 In just a week's time, on Monday, February 6th, we'll be hosting our annual Atlas Award. This year promises to be an annual event, but this year promises to be an especially moving one, as we welcome home the U.S. troops from Iraq and Afghanistan. Excuse me, I'm left-handed. And also acknowledge those staying on in Afghanistan. Our featured speaker will be General Peter Pace, the 16th Chairman of the Joint Chief of Staff, and Chairman of the Wall Street Warfighters Foundation. On February 22nd, we will welcome Trie Rubin, foreign affairs columnist at the Philadelphia Inquirer, a senior political analyst at Al Jazeera for an update one year after the Arab Spring. For details on the I of the Economy series as well as for our April visit, the former Prime Minister, Tony Blair, please refer to our website on our most recent newsletter, which is available at the registration table as you may have noticed on the way in. Your membership and participation in the World Affairs Program enables us to offer our highly regarded global education programs to a diverse group of over 2,100 middle and high school students in East schools throughout the Philadelphia area, fostering the skills they will need in order to thrive and compete in a knowledge-based global economy. We do have a number of students with us this evening, and I could just ask you to stand up for a minute and everyone will want to give a round of applause. We're still learning, so I'm going to give them a big round of applause. Now for the real topic again. Unfortunately, Larry Broder, the former New York Times South American Bureau Chief, was called away on a last minute assignment. However, I'm delighted to welcome Hal Weitzman to the Council's podium this evening. Mr. Weitzman is currently the Financial Times Chicago and Midwest correspondent. He has been on the staff for the Financial Times since 2000, not the New York Times. There is a copy over there as well, for those of you who would like to make complimentary copies. He first joined us as an editor on its op-ed desk, was named America's News Editor in 2002, and was the newspaper's Andes Bureau Chief from 2004 to 2007. While based in Lima, he traveled extensively, reporting from Peru, Bolivia, Ecuador, Venezuela, and Chile. In addition to the Financial Times, his reporting from the region also appeared in several publications, including the Los Angeles Times, the Miami Herald, New Statesmen, and the Irish Times. Originally from Wales, of course I mistaked him for England, Mr. Weitzman was educated at the Kennedy School of Government at Harvard, Oriole College, Oxford, and Leeds University. We are delighted to have him here with us this evening. If you would please join me in welcoming him. Thank you very much for the introduction, and thank you to the World Affairs Council for putting on this event. I have to say I'm overwhelmed by the interest in Latin America. Normally it's if they beat people's head with a blunt object to get them to listen to you talking about South America. Just excuse me a second, I'm just going to get my props out here. So I want to start off with a question. Could it be that the United States needs Latin America? More than Latin America needs the United States. Now think back a little over a decade ago. The United States was the undisputed heavyweight champion of the world. The most powerful country economically, politically, militarily, while on Earth. Would it need anyone? Let alone a continent known for its periodic economic crises, its political instability, and for having almost no global political influence. Well how times have changed? And how used we have become to them changing. There's an older Jewish joke set in 18th century Eastern Europe at a time when the borders were changing very rapidly, when countries were kind of asserting their sovereignty over disputed tracts of land. And so the story goes that a woman is pegging up washing in some remote shtetl somewhere and a Cossack soldier rides up. The soldier declares, old woman! From this day forth this land is no longer Poland. It is Imperial Russia. And he rides off. And the woman watches him go and she says, Thank God I couldn't stand another Polish winter. Like the old woman in that story, or the woman in that story, we have become used to the tectonic plates of global power and influence shifting beneath our feet. We hear time and again that America is in decline. America is going through something now that's akin to our midlife crisis. Something about which unfortunately I'm getting to know all too well. I'm going to be 40 in March. And America has got an ever expanding debt burden and a receding global role. I've got an expanding waistline and a receding hairline. We all have our problems. But America is going through a kind of deep existential angst. Its political institutions are discredited and broken. Its economy is still deeply wounded and suffering under an enormous, unwieldy debt burden. The Occupy Movement and the Tea Party are calling into question the very foundations of American society. Americans are becoming insular, cautious and unsure about the process of globalization itself. The very process that the United States has been promoting for decades around the world as a means to achieve free societies, free markets. And this has provoked a sort of forlorn sense of nostalgia in America. Just look at the titles of some of the best selling political books of the past year. Books like Republic Lost, The Unmaking of America. And that used to be us. That used to be us. What a pathetically sad and plaintive title that is. It sort of reminds me of my wife and me sitting on the couch, looking at photos of when we were first dating. She says to me, oh, you were quite handsome then. How do you respond to that? The ultimate go-underhand. That used to be us. I think, and I'm an outsider, so this is my observation, Americans are becoming weary of this gloominess. It's very un-American actually. And I think people want to know what's next. How do we get out of the rut that we're in? And there are two elements to this. One is the home front. And this is the one that we've all heard so much about. What do we do here at home to get America back on track? And of course, that's the ground over which the presidential election is going to be fought. And these are very substantial, significant