Annette Heuser, Executive Director, Bertelsmann Foundation 
Dr. Robert Kagan, Senior Fellow, Foreign Policy, Center on the United States and Europe, Brookings Institution  
Dr. Moises Naim, Senior Associate, International Economics Program, Carnegie Endowment for International Peace; Chief International Columnist, El País  
Moderated by Philip Stephens, Associate Editor, Financial Times 

This panel addressed the 2012 Global Trends conference’s core question by featuring diverse opinions on how the West must adapt to challenges of the future, with particular emphasis on US leadership, at a time when power will become more diffuse.

Ms. Heuser underlined the tectonic shifts taking place in Europe but rejected the idea of a post-Western world. She argued, instead, that there was now a “West plus” world in which the United States and allies must engage in a values-based dialogue with the world, debating ideas and paradigms of governance. Dr. Kagan questioned the traditional definitions of the West, noting the United States no longer has a majority of European-descended residents, and that major powers like Brazil, which are physically and even culturally Western, are not included. He further argued that the real challenge going forward is the clash between those who subscribe to the current liberal international order—including the EU, India, and Brazil—and those who do not for various reasons.In response, Dr. Naim offered alternative ways in which the future could unfold, especially if trends like individual empowerment and rapid urbanization amount to a serious erosion of state power across the board. He particularly emphasized that the decline of a major power does not entail the rise of another, but could result in “weakness everywhere.”  

There was agreement that the United States will continue to be a major player in the world, but that there is a danger it will choose not to exercise leadership to save the international order. Emphasis on facilitating regional governance, on renewing the transatlantic relationship, and dealing with the European crisis were further discussed as possible policy priorities.

Transcript

PHILIP STEPHENS: OK, good morning. My name’s Philip Stephens. I’m a writer on the Financial Times. I have the privilege of moderating this panel this morning, so my thanks to the Atlantic Council.
I think this is the session where it gets, sort of, hopefully interesting and hopefully a little bit heated.

FREDERICK KEMPE: As opposed to the previous sessions, Phil? (Laughter.)

MR. STEPHENS: They were educative. (Laughter.) Someone told me that the BBC back in London – Moises told me this – is running as its lead story that the U.S. intelligence community says that the United States is basically finished; it’s all over. So that’s the sort of perspective, I suspect, that –

MR. KEMPE: Well, those are the same people who told us there were weapons of mass destruction in Iraq, by the way. (Laughter.)

MR. STEPHENS: But I think this session actually pulls together the two reports because it pulls together global trends and the alternative future, and it pulls together the Atlantic Council report about U.S. leadership in a post-Western world. And I think the question we’re addressing is really the one that Fred Kempe posed yesterday, which is, you know, does the United States have a second chance, if you like, to shape the global system?

I’m going to just say a couple of things for two minutes and then I’m going to pass it over to our panelists. A couple of thoughts from me. One is, really, 2020 – 2030, which I think is an extraordinarily good report – I mean, I sort of drew two or three characteristics of the world we’re entering. One is that I thought it’s a world that belongs more to Hobbes than Rawls or, given present company, more to Mars than Venus, perhaps. (Scattered laughter.)

Two, it’s one in which the hopes of a sort of – the, expressed by George H. W. Bush at the beginning of the ’90s for a more inclusive global architecture, if you like, are fast disappearing. We’re not going to see reform on the U.N. Security Council; the G-20 has, I think, proved to be a rather ineffectual, damp squid.

The third characteristic is a world – it’s a world in which states are going to be more assertive. The rising powers are very conscious of their sovereignty. They don’t want to submerge it in some rules-based European-like system. And it’s going to be a world in which bits of the 1945 order survived but gradually the fabric gets torn away.

So the question, I think, for this panel is, where does this leave the U.S.? I think it’s clear from “2030” that there’s no other country that can act as a guarantor and a convener of the international system. But can the U.S.? And will the U.S. want to actually do that? I mean, one of the things that strikes me is that in virtually all the dimensions of power, the U.S. is what I call a “self-sufficient superpower.” The questions is, is it going to be a selective superpower as well or a selfish superpower, perhaps? Will it pull back from the rest of the world and intervene only where its own national interest is very, very touched?

So, to answer these questions, a very distinguished panel. You can read their biogs in the – in the agenda, so I’m not going to – get through, but you’ll know – people in this room will know Annette Heuser, who runs the Bertelsmann Foundation; a very distinguished commentator on European and trans-Atlantic affairs. And she will start, I think, by giving us a European perspective about U.S. power in the decades to come.

ANNETTE HEUSER: Thank you so much. Good morning, everybody.

Obviously, it was my dream to be the opening act this morning for Robert Kagan and Moises Naim. And it’s a little bit tough, I have to say, to answer the question about U.S. leadership in a post-Western world at 9 o’clock in the morning. (Laughter.) I mean, usually, you – I would love to do that after a nice dinner with a good glass of red wine sitting in front of the fireplace – (laughter) – but I hope we can accomplish this also this morning at this early hour.

And of course as a proper German I’ve tried to structure my thought in three categories, bullet points. And please bear with me while I’m presenting them.

I think the first point I want to make is that we are witnessing right now the greatest, if not one of the greatest, if not the greatest transformation process in modern history when we look to the European Union right now. We see that these 27 member-states are struggling deeply to hold this club of 27 together, and 17 of them are even in greater trouble by trying to consolidate the way they work together fiscally when it comes to the joint currency, the euro. And at the same time, we see that also this side of the Atlantic is struggling deeply. So we see that neither a supernational concept like the EU nor the ultimate nation-state like the U.S. is able to deal with these tectonic shifts that we are seeing worldwide occurring here.

