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Fareed Zakaria GPS

Is Iran Ready to Come in From the Cold?; On the Hunt for El Chapo; Interview with Paul Krugman; Refugee Crisis Across the Globe. Aired 10-11a ET

Aired July 19, 2015 - 10:00   ET

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

[10:00:06] JAKE TAPPER, CNN HOST: On the rarely used $100,000 is progressive icon President Woodrow Wilson. He was also something of a nasty racist. Let's put his contemporary suffragist Alice Paul on that bill. And while we all love Benjamin Franklin, it's pretty clear he already gets plenty of love.

What if abolitionists and women's rights activists Sojourner Truth were to be on the honey? It has a nice ring to it. It's all about the Sojourners, baby.

(END VIDEOTAPE)

TAPPER: Thanks for spending your Sunday morning with us. "FAREED ZAKARIA, GPS" starts right now.

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.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Every pathway to a nuclear weapon is cut off.

ZAKARIA: On today's show, breakthrough with Iran. The West and the Islamic Republican finally reached an agreement on its nuclear program. But the question remains, is Iran really ready to come in from the cold?

I have a perfect panel to discuss it.

Also the other big deal of the week. Greece gets saved by Europe. Or does it? Paul Krugman tells us why the deal is terrible for Greece and Europe.

And an all-powerful drug lord, a brazen escape while under the watchful eye of authorities. And now swirling questions about just who is responsible. The incredible story of El Chapo.

(END VIDEOTAPE)

ZAKARIA: But first here's my take. In selling the nuclear deal with Iran, the Obama administration has been careful to point out that it's just an agreement on nuclear issues. The deal solves one particular problem, President Obama explained in his news conference on Wednesday, and supporters and critics alike are quick to suggest that this move is quite different from Richard Nixon's opening to China which transformed China and its relations with the world. Iran, after all, is a rogue regime that chants "death to America" and funds anti- American terror across the Middle East.

But let's recall what China looked like at the time Henry Kissinger went on his secret trip to Beijing in July 1971. Mao Zedong was without question the most radical anti-American leader in the world at the time, supporting violent guerilla groups across Asia and beyond. And while it didn't chant "death to America" Beijing was the principal supporter of the North Vietnamese sending them troops, supplies and funds to fight and kill American soldiers every day.

Initially the opening to China changed none of this. During the talks involving Nixon, Kissinger, Mao and the Chinese premier Zhou Enlai the Chinese refused to end their support for the North Vietnamese regime. In fact, while Nixon and Kissinger were talking to the Chinese, Beijing's shipment of arms to the North Vietnam were increasing as documented in the book by the historic Chang Jie.

And just as we are told today that there was a mythical better deal to be had with Iran, conservatives excoriated the Nixon administration for selling out Taiwan, claiming that rather than hanging over Taiwan's spot in the U.N. to Beijing, Washington could have done more to arrange a dual seat arrangement.

But over time China did slow down its support for revolutionary movements in countries like Indonesia and Malaysia and Thailand and Burma. And its relations with Vietnam soured for many reasons, but certainly the opening to America was one of them. These shifts finally led to a wholesale rethinking of China's foreign policy. But only seven years after Kissinger's meetings under a new Chinese leader dung Xiaoping who first consolidated power and then broke with Mao's revolutionary world view.

On Iran, let's make several caveats. China's move toward the West was fueled by its split with the Soviet Union and perhaps the People's Republic's total isolation. Iran faces no such dire security threat. And as an oil producing country that even on under sanctions gets tens of billions of dollars in revenues, it has never truly been isolated or destitute. And yet Iran clearly resents being treated as a pariah in the world.

A new generation of Iranians has demonstrated that frustration in many different ways. And a new set of leaders who have some influence or not complete control wants to restore Iran to a more normal status.

[10:05:14] Will that mean that Tehran's foreign policies will moderate? Well, history suggests that as countries get more integrated into the world and the global economy they have fewer incentives to be spoilers and more to maintain stability. Of course Iran will follow its national interests and sometimes this will conflict with American policy sharply. But on America's most pressing challenges in the Middle East right now, the threat from ISIS, the stability of Iraq, the stability of Afghanistan, Iran and the United States actually have overlapping interests.

