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but we hung around her classroom like it was the malt shop and she was Wolfman Jack。
None of us could have articulated it then； but it was because we enjoyed being
harangued by her； disciplined by her； and taught by her。 She was a woman of clarity
and principles in an age of uncertainty。 I sit up straight just thinking about her！
Our children will increasingly be competing head…to…head with Chinese； Indian； and
Asian kids； whose parents have a lot more of Hattie's character…building approach
than their own American parents。 I am not suggesting that we militarize education；
but I am suggesting that we do more to push our young people to go beyond their comfort
zones； to do things right； and to be ready to suffer some short…run pain for longer
gain。
I fear； though； that things will have to get worse before they get better。 As Judy
Estrin said； it will probably take a crisis。 I would simply add： The crisis is already
here。 It is just playing out in slow motion。 The flattening of the world is moving
ahead apace； and barring war or some catastrophic terrorist event； nothing is going
to stop it。 But what can happen is a decline in our standard of living； if more
Americans are not empow306
ered and educated to participate in a world where all the knowledge centers are being
connected。 We have within our society all the ingredients for American individuals
to thrive in this world； but if we squander those ingredients； we will stagnate。
I repeat： This is not a test。 This is a crisis； and as Paul Romer has so perceptively
warned； 〃A crisis is a terrible thing to waste。〃
Developing Countries and the Flat World
：：：：： NINE
The Virgin of Guadalupe
It's not that we are becoming more Anglo…Saxon。 It's that we are having an encounter
with reality。
… Frank Schirrmacher； publisher of the German newspaper
Frankfurter Allgemeine Zeitung； commenting to
The New York Times about the need for German
workers to retool and work longer hours
Seek knowledge even unto China。
… saying of the Prophet Muhammad
The more I worked on this book； the more I found myself asking people I met around
the world where they were when they first discovered that the world was flat。
In the space of two weeks； I got two revealing answers； one from Mexico； one from
Egypt。 I was in Mexico City in the spring of 2004； and I put the question on the table
during lunch with a few Mexican journalist colleagues。 One of them said he realized
that he was living in a new world when he started seeing reports appearing in the
Mexican media and on the Internet that some statuettes of Mexico's patron saint； the
Virgin of Guadalupe； were being imported into Mexico from China； probably via ports
in California。 When you are Mexico and your claim to fame is that you are a low…wage
manufacturing country； and some of your people are importing statuettes of your own
patron saint from China； because China can make them and ship them all the way across
the
Pacific more cheaply than you can produce them； you are living in a flat world。
You've also got a problem。 Over at the Central Bank of Mexico； I asked its governor；
Guillermo Ortiz； whether he was aware of this issue。 He rolled his eyes and told me
that for some time now he could feel the competitive playing field being leveled…and
that Mexico was losing some of its natural geographic advantages with the U。S。
market…by just staring at the numbers on his computer screen。 〃We started looking
at the numbers in 2001 …it was the first year in two decades that ＇Mexico's＇ exports
to the U。S。 declined；〃 said Ortiz。 〃That was a real shock。 We started reducing our
gains in market share and then started losing them。 We said that there is a real change
here 。 。 。 And it was about China。〃
China is such a powerhouse of low…cost manufacturing that even though the NAFTA accord
has given Mexico a leg up with the United States； and even though Mexico is right
next door to us； China in 2003 replaced Mexico as the number two exporter to the United
States。 （Canada remains number one。） Though Mexico still has a strong position in
big…ticket exports that are costly to ship； such as cars； auto parts； and
refrigerators； China is coming on strong and has already displaced Mexico in areas
such as computer parts； electrical components； toys； textiles； sporting goods； and
tennis shoes。 But what's even worse for Mexico is that China is displacing some Mexican
companies in Mexico； where Chinese…made clothing and toys are now showing up on store
shelves everywhere。 No wonder a Mexican journalist told me about the day he
