Joseph Gaggero Hall Grand Opening

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Joseph Gaggero Hall
Grand Opening
How will the UK and
Europe Influence the New
US President?
Opening Remarks:
Dr Robin Niblett and Joseph J Gaggero


Discussion:
Lord Ashdown of Norton-sub-Hamdon, Co-President, Chatham House
Sir Malcolm Rifkind QC MP, Secretary of State for Foreign and
Commonwealth Affairs (1995-97)
Dr DeAnne Julius, Chairman, Chatham House
Chair: Sarah Montague, Presenter, The Today programme, BBC Radio 4


Wednesday 29 October 2008




Chatham House is independent and owes no allegiance to government
or to any political body. It does not hold opinions of its own; the views
expressed in this text are the responsibility of the speakers. This
document is issued on the understanding that if any extract is used, the
speaker and Chatham House should be credited, preferably with the
date of the event. While Chatham House aims to provide an exact
representation of the speaker’s words we cannot take responsibility for
any minor inaccuracies which may appear.




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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


Opening Remarks:

Dr Robin Niblett:
Your Excellencies, Ladies and Gentlemen.

I am delighted to welcome you to the Grand Opening of our newly refurbished
conference hall here at Chatham House. I hope you will agree that this is a
now a space that is worthy of the institute’s reputation as one of the leading
venues in the world for informed debate on international affairs.

Upgrading our hall has been a priority for us for a number of years – one
shared by Victor Bulmer Thomas, my predecessor, but which ended up falling
on my watch. It was always going to be a daunting undertaking logistically,
mechanically and, perhaps most importantly, financially.

This evening gives us the opportunity not only to show off the new hall at this
first major members meeting, but also to recognize and thank those who have
made the refurbishment possible. We simply could not have followed through
on the vision we had for the hall without their support.

First, I must thank all those individual and corporate members of Chatham
House who contributed to our special Annual Fund appeal for this project.
Their names are listed in the entrance to the Hall, but I would like to recognize
specifically those who have joined us tonight, many of whom are current and
former members of the Chatham House Council. They are DeAnne Julius,
Chairman of the Council, Tony Baldry, Andrew Fraser, John Goodall, Nik
Gowing, Adrian Lamb, John Llewelyn, and Colin Marshall. Thank you all for
your support.

Second, this event gives me, the Chatham House Council, all of my
colleagues at the institute, and you, who have been so kind as to join us this
evening, the opportunity to recognize the great generosity of Joe Gaggero
and the Gaggero family. By making one of the most substantial gifts that the
institute has received in recent times, they have enabled us to undertake the
entire refurbishment and modernization of the hall without drawing on our
reserves in any way.

In recognition of this gift and of Joe’s long-standing support of the institute, we
are delighted and honoured to have renamed this hall The Joseph Gaggero
Hall.

Let me say quick word about Joe, who I have only known since my arrival at
Chatham House 20 months ago. He has been a highly successful



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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


businessman, President of the Bland Group of Companies, based out of
Gibraltar, which is one of Europe’s most leading travel and holiday
businesses.

Like many successful businessmen, however, Joe has a passion for
international affairs, in his case the desire to promote closer relations
between Gibraltar, Spain, Morocco and Britain. Like many businessmen, of
course, he has discovered that the world of business, where a CEO can make
decisions stick, and the world of international politics, where matters tend to
remain stuck, can be very different.

Nevertheless, Joe brings to Chatham House the businessman’s desire to fix
problems and to build a more prosperous world. And I believe that his ethos is
captured in the inscription below his name at the entrance to this hall, which
reads …

“Let us come together to talk and listen for the good of all mankind.”

Joining us this evening are Joe’s family. His son James, who now chairs the
Bland Group, with his wife Arabella and their children Nicholas and
Alexander, and Joe’s daughter, Rosanne Broderman with her children,
Freddie, Max and Isabella.

It has been a great pleasure to get to know Joe’s family over this past year,
not only because the Foundation, under their leadership, chose to make this
wonderful gift to Chatham House. It is also clear that they bring to the institute
the vision of the next generation of Chatham House members, including their
own personal engagement in international affairs like many of our growing
number of Under 35 members – I should note that Nicholas returned recently
from serving in the British army in Baghdad and Basra while Freddie has
been in the United States helping out with the recent presidential election
campaign.

