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FAREED ZAKARIA GPS

Interview With David Miliband

Aired July 5, 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.

This week, we're coming to you out of London with an exclusive, in-depth conversation with David Miliband, the 43-year-old foreign minister of Great Britain. He's also the odds-on favorite to be the next Labour Party leader, and thus, potentially, the next prime minister of the country.

Miliband has to confront the problem of Iran head on, because last week, the Tehran government arrested nine Iranians who worked in the British embassy.

Western countries face a difficult set of choices with Iran. Should they return to the negotiating arena with Iran? Wouldn't that mean simply glossing over the rigged election and accepting President Ahmadinejad as the head of its government?

Yes, but it isn't clear what the alternative would be. The problem with Iran's nuclear program remains. And we're negotiating with them to see if some agreement can be reached. That program continues to grow. And refusing to negotiate will not do anything to stop it.

And yet, it seems odd to act as if the extraordinary events of the past month simply didn't happen.

So, here's one solution: Do nothing. The five major powers on the U.N. Security Council, plus Germany, have already given Iran a very generous offer to restart the nuclear negotiations. Iran has not responded. So, the ball is in Tehran's court.

Until Iran responds, the West should simply sit tight, build support for tougher sanctions and more isolation, if necessary.

It might seem like the West has bad options right now, but Iran has even fewer and worse ones. Its economy is doing very badly. The regime has faced its greatest challenge since its founding. Its proxies in Lebanon, Iraq and elsewhere are all faring worse than it had expected.

And we now know the answer to a very big question: Are there moderates in Iran? Yes. Within Iran, there are millions of people, including very powerful members of the establishment, who favor a less confrontational approach to the world. Let the supreme leader and President Ahmadinejad stew a bit and figure out what they should do first. Time might not be on their side.

Anyway, that's my view. Now, we will hear from David Miliband. A fascinating debate after all that about whether Africa gets too much foreign aid.

Let's get started.

(BREAK)

ZAKARIA: Mr. Foreign Secretary, thank you for joining us.

DAVID MILIBAND, BRITISH FOREIGN SECRETARY: I'm delighted to be with you.

ZAKARIA: First, let's talk about Iran, the British government officials who have been arrested by the Iranian government.

You unequivocally assert that none of these people were in any way involved in anything that could be regarded as instigating local demonstrations.

MILIBAND: The head of the Iranian intelligence service said yesterday that the riots were somehow organized from the British embassy. This is completely without foundation.

Anyone who managed to get and see some of the interviews in the early days, before the clampdown on the protestors, could see that these were just patriotic Iranians arguing about the future of their country. There is no mobilization, instigation, organization of protests from the British embassy. These are hardworking diplomatic staff going about their business in the normal way.

I think I'd also say, they're patriotic Iranians, and they're working for the British government in a way that's wholly consistent with their diplomatic status.

ZAKARIA: There's an article in the "Daily Telegraph" that says that perhaps Britain was singled out by Tehran because of Barack Obama. And the logic goes that Obama presented this much friendlier face of America, presented a kind of an offer of negotiation, and the Iranians were left with no one to demonize. And so, they fell back on the "Little Satan," given that the "Great Satan" was smiling too much at them.

MILIBAND: Well, I think that there's history that means there are reason why Britain is picked on that's deepened the Iranian rhetoric.

However, I think that we've been clear for some time that a policy of engagement from America to Iran was much, much needed. And the demonization that's happened for 30 years has been exacerbated by the fact that America wasn't present, in my view, in Iran. And what Barack Obama has done is make it harder to demonize. There's some demonization of America still going on. Let's not kid ourselves. But he's made it much, much harder.

And I think that there are millions of Iranians who are proud that they're an Islamic republic, who want to live according to their own traditions and their own religion, but actually, they seek coexistence with the rest of us. And that is what Barack Obama is appealing to, I think.

ZAKARIA: So, you, even at this moment, with British embassy staffers arrested by the Iranian government, you still believe in engagement...

MILIBAND: Yes.

ZAKARIA: ... with this regime.

MILIBAND: Yes. I think that we believe in engagement with Iran, with its people and with its government. The government is still disputed by the Iranian people.

