spread to iran, yes, it will. the iranians also want it. but how and what kind of form it will take is another issue. >> rose: and then a perspective from academia from harvard professor joe nye whose latest book is called "the future of power." >> there are two big power shifts going on in this century, one is among states, sometimes called the rise of china. the other is power diffusion, away from governments to non-governmental actors. that's the product of the information revolution. and egypt is a great example of that. it used to be conventional wisdom you had to choose between mubarak and the muslim brotherhood. and with this huge amount of information that's been flowing in into egypt for several decades now, it's filled in the middle. there's now something that wasn't there before. >> rose: a program note. we expected to show you this evening conversations with mike huck bea. we'll show you those interviews

later this week. tonight, lakhdar brahimi and joe nye when we continue. seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with the farmers that grow our sweet potatoes and merchants that sell our product. we've gone from being in 5 stores to 7,500. booming is using points to make connections that grow your business.

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: we begin evening with lakhdar brahimi. he has spent a lifetime working on conflict resolution, peacekeeping, and good governance. most of it at the united nations. he was special advisor to secretary general kofi annan and special representative for iraq in 2004. prior to that he was a u.n. envoy for afghanistan, both before and after the u.s.-led invasion of 2001. and from 1991 to 1993 he was the foreign minister of algeria. he is currently a distinguished fellow at the london school of economics. he is one of the elders, a group of eminent global leaders brought together by nelson mandela to try to solve the world's problems-- or at least

offer some advice. i am pleased to have him back on this program. welcome back. >> thank you very much. it's good to be here. >> rose: so let's just start with the obvious. what kind of advice should you be offering and the group of elders about change in the middle east? >> you know, this change is definitely taking place. it is the work of the people of the region of the different countries. there is a lesson of humility there. nobody has predicted how and when it was going to happen. >> rose: or that it was. >> that it was going to happen. nor the order in which it's happening. so i think we... if we learn that lesson of humility, that's already a great contribution. the second thing is, you know,

in places like tunisia and egypt they have been facing these problems with leadership for 23 years in the case of tunisia and 30 years in the case of egypt. we didn't say anything to help. now that the people have spoken themselves, i think let's listen to them. and let us, if we want to, to do something, let's tell them we are here for you if and when you need us. i think this is the most important thing. >> rose: but hasn't that been the response, essentially? i mean, no one has not given credit to the people. no one has not said that it's up to them. >> you know, i think that we are in many, many cases offering freed a vice and probably the

wrong kind of help. >> rose: what would be the wrong kind of help? >> you know, i think the french have gone to tunisia and are offering advisors. tunisians don't needed a visors. >> rose: right. (laughs) >> i think the americans also, in the case of egypt, are much more concerned about what is going to happen to the treaty between egypt and israel than about what the needs of the egyptians are. i think if we are a little bit patient and let things settle down slowly and offer them the kind of help they... >> rose: they ask for. >> they ask for. and they need plenty. but let's listen to them and see what it's about. >> rose: i may disagree with you slightly in the sense that i think there's been a reasonable amount of sense of admiration beyond expectation of a sense

that they've done very well on their own. and making sure that you don't even look like you had anything to do with it or you're trying to somehow participate in it. because that is, in fact, what they... they know. the people in the streets who are risking their life know that it is their courage, their commitment, their drive that's put all of this where it is. >> rose: absolutely. and that's why i said it is a lesson in humility. >> rose: history changes by one act. >> yup. >> rose: it's amazing. >> it is absolutely amazing. >> i can't think of anything comparable. >> it is absolutely amazing. especially that act you are talking about of that young tunisian. but it hasn't happened in a big city. it hasn't happened in the capital.

it hasn't happened in a big city where there are televisions and journalists and intellectuals. it has happened in an obscure village in a very, very remote part of tunisia. and it has triggered all these events inside tunisia. i'm sure that the tunisians themselves must be astonished and surprised by what they have done, what they have achieved. >> rose: and the egyptians. and the libyans. >> and that it has gone to egypt and if you had asked me where it would go from egypt i would have never said that the next place would be libya. never. >> rose: because? >> because libya looked like they were under the foot of a very, very strong and well-organized dictatorship. and it is sparsely populated

between benghazi and tripoli. there's one thousand kilometers. >> rose: right. >> and, you know, we all thought that, you know, libya was really... and the regime were movements that would be extremely difficult. >> rose: and because the state had the control of all kinds of force to use. >> yes, sure. and here, you know, there is... the area that the regime controls is shrinking by the day. >> rose: what's your judgment? his days are numbered by days or weeks or? >> i wouldn't say. i really don't know. one of the important things about what is happening in the middle east and north africa is the unpredictability.

