Foreign Policy - #207 July-August 2014

PERCENTAGE OF GDP 25 ALL OTHER U.S. REVENUE VS. 20 REVENUE SPENDING 15 SOCIAL SECURITY 10 HEALTH CARE PROGRAMS By 2043, federal spending on 5 entitlements and net interest payments will exceed federal revenues, meaning funds for any discretionary programs will be borrowed. SPENDING ALL OTHER SOCIAL SECURITY HEALTH CARE PROGRAMS NET INTEREST PAYMENTS REVENUE 2015 2020 2025 NET INTEREST PAYMENTS 2030 2035 2040 2045 2050 SOURCE: CONGRESSIONAL BUDGET OFFICE INFOGRAPHIC BY MGMT DESIGN THIS SHIFT IN ECONOMIC GROWTH TOWARD THE DEVELOPING WORLD percent this year—and has grown at least ninefold since 2000—and most experts think its real defense spending is is going to have strategic consequences. Military power considerably larger. The International Institute for Strategic ultimately derives from wealth. It is often noted that the Studies has judged that Beijing will spend as much on defense United States spends more on defense than the next 10 as Washington does by the late 2020s or early 2030s. Mean- countries combined. But growth in military spending while, regional powers like Iran—and even nonstate actors like correlates with GDP growth, so as other economies grow, those Hezbollah—are becoming more militarily formidable as it countries will likely spend more on defense, reducing the becomes easier to obtain precision-guided munitions and thus relative military power of the United States. Already, trends in threaten U.S. power-projection capabilities. global defense spending show a rapid and marked shift from the United States and its allies toward emerging economies, Simultaneously, the United States is slashing its defense especially China. In 2011, the United States and its partners spending while allocating its remaining funds less strategically. accounted for approximately 80 percent of the military spending by the 15 countries with the largest defense budgets. By 2021, nearly half of the U.S. defense budget will But, according to a McKinsey study, that share could fall go to personnel compensation. significantly over the next eight years—perhaps to as low as 55 percent. SOURCE: CENTER FOR A NEW AMERICAN SECURITY The resulting deterioration in American military superiority has already begun, as the countries benefiting most rapidly from globalization are using their newfound wealth to build military capacity, especially in high-tech weaponry. As Robert Work and Shawn Brimley of the Center for a New American Security wrote this year: “[T]he dominance enjoyed by the United States in the late 1990s/early 2000s in the areas of high-end sensors, guided weaponry, battle networking, space and cyberspace systems, and stealth technology has started to erode. Moreover, this erosion is now occurring at an accelerat- ed rate.” (Work has since been confirmed as deputy secretary of defense.) China, in particular, is acquiring higher-end capabilities and working to establish “no-go zones” in its near abroad in the hopes of denying U.S. forces the ability to operate in the Western Pacific. China’s declared defense budget grew 12 59FOREIGN POLICY

the greatest freedom of action over 2013 CHANGES IN ENERGY SUPPLY the long haul. But it needs to focus on its competitiveness, beginning +1.18 MBD with a few key priorities. Because America’s fiscal policy 1.0 MILLION BARRELS affects everything else and because PER DAY the current trajectory is unsustain- able, entitlement reform is inevita- +0.36 MBD +0.06 MBD OPEC ble. The only question is when it will COUNTRIES begin. A number of the fixes that CANADA RUSSIA could have the most significant UNITED STATES impact are straightforward and could be phased in over time with minimal disruption. For example, increasing the retirement age— which could be done over a decade 0.81 MBD or longer—would substantially improve America’s fiscal condition. Investing effectively in infrastruc- In 2013, while the United States enjoyed a surge of over a million barrels per day in ture—long a U.S. comparative advan- its liquid-fuels supply—including crude oil and biofuels—supply from OPEC countries tage, now increasingly a relative dropped sharply. The United States is on its way to being a net exporter of energy. weakness—would boost productivity and growth over the long term. So SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION would reforming corporate tax laws to encourage companies to bring profits home. (The current system creates perverse incentives for companies to maximize tax proved able to self-correct and adapt. It has a culture that advantages by keeping profits out of the United States.) favors economic growth, accepts and integrates people from all The nation can also focus on enhancing productivity in over the world, and enables mobility, creativity, and personal parts of its economy that would benefit greatly from even renewal and reinvention. As a result, the nation remains an modest improvements. As writer Reihan Salam and others abiding destination for foreign investment—a reliable source have shown, sectors such as health care and education— of growth and safety in uncertain economic and geopolitical which together comprise a quarter of the country’s economy— times. are inefficient compared with other OECD nations. Govern- In particular, America’s energy boom and its ability to ment services are laggard. Introducing best business practices attract talent from around the world could yield an outsized and up-to-date information technology to those areas would return on investment. not only improve Americans’ lives, but would also tap Less than a decade ago, energy loomed as an enormous underexploited sources of national wealth. challenge for the United States. Not anymore. The combina- With respect to defense policy, the United States must be tion of horizontal drilling and hydraulic fracturing, or ruthlessly strategic in its spending and preparations, prioritiz- “fracking,” technologies has generated a surge in U.S. oil and ing the principal source of its military advantage: technologi- natural gas production. Between 2007 and 2012, U.S. produc- cal superiority. This means focusing increasingly scarce tion of shale gas increased from roughly 3.5 billion cubic feet defense dollars on next-generation weapons, such as stealthy per day to over 28 billion, a jump of over 700 percent. In the bombers and quiet submarines, and on the assets that make same period, shale gas’s share of U.S. gas production grew from them smarter than their enemy counterparts—command, 5 percent to 45 percent. With each year, the efficiency of control, communication, and computer systems, as well as fracking has improved, and estimates of recoverable reserves intelligence, surveillance, and reconnaissance capabilities. of shale gas have nearly doubled. Driven by the production of And it means fielding these capabilities with a better-trained, tight oil made possible by fracking, U.S. crude oil production leaner military that de-emphasizes less lucrative investments, has also soared in the last five years, following four decades of such as personnel strength and systems that cannot survive or decline. prosper in the tougher emerging military-technological In 2013, the United States overtook Russia as the world’s environment. leading producer of oil and gas. Within two years it is likely to surpass Saudi Arabia as the world’s largest crude oil producer. U.S. imports of oil and gas have fallen steeply in the last five INFOGRAPHIC BY MGMT DESIGN THE KEY TO PREVENTING RELATIVE DECLINE AND PERHAPS SPARKING years, reducing the trade deficit. The United States will soon be a renaissance in American power—lies not simply in remedy- a net exporter of energy. ing problems with fiscal responsibility, economic productivity, The economic boost from the so-called “North American and military spending, but in leveraging the country’s energy revolution” has already been profound. Natural gas comparative advantages, which are significant. The United prices in the United States have plummeted, both in absolute States has an open political system that, historically, has terms and relative to other markets around the world. 61FOREIGN POLICY

Consequently, the United States is now uniquely advantaged in 24% INFOGRAPHIC BY MGMT DESIGN industries, such as petrochemical production, that require massive amounts of energy. Billions of dollars of investment According to a 2010 study, about 24 percent of the world’s capital have flowed into the United States, thereby helping to adults hoping to emigrate listed the United States as their revitalize the manufacturing sector. Energy analyst Daniel ideal destination—more than three times the number wanting Yergin has linked the creation of 2 million jobs to the develop- ment of shale energy, and other reports suggest that the to head to second-place Canada. renewal of the energy industry (and associated manufacturing and support services) is pumping hundreds of billions of SOURCE: GALLUP additional dollars into the U.S. economy every year. of its workers. The United States remains an attractive The energy boom has also significantly reduced carbon destination for smart, skilled, and creative individuals, even dioxide emissions in the United States, even as the emis- as the global competition for such workers intensifies. In sions from other, more traditionally “green” states, like 2010, for instance, Gallup reported that over 165 million of Germany, have increased. A large part of this shift has been the approximately 700 million adults worldwide looking to driven by the rapid transition from coal to less expensive emigrate would like to move to the United States, well ahead and less emissions-intensive gas-powered electricity. of second-place Canada. The United States did particularly According to the U.S. Energy Information Administration, in well among younger respondents. 2012 alone, a year in which U.S. GDP grew nearly 3 percent, the country’s energy-related carbon emissions fell almost 4 U.S. advantages in the global “war for talent” include the percent, to their lowest level since 1994 and 12 percent perception of meritocracy and mobility in the American below their 2007 peak. system, exceptional centers of economic activity in places like New York and Silicon Valley, and the allure of American Admittedly, some enthusiasts have overhyped the higher education. Shanghai Jiao Tong University’s influen- strategic implications of this revolution. True energy tial annual review of the world’s top universities, for “independence”—defined as isolation from shocks to global instance, lists 17 American universities among its top 20. energy markets—is impossible. And the United States has Major U.S. universities also have much larger endowments not gained newfound leverage over energy producers such than potential rivals abroad, helping them lure the best and as Russia. Nonetheless, the energy revolution has given the the brightest, which in turn enables them to serve as United States an important strategic capability. In 2011, the incubators for innovation. growth in U.S. and Canadian production helped moderate global oil prices when supplies from Libya were interrupted These assets have made the United States the leading during that country’s revolution. Going forward, the United destination for high-skilled immigrants, who provide an States will be better able to help allies by diversifying their essential engine for economic growth. William Kerr of energy options and, in some cases, offering them more- Harvard Business School, for instance, found that American secure supply lines. To Japan, for example, energy flowing immigrants of Chinese and Indian extraction accounted for from North America is vastly preferable to Middle Eastern 15 percent of U.S. domestic patents in 2004, up from just 2 supplies that must transit the South China Sea. percent in 1975. And the Brookings Institution has estimated that a quarter of technology and engineering businesses Preserving and furthering the energy revolution and its started in the United States between 1995 and 2005 had a boost to U.S. competitiveness is crucial. But it first requires a foreign-born founder. Hippocratic oath mindset: Do no harm. The North American energy revolution has been made possible in part by supportive Preserving the U.S. edge in human capital is essential. But property rights and state laws and regulations. But fracking the United States is not exploiting this advantage as much as does have risks. A prudent, predictable regulatory regime, one it should. Its current approach to H-1B visas, for instance, is that provides rigorous monitoring and reduces potential overly restrictive and ultimately harmful. The United States environmental risks, benefits both industry and the public. By contrast, efforts under way in some states to ban the transport of fracking wastewater on state roads—or even ban fracking entirely—could curtail one of the country’s greatest compara- tive advantages. Looking outward, Washington must change its mindset toward its place in the global energy market. The United States is the world’s leading energy superpower. It is time to reverse prohibitions on the export of oil and other hydrocarbons, many of which date from the OPEC embargoes of the 1970s. The government should continue to grant licenses to export liquefied natural gas to countries with which it does not have free trade agreements, and reverse the ban on crude oil exports. ANOTHER STRENGTH OF THE UNITED STATES IS ITS EDGE IN HUMAN capital—the productivity, innovation, and entrepreneurship 62 JULY/AUGUST 2014

