the possibility of prosecution and tried to erect barriers in a variety of ways including slicing and dicing and rewriting criminal laws. to protect themselves from accountability. ..

>> throughout the region, and he's written a very provocative book about how the changes in the global economy, how the commodities boom have affected not only latin americans' economy in the sense of their own destiny, but also u.s. policy. so what we'll do is have hal speak about 10, 15 minutes about his book, and then we're going to have a discussion with going from my immediate left christian who's the managing director at hsbc, global assets at hsbc, and the master teacher at new york university and also adjunct professor at new york university, and i think his proudest achievement, he's also on the editorial board of america's quarterly. so i just wanted to give a

shameless plug to the journal that we publish here, america's quarterly, which just came out two weeks ago. [laughter] but enough about me. hal? let's talk about your book. tell us a little bit about the conclusions you have in your book and why it's caused a little bit of a kerr enough. >> well, thank you very much. as they say, enough about me, what do you want to know about me? well, thanks to the council of the americas for hosting me x thank you all for -- and thank you all for turning up this evening. i want to start with a question. could it be for the be first time in history the united states needs latin america more than latin america needs the united states? now, cast your mind back a decade ago or little over a

decade ago. that question would have seemed absurd. the united states was the undisputed heavyweight champion of the world, the most powerful country economically, politically, militarily. why on earth would it need anyone, let alone a continent known for its economic crises, its political instability, for having almost no global clout? well, how times have changed. and how used we we have become o the fact of change. there's an old jewish joke that i heard probably about 5,000 times when i was growing up, and it's set in eastern europe in the 19th century in a period when borders were changing very rapidly.

and the story goes that a woman is pegging up washing, and a kazakh soldier rides up and declares, old woman, from this day forth, this land is no longer poland, it is imperial russia. and then he rides off. and she watches him go, and she says, thank god, i couldn't stand another polish winter. [laughter] thank you for laughing. i'll pass those on to my father and his father. like the woman in that story, we've become used to the idea of the tech on tectonic plates of l power and influence shifting beneath our feet. we've become used to the idea

that america is going to play a decreasing role in the global political economy in the coming decades. now, there's something of a debate about whether america is in decline or not, and we'll get into that a little bit later. but it seems clear that if you look ahead 20, 30, 40, 50 years, the global economy's going to be quite different, and the u.s. role in it is going to be smaller. and that's a good thing because it means other countries are rising, it means that fewer people in the world are going to be poor. and we should celebrate that. within the united states, though, it's provoked a forlorn sense of nostalgia. 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, that used to be us, that used to be us. what a pathetically sad and forlorn title that is. [laughter] it sort of reminds me of my wife and me is sitting on the couch at home looking at photos of when we were first dating. [laughter] you know, she turns to me and says, oh, you were quite handsome then. [laughter] that used to be us. [laughter] what i think that americans are getting bored of this gloominess, there was something very powerful about that clint eastwood super bowl ad. it's halftime in america. although somebody pointed out to me that that means america's

going to end in 2246 or thereabouts. maybe it's early in america rather than halftime. but it captured the idea that people want to know what's next. how do we get out of the situation that we're in? and a lot of the debate around that question has been focus bed on the home front. focused on the home front. and, of course, that's the ground over which the election is being fought, what is the role of the states in the economy, what is the nature of government. big, important questions. less focus has been on the international dimension. and the question here is, what is america's role in a world where within a few decades it will no longer be top dog? and that's one of the central questions that i was trying to address in writing this book.

now, when the financial times sent me to be their andes correspondent -- great title, probably the best title in the journalism -- in 2004 they sent me to be their andes correspondent. i would be lying if i said there were great expectations back in london about what i would produce in terms of news. so although i later reported from venezuela and chile, i was initially sent out to cover peru, bolivia and ecuador. not exactly the sorts of countries that regularly crop up on front pages of the newspapers. and i had a very memorable debrief interview with a senior editor at the ft, and he called me into his office, and he said, you know, this is great. you have got chavez, you've got the oil industry. i said, no, i'm not actually covering venezuela.

and he said, oh. well, you know, you've got the farc, you've got the war on drugs. [laughter] i said, no, i'm not actually covering colombia. he said, oh, well, what are you doing? [laughter] i said -- what are we sending you out there to do? i said, i'm covering peru, bolivia, ecuador. there was a long pause. [laughter] and then he said, well, in that case, go and get a suntan. [laughter] and i took that advice to heart. but, actually, it turned out to be an incredibly interesting and exciting time. so six months after i got there, the government was pushed out in ecuador. and six months after that the government was pushed out in bolivia. and evo morales, a fiery, indigenous, nationalist, left-wing, radical president was elected. and within six months he had

nationalized the gas industry. and six months after that rafael carea, another radical leftist allied with hugo chavez, the venezuelan president, he was elected in ecuador. so it turned out to be an incredibly interesting time, and i did end up getting a few stories on the front page after all. and after going through this wonderful experience for three years i said to myself, you have got to write a book about this. but it wasn't until the ft sent me to chicago, where i'm current liquor respondent, that the book really came together. because i came from a continent that was booming to a country where less than a year after i i arrived fell into this economic crisis that we're still struggling with today.

and it wasn't just economic growth, it was across the whole range of indicators. while unemployment was stubbornly high in the u.s., and is still stubbornly high -- although it's coming down -- in latin america joblessness rates had been falling. and where poverty and inequality had been getting worse in america since long before the financial crisis, in latin america poverty rates had plummeted. and while the middle class in america felt squeezed and under attack, in latin america tens of millions of people were entering the middle class for the first time. now, for a long time people who think and write about latin america have urged the united states to become more involved, and that's a call that i echo in

my book. but there's a difference. in the past that call was always made on the premise that latin america needed to be rescued, it needed to be saved. i say in the book that latin america was cast as sleeping beauty, and the united states as the prince who if only he could be bothered to cut through the weeds could kiss the sleeper back to life. and this ignoring, this inattentiveness led a number of high profile writers about latin america to call the continent the last continent or the forgotten continent. interesting phrasing. the assumption there was that it was forgotten was it was forgotten in washington.