i think that i... i certainly hope like everybody else that it is a matter of days but more than that i'm not sure. >> rose: what does it say that it was ignited, carried forward, by the young. >> that is the part that doesn't surprise me. the young in our part of the world are more educated than it is generally known. better educated than is generally known. it is amongst them that there is unemployment, the highest levels of unemployment and it is amongst them that there is knowledge and understanding where the world is, what is possible. they know that they have

resources, in the case of libya plenty of resources. in the case of egypt of course they don't have much resources on the same level, but they know there are resources in egypt. they know that those resources are not well made use of. and on the contrary, squandered, stolen. so that doesn't surprise me. the fact that it is the youth that have done this... has been in the lead does not surprise me at all. >> rose: can you imagine it spreading to iran? >> you see, the other thing... the few things that i think i am sure of is that whereas there is a lot of commonality in the problems and in the aspirations,

the situation in every country is totally different from the next. so whether it will spread to iran or... whether it will spread to iran, yes, it will. the iranians also want this. >> rose: sure. >> but how and what kind of form it will take is another issue because iran is totally different. they already had a revolution in the late... >> rose: 1979. >> in the late '70s and the system that exists there is totally different. is it... i mean, they have shown that they can resist uprisings. i mean, remember what happened after the last election. but how it's going to develop i think is difficult to say. i don't know. >> rose: what does it say about the arab world?

>> a lot, actually. first of all that we are like any other people. >> rose: in aspirations. >> in aspiration, in feelings of... >> rose: in the need for dignity. >> that is probably the most important element that is quite often disregarded or not taken into our situation. there is a very, very strong feeling of humiliation for all sorts of reasons. by people who are aware that they have had a long history and so on. and even recent history, the egyptians are very proud of a lot of things that happened in this country and it's not there anymore. so, you know, we have the same aspirations as everybody else. we have the same feeling of the need for dignity as everybody

else. now i think it's up to the young to translate that into something constructive. and that's not going to be easy. >> can it be hijacked? >> oaf, definitely, definitely. in our area and elsewhere we have lost a lot of opportunities in the past and there is no guaranty that this new opportunity will not be wasted. that is why it's so terribly important that the rest of the world understands what is happening and supports it in the proper manner. >> rose: and the proper manner is simply to listen to see what is requested? >> yes, absolutely. >> rose: so what does this say also about what has been characterized as sort of the

radical violent fundamentalist islam? that that was not the alternative? the alternative was something much more... >> radical islam is there. political islam is there. and within political islam, radical islam is also there. i think we knew that radical islam is a minority within political islam. they haven't been in the forefront of this movement. i think they haven't even participated in it to begin with i think they have joined in the tunisia and egypt. in libya i don't know what is happening and what political islam, extreme islam is doing.

i don't know. but in egypt and in tunisia i know. they were not there at the beginning, they have joined the movement and they are, i think... they are behaving until now. i think people who know the region and who have studied it both from within the region from outside realize that islamism and islam is not such a threat as a lot of westerners think and a lot of people in our region. how they are going to fit in the new necessarily diverse political dispensations that we are going to have remains to be seen. this depends a lot there again on what everybody else does.

>> rose: and the role of the u.n.? >> fwranally, not much. you know, there again i would like the u.n. to say-- just like everybody else-- "we are there for you if you need us." i think that it doesn't like any kindover expertise they have lawyers if they want a constitution. they have engineers if they want to build... rebuild their country. they have everything. the same thing is true very largely in tunisia. i think the u.n. can certainly accompany, like the rest of the international community, this movement. the u.n. hasn't any money of its own but can channel some... some money from... when it's needed.

