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Fareed Zakaria GPS

Bill Gates Interview; Third World Development; Solving the Economic Crisis

Aired October 05, 2008 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

FAREED ZAKARIA, HOST, GLOBAL PUBLIC SQUARE: From GPS, the GLOBAL PUBLIC SQUARE, welcome to our viewers in the United States and around the world. I'm Fareed Zakaria.
We're all worried about the economy. And who better to ask about it than the richest man in the world.

Bill Gates has occupied that spot, with a few dips here and there, since he was 37 years old.

(BEGIN VIDEO CLIP)

ZAKARIA (voice-over): From the moment the world saw him, he seemed to define the word "geek" - an odd, skinny kid, who made a preposterous claim: someday every home would have a computer.

His high school had a rudimentary one. And he and his friend, Paul Allen, would sneak into the building after hours to examine how it worked.

After one year at Harvard, Bill Gates dropped out. And with a band of his friends, he began to write software.

One day, IBM agreed to a meeting to see his product. The young man at that point did not have a tie. He bought one on the way to his meeting. And thus began the Microsoft juggernaut.

His fierce competitiveness is both legendary and controversial. People loved him or hated him. There were antitrust charges, fierce fights with rivals.

But now, he's making history in another way. He's giving away more money than anyone ever has before.

(END VIDEO CLIP)

ZAKARIA (on camera): He's now 53, and we spoke about his extraordinary charitable work, the future of technology, but also about his view of the American economy. The headline: he's not too worried.

(BEGIN VIDEO)

ZAKARIA: Are we, right now, in a kind of crisis of capitalism, when you see the financial industry seeming to be in meltdown, or in at least dramatic reorganization? Is this the end of a certain kind of model of capitalism?

BILL GATES, PHILANTHROPIST, BILL AND MELINDA GATES FOUNDATION, AND CO-FOUNDER OF MICROSOFT: No. Not at all.

It's a very interesting crisis. And it's important that that things move forward, that markets are continuing to operate. And there's some type of correction we'll have to look at in terms of the leverage we allow, the complexity of balance sheets we allow. People who are so key that the government feels like they have to come in and bail them out.

And there's a lot - a lot thinking the House go on. But fundamentally, the total market valuation of companies, companies' willingness to invest, right now we haven't seen a huge disruption in that.

There may be - it looks like the economy may go down somewhat, but nothing like a big recession or a depression. And the amount of innovation taking place, the amount of investment is actually greater today than ever, because you not only have more American companies with more scientists and engineers and innovators, but now you have what Friedman calls the flat world, where you have people from all over, including lots of people in India and China, now contributing to new drug design, new software design, new energy generation design.

And so, it's easy for people to underestimate that, despite these imbalances that are certainly scary, the rate of improvement on the medical front, the efficiency front, communication front is greater today than ever.

And in fact, that's why you can take a problem like the food crisis and say, you know, let's get cheaper fertilizer, let's get better seeds - or the climate crisis and say, let's get a different source of energy that's both cheaper and doesn't generate CO2. And given the right timeframes, this rapid innovation will deliver those advances.

ZAKARIA: But we were told that there was a massive innovation taking place in the financial industry, that it was producing all these new products, which were providing Americans with greater finance, American companies.

Was this all a sham? Or was the financial innovation, which grew the financial industry to 20 percent of GDP, was it real? Was it - how should we think of it?

GATES: Well, certainly, whenever a stock goes up and then comes down, there was an element of a mistake that people thought, "Oh, this really is going to go on forever. It's a great thing."

These financial companies, in terms of needing short-term funding, but not having liquid assets, so the short-term funding dried up, you get literally a bankruptcy. And so, all it took was a whiff of lack of confidence, and then the whole thing would come apart.

That was not a stable enough structure to deal with the mistakes that were made in mortgage valuation, particularly the so-called AAA type instruments.

Now, there have been people, including Warren Buffett, that have talked about this level of complexity, that some problems would come out of it. And so far, even despite this bailout, it doesn't look like fixing these problems is going to derail the economy in some dramatic way, where, you know, universities aren't doing research and drug companies aren't doing research, and software companies aren't hiring more engineers to sell to a market that, in the long run, is going to be a bigger and bigger market.