but it wasn't forgotten in beijing, and it wasn't forgotten in moscow. and it wasn't forgotten in tehran. and as for being lost, you could argue it was the united states itself that was increasingly lost. an unwilling superpower, unsure of how to wield influence in this fast-changing world. i do believe that the united states is in relative decline. not in absolute decline. i don't believe we're going to be in economic crisis for the next 20 years, but we are in relative decline. and as i said, what i think that means is something very positive. it means that emerging countries are rising up. people are getting richer. they are starting to realize the potential of their vast natural resource wealth in the case of

latin america. what does that mean for the united states? what it means is i need a new be kind of foreign policy. it needs new allies. and specifically, it needs new allies among these emerging powers. the countries that are going to be the global superpowers of tomorrow. so in the book i argue that there is no more natural partner for the united states among these emerging regions than latin america. the geography's important be, but it's not just geography. socially and culturally, we are actually very similar, more similar probably than the united states and any other emerging region. and, of course, this is a hemisphere where democracy is the norm. but at a time when the united

states needs this more than ever, its influence in the region has never been lower. and the principle reason for that is because the united states voluntarily withdrew from latin america after 9/11. now, i don't want to say yes that before 9/11 everyone in the united states was very engaged with latin america, but it went in cycles and waves so in the 1990s you saw a wave of interest around the time of the signing of the nafta, for example. finish and in the early days of the george w. bush administration he talked about putting latin america at the heart of u.s. foreign policy. you might remember that his first overseas -- overseas, his first foreign trip was to mexico. but 9/11 checked all -- changed

all that. and the focus shifts very dramatically and very rapidly to confronting this fire-breathing, radical islamism. and latin america dropped down to the bottom of a long list of foreign policy priorities. and in spite of a lot of rhetoric, it's pretty much remained at the bottom of that list ever since. and this created a vacuum. and into this vacuum came china and russia and iran, but principally china. and the focus for those countries was both the natural resources that latin america possessed in abundance, particularly south america, but also the idea of establishing a

foothold in a region that washington had traditionally regarded as its backyard. a second reason, and the reason that i was privileged enough to witness as a correspondent in latin america, was the rise of a particular form of nationalist left. but this symbolized a wider change, a wider shift. and that really was the shift to economic nationalism or resource nationalism. and that was in sharp contrast to an earlier period in the '08s and '90s when countries across latin america had opened up their economies, liberalized trade, invited in foreign investors under the broad rubric of what was called the washington consensus. and be that was a process that the united states enthusiastically backed.

and the basic idea was there was only one way to grow your economy, there was only one way to develop. and it amounted to removing the state from the economy, getting out of the way and making yourself as attractive as possible to foreign investors with low tax rates and all the rest of it. and what you've seen in the past decade is a reaction, a backlash existence that. -- against that. so the state has come back into the economy, and taxes have been raised on foreign investors. foreign investors have been squeezed. this is typically thought of as happening in two different ways. the two lefts of latin america, right? you've got the hard left, the nationallests. hugo chavez, morales, cuba, nicaragua, occasionally

argentina could be added to that list. and then you've got your moderates which people principally mean brazil when they say that, but they also include countries like chile and peru. sometimes people call them the carnivores and the vegetarians. two very different camps. but i think that a lot of this reflects a focus on politics and rhetoric. and when you strip that away and look at economics which is what we're really talking about, what are they actually doing, there are many more similarities between the cash roar -- carnivores and the vegetarians. brazil is a great example of this, and i just want to give two quick examples of what i mean. because in brazil you've seen in the past couple of years a rise in resource nationalism. and what i mean by that is a

rise in countries using their resources to further political ends. not just economic growth, but actually political ends. a reversal of those washington consensus policies. so the examples i would give from brazil come from the oil industry first and the mining industry. in the oil industry in the 1990s brazil ended the monopoly the company had over the oil sector. they invited private companies to come in. and, as i said, as many other countries did the same. and what you've seen the past couple of years is they've become much more nationalistic. so most foreign companies that have come in have been given secondary roles.

and these vast, eye-popping deposits they discovered under a layer of salt offshore, the subsalt deposits. if you're a foreign investor, you have to go in there in a joint venture with petro grass, and they have to have at least a third of the project. so that's the state coming back in. at the same time, you've seen the state becoming much more involved in what petro brass is actually doing. so in the past couple of months you've seen them telling pet row brass to use local detractors which is something they don't really want to do. interfering role. but it's not just interfering in state companies. you've also seen them interfering in the private sector. so in the mining industries. last year the world's second biggest mining company based in

brazil, the brazilian state forced out the chief executive last year because they didn't like his proposal to cut jobs. now, it's a private company, but it's controlled by the states because the public pension funds are the biggest shareholders. so they forced out the chief executive, a guy called roger. so you see the state coming back in, you see the government interfering much more over the management of state enterprises, and you see the management -- the government interfering in the private sector as well. so brazil is an example of economic nationalism. not to the same degree as venezuela, but there's a continuum there. the idea that these are two different ideologies, i don't think it's quite accurate when you look at what they're

