another statistic, much harder to measure, that I think is even more important and revealing: Does your society have more memories than dreams or more dreams than memories? By dreams I mean the positive, life-affirming variety. The business organization consultant Michael Hammer once remarked, "One thing that tells me a company is in trouble is when they tell me how good they were in the past. Same with countries. You don't want to forget your identity. I am glad you were great in the fourteenth century, but that was then and this is now. When memories exceed dreams, the end is near. The hallmark of a truly successful organization is the willingness to abandon what made it successful and start fresh."
Meg Whitman, the CEO of eBay, once told me a wonderful story that went like this: Whitman recalled that one day she got an e-mail from a couple in Orlando who were coming to an "eBay Live" event at which she was speaking. These are big revival meeting-conventions of eBay sellers. They asked if they could come backstage to meet Whitman after her speech. "So after the keynote," she recalled, "they come back to my green room, and in comes mom and dad and a seventeen-year-old boy in a wheelchair-very disabled with cerebral palsy. They tell me, 'Kyle is very disabled and can't go to school, [but] he built an eBay business and last year my husband and I quit our jobs, and now we help him -we have made more money on eBay than we ever made on our jobs.' And then they added the most incredible thing. They said, 'On eBay, Kyle is not disabled.'"
Different context, different narrative, different imagination
With some 150 million Muslims, India has more Muslims than Pakistan. But here is an interesting statistic from 9/11: There are no Indian Muslims that we know of in al-Qaeda and there are no Indian Muslims in America's Guantanamo Bay post-9/11 prison camp. And no Indian Muslims have been found fighting alongside the jihadists in Iraq. Why is that? Why do we not read about Indian Muslims, who are a minority in a vast Hindu-dominated land, blaming America for all their problems and wanting to fly airplanes into the Taj Mahal or the British embassy? Lord knows, Indian Muslims have their grievances about access to capital and political representation. And inter-religious violence has occasionally flared up in India, with disastrous consequences. I am certain that out of 150 million Muslims in India, a few will one day find their way to al-Qaeda-if it can happen with some American Muslims, it can happen with Indian Muslims. But this is not the norm. Why?
The answer is context-and in particular the secular, free-market, democratic context of India, heavily influenced by a tradition of nonviolence and Hindu tolerance. M. J. Akbar, the Muslim editor of the Asian Age, a national Indian English-language daily primarily funded by non-Muslim Indians, put it to me this way: "I'll give you a quiz question: Which is the only large Muslim community to enjoy sustained democracy for the last fifty years? The Muslims of India. I am not going to exaggerate Muslim good fortune in India. There are tensions, economic discrimination, and provocations, like the destruction of the mosque at Ayodhya [by Hindu nationalists in 1992]. But the fact is, the Indian Constitution is secular and provides a real opportunity for economic advancement of any community that can offer talent. That's why a growing Muslim middle class here is moving up and generally doesn't manifest the strands of deep anger you find in many Non-democratic Muslim states."
On November 15, 2003, the two main synagogues of Istanbul were hit by some fringe suicide bombers. I happened to be in Istanbul a few months later, when they were reopened. Several things struck me. To begin with, the chief rabbi appeared at the ceremony, hand in hand with the top Muslim cleric of Istanbul and the local mayor, while crowds in the street threw red carnations on them both. Second, the prime minister of Turkey, Recep Tayyip Erdogan, who comes from an Islamic party, paid a visit to the chief rabbi in his office-the first time a Turkish prime minister had ever called on the chief rabbi. Lastly, the father of one of the suicide bombers told the Turkish newspaper Xaman, "We cannot understand why this child had done the thing he had done . . . First let us meet with the chief rabbi of our Jewish brothers. Let me hug him. Let me kiss his hands and flowing robe. Let me apologize in the name of my son and offer my condolences for the deaths. . . We will be damned if we do not reconcile with them."
I am keenly aware of the imperfections of Indian democracy, starting with the oppressive caste system. Nevertheless, to have sustained a functioning democracy with all its flaws for more than fifty years in a country of over 1 billion people, who speak scores of different languages, is something of a miracle and a great source of stability for the world. Two of India's presidents have been Muslims, and its current president, A.P.J. Abdul Kalam, is both a Muslim and the father of the Indian nuclear missile program. While a Muslim woman sits on India's Supreme Court, no Muslim woman is allowed even to drive a car in Saudi Arabia. Indian Muslims, including women, have been governors of many Indian states, and the wealthiest man in India today, high on the Forbes list of global billionaires, is an Indian Muslim: Azim Premji, the chairman of Wipro, one of India's most important technology companies. I was in India shortly after the United States invaded Afghanistan in late 2001, when Indian television carried a debate between the country's leading female movie star and parliamentarian-Shabana Azmi, a Muslim woman - and the imam of New Delhi's biggest mosque. The imam had called on Indian Muslims to go to Afghanistan and join the jihad against America, and Azmi ripped into him, live on Indian TV, basically telling the cleric to go take a hike. She told him to go to Kandahar and join the Taliban and leave the rest of India's Muslims alone. How did she get away with that? Easy. As a Muslim woman she lived in a context that empowered and protected her to speak her mind -even to a leading cleric.