And so, we're maneuvering to make sure we don't get this broad contagion. And experts who know, who live in that financial world, should be disagreeing and debating - taking a little time to figure out this fix.

But it's not yet really cutting into the fundamental thing that's going on in the world today, which is an increase in the scale of the economy, increase in the number of people going to colleges, an increase in scientific understanding, which the Internet has facilitated this great sharing.

So, you know, our foundation has scientists in China and India and the U.K. and the U.S. And during the course of a 24-hour period, they're sharing results, coming up with new ideas, and it's almost location-independent.

ZAKARIA: What happens to Americans, Europeans, Japanese - people in advanced industrial countries - who can't communicate constantly on the Internet producing high value-added goods?

In other words, people who are, you know, have simple skills, who are going to do simple, repetitive tasks, what happens in this new world - with all this innovation, but with everybody else competing with everyone else rising - what happens to that person? That is, we're talking about tens of millions of Americans and Europeans and Japanese.

GATES: We certainly have a challenge that we have too many high school dropouts in the United States. And the structure of our economy does not offer that many opportunities to somebody without at least a high school education.

There's always this fallacy that there's a certain number of jobs. And ...

ZAKARIA: The Chinese are going to take them all.

GATES: ... you know, it's a finite - yes, that somebody's taking them.

Take farming jobs. Who took all those farming jobs? The tractor took those farming jobs. We feed this country on less than two percent of the population, and we're one of the great food exporters in the world. And so, automation took those jobs.

Is that a bad thing? Do people miss plowing? I don't know. I never did it.

As the economy expands, certain sectors like education and medical care and entertainment grow a lot bigger. And until we can say that our education is perfect and the, you know, medical care - everybody gets all the attention they need. You know, there are jobs there. We just need the breakthroughs that allow us to devote resources to those things.

So, college educated people are going to have plenty of opportunities.

But our education system is gypping people if it doesn't let them know that, if they drop out from high school, that they face a bleak future, so they're really engaged, so that they ...

ZAKARIA: You're very worried about American high school education, for example.

GATES: That's right. The United States has the challenge that it really needs to educate everyone to quite a high level.

Some of these other economies, because they're not as far along, they still have manual labor, low-paying jobs. So, China can feel great that 15 or 20 percent are college qualified, whereas in this country it's got to be a much higher number.

And our high school system hasn't improved enough to shift that average level of education. And so, you have numbers that, when I first heard them, are unbelievable - a third of all kids dropping out of high school. And if you take ethnic minorities, you get in urban areas over half of them dropping out. And the outcomes for those kids are not attractive to them or to the society that they live in.

ZAKARIA: Would you trade our educational system lock, stock and barrel for any other country's? The Singaporeans test very well. The Finns test very well. The Danes test very well. We don't.

Is there something lock, stock and barrel better about any other system?

GATES: I wouldn't trade with anyone.

We're a very large country. We have some big city challenges that many of those countries don't have. It's unbelievable that we are the melting pot, and it's great that we take on that challenge, which is not always easy. Our universities ...

ZAKARIA: And which drags down our averages sometimes.

GATES: Absolutely.

Our universities are the envy of the world. If you take the top 20 universities in the world, I don't think you'll find anyone who wouldn't have at least 12 of them be U.S. universities, and some might have 19 of them be U.S. universities. Now, China sees that, and it's a great thing for the world. But they're taking Tsinghua, Beijing University and all the good universities, and trying to up-level those. They've made good progress. But we shouldn't trade with anybody.

Why are we the best in information technology and inventing new medicines? It's not because we have low defense costs. It's not because we have low medical costs. It's not because we have a simple society to get things done in.

It is because, at least for that top 20 percent or so that get a good education going to these universities, the kind of innovative thinking and great teaching is strong. And there's an element of that that we've let smart people from other countries come here.

We net import massive I.Q. It's our most important import by far.

