NEWSWEEK: What does the title of your book, “The Kimchi Matters,” mean?
Marvin Zonis: People have forgotten that in order for globalization to be successful, close attention must be paid to the local realities and the local politics of each country. Kimchi is the Korean national dish. Every Korean housewife has to prepare a container of this pickled cabbage with ginger and garlic, and each woman makes it in a slightly different way. So the particularities are really important…
People often seem polarized by the word “globalization.” Either they believe it can really benefit the world or it’s a great evil. You seem to fall between.
Globalization has tremendous positive benefits and also negative consequences. The issue is your own values, as to whether or not you decide it’s a good thing or a bad thing. We know that the most important consequence of globalization is a massive increase in economic efficiency and considerably greater economic growth for the countries that participate than would otherwise be the case. On the other hand, globalization is accompanied everywhere by American popular culture. And American popular culture can be pretty appalling. You can imagine what it’s like for the people in other countries who see their own culture being dismantled in the face of this powerful American culture.
Many argue that the poor become even more disenfranchised by globalization.
We know by the data that have been collected, that over time, economic growth benefits all sectors of the population. However, in the short term, there is no question that economic growth increases income inequality. Some people are better positioned to take advantage of the new economic opportunities than others. Some people make a real bundle of money; others are lucky if they get a job. For example, in Latin American countries, particularly in Brazil and in Mexico, as those countries economies have expanded and as they have participated more in globalization, the rich have gotten richer in comparison to the poor. But it’s not necessarily the case that the poor have gotten poorer.
Do you think the poor actually benefit?
We have huge amounts of data that show that the poor benefit by improvements in infrastructure and education and income.
What about the stories we hear of garment factory workers in developing countries being subjected to terrible conditions and extremely low wages?
There is certainly validity to that problem and that criticism. I heard a union leader from Jamaica recently say that a lot of garment factories from the United States have opened plants in Jamaica, and that people who work in these factories make something like 75 cents or $1 per hour. I’m sure it’s terrible. But my response to that union leader was, “Nobody is making those people in Jamaica work in those factories. They choose to work there because it’s better than the alternative.”
Of course, by learning factory work and factory discipline, a Jamaican entrepreneurial class will rise, assuming the government of Jamaica sets up propitious circumstances so businesses can be started. The problem is that the governments of some of these countries have such terrible laws and regulations that nobody in their right minds would start businesses there.
Do you think the United States will be able to create a stable democracy in Iraq?
The first problem, in light of our book, “The Kimchi Matters,” is that the [Bush] administration did not pay enough attention to the local realities of Iraq. They launched the Iraq adventure with theories of democratization and theories of terrorism… Had they [paid attention], they would have appreciated the complexities and the difficulties.
What’s ahead, in my judgment, is similar to what the former U.S. senator from Vermont, George Aiken, once advised on Vietnam: declare victory and bring the troops home. I think what we are seeing now is a variant of that strategy. We are going to claim that we created a new Iraqi government that was not the dictatorship of Saddam Hussein, and then we’ll start to pull out.
How will companies doing business over there be able to function if we pull out?
There are the companies trying to take advantage of the present economic opportunities in Iraq. They are going in, building a road, fixing a power plant, building a cement factory, and then they are going to get out.
A more difficult problem is how to rebuild the Iraqi oil industry if there is no security or legitimate Iraqi government that gives these international oil companies a legitimate contract and induces them to go in and spend a few billion dollars in a [longer-term] project. Each of these companies has to lay down billions of dollars. They are not going to do it without security and a legitimate Iraqi government. They are afraid that the next Iraqi government is going to come in and say, “Wait a minute, those are the Americans who gave you that contract, and we’re not honoring that contract.”
So where is the money going to come from to rebuild Iraq? We’re going to spend $20 billion and then do you think we’re going to spend any more? It will be very painful for the Iraqi people and the next Iraqi government. They’ll be able to self sustain. They did under Saddam Hussein. But the idea of a robust, vigorous market economy–it’s going to be very slow and very painful.
Have you sent George Bush or Donald Rumsfeld a copy of your book?
I never even thought of sending it to [them]. Indeed, I know Don Rumsfeld, so there it is, I’m going to send it to him.
What is the current economic climate in Russia and do you think the situation there has improved since Russian President Vladimir Putin has been in office?
There is no question that President Putin has begun to build a stable Russia with a functioning state, which offers the promise–but so far only the promise–of creating the conditions which make investing attractive in Russia… Unfortunately, the recent arrest of the head of Yukos oil company and the [freezing] of his shares in the company by the government of Russia… suggests this is not the time to assume that Russia is on the right track and to wait and see what happens.
Do you think things might have been different in Russia had the United States had offered more assistance immediately after the fall of Communism?
I think it was one of the great failings of the first Bush administration, that when the greatest victory, probably in the history of American foreign policy, was achieved with the collapse of the Soviet Union and of Communism, the Bush administration declared victory and went home. We saved so much money in our defense budget that we could have not just poured money into Russia–because it all might have been stolen–but we could have easily gone to them and said, “We want to help you build a market economy.” I think that was a great mistake. Had we done so, would Russia be any different today? Who knows? Maybe it would have been just the same. But that’s no justification for not trying.
China seems to be doing well these days.
That’s an understatement.
Do you think China will eventually replace the United States as the world economic leader? Practically every product I buy these days says “Made in China” on its label.
Except for robes or housecoats, which the president just put [caps] on so we could keep them out of this country. I think, in the year 2003, the total amount for goods imported to the United States from China will add up to $140 billion. Huge numbers of things we buy are made in China, and in the future, more things are going to be made there. So is China going to have an economy larger than the United States? Probably. They may end up having a GDP larger than ours but they certainly won’t have a larger per capita income.
My view is that China cannot continue to grow at the rate at which it has been growing. There are a variety of reasons for that. The only interesting questions to me are when will the interruption come, how severe will it be and will it produce significant political unrest in China? It is possible to spell out a lot of scenarios in which China could turn into a disaster.
There has been talk of a growing gap between rich and poor here in the United States.
That’s a very complicated topic. The data suggest that there is a gap growing between the rich and the poor and I think it’s very bad for long-term American political stability. The question is, “Why is it happening?”
What is your opinion of Americans losing jobs to offshore outsourcing ? Do you think it will ultimately damage our economy or is it just a process of readjusting?
I’ve thought a lot about it. It will be great for the economy. The economy will become more efficient, more productive and will grow larger, because we will be able to take advantage of these new efficiencies, for example, getting the same work done for a lot less money because people in India are doing it instead of people in America.
But there is no question that there will be big winners and big losers within the American economy. There are certainly people who are going to lose their jobs. The question is, what ought to be done about it? There are a lot of people in the country who say let’s stop sending the jobs to India. That’s a very bad idea, because it will lessen our overall well being. [What we need] is public policy that cushions the blow to the workers who suffer, so the rest of the country can benefit–worker retraining programs, better public education systems, more adequate unemployment compensation.
