Can Americans Think (Strategically)?

WINSTON LORD: So I think we'll get going. My name is Winston Lord. I'm delighted to be presiding at this session. Let's get the housekeeping out of the way at the beginning. This meeting actually is on the record. Please turn off your cell phones -- not only noises but vibrations. And the way this is going to work, as I think most of you know, is that for the first 25 minutes or so I'll interview Kishore and we'll have a conversation, and then we'll turn back to you for your questions or comments, which I know will be concise and will be preceded by your grabbing the microphone and identifying yourself. So that's the basic ground rules. Let's get down to business here.

A gifted diplomat, student of history and philosophy, provocative writer and intuitive thinker -- I couldn't have said it better myself -- (laughter) -- this was the pleasant foreword to his latest book. He didn't -- no, this was done by the Foreign Policy Association a few years ago, and -- (inaudible) -- many awards. But it really does sum up Kishore, who is an old friend. And I'm pleased to welcome him both on a professional level and on a personal level.

Professionally, he has that rare combination of intellect, writing ability and diplomatic skill.

And he moves seamlessly between these worlds, which means when he's engaged in foreign policy, he takes a strategic approach, and when he's engaged in writing and teaching, he makes sure it's policy- relevant. And this is a rare -- a rare skill.

You have the essentials of his biography. I won't repeat them. His career -- now, of course, he's dean of the Lee Kuan Yew School in the National University of Singapore. His diplomatic postings have included as permanent undersecretary in the foreign ministry, and as ambassador to the United Nations.

And that leads me to my personal dimension here. I've known Kishore, I guess, for a couple of decades now. But in particular we worked closely as counterparts in the mid-1990s when I was assistant secretary, he was undersecretary in the foreign ministry -- permanent undersecretary, which is the highest career post.

There was good news and bad news.

The good news is, he was terrific both in formulation and in execution of policy. We worked very closely together. I remember long-distance phone calls reshaping the ASEAN Regional Forum, where we brought China and Russia but most delicately India into that forum, because Singapore was the host.

The bad news is, I discovered he -- his salary was three to four times higher than mine. (Soft laughter.)

KISHORE MAHBUBANI: (Laughs.)

LORD: Remember we had a discussion on that? Actually, that's a serious point. Because Singapore gets the best public servants. The phrase "intelligent Singapore public servant" is tautological. They get the best public servants, and they don't have any corrupt public servants, because they're paid well and rewarded for their skills.

So let's get to our conversation. For years, Kishore has been sounding some themes, namely that Asia's up and the West is down; there's a power shift under way -- not just in economics, which is obvious, but I think he would argue that in terms of strategic skill, even at times in terms of values, Asia's on the march -- they're smarter; the West is not as smart, not as nimble -- and the U.S. in particular; that democracy as a system and human rights as a principle are vastly overrated, especially for Asia and especially for China.

So his writings have been provocative, and I daresay to many in America and the West including me, annoying and irritating at times.

MAHBUBANI: (Chuckles.)

LORD: But they come from a person who is a clear friend of the United States, has lived here, has children at Yale, who knows America and who is speaking with the candor of a friend, and trying to give us wakeup calls whether you agree with that or not. So let's explore some of these themes.

The title of today's session is "Can Americans Think Strategically?" What's your answer?

MAHBUBANI: (Chuckles.) Before I answer, Winston, thank you for that very generous introduction. And I'm especially pleased, Winston, that you emphasized at the end that I speak as a friend of America.

I say this because, sadly, you know, as you yourself said, my writings are annoying, they're irritating.

LORD: They're often wrong, too. (Laughs, laughter.)

MAHBUBANI: (Laughs.) And some people in the State Department and the NSC think that I've become anti-American. So I want to emphasize that I speak as a friend of America, and I always believed that countries, like individuals, languish only when they have unloving critics or uncritical lovers, you know? I'm a better- loving critic of America, and we want America to succeed. Singapore wants America to succeed. The world wants America to succeed.

But at the same time, the whole world is deeply worried about where America is going.

And I've never in my -- either in my 33-year career in the foreign service or my six years as a dean seen a moment as the one that we are seeing now in terms of America and the world.

And to answer your question, "Can Americans think strategically," the answer is yes. You can think strategically, but you have not been doing so. And the thing that -- that's puzzling here is that geopolitics is supposed to work on the basis of logic.

And you know, my first time I spoke in the council here was in 1985, 25 years ago. Peter Tarnoff was the head then. And the topic that I chose was why the American naval base would be moved from Subic Bay to Cam Ranh Bay, right? And this is 1985, at the height of the Cold War. The United States was isolating Vietnam. And I said no, in due course Vietnam will move closer to the United States of America because Vietnam's primary geopolitical contradiction is with China and not the United States of America. And over time the geopolitical logic fell into place, and today the number-one supporter of American naval presence in Southeast Asia is Vietnam. So you could see that 25 years ago.

In the same way, in today's world, there are two geopolitical contradictions that America faces. One is with the Islamic world, and the other is with China. The big question for America is, which is your primary geopolitical contradiction, to use Mao's words.

And you were there in Beijing, okay, Winston -- you were there the historic moment when Mao Zedong switched. As you know, he -- Mao Zedong had two geopolitical contradictions: with the United States of America and the Soviet Union. And initially, especially after the Korean War, after millions of soldiers fought in the Korean War, everyone thought the primary geopolitical contradiction was in China and other things.

Mao Zedong, like a good geopolitical thinker, said, No. my geopolitical contradiction is with the Soviet Union. So he made this brilliant move, together with you and Henry Kissinger, and switched, and therefore made up with America, to take care of the Soviet Union, thus taking care of your primary geopolitical contradiction.

Now, in today's world, between the Islamic world and China, your primary geopolitical contradiction is with China, because the Islamic world cannot surpass American power -- not in my lifetime. But China has to -- not does have the potential, but WILL have a larger economy than America as soon as maybe 17, 18 years' time. So this country, China, is the one that can challenge American influence globally.

So logically, if you work on the basis of geopolitical logic, 80 percent of your resources should be focused on handling China, maybe 20 percent focused on handling the Islamic world. But in the last 10 years, you've spent 80 percent of your resources in the Islamic world, fighting an unnecessary war in Iraq; getting bogged down in Afghanistan; having a massive situation with Israel, Palestine; and there's the potential of a military conflict with Iran. Now, these is handling the secondary geopolitical contradictions.

And in the process, the biggest beneficiary of these changes is China.

Of course, China says, wow, America is so involved in the Islamic world? I can grow. And they're -- you know they're growing very, very fast.

But here I want to emphasize, I don't see China as an enemy of the United States of America, okay? That's not my message. Actually, I do think you can work out a long-term win-win arrangement with the U.S. and China. But to be able to do that, you got to focus on China. Eighty percent of your resources should be focused in dealing with China, and you should get out of this mess that you have had within the Islamic world.

So that's why I say, if you are thinking logically, long term, in geopolitical terms, stop spending. Trillion dollars that you've spent in Iraq got you nothing.

And let me just -- let me end with one story. This illustrates how brilliant the Chinese geopolitical behavior can be. You know, in my previous book, I tell this story. You know, after -- as you know, after United States invaded Iraq, in March 2003, you discovered you had a problem because there was no Security Council resolution -- (inaudible) -- invasion. Technically, the American/British occupation of Iraq was therefore illegal under international law. And the previous Security Council sanctions were still in place for America to not export Iraqi oil.

So America wanted to export Iraqi oil. To do that, you needed an enabling Security Council resolution. So in June or July, America got the enabling Security Council resolution. On the day that America got that resolution, I had tea with a senior American diplomat. And I asked him -- I said, who helped you get this resolution? So I thought he'd mention, you know, a friend of America, an ally of America: U.K., whatever it is. (Off mike) -- the country that helped us the most in the Security Council was China.

And I thought about it, I said, gee, how brilliant the Chinese are. Because we got one big geopolitical win, and this is a fact. President George W. Bush was so happy with Chinese help in legitimizing the American presence in Iraq that he helped out, as you know, by squeezing Chen Shui Bien. So China got one big geopolitical reward because Taiwan was squeezed. Right? Ferociously. But the other big win that the Chinese got, an even bigger win was that by legitimizing the American presence in Iraq, they guaranteed you stay there a long time.

So some brilliant move on their part. They got direct geopolitical benefits and long-term indirect geopolitical benefits. But that's an example of what I call good geopolitical behavior, focusing on what your long-term needs and interests are. And the thing that many of us in the rest of the world are worried about is when is America going to focus on its own long-term geopolitical interests?

LORD: Let's -- we'll get to China in a minute, but I want to stick with Asia and strategy more generally, and my job is not to debate you, but to get out your views. But leaving aside whether we're making the right decisions on the Islamic front, and that is certainly debatable, but it doesn't mean you necessarily ignore China or Asia. And I would ask -- seemingly, your criticisms in the last decade or so have been a couple, namely that America is quite arrogant in terms of imposing its values, but also it's been neglecting Asia. And you're now saying, in effect, we're neglecting China.

Do you feel that Obama has done a better job of this than his predecessor in terms of both of those criticisms? First of all, in terms of general tone in foreign policy, not just Asia -- you know, and he's attacked by this on the right for being too soft, but willing to talk to adversaries, multilateralism, tone down emphasis on human rights to a certain extent, but at least in terms of an arrogant imposition and try to work cooperatively on a global basis.

And secondly, on Asia, this administration, would you not agree, has made a much greater effort, in terms of trips, in terms of engaging, including with ASEAN, the summit, and appointing an ambassador, and the president meeting with all your leaders, not to mention the ASEAN Regional Forum and all the other -- East Asia summit, the G-20, including Asian countries.

So would you say that Obama's made at least an improvement both in tone on foreign policy and in engagement with Asia?

MAHBUBANI: Well, two separate question, one on values --

LORD: Right.

MAHBUBANI: -- and the other on Obama's performance.

LORD: Right.

MAHBUBANI: Now, the one on values, I want to emphasize that the values of democracy, the values of human rights, the values of the Universal Declaration of Human Rights, we all support. Right? It is not the values that are in question. We believe in those values. It's a question of how you export them.

Do you believe that these values are so beautiful in their own right that they will fly on their own wings and spread around the world, or do you impose conditions on the rest of the world, saying, unless you improve yourself, I will cut off aid to you, and so on and so forth? I mean, if human rights is so wonderful, why do you have to impose sanctions to spread the message of human rights?

And I actually believe, frankly, if you look at the world decade by decade, the good news is that the world is becoming a more civilized place. Right? There's less and less torture. There's less and less massive violations of human rights, as you saw with Stalin, Mao and so on and so forth.