(END VIDEO)

ZAKARIA: Coming up, Bill Gates on giving it all away.

(COMMERCIAL BREAK)

ZAKARIA: Over 95 percent of all charity is people giving money to their favorite churches, synagogues, symphony halls, opera houses and universities.

But Bill Gates is giving most of his money to save the lives of the world's poorest people. It is a decision premised on the idea that all human beings are created equal, and that all human life should be valued equally.

Listen to Gates on this.

(BEGIN VIDEO)

ZAKARIA: At a personal level, one of the decisions you've made is not to leave enormous amounts of money to your children. Are they old enough to understand this yet?

GATES: Well, I'm sure I'll get more flak as they get older.

But I don't think it would be beneficial to them to have huge amounts of wealth. I think that's very distortive in terms of how you think of what the impact you're going to have, how you measure yourself, how your friends think about you and how they do things with you.

And it's also bad for society. You know, Warren Buffett says that we could pick our Olympic team by picking the grandchildren of the 1900 Olympic team. And, you know, we could see how that would work.

In a sense, if we have so much inherited wealth, particularly these very large fortunes, we're actually doing that. We're picking the grandchildren of the people whose skill and luck accumulated that money and saying to them, they should have this vast control of society's resources.

I just don't think that's a great way to run a society. And so ...

ZAKARIA: So, you're in favor of the inheritance tax.

GATES: I'm in favor of two things. I'm in favor of people who are lucky enough to have these resources thinking about how either they or somebody they back should give the money back to society. And so, if you give money away, then you don't even get into the taxation issue.

If you don't give it away, yes, I think some portion of it ought to be taxed, that there would be an estate tax. After all, the accretion of that fortune depended on the government's educational system, justice system. You know, it wasn't something where you just went off on your own and magically pulled some gold out of the ground.

And my case is a clear one. I'm a beneficiary of an educational system and a system of stability and incentives, where I got to hire bright people and come up with products. And the fact I was 19 years old, that didn't matter. If I had a good piece of software, somebody could buy it from me.

I was just there to innovate. And that kind of society is where the opportunity for those great fortunes come from.

ZAKARIA: You're going to give away almost all your money. You're going to give away almost all of Warren Buffett's money. That's, collectively, tens of billions of dollars.

You've chosen something very unusual. Ninety-eight percent of the philanthropists in the United States give the money in America essentially to Americans.

You chose not to do that. Why?

GATES: If you look and say where is the greatest inequity, you have to take a global view of that. I mean, America stands for a lot of things. It stands for the innovation that a capitalistic society can drive. It stands for political freedom. But it also stands for ending inequity.

And over the decades, the inequities against women, or various religions, or races, America's made a lot of progress. And so, I think we can say today that the global economic inequity is the greatest one left and probably the hardest one to make progress on.

So, I think it makes sense, since the U.S. benefits from the world market, for people who give back to certainly give some in the country. Over a quarter of what we do is focused on helping to improve education in the United States, but the bulk of it goes to where a dollar can save a life most effectively. And we know that if you start to improve health and help people out who are poor, you can get that society into a situation where it's self-sufficient, where the population growth goes down, where the agricultural productivity goes up, the educational achievement goes up.

We have this incredible good news story, where the old divide of the rich and the developing world is a misleading dichotomy now, because that developing world, although it was once really bimodal, rich and developing now, across the whole spectrum, we have countries like China or Mexico or Brazil that have done so well. And then we have some like Yemen or Central African Republic - a lot of them in sub-Saharan Africa - that are still really down at the bottom and haven't gotten going.

And so, the capitalistic approaches, scientific innovation, decent governance - those things have been proven out in most of the world. And we should want to help the countries that have got tough situations, to help them get on that same track.

ZAKARIA: I know you've read the book, "The Bottom Billion," by Paul Collier. And he talks about the bottom billion of the world trapped in about 50 countries that are just not reforming, that are not getting their act together in various ways.

Does it make sense to give money to those governments to try to reform those educational systems or health systems?