The sectarian war in the Middle East, one being fueled by Sunnis as well as Shias will continue. But finally Washington and others can talk to both sides of this divide to try to broker a reduction of tensions.

No significant change is going to happen in Iran in the next few months. It didn't in China, it hasn't in Cuba or Burma, but over the next 10 years, if there is greater contact, communication, commerce and capitalism between Iran and the rest of the world, surely this will gradually empower those Iranians who see their country's destiny as being part of the modern world, not in opposition to it.

For more go to CNN/fareed and read my "Washington Post" column this week. And let's get started.

You just heard my take on the deal, now let's bring in some other important opinions to answer crucial questions like, is Iran really ready to come in from the cold?

Robin Wright has a terrific piece on Iran and the deal in next week's "New Yorker." She is a longtime journalist who now is a distinguished scholar at the Wilson Center. Vali Nasr is a former State Department official, now dean of the School of Events International Studies at Johns Hopkins. And Bret Stephens is of course a Pulitzer Prize winning foreign affairs columnist for the "Wall Street Journal."

Robin, in your long terrific "New Yorker" essay you talk about the fact -- you quote somebody saying, Iran is in a midlife crisis. So in that midlife crisis, what does this deal do?

It does seem like the people celebrating the deal are all the sort of young urban people who at least in my, you know, meetings with them when I was in Iran, they all seem very pro American, desperate for a connection with the world.

ROBIN WRIGHT, DISTINGUISHING SCHOLAR, THE WILSON CENTER: I think one of the reasons the Iranians came to the negotiating table was because of their own political environment, not just the international sanctions or the horrific mismanagement by the previous President Ahmadinejad. That there is a recognition that the majority of people and the majority of voters in Iran were born after the revolution. They very much want to be part of the 21st century, they're very acclimated despite the censorship, the repression.

They are -- they want to integrate and after 36 years they're into that phase of the revolution where they're struggling to get -- become a normal state again. They're not there yet. They may have a long way to go to get there. But we have to see what's happened beyond just the transaction over a single nuclear issue that it's really about transformation of a revolution at a particularly sensitive moment in its own history.

BRET STEPHENS, "GLOBAL VIEW" COLUMNIST, WALL STREET JOURNAL: But don't forget, Iran had a midlife crisis in 2009 and it put its midlife crisis in jail and the leaders, Moussavi and Karroubi, are still under house arrest. I mean, it's good that the Iranian people are eager for a deal, but we are not dealing with an Iranian people. We are dealing with an Iranian regime that believes that it's winning regionally and internationally on many fronts.

It's getting rid of the shackles of sanctions through the nuclear negotiations. It's advancing its aims throughout the region. The man who will appoint the next supreme leader was recently appointed, a man named -- an ayatollah named Yazdi, he is known as an ultra hard liner. So let's not confuse the Iranian people and what they want with a regime we just struck this bargain with.

ZAKARIA: I want to ask you, Vali, a question about, if there were a shift in Iran, if there were a moderation or a softening, and it's a big if, what do you think that would translate into in terms of policies in the Middle East? Because it does strike me that Iran and the United States do have some overlapping interests in Afghanistan, for example, where we both, you know, don't like the Taliban. In Iraq, Syria, where we both don't like ISIS.

[10:10:03] VALI NASR, DEAN, JOHNS HOPKINS SCHOOL OF ADVANCED INTERNATIONAL STUDIES: Well, absolutely. I think if you look at what is Iran's major headache in the region is ISIS and it's the sort of Sunni surge that they're seeing in Syria and Iraq. And that's what's going to preoccupy them.

I actually don't think that Iran is right now standing 10 feet tall and ready to take over the region. They're very much in a defensive mode. And that might be one reason why they wanted this deal. And I think it -- now that they've been able to negotiate with the United States on the most difficult issue, I think it's much easier for them to meet with the United States, to have a casual conversation and a serious conversation about varieties of issues.