actually doing in terms of their economic policy. and there are other examples in brazil. actually, there was a fascinating report in the economy itself a few -- economist a few weeks ago about state capitalism, and it was revealing that the three examples they chose were china, russia and brazil. 8% of -- 38% of the value of the stock market in brazil is made up by state-owned enterprises. so this idea that economic nationalism is something that confine bees the hard left -- confines the hard left to the carnivores is not quite accurate. now, i don't think that economic nationalism is about to wither away in south america. there are a lot of doubts particularly in venezuela over chavez's future, and there are periodically doubts in other

radical left countries like ecuador and bolivia about how long their leaders will last. their predecessors certainly didn't have very long time in office. so far they've done better. they might not -- they might run out quite soon. but whatever happens i think it's quite likely that this impulse of economic nationalism will be something that we'll be dealing with for a long time. and et comes as -- it comes at a time when here in the developed world we've been going through a process of naval gazing, of angst about our own economic system, our own free market system, the very system that we were telling these countries to adopt for decades. one of the key criticisms of chavez in venezuela, and it's

valid, is that it's unsustainable. i agree. it's unsustainable. but if financial crisis has taught us anything, it's that our own system was also unsustainable. i mean, is the eurozone sustainable? would the over-the-counter derivatives markets that gave us the collateralized debt obligations, were they sustainable? is the u.s. federal debt sustainable? and this questioning of the role of the market, the role of the government in the economy, this is an international debate. we are very focused on latin america. but latin america is an example of what's happening across the world. there's a very vibrant, very

important debate going on about different ways of developing your economy. and it's not clear within that debate that the free marketeers are winning the argument. now, i don't want to take up too much more time because i want to leave room for debate. i do have some policy recommendations about what the united states should do to become more engaged with this region. i think there's a real at no opportunity here. i don't think the opportunity will be there forever. but i think there is a, it is a moment when the united states could correct this inattentiveness. i think it's a big strategic mistake not to look at latin america more closely, not to be focused on that. not just as a part of western

hemisphere relations, but as part of the u.s.' global strategy. if the united states has no influence in latin america, how can it hope to have influence elsewhere? i think it's time to think strategically. latin american policy has too off been clouded by ideology. washington needs to correct this. it needs to become more engaged, it needs to become more involved. not for the sake of latin america, but for its own sake. thank you. [applause] >> i think you'll find a very receptive audience here, this is the council of the americas. but let me ask a question first. the economist within a private bank, how does this work for you and this idea, do you buy the

idea that latin america's reached this economically speaking, has reached this takeoff stage and will soon leave the united states in the dust? and there are very few details about the decline of u.s. manufacturing. >> look, first of all, i think we've got two latin americas here. we've got south america, and i think your book is really focused more on south america than central america. i was actually preparing for the panel today, i was actually looking at the average gdp growth on a per capita basis over the last 11 years in latin america, and i found something which i found quite surprising. i'm going ask, actually, people in the audience. what was the average gdp growth on a per capita basis of mexico over the last 11 years? more than 2% a year, less than 2 %? who would say more than 2% a year? who would say less than 2% per year? i'd say balanced.

okay, so i thought it would be much more than that. it's .be 8%. so gdp growth on a constant basis for the last 11 years on average was .8%. in latin america in the south, southern parts of latin america, it's about 2.5-3% with the larger countries. so the region, really, that has benefited from commodity price, the rising commodity prices and the appetite of the -- [inaudible] from china is south america. central america has not benefited that much. but what i would like to come back to and, i think, pick up on one of the things you were saying, latin america's been the lost con innocent for the -- continent for the u.s. i think it's true for most emerging markets. it's true for africa until recently, and it's also true for asia. i mean, china, until 15 years ago, was also --

[inaudible] part of the world. same thing with india and really for the rest andasia. and i think that's extremely important. but what is concerning me and that's why i started the point talking about the difference between what's happening in mexico and what's happening in the rest of latin america, what's concerning to me is the fact that latin america by many measures is falling behind when you compare to the growth in asia, when you compare even to the growth of africa. labor productivity in latin america has been lagging behind. so it's very good on the agricultural side, but it's very poor on the industry manufacturing side and more importantly on the services side. investing in education -- [inaudible] so i know there are certain countries in latin america where education has been a very important area of investment. by and large in latin america education has been, has been lagging.

investment in infrastructure, savings rate in latin america extremely low, especially compared to asia. so i think there are a couple of things which are, i think, of concern when it comes to latin america. one is you mentioned sustainability of growth. so the -- [inaudible] poverty unsustainable. but i don't know how much, what the sustainability of the current growth when we know that it's driven by china and driven by increase anything commodity rices -- increasing commodity prices in latin america. we know the investment has been made in the continent. so i totally agree with your comment that we have to rethink the way we look at latin america and emerging markets in particular. but i'm very concerned, and, i mean, the title of latin america is prospering. some part is prospering, yes.

how much of that will be carried out in the future is very concerning to me. >> want to respond? >> listen, there aren't, there isn't one -- it's very patronizing to say latin america's this or that. there are many countries in latin america, they're all different. but broadly there are three regions that we talk about, right? there's mexico, there's north latin america, there's central america and south america. and you're right that the focus of the boom has been in south america, absolutely. and you're right to say that it's been fueled by natural resources. in fact, it's worse in central america because it's not just that central america doesn't

have the natural resources to benefit, but they are, they've emerged as a competitor to china because they produce, they're a manufacturer. and, um, they don't even have the natural resources to balance that out. so i think the situation for central america is not good, but that's why i special chi put how -- specifically put how south america has been prospering. i don't think there's anything bad about that. i think sometimes when those of us who are focused on latin america, we're used to being so pessimistic that we miss the fact that this is a wonderful moment. and be, but you're also right to suggest that we are now into a different debate. we're into a debate about how do we spend the proceeds of this wealth, and that's a very important debate. the point i was trying to get across, though, i just want to come back to that. there is a kind of perception in that two lefts rubric that the

good guys are the brazilians. you know, we should all be like brazil. and the bad guys are the venezuelans, and we should not be like venezuela. and you see that debate playing out right now in venezuela because the opposition candidate has said that he wants to make venezuela more like brazil. and i don't yet see that -- even in brazil, in fact, in any of the countries that have benefited from this boom, they have not yet resolved those questions you talked about. so, actually, this is a great challenge for all of south america, is this challenge of spending. but how great that we've moved on to a different debate. we're not talking about economic crises, we're not talking about those kind of structural problems. we're talking about how do we spend the please of wealth -- the proceeds of wealth, and how do we do that effectively to make sure that this is a boom that continues? it's an important debate to have, and it's going on in latin america.