But from our point of view, cutting ourselves off from Iran can only strengthen those who want to cut Iran off from the rest of the world. And actually, that's not in our interest or in their interest.

ZAKARIA: You're a student of history. Does this moment in Iran remind you of General Jaruzelski's crackdown in Poland? Does it remind you of Tiananmen Square? Does it remind you of the brief flowering of freedom that takes place in various communist countries and then gets reversed?

What is happening right now in Iran?

MILIBAND: Well, I think all of those are interesting and suggestive examples. The echoes throughout history of governments which have tried to suppress demonstrations, or suppress the anger of their own people, are legion.

I think I would add, though, that every country is unique, but almost Iran is more unique than others. And I think one has got to be quite careful -- certainly if you're sitting in my shoes -- in suggesting comparisons, because I think that can set off all sorts of processes.

What's clear, though, is that there is for significant sections of the Iranian population a crisis of credibility about the results that were announced, the 63 percent vote for President Ahmadinejad.

I don't know how many votes he got. But a lot of Iranians think he didn't get 63 percent of the vote on an 85 percent turnout.

And that issue of legitimacy I think is very, very important now, because we've seen in many countries -- including some of the ones that you mentioned -- that legitimacy is an asset that's hard to build up. When it's built up, it's constructed over decades, but it can be destroyed quite fast. And in the modern age, in the Twitter age, you're on permanent trial for your legitimacy.

ZAKARIA: And right now, the Iranian regime is trying to use nationalism in a way that is quite familiar. I mean, Khomeini came to power accusing the shah of being an American puppet.

Then, Saddam Hussein invades Iran, which gives the regime more kind of nationalist credibility. And over the last 10 or 15 years, they have portrayed themselves as under imminent threat of attack from George Bush's administration, or the Americans, or the Israelis. And now they're trying it with the use of Britain, also the United States.

Will it work? Nationalism is a pretty powerful force in some of these countries, particularly in Iran. I wouldn't be surprised if many Iranians do believe that there is a plot being hatched by Washington and London to destabilize this regime.

MILIBAND: Well, nationalism is a potent force, especially if you control the means of communication. But so is internationalism.

And I think that there is a growing global consciousness powered by the technology that does break down borders and barriers, that does get through, especially in a country with the high levels of education and technological access that Iran still has, despite the best efforts of the regime. And in that sense, there are these contradictory forces.

And I think it's really important with countries like Iran that we -- perhaps especially with our history, which you referred to earlier -- we and the United States, because of its power -- respect is a very, very important work. Respect for a people, for its way of life, for its history. You can't buy respect, but you can show respect.

And I think that's something that we probably haven't been good enough about in the past. It's something we've got to do better with, I think, a lot of countries in the Islamic world.

One thing that I feel very, very strongly is that we talk about Islamic countries, Islamic people, Islamic leaders, as either moderates or extremists. It's almost like there are only two categories of Muslims. And actually, that doesn't show respect.

It shows lack of understanding of the diversity of Muslim thought. It shows lack of understanding of the diversity of Muslim countries, from Indonesia with 17,000 islands and a democracy, right through Turkey -- also an Islamic country, a democracy, too -- through to countries, other countries that are Shia rather than Sunni, et cetera.

And I think that our growing understanding of that diversity of Islamic thought is vital for a very simple reason. The problems that the world faces -- from nuclear proliferation to climate change -- can't be tackled by the West alone. They need a coalition of not just West and East, but they need a coalition of Christian and Jew and Muslim. And you can't solve the big problems unless the Muslim majority countries are part of the answer. We saw that at the G-20. Indonesia was here in London for the G- 20 economic meeting. But we see it also on the nuclear file.

ZAKARIA: Do you think that in a few months we will be back to negotiating with the Iranians on the nuclear issue?

MILIBAND: Well, in a way, I hope so. In fact, it's too late in many ways, because in this building a year ago, the E-3 plus three -- the three European countries plus Russia, China and the U.S. -- met, obviously, under the previous U.S. administration.

