Globalization, International Security and NATO
Jack Treddenick George C. Marshall European Center for International Security Studies
International Week in Kiev Ukrainian National Defence Academy Kiev , Ukraine February 9, 2004
2 Introduction Globalization is a huge and bewildering issue, one that encompasses a complex mix of economic, political, military, cultural and social factors. And as we can all sense, it is a phenomenon that is transforming every aspect of human affairs. To some, globalization is full of promise, the solution to many of the world’s ills and, properly managed, a source of prosperity, stability and security. Many, of course, adamantly reject such a possibility, as witness the massive and sometimes violent demonstrations that we have seen against it. To them, globalization is disruptive and intimidating change: it is uncertainty about the future and it is fear for people’s livelihoods and their accustomed ways of life. Indeed, to some it is just another name for imperialism, or perhaps Westernization, or even Americanization. But beyond this controversy − though certainly not unrelated to it − globalization, by its very nature, is also changing the way we have to think about international security. This is a connection made abundantly clear by the events of September 11, 2001 and one made ever more compelling by developments in the wake of those events. In this paper I attempt to explore those linkages. I begin by discussing the idea of globalization itself, including its origins, its perceived benefits, and its perceived dangers. I then move on to a consideration of how globalization is shaping the broad contours of international security. And because I argue that the success or failure of globalization is going to be a function of the institutional environment in which globalization evolves, I conclude by considering how one critical institution, NATO, might fit into all of this.
Globalization Broadly, economic globalization refers to the increasing integration of economies around the world. It occurs primarily through trade and financial flows, but also through the flow of ideas and people. Its result is increasing integration of the world’s cultures, its economies, and its political infrastructures. This is a simple enough idea, but it has immense implications. Globalization has had two powerful drivers: technological change, on the one hand, especially in communications and information technologies, and, on the other, a lowering of national barriers to foreign trade and investment, what we call economic
3 liberalization. First of all, and most obviously, the origins of globalization are to be found in the technological advances that have made it easier, cheaper and quicker to carry out international transactions. These include the jet transport, the fax, satellite communication, the computer, and especially the Internet. These innovations have reduced the costs of time and distance to such an extent that they have become essentially irrelevant in many commercial transactions. As a result, the market space for most goods and services has become global space. But technology alone cannot completely explain our current experience with globalization. Economic liberalization − the deepening and extension of free market institutions across the globe − has been the other indispensable factor. Over the past halfcentury there have been six decisive advances that have directed the international economy towards the globalized world of today. The first of these was the establishment of the beginnings of a global economic regulatory framework in the form of the so-called Bretton Woods institutions, including the International Monetary Fund, the World Bank, and especially the General Agreement on Trade and Tariffs in the years immediately following the Second World War. These institutions allowed international trade and investment to take place – at least for the most part – in a rules-based environment, thus avoiding the economic anarchy that had characterized the decades leading up to the Second World War. A second major development was the decision by the United States to abandon the gold exchange standard in the early 1970s. As a result, the fixed exchange rate system that had characterized the postwar international economy was largely dismantled to be replaced by a system of floating exchange rates. This shift had the effect of fundamentally changing the world monetary system. Most importantly, it allowed countries to eliminate controls on the movement of capital, thereby unleashing the huge international flows of money that today characterize our globalized economy. A third factor emerged from the two oil crises of the 1970s. Out of these crises came a quadrupling and then another doubling of the price of oil, giving rise to a huge transfer of wealth from the oil-consuming countries to the oil-producing countries. These countries, being unable to absorb such large sums, recycled them through international capital markets. In turn, these so-called petrodollars gave rise to a huge volume of
