Devin Stewart Interviews Ian Bremmer

Sep 12, 2006

"The J Curve is the nonlinear relationship between openness and stability," says Ian Bremmer, and it is important to recognise that a sudden increase of openness in closed societies such as North Korea and Cuba can lead to instability in the short-term.

DEVIN STEWART: I’m Devin Stewart of the Carnegie Council. I’m here with Ian Bremmer, President of the Eurasia Group. We are talking about his new book, The J Curve: A New Way to Understand Why Nations Rise and Fall.

Ian, thank you very much for coming. Please tell me what is the idea about the J curve. What is the J curve?

IAN BREMMER: The J curve is the nonlinear relationship between openness and stability. So if you imagine that we have a vertical axis, it describes how stable a country is. A horizontal axis describes how open that country is to both internal and external communication, flows of people, goods, ideas, and the rest.

The relationship that is described actually looks like a J for the United States, France, Japan. You have other countries that are quite stable, because they are closed—North Korea, Cuba, Burma, Turkmenistan, Iraq under Saddam Hussein—where the curve is more steep on the left-hand side than the right. It is a lot easier to become more stable by closing your country off and declaring martial law, at least in the short term, than by building institutions and civil society. It's also much quicker to fall apart, if suddenly there is an assassination of the leader who is in charge. So that is the basic nature of the J curve.

DEVIN STEWART: Is The J Curve a prescription? Is it advice for nations on a way to govern foreign policy, or is it simply an observation?

IAN BREMMER: Oh, I think it’s advice. But I think we need to recognize that it is advice about execution. Look, at the end of the day President Bush, President Clinton, have laudable goals. They want the world to be wealthier; they want individuals—Americans first and foremost but also the world—to be able to be free, have liberty, have equal rights, have economic development. Those are all laudable goals. The J curve does not change the nature of those goals. It doesn’t say those goals are more right or more wrong. But it does say that if you want to get to those goals, you have to execute.

I come from not just political science, but also from the business world. You know, everybody wants to maximize profits. You don’t get fired because you don't want to maximize profits. You get fired because you don’t execute.

What we are seeing in the world today is that a lot of crises come from abysmal execution. The J Curve is about that, and it certainly is prescriptive in terms of how to execute to get toward the laudable policy goals that generally are banal and everybody shares.

You talk about coming up with this idea, and about how this is an idea you’ve been kicking around for several years, and you finally got the courage to express it in a book. Is there a funny story behind this, or is it sort of a long-term observation?

IAN BREMMER: Funny-strange, in the sense that it is hard to write a book. You know, I’m one of these people that when I did my dissertation, once I knew what the conclusions were and I did the research, I lost a lot of interest in actually writing the dissertation. You had the article-length stuff, and then you had to do the footnotes and you had to go and finish the research, and you were doing that for 500 or 1,000 people in libraries, and no one was really going to care.

I think I felt the same way about The J Curve. It was something that I had a lot of internal thoughts about and some discussions with friends and colleagues. Then I had some broader conversations with some people that I really respected—Senator Gary Hart and Bob Hutchings, who was a professor at Princeton and then the Chairman of the National Intelligence Council. In both cases I was talking to them about the idea, but they convinced me that it really needed to be a book, not a book that 1,000 people would read, but a book for popular consumption. When you hear that from a couple of people with that sort of experience, even recognizing the amount of pain and angina you are going to put yourself through having a day job and actually writing the book, you sort of figure, "Okay, I should set myself to do it."

The funny thing is that I worked on this for about two years. Once I decided to do it, I discussed it with really nobody. I didn’t talk about the fact that I was working on it, because, still, there is this level of trepidation—"Oh God, it’s a book; am I going to finish this thing?" Now that it is finally done and I can talk about it, it’s a phenomenal relief. I am ready to go around the country, around the world, and talk about The J Curve. So I’m delighted that we’ll kick this off with you.

DEVIN STEWART: What are your primary audiences? Is it the U.S. government? Policy wonks in general? Corporations? Or many different governments?

IAN BREMMER: It’s people. I think that what’s tremendous about what has happened in the post-9/11 world—I’m talking to you right now on September 12th, and yesterday was a difficult day for all of us here, and we have been living with the consequences of that globally. But if there is anything good that came out of 9/11, it’s the fact that Americans are much more interested and engaged in the world around them. You look at the type of people who are reading nonfiction—The Tipping Point, Freakonomics, The World is Flat—these books ten years ago were not getting millions of people to read them.