GATES: Well, the most exciting thing I learned when I was just getting into philanthropy was that, if you reduce childhood deaths, if you improve health in a society, that, surprisingly, population growth goes down. And that's because a parent needs to have some children survive into adulthood to take care of them when they're old.

And so, if they think having six children is what they need to do to have at least two survive, that's what they'll do. And amazingly, across the entire world, as health improves, then the population growth actually is reduced.

And there's a miracle intervention, which is vaccines. In 1960, over 20 million children died. In 2005, less than 10 million died. And that's despite much larger global population.

That is huge progress. And a lot of that is because these vaccinations are being given broadly, over half of that improvement. Another part is from economic development.

And so, even in the poorest countries, we should go in and give them a malaria vaccine, and give them vaccines for diarrheal diseases. And if a mother wants to limit her family size, give her the tools that let her have that possibility.

So, I think we owe it even to the poorest billion to give them a chance.

ZAKARIA: But you're giving them, in effect, a one-shot - you're kind of getting in there, doing the vaccine and leaving, rather than trying to interact and reform the very broken, corrupt, dysfunctional political and governance system, in order to try and raise their general standard of living.

GATES: Well, it's - you want to - all these interventions are important, because they kind of go together. Poor countries generally have bad governance. Countries who have lots of sickness, countries with high population growth - all these things go together.

Every one of those countries that are cited as being in the bottom billion have mostly bad governance, high population growth, terrible health statistics, low education achievement, very poor agricultural productivity.

And it turns out that, if you can improve any one of those, it helps the other. So, amazingly, you can improve health in a country and the governance will get better.

(END VIDEO)

ZAKARIA: Up next, a glimpse inside the Internet of the future.

(COMMERCIAL BREAK)

ZAKARIA: Bill Gates is famously, ferociously competitive. But in our discussion about the future of the Internet, he took a broader view.

As always, though, he gets very excited when outlining the technologies that we'll all be able to use sometime soon.

(BEGIN VIDEO)

ZAKARIA: What is the Internet going to look like 10 years from now?

GATES: Well, the thing that I think people are underestimating is that the shape of the computers that are connected up will be very different. You know, a tablet-type reading device, ability to walk in the room and it can see who's coming in. You can just talk.

Your walls - screens will be very cheap, so your walls will - you'll be able to have sort of virtual wallpaper, anything that you're interested in. You know, you hear your parents walking down the hall, you change it to something else. Or you have your grandmother visiting, you change it to what she might be interested in.

ZAKARIA: Why will this increase productivity? What's the big leap ...

GATES: Well, the computer industry has always sold, amazingly, both into the home to let people play games, and plan their finances and plan their schedule, and communicate with their friends, as well as sold into business where you can look at product designs. You know, just think about how a car is designed digitally now, and you can try different things out. The whole economy is using software simulation, so that innovation is far more rapid. And way before you make a product, which is expensive and takes time, you understand the wear and the cost inside this computer model.

ZAKARIA: For Microsoft, is the dominating concern going forward who will dominate the Internet?

GATES: Nobody dominates the Internet. The Internet is this phenomenal thing that new companies and new ideas are being created all the time.

Microsoft participates in the software market. And software, whether it's voice recognition or reading devices or robotics, the opportunity to add value in software is greater today than it's ever been. And so, Microsoft has lots of opportunity. Where other companies can do well, Microsoft can do well.

Microsoft is very strong in helping people at work be more productive. That - you know, we are the company that gets up every day and says, "Why do people still need paperwork? Why do they still need that white board? How can they communicate at a distance very easily?"

And we ourselves see where software could make us more effective. So, new generations of office were really the company that has breakthroughs on worker productivity.

We also participate in video games and phones and search, and you name it.

ZAKARIA: But you're not worried about Google?

GATES: Oh, all good capitalistic companies get up every morning and think, "How can we make a better product? What are they doing well? We're going to make it cheaper, better, simpler, faster."

And great competitors spur companies on. And at every phase of our industry, it's been a different set of companies.

Historically you would have said Novell or Ashton-Tate or IBM, or something like that. Today you'd probably say Google or Apple. But that's wonderful, you know. We're going to give people a choice in search.