in libya, the u.n. may be needed now. there are some very, very serious problems. apparently there is some... it's a very rich country but the money is not in the hands of the people. i think they may need some humanitarian emergency help. there is also some need for the repat ration of the tens of thousands perhaps hundreds of thousands of expatriate workers from asia, from the rest of the arab world, from africa. so there there is definitely a need. >> rose: should the former dictators be put on trial? >> that is what the people are saying. >> rose: they should. >> that is what the people are saying both in egypt and tunisia and libya. >> rose: they want them on trial. >> they are saying that everyday

in egypt i understand that they have small committees that have been set up to try and see where the money has gone, what has been taken by members of the government and also by the nomenclature that benefited from the system. the same thing in tunisia. in tunisia they are also demanding that. in libya you hear also the same thing, how are you going to get this money out? is it mobl? is it advisable? these are not easy questions. but i'm sure that a lot of people are discussing that. >> rose: will this spread, in your judgment, to places beyond the middle east? will it spread to any country in which there is an absence of freedom, an absence of people to

influence decision making about their lives? a place where they do not believe that they were treated with the dignity they deserve as human beings? >> very good question. and with kofi annan we were discussing... >> rose: today? >> no, but about a week ago whether from north africa it will go across the sahara to south of the sahara, to countries south of the sahara. and we didn't have an answer. but there is certainly a lot of interest in what is happening in north africa and the middle east. in the rest of africa and i suppose elsewhere as well. >> rose: and what's going to be the model for the future and will it vary from place to place to place? >> yes, it will vary. the point i would like to make on this is a lot of reforms are going to be necessary in this

country. a lot of changes are going to be necessary in this country. one of them that is not talked about is how to correct the distorted manner which the first wave of reforms after the end of the cold war were implemented. after all, egypt has been implementing reforms and changing things and they have created a great free market. but that free market has been horrible for the majority of the people of egypt. so they'll have to reform those reforms. i mean, frankly, to get rid of a lot of what the... what those reforms have meant. the same thing is true in tunisia. libya is, of course, different.

so, you know, they... you know, the end of history thatcherism and reaganism that was, frankly, forced on a number of countries i think have shone their limits and, frankly, all the harm they have done. people are thinking of... speak of models. people are not thinking only of western democracy. they are looking at china... >> rose: i don't think they're particularly thinking of western democracy. >> they are thinking of china, they are thinking of india. they are thinking of singapore. >> rose: right. >> those are models... >> rose: but they are thinking of universal values. >> yes, but it's... they may call them differently but definitely... >> rose: sometimes they say turkey might be a model. does that make sense to you?

>> it makes sense to me. whether it makes a lot of sense to the people in tunisia, egypt, libya, i'm not absolutely certain. but we know enough about it. they certainly admire him but they admire because of his position on the palestinian issue... erdogan. >> rose: so what impact will this have on the palestinian issue? >> you know, i asked some palestinian friends "why don't you do the same? why don't palestinians go now to the street it is way the tunisians have done and the egyptians have done and the libyans are doing and say we'll not go home until the occupation ends?" of course they remember what happened to them in the first intifada which was totally peaceful. and they are divided.

>> rose: but the palestinian authority... >> this is really crippling. the other thing that's going to happen is no matter what kind of government you're going to have in egypt, i think what they would have slightly different attitude on how their treaty with israel is being implemented. there's one part of this treaty, between israel and egypt and between israel and jordan that nobody speaks about. >> rose: what part is that? >> the part is that says the deal we have between us-- we egypt and you israel-- is that there must be a solution, a fair solution on the palestinian issue. i think... with the u.s. saying whether it was going to have this hijacked or not, whether

it's hijacked or not, one thing that is, i think, irreversible is that there is going to be a free press in all these countries. that is irreversible. and that... whatever the government says, that free press is going to demand a better implementation of agreement between israel and the arab countries. i understand that israel is buying egyptian guards cheaper than the egyptian consumer and 40% cheaper than the jordanians. i don't think the egyptians would like to... >> rose: well, there have also been stories that people in gaza were paying a lot more for things that came from israel than the people of israel were paying for them. >> well, that's inside israel,

inside the occupation. but the egyptians are going to say how come we sell our goods to a neighbor-- no matter how friendly they are-- than to another neighbor, jordan, or to ourselves. that's very difficult to justify. >> would you speculate that it's more likely that freely-elected leaders will put more pressure on both sides to find a solution? that >> that's very difficult for me to foresee. what i know is that the population, however they express that, will they express it also in the ballot box? and that they will vote more for people who want to implement this treaty better or not? that is a... but the other point i want to make here, charlie is