And it’s quite clear for me that one of the key reasons why both sides of the Atlantic are struggling so much right now is that we lost our values-based narrative in the last decade. And I think there can be no doubt that Europe and the U.S. are still the core of what we call the West. The concept that was invented 500 in B.C. in Ancient Greece where values like democracy, the freedom of the individual, human rights, but – believe it or not – also capitalism was core of this concept.

And the second point I would like to make, that it’s quite clear to me as a European working and living here for almost five years right now that the U.S. has not fully employed the concept of the West in the last years. First and foremost, not in foreign policy. Only recently, Hillary Clinton gave, from my point of view, a very remarkable speech in Dublin that was called “Frontiers and Fault Lines,” where she addressed the issue of the necessity to having these kinds of universal values that are part of the West as part of the foreign policy of the U.S.

And when you take a look at this very, very intriguing NIC report right now, I would say there is not much that is going in the favor of the U.S. I mean, we have widespread aging, shrinking middle class. I think most of you read this amazing book by Joe Stieglitz where – “The Price of Inequality,” where he addresses the impact that a shrinking middle class can have not only on our economy but more severely on our democratic systems in Europe and the U.S. We have a gloomy economic outlook and declining defense budgets, and one of the only game-changers that the NIC identifies is growing energy independence of the U.S. – in particular our shale gas – and of course the never-ending hope that this country will still be a hub for innovation.

And reading that as a European, I was thinking, really, is this the only thing that is going in favor of the U.S. – growing energy independence? I wouldn’t say so. My argument is that one of the biggest assets in favor for the U.S. in the future is its potential to use the concept of the West more fully domestically but also abroad. And I’ll give you two examples because the times couldn’t be better for that.

We see if we look around the world right now that democracies are in decline. It seems that the concept of democracy is not very fashionable anymore not only if you look to the pure numbers of democracies but even more so if we take at the look – a look at the quality of our democracies. And here we see that the quality of democracies in Europe – first and foremost, Southeast Europe – in Hungaryia (sic), in Bulgaria and Romania is heavily affected, and Latin America, but also I would say here in the United States.

The second point is when times couldn’t be better for the U.S. to fully employ the concept of the West is that if we look around the world and see emerging powers – the big ones like India and Brazil – they have an intense debate going on – and, of course, Moises can elaborate on this more eloquently than I do – among their intellectuals, among their political class, where their countries are going. It’s part – the discussion about if they are part of the West or not is part of their identity-shaping process. And I think it’s important for us in the U.S. to recognize that there is an opportunity here to engage in this debate because the issue where these countries are going will be vital for the international world order, first and foremost, where international institutions like the U.N. will go.

So, to conclude, my third point would be that I highly reject that we are living in a post-Western world. And I hope the Atlantic Council is not kicking me out of their board because, of course, they have all the rights and reason to come up with this kind of title and label, “post-Western world,” which is from my point of view a very easy label to put on the current times right now to take a grasp of where history is going. But I would say we are far away from living in a post-Western world because I don’t like about this concept that it has this connotation that we are done with the West; that we have fully explored what the West is standing for; that we have fully digested the meaning of the West. This is far from being the case. The opposite is true.

I think the U.S. has an amazing opportunity on its hands to do what Philip just said, and also Fred Kempe addressed yesterday in the opening panel, by saying the U.S. has an amazing opportunity to become this convening power, I would say, for a values-based dialogue worldwide right now but also, of course, a convening power for security dialogue, for economic dialogue. But this opportunity to become a convening power for a values-based dialogue where we, the West – Europe and the U.S. – are defending – are defending our values-base and trying to make the case for it could never have been better than right now. And therefore I would say we are not living in a post-Western world. We are living in a world that I would like to call “the West-plus.” The West – Europe and the US. – trying to engage with other countries, with other concepts worldwide and trying to make the case for our Western values.

Thank you so much.

MR. STEPHENS: Thank you for a very powerful argument. One, we shouldn’t be defeatist. And, two, we should reassemble our – and rebuild our confluence about – around a values-based West. So, I’m going to turn to Robert Kagan, who you’ll all know as distinguished scholar, former public servant, author most recently of “The World that America Made.” I think pretty much an optimist about the U.S., if I’m not mistaken.

Robert.

ROBERT KAGAN: Thank you, Philip. And, well, I think that I’m reasonably optimistic because – and by the way I don’t read the NIC report as very pessimistic, and I was struck by the assessment that the United States will remain a preeminent power if not a globally dominant power. And my only question on that analysis is when were we ever that dominant? My reading of history, even beginning in 1945, is that, yes, the United States was preeminent; it had great capacities; it accomplished tremendous things in some parts of the world, particularly in Western Europe. But beginning right away it was also – had tremendous failures, particularly in Asia, where I think, you know, it’s very hard to look at the first decade of the – of the Cold War and look at what happened in Asia as a great success from the American point of view. And you can go through every decade. I don’t think we were globally dominant during the Vietnam War; we weren’t globally dominant in Lebanon in 1982; we weren’t – we certainly weren’t globally dominant in the 1970s when our two closest allies in the Middle East launched an oil embargo, which basically destroyed the American economy. So, we sometimes have an overly rosy view of the past and look at the present invidiously.

My view is that we are today more capable of shaping the world than we were at some points in the past and less capable than at other points in the past. And looking forward, I do think the United States enjoys some very great advantages compared to other power. And I think that the – that the Global 2030 report reflects that, and I think it’s right.

I have a – I have a little bit of a problem with the whole Western – or, the whole term “the West,” and with the idea of a post-Western world because, for one thing, the United States is not really going to be – I’m not sure it already anymore is – a Western power in the sense that we don’t have a majority of European descendants anymore in the United States. I think we have a majority of people coming from other parts of the world. But my question is why is Brazil not in the West? Like, what did – what did Brazil do to deserve not to be in the West, exactly? (Laughter.) You know? Its traditions are Western; it happens to be in the Western Hemisphere, for goodness sake. I mean, I don’t know – I don’t have a Brazilian response to how they got excluded from the West.

