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order to create the right environment for their companies and entrepreneurs to thrive
in a flat world； although many of the things I am about to say apply to many developed
countries as well。
When developing countries start thinking about the challenge of flatism； the first
thing they need to do is engage in some brutally honest introspection。 A country；
its people and leaders alike； has to be honest with itself and look clearly at exactly
where it stands in relation to other countries and in relation to the ten flatteners。
It has to ask itself； 〃To what
extent is my country advancing or being left behind by the flattening of the world；
and to what extent is it adapting to and taking advantage of all the new platforms
for collaboration and competition？〃 As that Chinese banking official boasted to my
Mexican colleague； China is the wolf。 Of all the ten flatteners； the entry of China
into the world market is the most important for developing countries； and for many
developed countries。 China can do high…quality low…cost manufacturing better than
any other country； and increasingly； it also can do high…quality higher…cost
manufacturing。 With China and the other nine flatteners coming on so strong； no
country today can afford to be anything less than brutally honest with itself。
To that end； I believe that what the world needs today is a club that would be modeled
after Alcoholics Anonymous （A。A。）。 It would be called Developing Countries Anonymous
（D。C。A。）。 And just as at the first A。A。 meeting you attend you have to stand up and
say； 〃My name is Thomas Friedman and I'm an alcoholic；〃 so at Developing Countries
Anonymous； countries would have to stand up at their first meeting and say； 〃My name
is Syria and I'm underdeveloped。〃 Or 〃My name is Argentina and I'm underachieving。
I have not lived up to my potential。〃
Every country needs 〃the ability to make your own introspection；〃 since 〃no country
develops without going through an X…ray of where you are and where your limits are；〃
said Luis de la Calle； one of Mexico's chief NAFTA negotiators。 Countries that fall
off the development wagon are a bit like drunks； to get back on they have to learn
to see themselves as they really are。 Development is a voluntary process。 You need
a positive decision to make the right steps； but it starts with introspection。
I Can Get It for You Wholesale During the late 1970s； but particularly after the fall
of the Berlin Wall； a lot of countries started to pursue development in a new way
through a process that I call reform wholesale。 The era of Globalization 2。0； when
the world shrank from a size medium to a size small； was the
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era of reform wholesale； an era of broad macroeconomic reform。 These wholesale reforms
were initiated by a small handful of leaders in countries like China； Russia； Mexico；
Brazil； and India。 These small groups of reformers often relied on the leverage of
authoritarian politicalsystems to unleash the state…smothered market forces in their
societies。 They pushed their countries into more export…oriented； free…market
strategies…based on privatization of state companies； deregulation of financial
markets； currency adjustments； foreign direct investment； shrinking subsidies；
lowering of protectionist tariff barriers； and introduction of more flexible labor
laws…from the top down without ever really asking the people。 Ernesto Zedillo； who
served as president of Mexico from 1994 to 2000 and was finance minister before that；
once remarked to me that all the decisions to open the Mexican economy were taken
by three people。 How many people do you suppose Deng Xiaoping consulted before he
declared； 〃To get rich is glorious；〃 and opened the Chinese economy； or when he
dismissed those who questioned China's move from communism to free markets by
saying that what mattered was jobs and incomes； not ideology？ Deng tossed over decades
of Communist ideology with one sentence： 〃Black cat； white cat； all that matters is
that it catches mice。〃 In 1991； when India's finance minister； Manmohan Singh； took
the first tentative steps to open India's economy to more foreign trade； investment；
and competition； it was a result not of some considered national debate and dialogue；
but of the fact that India's economy at that moment was so sclerotic； so unappealing
to foreign investors； that it had almost run out of foreign currency。 When Mikhail
Gorbachev started dabbling with perestroika； it was with his back up against the
Kremlin wall and with few allies in the Soviet leadership。 The same was true of
Margaret Thatcher when she took on the striking coal miners' union in 1984 and forced
reform wholesale onto the sagging British economy。
What all these leaders confronted was the irrefutable fact that more open and
competitive markets are the only sustainable vehicle for growing a nation out of
poverty； because they are the only guarantee that new ideas； technologies； and best
practices are easily flowing into your coun…
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try and that private enterprises； and even government； have the competitive incentive
and flexibility to adopt those new ideas and turn them into jobs and products。 This
is why the nonglobalizing countries； those that refused to do any reform
wholesale…North Korea； for instance… actually saw their per capita GDP growth shrink
in the 1990s； while countries that moved from a more socialist model to a globalizing
model saw their per capita GDP grow in the 1990s。 As David Dollar and Art Kray conclude
in their book Trade； Growth； and Poverty； economic growth and trade remain the best
antipoverty program in the world。
The World Bank reported that in 1990 there were roughly 375 million people in China
living in extreme poverty； on less than 1 per day。 By 2001； there were 212 million
Chinese living in extreme poverty； and by 2015； if current trends hold； there will
be only 16 million living on less than 1 a day。 In South Asia…primarily India；
Pakistan； and Bangladesh…the numbers go from 462 million in 1990 living on less than
1 a day down to 431 million by 2001 and down to 216 million in 2015。 In sub…Saharan
Africa； by contrast； where globalization has been slow to take hold； there were 227
million people living on less than 1 a day in 1990； 313 million in 2001； and an
expected 340 million by 2015。
The problem for any globalizing country lies in thinking you can stop with reform
wholesale。 In the 1990s； some countries thought that if you got your ten commandments
of reform wholesale right…thou shall privatize state…owned industries； thou shall
deregulate utilities； thou shall lower tariffs and encourage export industries；
etc。…you had a successful development strategy。 But as the world started to get
smaller and flatter…enabling China to compete everywhere with everyone on a broad
range of manufactured products； enabling India to export its brainpower everywhere；
enabling corporations to outsource any task anywhere； and enabling individuals to
compete globally as never before …reform wholesale was no longer sufficient to keep
countries on a sustainable growth path。
A deeper process of reform was required…a process I would call reform retail。
I Can Only Get It for You Retail
What if regions of the world were like the neighborhoods of a city？ What would the
world look like？ I'd describe it like this： Western Europe would be an assisted…living
facility； with an aging population lavishly attended to by Turkish nurses。 The United
States would be a gated community； with a metal detector at the front gate and a lot
of people sitting in their front yards complaining about how lazy everyone else was；
even though out back there was a small opening in the fence for Mexican labor and
other energetic immigrants who helped to make the gated community function。 Latin
America would be the fun part of town； the club district； where the workday doesn't
begin until ten p。m。 and everyone sleeps until midmorning。 It's definitely the place
to hang out； but in between the clubs； you don't see a lot of new businesses opening
up； except on the street where the Chileans live。 The landlords in this neighborhood
almost never reinvest their profits here； but keep them in a bank across town。 The
Arab street would be a dark alley where outsiders fear to tread； except for a few
side streets called Dubai； Jordan； Bahrain； Qatar； and Morocco。 The only new
businesses are gas stations； whose owners； like the elites in the Latin neighborhood；
rarely reinvest their funds in the neighborhood。 Many people on the Arab street have
their curtains closed； their shutters drawn； and signs on their front lawn that say；
〃No Trespassing。 Beware of Dog。〃 India； China； and East Asia would be 〃the other side
of the tracks。〃 Their neighborhood is a big teeming market； made up of small shops
and one…room factories； interspersed with Stanley Kaplan SAT prep schools and
engineering colleges。 Nobody ever sleeps in this neighborhood； everyone lives in
extended families； and everyone is working and saving to get to 〃the right side of
the tracks。〃 On the Chinese str