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FAREED ZAKARIA GPS

North Korea's Nuclear Test; Diplomacy With Rivals

Aired May 31, 2009 - 13:00   ET

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


FAREED ZAKARIA, HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

The big news of the week is, of course, North Korea's nuclear tests. What do they mean? How should the world respond?

It's a complicated issue, but I do think we need to keep it in perspective.

What does it mean? Well, that North Korea is a bizarre, aggressive regime and is defying the international community and building nuclear weapons. This has been true for about a decade.

The real reason that this is a complex problem, though, is that it could change the basic geopolitics of East Asia.

If Japan -- which is directly threatened by North Korean missiles -- if Japan decides to go nuclear, that would trigger a strong reaction from China. That could mean the start of an arms race and associated tensions in the region. In fact, some people think it would be in America's interests to have this happen, because it would finally scare the Chinese into pushing the North Koreans.

But, of course, that would have many associated costs. Other countries in Asia that have been dominated or invaded by Japan would probably have an allergic reaction to a nuclear-armed Japan. China would react very dramatically. None of this is going to be peaceful or stable.

And none of it is happening yet. I'm not predicting it will happen. But that is what is at stake. And it's the reason why these tests are important, and why we need to watch and manage the situation carefully.

So, today I'm talking to two men who've been sitting across the table from the North Koreans. Selig Harrison and Jack Pritchard know and have negotiated with these people. You'll be surprised by what they have to say.

Then, then main event, former Secretary of State Henry Kissinger. His ideas on what choices the United States has in dealing with this bizarre North Korean regime -- more importantly, what China can do, a country he knows well.

And we will take a look inside the private compound of Kim Jong- il. What does he do for fun?

And finally, some rosy economic predictions this week from Niall Ferguson and Joshua Cooper Ramo. If you've been reading what Niall Ferguson writes, you know that was a joke.

Let's get started.

(BREAK)

ZAKARIA: What are the North Koreans really thinking?

I'm going to talk to two men who have sat across the table from North Koreans, often recently, and negotiated directly with them in various capacities.

Selig Harrison made his 11th trip to North Korea in January. And just this week, he met with senior North Korean diplomats at the U.N.

And Jack Pritchard is a retired Army colonel who has worked on North Korean issues in both the Clinton and the George W. Bush administrations. Right after the show, he is going to go and meet with the North Koreans.

Welcome, gentlemen.

People sometimes look at what the North Koreans are doing. And they think, these guys are crazy.

Are they crazy? Does it make sense what they have just done?

CHARLES (JACK) PRITCHARD, FORMER AMBASSADOR TO THE DPRK: Well, it certainly doesn't make sense from a Western perspective. But if you take a look at this from a North Korean perspective and understand what's going on behind the scenes, then it begins to look slightly more rational.

We don't accept it, but it's something that we can understand.

SELIG HARRISON, AUTHOR, "KOREAN ENDGAME": First of all, they feel they've been conned by the United States.

We always talk about North Korea being untrustworthy and not living up to agreements. From their point of view, from the point of the view of the hard-liners in North Korea, they agreed, went along with the decision to suspend the North Korean nuclear program.

From October 2004 to December 2002, there was no North Korean nuclear weapons program, because the Clinton administration made a deal with them. That was abrogated.

We didn't fulfill our main promise in connection with that, in return for their suspension, which was building two light-water reactors for them. We just couldn't quite get our act together.

Then the moderates say, well, wait. We're going to get Obama now, and everything's going to be OK. Then along comes Obama. And from their point of view, he still is demonizing North Korea. Hillary Clinton, in particular, has been making a whole series of very -- of statements that confirm the North Korean belief that the U.S. is hostile to them, and confirmed the hard-line belief that we might engage in military action against them.

After all, from the point of view of are they being rational, they are surrounded by very powerful U.S. nuclear weapons capabilities.

ZAKARIA: Do you think that the Obama administration has done things to make them feel insecure?

PRITCHARD: No, I don't. I think the Obama administration has been put into a position of reacting far too soon.

Launching that rocket on the 5th of April seemed very provocative. And the North Koreans were asked, please don't do this.

The North...

ZAKARIA: Asked by?

PRITCHARD: Well, the entire international community.

ZAKARIA: But specifically and publicly by the Chinese, right?

PRITCHARD: The Chinese very specifically have told them this was not a good thing to do. The United Nations has done this. Each of the major players in the region have also done this. This has been a unanimous request not to do that at this point in time.