Over time, things are improving, so don't -- you don't have to use sanctions to spread human rights. Okay? Let them spread on their own. And the best way of spreading human rights is the way that you are actually doing, by training hundreds of thousands of Asians in American universities. After a four-year education in an American university, you don't go back and torture people. Okay? So that, I believe, America is doing.

On the question of the performance of the Obama administration, I would say that there is absolutely no doubt that the amount of anti- Americanism in the world went down sharply after he was elected. Right? Because, clearly, the Bush administration generated a lot of anger, especially in the Islamic world. And certainly, in the Islamic world, President Obama gave two brilliant speeches, as you know, one in Istanbul, one in Cairo. And then, everyone -- all the expectations were raised phenomenally in the Islamic world. And then, sadly, a year later, 18 months later, the big question that many are asking is: So what's the difference? What has changed? And this is a problem that the Obama administration has: It has raised expectations very high in some parts of the world, and it has not delivered on the high expectations.

But in other parts of the world, let me emphasize this -- vis-a- vis ASEAN, things have improved dramatically. And as you know, in the past, the previous secretaries of State used to miss ASEAN meetings, and I couldn't figure out why, because there isn't -- again, going back to my point about the primary geopolitical contradiction. If your primary geopolitical contradiction is with China, the one time and place in the year when all the great powers in Asia come together for serious congregation is at the ASEAN meetings.

Look, ASEAN is weak geopolitically, but in its capacity to provide a platform, bring everybody, is very strong.

So ASEAN is a geopolitical gift to America. In fact, ASEAN is -- it was created as a pro-American organization in 1967. Today -- I'm going to say this very carefully -- China's influence in ASEAN is (currently greater ?) than American influence in an organization created by America. That's geopolitical neglect. Why you allowed that to happen? You (allowed it to ?).

LORD: You say "neglect," but you would argue -- you would agree that the last couple years that --

MAHBUBANI: Oh, yeah, yeah, yeah. I think -- that's why I say, with the Obama administration, things have improved significantly. Hillary Clinton has come. And I'm really glad that President Obama is finally going to Indonesia, because the one country that loves President Obama is Indonesia. And you know, Indonesia, by the way, is the world's most populous Islamic country. Indonesia is also, for very profound cultural reasons, one of the most moderate Muslim countries in the world.

And if President Obama goes to Indonesia and you have scenes of thousands of Indonesians cheering Obama, those scenes of Muslims cheering Obama can have a very powerful impact on the rest of the Islamic world, you know?

So that's why it's a geopolitical asset that hasn't been -- has not been exploited yet.

LORD: Okay, but you -- one of your themes is the skill of China is diplomacy.

And you wrote: A peaceful rise, China's theme -- it's not a fluke, it's not temporary. It's superb geopolitical maintenance by Chinese leaders.

What's been going on with the peaceful rise the last six months or year? Would you not agree, including with ASEAN, but with us and others, there's been a more assertive Chinese posture in the world. Do you agree with that?

And is this a temporary phase and they'll go back to a bit more, you know, benign diplomacy? Or do you think they're beginning to feel their oats and they want to reflect their military and economic power?

MAHBUBANI: Well, to answer your question simply, China has made some serious mistakes. And I think the most serious mistake that they made was in Japan. Because, I mean I could understand why maybe they got upset about Japan seizing a Chinese fishing trawler and then they push very hard to get Chinese -- the Japanese to release the fishing trawler. To my surprise, the Japanese, as you know, caved in very quickly and released the trawler.

And then the Chinese went one step too far in calling on the Japanese government to apologize. You know, in -- the first rule in international relations is never make a demand that cannot be fulfilled.

LORD: Or in this case, quit while you're ahead.

MAHBUBANI: Yes, quit while you're ahead. Yeah.

And no -- it would be politically suicidal for any Japanese government to apologize to China after have being humiliated in the release. So that showed really very poor judgment on the part of the Chinese.

Here, again, what's interesting is that almost immediately, you know, after the big squabble between China and Japan, at the very next meeting, when the Chinese prime minister and Japanese prime minister were at same meeting of -- (inaudible) -- in Brussels, guess what? The meeting took place between China and Japan.

Now, that's what I call very quick, adept behavior. So the Chinese have quietly not mentioned the apology, they -- (inaudible) -- but they have already met the Japanese -- (inaudible) -- and they will try their best to quickly not allow this incident -- see, they make short- term mistakes, but in the long term they correct course very quickly. And that's the strength that they have.

And similarly with ASEAN. As you know, they have these problems with some ASEAN states on the South China Sea. They made some statements. They got people very upset. And then they sensed that the mood was getting angry, and I think they quietly, in their own way, would lower the temperature on those areas.

So they do make mistakes, but their correcting mechanism is also very good.

LORD: Since you have a great interest in China, and I know this audience does, let's talk a little bit about their domestic situation. Do you agree the following should apply to China and is a wise statement? "The people's desire and need for democracy are irresistible. Freedom of speech is indispensable for any nation."

Is that true for China?

MAHBUBANI: Yes, it's true for China. I mean, I have absolutely no doubt that in the long run, China will have to become democratic like any other state. There's absolutely no question about that. The destination is not in doubt. The only question is the route and the timing.

And here I'd make a point. And forgive me if I sound a little bit provocative here. You know, the United States (reached ?) the idea of equality of men and women in 1776. They took 90 years to abolish slavery, which is the exact opposite of equality of men and women. Took 150 years to give the women the right to vote, and then took 200 years to give the blacks the effective right to vote.

Now, the United States of America, a country with zero historical baggage, takes 200 years to achieve full democracy.

China, with 3,000 years of historical baggage, if they achieve a democracy in a hundred years, it will be a record. So it's a question of the timing.

And as you know, the Chinese watched what happened in the Soviet Union when the Soviet Union went overnight from being Communist Party to a democracy. They could see: It's been done; the experiment has been tried. Take a Communist Party; drop it; create a democracy. Guess what happened? The Russian economy imploded, became smaller than Belgium's economy. Right? Superpower -- number-two superpower in the world: a smaller GNP than Belgium. The life expectancy in Russia went down, infant mortality rates went up, the Russian people suffered. So the Chinese said: Hey, look at what happened in Russia. The lesson you learn is: Don't switch your political system overnight. Do it gradually.

And the good news about China -- and I know you've been going to China much longer than I have -- but on the 1980s, when I went there, everyone in China wear Maoist suits, you know? And you couldn't have a conversation with any Chinese. Today, when you walk into the American -- I mean the Chinese university, when you go to Beida, when you go to Tsinghua, when you go to Fudan, it's almost like being in an American university. Right? It's open. Everybody gets access to information. The Internet -- the single most widely used language in -- on the Internet is no more English, but is Mandarin. And each year, 40 million Chinese leave China freely and travel overseas, and 40 million Chinese return to China freely.

There's something obviously has changed in China. So we must recognize that the trend line in China is positive, whether -- it's never two steps -- always going forward.

Two steps forward, one step backward. So that will always be the case. But as long as the trend line is positive, let's keep encouraging China to move in the direction and therefore, that's why I believe a win-win engagement between the United States and China will lead to a dramatic, long-term transformation of China. And the best thing you are doing, remember, every year, 100,000 Chinese students come to study in American universities. That's the biggest engine of transformation.

LORD: That, that I completely agree with that. It's not my job to debate you here. I'm restraining myself -- great discipline -- but to equate American university campuses and Chinese is something I can't just let it go by. Or to pretend they can use the Internet the way they want to, I mean, there's so many mistakes you made in that presentation that it's -- we could spend the rest of the meeting on that.

But let me finish my last question and I gather -- and it does have -- at some point, someone is going to want to ask you on your views on the Nobel Prize, but I'll skip over that.

MAHBUBANI: Yes.

LORD: Because I gather you feel that Deng Xiaoping should have gotten the Nobel Prize.

MAHBUBANI: Yes.

LORD: But let's talk about India just for a couple minutes before we turn it to the audience. You, obviously, have a great interest in this and you and I worked to make sure -- (inaudible). How do you think India is going to do in competition with China looking in the next 50 years? They each have pluses and minuses, but it's a question that everyone is always asking.

MAHBUBANI: Thank you for restraining, by the way. (Laughter.) Don't get a heart attack, okay? I'm used to being beaten up. By the way, yesterday, I was beaten up very badly by Simon Schama, the historian -- I was on Fareed Zakaria's GPS program, so he set on me. I'm kind of used to that now.

On India -- I mean, that's a -- that's -- in fact, the thing I always keep emphasizing when I talk about the -- you know, I can't talk about the return of Asia, because I say from the year 1 to the year 1820, the two largest economies in the world were consistently China and India, for 1,800 years.

It's only in the last 200 years that Europe took off and then United States took off. So if by 2050 or earlier the projection is that the number-one economy will be China and number two India and number three United States of America, that's a return to a historical norm. And --

LORD: By the way, there's a difference between size of an economy and per capita. I mean, and --

MAHBUBANI: Yeah. Yeah, yeah.

LORD: -- can have a lot of poor people and a -- and a big economy.

MAHBUBANI: Sure. Sure, sure. But the size of the economy will be massive.

And if you read the cover story of Time magazine this week, Fareed Zakaria has a brilliant essay which -- he just came back from India, and he says it's amazing. You go to India today, it's like being in America in the 1960s. The feeling is that the future belongs to us, we can do anything, our lives are going to get much better. And you see that by contrast, of course, America today, as you all know, is feeling very pessimistic about the future.

So the big story about Asia is not -- is not just a story about China. It's a story of China and India. And if you look in my book, The New Asian Hemisphere, I keep emphasizing that it is not about China alone. It's about China and India and the rest of Asia. And that's very good news, because if it's -- if it's -- if it's purely China, I can understand why Americans get very, very nervous and upset and so on and so forth. Because it's China, India, Japan, South Korea, Vietnam and others, it makes it a very different environment. And this will create wonderful geopolitical opportunities for America in the --

LORD: But very quickly -- and I do want to get to the audience -- India's got an unruly democracy. China's got an authoritarian system. Who's going to prevail over the time? And is it going to be a model for the rest of the world?

MAHBUBANI: I -- frankly, I --

LORD: (Inaudible) -- they both prevail?

MAHBUBANI: My -- I -- I'm pretty confident that both will succeed.

China's interests in the region -- does it have any hegemonical ambition in the region which some of the countries fear? What is your take on it?

Thank you.

MAHBUBANI: I think the lesson of history that we've actually learned in the last 20, 30 years is that it's very dangerous to have one dominant superpower in the world, because then you get what is called a unipolar movement. And the unipolar movement means that you're a superpower and there are no checks and balance, and you make mistakes. And that's what happened with the United States in the last 20 years.

So it is bad for the world for any major power to emerge so dominant without any checks on it. And the best condition for the world is what you call a multipolar condition where you have many great powers that each of them balancing each other, and it also acts as a restraining force in many ways.

