NATO’s Biggest Problems in the Future will be Internal, not External

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If you missed the flap over Robert Gates’ speech to the Europeans over defense spending, start here. I am participating in one of those forums about the future of NATO. If had a dime for every time I have been to a conference or forum on this, or read an article on it from the Council of Foreign Relations, the German Marshall Fund, Foreign Policy…

I am amazed at the endless amount of navel gazing on this issue, especially by Europeans in conjunction with the (equally tiresome, endless, and speculative) ‘future of the EU’ debate. You could write a book about the future of NATO or the EU (and many have), but a far more interesting book would be on the cottage industry and rubber chicken circuit that has grown up around these topics. Most westerners still don’t know the difference between Sunnis and Shia, but there’s always more time and money to bemoan NATO’s lack of a ‘strategic concept’ or (worse) the EU’s rube goldberg institutional structure. My guess is the real reason we don’t close NATO is because about 10,000 transatlantic security analysts would be out of a job (but me too, so I’ll shut up now).

Anyway, here we go on the big problems for NATO in the next decade:

1. Coherence: The Soviet threat forced an unnatural level of coherence on alliance members that has since faded. Salafist terror is not a substitute (nor should be – god save us from the ‘long war’ and ‘world war IV’) . The policy struggles over NATO action in the Balkans, Afghanistan, Iraq, and Libya suggest this tussle (‘alliance politics’) will be a regular feature in the future. This will tempt the US to go it alone, especially as the European members are divided among themselves as well. So NATO will look less like an alliance and more like a club of democracies. Its operations will have a more ‘a la carte’ feel as members opt in and out of what suits them, such as Germany and Turkey’s rejection of the current Libyan operation. The more NATO operations move from consensus to majority decision-making, with ‘modalities’ of mixed cooperation, the less the ‘all for one, one for all’ Article 5 will mean. This will progressively unnerve eastern European members who now take Article 5 more seriously than anyone else in NATO.

2. European military capabilities: Collapsing European defense spending reinforces the slide from alliance to club. NATO was always unbalanced with no integrated European ‘pillar’ to complement the US one. This is worsening, because of growing Continental skepticism about the morality and utility of the use of force, and because of the ‘age of austerity’ cuts being forced on all NATO militaries (including the US soon, but worst in Europe). The back-biting and buck-passing of the Libya operation is likely to be repeated as NATO’s high-minded idealistic commitments collide with its operational limitations.

3. Out of area: The big NATO debate from the mid-1990s to mid-2000s was whether to go ‘out of area’ (out of Europe). Afghanistan was the first test of that, and no one seems to like it. European commitments there are so hedged with rules of engagement limitations, that US commanders simply go around them. European publics don’t support ISAF. Perhaps Afghanistan was too far away and too contentious to Europeans for its connection to the much-disliked war on terror. Perhaps Libya, Syria or Somalia might revive the idea. But European publics seem to have little taste for large footprint operations. Minimalist ‘bombing for peace,’ as in Kosovo and Libya, seems like about all the out-of-area European publics are ready to tolerate, again reducing the ‘alliance’ character of the alliance.

4. No one in Asia cares about NATO that much anyway. I have been teaching international relations in Asia for years, and in my experience NATO is seen as just a pleasant, somewhat dated, regional organization. Any hype about NATO as a global police force for globalization would crash right into the new core’s disinterest in any such role. Forget that.

5. Ad hocery is the rule now. In the endless speculation over the future of NATO, my sense is that the organization increasing suffers from the outsized, almost mythic expectations that have accreted around it over two generations. Call it the public relations inertia of NATO’s path dependent trip in the western mind – from hastily thrown-together alliance to the single most important international organization ever (particularly to Europeans). After 60 years, the notion of ‘NATO’ has taken such a hold of the public imagination, certainly among western foreign policy elites, that we are constantly calling for big plans to ‘revive’ it with ‘strategic concepts’ and the like, and we regularly lament that it is fracturing. We have talked up NATO into a powerful image of western solidarity and community, but one which members don’t really want to pay or sacrifice for. NATO’s own self-image often gets in the way of its likely and ad hoc role in the future. No one really knows what NATO is supposed to do after the Cold War, but inertia in the West means we are afraid to close it (which is why we have been having forums like this one for 20 years now). So we keep throwing missions at NATO, wondering whether or not they will work, unsure quite what to expect. Expectations management (read: reduction) is needed. NATO is highly unlikely to forge a widely shared geopolitical consensus, as in the Cold War. But we can try various missions and experiments. Some may work, some won’t. But holding NATO together as a symbol of western political unity is not a bad thing in itself.

The Impact of Arab Spring on North Korea (2): Cleave to China even more

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Part one is here.

This is the second part of a soon-to-be-published quick piece for the Korea National Defense University on Arab Spring and NK. Comments would be appreciated.

4. Find new nuclear clients, perhaps in Asia. It is widely argued that NK’s decision to nuclearize was foolishly expensive for an impoverished country. This might not have been true, as the DPRK has actively proliferated for cash – most notoriously with the AQ Kahn network and Syria. But as old autocratic buyers in the ME fade, pressure will grow to re-coup the expense of NK’s nuclear program elsewhere. Look for NK to probe new proliferation ‘friends,’ including Hugo Chavez, Mahmoud Ahmadinejad, the Burmese junta, and others; this will test the meaningfulness of the Proliferation Security Initiative.

5. Cleave to China, as the moral cover of fellow autocracies fades. Not only will there be fewer autocracies in the world as a result of Arab Spring, the remaining will be more morally intolerable. For two decades, the ME seemed impenetrable to the post-Cold War spread of liberal democracy seen in Eastern Europe, Latin America, and parts of Africa. Continuing ME dictatorships bolstered the moral ‘normalness’ of NK; if there are many dictatorships in the world, then NK is not especially odious. By contrast, if the world becomes more and more democratic, then non-democracies increasingly stick out. (This is arguably why China informally props up so many other dictatorships.) If this democratization of the ME is genuine, then many of the fellow autocrats who helped NK seem less uniquely awful will disappear, and NK’s isolation will deepen. NK already faces major restrictions on where its nationals and firms may operate. The loss of ‘friends’ like Qaddafi or Assad shrinks this further.

