Transcript: View from the Top with Madeleine Albright

Chrystia Freeland, US managing editor, interviewed Madeleine Albright, former US secretary of state and chairwoman of the Albright Stonebridge Group and Albright Capital Management. They spoke about Obama’s first year and Afghanistan, China, Iran and democracy, and health care and global opportunities. This is a transcript of that interview.

Part I: Obama’s first year and Afghanistan

FT: Thank you for joining us, Secretary Albright.

MA: Great to be with you. Thank you so much.

FT: I can’t resist asking you about your pin. Can you explain it?

MA: I’d be happy to. This is one of my newer pins because the pins that I’ve had have actually been taken away from me and they’re in a museum; so what happened was that some of my friends have been giving me what I call pity pins. And this one came from the former chairman of the Joint Chiefs, General Shalikashvili, who came to one of my book signings, and this is called America. And it’s got an eagle in the middle and then it has these four pearls that signify liberty and equality, prosperity and justice; so very pleased with it, and I think it’s kinda neat.

FT: And beautiful as well.

MA: Thank you very much.

FT: You wrote a book of advice for the president called Memo to the President Elect. What advice has he taken and what is the piece of advice you most regret he hasn’t followed?

MA: Well, I tell you I gave the book to him when he was president-elect, and I inscribed it, “With the audacity to hope that this book will be helpful.” What I talked about in the book was that there was going to be a very, very difficult agenda. I think the agenda is actually even more difficult than I had outlined. And I talked about the importance of understanding that the issues that were out there, whether it was fighting terrorism or dealing with environment and energy issues or how to deal with the inequality of the world, that there had to be partnerships. And I think that is some of the way that President Obama has really been working in terms of understanding that as strong as America is, it needs partners.

I also, and I was so pleased with this, I said that I wanted to see a confident president rather than a certain president. And I said that a confident president was somebody that was comfortable receiving a lot of different ideas and weighing them and asking questions. And I think we saw that in President Obama in making the Afghan decision in terms of gathering ideas and feeling comfortable. A certain president is somebody who thinks that he knows everything and doesn’t want to hear a lot of different opinions.

I think the only thing that I wish that – I don’t think he’s had a choice, frankly, because there’s so many issues out there. But I’d talked about the need of prioritising, and prioritising is really difficult when you have things coming at you from all directions.

FT: Did the president take the right decision on Afghanistan?

MA: I believe he did. I think it was a very hard one because this was not – the arguments that many of us made was that President Bush did the wrong thing by shifting attention away from Afghanistan and focusing on Iraq. And that having that eight years where we didn’t pay enough attention to the country from whence the 9/11 people have come really created a very difficult situation. What I think is very important is that he did – I think it’s necessary to help secure territory and provide security for the people so that they then can develop a system that works for Afghanistan. So sending the additional troops, I think, was right. Calling on Nato to be more helpful was right. I think the other part that I think is very important is obviously fighting terrorism specifically, but then also looking at what we’ve been calling kind of a comprehensive approach in terms of building up the civilian contingent and making sure that a variety of assistance goes into Afghanistan.

FT: But will all these efforts in Afghanistan work? Isn’t it doomed to failure and isn’t this just sort of a polite way of preparing for the withdrawal?

MA: I don’t think it’s doomed to failure, and I think you can’t guarantee success, but I don’t think it’s doomed to failure, and I think it would have been a big mistake to kind of leave a vacuum. I think we have to do everything we can. I think the real issue is what’s going on in Pakistan, and there obviously are a lot of policies that are directed towards that. So I think he’s made clear we’re not gonna stay there forever, that we have to give the Afghan people a chance to pull themselves together, but it’s very difficult. I mean I don’t think anybody should say that there’s anything very easy about this, but I do think the president made the right decision.

FT: One issue which has now returned to the public consciousness with the failed December 25th possibly airplane terror attempt is global terrorism and terrorism in the skies. Do you think the administration’s response has been the right one there?

