The economy trumps national security as the country’s top political issue this election cycle. With the unemployment rate at 8.2 percent, this is not surprising. From a long-term strategic perspective, however, the two issues are closely connected. The current economic crisis threatens Americans’ standard of living and our capacity to address social problems. It also undercuts the U.S. ability to sustain international stability, a prerequisite for domestic prosperity. The campaign debate we must have is how the United States can deal with global problems while restoring its economic health.
In the near term, lackluster growth and ballooning deficits mean fewer resources for national security, including defense, diplomacy, foreign assistance and development. Economic challenges and dissatisfaction with the Iraq and Afghanistan wars are prompting Americans to turn inward. Pressure to reduce the international burden is growing even as U.S. influence is declining. What is worse, these domestic constraints arise at a time when problematic trends abroad are limiting our options or creating greater demands for U.S. action.
Consider some key challenges: first, traditional U.S. allies seem less and less willing to step up to mutual-defense needs. The United States has complained for decades about Europe’s underinvestment in its defense and its lagging contribution to joint efforts. As the Europeans renegotiate their political and economic priorities amid the current fiscal and monetary crisis, NATO countries are likely to spend even less on defense or new NATO missions. European defense spending fell by close to 2 percent in 2011, with countries hit hardest by the sovereign debt crisis seeing more drastic cuts: Greece, 26 percent since 2008; Spain, 18 percent; Italy, 16 percent; and Ireland, 18 percent. By 2015, Britain and Germany, two of the top three European defense spenders along with France, plan cuts of 7.5 percent and 10 percent, respectively. France, if its withdrawal from Afghanistan is any indication, also will retrench in the coming years under its new socialist leadership.
In Asia, meanwhile, our strongest ally, Japan, is suffering from political gridlock and a crisis of confidence following the tsunami, nuclear accident and rapid rise of its regional rivals, particularly China.
Second, the United States cannot rely instead on emerging powers as they do not share, for the most part, U.S. views across a range of international-security issues. Rising powers such as China, India, Brazil, Turkey and Indonesia leverage their economic growth to modernize their militaries, press regional claims and demand greater representation in international bodies. But they don’t see themselves as stakeholders in the American-led international order. Rather, they show little inclination to share in the burdens of providing the collective goods needed to maintain security, enable global commerce and make international institutions work. The United States should seek cooperation with emerging powers on issues of mutual interest, but the absence of strategic like-mindedness will inhibit the emergence of fully integrated alliances. The divergence of interest among great and rising powers thwarts agreement on matters of substance at bodies such as the G-20.
Third, key regions are experiencing destabilizing transitions, particularly in the greater Middle East. The transnational terrorist threat from the Afghanistan-Pakistan region endures. Iran’s nuclear program threatens a cascade of proliferation. Prospects are real for a sectarian war between Sunni and Shia forces in Iraq, Syria and the Gulf, fueled by regional powers such as Iran, Saudi Arabia and Turkey. The most significant great powers outside the region—America, Europe, Russia, China and India—can’t agree on how to address these challenges.
The United States cannot afford to be indifferent to these problems, yet it lacks the resources to address them. The country’s fiscal health must be its top priority. Continuing with low growth and large deficits while economically dynamic rising powers expand their military capabilities will undercut U.S. leadership over time. These trends would culminate in a multipolar world like that of the nineteenth and the first half of the twentieth centuries. A multipolar world would increase the likelihood of war among major powers. The lesson of the twentieth century is that nothing is more expensive than such conflicts. So addressing the economic underpinnings of U.S. power is vital.
Two recent reports offer starting points for reform. The report of the Simpson-Bowles commission, appointed by President Obama in 2010, recommends a combination of cuts in domestic discretionary spending, revenue-increasing tax reforms, and controls on health-care costs and entitlements that could save $4 trillion over ten years. And in its study of “Fortune 500” companies, a report by the Partnership for a New American Economy found that the United States could exploit the already substantial contribution of immigrants by offering more green cards and visas for graduates with advanced degrees, entrepreneurs and highly skilled workers.