They're not just going to have one choice in phones. You know, this phone you can talk to and it - you just point it at your sales receipt and it can recognize what that is and immediately file that for you without you having to do anything.

That kind of software breakthrough, that's why we have our research group and we're so excited about what we can do. And the fact that other companies are doing some of the same, that's always been the case, and it's great to see.

ZAKARIA: Is some of the innovation coming from outside the United States now in a way that it wasn't 10 or 15 years ago?

GATES: Absolutely. The computer market 15 years ago, you could say the most demanding customers were in the United States. And so, if you could satisfy their needs, you just basically took the same thing and sold it worldwide. You did some localization.

Today, the penetration of cell phones is actually higher in other countries. China's got more broadband users than any country in the world. And unless India really goes fast, that'll be the case for the rest of the century.

So, you have to be far more global in terms of seeing what customers are doing, and having bright people who work on those problems. And so, all the technology companies are figuring out how we gather that customer input on a broader basis than ever before, how we work with more universities on their research programs than ever before.

And I'm very proud of the way that Microsoft has done that. It's one of the things that has driven our success.

ZAKARIA: And you think you'll really be able to stay out and mostly focus on the foundation?

GATES: Well, my situation is quite unusual, which is that I have two things that are just so interesting and so much fun. I love software, I think the neat things in software are really going to be in the next decade.

But just as much, I love thinking about a malaria vaccine and meeting with scientists and backing various approaches, seeing what failed, how should we try to do it differently - thinking how you get these things delivered, some of the issues of governance and how that sometimes gets in the way.

How do you create visibility for these issues so that the right resources are put into them? And I'm really diving into that, learning a lot, forming new partnerships, really spending a lot of time with the people at the foundation and getting out around the world.

And so, that's my new full-time job, and I'm enjoying it immensely. And so, I can't think of anything that would pull me away from it.

ZAKARIA: Do you think history will remember you as the man who created Microsoft, or the man who created the Gates Foundation?

GATES: You know, who knows how history will think of me? You know, the person who played bridge with Warren Buffett, maybe. Or maybe not at all.

You know, most of the things we do, we do because of the people we care about, our family, because we love doing them every day. And it doesn't require a historical perspective. You have values. You have things you enjoy, things you're good at. And for me, these foundation issues really fit every one of those characteristics.

ZAKARIA: Bill Gates, it's been a pleasure.

GATES: Thank you.

(END VIDEO)

(COMMERCIAL BREAK)

ZAKARIA: As I travel around the world, I'm struck by how rapidly the rest of the world is changing. Over the past few decades, countries all over the world have been experiencing rates of economic growth that were once unthinkable.

That growth has been most visible in Asia. With growth comes confidence, pride and power.

I was recently in Singapore, so I gathered some local experts to discuss their view of current affairs and how they perceive America and their own changing role in this new world.

(BEGIN VIDEO)

ZAKARIA: I'm here in Singapore with three very distinguished analysts of international affairs: Kishore Mahbubani, the dean of the Lee Kuan Yew School of Public Policy; Simon Tay, the chairman of the Singapore Institute of International Affairs; and Raja Mohan, who is on loan from India, where he is a columnist for the "Indian Express," but also here at the Rajaratnam School in Singapore.

Kishore, what I am struck by is coming to Singapore and listening to the usually very hard-nosed Singaporeans, who have tended to be very cool, realistic, and generally prefer Republicans, because they are hard-headed. And I notice that many of you are in something of a swoon over Obama.

You wrote in Newsweek that, if Obama were elected president, 50 percent of the anti-Americanism in the world would disappear.

Why is it that Singapore is Obama-crazy?

KISHORE MAHBUBANI, DEAN, LEE KUAN YEW SCHOOL OF PUBLIC POLICY, SINGAPORE: Well, let me emphasize, not all of Singapore is Obama- crazy. But there are many in Singapore who are actually troubled by the growing divide between America and the world.