it's not like we're the only people talking about it. they're aware of the problems, and they're certainly aware of the challenge of china, something that you guys have written about a lot. the challenge of china and how china is, um, a relationship that at first be the door was wide open, and now they're realizing that it has to be managed a bit more carefully. i think they're aware of that. but i celebrate the boom, and i celebrate the fact that we are on to a different part of the debate be. how do we spend our money on education, on infrastructure, as you said, on reducing poverty and equality, these very things that have held development back. that is a change from the past when the policy prescription was about, as i said, getting the state out of the economy, liberalizing yourself. in the past we placed too little emphasis on spending, how to spend effectively, and too much emphasis on headline growth. you know, there was a very interesting election that happened last year in peru.

and peru has been growing phenomenally. those of you who follow banks and other financial institutions will know that peru has been a superstar. its growth has been among the fastest in the world. it's been growing at rates like 9% a year. and last year they elected a president who potentially would have overturned all that. so after a year in which they grew at 9%, they elected this man who has been in his past, at least, recent past, a radical leftist. in fact, when i gave that timeline of, you know, six months after i got there this happened, six months -- in between the radical leftist being elected in bolivia and the radical leftist being elected in ecuador, peru almost went the same way. and that would have been a very different story had that happened then. it didn't happen then, it

happened last year. the same guy got elected in peru. and i think a lot of people were scratching their heads, how could a country grow 9% a year and still elect this kind of guy? and the reason was because they had not used the proceeds of that growth to -- they've not spread the wealth effectively. and in peru it was a problem of social inclusion. and he's made that a focus or at least rhetorically made that a focus of his political strategy. so i think those -- [inaudible] >> what the heck was that? [laughter] >> it's the cia. those questions are important, but i think it's, i welcome that debate. i think it's a very healthy debate to have when we're at the level of how do we spend our money effectively. >> want you to -- [inaudible] be go ahead, doctor. >> no, i was just curious to know because i think it's an

issue that we see in latin america, we also see in certain asian countries and african countries. we are in different world, and we've seen increase, very substantial increases in wealth, extension of the middle class. 45 million people have joined the middle class. at the same time, there are some clouds, one of them is commodities. one of the issues, the foreign exchange is appreciating. everybody knows it's very, very high which is creating some very serious issues within the industry on the export side. so we've got some very complex dynamics linked to this new nature of growth which is driven by china. and then, obviously, the question for the government is how are we going to be investing for the long term in infrastructure and innovation to make the country more competitive. and over the last five or six year we haven't seen really

those countries lead anything terms of innovation. brazil, if we look at the world economy foreign data, hasn't really gone up compared to pretty much the same thing as five or six years ago. i think it's -- because we talked about the washington consensus. i would love to see a sao paulo consensus. but i'm not sure we see that today. in the past we had new ideas in terms of economic development. do we see -- i would love to see latin america come to the world and show a different type of economic growth, a different type of model for sustainable growth. do you see that happening? are there debates? >> i mean, i think the rest of the countries in south america would probably balk at the idea of a sao paulo consensus. [laughter] you know, i don't think there's necessarily going to be a latin american model or a south american model. there might be a few

different -- frankly, i want to get away from the idea that there's one model per bloc. i think each country has its own characteristics that require a different kind of policy. and, but i do think that the focus has, in latin america -- in south america has shifted much more to social spending, as i say. and the focus has shifted away from a pure concentration on headline growth towards these other factors. now, you mentioned labor, but you could talk about employment, you could talk about poverty, inequality. there has been a lot more focus on those kind of issues, and i think that the countries are aware of the problem. it's not completely passing them by. the infrastructure deficit is something that's been talked about a lot and, actually, bolivia -- which is a case of a country that did go to the radical left -- has been going through in the past few months a very, very fierce debate about

building a road that is kind of -- that has kind of been seen by its proponents as essential for its economic development. so here's the case of a leftist government fighting its own supporters to provide infrastructure. there is that debate going on. and the big test will be to what extent the spending on education, on infrastructure, on anti-poverty programs is maintained and is ramped up in the years ahead. >> turning now to political science, the more difficult science even than economics. [laughter] explain a little bit about -- [inaudible] of this are. >> well, my own thinking in reading the book, and i think it's an excellent book, it has great stories and very provocative, has to do with, um, the sort of -- perhaps the way the book, um, particularly the title and the first few pages are framed. and i think that has much more to do with the editorial than

with yourself. having written books, i know editors like to put provocative titles in there. but you can have a different sort of -- and i think you can read that story here, too -- a different story on what actually happened. latin america didn't do anything to get the commodity boom. so, sure, we're lucky, but we just won the lot lottery. and the question is what you do when you win the lottery. and i think that part of the success at least of some latin american countries has to do with them actually following the washington consensus. that's part of the success. if there's any criticism to go around, it's against washington for not following the washington consensus, particularly in terms of fiscal responsibility and more transparency, a number of issues that were central to the washington consensus. and you point this out too. there is a lot of criticism against neoliberalism in latin