MA: I think the president actually saying the buck stops with him of taking responsibility was very important, and I think it’s very interesting to have watched the president because he clearly was very determined and angry about the fact that things had not worked. And so I think that they are going about this now in the right way, but it’s not easy.

We have a huge intelligence bureaucracy. I know what it was like when we were in office, and I loved being secretary of state except on August 7th, 1998, when our embassies in Kenya and Tanzania were blown up and there were questions as to how the CIA worked with the FBI and how – it’s a very large bureaucracy. And I think having the president come down as strongly as he did was very important.

FT: Janet Napolitano’s reaction right away was much, much more muted. Was that a mistake, and should she step down?

MA: No. I mean I don’t think that – and the president made it very clear yesterday that this is not about getting rid of people. I think that there must have been some reason that, in fact, that the approach in terms of saying that the system worked, it did work afterwards, but clearly there are lots of questions, and it’s very, very hard.

FT: What about this new focus on people who come from specific countries? Is that the right thing or is there a danger that that actually will feed into feelings of resentment?

MA: I can understand why it might, but the bottom line is you have to begin somewhere, and I think you have to be very careful. I mean we do have lists that are created at the State Department of countries that are designated as terrorist countries or we have lists of organisations that are determined as terrorist organisations. So in life you do have to kind of create certain categories. I would hope they would look at everybody, frankly. I mean I know I feel safer when I travel to think that there have been very strict various ways that they take care of looking at security.

Part 2: China, Iran and democracy

FT: How worried are you about the possibility that Iran will acquire nuclear weapons, and is the United States pursuing the right policy there?

MA: I am obviously worried about Iran acquiring nuclear weapons. I think it is of great concern whenever there are more nuclear countries. That is a great concern. I spent time working on the North Korean issue, and clearly we talked about Pakistan as a very complex country. But I am worried. I think that it is something that has concerned a lot of people because of the kind of lack of information about Iran and what the IAEA has been able to get out of Iran. And the director-general ElBaradei, who really worked very hard on it, and in his kind of departure statements he made clear that this was of great concern.

I do think that the administration has been going about this in the right way in terms of what they call kind of a dual-track strategy of trying to engage Iran. Very difficult given what’s going on in Iran, but I certainly have supported the idea that we talk to countries that we don’t like in order to – that’s what diplomacy should be about. But also I think preparing for some tough international action on sanctions and getting the international community together in terms of understanding that a nuclear weapon in Iran is not just a threat to the United States but to the region and to other countries.

FT: How does this very visible emergence of an Iranian opposition change the calculations with Iran?

MA: Well, I think the part that more people are beginning to understand is that Iran is not a monolithic society, and that there have all along been discussions about what the various grouping are in Iran. As a matter of fact, when we were office I removed sanctions on caviar, pistachios, and rugs. Not that we needed those, but they were primarily associated with the merchant class, which was one of the classes that kind of showed some differences within Iran. So I think it’s very important for people to understand that not everybody is the same in Iran.

I believe that – I’m just, I have to say, overwhelmed with admiration for those people that are out there demonstrating to show that the elections were not – the results were not properly counted, and they are really showing. I think the part that makes this complicated is that in some ways it has – I don’t think paralysed is quite the right word, but made it much more difficult for decisions to be made by Iran because they’re dealing –the governments are dealing with their internal issues when we had hoped that they would deal with us. But I think it just shows the vibrancy of the Iranian society, the interesting aspects of the younger people who want to live in some kind of a different way. So I do think that it clearly adds to the complications of the whole issue, but also shows great hope that Iran could take a different place in the region and play a very important role.

FT: What about China? As we’ve seen China’s global economic role become stronger, particularly with the United States running such a big deficit, do you think the American government has become more muted in its comments about China’s human rights record and about the possibility of democracy in China?