And you must remember that Singapore lives in a region where, indeed, Singapore is surrounded by more Muslims than Israel is. Right?

And so, as a consequence of that, we have to put our finger on the pulse of what's happening in the Islamic world. When it gets angry, it affects us. If it calms down, it's a better environment for us.

And Obama clearly will work a magic in the Islamic world.

I mean, I was asked by President S.P.Y. to deliver the presidential lecture a few weeks ago.

ZAKARIA: The president of Indonesia.

MAHBUBANI: The president of Indonesia. And he was very clear. And he said, and several other people said that, if Obama - if the Indonesians could vote, 200 million Indonesians would vote for Obama, partly because he will be the first Bahasa-speaking American president.

And also, at the same time, I think he understands, you know. He can connect with the rest of the world in a way that I think McCain cannot. The psychological universe of McCain is a very confined one. The psychological universe of Obama understands the diversity of the world.

And what puzzled me is, there is - not just in Singapore, but when I met a billionaire from India - I can't mention his name - he said to me, "Kishore, root for Obama. Root for Obama."

So, there is a magical effect that Obama is having on the rest of the world. And that's why, frankly, all the polls show - most of them, with some exceptions - the Muslim world for Obama.

ZAKARIA: But the lowest number is in India, Raja.

RAJA MOHAN, COLUMNIST, "THE INDIAN EXPRESS," AND PROFESSOR, RAJARATNAM SCHOOL OF INTERNATIONAL STUDIES, SINGAPORE: I think in India, I think our heart is with Obama, but our head is with McCain. Our heart is with Obama, because I think Obama represents not only, you know, the American system's capacity to change, it's also we're debating in India, about how do we empower our minorities, how to empower our lower castes.

If Obama can become the U.S. president, there's also a debate in India that the Dalit leader, Mayawati, can become the next prime minister.

ZAKARIA: She has come from a very lower caste background, yes.

MOHAN: Yes. So, in a sense it's very positive.

But at the same time, when we look at the issues on trade, I think any day I would take the Republicans. On outsourcing, I would take the Republicans. On immigration, I would take the Republicans.

ZAKARIA: Well, on immigration you'd take McCain, I think it would mean.

MOHAN: Yes.

ZAKARIA: Because the Republican position, you wouldn't accept it.

MOHAN: And the problem with the Democrats is that they come with their single-issue groups. Somebody does nonproliferation, somebody does human rights, somebody does workers' rights. I mean, you have them going around pricking everyone in Asia, without a sense of a coherent vision.

I agree with Kishore. Obama honeymoon will last for six months. But after that, we're going to have serious problems.

So, the need for a coherent strategy towards Asia, we don't see that from the Democrats. And they tend to be far more hectoring. They'll come back to India and say, "Look, do something on Kashmir. Do this, do that" - rather than saying, "Look, listen, we've got to work within certain limitations."

And I think on that, Bush has set a good example in Asia. I'm not sure Obama will really (ph) follow that.

SIMON TAY, CHAIRMAN, SINGAPORE INSTITUTE OF INTERNATIONAL AFFAIRS: Well, I'm not sure. I mean, first, I am not sure that these international polls actually help Obama at all. You know, it might even play against him, someone in Texas.

But the second, more serious factor, so it gives some credence for presidents and bright presidents to learn on the job. We saw this in Bill Clinton, you know.

Bill Clinton, despite being somebody backed by Democrats, you know, he opened NAFTA. He opened up - he pushed up APEC in the Seattle. And APEC is exactly the kind of mechanism that will need to be really revisited, whoever the next president is.

FAREED: The Asia ...

TAY: The Asia Pacific Economic Cooperation that links both sides of the Pacific. And both sides of the Pacific, that would include Russia, include China. And on the North American side, the USA, Mexico and a few other countries. That's the largest production base now in the world.

ZAKARIA: So, you're also suggesting that Obama might be ...

TAY: He might be the right person to restart it.

But whatever it is, the challenge for America is - my own feeling is, the better person to deal with that challenge would be Obama. But even if it's McCain, I hope he and the Republicans will recognize that challenge and will respond to it.