The North Koreans were extraordinarily angry. They were angry at the Chinese. That put in play their next item, and that was the nuclear test that we witnessed on the 25th of May.

HARRISON: But I think the whole point is that they view the idea, the U.N. resolution on this satellite launch as completely unjustified, and what they consider a double standard internationally that makes them feel that they're the aggrieved party.

ZAKARIA: Do you agree with the idea that this is a regime in which there is a debate? I mean, you were actually negotiating with them.

PRITCHARD: Yes.

ZAKARIA: I mean, it strikes one from the outside, this is about as close as you get to a one-man regime there.

PRITCHARD: It is a one-man regime. But there are discussions that take place before decisions are made.

But what has occurred in the last few years -- not just the last weeks or months -- is that those that Selig describes as being moderate forces have lost the battle. ZAKARIA: The feeling is the relationship with the United States is dead and is not going anywhere anyway.

PRITCHARD: Well, this is where the mistake takes place.

The anticipation that President Obama would come in with a more open attitude and a willingness to engage even on a higher plane, that was what they had anticipated. But they didn't give this administration an opportunity to respond...

ZAKARIA: Isn't that fair...

HARRISON: Well, I agree...

ZAKARIA: Isn't that fair, Selig? For the last two years, we have adopted a policy toward North Korea which has been negotiations, talks...

HARRISON: However, here again -- here again, they feel that they've been conned. In the negotiations that took place last year, in which we got them to disable their Yongbyon plutonium reactor, we were supposed to -- the six parties -- were supposed to provide 600,000 tons of energy aid. That was the main quid pro quo.

They disabled the reactor. Our side provided 400,000, and not 600,000.

And when I went there in January, they said, "Now, you tell Obama, the one thing he's got to do to show us he's serious about a fair, equitable bargaining relationship is to get Japan to provide those 200,000 tons they were supposed to provide. If you can't get the Japanese to do it, then find another way to do it."

ZAKARIA: OK. Let me ask about the one country that people say we should be working harder with and to get them to push the North Koreans. And that's, of course, China.

PRITCHARD: Yes.

ZAKARIA: In your experience, did the Chinese have real leverage with the North Koreans?

PRITCHARD: The Chinese will tell you when you talk to them, yes, we have leverage. But the first time we try to use it, we lose it. So, they're very cautious about that.

And for the Chinese, the significant events in Northeast Asia would be instability along their border with North Korea. That, above all else, drives their own national security interest.

ZAKARIA: Meaning they fear a North Korean implosion more than they fear North Korea with nukes?

PRITCHARD: That's correct.

ZAKARIA: What's your sense of the North Korean-Chinese relationship?

HARRISON: Well, the whole point is that China and the United States have conflicting interests in North Korea. We do not have divergent interests. Everything Jack said is correct.

But the point is that the Chinese want to make sure that North Korea survives. They don't want a unified Korea in which the United States has bases next to their border, so they're trying to make North Korea as economically dependent on them as possible.

ZAKARIA: But you know, a lot of people say -- are going to listen to this and say -- it sounds an awful lot like you are kind of an apologist for a very nasty regime.

This is a regime that has allowed two million of its own people to starve to death. This is a regime that maintains gulags, that has been responsible for an enormous amount of internal misery and also external instability.

Why do you trust them enough that you feel like you could imagine this kind of amicable, rational relationship?

HARRISON: It is a nasty regime. I don't like the regime.

The only way to change the regime is by opening up with North Korea, engaging with North Korea. They want to do it. Because the hard-liners have been empowered through mistakes on our part, in my view, it's going to be harder to do it now.

We won't even send back the -- we won't even invite the DPRK Philharmonic to come to Washington, to the United States now, after the New York Philharmonic went there, because Hillary wants to use it as leverage. Now, that is not helping our cause in North Korea.

To the extent that we open it up, we can defeat -- we can help the people working for human rights in North Korea.

ZAKARIA: Do you buy this?

PRITCHARD: Not at all. The North Koreans are responsible for their own actions. We have given them plenty of opportunity.

The North Koreans are not on a path for benign...

HARRISON: In what way have they reached out?

ZAKARIA: Wait, wait, guys.

PRITCHARD: I'll answer my question. You answer your question.

HARRISON: OK. I was told to interrupt when I had something.

PRITCHARD: OK. I have seen no evidence in the last three years that the North Koreans are pursuing what used to be the standard conventional wisdom that they wanted to have a more amicable relationship with the United States. That hasn't been on the books for some time.