And I think the key one is Iraq because it's very clear that the only country in the Middle East that is willing to put boots on the ground and actually fight in Iraq is Iran. And ultimately there is a conversion of interest. So the question is, where do the two sides pick up the tread? And can they actually have yet another, say, small win on top of this one and sustain the momentum.

WRIGHT: But the interesting thing is that they have already begun to talk about how they can deal with United States on other issues. It's very striking, the language over the last week, even in the run-up to the deal, and the fact the supreme leader right after the interim framework was announced in April came out in a very striking speech and said, if we are successful in negotiations on a nuclear deal, we are -- it is possible to talk with the United States on other issues.

And for the supreme leader, who once everyone believed had anti- Americanism in his DNA, this was a very striking moment. It's also tremendously important for proliferation. The last four countries to join the nuclear club, Pakistan, India, Israel and North Korea, diplomacy failed to prevent them from joining the nuclear club.

STEPHENS: Well, the North Korean example is especially apt because this deal in many respects resembles the Yongbyon agreed framework in a period when a lot of people thought that a sunshine policy with North Korea could actually achieve diplomatic results where pressure had failed. And we know how -- we know how the North Korean story.

I think it's important not to get carried away with this notion that we have all these interests which we share with the supreme leader. The "Wall Street Journal" recently reported that Iran continues to support elements within the Taliban. Iran is the principal sponsor of Bashar Assad in Syria, not a nice guy. Hezbollah, Hamas and Israel. Iran is opposed to all of our key historic allies in the region.

And we should be very careful, by the way, in risking those alliances and that trust for the sake of hoping at some point in the future that Iran will become in 10 years', 15 years'' time what China became during the transition from Mao Zedong to Dao Xiaoping. That's a classic -- the tribal hope over experience.

NASR: But we shouldn't throw away our alliances. But we also have to think of this, that we have interests in this region. Our interest, the European interest, and the Russian interest is extremist and ISIS. None of our classic allies in the region are actually interested or engaged in the fight against ISIS. I mean, that's a fact. That if ISIS continues to be a threat to Europe, to Russia, to the United States, so by default, the only government in the region that is actually engaged in fighting ISIS is Iran. This is a classic case of real politic rather than being naive about it all.

WRIGHT: Yes. We shouldn't let the euphoria of the moment and the deal shape our thinking about what Iran really wants. And it is still the most destabilizing force from an American perspective in the region. It is -- you know, it's funding all the groups that are opposed to Israel. Its hand is --

(CROSSTALK)

ZAKARIA: But it's also funding all the groups that are opposed to ISIS. I mean, I think Vali's point is --

WRIGHT: Yes.

ZAKARIA: Right now the so-called Shia militias that Iran is funding in Iraq and Syria are the principal force on the ground against ISIS.

WRIGHT: Absolutely. And --

ZAKARIA: If we stop funding them, ISIS is going to take more territory.

WRIGHT: And I think one -- another one of the reasons they went to the negotiating table was because they understood that the Middle East map is crumbling. And ironically, two of the countries that are most interested in keeping the map as it is today are Iran and the United States.

ZAKARIA: All right. We have to take a break. When we come back, we're going to talk about what Iran might do with its windfall when we come back. [10:14:35]

(COMMERCIAL BREAK)

ZAKARIA: And we are back with Robin Wright, Vali Nasr and Bret Stevens.

Give us a picture of Iran. Is it macerated and is the regime going to take all this money and give it to Hezbollah?

WRIGHT: It may well. I mean, who knows how they're going to use $100 billion. That's a lot of money but the fact is, all of the interventions they've had across the region -- they're enormous help particularly to Hezbollah against Israel-- was funded even at some of the hardest times of economic hardships so, you know, that money has always been available.

Yes, they want to be players in the region. It is the largest population, larger than all the Gulf countries combined. It felt -- it feels actually strategically vulnerable because it feels that the Sunnis who dominate the region, dominate the Islamic world are surrounding them, whether it's the Taliban, ISIS, an array of forces. Needless to say, the Saudis have not been shy in opposing them either.

