FOREIGN AFFAIRS: by Sharf ShujaNews Weekly
New strategy needed for global security, prosperity
, October 28, 2006
For most of the 1990s, US foreign and economic policy was based on two assumptions: first, that a healthy economy and sound financial system make for political stability, and second, that countries in business together do not fight each other.
The number one priority of US foreign policy was clear: to encourage the former Communist countries of Europe and the developing nations in Latin America, Asia, and Africa to adopt business-friendly policies. Private capital would then flow from the developed world into these countries, creating economic growth and jobs.
When free enterprise took hold, so the argument went, traditional grievances, resentments, and hostilities would fade. As Americans liked to say, no two countries with McDonald's had ever gone to war with each other.
The policy was backed with lots of money, in the form of direct aid, loans from multilateral lending institutions such as the IMF, and a liquid market for governments to issue bonds to international private-sector investors.
Perhaps the most dramatic instance of this support was the US-led bailout of Mexico after the so-called Tequila Crisis of 1994. In effect, the United States and other developed countries were sending a message: adopt economic reform, and we will be there to bail you out if your economy gets into trouble.Reform agenda
This reform path involved fiscal discipline, trade liberalisation, privatisation, deregulation, and expanded property rights through legal reforms. Promoters of these reforms hoped the changes would make developing countries more attractive to foreign investment and would integrate those countries even further into a competitive, but peaceful, global economic network.
The vision became one in which these countries would become part of a liberal, open world economy that promoted Western values such as democracy and helped globalisation.
For most of the 1990s, the developing countries were more than happy to oblige. By August 2000, with the membership of Albania, the number of WTO members had nearly doubled to 139.
Since 2000, however, America's focus has switched to national security, now defined not just in the narrow Cold War terms of safety from attack from a hostile power, but very broadly to include safety from terrorism and weapons of mass destruction, as well as vital economic inputs such as oil.
Every individual feels the consequences of globalisation in his or her daily life; some feel helplessly exposed to them, and some are concerned that their national identity is at stake, that their cultural identity will be erased through the spread of ever more generally accepted norms. Many developing countries no longer accept the rhetoric of globalisation.
Under the second Bush administration, the economic and political rationale behind the Washington Consensus of the 1990s has unravelled, forcing a radical change to our perceptions of which countries are and are not safe for business.
Bush's new foreign policy chiefly means that the US government will base its decision on whether or not it will provide economic support less on a country's economic policies and market size and more on its importance to US national and international security.
In today's world, no matter where we live and work, we are faced with two major challenges: first, the phenomenon of globalisation; and second, how can we establish and maintain peace and security in the world.
India has a major role to play in bringing this about. Its voice carries great weight, especially amongst developing countries. Multilateral trading systems are superior to other systems because they are fairer. A multilateral approach is the only one geared to letting many people see the tangible benefits arising from globalisation.
Over the past three years, global economic growth has been positive despite high oil prices and political uncertainties. It is important to establish a strategy for bringing secure energy supplies into the global economy. Here, a multilateral approach is needed. We need safe, reliable, and politically stable energy-exporting nations.
The second challenge we are facing is the international security situation. There is the threat of international terrorism. There is privatised violence, the disintegration of entire states, and the fear of WMDs.
The tasks we are facing require a strong multilateral system based on the rule of law rather than on the idea of the survival of the fittest.
Acts of terrorism are a fundamental threat to any civilisation. But security cannot be guaranteed by police or military means alone. To eliminate the breeding grounds of fanaticism and terrorism, we must ensure that we provide for social, material, and cultural security. We hear voices around the world talking about a "Clash of Civilisations." This does nothing but fuel extremism. It would be far better to point to the values we all share and which therefore unite us, such as the desire to live in an atmosphere of peace, tolerance, and justice.
The knowledge about the diversity of cultures and respect for other religions, I believe, will make us more tolerant, bring people together, and create the basis for successful economic activity in a globalised world.- Sharif Shuja
(Sharif Shuja teaches International Relations at Victoria University and is an Honorary Research Fellow in the Global Terror Research Unit at Monash University, Victoria.)