It'd be nice if they showed us that it was a return, what they'd like to do. But that's not what's going on now.

ZAKARIA: On that note we have to stop.

Selig Harrison, Mr. Pritchard, thank you so much.

And we will be right back.

(BEGIN VIDEO CLIP)

NIALL FERGUSON: And what's coming, it seems to me, in terms of the fiscal crisis of the United States is a far bigger and far worse story. I think all talk of recovery or of end of the recession is wishful non-thinking.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: President Obama, who was described in the "Financial Times" this week as full-time president and part-time auto analyst, predicts that General Motors will ultimately be a strong company.

Meanwhile, we learned this week that U.S. home sales are on the rise. And a survey of American economists shows that more than 90 percent of them think the recession will end this year.

This all sounds like good news, doesn't it? So I can't wait to hear what Niall Ferguson has to say about it.

Niall is, of course, a frequent guest here on GPS. He has described himself as a "moderate doomster." He is also an esteemed Harvard historian, as well as the writer of nine books, the latest of which is the "New York Times" bestseller, "The Ascent of Money."

And Joshua Cooper Ramo is another "New York Times" bestselling author. His fascinating book, "The Age of the Unthinkable," has one of those wonderfully self-explanatory titles -- I think. Joshua is managing director of that international consulting firm that is run by Henry Kissinger, Kissinger Associates.

Niall, so that was the good news I pointed out. But there was also some bad news that's a little more complicated to explain, the Treasury auctions. Explain what you think is going on.

NIALL FERGUSON, AUTHOR, "THE ASCENT OF MONEY": One consequence of this crisis has been an enormous explosion in government borrowing. And the U.S. federal deficit -- that's the difference between what the government spends and what it raises in taxation -- is going to be equivalent to around $1.8 or $1.9 trillion this year alone, which is equivalent to nearly 13 percent of gross domestic product.

There hasn't been a deficit that large since World War II. And it's actually comparable in magnitude to the 1942 deficit. But I'm not aware of any world wars currently going on.

So, my view is that this is an excessively large deficit. It can't all be attributed to stimulus. And there is a problem. And the problem is that the bond market, which is already reeling from a global financial crisis, is staring at an oncoming tidal wave of new issuance. And it's taking flight (ph).

So, the price of 10-year Treasuries -- that's the standard benchmark government bond -- took quite a tumble in the past week. In fact, it's taken a pretty steady tumble since December of last year.

So, the interest rates, the long-term term interest rates, as a result, have gone up by -- well, it's actually quite a lot. It's 100- plus basis points.

You could actually say that long-term rates have risen by about 75 percent, by three-quarters, in the space of just five months. And that poses a problem, since part of the projects in the mind of the Federal Reserve chairman, Ben Bernanke, is to keep interest rates down.

ZAKARIA: So, is it fair to say that this bad news, the fact that we can't sell our debt as cheaply as we thought, overshadows all the good news that seems to be coming?

FERGUSON: Well, I mean, I'm not sure that the fate of General Motors can be regarded as good news. But then, I'm from Britain, where we tried to take over the automobile industry in the 1970s, and that didn't end too well.

But the green shoots that are out there seem to me like tiny little weeds in the garden. And what's coming, it seems to me, in terms of the fiscal crisis of the United States, is a far bigger and far worse story. I think all talk of recovery or of end of the recession is wishful non-thinking.

ZAKARIA: Josh, this seems like, in a strange way, an episode in your book, because we have a big crisis, we try to solve it with the tools that we think we know, which are Keynesian tools. Maybe it's solving it. Maybe it's solving it and producing a whole new crisis.

JOSHUA COOPER RAMO, AUTHOR, "THE AGE OF THE UNTHINKABLE": It's a big problem, right. Because we're talking about, for instance, the situation in the U.S. debt market. That's one thing.

But imagine, if you're borrowing from the U.S. -- if the U.S. is borrowing from you, and you're paying them, you know, 8 percent a year interest -- if you're Hungary, or you're some other country, you're going to have to pay even more to get people to take your debt. And so, what you worry about is a fiscal crisis in the U.S., which then spreads around the world.

And we had a lot of discussion earlier this year about the risk of a European sovereign default. We haven't heard much about it recently. But the continuing failure of these auctions -- and it's worth noting this is the third one of these to fail in the last four months -- by fail, it means you have to go re-price them.

ZAKARIA: You have to charge higher interest rates...

RAMO: Right.

ZAKARIA: ... than you thought you would.