So this is trying to get back to what they think is their rightful place in the region. You know, we could argue hedge them on or you could say it's kind of traditional, historic place in the region. It is one of the most stable states unbelievably in the region today.

[10:20:02] ZAKARIA: It's a striking fact to me, Vali, if you look at the Middle East today, the most successful countries in the Middle East are all non-Arab. It's Iran, Turkey and Israel. That essentially are dominating the new Middle East.

NASR: You know, we can argue both sides of the argument. We think that Iran came to the table because of the pressure of sanctions, which means that the very first place they have to put the money is to relieve political pressure because if the assumption is political pressure brought them to the table, that's where the money is going to go. But even if you look at the Middle East, Iran even in this new budget has 5 percent allotted to defense.

It spends less in absolute terms per capita than all of its neighbors who have even much more technologically advanced weaponry. They're watching what the Saudis are doing in Yemen. To them, you know, the -- this makes it about an arms race. It's not about only nuclear arms race, this is not a conventional arms race. The Saudis are sending a very powerful signal that they're going to use their sophisticated weaponry and guess what, we're going to give even more of it to them as compensation for this deal.

STEPHENS: And this is why one of the consequences of this deal, I suspect, is going to turbocharge the very kind of Sunni-Shia competition that we would actually prefer to tamp down because the Saudis, whatever you think is the rational course, the Saudis are not going to take this lying down. You heard Prince Turkey a few months ago unequivocally saying whatever the deal gives to the Iranians, we will want to get the same.

I think the Saudi response to the Houthis was not just concern about what was happening on their southwestern flank, but also a reflection of their broader concern that Iran was, as you spelled out, becoming the dominant player in its neighborhood. And so as a result you're going to see more radicalism and more regional confrontation as a consequence of this deal, not to say proliferation, than if you had simply extracted tougher terms or walked away from the agreement.

NASR: But at the same time, while this is the case, if they're going to spend anywhere the money for military, it's going to be to defy the Sunni radicals. So that's the priority and even Hezbollah is fighting ISIS. So yes, they're going to put money in but that's the capture of Ramadi, it's the capture of Mosul, to build a wall that ISIS cannot cross into Bagdad, and also to save the Assad regime and fight ISIS on the borders of Lebanon.

This is the strategic decision they've made, which is to preserve their equities in Syria and in Iraq. And you're right --

ZAKARIA: And establish a Shiite presence.

NASR: But --

(CROSSTALK)

NASR: No, but there was no fighting. You see we can't get in the middle of this.

ZAKARIA: You can't have it both ways. You either want ISIS defeated or you don't.

NASR: Yes, but I don't want them defeated by the Iranians and for the benefit of the Iranians.

ZAKARIA: You get the last word.

WRIGHT: You know, this is a something that we should all hope that something comes out of it. A lot of challenges ahead. It'd be very interesting to see the politics play out both in Congress and in Iran's parliament.

ZAKARIA: Pleasure to have you all on.

Next on "GPS," how in the world did Mexico lose its most important inmate? We will delve into this incredible story when we come back.

(COMMERCIAL BREAK)

[10:27:02] ZAKARIA: When Osama bin Laden was killed by SEAL Team 6 in Pakistan in 2011, a man named Joaquin Guzman or El Chapo became the world's number one fugitive. Guzman was the head of Mexico's all powerful Sinaloa drug cartel. He has been caught and put in a Mexican prison in 1993 but then escaped in a laundry cart in 2001. When El Chapo was caught again in 2014, in the resort town of Moz at land, Attorney General Eric Holder called the capture a landmark achievement, a victory for the citizens of both Mexico and the United States.

Guzman had been indicted in jurisdictions all around the U.S., and after the arrest, U.S. officials suggested he be expedited north of the border where he could be locked up more securely, but that never happened and, of course, Guzman escaped again., last weekend from a Mexican jail cell, even though the cell was under surveillance. He used a blind spot in the camera's field of view to conceal his drop here into an elaborately constructed tunnel complete with a motorcycle track.

My next guest, Patrick Radden Keefe, who wrote a great long read for the "New Yorkers" by Guzman called "The Hunt for El Chapo."