Worse, the debate in the West seems to be genuinely changing on the merits of looking the other way on dictators in the interest of stability. Western elites increasingly recognize the long-term unsustainability and ultimately self-defeating posture of tolerating dictatorships. As Western leaders scramble to get on the right side of history with the Arabs, their moral tolerance of dictatorship elsewhere will decline too. That obviously includes NK. If NATO can bomb for Libyans’ human rights, then why not for Ivorians, Syrians or North Koreans? This is opportune for the Lee Myung-Bak (LMB) administration. LMB’s rejection of the Sunshine Policy and tough line on NK has not been popular in the West. However, changing Western attitudes on the accommodation of dictatorships will likely generate new Western acceptance for LMB’s harder line. Post-Arab Spring, LMB’s rejection of the Sunshine Policy will go down more easily if detente is seen as coddling a dictator similar to Saleh or Assad.

If dealing with dictatorships becomes harder for democratic elites to justify and for democratic publics to accept, then the Six Party Talks are unlikely to resume, and NK will more openly become a Chinese client. It is no surprise Kim Jong Il now visits China regularly; it is all he has left to go to. Post-Arab Spring, the democracies of the Six Parties are even less likely to deal with NK. Losing its autocratic ME friends and unable to meaningfully negotiate with democracies, NK will (d)evolve into a Chinese satellite.

6. Do not give up the nuclear weapons – ever. This most obvious lesson is one Qaddafi, and before him, Saddam Hussein, learned the hard way. The CNN effect can chain-gang the West into places like Kosovo or Libya under R2P, but the West’s casualty tolerance is low. The West will not carry a war solely for human rights if casualties are high, and minimally interventionist air-power is the preferred tool. The easiest way to deter R2P interventions then is weapons of mass destruction (WMD). Libya turned away from its WMD program in 2003, for which it received an implied ‘no regime change’ deal from the Bush administration. The West then reneged on this deal, attacking Qaddafi, just as it was able to attack Hussein, because neither completed their WMD deterrent. Now with NATO insisting on Qaddafi’s ouster (likely resulting in his death at the hands of angry Libyans, as with Mussolini or Ceausescu), NK, especially the Kim family, will be that much less likely to deal on its nuclear program. If NK gives up its program today, it will be more open to democratic pressure and air campaigns tomorrow. Without nukes, one is vulnerable to R2P air interventions, but no democratic public is willing to tolerate a nuclear strike to push regime change. Bombing, yes; nuclear war, no. The lesson of Qaddafi, Slobodan Milosevic, and Hussein is that the West will only blink if you have WMD.

In sum, the overall lesson to NK of Arab Spring is, don’t change at all: permit no foreign reporters (they synergize the CNN effect), give as little information as possible to the NK people (rising expectations from the internet pushed Arab youth into the streets), push China as much as possible (it’s the only option), leave son-gun in place as a bulwark (when in doubt, massacre first, ask questions later). Indeed, this is the lesson of Arab Spring to all the world’s remaining dictatorships, and the worse the regime (Zimbabwe, Syria, NK), the more it applies. Moderately authoritarian states like China or Tunisia can flirt with reform, but for genuinely ferocious systems, like NK, any change risks a huge explosion, because so much social frustration has built up. There is no other way to maintain the state in its current configuration than to clamp down yet more. Sadly, Arab Spring’s liberatory potential in the ME is precisely why its impact in Korea will be a yet deeper freeze.

The Impact of Arab Spring on North Korea (1): When in Doubt, Repress

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Part 2 is here.

The following is a brief analysis of what NK will ‘learn’ from Arab Spring. The good people at the Korea National Defense University asked for a quick, non-jargony write-up. I have previously written for KNDU’s Research in National Security Affairs (RINSA) notes here (no. 70), about NK’s shelling of Yeonpyeong island last year. Northeast Asia security wonks would like RINSA.

Comments would be appreciated, as this will be published in the next few weeks. For my previous writing on Arab Spring, go here.

ABSTRACT

NK will draw six lessons from Arab Spring: 1. Quash protest as quickly as possible. 2. Give the military everything it wants. 3. Return to post-colonial ideology. 4. Find new nuclear proliferation clients. 5. Cleave to China, as the moral cover of fellow autocracies fades. 6. Do not give up the nuclear weapons – ever. In short – dig in your heel, clamp down harder, don’t change.

The Arab Spring revolts present a frightening prospect to any dictatorship. As the world’s most orwellian and repressive – Human Rights Watch has given NK its lowest score for almost forty consecutive years – the DPRK will clearly draw lessons from these events. Six ‘tips’ for NK stand out:

1. Quash protest as quickly as possible. Precisely because the Arab revolts drag on and on, they have held world attention long enough to force a major debate on the premises of Western policy in the Middle East (ME). The longer revolts continue, the harder it becomes for outsiders to ignore them and the louder calls for external intervention become. This ‘CNN effect’ – in which a steady stream of horrific images from conflict or other catastrophe raises hard, increasingly unavoidable moral questions about external intervention – precipitated US pressure on Mubarak, the French turn-around on Tunisia, NATO bombing in Libya, and a possible future intervention in Syria. The best way to keep outsiders out is absolute control. Tiananmen Square (1989), Burma’s Saffron Revolution (2007) and Iran’s Green Revolution (2009) were definitively crushed, while Mubarak tried to negotiate. Chinese overreaction to the proposed ‘jasmine revolution’ is the likely NK response to any civil protest, only yet harsher.