So, you're right. I mean, if China emerged and became the sole superpower in the world with nobody around, everybody gets very nervous, naturally, because when you have a great power on your own, the temptations to do things is enormous. But the good news, of course, in the region is that, fortunately, you will be in a multipolar environment, everybody wants the United States to remain in a strong way. And the good news is that India is emerging in a strong way. And China also has to be geopolitically very careful because there is a nightmare geopolitical scenario for China. And you know what the nightmare geopolitical scenario for China is? They become too aggressive, too assertive. You get this combination of the United States, Japan, Russia, India and even Vietnam and Australia.

Now, that's a nightmare scenario for China. So the Chinese will do their very best not to get that nightmare scenario and I think they will probably have to be much more careful in how they behave.

So, yes, everybody'd be worried if they emerge as the sole superpower, but that is unlikely to happen.

LORD: Jerry.

QUESTIONER: Jerry Cohen, NYU and council.

Kishore, it's great to have you back, and you bring us to the maximum vision and I think everything you said is right. The problem is when we come down a level, for example, how do we engage China? That has so many multiple challenges. But I want to ask you about one in which you're peculiarly competent. How do you see the South China Sea rivalry playing out? Concretely, should we be worried about this? We're having a program Thursday here at the council on China and the law of the sea --

MAHBUBANI: Yes.

QUESTIONER: -- that's largely stimulated by the concern over recent Chinese interaction with Singapore and others. Could you give us a few more specifics so we get the feel and benefit of your location, as well as your overview?

MAHBUBANI: Yeah. Well, I'm very, very glad you asked that question because my answer is an answer I hope that you will like. I hope you will remember -- I don't know what you will remember from my remarks this morning, but I do want you to take away one phrase, okay, just one phrase from this whole, morning and that one phrase is rule of law. I see the rule of law as the answer to most of the future problems in the world.

And if we can duplicate -- see, America has achieved the highest levels of rule of law domestically, within America. If we can duplicate what America has achieved domestically in the rule of law and create a global or international rule of law that matches what America has done domestically, then all the problems in the world will be solved.

And I know -- I know you'll all be -- you'll all be surprised by this, but I do believe that it can be done. And the reason why it can be done is because it is in the interest of all major countries, all major powers in the world today.

Remember, we know -- in the pre-World War II era, two emergent great powers like Japan and Germany had to go out and conquer and colonize. In the post-World War II era, on the basis of 1945 rules-based order, you can go out and you can grow your -- emerge great powers like Japan and Germany did by going out and buying your natural resources and so on and so forth.

So if China, on the basis of rule of law, can go out and buy resources, it doesn't have to go to war to look for resources. And similarly, in the South China Sea -- and I've discussed this with many Chinese -- I said all you have to do to reassure the Southeast Asians is to say that you will pursue your claims in the South China Sea on the basis of prevailing international law. That's all you have to say. And what -- the good news is that in private, they're beginning to recognize that that's the positive thing.

Now -- but what's the problem here? The problem here, as you know, is that the Chinese government has published a map which shows a tongue -- some kind of tongue, you know, jutting into the South China Sea. And nobody quite -- is quite sure what exactly the claim is. What does a dotted line in the South China Sea mean?

Because the Chinese themselves have not been clear what that means. Are they saying those are territorial waters? What do you mean by that drawing?

Now, the problem that the Chinese have is that having drawn that map, they have great difficulties backing away from that map. So we will go through a phase of what I call ambiguity in the next couple of years. And my hope is that eventually China will come on to recognizing that the best thing they can do is to try and resolve disputes on the basis of international law. And this is why I believe if the United States can take the lead in promoting international law and abiding by international law, then, believe me, you can set a very powerful example for China.

LORD: Thank you. I think over here, then there, and then here.

QUESTIONER: Hi. My name is Carol Bogert (sp). I was somewhat astonished by your --

LORD: (Inaudible.)

QUESTIONER: -- metaphor of human rights as a bird, a beautiful bird that flies around the world, because I work for Human Rights Watch and I'm strongly of the opinion that that bird would be immediately shot dead by any number of world leaders, given the chance; and that it is the strength and persistence of civil society, with allies, sometimes paradoxically even in those governments that do abuse human rights, that keeps the idea alive.

We saw last week 23 retired Chinese leaders signing a letter calling for precisely the same things that Liu Xiaobo has called for in Charter 08.

So I'll be the gun that goes off, since Win raised the question of Liu Xiaobo. The Nobel Peace Prize Committee -- one ally, in this instance, of the human rights movement -- has, without recourse to sanction, which you suggest is a bad idea, pushed the idea of human rights in China. And what do you make of their action?

MAHBUBANI: Yeah, you know, I have got into lots of trouble over the last 20, 30 years discussing human rights issues because there's a -- there's a very profound misunderstanding that arises on this subject. And I believe -- and I still believe -- I like this metaphor for human rights as a bird that travels around the world. And you're right, he'll be shot down by various governments from time to time, but the -- I also believe that when governments promote human rights -- when Western governments promote human rights -- they damage the cause. And the reason why they damage the cause is that -- remember that there are 6.8 billion people in the world; 800 million people live in the West, 6 billion people live outside the West. The idea that 800 million people, you know, who used to dominate the world by the way -- one of the biggest themes in my writings is that clearly, in the last 200 years, you saw Western domination of world history, Europe colonizing the world and American power spreading around the world. And so the Western mind has gotten used to this idea that the West can somehow dominate the globe.

Now, believe me, the biggest shift in human history in the 21st century is that we have reached the end of the era of Western domination of world history. Now, the end of the era of Western domination of world history is not the end of the West. The West remains the single strongest civilization. But the capacity of 800 million people to impose their views and values on the remaining 6 billion people is disappearing.

And therefore, the idea of sanctions is an exercise in futility, partly because the remaining 6 billion people have become massively intelligent as a result of American education.

And so when the U.S. State Department writes a report --

LORD: Excuse me for interrupting, but her question wasn't about sanctions, it was about the Nobel Prize and universal --

MAHBUBANI: No, no, no, but --

LORD: -- values, (not to question ?) values.

MAHBUBANI: No, no, but the question was, can you promote human rights through sanctions by Western governments? And I'm telling you it's not going to work. And it will not work. And I believe that they will spread on the basis of their own strength and values, because the Chinese will discover that they don't want to live in a world where they can be tortured and so on and so forth.

My very important point I do want to emphasize to you is -- about the State Department Human Rights report is that, you know, you must understand that something profound changed in the world after Guantanamo. Nobody takes the State Department Human Rights Report seriously today. They say, excuse me, you tortured people; stop judging other countries. You know, that profound, massive shift has happened, and many of you are not aware it has happened.

Now, coming back to the Chinese Nobel Prize winner, now, you know, unfortunately, I made a mistake of speaking at a Norwegian shipping conference -- this is a fact -- on the day before the Nobel Prize was announced. And before the Nobel Prize was announced, somebody stood up and asked the question, you know, hey, I understand a Chinese dissident, they got Nobel Prize. And I said, oh, I don't know about that, but, you know, in general -- (says give me ?) a general response. I said, but frankly, I think Nobel prizes should also be given to leaders like Deng Xiaoping, who made a huge difference, because the largest poverty-reduction program in the world was carried out by Deng Xiaoping.

He lifted up 600 million people out of poverty.

LORD: That's not peace. That's development.

MAHBUBANI: Yeah. Well, you know, the other -- the other thing I said mischievously, also, I said, is that you give the Nobel Peace Prize to President Obama, who's a wonderful human being, but what peace has he achieved? Okay?

So now going back to the Chinese dissident now, I do not know this Chinese dissident myself. In fact, I never heard of him, to be honest with you, until after the Nobel Peace Prize was announced. But I'm going to say something, which is -- I've got to choose my words very, very carefully. But I want you to understand this, okay?

You know, Max Weber once said it is not true that only good comes out of good intentions, and evil comes out of evil intentions. The intention in giving the Nobel Peace Prize to Liu Xiaobo was a good intention, but the results may be negative. And let me explain why.

Apparently -- I don't know enough about the domestic politics in China, but apparently there were some reformers in China who are trying to push China towards greater political reform. The reformers are being by resisted by people -- what you might call "hard-liners" or whatever it is. And sometimes Western terms don't capture the nuances.

The reformers thought they were making progress. Pop! The Nobel Peace Prize comes in. The hard-liners said, "See, I told you. The West is out to undermine political stability in China." And they push back on reformers.

So the intention was good, I agree. But the effect can be negative. And that's why I actually believe that if you want to transform China, it can be transformed, but it has to be done by the Chinese.

The Chinese themselves must come to decisions about what they want to do with their future.

And I believe that when they finally see where the future lies, they will finally come to achieve the same kind of modern, middle- class societies that you have in the rest of the world, with greater respect for human rights. So in the long run, I'm an optimist that human rights will spread faster.

LORD: Well, I think -- first, I think most would agree that it's going to have to come from within China. There is an issue of whether the short-term effect, which is negative, will yield to a longer-term effect of encouraging performance.

And I also think you have a tendency to say it's Western domination of values. We're talking about universal values that China's got in its own constitution, which are in the United Nations, which Charter 08 endorsed. And so -- and I would urge you to read Havel and Tutu, who are not exactly Americans, their editorial today in The Washington Post.

But we'll see whether it helps over the long run or not. Let's go on.

I have you in the back, and then John Brademus and then Kathy --

QUESTIONER: William Haseltine, ACCESS Health International. It seems as if the economies of the East and West are becoming delinked. I wonder --

LORD: Becoming what?

QUESTIONER: Delinked. Unlinked. The growth rates, the health of the economies.

How long do you think -- first of all, is that your impression? Can that persist?

And if it does persist, what does it imply for your own foreign policy and the foreign policy in the region?

LORD: I'm going to collect two or three more questions if we can. We got so many that are here. I'm going to try to collect several --

QUESTIONER: Sure. (Off mike.)

LORD: -- and try to keep both the answers and the questions brief.

Kathy and then to David DeNoon over there.

QUESTIONER: Hi. KT McFarland, Fox News.

When you talk about the United States, you've given prescriptions of how do we use our resources.

And you've said we pull out of the Middle East, and we have a lot of foreigners come to American universities, and we promote international law.

What else would we do with our resources?

LORD: Okay. We'll take David, and then we'll -- (off mike) -- and then we'll go --

QUESTIONER: Dave DeNoon from NYU.

Kishore, you spoke in your remarks relatively favorably about ASEAN. And since you and I have been going to ASEAN meetings for a long time, it's the first time I've ever heard you speak so favorably about ASEAN.

Could you give us a sense of what you think ASEAN as an institution and particularly ASEAN defense ministers really could plausibly achieve in the next couple of years?