Patrick, welcome.

PATRICK RADDEN KEEFE, STAFF WRITER, THE NEW YORKER: Thanks for having me.

ZAKARIA: So the prison he was in was in the middle of -- in central Mexico. They have established a no-fly zone over the prison so that there was no chance he could be -- get out through helicopters. It was an area where they jammed all cell phones, but they didn't think about a tunnel?

KEEFE: Yes, it's extraordinary. It's one of the aspects of this story that leaves really you shaking your head. This was Mexico's most secure facility. And he was really the most famous inmate inside, a guy who had escaped before, who the U.S. authorities had information was planning on perhaps escaping again. And they had informed their Mexican counterparts that he might try to escape.

So it's quite extraordinary to think that he escaped, you know, not only by climbing over a wall, but by constructing a mile-long tunnel underground, you know, a feat that would have involved engineers, surveyors, a lot of -- a great deal of labor.

ZAKARIA: Right. The tunnel actually comes up in his cell in the bathroom right at the drain, at the, you know, the 20-inch by 20-inch drain. And all it leaves one to feel like this is not just a feat of engineering. This is fundamentally about bribery and corruption, is it not?

KEEFE: Absolutely.

[10:30:00] I think there's no question. The amount of resources that would have had to go into building this tunnel and the suggestion that we now have -- that construction on the tunnel began actually early last year. So just shortly after he was first locked up in this prison in the first instance. So they've been working on this thing for quite some time. There's been a suggestion that it's climate controlled, he actually had a bird -- they found a dead bird in his cell. He had used it like a canary in a coal mine to send it down into the tunnel and find out if he could actually breathe the air down there and survive.

So the suggestion here I think is that you're going to find complicity, both of people outside the prison, but also inside, and I would think in the Mexican government.

You have to think about the last time El Chapo escaped from prison in 2001. After that escape, it emerged that he had much of the prison on his payroll when he was an inmate there. And in fact, criminal charges were brought against 71 different people who worked at that prison associated with his escape, including the warden of the prison.

ZAKARIA: Do you think the corruption here extends beyond the prison? Higher levels within the Mexican government?

KEEFE: I think there's no question that that's the case. I think it's an open question whether or not we'll ever find that to be proven or charged in a criminal context in a satisfying way. So already the warden of the prison now has been fired, but I think there's real questions about whether or not you'll see some scapegoats at a low level, who will be dismissed, but not a real thorough investigation of much higher-level complicity in the administration of President Enrique Pena Nieto.

ZAKARIA: Why is it so difficult to handle in Mexico, this kind of corruption, particularly associated with drugs? Calderon, the previous president, made a big deal of the fact that he was taking the war to the drug cartels. Pena Nieto has tried his own approach. Fundamentally, is this -- what would it take for things to change?

KEEFE: Well, I think it would take a great deal, and you'd have to see a slow unwinding of a culture which has really set in over decades.

What concerns me about the way we talk about this as a foreign policy issue in the United States is we talk about it as though this corruption is something that's indigenous to Mexico. We really need to remember that the cross-border drug trade is a market. Right? We are the demand for this. So I've talked to people who worked in the Sinaloa cartel. They'll tell you that only half of the job is figuring out how to get drugs up into the United States. The other half of the job, also a logistical challenge, is figuring out how to take all the billions of dollars they make who are coming from Americans who are paying for those drugs, and getting them back out of the country, and into Mexico, laundering them, getting them into the financial system.

So I think there's something that's endemic here, which ultimately ties back to our prohibition on drugs. I don't think it's an accident that the biggest exporter of drugs in the world and the biggest importer just happen to be neighbors.

ZAKARIA: Do you think that because the United States had warned the Mexican government and asked to extradite him, is this going to sour U.S.-Mexican relations and cooperation?

KEEFE: I think this is going to be a huge problem for security cooperation between the two countries. You've got to remember, this was from the moment this guy was captured, it had been a great triumph for Pena Nieto and for bilateral cooperation on security issues. Nobody thought this would ever happen. They managed to get the guy last February. But then almost immediately, a quiet diplomatic fight began over whether or not he would be extradited. And you had the Department of Justice in the U.S. saying, look, he got away last time, we don't trust you guys to hold him this time. Why don't you bring him here? And Mexico saying, for reasons that in some respects make a lot of sense, most of his crimes were committed here, we captured him here, we're not going to just give him up to the gringos, we want to try him here first.