But it – more broadly, I think that what the United States has been about, and what we should be caring about going forward, has not been supporting “the West.” It has been supporting a liberal international order – an order that reflects liberal political principles, liberal economic principles and liberal principles of interstate behavior. And in that regard, when I look at countries like Brazil and India, I see them as being part of that liberal order, not apart from it. I think the real challenge going forward is the challenge between those who support and want to maintain this liberal order in all its many manifestations and those who clearly, for a variety of reasons, don’t favor it. And I think, you know, in the case of China, China sort of favors some of it but not others of it. And that – and that’s going to be part of the challenge.

But, you know, the “rise of the rest” that everybody talks about – you need to differentiate among who “the rest” is in order to decide what its impact is on the United States. The most important “rise of the rest” in our history was the rise of Germany and Japan. The United States had 50 percent of global GDP at the end of World War II, and within 25 years, it was down to 25 percent of global GDP partly because of the redistribution to American allies. So, I don’t know that that actually counts against the United States.

So, you know, looking forward, it seems to me – and I do agree with Philip’s characterization of what the world is going to look like in terms of – and I guess which is partly borrowed from the 2030 report, which is an America that’s still preeminent, but a world in which the liberal order is fraying. And this is where I worry about the institutions that currently exist of the liberal order, like the EU. And I think it’s very important that the EU is successful. I think it’s very important that the United States and others – not just Europe – Japan, India support these principles in the arenas in which they’re challenged, which is an economic arena, which is in an – on the Internet openness, freedom of information and in general in supporting these principles which bind nations together regardless of their geographical position. I think that’s really the challenge.

And just one final word about leadership. I think we need to recognize if we don’t already – “leadership” is a funny kind of word and we need to be careful about it. The world is not really looking for American leadership. You don’t see a lot of people saying we wish America were leading. What the world is looking for from the United States – and it’s not the world, individual states look for protection; they look, in some cases, for the ability to organize. I mean, if you take the Syria issue which is before us right now, what people are waiting for is for the United States to step up and start pulling everyone together. And what’s been missing has been the United States playing that role, for whatever reason it’s been. And this gets to my last point.

Right now, the United States is underachieving, in my view. It’s not that we’re incapable of playing this role today and in the future. We are choosing not to play it in the case of Syria, for instance. There is nothing preventing the United States from assuming a leadership position on the issue of Syria except our own decision not to. And this is where I think – and, again, I think this is a challenge that the 2030 report makes to the United States – is is it willing to play this role?

Now, judging by the history of American foreign policy, if you go back from – to 1945 and onward, you would say, yes, by and large, the United States will continue to play this role. But there certainly have been periods – and I’ve been studying one of them very closely – the 1920, for instance, when the United States has not been willing to play that role.

Now, my view is the American people are not the same people that they were in the 1920s and that still the experience of the 20th century is enough with us and, I would say, reinforced by events subsequently, including Sept. 11th – that the sense that the United States could possibly withdraw from the world is just – I think it’s too widely rejected. And if you look at the political system in the United States, those candidates who recommended with pulling back and retrenching in any serious way have had no traction in the American political system. Not in the Republican Party and not in the Democratic Party. They exist – those arguments exist, but if you look at the mainstream candidates who have any chance of success, they have rejected that view. So the challenge is whether the United States is willing to play this role but it – keeping with Philip’s assessment of me, I’m optimistic that it will be.

MR. STEPHENS: Thanks very much. Call a range of issues for people, I think, to discuss here that the line is between liberal and illiberal approaches. We could perhaps have a more inclusive – to marry the two contributions. We could think of the West as important but a more inclusive West that includes Brazil and perhaps India or – and others; a West that defies geography in that respect. But also the fraying of the international order, which I think is my – personally, is quite important, and only the U.S., it seems to me, can actually regenerate or rebuild an international order.

But, our last panelist – again, everyone knows Moises Naim: distinguished scholar at Carnegie, chief columnist, thinker, El Pais, and many other things. Moises.

MOISES NAIM: Thank you, Phil, and thank you for the invitation.

So, yesterday at 9 a.m. I had an experience that I didn’t know was going to be so closely related to where I was going today at 9 a.m. So, yesterday morning I was in London, talking to a group of hedge funds – managers – about 2013 and beyond, and what was coming and all that. And I was impersonating Bob Kagan. (Laughter.) By that, I mean I was very, very optimistic about the United States in 2013 and beyond. I talked about the notion that I persuaded that the country is recovering and we’re going to see an even stronger recovery next year. All we know about what’s happening in the oil industry and the shale and the boom that that’s going to generate and the impact on the balance of payment, that I don’t believe we’re going to go down the fiscal cliff – all of that. And so – and you know the numbers and I have the long list of the good-news kind, of the glass-is-half-full story of what the United States is going to look like in years to come, without ignoring all of the glass-is-half-empty kind of list that we all know also.

In the middle of that, though, after – so, a couple of the individuals there – very knowledgeable – raise their hands and said: How can you say that if the American intelligence community says that the United States is going to hell, that it’s in great decline, that all the powers are going to challenge it? And I said what are you talking about?

And he – of course, they were talking about this report. So, it happens that I have been close to the report for many years and Matt Burrows has been kind enough to share with me his thoughts. And of all the reports over these years, I think this is the best one. I really like this one very, very much. I also liked very much the insight that Matt and his team had when they did an evaluation of prior reports. They tried to understand where did they get it right and where they did not get that right. Most of the mistakes, they concluded – they concluded that most of the mistakes they made was in underestimating the speed at which some of the things they got right happened. So when they got things right that they were correct in anticipating happened at a much faster speed. And I think when you read this report, this edition, keep that in mind. This has – may have a bias towards having an evolution of the variables that – at the pace that it’s – may be slower than what actually happens if that same bias that they found in prior reports was correct.