RAMO: It's an indication of exactly what you're saying, which is, these are network effects here. We're all interconnected.

The reason this crisis is so terrifying is the speed at which it spread from being a subprime crisis to a financial crisis. We're now injecting the entire system with an amount of demand for debt that's never been seen in human history before. It's impossible that that's not going to trigger ripple effects.

ZAKARIA: So, why do 90 percent of economists think things are getting better?

FERGUSON: Well, of course, they're economists. And they're trapped in Econ 101 land, like that "New York Times" columnist, Paul Krugman, who assured me only a month ago that there would be no upward pressure on interest rates, because there was a massive excess of savings in the world economy.

The Keynesian model actually didn't work terribly well, even when it was popular. And ultimately, it got us into the mess of the 1970s, a mess which, of course, produced double-digit inflation, and then required the Fed to produce double-digit interest rates to bring inflation under control.

So, I think one should take what the economists say with a very large pinch of salt these days. After all, very few of them anticipated this financial crisis, because their wonderful models didn't predict that either.

ZAKARIA: Why did nobody anticipate this? I mean, what does that tell us going forward?

RAMO: Well, this is the classic symbol of a revolutionary era. I mean, when I call it the "Age of the Unthinkable," it's really, basically, another way of saying we're living in a revolutionary era.

The first thing that happens in a revolutionary era is, the great figures of the old era get discredited. So, Greenspan, last October, sitting in front of Congress saying, "Guess what. I was wrong. Forty years of experience was worthless," is a marker of a revolutionary time.

What then happens is, people get elevated from positions of great obscurity into positions of great power, whether they're caves in Pakistan or the Illinois state senate.

And what's going to happen now is a regeneration of new economic ideas, and that's what you have to hope for.

But the old models -- it's just like the old models of warfighting don't work to fight the wars that we face today. These old models of trying to battle a financial crisis not only don't work, they make the situation worse.

ZAKARIA: So, what the hell do we do?

FERGUSON: Well, I think one thing that could be done, and done very quickly, is for the president to give a speech to the American people --and, indeed, to the world -- explaining how the administration proposes to achieve some kind of medium-term stabilization of American public finance, because you can't blame all of this on the crisis. There's actually a structural deficit that's nothing to do with the economic cycle, equivalent to around 5 percent of GDP.

If you look at the administration's budget forecasts...

ZAKARIA: Would you explain that? And that's ...

FERGUSON: That's to say...

ZAKARIA: ... Medicare and...

FERGUSON: Leave aside the fact that we're in a crisis at the moment. There is still a fundamental imbalance between the federal government's expenditure, even in a normal year, and its revenue. The tax base is too narrow, or the expenditure is too great.

And off balance sheet, you have these enormous liabilities of the Medicare system and the Social Security system that are really driving the United States towards being, frankly, a Latin American economy in financial terms. And that's something that needs to be addressed soon.

The administration doesn't have that long a honeymoon period. It's got very little time in which it can introduce the American public to some harsh realities, and particularly about entitlements and their future costs.

And I think, if a signal could be sent really soon to the effect that the administration is serious about fiscal stabilization and isn't planning on borrowing another $10 trillion between now and the end of the decade, then, just conceivably, markets might be reassured.

It's not as if the U.S. is Argentina. I mean, there still are fundamentals here which are really healthy. It's still a dynamic, entrepreneurial economy, which produces technological innovation and all the rest of it.

But at the moment, its tax system and its expenditure system are really wildly out of whack. And they need to do something soon, or credibility -- and that means the credibility of the dollar as an international reserve currency -- could ebb away really quickly.

ZAKARIA: And we will be back with Josh Ramo and Niall Ferguson right after this.

(BEGIN VIDEO CLIP)

FERGUSON: Why do empires wane? They usually wane because they get excessively indebted and their growth rate slows, especially when their debts are to foreigners. This was the British experience, and the U.S. is there right now.

ZAKARIA: And the Spanish experience, and the French experience.

FERGUSON: And the French experience -- you name it. And that's what tends to kill empire.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: And I'm back now with Niall Ferguson, the Harvard historian, and Joshua Cooper Ramo, the author of "The Age of the Unthinkable."

You live in China. You know the regime well.

Do the Chinese feel like, "Wait a minute. We cannot finance simultaneously the two largest fiscal expansions in human history, the United States and ours. We're going to take care of our own country, and maybe we'll do a little bit less for the United States?"