issues. What is the role of the state and the economy? What is the nature of government? And the great and the good have all weighed in on them, and you've heard a lot about that. But an issue that we've heard a lot less about is the question, what is America's role in a multipolar world? How can America use its influence and its power in a world where it's no longer top-down? And that's really the question that I was trying to answer or trying to address in this book. In 2004, the Financial Times sent me to Peru. I was working in London. It sent me to exile in Peru to be there. Grandly titled, Andy's Correspondent. We're the best title in journalism. Andy's Correspondent for the Financial Times. And I would be lying if I told you that there were great expectations about what I was going to produce when I got there. I ended up reporting from Venezuela. But when I was first sent out, my assignment was to cover Peru. In the blue, Bolivia, the green, and Ecuador, and the purple. These aren't exactly the countries that you see on the front page of the newspaper, right? So I had a very memorable sort of debrief interview with one of the senior editors at the FT, called me into his office. He said, you know, you've got a great story here. You've got Chavez, you've got the oil industry. I said, no, I'm not actually covering the Venezuela. He said, oh, well, you've got the FARC, you know, you've got the war on drugs. I said, no, I'm not actually covering Colombia. He said, oh, what are you actually covering? I said, you know, I'm taking Colombia and Ecuador. It was a very long pause. And then he said, hmm, well, go and get a suntan. And I took that advice to heart. But as it turned out, there was a huge amount of very important stuff that happened when I was there. I was lucky to have that most important thing, but all due to this new timing. Six months after I got there, the government in Ecuador was pushed out. Six months after that, the government in Bolivia was pushed out. And Ebon Morales, a left-wing firebrand nationalist, was elected president. And within six months, he had nationalized the gas industry. And six months after that, Rafael Correa, another left-wing nationalist, was elected in president in Ecuador. And in the meantime, another left-wing nationalist called Oyanta Umala was almost elected president of Peru. And for those of you who follow the region will know that he subsequently became president of Peru last year. So it was an incredibly exciting time. And actually, I did make the front page quite a few times. But after going through all this reporting, these wonderful experiences I sent to myself, you've got to write a book about this. But it wasn't until the FT sent me to Chicago to be the Chicago correspondent that the book really came together. And I had a complete picture of what I wanted to say. Because I left a continent that had been booming and thriving. And I came to a country where within a year, it was plunged into this deep economic crisis from which we still struggle with dealing. And I'm just going to remind myself what I wanted to say next. For a long time, people who write and think and write about Latin America have argued that the United States needs to re-engage with the region. The premise of the argument has always been that Latin America needs to be rescued. It needs to be saved by the United States. I say in the book that Latin America sort of cast as sleeping beauty. The United States is the prince who, if only he could be bothered to cut through the weeds, could kiss the region back to life. And in the eyes of several high profile writers about Latin America, whom you may know, the region became the lost continent or the forgotten continent. Interesting terms. I mean, the forgotten continent kind of depends on where you're sitting. There's a kind of assumption there that because Latin America was forgotten in Washington, it was the forgotten continent. Well, it wasn't forgotten in Beijing or in Moscow or in Tehran. And as for being lost, you could argue that it was the United States that was lost. A country, a superpower, unsure of how to use its power in an ever-changing world. But with the U.S. now in decline, what it really needs is alliances with new partnerships with new countries. Most importantly, countries in the emerging markets that are playing more a greater and greater role in the global economy. Now, America's big multinational company, some of which I now cover as the FT Chicago correspondent, long ago learned a lesson that they needed to invest in emerging markets. And if you look at the performance of some of the biggest companies in this country over the past few years, they think they're lucky stars that they had the prescience to invest in emerging markets because their growth in the United States and other developed economies has been pretty meager. A lot of companies have depended for their profits on sales and demand in emerging economies. But the U.S. government has been a lot slower to recognize the opportunities that globalization presents. And something that really struck me when I came from South America to North America was how few people had noticed the dichotomy between the economic performance of the U.S. and the economic performance of Latin America. So across a whole range of measures, the trajectories were going in entirely opposite directions. U.S. growth, economic growth, I mean, was sluggish, occasionally flat. Latin America was booming. U.S. unemployment was stubbornly high in Latin America. Joblessness was coming down. The United States was groaning under this enormous and ever-expanding debt burden. Latin American countries had paid off their debts or were paying off their debts. Poverty and inequality was getting worse in the United States, stretching back to long before the financial crisis. And in Latin America, poverty rates were coming down. The American middle class feels increasingly squeezed under attack. In Latin America, millions of people are entering the middle class. The United States seemed to be played by self-doubt, almost afraid of the future. For Latin America, there had never been more self-confident and the future couldn't come quick enough. And none of this, of course, means that Latin Americans are wealthier than Americans. Of course not. There's a huge gap still. But the gap is narrowing