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FAREED ZAKARIA GPS

Interview with Rahm Emanuel; Interview with Paul Kagame

Aired June 10, 2012 - 10:00   ET

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


FAREED ZAKARIA, CNN 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.

We have a great show for you this week. We have, on one show, the two most powerful mayors and two of the most powerful politicians in America.

First up, Rahm Emanuel of Chicago, I'll talk to the feisty former White House Chief of Staff about the economy and the presidential campaign and much more.

Then, Michael Bloomberg on immigration, he's chief executive of a city that has an estimated half a million illegal immigrants. He'll tell us what he's learned. The mayor is part of the newest GPS special on immigration which airs Sunday night at 8:00 p.m. and 11:00 p.m., Eastern and Pacific. I'll give you a preview later in the show.

Plus, America's amazing energy boom and how it will reshape global politics and, finally, an African success story. I'll talk to Rwanda's president Paul Kagame.

But, first, here's my take. It's been graduation season in the United States and I was honored enough to be asked to provide some words of advice at two universities this year, Duke and Harvard, where I got my Ph.D. Many of you have been interested in what I said at those events so I thought I would give you a quick summary.

This has been a tough year mostly everywhere, but I am less gloomy than most. I think back on the crises we have already come through. Remember the fears after the financial crisis began in late 2007.

In the 12 months following the economic peak in 2008, industrial production fell as much as it did in the first year of the Great Depression. Equity prices and global trade actually fell more. Yet, no global depression followed.

Or remember the period after 9/11 when most experts predicted that we had entered an age of terrorism. In fact, groups like al- Qaeda have been battered over the past decade. Why? In both those cases, human beings responded to the crisis, governments around the world cooperated and acted.

When we look at our problems, economic slowdowns, debt, terrorism, climate change, keep in mind that these problems are real, but also keep in mind that the human reaction and response to them will also be real.

Were actually living an age of astonishing progress. The world is at peace, the number of people who have died as a result of war, civil war and, yes, terrorism is down 50 percent this decade from the 1990s. It is down 75 percent from the preceding five decades, the decades of the Cold War.

This political stability has allowed the creation of a single global economic system in which countries around the world are participating and flourishing.

Even in the current period of slow growth, the global economy as a whole will grow 10 to 20 percent faster this year than it did a decade ago, 60 percent faster than it did two decades ago, and five times as fast as it did three decades ago.

The United Nations estimates that poverty has been reduced more in the past 50 years than in the previous 500 and much of that reduction has taken place in the last 20 years.

The average Chinese person, for example, is 10 times richer than he or she was 50 years ago and lives for 25 years longer. Life expectancy across the world has risen dramatically. We gain five hours of life expectancy every day without even exercising.

Through recession and recovery, technology continues to gallop ahead touching new fields. Consider that today's smart phone has more computing power than the Apollo space capsule or that the human genome, for example, is now being sequenced at a pace faster than anyone imagined possible.

A "Third Industrial Revolution," involving material science and the customization of manufacturing, is yet in its infancy and all these fields are beginning to intersect and produce new opportunities that we can't really foresee.

In almost all of our successes, one feature stands out, cooperation whether in the global financial crisis or against al-Qaeda or in fighting cancer. When we come together, when we put aside petty differences, the results are astounding.

I'm not urging complacency, far from it. We should worry about the terrible problems we face. In so focusing our energies, talents and attention, we will help solve those problems.

Let's get started.

Joining me now from the city of Chicago, the mayor, Rahm Emanuel.

MAYOR RAHM EMANUEL, CHICAGO, ILLINOIS: Thanks for having me, Fareed.

ZAKARIA: To take you back to your old job, what does it look like to you? EMANUEL: I want you to know I'm loving this job, OK.

ZAKARIA: I know you do.

EMANUEL: Don't do this to me.

ZAKARIA: But if you were -- I mean, as somebody who's politically engaged, you're looking at this election. How close is it really?