RAMO: The shock and awe inside the Chinese government when they realized the amount of dependency they had over the summer, and for those of us who had a front row seat to it, we were getting regular phone calls from them saying, you know, will the U.S. default on the Fannie and Freddie debt? It was a level of panic.

And there's a footnote. I'd say it's important to keep in mind that, as interesting as all these economic things are, they're all stalking horses in China for political debates.

And so, the people who want more U.S. contact are the people who also happen to want political reform. And the people who want less U.S. contact are the people who are opposed to it.

We're heading into a leadership change in 2012. And we're in the middle of probably the most sort of bloody struggle over influence in China that anybody's seen for a while.

ZAKARIA: What do you think of all this? You know, you called the Chinese and American relationship so deep that it was sort of one country.

FERGUSON: Chimerica. That was the word I used to describe it. And it was the driver of the global expansion from the Asian crisis until the American crisis began in 2007.

And I likened it to one of those marriages in which one partner does all the saving, and the other partner does all the spending. Well, right now, I think this marriage is on the rocks, for very much the reasons that Josh gives, these signals of disquiet that the Chinese have about holding nearly $2 trillion worth of U.S. dollar- denominated bonds. They know that the endgame is approaching.

Wearing my hat as a historian, it seems to me we're at one of those great turning points in history, when one empire recedes and another takes a great leap forward, if that's not an unfortunate expression to use in a Chinese context.

Certainly, the United States looks, as I've said for some years, like an empire on the wane. Why do empires wane? They usually wane because they get excessively indebted and their growth rate slows, especially when their debts are to foreigners. This was the British experience, and the U.S. is there right now.

ZAKARIA: And the Spanish experience, and the French experience.

FERGUSON: And the French experience -- you name it. That's what tends to kill empire.

The problem for the Chinese -- and here I agree with Josh -- is it's not quite clear that they are going to make a real leap ahead of the United States. Goldman Sachs predicted a few years ago that China's GDP would equal that of the United States in 2027, which is pretty soon.

And I can't decide whether they're going to make it, or whether it's going to be like the Japan story when people predicted that would happen. And of course, it never happened, because Japan did fall foul of an excessively strong currency, and then a financial crisis of its own, followed by a lost decade.

So, I think for China, this is very much in the balance at the moment. Yes, the stimulus package is delivering some results. That's obvious in commodity prices. But there obviously are problems, and it could peter out. I think that must be the leadership's number one worry.

ZAKARIA: But you are seeing, it seems to me, two worlds -- a Western world that is laden with enormous debt, where the consumer in the United States is maxed out. In Europe, you have very low demand for other reasons.

Very difficult to imagine a high-growth scenario, even if the crisis passes, and a world -- China, India, Brazil -- substantially more robust.

I mean, are we moving into this kind of two-world scenario?

FERGUSON: Your post-American world is looking more and more plausible by the day, Fareed. But it is still one world. And we stand or fall together.

And I've been likening this to that wonderful, corny 1950s Japanese movie, "Godzilla versus King Kong." On the one side you've got the Godzilla of central banks led by the Fed, spewing money at the problem, trying to generate some inflation. But King Kong, the King Kong of global deflation, is pretty much dominant at the moment.

There's massive over-capacity in manufacturing in Asia. And in fact, building more capacity, which is what the Chinese are doing, doesn't really present a long-term solution to this problem.

So, right now, I think we're looking at a very protracted period of low growth for the world as a whole. And I'm not sure that China alone, no matter what it does, can necessarily buck that trend and kill King Kong.

ZAKARIA: Does that produce political change in China? We're at the anniversary of Tiananmen Square.

RAMO: It begins to open up a political debate, as we've seen. The economic issues really are an expression of an overall changing political dynamic in China today. And there's a tremendous competition for power going on.

And I think one of the senses you get in Beijing right now as we head into the 20th anniversary is, a lot of the people who stayed in government or who remained in the party, but who were part of the movement -- you've got to remember, when Tiananmen happened, you had not just students out there, but you had thousands of government officials, you know, people who are now in their early 40s or late 30s involved in this.

And you can see when you talk to them, when you go out and have tea and dinner with them, that this is kind of echoing in their head. And they're asking themselves, "We've had this incredible two-decade sprint. But those ideas that lured us to Tiananmen Square, the promise that we suffered through this atrocity and that two decades later we should be confronting some of those issues, hasn't been delivered on yet."

And that's why there's this debate inside China. We've seen amazing things happen in Chinese politics in the last few weeks. We've seen people emerge from retirement to lead think tanks, which is something that's never happened before. We've seen the president criticize the military publicly, which is very unusual.