and the trajectories are clear. And of course, that's not just true of Latin America. It's true of all emerging markets. And that means that we have to get used to a world where emerging markets take a bigger and bigger share of the global economy. Now, of course, that's already happening. And one of the props I wanted to show you was my own paper, the FT, from December the 2nd. So there's the front page of the FT, and the headline is Brazilian growth shutters to a halt. The first thing reading this fascinating to me is Brazil is the lead story in the leading financial newspaper of the world. I mean, that's incredible. It shows you how important Brazil is to the global economy. But obviously the meaning of the headline, Brazil growth shutters to a halt, indicates that it's not a linear process. You know, there will be years when the United States grows as fast as Latin America or other emerging markets. Maybe it will even go faster. I mean, this year is actually quite a good example. So this year the United States is forecast to grow at about 3% and Brazil is forecast to grow only slightly fast, about 4%. But you wouldn't bet on that for the long term, right? For the long term, you would assume that emerging economies are going to play a bigger and bigger role in the global economy. They're going to become more and more important. We're going to hear more and more about them. They're going to take up more and more headlines in the FT, in the Wall Street Journal and the Economist. There was a study I saw a few weeks ago by PWC, the consultants. It was one of these fascinating projections where they show you what will be the top economies in 2050. And one of the interesting things from the study is that they predict the United States will grow pretty healthily. So they say that between now and 2050 the US is going to grow by two and a half times. The economy is going to grow by two and a half times. Not a shoddy achievement. But Brazil is going to grow by three and a half times. So it's the relative rate of growth that we're talking about. That, of course, is not only true of Brazil. It's true of all emerging markets, which is why it would be no surprise to any of us that in that PWC survey the top two countries in the world by 2050 will be China and India. So America needs new partners. America needs new partners, particularly among the emerging markets. And in the book I argue that there is no more natural partner for the United States than Latin America. I mean the United States has on its doorstep one of the most lively, most dynamic emerging regions in the world. Why wouldn't it want to couple its economy and its society, its politics with those countries? This isn't just a question of geography. I mean socially, culturally, the United States and Latin America are more similar than the United States is with other emerging markets. And more importantly, the Americas, or at least the continental Americas, is a region that is mostly democratic. It's almost wholly democratic. So we have a deep connection there. But at a time when the United States needs new ties with emerging markets, and particularly I would argue with Latin America, US influence in Latin America has never been lower, ever. Why? I think the main reason is because the United States voluntarily withdrew from Latin America, diplomatically speaking, after 9-Ele. So if you remember back in the early days of the Bush administration, there were some efforts to reach out and reset, re-establish a firm relationship, particularly with Mexico. But of course 9-Eleven changed that, and the focus moved to fighting this fire-breathing, violent Islam. And Latin America dropped down a long list of foreign policy priorities in the State Department, and it's pretty much remained down at the bottom of that list ever since. And so this creates a vacuum. And into that vacuum come other countries, principally China, but also Russia and also Iran. And these countries are interested in the natural resources, in the oil and the metals and the grains, agricultural products that Latin America pumps out. But they're also interested in establishing a foothold in a region that Washington traditionally thought of as its backyard. Zbigniew Bryzinski is touting a book at the moment, and I heard him talk about how America's strategic isolation is only matched by China's strategic patience. Well if you want to see an example of that, look at Latin America. I talked about how American corporations have been investing in emerging markets, and it's produced a very interesting trend in the trade flows between North America and Latin America. So if you look at the data, you'll see that in 1919, the US exported a little under 14% of its exports to Latin America. By 2010, that had risen to 24%. So a quarter of US exports, significant increase. If you look at Latin American exports to the US, they go in the opposite direction. So in 1990, Latin America is exporting 48% of its exports to the US, and that's fallen by 2010 to 40%. What do we learn from that? Well, in crude terms, the United States is becoming more dependent on Latin America at the very time that Latin America is becoming less dependent on the United States. Latin America very sensibly is looking at these changes in the global economy, and retilting its society, its politics, its economy accordingly. So if you take those same data and look at what happened with China, less than 1% of Latin American exports went to China in 1990. By 2010, 10% of Latin American exports went to China. Explosive growth. China, not the US, is now the top trading partner of Brazil, of Chile and of Peru. The United States withdrawal from the region has enabled that. So that's my first explanation. My second explanation for why US influence is at an all-time low relates to what I saw when I was there and what I mentioned earlier. There's been a growth of a radical nationalist, leftist movement in Latin America that is at its heart very anti-American. I'm talking here about Hugo Chavez in Venezuela, about Ava Morales in Bolivia, about Rafael Correa in Ecuador, and other allies. I mean, from time to time you could put Argentina in that group too, and Nicaragua, Cuba of course. And these leaders really emerged in reaction to the Washington consensus. As I'm sure you know, in the 1980s and 1990s, the US backed efforts by the