Let the West be One: Why the western alliance is needed more than ever

This article first appeared in Haaretz on 18 April, 2008.

The Western alliance has been a fractious affair at the best of times. That's hardly surprising. In an alliance of democracies, where domestic politics actively shape foreign policy, and free market economies, where competition is the norm, serious disagreements are to be expected. But when one adds to the blend satiated (some would say "fat"), aging, jaded societies that are increasingly reluctant to accept the concept of sacrifice, the question of the alliance's ability to be effective becomes a real concern.

There are many who would argue that the nearly eight years of the Bush administration have shown the Western alliance at both its best and its worst. Following the 9/11 attacks, the alliance was at the peak of cohesion, activating Article 5 of the NATO charter - by which the organization is mobilized in defense of a member state under attack - for the first time since its establishment

in 1949. But following the toppling of the Taliban regime in Afghanistan, the alliance began to show cracks, with Iraq becoming a veritable fault line - as the Bush administration opted increasingly to go it alone. Most recently, the question of relations with Russia returned to the fore, with Washington seemingly ready to risk the possibility of a renewed cold war in Europe. The decision at NATO's Bucharest Summit, earlier this month, not to invite Ukraine and Georgia to join the alliance right now signaled a failure for the Bush administration, and perhaps even the end to a period in which NATO expansion eastward was considered an effective tool of democratization and stability.

The past eight years of tumult within the alliance have given many critics plenty of ammunition to decry NATO's relevance. Moreover, the unilateralism of the Bush administration has aggravated one of the thorniest and most sensitive issues for all alliances: equality among members. Even though it is historically not unusual for alliances to be centered around a major power, the Western alliance is anything but normative: It has managed to survive nearly 60 years, in part because of unparalleled consensus; and has contributed to and coexisted with the emergence of an alliance of European democracies − the European Union. As such, not only has the longevity of the alliance meant that member states have changed considerably since the early years, but the emergence of the EU has created rival institutions to NATO, and increasingly a sense that the Western alliance should come to represent a more equal cooperation between two large units - the U.S. and the EU.

This requires significant shifts in mindsets, both in Washington and in European capitals: Foreign policy and security priorities must be assessed differently, with broader interests in mind, and at the same time contributions and capabilities in personnel and hardware must be more readily forthcoming. When one adds to this equation the fact that not all European members of NATO are EU members - with Turkey, in particular, embodying complexities that go beyond issues of security - it is not difficult to appreciate the confusion that surrounds the Western alliance at this time.

Whether hardcore realist, or ardent idealist, anyone who believes in the idea of the West must also wish to see the alliance continue, and encourage its transformation into a more cohesive, effective force. At this particular juncture in history there are some basic facts that necessitate a very frank approach. For many in the non-Western world, the West represents a destination, a target, a dream and a future. However much Westerners criticize the way they have lived - and there is plenty to scorn - during the past 60 years, the West has offered a safe haven for the oppressed, a future for immigrants, a beacon of hope for those enslaved. It has offered economic opportunity, shared knowledge, open gates to newcomers seeking a better tomorrow, all because concepts of human rights, respect for individual freedoms, and free, unhindered dialogue are respected, protected, cherished values. The collective role of the Western alliance in maintaining these values should not be downplayed.

Furthermore, for the first time in the post-1945 era, there are real and immediate crises around the world that transcend boundaries and whose nature is only partially military. For example, in recent weeks, there have been statements by senior officials of the United Nations, the World Bank, the IMF, and elsewhere, pointing to a grave crisis in the availability of food, and warning that scarcity at such critical levels may lead to wars. Even the most skeptical student of history will be tempted to draw parallels to the Roman Empire in the 3rd-5th centuries C.E., besieged by hungry tribes seeking refuge from marauding invaders in the steppes, or worse, climatic changes that devastated their crops and hunting grounds.