2. Give the military everything it wants. ‘People power’ does not undo dictatorships, splits in the regime, particularly the security services, do. Mubarak lost when the military split over the repression; Yemen and Libya’s rebels have strengthened as the militaries fractured. Son-gun was prescient in its blatant effort to buy off the KPA, even as it bankrupts the DRPK budget.

3. Return to post-colonial ideology. The growing global normative acceptance of the ‘responsibility to protect’ (R2P), the intellectual justification for external human rights-motivated intervention, narrows NK’s ideological space. R2P, for which even China and Russia voted in the UN, raises the ‘audience costs’ of the NK dictatorship. It posits that a legitimate government must meet a minimum threshold of good behavior toward its own people to preclude external intervention: some governments are so bad, they forfeit the right to rule. To date this has been used to justify interventions in Libya, Kosovo, Bosnia, and Somalia; it also impacted the debate on Darfur, Ivory Coast’s recent internal conflict, and a possible future intervention in Syria. This is an important breach of the long-standing norm of mutual, sovereign non-interference, behind which NK and most dictatorships hide.

No case more clearly meets the R2P benchmark than NK with its man-made famines, concentration camps, and extreme privation. The DPRK needs an intellectual response to this challenge, and anti-colonial nationalism is a good choice. Decolonization stirs strong feelings in the global South, the region most likely to confront R2P-motivated interventions. Qaddafi portrays the NATO bombing campaign as Western neocolonialism, with good effect in the African Union, which has repeatedly called for a NATO halt. A vigorous argument to global public opinion that SK is a US puppet bent on globalist exploitation of the peninsula would be a persuasive postcolonial counter to the ‘human rights imperialism’ critics fear in R2P. Further, ideological committed security forces, like Iran’s Basij, are less likely to split with the regime, so propagandizing the KPA complements ‘tip’ 2 above.

Continue to Part 2.

Erratum Notification for Korea Times Readers: I am not a US Imperialist

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On the editorial page of today’s Korea Times, a significant misprint of my writing occurred.

The editorial, “Implication of US Budget Deficit for Korean Security,” reads: “Although America should be globocop, America’s finances force the obvious question of whether it can.” It should have read: “Even if one believes America should be globocop, America’s finances force the obvious question of whether it can.” Due to this and other editorial issues, I have asked the editors to remove the electronic version and to print an erratum retraction tomorrow.

Readers interested in the original argument can refer to the original blog-post on which the op-ed was based – here.

Sorry for the misunderstanding. Thank you for visiting my website.

2 pm UPDATE: The editorial has since been republished in its correct form.

Unleash the ‘Animal Spirits’ of Korea’s Small & Medium Enterprises

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The Financial Times had an important story over the weekend decrying the emergence of a two-tiered economy in Korea, and it is getting some play in Korea. Koreans are loathe to admit this (don’t criticize the team to foreigners), but any outsider can see this almost immediately here, and just about every non-Korean social scientist I know in-country agrees that this is a huge problem.

By two-tiered I mean the enormous concentration of market power and political access concentrated in the largest 200 hundred or so Korean companies, while small and medium enterprises (SMEs) struggle to find credit, and Korean households pile up debt (now at 150% of income). Non-Koreans will recognize such brands as Samsung, Hyundai, or LG, but others include widely visible names in Korea like SK or Posco. Like Japan’s infamous keiretsu, Korean mega-companies often sprawl into many different sectors, building cross-sectoral conglomerates (the Korean word is chaebol). SK, e.g., owns a telecom service, gas station chain, and real estate distributor. The chaebol have become so massive, that they enjoy many distinctly unearned, oligopolistic benefits of size.

1. They are ‘too big to fail.’ Chaebol in trouble can usually go to the government for help, as many did in the Asian Financial Crisis (AFC). In the 1997 IMF bailout of Korea, the big IMF condition was breaking the chaebol into smaller, more competitive, less openly oligopolistic firms. The chaebol have fought this ever since, often using bribery and political connections, to re-scale the commanding heights. Even Korea’s ‘reformist’ administrations – Kim Dae Jung and Roh Moo Hyun (1997-2007) – got tarred with scandal for taking bags of cash from Korea’s biggest companies. By contrast, Korea’s small and medium enterprises have no such informal political safety net. Anyone walking down the same street in Korea for more than a year or two can see the dramatic merry-go-round of small businesses here. Korea is filled with mom-and-pop stores just one or two bad months away from bankruptcy.

2. Size means political influence. It should surprise absolutely no one that the sheer bulk of the chaebol gives them inordinate, collusive political influence. The most obvious mark of this is the pardons extended to top chaebol officials convicted of a crime. More important is the informal pressure of the government on Korean banks to loan to the biggest firms at generous rates. The not only encourages recklessness at the top, it squeezes Korea’s SME’s at the bottom. Perhaps most scandalous of all, the chaebol were able to terrify the Korean state and taxpayer into picking up the bill of the Korean AFC. The Korean AFC was not caused by reckless sovereign or household borrowing. It was the chaebol, who then, mirabile dictu, dumped their debt onto the state, which ultimately forced the government to approach the IMF. Koreans traditionally blame the IMF for the crisis, but it was in fact, because the Korean state, terrified of the consequences, ‘generously’ nationalized the debt of Korea’s corporate sector. In truth, I suspect the Korean government was bullied by the wealthiest corporate heads in 1997 talking about what will happen to Korea if the government doesn’t give them the money immediately – a shakedown.