multilaterals, the IMF, the World Bank to open up the economies of Latin America. And in South America, it was done very aggressively in countries like Bolivia. I mean, Bolivia was the laboratory for the Washington consensus. That meant a lot of privatizations. It meant getting the state out of the economy and making the country as attractive as possible to foreign investors. Offering low tax rates, special benefits, whatever it was. The problem was, it didn't quite work. And so, at least not in the short term, let's say that, let's be fair. So, between 1998 and 2003, you have what people call a lost half decade, and the economy completely stagnated. Latin America only really started to grow in 2004. And the reason for that was because the commodities that Latin America sells, all this oil, these metals, these agricultural products, the prices for those took off and have pretty much been rising ever since because of the rapid industrialization of China and India. And there was an interesting reaction to this in Latin America. In previous booms, much of the profits from extracting raw materials had really gone to foreign corporations and been spirited away and hadn't really benefited the country. Or in some occurrences, it had gone to corrupt leaders. The point is, it hadn't gone to development. So there was a groundswell of demand that this time we're not going to miss out. This time we want more control over the economy. We want more control over these natural resources that are being removed from our land. And the old orthodoxy, the orthodoxy of the Washington Consensus, was that the most important thing you could do was get out of the way of the economy and to bring in foreign corporations. And these leaders didn't care about that. They did entirely the opposite. They nationalized industries, they put up taxes on foreign investors, they insisted that they engage in joint ventures if they wanted to exploit natural resources and all the rest of it. And the other reason these leaders were popular and were able to gain power, of course, is because since the 1830s of the Monroe Doctrine, there was a strong strain. There is a strong strain of anti-Americanism in Latin America, and this is a good reason. I mean, let's not forget the dirty wars and the coups and the assassinations and all the rest of it. So this history of anti-Americanism combined with this anti-free marketeering to form a very heady, populist broom. Now, South America, I'm sure of you heard many times, is often described as having two lefts, two left-wing camps. The first is the radicals that I talked about, so Venezuela, Bolivia, Ecuador. And the second is usually taken to mean Brazil. So the implication here is that Brazil are kind of the good guys and the Venezuelans and their friends are the bad guys. That's a very common analysis. I'm not sure you've seen. But I think once you strip away some of the rhetoric that you get, and you get a lot of rhetoric from Chávez and friends, when you strip that away and look at what they're actually doing, what it amounts to is resource nationalism or economic nationalism, essentially getting the state back into the economy and taking greater control over state companies and using them for political ends, whether it's trying to bring down poverty rates or increase social spending or whatever it is. And to my mind, economic nationalism of that sort has been on display in Brasilia as well as in Caracas and La Paz and Quito. I'll give you a couple of quick examples. In 2010, Brazil issued a massive share offering in Petrobras, the state oil company. $67 billion worth of shares, the biggest share offering in history, which is another indication, by the way, of how important Latin America is to the global financial system. Now, the state always retained control over Petrobras. But in this share offering, they structured it cleverly so that the state would take greater capital control over Petrobras. They increased their capital share from 40% to 48%. That's an economically nationalist thing to do. And they're not afraid, the Brazilians are not afraid of using their power over Petrobras to force it to make decisions. So right now, for example, they are telling Petrobras they've got to use local contractors to buy equipment or whatever. Even though there's some doubt about whether those local contractors are any good. The second example came last year in 2011 under the presidency of Dilma Rousseff, who's often thought of as more moderate than Lula, her predecessor. I disagree. I mean, at least in this sense, at least in the economic sense, I don't think that's accurate. Under Dilma, the Brazilian government forced out the head of Bali. I'm sure you're familiar with Bali. It's the world's second biggest mining company. It's based in Brazil. And the head of it was a guy called Roger Agnelli, very respected in business circles, who laid out a cost-cutting plan. Not a very good idea for a company that's effectively controlled by the state, and he was forced out. Actually, Bali is a private company, but the biggest shareholder is the public pension funds, so they're effectively a state-controlled company. And there are other examples. In fact, if you look at the Brazilian stock market, 38% of the Brazilian stock market is accounted for by state-owned companies. So to my mind, the idea that economic nationalism only belongs to the radical left is just not true. Most of Latin America is controlled by governments that do not believe anymore in the ideas of the Washington consensus, but believe in economic nationalism, in the state taking greater control over the economy. Now, in 2005, 2006, when these left-wing nationalist governments were elected, and I was reporting about them, there was a widespread assumption, not just in the US, but pretty much everywhere among mainstream Latin America watches that they would either collapse pretty quickly or that they would have to moderate themselves. Because the orthodoxy was that the best thing you could do was to bring in foreign investors. So the idea that you would squeeze foreign investors, you would nationalize industries, kick out foreign investors, there's no way that would work. The logic was, the logic of globalization meant that that had to fail. Well, unfortunately, the logic wasn't quite right because it hasn't failed. I mean, those leaders didn't