-Caveat Lector-
-----Original Message-----
From: David Kellogg <[EMAIL PROTECTED]>
To: Multiple recipients of list <[EMAIL PROTECTED]>
Date: Thursday, March 04, 1999 6:43 PM
Subject: January/February 1999 Issue of FOREIGN AFFAIRS
_______________________________________________________________
In the March/April 1999 issue of FOREIGN AFFAIRS . . .
* Clash of the Titans?
C. Fred Bergsten on why the launch of the euro could mean a showdown
between the United States and Europe.
* The Rogue Superpower
Samuel P. Huntington and Garry Wills criticize American hegemony and
hubris.
* How to Handle the Next Panic
Martin Feldstein offers a plan of action for the emerging markets;
Jeffrey Garten dissects the global financial system.
* Reportage: Milton Viorst Gets an Exclusive Interview With Libya's
Colonel Qaddafi
_______________________________________________________________
America and Europe: Clash of the Titans?
C. Fred Bergsten, Director of the Institute for International
Economics, argues that the euro's launch will transform the
transatlantic relationship for good by placing Europe on an equal
economic footing with the United States. If Washington does not face
up to this and tackle outstanding trade and monetary-policy issues
with its European partners soon, its current concerns_such as
ballooning trade deficits and rising protectionist pressures at
home_could spiral out of control. A good starting point for
cooperation would be a joint initiative to limit fluctuations in the
dollar and the euro. Trade negotiations between Europe and the United
States also need a shot in the arm to get commerce flowing freely. An
effective U.S. partnership with Europe is essential to avoid a
showdown and maintain global leadership.
"The launch of the euro offers the prospect of a new bipolar
international economic order that could replace America's hegemony
since World War II. Euroland will equal or exceed the United States
on every key measure of economic strength and will speak increasingly
with a single voice on a wide array of economic issues. The euro is
likely to challenge the international financial dominance of the
dollar. Moreover, the end of the Cold War has sharply reduced the
importance of U.S. military might for Europe and pulled aside the
security blanket that often allowed both sides to cover up or resolve
their economic disputes for the greater good of preserving the
anticommunist alliance."
The Lonely Superpower
Harvard political scientist Samuel P. Huntington argues that the
unipolar moment has passed. Even old allies stubbornly resist
American demands, while many other nations view U.S. policy and
ideals as openly hostile to their own. Washington is blind to the
fact that it no longer enjoys the dominance it had at the end of the
Cold War. It must relearn the game of international politics as a
major power, not a superpower, and make compromises. U.S.
policymaking should reflect rational calculations of power rather
than a wish list of arrogant, unilateralist demands.
"In acting as if this were a unipolar world, the United States is
also becoming increasingly alone in the world. American leaders
constantly claim to be speaking on behalf of "the international
community." But whom do they have in mind? China? Russia? India?
Pakistan? Iran? The Arab world? . . . On issue after issue, the
United States has found itself increasingly alone, with one or a few
partners, opposing most of the rest of the world's states and
peoples. These issues include U.N. dues; sanctions against Cuba,
Iran, Iraq, and Libya; the land mines treaty; global warming; an
international war crimes tribunal; the Middle East; the use of force
against Iraq and Yugoslavia; and the targeting of 35 countries with
new economic sanctions between 1993 and 1996. On these and other
issues, much of the international community is on one side and the
United States is on the other. The circle of governments who see
their interests coinciding with American interests is shrinking.
Benign hegemony, however, is in the eye of the hegemon. "One reads
about the world's desire for American leadership only in the United
States," one British diplomat observed. "Everywhere else one reads
about American arrogance and unilateralism." At a 1997 Harvard
conference, scholars reported that the Elites of countries comprising
at least two-thirds of the world's people_Chinese, Russians, Indians,
Arabs, Muslims, and Africans_see the United States as the single
greatest external threat to their societies. They do not regard
America as a military threat but as a menace to their integrity,
autonomy, prosperity, and freedom of action. They view the United
States as intrusive, interventionist, exploitative, unilateralist,
hegemonic, hypocritical, and applying double standards, engaging in
what they label "financial imperialism" and "intellectual
colonialism," with a foreign policy driven overwhelmingly by domestic
politics."
Bully of the Free World
Commentator Garry Wills criticizes America, which since World War II
has styled itself the "leader of the free world." But to get its way,
the United States has ignored the American public and used covert
action, sabotage, and threats against hapless foreign countries. This
is not true leadership. To lead in the 21st century, the United
States will have to learn to acknowledge the world outside its
borders and listen to others' opinions, act in partnership with other
nations, and get used to persuading allies rather than browbeating
them. Given its penchant for secrecy and long history of avoiding
"entangling alliances," America does not seem up to the challenge.
"The United States considered itself not only a legitimate leader
but actually more legitimate than indigenous leaders who did not meet
the U.S. definition of freedom-loving behavior. Washington "led"
people by removing inauthentic leaders_the enemies of freedom_even
when the people had chosen them. . . . This is what was considered
"leading the free world." But however justified these acts may have
been strategically, they cannot be called leadership. Leaders
persuade followers. The United States used covert action, sabotage,
and threats."
The Colonel in his Labyrinth
Milton Viorst, a Western journalist, travels to Libya for an
exclusive interview with Colonel Mu'ammar Qaddafi and finds a country
struggling to modernize. Tired of suffering under the U.N. embargo,
Libya may be ready to hand the suspected Lockerbie bombers over for
trial. After being pariahs for over a decade, most Libyans seem eager
to reenter the international community. But power in their country is
divided between bureaucrats who favor the West and the old, fiercely
anticolonial revolutionaries who still cherish Qaddafi's defiance.