4 foreign-exchange trading and speculative investment, so large that they dwarfed the currency reserves of governments and threatened to swamp the financial markets of individual nations. A fourth development was ideological. Beginning in the 1970s, especially with the appearance of the formidable Mrs. Thatcher, and later taken up by President Reagan, the established capitalist countries seized on the ideology of laissez-faire economics with a vengeance. This was an ideology that held that whatever government does, it can, with certain exceptions, be done better by private markets. Out of this intellectual position, bolstered as it was by the influence of the so-called Chicago school of economics − especially in the works of Milton Friedman − there emerged a rolling tide of deregulation and privatization. A fifth factor, one that was critical in the push towards globalization, was the end of the Cold War. Not only did this usher in a period of more open limitations and more extensive economic relationships, it ended any pretense that planned economic systems could match the performance of free market systems. However, for many countries, it also ushered in an extremely difficult and confusing period of transition from commandtype economies to market-based economic systems. A final factor was the establishment of the World Trade Organization in 1994. This completed the set of Bretton Woods institutions – almost half a century after the others – and finally provided the promise of an institutional basis for the regulation of a transparent and rules-based international trading system. As such, it has an obvious potential to become the prime mover in the deepening and widening of globalization. Currently, however, the WTO’s major preoccupation is with managing the implementation of the latest round of trade initiatives – the so-called Doha round – that emerged from the meetings in Doha, Qatar in November, 2002 and which experienced a possibly fatal setback during the Cancun meetings of September, 2003. It is the convergence of all of these factors that accounts for the dramatic thrust of globalization over recent decades. In a word, though, all of them come down to two great phenomena: first, incredibly rapid technological change, and second, a triumphant, even strident, free-market capitalism, one characterized by a much-diminished economic role for government. Indeed, globalization’s great promise was seemingly confirmed by the
5 remarkable performance of the US economy, especially during the last half of the 1990s. In those years, the US economy saw high rates of growth, low unemployment, low inflation, high productivity and rising incomes. This performance reinforced the notion that free market capitalism was the economic system best able to produce economic growth and high standards of living. Globalization is, of course, not all that new. As a process, it seems to have occurred in waves over the centuries as technological and societal developments came together to produce major economic transformation. The world’s last experience with this type of convergence occurred in the late 19th and early 20th Centuries, particularly in the period between 1870 and 1913. Indeed, by some measures, our current levels of globalization and degree of economic integration have yet to reach the levels they did at that time. Consider, for example, technological progress. In the second half of the 19th Century, the maturation of steam-powered railways and ships and the telegraph greatly reduced transportation and communication times, reductions which in relative terms were much greater than those we have experienced in our own time. Similarly, trade and investment at that time moved very easily across the face of the earth, with little or no restriction. People, too, moved in largely unrestricted great waves of migration from Europe and Asia to North America and Australasia. This was a time, too, when governments exercised only limited control over economic policy, leaving monetary issues to the mechanics of the gold standard and fiscal issues to the discipline of balanced budgets. But, the great lesson of this last intense period of globalization is not so much that it happened, but that it ended. Completely unexpectedly and quite abruptly, this last great period of globalization was brought to a grinding halt by the outbreak of the First World War. This war itself was followed by a whole series of events that restricted and constrained international economic activity, including the Russian Revolution, the rise of communism, the Great Depression, the rise of fascism, the Second World War and finally the Cold War. As a result, even though technological progress continued at a vigorous pace during this period, particularly in the areas of transportation and communications, globalization was effectively absent for most of the 20th Century. This would tend to corroborate the suggestion that while technological progress may be a necessary condition for successful