america, but in parts the success of some of these left-wing governments has to do with them being a bit fiscally responsible. now, they are fiscally responsible because they live in a commodity boom. so the question is what's going to happen when the situation tightens a bit, and they are pressed to be a bit more responsible? and there the evidence is not as, um, perhaps as, um, optimistic or as reassuring as one would like. given the positive be conditions that this country has, growth has been very good, but investment in infrastructure, education or, um, even poverty reduction in many of these countries has lagged behind. they have reduced poverty, but much less than they could have given the levels of economic development. so i'm a bit less optimistic than you are. i mean, if you think about countries like argentina which

is, perhaps, a very, very interesting case of openly responsible policies that they can get away with because they have extremely positive terms of trade. so the big problem in the 1950s and '60s the school problems were that the terms of trade were declining. so the stuff that latin america exported, their prices were going down whereas the things that latin america imported, the prices were going up. and now the terms of trade are very positive, but they are really sort of blowing the opportunity to -- they are not taking advantage of the opportunity to transform those positive terms of trade into long-term investment. they implement subsidies that are very regressive, that are going to be very difficult to sustain once the boom, um, ends. and they are not making the type of investment that they should make. so in that sense i wish i could

be, um, as optimistic as you are. but the history of latin america has been previous periods where they also went through commodity booms, and when the boom was over, they were left with nothing. >> forgotten the lessons of its favorite son? [laughter] >> i mean, i think those are excellent points. i think i agree with much of what you said. you know, it really all comes could down to this question of sustainability, and be there are two elements to that. one is that you have countries like argentina, like venezuela that a lot of people think are doing things that are just unsustainable. so even if you agree with them, this is not the way to reduce poverty. actually, i think that the reduction in poverty in venezuela has been, you know, dramatic and far ahead of, i think, any other latin american country, but it's not sustainable. how are you going to sustain that? so that's one thing. and i agree with that.

i mean, the book, you know, i dedicate a whole chapter to how unsustainable it is. in fact, in the book i say that, um, you know, the people who support chavez often portray venezuela as a kind of socialist paradise. and his critics often portray it as a kind of bleak prison. and, actually, it was -- it's neither. it's this kind of consumer orgy where because of the inflation is so high, as soon as you get any money, you have to buy things immediately. but because of all the restrictions that have been put in place, there's kind of nothing to buy. so we have a very distorted, wacky, wild, wonderful world. and i say kind of reminiscent -- not that i remember it, but i imagine it -- of a party at studio 54 in the old days where, you know, everyone's having a wonderful time, but you know that in the morning we're all

going to have the mother of all hangovers. so i do think it's unsustainable. i don't have any -- and argentina has a lot of distortions. the funny thing about these distortions or contortions is once you get into that situation, you can really only get out of it by having more distortions. so it's like telling lies upon lies. so that's what part. the -- so that's one part. the other part is the commodity aspect. so all the countries in south america pretty much have benefited from this incredible surge, historic surge in commodity prices. and be, um, you know, aside from chile which has created a southern wealth fund with the proceeds of that, it's hard really to argue that any of them have successfully managed it. so, um, on the one hand you have an internal policy, and on the other hand you have a criticism

that they've become too dependent on that. in fact, it's kind of hard to see how they couldn't have become more dependent on that. 75% of the country exports raw materials, but that's a function of the price increase. i mean, that was inevitably going to happen. did they do anything to court that? beyond sort of improving their relations with china and recognizing that the united states had pretty much ignored them and they needed to diversify, no, they didn't really do anything to do that. in fact, my wife's criticism of the book title, seeing as you guys are critical of the title, my wife's criticism is it should be how south america prospered and stopped listening to the united states. the order of it is the other way. and, obviously, i defer to her in every matter. but i think it's a little bit of both. i think that, you know, you saw reaction against the washington consensus why? because although the washington consensus policies helped

countries deal with their debt burdens and hyperinflation, undoubted achievements, they didn't really at least in the initial phase bring economic growth or poverty reduction. so if you look at the day, poverty pretty much stayed the same, and between 1998 and 2003 we had what's been called a lost half decade where there was stagnant growth in latin america. so i think that they did start to turn -- there was the idea that when the boom came this time that we would do things differently. and that's pretty much what happened. there is a whole other debate that we don't want to get into here about super cycles and how sustainable the commodity market is, but i do think that in certain commodities, take food, it's hard to argue that we're all -- we're going to need more food in the next 20 30rbgs, 40, 50 years. so, you know, soybeans is a good thing to be growing in the long term.

on other commodities maybe you could argue that, you know, it's going to be short term. but i think that there is still some time in this boom left even if china comets to correct -- continues to correct, there's still some time left in this boom for latin american countries to seize the opportunities that it presents. >> i have a follow-up question for patricio. one of the interesting things in the book is the overlay of political change, the growth of indigenous movement, the growth, emergence of outside parties, and i'm curious from your perspective how much do you think this overlay of economic boom and political change, how much will that political -- that economic growth sustain these political movements? i mean, hal, i think, writes very provocatively and very wittily about it. >> well, we do have sort of past

experience in latin america. presidents have for the past 20 years or so or at least successful presidential candidates, many of them have campaigned against neoliberalism. and when they come to power, if economy's growing, they do nothing, and they just keep the same economic policies that were in place. so we don't see changes in terms of economic policies when the economy's growing. we only see changes when the country is in stagnation, and they can choose sort of the right policies, the wrong policies, they can be successful or not. but if an economy's growing, if it ain't broke, don't fix. they come in and say, well, i'm going to change all these things, but in the meantime, people take advantage of the situation. now, i do think some progress has happened, but particularly in places like peru and bolivia, i think there is positive aspects to morales being in power in bolivia, and that's the

fact that now the result of the democratic process is that people let, um, or people elect leaders -- [inaudible] so i think the question is whether morales will be a nelson mandela or subsequent president of south africa i think is still an answer. but it is true that if latin american democracies were tock successful -- to be successful, they have to be more inclusive, and there have to be steps to make can unthe countries more inclusive. however, and let me use a metaphor here. this is, in many regards this is like going into a bar, and you see people drinking. you don't quite know who are the alcoholics and the social drinkers. and when you go to latin america today because of the commodity boom, you see latin american countries doing significant steps in reducing poverty.

