Now the Dean of the soon-to-be opened Lee Kuan Yew School of Public Policy in Singapore, Mahbubani was twice posted as Ambassador to the United Nations, during which time he also served as President of the Security Council.
"The reason why I wrote the book is because I see a major structural problem emerging in America's relation to the world," he told the Foreign Correspondents Association in Singapore recently. "This is the result of two factors: one, the world has shrunk because of globalization led by America technology. But in this shrunken world, American power has not shrunk and remains as strong and the consequence is that American decisions and policies have a huge impact on the world in a ways that most Americans are not aware of."
The curious paradox is that America has done more than any other country to change the world, yet Americans are among the least prepared to cope with the world they have changed.
For Mahbubani, the root of the current problem dates back to the end of the Cold War, when America "made an awesome strategic error" by deciding to become an "ordinary" country.
"One of the great historical ironies is that what the brutal European colonizers failed to do in the Islamic world in a century, America has managed to do in a decade," he wrote in his book which will be published this month.
It comes as a shock to most American citizens to be told that their government may have, knowingly or not, radicalized Islam. But that is what happened in the 1990s, the book argues.
"9-11 did not happen because of something that happened around that time. It was not a reaction to Bush. The forces that unleashed it became at least a decade earlier," Mahbubani said.
"Osama bin Laden was in some way the creation of the west in the Cold War. He was the hero, the man who brought the Soviet Union down," he pointed.
Meanwhile, globalization facilitated the flow of a conservative brand of Islam through the world.
Mahbubani blames the lack of coherent long-term plan from the part of the Europeans and Americans to help the Islamic world. He believes the West made a strategic mistake to assume that its long-term interests were best served by a world in which Islamic states were mired in poverty and backwardness. Flowing from this decision, it did not share the successful policies of modernization with the Islamic world. The United States had a Marshall Plan to develop Europe after World War II, even a plan to develop Japan, but nothing was devised for the Islamic world.
Another strategic mistake was to not see the huge importance of encouraging the success of Muslim moderates in Islamic societies, he contends
Mahbubani warned that America's relation with 1.3 billion Chinese could be heading the same sour way its relations with Muslims went if it is not careful.
"There is a huge divide in the way Americans and Chinese see the world. Americans like to believe that there is only one right way. But their perceptions is not necessarily shared by others," he pointed.
"I think fundamentally China is not quite sure whether the U.S. means China well or means China ill," he said.
Mabhubani strongly believes America needs to give up its insularity and start caring about what the world thinks. "Unlike American society is determined to understand its impact on the rest of the world, a vicious circle is likely to ensue," he warns.
He points to the problems of the American "law of intended consequences."
"American did not 'intend' to wake up the radical forces in the Islamic world, when it stirred up Islamic solidarity against the Soviet invasion of Afghanistan. Nor did it 'intend' to bring the pools of chaos close to America when it unleashed the forces of globalization across the planet. The rest of the world does not 'see' American intentions. It only experiences the many complex effect of American actions," he explained.
No contemporary U.S. administration wants to be held accountable for the sins of its predecessor. "Americans feel a cleansing process when they flush an administration down into the sluices of history. The rest of the world does not experience such a cleansing process. Other countries do not hold one single administration accountable. Instead they hold America accountable. This leads to a dangerous divide between America and the rest of the world," the book said.
"My conclusion in the book is that America has got to factor in the global consequences of its actions, because if it doesn't do that at some point the consequences will come back," he said.