EMANUEL: It's a close election. I don't -- I'm not saying anything that the president doesn't believe. I mean it's a close election and I think it's going to come down a handful of states. And I mean I say this pithy, I don't mean the exact science. It's five states, 500 precincts. That's what I believe.

ZAKARIA: And what you do think moves those? Because -- and you're seeing this with the ads also. They are often kind of narrow casting to those people. What do you think move those people? Is it different in every state? And so you're going to see --

EMANUEL: Oh yes, I think it's different. I mean, look, what moves a voter in Ohio and even in different parts of Ohio, Cleveland will be in a different place than Cincinnati or Columbus or Toledo or Akron.

It is different than what would maybe play in Virginia. That's just who we are as a country as well as -- but the fundamental that's kind of -- yes, it is narrow, but the fundamental is -- in my view, is which person to you want in the Oval Office because who's going to hear the voices that shake things.

And I do think it's seminal on behalf of the president. Take the auto industry, clearly Mitt Romney would have done something different. He's a product of his experience. He would look at the financials and say let it go bankrupt. He said it.

The president spent time on the South Side dealing with steel workers who saw their jobs and their lives and their whole communities disappear, everything they built. And he made a different decision against conventional wisdom.

Everybody, two weeks to go, that was it when we walked in the Oval Office and whose voices and whose interests do you represent? Because you are removed in the Oval Office and none of the choices are easy and I think that is a fundamental whether you're in Virginia, Ohio, Illinois, Wisconsin, Michigan, Florida, California, Washington, Oregon.

Who is going to fight for who in that Oval Office and they auto industry, the financial industry, the housing and Mitt Romney said, let it bottom out. To the president, those are people holding on to their entire American dream as they see it.

And they're really different people with different experiences with different views about how to shape the future of this country. And I think that's going to be the fundamental core piece of what this election's about.

ZAKARIA: You talked about the background of Mitt Romney. Do you think the ad about Bain Capital is a fair ad?

EMANUEL: I think, look, he is running on his record as a private sector person and, therefore, it's fair for the president and his campaign to run an ad about that in the same way that Mitt Romney's going to run an ad and saying that this is what the president's job creation was and talk, you know, it's all maxed by the first month, something he had no influence on. Is that fair?

OK, so I don't buy that it's unfair. It is part of what Mitt Romney talks about in the same way that it's legit for the president, in my view, to say, and it's true, that when we were at -- when he got into office, we were losing, on average, 700,000 jobs a month, the economy was contracting at a 9 or 8 1/2 percent, not growing healthy, but it's growing, it's not contracting, jobs are being added and not subtracted not at the pace the president's comfortable with.

Now, I do think, beyond the ad, there's a healthy discussion we should have which is where are we going as a country and what are the set of choices we're going to make.

ZAKARIA: When you look at certainty and businesses talked about the importance of certainly going forward, what everyone, even you as a mayor and business is confronting is this fiscal cliff that's going to take place.

Do you think -- I mean, you were Chief of Staff, do you think there's a way to bring the people in Washington together and say guys, we've got to come to some kind of deal.

EMANUEL: Yes, it all comes down to the election. And here's what I mean, I'm a product of my experience. In 1995, the Republicans shut the government down. President Clinton beat them back.

In '96, we had a rip-roaring debate about the role of government, what was right and what was wrong, President Clinton won. The Republicans lost seats in the '96 election in the House.

Nine months later, you had a balanced budget agreement, doubled the size of our national parks, created the Children's Health Insurance Program, for college for middle class families created the Hope and Lifetime Learning tax credits.

I mean it did a host of things progressive, appropriate for government to do because the election had meaning. I believe, if the president gets reelected, everybody will realize, OK, he's here for four years, he got reelected, we got to now work things out.

I believe elections have meaning. If the meaning coming out of this election is muddled, that's one set of political dynamics associated with that cliff.

If the election is decisive in its clarity of meaning; that is the president gets reelected and other scenarios happen at the state and local and Congressional level that has meaning.

