Sunday, April 27, 2008

Excerpt: The Path to Prosperity

Here's a 3-page excerpt from my book. The Economist this week had a special feature on Vietnam, and it reminded me of these pages in The Secret Peace. Take a look:

We frequently hear the discouraging news of the poverty that still exists for billions of people in the world today. But the reduction of the world’s extreme poverty is one of the most dramatic – and surprising – trends leading toward peace. There is a proven path out of poverty, and two examples illustrate it perfectly. Korea and Vietnam share the dubious distinction of being the sites of the United States’ worst wars since World War II. Though Korea and Vietnam are more than two thousand miles apart and have very different cultures, their recent histories are strikingly similar. After World War II, both countries remained occupied against their will. Then, around the same time, they each became embroiled in conflicts that were simultaneously civil wars and proxy battles between the United States and the Soviet Union. Korea and Vietnam each held communist forces in their northern halves supported intermittently by communist Russia or communist China. They each had southern forces supported by the United States and its allies, who were attempting to block the spread of communism. Both wars were waged as opposing sides vied for control of the country’s central parallel. Although both countries began their conflicts under very different circumstances, each ended a vast war—Korea in 1953 and Vietnam in 1975—with hundreds of thousands of casualties, an impoverished citizenry, and a devastated countryside.

Here their histories diverge. North Korea’s communist forces were unable to conquer the southern half of the country and were only able to maintain control of the northern half of the peninsula. North Korea became isolated, and for fifty years it carried out a countrywide experiment in pure communism and totalitarianism. Today North Korea faces economic collapse and widespread famine. Perhaps more than any other country, it is cut off from global civilization. Its people exist in a semifeudal society: hungry, destitute, and scared of being shipped off to labor camps for any dissent. Only top-level Communist Party bosses enjoy luxuries such as cars and foreign food. Every year many North Koreans risk death as they attempt to escape by crossing the heavily armed border. What little wealth their leader Kim Jong Il amasses gets diverted into outdated military forces and giant, solipsistic statues. If you look at the earth at night, North Korea remains dark next to the shining electric wealth of Japan, South Korea, China, and much of the rest of the globe. North Korea remains a pariah, and its desperate attempt to develop nuclear weapons reveals its weaknesses: it has no other power or influence in the world. It relies on energy from China and aid from South Korea. In terms of its economy, the health of its citizens, and its reputation in the world, North Korea is one of the most failed states in modern history.

In contrast to the situation in North Korea, North Vietnam’s communist forces seized control of the entire country. Vietnam united under communism, and the United States, having suffered a terrible loss, expected the worst. Vietnam seemed destined to follow in North Korea’s footsteps. True to form, Vietnam played the role of a strict communist state for a decade. But then something strange started happening. In the mid-1980s, facing potential famine, Vietnam had a change of heart. The government started enacting market reforms under a policy it called doi moi (renovation). It abandoned its attempt to collectivize its industry and agriculture, and it slowly began to allow free-market enterprise. It invited foreign firms into the country to open new factories and provide employment. Private ownership became acceptable. The changes didn’t translate into political freedom; they focused only on the economy. Nevertheless, the people of Vietnam saw their standard of living start to improve. Life expectancy went up, and infant mortality rates went down. The number of Vietnamese living in extreme poverty dropped from 50 percent in 1990 to a scant 10 percent in 2003. The United States restored trade relations with Vietnam in 1994, and in 2006 removed it from a blacklist of countries that suppressed religion. Today Vietnam is engaged with the world community, participating in international law and encouraging tourism, and with a relatively free press. To complete the metamorphosis, Vietnam’s leaders recently unveiled a plan to establish the country as a fully modern, industrial nation by 2020.

Totalitarian, isolationist North Korea is looking more every day like an anachronistic aberration. Meanwhile, different versions of Vietnam’s success story are playing out all over the world.

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