moderate. They haven't yet collapsed. Of course I can say that now, maybe they'll collapse tomorrow, but at the time of speaking, they haven't yet collapsed. And not only that, but it hasn't been all that. I mean, they have managed to bring down poverty rates. Maybe the cost is high, but nevertheless, that's what they wanted to achieve and they've achieved it. At the same time, there's a much bigger event going on in the world which is that there's a questioning of the whole economic system that we live under. I mean, one of the principal objections made about Chariz's Venezuela is that it's unsustainable. So people may be sympathetic, but it's unsustainable. To my mind, the financial crisis meant that everything was unsustainable. I mean, is the Eurozone sustainable? What was the over-the-counter derivatives market that gave us the credit default swaps and the collateralized debt obligations? Was that sustainable? Is the US debt sustainable? The economic system that we live under is being questioned like never before. And I'm not just talking about the Occupy movement, although that's a part of it. But if you look at polls, people are deeply skeptical about the system that we live under. Get this. The Financial Times is running a series called Capitalism in Crisis. Wow. I mean, 10 years ago, you'd have to read a Marxist publication to read a series called Capitalism in Crisis, not the FT. And at the same time, there's been a growth in a different kind of model. A lot of people call it state capitalism. It's a big report in The Economist last week about this very subject. We were told in the kind of end-of-history days of Francis Fukuyama that there was only one way to develop. That was the Washington consensus idea. There was no other way. You might not like it, but the state can't be involved in the economy. You have to let free markets take their course. And you wouldn't develop otherwise. That was the only path to development. Well, the Chinese and the Russians and the Middle Eastern countries didn't see it that way. They have made state capitalism work. They've essentially directed their development with the use of the state, the state controlling the economy. So some good nuggets in that Economist report. I really recommend reading it. The 13 biggest oil companies in the world are all state-owned. They control three quarters of the world's oil reserves. And not to mention that there are state-owned companies that are banks and airlines and manufacturers and the list goes on and on. So there is a different model out there. The debate that's going to be had in America about the role of the government in the economy, this is an international debate. And it's not clear that the free marketeers are winning the debate. So what should the United States do? Let's talk about some practical policy issues. It needs to re-establish good ties with Latin American countries. It doesn't have very much money to do that, right? We're talking about a cash-strapped superpower. Well, to my mind, a good place to start would be to undo some other things that America's been doing. If you look at US foreign policy, it is a hell of a model when it comes to Latin America. Bits from the Cold War, bits from the war on terror, cobbled together, incoherent, unsatisfying, bit of a mess. So let's start by undoing some other things we've been doing. Here's my initial checklist. One, two, three. The Cuba embargo has failed. It was aimed at unseating the Castro regime after 50 years. You know, maybe it's time to reassess whether that really worked. And number two, the war on drugs. You know, I could almost say ditto. It's not so old. It's from the 80s, essentially. The war on drugs. I mean, fortunately, America's now admitting that demand has some role in bringing drugs from narcotics from Latin America to North America. That's a good start. But, you know, the war on drugs hasn't stopped the flow of drugs into the United States, hasn't brought down the cost of drugs. And look at the price. 50,000 people have been killed in Mexico in the past six years in drug-related violence. And number three, will also be no surprise to immigration. The United States desperately needs comprehensive immigration reform. Why shouldn't it do that? Why shouldn't it develop that reform in partnership with the very countries where the migrants are coming from? I mean, if you want to stop people coming from Latin America, you need to talk to Latin America. You need to help Latin America develop. You can't just, you know, close the door and shut it with a key and pretend that people won't climb up and under and whatever. So that's my kind of, let's get to a level playing field. Let's get to where we want to be, where we want to start from. How do you get to whatever? Well, I wouldn't start from here. Well, I wouldn't start from here, but I would start from there. I would start from getting rid of the war on drugs, the Cuba embargo, and comprehensive immigration reform. But beyond that, the United States really needs to build good, solid ties with Latin American countries. Not the old-style ties where you tell them what to do, but real partnership. You know, think more European Union than the kind of old-school US foreign policy. And critical to this is Brazil. The relationship with Brazil is absolutely central for the United States. I mean, Brazil recently became the sixth biggest economy in the world. And as I said, it's forecast by 2050 to overtake Russia and Japan as the fourth biggest economy in the world. Why wouldn't you want to shackle your economy to that? That is the most natural partnership for the United States in the world. Now, as I'm sure you know, Brazil although it's achieved tremendous America economically, first, it has a lot of problems still. But second, it has political ambitions that have never been realised. It's extremely frustrating to the Brazilians. I mean, they have a very good case. Give me an example. They're the sixth biggest economy in the world. Are they in the G8? I mean, six is within eight. They ain't there. They're not there. So they've been completely overlooked by the G8. They are desperate to have a seat on the UN Security Council. As are other emerging economies, right? Like India. Barack Obama has backed India for a seat on the UN Security Council. A permanent seat on top of that. Why hasn't he