6 globalization, it is clearly not sufficient. A liberal and open international economic order is also a necessary part of the equation. Contrary to what we might sense, then, absent such an order, globalization is not inevitable, it is not irresistible and it is not irreversible. But would globalization really be missed if it were to be halted or even reversed? Certainly there have not been many demonstrations in favor of globalization. Indeed, it is hard to think of any city that has actually been besieged by crowds demanding more globalization. But perhaps there should have been. For globalization does have a positive side. It is based on the simple idea that the liberalization of markets for goods, services and investment on a global scale can lead to increased world production through competition and division of labor − the specialization that allows people and economies to focus on doing what they do best. Global markets offer greater potential for specialization and more access to capital, technology, cheaper imports, and larger export markets. The result, it is argued, is higher world income. Globalization therefore offers the possibility – not necessarily the promise – but at least the possibility of widespread economic growth, development, and most important of all, the reduction of poverty. Encouraging this trend, many believe, is the key to progress in democracy, in raising living standards, in improving health, in protecting the environment, and indeed in promoting peace, stability and security. At least that is the theory. Of course not everybody accepts this argument. Rather, as we have seen in Seattle, Washington, Prague, Gothenburg, and Genoa, massive anti-globalization demonstrations and even violence have underlined the fact that disbelief in globalism is huge and widespread. Thus some people see globalization as something to be feared, not unlike a foreign invasion that overwhelms local cultures, regional tastes and national traditions. In particular, it threatens the standardization of cultures along the US model, the so-called McDonalds’ effect, where large multinational consumer corporations such as Nike, Levi’s, Coca-Cola, and MTV shape lifestyles and tastes Some see the forces of globalization – especially the supposed materialism and individualism of Western culture – as posing an irreconcilable threat to fundamental national values, including language, community, family relationships, social mores and so on. And even if there can be no question that globalization has dramatically increased total world income, it is unfortunately true that it also appears to be linked to an
7 increasing inequality in the distribution of that income. Around the world, there is a growing gap between rich and poor. In 1960, incomes of the richest 20 percent of the world’s population exceeded incomes of the poorest 20 percent by 30 times. By 2002, this gap had increased to 90 times. Absolute poverty, too, has also apparently increased, at least in terms of actual numbers if not in terms of shares of populations, especially in Africa, South Asia and some parts of Latin America. Today, perhaps two billion of the earth’s six billion people exist on less than $2 per day. Of those, about one billion live on less than $1 per day. They have little food, no clean water, no education, no health care – and they lead short, brutal and suffering lives. That this grinding poverty should continue and even worsen has to be the great failure of globalization. Many also see globalization causing unrelenting erosion of national borders. They complain that transnational corporations operate beyond the laws of individual states and that they unduly influence economic and social policy through their ability to shift operations to jurisdictions seen to be more cooperative with respect to taxes, labor laws, and environmental standards. Anti-globalization activists also complain that multilateral institutions such as the UN, the G8, the IMF and the WTO, the institutional embodiments of globalization, were not elected and exceed their mandates by encouraging an unwanted homogenization of cultures through the creation of universal norms for a wide range of national social and economic policies. Globalization, too, has been held responsible for much of the migration that characterizes our times and which is held by many to threaten social stability. And there is of course much truth in that. Given the unevenness with which the benefits of globalization have been distributed across the globe, it is inevitable that more and more people will see migration to the wealthy zone as their only salvation. If the jobs and incomes will not come to them, they will go to the jobs and income − legally or otherwise. For the recipient countries, however, large-scale migration can be socially destabilizing and even threatening. And, of course, we have seen in a number of countries in Western Europe just how immigration issues can play out in domestic politics.
8 While many welcome the continuing integration of markets, at the same time, a series of financial crises in recent years have provided significant reasons for concern about the instability of international capital flows, especially short-term credit flows to emerging market economies. About $2 trillion moves through foreign exchange markets every day. Given that $2 trillion is a very large amount of money relative to the size of most economies − the annual gross domestic product of the United States, the world’s largest economy, for example, is about $11 trillion − movements of this amount of money from country to country can have huge, destabilizing effects. Such movements can leave devastated economies and human tragedy in their wake. And in recent years we have seen just how much damage can be done – in Mexico in 1994, in East Asia in 1998, in Russia in 1999, and very recently in countries as diverse as Argentina and Turkey. Unfortunately, we have yet to devise a global institutional architecture that can prevent and resolve these sorts of financial crises.
