December 26th, 2011
11:45 AM ET

Zakaria: Samoa goes back to the future

By Fareed Zakaria, CNN

Come with me now on a long journey to a far off island nation about halfway between Hawaii and New Zealand - Samoa. Its lush volcanic valleys make it a mostly agricultural nation; it has no military whatsoever; and it shouldn't be confused with its neighbor, American Samoa. Now, if you're tempted to visit, do not plan a celebration there on December 30th. Why? Because that day will simply not exist there. The calendar will jump from the 29th of December to the 31st. What in the world?

It's actually a smart economic decision. You see, Samoa is just 20 miles away from the International Dateline. As the name suggests, it's an imaginary longitude that marks a change in date when we fly, sail or steam over it. That line was created more than a century ago, when it was decided Samoa would be 11 hours behind Greenwich Meantime outside of London; it's three hours behind Pacific Time in Los Angeles.

The theory went that being on a similar time zone to the Americas would benefit trade and commerce for Samoa - but the times, quite literally, are changing. Samoa now does most of its business with its neighbors.

But Sydney, in Australia, is 10 hours ahead of London, and - bear with me on the math here - that means Samoa has been conducting most of its trade with a country that is 21 hours ahead of it. So when it's Friday morning at a Samoan factory, Australian clients are already at the beach on a sunny Saturday. And when the Aussies go back to work on Monday, the Samoans are still at Sunday church, or whatever Samoans do on Sundays.

Come December 29th, that's all going to change. Samoa will leap forward a day, and it will be just three hours ahead of Sydney.

Samoans already made one historic change to align itself with Australia. In 2009, it switched from driving on the right side of the road, as we do, to the left side of the road. Now Samoans can import cheaper cars from next door.

On the one hand, Samoa's Antipodean shift is a story about how economics dictates policy, but it's also a larger narrative about the quiet success of Australia. Australia's growth rate has averaged nearly four percent for the last two decades, higher than almost every other rich country. It may be on the bottom of the map, but it's on top of almost every livability index. The unemployment rate is low; the deficit is almost negligible; it has strong education and universal health care. One could go on....

So how did it get there? Self deprecating Aussies may put it down to good luck. They had good weather, abundant natural resources and a billion Chinese hungry to mine Australia's metals and minerals.

But that's not the whole story. Australia's real economic rise dates back to the 1980s and a series of forward-thinking reforms. The government floated its dollar and made the central bank independent; it maintained a budget surplus and kept inflation in check; state owned firms were privatized and industries deregulated.

When the global financial crisis hit in 2008, Australia's banks benefited from a more conservative regulated approach. They were not overleveraged, so they weathered the storm. And robust trade with China soaked up a potential drop in Australian consumer demand.

Australia's been smart on another issue that plagues American lawmakers these days - immigration. It has gone from 98 percent Anglo-Celtic population after the Second World War, to having a quarter of its current population born abroad. Asians make up 10 percent of the population. Much of the real growth in Australia's GDP can be attributed to immigration and population growth.

There's much speculation about a lost decade for the United States economy. All Samoa had to do to rev up its economy is lose a day. I wish we had that option.

For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to visit the Global Public Square every day. Also, for more What in the World? pieces, click here.

soundoff (24 Responses)
  1. Ryan

    This exact article was originally posted in June. Can we please add a notation indicating that this is a repeated article rather than passing it off as a new piece?

    December 26, 2011 at 1:26 pm | Reply
    • Desert Resident

      Ryan, as the change is happening this week, it seems appropriate to run the article now.

      December 26, 2011 at 1:33 pm | Reply
    • j. von hettlingen

      While we in the U.S. and Europe suffer from economic meltdown, we should be glad the clock down under is still ticking properly. Indeed Australia and Brazil have been notable winners of economic growth in 2011.

      December 26, 2011 at 4:38 pm | Reply
  2. Winston

    Thanks for the education, its nice to know that government can work with the right people elected.

    December 26, 2011 at 1:27 pm | Reply
    • RogerE

      Don't be fooled, the government and politics is just as dysfunctional and divided in Australia at the moment. Also Australia also has one of the largest current account deficits in the world. We just dig up the earth, export it, and buy it back as manufactured goods. We don't make anything. Great government we do not have.