3. Cross-sectoral holdings allow a firm to leverage success in one sector for success in another. Even within a sector, Korea is often oligopolistic. The telecom industry is dominated by just two providers (SK and KT – a duopoly), resulting in exorbitantly expensive IT/long distance rates. These sorts of oligopolistic effects are well-known. Yet worse is the regular invasion of wholly unrelated sectors, in which the market power of one sector is used to push into other. The best know example of this to westerners is Microsoft. For more than a decade, MS used its power in operating systems (Windows) and office software (MS Office) as leverage to crush rivals in other areas where MS was weaker – browsers (Netscape), instant messaging (ICQ), media players (WinAmp), etc. In Korea, it is vastly more predatory and oligopolistic, as the chaebol often expand into areas wildly unconnected to each other, a practice that can only be explained by extraordinarily weak anti-trust enforcement, regulatory ‘looking away,’ and the political connections to give an unstated veneer of approval. Even Adam Smith rejected excessive concentration (monopolies, duopolies, oligopolies), and I can think of not credible market explanation whereby SK is the country’s biggest telco, real estate holder and gas station chain simultaneously. These outcomes are so blatantly political and ridiculous, that I am amazed Korea sees so little populism.

But corruption, scale, and political influence can’t be the only reason. Korea could elect genuine progressives to push through deconcentration. Even the Reagan administration broke up AT&T, right? And here is perhaps the most insidious element of the chaebol – they have convinced Koreans, a) that they are the flag-bearer toward the rest of the world, and b) that if they went through bankruptcy that Korea’s economy would implode.

a) Corporatized nationalism. Korea is a small place, bullied often by its neighbors, with a language no one learns, a culture that’s not easily distinguishable from China or Japan, and a nuclear lunatic running half the country. But as anyone living here for about 5 minutes can tell you, they are intensely nationalistic and absolutely determined that the rest of the world know who they are. That is why Yuna Kim is a legend here – not because she is a good skater, but because she brings the world’s attention to Korea. The chaebol have masterfully exploited that absolutely desperate craving for attention.

When the EU FTA was up for debate, the government ran commercials on TV showing smiling white people in European locales using Korean goods – helpfully pointed out as from Samsung, LG, etc. In trains, airports, bus terminals, on the government TV networks, etc, one sees an endless stream of government promotional commercials and videos showing dynamic-looking Korean businessmen talking up this or that Korean export product to someone who looks like a foreigner (i.e., a white guy in a suit). The Korean news gives you a regular diet of chaebol agit-prop, as the ups-and-downs of Samsung, SK, LG, Kia, etc are reported religiously. And the dream job of just about every Korean student I’ve ever had is to be a jet-setting corporate executive for Samsung. Koreans have routed their nationalism through their MNCs, and the chaebol take advantage of this to blackmail the state when necessary – particularly soft loans from the government.

b) Korea is Korea, Inc. is chaebol-land. Almost as bad is the widespread belief in Korea that if the chaebol are threatened, then somehow Korea will collapse. I see this all the time in conversations here. Despite all the above arguments for anti-trust action, my interlocutors inevitably retrench to fear – what would Korea look like if Posco went bankrupt? That Korean demand for the products Posco used to make would persist and therefore encourage new market entrants seems to arcane. That start-ups are often more efficient and more innovative (Facebook vs Microsoft) suggests even more unnerving change. That shaking up markets usually reduces consumer prices by forcing established winners to work harder is irrelevant: Koreans are ready to pay higher prices at home if that it what is required for Korea, Inc. to carry the Korean flag abroad. In the end, Korea must have national champions – not because they are champions, but because they are national. If Korea is a divided country of minor global importance (ie, no one cares about us politically), then we must have, economically, megacompanies to broadcast our national awesomeness. In the end, if Korea must be Korea, Inc. in order to get globally noticed, then its ok to be chaebol-land.

If this is depressing, there are obvious answers that do not require the government to forcibly to delimit some areas for the SMEs and some for chaebol, nor to beg the chaebol to be nice. And these would bring Korea into greater compliance with OECD norms and best practices on corporate governance:

1. Halt easy credit for the chaebol, while creating a pool of such capital for small business, modeled on the US Small Business Administration. The Korean SME sector is the most dynamic economic force in the country, taking huge risks to build neighborhood-enriching corner shops. This is far gutsier than mega-companies with lots of government buddies producing variants on the same product every year. The Korean Jeff Bezos or Mark Zuckerberg is out there, but I guarantee he is not a mid-level salary-man at Samsung. The government needs to unleash the ‘animal spirits’ of Koreans; access to bank credit on an equal playing field is the obvious place to start.

2. Enforce anti-trust law. Oligopolies create so many negative effects that even the conservative Reagan administration broke up AT&T and achieved a 70% reduction in long-distance rates. There is no possible economic justification for consumer-punishing cross-sectoral conglomerates. Western regulators would long ago have forced chaebol spin-offs. More firms means more competition, more innovation, and lower prices.

3. Stop sterilizing the won’s appreciation. ‘Fine-tuning’ is a laughable euphemism for forcing depreciation at the behest of chaebol exporters. It creates obvious costs – 5000 won for an import beer at HomePlus – for consumers. Korea’s inflation rate is now 4.2%; an easy way to return purchasing power to Korean consumers would be for the currency to rise.

Robert Gates’ Final Speech on US Defense Cuts

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The Secretary of Defense is on his way out. To my mind, Gates was excellent, although, as Walt notes, coming after Donald Rumsfeld could make anyone look good. Gates, more than any SecDef since the end of the Cold War, has pushed the real ‘transformation’ of DoD – toward restraint and limits.

Readers will recall Secretary Rumsfeld’s original use of that term meant a smaller, lighter force that could intervene rapidly and globally to force local decisions on America’s terms. Afghanistan 2001 originally seemed like a model of this, but the bog-down of the war on terrorism has frozen the ‘revolution in military affairs.’ Rather it is Gates who has pushed the real change – nudging the US, specifically Beltway think-tank elites like Brookings or the American Enterprise Institute, to realize that the US can no longer afford the expansive globocop role we have become accustomed to in the ‘unipolar moment.’ Besides Walt, Fred Kaplan has been excellent on this.