Globalization and Security Turning to the linkages between globalization and security, it is possible to clearly see four critical points where globalization’s implications and security issues come together: the clash of values, the marginalization of countries and regions, political disintegration, and the emergence of failed states. As suggested earlier, globalization involves an integration of economic, political, social and cultural values. But it also involves a clash of those values. The events of September 11th were very much a product of this dichotomy. On the one hand, the perpetrators of those events relied on modern technology to conduct their activities, on political openness to move relatively freely across borders, and on social diversity to blend into a foreign society. All the pieces of globalization – the free flow of capital, a sophisticated and efficient international financial system, immigration, airline travel, the Internet, and the global media – were used by these terrorists as adroitly as they are used in international business. On the other hand, their extreme religious beliefs collided violently with values of modernization, political openness, and social tolerance – in a word, with what we call globalization. In this light, transnational terrorism has to be seen both as a direct product of globalization and as its implacable enemy.
9 As we have seen, then, globalization can provide means, motive and opportunity for those in the vanguard of terrorist activities. But, it can also provide popular support and sustenance, especially in those countries and regions that have been by-passed by globalization or which are unable to adjust to it. Here, a rising proportion of people find access to basic necessities severely restricted, while at the same time television and movies raise in them unrealizable aspirations. Globalization makes economic disparities graphically obvious, making misery, injustice, and humiliation painfully evident. It can, therefore, be a powerful source of resentment. Resistance to what is seen as an unjust economic globalization can then fuel terrorism. Resistance is intensified when that unjust globalization is clearly associated with a Western culture seen to be threatening local religions and cultures. But we have to be careful not to exaggerate this, especially since the terrorists involved in September 11th were all well educated, young men from middle class and even wealthy families. Nevertheless, terrorists, even wealthy terrorists, are very much more likely to find support for their cause, sanctuary, and an ample supply of foot soldiers in areas marked by instability and extreme poverty. Geographical disparities in income and wealth are complicated by what are becoming severe international demographic imbalances. The populations of most rich countries are aging as birth rates fall and medical science prolongs life spans. Birth rates are such that they are below the replacement rate and without immigration the populations of some rich countries will begin to fall. Germany, for example, expects to see its population decline by some 30 per cent within the next fifty years. At the same time, birth rates in the poorer countries are much higher. Their populations are growing, and they are much younger. Indeed, it is estimated that population in the least developed countries will triple by 2050. By contrast, over that same period of time, the population of the developed regions is expected to remain more or less unchanged. And among the poorer countries, more than one-third of the population is currently under age 15, compared with less than one-fifth of the population in industrialized countries. The result of all this is that there are a lot of unemployed, resentful and angry young people out there in the poorer areas of world. Left to smolder, this situation has an obvious potential to undermine international security and stability. And where intellectuals can espouse a religious fundamentalism with a rigid simplicity and a grain of coherence, their potential
10 threat to the world system can be huge. Globalization itself, its institutions and its symbols become the enemy. Yet another, somewhat curious security implication of globalization seems to be that economic integration on a global scale can encourage political disintegration. The reasoning seems to be that when the whole world becomes the market place – the ultimate consequence of globalization – then the economic justification for large political conglomerates, those that transcend ethnic, linguistic, or religious divisions can no longer be justified on economic grounds alone. In other words, the relevant economic space for a nation-state may no longer match the relevant political space. The result can be fragmentation, often leading to secessionist movements and conflict. Closely related to this notion of political disintegration is the phenomenon of an increased number of failed states. As the economic, cultural and political integration associated with globalization progressed in the 1990s, many states revealed themselves to be no more than pseudo-states, without solid institutions, internal cohesion, or national consciousness. Many indeed, had survived as ongoing entities solely on the basis of their usefulness to Cold War patrons. And we have indeed witnessed the emergence of a whole series of quasi-states, fragile states, failing states or failed states. Most of these were states by-passed by globalization or states unable or unwilling to adapt to its demands. As a result, they experienced persistent economic failure, leading to a collapse of the capacity to govern. More importantly, though, at least from a security perspective, such failed states provide ideal bases for stateless, decentralized groups that can spread freely, quickly, and stealthily across national borders to engage in terror. Failed states can also provide secure bases for other groups, groups just as threatening to international stability and security, including those engaged in illicit trade in drugs, people, body parts, arms, counterfeit goods and money. And, like terrorist organizations, criminal networks skillfully exploit the technologies and structures of globalization. They operate in incredibly efficient market systems where the economic rewards of their illicit activities are immense. These organizations have refined global networking to a high science, entering into complex and improbable strategic alliances that span cultures and continents. Human traffickers deal with counterfeit goods makers who deal with arms dealers who deal with terrorists and so on. The result is a noxious
