ABOUT THE SPEAKER
Dambisa Moyo - Global economist
Dambisa Moyo is an international economist who analyzes the macroeconomy and global affairs.

Why you should listen

Dambisa Moyo's work examines the interplay between rapidly developing countries, international business, and the global economy -- while highlighting opportunities for investment. She has travelled to more than 60 countries over the past decade, studying the political, economic and financial workings of emerging economies, in particular the BRICs and the frontier economies in Asia, South America, Africa and the Middle East. Her latest book, Winner Take All: China’s Race for Resources and What It Means for the World, looks at how commodities markets influence much more than the global economy -- and examines the possible consequences of China's unprecedented rush for commodities such as oil, minerals, water, and food, including the looming specter of commodity-driven conflict.

She is the author of the brilliantly argued Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa and How the West Was Lost: Fifty Years of Economic Folly and the Stark Choices Ahead. Previously, she was an economist at Goldman Sachs, where she worked for nearly a decade, and was a consultant to the World Bank in Washington.

More profile about the speaker
Dambisa Moyo | Speaker | TED.com
TEDGlobal 2013

Dambisa Moyo: Is China the new idol for emerging economies?

Filmed:
2,517,517 views

The developed world holds up the ideals of capitalism, democracy and political rights for all. Those in emerging markets often don't have that luxury. In this powerful talk, economist Dambisa Moyo makes the case that the west can't afford to rest on its laurels and imagine others will blindly follow. Instead, a different model, embodied by China, is increasingly appealing. A call for open-minded political and economic cooperation in the name of transforming the world.
- Global economist
Dambisa Moyo is an international economist who analyzes the macroeconomy and global affairs. Full bio

Double-click the English transcript below to play the video.