that, you know we've had elections all the time. elections have been mostly a disappointment so i think people... and they want elections and they most probably have them. but most important is what is the content of this democracy i was talking about. you spoke of dignity. you must have dignity. the election does not necessarily provide that. you need a rule of law so that... if somebody pushes you around, you can go somewhere and... >> rose: you need a civil society with institutions that can serve a civil society. >> absolutely. >> rose: respect for law. >> these are more important than election in itself. election is extremely important if it is part of a credible

political system. if it is just election. that is the best way of hijack >> rose: how about your own country of algeria? >> it is the same thing. the same aspirations but there again not unlike palestine. we've had our revolution already in '88. and it has created lots of problems and especially nightmare for ten years with the islamist insurgents. i would say 100,000 people were killed. most people say 200,000. so people are a little bit not in a hurry to create everything.

our government has done a number of rather good things but their communication is lousy and it's definitely not enough. but i think if they want to, they can lead the change rather than be the victim of it. algeria, morocco, saudi arabia have the means, totally different situations to leave the change rather than be the victim of it. but they have to do it sooner or later. >> rose: a big question is... and saudi arabia. >> yes, sure. it's not bigger question than anywhere else. >> rose: no, i agree. >> but they have the resources they have a very popular king who is respect and admired. you can fault practically anything you have done since he has become king.

and i think he does understand that change is needed and i think he can lead that change. >> rose: what if it becomes in one place or another a massacre, that it would be a terrible judgment of history if you didn't try to do something about it. >> rose: this is a very, very fair question. i know that in the security council members of the security council, other members of the community are struggling with this question concerning libya. what are you going to do? you know that it is rejected. that people have taken things

into their own hands, that they have done almost everything they can do. that... i was telling you that free press is irreversible. the end of the regime in libya is also irreversible. and the sooner it ends the better. and if it is going to be a big massacre, how are you going to allow it to happen? the arab countries i know are also struggling with this question. >> rose: about libya? >> yeah, about libya. they have suspended libya, the libyan government, in the arab league. it's not an easy question. it's not an easy question to answer. but i'm sure tha people are working on it and i hope that they find the right answer. >> rose: one scenario has it that someone within will take the matter into their own hands,

close to qaddafi. >> that is a possibility. he's being deserted slowly by a lot of people. you know, what kind... his speeches, i listened to them directly and the speeches of his were profoundly disappointing in many ways. >> rose: delusional. >> not what one would have hoped to hear from a responsible person. some libyan friends tell me "we want to finish the job ourselves." you see, because a person of dignity, for 40 years they've been ashamed to be represented by this kind of person.

"we want now to do it ourselves >> rose: that courage and that aspiration is one of the nobler things about... >> yes, you have seen that everywhere. you see these young people in egypt, you've seen them in tunisia. and seen how non-violent it has all been in tunisia and in egypt i think that in tunisia nobody was harmed by the revolution, if you like. >> rose: there were people who died. >> it was the government. it was the government. so that is rater a matter of

pride and a matter of hope. but from the point where they are to the point where this will all take shape there is some distance. >> rose: as one who has lived a life of experience, involvement, a connection to big ideas and big events and big people, where do you put this? >> if events... the event in itself, what happened in tunisia what happened in egypt, what is happening in libya... >> rose: bahrain. >> bahrain is different. >> rose: right. >> this is milder. it's a matter of pride for all of us. i happen to have been saying for

a very, very long time that our difficulty is that we haven't been able to move from our generation to the next. this is taking place. not thanks to us. it is the next generation that is saying "thank you very much, now we are going to take charge of our own future." so this is... >> rose: well, they are saying "it hasn't been done so we're going to do it." >> yes, they're telling us politely and sometimes less politely we've waited, you haven't done anything now please move aside and let's do it. >> rose: thank you for coming. >> thank you for having me. >> rose: always a pleasure to see you. >> a pleasure seeing you. >> rose: joseph nye is here. he's the former dean of harvard university's kennedy school of government. he also served in the clinton administration as chairman of

the national security council and assistant secretary of defense for international security affairs. his latest book is call "the future of power." i'm pleased to have him back at this table to talk about something he has been thinking about, writing about, teaching about and pulling into play for a long time. i'm pleased to have you here. welcome. >> it's nice to be back. >> rose: power has been your subject. soft power, hard power, smart power, and now the future. >> well, power is simply the ability affect others to get what you want and you do it by... in three basic ways. you can do it by threats, sticks you can do it by payments, carrots, or you can do it by attraction in getting others to want what you want. that's what i call soft power. but combining them so you can do both hard and soft is what's smart pow which is what hillary clinton called using all the tools in your tool box, and that's hard. >> rose: take me to egypt and how you saw it and what does

