Khyber Pass Bridge Photo

NATO supply lines into Afghanistan have been cut by a terrorist attack on a key bridge, Riaz Khan reports for AP.

Islamist militants blew up a bridge in northwest Pakistan on Tuesday, cutting a major supply line for Western troops in Afghanistan, a government official and a NATO spokesman said. 

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The United States is Still Sticky

One consistent theme  at the World Economic Forum in Davos was blaming the United States and calling for a new global economic order that doesn’t speak with an American accent. 

Chinese Premier Wen Jiabao said, “The current crisis has fully exposed the deficiencies in the international financial system and its governance structures. Developing countries should have greater say and representation in international financial institutions… [there must be] a push for the establishment of a new world economic order that is just equitable sound and stable.”  Russian Prime Minister Vladimir Putin said, “In order to put the world economy back onto a stable growth trajectory, one imperative is correcting the global imbalance that has arisen from overconsumption in the United States and insufficient internal demand in other countries.” 

Without President Barack Obama in Davos to counter these accusations or lead discussion in Davos, some are wistfully declaring the end of the American era.

But they are wrong.  

In spite of the outrage and real economic problems in the United States, these same leaders will continue to invest in the United States and do little to control their citizens from shifting wealth to the United States. The United States still attracts investment. The US housing market bubble burst, banks are failing, government spending is rising, but the dollar gets stronger. 

In a 2004 Foreign Policy essay, Walter Russell Mead coined the concept of "sticky power," arguing that U.S. economic policies and institutions attract other countries to the U.S. system and then trap them in it.  Alan Binder, an economist at Princeton and former vice chairman of the Federal Reserve, quoted in the Wall Street Journal noted the general perception of the United States has changed, but “not the view of the dollar.” In spite of record deficits and a nearly 11 trillion dollar debt, foreign capital still flocks to the United States. Even with Treasury bills near zero percent, foreign governments and foreign banks still buy. The United States is expected to issue $2 trillion in debt this year. 

The dollar is not simply the national currency of the United States, it is a global currency. Governments hold trillions of dollars in reserve. Commodities like oil are priced in dollars. And several countries, including China, pegs its currency to the dollar. The dollar is sticky

Just as the dollar isn’t going away, neither is the International Monetary Fund. It was less than two years ago that Venezuela’s President Hugo Chavez called for a new global lending system. Riding high on record oil profits, Chavez said, “We will no longer have to go to Washington, nor to the IMF, nor to the World Bank, not to anyone.” 

Yet, the IMF has never been more relevant. Since fall, the IMF has loaned $50 billion to Hungary, Ukraine, Iceland, Pakistan, and Hungary. Japan provided an additional $100 billion to the IMF, which should find its way to Belarus, Serbia, Turkey, and El Salvador. As countries like Russia spend their rainy day funds, it may not be far behind El Salvador asking for a loan to refinance $600 billion in bonds this year. The real danger of this, notes Ulrich Volz, is that this “has given way to a withdrawal of funds from all corners of the developing world.” Consequently, there will be little international capital to assist countries reaching the millennium development goals for countries that are attempting to end poverty and decrease infant mortality. Japan has recognized this problem and announced in Davos its plan to spend at least $17 billion on Asian development. 

While it is easy to blame Wall Street or American-dominated institutions for the recession, it is unlikely that American capitalism will morph to Euro-capitalism. China, Russia, or India is unlikely to create a new international financial system. And no country can economically de-link itself from the United States. Far from ushering in a new economic order, the global recession has illustrated how sticky the United States. It remains to be seen whether the Obama administration also understands how essential the world is to a US economic recovery.

Derek Reveron is a professor of national security affairs at the U.S. Naval War College in Newport, RI. These views are his own. Photo by AFP/Getty Images.

Preparing for the NATO Summit: From Allies to Partners

At NATO’s 60th anniversary Summit in April the tasking will be given to draft a new strategic concept, which will undoubtedly provoke an intense and none too easy debate about the future of the Alliance. When undertaking this exercise, it is important to realize that the context in which NATO operates has changed fundamentally. Accordingly, rather than just improving NATO-EU relations and streamlining the NATO apparatus, more fundamental changes in the organization of transatlantic relations overall are required. 

For some time now, the political center of gravity has been shifting away from NATO to the European Union (EU) and the United States (US). NATO no longer is the forum for political debate between Europe and North America. On many issues direct dialogue between “EU-Brussels” and Washington takes place. Many of the priority issues on today’s agenda are only indirectly related to security and defense. Not only does NATO have little or no expertise on the financial crisis, climate change, energy, and other key issues but  it would also send a strange signal if we would task a military alliance to address them. Furthermore, even with regard to security and defence issues, a comprehensive or holistic approach is required that also integrates the political, economic and social dimensions of foreign policy. And in some cases, like relations with Russia, NATO appears part of the problem rather than of the solution.  