regularly educates and trains hyperskilled Ph.D. students in encouraging flexible working hours and changing how Social the sciences, for example, and then makes it difficult for Security retirement benefits are calculated—would not only them to stay in the country. America should welcome and try help alleviate the strains on entitlement spending and to keep skilled and talented workers and entrepreneurs. The increase retirement savings, but it would also help the payoffs are clear: Every H-1B visa granted for an employee to economy grow as more mature workers continue to contrib- join a high-tech company adds another five jobs to the ute the lifetime of expertise they have developed. economy. Other countries, such as Canada and Australia, already understand this dynamic. They are attracting talent Building such skills among the coming generation of through incentives and criteria, such as educational attain- workers is critical as well. Even during the recent recession, ment and work history, that suggest great economic poten- employers could not fill certain high-skilled positions—a tial. The United States ought to learn from their example. supply-demand imbalance projected to continue through the decade. One way to address this gap may be through educa- More broadly, improving America’s world-class universi- tion tailored to specific careers. The Automotive Manufac- ties and research centers is essential to building and turing Technical Education Collaborative, for example, attracting the world’s best talent and to fostering the partners auto companies and community colleges in 12 innovation that will fuel economic growth in the 21st states to train students for high-skilled careers in the auto century. The U.S. experience in the last century demonstrat- industry. ed the multiplier effect of public investments in basic research. Failure to prioritize funding for such bodies as the PERHAPS THE SINGLE MOST IMPORTANT THING AMERICANS CAN DO, National Science Foundation, the National Institutes of Health, and the Defense Advanced Research Projects Agency however, is to be honest with themselves about the challenges is penny-wise and pound-foolish. It was technological the country faces and the seriousness with which it needs to innovation that produced the startling boom in oil and gas treat them. America needs to talk less about its exceptionalism production, and the country’s ability to generate and exploit and focus more on demonstrating it. alternative energy sources will be driven by scientific breakthroughs—as with graphene, a nanomaterial that has If America chooses the path of economic adaptation, reform, the potential to revolutionize batteries. and restored productivity—that is, if it resolves to make tough choices—it will be able to remain prosperous and strong and The United States also needs to tap fully its existing therefore retain extraordinary influence over its future and in reservoirs of domestic talent. Extending the careers of the the world. If it does not, it will see the domestic sources of its country’s 76 million baby boomers—perhaps through power erode far more quickly and with far more damaging consequences than is currently appreciated. HARVARD STANFORD UNIVERSITY OF MASSACHUSETTS UNIVERSITY OF UNIVERSITY UNIVERSITY CALIFORNIA, INSTITUTE OF CAMBRIDGE Within the United States, there is an ongoing debate about BERKELEY TECHNOLOGY the appropriate uses of American power abroad. But whatever one’s views on how U.S. power should be used, there is little CALIFORNIA PRINCETON COLUMBIA UNIVERSITY OF UNIVERSITY OF reason to support its erosion. If one favors extensive American INSTITUTE OF UNIVERSITY UNIVERSITY CHICAGO OXFORD engagement, a resilient America will be better able to lead and TECHNOLOGY intervene effectively. If one favors retrenchment and restraint, a more powerful America will be better insulated from outside YALE UNIVERSITY OF CORNELL UNIVERSITY OF UNIVERSITY OF threats. If one favors measured engagement, strength provides UNIVERSITY CALIFORNIA, UNIVERSITY CALIFORNIA, PENNSYLVANIA options and the firmest basis for sustained success. And, LOS ANGELES SAN DIEGO irrespective of foreign policy, an economically dynamic, growing America will benefit all its citizens, particularly the INFOGRAPHIC BY MGMT DESIGN UNIVERSITY OF JOHNS HOPKINS UNIVERSITY OF UNIVERSITY OF SWISS FEDERAL generations to come. WASHINGTON UNIVERSITY CALIFORNIA, WISCONSIN, INSTITUTE OF SAN FRANCISCO MADISON TECHNOLOGY ZURICH Otto von Bismarck is often quoted as having said that God takes special care of drunks, children, and the United States of 17 of the top 20 universities are in the United States. America. But as another saying goes, God takes care of those who take care of themselves. Although the former may still be SOURCE: ACADEMIC RANKING OF WORLD UNIVERSITIES, true, the latter certainly is. SHANGHAI JIAO TONG UNIVERSITY, 2013 While believing that America is doomed to decline is a fallacy, refusing to confront the problems that imperil its economic vitality would be no less a failing. American strength and freedom of action are not rights to be inherited but outcomes to be earned. Preserving U.S. influence abroad requires that Americans focus on renewing the sources of their nation’s power and mitigating its weaknesses. It is time to play the long game. Elbridge Colby is the Robert M. Gates fellow at the Center for a New American Security. Paul Lettow was senior director for strategic planning on the U.S. National Security Council staff from 2007 to 2009. The views expressed here are theirs alone. 63FOREIGN POLICY

THE SOCIAL LABORATORY

SINGAPORE IS TESTING WHETHER MASS SURVEILLANCE AND BIG DATA CAN NOT ONLY PROTECT NATIONAL SECURITY, BUT ACTUALLY ENGINEER A MORE HARMONIOUS SOCIETY. BY SHANE HARRIS PHOTOILLUSTRATIONS BY LEANDRO CASTELAO

find the proverbial needle in the haystack,” Ho later recalled. He wanted to know whether the system, which was not yet deployed in the United States, could be used in Singapore to detect the warning signs of terrorism. It was a matter of some urgency. Just 10 days earlier, terrorists had bombed a nightclub, a bar, and the U.S. consular office on the Indonesian island of Bali, killing 202 people and raising the specter of Islamist terrorism in Southeast Asia. Ho returned home inspired that Singapore could put a TIA-like system to good use. Four months later he got his chance, when an outbreak of severe acute respiratory syndrome (SARS) swept through the country, killing 33, dramatically slowing the economy, and shaking the tiny island nation to its core. Using Poindexter’s design, the government soon established the Risk Assessment and Horizon Scanning program (RAHS, pronounced “roz”) inside a Defense Ministry agency responsible for preventing terrorist attacks and “nonconventional” strikes, such as those using chemical or biological weapons—an effort to see how Singapore could avoid or better the U.S. Defense Department’s R&D outfit best known for manage “future shocks.” Singaporean officials gave speeches developing the M16 rifle, stealth aircraft technology, and the and interviews about how they were deploying big data in the Internet. Ho didn’t want to talk about military hardware. Rather, service of national defense—a pitch that jibed perfectly with he had made the daylong plane trip to meet with retired Navy the country’s technophilic culture. Rear Adm. John Poindexter, one of DARPA’s then-senior Back in the United States, however, the TIA program had program directors and a former national security advisor to become the subject of enormous controversy. Just a few weeks President Ronald Reagan. Ho had heard that Poindexter was after Poindexter met with Ho, journalists reported that the running a novel experiment to harness Defense Department was funding experimen- enormous amounts of electronic information tal research on mining massive amounts of and analyze it for patterns of suspicious Americans’ private data. Some members of activity—mainly potential terrorist attacks. Congress and privacy and civil liberties The two men met in Poindexter’s small advocates called for TIA to be shut down. It office in Virginia, and on a whiteboard, was—but in name only. PREVIOUS SPREAD: EDWARD TIAN/GETTY IMAGES; PHOTOILLUSTRATION BY LEANDRO CASTELAO Poindexter sketched out for Ho the core In late 2003, a group of U.S. lawmakers concepts of his imagined system, which more sympathetic to Poindexter’s ideas Poindexter called Total Information Aware- arranged for his experiment to be broken ness (TIA). It would gather up all manner of into several discrete programs, all of which electronic records—emails, phone logs, were given new, classified code names and Internet searches, airline reservations, hotel DARPA’s Total placed under the supervision of the National bookings, credit card transactions, medical Information Awareness Security Agency (NSA). Unbeknownst to reports—and then, based on predetermined almost all Americans at the time, the NSA scenarios of possible terrorist plots, look for logo. was running a highly classified program of the digital “signatures” or footprints that its own that actually was collecting Ameri- would-be attackers might have left in the data cans’ phone and Internet communications space. The idea was to spot the bad guys in records and mining them for connections to the planning stages and to alert law enforcement and intelli- terrorists. Elements of that program were described in gence officials to intervene. classified documents disclosed in 2013 by former NSA “I was impressed with the sheer audacity of the concept: contractor Edward Snowden, sparking the most significant that by connecting a vast number of databases, that we could and contentious debate about security and privacy in America 66 JULY/AUGUST 2014