So I don't do electoral politics so I can just do electoral politics or govern. I think elections have meaning in this system and if there's clarity to definition to this election, I think you can find a solution to all these issues.

And I think it's in our self-interest in this way: Europe's a mess. It's going to be a mess on November 7th. If the United States deals with its issues with an honest compromise, meaning everybody's going to have to come off their campaign positions into their governing positions, we'll show the world we're ready to tackle our challenge.

The entire questions by the financial and worldwide markets are not economics, they're political. And if the political system can show its capacity to measure up, you will win the economic pieces. It used to the other way around.

If our political system measures up to the challenges, we will win the economic vote of confidence and then we can make the investments we need to do.

ZAKARIA: You know there are a lot of people who say if only President Obama had embraced Simpson-Bowles.

EMANUEL: Yes.

ZAKARIA: You were Chief of Staff at the time. Why didn't he?

EMANUEL: Oh, well, I was Chief of Staff when we created Simpson- Bowles and I think what the president has done is, in my view, the right. First of all, a lot of people just kind of now say that simply. They don't even know what's in it.

But the blueprint, in my view here, what I'm trying to do -- and I think I know this is what the president's trying to do, I'm trying to do it on infrastructure.

Create jobs today, get the economy with real productive investments not just money around, building our roads, building our bridges, building our broadband, building our airports, making those investments and, then, make sure your fiscal health, both medium and long-term, is structured correctly.

But if, as a country, were to all of the sudden adopt some of the strategies being advocated in Europe, we'll have the same results. They're in a recession now, 1.9 percent GDP growth is not healthy, but it's not 3 percent contraction, OK. That's a big spread.

And so my view is we need to do exactly what the president's saying.

ZAKARIA: But the president has proposed a number of things, like the Infrastructure Bank, infrastructure -- other infrastructure proposals.

EMANUEL: Yes.

ZAKARIA: They don't go anywhere. Should he run a campaign against a do-nothing Republican Congress, a kind of reprise of the Truman campaign?

EMANUEL: The campaign he's running is correct in the sense that they are do-nothing. They're not doing anything and they haven't been productive. In this Congress, under the Republican leadership, they haven't produced the type of investments.

It used to be, let's take infrastructure. The last infrastructure bill for the country, there were two. One in 2005, the Highway Bill, hasn't been reauthorized or refinanced since 2005.

It's just being kicked along, nine times now for 90-day extensions. And, then, the Stimulus Bill, that's it. That's no way to run a modern economy.

ZAKARIA: And we'll be back with Rahm Emanuel, the mayor of the great city of Chicago.

(COMMERCIAL BREAK)

ZAKARIA: And we are back with the mayor of the City of Chicago, Rahm Emanuel.

EMANUEL: Thanks, Fareed.

ZAKARIA: Tell me your reaction to the Wisconsin election. You have, in your own way, been trying to take on some of the issues of pension, retirement benefit cost, cost of living adjustments.

What do you think one should interpret from that victory? What does it say that Governor Walker was reaffirmed with such a strong majority?

EMANUEL: I think, well -- I don't go where the interpretation's going that somehow this is an affirmation for doing that type of politics. I think people know that when you recall, there's got to be something severe. You've committed corruption or something of that level.

And I think that that's where the judgment was. This was not the tool for disagreeing with his policies on collective bargaining or other issues. So I'm not where the conventional wisdom is about oh, this means it's war on public employees.

I think public employees should be partners in solving problems. Labor should be a partner. If you're view when you sit at the table is, I want to get to a yes and I want to work a way that's a win-win, I'll not only pull up a chair, I'll get you a cup of coffee.

But if you're attitude is we did it this way for 30 years, we're going to keep doing it this way for 30 years, that's not feasible. The taxpayers can't support that anymore. ZAKARIA: Is there a danger that the Democratic Party is going to end up on the wrong side of this issue because the public sector unions are such a large funder of the party.