But together, we presented a very clear offer to Iran, which is that it could have its rights to civilian nuclear power respected, as long as there was confidence that there wasn't leakage from that civilian program into a military program. And we can't have that confidence at the moment, because of the pre-2003 secret programs, and because of the refusal to cooperate properly with the International Atomic Energy Agency.

ZAKARIA: Could you live with a program in Iran, and a program in which the Iranians would enrich uranium on their soil, but with international inspectors?

MILIBAND: There's only one condition, that we -- and that's not just Britain, it's all six countries -- have placed on an Iranian civilian nuclear power program. And that is that there's full confidence in the international community that there isn't leakage into a nuclear weapons program, whether secret or not.

And that is the only red line that we have -- all of us, all six countries -- put. Because the truth is that an Iranian nuclear weapons program is a huge danger, not just to the Middle East, but to the wider world. It threatens to blow a big hole in the Non- proliferation Treaty, an even bigger hole.

ZAKARIA: But to be clear so the viewers understand, what that does suggest is there is a potential compromise here, because the Iranians have said that they might accept a system in which they are allowed to have an enrichment facility, but it has to be in Iran and there have to be Iranians involved.

And what you're saying is, if you could have confidence that that civilian program were not leaking into a weapons program, that would be fine with the West or the negotiating powers.

MILIBAND: We've, all of us, never ruled anything in. We've always been clear what we rule out.

And what we rule out is a situation where there is a fear, a justified fear, that an Iranian civilian nuclear power program -- which is a right under the Non-proliferation Treaty -- is, in fact, leaking into a nuclear weapons program, which is prohibited under the Non-proliferation Treaty. And we've said very clearly that we want to open negotiations.

And your first question was, do I hope that the Iranians take up this offer of negotiations as well as the details of the offer. The answer is "yes." But we're waiting for them. We've been waiting for them since last year.

And part of this is an argument that needs to happen in Iran, but also around the world. Because I think what's important is that, while Iran may try to present itself as a victim of Western aggression -- whether in respect of its demonstrations or in respect of its nuclear program -- the truth is, Iran's leaders are making choices every day about how they engage with the outside world, whether in respect of diplomacy or in respect of the nuclear issue. And we need a much more positive kind of engagement from Iran.

(BEGIN VIDEO CLIP)

DAMBISA MOYO: I think it's problematic that we've gotten to a culture that celebrities have become the face of Africa.

My biggest problem is that a lot of the celebrity platform is couched in negativity.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: You gave a speech about Britain and the wider Islamic world, a speech in some ways -- a very intelligent speech -- a few weeks before Barack Obama gave his speech in Cairo.

Do you believe that, right now, relations between the West and the world of Islam -- if one can characterize it as such -- are improving?

MILIBAND: I think they've gone backwards since 2001.

But I think that the drive by President Obama, starting from a simple statement, "We are not at war with Islam." And it's shocking in a way that that statement should be seen as such a step forward, but in many Muslim majority countries it was. And I think he set off a very interesting debate, and a very important conversation.

So, I think that the approach that the Obama administration has started offers huge potential benefits and is immensely necessary. Does that mean it will be plain sailing? Obviously not. But I think it's right.

ZAKARIA: You in Britain have a particular problem, because one of the things that has puzzled many people is, after the London bombings, the 7/7 bombings of the subway, people looked at London and Britain's Muslims and thought, wait a minute. These people can't be upset because they don't have democracy. They live in one of the world's most established democracies. They can't be upset because they're poor. They were not poor.

So, why does Britain have some part of its Muslim population that is radicalized, alienated and susceptible to terror? MILIBAND: Well, that's a good question. I think the first thing one has to say is, "some part." I mean, Britain is a country of successful Muslim businesspeople, teachers and educators, journalists. So, we have to say very strongly that the two million plus Muslims in Britain, the vast bulk of them make a huge contribution to our society, and they actually make it the vibrant society it is.

But there is a radicalization that has happened. The detailed work on that suggests that a combination of exclusion, anger, not simply poverty, income levels, speaks to that. Also, there's no question that there are links back into Pakistan for 70 percent plus of our terrorism problems.

And I think that that is a big challenge, obviously, because you're right. It's not susceptible to a simple answer about...