this mean because... >> it's extraordinary. >> rose: it's extraordinary for people who looked at how nation states change and how forces... new forces, maybe even more important than old forces. >> one of the things i argue in the book is that there are two big power shifts going on in this century. one is among states-- sometimes called the rise of china-- the other is power diffusion, away from governments to non-governmental actors. and that's the product of the information revolution and egypt is a great example of that. it used to be conventional wisdom you had to choose between mubarak and the muslim brotherhood and with this huge amount of information flowing into egypt for several decades now it's filled in the middle. there's now something that wasn't there before. and you have not only this younger generation which is much more aware of the world but they also now have technologies where they can coordinate with each other and in that sense the

egyptian events, the january 26 revolution, this is a great example of this diffusion of power. and the problem then for the american government is how do you have a foreign policy which deals with the hard power of the egyptian government-- which you still need for peace with israel or countering iranian power-- and at the same time communicate with your soft power to the people until tahrir square, to the civil society. because you can't do one or the other, you have to be able to do both. the administration has been on something of a tightrope and they wobbled a bit from time to time but i think basically they got it about right. >> rose: but clearly history will look back at that this in as a sense as tunisia and then egypt as the beginning of something important in the relationship between people and power. >> oh, absolutely. and this whole issue of

diffusion of power and what the information revolution is doing is quite dramatic. we saw in egyptian and tunisia the use of twitter and facebook and even when the egyptians cut off the internet you could use land lines to do this speak-to-tweet feedback. that's just the tip of the icebergs. you have wikileaks and julian assange. you have governments using... we think it's governments using worms and viruses like the stuxnet virus which disrupted the iranian centrifuges and we're just beginning to deal with this. i have a chapter in the book on cyber power and i say that there that we are, in terms of understanding cyber power, about where we are in understanding nuclear weapons around 1950. we knew it was there, we didn't have a strategy, we didn't fully understand its effects and we're just now beginning to get to that point. i was at the munich security conference a couple of weekends ago, which is a prime security

conference, all presidents and prime ministers and so forth. and in the 47 years of its history, this is the first time they've had a discussion of cyber power. >> you're a consultant to the pentagon. they've been thinking about this for a while >> well, the pentagon is making some progress. bob gates and bill lynd, the deputy secretary. >> rose: he talked to us. >> they're making progress and keith alexander is the new head of cyber command and very good. the problem is the pentagon is just a little part of it. 80% of the internet is owned by the private sector and that's not under the pentagon, it's under homeland security and outside of the government entirely. so people say the pentagon has done a good job on what's called dot-mill. military communications. but dot-gov, all government communications, has a long way to go and dot-com, all the other domain names, we're a long, long way to go. >> rose: so the 21st century

will be marked by, among other things, the decline of the nation state? >> i wouldn't call it decline as such. >> rose: okay. but you do underline the rise of non-state actors. >> that's absolutely right. and what's happened is governments have the most capability but the stage is more crowded. they used to have the stage mostly to themselves. now there are all these others on the stage with them. >> rose: and the demand for a new foreign policy is to be able to communicate with the people of a country, not just the state. >> absolutely. if we... we have to learn how to combine our hard and soft power in the right proportions. the idea that you can go into iraq, invade iraq and impose democracy, that's old thinking. that was a very 20th century-- early 20th century-- thinking. it used to be said that... a.j.p. taylor wrote the book about classic international relations. he said "whose army wins is the

mark of a great power." you know, the great power is the country can win in war. that that's still important but in an information age whose story wins is just as important. >> rose: whose narrative. >> whose narrative. and that ability to attract others with soft power of your narrative is just as important as the ability to deter and protect and win wars. >> rose: give me an example of a powerful narrative. >> let me give you an example of the elections of 2008. americans were still pretty unpopular and people thought the american system was corrupt, you need money, a family name and so forth. and i talked to the second or third most powerful politician in britain and london a few days after the election and he said "you just elected an african american with a funny-sounding name and you have just converted a couple of billion people to thinking that the american values of the political system