In addressing its international challenges, America must embrace five critical adjustments:
1. Preventive diplomacy: the United States should address security challenges early to prevent later needs for military action. The classic case is Afghanistan after the Soviet withdrawal in the 1990s. A focused diplomatic effort supported by investments in state building and reconstruction could have precluded the power vacuum and civil conflict that led to 9/11.
Today, active diplomacy could mitigate the risks of conflict in regions of instability such as the South China Sea and the Afghanistan-Pakistan theater.
The U.S. president should work with Congress in conducting a strategic review of America’s diplomatic instruments. While more resources may be needed, the more critical imperative is in the organization and interaction of civilian agencies. In conflict zones, initiatives carried out by embassies should be integrated with military missions. Part of the solution may be to create a diplomatic equivalent to military commanders, equal to them in resources, stature and bureaucratic independence. GOP presidential candidate Mitt Romney's "dynamic diplomacy" initiative to "place all diplomatic authority in a given region under the charge of one envoy," is a good start, but implementation will require presidential leadership and bipartisan buy-in from Congress.
2. Coalitions of the relevant: established multilateral institutions such as the UN, NATO and World Bank are valuable but have proven incapable of securing U.S. interests in some key areas. The same is true of U.S.-led “coalitions of the willing,” which have not reduced U.S. exposure to a sufficient degree.
A better approach would be mutual accommodation with what might be called “coalitions of the relevant.” While some threats such as border security are principally American problems and others such as climate change are truly global in nature, the most pressing challenges on the horizon are those in which a subset of international actors share with the United States a critical stake in the outcome but not necessarily the same strategic approach. Examples include the U.S. cooperation with the Arab League during the Libya intervention and its more recent leadership in organizing the Friends of Syria. By seeking context-specific understandings with key players, the United States can shape outcomes in ways that, even if not ideal, enable us to secure our most important interests.
3. Military strength combined with limited intervention: while global trends and potential challenges require us to sustain our military strength, Washington should advance its objectives by empowering others and relying on specialized and focused operations. In conflicts involving failing states or internal war, the United States should work through local partners. Iran, while not a country to emulate, is worth examining. It has at times outmaneuvered its adversaries on the cheap through effective use of such forces. Despite its collapsing economy at home, Iran has managed to shape strategic outcomes from Afghanistan to the Gulf to the Levant at a small price through selected investments in militias and political proxies. In many of the instances in which the United States has been most effective in countering Iranian influence, our policies have involved brokering anti-Iranian coalitions and tactical partnerships with substate actors such as tribes. To bolster this strategy, the United States should emphasize security-force assistance and foreign military sales.
4. Using foreign policy to restore the U.S. economy: since World War II, the United States has built and maintained global economic institutions and international trade regimes that enforced common rules and facilitated commerce. This was a shift from the country’s nationalistic or mercantile approach, focused on territorial expansion and direct interventions on behalf of U.S. business. While the United States should not return to its mercantilist past, U.S. grand strategy should focus on facilitating economic growth at home.
One imperative is trade liberalization that opens markets for U.S. goods and services abroad. As Senator John McCain has noted, China since 2003 has secured nine Free Trade Agreements in Asia and Latin America alone, while other Asian countries had concluded or were negotiating nearly three hundred trade agreements in the past year, none of which included the United States of America. Yet the Doha Round remains stalled, and U.S. efforts to bolster the partnership with India have languished since the 2008 civil nuclear deal, even in the promising realm of defense sales.
As Secretary of State Hillary Clinton has argued, we also need greater emphasis on foreign commercial diplomacy. While our economic competitors use their political influence to gain market access or close important deals, the U.S. government is often reluctant to assist American companies. This is an area where active diplomacy can contribute directly not only to the restoration of our economic strength but also to the commerce that binds us to our strongest allies and friends. Accentuating such diplomacy will only happen if the president makes it a priority.