in more than four decades. pro-business, and a 2012 report ranked it as the world’s Because of such uproars, many current and former U.S. wealthiest country, based on GDP per capita. Singapore’s port handles 20 percent of the world’s shipping containers and officials have come to see Singapore as a model for how they’d nearly half of the world’s crude oil shipments; its airport is the build an intelligence apparatus if privacy laws and a long principal air-cargo hub for all of Southeast Asia; and thou- tradition of civil liberties weren’t standing in the way. After sands of corporations have placed their Asian regional Poindexter left DARPA in 2003, he became a consultant to headquarters there. This economic rise might be unprece- RAHS, and many American spooks have traveled to Singapore dented in the modern era, yet the more Singapore has grown, to study the program firsthand. They are drawn not just to the more Singaporeans fear loss. The colloquial word kiasu, Singapore’s embrace of mass surveillance but also to the which stems from a vernacular Chinese word that means “fear country’s curious mix of democracy and authoritarianism, in of losing,” is a shorthand by which natives concisely convey which a paternalistic government ensures people’s basic the sense of vulnerability that seems coded into their social needs—housing, education, security—in return for almost DNA (as well as their anxiety about missing out—on the best reverential deference. It is a law-and-order society, and the schools, the best jobs, the best new consumer products). definition of “order” is all-encompassing. Singaporeans’ boundless ambition is matched only by their extreme aversion to risk. Ten years after its founding, the RAHS program has evolved beyond anything Poindexter could have imagined. Across That is one reason the SARS outbreak flung the door wide Singapore’s national ministries and departments today, armies open for RAHS. From late February to July of 2003, the virus of civil servants use scenario-based planning and big-data flamed through the country. It turned out that three women analysis from RAHS for a host of applications beyond fending who were hospitalized and treated for pneumonia in Singapore off bombs and bugs. They use it to plan procurement cycles had contracted SARS while traveling in Hong Kong. Although and budgets, make economic forecasts, inform immigration two of the women recovered without infecting anyone, the policy, study housing markets, and develop education plans third patient sparked an outbreak when she passed the virus to for Singaporean schoolchildren—and they are looking to 22 people, including a nurse who went on to infect dozens of analyze Facebook posts, Twitter messages, and other social others. The officials identified a network of three more media in an attempt to “gauge the nation’s mood” about so-called “superspreaders”—together, five people caused more everything from government social programs to the potential than half the country’s 238 infections. If Singaporean officials for civil unrest. had detected any of these cases sooner, they might have halted the spread of the virus. In other words, Singapore has become a laboratory not only for testing how mass surveillance and big-data analysis might Health officials formed a task force two weeks after the virus prevent terrorism, but for determining whether technology can was first spotted and took extraordinary measures to contain be used to engineer a more harmonious society. it, but they knew little about how it was spreading. They distributed thermometers to more than 1 million households, Singapore was the perfect home for a along with descriptions of SARS’s symptoms. Officials checked centrally controlled, complex technological for fevers at schools and businesses, and they even used system designed to maintain national order. infrared thermal imagers to scan travelers at the airport. The government invoked Singapore’s Infectious Diseases Act and In a country run by engineers and technocrats, it’s an article of ordered in-home quarantines for more than 850 people who faith among the governing elite, and seemingly among most of showed signs of infection, enforcing the rule with surveillance the public, that Singapore’s 3.8 million citizens and permanent devices and electronic monitoring equipment. Investigators residents—a mix of ethnic Chinese, Indians, and Malays who tracked down all people with whom the victims had been in live crammed into 716 square kilometers along with another 1.5 contact. The government closed all schools at the pre-university million nonresident immigrants and foreign workers—are level, affecting 600,000 students. perpetually on a knife’s edge between harmony and chaos. By mid-April, fewer people were visiting the country, and “Singapore is a small island,” residents are quick to tell hotel occupancy rates plummeted, along with revenues at visitors, reciting the mantra to explain both their young shops and restaurants. Taxi drivers reported fewer fares. The country’s inherent fragility and its obsessive vigilance. Since unemployment rate ticked up. Officials slashed the country’s Singapore gained independence from its union with Malaysia economic growth forecast for 2003, from a strong 2.5 percent to in 1965, the nation has been fixated on the forces aligned a possible 0.5 percent. When the full effects of the outbreak against it, from the military superiority of potentially were finally measured, the economy had actually contracted aggressive and much larger neighbors, to its lack of indigenous 4.2 percent from the same time the previous year. The SARS energy resources, to the country’s longtime dependence on outbreak reminded Singaporeans that their national prosperity Malaysia for fresh water. “Singapore shouldn’t exist. It’s an could be imperiled in just a few months by a microscopic invented country,” one top-ranking government official told invader that might wipe out a significant portion of the me on a recent visit, trying to capture the existential peril that densely packed island’s population. seems to inform so many of the country’s decisions. Months after the virus abated, Ho and his colleagues ran a But in less than 50 years, Singapore has achieved extraordi- simulation using Poindexter’s TIA ideas to see whether they nary success. Despite the government’s quasi-socialistic could have detected the outbreak. Ho will not reveal what cradle-to-grave care, the city-state is enthusiastically forms of information he and his colleagues used—by U.S. standards, Singapore’s privacy laws are virtually nonexistent, and it’s possible that the government collected private 67FOREIGN POLICY

communications, financial data, public transportation records, and the police may come to your door. JOSEPH NAIR/ASSOCIATED PRESS; PHOTOILLUSTRATION BY LEANDRO CASTELAO and medical information without any court approval or private Singaporeans have been charged under the Sedition Act for consent—but Ho claims that the experiment was very encour- aging. It showed that if Singapore had previously installed a making racist statements online, but officials are quick to point big-data analysis system, it could have spotted the signs of a out that they don’t consider this censorship. Hateful speech potential outbreak two months before the virus hit the threatens to tear the nation’s multiethnic social fabric and is country’s shores. Prior to the SARS outbreak, for example, there therefore a national security threat, they say. After the 2012 were reports of strange, unexplained lung infections in China. arrest of two Chinese teenage boys, who police alleged had made Threads of information like that, if woven together, could in racist comments on Facebook and Twitter about ethnic Malays, a theory warn analysts of pending crises. senior police official explained to reporters: “The right to free speech does not extend to making remarks that incite racial and The RAHS system was operational a year later, and it religious friction and conflict. The Internet may be a convenient immediately began “canvassing a range of sources for weak medium to express one’s views, but members of the public signals of potential future shocks,” one senior Singaporean should bear in mind that they are no less accountable for their security official involved in the launch later recalled. actions online.” The system uses a mixture of proprietary and commercial Singaporean officials stress that citizens are free to criticize technology and is based on a “cognitive model” designed to the government, and they do. In fact, one of the country’s most mimic the human thought process—a key design feature popular books this year has been a provocative rebuttal to the influenced by Poindexter’s TIA system. RAHS, itself, doesn’t decades-old official dogma concerning the country’s existential think. It’s a tool that helps human beings sift huge stores of peril. Hard Choices: Challenging the Singapore Consensus, by data for clues on just about everything. It is designed to Donald Low and Sudhir Thomas Vadaketh, argues that the analyze information from practically any source—the input is ruling People’s Action Party, which has held uninterrupted almost incidental—and to create models that can be used to power since 1959, may have forecast potential events. Those scenarios can then be shared invented the notion that across the Singaporean government and be picked up by Singapore is one step away from whatever ministry or department might find them useful. ruin in a bid to subdue the Using a repository of information called an ideas database, masses and cement the RAHS and its teams of analysts create “narratives” about how government’s hold on power. various threats or strategic opportunities might play out. The point is not so much to predict the future as to envision a Commentary that impugns number of potential futures that can tell the government what an individual’s character or to watch and when to dig further. motives, however, is off-limits because, like racial invective, it The officials running RAHS today are tight-lipped about is seen as a threat to the nation’s exactly what data they monitor, though they acknowledge that delicate balance. Journalists, a significant portion of “articles” in their databases come from including foreign news publicly available information, including news reports, blog organizations, have frequently posts, Facebook updates, and Twitter messages. (“These been charged under the articles have been trawled in by robots or uploaded manually” country’s strict libel laws. In by analysts, says one program document.) But RAHS doesn’t 2010, the New York Times Co. need to rely only on open-source material or even the sorts of settled a lawsuit over a column intelligence that most governments routinely collect: In in the International Herald Singapore, electronic surveillance of residents and visitors is Tribune about “dynastic pervasive and widely accepted. politics,” which implied that Lee Hsien Loong, the prime Surveillance starts in the home, where all minister, owed his job to Internet traffic in Singapore is filtered, nepotism. Lee’s father is Lee Kuan Yew, Singapore’s first a senior Defense Ministry official told me (commercial and prime minister, co-founder of business traffic is not screened, the official said). Traffic is the People’s Action Party, and monitored primarily for two sources of prohibited content: the country’s patriarch— porn and racist invective. About 100 websites featuring sexual revered in Singapore like content are officially blocked. The list is a state secret, but it’s George Washington might be in generally believed to include Playboy and Hustler magazine’s the United States if he were still websites and others with sexually laden words in the title. (One alive. The company paid Singaporean told me it’s easy to find porn—just look for the $114,000, and the Herald web addresses without any obviously sexual words in them.) Tribune published an apology. All other sites, including foreign media, social networks, and blogs, are open to Singaporeans. But post a comment or an Not only does the govern- article that the law deems racially offensive or inflammatory, ment keep a close eye on what its citizens write and say publicly, but it also has the legal authority to monitor all manner of electronic commu- 68 JULY/AUGUST 2014

nications, including phone calls, under several domestic obtain an Internet account must also show identification—in the security laws aimed at preventing terrorism, prosecuting drug form of the national ID card that every citizen carries—and dealing, and blocking the printing of “undesirable” material. Internet service providers “reportedly provide, on a regular basis, According to the civil rights watchdog Privacy International, information on users to government officials.” The Ministry of “the government has wide discretionary powers … to conduct Home Affairs also has the authority to compel businesses in searches without warrants, as is normally required, if it Singapore to hand over information about threats against their determines that national security, public safety or order, or the computer networks in order to defend the country’s computer public interest are at issue.” systems from malicious software and hackers, a defense official told me. The U.S. Congress has been debating for years now a The surveillance extends to visitors as well. Mobile-phone SIM similar provision that could compel some industries deemed cards are an easy way for tourists to make cheap calls and are crucial to the U.S. economy or security to hand over threat data, available at nearly any store—as ubiquitous as chewing gum in but it has been blocked by the Chamber of Commerce and the United States. (Incidentally, the Singaporean government businesses that see it as costly, heavy-handed government banned commercial sales of gum because chewers were regulation of private security matters. depositing their used wads on subway doors, among other places.) Criminals like disposable SIM cards because they can be Perhaps no form of surveillance is as pervasive in Singapore as hard to trace to an individual user. But to purchase a card in its network of security cameras, which police have installed in Singapore, a customer has to provide a passport number, which more than 150 “zones” across the country. Even though they is linked to the card, meaning the phone company—and, adorn the corners of buildings, are fastened to elevator ceilings, presumably, by extension the government—has a record of every and protrude from the walls of hotels, stores, and apartment call made on a supposedly disposable, anonymous device. lobbies, I had little sense of being surrounded by digital hawk eyes while walking around Singapore, any more than while Privacy International reported that Singaporeans who want to 69FOREIGN POLICY