So, then I explained that I, like Bob and others – I don’t read the report at all in the – in that way. But, however, if you read the newspapers and the coverage and, in fact, I then watch the BBC and it says, the American intelligence community is anticipating that the United States is in – is declining, and others are going to take – replace it and so forth. And all the newspapers – the New York Times – very intelligent, very savvy, knowledgeable reporters are saying this. And I think that that reflects a very fundamental idea that I think hinges on the conversation today. And that idea is that it’s impossible for someone to decline without others to ascend. But what if we have entered a period, an era in which it is possible for everyone to decline? What happens if power gets more diluted, more dispersed? What happens if power doesn’t buy you as much as it did before? What happens if it is not absolutely true that if the United States has more constraints in its ability to project power and exert power internationally? That doesn’t mean that China will fill that vacuum. It may be that the mantra in years ahead is weakness everywhere. Maybe that’s the title of the next NIC report. (Laughter.)

I’m not saying that countries and nations will not be power and will not exert influence. I would – I’m not saying – I’m not naïve enough to say that if there’s a vacuum, others and whoever can fill that vacuum will not try to do it. I’m not saying that, of course, the United States is and will be more constrained in years ahead for a variety of reasons. More constrained than what it was in the past. But I am saying that the others are going to be as constrained or more than the United States. Assuming that China is going to continue to expand in the same way without accident; that China will not have a growth-constraining, growth-hurting kind of accident is a huge, heroic assumption. Assuming that everyone else would essentially continue to expand their capacity to project power – military power – internationally, it’s also a heroic assumption. So the essence of my reaction is that the way to look at this is to try to abandon the notion that if someone or some nation is going up – is going down, that means that others are going down.

MR. STEPHENS: Moises, thank you for a fascinating series of insights. It often occurs to me that all high school students before going to college, and all journalists before being allowed to write a news story should be required to write an essay on the difference between relative and absolute power – (laughter) – and explain it. It’s amazing how people still don’t seem to understand that basic difference. And of course, your “decline everywhere” is a theme of “2030” in the fact that there’s a dispersion of power away from states. And it seems to me that one of the sort of paradoxes of our age is that people are looking to states to protect them from the insecurities of globalization – economic as well as physical. But states are getting weaker because of globalization. And that, to me, is a bit dangerous because then that’s where – that’s how you get nationalism that you get. That’s why I think, sort of, institutions – though it’s on its back – like the EU still have some importance and relevance in trying to deflect this.

But I’m going to – I’m going to shut up now and open the floor. There are two conditions for contributions. One is that you state your name and affiliation, and the second is that you’re provocative and challenging in your questions and comments. And you could be rude about the United States, rude about Europe. It’s very easy to be rude about Europe at the moment.

MR. NAIM: But not rude about the panel.

MR. STEPHENS: (Chuckles.) But not rude about the panel.

Who’d like to be first? No one wants to be provocative.

Yes, just here.

Q: Good morning. Thank you for taking questions. My name is Walter Dublin (sp) Global Enterprise. Now, can you explain it why the nation and national debt and individual debt is equal trouble for everyone? National debt as well as individual debt, it will be equal for – trouble for everyone.

What I mean is we have in Japan, United States, Europe, every nation is debt. They have a financial crisis. And I observe also that individuals are also in debt. In Washington, D.C., area alone, there is about 20 percent of $20,000 in debt. They’re not allowed to pay by credit cards, by other means. So, how can you explain? How can you fix that, the troubles with financial debt?

MR. PHILIPS: Thank you. I’d like to try and take one or two other contributions – right at the back there – and we’ll – and then we’ll come back to the panel. But, we’ll mark that down. We’re sinking under a mountain of debt is our first.

Q: Thank you. My name is Martin Ortega, from Royal Institute, Madrid. In Europe, we have very worried about the – Obama’s new policy on Asia. And the United States is an Atlantic power and a pacific power, but Europe cannot afford to be a global power. Europe interprets the whole world through the United States and through the Atlantic alliance. So, the question is mainly to Bob. Do you think that the Europeans should be worried about this new policy that Obama declared? This new Asia policy? And then he balanced that policy with every affirmation of the Atlantic alliance. But we Europeans, we think that the United States is increasingly looking to Asia and increasingly disengaged about our own worldview. Do you think that the Europeans should be worried about that? Thank you.

MR. STEPHENS: OK. Any others? Yes, one here.

Q: (Off mic.)

MR. STEPHENS: If you’d just wait for the mic, sorry.

Q: My question is – it’s in part directed to Philip, too, if I may. It’s about the U.K. Can you explain where the ambitious head of UKIP and Boris Johnson and the Tory euro skeptics think they’re taking the U.K. if they go ahead with this sleepwalk toward the exit from the EU? Where will the U.K. be in a couple years, let alone 2030, if it’s not inside Europe?

MR. STEPHENS: OK. So we’re going to take – we’ll take – thank you. We’ll take those three. Mountains of debt; should Europeans be worried; and is the U.K. drifting off the map of Europe? We’ll start with Moises’s first and then we’ll – (off mic).

MR. NAIM: So, the first one about the debt. Historically, when countries are great indebted, there are just three ways out: growth, inflation and what we call “financial repression.” And that is a much more activist role of the governments to direct credit and control capital flows and all sorts of regulations. And typically what happens is that you end up with a combination of the three. So, that’s the first – the first part of the answer; is you’re either going to get inflation or you’re going to get growth or, more likely, in my judgment, you’re going to get more financial repression.

Second, it’s very important to understand that not all debts are the same. It is not the same if everybody is indebted in your own currency. It’s very nice to be – if you are the United States, it’s very nice to be indebted in U.S. dollars. If you’re Greece, it’s not that nice to be indebted in euros. So, not all debts are the same, and that is a very, very important detail.