Whoever comes after Gates will have a difficult time continuing this. There is a strong predilection in the Pentagon and on Capitol Hill for defense spending. It looks patriotic and exciting. Cutting it can be easily demagogued as ‘imperiling our national defense in an era of terrorism’ or something like that. Pentagon weapons procurement is notorious for placing bits and pieces of defense production in as many congressional districts as possible. This gives everyone a an economic and ‘patriotic’ stake in voting yet more cash to DoD. And the Navy and Air Force are genuinely terrified of a much-reduced role if the future use of American force becomes mini-interventions like Libya or (what was supposed to) Afghanistan. Watch for those parts of the force to hype the China threat (although I do think China containment, with a US supporting role, is probably inevitable).

Finally, it is simply undeniable that Americans sorta like ‘empire.’ We like the fact that we can go anywhere in the world and command a level of respect, because we are citizens of the ‘indispensible nation.’ Everyone uses the dollar and pays attention to the intricacies of our politics. (In Africa last summer, I got questioned regularly on Obama). No, I’m not saying we are the European caricature of global-strutting imperialist. But you only need to watch American film (or worse, video games) to see how attractive the idea of a big, bad-a—US is to Americans. We love the narrative of American exceptionalism; remember that George W Bush said ‘God has a special mission for America,’ and he got re-elected despite the Iraq War. You don’t have to be Noam Chomsky to think this; just live outside the US for a few years to see how ‘the rest’ think about us.

So Gates’ value, in the end, was seeing that the US simply cannot afford the neocon-liberal hawk synthesis in which the US use of force is a regular response to global problems. Even if you think America should be globobcop, America’s finances force the obvious question of whether we can. Historians regularly tell us that rising debt and long foreign wars are the death-knell of empires. Cut we must, or face a truly devastating melt-down at some point. It will take time for Americans to digest this reality, and Gates, with his huge personal prestige, started this process.

I say that quite aware that I supported NATO force against Gaddafi. (I would defend that position by noting that I argued for a super-light air intervention to stop a massacre. Beyond that, Libyans must achieve ‘regime change’ on their own.) I also say this with some trepidation, because part of me does think that unipolarity backed by US force, has made the world safer and the global economy function more easily. I worry too what a ‘post-American’ world will look like, especially if authoritarian China plays a much bigger role. While no fan of ‘empire,’ I will agree that this is unnerving.

But the larger concern of overstretch is now so apparent that Gates’ retrenchment position can either be, a) a choice now, in which we slowly retrench in order to better accommodate America’s fiscal mess and do so in a professional, ‘graceful’ manner, or b) forced on us later, when when we are genuinely broke because we continue to borrow $1-2 trillion dollars a year. Even America can’t do that forever, and cuts are coming whether we want them or not.

The Korean case has really forced my thinking about this, because Korea’s security is obviously dependent on a US commitment. Any war here will be bloody and expensive, far worse than the US post-Cold War wars in the Middle East. Americans are genuinely nervous about getting chain-ganged into a long conflict here. China, which holds around 1/4 of all US T-bills, would have an obvious incentive to stop buying if US Forces in Korea were suddenly marching toward the Yalu. And I can think of few uses of US force more noble than helping a democracy against the world’s last, worst stalinist tyranny. But that shouldn’t blind us to the obvious. Gates himself said, “any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should ‘have his head examined.’” That should be a wake-up call.

Hence I have argued repeatedly here, especially for Korean readers, that Korea needs to be far more aggressive in preparing its own defense and imaging an East Asian alliance structure beyond simply a US guarantee. Korea should finally end the tiresome, endless Dokdo dispute with Japan, so that real joint decision-making on vastly greater issues like NK or China’s rise can begin. Korea should be looking further afield to other Asian democracies like India, Australia, and the Philippines. These are no substitute for the US of course, and the US isn’t simply going to leave tomorrow or next year. But the US will have to be further and further ‘over the horizon’ in the medium-term, barring some major turn-around of the US fiscus. Korea has the money and talent to fill in this gap, but first the recognition of US limits, pushed by no less than the US secretary of defense, needs to sink in – not just in Seoul, but in the whole US establishment in Korea, and in the Beltway think-tank industrial complex. I hope I am wrong…

Think You Can Do Grand Strategy in Asia? (It’s Really Hard Actually…)

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Regular readers will know that I part-time consult for a geopolitical consulting firm called Wikistrat, and this competition is a cool idea, especially for the IR types who likely read a blog like this. Graduate students especially should sign up for it. (And if you think you can hack it as an analyst, and you have some decent credentials, contact them. Good analysts are always in demand.)

It’s great practice for big thinking, as if you’re Clausewitz or Spykman or something, but always remember the well-know adage: “Amateurs talk about strategy, professionals talk about logistics.” Before you argue that China should fix Africa or the US should fix the Middle East, remember to figure out how to pay for it, and to plan your way to that outcome (i.e., avoid America’s mistakes in Iraq). For my own version of US grand strategy in Asia, read this.

I will be a supporting judge in the competition too, so please bring your good ideas so that I can repackage them as my own. Anyway, give it a spin; the blurb is below:

“Wikistrat is gearing up for an exciting International Grand Strategy Competition.

Select teams representing leading academic institutions from around the world are invited to participate in the first ever wiki-based grand strategy competition. Managed by Dr. Thomas PM Barnett, this competition will provide participants with the opportunity to test their skills with global counterparts and network within that community. Participants can demonstrate their capacity for strategic thought to agencies, institutions and firms seeking to recruit up-and-coming analytic talent.

We are currently reviewing applications by groups representing top Universities and Think Tanks worldwide. There are still open spots available for this exciting event.

To nominate a team, or to see if you institute has been invited, contact us HERE.

Participation is free, and winner team will get a $10,000 prize.