surfing the web I could detect the digital filters of government In 2009, Singapore’s leaders decided speech-minders. Most Singaporeans I met hardly cared that they to expand the RAHS system and the use of live in a surveillance bubble and were acutely aware that they’re scenario planning far beyond the realm not unique in some respects. “Don’t you have cameras every- where in London and New York?” many of the people I talked to of national security—at least as it’s commonly understood in the asked. (In fact, according to city officials, “London has one of the United States. They established the Strategic Futures Network, highest number of CCTV cameras of any city in the world.”) staffed by deputy secretaries from every ministry, to export the Singaporeans presumed that the cameras deterred criminals and rahs methods across the entire government. The network looks accepted that in a densely populated country, there are simply beyond national security concerns and uses future planning to things you shouldn’t say. “In Singapore, people generally feel address all manner of domestic social and economic issues, that if you’re not a criminal or an opponent of the government, including identifying “strategic surprise” and so-called “black you don’t have anything to worry about,” one senior government swan” events that might abruptly upset national stability. official told me. The RAHS team has mounted a study on the public’s attitude This year, the World Justice Project, a U.S.-based advocacy toward the housing system and what people want out of it. The group that studies adherence to the rule of law, ranked Singapore provision of affordable, equitable housing is a fundamental as the world’s second-safest country. Prized by Singaporeans, promise that the government makes to its citizens, and keeping this distinction has earned the country a reputation as one of the them happy in their neighborhoods has been deemed essential most stable places to do business in Asia. Interpol is also to national harmony. Eighty percent of Singapore’s citizens live building a massive new center in Singapore to police cybercrime. in public housing—fashionable, multiroom apartments in It’s only the third major Interpol site outside Lyon, France, and high-rise buildings, some of which would sell for around U.S. Argentina, and it reflects both the international law enforcement $1 million on the open market. The government, which also owns group’s desire to crack down on cybercrime and its confidence about 80 percent of the city’s land, sells apartments at interest that Singapore is the best place in Asia to lead that fight. rates below 3 percent and allows buyers to repay their mortgages out of a forced retirement savings account, to which employers But it’s hard to know whether the low crime rates and also make a contribution. The effect is that nearly all Singaporean adherence to the rule of law are more a result of pervasive citizens own their own home, and it doesn’t take much of a bite surveillance or Singaporeans’ unspoken agreement that they out of their income. mustn’t turn on one another, lest the tiny island come apart at the seams. If it’s the latter, then the Singapore experiment Future planning has been applied to a broad variety of policy suggests that governments can install cameras on every block in problems. It has been used to study people’s changing attitudes their cities and mine every piece of online data and all that still wouldn’t be enough to dramatically curb crime, prevent about how kids should be terrorism, or halt an epidemic. A national unity of purpose, a educated and whether it’s sense that we all sink or swim together, has to be instilled in the time to lessen Singapore’s population. So Singapore is using technology to do that too. historically strong emphasis on test scores for judging student achieve- NICKY LOH/GETTY IMAGES; PHOTOILLUSTRATION BY LEANDRO CASTELAO ment. The Singapore Tourism Board used the methodology to examine trends about who will be visiting the country over the next decade. Officials have tried to forecast whether “alternative foods” derived from experiments and laborato- ries could reduce Singa- pore’s near-total depen- dence on food imports. Singaporeans have even begun studying what officials describe as a perva- sive “nostalgia” among many citizens, who are longing for a simpler, slower-paced time before the city-state’s breathtaking 70 JULY/AUGUST 2014

economic rise, moving from Third World to First World status in But the social contract is negotiable and “should not be taken a generation and a half. “But there is also an ugly side to for granted,” the RAHS team warns. “Nor should it be expected nostalgia,” the government warns. “It can be about rejecting to be perpetual. Surveillance measures considered acceptable certain aspects of the present, such as the growth of Singapore today may not be tolerable by future generations of Singapor- into a diverse, global city, and cultivating an insular sense of eans.” At least not if those measures are applied only to them. nationalism. We explore what can be done to channel this urge One future study that examined “surveillance from below” for nostalgia in a direction that is more forward-looking.” concluded that the proliferation of smartphones and social media is turning the watched into the watchers. These new But the future is one of the things that worries Singaporeans. technologies “have empowered citizens to intensely scrutinise In 2013, the government issued a so-called “population white government elites, corporations and law enforcement officials … paper” that described its efforts to grow the country and forecast increasing their exposure to reputational risks,” the study a 30 percent population increase by 2030, bringing the number found. From the angry citizen who takes a photo of a policeman of residents to as many as 6.9 million in the already crowded sleeping in his car and posts it to Twitter to an opposition city-state. Immigrants were expected to make up half the total. blogger who challenges party orthodoxy, Singapore’s leaders Singaporeans revolted. Four thousand people attended one rally cannot escape the watch of their own citizens. against the population plan—one of the largest public protests in the country’s history. The white paper revealed a potential In the nation’s 2011 elections, the People’s Action Party won double threat: Singaporeans were already turning against the “only” 81 out of 87 seats in Parliament, an outcome that most government for growing the country too big and too fast, and political observers considered a disaster. The opposition had its now they were turning on their immigrant neighbors, whom best showing in Singapore’s history. For the first time, partisan they blamed for falling wages and rising home prices. adversaries mounted a credible threat to the status quo, and Singaporeans voted in larger numbers against the government’s The protests shook the “nation’s mood” at the highest level, and management of the country. Even Prime Minister Lee Hsien the government was prepared to take drastic measures to quell the Loong saw his party’s victory as an alarming loss. “It marks a unrest, starting with cutting immigrant labor. The National distinct shift in our political landscape,” Lee told reporters after Population and Talent Division—a kind of immigration-cum- the vote. “Many [Singaporeans] wish for the government to human-resources department—intends to slow the growth of the adopt a different style and approach.” workforce to about 1 to 2 percent per year over the rest of the decade, which is a dramatic departure from the more than 3 The election results had little to do with surveillance per se, percent annual growth over the past 30 years. With that, GDP but surveillance and its ostensible benefits are an integral part growth is likely to retract to an average of 3 to 4 percent per year. of how the government has defined Singapore as a nation. When It is impossible to know whether wealthy Singaporeans—and the Peter Ho, the senior defense official, met with John Poindexter country’s foreign investors—will tolerate an economic slow- back in 2002 about the Total Information Awareness program, down. (Or whether a country with an abysmal fertility rate of 1.2 Poindexter suggested that Singapore would face a much easier children can even sustain its economy without foreign labor.) time installing a big-data analysis system than he had in the But the government has concluded that a slowdown is the right United States, because Singapore’s privacy laws were so much price to pay for keeping a harmonious society. The data tells it so. more permissive. But Ho replied that the law wasn’t the only consideration. The public’s acceptance of government programs Singapore is now undertaking a multiyear initiative to study and policies was not absolute, particularly when it came to how people in lower-level service or manufacturing jobs could be those that impinged on people’s rights and privileges. replaced by automated systems like computers or robots, or be outsourced. Officials want to understand where the jobs of the It sounds like an accurate forecast. In this tiny laboratory of future will come from so that they can retrain current workers and big-data mining, the experiment is yielding an unexpected adjust education curricula. But turning lower-end jobs into more result: The more time Singaporeans spend online, the more they highly skilled ones—which native Singaporeans can do—is a step read, the more they share their thoughts with each other and toward pushing lower-skilled immigrants out of the country. their government, the more they’ve come to realize that Singapore’s light-touch repression is not entirely normal among If national stability means more surveillance developed, democratic countries—and that their government is and big-data scanning, Singaporeans seem not infallible. To the extent that Singapore is a model for other willing to make the trade-off. countries to follow, it may tell them more about the limits of big data and that not every problem can be predicted. “In Singapore, the threshold for surveillance is deemed relatively higher,” according to one RAHS study, with the Shane Harris is a senior staff writer at FOREIGN POLICY and the majority of citizens having accepted the “surveillance situation” author of the forthcoming book @War: The Rise of the Military- as necessary for deterring terrorism and “self-radicalization.” Internet Complex, which will be published in November 2014. Singaporeans speak, often reverently, of the “social contract” between the people and their government. They have con- Editor’s note: Shane Harris’s trip to Singapore was jointly sponsored sciously chosen to surrender certain civil liberties and individu- by the Singapore International Foundation and the New America al freedoms in exchange for fundamental guarantees: security, Foundation, where he is a fellow. The FP Group, which publishes education, affordable housing, health care. FOREIGN POLICY, is partnering with Singapore’s Centre for Strategic Futures and Peter Ho, who is quoted above, to convene an expert forum on the global impacts of rapid technological change. Neither Peter Ho nor the Singaporean government had any control over the content of this article. FOREIGN POLICY 71

IRAN IS UP. AMERICA IS DOWN. NORTH KOREA ISN’T AS BAD AS YOU THINK. BUT WHAT DO NUMBERS RATING THE STABILITY OF A COUNTRY REALLY MEAN? 72 JULY/AUGUST 2014

IN 2013, JUST HOW MUCH DID THE UNITED STATES SUFFER FROM The 2013 overview uses data gathered throughout that calendar THE GOVERNMENT SHUTDOWN? DID INDIA’S ECONOMIC SLOW year (so readers will have to wait a while longer to learn how Russia’s DOWN AFFECT ITS OVERALL SECURITY AND GOVERNANCE? AND foray into Ukraine affected both countries). The index shows how, within DID THE ARAB SPRING MAKE ANY LASTING PROGRESS TOWARD a relatively short time frame, the promise of nascent democracies can GENUINE DEMOCRACY? quickly unravel. The hope for groundbreaking change in Libya was quashed, as the embattled central government struggled to bring armed The very structure of a country, even a healthy one, can be challenged militias to heel. And despite optimism from its economic and political by overwhelming events during the course of a year—and the conse- benefactors in the West, South Sudan—the world’s newest country— quences inform not only the legitimacy of the state, but also the experi- took a dive in stability as it descended into civil war. ences of its citizens, often for decades to come. For 10 years now, the Fragile States Index, created by the Fund for Peace and published by But there is good news too. Iran, having initiated tentative nuclear FOREIGN POLICY, has put countries into perspective by providing an annual negotiations with the West, has the most improved score on the index. snapshot of their vitality and stability (or lack thereof) and ranking them And several emerging economic powerhouses weathered internal strife— accordingly. (This year, the name of the project has been changed from the an unprecedented corruption crackdown in China and anti-government Failed States Index to the Fragile States Index. While the methodology protests in Turkey, for instance—to see improvement in their scores. remains the same, the new title is an acknowledgment that all states, to different degrees, face conditions that threaten the livelihoods of More unexpected, perhaps, is that North Korea is less fragile than one their citizens.) might think, as the index’s “Human Flight” indicator shows. And though the West likes to pride itself on being stable in comparison with the rest What these metrics often show is that rarely, if ever, do states change of the world, the data show this isn’t necessarily the case on all fronts: fundamentally from year to year: Nine of the index’s 10 most fragile states Partisan bickering and the controversial activities of the National in 2013, for instance, held the same distinction the prior year. Look a little Security Agency, for instance, worsened the U.S. score. closer, however, and there are significant, even surprising, developments and trends—in single countries, across regions, and even within the index’s Although the overall picture here might seem familiar, the numbers 12 political, economic, and social indicators. themselves reveal narratives that were unforeseen, and perhaps over- looked, in 2013. INDEX BY THE FUND FOR PEACE • ILLUSTRATIONS BY LUKE SHUMAN 73FOREIGN POLICY