But I think what we see now in retrospect is that a lot of these Mexican officials were perhaps a little overconfident, even blithe, about their ability to hold on to somebody who has the money and the genius when it comes to this kind of escape to really stymie them in this instance.

ZAKARIA: Patrick Radden Keefe, terrific reporting, thank you so much.

KEEFE: Thank you.

ZAKARIA: Greece and the EU finally came to an agreement on a deal, so everyone is happy, right? Wrong. Find out why when we come back.

(COMMERCIAL BREAK)

ZAKARIA: Now to the other big deal that was reached this week, the agreement struck between Greece and its European creditors. Tehran reacted joyfully to its deal. Athens not so much; there was rioting in the streets against the deal. Former Finance Minister Varoufakis said that what the Greeks agreed to was fiscal waterboarding. And my next guest, Paul Krugman, called the deal a ritual humiliation for Greece. Krugman is of course a Nobel Prize winning economist and a columnist for the New York Times.

Paul, thanks for being on.

PAUL KRUGMAN, NEW YORK TIMES: Thanks for having me.

ZAKARIA: Lots of people believe that the Greek crisis is over. You don't think so.

KRUGMAN: No. I mean, really nothing has changed in the strategy, which is still cut, cut, you know, austerity your way back to solvency, which was not working, has never worked actually in this kind of situation, and will not work. So all that's happened is we've gotten a pause for the moment, maybe, not even sure of that.

It's amazing. We're by no means out of the woods.

ZAKARIA: Ken Rogoff on last week's show actually said that you bear some responsibility here, because you advocated that the prime minister of Greece vote no, support the no proposition, the referendum he took, in a sense defying the European creditors. The result of that was that he got worse terms. Do you think that's fair?

KRUGMAN: Well, it's certainly true that -- I had assumed -- it didn't even occur to me that they would be prepared to make a stand without having done any contingency planning. ZAKARIA: This is Greece?

KRUGMAN: Yes.

ZAKARIA: You assumed that Greece had an exit plan from the euro.

KRUGMAN: Yes, that they -- not that -- at least something they could hold up, this is what we will do if we can't get any new cash. And amazingly, they were -- everything hinged on them -- they thought they could simply demand better terms without having any backup plan. So certainly this is a shock.

But you know, in some sense, it's hopeless in any case. It's not as if the terms that they were being offered before were feasible. The new terms are even worse, but the terms they were being offered before were still not going to work. So I may have overestimated the competence of the Greek government, but in some sense, it's a hopeless situation regardless.

ZAKARIA: And what does that mean in terms of where is this going to end? Is Greece going to have to exit the euro?

KRUGMAN: My guess is -- nothing can ever be certain. But my guess is yes. Either in the end they will get this sort of enormous debt relief that they're not getting, or they will have to exit. I guess my money in some currency or other, is on exit one way or another.

ZAKARIA: And will that cause a Lehman-like crisis? The Germans seem convinced that at this point, all that debt is on the balance sheet of central banks, not private banks, and so it won't have that cascade that Lehman had.

KRUGMAN: I think that's right. We do not see that kind of crisis. We're not -- even a Lehman event would not cause a Lehman event now, because there has been -- a lot of buffers have been put up. We know that the public sector will stand behind. That doesn't mean that a Greek exit is trivial. A Greek exit would have huge implications for the future of the European project. And if Greece exits and then starts to recover, which it probably would, that, in turn, would be in a way be encouragement for other political movements to challenge the euro. So this is not trivial. But no, we're not talking about 2008 all over again.

ZAKARIA: Steve Rattner and several others, this is the general view in the business community, feel, look, the truth of the matter is the fundamental problem is Greece is massively uncompetitive. It's a highly overregulated economy. It's -- if you look at its retirement age, if you look at areas like pharmacy, you look, at you know, vast swaths of the Greek economy, has too many regulations, very business unfriendly, and a Swiss-cheese-like model of tax collection. If you don't reform that, and that's what really the Germans are asking for more than austerity.