While I hope they are pleased with the great improvement in the physical
space of this hall, I know that they are especially focused on our ability to use
the technology now embedded in the hall to reach out to our members and
audiences beyond these walls and create a more interactive and dynamic
space for our future debates.

Let me close with one word about John Power. As many of you will know,
John was one of the founding members, who helped to build a beautiful,
wooden old-style conference hall in what was a garden above this roof. That
building was pulled down in the 1960s to make room for all sorts of
refurbishments.   We     look   forward   to   recognizing   John    Power    and


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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


other founding members of Chatham House along our hall in two or three
weeks time. There will be some recognition.

Before handing over to Sarah Montague, from the Today Programme, who
will introduce and moderate this evening’s debate, let me invite Joe to
symbolically cut the ribbon.



Joseph J Gaggero:
Robin, I greatly appreciate the warm, generous words you have expressed.
The renovated Hall has magnificently uplifted our principal meeting place.
Congratulations to you and all your wonderful team who have worked on
completing this much needed project. Well done.

I am delighted our family enterprise under my son James was able to create
this legacy with Chatham House. It comes at a climax in my own life. At the
                                                          th
end of next year, we will be celebrating the 200               anniversary of our
international multi-facet trading venture which dominated my last 60 years in
the areas we served. We have survived many political and economic crises
over these years and it gives me enormous satisfaction to be now linked with
this world-wide recognised institute which you are enhancing.

As a member I have truly valued participating in numerous meetings here.
What superb memories, spanning many years, you have given me to broaden
my vision and learning and producing much pleasure. Thank you all at
Chatham House.




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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


Discussion:

Dr DeAnne Julius:
Thank you ladies and gentlemen. Tonight is indeed a very special occasion
and just before I begin my remarks I hope you’ll allow me to extend my
personal thanks to the Gaggero family and to all the others of you who have
helped to make this splendid transformation possible. I think this is really the
start of a new era at Chatham House that focuses on the next generation of
our history.

Of course, the other reason we’re here tonight is to indeed talk about one
great event that’s about to happen and to speculate a bit about what it might
mean for us here in Europe. We are within a week of a momentous decision
on the part of some of my fellow Americans (I guess I can say that; I have
dual nationality now). We are in the midst of a choice that they are making
which will shape US policy and indeed US foreign policy for at least the next
four years and probably the next eight years, given how things go.

I think from an economic point of view this is a particularly interesting election
because it’s being held against the backdrop of what we have been told by
many many people is the worst financial crisis that we’ve seen since the
1930s. And even very sober people like my ex-colleague, Mervyn King at the
Bank of England is beginning to use this sort of language. I think that it is not
really an exaggeration; we are in a very unusual situation. To say that this is
the worst financial crisis in 50 or 60 years does not mean that I or most
Americans who will be voting believe that we will be headed into something
like the Great Depression. That was an extreme situation from what policy
makers have learnt. We will not be making the same mistakes and indeed
haven’t made the same mistakes, and we have at the head of the Federal
Reserve Board Ben Bernanke who has written extensively on the Great
Depression and the lessons learned from it.

So I think that we should not see this as Apocalypse Now, but on the other
hand it does mean that the global nature of this crisis and the complexity of it
and the number of markets it affects... does mean that the US and many of
the rest of us are headed into a recession for at least the next year. I think
that recession could be a relatively shallow one that is sharp but short, maybe
has a two or three percent loss of GDP, but it’s also possible that we are on a
slipperier slope and are moving into something which is more like a five or
seven percent loss of GDP that might last three or four years.




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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


There is a downside risk out there. Those of you who read John Llewellyn’s
article in The World Today this month will recognise what that downside risk
may consist of. That’s not a certainty, but it is a plausible scenario and the
important element is whether the policy changes that governments have put
in place and the new government in the US will put in place, whether those
policy changes are sufficient in number and in depth to draw a line under the
financial crisis and allow the economy to recover sufficiently.

So what are the implications for this sort of recessionary backdrop? Whether
it be a shallow recession or a deep recession, what are the implications for
the election and the policies of the new administration? Well I think on the
election itself, it does seem to me that it is unambiguously clear that the
terrible economic headlines of the past weeks and months, that those are
negative for the Republicans. John McCain cannot help but be tarred by the
brush of George Bush and in many peoples’ minds he was at the helm when
this all happened, so he bears some of this responsibility if not all of it.