MA: Well, I think that – again, this is the similar kind of thing. You have to be able to do both things, and I think there’s always been a discussion, whether it’s this administration or previous administration, to what extent you say things publicly and privately. I know that when we were office there always were questions about what were the talking points, and we always – the Chinese always had their points about Taiwan and Tibet. We always had our points about human rights, and I think that that is something that was clear with this administration also.

We do have to deal with China. I’m very glad we’re dealing with China. I think that – recently I’ve spent a lot of time thinking and talking about China and that we need to have China part of a globally responsible system. We also need to say what we think about what they’re doing internally, and it doesn’t mean that it has to be done on the front pages of the newspapers. It is something that I’m sure is part of the dialogue that goes on.

But I think what is important is to realise that if you look at the issues that are out there, whether they are Iran or the economy or climate change or energy, that the Chinese role is increasingly important, and having a dialogue with them is, I think, one of the essential changes. You asked earlier about the book, and I talked a lot about the importance of dealing with a rising China; so I agree with the way that things have been going.

FT: Throughout your career you’ve been a huge advocate of democracy. Does the rise of China and the apparent success of China make it harder to make the case for democracy?

MA: I think the thing that’s made it harder to talk about democracy is what happened for the last years because democracy was identified with the imposition and militarisation of democracy in Iraq. That is what has made it much harder.

FT: A Chinese leader would argue if he or she were here today that the Chinese leadership is very attentive to its population, to listening to the needs, the desires of that rising middle class and expresses those in its policies, and that actually it does that more effectively than the rather chaotic democracies we see in some Western countries, which are maybe not as good as the Chinese leadership at rising to big global challenges.

MA: I wouldn’t agree with that. I mean first of all, I do think they’re clearly – everything about China – in terms of population you can make any statement about it. That the middle class is happier, but they also have brought more people out of poverty, but they still have a lot of people in poverty. I think what I find interesting about China is that there are elements within the society which are not happy, that are concerned about the pollution or mining accidents or generally environmental issues. And I think that there is a whole question, the communist party, in terms of trying to find a role for itself.

So I think it’s not quite as kind of smooth and calm as they say. I think they do listen to a certain element of their society. I think they clearly have a very dynamic growth model, but I think there also are a whole host of issues in terms of divisions within that society that may not be as evident every day to the public eye.

FT: President Obama has been criticised, particularly from the right, for giving up on this notion of American exceptionalism, of America as the beacon of democracy to the rest of the world and indeed the bringer of democracy to other parts of the world. Is that criticism fair?

MA: I don’t think it’s fair. I think part of it goes back to the point that I made earlier. I do think, and I have said this many times, I think that the Bush – you can’t keep blaming the Bush administration for everything, but the bottom line is that the Bush administration did, I think, complicate the concept of democracy. I have felt this as chairman of the board of the National Democratic Institution that people, as I said, identify it with the military, which is not what it’s about. And I think that what President Obama has been doing is explaining American values in a very specific way of being a partner to countries, of understanding the problems of poverty in countries, of understanding that America has a role to play, but not telling everybody what to do, which is a very different concept than lecturing, listening more, of making clear that not everything that America’s ever done is perfect.

What I like about him is that I think he’s a very proud American and very proud of our value system without going a hammering people over the head with it. But there is a real problem here, and it’s something that I deal with every day, which is that democracy got a bad name because of Iraq. And I think that what President Obama’s done in terms of changing the way that America presents itself ultimately is a much better symbol of what democracy’s about than saying our way or the highway.

Part 3: Health care and global business opportunities

FT: You are a great believer in setting priorities. President Obama took office at a time when America was engaged in two wars and faced an unprecedented global financial and economic crisis. Was it a mistake to also try to tackle healthcare reform?

MA: As president what you have to do is blend domestic and foreign policy, and I have argued that there is a continuum between domestic and foreign policy all along. If the US is going to present itself as a country that can solve problems for people, health policy is a very big deal.