So my hope is that I am going to get beyond the Washington wonkocracy—you know, they are going to read the book; I understand that. Let me get beyond the Council on Foreign Relations—they’re going to read the book; I understand that. I want to talk to people. I want to get out to people who are affected by the world, people who are going to vote.

I don’t think that’s just about the United States. It’s a global economy, it’s a global marketplace for ideas. I got an email just today from a fellow from South Africa who had seen a review in The Economist and was asking me about applications to his country. I want to be able to talk to people like that.

If at the end of the day, as a consequence, we have people thinking about the world a little differently— news headlines you see and you say, "Oh, I understand; the J Curve tells me that this makes sense"—then I have accomplished a lot. That’s what I want to do with the book. I don’t have the need to write for 5,000 folks.

DEVIN STEWART: Is there an ethical application here? You’re talking about the benefits of openness and the benefits of stability. Two, I think, pretty good goals. Can The J Curve be used as a device for policymakers to pursue a more ethical or moral foreign policy?

IAN BREMMER: I think that it is important to recognize that stability by itself is not necessarily a good goal; it’s not necessarily an ethical goal. I often worry about people who worship at the shrine of stability.

There are many countries out there that have been stable for a long time. If you look in the former Soviet Union, a place where I cut my teeth as a political scientist, Turkmenistan is the most stable country in the region. They’ve got serious energy wealth, they’ve got no opposition to speak of, they’ve got no challenges domestically to the existing president—Turkmenbashi, the self-anointed father of all Turkmen. That’s not an ethical policy. It’s not an ethical state.

So I think what The J Curve does, I think, is it tries to lay out the very real compromises that are made between two goals that are often considered to be ethical without thinking. One of them is globalization, and another one is stability, both of which have aspects that can be laudable, but both of which have applications which can be fundamentally problematic and unethical. That’s really what The J Curve is about.

And how about the role for the international community? Do they have a moral duty to help out countries that are traversing through the J?

IAN BREMMER: I think that there is always a duty to do what you can to avoid the worst crises that we have seen the world traversing. It’s becoming more of a global duty, not just an American duty, because the world is moving from a system that was really a U.S.-led hegemonic unipolar system to a more multipolar system.

We see this today in the Middle East. In Lebanon, we just had 1,500 troops that have been committed by the French, 2,000 by the Italians. You know, a couple of years ago the United States wouldn’t have taken too well to the notion of the French putting troops on the ground. Today it’s, "Thank you very much, we appreciate that." That shows a shift, and it shows that, yes, this is not just about the United States. Increasingly, these are international obligations.

China is growing at a momentous rate. They talk about themselves as "extreme capitalists." But we also see that anti-Chinese sentiment on the ground in many of these countries, some of the least-developed countries in the world—in Africa, for example, and in Southeast Asia—is starting to become much more problematic. We see this in Nigeria, with car bombs for the first time against Chinese targets. We see this in Zambia, with the demonstrations that have occurred, and the trade unions the Chinese have reacted to.

None of these countries can operate in isolation anymore. In today’s interconnected world almost any country that suddenly slides down the curve is a potential threat. So it’s not just the moral imperative. It’s also a very clear need for national interest. The fact that you can conflate those two increasingly should make an ethical foreign policy easier to get to.

DEVIN STEWART: It seems that as part of becoming a more stable and open country you would expect those countries to become more democratic and more respectful of human rights and plurality. That seems to be the implication. What is the mechanism behind following the path along the J curve toward becoming more open and more stable and the development of democracy? Is there any mechanism?

IAN BREMMER: I think we need to recognize that becoming more open doesn’t always mean becoming more democratic. We saw this in Algeria, we see this to a certain extent in Palestine in Gaza, certainly in Lebanon. In many cases where the conditions—the economic conditions, the educational conditions—are not ripe, you can have free and open democratic elections and you can end up with a leadership which moves directly away from openness.

We see this happening today in Iran. It wasn’t the best election in the world, but it wasn’t the worst. At the end of the day, Ahmadinejad pretty much won that election, and yet he now wants to take that populist mandate and use it to close that society off, and is prepared to actively provoke an international conflict to do so.

President Putin is sitting on a 78 percent popular approval rating today in his country. The general sense in Russia is that democracy—what the international community, the IMF, the United States, Larry Summers, and others were saying was good for the country in the early 1990s—led to significant poverty, it led to robber barons, it led to these very corrupt privatizations with billions of dollars ending up in the pockets of a small number of individuals who were connected to the Kremlin. The average Russian is saying, "If that’s democracy, I don’t want it." The fact that people routinely refer to Putin as "Putinochet," and that’s considered a positive thing in Russia, should lead us to question the relationship between democracy and openness. I think this is a distinction that is lost on too many people.