I think it’s also true that the Republicans are historically, in the mind of most
Americans, the party that’s closer to those dreaded Wall Street fat cats who
are also increasingly reviled in the press. And of course John McCain himself
has said that economics is not really his strong suit. Those of you who
watched the debates probably agree with him. While on the other hand
Obama’s message of change (while he hasn’t spelled out too carefully what
we’re changing to, but we know what we’re changing from), his message of
change is ideally suited to the economic circumstances where virtually
everybody agrees that we would like to change the direction, which at the
moment is a rather negative one.

So I think the economic news has probably had more to do with the bounce in
the polls until I gather today or yesterday’s polls telling me that the recent
bounce in the polls that Obama has taken... I don’t think that it is all Sarah
Palin’s wardrobe and makeup budget.

What about policies? The first point I’d made about policies is that whichever
administration and whatever the policies are, there is no escape from the
recession that the US is headed into. So I wouldn’t have too high an
expectation on that front. The issue really is how to avoid this deeper risk of
recession and there I think it will require leadership, both in terms of the policy
side and in terms of the psychological side. It’s not exactly like when Franklin
Roosevelt took office and said, ‘all we have to fear is fear itself’, we have a
few other things to fear than fear itself.




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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


But it is certainly true that the drop in confidence that is showing up in most
measures to a 40 year low (by the standards of one of the measures
published yesterday), that drop is very serious because people stop
spending, businesses stop investing, the demand for their products goes
down, employment goes down and we can rapidly drop into a worse situation
that we need to be. It’s certainly true that on the campaign trail at least,
Obama proved to be a more inspirational orator than McCain did. And so I
think that there is some argumentation that he would prove to be a better
psychological leader in this economic circumstance.

On the policy front, it’s quite tricky to design and then implement the whole
range of policies that are necessary to get the US out of this downward spiral
because this is a complicated situation, there really isn’t a silver bullet to this
one. If McCain is President, I suspect that Paulsen will be the man still in
charge as Treasury Secretary. I think McCain would be wise to leave him in
charge, he is certainly capable of understanding what needs to be done. He
may have a few issues in terms of being a spokesman, having come from
Wall Street himself his credibility isn’t the strongest but he’s a reasonably
competent pair of hands and I think that will be important to stay there. He
spoke to a Chatham House audience back last summer.

If it’s Obama, we don’t know who his Treasury Secretary will be. I think the
best choice, and this is a name I’ve heard some people mention, would be
Tim Geigner. Tim is the president of the New York Fed. He took has spoken
at Chatham House; he was here a couple of years ago in connection with an
economics conference. He came across as a very serious person, but even
then he was warning about the excessive leverage in the derivatives market
in the international financial system. So he’s been following these issues a
long time, and of course works very close with Bernanke.

A quick word about how Europeans might influence this next administration. I
haven’t spent as much time in this as I have on the backdrop because I think
that’s actually more important in the US election. I think one could make the
point that Europeans are doing a pretty good job already influencing the
direction of the debate and policy response to the economic crisis. In the
vacuum of leadership that the US faces right now, with a lame duck
President, the Europeans have stepped up. In fact, you might even say that
Gordon Brown and Nicolas Sarkozy are engaged in a great battle for the title
of Saviour of the World.

Some of their plans are just rebaked old plans, but some of them are quite
sensible and I think that whatever your views are of Gordon Brown I think that



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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


he stepped up to the plate in coming up with a comprehensive package for
dealing with the crisis. Their plans will get a good hearing in Washington on
15 November when the summit is held with the G20.

I think it’s not just the Heads of State but also in terms of the Central Banks;
there is a lot of co-operation. International co-operation on the part of central
bankers, from what I hear, the European Central Bank is particularly active in
this and we saw the results of some of that in the co-ordinated half point
interest rate cut.