EMANUEL: Well, it requires everybody being straightforward and honest with each other. I think the truth is you could say, on my side -- meaning, obviously, you're talking about from a partisan or a party affiliate, you cannot put your head in the sand and say this will go away, it will take care of itself.

As I always joke around, denial is not a long-term strategy. It doesn't work. We have to take on these issues -- I don't want to say, "man up to them," but deal with them, confront them, but from a position of being honest with people as long as painful it is.

No city today can function as if the past and the past responsibilities are going to hold true. And that means saying to people and I say this when I go to firehouses, "You did nothing wrong. This is not your fault, but I can't be your mayor and tell you if we don't change it, everything's going to be OK and that's just not true."

"And you and your spouse have made plans all along the way. I want you to have a pension not a defined contribution, a defined benefit. I want you to have it, but to have it, if you want it, we're going to have to make changes."

And remember, I'm making changes to expectations. That's the hardest thing to do in life, but it starts with, "It's not your fault things weren't done right, but we're going to get them right so when you contribute, you know it will be there."

ZAKARIA: The biggest piece of this is cost of living adjustments, am I right?

EMANUEL: On the pensions.

ZAKARIA: On the pensions.

EMANUEL: That's the automatic increase. I testify to this, unless you deal with what's happening for present retirees as part of a solution. You can do everything else on top to current. If you don't stop the bleeding, none of the other stuff will take hold and really fix the system.

And cost of living adjustments are the ones that move the needle of fastest to health and I think -- I'm not going to win popularity points with retirees, but I want to be honest. They're getting it as part of our pensions, not all, they're getting an automatic 3 percent.

An employee, I think the statistic is, that retired in '95 at $60,000 a year, now makes $100 plus thousand. The employee current that is paying that took a furlough, a pay cut, while the other person's get a 3 percent annually increase. And that's just -- and that's not sustainable. Maybe in a different era that's sustainable. It's not sustainable now and that's what I meant when people agree to things in -- maybe the heady days, but they're not sustainable long-term.

And you have to deal with retirement age, you have to deal with benefit structure, you have to deal with contribution, you have to deal with choice, but you're also going to have to deal with what was once an agreement, contractual, that you can't sustain, otherwise the current employees and the young employees will never get the pension that they're earning.

ZAKARIA: If President Obama wins reelection, is there any job in Washington --

EMANUEL: No.

ZAKARIA: -- offer you.

EMANUEL: No.

ZAKARIA: I was going to say other than his own.

EMANUEL: Fareed, look, I like you. You're a precedent now. Here's the thing. I love this job. I was honored to work for the president. I was honored to work for President Clinton. I was honored that the people of the city of the North Side gave me their vote of confidence four times to represent them.

This is the best job I've ever had in public life. I love doing this. Nothing is more exciting. You can make decisions, see them through, make kind of changes.

Truth is, Fareed, if I wasn't in Chicago and I wasn't doing this sort of thing, you wouldn't want to sit with me. Forget even just the Chief of Staff. This is exciting things and we're showing the way, I think, forward in a progressive way of how to make reforms rather than, in my view, the alternatives that are being shown and held up.

There is a progressive agenda for reform of the public sector and anybody who wants to be a partner with that, I'm ready to meet, talk and design.

ZAKARIA: Rahm Emanuel, pleasure to have you on.

EMANUEL: Thank you.

ZAKARIA: When we come back, I will explain why shale gas is revolutionizing not just the American economy, but global geopolitics as well. Stay with us.

(COMMERCIAL BREAK)

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

Last year, the world's energy watchdog published a report which asked an important question. "Are we entering a golden age of gas?" So I was struck when I saw the International Energy Agency's 2012 report. Gone is the question mark.

Instead it simply says, "Golden rules for a golden age of gas." And the starting point of that golden age is right here in America. It's become increasingly clear that the shale gas revolution is a game-changer not just for the energy industry, not just for the U.S., but for geopolitics.