ZAKARIA: Socioeconomic...

MILIBAND: ... socioeconomic answer. It's a mix of social exclusion, ideological anger, falling into the wrong company. Some of the most interesting books in Britain are written by people who are former radicals, who have seen the dangers of what they were being sold.

ZAKARIA: But what's the lesson? Is there a...

MILIBAND: Well, I think the lesson is that you have to build a genuinely inclusive society in all of its dimensions. And the truth is, those who are terrorists only have to succeed once, and those of us who are trying to build an inclusive society have to succeed every time.

But I think that the wrong lesson is to pull up the drawbridge, because actually, pulling up the drawbridge is no strategy for the modern world. You have to make a -- you have to combine a sense of internationalism with a sense of rootedness and inclusion. And that has to be on the basis of a very, very clear understanding of what you sign up to when you come to Britain as a citizen or as a resident.

And one of the things that I think we probably haven't been good enough here in this country -- we've worked hard in the last 20 or 30 years to promote respect for ethnic minority groups. I think we haven't had the sense of a British credo that people are signing up to. The integrative part of the multicultural society has not been built up strongly enough.

And that's why the prime minister puts very strong emphasis on citizenship. It's why we now take much more seriously -- perhaps learning from America -- about the preparation for citizenship, and the ceremony of citizenship and the obligations of citizenship. And that's something that we have to learn from.

ZAKARIA: Let's talk about Pakistan, the country, as you said, that 70 percent of Britain's terrorism suspects come from originally and have often had some contact with. Why is it that, despite all the efforts, the United States and Britain have not been able to really make much of a dent in the radicalization that is going on in Pakistan?

Many people believe it is because the Pakistani military continues to play a game of, on the one hand encouraging these forces, because they can be effectively deployed against India or Afghanistan when the military wants, and then occasionally clamping down on them when those same forces or associated groups seem to threaten the Pakistani state. Is this a cycle that can be stopped?

MILIBAND: Well, I think it's a cycle that has to be stopped, because it's a mortal threat to Pakistan. The enemy that Pakistan faces is a domestic terrorist enemy, not a large and successful neighbor, India, which has got far better things to do in the world of commerce and politics than end up in a standoff with Pakistan.

ZAKARIA: But do you feel, when you talk to the Pakistani military, they get that?

MILIBAND: Well, that's what I'm coming on to. I think there has been a change, I think, since the -- first of all, the assassination of Benazir Bhutto. And then, if you remember, six or seven weeks ago the headlines across the world, but also across the Pakistani press, the Taliban 70 kilometers from Islamabad. That was a pivotal moment, because you could feel especially the middle classes in Pakistan asking, "Are we safe in our country?"

And what you've seen, I think, over the last six or seven weeks is unity across the political spectrum -- government and opposition -- and critically, unity between politicians and the military in pursuing a very difficult campaign in the Swat Valley. Remember, the Pakistani military has lost 2,000 of its own soldiers in the Frontier Corps in the last 18 months or so.

So, you have seen unity. And you've seen a sigh of relief, really, from large parts of Pakistani society, suggesting our leaders are going to get a grip.

But Pakistan is a -- you asked at the beginning of your questions, well, is it Britain or America's fault. I mean, we haven't run Pakistan for 60 years now, 61 years now. So...

ZAKARIA: You did draw the boundary between India and Pakistan, which caused almost half a million people to die.

MILIBAND: We did. And we have to recognize our own history.

But remember, 61 years, India is the world's largest and most successful -- the largest democracy and the success story of the region.

Pakistan, 31 years of military rule, two-thirds of its boundaries still contested. Communities from Baluchistan through to the Punjab split by lines between countries, and, of course, the Bangladesh experience of the early 1970s. So, you see, let me just make the point that Pakistan has been a society deeply challenged -- socioeconomically, politically, geographically -- over the last 60 years.

And I think what is important is that countries like Britain and America are engaged in the right way. And we have to support credible strong government in Pakistan that is able to come to grips with its own problems, because it's the mortal threat that their own society faces that is the greatest threat to us.