ZAKARIA: How will Bush be seen in history? Quickly go around. How do you think Bush will be seen in Asia?

MAHBUBANI: Sadly, not well, because the feeling is that he was fundamentally incompetent as a president. You know, that even if - whether or not you agree or disagree with his goals. I mean, the Iraq war is a textbook example of how not to invade and occupy a country.

Look at Afghanistan, you know. Look at the enormous amount of resources you put in Afghanistan, and it's going to end up as a failure.

So, clearly, even - regardless of whether or not you agree or disagree with his ideology, the question of competence is one on which he will fail.

MOHAN: I would say Bush will be remembered as a good friend in India for a long time. I think he's been the first president India has seen in the United States, because he's broken much of the traditional paradigm towards India. He has done a deal to remove the nuclear dispute.

He's treated India and Pakistan differently on the Kashmir question. So the tilt towards Pakistan, historically, that existed in the U.S. has changed that.

And more importantly, I think he has put India in a template which is about the larger balance of power in Asia. So, everything that India has griped about the United States, I think Bush has done to change that.

But I think in the longer term, that I think what Bush has done by improving relations with China and Japan and India, and creating a basis for a new balance of power, I think history would see him far more kindly than it treats him now.

ZAKARIA: Simon, how do you think the Chinese view George Bush?

TAY: I think the Chinese have been quite comfortable with Bush. They have - some of their thinkers have been worried about this free (ph) containment issue.

I think, by and large, after the initial sort of hard view of China, his shift around, his attempt to accommodate various interests of China over time, I think will go down well for the president.

The longer arc of history I think will not necessarily be kind to Bush. There were times where I think he had a chance to really be - to give us a great presidency and to lead the world into a new order.

As he leaves office - and it's not just a question of the surveys and polls, whether here in Asia or back home in America - I think this fundamental effort to rethink a new world order and America's position in it, I think that is the opportunity that has passed Bush by.

(END VIDEO)

ZAKARIA: When we come back, a look at how the Georgian-Russian conflict looks from the other side of the world.

(COMMERCIAL BREAK)

ZAKARIA: During my discussion with foreign policy experts in Singapore, I asked them about an event that took place a couple of months ago - the Russian attack on Georgia.

I was struck by how different their discussion on this issue was compared to the ones we hear in New York and Washington. Take a look.

(BEGIN VIDEO)

MAHBUBANI: The West had been humiliating Russia for almost 15 or 16 years. And Russia is a proud, old country. And if you keep humiliating them for so long, at some point they had to react.

And they reacted viciously, as you know, in Georgia, because they said, "Enough is enough. I do not want to have my face scrubbed in the dust one more time. This time I want to send a signal. I will draw a line."

And so, what amazed me is, all the Western commentary tried to portray Georgia as the victim of this exercise, even though the Georgian president instigated the exercise and the Russians were reacting. And of course, they were given the perfect excuse to react.

But they were sending a broader signal that there is a larger geopolitical issue that they would like the West to comes to terms with, and to treat Russia as an equal and not as a subservient power.

ZAKARIA: Raja, how was this seen in India?

MOHAN: I think there's another view. We've had a relationship with Russia that goes a long time. But yet, I don't think India would support, has supported, what Russia has done, essentially because the idea that you could recognize separatist movements in a particular country as independent, I think it's fundamentally unacceptable to India.

We didn't accept Kosovo. We're not going to accept Abkhazia and Ossetia as separate entities.

So, there is, while we would like to see Russia not humiliated, and treated like a great power, but the Russian actions are fundamentally in contradiction with the interests of India and, I would say, in China, because anybody who has a bit of a problem of separatism are not going to accept what Russia has done.

ZAKARIA: Simon, what was - the Chinese have been careful to distance themselves from the Russian position, but not too far away.

TAY: Well, I think this is exactly correct. What Kishore says is true.

I think rising powers, Asian powers, certainly do not want to be in the same position as Russia, where your very real economic strength, et cetera, is being sort of pinned down and you are literally forced back in areas which you consider your backyard.

