How bold visionaries saved their countries from economic catastrophe

‘ The Fix’ features leaders who put away self-serving interests to benefit society

GOOD news for a change. This book makes you happy. It is all about optimism. All about hope. Jonathan Tepperman, managing editor of Foreign Affairs has traveled around the world in search of the most successful countries. The Fix is a collection of success stories: it tells us how some exceptional world leaders had the power to get things done. The person with the fix: the right person, in the right place, at the right time with the right strategy can overcome the harshest obstacles.

The first story takes us to Brazil where the man with the fix, former president of Brazil, Lula Da Silva, is the victim of an unprecedented defamation campaign although the prosecutors are unable to find any illegal activity committed. He is still popular for having lifted thousands of Brazilians out of poverty thanks to Bolsa Familia, one of the word’s cheapest antipoverty programs. He left office with an 87 percent approval rating and Obama called him “the most popular politician on earth.”

The seventh of eight children, he had to quit school after the second grade to earn money shining shoes. He taught himself to read when he was 10 and at 14, he worked his way into a factory; and soon after became a member of the Sao Bernardo Metalworkers Union.

He ran for president three times and succeeded on his fourth attempt. In his first year, he cut spending by about $4 billion and implemented an even stricter budget-surplus target than the International Monetary Fund recommended. These positive moves boosted the market but his greatest legacy is the groundbreaking Family Grant, known as the Bolsa Familia.

First, Lula realized that providing the poor with physical stuff was complicated, costly and created opportunities for corruption. Second, new research showed that poor families did not waste the money especially when the mothers were responsible for the budget. Lastly, Lula knew that the wave of privatization that took place in Latin America had left many people destitute. Renationalizing big businesses was out of the question so the best way to tackle people’s economic hardship and social exclusion was to give them cash.

It was easy to be accepted in the Bolsa Familia program but to stay in the program, participants had to ensure that children from 6 to 15 years old were properly vaccinated and attended school at least 85 percent of the time. Pregnant women were also required to get prenatal care and breast-feed their infants.

These clauses put an end to the parents sending their children to work and earn money instead of going to school. Some economists, however, believed that the government should be investing in the infrastructure instead of paying children to go to school. And Lula told the author, “The opposition said we were going to create an army of lazy people.”

To prevent undeserving recipients from benefiting from the free distribution of cash, Lula established a unified national registry to keep track of each and every individual who entered the Bolsa Familia program. Ten years after its launch, this program reaches some 14 million families, which corresponds to 55 million Brazilians. When Lula first presented the program he said, “When the millions can go to the supermarket to buy milk, to buy bread, the economy will work better. The miserable will become consumers.” Lula also said that “of the people that received benefits under the Bolsa, 80 percent of them bought a television set, 79 percent bought a refrigerator, and 50 percent bought a washing machine. So what had seemed like a program just for people who were living in 18th-century conditions helped meet the needs of modern manufacturers, generating millions of jobs. Everyone won.”

Although Brazil is currently experiencing economic problems, the Bolsa Familia has succeeded in protecting the masses, which are not suffering as much as they used to during past crises.

For the following success story, we leave South America and head up north to Canada, a country which has completely overturned its immigration policy.

On Dec. 10, 2015, Justin Trudeau, Canada’s newly-elected prime minister was handing coats to the first of 25,000 Syrians admitted into the country. “You’re safe at home now,” he told them.

But Canada hasn’t always been so open toward asylum seekers. The country embraced immigration out of necessity.

After Canada gained its independence in 1867, Frenchspeaking Canadians were badly treated. Consequently, nearly a million French Canadians fled the country for the US.

When the dashing Pierre Trudeau became prime minister in 1968, he faced the vengeful Francophone, the dominant Anglophone and Canada’s other minorities mostly consisting of eastern Europeans and also Italians, Armenians, Portuguese, Greek and Jews. Known as the third force, they represented about 26 percent of Canada’s population and they clearly did not want either of the other two to become dominant.

Pierre Trudeau, whose motto was “Reason Over Passion,” came up with a bold proposition. On Oct. 8, 1971, Trudeau delivered an audacious speech in which he announced that “cultural pluralism is the very essence of Canadian identity… There cannot be one culture policy for Canadians of British and French origin, another for the original peoples, and yet a third for all others…Although there are two official languages, there is no official culture, nor does any ethnic group take precedence over any other. No citizen or group of citizens is other than Canadian, and all should be treated fairly.”

The prime minister went on to create a new Ministry of Multiculturalism. However, there were more pragmatic reasons behind Pierre Trudeau’s call for a multicultural society. Canada was vastly under populated and the Department of Manpower and Immigration had begged the government to fill up the empty spaces as soon as possible. The other reason was that Canada’s economy was starting to flourish and it needed workers.

“Trudeau’s new emphasis on pluralism, coupled with Canada’s shift to a color-blind and economic-focused immigration system, quickly began to change the way Canada thought about the issues… The new system promptly began producing financial dividends that helped convince still-wary Canadians that opening their doors would benefit everyone, especially themselves,” wrote Tepperman.