ZAKARIA: And what does it all mean?

RAMO: All of it is a sign of this kind of underlying, shifting dynamic of Chinese politics at the moment, which has grown, not surprisingly, much more complex, but to some degree, a little more complex maybe than their system is capable of handling.

I mean, our system has many problems, but we can handle interest group conflicts. The Chinese system is not quite as good at that.

ZAKARIA: Niall Ferguson, Josh Ramo, thank you very much.

We will be back.

(BEGIN VIDEO CLIP)

HENRY KISSINGER: If, for some reason, they're impelled to give up -- I mean, if it's conceivable that they're impelled to give up these nuclear weapons...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: There are few people who can offer keener insight and deeper understanding on North Korea and other international problems than former Secretary of State Henry Kissinger.

His list of accomplishments is long, so I will point out that he is a Nobel Peace Prize winner who engineered detente with the Soviet Union and brought Nixon to China. He currently runs Kissinger Associates, an international consulting firm.

Welcome, Henry.

HENRY KISSINGER, FORMER U.S. SECRETARY OF STATE: A pleasure to be here.

ZAKARIA: First tell me, how big a deal are these tests, because this is a small, dysfunctional country with a small arsenal?

KISSINGER: They have now put themselves into a position where, if, for some reason, they're impelled to give up -- I mean, if it's conceivable that they're impelled to give up these nuclear weapons, their whole regime might collapse.

And then one has the problem of the evolution of Northeast Asia in a region, of course, of primary interest to South Korea, but of huge interest to Japan and China.

ZAKARIA: So, you think that were the weapons to be taken away from them, were they to face a kind of diplomatic reversal and the loss of their weapons and, thus, the loss of prestige, the regime could collapse?

KISSINGER: It could collapse. At any rate, it would be a different regime.

The one significant accomplishment of that regime that they can advertise is their nuclear program. And for that, their people have suffered unimaginably.

ZAKARIA: So, it's a terrible set of choices. So, either we accept a nuclear North Korea, which has consequences for proliferation policy, or we risk a highly -- a destabilizing push to denuclearize it, which might mean the implosion of the regime, refugees...

KISSINGER: Yes. But we cannot have a view of international affairs where we say a country can develop nuclear weapons in the face of the Non-Proliferation Treaty and other obligations.

And then you're afraid to get them to give it up, because the impact on their domestic structure might be too severe.

ZAKARIA: Because the Chinese look at this and say, "Look. The scenario under which we press the North Koreans harder has many possible outcomes, all of which are mostly bad for us.

"Either the regime implodes and we have millions of refugees, or unifies, and we then have a unified Korea on our border, perhaps with some nuclear weapons. The state will certainly be an American ally, as Germany became when it unified.

"So, why is any of this good for us? Why should we press them?"

KISSINGER: If they do nothing, they will then live in an Asia in which South Korea and Japan have nuclear weapons, and it creates a nuclear-armed regime that's on their borders. That's not a good prospect either.

What I think is necessary is that the United States and China, and with some significant consultation with Japan and Russia, but -- and, of course, South Korea -- but that they come to some understanding about a Northeast Asia security conference.

ZAKARIA: Give North Korea some security assurances, so that they don't...

KISSINGER: As part of a...

ZAKARIA: ... so that they're not justified in being insecure.

KISSINGER: That's right. North Korea does not, should not have to worry about an American military attack -- or, for that matter, a Chinese military attack.

ZAKARIA: You know there are many people who say, we've been trying to get the Chinese to push the North Koreans. And they really always stop, because they don't want this to happen.

Should we be telling the Chinese that we are going to encourage Japan and South Korea to collaborate with us on security arrangements? Should we signal to them the scenario you suggested, which is they might end up facing a nuclear-armed Japan and a nuclear-armed South Korea, if they're not -- if they don't push hard enough?

KISSINGER: When you go to the Chinese and say, "Will you bring pressure on the North Koreans in the following way," in the back of their minds they say to themselves, "If the pressure doesn't succeed, we look impotent. If the pressure does succeed, we may face an implosion along our border."

And so, they would need to have some dialogue about what happens in case of an implosion. And it would have to be conducted in a manner in which they are not the initiators of this.

You understand, this is my assessment. This is not my knowledge. But this, I believe, is the way to proceed.

ZAKARIA: But you imagine that the Chinese view of their interests in North Korea is shifting, because they see...