11 brew of motivations and opportunities. Religious or political fanaticism drives terrorist networks. The promise of enormous profits drives the criminal networks. And networking between them is a potent recipe for murder, mayhem and global instability and insecurity. These security threats – the clash of values, marginalization, political disintegration, and failed states – all come together to create fertile breeding grounds for terrorism. And for the most part these breeding grounds can be located in a broad but irregular belt girdling the earth from areas in South America and the Caribbean across the Atlantic to most of Africa, on through the Middle East and into South Asia. This suggests that our globalizing world is a divided world, one split between a more-or-less successfully globalizing space and another, where globalization has completely failed to take root. The divergences between the two go a long way towards explaining the polarization in the world system between a zone of relative peace, stability and prosperity and a zone of turmoil, instability and economic stagnation. The non-globalizing space is characterized by backwardness, underdevelopment, instability, authoritarianism and oppression. Not surprisingly, it is also home to the major threats to global stability and security. It is here where the security agenda facing the world is largely defined. And it is a very complex agenda, one that goes beyond terrorism and WMD to include the new international threats emerging out of globalization: economic inequality, economic instability, migration, organized crime, environmental degradation, disease, illicit trade in humans, drugs, arms, and so on. None of these problems is really new, but in an age of globalization, they become universal in scope. All of them, too, are highly interrelated, greatly compounding the security threats that have emerged with globalization. However, not only does globalization present the world with a broader and deeper set of security threats, it also renders it ever more vulnerable to those threats. For one thing, globalization increases the interconnectedness and complexity − and hence the fragility and vulnerability − of national and international infrastructures. Thus, a successful attack against a single sector in one country can have adverse and unexpected effects in other sectors around the globe. Moreover, globalization makes it easier for extremists to gain access to highly effective means of attacking these infrastructures. The resulting sense of insecurity and vulnerability can in turn lead to an intensifying climate
12 of fear, such that every time some disastrous event takes place, many, if not most people will quickly assume that it is the result of a terrorist act. For the moment, then, globalization has made the world a very nervous place. Such a climate of fear can, of course, lead to a turning inward and a turning away from global integration. Rich countries could increasingly attempt to insulate themselves from the negative aspects of globalization and emphasize a re-nationalization of security. In confronting the tradeoff between global integration and security, they would likely opt to move in the direction of what we could call the “national security state”, one where security concerns become paramount. They will be tempted to create what could be considered “gated communities” of economic and political stability. And, of course, it just such a climate of fear that terrorism wants to create. All of this would seem to bring into question the future viability of globalization itself. From our current perspective, it seems to most of us that globalization is inevitable and non-stoppable, something that we have to adjust to. But this is not necessarily so. Recall that the previous great age of globalization came to an abrupt and unexpected halt in 1914, a time, not unlike today, when there was great confidence in the notion of economic progress on a global scale. And remember, too, that the process of global integration did not resume again for another 60 to 70 years. Could this happen again? There are a number of reasons to suggest that it might just be possible. One of these is the very nature of globalization itself. Globalization is essentially a measure of the ease with which goods, capital, labor, ideas, and technology can move across borders. But, as we have seen, such free movement can generate very real security threats. Globalization is about opening borders; security is about closing them, or at least carefully controlling who and what goes through them. This underlines the fact that there is a very real tension between globalization and security, indeed a clear tradeoff between them. Security measures raise the cost of travel and transportation and slow the pace of trade and commerce. At the same time, combating the financing of terrorism, particularly through initiatives designed to counter money laundering, involves greater scrutiny of banks and increased oversight of capital movements. As a result, the very mechanisms that have made globalization possible are being slowed.