backed Brazil? He refuses to back Brazil for a permanent seat on the UN Security Council. To my mind, Brazil is a much more important strategic partner than India. I'm not saying that India is not important. Of course it is. But if you're looking at strategically in that way that Brzezinski talks, you have to look at Brazil. It's critical. There's a big mistake. It indicates to me the kind of foreign policy shift that needs to go on in Washington if the U.S. is to take advantage of this proximity to such an important emerging market. The U.S. should be advocating for a seat for Brazil on the UN Security Council. It should be advocating to either disband the G8 and replace it with G20 which is a much more important organization anyway, or at least enlarge the G8 to better reflect the changes that have taken place in the world economy. The U.S. and Latin America have a huge amount in common. I mean, concern, policy concerns in common. Energy security. I haven't even mentioned the fact that Latin America is a bigger source of U.S. oil imports than the Middle East. Do you want to talk to them about energy security? And what about crime? We talk about the war on drugs, but crime in general is an issue that transcends this artificial border between Latin America and the United States education. Climate change. Human trafficking. There are lots of issues that we have in common where the United States could forge a common agenda. But it isn't going to be able to do that without telling people what to do. The U.S. has to listen and it has to at some point seed ground. The United States has to get used to working with countries it doesn't always agree with. I mean, the State Department has got used to doing that elsewhere, China being a good example, Saudi Arabia. Latin America is the place to start putting that policy into effect. As I've argued, it's just because it's an important trading partner but because it's important for the U.S. in the world. I don't think it's too late but I do think it's very urgent that the U.S. re-engage, rethink, develop a new strategy for engaging building ties and partnerships with Latin America. Not for the sake of Latin America but for its own sake. Thank you very much. Please take questions. A great presentation. I've read recently like the problems in New York that a lot of unemployed architects or other types of workers are going from Spain to Brazil. We have unemployment issues here. We have a lot of trained people in terms of partnerships with Brazil. I'm wondering about the possibilities of what we can do to say we can also help you provide labor or something like that. We're going to ask Latin Americans for work. Amazing. The other thing I didn't mention is it relates to what you just said. Thank you for that great question. Christine Lagarde, the head of the IMF, was in Latin America recently begging them for money to help save Europe. I saw the article myself in a very interesting phenomenon. I don't know if the US is in the same position but it certainly shows you the thing that I find remarkable about these kind of stories is you hear, as I said in the presentation, you hear about America being in decline and the emerging markets rising but sometimes you get such a potent example that really strikes you in the face. You're leaving Europe to go and work in Brazil to get jobs or your idea of the US asking Brazil for jobs. Fascinating. Who knows what may happen in the future? I don't think we're quite there yet. Thank you for that question. That's an excellent point. A lot of it is. When I mentioned the changing trade the change in exports with China is pointed for by natural resources. As I'm sure you know China outside Asia really targeted Latin America as a place for foreign investment and in fact it's their top location outside Asia for foreign investment. A lot of it is in natural resources and so the big question that's being asked right now is how sustainable, again back to the question of sustainability how sustainable is that? China is slowing down and so the question is Latin America actually, good to go back to the gentleman's question Latin America is very little exposed to Europe. There's only about 2% of Latin America's GDP depends on Europe but it's become very heavily exposed to China, particularly South America. So much of this does depend on China and there's a great concern in the region about the Chinese slowdown but here's my observation about that. Let's imagine that China doesn't slow to 8% or whatever people are projecting but slows to 3%. It's not only Latin America that's going to be in trouble we're all going to be in trouble. You know, if the second biggest economy in the world slows down significantly we're all going to be hit. I mean that will ricochet back to the US, back to Europe God knows what that would do to Europe. But I mean the idea that Latin America is the only continent that's exposed to the Chinese economies is just a nonsense. Sometimes you see it written that way. It is exposed, it is very dependent on natural resources. So there's a big question in Latin America about how to diversify development. Something I didn't mention but I talk about in the book is the relationship between Brazil and China. There is a kind of love-hate relationship between Latin American countries and China. On the one hand they're delighted for the investment and for the market. On the other hand they're being flooded with cheap Chinese goods that has undermined a lot of their manufacturing. So in Brazil like shoe manufacturing, that kind of thing has really been toy manufacturing, has really been heard by cheap Chinese imports and actually I think I'm right in saying that Brazil is the largest number of anti-dumping complaints at the WTO against China of any country in the world. So that is a big concern in Latin America. At the same time if you believe the analysts who say we're in a super cycle where else would you go? That is where the demand for natural resources is going to be. So the best thing, it's kind of like money spitting out of the ATM. At some point it's going to stop but are you going to walk away? I think it's very natural for Latin America to take advantage of that. Will the same be true in 50 years time? Probably not. But by then these problems have grown. In Latin America in much the same way as the US in the US the