Some of the issues we will cover in the Competition include (Download the full PDF OUTLINE):

1. Global Energy Security

2. Global Economic “Rebalancing” Process

3. Salafi Jihadist Terrorism

4. Inevitable Sino-American Special Relationship

5. Southwest Asia Nuclear Proliferation

Some of the Scenarios explored will include:

1. Major Biological Terror Attack

2. “2.0 Revolutions” in Arab World

3. + Additional Surprise Shocks”

The EU has Sewn Up the IMF Race Already? …. plus some media

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I published an op-ed in the Korea Times last week on the IMF managing director (MD) race. For readers outside of Korea, the KT is a mid-level paper here in Korea, sort of like the Plain Dealer from my hometown Cleveland. The biggest paper in Korea’s landscape is the conservative Chosun Ilbo. The KT is smaller, and because it is written only in English, it has a substantial foreign readership beyond Korea. My op-ed is based on this post last week.

I am amazed at how quickly the replacement for Dominique Strauss-Kahn (DSK) is emerging as a European once again  – the French Finance Minister, Christine Lagarde (above). The Europeans seem to be moving lightning fast on this, before Asians or developing states can get their act together and congeal around one or two non-European alternatives. As I noted in the op-ed, there is no functional reason for the IMF MD to be a European. It has simply been precedent, justifiable so long as Europe was the second major pole in the global economy with the US. Well now there is a third, in East Asia, what Barnett calls the ‘New Core’ (the North Atlantic being the Old Core). Surely it’s time to give the new Core a shot at running one of the big international economic organizations of the world?

The EU has driven its economy into a ditch in the last few years, so I see no ‘competence’ reason why a European finance minister would be better than a Japanese or Singaporean banker, e.g. Nor have the last three European MDs of the IMF been very good. Horst Koehler (2000-04) and Rodriego de Rato (2004-07) were placeholding non-leaders who took the MD-ship in order to springboard into higher office back home. And of course, DSK just globally embarrassed the institution in a manner that basically epitomizes its critics’ worst fears. The narrative of a powerful wealthy white man assaulting an black immigrant female maid is straight out of the antiglobalization movement’s nightmare imagery. So there is no particularly history of ‘quality leadership’ from the EU to justify its sinecure either. In fact, quite given how bad the last three MDs in a row have been, it would be a good idea to drop the EU for a round or two.

So where is substance to the argument that somehow Europeans are somehow entitled to the MD-ship? There is none. It’s bogus. The real claim is tribal – the EU wants the position, because it bolsters Europe’s otherwise declining claim to global leadership and relevance. The EU is like a child running around the adult table waving its hands demanding attention. As Martin Wolf noted on this issue, if the IMF can’t change to accept new realities (the rise of  the rest, especially Asia and the BRICS), then unfairly excluded states will simply walk away from the institution. Asia has already flirted with this because it felt so high-handedly treated in the Asian Financial Crisis (AFC).

Finally, the argument that the IMF should have a European leader right now because the IMF will be working so much in Europe in the near-future, is so specious as to be nearly racist. I find this almost revolting. Back when the AFC hit (1997-98) and westerners were dispensing painful but necessary advice to Asia, no one in the West worried about white bankers dispensing hard medicine to Asians. To say, today, that German Chancellor Angela Merkel won’t trust anyone to run the IMF unless it’s a European she knows,  is so ridiculous, hypocritical, self-serving, and borderline racist, that it really should shock the non-western IMF members into some pretty harsh language in response. If the EU wants to run its economy over a cliff, that’s its own choice. But the EU has no special claim to line up the globe’s resources (through the IMF) to bail out foolish German bondholders badly exposed in Greece, Spain and Ireland. For a counter-example, ask if California, with its own nasty budget crunch, is getting a bail-out from the IMF? No; Americans will wrestle through that on their own, and the EU should too on Greece and the other euro-miscreants.

I find the sheer, bald-faced selfishness and parochialism of this just shocking, especially given how often the EU preens about the importance of multilateralism and international institutions, in obvious contradistinction to ‘mercantilist’ Asians and ‘cowboy unilateralist’ Americans. So here is a golden chance for the EU to really improve global governance, to make it fairer and more democratic. But no, they’d rather insist on tribal privileges. Bleh.

Does it need to be restated that the IMF is a global institution, not a European regional one? The IMF does have other lending responsibilities, and most of its non-European borrowers are vastly poorer than Greece or Ireland. The EU has huge resources compared to the many LDCs (less developed countries) of Africa, but I guess the IMF is really supposed to be a global slush fund for the euro mess.

As best I can tell, Lagarde is pretty competent, and may do a good job. I certainly hope so, and her first trip as MD should be to non-European borrowers, especially in Africa, to prove her credibility. But there is no substantive argument from her resume to set her apart. Try here and here for a nice run-down of all the good non-western candidates who won’t be considered, because Merkel couldn’t care less about global governance and multilateralism when her campaign contributors’ South European bond-holdings are about to be ‘hair cut.’ It’s all just tribalism and selfishness. The real European claim is narcissism – put off succumbing to the new global reality where Asian economies are easily as influential as the old Core’s.

Read this and this as well on this issue.

Does it Make Humanitarian Sense to Let Libyans Fight it Out Alone?

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Regular readers know that I supported the Libyan intervention primarily on humanitarian grounds. For my writing on Libya, please try here and here. My big concern was that the fall of Benghazi might initiate a massacre like Srebrenica. If a limited intervention could forestall that, I think it was justifiable. To critics who said this was duplicitous, because we did not intervene in Ivory Coast or Syria, my response was that Libya moved first (its problems were presented earlier), which matters in a world of scarce resources with limited knowledge of the future. Also, Libya was proximate to NATO making it that much easier and so more morally compelling. This is hardly an air-tight case; Libyan lives are no more ontologically valuable than Syrian or Ivorian. But there are limits to what outsiders can do; and I thought Libya pretty well met the nexus of limited western capabilities – badly restricted by American military overstretch and degraded European militaries – and the clear humanitarian imperative raised when Gaddafi and sons started ranting about ‘rivers of blood’ and ‘hunting the rebels like rats, alley by alley.’ Non-interventionists retort that a massacre was not actually likely, but I disagree with that assessment.