but the fact that they are all reducing poverty doesn't mean they're all doing it the right way. perhaps in argentina, and argentina's my good example of why some countries are not doing it the right way. it's an example particularly because the financial times give us information on argentina almost daily on how wrong they're doing things. but in the case of argentina, they have grown so fast and yet poverty reduction has been in terms of their economic growth has been very limited. in terms of poverty reduction for their economic growth, it's very, very meager. i mean, it's not that successful. >> before i open it up for questions, christian, do you want to comment on -- first of all, defend the washington consensus a little bit? [laughter] >> yeah. >> this gets kicked around all the time, and i think part of

it's the branding of washington. >> [inaudible] >> yeah, go ahead. >> i think what you said is very important. one of, i think washington con enus has many dimensions. deregulation, probably too much of it was down. privatization, probably also there were some issues, but fiscal responsibility be, i think this is something which is really important, and one of the reasons why brazil is doing so well today is precisely because of fiscal responsibility. inflation targeting or at least reducing inflation, taxation of the economy, all this has been really good, and fighting inflation is one of the reasons why -- [inaudible] so i really agree with what you are saying in terms of certain elements within the washington consensus should be followed by washington and by the european countries. i mean, the issue that europe is facing today are very much the same latin america was facing in the '70s and '80s.

so i really think there are some important elements that latin america shouldn't be forgetting. one thing, also, which i would like to pick up on what you were saying now is that i see a lot of come lay seven si in latin america today, and i don't want to be seen as the worried guy here. i share the optimism, and i'm extremely -- especially coming from a european background. i see -- and, actually, i want to say one thing on that. as hsbc we did a study a couple of years ago about attitudes toward retirement, and we surveyed many, i think, 55 countries in the world asking people what they think about retirement, whether in their lives they will have finish or in their retirement they will be better off than their parents which i think is a very interesting question to see how you see the future. and the divide between emerging markets and developed markets couldn't have been more clear and starker.

in emerging countries everyone believes that at every time they will be better than their parents. in the developed market, the other way around. we believe that the future is going to be more difficult than the past. so i think this attitude towards growth and excitement, it's fantastic, and this is, i think, towards those countries that the u.s. and the developed markets -- [inaudible] the model. but what worries me a little bit is the complacency we're starting to see in many places, and particularly in latin america. i love the quote you have in your book saying this crisis -- talking about the subprime crisis in 2008 in the u.s -- this is a wide man's blue-eyed type of crisis. it's not o our crisis. [laughter] it's made by you. and we've got nothing to do with it. but the reality is that growth in brazil hit a wall at the end of 2008.

and the only reason why brazil really recovered very quickly, it's not because of, you know, fiscal measures to promote the purchase of cars in brazil or to spur domestic consumption, it's because china did a mega stimulus program in 2008, at the end of 2008, that drove commodity prices up. so this, i think there is a lot of complacency and, yes, latin america is riding the wave of commodities. and when it comes to a halt -- and it will come to a halt because it's really dependent on china, it's not dependent on the other emerging countries, it's not going to be followed by india -- the commodity intensiveness of growth in china has gone from 900% ten years -- 100% ten years ago to 160% now. combine with the the tremendous growth, this is what has led the commodity price boom, the rally over the last ten years.

but it will come to -- i mean, it will come to a halt. maybe, maybe not in food prices, but it will come to a halt. so this complacency, i think, is extremely worrisome. >> before i -- give me your three top recommendations to washington. >> okay. >> and start circulating with the microphone. >> i just want to preface that by saying the united states has a long and quite dark history of involvement with latin america, and current policy is a real muzzle, and it comprises a lot of remnants from those previous initiatives. so my first recommendation is to get rid of what we've been doing, to undo what we've been doing. and particularly to give the cuba embargo and the war on drugs. and interestingly, these are two issues that have kind of united people on the left and right, um, against them. they're both failed policies, um, they both have -- neither has achieved what it was

intended to achieve, and both of them have been in place for decades and there's a real inertia about both those policies. so that's, that's number one. and more generally, though, i think that there are a whole range of policies that we could -- of initiatives that the united states could work on with latin america if it were able to establish some kind of framework for permanent dialogue. now, the organization of american states is in a bad way at the moment, and it's not clear if organization could be given a rebirth or whether it will just kind of die quietly. >> they could rent it out. it's a nice building for weddings and bar mitzvahs. >> make some cash. >> yeah. >> whether it's through the oas reborn or some other initiative, i think there needs to be some way for permanent dialogue between the united states and latin america be, particularly the big countries.

there were two instances in the past couple of years of a real split between the united states and brazil. one was over honduras in 2009, and one was over a plan to get over the iran crisis by having an exchange of enriched uranium which involved brazil and turkey mediating with iran. and this both cases it was a real split for the united states. as i understand it there my sources in washington, at least some of that split in both cases was to do with a lack of communication. now, that should not be allowed to happen. so i think there needs to be a structure that enables communication to occur. not big initiatives because i think initiatives could come out of those discussions, but a framework for discussion. ..