So I suppose we just have to recognise that it’s a US crisis but it’s also a
global economic crisis. Most people recognise that concerted action, co-
ordinated action, is more effective in dealing with the global crisis that
individual actions. And I hope that, at least with hindsight, when we get
through this, the silver lining of this recession we’re going into may be a new
recognition on the part of all of the important financial capitals, not just
Washington and New York but also London, Brussels, Tokyo, Beijing, Dubai...
                                   th
all of those capitals, that an 18       Century saying by a famous US patriot,
Benjamin Franklin, that his old saying rings true again, ‘we must all hang
together or we will most assuredly hang separately’. Thank you very much.



Sir Malcolm Rifkind:
Ladies and gentlemen, can I begin by offering my congratulations to Joe
Gaggero and all those who made this extraordinary transformation possible. It
really is a remarkable change and one which I’m sure will be of enormous
benefit to Chatham House. Those of us who are speaking were encouraged
not to speak for too long in our opening comments, so I will not emulate what
one of my parliamentary colleagues once did when he spoke so long that it
was said of him that his speech had exhausted time and was encroaching
upon eternity.

I want to begin, if I may, by saying that regardless of whether John McCain or
Barack Obama win, already the last nine months or year of this campaign
have already made an enormous contribution to assisting the reputation of
the United States around the world. We also know that the last eight years of
the George Bush presidency rightly or wrongly, I pass no judgment for the
moment on this, have nevertheless been extraordinarily controversial and in
many ways have reduced America’s moral authority, leadership of the world,
in a way that we had not seen for many generations before.

Now the sight over the last few months of tens of millions of Americans
debating between three exceptionally able candidates - McCain, Obama,

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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


Hilary Clinton - continuing to debate and even at this very moment we do not
know for certain who is going to be President of the United States, shows the
fundamental health and vigour of American democracy. One only has to
compare the United States elections with those that took place in Russia
where Mr Putin said ‘I think I will retire as President, I would like Mr
Myedvadev to succeed me. There will of course be an election, so you can
decide whether you agree with me or not’. The contrast only has to be stated
to be shown to be remarkable.

But the campaign was not only a very important campaign, there was also
some very splendid campaign humour that emerged from it, and I’m not just
referring to Sarah Palin. I understand that at one stage, before Hilary Clinton
withdrew, her daughter Chelsea Clinton was campaigning on her behalf. And
she went up to this guy and she didn’t realise he was a Republican and she
said, ‘I am Chelsea Clinton, Hilary’s daughter, I hope you will support my
mother’. And the Republican replied, ‘no I will not. There are three problems
with this country: the first is Osama, the second is Obama, and the third is
your mama’.

Be that as it may, she is no longer running. I always think it’s significant that in
Britain we stand for election and in the US they run for office. I think this is
more than a cultural distinction, I have to say. I think that we can certainly
assume that regardless of whether McCain or Obama wins, there will be
certain things that flow from that. First of all, certain of the gut issues that
have upset so much of the rest of the world will be resolved. Guantanamo will
be closed down. One of the greatest stains I’ve seen over the past years has
been the attempt to try to redefine torture in order to justify it. I think that
whether it’s McCain or Obama, that will be past into American history and be
unlikely to be repeated. I hope also that (inaudible) rendition which is a
marvellous euphemism for kidnapping and sending people to rather
unfortunate parts of the world will cease to be part of American policy.

In some respects that will happen regardless of the candidate. But there’s
another point of a general kind that I think needs to be made. Obama fights
his campaign essentially as a liberal, as someone who has not got a huge
amount of experience in foreign policy and as, sort of a concern to many
people, will he be tough enough at this time. McCain comes from the opposite
end of the spectrum: hugely experienced on foreign policy, but with a
question about whether he will be too tough, will he be too much of a George
W Bush for those who don’t like Bush’s foreign policy. Will he be simply a
continuation of that?



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Of course, either of these may be true. But it may be equally the case that the
reverse might apply. That precisely because Obama knows he comes from
people being concerned about whether he’s tough enough, he may feel, at
least in the first year or so, the need to be very tough to reassure American
opinion and so that the wrong signal does not go around the world.

For McCain, indeed, the reverse might apply. That precisely because he has
a reputation for his toughness and hardness in foreign policy, he will wish to
demonstrate that a McCain presidency will not simply be a continuation of
George W Bush and that there is likely to be greater flexibility and greater
sensitivity.

