The Virgin of Guadalupe

IntroductionWhen the rest of the world recognized the

world is flat…Mexico – statues of the Virgin of Guadalupe

imported from ChinaEgypt – Ramadan lanterns imported from

ChinaBoth were known for their low-cost

manufacturing, primarily Mexico, until China emerged

IntrospectionDeveloping countries need to take a step

back and identify and evaluate their problems in order to play a role in the flat worldHave to be honest with themselves when

looking at their strengths and weaknessesFirst step is identifying that they have a

problem “Developing Countries Anonymous” vs. A.A.

I Can Get It For You WholesaleNeed to get 4 basic things right:

InfrastructureEducational SystemRight GovernanceRight Environment

Turning point – fall of the Berlin Wall“Reform Wholesale” – macroeconomic reform

initiated by China, Russia, Mexico, Brazil and India

“Black cat, white cat, all that matters is that it catches mice.” - Chinese premier Deng Xiaoping p. 409

Poverty in globalizing countries is declining while poverty in non-globalizing countries is and is expected to continue increasing.

I Can Only Get It For You RetailProblem – countries are stopping with

“Reform Wholesale” when they should be continuing with “Reform Retail”

“Reform Retail involves looking at infrastructure, education, and governance and upgrading each one..”

Real issue is not employment, but more productive employment that allows living standards to rise

I Can Only Get it For You Retail (Cont.)The IFC’s five basic questions about doing business in

developing countries regarding how easy or difficult it is to:1. start a business in terms of local rules, regulations,

license fees2. hire and fire workers3. enforce a contract4. get credit5. close a business that goes bankrupt or is failing

Often difficult to start and run a business in developing countries

Excessive regulation tends hurt most of the people it is supposed to protect.

Ability to establish new businesses allows the country to readily create more jobs for its citizens

Follow the Leapin’ LeprechaunsIreland is a shining example of moving forward

through reform retail of governance, infrastructure and education.

Had to adapt and conform to be able to compete with other countries and survive

Houses 9 of the 10 top pharmaceutical companies, 16 of 20 medical device companies and 7 of 10 software firms

Public college education basically free providing incentive for citizens to earn a higher degree

Ireland starting to play offense while Germany and France are playing defense

Culture Matters: GlocalizationThe “elephant in the room”: Why can some

countries mobilize economic change and others struggle?

Freidman believes that some religions/cultures are “progress prone,” and welcome change and adapt to free market capitalism quickly… called “Glocalization”

Culture Matters: GlocalizationSome nations are “progress resistant,” and

will take longer to change and never will become leaders in the flat world.

Islamic nations in the Middle East have problems adapting to the newly flat world because their leadership is still dominated by very conservative religious leaders that have literally banned reinterpretation of basic Islamic principles to better themselves in the world marketplace.

“The Intangible Things”What causes some

city’s skylines to change seemingly overnight, while others stagnate over decades?

Beijing, China

“The Intangible Things”Two main intangible concepts:

A society’s ability and willingness to pull together and sacrifice for the sake of economic development.

Leaders with the vision to see what needs to be done in terms of development and the willingness to use their power to push for change rather than enrich themselves.

India has leaders that invest in institutes of technology, other countries have leaders that invest in their palaces.

Many Speeds, One DirectionFreidman ends the chapter by stating that,

“There are many speeds that a country can go at down this globalization path – and each country has to choose the right speed for its particular circumstances. But there is only one right direction.”

....Friedman says he gets a lump in his throat when he sees such large numbers of people escaping poverty in places like India, China, or Ireland, but what about the 36.5 million people in poverty in the U.S. during 2006? What kind of direction needs to be taken to bring this number of Americans out of poverty?