and fell short of backing down aspirations. that was a strategic mistake. presidents coming to the u.s. very soon could be a very good gesture for do it sits on the un security council and would show declaration of intent that the united states won't engaged in building a partnership to make this more of a region of a

coherent region and we tell them what to do but where we listen to each other and back the others operations. >> questions? from the audience? raise your hands. charles is always the first one with a question. before he walks in there is always the question anyway. >> thank you. because you touched on cuba -- >> even if he hadn't. >> would have found a way to do it. we are coming of the summit of the americans in april and in many ways the last summit was obama's hy point. heigh point. he came into the scene of and

acknowledge they would do all these things that if no about. he was polite to hugo chavez. it sort of gave everybody a sense that something different was happening. partially honduras but partially distraction in a sense that question comes back to the table. to the cubans get invited. if the cubans are not invited we don't come and the u.s. is saying they shouldn't come because of democracy issues, the co a s is saying it is completely up to colombia to the side. and it is a mutable position and a decision of the host country. the question is, it is not just because of my peculiar interests

in cuba but in a larger sense the question of how obama approaches the summit and solve the problem of cuba in a gracious way rather than a non gracious way is symbolic with my question. am i right that is symbolic of where we are in terms of relationships with the hemisphere? >> thank you. great question. i do think given cuba as a symbol was very interesting that when the brazilian president in cuba recently refused to criticize the cuban regime. the point i was trying to make about pragmatism, what other region of the world in un foreign policy, it is only really in white america that we

deal with saudi arabia and china and we may bring of these issues of human rights but we don't stop trading with them because of it. there are many other examples. that is the strategic error--with latin america. latin america has too long been captured by political interests whether it is cubans in miami or people are lined about the war on drugs. a strategic way to think about foreign policy. if you think about what is the united states's role in the world in decades to come you don't governed by small groups, domestically telling you about foreign policy. that is the wrong way. cuba is a symbol.

it doesn't matter to anyone outside cuba. it indicates a kind of approach to the region and we will talk. >> did you learn anything? >> statistically commenting on the security council one of the strongest opponents of brazil getting into the security council, the u.s. has a difficult challenge in mexico, and immediate issues with mexico and brazil. it is not that simple foreign-policy choice for the u.s. and -- >> the war on drugs. >> go to mexico, the review of u.s. policy captured by domestic interest and also favorable to a

cuban regime that benefited from presenting the u.s. with some light it cannot liberate themselves more. vendors discussing cuba also have a point in latin american countries from being able -- before the september 11th attacks, signed with the u.s. and democratic charter of the year but the democratic charter was chosen as punishment over cuba for not being a democracy with bananas over honduras. when it goes to cuba it doesn't say anything about human rights and a number of other issues. she was herself a victim of human rights violation. the case of cuba in the united

states dealing with the cold war--but american companies -- and latin american countries responsible for the deal with cuba. >> they feed into each other. because it doesn't want to be seen to be told to tell them what to do and if you were to remove that it would change completely. you were right to say they benefited from the environmentalist's showing itself -- >> not when the profile occurred. a policy of other things. >> other questions? went to the microphone. >> it is the rise of the beijing

census. the powerful nation in other nation's economy sir. u.s. -- the uphold of human rights. a threat to the future development of those countries. >> we talk about that clearly, try to ask their questions. ask no questions is unconditional. development assistance. is there a risk of non normative behavior? >> great question. the chinese will invest anywhere. they don't ask questions. for a continent told what to do

so long it is a very at refreshing approach. if there is democratic change by cuba and improvement and democracy strengthened in latin america. it doesn't come from china. and for the united states a hazard of expertise, and partnership based on the fact there in the same region. not the same goal in mind. that is one part and in the economic aspect latin america, fully aware of the dangers of the china relationship and the down side and we talk about central america which suffered the brazilian industry and the shoe industry and the toy industry and very worried and a

huge number of complaints that the world trade organization against china from latin america. it is a nice break but i don't think there's any consensus. there's a policy that started providing a lot of benefits and on the downside as well. [talking over each other] >> the beijing consensus and very commercial attribute for business. they want to improve the commodities and from the region that is the thing. highways and railways and executives secure access that they needed. at the same time by investing,

favorable for long-term. there is a consensus and a different relationship the jury is still out. structure of trade, it is extremely balanced. it went from $7 billion in 2000 to $90 billion in 2001. lana america -- $90 billion to china. and $90 billion from china. obviously a concern for manufacturing on that side, so i don't think china cares so much about the strength of latin

america. all the resources rich countries and several factors that constantly come together like the conflict and corruption and so on long-term, in criminal aspects. >> one more thing about the relationship. people who focus on latin america talk about china. if china slows down sharply than latin america will be in trouble. if china really slows down, we will all be in trouble. second-biggest economy in the world. no one will the skate that. if it happens very soon, it will be damaging not just for latin america. >> we have one right here. right behind you.

hold on for the microphone. >> what are the arguments for the united states, are we at the point with this problem? >> repeat the last -- [talking over each other] >> may not even be -- >> can you repeat that? >> please. >> what are the arguments for supporting brazil over india or the united nations and isn't it true germany should be there and

also true problem that indian -- might not be there shortly. [talking over each other] >> call england. separate country, it is not one in war one out. i don't have any problem with india had a permanent seat on the u. n. security council. the reason you got your seat on the security council was you had nuclear weapons. they could both be on the un security council. my argument is not brazil -- strategically for washington whether you want to build relationships. of course it is critical.

with indiana and china and the emerging region, latin america, the rival. if you look at russia and brazil and china and india the classic fall, only brazil likely to be a partner, not a rival. india would have to have the same partnership with the united states. will be a rival of the united states when you see projections how the global economy will turn out. many expect india to overtake the u.s. by the middle of the century. there is an opportunity to build that partnership and the danger is brazil is a rival of the united states which will not be a healthy outcome so my suggestion was strategically it makes sense to back brazil.