But remember, again, one other point: that whichever it is, when you become
President of the United States, your first interest and responsibility, your duty
as well as your inclination are to the national interests of the United States.
So whether it’s Obama or McCain, do not assume that we are going to have a
President of the United States that will be so anxious to be nice to the rest of
the world that America will cease to act like a super power. Just as the United
Kingdom when it was the British Empire at the high of its power behaved like
the world power, so will the United States whose power is even greater, will
act accordingly.

There will be much more multilateralism, much more partnership, all to be
welcomed. But at the end of the day, the Americans will not be instructed by
the rest of the world as to how they should behave; they will come to their
own judgement regardless of the individual who happens to be President. So
there will be change, but we shouldn’t imagine that it will be a total
transformation.

In the time available, can I just comment on the specific question we’ve been
asked to comment on: how the European and the American relationship will
relate to each other. I think there are two issues at the moment that I would
like to comment on, that I think are going to be crucial for the new President
of the United States, and where Europe has a very important contribution to
make.

The first is Iran and the question of Iranian nuclear weapons. What could be
the single most difficult problem the new president will have to address over
the next year to 18 months, and the omens at the moment are not good.
None of the measures, including the sanctions that have been taken, seem to
have made much of an impact on Iranian opinion. I believe that what is
needed by whoever is the next President of the United States is a major



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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


transformation of US policy, but one that requires a very significant
contribution by Europe as well.

It’s not an original point but it’s one that I emphasise, and it’s that the United
States, in my view - and Obama might be more likely than McCain to make
such a proposal - is to offer what has been described as the Grand Bargain.
To say to the Iranians that if you are willing to renounce nuclear weapons in a
verifiable and transparent way and stop support for terrorism, we’ll not just
speak to you, we can look forward to a full normalisation of relations, an
exchange of ambassadors, no question of regime change being part of our
policy, normal economic relations. And that is something that I think some
Iranians would be willing to respond to, including some in positions of great
power.

But, and it’s an important point, the corollary of any transformation of
American foreign policy of that kind, which is after all what is already
happening with Libya and could happen with North Korea... but for the
Americans to be able to do that sensibly, there has to be a commitment by
Europe, not just the United Kingdom but by France, Germany, Italy and other
European countries. If the Americans made such a generous offer, and it was
thrown back in their face, then it would not just be America, then Europe
would be solidly with the US in the toughest possible response, including
sanctions, preferably through the Security Council. Europe has to
demonstrate that it is willing, if America itself is imaginative that the
Europeans will give the Americans the diplomatic and other support they will
need in that situation. That is one priority for the new American president.

The other way I believe that Europe and America really must sort out the
current situation is on NATO and the question of NATO expansion. The
particular point that I want to make here is that it is not whether or not NATO
expansion is good or bad. I personally believe that most of the expansion that
has taken place since the end of the Cold War has been justified as being
right and proper. But that’s not the point I want to make.

I think the crucial point is that Europe and America must closely come
together and decide and conclude that NATO remains fundamentally a
defence alliance, not a political statement of aspirations. As a defence
alliance, of countries committed to mutual defence, I hope the Europeans will
do all within their power to persuade the new President of the United States
that we should only contemplate a new member of NATO, not just when a
country wants to join and meets certain criteria, but when the members of




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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


NATO are prepared - if necessary, in a crisis - to go to war, to help that
country recover its freedom or its territorial integrity.

And if we are not prepared to go to war, as I suspect we never would have
been in the case of Georgia whether it was a member of NATO or not, then
membership is not the right response. But if we are prepared, then that is a
different matter. And I say that, not simply because we mustn’t upset the
Russians, important though that may be. I say it because you will denude and
you will detract from the essence of NATO as a defence pact for mutual
defence if you decline to come to the support of a country that may have been
attacked, simply because we find it inconvenient to do so. NATO must retain
its total credibility that if a member state is attacked, all other countries will
use their military forces to defend it. If we’re not prepared to do that, in the
case of a potential future member, then that country should not be invited to
join in the first place. There are other ways we could assist, through
membership of the European Union, through other means of support. But that
is the important part.

I conclude my remarks by simply saying that inevitably when a new President
of the United States takes power, that is a sea change, the beginning of a
new era. I recall Henry Kissinger once saying in London, he said that when
Adam and Eve were expelled from the Garden of Eden, never to return,
Adam apparently turned to Eve and said, ‘you know, my dear, we are living in
an age of transition’. Well I think we’re about to see that transition taking
place and I can’t wait to see the consequences.