And, yes, the theme of the debt – and it’s not just the debt. It’s the consequences of debt and what you – countries are doing to manage that and deleveraging and restructuring. What is that having on growth and employment? And what growth and employment is doing to politics is going to be with us, especially with Europe, for a long period. It’s very important to note that this very difficult situation is highly concentrated in Europe. The United States does have a very important debt situation but it’s – for a variety of reasons, it is not as desire as it is the European one, which brings me to: Should the Europeans worry about the pivot, about the Asia emphasis?

Now, in the long list of things that the Europeans should worry about, I would not put that at the top – in the top 10. You know, there are many other priorities and many other themes that should concern Europeans. I understand that a pivot would impose – a pivot to Asia would impose more requirements in terms of Europeans’ defense expenditures. And we’ll create a new defense and security reality in Europe. but, again, if you need to look at the triage – if you look at Europe from a triage perspective – meaning, you know, I need to do 20 things, but let me just pick the ones that are really, really important. I would not put the American pivot to Asia among the top ones.

And as for the U.K., I sympathize with the tone of the question and with the question. I do believe that it would be catastrophic for the U.K. to start moving away in very fundamental ways from Europe.

MR. KAGAN: Well, I’ll skip on the debt question. But on the U.S. – on the pivot issue, you know, what the Obama administration didn’t say – but meant – by “pivoting” was that they were pivoting to Asia away from the Greater Middle East. I mean, that’s what they were really talking about. And it’s unfortunate Europe found itself feeling like it – they were also pivoting away from Europe. Now, in my view, the Obama administration has not been paying very much attention to Europe anyway, even before announcing the Europe. They paid much more attention to Russia in the first term and they don’t show a lot of sign of paying much attention to Europe in the second term. Now, part of that is the good news. The good news is that Europe is not a major crisis area. I mean, it is economically but it’s not strategically. And since the United States has nothing to offer the Europeans anything economically, really, except our brilliant advice – (laughter) – which the Europeans seem very eager to take – (laughter) – strategically, this is the great, wonderful aspect of what’s happened in Europe. It’s not a dangerous place.

Now, on the larger question of the pivot, if I was recently in the Middle East where people are more legitimately concerned about the idea that the United States is losing interest in a part of the world that that United States cannot actually escape, the whole notion of a power like the United States pivoting is flawed. The United States is what it is because it has played simultaneously a key security role in three major theaters: one in East Asia, one in Europe in the Atlantic region, and one in the Middle East and Persian Gulf region. And unless the United States has now got a new plan for the world, it has to continue to do that. And I must say I was struck by the irony that as the president headed off to Southeast Asia with the secretary of state, no sooner they arrive there than the Gaza conflict breaks out. They spend all their time talking about Gaza and Secretary Clinton has to go running back to the Middle East. So, so much – so much for the pivot.

I think that, you know, the larger problem that we’re going to face is that even in terms of the pivot, what certainly – part of the pivot is trade and engagement, which I think they’ve been doing very well. But at these – in these particular times, people are looking for a military component to that as well. And if you consider the continuing tasks in the Middle East and the Persian Gulf and probably increasing tasks as well as the desire to provide reassurance in the East Asian theater given our budget situation, that’s where we’re really going to be facing real pressure.

I just want to say one word about the U.K. I mean, in the years of the now-detested Tony Blair, the – Britain was in the remarkable position of having a very good relationship with the United States and a very good and somewhat influential position in Europe. Where Britain is today is that the United States has downgraded substantially its interest and relationship with the U.K. It doesn’t have a particularly wonderful relationship with the U.S. and it is an increasingly bad relationship with Europe. Now, this would be one thing if Britain were a rising superpower, but since Britain is not, it seems the overall effect of this, unfortunately, has been to increasingly – I guess this is kind of – it’s not a good phrase – but increasingly diminish the U.K.’s influence in the world, and I think it’s much to be regretted. I think that the Blair approach of having a good relationship with the United States and an influential part in the European Union was the right approach for the U.K.

And all my friends on the conservative side of the U.K. spectrum hate me whenever I say that. (Laughter.)

MR. STEPHENS: And, should Europe be worried about the pivot? And particularly, as you say, if you – you know, if you want to recreate the West as a – as a values-based organization, does the pivot to Asia undermine that?

Also, I’d like to pose a slightly, sort of, question relating from your own comments that, you know, Europeans in my respect – and I’m a – I count myself, oddly – although I’m a Brit, I oddly count myself as a European as well. You know, when the U.S. in the, sort of, Bush years was stomping around the world, creating some havoc in different places, we all complained about the U.S. stomping around the world, and said to them why don’t you just get back?

MR. KEMPE: And now you’re nostalgic.

MR. STEPHENS: And now – (laughter) – and now that – now that President Obama is saying actually, we’re going to be far more selective – (laughter) – in where we intervene, we’re all waving our arms saying, hey, come on, you’re supposed to be leading here. (Laughter.)

But – and we’re all cutting our military expenditure dramatically, and that’s another thing that Britain is going to do again very shortly. If we want this West, as it were, and this refurbished Atlantic alliance, don’t we have to – we, as Europeans, have to contribute not just to values side but to the – can I say, the Martian side of this by actually putting some security on the table?

MS. HEUSER: No, absolutely. Let me first start with this pivot-to-Asia question. If the Europeans would be smart right now, they would see that as an amazing opportunity in shaping their position towards Asia not only in economic terms but also in security terms together with the United States. Not that we are agreeing on all terms, but this is an amazing opportunity and it would also provide, in particular, a country like Germany that is not well-known for its foreign policy and security policy but first and foremost for its geo-economic policy to change a little bit the narrative of its – of its outreach to the world here.