It is doubtful whether a "Fortress West" mentality is the answer in a world whose countries are increasingly interlinked, but it is also clear that the West will have to play an increasingly active role, both at its borders and in more distant lands, if it is to preserve its shared interests and values, and also help others survive in increasingly difficult natural and political circumstances. Similarly, if crises like Darfur − a Western failure par excellence − are not to become increasingly common, the Western alliance must undergo the necessary changes to become more effective and its governments must find the wherewithal for the sacrifices this requires.

Michalis Firillas

18 April, 2008

http://www.haaretz.com/hasen/spages/976271.html

U.S. crashes - China breaks

This article originally appeared in Haaretz on 21 March, 2008.

News from America is bleak. Earlier this week the Federal Reserve came to the rescue and backed a deal for the sale of a paragon of Wall Street culture, Bear Stearns, to JP Morgan Chase, for a mere $2 per share. Lehman Brothers, another major investment bank, was also felt to be tottering. Responding to the crisis of liquidity - the availability of money for banks to loan, primarily to other smaller banks and then on to Joe in the street - the Fed dropped the rate by a further 0.75 percent. After weeks of dire financial instability, and months of efforts by Fed Chairman Ben Bernanke to stem the downward spiral sparked by the subprime collapse, mostly by repeated cuts in the interest rate, the question on everyone's lips is one of anticipation: How long will this go on? Perhaps they should also be asking, "How much worse can this get?"

Even the most optimistic forecasts do not exclude the possibility that a recession, or worse, stagflation (high prices on top of no jobs), will go on for many months. Realists will also tell you that unless the legacy of former Fed chief Alan Greenspan, primarily of averting recession by adding cash to the economy through interest-rate manipulation and lax lending regulation, is adjusted to the current international conditions, we are all in for lean times. The condition of the number one economy in the world will obviously affect the rest of the world. But as you watch America tumble into what may be the biggest economic crisis since World War II, from an international perspective, China is the one to keep an eye on.

Let's state the obvious: China is the world's most populous country; on average its economy is the fastest-growing one in Asia; its economy is a mixed bag of reforms and strict state controls; and it is not a democracy. Managing this problematic combination of factors is a complex task to say the least, but more important, it is not something that can go on indefinitely. Moreover, these factors have also contributed to three parallel processes that have matured and are now converging in China at this critical juncture, when the American economy is in a downward spin. The impact of this convergence may mean that the biggest domino in the world economy will also fall over, and this is a crash that will not only be heard around the world, but may also turn bloody.

The first process is the enrichment of China. The opening of the Chinese economy to foreign investment made it part of the global capitalist economy, bringing in billions of dollars from exports of consumer goods and contributing to the emergence of a middle class. The insatiable hunger of the developed world, particularly the United States, for inexpensive Made in China products transformed the country into what is essentially a lender of money. China has the largest foreign reserves in the world, estimated at a staggering $1.4 trillion dollars, nearly 70 percent of which is held in U.S. dollars. Even with the gradual, yet significant, adjustments of the yuan's value during the past two years, the dollar's dive means that Chinese laborers are working harder to sustain the Americans' high standard of living, which for years has relied on borrowed money - not on American production. A financial meltdown in the U.S. will affect China and its accumulated wealth badly.

Secondly, China is constantly in search of resources. The explosive growth of the Chinese economy has made the need for fuel and raw materials a priority, sending the price of commodities internationally sky high. Coupled with the declining value of the dollar, the main currency of international trade, not only are essential commodities, like oil and grain, enormously expensive, but this past year the situation has been exacerbated by growing concerns that climatic changes may result in serious global shortages in basic foodstuffs. This past month alone, the cost of foodstuffs in China rose by approximately 24 percent. Inflation and scarcity, particularly of basic necessities, including heating fuel, is the stuff public unrest is made of.

The third process is socio-political. The decision of the Chinese leadership, since 1989, to increasingly open up their society economically, and allowing it to grow into a significant component of the global economy, created openness on various levels, notwithstanding the efforts of Chinese officials to keep the clamps of centralized control in place. Such controls are impossible to apply perfectly. As such, Chinese society is becoming increasingly unequal, with a growing disparity between classes, and also growing unease, as the public has greater access to information and means with which to express dissatisfaction. Adding to this complex situation are minorities, comprising nearly 9 percent of China's 1.3 billion citizens, whose ethnic and cultural identities have for decades been oppressed in a process the Dalai Lama recently described as "cultural genocide."