KISSINGER: I think the Chinese view of their position in the world is shifting, in general. And I think that the Chinese, if they analyze it in the long-term view that I have known them to, they must realize that this is an untenable situation.

So, I believe that we need a comprehensive, strategic concept of how we're going to operate, that we should try to coordinate that importantly with China.

ZAKARIA: And our interests are aligned?

KISSINGER: Our interests are sufficiently aligned that we both want a peaceful Northeast Asia, and that we cannot go on to have the proliferation of nuclear weapons.

To say that a government that oppressive, and that monomaniacally focused on this one weapon will then not use it in some way, is an illusion. But even -- it's not an issue of how they would use it. It's an issue also of the symbolic effect of the impotence of the world community in the face of a very unambiguous challenge.

ZAKARIA: And we will be back with more with Henry Kissinger.

(BEGIN VIDEO CLIP)

KISSING: What would the Japanese think if the United States suddenly said, we'll turned North Korea into a paradise? What would the South Koreans think?

It's an absolutely unworkable idea. But even if it were even conceivable, why would we needle China at its Korean border?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: I'm back now with Henry Kissinger for more on North Korea, China and Russia.

Back to China, because no one knows China better than you. Is it your sense -- you said China's interests are changing. Its conception of its interests are changing in the world.

Do you think China is becoming more aware that it has broader responsibilities for global order or for regional interests?

So far, let's be honest, they have tended to have a very internally driven view. They want to develop. They want peace.

They want a free ride on American security. They have not wanted to provide security and make any dramatic policy initiations that would do that.

KISSINGER: You know, the idea of a country having a global responsibility for security everywhere, simultaneously, that's a uniquely American idea.

And I'm not sure it's all that much in our interest to have China actively engaged strategically in every corner of the world.

ZAKARIA: But this is on their border.

KISSINGER: But this is on their border. And they are -- of course, it is in their interest. And there they are engaged, at least...

ZAKARIA: But I press you on this, because you know there are a lot of people, a lot of conservatives -- Bob Kagan had a piece in the "Washington Post" where he said, let's face it. The Chinese interests and our interests are completely opposed. They want a client state in North Korea.

KISSINGER: He wants to create an American client state in North Korea. He said, let's magnify our contact with North Korea, turn it into a democracy by having exchange programs. That will then teach the Chinese a lesson.

ZAKARIA: But to a certain extent, Selig Harrison was also saying, we should combat Chinese influence in Northeast Asia by extending ourselves.

There are people who feel -- Robert Kaplan in "The Atlantic" says, this is a North Korean play to get America involved, to balance against the Chinese, whom they fear are going to overwhelm them.

KISSINGER: I believe that it's not a wise American strategy to challenge China at its very -- at the Yellow River -- in a broken-down country, to see whether we can turn it into a symbolic anti-Chinese state, which in more ways is frankly an absurd idea.

Who in North Korea would cooperate with us on such an effort?

What would the Japanese think if the United States suddenly said, we'll turn North Korea into a paradise? What will the South Koreans think?

It's an absolutely unworkable idea. But even if it were even conceivable, why would we needle China at its Korean border?

I think, in the next decade, the evolution of the Chinese- American relationship is going to be complicated enough. And I think we should look at it first from the point of view of cooperation.

Of course, if any country attempts to dominate Asia in a hegemonic fashion, that would be a challenge.

And if North Korea should think that the way to get us to make them an ally against China is to kick over an existing agreement, throw out the American, the distinguished American ambassador who was sent to negotiate and to check the American secretary of state's visit to Pyongyang, that is a very short-sighted view.

ZAKARIA: Let's talk about the other great power that's involved here -- because this is another thorny relationship -- Russia.

How do we get the Russians to be more cooperative on an issue like this? And I say "like this," because there is a more general problem.

The Obama administration has made a significant overture, with Hillary Clinton. And so far, there doesn't seem much in the view, in the way of reciprocation.

Now, you have met with Putin more often, one-on-one, than I think any American. You've met with him about...

KISSINGER: Twenty -- 18, 20 times.

ZAKARIA: What is your sense of what it would take to get the Russians, to draw the Russians in?

KISSINGER: Well, first of all, Russia has achieved its national identity historically through a kind of imperial policy in all directions, and has been progressively expanding in all directions, which was extremely difficult, obviously, for neighboring countries.

Now, in the space of 20 years, they have lost towards the West 300 years of their history. And they're right back...

ZAKARIA: The 300-year-old empire.