ZAKARIA: Would you send more troops into Afghanistan, if President Obama asks you to?

MILIBAND: We will decide on our troop deployments according to the need on the ground and the overall coalition contribution, because we have 9,000 troops in Helmand Province now -- well, 6,000 in Helmand, 3,000 elsewhere in the country. The British commitment is very, very substantial, 12 percent of the total before the American surge.

But the biggest increase in troops -- and I think people forget this -- in the next few years is not going to be Brits or Americans. It's going to be Afghans.

ZAKARIA: But this sounds like a nice way of saying "no."

MILIBAND: No, it's saying that we -- look. No one should say, given the level of sacrifice of British soldiers -- 169 British soldiers have died in Afghanistan. We increased our numbers from 4,000 to 5,000 to 6,000 to 8,300, now to 9,000.

ZAKARIA: But no more.

MILIBAND: We always judge according to the conditions on the ground. We agreed to put in an extra 700, because of the electoral -- the importance of credible elections in August. But this is a major contribution by the British Army.

We've done it because it's the right thing to do, because it's backing up a credible strategy that is making a difference. Because we know that if there weren't British and American and Danish and other troops, and Canadian troops in Afghanistan, the Afghan security forces don't yet have the ability to withstand the insurgency.

But with our support and with our training, they have the chance to build up that capacity. And that's why we're there. We're not there to create another British colony. We're there to build up a society that's able to defend itself.

(COMMERCIAL BREAK)

ZAKARIA: Do you find it difficult to speak about matters of religion and faith? The "New Statesman" describes you as an atheist. You have a Jewish background.

Does this whole world of religion puzzle and bother you? MILIBAND: Well, I'm British. So, by definition, I don't like talking about myself. But I think that it doesn't -- people of faith -- I have huge respect for people of all faiths, actually. But I also have to be honest about where I'm coming from.

My parents and grandparents -- all of them Jews -- went through huge trauma. They went through the trauma of the Holocaust. I don't know if it's for that reason that, by 1965, when I was born, my grandparents, who were alive, my parents were secular. But I've grown up in a secular way. I've thought about this, and I'm an atheist. I say that. I'm not a person of faith myself.

And I think that one's got to be able to say that. In that sense, it's not a problem or a difficulty. But equally, it's not something I go around broadcasting.

ZAKARIA: And is the hardest part of the job two little kids, both under five?

MILIBAND: Yes, that is -- I mean, probably, we shouldn't complain about our lives, because they are a great privilege. But the people who suffer are your family, because they don't have as much of you as you'd like.

And when you've got a four-and-a-half-year-old and a one-and-a- half-year-old who are changing every weekend when you're away, they've changed by the time you come back. And that is the toughest thing, I think, because they're only children once. And so, you don't want to miss any of that.

ZAKARIA: So, what do you do? Is there any kind of...

MILIBAND: You have to switch off the BlackBerry. That is the -- the thing I've learned in the last four-and-a-half years since the first one was born, is that you can't multitask when it comes to your children. If you have limited time with them, you've got to be with them. You can't be half on the BlackBerry. And so, that's a hard thing to do sometimes.

But they are the sharpest cookies. They pick up if you're actually focused on what's on the Blackberry rather than what's on their minds. And so, that's what I've learned the most. I'm a recovering addict on the BlackBerry, and I'm not sort of completely sorted on it.

But I think that's the most important thing. But it's still not enough. And that's the biggest dilemma that any of us face.

ZAKARIA: David Miliband, a pleasure.

MILIBAND: Thank you very much.

(BEGIN VIDEO CLIP)

JACQUELINE NOVOGRATZ: The debate is getting stuck between aid versus no aid, rather than what are the opportunities we have at this extraordinary historic moment.

(END VIDEO CLIP)

(COMMERCIAL CLIP)

ZAKARIA: Every year the United States and many other governments send many, many billions of dollars in aid to alleviate the desperate poverty in parts of Africa. Who could argue with that? Well, one of my next guests, as it turns out.

I recently spoke with two women at our studios in New York who make strong arguments for and against foreign aid, or rather, for two different approaches to foreign aid. Take a look and listen.