MAHBUBANI: Okay.

LORD: Okay, we, we'll take -- this is tough, because these are big questions, and --

MAHBUBANI: Yeah. I'll give very -- I'll give very short, quick answers, okay? (Off mike) -- every question.

Bill, on delinked, I think that the incorrect word to use is whether or not the U.S. economies are linked or coupled and so on and -- U.S. and Asian economies are linked or coupled and all of that. That's a binary proposition which is not true. It's about degrees of dependence on each other.

And I think what's happening in Asia today, which is surprising me even, is that there is an independent growth dynamic developing in Asian economies. Why, exactly? I don't know. But something is happening down there. And it's astonishing that in the year when the world economy goes through its worst year in 50 years, China's economy grew 9 percent; India's economy grew 8 percent. And this year again China is growing 9 percent or 10 percent. And India is growing 7 percent, 8 percent. And Singapore is growing 15 percent. I mean, what's happening really?

Something clearly is happening down there. I'm trying to wait and see whether this will continue. But I believe that the independent growth dynamic was going to happen, partly because of what I describe in my book. The -- on the question of what else can the United States do, by the way, I think the most fundamental thing that the United States can do, frankly -- and that would be good for the United States, and good for the rest of the world -- is to fix your economy.

You cannot live with such large budget deficits forever. You cannot live beyond your means. It is untenable. And our fear is that if you continue doing this, there will be an hour of reckoning that will come that will be so painful for you and for the world.

So the whole world would like the United States to develop a very strong domestic economy. And then your strong domestic economy then will have a positive influence on the rest of the world. Right now, the nervousness and uncertainty about the U.S. economy is making our world very nervous. And that's why you notice markets behaving very, very strange recently. Nobody knows what the hell's going on and what's going to be the consequence. Nobody knows what's going to happen with bonds and so on and so forth.

So there's a very new kind of uncertainty that we are dealing with. And, believe me, everybody wants the United States to succeed and do well. That's the important point I must emphasize to everybody here.

David, on ASEAN -- and by the way, ASEAN is a very strange organization. It always moves two steps forward, one step backwards; two steps forward, one step backwards. And it's a very difficult organization. If you look at it at the micro level, if you get down to the micro level, you see -- you can see all the dysfunctional parts. If you look at the macro level, you're actually amazed that it keeps moving forward.

So ASEAN defense minister's meeting recently was a huge breakthrough, by the way. There was tremendous resistance to ASEAN defense ministers meeting. Then, voila, one day, one day they said hey, why not meet? And, believe me, that the dialogue that is growing in the region is a very positive development.

LORD: You had your hand up. And then Garrick (sp), and then over -- you have your hand -- okay. We'll do three of those.

QUESTIONER: Great. I'm Matthew Lee, Inner City Press. I cover the U.N. And I wonder if you could -- in terms of China, India and the United States, if you could just give your views on how this played out recently in both Myanmar with the upcoming election, and the sort of the competing -- the place of sort of human rights in a real election, and that -- and also in Sri Lanka where there was a sort of a very bloody end to a conflict where I know at the U.N. China basically blocked any discussion of the civilian casualties.

So just where you think that's going, if both or just -- are in China's sphere, or are they in India's sphere? What's going to happen?

LORD: I want to get a couple more questions, because I want to get as many people in as -- Garrick, and then over here.

QUESTIONER: Garrick (Utley ?) -- (off mike) -- University. I'd like to ask you to put on your academic cap -- (inaudible) -- National University of Singapore.

In future thinking, the -- very often what doesn't come to the equation is the level of talent, human capital, particularly in higher education. China's putting vast resources into it; India, an enormous university -- (off mike).

And Singapore, obviously, with higher education -- all education -- (off mike). How do you see the ability of Chinese and the Indian higher education -- (off mike) -- true world-class talent in sufficient numbers to be as competitive as their potential would allow them to be in the world economy? I'm asking this because we know -- we've done research on the Chinese -- (off mike) -- engineering -- (off mike) -- once you get below -- (off mike). Is there something in the culture that's distinct from the policy -- (off mike)?

LORD: That's another great question, because this is something he's given great thought and written about, actually, about Asian education at the higher levels. So I would be interested in your answer. But we have a question here.

QUESTIONER: Yes.

LORD: Don (ph), did you put your hand up? Did you --

QUESTIONER: (Off mike.)

LORD: Yeah.

QUESTIONER: Michelle Wucker with the World Policy Institute.

What grade would you give the United States strategy on the currency issue with China? And why?

MAHBUBANI: Okay, let me take up -- you had a question -- (off mike) --

QUESTIONER: (Off mike.)

LORD: John Brademas, you know.

QUESTIONER: (Off mike) -- New York University. Do you have many students from the United States at your university?

And are there many students from your university studying in the United States?

LORD: Great, that gives you four questions.

MAHBUBANI: Okay. Very quickly. Sri Lanka and Myanmar. By the way, I should emphasize that many parts of Asia are doing badly. Myanmar is doing badly. Sri Lanka, I would say, it's a mix for you, okay?

And anyway, incidentally, even though the suppression of the Tamil Tigers was a very brutal exercise, the activities of the Tamil Tigers were equally brutal. And, believe me, the Tamil Tigers did things which are horrifying. So in war, as you know, terrible things happen. I'm not saying -- I'm not justifying it. I'm just saying that Sri Lankans suffered so much from the Tamil Tigers. So you've got to be careful deciding who's right, whose wrong in that thing. But, again, the trend line overall, I think they'll get better.

The big question, of course, on India and China is education. By the way, earlier, Garrick, I was asked by The Chronicle of Higher Education to write an article. I was surprised actually -- (inaudible) -- write an article. The article was, "What can American universitites learn from Asian universities?" At first, I thought I would have nothing to say. I ended up writing quite a long article. It's on my website, Mahbubani.net. I refer that article to you. And believe me that even though the top Asian universities are way below the Harvard, Yale, Princeton, Stanford, and so and so forth -- they're still up there. We are still down here.

But at the mid-level where, you know, the majority of American universities are, as The New York Times once said, they're becoming failure factories. First, I contrast. In Asian universitites, the real, the biggest asset that Asia has is that the young people in Asia have an enormous hunger for education. You don't have to push them, you know. They drive themselves into their education. You just open the door, and they go rushing in. And that, that's the big thing that is happening in Asia in a huge way, and that's -- people haven't understood the scale of what is happening in that area.

Now, your question about USA and currency and grades, that's out of my field. But I do think that the biggest, most painful shift the United States will have to make is that it will realize that it can no longer make unilateral decisions on issues of global economic consequence.

And the world has got to learn to develop capacities to coordinate and discuss things like currency. And that's going to be quite, again, a painful shift. That's what my next book is about -- (inaudible) -- it's about global government, (the word ?) that puts everybody to sleep, and how we need to develop greater coordinating mechanisms around the world to deal with the issues of the future.

LORD: Are you distinguising governance and global -- (inaudible)?

MAHBUBANI: Global government is out. It never happened. Global government is about rules, procedures, conferences, (perspectives ?) that take place.

And your question, John, about students -- I'm very pleased to inform you that in our school, the Lee Kuan Yew School of Public Policy, only 20 percent of our students come from Singapore. Eighty percent come from the rest of the world. After Singapore, next largest number, India; third largest number, China; fourth largest number, United States of America.

So if you can help us to send more young people to come to our schools, we would welcome them, even give scholarships to American students to come and study in Singapore. And at the same time, of course, the number of Singaporeans or Chinese or Indians or others coming to study in Asian -- in American universities is growing by leaps and bounds.

But the most visionary thing that is happening -- (inaudible) -- by the way -- I encourage you to have a look at it -- there's something called the Yale-NUS Liberal Arts College Project. It's not confirmed yet. It may not happen. But if it happens, that's a really visionary thing that will show what the future of the world is going to be. The future of the world is going to -- will have a situation where you have more and more of what I call East-West partnerships. In education, the future is in East-West partnerships.

LORD: We're on the home stretch. I want to give you a chance. Did you have a question? We can work in one more question, if you'd like, and then I want to give you a chance. If there's anything you wished you had said that you didn't, and you want to get in before we adjourn, or any concluding thought, in a minute or two, I'll give you that chance.

But you had a question. Yes.

QUESTIONER: Thank you. I'm Julia Fromholz from Human Rights First.

You said a few minutes ago that -- at some point, I think you said, the Chinese people will awaken and understand that they don't actually want to be tortured. And you also said that 800 million people in the West are now trying to export our view of human rights.

I, not suprisingly, disagree, and I believe that every -- 5.999 billion people in the world know exactly what they want, and it's the governments that are not -- many governments are not allowing them to fulfill their fundamental rights.

Do you believe what -- do you agree with what Mr. Lord said, that these are fundamental rights? Or do you believe that they don't already exist around the world?

MAHBUBANI: Well, I completely agree that these are fundamental rights. I agree that the Universal Declaration of Human Rights are universal values that we should all endorse. I have no difficulty whatsoever with that.

But, you know, if -- again, you know, I have to say this, because you have to understand there's a different point of view out there in the world, okay? You continue to believe in America that governments are the problem, and the people are the solution.

Believe me, in many parts of the world, if the government fails, the society fails. Governments are needed in weak and poor countries, and governmental performance is important. So don't see governments as the enemy. And that's a very, very important point that you need to register in the Western mindset.

Now, the last point I'm going to emphasize to all of you is three points. Look, I just want to leave with three points. One is that I'm not anti-American, okay? Tell your friends in the State Department. And number two, that it's very important that America makes some major shifts in its geopolitical policies, very, very important, otherwise you will lose another 10 or 20 years.

And the third point is that there is one big, simple solution for most of the problems in the world, and it's called rule of law. Peace spread the rule of law. And, by the way, by spreading the rule of law and creating a more predictable, rules-based society, you're also spreading human rights.

LORD: Well, let me conclude this. First, let me say that quote I gave you about people's need for democracy irresistible, freedom of speech is indispensable, as you probably know, came from the prime minister of China, Wen Jiabao. Now, whether he meant it, whether it's going to have an impact, I don't know. It was censored of course in China. If their own prime minister's own remarks were censored, it tells us something.

But let me conclude by first thanking the audience. I thought this was a particularly good range of questions, concise and covering a big agenda. And I'm very pleased with that.

But above all, of course, I want to thank Kishore. It is good to see you again personally. You're as sharp as ever. I think you don't have to prove you're a good friend of the United States. Candor is what friendship's all about.

And you're obviously rooting for Americans in your own self- interest, and Singapore's self-interest, the world's self-interest. We may disagree with you, but we've been challenged by you. And I want to thank you for both your candor and your friendship and your performance here today. So thank you. (Applause.)