FRAGILE TURKEY STATES BY RANK ISTANBUL RISING 10 MOST FRAGILE UNITED STATES At first glance, it would seem 1 SOUTH SUDAN AMERICAN Turkey had a rough year: 2 SOMALIA EXCEPTIONALISM Corruption scandals forced 3 CENTRAL AFRICAN REPUBLIC several ministers to resign, 4 DEMOCRATIC REPUBLIC OF THE CONGO The political brinkmanship that anti-government protesters 5 SUDAN has defined Washington clashed with police in a 6 CHAD throughout Barack Obama’s number of cities, and the 7 AFGHANISTAN administration came to a head country continued to 8 YEMEN during the government incarcerate journalists at an 9 HAITI shutdown in October 2013. As alarming rate. Yet the 10 PAKISTAN a result, the United States had country made modest its worst score on the progress on the Demo- Factionalized Elites indicator graphic Pressures, Public (for indicator definitions, see Services, and Security p. 77) in the nine years that the Apparatus indicators, to country has been included in emerge as one of the index’s the index. The release of most improved countries. classified NSA documents by 10 LEAST FRAGILE AUSTRALIA Edward Snowden, as well as IRELAND the April 2013 bombings at the 169 ICELAND Boston Marathon, also 170 contributed to the country’s 171 LUXEMBOURG comparative decline. 172 NEW ZEALAND 173 SWITZERLAND 174 175 NORWAY 176 DENMARK 177 SWEDEN 178 FINLAND 10 MOST WORSENED S +5.3 PTS CENTRAL AFRICAN REPUBLIC +4.2 PTS SYRIA +3.3 PTS LIBYA +3.1 PTS MOZAMBIQUE +2.5 PTS PHILIPPINES +2.3 PTS SOUTH SUDAN +2.2 PTS FRANCE +1.9 PTS SINGAPORE +1.9 PTS THAILAND +1.9 PTS UNITED STATES 10 MOST IMPROVED T IRAN BALKAN RISE SERBIA 2.5 PTS ZIMBABWE BOSNIA-HERZEGOVINA 2005: 93.5 pts 100 pts 2.4 PTS Ten years ago, Bosnia-Herzegovina was still 2.4 PTS CUBA struggling to build a sustainable state after -17.6 80 pts 2.0 PTS MEXICO the 1990s war that tore it apart. Since then, 2014: 75.9 pts 2.0 PTS BOLIVIA the country has improved more than any 1.9 PTS CHINA other country in the index. Major concerns PTS 1.9 PTS about ethnic tensions, corruption, and 60 pts 1.8 PTS FIJI governance remain, but the disparities 1.8 PTS IVORY COAST among different groups and regions have 1.8 PTS KYRGYZSTAN greatly improved, as have measures related 1.8 PTS to refugees, internally displaced persons, TURKEY and demographic pressures. *MORE POINTS INDICATE WORSE PERFORMANCE. 74 MARCH/APRIL 2014 74 JULY/AUGUST 2014

ZIMBABWE SINGAPORE STRONGMAN’S THE RICH SURPRISE AND THE REST President Robert Mugabe’s Singapore remains one of the administration maintains an world’s richest countries. But abysmal human rights record. while its economy continued to Yet a little good news may finally perform well in 2013, the be coming out of Zimbabwe. In country faced pressures in 2013, the government instituted other areas that worsened its some positive, albeit tenuous, overall rating. Pollution, due in political reforms, including large part to the burning of approving a new constitution forests in nearby Indonesia, that limits future presidents to was at record levels. In two terms. And while still December 2013, 400 foreign struggling with poverty, workers clashed with police— Zimbabwe has seen significant the country’s largest riots in economic growth in recent years. more than four decades—after an Indian migrant worker was reportedly hit by a bus and killed; the incident highlighted simmering resentment among some low-wage foreign laborers about perceived discrimination and poor working conditions. POPULATION PRINCIPLES HIGH WARNING AT ITS CORE, BENEATH THE describing those nations that are VERY HIGH ALERT indicator scores and state-by-state the most fragile, “Warning” HIGH ALERT rankings, the Fragile States Index is describing those that fall in the ALERT a measure of the livelihoods of real middle, and “Very Sustainable” as VERY HIGH WARNING people. Security-force abuses and the most stable countries, a little WARNING inadequate public services, for over half of the index’s populations instance, are not simply inputs into live in the “High Warning” group of LESS STABLE a formula; they are parts of citizens’ states, while only 17 percent live in STABLE everyday reality. more stable nations. To look at the VERY STABLE data another way, a little more than So how, then, is most of the 83 percent live in “Warning” SUSTAINABLE world living? It turns out, not so nations or worse. VERY SUSTAINABLE well. With “Very High Alert” 1.9% 5.4% 11.4% 7.7% 51.9% 5.0% 0.8% 3.4% 10.6% 1.7% 0.1% FOREIGN POLICY 75 FOREIGN POLICY 75

WHAT’S BEHIND THE RANKINGS? fragile countries and white being the least fragile. What does this show us? Most importantly, there are no flat lines. North Korea, for The trends that inform the rankings of the Fragile States Index are complex. The chart below breaks them down visually: A country’s overall score is calculated example (bolded in orange), is fragile according to some indicators, and not according based on its performance on 12 distinct indicators. Each line on the chart rep- to others. The Hermit Kingdom is not alone. Every country in the index has divergent resents one of the 178 countries in the index and shows where it scored on the in- social, political, and economic pressures that make up its overall score. dicators. The colors of the lines represent a 10-point “tier,” yellow being the most MOST LEAST EACH LINE FRAGILE FRAGILE IS A COUNTRY EMPTY NEST DEMOGRAPHIC REFUGEES GROUP HUMAN UNEVEN POVERTY AND There are myriad reasons why PRESSURES AND IDPS GRIEVANCE FLIGHT DEVELOPMENT ECONOMIC DECLINE citizens flee a country. A state 10 10 10 9 10 9 10 10 may be embroiled in a 8 9 9 8 decades-long humanitarian 7 8 8 7 99 6 7 7 6 crisis (Somalia), or it may 5 6 6 5 88 simply be too small to offer 5 5 4 enough economic opportunity 4 4 3 77 for the high-skilled elite among 3 3 2 2 2 1 66 its citizenry (Micronesia). 1 1 0 Whatever the cause, human 0 0 55 flight can be costly—draining a 5.50 country of its youngest talent 5.04 6.01 and a broader workforce that could boost economic growth. Here are the top 15 places where people are buying a one-way ticket to anywhere. Haiti (9.1) Samoa (8.9) Somalia (8.9) Guyana (8.8) Micronesia (8.7) Sudan (8.7) Cape Verde (8.6) Malawi (8.4) Chad (8.3) Guinea-Bissau (8.3) Sierra Leone (8.3) Zimbabwe (8.3) Grenada (8.2) Sao Tome and Principe (8.2) Mali (8.1) UNDER 4 44 PRESSURE 3 Despite Africa’s recent 2 33 economic boom, the continent 1 continues to struggle with 0 22 demographics. Of the 10 worst performers on the Demographic 6.15 11 Pressures indicator, only Yemen was based outside the 0 0 continent. Even Africa’s more stable states struggle on this 6.44 5.83 front. Zambia, which continued to see positive economic growth and improvements in poverty and health in 2013, tied for the fourth-worst score on demographics, yet it barely cracks the top 50 in the overall rankings. AVERAGE SCORE: 76 JULY/AUGUST 2014

DEFINING THE INDICATORS regions within the state. Poverty and Economic Decline: Poverty rates and economic performance. State Legitimacy: Corruption and other measures of Demographic Pressures: Concerns related to population, such as food scarcity, democratic capacity, such as government performance and electoral process. population growth, and mortality rates. Refugees and Internally Displaced Persons: Public Services: Provision of education, health care, sanitation, and other ser- Concerns associated with population displacement and refugees. Group Grievance: vices. Human Rights and Rule of Law: The protection and promotion of human Tensions and violence among groups within the state. Human Flight and Brain rights. Security Apparatus: Internal conflict and the proliferation of nonstate Drain: Levels of migration out of the country including, but not limited to, the flight armed groups. Factionalized Elites: Conflict and competition among local and of refugees and educated individuals. Uneven Economic Development: Dispari- national leaders. External Intervention: Levels of foreign assistance as well as ties in development among different ethnic and religious groups and among imposed interventions, such as sanctions or military invasion. LEGITIMACY PUBLIC HUMAN SECURITY FACTIONALIZED EXTERNAL HUMAN RIGHTS OF THE STATE SERVICES RIGHTS APPARATUS ELITES INTERVENTION BY REGION 10 10 Africa 10 9 10 10 10 Worst: Dem. Rep. of Congo (10.0) 9 9 8 9 9 9 Best: South Africa (4.3) 8 8 7 8 8 8 7 7 6 7 7 7 Asia 6 6 5 6 6 6 Worst: North Korea (9.6) 5 5 4 5 5 5 Best: New Zealand (1.1) 4 4 3 4 4 4 3 3 2 3 3 3 Middle East 2 2 1 2 2 2 Worst: Syria (9.9) 1 1 0 1 1 1 Best: Qatar (5.9) 0 0 0 0 0 5.87 Americas 6.34 5.72 5.82 6.27 5.89 Worst: Haiti (7.5) Best: Canada (2.1) Europe Worst: Russia (8.7) Best: Finland, Ireland, the Netherlands (1.2) CENTRALIZE AND DELIVER Years removed from the brutal military offensive that quashed the Tamil Tiger insurgency, Sri Lankan President Mahinda Rajapaksa often acts like his country is still at war. Rajapaksa has centralized power within the executive branch, and his security forces continue to be implicated in abuses against suspected rebels. But the index’s indicators show that the island does have at least one thing going for it: Of the 30 most fragile states, Sri Lanka performed by far the best on the Public Services indicator. THE BENEFITS OF AUTHORITARIANISM How is North Korea not one of the world’s most fragile states? After all, it is governed by arguably the most brutal regime in existence. It turns out that some indicator scores are improved by absolute authoritarianism. The Hermit Kingdom’s rank is bolstered by its commitment to keeping refugees out and—as indicated by its strong Human Flight rating—preventing its own people from leaving. FOREIGN POLICY 77

The Bleeding Edge The Barostim neo, which helps lower blood pressure, is produced by the firm CVRx in Minneapolis.