KRUGMAN: Well, let me say that the one about tax collection, while it's true that there are a lot of holes, and a lot of evasion, Greece nonetheless does manage to collect a lot of taxes. People look at it and say, well, they must be -- they can't be collecting any money. In fact, they're collecting a higher share of GDP in taxes than the United States is one way or another. So it's not as if they don't manage to raise revenue. Maybe they should do it better. They should. Obviously. As for all the other stuff, yes, Greece is an overregulated, problematic economy, not as much as it was. It's done much more reform than people think. But also all of these structural issues--

ZAKARIA: Structural reform, not just cutting budgets?

KRUGMAN: They've done a lot of structural reform. You look at the World Bank survey of doing business, and Greece is not a great place, but not as bad a place as it was. So -- but the main point is all of these things were true of Greece ten years ago, 15 years ago. But Greece was not in the midst of an incredible Great Depression level slump back then. So these are part of the background noise, if you like. It is, in fact, the euro -- the trap that the euro has turned into and the austerity policies imposed in an attempt to keep Greece in the euro that are responsible for the disaster that's taking place now.

It's like looking at -- every country has problems, Greece maybe more than some, less than others. But it's the euro that is responsible for this disaster.

ZAKARIA: Paul Krugman, pleasure to have you on.

KRUGMAN: Thanks.

ZAKARIA: Up next, waves and waves of them have been washing up on Europe's shores. Millions of them have fled from Syria alone. Just why are the world's refugees streaming across borders in numbers not seen since World War II? I have two top experts, David Miliband and Nick Kristof with me when we come back.

(COMMERCIAL BREAK)

ZAKARIA: Last year, the number of people who had been forced to leave their homes across the world reached 60 million. That's the population the size of Italy, the world's 23rd largest nation. That's 42,500 new people on average every day in 2014 forced out because of war, persecution or violence, according to the U.N. High Commission for Refugees. About 20 of those 60 million are refugees who had to leave their own nations and flee to another, and almost 40 million of them have had to move within their own nation.

The problem today is worse than at any time since World War II. To talk about this global crisis, I have two important guests, David Miliband is the former foreign secretary of the United Kingdom, he is now the president and CEO of the International Rescue Committee, he is just back from Niger. And Nicholas Kristof is the two-time Pulitzer Prize winning columnist for the New York Times, who is just back from Sudan. Welcome.

Nick, why is this happening? At some level, you look at the world, and there are no major wars taking place among states. It feels like a world of relative stability suddenly compared to the Cold War. And yet you have this staggering statistic.

NICHOLAS KRISTOF, NEW YORK TIMES: Well, we're certainly seeing a huge decline in wars between states and among states. What we're seeing is a continuation of and in some cases explosion of conflicts within states. And it's those internal conflicts within states, often one group monetizing a particular natural resource in that country, that are driving these internally displaced people and these refugees. And I think in part that's a reflection of the decline of the Cold War, that you no longer have patrons who are determined to keep this state functioning because it's a pawn in a larger game. Now, if the pawn collapses into a failed state, nobody much cares.

ZAKARIA: Have you been surprised, David, I certainly have, at how fragile it turns out that political order is in so many of these places? That it's not so much the kind of government, but just the degree of government that turns out to be very, very difficult to maintain? Libya after Gadhafi, Iraq after Saddam. Syria -- all these places turn out to be very fragile and very little underneath them.

DAVID MILIBAND, FORMER UK FOREIGN SECRETARY: It's not surprising if you think that a country like Niger, twice the size of France, has an average income of $1.00 a day for its 17 million citizens. It had I think five coups in the course of the 1990s and the early 2000s. It's got massive climate change and now it's got Nigeria exploding on one border and Mali on the other border. So this dual problem of weak states and a weak international system is coming together to create this really world on fire in about 30 countries, 30 to 35 fragile states that cannot contain ethnic and political and religious difference within peaceful boundaries and don't have the anchor of either regional or international sponsors, as Nick says, or international order that's going to hold the ring.