The technology behind shale gas production, where shale rock is blasted with a mixture of water, sand, and chemicals, is only two decades old. The process is called fracking.

And in a short time, its success has led to the drilling of 20,000 wells in America, the creation of hundreds of thousands of jobs, and a guaranteed supply of gas for perhaps 100 years.

The International Energy Agency says global gas production will rise 50 percent by the year 2035. Two-thirds of that growth will come from unconventional sources like shale, a market the United Sates completely dominates.

We've become the world's lowest-cost producer of natural gas at a cost of $2 per thousand cubic feet. Compare that with many European countries which have to pay seven times as much to Russia.

It's increasingly possible to use liquefied natural gas as a substitute for oil as a transportation fuel, so the effects go beyond generating electricity. General Motors, for example, is planning to produce cars that can take natural gas or oil in their fuel tanks.

Aside from the advantages to America, shale gas has the potential to change the geopolitics of energy. So far, gas has been supplied by a handful of regimes, Russia, Iran, Venezuela, many of them nasty and illegitimate, thriving on global instability, which actually helps their bottom line since instability equals higher oil and gas prices.

In the next 20 years, however, much of this new energy could come from stable, democratic countries like the United States, Canada, Australia, Poland, France and Israel. That would be good for the free world, bad for the rogues and good for global stability.

China has huge shale reserves and, even though it is not democratic, it is a country that seeks stability, not instability. One problem, there's a significant lobby against shale gas and the way it's produced. Fracking consumes a lot of water.

Shale production also creates large quantities of methane, a greenhouse gas. Sometimes methane pours out of faucets in areas near shale gas production centers. Look at this video. Critics also claim fracking can trigger minor earthquakes. So what do we do? The good news is that these risks are manageable as the IEA's new report points out and it has a list of golden rules to follow, from safety measures to reducing emissions to engaging with local communities. The IEA estimates these measures would add just seven percent to the cost of the average shale gas well. Many of the riskiest practices are actually employed by a small number of the lowest cost producers, so it's a situation that calls for sensible regulation. Read the IEA's report, we've put a link to it on our Website. Let's figure out how to make fracking cleaner and safer. We can regulate the process with good, simple rules. The benefits are immense and the problems are manageable. We'll be right back. Up next, America's immigration policies are national suicide, says New York mayor Michael Bloomberg. Find out why and what we can do about it, up next.

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington. Fareed Zakaria GPS returns in a moment, but first a check of the top stories.

There are reports of multiple victims in a shooting near Alabama's Auburn University. The incident occurred last night at an off campus apartment complex. Police are expected to release more details later today.

Evacuations have been ordered in northern Colorado where a wildfire is burning. So far the blaze has consumed 8,000 acres and is expected to grow. No injuries have been reported.

Heavy rains pounded the Gulf Coast this weekend, causing severe flooding. 13 inches of rain fell on Pensacola, Florida, where a state of emergency has been declared. Residents in low-lying areas are being urged to evacuate.

The Supreme Court's ruling on the health care law could come as early as tomorrow. The high court could strike down the entire law or just the part involving the individual mandate, which requires everyone to have health care insurance. The Supreme Court could also uphold the entire law. The remaining rulings from the court for this term will all be handed down by the end of the month. Those are your top stories. "Reliable Sources" is at the top of the hour. Now back to Fareed Zakaria GPS.

ZAKARIA: Immigration remains a hot, controversial topic in America and many other places as well. It is the subject of our next special, which is premiering tonight at 8:0 p.m. and 11:00 p.m. Eastern and Pacific for our viewers in North America. It's called "Global Lessons: the GPS Road Map for Making Immigration Work." In the special we go around the world to learn lessons both positive and negative about how to deal with immigration, both legal and illegal. Let's start with the hottest of them all, illegal immigration here in America. I was surprised by what one of America's best-known politicians told me.

(BEGIN VIDEO CLIP)

ZAKARIA: When you look at New York City's undocumented immigrants ...