interviewed a Chinese central bank official； who told him something about China's
relationship with America that really rattled him： 〃First we were afraid of the wolf；
then we wanted to dance with the wolf； and now we want to be the wolf。〃
A few days after returning from Mexico； I had breakfast in Washington with a friend
from Egypt；Lamees El…Hadidy； a longtime business reporter in Cairo。 Naturally I asked
her where she was when she discovered the world was flat。 She answered that it was
a just few weeks earlier； during the Muslim holy month of Ramadan。 She had done a
story for CNBC Arabiya Television about the colorful lanterns called fawanis；
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each with a burning candle inside；that Egyptian schoolchildren traditionally carried
around during Ramadan； a tradition dating back centuries to the Fatimid period in
Egypt。 Kids swing the lanterns and sing songs； and people give them candy or gifts；
as in America on Halloween。 For centuries； small； low…wage workshops in Cairo's older
neighborhoods have manufactured these lanterns…until thelast few years。That was when
plastic Chinese…made Ramadan lanterns； each with a battery…powered light instead of
a candle； began flooding the market； crippling the traditional Egyptian workshops。
Said Lamees； 〃They are invading our tradition …in an innovative way…and we are doing
nothing about it。。。 These lanterns come out of our tradition； our soul； but ＇the
Chinese versions＇ are more creative and advanced than the Egyptian ones。〃 Lamees said
that when she asked Egyptians； 〃Do you know where these are made？；〃 they would all
answer no。 Then they would turn the lamps over and see that they came from China。
Many mothers； like Lamees； though； appreciated the fact that the Chinese versions
are safer than the traditional Egyptian ones； which are made with sharp metal edges
and glass； and usually still use candles。 The Chinese versions are made of plastic
and feature flashing lights and have an embedded microchip that plays traditional
Egyptian Ramadan tunes and even the theme song to the popular Ramadan TV cartoon series
Bakkar。 As Business Monthly； published by the American Chamber of Commerce in Egypt；
reported in its December 2001 issue； Chinese importers 〃are pitted not only against
each other； but also against the several…hundred…year…old Egyptian industry。 But the
Chinese models are destined to prevail； according to ＇a＇ famous importer； Taha Zayat。
Imports have definitely cut down on sales of traditional fawanis；' he said。 'Of all
fawanis on the market； I don't think that more than 5 percent are now made in Egypt。'
People with ties to the Egyptian ＇fawanis＇ industry believe China has a clear
advantage over Egypt。 With its superior technology； they said； China can make mass
quantities； which helps to keep prices relatively low。 Egypt's traditional ＇fawanis＇
industry； by contrast； is characterized by a series of workshops specialized in
different stages of the production process。 Glassmakers； painters； welders and metal
crafts…
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men all have their role to play。 'There will always be fawanis in Ramadan； but in
the future I think Egyptian…made ones could become extinct/ Zayat said。 'There is
no way they can ever compete with things made in China。'〃
Think how crazy that statement is： Egypt has masses of low…wage workers； like China。
It sits right next to Europe； on the Suez Canal。 It could be and should be the Taiwan
of the eastern Mediterranean； but instead it is throwing in the towel to atheistic
China on the manufacture of one of Muslim Egypt's most cherished cultural artifacts。
Ibrahim El Esway； one of the main importers from China of fawanis； gave The Business
Monthly a tour of his warehouse in the Egyptian town of Muski： He had imported sixteen
different models of Ramadan lanterns from China in 2004。 〃Amid the crowds at Muski；
＇El Esway＇ gestured to one of his employees； who promptly opened a dust…covered box
and pulled out a plastic fawanis shaped like the head of Simba； from The Lion King。
'This is the first model we imported back in 1994；' he said。 He switched it on。 As
the blue…colored lion's head lit up； the song 'It's a Small World' rang out。〃
Introspection
The previous section of this book looked at how individuals； particularly Americans；
should think about meeting the challenge posed by the flattening of the world。 This
chapter focuses on what sort of policies developing countries need to undertake in
order to create the right environment for their companies and entrepreneurs t