But unfortunately – and, here, I have to also disagree with Mr. Robert Kagan when it comes to the Euro crisis and its problems – the Euro crisis is not only a fiscal crisis. It’s a deep-rooted political crisis that has enormous power to bring this entire European project – the big-peace project – we just received yesterday the Nobel Peace Prize; we shouldn’t forget about that – and tore it apart. And therefore I would make the argument that the Euro crisis needs to be at one of the key issues that this U.S. administration is paying attention to right now because it can cause some real security issues and balances in Europe, and therefore it needs to be addressed more aggressively. And you can ask the question isn’t it time for the U.S. also to have more skin in the game when it comes to solving the Euro crisis? And the position of this administration was in the IMF, eh?

So – and when it comes to Europe’s foreign-and-security policy, the drama around the euro crisis is that, unfortunately, solving this crisis is taking all of the oxygen out of the room to discuss the joint foreign-and-security policy or anything else. So, therefore, unfortunately, the great call of Robert Gates when he went to Brussels before he left office – you know, really trying to give Europeans a wake-up call to spend finally the 2 percent of their GDP for defense – for defense courses – will not be answered any time soon. There is no political will right now to go forward to really build a foreign-and-security policy. And this will cause in the future not only problems in Europe but even more so, I would say, here in the United States.

MR. STEPHENS: OK. I’ll add one word on Britain and Europe, which is I think it’s entirely plausible – well, first, I agree entirely with Bob in his analysis. Second, I think it’s entirely plausible that within the next five to 10 years, Britain will have left the EU and Scotland will be in the process of leaving Britain as a consequence of that. So it really might be “Little England.”

There’s only thing that – there’s one thing that could persuade the Scots to leave the United Kingdom and that’s the idea of being tied to an England that’s detached from Europe. And I think there are lots of structural problems here and history and, you know, the fact that we genuinely don’t want to be part of the eurozone sort of economic governance. But there is also – the conservatives are afflicted by their own “Tea Party syndrome,” I’m afraid. And to be a conservative MP these days, you – to be selected as a candidate, you have to swear an oath to be anti-European. And David Cameron, who is a moderate Euro-skeptic – he’s not, you know, a great fan of Europe, but he’s a practical man – is being driven by, if you like, the European equivalent of the Tea Party.

Matt is asking for right-of-reply. I’m going to take – I’ll take – this is going to be the last session and I’m going to take as many as I can, and then come back for a last – a last go with the panel. So, yeah. Wasn’t it you? It was you. Yeah, Matt –

MR. KEMPE: Yeah, but he needs a microphone.

MR. STEPHENS: Ah, yeah, sorry. Sorry, yeah.

MR. KEMPE: Right here.

MR. STEPHENS: And then we’re going to come back.

MATT BURROWS: I want to bring a – actually, it’s not a right-of-reply, it’s more of a question. I wanted to bring the conversation back to Anna’s (sp) point about a Western-plus, or, a West-plus, and also I think Bob also mentioned this larger liberal order and just – and trying to be provocative, ask the question: What’s in it for the Brazil, Indias and others? I mean, we had an interesting section with the – some Brazilians. You know, they do philosophically see themselves as part of the West. But they also explain that, look, we’ve – do this very complicated analysis all the time, figuring out just how far we can get away from America so that we don’t actually get thrown into the pariah list, but we then don’t get too close to America because of what that means is that you’re expected to actually step up to the plate and, you know, shoulder some of this burden.

And so if you’re thinking about, in Philip Stephens’s analysis of a more selective America, can you think about these other states that can be selective, too, and take kind of an à la carte approach to what bits in the liberal order obviously benefit a lot of that on the commercial economic side and what bits that they don’t actually like, so that we’re kind of going into this world of – and we had a scenario one time we entitled “fragmentation,” which is basically that there’s no liberal order but there’s no illiberal order either, particularly. There’s no order.

MR. STEPHENS: OK, thanks. Here and then – and then two rows back there and then, yeah.

Q: Thanks. I’m Garrett Mitchell and I write the Mitchell Report, and I want to – I should probably say that on day two of this conference, I’ll admit to not having yet had an opportunity to work my way through the NIC, so if this question, you know, makes that abundantly obvious, you can move onto the next question.

I want to raise a question again about the subject of governance and in two realms. One is nationally and supernationally, which is to say the U.S. and the EU, where I think it’s fair to say governance is not having its best days in either realm, but that’s a way of asking a question to Bob Kagan about whether I’m misreading the history of the U.S. But, point number one would be – it looks to me as though – that we are, for a variety of reasons – some of which we’ve talking about at this conference – governance is having a hard time in the U.S., in the EU, and elsewhere. And then – and then on a larger scale is the question about global governance and the institutions that served us well for some period of time and which people generally agree are not doing quite so well now.

So the question for the panel is – your observations about and your sense of optimism or pessimism about the capacity for us in a – in a Western-plus world heading to 2030, whether these governance challenges are significant enough to make some of the observations in the NIC off-course or whether I’m overdoing this issue to begin with? Thanks.

MR. STEPHENS: Thank you. The gentleman four rows back on this side. Oh, sorry.

Q: Thanks. Chris Nelson, the Nelson Report. The gray-haired personal report caucus. (Laughter.) My report – been going on for about 26 years now – is very Asia-focused. My clients are all Asian. And I just wanted to say a couple things about the pivot and then ask a question. They don’t ask me about Europe except more recently, what about these FTAs you guys are doing.

You really got our attention and their attention with the FTA with South Korea, for example. The recent relative optimism about starting a U.S.-EU FTA that we know Mr. Froman supports – and he may be the next USTR – you know, that’s got their attention. There’s a lesson there, and that is when it looks like you guys are being – are economically engaged in Asia, they pay attention to you. Obviously, we’re not going to see the Royal Navy or the German navy steaming through the East China Sea any time soon, but one of the things you always need to remember about the pivot is there is no NATO; there is no EU in Asia. In many ways, we’re it; we’re the balance there. So don’t lose track of that.