MICHAEL BLOOMBERG, MAYOR, NEW YORK CITY: Yes.

ZAKARIA: ... illegal aliens ...

BLOOMBERG: Yes. ZAKARIA: Call them what you will, what lessons do you (inaudible)?

BLOOMBERG: Well, undocumented have very low crime rate. Why? Because they're scared to death they're going to get arrested ...

ZAKARIA: And deported.

BLOOMBERG: And deported.

ZAKARIA (voice-over): New York City Mayor Michael Bloomberg has a unique perspective on the situation. As the chief executive of the city with an estimated half a million undocumented residents.

BLOOMBERG: Undocumented are not unemployed. They take jobs. They may be in the cash economy off the books, but they work. America is not a place to come, put your feet up and just take welfare. It's a very competitive place. If that's what you want to do, you should stay home, wherever home is.

ZAKARIA: Bloomberg says the undocumented don't use public schools, because they usually leave their kids in their home country, and they don't use health care much because they tend to be young and healthy. And to top it all, he notes about 75 percent of New York City's undocumented immigrants pay taxes.

BLOOMBERG: Employers withhold and then the government says well, this guy didn't earn enough, we have to send a refund. To where? The documentation doesn't exist or is fraudulent.

ZAKARIA: That certainly defies conventional wisdom.

(END VIDEOTAPE)

ZAKARIA: You'll also hear from someone who strongly disagrees with the mayor. In the special, we go to Japan, the European Union and, as you're about to see, to an unlikely immigration epicenter, Calgary, Alberta, Canada.

If you have never been to Calgary, you might know it for its annual stampede. Ten days of cowboys. Rodeos. Last year the royals. And of course its Muslim cowboy hat wearing mayor. What? Who?

(BEGIN VIDEO CLIP)

NAHEED NENSHI, MAYOR, CALGARY: The great thing about Calgary is nobody thinks it's funny that a guy who looks like me in a cowboy hat is sometimes the image of this city. People just accept that.

(END VIDEO CLIP)

ZAKARIA: When Naheed Nenshi became the first Muslim mayor of a major Canadian city in 2010 - he shattered Calgary's redneck stereotype.

(BEGIN VIDEO CLIP) NENSHI: When I was running for office, it was only people who were not from here who said wow, is Calgary ready for a mayor like that? The people in Calgary just said, that's a kid from the East End. We know him.

(END VIDEO CLIP)

ZAKARIA: Not only is Canada accepting of immigrants, it actively pursues them to benefit the nation's economy. Canada may not have the cache the U.S. does, but the Economist's business editor Robert Guest says, it holds great appeal for would-be immigrants.

(BEGIN VIDEO CLIP)

ROBERT GUEST, THE ECONOMIST: Canada offers many of the same things that America does. Very high standard of living, the rule of law, peace, safety.

(END VIDEO CLIP)

ZAKARIA: Canada is even more appealing to immigrants with something to offer, a hard-to-find skill or an advanced degree.

(BEGIN VIDEO CLIP)

GUEST: And they have decided to cherry pick and say, you know, we're a rich country, we can attract the best and the brightest from the rest of the world.

(END VIDEO CLIP)

(BEGIN VIDEOTAPE)

ZAKARIA: Cherry-picking the best and brightest would be a great thing for the United States to do. Instead, with most highly talented foreigners, we do the opposite. We kick them out. Meet Cornal Bahl (ph), a 28-year-old entrepreneur from India. His dream was to start a tech company in Silicon Valley. He got an engineering degree and a business degree from the University of Pennsylvania and a job at Microsoft in Seattle.

UNIDENTIFIED MALE: My plan was work with Microsoft for about two to three years, gain a bunch of experience there and then move to Silicon Valley, work with a start-up there for maybe two or three years and then start my own company.

How many people are participating tomorrow?

ZAKARIA: He says Microsoft applied for a work visa on his behalf so he could stay on there after his student visa ran out. But Bahl was rejected, despite his Ivy League degrees.