And we are also in an area where the American presence is very real, but there are rising Asian powers. So, in some ways, I think we could, if you're going to watch it, be in a similar situation. As for China, my own take is, China is going to be a big winner in this, because if tensions rise between Russia and the West, China is going to look like a darling and an angel in comparison.

ZAKARIA: Because both sides will also be wooing China ...

TAY: Correct.

ZAKARIA: ... and wanting it on their side.

TAY: Correct.

ZAKARIA: But Kishore, when one hears the discussion in the United States or even in Europe, it's really all about Georgian democracy, supporting Georgian democracy. Why are you not moved by all this?

MAHBUBANI: Well, I mean, certainly, we would like to see the spread of democracy.

But there is an incestuous, self-referential, self-congratulatory dialogue among Western intellectuals, which is very, very dangerous, because it's a dialogue that reflects the wishes and interests of 10 percent of the world's population and shuts off the voices of 90 percent of the world's population. And that's the biggest danger.

And certainly, no one is opposed to democracy in Georgia. That wasn't the issue at all.

But what the world noticed is that the West keeps tapping and intruding into spaces of other countries and other societies without even being aware that it is doing so. And that's the problem.

I mean, the West has basically been in a sort of a triumphant mood since the end of the Cold War. And that, over the course of time, has built up a lot of resentment towards the West. And that's what I try to talk about, because I think this resentment is not necessary.

I think you can easily, very easily, build bridges between the West and the rest of the world, if the West is prepared to accept parity in the discourse between the West and the rest.

ZAKARIA: And on that note, from Singapore, thank you all very much.

(END VIDEO)

(COMMERCIAL BREAK)

ZAKARIA: T.S. Eliot was wrong. October is the cruelest month, at least for the stock market.

We're coming up on anniversaries of Black Thursday, Monday and Tuesday - October 24th, 28th and 29th, 1929, when the New York Stock Exchange went into a nosedive that signaled the end of the jazz age and the beginning of the Great Depression.

October was also the month that Black Monday took place, October 19, 1987, when stock markets around the world crashed, starting in Hong Kong and moving through the United States and Europe.

Remembering these previous crises helps put the current one in perspective. The Dow Jones Industrial Average dropped 22 points, 6 percent, in one day in the 1987 crash. In 1929, by November 11th, the market had dropped 40 percent from its high six weeks earlier.

By comparison, last Monday, our own Black Monday, saw the Dow Jones drop by 777 points. But in percentage terms, it was a 7 percent decline.

I'm not in any way suggesting that we are not in a serious economic crisis. But I believe that this one will not mark the end of capitalism, laissez-faire or free markets. In fact, it will probably lead to a more mature, robust and resilient free market financial system.

The real question is how to regulate the markets so you get the maximum innovation and growth, but temper their wilder movements. And we do this by trial and error. No one knows in theory what the perfect system would look like.

Clearly, America's financial system needs new, different and better regulations for the 21st century, and this crisis should help produce those. Reorganization is not a sign of failure, but an acknowledgment that creative destruction is an essential part of capitalism.

That's it for this week.

But before I go, I want to thank you for all the questions you sent in for Bill Gates. Though I couldn't ask all of them, I think many were ultimately asked and answered. And no, he is not available for any of your loan requests. He's busy giving his money away to people who really need it.

Now, some of you may have heard that I expressed my view of vice presidential candidate Sarah Palin's qualifications in my Newsweek column this past week.

My question to you is this: Whom do you think is the most unqualified vice president the United States has ever had? Not candidate, but actual vice president.

Also, I want to recommend a book. Earlier, talking to Bill Gates, we discussed a book called "The Bottom Billion" by Paul Collier. I actually recommended this to some of you this past summer, but I want to do so again, because it's an important book that deals with many of the issues that Gates talked about.

Remember, you can e-mail me at fareedzakariagps@cnn.com. You can also visit our Web site, cnn.com/gps, for highlights from this program. And you can always find our weekly podcast on the Web site and on iTunes.

That's it. Thanks, and I will see you next week.