still work." that's something we can do not by imposing it on others but by living it up to our own value. a lot of soft power comes from civil society. everything from harvard to hollywood to the bill gates foundation. but i think the more we have contacts with other peoples, the more you get face-to-face contacts, the more essentially we're able to get an understanding of american values. it's not by broadcast, it's these context. 750,000 foreign students at this country every year. that's a great source of soft power for us. >> rose: when you talk to people in the middle east before egypt happened they would always say there was a speech in which showed a respect and an understanding of the conflicts in our region but there were not followed by deeds and followed by actions that were likely to change things. >> rose: i think that's a problem. your narrative doesn't last if you don't have actions that are

consistent with your words. >> right. >> so that's true and if you look at the pew polls done globally. you will find we do less well in the muslim world than let's say in europe or asia or latin america. >> rose: there's another idea of the 21st century called american decline. >> uh-huh. >> rose: and joe snooi rises to say "not so fast." >> that's true. americans go through cycles of declinism every ten or 20 years. after sputnik the russians were ten feet tall. >> rose: and the japanese were ten feet tall. >> now the chinese are ten feet tall after the recession of 2008. we usually outgrow this. but the reason it's important is when you misunderstand what power relations are really like it can do two things. you can make us too fearful and it can make other countries like the chinese have hubris which

makes them push in a ways which unproductive and get into trouble. >> rose: but you argue they've overextended themselves and their overconfidence about their relationship with the united states and they've made a lot of... >> rose: that's true. i was in beijing in both december and january talking with chinese friends and there is widespread view among many not just the people's liberation army and that the united states is in decline. i think they're wrong but if they believe that they think they can push harder when they when we gave arms to taiwan sold arms to taiwan, the chinese reacted much more strongly than in the past. they broke off military-to-military contacts and when they were asked why they said "because we're strong now" because the question is why didn't you object so much in the past and you're objecting now. if they have that feeling that we're going down, they're going

up. they can lead to miscalculation in fact, chinese foreign policy has had a bad year or so. they've antagonized the u.s., they've antagonized india, they've antagonized japan, they've antagonized vietnam. >> rose: right. >> so this hubris is not good for china. >> rose: and it causes people to reach out and say "what kind of relationships and alliance cans i form"? >> exactly. what we're definitely seeing in the 21st century is the rise of asia, but it could be called the recovery of asia. in 1800, asia was basically half the world's population, half the world's product. by 1900 still half the world's population, 20% of the world's product. in this century we're going to see asia return to a normal proportion. starts with a japan in the last century, korea, the so-called smaller asian tigers, now it's china. another ten years or so it will be focused on india. this is normal and we have to learn how to deal with it.

the good news about this is we have time to deal with it. unlike britain where germany... the rise of germany created fear of britain that led to world war i. germany had passed britain by 1900. we still have... there's another 20 years or so before china catches up with us, if thin. >> rose: as a macroeconomic power. >> there are various pro projections, goldman sachs says 2027 china will be equal in size to the american economy. >> rose: overall... >> overall size. but that's not too surprising given the size of the country. if you look at per capita income which is a better measure of the sophistication of the economy, they won't be equal. >> rose: they're 40,000, we're 32 or 33. >> so we shouldn't get too nervous or overwrought about china. it's going to be a difficult problem to manage the rise of china. it's not impossible and we don't have to overreact out of fear and the chinese should be

careful not to overreact on their side. >> rose: so what do you make of what happened in egypt? >> a sense of wanting to be free. we see one version of it which, of course, is tiananmen square. i don't think we're going to to see another tiananmen square but we are seeing something a former american ambassador to china said. he said more chinese are fry now than any time in chinese history. from a day where you had to wear a mao suit and couldn't travel and needed a permit to live someplace, now a lot of these things are more open. with the internet sure there's a great firewall of china but more and more people learn how to pierce that. it's interesting to compare this with india. india is way behind china in economics but they were born with a democratic constitution which allows people to participate. china did very well economically in the last 30 years basically

since deng xiaoping but they haven't solved the problem of political participation. this is one of the big questions. there are some like a hundred thousand riots, disturbances, demonstrations in china, usually overlocal issues. if some of those get connected on the internet you could see some difficulties. >> rose: why they're so paranoid. >> exactly. and that's why they do things like shoot themselves in the foot like locking up yue ciao bao. hu jintao said in 2007 "we need to invest more in power." they need to spend more on broadcasts overseas, they did a great job with the olympics, the shanghai expo and so forth and then they look up yue bo and they undercut all that. >> rose: back to narrative, too. >> exactly. >> rose: what damage to you