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THIS IS A RUSH TRANSCRIPT.

WINSTON LORD: So I think we'll get going. My name is Winston Lord. I'm delighted to be presiding at this session. Let's get the housekeeping out of the way at the beginning. This meeting actually is on the record. Please turn off your cell phones -- not only noises but vibrations. And the way this is going to work, as I think most of you know, is that for the first 25 minutes or so I'll interview Kishore and we'll have a conversation, and then we'll turn back to you for your questions or comments, which I know will be concise and will be preceded by your grabbing the microphone and identifying yourself. So that's the basic ground rules. Let's get down to business here.

A gifted diplomat, student of history and philosophy, provocative writer and intuitive thinker -- I couldn't have said it better myself -- (laughter) -- this was the pleasant foreword to his latest book. He didn't -- no, this was done by the Foreign Policy Association a few years ago, and -- (inaudible) -- many awards. But it really does sum up Kishore, who is an old friend. And I'm pleased to welcome him both on a professional level and on a personal level.

Professionally, he has that rare combination of intellect, writing ability and diplomatic skill.

And he moves seamlessly between these worlds, which means when he's engaged in foreign policy, he takes a strategic approach, and when he's engaged in writing and teaching, he makes sure it's policy- relevant. And this is a rare -- a rare skill.

You have the essentials of his biography. I won't repeat them. His career -- now, of course, he's dean of the Lee Kuan Yew School in the National University of Singapore. His diplomatic postings have included as permanent undersecretary in the foreign ministry, and as ambassador to the United Nations.

And that leads me to my personal dimension here. I've known Kishore, I guess, for a couple of decades now. But in particular we worked closely as counterparts in the mid-1990s when I was assistant secretary, he was undersecretary in the foreign ministry -- permanent undersecretary, which is the highest career post.

There was good news and bad news.

The good news is, he was terrific both in formulation and in execution of policy. We worked very closely together. I remember long-distance phone calls reshaping the ASEAN Regional Forum, where we brought China and Russia but most delicately India into that forum, because Singapore was the host.

The bad news is, I discovered he -- his salary was three to four times higher than mine. (Soft laughter.)

KISHORE MAHBUBANI: (Laughs.)

LORD: Remember we had a discussion on that? Actually, that's a serious point. Because Singapore gets the best public servants. The phrase "intelligent Singapore public servant" is tautological. They get the best public servants, and they don't have any corrupt public servants, because they're paid well and rewarded for their skills.

So let's get to our conversation. For years, Kishore has been sounding some themes, namely that Asia's up and the West is down; there's a power shift under way -- not just in economics, which is obvious, but I think he would argue that in terms of strategic skill, even at times in terms of values, Asia's on the march -- they're smarter; the West is not as smart, not as nimble -- and the U.S. in particular; that democracy as a system and human rights as a principle are vastly overrated, especially for Asia and especially for China.

So his writings have been provocative, and I daresay to many in America and the West including me, annoying and irritating at times.

MAHBUBANI: (Chuckles.)

LORD: But they come from a person who is a clear friend of the United States, has lived here, has children at Yale, who knows America and who is speaking with the candor of a friend, and trying to give us wakeup calls whether you agree with that or not. So let's explore some of these themes.

The title of today's session is "Can Americans Think Strategically?" What's your answer?

MAHBUBANI: (Chuckles.) Before I answer, Winston, thank you for that very generous introduction. And I'm especially pleased, Winston, that you emphasized at the end that I speak as a friend of America.

I say this because, sadly, you know, as you yourself said, my writings are annoying, they're irritating.

LORD: They're often wrong, too. (Laughs, laughter.)

MAHBUBANI: (Laughs.) And some people in the State Department and the NSC think that I've become anti-American. So I want to emphasize that I speak as a friend of America, and I always believed that countries, like individuals, languish only when they have unloving critics or uncritical lovers, you know? I'm a better- loving critic of America, and we want America to succeed. Singapore wants America to succeed. The world wants America to succeed.

But at the same time, the whole world is deeply worried about where America is going.

And I've never in my -- either in my 33-year career in the foreign service or my six years as a dean seen a moment as the one that we are seeing now in terms of America and the world.

And to answer your question, "Can Americans think strategically," the answer is yes. You can think strategically, but you have not been doing so. And the thing that -- that's puzzling here is that geopolitics is supposed to work on the basis of logic.

And you know, my first time I spoke in the council here was in 1985, 25 years ago. Peter Tarnoff was the head then. And the topic that I chose was why the American naval base would be moved from Subic Bay to Cam Ranh Bay, right? And this is 1985, at the height of the Cold War. The United States was isolating Vietnam. And I said no, in due course Vietnam will move closer to the United States of America because Vietnam's primary geopolitical contradiction is with China and not the United States of America. And over time the geopolitical logic fell into place, and today the number-one supporter of American naval presence in Southeast Asia is Vietnam. So you could see that 25 years ago.

In the same way, in today's world, there are two geopolitical contradictions that America faces. One is with the Islamic world, and the other is with China. The big question for America is, which is your primary geopolitical contradiction, to use Mao's words.

And you were there in Beijing, okay, Winston -- you were there the historic moment when Mao Zedong switched. As you know, he -- Mao Zedong had two geopolitical contradictions: with the United States of America and the Soviet Union. And initially, especially after the Korean War, after millions of soldiers fought in the Korean War, everyone thought the primary geopolitical contradiction was in China and other things.

Mao Zedong, like a good geopolitical thinker, said, No. my geopolitical contradiction is with the Soviet Union. So he made this brilliant move, together with you and Henry Kissinger, and switched, and therefore made up with America, to take care of the Soviet Union, thus taking care of your primary geopolitical contradiction.

Now, in today's world, between the Islamic world and China, your primary geopolitical contradiction is with China, because the Islamic world cannot surpass American power -- not in my lifetime. But China has to -- not does have the potential, but WILL have a larger economy than America as soon as maybe 17, 18 years' time. So this country, China, is the one that can challenge American influence globally.

So logically, if you work on the basis of geopolitical logic, 80 percent of your resources should be focused on handling China, maybe 20 percent focused on handling the Islamic world. But in the last 10 years, you've spent 80 percent of your resources in the Islamic world, fighting an unnecessary war in Iraq; getting bogged down in Afghanistan; having a massive situation with Israel, Palestine; and there's the potential of a military conflict with Iran. Now, these is handling the secondary geopolitical contradictions.

And in the process, the biggest beneficiary of these changes is China.

Of course, China says, wow, America is so involved in the Islamic world? I can grow. And they're -- you know they're growing very, very fast.

But here I want to emphasize, I don't see China as an enemy of the United States of America, okay? That's not my message. Actually, I do think you can work out a long-term win-win arrangement with the U.S. and China. But to be able to do that, you got to focus on China. Eighty percent of your resources should be focused in dealing with China, and you should get out of this mess that you have had within the Islamic world.

So that's why I say, if you are thinking logically, long term, in geopolitical terms, stop spending. Trillion dollars that you've spent in Iraq got you nothing.

And let me just -- let me end with one story. This illustrates how brilliant the Chinese geopolitical behavior can be. You know, in my previous book, I tell this story. You know, after -- as you know, after United States invaded Iraq, in March 2003, you discovered you had a problem because there was no Security Council resolution -- (inaudible) -- invasion. Technically, the American/British occupation of Iraq was therefore illegal under international law. And the previous Security Council sanctions were still in place for America to not export Iraqi oil.

So America wanted to export Iraqi oil. To do that, you needed an enabling Security Council resolution. So in June or July, America got the enabling Security Council resolution. On the day that America got that resolution, I had tea with a senior American diplomat. And I asked him -- I said, who helped you get this resolution? So I thought he'd mention, you know, a friend of America, an ally of America: U.K., whatever it is. (Off mike) -- the country that helped us the most in the Security Council was China.

And I thought about it, I said, gee, how brilliant the Chinese are. Because we got one big geopolitical win, and this is a fact. President George W. Bush was so happy with Chinese help in legitimizing the American presence in Iraq that he helped out, as you know, by squeezing Chen Shui Bien. So China got one big geopolitical reward because Taiwan was squeezed. Right? Ferociously. But the other big win that the Chinese got, an even bigger win was that by legitimizing the American presence in Iraq, they guaranteed you stay there a long time.

So some brilliant move on their part. They got direct geopolitical benefits and long-term indirect geopolitical benefits. But that's an example of what I call good geopolitical behavior, focusing on what your long-term needs and interests are. And the thing that many of us in the rest of the world are worried about is when is America going to focus on its own long-term geopolitical interests?

LORD: Let's -- we'll get to China in a minute, but I want to stick with Asia and strategy more generally, and my job is not to debate you, but to get out your views. But leaving aside whether we're making the right decisions on the Islamic front, and that is certainly debatable, but it doesn't mean you necessarily ignore China or Asia. And I would ask -- seemingly, your criticisms in the last decade or so have been a couple, namely that America is quite arrogant in terms of imposing its values, but also it's been neglecting Asia. And you're now saying, in effect, we're neglecting China.

Do you feel that Obama has done a better job of this than his predecessor in terms of both of those criticisms? First of all, in terms of general tone in foreign policy, not just Asia -- you know, and he's attacked by this on the right for being too soft, but willing to talk to adversaries, multilateralism, tone down emphasis on human rights to a certain extent, but at least in terms of an arrogant imposition and try to work cooperatively on a global basis.

And secondly, on Asia, this administration, would you not agree, has made a much greater effort, in terms of trips, in terms of engaging, including with ASEAN, the summit, and appointing an ambassador, and the president meeting with all your leaders, not to mention the ASEAN Regional Forum and all the other -- East Asia summit, the G-20, including Asian countries.

So would you say that Obama's made at least an improvement both in tone on foreign policy and in engagement with Asia?

MAHBUBANI: Well, two separate question, one on values --

LORD: Right.

MAHBUBANI: -- and the other on Obama's performance.

LORD: Right.

MAHBUBANI: Now, the one on values, I want to emphasize that the values of democracy, the values of human rights, the values of the Universal Declaration of Human Rights, we all support. Right? It is not the values that are in question. We believe in those values. It's a question of how you export them.

Do you believe that these values are so beautiful in their own right that they will fly on their own wings and spread around the world, or do you impose conditions on the rest of the world, saying, unless you improve yourself, I will cut off aid to you, and so on and so forth? I mean, if human rights is so wonderful, why do you have to impose sanctions to spread the message of human rights?

And I actually believe, frankly, if you look at the world decade by decade, the good news is that the world is becoming a more civilized place. Right? There's less and less torture. There's less and less massive violations of human rights, as you saw with Stalin, Mao and so on and so forth.