DEVIN STEWART: Is the premise of your book, the sliding along the J, that openness is inevitable? Are you saying that globalization forces down the walls of oppressive regimes and that a more controlled openness is more preferable? Is this how you’re defining openness?

IAN BREMMER: I think there’s something to that. I think I’d put it a little bit differently. I would say that, with the diffusion of technologies and the communication revolution, the pressure for openness is growing over time. And yet, we see that the ability of the Chinese government to put massive amounts of resources towards stopping the average Chinese from having an effective search engine to get information of the rest of the world is pretty sophisticated. A well-resourced government intent on shutting out the globe is nearly as effective in North Korea today as it was in Albania under Enver Hoxha. It is nearly as effective in China today as it was in other countries twenty and thirty years ago.

I think there is a level of inevitability. That’s why ultimately I am probably more bearish on the ability of the Chinese political system to make it through this J unscathed than I might otherwise be. I think that the political pressures are growing and they are going to be untenable.

But we shouldn’t underestimate the repressive power of the state to maintain a level of isolation, even in the globalized world of 2006. And this is where I take a bit of issue with the world being flat. There are still some very significant borders, and it is hard to break those down.

DEVIN STEWART: Let’s take a couple of the cases that you outlined in the book. Starting with China, given the possible direction of China and the possible strength of oppressive regimes, what would you recommend that an ideal U.S. foreign policy approach be toward China?

IAN BREMMER: I actually think that we are reasonably close today. I think we need to recognize that the Bush Administration got extremely fortunate with the appointment of Hank Paulson, the Secretary of Treasury. He’s someone who is an old China hand. He has been there about thirty times. He knows the country and he understand the mutually assured destruction that exists economically between the United States and China—the same way it did between the United States and the Soviet Union in the Cold War on the security front. In other words, the United States cannot afford for the Chinese government to fail economically, because that’s where the multinationals that are U.S.-based are making all the money. The Chinese are buying the dollars. The Chinese are propping up the American economy as much as the United States is proving the engine of growth for China. A realization of that is healthy, because it is an imperative. So I think you don’t want to push the Chinese too much.

A hedging strategy? We heard Zoellick when he was Deputy Secretary talking about a hedging strategy and the need that if something goes wrong with China and things go horribly awry that the United States should have strong relations with India, with Japan. Again, some of the successes of the Bush Administration. We see lots of failures in the Middle East. We should point out the successes as well. I think that that is a reasonable strategy.

I think the problems for U.S.-China policy have been coming out of Congress. Mr. Schumer is talking about 27.5 percent across-the-board tariffs, which would be disastrous for both the U.S. economy and China. I think that in private moments Schumer admits that himself. But nonetheless we do see that there is a neo-isolationist sort of movement, especially as there is a feeling that the U.S. economy might not be doing as well, homeland security is a high priority, as the neo-conservatives sort of wither away. Whether that comes from the right, with Pat Buchanan, or the left with Lou Dobbs and "broken borders," it is a danger for the global economy. I’m not suggesting these people are wrong. I’m just suggesting there is an economic cost to that and we need to be aware.

DEVIN STEWART: What are senators such as Schumer worried about? This sounds like the debate that was going on at the end of the 1980s. Are they worried that a strong economy might be a threat militarily or politically? What is the real fear with a strong Chinese economy?

IAN BREMMER: The real fear for Schumer is reelection. He is playing to a domestic constituency where he finds that that’s relatively easy—whack on some international countries, support local labor, support local business in whatever way he needs to define that. Whether you’re talking about Cuban-American relations, about the anti-China stuff, about protectionism, about immigration issues, a lot of that all plays back to domestic politics.

You know, clearly there is a concern that the Chinese don’t play by the same rules that the Americans do, and it is a legitimate concern. I mean the United States basically prevented CNOOC from buying Unocal. The funny thing is that Unocal managers were actually not opposed to it, because in general they felt that was the way they could keep their jobs, because the Chinese needed management skills. Chevron had no need for Unocal management.

But leaving aside that kind of pleasant irony of the entire thing, there was a real point, that if the United States or a U.S. company had wanted to go into China and buy a Chinese stake of an oil company or buy a Chinese national champion in another field, that they would be precluded from doing so, and that rule of law, independence of judiciary, contractual rights and obligations don’t exist in China the way they do in the United States.