And I think globalization, far from homogenizing global culture, is going with an assertion of local, ethnic, religious identity. That's what we're seeing in these fragile states. And the assertion of that identity is overwhelming the forces that are trying to hold the ring for politics. And in a situation where you've got regional players sponsoring quite a lot of these forces -- remember that in a lot of these countries that we're talking about, Syria, the Congo, et cetera, you've got regional forces, regional powers that are playing an important proxy role. It's not just --

ZAKARIA: Let me spell out what you're saying. You're saying that in a place like Syria, you know, there is a problem of Assad who is supported by the Iranians, but there's also these Sunni militants who are supported by Saudi Arabia. And so--

MILIBAND: Exactly.

ZAKARIA: -- in a sense, the conflict gets exacerbated, right?

MILIBAND: Exactly.

ZAKARIA: How do you make politics work in a way that ends these conflicts? Everybody wants to do that, and everyone calls for conferences in Geneva, where the two or the three or the five parties will come together. And you can draw up the outlines of some kind of power-sharing deal. It never takes.

KRISTOF: I think the politics is much harder than the rest of that. And I think especially now, there's kind of a weariness with the world, an exhaustion, a fatigue, with these crises around the world. And I mean, the other part of the problem is that what we're trying to maximize often is not humanitarian values, but U.S. food aid programs for example aren't based on saving people from starvation. They are essentially -- it's a U.S. agriculture support program and U.S. shipping program. So we buy food in the U.S., expensively, ship it over on American ships, and it does much less good than it would be -- than if we just bought food on location or provided cash on location. But we wouldn't have support for it otherwise.

ZAKARIA: If you had a magic wand in one of your old jobs, foreign minister of Britain, what is the one thing you could do to make the politics of this work better and in some way deal with the politics?

MILIBAND: Let me offer this. It is extraordinary that the Syria conflict hasn't just cost 260,000 lives, hasn't just driven 4 million people into the neighboring states. There is no political process of real heft and power to bring a diplomatic solution. We have a very committed U.N. envoy, but he is working on his own. Where is the international effort from not just the U.S. and the U.K., but Russia as well, and the regional powers, to recognize some of the common enemies that exist? The problem in Syria is now a Syria and Iraq problem, and it's a worse problem than a year ago. And I promise you this, in a year's time, it will be worse again, because the humanitarian catastrophe is feeding the political instability. And that's the cycle we're stuck in at the moment.

KRISTOF: I think we in the media have some responsibility for this. If you look at past humanitarian crises, that were addressed, like the Balkans, that was in part because television brought images, horrifying images into everybody's living room. And that's much likely to happen in 2015 at a time when news media organizations are struggling for a new business model, and that doesn't usually involve sending camera crews abroad to refugee camps.

ZAKARIA: Nick Kristof, David Miliband, pleasure to have you both on. Difficult subject. Thank you.

KRISTOF: Good to be with you.

ZAKARIA: We will be back.

(COMMERCIAL BREAK)

ZAKARIA: The Iran deal elicited strong reactions from around the world, and it brings me to my question of the week. Which of the following politicians created a Farsi Twitter account to be able to communicate directly with the Iranian people this week? Barack Obama, John Kerry, Vladimir Putin or Benjamin Netanyahu? Stay tuned and we'll tell you the correct answer.

This week's book of the week is a great guide if you want to understand Iran. It is called conveniently enough, "Understanding Iran, everything you need to know from Persia to the Islamic Republic, from Cyrus to Ahmadinejad." It's by William Polk, a great short read.

The correct answer to the GPS challenge question is D. Believe it or not, Benjamin Netanyahu tweeted about the deal in Hebrew and English and from his new Farsi account @israelipm_farsi. The morning after the deal was struck, he tweeted "the hundreds of billions of dollars that would be deposited at Iran's treasury will be spent on terrorism and aggression, not on hospitals and schools."

For the moment, this account has a relatively small number of followers. Only time will tell if incendiary tweets will change that.

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