They also notice that the pivot is – exactly as Bob Kagan says – is more about the Middle East. And they worry about that, of course, because that’s where they get their oil. However, my question to you: It’s a great report. We’ve all had a chance to at least glance through it. But I think it has so many things in it, the tendency is just pick on the one thing that, oh, OK, this is what I’m hung up on. And I’m really struck by yesterday’s NIC focus on global warming and the climate and all – and it’s in some ways an octopus. It has fingers reaching into everything else. If the sea level goes up or if we’re losing coast lines; if there’s a water crisis or there’s food wars, all these other discussions become subsidiary to that. So, can we perhaps focus a little bit on what could be the mega trend for this century, and that is, what global warming is going to do that affects everything else we’re talking about. Thank you.

MR. STEPHENS: Well, we’re running out of time. I saw a couple of more hands up. But if – 30 seconds each for a sort of short comment or question. This gentleman and then the gentleman on the other side a few rows back.

Q: Barry Hughes from the Pardee Center at the University of Denver. And actually my question is a little bit related to the one over here because I’ve been struck in our discussion around U.S. leadership at the focus on the relative power of the U.S. and other actors, the West versus the East. But the question that’s been going through my mind is leadership with respect to what? What are the key issues that we are looking at over the next 25 years? Has the NIC report gotten those right, and how tractable or intractable are they with respect to leadership? The NIC made a – the fairly striking statement in Global Trends 2030 that we’re not going to be so worried about Islamic fundamentalism by 2030 – a potentially challengeable statement in and of itself in terms of the issues that we’ll be dealing with. The issue of climate has been raised. Obviously, the rise of China is an issue in the power context. But what are the key issues that are facing us over the next 20 years and how tractable or intractable are they?

MR. STEPHENS: Thank you. Finally, the gentleman a few rows back there on the other side.

Q: Chris Steinitz from CAN’s Center for Naval Analyses. I just wanted to press on a term that has been thrown around a little bit yesterday and in today’s panel of the United States having convening power or being a convening power. What does that mean, exactly? If we’re entering an era where I don’t think anyone will deny that the U.S. has influence but its relative influence compared to others is less, what does it mean to be a convening power if we can’t actually rally people to take action?

And at the risk of making this – I don’t want it to be a Syria-oriented question, but look at Syria. The U.S. is engaged in convening people in various ways but Russia doesn’t want to do anything, China doesn’t want to do anything. Various regional powers – Turkey, Israel, Saudi Arabia, Qatar – do want to be involved, all in different ways. If the United States can convene parties, what does it actually mean to have convening power if no action can be taken after that?

MR. STEPHENS: OK. Thank you for that array of questions. Just to the last one – it seems to me that to be a convener, you’ve got to be committed as well. And that’s the key – that’s the key point. But I’m going to give the final word to the panel. We’ve got from questions ranging from why shouldn’t the rising states be selective in their buy-in; what about governance is – don’t we need to refurbish national as well as global governance? Climate change being overarching perhaps – mega-trend game-changer. How tractable are these serious problems; and we’ve got, what does it mean to be a convener? So –

MR. KEMPE: We have until 11:00. (Laughter.)

MR. STEPHENS: I’m going to leave it to each of you to choose one or two of those – (background noise) – we can have some coffee. And why don’t we start in reverse order? So, we’ll go to Moises first.

MR. NAIM: One of the things that this NIC report does very, very well, and is very persuasive, is depicting a future where a lot of problems are beyond the ability of any one state acting alone to do anything significant. The number of issues that they mention – from climate change to – there’s a long list of problems that transcend even the most powerful countries in the world.

And that then brings us to the issue of global governance that several of you have raised, and then the issue of leadership for what if you cannot act in terms of problems that transcend the nation-state? And there, we have seen for a while now a situation where the demand for global public goods is soaring and the supply is either stagnant or declining. In economics when that happens, you have inflation. When the supply is much larger than – and the demand is much larger than the supply. In security, instead of inflation, you have a security de-stability and a lot of human suffering. And that’s what we have. That’s the biggest deficit in the world today is not the debt, it’s not the fiscal deficit. It’s that the gap is the deficit between the supply and demand of global public goods. And that then is predicated in the notion that a bunch of countries – 190 countries – get together and act and decide, and the United States is the convener and is a rallier of nations. And that is not happening.

When was the last time that we heard that a large number of countries agreed on anything substantive? Well, not recently. It was probably the WTO, and we have seen now a pattern where we also see names of cities with failure. We have Copenhagen and Oslo and Kyoto and all of those things in terms of climate change. We also see it with summits that don’t really deliver on the need.

I have been advocating for a while the need to move the world what I call “mini-lateralism.” Given that multilateralism doesn’t work, why don’t we identify the least – the smallest number of countries that have the largest impact on a problem? And if you do the list of what are the major problems – pick any important global problem and you will see that the number is under 20. Less than 20 countries account for 70 (percent) to 80 percent of the problem. So bring them together at the table and try to generate something going there that is – that will enhance the democratic deficit, that will create all kinds of protests by those that are no part of the countries that are involved. It has all sorts of very negative and potential criticism but it’s much, much better than doing nothing, which is what multilateralism has taken us today.

We have a whole slew of highly threatening problems that we know that are going to become more acute, that we know that we need to act, and then nothing happens. And nothing happens because multilateralism still looms large. And the need for more formal, more active, more aggressive mini-lateralism, I think, is called for.