Lord Ashdown:
I’ve been asked to speak to you about security, chiefly on the grounds that my
time I’ve been taken to be a weapon of mass destruction. I’m not going to
speak about defence, because here’s the point: that if you’d been asked to
speak about defence five years ago, certainly 20 years ago, you’d have been
talking about armies, about air forces, your navy and how strong it is. Now
defence is everything. Security is everything. It involves every single
department of state. The Ministry of Agriculture? Sure, food security is going
to be a problem. Ministry of Health? Yes, when you think of pandemic
diseases. Foreign Office? Self evidently. Home Office, as we all know.

It not only involves everything, but it also involves everywhere. The revelation
after 9/11 is that you cannot ignore what happens in a far away country.
Otherwise, death and destruction will be delivered, even to the most powerful
nation on Earth. That I think is one of the key revelations of our time. So I will


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not talk about defence as such, I’m going to make some predictions. You’re
always told that you shouldn’t make predictions. But here are some
predictions to stimulate our debate.

My first is that I don’t agree with our distinguished first speaker. I think this
recession is going to be deeper. I’ve always thought, I never believe the
rhetoric we’ve been hearing for the last year or so. And I don’t believe it not. I
believe this is going to be much longer, and I think it’s going to be much more
painful than we are currently hearing. But something more important than that
is happening, because this is not a recession like the others, in which we go
down and then bounce back and hit the position we were in. This is about a
step change in the passage of economic power from the nations of the
Atlantic rim to the nations of the Pacific shore board. It’s about a shift of
power, and that’s the fundamental fact of our time to which we are going to
have to relate to almost another. We’re going to end up lower, relatively
poorer, at the end of these. And that leads me to a second point.

The United States is not going to be looking at the Atlantic in the way that it’s
been looking at the Atlantic up until now, because it’s also going to be looking
at the Pacific and what happens to its west, not just to its east. My guess is
that Europe is going to be less important to any future United States
President, even Mr Obama, than it has been to every past US President,
even George Bush. And that has a profound implication for us, and in terms
of our defence, in terms of our American security guarantee.

Next I think we are going to continue to see an assertive Russia. But in my
judgment the danger is not Russia because it feels it’s strong because it has
the temporary leverage of energy, but when it realises how weak it is, that it
cannot occupy even its own territory, let alone defend it. That’s when, I think,
we will begin to see Russian adventurism.

We will see a rising China, of course we will. But I don’t think the straight line
graph produced by some people is going to appear. They’re saying that China
was here, it’s now there therefore we just lengthen the graph in a straight
line... I don’t think that’s the way it will happen. China has a democratic deficit
to overcome. And that passage from where it is now to where it wants to be
will be checked at some stage. Look at Chinese history. It always has to
happen and it always produces in China a unique period of turbulence.

Does that mean that China will not reach super power status? No, but it won’t
reach it within the time scale that some people are saying. I believe it will get
there. Next, what does that mean? It means not that we have passed the
zenith of American power, I don’t think it’s true, I think the US will remain an


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extremely powerful nation. I think you underestimate enormously if you
underestimate the extent to which there is a dynamic sea change which will
accompany a new American President.

But I do think we’re going to be moving in a much more multipolar world. The
world in which we are currently used to living which is dominated by a single
super power is not the world that we will see in the near future. If you want a
model for the kind of world we’re looking at, take a look a George Kenning’s
  th
19 Century Europe and the Concept of Power. My guess is that for nations
like those in the European Union, it will not be sufficient when you have a
foreign policy simply to have one which hangs onto the apron strings of your
neighbourhood super power. We’re going to require something much more
subtle, much more flexible, in order to be able to relate to the other powers in
the world.

I want to talk next about what I think is the other great event of our time. Not
the passage of power from the West to the East, but the passage of power
from the institutions created to control, the institutions of the nation state, onto
the global stage where it is largely unregulated, uncontrolled and not subject
to the rule of law. By the way, that’s why Al Queda is there. There isn’t just a
lateral shift of power taking place, there is also a vertical shift in power. If you
look at our problems today, that’s where our problems reside to. There is a
rule of history, where power goes, governors much follow, and if it doesn’t, a
period of turbulence becomes more dangerous, more turbulent and more
threatening to all of us.