Scientists at the University of Minnesota’s Lillehei Heart Institute removed cells from a mouse heart and are now hoping to repopulate it with human-induced pluripotent stem cells. For decades, Minnesota has led the world in developing medical technology. But now red tape at home and competition abroad are threatening its dominance. By Sarah Laskow Photographs by Christopher Leaman

IN 1952, a group of surgeons performed the $15 billion worth of medical technology each year; last year, world’s first successful open-heart surgery at exports were valued at more than $43 billion. the University of Minnesota. They knew they had just a few minutes—10 at the very Still, the United States has remained these companies’ biggest most—after cutting off their patient’s market because Americans wanted—and would pay for—the most advanced medical devices out there. Today, the U.S. circulation to slice into her heart and sew up medtech market is worth around $127 billion, nearly 40 percent of the world’s total. a hole inside, before risking damage to her Recently, however, the industry centered in the Land of 10,000 brain. If left untreated, the hole could have Lakes has hit something of a crisis point, both at home and abroad. Minnesota’s biggest medtech companies have long killed her within a few years. It took them five and a half minutes preferred to just make updated versions of the products they already know can sell. That is, in order to avoid the most to do the procedure—and the patient lived. challenging demands of a complex, sluggish federal bureaucracy that regulates new devices, they have left the real innovation to Within six years, Walt Lillehei, a member of the surgical team, enterprising smaller companies. For a while, that setup worked just fine. But new government pressures, including provisions of would go on to perform more than 400 open-heart surgeries. the Affordable Care Act, have made the path to profitability less clear, and investors that support innovative companies are more Most succeeded in keeping patients’ once-failing hearts pumping risk-averse than ever: Early-stage funding for new technologies has been on the decline. for decades. But sometimes, stitches put in during surgery would Meanwhile, traditional foreign markets for Minnesota’s damage a heart and send it off its rhythm. A pacemaker had been companies are toying with new, tighter regulations, prompting businesses to consider putting resources into other, rapidly developed to reset a patient’s heartbeat, but it was the size of a developing countries. Even Medtronic recently announced that it plans to move more of its corporate operations overseas in order small microwave oven and had to be plugged into the wall. Still, to save money and capitalize on new opportunities. But many emerging markets are trying to boost their own medtech this counted as an improvement: Just a few years earlier, the only industries so that perhaps, one day, they can seize Minnesota’s mantle. “Every country who doesn’t have a medtech business way to fix an erratically beating heart was to regularly shock the wants one,” says Shaye Mandle, president of the Minneapolis- based trade group LifeScience Alley. patient’s chest with as many as 75 volts of electricity, leaving The more that foreign doctors, engineers, managers, and blisters behind. investors can learn about the medtech industry, the more competition American companies will face. And Minnesota, with In 1957, Lillehei asked Earl Bakken, an electrical engineer America’s highest concentration of medtech jobs, has the most at stake in making sure the industry Medtronic spawned stays on employed by the university’s hospital, whether he could make top—no easy task. pacemakers portable. About a month later, Bakken showed up “If medtech disappeared from the face of the Earth, the biggest hole economically would be right here,” Mandle says of at work with what he would later call the Medtronic 5800. Minnesota. If the state’s industry and the infrastructure that supports it can’t adapt to changing circumstances—and fast—a (Medtronic was the name of Bakken’s repair company, which hole could also rip open as medtech’s epicenter moves to the other side of the world. he had co-founded in a Minneapolis garage.) The device, the IN THE BACK ROOM OF THE BAKKEN MUSEUM, HOUSED IN A MANSION first of its kind, was small enough to fit into an adult’s hand on one of Minneapolis’s famous lakes, David Rhees, the and ran on a 9-volt battery. Connected to the heart by just a museum’s executive director, pulls down what looks like a large, opaque gummy candy with electronics embedded inside. It is a thin wire and attached to the outside of the body, it could Chardack-Greatbatch pacemaker (named for its creators), the first device of its kind to be implanted in a person’s body. travel wherever a patient did. Bakken had based the design on Licensed to Medtronic in 1961, just a few years after Bakken’s initial technological breakthrough, it is roughly the size of a a circuit for a metronome he had found in Popular Electronics. hockey puck and weighs about the same too. The electronics inside include the five little disks that powered it. It tested well in dogs, and as soon as he had a chance, Lillehei Nearby, the museum’s main hall displays a wide selection of connected it to a human heart. pacemakers, each one smaller than the next, developed over many years. Each also has features different from those of its It worked. predecessors. One is even nuclear-powered. Basically, Rhees explains, Bakken’s first, simple design “opened up a cycle of What happened next was monumental—and not just for innovation [for pacing] that really hasn’t stopped.” patients with arrhythmias. At the time of the pacemaker’s development, Minnesota’s largest industry by far was agriculture. But Bakken’s revolutionary device set the Midwestern state on a new course: Long known for milling wheat and processing meat, Minnesota would rapidly become a global hub of medical technology development. Over the next few decades, Medtronic grew to become one of America’s largest corporations—and the largest to focus exclu- sively on developing and marketing medical devices. (In 2013, Medtronic raked in $16.6 billion in revenues.) And like a massive glacier calving icebergs, Medtronic spun off other Minneapolis- based medtech companies. These businesses, along with others eager to join the state’s thriving medtech scene, created heart valves, ventilators, heart-rate monitors, defibrillators, lasers, and an abundance of other devices. By 1985, the state’s health-care industry, including medtech companies and major providers like the Mayo Clinic, accounted for 200,000 jobs and more than $6 billion in annual sales. Before too long, Minnesota’s government was pitching the state as “the heart of the nation’s health care.” But the medtech industry had already expanded well beyond U.S. borders. In 1967, Medtronic opened its first international service center in Amsterdam, and in the mid-1970s, one-third of its executives were working to sell products in international markets. By the end of the 20th century, American companies like Medtronic were exporting some 80 JULY/AUGUST 2014

Manny Villafaña, Medtronic’s first international sales net sales in 2013, is just a few slots behind A researcher at manager, was a part of this cycle. The way he tells the story, he Boston Scientific on the list of the world’s the University of was swimming at a Minneapolis hotel in 1971 when he ran into largest medical-device companies. Minnesota Wilson Greatbatch. Villafaña had been working in South examines stem America, and he had noticed that pacemakers usually failed Health care is still Minnesota’s biggest cells. after a year or so. It turned out that Greatbatch, one of the industry, and medtech specifically attracted creators of the first implantable pacemakers, had started a new company, in Clarence, New York, to create batteries for medical nearly 60 percent of venture capital invest- devices. And he had already licensed one that could last six years, maybe more. ments in the state in 2013, according to Minnesota’s economic But the battery contained lithium—the same element that, development department. As medtech companies have grown more recently, has caused electric vehicles’ batteries to burst into flames—and not everyone trusted the safety, power, or and multiplied, local manufacturers, intellectual property longevity of Greatbatch’s invention. Nevertheless, Villafaña, standing by the pool in a paper bathing suit bought from a lawyers, regulatory experts, communications consultants, and vending machine, was eager to hear more. The two met later that day to discuss Greatbatch’s work, and within months, engineers have specialized in the field too. More than any- Villafaña was raising money to start a new company. A year later, he officially opened Cardiac Pacemakers Inc. to develop where else in the United States, Minnesota has come to depend devices with Greatbatch’s batteries inside. on the medtech industry for jobs—and enormous profits. “In Many medtech companies have started like this, with a business-minded person who understands patients’ needs and an the last one and a half to two decades, their margins were engineer or a doctor who knows how to satisfy them. The company that resulted from that particular hotel meeting sold in astronomical,” Ed Yu, a principal at PricewaterhouseCoopers 1978 to Indianapolis-based Eli Lilly and later, in 2006, became part of Boston Scientific, one of the world’s largest medtech (PwC) who focuses on health innovation, says of major companies. (Despite its name, the company has more employees in Minnesota than in Massachusetts.) Villafaña’s next endeavor, American medtech companies. “I’ve heard of 70 percent, to St. Jude Medical, created the first clinically (and commercially) successful mechanical heart valve with two flaps, which could even 90 percent, gross margins.” open like French doors to let blood through—an innovation that reduced the risk of clotting. Today, St. Jude, with $5.5 billion in Minnesota-based companies still sell pacemakers—plenty of them—and simple devices, such as surgical scissors and medical tubing. More-advanced devices, however, treat everything from sinusitis to high blood pressure to symptoms of multiple sclerosis. They can stimulate spinal nerves to reduce chronic pain or send pulses of electricity to the brain to treat Parkinson’s disease. Implants adjust the breathing patterns of people with sleep apnea. Surgeons can use a laser to ablate cancerous cells in the brain of a patient lying in another room in an MRI machine. A few years back, a team of researchers at the University of CHRISTOPHER LEAMAN Minnesota managed to grow bioartificial rat hearts and get them beating, and the university’s cardiology labs are now working on stem-cell technology that could treat heart disease. But innovation actually hasn’t happened at the superfast pace 81FOREIGN POLICY