Even though China is most often described in the U.S. as a "rival," in great part due to the lack of transparency endemic to its one-party system, in reality it is at this time much more of a partner. Indeed, over the past five years, the two states have been locked in a bear hug: each is too deeply reliant on the other for maintaining its economic ethos that a separation would be detrimental to both. The logic has so far been that the infusion of American dollars into China, and their return to the U.S. for investment (mostly in Treasury bills), is what is keeping the economies of the two countries afloat. What happens if that balance fails? How much devaluation of the dollar can China accept? How will Beijing weather a sustained depression in the U.S., with fewer buyers for its consumer products?

This is a precarious time for a Chinese political system that abhors instability. Will it make an audacious turn and break free of the American financial embrace, risking its economic growth and potential domestic upheaval? Will this not exacerbate the already dour economic conditions in the U.S., forecast to spread elsewhere? We will have to watch and see.
Michalis Firillas
21 March, 2008

http://www.haaretz.com/hasen/spages/966762.html

USAF buying Airbus is a shift that Europe must not leave unnoticed

The U.S. Air Force decision to recommend that Boeing’s arch-rival Airbus be selected to build a fleet of airborne tankers came as a shock to many. Whether the deal for 179 KC-45 aircraft (the USAF designation for the chosen air tankers), worth nearly $40 billion dollars over a 15 year period stays unchanged or not, remains to be seen. Some believe that Boeing will fight this hard, as will Congressmen bent on capitalizing over this ‘violation’ of the ‘Buy American’ motto. Given the thousands of jobs this project will create in the U.S, the fact that 60% of the aircraft will be made in the U.S. and with American components, and that the local partner in this venture is the venerable Northrop-Grumman, the third largest defense contractor in the U.S., it will be very difficult for the patriots to ground this deal. In any case, however one looks at it, this was the right decision and its implications are much more than economic.

From the start this was Boeing’s battle to lose – and it did. Five years ago the USAF was ready to sign a deal for tanker aircraft based on the 767, but cancelled as a result of a scandal that brought down Boeing’s CEO. This only exacerbated the already long overdue replacement of the ageing fleet of nearly 500 aerial tankers in service with the USAF, some dating back to the 1950s. Moreover, the chosen package is better: the A330, on which the KC-45 will be based, is a more modern, efficient, and larger aircraft, which offers greater flexibility in air refueling but is also capable of ferrying materials and personnel without compromising its main role as an airborne gas station.

No less important is what this deal does for Northrop-Grumman and by extension the ability of the U.S. defense industry to meet both qualitatively and quantitatively, the needs of the U.S. armed forces. Created in a merger of two Cold War mainstays of the U.S. aerospace industry in 1994, the company managed to survive further consolidation in the industry when the government did not authorize a Lockheed offer to buy it. The likelihood that the KC-45 contract will grow to as much as a $100 billion deal over the coming years is a major boost for Northrop-Grumman. The reduction of the bloated Cold War defense industry to two behemoths – Boeing and Lockheed – seemed like a natural evolution of a changing security environment. But there is a limit to the kind of streamlining that the defense industry can be allowed to undergo – certainly in light of the security challenges the U.S. is likely to face in the future.

But this deal is most of all a watershed in what it symbolizes for the western alliance. This is the first time in more than six decades that the U.S. has opted for a major, strategic system produced by its allies. Prior to this, rarely and for very specific reasons did the U.S. buy foreign systems, always in limited quantities. Without overstating the matter, there are signs of a new trend – motivated by a new understanding that the U.S. cannot go it alone, whether in Afghanistan or in future challenges. The recognition that its allies can provide the cutting edge technology for a system that is crucially important to American power projection and the ability of the western alliance to safeguard shared interests globally is a change in Washington that should not go unnoticed in European capitals.
Michalis Firillas
4 March, 2008