Over time, things are improving, so don't -- you don't have to use sanctions to spread human rights. Okay? Let them spread on their own. And the best way of spreading human rights is the way that you are actually doing, by training hundreds of thousands of Asians in American universities. After a four-year education in an American university, you don't go back and torture people. Okay? So that, I believe, America is doing.

On the question of the performance of the Obama administration, I would say that there is absolutely no doubt that the amount of anti- Americanism in the world went down sharply after he was elected. Right? Because, clearly, the Bush administration generated a lot of anger, especially in the Islamic world. And certainly, in the Islamic world, President Obama gave two brilliant speeches, as you know, one in Istanbul, one in Cairo. And then, everyone -- all the expectations were raised phenomenally in the Islamic world. And then, sadly, a year later, 18 months later, the big question that many are asking is: So what's the difference? What has changed? And this is a problem that the Obama administration has: It has raised expectations very high in some parts of the world, and it has not delivered on the high expectations.

But in other parts of the world, let me emphasize this -- vis-a- vis ASEAN, things have improved dramatically. And as you know, in the past, the previous secretaries of State used to miss ASEAN meetings, and I couldn't figure out why, because there isn't -- again, going back to my point about the primary geopolitical contradiction. If your primary geopolitical contradiction is with China, the one time and place in the year when all the great powers in Asia come together for serious congregation is at the ASEAN meetings.

Look, ASEAN is weak geopolitically, but in its capacity to provide a platform, bring everybody, is very strong.

So ASEAN is a geopolitical gift to America. In fact, ASEAN is -- it was created as a pro-American organization in 1967. Today -- I'm going to say this very carefully -- China's influence in ASEAN is (currently greater ?) than American influence in an organization created by America. That's geopolitical neglect. Why you allowed that to happen? You (allowed it to ?).

LORD: You say "neglect," but you would argue -- you would agree that the last couple years that --

MAHBUBANI: Oh, yeah, yeah, yeah. I think -- that's why I say, with the Obama administration, things have improved significantly. Hillary Clinton has come. And I'm really glad that President Obama is finally going to Indonesia, because the one country that loves President Obama is Indonesia. And you know, Indonesia, by the way, is the world's most populous Islamic country. Indonesia is also, for very profound cultural reasons, one of the most moderate Muslim countries in the world.

And if President Obama goes to Indonesia and you have scenes of thousands of Indonesians cheering Obama, those scenes of Muslims cheering Obama can have a very powerful impact on the rest of the Islamic world, you know?

So that's why it's a geopolitical asset that hasn't been -- has not been exploited yet.

LORD: Okay, but you -- one of your themes is the skill of China is diplomacy.

And you wrote: A peaceful rise, China's theme -- it's not a fluke, it's not temporary. It's superb geopolitical maintenance by Chinese leaders.

What's been going on with the peaceful rise the last six months or year? Would you not agree, including with ASEAN, but with us and others, there's been a more assertive Chinese posture in the world. Do you agree with that?

And is this a temporary phase and they'll go back to a bit more, you know, benign diplomacy? Or do you think they're beginning to feel their oats and they want to reflect their military and economic power?

MAHBUBANI: Well, to answer your question simply, China has made some serious mistakes. And I think the most serious mistake that they made was in Japan. Because, I mean I could understand why maybe they got upset about Japan seizing a Chinese fishing trawler and then they push very hard to get Chinese -- the Japanese to release the fishing trawler. To my surprise, the Japanese, as you know, caved in very quickly and released the trawler.

And then the Chinese went one step too far in calling on the Japanese government to apologize. You know, in -- the first rule in international relations is never make a demand that cannot be fulfilled.

LORD: Or in this case, quit while you're ahead.

MAHBUBANI: Yes, quit while you're ahead. Yeah.

And no -- it would be politically suicidal for any Japanese government to apologize to China after have being humiliated in the release. So that showed really very poor judgment on the part of the Chinese.

Here, again, what's interesting is that almost immediately, you know, after the big squabble between China and Japan, at the very next meeting, when the Chinese prime minister and Japanese prime minister were at same meeting of -- (inaudible) -- in Brussels, guess what? The meeting took place between China and Japan.

Now, that's what I call very quick, adept behavior. So the Chinese have quietly not mentioned the apology, they -- (inaudible) -- but they have already met the Japanese -- (inaudible) -- and they will try their best to quickly not allow this incident -- see, they make short- term mistakes, but in the long term they correct course very quickly. And that's the strength that they have.

And similarly with ASEAN. As you know, they have these problems with some ASEAN states on the South China Sea. They made some statements. They got people very upset. And then they sensed that the mood was getting angry, and I think they quietly, in their own way, would lower the temperature on those areas.

So they do make mistakes, but their correcting mechanism is also very good.

LORD: Since you have a great interest in China, and I know this audience does, let's talk a little bit about their domestic situation. Do you agree the following should apply to China and is a wise statement? "The people's desire and need for democracy are irresistible. Freedom of speech is indispensable for any nation."

Is that true for China?

MAHBUBANI: Yes, it's true for China. I mean, I have absolutely no doubt that in the long run, China will have to become democratic like any other state. There's absolutely no question about that. The destination is not in doubt. The only question is the route and the timing.

And here I'd make a point. And forgive me if I sound a little bit provocative here. You know, the United States (reached ?) the idea of equality of men and women in 1776. They took 90 years to abolish slavery, which is the exact opposite of equality of men and women. Took 150 years to give the women the right to vote, and then took 200 years to give the blacks the effective right to vote.

Now, the United States of America, a country with zero historical baggage, takes 200 years to achieve full democracy.

China, with 3,000 years of historical baggage, if they achieve a democracy in a hundred years, it will be a record. So it's a question of the timing.

And as you know, the Chinese watched what happened in the Soviet Union when the Soviet Union went overnight from being Communist Party to a democracy. They could see: It's been done; the experiment has been tried. Take a Communist Party; drop it; create a democracy. Guess what happened? The Russian economy imploded, became smaller than Belgium's economy. Right? Superpower -- number-two superpower in the world: a smaller GNP than Belgium. The life expectancy in Russia went down, infant mortality rates went up, the Russian people suffered. So the Chinese said: Hey, look at what happened in Russia. The lesson you learn is: Don't switch your political system overnight. Do it gradually.

And the good news about China -- and I know you've been going to China much longer than I have -- but on the 1980s, when I went there, everyone in China wear Maoist suits, you know? And you couldn't have a conversation with any Chinese. Today, when you walk into the American -- I mean the Chinese university, when you go to Beida, when you go to Tsinghua, when you go to Fudan, it's almost like being in an American university. Right? It's open. Everybody gets access to information. The Internet -- the single most widely used language in -- on the Internet is no more English, but is Mandarin. And each year, 40 million Chinese leave China freely and travel overseas, and 40 million Chinese return to China freely.

There's something obviously has changed in China. So we must recognize that the trend line in China is positive, whether -- it's never two steps -- always going forward.

Two steps forward, one step backward. So that will always be the case. But as long as the trend line is positive, let's keep encouraging China to move in the direction and therefore, that's why I believe a win-win engagement between the United States and China will lead to a dramatic, long-term transformation of China. And the best thing you are doing, remember, every year, 100,000 Chinese students come to study in American universities. That's the biggest engine of transformation.

LORD: That, that I completely agree with that. It's not my job to debate you here. I'm restraining myself -- great discipline -- but to equate American university campuses and Chinese is something I can't just let it go by. Or to pretend they can use the Internet the way they want to, I mean, there's so many mistakes you made in that presentation that it's -- we could spend the rest of the meeting on that.

But let me finish my last question and I gather -- and it does have -- at some point, someone is going to want to ask you on your views on the Nobel Prize, but I'll skip over that.

MAHBUBANI: Yes.

LORD: Because I gather you feel that Deng Xiaoping should have gotten the Nobel Prize.

MAHBUBANI: Yes.

LORD: But let's talk about India just for a couple minutes before we turn it to the audience. You, obviously, have a great interest in this and you and I worked to make sure -- (inaudible). How do you think India is going to do in competition with China looking in the next 50 years? They each have pluses and minuses, but it's a question that everyone is always asking.

MAHBUBANI: Thank you for restraining, by the way. (Laughter.) Don't get a heart attack, okay? I'm used to being beaten up. By the way, yesterday, I was beaten up very badly by Simon Schama, the historian -- I was on Fareed Zakaria's GPS program, so he set on me. I'm kind of used to that now.

On India -- I mean, that's a -- that's -- in fact, the thing I always keep emphasizing when I talk about the -- you know, I can't talk about the return of Asia, because I say from the year 1 to the year 1820, the two largest economies in the world were consistently China and India, for 1,800 years.

It's only in the last 200 years that Europe took off and then United States took off. So if by 2050 or earlier the projection is that the number-one economy will be China and number two India and number three United States of America, that's a return to a historical norm. And --

LORD: By the way, there's a difference between size of an economy and per capita. I mean, and --

MAHBUBANI: Yeah. Yeah, yeah.

LORD: -- can have a lot of poor people and a -- and a big economy.

MAHBUBANI: Sure. Sure, sure. But the size of the economy will be massive.

And if you read the cover story of Time magazine this week, Fareed Zakaria has a brilliant essay which -- he just came back from India, and he says it's amazing. You go to India today, it's like being in America in the 1960s. The feeling is that the future belongs to us, we can do anything, our lives are going to get much better. And you see that by contrast, of course, America today, as you all know, is feeling very pessimistic about the future.

So the big story about Asia is not -- is not just a story about China. It's a story of China and India. And if you look in my book, The New Asian Hemisphere, I keep emphasizing that it is not about China alone. It's about China and India and the rest of Asia. And that's very good news, because if it's -- if it's -- if it's purely China, I can understand why Americans get very, very nervous and upset and so on and so forth. Because it's China, India, Japan, South Korea, Vietnam and others, it makes it a very different environment. And this will create wonderful geopolitical opportunities for America in the --

LORD: But very quickly -- and I do want to get to the audience -- India's got an unruly democracy. China's got an authoritarian system. Who's going to prevail over the time? And is it going to be a model for the rest of the world?

MAHBUBANI: I -- frankly, I --

LORD: (Inaudible) -- they both prevail?

MAHBUBANI: My -- I -- I'm pretty confident that both will succeed.

China's interests in the region -- does it have any hegemonical ambition in the region which some of the countries fear? What is your take on it?

Thank you.

MAHBUBANI: I think the lesson of history that we've actually learned in the last 20, 30 years is that it's very dangerous to have one dominant superpower in the world, because then you get what is called a unipolar movement. And the unipolar movement means that you're a superpower and there are no checks and balance, and you make mistakes. And that's what happened with the United States in the last 20 years.

So it is bad for the world for any major power to emerge so dominant without any checks on it. And the best condition for the world is what you call a multipolar condition where you have many great powers that each of them balancing each other, and it also acts as a restraining force in many ways.