      December 26, 2011 at 2:10 pm | Reply
      • ZT205

        Great reading skills you do not have– the article and the comment were about Samoa not Australia.

        January 8, 2012 at 7:42 pm |
  3. friendsofindia

    Fareed, don't forget about India. Delhi is 5 hours ahead of Australia and that makes India the world's greatest democracy and its only super duper power.

    As the world's greatest democracy, Incredible India will automatically achieve hyper growth every month.

    With Russia melting, China collapsing, and Brazil running into the ground, India is the undisputed leader of the BRIC countries. Here in Mumbai, there in Delhi, and there again in Pune, India shines while the world declines!

    And what are the rest of you in, PIIGS, Bordello, Chinks, and Yankees? A crisis of course. All, come to sugar daddy, India; we are willing to rush to your help! We got all the jobs in the world, and our dalits are certainly willing to spare their jobs for you. Our prime minister has already pledged $300Billion US dollars of aid, virtually every single drop of dollars in our coffers.

    Because we can afford it! India's Tata has been lording over the world industries by purchasing such Western properties as LRJ and Corus, and making these former money pits a big success. Our Mittal has been overwhelming the world's steel makers by swallowing up Arcelor. Our mobile phones have been out-talking all other countries by growing 100 million users every quarter. Our architects had designed and finished the world's largest airport in Delhi in Terminal 2. Our engineers have built the world's greatest hydro dam. Our road builders had just completed the world's longest bridge in Mumbai. Our prime minister has been presiding over these big international meetings by sounding our voices over all these heads of all your minor states. Our super aircraft carriers have been patrolling the world's oceans and scaring all the Ethiopia and Somalian pirates off their pants.

    For all these a million reasons, submit to your fate under our Hindu colossus, beg our 5-rupee meal middle classes, bow to our super powers.

    Pray for India, we will have pity on you. Jai Hind!

    December 26, 2011 at 1:57 pm | Reply
    • rockian

      Also, I'm pretty sure that Australia is 5 1/2 hours AHEAD of India. Of course, after seeing the quality of products out of India, I'm not surprised at this error.

      December 26, 2011 at 2:17 pm | Reply
    • rockian

      I get it.....friendsofindia's racist post is allowed to exist on the forum, but any rebuttal is blocked. There were no swear words at all in my rebuttal and no racist rants (like that of friendsofindia).

      December 26, 2011 at 2:22 pm | Reply
    • Lupz

      Can you explain the Slum dog in India...and the many poor places in India...A nation's success, I believe, is when its resources benefit the general population in a fair manner...from the weak to the strong, the poor to the rich..I find that in Australia.

      December 26, 2011 at 3:20 pm | Reply
    • SS

      Your "super aircraft carriers" may scare off the pirates, but can't feed the millions. Quit being delusional and get to reality. Wealth and super power is only as strong as the poor guy begging in the street. Use your delusional arrogance to clean up your crooks, that you call politicians, to help spread the wealth to the needy Maybe, then you can claim your superiority.

      December 26, 2011 at 5:51 pm | Reply
    • notsoincredibleindia

      India's stagnated in the past few months, under corruption scandals and a slowing economy, that while still nominally impressive at 6.7% annual GDP growth rates, is barely treading water, if that, on providing higher standards of living for those working and new jobs for the millions entering the market every year. Coupled with inflation of 7-9%, and you have a big problem.

      Brazil, Russia, and China are all doing fine, India is the only BRIC that is having troubles–as Fareed noted in one of his segments a week or two ago ('If India doesn't get its act together, the I in BRIC might stand for Indonesia, not India.')

      Mittal is a British company, not Indian.
      The world's longest bridge is in China.
      Dubai and Beijing have the 1st and 2nd largest airport terminals in the world.

      December 27, 2011 at 11:56 am | Reply
    • thisisrr

      To friendsofindia – By using such an arrogant language, you are really maligning both India and Hinduism. Please try to understand the history of the great land and the religion. Please refrain from expressing your opinion in this manner. I disagree with you that India has achieved great economic success. You have no idea about India as you are probably one of the small fraction of Indian population living in a city and boasting about fake economic success arrogantly.