00:12
"Give me liberty or give me death."
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When Patrick Henry, the governor of Virginia,
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said these words in 1775,
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he could never have imagined
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just how much they would come to resonate
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with American generations to come.
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At the time, these words were earmarked
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and targeted against the British,
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but over the last 200 years, they've come to embody
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what many Westerners believe,
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that freedom is the most cherished value,
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and that the best systems of politics and economics
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have freedom embedded in them.
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Who could blame them?
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Over the past hundred years, the combination
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of liberal democracy and private capitalism
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has helped to catapult the United States
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and Western countries
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to new levels of economic development.
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In the United States over the past hundred years,
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incomes have increased 30 times,
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and hundreds of thousands of people
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have been moved out of poverty.
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Meanwhile, American ingenuity and innovation
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has helped to spur industrialization
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and also helped in the creation and the building
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of things like household appliances
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such as refrigerators and televisions,
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motor vehicles and even the mobile phones in your pockets.
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It's no surprise, then, that even at the depths
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of the private capitalism crisis,
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President Obama said,
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"The question before us is not whether the market
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is a force for good or ill.
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Its power to generate wealth and to expand freedom
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is unmatched."
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Thus, there's understandably
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a deep-seated presumption among Westerners
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that the whole world will decide to adopt
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private capitalism as the model of economic growth,
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liberal democracy, and will continue
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to prioritize political rights over economic rights.
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However, to many who live in the emerging markets,
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this is an illusion, and even though
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the Universal Declaration of Human Rights,
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which was signed in 1948,
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was unanimously adopted,
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what it did was to mask a schism
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that has emerged between developed
and developing countries,
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and the ideological beliefs
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between political and economic rights.
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This schism has only grown wider.
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Today, many people who live in the emerging markets,
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where 90 percent of the world's population lives,
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believe that the Western obsession
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with political rights is beside the point,
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and what is actually important
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is delivering on food, shelter,
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education and healthcare.
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"Give me liberty or give me death"
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is all well and good if you can afford it,
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but if you're living on less than one dollar a day,
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you're far too busy trying to survive
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and to provide for your family
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than to spend your time going around
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trying to proclaim and defend democracy.
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Now, I know many people in this room
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and around the world will think,
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"Well actually, this is hard to grasp,"
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because private capitalism and liberal democracy
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are held sacrosanct.
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But I ask you today, what would you do
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if you had to choose?
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What if you had to choose
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between a roof over your head
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and the right to vote?
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Over the last 10 years,
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I've had the privilege to travel to over 60 countries,
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many of them in the emerging markets,
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in Latin America, Asia,
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and my own continent of Africa.
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I've met with presidents, dissidents,
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policymakers, lawyers, teachers,
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doctors and the man on the street,
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and through these conversations,
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it's become clear to me
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that many people in the emerging markets
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believe that there's actually a split occurring
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between what people believe ideologically
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in terms of politics and economics in the West
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and that which people believe in the rest of the world.
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Now, don't get me wrong.
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I'm not saying people in the emerging markets
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don't understand democracy,
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nor am I saying that they wouldn't ideally
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like to pick their presidents or their leaders.
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Of course they would.
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However, I am saying that on balance,
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they worry more about
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where their living standard improvements are going to come from,
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and how it is their governments can deliver for them,
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than whether or not the government
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was elected by democracy.
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The fact of the matter
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is that this has become a very poignant question
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because there is for the first time in a long time
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a real challenge to the Western ideological systems
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of politics and economics,
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and this is a system that is embodied by China.
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And rather than have private capitalism,
they have state capitalism.
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Instead of liberal democracy,
they have de-prioritized the democratic system.
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And they have also decided to prioritize
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economic rights over political rights.
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I put it to you today that it is this system
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that is embodied by China
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that is gathering momentum amongst people
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in the emerging markets as the system to follow,
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because they believe increasingly
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that it is the system
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that will promise the best and fastest improvements
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in living standards in the shortest period of time.
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If you will indulge me, I will spend a few moments
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explaining to you first
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why economically they've come to this belief.
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First of all, it's China's economic performance
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over the past 30 years.
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She's been able to produce record economic growth
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and meaningfully move many people out of poverty,
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specifically putting a meaningful dent in poverty
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by moving over 300 million people
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out of indigence.
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It's not just in economics,
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but it's also in terms of living standards.
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We see that in China, 28 percent of people
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had secondary school access.
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Today, it's closer to 82 percent.
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So in its totality, economic improvement
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has been quite significant.