If the phenomenon of our time is the globalisation of power, and that’s not just
about interdependence,       that’s     about   where   power   resides...   if   the
phenomenon of our time is about the globalisation of power, then the
challenge of our time is about bringing governance to the global space and
we will have more calmed decades in the decades ahead as the shift of
power occurs laterally, if we rise to that challenge.

And here’s a thought for you, absolutely relevant to rising to that challenge.
Take a look at the figures. The number of conflicts are going down. But the
number of frozen conflicts are going up. We are very good at winning the
conflicts; we can do it in days in modern short sharp digital wars, we are very
good at that. We are very bad at solving the problem of frozen conflicts. We
can project military force, we have reshaped whole armed services to do so!
But we do nothing about projecting the power to reconstruct nations, to solve
the post-conflict reconstruction conundrums that we have so failed to




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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


confront, for instance in Iraq and Afghanistan. We’re going to have to learn
how to do that if we want to have a more peaceful world.

My guess, therefore, is that we are seeing the beginning of the end of the
Western hegemony of international affairs. I don’t think we will see the
dominance of Western ideas and Western power, I think actually we’re going
to have to start thinking about how we build new partnerships with the new
emerging nations. One of the great strategic mistakes that we made was to
fail to understand at the end of the Cold War that we had an almost unique
opportunity to build a new relationship with Russia. We chose instead
triumphalism and humiliation and the consequence was (inaudible).

If we do not understand now that we should be recognising that there is a
chance to build a new kind of strategic relationship - especially with China, in
my view. China wants world order. Of course they do. If you’re a mercantalist
power, that’s what you need to trade in. We should be reaching out to try to
reconstruct these new kind of relationships, which will be necessary with the
new emerging powers.

So what happens after the end of the American presidency election? How will
that be changed? Well, my guess is that half the world (the decent half the
world) is dying for the United States to give us a reason to love them again. I
hope that will be delivered. If it isn’t delivered, then I think we will lose the last
chance we have to shape the new world institutions on broadly Western and
liberal values. If it is, and if Obama can follow a policy which begins to reach
out to the other emerging powers in the world, then I think we have one more
chance to do this on the basis of what we believe in and what we have tried to
achieve.

What does that mean for us? And here I end. It means, first of all, that what
you do - as a nation, as an individual, as a department of government - is
probably less important than what you can do with others. The Foreign Office
will have to become a project manager if it wants to influence foreign affairs. It
will have to bring together the various departments of state that are necessary
to reconstruct the nations after conflict to achieve what it needs to achieve
elsewhere. It will not longer be good enough for it to be staffed by high priced,
well-educated people writing elegant telegrams from foreign capitals.

The capacity to be able to make things happen... nearly all governments will
depend on their capacity to manage projects which involve other
departments. But it’s not just in government departments that that happens, it
will be with nations too. What we can do as Great Britain will be less
important than what we can do with others... our partners, in coalitions of the


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Transcript: Lord Ashdown, Sir Malcolm Rifkind and Dr DeAnne Julius


willing, in multilateral institutions of the world, and we ought to concentrate on
that a little more.

Secondly, if we are to bring governance to the global space we have to begin
to construct multilateral institutions that are capable of doing it. My guess is
that we will not use the UN as much as we think we will. My guess is that the
UN, if it’s going to be right, will not be a manager of executive actions but it
will rather be the receptacle for international law, the developer of
international law and the legitimiser of action created by others. My guess is
that the challenge of global governance will be more met through treaty-
based organisations like the WTO, than through formal UN organisations. My
guess also is that a relationship with the new emerging powers, especially
China, is going to be an essential part of creating a secure world, and I think
that we should be building that strategic relationship based on what I think is
a common interest in bringing an order to our world. That will mean, of
course, some very unpleasant and uncomfortable compromises on places like
Tibet.

And finally, if we in Europe do not realise that in the face of a retrenching
United States, or at least the United States whose intentions are elsewhere,
in the face of a dangerous and assertive Russia, in the face of a rising China,
and in the face of a massive shift of world power... if we do not realise in
Europe that the right response from Europe to that situation is to deepen the
institutions of our political and defence co-ordination, then ladies and
gentlemen, we are stupid. Thank you very much.




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