(BEGIN VIDEO)

ZAKARIA: Dambisa Moyo is originally from Zambia. She's an economist educated at Harvard and Oxford who has worked at Goldman Sachs. She has written a book called "Dead Aid," in which she argues that foreign aid to Africa has led to a culture of corruption and dependence that solves nothing. And she says celebrities like Bono and Bob Geldof haven't helped either.

Also with me today, Jacqueline Novogratz. She is the founder and CEO of Acumen Fund, which uses highly innovative entrepreneurial approaches to solving poverty worldwide. She, too, began her career in banking at what was then Chase Manhattan Bank, and she, too, has a new book out, which is called...

JACQUELINE NOVOGRATZ, FOUNDER AND CEO, ACUMEN FUND, AND AUTHOR, "THE BLUE SWEATER": "The Blue Sweater."

ZAKARIA: ... "The Blue Sweater." A wonderful book. All right.

So, reading your book I'm thinking to myself, why are you so angry with these people?

I mean, you look at somebody like Bono. I mean, he's spending an enormous amount of time traveling in Africa, trying to learn about the conditions, talking about programs that work, dealing with some macroeconomic issues like debt relief, which seem to make sense with a debt burden for these African countries that's extraordinary. But you really have it in for him.

DAMBISA MOYO, AUTHOR, "DEAD AID": My biggest problem is that a lot of the celebrity platform is couched in negativity on Africa. And in the book I call it the four horsemen of Africa's apocalypse. So the focus on corruption, poverty, disease and sort of ongoing wars is not helpful.

ZAKARIA: Jacqueline, you -- just to let people know, Acumen basically tries to find entrepreneurs around the world, and then funds them, so that this becomes a kind of self-sustaining process.

But you've also worked a lot with aid agencies. What is your experience of these aid agencies that get government money and are trying to alleviate poverty?

NOVOGRATZ: There's a real opportunity to work with some of the government agencies, like UNICEF and the Global Fund, that have done enormous things for malaria and HIV/AIDS.

We have one example where Acumen Fund, which uses this concept of patient capital, recognizing that we need to invest in entrepreneurs, but take below-market returns and leave it in for a long time.

When the Global Fund and aids decided that they wanted to find a way to get bed nets to all Africans, and over the last few years have distributed 70 millions nets -- that's a lot of nets -- Sumitomo Company in Japan was the major producer. All of those nets were being produced in East Asia. And so, the Global Fund and Sumitomo said, isn't there an opportunity to find an African entrepreneur to produce these nets?

We came in to help identify that entrepreneur, as well as provide this patient capital, a loan back in 2003. And today, A to Z Textile Mills in Arusha, Tanzania, employs 7,000 people, mostly women, mostly uneducated women, making 20 million bed nets per year, which provides coverage for 40 million.

And so, there are opportunities for us to reinvent, innovate around the aid establishment by recognizing what it's good at, and finding ways to support entrepreneurship and private sector development, particularly for the poor. Because the markets alone aren't going to do it, and traditional aid alone isn't going to do it.

ZAKARIA: But you don't like the whole bed net thing. Somewhere in here you say -- tell us what your gripe with the bed nets is.

MOYO: Well, I think what Jacqueline has just...

ZAKARIA: Just to make sure people understand...

MOYO: Sure.

ZAKARIA: ... bed nets is what helps people survive -- it prevents malaria, because, particularly if they're sprayed and people sleep under them, the incidence of malaria go down. But you don't like them.

MOYO: Well, I don't like the fact that very often Western -- the Western debate focuses on making the donations of mosquito nets. When I talk in there about bed nets, it's the same thing.

I think what I have proposed in the book is exactly what Jacqueline has just described. Rather than dumping 10,000 nets into a country, which kills off the domestic producer of those nets, why not invest with the domestic bed net producer, so that they can expand their production, employ people, so that people can actually -- you get the job creation?

ZAKARIA: But understand, it's not the market that's working, because she's doing it essentially as a charitable... NOVOGRATZ: And in fact -- and in fact, when we started, I was much more, none of these nets should be given away, we should sell the nets.