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Second, China has been able
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to meaningfully improve its income inequality
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without changing the political construct.
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Today, the United States and China
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are the two leading economies in the world.
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They have vastly different political systems
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and different economic systems,
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one with private capitalism,
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another one broadly with state capitalism.
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However, these two countries
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have the identical GINI Coefficient,
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which is a measure of income equality.
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Perhaps what is more disturbing
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is that China's income equality
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has been improving in recent times,
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whereas that of the United States
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has been declining.
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Thirdly, people in the emerging markets
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look at China's amazing and legendary
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infrastructure rollout.
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This is not just about China
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building roads and ports and railways
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in her own country --
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she's been able to build 85,000 kilometers
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of road network in China
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and surpass that of the United States --
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but even if you look to places like Africa,
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China has been able to help tar the distance
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of Cape Town to Cairo,
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which is 9,000 miles,
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or three times the distance of New York to California.
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Now this is something that people can see and point to.
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Perhaps it's no surprise
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that in a 2007 Pew survey, when surveyed,
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Africans in 10 countries said
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they thought that the Chinese were doing
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amazing things to improve their livelihoods
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by wide margins, by as much as 98 percent.
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Finally, China is also providing innovative solutions
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to age-old social problems that the world faces.
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If you travel to Mogadishu, Mexico City or Mumbai,
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you find that dilapidated infrastructure and logistics
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continue to be a stumbling block
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to the delivery of medicine and healthcare
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in the rural areas.
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However, through a network of state-owned enterprises,
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the Chinese have been able to go into these rural areas,
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using their companies
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to help deliver on these healthcare solutions.
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Ladies and gentlemen, it's no surprise
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that around the world, people are pointing
at what China is doing and saying,
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"I like that. I want that.
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I want to be able to do what China's doing.
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That is the system that seems to work."
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I'm here to also tell you
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that there are lots of shifts occurring
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around what China is doing
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in the democratic stance.
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In particular, there is growing doubt
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among people in the emerging markets,
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when people now believe that democracy
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is no longer to be viewed
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as a prerequisite for economic growth.
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In fact, countries like Taiwan, Singapore, Chile,
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not just China, have shown that actually,
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it's economic growth that is a prerequisite
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for democracy.
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In a recent study, the evidence has shown
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that income is the greatest determinant
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of how long a democracy can last.
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The study found that if your per capita income
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is about 1,000 dollars a year,
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your democracy will last about eight and a half years.
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If your per capita income is between
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2,000 and 4,000 dollars per year,
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then you're likely to only get 33 years of democracy.
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And only if your per capita income
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is above 6,000 dollars a year
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will you have democracy come hell or high water.
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What this is telling us
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is that we need to first establish a middle class
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that is able to hold the government accountable.
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But perhaps it's also telling us
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that we should be worried about going
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around the world and shoehorning democracy,
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because ultimately we run the risk
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of ending up with illiberal democracies,
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democracies that in some sense
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could be worse than the authoritarian governments
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that they seek to replace.
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The evidence around illiberal democracies
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is quite depressing.
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Freedom House finds that although 50 percent
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of the world's countries today are democratic,
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70 percent of those countries are illiberal
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in the sense that people don't have free speech
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or freedom of movement.
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But also, we're finding from Freedom House
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in a study that they published last year
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that freedom has been on the decline
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every year for the past seven years.
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What this says
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is that for people like me
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who care about liberal democracy,
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is we've got to find a more sustainable way
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of ensuring that we have a sustainable form
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of democracy in a liberal way,
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and that has its roots in economics.
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But it also says that as China moves
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toward being the largest economy in the world,
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something that is expected to happen
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by experts in 2016,
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that this schism between the political
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and economic ideologies of the West and the rest
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is likely to widen.
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What might that world look like?
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Well, the world could look like
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more state involvement and state capitalism;
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greater protectionisms of nation-states;
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but also, as I just pointed out a moment ago,
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ever-declining political rights
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and individual rights.
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The question that is left for us in general
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is, what then should the West be doing?
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And I suggest that they have two options.
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The West can either compete or cooperate.
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If the West chooses to compete with the Chinese model,
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and in effect go around the world
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and continue to try and push an agenda
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of private capitalism and liberal democracy,
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this is basically going against headwinds,
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but it also would be a natural stance
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for the West to take
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because in many ways it is the antithesis
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of the Chinese model
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of de-prioritizing democracy, and state capitalism.
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Now the fact of the matter is,
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if the West decides to compete,