one might expect—certainly not with the major players, such as signals the heart, kidneys, and arteries to Although CVRx Medtronic, St. Jude, and the like. These companies, Yu says, lower blood pressure. The company makes the develops products “figured out that the way to maximize their profit is selling more of device in a small Minnesota facility—a in Minneapolis what they had.” For instance, they make the same device, smaller modern-day equivalent of Bakken’s garage (right), it has tested them in Europe. or cheaper, rather than developing something entirely novel. with a clean room where production happens In part, this is due to simple economics. If a company can and another where CVRx bench-tests qualities make a ton of money without having to invest heavily in like strength and heat-tolerance. But in 2003, when CVRx tested research and development, it will jump at the chance. But the the device on a human, for just a few minutes, it was in Bern, anchors of Minnesota’s industry have also moderated their Switzerland. The first operation to implant the device more speed of innovation because of the U.S. Food and Drug Adminis- permanently happened in Bern, too, with Kieval standing in the tration (FDA). operating room next to the doctor. Coming up with ideas for new devices is the easy part, In CVRx’s office, one wall is covered with silver plaques— medtech entrepreneurs say. The harder—and much longer— patents and trademarks from places where the company would like part is moving the idea to commercialization. High-risk to sell its products, including the United States. Right now, though, innovations often have to be tested on animals before the FDA CVRx is focused on selling its device in European countries, from will approve them for a small, exploratory trial with humans. If Spain to Norway to Hungary. that goes well, a more expansive (and expensive) trial follows. The European process goes faster in part because regulators Only then, if the FDA deems a device both safe and effective, can want to know only that a new device won’t harm a patient. Unlike the company move toward commercializing it. the FDA, the more decentralized European system leaves the An industry-supported PwC survey in 2010 found that, for question of how well a device works in improving or managing a innovative, higher-risk devices, it took companies an average of health condition to doctors, patients, and the people who pay the 54 months to move from preliminary communi- bills. That makes it an enticing proving ground cations with the FDA to formal submission to for U.S. medtech companies hoping to convince the final green light. The same survey reported the FDA of new products’ safety and worth so that that, apart from marketing and related costs, If a company they can eventually be marketed back home. companies working on the same class of devices can make money But this could soon change. In 2011, a French spent an average of $94 million on the road to without having to commercial clearance. (The FDA is working to company’s defective breast implants pushed European lawmakers to re-examine the conti- shorten the average time it takes to make invest heavily nent’s oversight system. In October 2013, the decisions; a plan to implement new recommen- in research and European Parliament voted to increase scrutiny dations is due in December.) development, of device-makers. As of June 2014, those new rules still hadn’t been finalized, but some Once upon a time, this process was faster and cheaper. Take Greatbatch and Villafaña’s it will jump at the lawmakers are still pushing for a stricter, more lithium-powered pacemaker. The two men didn’t chance. centralized system, closer to the U.S. model. have to worry about convincing government Europe’s shifting environment, however, is officials that their device was safe, because the only one relatively small piece of the puzzle FDA only began comprehensively regulating jeopardizing the medtech industry’s typical medical devices in 1976. research-and-development process. More so than Increasingly, industry executives and experts say, Minnesota’s ever, particularly in the United States (though Europe is not behemoths have been acquiring smaller companies, but waiting immune), it’s unclear that a device that meets regulators’ stan- until after the newbies have tangled with the FDA. In the mean- dards will be able to make money. And that really spooks investors. time, funding for these new companies often comes from private Medtech companies make money when their products are investors or venture capitalists who have already made fortunes in purchased by hospitals (or purchasing coalitions), which in medtech, know the industry, and want to back the next big thing. turn ask payors—insurance companies and the government— And to raise the chance of getting FDA approval (and making for reimbursements. money in the interim), companies with this funding often try out Insurers have long found ways to nip and tuck these payments; their products first across the Atlantic. for instance, they might limit which patients qualify for certain But, medtech executives say, that system is now breaking down. procedures, including ones in which medical devices are required. As a general rule, when hospitals cannot bill insurers for a chunk of a device’s cost, they are less likely to buy it. INVESTORS HAVE ALWAYS BEEN NERVOUS ABOUT MEDTECH COMPANIES’ Today, as pressure grows in the United States to keep rising viability. While the FDA takes years to approve a device, the waiting health-care costs in check, insurers are not as generous with company burns through the capital it has raised. In the recent past, reimbursements. On top of that, the Affordable Care Act has this has often meant that Minnesota’s most innovative products moved Medicare, the national health program that serves aren’t immediately available to American patients. Rather, primarily the elderly, toward new “value-based” systems, which consumers in Europe get to try them first, thanks to the continent’s reward (or punish) providers for the overall outcomes of treatment, looser regulatory environment. “[The] FDA is rigorous, but not rather than paying for each service performed. For instance, a always transparent or predictable,” explains Robert Kieval, whose hospital’s ability to recoup costs will not depend directly on how CHRISTOPHER LEAMAN company, CVRx, grew out of a Minneapolis-based incubator. “So many pacemakers doctors have installed; it will depend, more you ask, ‘What else besides the U.S. market is important?’” than ever, on how many hospital visits those pacemakers can CVRx’s main product stimulates a spot on the carotid artery that preempt. Private insurers, which take cues from Medicare, are 82 JULY/AUGUST 2014



moving toward similar payment models. WHEN JIM BUCK STARTED RAISING MONEY FOR HIS COMPANY, Medtech companies, then, must prove that their products will Minneapolis-based Mardil Medical, he didn’t think he would find keep people healthier in the long term, but they are still figuring many interested parties in the United States. The company’s out what sort of evidence they need to collect in order to do so. If technology, which puts a saline-filled “bladder” around the heart they are lucky, they have anticipated these data demands in to improve the function of a particular valve, faced a difficult clinical trials and have guessed correctly at what will sell insurers regulatory pathway, one made even more challenging because an on their products. Often, however, companies aren’t even sure earlier version of the technology (owned by a different and what payors will require and end up scrambling for data once a now-defunct company) was repeatedly rejected by the FDA. device is already on the market. “The kind of evidence that FDA So Buck flew around the world to find investors in places such needs to make the regulatory decision doesn’t match the as China, Singapore, Thailand, Canada, and Romania. In 2013, he evidence payors are requiring to make reimbursement decisions,” raised more than $6 million, most of it from Agensi Inovasi says Greg Daniel, a fellow at the Brookings Institution who Malaysia (AIM), a government agency focused on innovation. AIM, studies biomedical innovation. Buck says, offered Mardil “very attractive investment terms.” In this tumult, venture capitalists are reining in their medtech Mardil wasn’t required to operate in Malaysia as part of the deal, investments in up-and-coming companies, focusing on develop- but Buck says it made good business sense. His company now has ment teams with excellent track records or new outfits with a Malaysian subsidiary and a staff there to develop part of its unusually clear paths to market. From 2007 to 2012, the value of product portfolio. And in February, in the earliest clinical trial for venture investments in U.S. medtech companies dropped by the company’s lead product, Mardil implanted its device in two about a third. In 2013, it decreased by another 17 percent, down to patients at the National Heart Institute in Kuala Lumpur. $2.1 billion. According to the industry, this drought is hurting All this involves sharing some of the knowledge built up in innovation. Without robust investment, says LifeScience Alley’s Minnesota about how to develop a successful medtech Mandle, advances in medical technology will quickly slow. business—a transfer that, Buck says, was part of what enticed his But not everywhere. Other countries are eager to pick up the investors in the first place. “Malaysia is not investing in Mardil slack. In 2011, PwC ranked the United States behind China, Medical because they’re a venture investor,” he says. “They’re India, and Brazil in an assessment of early-stage entrepreneurial trying to pivot from a low-margin [manufacturing] industry to a activity in medical technology because the three developing high-margin knowledge-based economy.” countries had more innovation efforts just getting under way Malaysia’s medtech industry is small right now, around and more easily available funding. one-fifteenth the size of Minnesota’s. The country’s extensive Still, arguably no place can compete with the deep bench of rubber industry means that its primary medical product is latex medtech infrastructure and talent that Minnesota has. surgical gloves. But the government has targeted medical One quick solution is to import the state’s expertise and A prep and supply devices as a potential area for growth. It has been use it to supplement and invigorate growth abroad. area in the working for almost a decade to improve its regulatory That’s why some of the most eager supporters of system for devices; in 2012, it passed a series of laws that American medtech companies right now are foreign Lillehei Heart required device manufacturers to register with the investors who aren’t just looking to make a profit: They Institute’s labs government, imposed new rules on device quality, and want companies in their own countries, for good. (left); a researcher authorized a Medical Device Authority to oversee these sorts stem cells (right).