KISSINGER: ... to where they had started under Peter -- where they've started under Peter the Great.

So, the posture of Russia is very assertive, but the analysis of Russia is very insecure. And so, Russia has been groping in its historically and sometimes clumsy way towards some kind of a possible partnership with the United States.

ZAKARIA: But you don't think Russia has so far demonstrated that it wants to reject international order? Do you think that there's a good chance to work with them?

KISSINGER: I think there is a possibility of working with Russia. We have to understand their special concerns. And they need to understand our special concerns.

I have the impression from the last conversation of Putin with President Bush in Sochi, and the conversations between President Obama and the new Russian president, Medvedev, in London, that at least a framework exists in which discussions are possible, and that that should be the basis of our relationship.

And now it tests this in a way. North Korea is a test of China. Iran is a test of Russia.

ZAKARIA: And we will talk about Iran and Russia and more the next time you come on the program.

Henry Kissinger... KISSINGER: It's always a pleasure to be with you.

ZAKARIA: Thank you, sir.

(COMMERCIAL BREAK)

ZAKARIA: Now for our "What in the World?" segment.

Can you make out what this image is?

It's a satellite image of a waterslide. But not just any waterslide. This is North Korea, in a compound where the country's dear leader, Kim Jong-il, and his henchmen live just outside the capital of Pyongyang.

This mini water park was discovered by a band of cyber sleuths. They pore over Google maps of North Korea looking for landmarks that might aid our understanding of this bizarre nation.

They have found what they say are the countless idolatrous statues of Kim's father, the golf courses that Kim built for himself, the massive shells of buildings never finished and stadiums rarely used -- all further evidence of Kim's megalomania and his profligate spending.

The ridiculous amounts of money wasted is especially egregious in a country where millions of citizens have died of starvation because of Kim Jong-il's ruinous policies.

Which brings us to this picture. Experts confirm that what you're looking at here is a mass burial site. Hundreds upon hundreds of individual graves that many believe are filled with the victims of the mass starvation. These separate graves are much different from the mass graves that you find in other countries.

One more quirk of North Korea, I suppose. Even if the living have blood on their hands, they will always bury the dead with honor.

For more information on these armchair sleuths and what they have found, go to our Web site, cnn.com/gps.

Now, for the "Question of the Week."

We at GPS are swiftly approaching our first birthday marking one year since the program began. And last week I asked you to tell me the one GPS moment over the course of the last year that stands out for you. You were all very kind.

The top answer so far, my interview with Chinese Premier Wen Jiabao, and especially this remarkable moment of candor about his country's political future.

(BEGIN VIDEO CLIP)

ZAKARIA: Do you think in 25 years there will be national elections in which there will be a competition, there will be perhaps two parties running for the positions such as your own?

WEN JIABAO, CHINESE PREMIER (voice of interpreter): It's hard for me to predict what will happen in 25 years' time.

This being said, I have this conviction that China's democracy will continue to grow.

In 20 to 30 years' time, the whole Chinese society will be more democratic and fairer, and the legal system in China will further be improved. The socialism, as we see it, will further mature and improve.

(END VIDEO CLIP)

ZAKARIA: Next week we'll have a special look back at many of the highlights from the year. You won't want to miss this, so please make sure to tune in.

As for this week's question, if you were advising President Obama, what is the one idea you would tell him he must include in his speech in Cairo on Thursday? What's the one thought that he needs to get across to the Muslim world?

Send me an e-mail and let me know. We'll see if he uses your idea.

As always, I'd like to recommend a book. This one is called "The Man in the White Sharkskin Suit." Beautifully written, it is by Lucette Lagnado, and it's her account of a Jewish family's flight from Egypt to Paris, to Brooklyn. But it's a great personal story of Egypt's complicated history in the last half of the 20th century.

Lagnado, who is now a reporter for the "Wall Street Journal," draws a picture of a liberal Egypt that disappeared, but perhaps is coming back, or might some day come back.

Now, please mark your calendars. I will be taking questions from you, our loyal viewers, live on cnn.com, this coming Thursday, June 4th, at 11:30 a.m.

Thursday, 11:30 a.m., go to our Web site, cnn.com/gps. You'll find a link to the chat. And if you have a burning question you've always wanted to ask me, e-mail it to gps@cnn.com.

And please remember, if you've missed a GPS interview that you really want to see -- Musharraf, Wen Jiabao, Eliot Spitzer, any of them -- you can always find them on our Web site.

Thanks to all of you for being part of this program. I'll see you next week.

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