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it will create a wider schism.
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The other option is for the West to cooperate,
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and by cooperating I mean
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giving the emerging market countries the flexibility
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to figure out in an organic way
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what political and economic system
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works best for them.
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Now I'm sure some of you in the room
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will be thinking, well, this is like ceding to China,
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and this is a way, in other words,
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for the West to take a back seat.
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But I put it to you
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that if the United States and European countries
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want to remain globally influential,
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they may have to consider cooperating
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in the short term in order to compete,
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and by that, they might have to focus
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more aggressively on economic outcomes
293
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3235
12:33
to help create the middle class
294
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1709
12:35
and therefore be able to hold government accountable
295
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2671
12:37
and create the democracies that we really want.
296
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4027
12:41
The fact of the matter is that
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2589
12:44
instead of going around the world
298
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1903
12:46
and haranguing countries for engaging with China,
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3487
12:49
the West should be encouraging its own businesses
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2960
12:52
to trade and invest in these regions.
301
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2499
12:55
Instead of criticizing China for bad behavior,
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4252
12:59
the West should be showing how it is
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2600
13:02
that their own system of politics and economics
304
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2387
13:04
is the superior one.
305
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2150
13:06
And instead of shoehorning democracy
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2020
13:08
around the world,
307
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1491
13:10
perhaps the West should take a leaf
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1275
13:11
out of its own history book
309
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1852
13:13
and remember that it takes a lot of patience
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13:16
in order to develop the models
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1570
13:17
and the systems that you have today.
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2333
13:20
Indeed, the Supreme Court Justice Stephen Breyer
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3472
13:23
reminds us that it took the United States
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13:26
nearly 170 years
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2646
13:28
from the time that the Constitution was written
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13:31
for there to be equal rights in the United States.
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13:34
Some people would argue that today
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1362
13:35
there is still no equal rights.
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1514
13:37
In fact, there are groups who would argue
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13:39
that they still do not have equal rights under the law.
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5328
13:44
At its very best,
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13:46
the Western model speaks for itself.
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13:48
It's the model that put food on the table.
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13:50
It's the refrigerators.
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1591
13:52
It put a man on the moon.
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2032
13:54
But the fact of the matter is,
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1790
13:55
although people back in the day
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1650
13:57
used to point at the Western countries and say,
329
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2066
13:59
"I want that, I like that,"
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2043
14:01
there's now a new person in town
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2159
14:03
in the form of a country, China.
332
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2439
14:06
Today, generations are looking at China
333
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2086
14:08
and saying, "China can produce infrastructure,
334
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2640
14:11
China can produce economic growth,
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2116
14:13
and we like that."
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14:14
Because ultimately, the question before us,
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2714
14:17
and the question before
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1856
14:19
seven billion people on the planet
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1705
14:20
is, how can we create prosperity?
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3100
14:24
People who care and will pivot towards the model
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2915
14:26
of politics and economics
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1525
14:28
in a very rational way,
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1567
14:30
to those models that will ensure
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2465
14:32
that they can have better living standards
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1981
14:34
in the shortest period of time.
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2623
14:37
As you leave here today,
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14:38
I would like to leave you
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1405
14:40
with a very personal message,
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14:41
which is what it is that I believe
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2086
14:44
we should be doing as individuals,
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14:46
and this is really about being open-minded,
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3369
14:49
open-minded to the fact that our hopes and dreams
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3339
14:53
of creating prosperity for people around the world,
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3235
14:56
creating and meaningfully putting a dent in poverty
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2924
14:59
for hundreds of millions of people,
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1676
15:00
has to be based in being open-minded,
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2784
15:03
because these systems have good things
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2227
15:05
and they have bad things.
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2477
15:08
Just to illustrate,
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1709
15:10
I went into my annals of myself.
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2486
15:12
That's a picture of me.
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1782
15:14
Awww. (Laughter)
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2240
15:16
I was born and raised in Zambia in 1969.
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4226
15:20
At the time of my birth,
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908892
1947
15:22
blacks were not issued birth certificates,
366
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2082
15:24
and that law only changed in 1973.
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2344
15:27
This is an affidavit from the Zambian government.
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15:30
I bring this to you to tell you that in 40 years,
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2452
15:32
I've gone from not being recognized as a human being
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2885
15:35
to standing in front of the illustrious TED crowd today
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15:38
to talk to you about my views.
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15:41
In this vein, we can increase economic growth.
373
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3724
15:44
We can meaningfully put a dent in poverty.
374
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3417
15:48
But also, it's going to require
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2201
15:50
that we look at our assumptions,
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1994
15:52
assumptions and strictures that we've grown up with
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2227
15:54
around democracy, around private capitalism,
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1979
15:56
around what creates economic growth
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1935
15:58
and reduces poverty and creates freedoms.
380
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2632
16:01
We might have to tear those books up
381
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1877
16:03
and start to look at other options
382
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2571
16:05
and be open-minded to seek the truth.
383
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2857
16:08
Ultimately, it's about transforming the world
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16:10
and making it a better place.
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1686
16:12
Thank you very much.
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16:14
(Applause)
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ABOUT THE SPEAKER
Dambisa Moyo - Global economist
Dambisa Moyo is an international economist who analyzes the macroeconomy and global affairs.

Why you should listen

Dambisa Moyo's work examines the interplay between rapidly developing countries, international business, and the global economy -- while highlighting opportunities for investment. She has travelled to more than 60 countries over the past decade, studying the political, economic and financial workings of emerging economies, in particular the BRICs and the frontier economies in Asia, South America, Africa and the Middle East. Her latest book, Winner Take All: China’s Race for Resources and What It Means for the World, looks at how commodities markets influence much more than the global economy -- and examines the possible consequences of China's unprecedented rush for commodities such as oil, minerals, water, and food, including the looming specter of commodity-driven conflict.

She is the author of the brilliantly argued Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa and How the West Was Lost: Fifty Years of Economic Folly and the Stark Choices Ahead. Previously, she was an economist at Goldman Sachs, where she worked for nearly a decade, and was a consultant to the World Bank in Washington.

More profile about the speaker
Dambisa Moyo | Speaker | TED.com

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