>> good strong point. >> the u.s. and in the and china peterson having -- >> the great thing is there are no power games. people criticize brazil for not having any enemies. friends with everyone. no reason they shouldn't be better friends. [talking over each other] >> no problem. [talking over each other] >> one of the things we talk about is social inclusion and the next america's quarterly, inclusion by race, gender, ethnicity, please keep an eye out for that. let's try the panelists and thank them for coming up here especially john. [applause]

he is available to sign books. if you bought books recommend sticking around. >> we would like to hear from you. sweet as your feedback at twitter.com/booktv. >> would you reading this summer? >> how high and the taliban. american is working on another biography at this time.

walter isaacson's book on steve jobs was an international bustling phenomenon because of all the things we could learn. >> what are you currently reading? >> guest: i read an eclectic way. i read a wonderful book written by a british about his father in world war ii. i love that. the 48 campaign which was really wild and harry truman and henry wallace and strom thurmond am tom do we the first election after the war. terry anderson and the book about george bush and how he decided to go to war. my wife just finished catherine the great. she picked it off. i have to go back and get involved in that. i read a lot of magazines and essays and open the correspondence with donald hall, something he wrote in the new yorker about growing old and it spoke to me in a way.

we had a little exchange. i am in off of great writers. i don't pretend to be a great writer. i am energetic. >> visit booktv.org for more information. >> i wanted to read what i thought was one of the more moving passages as you describe what is happening before the camera is rolling. so this is what you described. you said but that was not their intent and that was made clear to me when one of the officers suddenly kicked me with his boot inside of my face smashing my job. it felt someone had taken a baseball bat to my head. . it felt someone had taken a baseball bat to my head. before i could register that one of the other officers slammed me

in the lower leg. i pleaded with melanie who was one of the arresting officers but had become my guardian angel at least in my mind was different from the rest. i knew it was going to sound kind of strange but until that point i had felt safe with her at the scene. a maternal presence that would not allow things to get too out of control. i shouted out to her they don't have to do this. tell them they don't have to do this. >> going into that story when i was initially cool over, i had a job to go through, a union job and pay and weigh more money than i was making at dodger stadium bending hot dogs and pizza stands and all.

i was ready tovending hot dogs pizza stands and all. i was ready to go to work monday. i didn't know how to feel about that. i felt a little angry. we were on our way -- my dad used to take us fishing. didn't want to be stuck in the same community where we were, a couple of us. we started out over there and the highway patrol got on me and started chasing me so i saw -- the only thing i think about was i got to make it to get to that job. i stock monday and have the cops after me. i got to get away. >> that is a lot to worry about. >> i worked myself very -- when you come out of prison you try

to do the right thing and all of a sudden your whole world is about to stop and you are going back to jail. that was the only thing i could think of. i lost the highway patrol car and what happened was the helicopter was a fair. get away from the helicopter. my goodness. >> host: you did say you might out run -- you were in a hyundai. >> guest: hyundai excel. >> host: the joke that mr. king doesn't know was i was pushing a hyundai at the time. it was -- the coo hatchback. i used to drive from philadelphia to chicago from college homes in the allegheny

mountains and it wouldn't get past the side. it wouldn't get past 55. you were thinking you were in a hot rod. >> guest: they got up with me. it looks like -- pull over. and i already know -- the results. looking for a pretty witted area to stop. and -- somebody will come outside or something and sure enough it went bad.

ordered me out of the car. a husband and wife team, i will patrol an initial one on the chase. she came over to me and already ordered me out of the car. the right hand opens the car up and laid down so i laid down face down and she came over to me and got my wallet to get my id. as she was doing that i am looking at them and get into the truck and trying to get his taser out running towards me. weighing on the floor face down and say tell them they don't have to do this. her husband walked up to me and

kicked me in the temple arianna and broke my job and asks howbru feel? my feeling -- it could even say it right. i feel fine. of broken leg. i feel fine. the sergeant heard that and i was being taste and i could feel the blood coming out of my face and ask how are you feeling? i couldn't say anything and he says ron. when he said we're going to kill you i . when he said we're going to kill you i am going to run. i hesitated for a second, stay on the ground looking for

clearance and when i see the clear and it is between the hyundai and a police officer. i get up to go run, but when this leg was in front of me i didn't know it was broke so the leg fell down so when i fall down it looks like it was able to make the camera looks like i was going after it because my hands were like this but i was trying to get my hands in front of me. >> the video wasn't running by then. >> that is when the video had been running maybe 15 -- [talking over each other] >> what it didn't catch was them name-calling and the tasers running at 50,000 volts through my body. he did that like three shots and discharge all three shots but while he was doing that, these guys are being me with a baton

telling me to stay still. no way you can stay still with those kind of bulls running through your body. i am all smoked at this point in blood and electricity. this was like when i burned up the house when i was a kid playing with matches when it caught on fire and i ran out. take a bath and draw off. that same warping somehow felt like it repaired me for that night with the taser. getting hit with a stick extension cord and shocked is the same feeling. a horrible feeling. when i felt that it was 20 times worse than the extension card -- extension cord. the guy running of the taser ran

out and stay still and when he stopped the taser i am regrouping myself to see if i am still there. i am trying to stay still but i can't. so he starts beating me some more. he is moving, he is moving. i could hear me calling names. and then once you start cursing and beating somebody you really get into it. they were really into calling me these names. at this point i am like oh man. >> you had a moment you describe in the book that i want the audience to hear. where you insert yourself in the long history of black people experiences in the united states and specific reference to slave beatings.