What's been a real learning for me is that 95 percent of the nets that A to Z produces are actually given away through the Global Fund.

And there are cases when it makes sense to give away these nets. And in fact, I've been visiting this man, Eli Arahaymuf (ph), four years in a row. And I've watched him go from skin and bones, $6 a month, endemic and perennial malaria, to malaria-free, where he's growing all of this maize.

And the last time I visited him, for the first time ever he had a mattress. And I said, "How old are you?" You know, sleeping forever on a mud floor.

And he said, "I'm 66 years old."

And I was thinking, you know, "First time in your life."

And that's where these issues are complex, because he was given a net. He knew how to use it. His life was changed.

I still think there's room for innovation, experimentation with what it would take to sell the nets to a certain percentage of the population, while also recognizing giving away is also -- also can work.

The issue for me is, can you move those aid flows to invest in African entrepreneurs, that then build the solutions themselves?

ZAKARIA: But that's not a private sector solution. That is using a lot of government money.

So, I mean, at the big picture here, what we're saying is, is there a role for aid?

NOVOGRATZ: And I guess...

ZAKARIA: Not can it be, you know -- because what Jacqueline is saying is, we can do it in a more innovative way. But we still need Western cash.

Are you comfortable with that?

MOYO: What I'm comfortable with is a society where governments are primarily responsible for providing health care, education, infrastructure and security to their people in a very accountable basis.

And what I'm saying is that...

ZAKARIA: But we don't have that world. I mean, the African countries...

MOYO: We do. We have it much closer (ph).

ZAKARIA: ... if they were that way, then you wouldn't have these problems.

MOYO: Precisely. And that's my point.

My point is that, in an aid-based model where governments do not need to spend time listening to domestic citizenry, rather they spend time courting donors, you will never get a situation where the governments care enough or feel threatened enough to lose office, so that they start to provide innovative solutions to problems that are going on in the concept (ph).

It is to me, rather, kind of temporary and perhaps even foolhardy for us to be growing an economy based on external interventions.

NOVOGRATZ: I think that we're not that far apart, in that this is the moment for reinvention, and that the private sector and private innovation can lead the way to public change.

MOYO: I mean, I'm not going to sit here and dispute the fact that some international organizations -- actually, in fact, I would say arguably few international organizations -- have actually gone into Africa and meaningfully to transform people's lives. But it's in a very narrow context.

I'm here to basically argue, we need a much more aggressive, innovative system to actually transform the economy of Africa from where it is today into something where it's much more -- a greater participator in the global economy.

Africa is shearing off, to quote Paul Collier. The rest of the world is going in one direction, Africa is going in a completely different direction.

NOVOGRATZ: Well, we would both agree on that.

MOYO: It's not surprising that, in the 1970s, only 10 percent of the population was under -- living under $1 a day. That number is over 70 percent.

As I said earlier, with the populations -- over 60 percent of the population under the age of 24 -- we should be concerned that we're not creating jobs enough, enough jobs fast enough to ensure that Africans ultimately are the ones who will be providing health care, and that African governments are held to task.

They are responsible ultimately -- not the Gates Foundation, not charities -- they are ultimately responsible, the African governments, to provide these goods and services to their people.

NOVOGRATZ: But Dambisa, don't you think that -- because to me the debate shouldn't be aid or no aid. To me the debate should be, we've got broken systems -- our financial system, the international aid complex. If we really believe that all human beings are fundamentally equal -- I mean, that's, you know, you take that principle, and we think about how do we extend that to every person on the planet.

There are also some problems that we have as a world that are truly global, that are not for a government. And I think if you look at smallpox is another example, 500 million people died in the 20th century due to smallpox. Two million people a year were dying until 1980.

A billion house calls were made by Rotary in the private sector and government, because of WHO, because of this worldwide moral vision to eradicate smallpox.

Wouldn't you say that there is room, if we were -- where we totally agree is, systems are broken. We need more innovation. We need more private sector market development.

And we need to be clear about what's the role of government, what's the role of aid, what's the role of the private sector, what's the role of charity -- that we actually could make progress on this.

But I worry that the debate is getting stuck between aid versus no aid, rather than, what are the opportunities we have at this extraordinary historic moment.