De facto, the Alliance is evolving into a “2-pillar-NATO" in which, next to the individual governments, the EU and the US are the primary level of decision-making. They can wage a holistic foreign policy, from aid and trade, democracy and human rights promotion, to diplomacy and defense. And the EU, unlike NATO, is much more than a mere intergovernmental organization.

Importantly, at the same time a strategic divergence has occurred between the EU and the US, best expressed in their respective strategies.  Reading the US National Security Strategy, the conclusion is that the world is a very dangerous place; reading the European Security Strategy, the conclusion is that the world is a very complex place. This divergence will not disappear with another occupant in the White House, because it is a result not of the Americans, but of the Europeans having changed – the EU has become increasingly aware of its own interests and priorities.  

This double-sided evolution should be reflected in the way transatlantic relations are organized:  

(1)   In a multi-polar world, the EU must have the necessary margin of manuever to interact flexibly with all global actors. Nevertheless, the US will remain the closest to Europe. The EU-US partnership therefore must be deepened, more comprehensive, and more operational. This political partnership must be much more than “summitry." Perhaps permanent bodies are in order; in any case Europeans must speak to the US as EU. Within such a partnership, NATO becomes more of a technical, executive body: if the EU and the US decide to act together militarily, they will use NATO.  

(2)   The primary level of decision-making, including on security and defense, are the two “pillars”, the EU and the US. Increasingly, it is in the EU that Europeans take the primary political decision on whether to act in a given crisis. If military action is decided upon, the secondary decision is to choose the operational framework: the European Security and Defense Policy (ESDP), NATO, the UN, or the OSCE. That choice will always be an ad hoc decision, in function of which partners want to go along and which organization is best suitable for the crisis at hand – reality is too complex for a fixed division of labor to work. If before a European pillar within NATO was talked about, now the pillars are the dominant players. Where the European Security Strategy and the US National Security Strategy coincide, will determine NATO’s new strategic concept – not vice versa.  

(3)   At the EU level therefore, in the context of ESDP, must European military capabilities be further developed, through various forms of cooperation and pooling. This guarantees the autonomy of ESDP, while even fully integrated European capabilities can be deployed for NATO operations if that framework is decided upon for a specific mission. With regard to the EU’s civilian assets, an EU-NATO cooperation agreement can be concluded, providing for full involvement of the EU in planning for scenarios in which NATO would lead a military operation and the EU would lead a concurrent civilian deployment.  

The ball is now in the European camp – is the EU ready to catch it? A de facto evolution towards a “two-pillar-NATO” is taking place, but for the model to work effectively and a true partnership of equals to emerge, Europe must speak, and act, as one.   

Prof. Dr. Sven Biscop, a member of the Atlantic Council's Strategic Advisors Group, is director of the Security & Global Governance Program at Egmont – The Royal Institute for International Relations (Brussels) and Visiting Professor for European Security at the College of Europe (Bruges) and at Ghent University. 

The annual economic summit in Davos did not come up with a magic bullet to solve the world's financial woes, Edith Lederer reports for AP.

Mired in indecision and uncertainty, the world's foremost gathering of the best and brightest in government and business failed to come up with any new plan to stem, much less reverse, the global financial meltdown.

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Who has jurisdiction over alledged war crimes?  A growing number of countries believe they do, Paul Haven reports for AP.

A Spanish judge's decision to investigate seven Israeli officials over a deadly 2002 attack against Hamas that had nothing to do with Spain has renewed a debate about the long arm of European justice.

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Samantha Power, Obama foreign policy advisor who was forced to resign after calling Hillary Clinton a "monster" during the heat of the Democratic nomination battle, will be working closely with Clinton, AP reports.

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A bizarre incident at Davos yesterday, as reported by Katrin Bennhold for NYT:

Prime Minister Recep Tayyip Erdogan of Turkey walked off the stage after an angry exchange with the Israeli president, Shimon Peres, during a panel discussion on Gaza at the World Economic Forum on Thursday, vowing never to return to the annual gathering.

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As governments on both sides of the Atlantic scramble to cope with a global financial crisis most observers are calling the greatest since the Great Depression, the French citizenry seems to be losing patience.

Hundreds of thousands of angry and fearful French workers mounted nationwide strikes and protests Thursday to demand President Nicolas Sarkozy do far more to fight the economic crisis.

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Last week, Kim Jong-il met with a foreign representative, CCP International Department head Wang Jiarui, for the first time since what many intelligence reports believe was a stroke in August.  He "warmly accepted" an invitation from Hu Jintao to visit China and even hinted at working with Obama over nuclear issues.  However, the North Korean dictator has thinned significantly since the fall, raising questions about his deteriorating health and the regime.

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