UNIDENTIFIED MALE: If they want me here, I would love to be here because I can learn a lot. But if it's going to be that hard for me, then I'm better off just going back to India and starting a company now than waiting five years in the U.S. ZAKARIA: So Bahl went back to New Delhi and started a website out of his bedroom. Snapdeal.com. Two years after its launch, the site is expected to generate $100 million in revenue in 2012 alone.

UNIDENTIFIED MALE: We essentially build one of the largest e- commerce companies in the country. People often refer to us as the Amazon of India.

ZAKARIA: Bahl's outfit has created around 1,500 jobs and counting.

UNIDENTIFIED MALE: We're looking to launch a couple of new categories.

ZAKARIA: And the future looks bright. Bahl expects to go public in a couple of years in the United States. But the jobs he will create will all be in India.

(END VIDEOTAPE)

ZAKARIA: It's a terrific show, even if I say so myself, please don't miss it. "Global Lessons: the GPS Road Map for Making Immigration Work." It airs Sunday night at 8:00 p.m. and 11:00 p.m. Eastern and Pacific here in North America. International viewers, check our Website for air times. And we'll be right back with a rare turnaround story from Africa, a country that is now being called the Singapore of Africa. My interview with the president of Rwanda.

(COMMERCIAL BREAK)

ZAKARIA: Books have been written about it, films have been made about it. Rwanda is best known for a genocide that claimed more than half a million lives in 1994. But in the ensuing years, quiet changes have taken place there. So much so that "The Economist" magazine now asks is Rwanda Africa's Singapore. The World Bank ranks it 45th in the world for ease of doing business, higher than any African country barring South Africa and Mauritius. Transparency International says it is less corrupt than Greece or Italy. The man credited with this transformation is Paul Kagame, now in his 13th year as president. He faces a number of obstacles, however. Rwanda is landlocked between corrupt countries. It is the most densely populated country in Africa and its people earn only $1,300 a year, 1/36th of the average in the United States. So where is it headed? President Kagame joins me.

Thanks for coming on. Again.

PAUL KAGAME, PRESIDENT OF RWANDA: Thanks. Thank you.

ZAKARIA: Tell me about corruption. Because corruption is -- when people think about Africa, this is the dominant image that comes up. And when you talk to businessmen, they will often tell you this is a huge problem. How did you create a culture or is it institutions or is it laws that have made corruption decline so dramatically?

KAGAME: In our case, it's not one thing that solves the problem of corruption, it's a combination of factors. First, it is education. And people have got to talk about it. We have to discuss it, we have to show how corruption will make institutions fail to serve the way they should serve the people. At the same time, we'll have to put institutions in place, we have to put processes of accountability in place.

ZAKARIA: You have sent a lot of people -- I mean the system have sent a lot of people to jail for corruption. Ministers have gone to jail for corruption in Rwanda.

KAGAME: Well, we have found that people have used public funds, public money for their own use rather than for the public good. Definitely they have been held accountable by the institutions that have been put in a place to root (ph) that.

ZAKARIA: How do you get these people to be not -- just do not be corrupt? Because in many countries, the judiciary itself is one of the most corrupt parts of the system. So, you know, it undermines the whole process. How do you get good judges who are -- how do you get a system in place where that corruption doesn't infect the judiciary?

KAGAME: Well, those are (inaudible) question and a difficult one, but we've got to start from somewhere, and the best place to start from is from the top. When you have a few people and a few leaders who are committed to fighting corruption and, for example, heading these institutions and influence those institutions to do what they should do, you find things will start happening. But it takes a lot of time, it takes a lot of effort.

ZAKARIA: There is the perception that while you have been able to institute a very good sense of rule of law in Rwanda, economic growth, it has all been done with the absence of democracy. The way "The Economist", which praises Rwanda in its article puts it, the elections are a sham. Many people feel that your party has extraordinary and unfair advantages over other parties.