China’s joining the World Trade Organization and trying to integrate China into the global economy, while potentially sowing the seeds for the instability of the Chinese regime, clearly will help to move that process along. But that process is moving too slowly. There is a lot of potential for value destruction for American corporations investing in China because of the opacity of the Chinese system.

So there is a real point to be made, that the Chinese need to shape up on these issues, and I think we should make that point strongly. But we need to recognize that the worst thing to occur for the United States would be the Chinese economy to suddenly stop growing. So that’s a very difficult balance, that’s hard to do.

I want to say that I am very sympathetic to those who are really concerned about China. I talk to corporations all the time that would love to see American congressmen whack China around because they don’t feel they can do it themselves. China is too important a market for them. They don’t want to irritate the Chinese government. So they are saying, "You take the lead because we can’t afford to go out publicly." So let’s recognize that they are carrying water even for some big corporates. But there is a danger that they actually get what they wish for, and that would be a bad thing.

DEVIN STEWART: Another issue that comes up with domestic politics a lot, and it also comes up in your book, is the use of sanctions. We are now threatening once again to impose sanctions on North Korea as a way to deal with the lack of progress with North Korea. How do you view sanctions as a foreign policy tool, given your J curve theory?

IAN BREMMER: I think the most important point to recognize about sanctions is that typically they are being used to try to prevent a country, often a rogue state, from engaging in behavior which is considered to be inappropriate. My response to that is that the United States historically has been much more effective as the world’s policeman than as the world’s parochial school.

You tell the North Koreans: "You’re behaving badly and we will punish you. We’ll treat you like a child as a consequence. We’re going to send you to your room. We’re going to isolate you." What The J Curve says very clearly is that for Kim Jong-Il to stay in power he needs that isolation; that isolation is good for him. He does not want inspectors running around his country, he does not want foreign direct investment into his country, he doesn’t want open markets, he doesn’t want media. He does not want to be a normal country. They call it the "hermit kingdom." His ideology is called juche, self-reliance. That should tell us something. So we need to recognize that that is counterproductive.

The United States wants to stop the Iranians from developing nuclear weapons. There is a degree to which effective sanctions, if they could be implemented, might stop them from getting the materiel and so forth. But if the United States also wants regime change in Iran—and the stated policy of the United States for North Korea, for example, has been regime change—they say, "Iran deserves a better government," they want this government out—then they need to recognize that the best way to bring about regime change is not by isolating the country. The best way to bring about regime change would be to have diplomatic relations, have economic relations—you are going to destabilize the country from within.

You have Luce and Alcatel trying to do a deal in the United States. You had American senators and congressmen saying, "We don’t want to approve that deal. We’re concerned about it because Alcatel is investing in Iran." Alcatel was wiring Iran. If you want to bring about a change in the Iranian regime, I would suggest that wiring Iran is a good idea.

Now, I’m not telling you that the policy should be wiring Iran. I’m telling you that if the policy is regime change, then to execute that policy, going back to the point at the beginning, you want to do things that will destabilize the country. If, on the other hand, you are hoping to maintain stability, then you should isolate them to a greater degree.

So you tell me what you want and I’ll tell you how to get there. My concern is that we have been talking about what we want and doing something completely counterproductive. That is the fundamental issue in The J Curve.

DEVIN STEWART: In going back to engaging North Korea, perhaps opening it up toward perhaps some foreign policy goals of eventual peace in Northeast Asia, let's talk about the Kaesong debate. The United States and South Korea are negotiating a free trade agreement. The South Koreans want Kaesong products to be included in this free trade agreement. I was thinking about your book when I read the news article about this. How would you interpret this debate, given what you know about stability and openness? Would you say that the United States should allow Kaesong products to be included in the free trade agreement?

IAN BREMMER: North Korea to a certain extent is lost, to the extent that they have nuclear weapons. The United States has said that U.S. policy is complete, verifiable, irreversible denuclearization. That’s only four words, believe it or not—it sounds like a lot longer. They can’t get there. It can’t be complete, it can’t be verifiable, it certainly can’t be irreversible. And they are nuclear; they are not going to change that. So even though the United States demands it, the fact is that the effective U.S. policy today is capitulation and acceptance. It’s not the formal U.S. policy, it’s not the public policy; it is the de facto policy on the ground. It is the Chinese policy, it’s the South Korean policy, it’s the Japanese policy. And meanwhile the North Koreans try to get more money—without more openness, just more money.