So, you're right. I mean, if China emerged and became the sole superpower in the world with nobody around, everybody gets very nervous, naturally, because when you have a great power on your own, the temptations to do things is enormous. But the good news, of course, in the region is that, fortunately, you will be in a multipolar environment, everybody wants the United States to remain in a strong way. And the good news is that India is emerging in a strong way. And China also has to be geopolitically very careful because there is a nightmare geopolitical scenario for China. And you know what the nightmare geopolitical scenario for China is? They become too aggressive, too assertive. You get this combination of the United States, Japan, Russia, India and even Vietnam and Australia.

Now, that's a nightmare scenario for China. So the Chinese will do their very best not to get that nightmare scenario and I think they will probably have to be much more careful in how they behave.

So, yes, everybody'd be worried if they emerge as the sole superpower, but that is unlikely to happen.

LORD: Jerry.

QUESTIONER: Jerry Cohen, NYU and council.

Kishore, it's great to have you back, and you bring us to the maximum vision and I think everything you said is right. The problem is when we come down a level, for example, how do we engage China? That has so many multiple challenges. But I want to ask you about one in which you're peculiarly competent. How do you see the South China Sea rivalry playing out? Concretely, should we be worried about this? We're having a program Thursday here at the council on China and the law of the sea --

MAHBUBANI: Yes.

QUESTIONER: -- that's largely stimulated by the concern over recent Chinese interaction with Singapore and others. Could you give us a few more specifics so we get the feel and benefit of your location, as well as your overview?

MAHBUBANI: Yeah. Well, I'm very, very glad you asked that question because my answer is an answer I hope that you will like. I hope you will remember -- I don't know what you will remember from my remarks this morning, but I do want you to take away one phrase, okay, just one phrase from this whole, morning and that one phrase is rule of law. I see the rule of law as the answer to most of the future problems in the world.

And if we can duplicate -- see, America has achieved the highest levels of rule of law domestically, within America. If we can duplicate what America has achieved domestically in the rule of law and create a global or international rule of law that matches what America has done domestically, then all the problems in the world will be solved.

And I know -- I know you'll all be -- you'll all be surprised by this, but I do believe that it can be done. And the reason why it can be done is because it is in the interest of all major countries, all major powers in the world today.

Remember, we know -- in the pre-World War II era, two emergent great powers like Japan and Germany had to go out and conquer and colonize. In the post-World War II era, on the basis of 1945 rules-based order, you can go out and you can grow your -- emerge great powers like Japan and Germany did by going out and buying your natural resources and so on and so forth.

So if China, on the basis of rule of law, can go out and buy resources, it doesn't have to go to war to look for resources. And similarly, in the South China Sea -- and I've discussed this with many Chinese -- I said all you have to do to reassure the Southeast Asians is to say that you will pursue your claims in the South China Sea on the basis of prevailing international law. That's all you have to say. And what -- the good news is that in private, they're beginning to recognize that that's the positive thing.

Now -- but what's the problem here? The problem here, as you know, is that the Chinese government has published a map which shows a tongue -- some kind of tongue, you know, jutting into the South China Sea. And nobody quite -- is quite sure what exactly the claim is. What does a dotted line in the South China Sea mean?

Because the Chinese themselves have not been clear what that means. Are they saying those are territorial waters? What do you mean by that drawing?

Now, the problem that the Chinese have is that having drawn that map, they have great difficulties backing away from that map. So we will go through a phase of what I call ambiguity in the next couple of years. And my hope is that eventually China will come on to recognizing that the best thing they can do is to try and resolve disputes on the basis of international law. And this is why I believe if the United States can take the lead in promoting international law and abiding by international law, then, believe me, you can set a very powerful example for China.

LORD: Thank you. I think over here, then there, and then here.

QUESTIONER: Hi. My name is Carol Bogert (sp). I was somewhat astonished by your --

LORD: (Inaudible.)

QUESTIONER: -- metaphor of human rights as a bird, a beautiful bird that flies around the world, because I work for Human Rights Watch and I'm strongly of the opinion that that bird would be immediately shot dead by any number of world leaders, given the chance; and that it is the strength and persistence of civil society, with allies, sometimes paradoxically even in those governments that do abuse human rights, that keeps the idea alive.

We saw last week 23 retired Chinese leaders signing a letter calling for precisely the same things that Liu Xiaobo has called for in Charter 08.

So I'll be the gun that goes off, since Win raised the question of Liu Xiaobo. The Nobel Peace Prize Committee -- one ally, in this instance, of the human rights movement -- has, without recourse to sanction, which you suggest is a bad idea, pushed the idea of human rights in China. And what do you make of their action?

MAHBUBANI: Yeah, you know, I have got into lots of trouble over the last 20, 30 years discussing human rights issues because there's a -- there's a very profound misunderstanding that arises on this subject. And I believe -- and I still believe -- I like this metaphor for human rights as a bird that travels around the world. And you're right, he'll be shot down by various governments from time to time, but the -- I also believe that when governments promote human rights -- when Western governments promote human rights -- they damage the cause. And the reason why they damage the cause is that -- remember that there are 6.8 billion people in the world; 800 million people live in the West, 6 billion people live outside the West. The idea that 800 million people, you know, who used to dominate the world by the way -- one of the biggest themes in my writings is that clearly, in the last 200 years, you saw Western domination of world history, Europe colonizing the world and American power spreading around the world. And so the Western mind has gotten used to this idea that the West can somehow dominate the globe.

Now, believe me, the biggest shift in human history in the 21st century is that we have reached the end of the era of Western domination of world history. Now, the end of the era of Western domination of world history is not the end of the West. The West remains the single strongest civilization. But the capacity of 800 million people to impose their views and values on the remaining 6 billion people is disappearing.

And therefore, the idea of sanctions is an exercise in futility, partly because the remaining 6 billion people have become massively intelligent as a result of American education.

And so when the U.S. State Department writes a report --

LORD: Excuse me for interrupting, but her question wasn't about sanctions, it was about the Nobel Prize and universal --

MAHBUBANI: No, no, no, but --

LORD: -- values, (not to question ?) values.

MAHBUBANI: No, no, but the question was, can you promote human rights through sanctions by Western governments? And I'm telling you it's not going to work. And it will not work. And I believe that they will spread on the basis of their own strength and values, because the Chinese will discover that they don't want to live in a world where they can be tortured and so on and so forth.

My very important point I do want to emphasize to you is -- about the State Department Human Rights report is that, you know, you must understand that something profound changed in the world after Guantanamo. Nobody takes the State Department Human Rights Report seriously today. They say, excuse me, you tortured people; stop judging other countries. You know, that profound, massive shift has happened, and many of you are not aware it has happened.

Now, coming back to the Chinese Nobel Prize winner, now, you know, unfortunately, I made a mistake of speaking at a Norwegian shipping conference -- this is a fact -- on the day before the Nobel Prize was announced. And before the Nobel Prize was announced, somebody stood up and asked the question, you know, hey, I understand a Chinese dissident, they got Nobel Prize. And I said, oh, I don't know about that, but, you know, in general -- (says give me ?) a general response. I said, but frankly, I think Nobel prizes should also be given to leaders like Deng Xiaoping, who made a huge difference, because the largest poverty-reduction program in the world was carried out by Deng Xiaoping.

He lifted up 600 million people out of poverty.

LORD: That's not peace. That's development.

MAHBUBANI: Yeah. Well, you know, the other -- the other thing I said mischievously, also, I said, is that you give the Nobel Peace Prize to President Obama, who's a wonderful human being, but what peace has he achieved? Okay?

So now going back to the Chinese dissident now, I do not know this Chinese dissident myself. In fact, I never heard of him, to be honest with you, until after the Nobel Peace Prize was announced. But I'm going to say something, which is -- I've got to choose my words very, very carefully. But I want you to understand this, okay?

You know, Max Weber once said it is not true that only good comes out of good intentions, and evil comes out of evil intentions. The intention in giving the Nobel Peace Prize to Liu Xiaobo was a good intention, but the results may be negative. And let me explain why.

Apparently -- I don't know enough about the domestic politics in China, but apparently there were some reformers in China who are trying to push China towards greater political reform. The reformers are being by resisted by people -- what you might call "hard-liners" or whatever it is. And sometimes Western terms don't capture the nuances.

The reformers thought they were making progress. Pop! The Nobel Peace Prize comes in. The hard-liners said, "See, I told you. The West is out to undermine political stability in China." And they push back on reformers.

So the intention was good, I agree. But the effect can be negative. And that's why I actually believe that if you want to transform China, it can be transformed, but it has to be done by the Chinese.

The Chinese themselves must come to decisions about what they want to do with their future.

And I believe that when they finally see where the future lies, they will finally come to achieve the same kind of modern, middle- class societies that you have in the rest of the world, with greater respect for human rights. So in the long run, I'm an optimist that human rights will spread faster.

LORD: Well, I think -- first, I think most would agree that it's going to have to come from within China. There is an issue of whether the short-term effect, which is negative, will yield to a longer-term effect of encouraging performance.

And I also think you have a tendency to say it's Western domination of values. We're talking about universal values that China's got in its own constitution, which are in the United Nations, which Charter 08 endorsed. And so -- and I would urge you to read Havel and Tutu, who are not exactly Americans, their editorial today in The Washington Post.

But we'll see whether it helps over the long run or not. Let's go on.

I have you in the back, and then John Brademus and then Kathy --

QUESTIONER: William Haseltine, ACCESS Health International. It seems as if the economies of the East and West are becoming delinked. I wonder --

LORD: Becoming what?

QUESTIONER: Delinked. Unlinked. The growth rates, the health of the economies.

How long do you think -- first of all, is that your impression? Can that persist?

And if it does persist, what does it imply for your own foreign policy and the foreign policy in the region?

LORD: I'm going to collect two or three more questions if we can. We got so many that are here. I'm going to try to collect several --

QUESTIONER: Sure. (Off mike.)

LORD: -- and try to keep both the answers and the questions brief.

Kathy and then to David DeNoon over there.

QUESTIONER: Hi. KT McFarland, Fox News.

When you talk about the United States, you've given prescriptions of how do we use our resources.

And you've said we pull out of the Middle East, and we have a lot of foreigners come to American universities, and we promote international law.

What else would we do with our resources?

LORD: Okay. We'll take David, and then we'll -- (off mike) -- and then we'll go --

QUESTIONER: Dave DeNoon from NYU.

Kishore, you spoke in your remarks relatively favorably about ASEAN. And since you and I have been going to ASEAN meetings for a long time, it's the first time I've ever heard you speak so favorably about ASEAN.

Could you give us a sense of what you think ASEAN as an institution and particularly ASEAN defense ministers really could plausibly achieve in the next couple of years?