13 But even beyond the security issue - which probably represents the most important threat to globalization - there are other grounds for suspecting that globalization is not quite as robust as we tend to think. For one thing, as we have all witnessed, the anti-globalization forces are powerful, determined, organized, articulate and very persuasive. Many people are convinced that they are right. As a consequence, they might well succeed in rallying sufficient political support to reverse the globalization process. At the very least, they may very well succeed in significantly slowing it down. Globalization could also slow down or be brought to a halt simply because of a lack of interest on the part of the major players. The vast majority of world trade and direct investment already takes place among the economically developed countries. The United States, for example, is the largest recipient of foreign investment. Thus these countries have already obtained the most significant advantages of globalization. Any further gains would be marginal and probably not worth the political cost of pursuing. Consequently, developed countries, especially the United States, Japan and the members of the European Union, continue to protect markets, particularly in the areas of agriculture, textiles and clothing, areas in which less developed countries are particularly competitive, but where domestic producers in developed countries have very powerful political influence. As a result, many developing regions are excluded from the benefits of globalization. Even worse,they may well be unable to compete in their own domestic markets as a result of market distortions induced by rich country protective subsidy schemes. Finally, globalization may have a limited future simply because it is not the only way to organize world economic relationships. There are alternatives. For example, it is not overly difficult to look into the future and see a potential world economy characterized not by an all-encompassing globalism, but rather one dominated by large regional trading blocs, the so-called Triad of North America, the EU and East Asia, for example. Each of these blocs could be tied together by a particular currency - the dollar, the Euro and the yen (or perhaps the Chinese renminbi) and the rest of the world would be more or less loosely associated with one of these blocs. Regional trading groups do have certain advantages over globalization. For one thing, they are definitely more manageable than a wider globalization since a smaller
14 number of countries are involved and among them there usually exist common geographical and cultural bonds. Some would argue that regionalization should be regarded as a phase in the intensification of economic globalization, something that should be a way station to globalization, rather than an alternative to it. But most economists would argue that regionalization is not the way to go, that broad, multilateral and inclusive trade liberalization is far superior to bilateral or regional agreements. However, should the Qatar trade round actually fail as the result of the collapse of the Cancun talks, there is every danger that the WTO could slip into irrelevance, much to the delight of the anti-globalization forces, and that the multilateral world trading system would be gradually eroded, possibly to be replaced by competing regional trading groups. Unfortunately, the obvious losers from such a trend would be precisely those countries that lie outside of the major regions, chiefly the developing and transition countries. We have to acknowledge, then, that there are positive sides and negative sides to globalization. The difficulty is that it at least appears that the great benefits of globalization are flowing disproportionately to the already-rich countries. The negative effects, on the other hand, are seen as flowing disproportionately to the poorer areas of the world. This perception has to be a fundamental cause of global instability, and has to be a considered as a major factor in the propagation of international terrorism. Thus globalization makes no sense if it does not reduce poverty in the world. Therefore, if it is to continue, globalization will have to become more inclusive. In other words, it will have to bring more and more countries into the globalizing zone. And the best way to do this is through a more open world trading system. More open trade offers the most immediate prospect for integrating the developing world into the global economy and alleviating the wretched poverty found in the poorest areas. Here, with sufficient political will and the courage to put global stability ahead of domestic and regional politics, the EU and the US in particular can both make an enormous contribution. It is crucially important that the interests of the developing countries, particularly in the areas of agriculture, textiles and clothing, be fully accommodated. This, of course, is the thrust of the current Doha Development Round of the WTO trade negotiations, a round of trade negotiations that unfortunately has gotten off to a rather shaky start and