A much stronger argument raised by non-interventionists directly challenges the humanitarian rationale. This argues that civil wars that stalemate, as Libya’s has now, actually produce more death and destruction over time than quick, definitive endings. I don’t have any particularly good cite on this, but generally I find that Max Hastings at the Financial Times, Stephen Walt at Foreign Policy, and various authors at the National Interest have leaned in this direction on Libya. In passing, I should say that I find all these authors to raise excellent points. Their analysis is worth your time and vastly more professional and serious than the partisan and uniformed commentary coming from Congress and the GOP presidential field. If you want to know why Libya is a mistake, read Walt or Hastings; don’t waste your time with FoxNews or Newt Gingrich.

So if the Libyan civil war drags on for years, with hundreds of thousands killed, does that mean it would have been better for Gaddafi to win early, and ‘only’ kill ten thousand? This strikes me as quite strong (and humane, albeit macabre) logic. Here are three possible responses:

1. Any comparative body counts (yes, it is that ghoulish to say so, but this is what murderous thugs force on us) must account for all the violence Gaddafi would also inflict on Libyans in the wake of his victory and restoration of the old order. In other words, it is not enough to say that Gaddafi would kill fewer than the civil war would, therefore his victory is better, because Gaddafi would end up killing many more in the future, presumably, in order to re-bolster his police state. These future murders and persecutions must be included with the casualties of a Benghazi massacre on the interventionist side of the ledger.

2. At the time of intervention (mid-March), it was not possible to seriously predict that the civil war would drag on. Indeed, even now, no one really knows how long this will go. Gaddafi could fold at any time; defections keep happening; the rebels do seem to be, slowly, clawing back. Even Walt agrees that Gaddafi is probably on his way out. This lowers the probability of a much higher body count from a civil war, because we don’t really know how long it will, in fact, last. On the hand, the probability was pretty high that a Gaddafi victory in Benghazi would lead to a massacre.

In the end, the only way to definitively know is post-hoc, which means we must estimate at the pre-hoc time of decision. We can only say if the intervention was humanitarianly beneficial after the war ends. If it does take 5 years and 250,000 dead, we will then look back in 5 years and concur that it was an error. If it ends next week, we won’t. By way of example, look at our thinking on Iraq 2. In 2003, the Bush people promised a blitzkreig like Desert Storm. We were to be liberators with a quick ‘mission accomplished’ and home by Christmas. Like many, I (foolishly) believed this narrative also and supported the Iraq War. In retrospect, this was a terrible error for which I feel ashamed and for which students regularly criticize me, but I (and many others) only knew that clearly by, say, 2005/06. (How Bush can still say he would do it all over again is just beyond me.)

Like so many, I thought the Bush people had actually planned something for Iraq after the victory, especially given that it was a war of choice with lots of time to plan and think. And indeed, if Iraq 2 had gone as Iraq 1, Bush 2 would be hailed as one of America’s great presidents. Unfortunately, decisions can’t be made with full information at the time, and looming massacre in Benghazi forced a rapid decision on Obama. This is the real distinction between Obama’s Libya forced intervention decision and Bush’s Iraq war of choice. Obama had little time to prepare, and so inevitably the operation is clunky and rushed; Bush, by contrast, had months of time to plan Iraq and its aftermath (plus the years spent on the Future of Iraq Project) and clearly didn’t do it. This is why I reject Walt’s comparisons of the Libyan war to Iraq 2.

So Obama had to make the best choice at the time and with time pressing dramatically. And while it is true that Iraq should have served as a cautionary against charging in, it is also true that Bosnia and Rwanda should have served as a cautionary against doing nothing and that Kosovo presented a possible model for how NATO airpower could help tip the local balance. The analysis, because it must be predictive, is messy and imprecise, and if Libya becomes Iraq 2, we will all be chastened as we were after Iraq 2 turned into a bloodbath. But remember that we were also all chastened after Rwanda also turned into a bloodbath. We felt ashamed we did nothing and promised to try harder the next time. This is that next time.

3. Finally, I am not sure how much I buy it that quickly resolved civil wars are in fact for the best. This post was motivated by this story at the Economist on the end of the Tamil insurgency in Sri Lanka. Sri Lanka is a good parallel with Libya, because it was a civil war that dragged on endlessly, killing thousands over decades and regularly debilitating Sri Lanka’s ability to develop and normalize. I think this is why everyone looked away as the Singhalese army basically wiped out the Tamils with inevitable end-massacre. Everyone just wanted it to end, and this seemed like the final closure the world wanted on an awful, endless problem that know one really knew how to resolve. One victor, completely triumphant and imposing a peace that might eventually mature, seemed better than years and years further of more of the awful same. James Fearon’s work on civil wars suggests this too: the best way to end them is a definitive victory by one side or the other. The American civil war would be a case in point, and definitive end of secession was clearly behind Lincoln’s tacit endorsement of Sherman’s scorched earth policy in the South. The Singhalese provided such an end in Sri Lanka, and NATO intervention probably stopped this outcome in Libya.

But note also the extraordinary cost the Economist notes of the Singhalese victory. Does anyone really feel comfortable advocating that? If tens of thousands of guaranteed Libyan deaths prevent possible hundreds of thousands of future Libyan deaths, how does one possibly morally choose among those alternatives? Who wants to say to the residents of Benghazi (or the Tamils), you must die for the ‘greater good’ of society? There are examples of fragile peace between the sides of a civil conflict (Bosnia today, or Cyprus) that manage to avoid the ‘eliminationist’ logic that one side needs to win in order to finally stop the killing. And who wants to make such an awful, unbelievably cold-blooded decision? Who could sleep at night endorsing this? Bill Clinton cannot.