KAGAME: Well, it is said like that from the outside. When you come to the country, the situation is entirely different. And in fact even partly from outside, if you look at, say, the Gallup polls that have recently been carried out in Rwanda on everything, they show the confidence that people have in the institutions, people have in the government. They all score above 85 percent. Better than you can witness in any African country or even other countries outside. This is ...

ZAKARIA: But you understand the suspicion people have. You win the elections with 95 percent of the vote. I mean--

KAGAME: Yes.

ZAKARIA: That's the kind of margin that Mubarak used to win with in Egypt.

KAGAME: Right.

ZAKARIA: And so at least people think either you are wildly popular ... KAGAME: Yes.

ZAKARIA: ... or there's something going on.

KAGAME: You see, but that's where the problem is. Those judging from outside would never accept that there is an issue of popularity in Rwanda or in Africa. Whenever that issue comes up, of popularity, they call it a dictatorship. They think popularity is a preserve of developed countries. But in other situations, leaders can be popular and unpopular.

ZAKARIA: And popular is one thing, but winning 95 percent of the vote is another.

KAGAME: Absolutely. But you see, you have to put all matters in context. If you take it out of context, then you lose the point. One, I have told you about outsiders coming to the country and assessing the feelings of the citizens of our country. Which they have interacted with independently and at all levels, the score is very high. This is a practical thing, this is a fact. Now, the other is in that context, you have to know where Rwanda is coming from. Rwanda the other day, 18 years ago, starting from scratch. In fact, supposed to be a failed state. And it has come out of that. People rallied around the leadership that was there and building on their own effort and a desire to be out of this situation, this is what produces the kind of things you see.

ZAKARIA: Paul Kagame, pleasure to have you on.

KAGAME: Well, thank you.

(END VIDEOTAPE)

ZAKARIA: And we will be back.

(COMMERCIAL BREAK)

ZAKARIA: "Sesame Street" is one of America's greatest exports, not in monetary terms, of course, but in terms of winning hearts and minds. The pre-school show is exported to more than 150 countries, and in some of those places, the U.S. government provides production funds. And this brings me to my question of the week. The U.S. Agency for International Development ended funding for the production of "Sesame Street" where this week? Is it, a, Pakistan, B, the Palestinian territories, C, Afghanistan or D, Nigeria. Stay tuned and we'll tell you the correct answer. Go to cnn.com/fareed for more of the GPS challenge and lots of inside and analysis. You can also follow us on Twitter and Facebook. Also remember, if you miss a show, go to iTunes. You can get the audio podcast for free, or you can buy the video version. Go directly there, type in iTunes.com/fareed into your browser.

This week's book of the week is "Adapt" by Tim Harford, the British economist, who is a columnist who "The Financial Times." If you like "Freakonomics" or Malcolm Gladwell, you will like this book. It explains why success often leads to failure. Harford says we all need to learn how to adapt to new business opportunities, to financial downturns, even to climate change. And he uses compelling case studies to prove his point.

Now for the last look. Just as the number combination 9/11 will forever resonate for Americans, 6/4 is deeply meaningful for the Chinese. You see the crackdown at Tiananmen Square happened on June 4th or 6/4 in 1989. That's why observers were intrigued to see this on the 6/4 anniversary this week. It's how much the Shanghai composite index fell that day, 64.89. Six, four, 89. What's more, the market opened that day at 2346.98. You don't see a 6/4 in there, do you? No, but you do some reversing, and you will get 89, then six, four -- and that 23 in the front? The day was the 23rd anniversary of the Tiananmen crackdown.

I bet you didn't know that we study numerology here at GPS. The correct answer to our GPS challenge question was A. Pakistan's version of Sesame Street known there as "Sim Sim Hamara."

Don't forget for viewers in North America, our new special on making immigration work will air Sunday night, tonight, at 8:00 and 11:00 p.m. Eastern and Pacific. International viewers can check the website for air times. I'll see you back here next week. Thanks for being part of the program. Stay tuned for "Reliable Sources."