whole Occupy movement is about when we start growing again how are we going to distribute the wealth? That's how I understand it anyway. I mean that's the serious aspect of Occupy. Latin America has been talking about that for a few years now. These debates between the more radical left and the softer left are really about how do we direct this windfall to make sure that we don't have problems we have fewer problems of poverty and inequality. I hope that answers your question. Do you sense that Brazil would like to do that as a leader in Latin America as well? Thank you for the question. That's an excellent point. There is that danger. I think that if the US doesn't re-engage Latin America that is inevitable. And the fact that the US history in Latin America has generally been so bad right then there is a late Americanism. Having said that something very interesting happened. Do you remember the coup or non-coup, whatever you want to call it that happened in Honduras a couple of years ago? So the United States initially said it was a coup then said they weren't so sure about whether it was a coup or not and it emerged there was kind of a split between the United States and Brazil. And the reason I mention it not because of Brazil but because they said on this TV show said Obama do something which was fascinating. The very guy who's telling Americans to keep their hands off at the moment of crisis says do something. So I think there is although there's a kind of late and anti-Americanism there is a desire to to have a relationship with the United States, a better relationship. Certainly when Barack Obama was first elected there was definitely a change in tone everywhere. I mean remember he shook Chavez's hand or whatever there was a change there I think things have slipped a bit because people saw that the Americans really weren't that concerned and as I said when Obama went to Brazil there was a sense that he might back Brazil for a UN Security Council seat and he didn't there was kind of a disappointment. The other thing I would mention to you is I'm sure you remember is in 2010 Brazil and Turkey came up with a plan to negotiate with Tehran over nuclear weapons oh nuclear capability sorry to give I think the deal was to give Iran enriched uranium for civil development and this was infuriated Hillary Clinton because she'd been working on sanctions separately and you know very interesting question, Turkey it's obvious why they want to deal with Iran half of their oil imports come from Iran. What about Brazil? Why would they care really about Iran? Well the reason they care is because they want to be a global player if the United States could somehow harness that and work with them back then in the book I recommend forming an American G5 or G4 whatever it is to get together Canada, United States Mexico and Brazil maybe Argentina to try and thrash out issues that will be relevant in forums like the G20 or the United Nations a change in attitude I think could go a long way towards repairing that relationship and if the United States were to enthusiastically back Brazil I think that would work wonders but there is that danger Same day Are they shrugging it all off or are they just used? You're not actually asking me to explain the stock market I hope not Well to me the remarkable thing about Europe is the pathetic inability of European leaders to seize control of the situation so we've seen a succession of attempts of them saying oh we've got this fund market rallies then the next day someone realizes there's no money in the fund you know we've got this solution somebody realizes there's a bigger hole in the solution in the market called I mean it's very depressing what's going on in Europe I think it's a real failure of governance to some extent I mean my paper is supported but skeptical of the Eurozone I think to some extent these tensions that were inherent in the system have to be fixed but I mean it does indicate to you if you think back 20-25 years ago the US stock market would not have reacted like that to a crisis in Europe it shows you how related we all are Brazil Brazil went into a slight not recession but it contracted in the third quarter of last year these things have an impact people are plugging that into their models high frequency traders plugging that in these are important pieces of information so you can't anymore retrench into your own economy and say we're just concentrating on growth the sort of wrong poor response we're all connected and the more as history rolls out the lesson is that we're very much connected that's exactly the argument I'm trying to make that if you look 50 years in the future what are the chess moves you need to make to get to wherever you want to be and I think an important one is right here in the Americas sorry I have a silly wrap up I used to swim in this yes I'm saying good I mean a host country develops an infrastructure and they receive some of the benefits and the mineral rights aren't simply given away I'm thinking for example in Venezuela the Chinese do not purchase Venezuelan oil they insist upon doing the exploration of themselves do you see a good model in some places in the world for mineral expression that's a great question the question was is there a good model in the world for extracting minerals we all know about Dutch disease when it comes to resource curse in Venezuela oil was the devil's excrement because it always ends up badly with oil there have been very few examples of what you talk about I think maybe rather than Venezuela which has I defend Venezuela a little bit but it has a huge amount of problems that are very inefficient but look at Brazil Brazil maybe has the potential they discovered these large deposits now they're having some problems getting them out but the thing that people always point to in development terms in Brazil is Bolsa Familia you're aware of the program of giving to low income families a handout it's a program that's been copied in Bolivia by the Morales administration so essentially Bolivia for example is if you send your kids to school you get a payment for low income families now in Brazil I believe they've demanded that all the extraction from the pre-sale offshore deposits are going to be joint ventures with the government and the fascinating thing about it is when I was in Bolivia in 2006 