So at this point the real question is: How much are you prepared to tolerate that status quo? There is a tradeoff: the longer you tolerate the status quo, the more the likelihood is that some of this "stuff" will get into the free market.

We know the North Koreans have already been one of the leading human traffickers in the world, drug traffickers in the world, traffickers of illicit ballistic missile technology. One would surmise over time that nuclear materiel and technology will be exported from North Korea someplace else. So you must take that on the one hand and, on the other hand, the dangers of destabilizing North Korea, which are real, which are manifold—you know, major numbers of North Koreans streaming over the border into China, South Korean market crash—not to mention the possibility that the North Korean government figures this all out and decides that they’re going to do something preemptive.

So at this point the North Korea policy is kind of a wash. But I tell you, one of the policies I liked in terms of destabilizing the North Korean government from within, which felt to me quite a bit like the Marshall Plan, was when a group of South Korean dissidents decided they wanted to send over a whole bunch of solar-powered radios by balloon into North Korea—solar-powered, don’t need electricity, good thing because most Koreans don’t have it. They turn on their radios, it’s sunny, and they can listen to anything—BBC, CNN, Al-Jazeerah, I don’t care, just something, just let them listen to something. Let them watch us talking about The J Curve—it’s all over then in North Korea, right? At that point there is going to be a problem in North Korea. And the South Korean government stopped it from happening, fearing that there would be retribution from North Korea. But that’s the kind of policy.

Certainly, if the United States could have diplomatic relations with North Korea, with the ability to gain intelligence from within the country, it would be a better thing. The likelihood that the North Koreans would allow that is very low.

So I think we also need to recognize that at that stage these countries are aware of the fact that they want to remain isolated. It’s not like you can say, "Oh, we just need to open them up." They’re not going to say, "Come on in." That’s an issue.

Iran is a bit of a different story because Iran is not nearly as totalitarian today as North Korea, which provides more of a window of opportunity. It also provides more of a danger because the status quo is unstable.

DEVIN STEWART: Would you say that South Africa is a success story with sanctions?

IAN BREMMER: It was a success story with sanctions. It may not stay one. But certainly, here was a situation where you had an extraordinary individual, Nelson Mandela, who recognized the need to maintain the white old ruling classes to keep the economic capacity of the country, and wasn’t going to try to go after them as the ex-colonials. You also had the whites living in South Africa knowing that they couldn’t keep the status quo.

And nobody wanted to be isolated. I mean this was a country that wanted to be a part of the international community, that saw themselves as a developed state. So they weren’t strongly on the left-hand side of the curve. That allowed them to get tough. It wasn’t a totalitarian state. It was just a state that was deeply problematic in a couple of key variables. So that was a success.

Unfortunately, the political capital that exists today with Mr. Mbeki is not what it was with Nelson Mandela, and economically that country is not doing as well as had been hoped, had been promised, in terms of unemployment, in terms of growth, in terms of foreign direct investment. South Africa is one of the few countries outside Russia where people talk about local oligarchs. South Africa is considered a developed state. Local oligarchs? It’s a very dangerous place to walk around by yourself, one of the places where you feel like you really need security if you go and visit.

So, you know, it has been a success story. It’s not clear it is going to stay a success story. But certainly, the period of sanctions being implemented—and de Klerk admitted this himself—and then moving them to the right-hand side of the curve, that was a success story.

DEVIN STEWART: So it seems that the country needs the will or the want to become open.

How about Cuba? Recently, there have been some energy resources discovered off the coast of Cuba. The Indians are looking at this as a potential source of energy. Nevertheless, we have a closed approach toward Cuba. What would you recommend to the Bush Administration as an appropriate policy toward Cuba, given our foreign policies and the sentiment of Cubans?

IAN BREMMER: Well, Castro has been in place for forty-seven years, the longest-standing sitting head of state in the world today. Certainly, U.S. sanctions have helped maintain him in power. I mean you look at Mr.Payá, the leading dissident in Cuba, and he’s someone who can’t stand this regime but would like sanctions to be removed because he sees that as a better opportunity to actually get rid of these guys. When sanctions are gone, foreign direct investment in Cuba is going to grow.

You talked about oil resources. If oil reserves were really found outside Cuba, a couple of things would happen. One, the Cuban government would suddenly say, "Ah, we can get rid of tourism. We don’t need it anymore. We can cut ourselves off because now we have a source of cash."