think that the iraqi war did that that narrative. >> we can see from the pew polls that the attractiveness went down in european countries about 30 points on average but if you take a country like indonesia which is the largest muslim country in the world in the year 2000, three quarters of indonesians had a positive view of the u.s. >> rose: in 2000. >> forward to 2003 after the invasion of iraq that goes down to 15%. then go forward another year or two when the u.s. uses the navy to provide tsunami relief and it goes back up to 45%. so there are things we can do to recovery and that happens under the bush administration. there are things we can do to recovery our soft power. >> rose: and some of the things we've done in africa in terms of global health.

>> right. and bush, that's one of the areas he was very good, on aid and fighting disease in africa. >> rose: what's your judgment on this whole issue of bush and his second inaugural talking about democracy from an american view it was wonderful. it could have been uttered by woodrow wilson or harry truman. it was wonderful. the trouble is... >> rose: it was an idealistic speech. >> very idealistic. but he had a two-audience problem. it played very well with americans domestic politics and didn't play well overseas. they say wait a minute, you give a speech about freedom agenda and democracy and you just invaded an arab country and created a mess. >> rose: so if there had been no invasion of iraq... >> he would have done better without that invasion. >> rose: it would have been an idea in which people in egypt would have said america

understands that we're living under a regime >> and condi rice gave a speech in cairo along those lines but by then the view... sort of what we were talking about in democracy under the situation has been discredited by... remember the mess we were in in iraq at this this time of condi's speech. >> rose: and it was also somehow tagged with the notion that they want to-- those americans-- they want to impose their version of democracy. >> right. i think that's exactly right. jack kennedy got this right. jack kennedy added "i want to make the world safe for diversity." we've got to remember that diversity as well as democracy. >> rose: is the power of demographics as a force in the future? and the power of population, size... >> well, it's very interesting. if you project into 2050 the

yilgts is the only country which keeps its rank among the rich countries we'll stay at number three because we have immigration. radioright now we're going through an anti-immigration spell, but we are a country of immigration. i would tell you whatly kwan yue, a very sage observer from the united states and china. i asked him when i was writing the book what he thought about my theory that america was in decline and china wasn't going to pass us. he said if you look at china it can draw from a talent pool of 1.3 billion people. if you look at the united states it can draw on a talent pool of seven billion people. >> rose: he also said, though, on this program in three hours of conversation here that the thing he worried most about the united states was the debt.

that somehow we had to get our own financial house in order. >> i agree with that. >> rose: if we lost that, we would lose our ability. >> the two things that bothered me are the deficit and the debt and secondary education. we have to come to terms with both of those. right now we're in a bit of a political slump, partisanship has gotten so severe, but could you imagine in principle a solution to the deficit and debt problem? yeah. the simpson-bowles bipartisan commission suggested it. my own guess is... >> rose: the president has not endorsed it. >> i don't think you'll see it until after the 2012 election because if you put forward a target to, let's say, solve social security or medicare, the other side will just shoot at it. as an entry into the 2012 election. so i doubt that you're going to have... i'd like to see a compromise such as reagan had

with tip o'neill about how to repair social security, make it strong for the long run. i guess it probably won't happen until after 2012 but if you ask me is there in principle a solution to this problem that li kwan you properly identified, there is. and i think it's whether the political system will move toward it. >> another thing you think about and kennedy school thinks about is defining leadership. as a leader, how do you assess president obama? >> i think president obama has tide to set forward an agenda. it's not been easy given the recession which knocked him off course, given the extreme partisanship. >> rose: and inherited a economy in collapse. >> but i think by and large he has been able to and the kind of speech he gave in tucson was an

example of the way he can appeal to these larger things that pull us together as a people. some of the things he used in his 2008 campaign i hope he's going to return. >> rose: "the future of power." madeleine albright says "if your goal is to understand world affairs in the 21st century there can be no better guide. thank you for joining me. >> thank you, charlie.

>> tom: stocks rally to cap off a volatile february, but traders say the bulls' path could be blocked by a huge obstacle: rising oil prices. >> there scenario where oil prices derail the stock market is real. it's not a baseline scenario. >> susie: we look at how higher crude prices could affect the market and how higher gasoline prices are putting the squeeze

on small businesses. you're watching "nightly business report" for monday, february 28. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you.