15 after Cancun is in some danger of faltering. Thus, it is hardly an exaggeration to suggest that the future of an equitable globalization depends critically upon the success of this round of negotiations. And in my view, an equitable globalization is the sine qua non of a stable, prosperous and democratic world. Indeed, I would argue that if you want a reading on the future of globalization, keep your eyes on developments as the WTO attempts to salvage what it can of the Doha Round. Globalization is about change, and change is disruptive. While overall most nations will be better off as a result of opening up to globalization, there can be no question that there will be losers as well as winners. To make globalization acceptable, then, the rich world will have to take measures to minimize globalization’s disruptive effects. For one thing, some creative thinking has to be done about stemming the destabilizing effects of short-term capital flows. Banning them outright − through the imposition of capital controls − would seriously impede the free flow of capital across the globe and thus cut off one of the major benefits of globalization. There is also the issue of economic aid. Decades of such aid to underdeveloped regions have obviously done very little to alleviate global poverty. Much of that aid has disappeared into prestige projects of dubious economic merit or simply into the pockets of corrupt politicians and bureaucrats. But aid does have an important place. Integrating a developing economy into a competitive world economy requires first and foremost a healthy and educated work force. But adequate health and education are beyond the financial means of the poorest countries, and it is here that properly managed, targeted aid can make a huge difference, not only in economic development, but also in terms of international security. It is abundantly clear, too, that we will have to broaden our concept of security to include not only physical security, but also economic, social and cultural security, not only on a national basis but also on a global basis. Security is no longer − if it ever really was − a straightforward, one-dimensional concept. If we are to reap the benefits of globalization without succumbing to its more negative consequences, a globalized world is going to require some form of supervision, or at least some set of globally acceptable rules of behavior. As globalization progresses, as markets continue to expand beyond the political control of individual nations, international institutions will become increasingly
16 important. The great challenge of the 21st Century is to get globalization under control. This will happen only if an institutional environment can attain the global reach aspired to by markets. This will probably require new international institutions, but strengthening existing international institutions may be the most direct way of bringing order to the system. Globalization, Security and NATO As the world system struggles to match the economic order with an appropriate institutional order, NATO may well be an existing institution that becomes indispensable to successful globalization. Let me suggest three reasons why this might be the case. First, NATO is itself a “globalizing” institution. Second, it has a vital role to play in keeping the US engaged, not only in Europe, but also in the broader, multilateral globalization process. Finally, it can be, indeed has to be, an effective instrument in defending the globalization process. First of all, NATO is itself a globalizing institution. It is indeed an agent of globalization. Like EU expansion or WTO expansion, NATO expansion is engaging historically peripheral areas such that are becoming economically, strategically, socially and politically integrated into the zone of stability and democracy. NATO is an effective alliance precisely because it is a political security community of countries with common values and democratic institutions. It therefore embodies precisely those values that history suggests are conducive to political stability and economic prosperity. Thus, the prospect of NATO membership has been a powerful incentive to internal reform and modernization throughout Central and Eastern Europe. Preparation of candidates through the Membership Action Plan, for example, can be a very effective means of integrating countries politically or economically into the global system. And NATO’s influence extends well beyond potential membership candidate countries. It extends through PfP to countries in Central Asia and through the Mediterranean Dialogue to countries in North Africa and parts of the Middle East. Perhaps most telling of all, there have even been formal discussions between NATO and China. Like it or not, then, the NATO is in the business of globalization. It is making a significant contribution to meeting what I would argue is the single most important challenge of globalization: making globalization more inclusive.