FT: Secretary Albright, you are now a business woman as well as everything else. What parts of the world are your clients most interested in right now as business opportunities?

MA: Well, we are – particularly my firm focuses primarily on emerging markets, and part of it has to do with the fact that I have been fascinated by what is going on outside of, as a foreign policy person, outside of the United States and what the whole role of emerging markets in emerging countries are. And I think that what we specialise in is actually helping in terms of how American companies and other multinational companies can operate within emerging markets, and we see a whole lot of opportunities in the whole emerging markets.

FT: Name the top three.

MA: Well, obviously we talk about the Bric countries. I mean we spend a lot of time in China and India, Brazil, but also –

FT: You didn’t name Russia.

MA: Well, Russia is a real issue, a real question. And I have spent my entire life first studying the Soviet Union and now Russia, and I think that there are opportunities, but I think it’s a very complicated place. And I can argue this week that, for instance, things seem to look better in Russia because of commodity prices and various aspects, but politically the domestic political situation there is very complicated. And so I think there are opportunities, but one has to be very careful.

FT: What about the world beyond the Brics?

MA: Well, I think we look a lot at frontier markets and think that there are a variety of different opportunities. To go back to my thinking is, as I said, I believe in democracy. I believe that you don’t have it without a middle class. There are no middle classes without functioning economies. Functioning economies don’t happen without domestic investment, and domestic investment doesn’t happen without foreign investment. So in my life I kind of work along that whole continuum, and I do believe that interest and investment in emerging markets ultimately is good for the investor and for companies, but at the same time works towards greater stability in the world and getting more countries involved in having functioning economies is good for the US.

FT: So I’m looking for some free Albright advice for readers and viewers of the FT. What are the top frontier markets in your view right now?

MA: Well, I think – the thing that we do is that we look at a variety of sectors and a variety of countries; so I don’t want to pick any particular –

FT: Oh, pick three. Pick a couple. Just the ones you’re most interested in right now.

MA: Well, no, but I think that there are some fascinating possibilities in Angola. I find that a very interesting place. Obviously in Central Asia there are a variety of possibilities, and a part of the world that I have spent a great deal of time on is Central and Eastern Europe. I think that there are a variety of opportunities, but the thing that I have liked about being a businesswoman is that we have not kind of focused ourselves narrowly on either one sector of the economy or one part of the world. And one thing that I’ve learned that has made – that I kind of say that shows the difference in my life, I’ve learned that opportunistic is a good word.

And so I think that it is very important to be flexible and understand that in what is basically a volatile economy that you have to be able, with very careful due diligence, to find the right places to operate. And one of the kind of ways that I’ve been talking about this is sometimes there are bad companies in good zip codes and sometimes good companies in bad zip codes, and so you really have to – what we pride ourselves on is really being very careful and not just saying we’re only gonna be in this country or only in that particular sector.

FT: Thank you very much, Secretary Albright.

MA: Thank you very much.

LONG/SHORT

FT: Now we’re gonna play long/short, Secretary Albright.

MA: Okay.

FT: Are you ready?

MA: It depends. I can try.

FT: The Afghan surge.

MA: I think long. Yeah.

FT: Hillary Clinton.

MA: Definitely long.

FT: The Iranian opposition.

MA: Long.

FT: China.

MA: Long.

FT: Print newspapers.

MA: Medium. [Laughs]

FT: That sounds like a short to me.

MA: Sure and I’m worried about it. I really am. I love print media. I really do. It is my passion, and I hate to say this, but I don’t like to read online. I like to hold it, and I do believe in print media, but I am worried.

FT: Rahm Emanuel.

MA: Long.

FT: Sarah Palin.

MA: Short, I hope.

FT: David Cameron.

MA: Probably long.

FT: Vladimir Putin.

MA: Long.

FT: Goldman Sachs.

MA: Long.

FT: Thank you very much.

MA: Okay. Thanks.