MR. KAGAN: Well, let me just take a couple of questions. I was – I was struck listening to Matt’s description of Brazil trying to be – how far being – it could go being anti-American while still sort of being in the club. And I thought you must be talking about France. (Laughter.) And that’s not a joke, actually. I mean, if you think about de Gaulle’s policies including leaving NATO, the point being, again, let’s not – let’s not have an overly fantastic view of what alliances have ever meant, especially when you’re dealing with democracies.

Now, it’s true that the degree to which the European allies and Japan during the Cold War were very heavily and directly dependent on the United States for their very survival, it is remarkable that France tried to achieve the independence it did under that scenario. But, of course, they would – they tended to be a little bit more aligned with the United States. And Brazil doesn’t have that situation. India may have that situation to some extent. But I think that what we should be looking for is not countries moving in lock-step with the United States. It is that in their own way they do support the liberal order.

Now, the question is does Brazil have enough of a stake in the liberal order to actually support it? I’m going to guess yes, ultimately. Now, being in Brazil means that you live in the Western Hemisphere which means that you hate the United States, and so there’s going to be an element of that tension. And both Brazil and India are in the process of choosing whether they want to be a post-colonial state or whether they want to be a great power, a great democratic power standing on their own. I think if they maintain their current position, the post-colonial aspect of their foreign policy will diminish and the great-power democracy element of what they could be will grow. But, again, it’s wrong to assume that they’re ever going to do whatever we want to do – want them to do. But that’s just not the nature of the beast in any case. So, I’m not sure that that’s as big a problem as some – as people like Charlie Kupchan suggest, for instance.

Let me just say one word about the convening thing. I totally agree that convening, I mean, you know, is not just a matter of, you know, providing the room and the coffee. And I don’t like the word “convening” because it sort of implies there’s some kind of neutral activity where you just kind of bring everybody together. I mean, you – but the United States does have the capacity – when it decides that it wants to do something, it does have a unique capacity to pull different folks together who might have disparate interests, who might – and who might not by themselves be able to work out a way of moving forward. The United States could do that. And you see the situations – you know, the difference between the United States addressing the Balkan problem in 1993 versus the United States addressing the Balkan problem in 1995. The problem was the same, the players were the same; the difference was the United States finally decided it wanted to do something. And I think that the Syrian situation, we’re sort of in Syria 1993 right now. And I don’t know when we get to Syria 1995. I hope – I hope sooner rather than later.

And this – again, the point I made earlier is we’re – we can be in a state of underachievement. I don’t think there’s any question about the capacity of the United States to pull a group together to do something about Syria. And on the – and again, on the multilateralism point and on the Russia-and-China point – yes, we used to know, and we have known very recently, that if we are going to insist on the U.N. Security Council approving everything we do then we are not going to do very much. And we have overvalued – we have given Russia much more power than it needs to have.

We need to periodically demonstrate to Russia, especially, that if they are going to obstruct everything that needs to be done in the Security Council, we will go outside the Security Council. To my mind, that’s a way of strengthening the Security Council because it will teach Russia that it has to be more responsible. I think the Chinese will go along because they don’t like to be left by themselves. The Russians enjoy this kind of thumbing-their-nose at the whole world. That’s their – there’s a certain self-definition especially for Putin in that. But we need to be able to demonstrate that getting things done – if the Security Council is going to block it, we’ll find another way. Bill Clinton did that. Needless to say, George W. Bush did that. The United States did that for 30 or 40 years. That’s been the norm, actually.

MR. STEPHENS: Thanks very much. I did read the other day that Obama is going to appoint Anna Wintour to be ambassador of Paris. Perhaps –

MR. : I thought it was Britain.

MR. STEPHENS: No, I think – (laughter). I think – I think it’s the exquisite appointing the British-born Anna Wintour to be the ambassador of Paris is the ultimate –

MR. KEMPE: The ultimate –

MR. STEPHENS: – punishment. (Laughter.)

MR. KEMPE: It’s payback, right.

MR. STEPHENS: Sorry, Annette.

MS. HEUSER: Yeah, you see, there are career opportunities for you in case the newspaper business is not going so well in the future. Just saying. (Laughter.)

Anyway, I think when it comes to the point of global governance – and I’ve traveled quite a bit in the last month. And wherever I was in the world, there was only one key question actually that people asked, was what are we doing with the G-20?

I mean, if you look around the world, of course, you have the U.N., you have NATO, you have WTO, you have the OECD. But who are the key – what is the key decision-making body in today’s world? And I would say it’s the G-20 on most of the global governance issues right now. But the G-20 itself is highly dysfunctional, so there is no real follow-up process. Nobody knows how the real troika process works within the G-20. So, I think that that could be one of the big projects for the U.S. and the EU in the years to come, is really to reform the G-20 and make it really efficient.

Second point regarding Matt’s issue on Brazil and this values-based à la carte approach. Yes, maybe we’ll end up in a situation where Brazil and India will come up with a kind of in-between value model that is not the concept of the West. But, again, the concept of the West is not a geographical concept; it’s an intellectual concept.

And my eye-opening moment was when I was involved in the EU convention in the early 2000s when the Europeans were very ambitious and wanted to give themselves a European constitution. So we had days of debate about the preamble of this potential constitution, and if Christianity is part of the European heritage. Guess what, we ended up not integrating Christianity explicitly in the preamble. And I really regretted that because my point was if we are not sure and, you know, confident where are we coming from and what our values base is, how can we engage with the rest of the world? How can we engage with Islam without knowing what our values base is? And, therefore, even more so, I would say one of the biggest assets that the United States has on its hands right now is the concept of the West defined as an inclusive concept where you can be a convening power; where you can be a leader also in military terms when it is necessary. And I would strongly advocate for reinventing this concept.

Thank you.

MR. STEPHENS: Thank you. And thank you to all the panel and to all – everyone who contributed. Certainly, for me, it’s been a very interesting and educative panel, so thank you very much. (Applause.)

(END)