A South Asian Muslim friend of mine once told me this story: His Indian Muslim family split in 1948, with half going to Pakistan and half staying in Mumbai. When he got older, he asked his father one day why the Indian half of the family seemed to be doing better than the Pakistani half. His father said to him, "Son, when a Muslim grows up in India and he sees a man living in a big mansion high on a hill, he says, 'Father, one day, I will be that man.' And when a Muslim grows up in Pakistan and sees a man living in a big mansion high on a hill, he says, 'Father, one day I will kill that man.'" When you have a pathway to be the Man or the Woman, you tend to focus on the path and on achieving your dreams. When you have no pathway, you tend to focus on your wrath and on nursing your memories.
The Fall of Berlin Wall - How 11/9 happened?
In July 1989, hundreds of East Germans sought refuge at the West German embassy in Hungary. In September 1989, Hungary decided to remove its border restrictions with Austria. That meant that any East German who got into Hungary could pass through to Austria and the free world. Sure enough, more than thirteen thousand East Germans escaped through Hungary's back door. Pressure built up on the East German government. When in November it announced plans to ease travel restrictions, tens of thousands of East Germans converged on the Berlin Wall, where, on 11/9/89, border guards just opened the gates.
The dismantling of the Berlin Wall on 11/9 was brought about by people who dared to imagine a different, more open world-one where every human being would be free to realize his or her full potential - and who then summoned the courage to act on that imagination.
The Fall of World-Trade-Center - How 9/11 occurred?
At a meeting in Kandahar, Afghanistan, in March or April 1999, Bin-Laden accepted a proposal initially drawn up by Khalid Sheikh Mohammed, the Pakistan-born mechanical engineer who was the architect of the 9/11 plot. Bin Laden summoned KSM to Kandahar in March or April 1999 to tell him that al-Qaeda would support his proposal. The plot was now referred to within al-Qaeda as the 'Planes Operation.' He outsourced the overall design and blueprint for 9/11 to KSM and overall financial management to KSM's nephew, Ali Abdul Aziz Ali, who coordinated the dispersal of funds to the hijackers through wire transfer cash, traveler's checks, and credit and debit cards from overseas bank accounts. Bin Laden recruited from the al-Qaeda roster just the right muscle guys from Asir Province, in Saudi Arabia, just the right pilots from Europe, just the right team leader from Hamburg, and just the right support staff from Pakistan. He outsourced the pilot training to flight schools in America, raised the necessary capital for training pilots on all these different aircraft from a syndicate of pro-al-Qaeda Islamic charities and other Muslim adventure capitalists ready to fund anti-American operations. In the case of 9/11, the total budget was around $400,000.
Once the team was assembled, bin Laden focused on his own core competency-overall leadership and ideological inspiration of his suicide supply chain, with assistance from his deputies Mohammed Atef and Ayman Zawahiri "On or about September 29, 2000, Zacarias Moussaoui contacted Airman Flight School in Norman, Oklahoma, using an e-mail account he set up on September 6 with an Internet service provider in Malaysia. In or about October 2000, Zacarias Moussaoui received letters from Infocus Tech, a Malaysian company, stating that Moussaoui was appointed Infocus Tech's marketing consultant in the United States, the United Kingdom and Europe, and that he would receive, among other things, an allowance of $2,500 per month . . . On or about December 11, 2000, Mohammed Atta purchased flight deck videos for the Boeing 767 Model 300ER and the Airbus A320 Model 200 from the Ohio Pilot Store ... In or about June 2001, in Norman, Oklahoma, Zacarias Moussaoui made inquiries about starting a crop dusting company . . . On or about August 16, 2001, Zacarias Moussaoui, possessed, among other things: two knives; a pair of binoculars; flight manuals for the Boeing 747 Model 400; a flight simulator computer program; fighting gloves and shin guards; a piece of paper referring to a handheld Global Positioning System receiver and a camcorder; software that could be used to review pilot procedures for the Boeing 747 Model 400; letters indicating that Moussaoui is a marketing consultant in the United States for Infocus Tech; a computer disk containing information related to the aerial application of pesticides; and a hand-held aviation radio."
A recent six-year-long study shows that terrorist organizations and their supporters have been using all of the tools that the Internet offers to recruit supporters, raise funds, and launch a worldwide campaign of fear. It is also clear that to combat terrorism effectively, mere suppression of their Internet tools is not enough. Our scan of the Internet in 2003-04 revealed the existence of hundreds of websites serving terrorists in different, albeit sometimes overlapping, ways. . . There are countless examples of how [terrorists] use this uncensored medium to spread disinformation, to deliver threats intended to instill fear and helplessness, and to disseminate horrific images of recent actions. Since September 11, 2001, al-Qaeda has festooned its websites with a string of announcements of an impending "large attack" on US targets. These warnings have received considerable media coverage, which has helped to generate a widespread sense of dread and insecurity among audiences throughout the world and especially within the United States . . .
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