new regulations. “The value we add is innovation and expertise,” Inside, however, dozens of suited executives who work in those says Buck, speaking of companies like his. buildings are chatting over omelets covered in mushroom gravy. But, he admits, it’s reasonable to think that the knowledge One of these execs is Dennis Wahr, who spent the first half of Mardil is sharing will one day enable businesspeople in Malaysia his career in Ann Arbor, Michigan, as an interventional cardiolo- to start companies—and win scarce investment dollars—without gist. (His field relies on technologies like specialized catheters to tapping into American knowledge. treat heart disease.) Having served for years on the advisory Malaysia is far from the only place that is investing heavily in boards of medical-device companies, “I always figured I’d start my its medtech infrastructure. “A lot of countries are getting more own thing,” Wahr says. He was so close to going to San Francisco aggressive about putting in protocols to set up quality clinical to start a company that he put a down payment on a house there. trials for cheaper,” LifeScience Alley’s Mandle says. Dick Bianco But then he bumped into one of Minneapolis’s most successful of the University of Minnesota’s Experimental Surgical Services, medtech leaders, Dale Spencer, who had grown a company called which runs the institution’s animal-testing labs, has gone to SciMed Life Systems into a legendary Minneapolis success story. Brazil and India to help set up labs like his. “We’re exporting (Boston Scientific acquired it in 1995, in a deal worth about safety techniques,” he says. Foreign governments, he adds, ask $869 million.) Just a few days later, “at what must have been 7 a.m.,” directly for his help. Wahr says, Spencer called to sell him on Minnesota’s advantages and Industry stalwarts are also trying to carve out a place for promised to serve on his board. Wahr changed his plans. themselves in emerging markets—hoping to take advantage of For some medtech entrepreneurs, and Wahr is one of them, them, rather than having them strictly as competitors. Medtronic, plenty of money is still here. It helps that Wahr’s last two companies for instance, has begun acquiring Chinese medtech companies; it sold quickly—within just four years—and that one went to St. Jude. opened an “innovation center” in Shanghai in 2012 (its first As for generating data to meet the new demands of regulators, research-and-development outpost outside the United States and Wahr’s company is conducting an additional, intermediate Europe); and it has said it will hire 1,000 Chinese workers by 2017. round of testing on a product in Europe. This extra trial will add “It’s an element of requirement to be able to get $30 million to the cost of developing the into those markets effectively,” says Mandle. device, but Wahr thinks it will make the “That’s not great for jobs here in the United Emerging medtech product’s ultimate success in the United States States. Some of our big companies aren’t much more likely. necessarily shrinking here, but all of their industries “People like to say that the government has growth is occurring someplace else.” in other countries slowed us down,” he says. But developing a truly might very well new idea—and making sure it works safely— Some smaller companies are leaving the should take time. Wahr points out that it took United States altogether. In an interview, one medtech executive said that he was recently on a serve local needs more than a decade to get penicillin from a petri panel populated with American CEOs who had in a way that dish to patients, and even longer to produce it moved their businesses to China because their companies on a mass scale. biggest investors were there. And heavy hitters in America never may be following suit before too long: In June, The question is: How much time? The next couple of decades promise to offer seemingly Medtronic announced an agreement to acquire can. limitless opportunities that medtech companies Covidien, a competitor incorporated in Ireland, just about anywhere can seize on—if they’re fast for $42.9 billion. If the deal goes through, and nimble enough. Genome research will lead Medtronic will become an Irish company, with to personalized health therapies; nanomaterials access to more-favorable tax rates than it has in the United States. will patch nerves, bone, and flesh; and mobile devices will track Medtronic says it wants to acquire Covidien, in part, because of real-time data from the human body. “What will happen in the the company’s “extensive capabilities in emerging market R&D next 20 years,” Wahr says of innovation, “will dwarf what and manufacturing.” happened in the last 20.” But even in this earthquake of a development, there could be Emerging medtech industries in other countries that want a piece good news for Minneapolis: Medtronic says it will maintain a of this pie might very well serve local needs in a way that companies strong presence in Minnesota and that the deal will allow it to rooted in America never can. Still, Minnesota’s companies—and U.S. invest $10 billion in the U.S. medtech industry—including in medtech infrastructure generally—don’t have to forfeit their global early-stage companies that need venture capital. lead in the coming burst of medtech innovation. Staying ahead, however, requires big changes. The industry will need to stop relying so heavily on short-term profits, and, along CHALLENGES TO MINNESOTA’S MEDTECH DOMINANCE ARE CONSTANTLY with the government, it must stop letting exciting ideas languish. mounting. But at 8 a.m. on a Tuesday in May, at least, things look Above all, both sides will need to figure out how to balance good like they always have at the Good Day Cafe. regulations and a desire to cut health-care costs with genuine MedCity News, which covers health-care innovation, has called experimentation and risk-taking. the cafe one of the more popular spots in the United States for Otherwise, the United States could find itself playing catch-up medtech CEOs and venture capitalists to meet. The low-slung to the world for the first time—while resources and jobs rush away establishment is tucked right up next to Interstate 394, which heads from Minnesota. “Most medtech innovation has happened in the CHRISTOPHER LEAMAN straight from central Minneapolis out to the western suburbs, U.S.,” says Buck, of Mardil Medical. In the very near future, he where many of Minnesota’s 400-odd medtech entities are now warns, “that might not be true.” based. With its cheerful neon signs advertising blue-plate specials, the cafe seems out of place among the tall office-park buildings. Sarah Laskow is a journalist based in New York. 85FOREIGN POLICY

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COLUMN << CONTINUED FROM PAGE 88 should be a relative would only be a 10 percent cut (based on In terms of new technologies that will snap. (This, in part, is thanks to the fact current spending). Given that today propel economic growth—3-D printing, that overall emissions have already fallen America spends as much as the next 10 biotechnology, and more—no country is 10 percent since 2005, the start date from countries (ranked by defense budgets) better prepared to be at the forefront of which the cuts are to be calculated.) combined, the number will still be R&D. This is because of America’s pretty darn beefy. system of higher education, the size of Critically, too, the U.S. budget deficit its economic market, Americans’ is shrinking. The total for the first eight Some argue that, regardless of what’s predisposition to inventiveness, and months of this fiscal year is the smallest happening with defense and deficits, their willingness to embrace change. On since the same time period in 2008, and America is losing its will to lead in the top of that, old factors that made the overall deficit for 2014 is projected to world. There are plenty of well-founded America strong in the past—from being be about half a trillion dollars—a big fall criticisms of the current administra- surrounded by oceans to the domestic from $1.4 trillion in 2009. The country is tion’s foreign policy—and I’ve aired and regional struggles faced by key certainly not out of the woods, but it is them before—but the reality is that the rivals—are holding steady. trending in a direction that makes country is in a typical retrenchment that deficit spending sustainable. follows major overseas military involve- In short, there’s every reason to expect ment. And historically, after World War that the 21st century might also be seen There is concern that budget pres- I, World War II, the Korean War, and the as an American century. sures will result in America cutting back Vietnam War, America has re-engaged its defense spending in some quarters within a decade or two. My guess is that, Can the country screw it up? It doesn’t and that America will therefore become no matter who wins the presidency in take a long look at Congress or America’s weaker internationally. In their article 2016 (Hillary Clinton? Jeb Bush?), she or failing infrastructure or its lousy math about American power in this issue of he will be more inclined to have America and science test scores to know that this FOREIGN POLICY, for instance, Elbridge play its traditional leadership role. And is a possibility. And to be sure, myriad Colby and Paul Lettow fret that the U.S. many of America’s allies and other problems big and small need fixing. has already weakened itself by cutting actors will welcome that re-engagement However, perhaps America’s best $600 billion from planned defense in ways that would have been impossible character trait is that it has learned to spending over the next decade. But that to imagine after the fiasco in Iraq. After grow and recover without too much probably won’t happen, given Washing- all, global institutions and alliances “help” from the government. States and ton’s penchant for the status quo on require an engaged United States. localities, as well as the private sector, such things. And even if it did, that are sources of much innovation. And sooner or later, the government always PROMOTING UNDERSTANDING comes to realize that there are some OF RUSSIA roles only it can play, and even Washing- ton steps up to bat. Alfa-Bank and Cultural Vistas are pleased to announce a call for applications for the Alfa Fellowship Program, an 11-MONTH PROFESSIONAL-LEVEL initative, So it’s time to intervene, to set aside which is celebrating its ten-year anniversary this year. At a time of increasing the gloom and doom of the chattering need but decreasing funding for exchange programs to Russia, this program classes and face facts—the good kind. affords young American and British leaders the opportunity to receive Sure, there will always be declinists. meaningful professional experience in Russia. Even a robust America will allow them to continue to peddle their slogans. The program begins with LANGUAGE TRAINING in the U.S. or U.K., followed by Because in the richest and most a language course in Moscow starting in mid-June. Throughout the summer, powerful nation in the history of the Alfa Fellows attend a SEMINAR PROGRAM with key public and private sector Earth, all evidence to the contrary officials to discuss current issues facing Russia. Fellows then WORK AT notwithstanding, there will always be PROMINENT ORGANIZATIONS IN RUSSIA, including private companies, media those who think that the only way to go outlets, think tanks, and foundations. is down. Eligible candidates must have a graduate degree and professional experience David Rothkopf is CEO and editor of the FP in business, economics, journalism, law, public policy, or a related field. Group. Russian language proficiency is preferred. The Fellowship includes a MONTHLY STIPEND, LANGUAGE TRAINING, PROGRAM-RELATED TRAVEL COSTS, HOUSING, FOREIGN POLICY (ISSN 0015-7228) July/August 2014, AND INSURANCE. issue number 207. 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COLUMN Therapy for the Self-Hating Superpower By David Rothkopf Illustration by Matt Chase America is in decline. America is broke. America is unwilling to lead. America has alienated the world. America is fat. America is addicted to sugar, reality television, and hearing itself speak. Washington is dysfunctional. Washington is corrupt. Washing- the hopes that the country will snap out of this downward ton is full of liars, con men, and self-promoters who prove that psychological spiral it is in. there is no limit to how far people can go in life if they have the right PAC spending dough behind them. The intervention needs to show that this mopey, downcast Eeyore of a global power is actually doing much better than it Americans are a violent people. They are narcissistic. They are thinks it is. The facts suggest that, come the end of this century, misogynistic. They are puritanical, hyped up on religiosity, and perhaps the only things that will be the same on planet Earth turning against science, math, and history. are that America will still be seen as the richest, most powerful nation around—and the world will still be complaining about it. Americans don’t read. They don’t work hard anymore. The American dream is dead. Today’s children will be the first Of all the world’s major developed economies, America has generation who must learn to expect less, not more, than their best recovered from the financial crisis, showing again its parents had. resilience and ability to reinvent itself. Thanks in no small part to this reality, North American partners—that is, Canada and For the richest and most powerful nation in the history of the Mexico—are enjoying simultaneous periods of promise. NAFTA is Earth, having ideas like these bouncing around the Internet and working, big time. For example, Texas exports almost as much to laced into talk-show banter sure does suggest that America has a Mexico as the United States exports to China. Integrated supply nasty self-image problem. Call it body-politic-dysmorphia. Call it chains are fueling this, and more integration of the countries’ the self-hating superpower disease. Call the problem whatever you economies is inevitable. That’s all very good, especially because, want—so long as you recognize the country needs to deal with it. when there is growth below the border, Mexico’s youthful, energetic population is less inclined to head north (and more What America needs is an intervention. Not another overseas likely to be reliable consumers of U.S. products back home). intervention; it has tried those, and they only accelerated the descent into a collective neurosis that has Americans behaving Moreover, cheap energy, especially natural gas, is already like they’re channeling Woody Allen. driving investment flows to the United States. That will make it easier for the country to compete in key sectors, such as petro- No, what the country needs is a good, strong domestic chemicals and other similarly energy-intensive industries, while intervention, along the lines of what someone would do for a also lowering emissions. Hitting President Barack Obama’s new self-destructive friend or family member. Americans all gather in goal of reducing emissions by almost a third CONTINUED ON PAGE 87 >> someone’s living room—Jay Z and Beyoncé probably have space for everyone at their house—and start telling some hard truths in 88 JULY/AUGUST 2014

Addressing the critical issues facing Asia in the 21st century Human trafficking is among the fastest growing criminal industries, with many Asian countries both a source and destination for victims. Globalizing economies mean labor migration is on the rise, particularly for women, but can put them at risk of exploitation and abuse. The Asia Foundation works to help people actualize their economic aspirations without risk of exploitation. Our Women’s Empowerment Program creates economic opportunity, increases women’s rights, and ensures their personal security. We focus on the economic, social, and cultural factors that contribute to trafficking in the first place. Read more at asiafoundation.org #Asia60