MAHBUBANI: Okay.

LORD: Okay, we, we'll take -- this is tough, because these are big questions, and --

MAHBUBANI: Yeah. I'll give very -- I'll give very short, quick answers, okay? (Off mike) -- every question.

Bill, on delinked, I think that the incorrect word to use is whether or not the U.S. economies are linked or coupled and so on and -- U.S. and Asian economies are linked or coupled and all of that. That's a binary proposition which is not true. It's about degrees of dependence on each other.

And I think what's happening in Asia today, which is surprising me even, is that there is an independent growth dynamic developing in Asian economies. Why, exactly? I don't know. But something is happening down there. And it's astonishing that in the year when the world economy goes through its worst year in 50 years, China's economy grew 9 percent; India's economy grew 8 percent. And this year again China is growing 9 percent or 10 percent. And India is growing 7 percent, 8 percent. And Singapore is growing 15 percent. I mean, what's happening really?

Something clearly is happening down there. I'm trying to wait and see whether this will continue. But I believe that the independent growth dynamic was going to happen, partly because of what I describe in my book. The -- on the question of what else can the United States do, by the way, I think the most fundamental thing that the United States can do, frankly -- and that would be good for the United States, and good for the rest of the world -- is to fix your economy.

You cannot live with such large budget deficits forever. You cannot live beyond your means. It is untenable. And our fear is that if you continue doing this, there will be an hour of reckoning that will come that will be so painful for you and for the world.

So the whole world would like the United States to develop a very strong domestic economy. And then your strong domestic economy then will have a positive influence on the rest of the world. Right now, the nervousness and uncertainty about the U.S. economy is making our world very nervous. And that's why you notice markets behaving very, very strange recently. Nobody knows what the hell's going on and what's going to be the consequence. Nobody knows what's going to happen with bonds and so on and so forth.

So there's a very new kind of uncertainty that we are dealing with. And, believe me, everybody wants the United States to succeed and do well. That's the important point I must emphasize to everybody here.

David, on ASEAN -- and by the way, ASEAN is a very strange organization. It always moves two steps forward, one step backwards; two steps forward, one step backwards. And it's a very difficult organization. If you look at it at the micro level, if you get down to the micro level, you see -- you can see all the dysfunctional parts. If you look at the macro level, you're actually amazed that it keeps moving forward.

So ASEAN defense minister's meeting recently was a huge breakthrough, by the way. There was tremendous resistance to ASEAN defense ministers meeting. Then, voila, one day, one day they said hey, why not meet? And, believe me, that the dialogue that is growing in the region is a very positive development.

LORD: You had your hand up. And then Garrick (sp), and then over -- you have your hand -- okay. We'll do three of those.

QUESTIONER: Great. I'm Matthew Lee, Inner City Press. I cover the U.N. And I wonder if you could -- in terms of China, India and the United States, if you could just give your views on how this played out recently in both Myanmar with the upcoming election, and the sort of the competing -- the place of sort of human rights in a real election, and that -- and also in Sri Lanka where there was a sort of a very bloody end to a conflict where I know at the U.N. China basically blocked any discussion of the civilian casualties.

So just where you think that's going, if both or just -- are in China's sphere, or are they in India's sphere? What's going to happen?

LORD: I want to get a couple more questions, because I want to get as many people in as -- Garrick, and then over here.

QUESTIONER: Garrick (Utley ?) -- (off mike) -- University. I'd like to ask you to put on your academic cap -- (inaudible) -- National University of Singapore.

In future thinking, the -- very often what doesn't come to the equation is the level of talent, human capital, particularly in higher education. China's putting vast resources into it; India, an enormous university -- (off mike).

And Singapore, obviously, with higher education -- all education -- (off mike). How do you see the ability of Chinese and the Indian higher education -- (off mike) -- true world-class talent in sufficient numbers to be as competitive as their potential would allow them to be in the world economy? I'm asking this because we know -- we've done research on the Chinese -- (off mike) -- engineering -- (off mike) -- once you get below -- (off mike). Is there something in the culture that's distinct from the policy -- (off mike)?

LORD: That's another great question, because this is something he's given great thought and written about, actually, about Asian education at the higher levels. So I would be interested in your answer. But we have a question here.

QUESTIONER: Yes.

LORD: Don (ph), did you put your hand up? Did you --

QUESTIONER: (Off mike.)

LORD: Yeah.

QUESTIONER: Michelle Wucker with the World Policy Institute.

What grade would you give the United States strategy on the currency issue with China? And why?

MAHBUBANI: Okay, let me take up -- you had a question -- (off mike) --

QUESTIONER: (Off mike.)

LORD: John Brademas, you know.

QUESTIONER: (Off mike) -- New York University. Do you have many students from the United States at your university?

And are there many students from your university studying in the United States?

LORD: Great, that gives you four questions.

MAHBUBANI: Okay. Very quickly. Sri Lanka and Myanmar. By the way, I should emphasize that many parts of Asia are doing badly. Myanmar is doing badly. Sri Lanka, I would say, it's a mix for you, okay?

And anyway, incidentally, even though the suppression of the Tamil Tigers was a very brutal exercise, the activities of the Tamil Tigers were equally brutal. And, believe me, the Tamil Tigers did things which are horrifying. So in war, as you know, terrible things happen. I'm not saying -- I'm not justifying it. I'm just saying that Sri Lankans suffered so much from the Tamil Tigers. So you've got to be careful deciding who's right, whose wrong in that thing. But, again, the trend line overall, I think they'll get better.

The big question, of course, on India and China is education. By the way, earlier, Garrick, I was asked by The Chronicle of Higher Education to write an article. I was surprised actually -- (inaudible) -- write an article. The article was, "What can American universitites learn from Asian universities?" At first, I thought I would have nothing to say. I ended up writing quite a long article. It's on my website, Mahbubani.net. I refer that article to you. And believe me that even though the top Asian universities are way below the Harvard, Yale, Princeton, Stanford, and so and so forth -- they're still up there. We are still down here.

But at the mid-level where, you know, the majority of American universities are, as The New York Times once said, they're becoming failure factories. First, I contrast. In Asian universitites, the real, the biggest asset that Asia has is that the young people in Asia have an enormous hunger for education. You don't have to push them, you know. They drive themselves into their education. You just open the door, and they go rushing in. And that, that's the big thing that is happening in Asia in a huge way, and that's -- people haven't understood the scale of what is happening in that area.

Now, your question about USA and currency and grades, that's out of my field. But I do think that the biggest, most painful shift the United States will have to make is that it will realize that it can no longer make unilateral decisions on issues of global economic consequence.

And the world has got to learn to develop capacities to coordinate and discuss things like currency. And that's going to be quite, again, a painful shift. That's what my next book is about -- (inaudible) -- it's about global government, (the word ?) that puts everybody to sleep, and how we need to develop greater coordinating mechanisms around the world to deal with the issues of the future.

LORD: Are you distinguising governance and global -- (inaudible)?

MAHBUBANI: Global government is out. It never happened. Global government is about rules, procedures, conferences, (perspectives ?) that take place.

And your question, John, about students -- I'm very pleased to inform you that in our school, the Lee Kuan Yew School of Public Policy, only 20 percent of our students come from Singapore. Eighty percent come from the rest of the world. After Singapore, next largest number, India; third largest number, China; fourth largest number, United States of America.

So if you can help us to send more young people to come to our schools, we would welcome them, even give scholarships to American students to come and study in Singapore. And at the same time, of course, the number of Singaporeans or Chinese or Indians or others coming to study in Asian -- in American universities is growing by leaps and bounds.

But the most visionary thing that is happening -- (inaudible) -- by the way -- I encourage you to have a look at it -- there's something called the Yale-NUS Liberal Arts College Project. It's not confirmed yet. It may not happen. But if it happens, that's a really visionary thing that will show what the future of the world is going to be. The future of the world is going to -- will have a situation where you have more and more of what I call East-West partnerships. In education, the future is in East-West partnerships.

LORD: We're on the home stretch. I want to give you a chance. Did you have a question? We can work in one more question, if you'd like, and then I want to give you a chance. If there's anything you wished you had said that you didn't, and you want to get in before we adjourn, or any concluding thought, in a minute or two, I'll give you that chance.

But you had a question. Yes.

QUESTIONER: Thank you. I'm Julia Fromholz from Human Rights First.

You said a few minutes ago that -- at some point, I think you said, the Chinese people will awaken and understand that they don't actually want to be tortured. And you also said that 800 million people in the West are now trying to export our view of human rights.

I, not suprisingly, disagree, and I believe that every -- 5.999 billion people in the world know exactly what they want, and it's the governments that are not -- many governments are not allowing them to fulfill their fundamental rights.

Do you believe what -- do you agree with what Mr. Lord said, that these are fundamental rights? Or do you believe that they don't already exist around the world?

MAHBUBANI: Well, I completely agree that these are fundamental rights. I agree that the Universal Declaration of Human Rights are universal values that we should all endorse. I have no difficulty whatsoever with that.

But, you know, if -- again, you know, I have to say this, because you have to understand there's a different point of view out there in the world, okay? You continue to believe in America that governments are the problem, and the people are the solution.

Believe me, in many parts of the world, if the government fails, the society fails. Governments are needed in weak and poor countries, and governmental performance is important. So don't see governments as the enemy. And that's a very, very important point that you need to register in the Western mindset.

Now, the last point I'm going to emphasize to all of you is three points. Look, I just want to leave with three points. One is that I'm not anti-American, okay? Tell your friends in the State Department. And number two, that it's very important that America makes some major shifts in its geopolitical policies, very, very important, otherwise you will lose another 10 or 20 years.

And the third point is that there is one big, simple solution for most of the problems in the world, and it's called rule of law. Peace spread the rule of law. And, by the way, by spreading the rule of law and creating a more predictable, rules-based society, you're also spreading human rights.

LORD: Well, let me conclude this. First, let me say that quote I gave you about people's need for democracy irresistible, freedom of speech is indispensable, as you probably know, came from the prime minister of China, Wen Jiabao. Now, whether he meant it, whether it's going to have an impact, I don't know. It was censored of course in China. If their own prime minister's own remarks were censored, it tells us something.

But let me conclude by first thanking the audience. I thought this was a particularly good range of questions, concise and covering a big agenda. And I'm very pleased with that.

But above all, of course, I want to thank Kishore. It is good to see you again personally. You're as sharp as ever. I think you don't have to prove you're a good friend of the United States. Candor is what friendship's all about.

And you're obviously rooting for Americans in your own self- interest, and Singapore's self-interest, the world's self-interest. We may disagree with you, but we've been challenged by you. And I want to thank you for both your candor and your friendship and your performance here today. So thank you. (Applause.)

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