It is difficult to imagine that for most of its history, Canada was not open to immigrants, given that at present, 85 percent of Canadians now see multiculturalism as very important to national identity.

We leave the American continent, and follow Jonathan Tepperman to the smallest country in Asia: Singapore. When it became independent in 1959, Singapore was also known as Sin-galore. That year a talented young barrister, Harry Lee, decided to run for prime minister and fighting corruption was his priority. He was taking a big risk at a time when corruption was rampant. Years later, he wrote that “the percentage, kickback, baksheesh, slush, or whatever the local euphemism, was a way of life in Asia: People openly accepted it as part of their culture.”

Lee was backed by the People’s Action Party (PAP), a party he and some friends had founded in 1954. PAP fought a successful anti-corruption campaign and the 35-year-old Lee became Singapore’s first prime minister in 1959. After he was sworn in, he dressed in white to symbolize purity. He launched a war against bribery and implemented one of the most effective anticorruption systems in the world. Since 1992 Singapore has provided anticorruption training to more than 80,000 officials from 170 countries. Singapore nowadays spends money to help keep the country clean, by paying government employees well and generously funding anticorruption efforts. Incidentally, at the beginning of his tenure, Lee actually reduced government salaries but corruption declined.

“As Singapore’s stratospheric cleanliness rankings attest, this multifaceted system has paid handsomely. Lee’s ‘First World standards’ along with a host of other good governance initiatives, have turned this once nearly destitute city into a world-beating economy. In 2015, the World Bank named Singapore the easiest place on the planet in which to do business. The country now boasts that $300 billion economy which is slightly larger than that of the Philippines… In per capita purchasing power terms, Singapore is now the world’s sixth-richest country. Not bad for a country which is about half the size of New York City,” wrote Tepperman.

Also situated in Asia, Korea is another country that attracted the author’s attention. Invaded by Japan in 1910 and liberated in 1945, Korea was then occupied in the north by the Soviets and in the South by the Americans. A civil war broke out in 1950 and destroyed the infrastructure and the economy. At the end of the war in 1953, 900 factories were demolished and a tenth of the population died. South Korea was poorer than Ghana, but has managed to become one of the richest countries in the world. The country’s transformation was first engineered by a general, Park Chung-hee who took power in a military coup. Park was impressed by Japan’s rapid industrialization during the Meiji era and he knew he could count on the help of large numbers of young people ready to work for a small wage. He decided to begin mass-producing cheap goods such as toys, shoes and textiles for export. He totally gave himself to this task, declaring “let’s fight while we work and work while fighting.” Park also rebuilt the country’s infrastructure and recreated a professional bureaucracy, which combined “strict Japanese-style hierarchy and discipline with the technocratic competence and can-do spirit he’d admired in the US troops he fought alongside during the civil war.” Park also enlisted the help of Korea’s family-owned business conglomerates into complying with his agenda. Ten years later, the country became a victim of its own success. Wages rose sharply, increasing manufacturers’ costs and as a result, South Korea lost its competitive edge. Park was advised to focus more on technically demanding thus more profitable industries such as steel, steel, ships, electronics and cars. Once more, Park led the drive, the strategy worked and South Korea’s boom continued. The country’s economy grew by an average of 8 percent from the 1990 to 1996 until the Asian financial crisis spread to Malaysia, the Philippines, Indonesia, Hong Kong and South Korea.

The country’s president was Kim Dae-jung, a one time dissident, known as KDJ. In his inauguration speech, he promised to “do whatever it takes to realize politics…in which the people truly become the masters.” And he implemented a series of measures to liberalize the economy.

He boosted competition by opening the doors to foreigners and by offering tax incentives to overseas firms. Most of all, he submitted family conglomerates to new accounting and transparency rules, and forced them to be more efficient and innovative.

As a result, they returned to their original competencies. Therefore, Hyundai quit electronics to concentrate on cars whereas Samsung would specialize in emerging technologies like plasma TVs and 3G and 4G smartphones.

Samsung’s microchips are so good that its archrival Apple uses them in its iPhones.

Despite the scandal affecting the disgraced president Park Geung-hye formerly charged in a corruption probe, South Korea remains one of the top richest nations in the world and one of the most vibrant places to live.

“South Korea proves that good economics requires good, open government, and vice versa” writes Tepperman. It is interesting to see how the new president will treat the “Chaebols” whose ties with the government are very much criticized by the Koreans.

The Fix also analyzes how Indonesia confronted extremists, how Rwanda implemented a successful reconciliation policy and how Botswana built effective state institutions that promote accountability and economic development. Problems can always be solved. All it takes are leaders who are dedicated, ready to make sacrifices and take risks.

The Fix is all about what should be done. It is a book about leadership.

The leaders in this book nurtured a vision for their native countries, they turned adversity into advantage and they used each crisis as a stepping stone toward a better future.