But, interestingly, the pressure to remove sanctions from the United States would suddenly grow, because if you have to compete with a nascent oil lobby, with $3.50-a-gallon gas, to get into a Cuban field, as opposed to letting the Spaniards and the French and everyone else have it, and compare that with a couple of key constituencies full of Cuban-Americans, many of whom are increasingly young and don’t have the same issues with the Castro regime that their forefathers do, I would suggest that the balance might shift there. So a big oil find cuts both ways in Cuba. It’s sort of interesting to think about.

But certainly, the sanctions on Cuba—you tell me what the purpose of U.S. policy is. If the purpose of U.S. policy is to maintain the regime in Cuba, to keep the Cubans relatively impoverished, and to keep the Cuban-American constituency relatively happy, the U.S. policy has succeeded. There is a relative level of stability.

If the purpose of the U.S. government policy has been to remove Castro from power and allow Cuba to grow economically as a functional, developing state, then the U.S. policy—you tell me. Has it failed or succeeded? Forty-seven years, Castro is still in, right?

So tell me what you want and we’ll try to tell you how to get there. But I don’t think that we’ve been moving in the direction that we’ve stated we want.

DEVIN STEWART: President Bush’s reading list is often talked about on TV and in the press. If The J Curve were on his fall reading list, how do you think President Bush would change his foreign policy or foreign policy perspective?

IAN BREMMER: I’ve already told you that I think I agree with Bush on a number of things. I agree with the Bush Administration on China, on India, on Japan. I think we’re just sort of doing okay right now on places like Brazil. I think the European policy has picked up.

I think we need to recognize that a lot of the problems that the Bush Administration has today, as opposed to three years ago, are legacy problems. You can have the best policy recommendations in the world on Iraq—you’re not in a good direction there, right? The political capital to keep 134,000-plus troops on the ground in Iraq just isn’t there. The ability to maintain relative sustainability of that government as it stands right now isn’t there. So Bush can read my chapter on Iraq.

I think where you might see some changes is on the pushing for democratization. It would be on the recognition that calls for isolating these states are counterproductive. That’s where I think there’s real capacity to make a shift, and where the United States might be making some mistakes on Iraq, might be making some mistakes on some other countries in the world, on Cuba and places like that.

But we do need to recognize that anyone who goes out and says, "The state of the world today is Bush’s fault"—the state of the Middle East is as much the Europeans’ fault as it is that of the United States. These are legacy issues. These are not quick fixes.

But it is important, if you have this lens, if you have this framework, to start thinking about how it works, so that as these new challenges come up you can deal with them more effectively. Look, he has been reading Camus, he has been reading Shakespeare. I’m not sure The J Curve actually stands up to any of that historically. But there is some direct relevance to some of the things we are facing today, so maybe it will creep up the list.

DEVIN STEWART: Is it relevant for corporations? Is The J Curve useful to other organizations, like companies?

IAN BREMMER: Political risk matters to firms. It has mattered to firms for a long time. They are becoming more aware of that, for lots of reasons. Dangerous technology is becoming more diffuse, so political risk, even if it is in a small country, affects global markets. Energy is coming from relatively opaque and unstable parts of the world, so the energy markets are becoming more volatile. The basic price point, even though cyclical, is going up. Multilateral architecture is from the post-World War II era, but we have a very different geopolitical environment today.

As a consequence of all those things, you need to understand how politics affect the markets. So if you are a company and you are investing in China, one thing you may want to think about in terms of the J curve is that the very things that are making China more attractive for you to invest in, the very things that are facilitating Chinese growth, that globalization, are also making the Chinese political system more unstable.

The J Curve is telling you a lot about trends. I talked about governments worshipping at the shrine of stability. Companies worship at the shrine of stability. They need to recognize that there is a lot of directionality around that stability, some of which is favorable (Brazil, India), some of which is unfavorable (China, Saudi Arabia longer term). So it's very important to know about underlying stability.

If you are a company and you are dealing with political risk, there are two things you can pay attention to: stability and shock. Shock is hard to measure because shock can come from anywhere—it could be a tsunami in Indonesia, it can be a political assassination, it can be an oil spike. It’s hard to predict a lot of those things. Stability, on the other hand, is something you can actually get your hands on. So The J Curve really helps with that.

DEVIN STEWART: For your clients as well?

IAN BREMMER: I started the company in 1998 with $25,000, no outside investment. Today we’ve got about 250 clients, we’ve got eighty full-timers in three offices, we’ve got 480 people on the ground. So for someone with no business experience, either it matters or I am seriously lucky. I’m prepared to go with either, but I’m hoping "it matters" is the one that counts.

DEVIN STEWART: We’re lucky to have you here, Ian. Thank you very much.

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