If Strauss-Kahn Resigns, How about an Asian to run the IMF this Time?

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I have no particular intelligence on the details of the Dominique Strauss-Kahn (DSK) case. I would only say what everyone would agree to: He should be investigated properly with due process and the assumption of innocence. (That we even need to say this in the US is now, unfortunately, necessary given the US flirtation with extra-judicial methods because of the war on terror.) That he was fleeing the US for his home country when he was arrested does not bode well; this is why he was denied bail. If he is found innocent, then he perhaps can stay on the job, unless this incident comes to be seen in a pattern of irresponsibility, even if formal guilt is not found. DSK was rebuked for an affair with an IMF staffer a few years ago, so perhaps this will tip him out, even if he is found innocent.

But any decision to retain him as IMF managing director (MD) should be based on the evidence, not because he has helped revive the IMF’s fortunes after a tough decade (because of heavy criticism of the IMF’s handling of the Asian Financial Crisis and globalization generally), nor because he has helped so much in the recent debt crisis, especially in Europe. I agree with both of those assessments, but they don’t really change the issue of whether or not he is personally responsible enough to complete his duties. It is also worth noting that infidelity is not a crime (DSK is married). The real issue is whether he tried to rape his alleged victim or not. If he did, he should obviously go. But the important distinction here is with the Clinton impeachment. If DSK’s wife can live with his libertinism, as Hillary Clinton was able to, then that is ultimately a personal issue. There is no need to import the ‘politics of personal destruction’ into the IMF. It is also worth noting that French politicians get far more leeway on personal indiscretions that US politicians. France’s longest serving modern president, Francois Mitterrand, had a love-child out of wedlock who was revealed after his death. Perhaps DSK never quite escaped that more tolerant expectation set.

My own sense is that, even if found innocent because it turns into ‘he-said-she-said,’ it will be hard for him to stay on. The images of him in handcuffs, being pulled off a plane, standing sullenly in a court will make it hard to keep him. Paul Wolfowitz too was forced out of the World Bank presidency several years back for a similar, less egregious, personal affair. My guess is that DSK will have to go too.

For my own previous writing on the Fund, broadly sympathetic to its role, try here or here.

The issue of his replacement brings up a long-standing dispute over the leadership of the Bank and Fund. Precedent says the Europeans pick the IMF MD, and the US picks the World Bank president. This logic was based on the, previously reasonably accurate, claim that the North Atlantic represented the core of the world economy. Of course, it was more than this; prestige has always played a huge role, particularly for the Europeans. Having the IMF sinecure helped buttress Europe’s self-image as important central to global governance.

But you hardly need to be an economist to know that Europe’s role, relative to that of the US and Asia, has been in decline for awhile. Decolonization generally reduced Europe’s global footprint. Decades of slow growth and declining military spending has vaulted the US past the EU in the transatlantic partnership. The seemingly endless inability of the Europeans to put the EU into good working order – the euro mess, the constitutional-institutional rube goldberg structure of the EU itself, the continuing inability of outsiders to know who ‘speaks’ for Europe – cripples an EU global role. Just about everyone outside Europe thinks that the EU should have one EU seat on the UN Security Council, not two for Britain and France. Henry Kissinger famously quipped that he did not know whom to call if he wanted to talk to Europe, and that question is still unresolved. And of course, the rise of Asia has relatively squeezed the EU more than the US. I was at a conference last year where I made this point, and the EU speaker could at best only respond that the EU was a ‘foreign aid superpower.’ If that is all you got, it is time to step aside and allow the ‘New Core,’ Asia, to have a crack at the top-table of world politics. And last year, when I was at an IMF conference in Korea, Asian questioners did in fact ask DSK this, and he was response was, yes, the MD after him should be an Asian.

Everyone knows that Asia’s weight in the global economy has grown dramatically in the last several decades. The IMF’s own voting quotas have been re-ordered to reflect this. Chinese, Japanese, and Indians have already been pretty high up in the managerial order in both the Bank and the Fund.

My own sense is that a Japanese banker would be an excellent choice. Japan is the most open and mature of the Asian economies. The Bank of Japan has been downright heroic in its battle against deflation for years now; it is vastly more serious about Japan’s economic problems that Japan’s politicians. The BoJ has tremendous skills on issues that dog IMF debtors, like government debt, the money supply, or slow growth. A Chinese might be a more controversial choice, one the US and EU might veto, because China is highly interventionist and still a formally communist country. If China would object to a Japanese, likely out of sheerly nationalist resentment, then what about a Korean, Indian or Singaporean?

In short, Asia’s time to run one of the two Bretton Woods Institutions has arrived. Europe’s economic claim to that leadership role is now much-reduced. The euro is a mess; EU economies are carrying huge debt burdens; the EU remains unable to find a common voice despite decades of waiting and endless speculation; and the last few Europeans to run the IMF have been been pretty meager – Rodrigo De Rato lasted just three years (2004-07) and used the position to jockey for political position at home in Spain; before him, Horst Koehler (2000-04) did the same.

In fact, the only argument to keep a European one more time, is based on Europe’s weakness, not its strength; that is, because the IMF’s most important work in the next few years will be in Europe, it should have a European. But this strikes me as too clever by half and yet another gimmick to keep Asia from its clearly-earned place to run these institutions occasionally. By any reasonable criteria, Asia is qualified – probably more qualified actually given Europe’s economic state today – to take the MD-ship. The inevitable arguments to be heard in the next few weeks about Europe’s ‘weight’ in the global economy will just be mask the real,  tribal and prestige-driven desire to hang onto the last shreds of influence in an increasingly ‘post-atlantic’ world.