      December 27, 2011 at 6:02 pm | Reply
    • alan seago

      FriendsofIndia is most likely writing his comment tongue-in-cheek. At least one would hope so.

      December 29, 2011 at 12:31 pm | Reply
    • harmeet

      my(not so dear)freindsofindia..being an indian myself i too am proud of what we have achieved in the last 60 years...but that still does not reflect even an iota what we should have achieved and ur tone surely does not reflect the real humility of the common indian. on the contrary it is the tone of the very people who are decelerating our growth...but whatever else you may least get ur facts right man!!

      January 6, 2012 at 6:41 am | Reply
  4. palintwit

    I'm hoping Sarah Palin weighs in on this one pretty soon. Her legions of loyal baggers and birthers are unable to form an opinion without her.

    December 26, 2011 at 2:06 pm | Reply
  5. Adam

    "It may be on the bottom of the map, but it's on top of almost every livability index. The unemployment rate is low; the deficit is almost negligible; it has strong education and universal health care. One could go on...."

    Wait, according to the GOP, strong education and universal health care are supposed to bankrupt a country, not make it the best in the world...

    December 26, 2011 at 2:24 pm | Reply
    • CNNTom

      Actually, if they didn't have China buying all their stuff, those social program may have bankrupt the country. I guess under your logic, Saudi Arabia could be a model for success. Their policies should be a model for the rest of the world because of their success. People there get a salary from the government. Large percentages of the population do not have to work. These guys clearly know what they are doing. Or maybe it could be the natural resources that other people want?

      December 26, 2011 at 3:09 pm | Reply
      • Adam

        Yes, because you can compare a successful, Democratic Society with a legitimate legal, cultural, and democratic process, with a country that has a Monarchy, Sharia Law, and no socialist government at all that functions almost entirely based on oil prices.

        December 26, 2011 at 3:20 pm |
  6. Jorge

    Central bank? Free-floating dollar? These are good things? It might work for a little while, but eventually, it will spawn corruption. Men cannot be trusted with these things and it is just a matter of time until the very policies you are touting will be their downfall... just like in the US.

    December 26, 2011 at 3:36 pm | Reply
    • Rod C. Venger

      Exactomundo. When the Euro made it's debut I predicted it's ugly demise. It was a contrivance made for political reasons that simply crossed too many sovereign borders. 5 years ago when the Euro was topping out I took a lot of flak for my position but I held to it. OWS would have us go down that road, with the rich bailing out the poor until the whole thing collapses. Turns out I was right. The Euro ship is sinking. The wealthier nations are making themselves poorer bailing out people that don't want to change their ways. The keel of the Euro ship is creaking and will soon snap. If we're not careful, we'll be dragged down into the whirlpool of the EU's demise as well.

      December 26, 2011 at 3:56 pm | Reply
  7. Rod C. Venger

    So Fareed suggests that we should prosper by importing more...Muslims? Not gonna happen.

    December 26, 2011 at 3:50 pm | Reply
  8. trevdee

    If one looks at the BRIC countries, excuse Russia for now, and Australia and try to figure out why they are enjoying economic success you'll see that it's a combination of factors: education, a strong manufacturing base, smart regulations in place and governments trying to do their best to uplift the living standards of their people. Yes, things are not perfect in these countries but, compared to us, they are better. While they are trying to find ways to get things done we are trying to find ways to further dumb this country down. While Brazil, India and China are trying to find ways to not be seen as 3rd-world backwaters anymore we are busy trying to become a third-world backwater. While Brazil, India, China and Australia realize that having a strong mfg base is part of having a strong and secure economy we seemingly believe that exporting our mfg base abroad is part of a good economic and nat'l security strategy/policy. What is it that countries like Australia, Brazil, India and China know that we don't or have seemingly forgotten?

    December 27, 2011 at 9:34 am | Reply
  9. MarcV

    Why the celebration that Australia's population is no longer 98% Anglo-Celtic? Why is it that African, Asian, and Latin American countries are allowed to maintain their racial/ethnic make-up but Anglo-European countries are not?

    December 28, 2011 at 10:20 am | Reply

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