17 The second reason why NATO is the indispensable institution of globalization is its hugely important role in keeping the US engaged in a broad, multilateral globalization process. And this isn’t easy. Globalization without the vigorous participation of the United States, especially with its huge economic and military clout, is clearly impossible. But throughout its history the US has cycled through worldviews that range from an inward-looking nationalism through a multilateral internationalism to a unipolar world leadership. Neither the isolationism of the first of these worldviews nor the unilateralism implied in the last would seem to be consistent with a comprehensive and acceptable form of globalization. It would appear that only the middle course, an outward looking multilateralism, is consistent with a vigorous and healthy globalization. Quite simply, then, a secure and prosperous world order requires the participation and support of an outward-looking United States prepared to share its responsibilities of world leadership within a multilateral framework. The one certain way to achieve this is to maintain a solid transatlantic connection. And NATO is the unique institutionalization of this connection. Without it, a more narrowly focused regionalism would surely predominate. From the US viewpoint, especially in terms of the current anti-terrorism campaign, perhaps the first campaign of the new era of globalization, the relevance of NATO is clearly linked to the quality and quantity of the military capabilities its European allies are able to bring to the table. Failure to redress the obvious “capabilitiesgap” between the US and European sides of NATO clearly runs the risk of invigorating the present US administration’s unilateral tendencies. But there is a second gap that threatens NATO integrity. We might call this the “strategic concept gap”. And it is just as critical as the capabilities gap for the long run viability of the Alliance. This conceptual gap, which can be described in broad terms as the difference between lawbased and power-based concepts of security, obviously reflects the difference between European and US philosophical positions with regard to the use of force. There exist, then, two gaps: the “capabilities gap”, which preoccupies the US, and the “strategic concept gap”, which preoccupies the Europeans, or at least some Europeans. Preventing a transatlantic rupture requires addressing both of these gaps. It would appear to be quite clear that only NATO can provide the forum within which the rebalancing of these two
18 gaps can take place such that the strength of the transatlantic link, which is so critical to a benevolent globalization, is reinforced. Finally, the third reason why NATO has to be the indispensable institution of globalization is that it alone has both the multilateral legitimacy and the military means to secure the globalizing zone against the complex threats emanating from the nonglobalizing zone. NATO’s frontier lies along this zone of instability. In its own interests, it will have to undertake to avert crises in this vast area, and should prevention fail, NATO will have to contain any crisis, stopping it from degenerating into conflict. As it extends its linkages to other areas of the world – to Russia, to Ukraine, to the other PfP countries, to the Mediterranean, perhaps to the Middle East and even to China, it not only tightens the integrating globalized world, it is better placed to confront threats to that world. It would appear, then, that NATO’s scope is evolving towards a truly global role. This is a role that would seem to devolve upon it quite naturally. For we seem to be at a peculiar historical point, one where NATO’s own unique history, its pattern of relationships and its tremendous capabilities, all seem to be compellingly necessary if the world is to benefit from the great potential of globalization. To be practical, however, we have to understand that NATO’s ability to act as an agent of globalization, to engage the US in a multilateral globalization, and its ability to defend globalization all depend upon NATO’s continuation as a functioning and effective security alliance. But its effectiveness has always depended upon its military capability. Until now, the US has been the main supplier of that capability. Paradoxically, however, circumstances now seem to require that the other members get serious about their own contributions. The challenge is really to meet a yawning capabilities gap between lean 21stCentury, network-focused US forces and under-funded, manpower-heavy and Cold War configured European forces. In theory, at least, the Prague Summit of November 2002 began the process of redressing this gap when the European members undertook to rapidly transform their armed forces and to fill existing capability shortfalls. But this is a familiar refrain. The Europeans have undertaken commitment capabilities on other occasions and yet the fundamental asymmetry remains. In my view though, we are at a critical juncture. The current tensions within the alliance are just too serious to chance paying lip service to needed reforms and hope that the Alliance can
19 somehow muddle through as before. This time, it just won’t happen. The Prague summit made it clear that an important psychological and historical hurdle has been crossed in NATO: no member is ever again going to object at least to the principle of ‘out of area’ interventions. NATO, then, at least in theory, has become a global actor, and a global actor of potentially critical importance. Failure to turn that potential into reality could be immensely detrimental not only to the future of the Alliance, but also to the future of globalization and, without exaggeration, to a secure, prosperous and stable future for humankind.