and they nationalized the gas industry all the energy companies were calling me saying right that's it, we're out we're serious, we really are serious and of course some of them did leave but many of them didn't occasionally you see an item if you have a reader like Platts or those energy magazines at the bottom of page 17 BP has agreed a new deal with Bolivia government but they're creeping back in you get some of that as well in Venezuela but to answer your question I think we're still in the stage of developing the models something I should have said though the idea that there's one model for anything, for development for the economy, for managing your natural resources is just a very old-fashioned way of thinking when we start thinking it's a bit like medieval Christianity we don't start thinking that there's one way of doing things there are going to be different models of development, that's a good thing each country has its own problems oil has generally been more of a curse than a blessing but it hasn't necessarily been more of a blessing when you bring in foreign oil companies then you have state oil companies so I think the important thing is to try to encourage countries that have resources to make sure that they spend them on development and to try and measure that in someone there's something that people are trying to do for example in Nigeria which has its own problems yes sir as a result of the war in Iraq would you argue that the US government has injected more money into our economy or as a result of the war in Iraq I'm not sure I understand the question has the US government injected more money into the US economy or or just siphoned it off to abroad to other countries I'm not sure I'm qualified to answer that question I think certainly to relate it back to Latin America there is a there is a desire not to spend any money on foreign policy right now in America I went to a fascinating talk by Enrique Capriles Radonsky who may well be we're going to find out in the next few days whether he'll be standing against Chavez in Venezuela he came to Chicago to the Council on Global Affairs and you know somebody asked him what can we do to help you the kind of anti Chavez movement he said great answer he said problems are going to be solved by Venezuela and the crowd was enthusiastic and to my mind part of the reason is because that's free you don't have to spend any money to let Venezuela solve their own problems all the things that I outline are essentially free you don't have to spend any money it's a diplomatic foreign policy in that sense I do agree with Ron Paul at least what he says it's a diplomatic foreign policy not a military foreign policy it's not gun bug diplomacy which is what America has often done but to be honest with you I cannot answer your question these are excellent questions I would be lying if I said I knew the answers but great question what is stopping North America from working together with South America in order to maximize the economic growth of both countries and if you can answer that question do you believe it can be done repeat the question the question was what's stopping North America working more closely with South America and Latin America to promote economic growth in both regions do I believe it can be done I think I said it can definitely be done I outlined some ways I think the US can start I think what's holding the US back to be honest I think America is very distracted it doesn't have a very and that's Brzezinski's point it's a very strategic foreign policy I think it's time for America to stop thinking ideologically and start thinking pragmatically as I said where do we actually want to go to how do we get there to my mind the road to America's future role goes through Latin America of instability political instability as well as economic perhaps even centuries have made it so that the American government is afraid to get involved because every time they go that direction it falls apart and there's a coup and then they're on to another power so how can they possibly have any continuity that's a really good question so did everyone hear that let's not forget that much of the instability has been caused by US foreign policy from time to time but Chile in the 70s this year but the fascinating thing that actually has happened in Latin America is there is tremendous political stability so when Rafael Correa for example was elected in Ecuador people assume because Ecuadorian governments normally last about 18 months that he would soon be off to Miami or Illinois actually he's a graduate of the University of Illinois but he's still in power, amazing and the same in Bolivia actually it's tremendous political stability that you've seen look at Brazil the workers party won power how many decades of being shut out and they hand it over Lula handed over power to his designated successor so actually I think what you've seen in Latin America is tremendous continuity oh I see do I think well that's a whole other question I mean I think in terms of political stability there's probably never been a better time than now I mean the region is democratic there's a poll that comes out every year that's published in economists first called Latino Barometro which is a fascinating poll about attitudes to democracy and development across Latin America and they usually show that people are pretty they grumble about things you know they usually upset about something so you often get about a fifth of the population saying you know I would have a military government if things were more you know feelings were more stable but actually when it comes down to it most people believe in democracy they believe that the democratic way that swept across Latin America in the 70s and 80s has been beneficial and you know I mean it's an incredible thing as I said in the presentation that you have this huge emerging economy that is wholly democratic sitting on your doorstep it's a fantastic opportunity if the State Department doesn't know about it I don't know where they've got their heads thank you very much excellent presentation how we'll be joining us for a while to sign his book Latin Lessons so please stay up for a little bit we'll have to add a G4 to our student programs because we do a G20 I like that G4 idea thank you for joining us best of luck to you and see you soon