MOYO: I am very confident that the model can work. The aid model has not delivered jobs, and that's what Africans need.

Yes, we can quibble about whether it's a five-year program, a 10- year program. I think what we really need to focus on is that it cannot be an open-ended program.

We need to be much more focused on actually doing what we know works, and moving ourselves away from the things that we know do not work.

There are no countries that have achieved long-term economic growth and reduced poverty as dramatically as we've seen in China and in India in recent years, that have been wholly dependent on an aid system. And that is what I would like to see.

I think the aid model is ultimately based and couched in an attitude of pity. We need more businesses to come into Africa.

The only way to get businesses in Africa is if the governments can be held accountable. And governments will only be held accountable if they need to start looking for more accountable types of, and more transparent types of capital, which is not aid, unfortunately. But it isn't aid.

ZAKARIA: On that note, Dambisa Moyo, Jacqueline Novogratz, thank you very much. A fascinating conversation.

NOVOGRATZ: Thank you.

MOYO: Thank you very much.

ZAKARIA: And we will be right back.

(COMMERCIAL BREAK)

ZAKARIA: Now for our "What in the World?" segment. Here's what caught my eye this week.

Vladimir Putin has a plan to end the recession in his country: no summer vacations for bankers. Putin has asked Russia's state-owned banks to help the country pull itself out of its steep decline by loaning out cash. He set a target of $16 billion, and has asked that the heads of banks scrap their plans for summer vacations until they've implemented these plans.

Putin has good reason to try drastic measures. The Russian economy is in freefall. It contracted by 10 percent in the first half of this year. And for the whole of 2009, it's expected to go down about twice as badly as the World Bank had originally projected.

This is happening despite the fact that oil prices, crucial to Russia's wellbeing, have actually risen over the past few months. Outside of oil and other natural resources, Russia has no economy.

Its efforts to create a legal and political structure to encourage real business activity have been a near complete failure. Its stimulus plan this year was too little too late.

President Obama should keep this in mind as he meets with Russia's leaders.

Unlike the other emerging market countries like China and India, Russia is not a rising power, but a declining one. It has an unimpressive economy, a shrinking population, a bloated, inefficient army, and it confronts an array of problems along its borders.

The Kremlin might dream of reclaiming its superpower status, but it is, quite frankly, a dream.

Russia remains important. It has thousands of nuclear weapons, spans 11 time zones and has a vote on the Security Council. But it can really only play the role of a spoiler.

President Obama should treat it with the respect it deserves, but no more. And frankly, he should have gone to Beijing before Moscow.

(COMMERCIAL BREAK)

ZAKARIA: Now for our question of the week. Last week I asked you whether you thought you were getting an accurate picture of what's happening in Iran. Reporters, of course, have not been allowed to cover the story, so our only source has been the people, the Internet, Twitter.

Most of you said "no." You did not feel you were getting the whole story. One particularly astute e-mailer, who did not use his or her name, said the problem with getting Iran news via Twitter is that it's like watching a sporting event by focusing on only one player. It's a close-up. No wider view or perspective.

I agree. And I hope that's what we offer on this program each week, a bit of perspective.

Now, my question for the week. In the coming days, I'll be interviewing the United States secretary of treasury, Tim Geithner. He had a bit of a rocky start in that job, now seems to have stabilized. I want to ask you, do you think he's doing better? Do you approve of the moves he's been making?

Let me know what you think of Tim Geithner.

On this anniversary of America's Declaration of Independence, I'd like to recommend a book called "American Creation." It's by a Pulitzer Prize-winning American historian, who has been a guest of this program, Joseph Ellis.

The book tells a terrific tale of the tumultuous years of America's founding, from the shots fired in Lexington and Concord in 1775, to Thomas Jefferson's Louisiana Purchase in 1803. Ever wondered how America got saddled with an electoral college? Well, this book answers that question and many others -- lots of insights.

Remember, you can now follow us on both Twitter and Facebook. Go to our Web site, cnn.com/gps, for links and information. And while you're there, make sure you try the weekly world affairs quiz, the Fareed Challenge.

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

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