The bureaucrats are ready to put Libya's rotten image behind them,
but the colonel is leery.
"Libyan society seems divided into two sectors, technocratic and
tribal. Hammouda symbolizes the first, which, though far from
dominant, is growing in influence. This sector aspires to have Libya
become a modern country: industrial, open, free, prosperous. Qaddafi,
not without ambivalence, represents the tribal sector: jealous of
Libya's individuality, suspicious of outsiders, committed to
customary ways, Arab rather than global in orientation. He even rules
like a tribal chief, grounding his authority in tradition, if not
divine right."
A Self-Help Guide for Emerging Markets
Harvard economist Martin Feldstein recognizes that the global
financial crisis of 1997-98 was neither the first of its kind nor the
last. But this time, even the virtuous were not immune. The stricken
countries desperately need a plan for protection in the future. The
IMF is too strapped and its program too flawed to serve as an
effective international lender of last resort. Instead, emerging
markets must learn to inoculate themselves against future currency
attacks by increasing liquidity, such as foreign currency reserves,
so they can fight back the powerful forces of market speculation on
their own. While self-help is expensive, it is far less painful than
the turmoil of currency crises. Emerging markets must take their fate
into their own hands.
"Like death and taxes, international economic crises cannot be
avoided. They will continue to occur as they have for centuries past.
. . . Unfortunately, there is no international "911" that emerging
markets can dial when facing economic collapse. Neither the
International Monetary Fund (IMF) nor a new global financial
architecture will make the world less dangerous. Instead, countries
that want to avoid a devastating rerun of the 1997-98 crisis must
learn to protect themselves. And self-protection requires more than
avoiding bad policies that make a currency crisis inevitable, for the
threat of contagion makes even the virtuous vulnerable to currency
runs. Liquidity is the key to financial self-help."
-----------------------------------------------
Foreign Affairs March/April 1999 (volume 78, number 2)
Table of Contents
COMMENTS
BANK ON DEMOCRACY Sheri Berman and Kathleen R. McNamara 2
As the world gets more democratic, central banks get more undemocratic.
These powerful institutions should not be exempt from popular control.
DREAMS OF THE EURASIAN HEARTLAND Charles Clover 9
An old political theory, "Eurasianism" is fast gaining converts in
Russia's corridors of power. Its vision of a new Russian-Asian alliance
could start World War III.
PAINTING CHINA GREEN Elizabeth Economy 14
China gambled that economic growth would outpace environmental harm. It
lost. Fixing the resultant damage may break the stalemate in
U.S.-Chinese relations.
ESSAYS
AMERICA AND EUROPE: CLASH OF THE TITANS? C. Fred Bergsten 20
The euro's launch will transform the transatlantic relationship for good
by placing Europe on an equal economic footing with the United States.
If Washington does not face up to this and tackle outstanding trade and
monetary-policy issues with its European partners soon, its current
concerns-such as ballooning trade deficits and rising protectionist
pressures at home-could spiral out of control. A good starting point for
cooperation would be a joint initiative to limit fluctuations in the
dollar and the euro. Trade negotiations between Europe and the United
States also need a shot in the arm to get commerce flowing freely. An
effective U.S. partnership with Europe is essential to avoid a showdown
and maintain global leadership.
THE LONELY SUPERPOWER Samuel P. Huntington 35
The unipolar moment has passed. Even old allies stubbornly resist
American demands, while many other nations view U.S. policy and ideals
as openly hostile to their own. Washington is blind to the fact that
it no longer enjoys the dominance it had at the end of the Cold War.
It must relearn the game of international politics as a major power,
not a superpower, and make compromises. U.S. policymaking should
reflect rational calculations of power rather than a wish list of
arrogant, unilateralist demands.
BULLY OF THE FREE WORLD Garry Wills 50
Since World War II, America has styled itself the "leader of the free
world." But to get its way, the United States has ignored the American
public and used covert action, sabotage, and threats against hapless
foreign countries. This is not true leadership. To lead in the 21st
century, the United States will have to learn to acknowledge the world
outside its borders and listen to others' opinions, act in partnership
with other nations, and get used to persuading allies rather than
browbeating them. Given its penchant for secrecy and long history of
avoiding "entangling alliances," America does not seem up to the
challenge.
THE COLONEL IN HIS LABYRINTH Milton Viorst 60
A Western journalist travels to Libya for an exclusive interview with
Colonel Mu'ammar Qaddafi and finds a country struggling to modernize.
Tired of suffering under the U.N. embargo, Libya may be ready to hand
the suspected Lockerbie bombers over for trial. After being pariahs
for over a decade, most Libyans seem eager to reenter the
international community. But power in their country is divided between
bureaucrats who favor the West and the old, fiercely anticolonial
revolutionaries who still cherish Qaddafi's defiance. The bureaucrats
are ready to put Libya's rotten image behind them, but the colonel is
leery.
LESSONS FOR THE NEXT FINANCIAL CRISIS Jeffrey E. Garten 76
The global financial crisis has eroded developing nations' faith in
modern capitalism itself, and the meltdown of Brazil's currency was
grim evidence that the chaos is far from over. But few lessons have
been absorbed. That had better change. Key Wall Street and Washington
players do agree that crisis management was muffed, the nature of
contagion misunderstood, and the importance of local politics
underestimated. But they argue over the pace of fiscal liberalization,
the efficacy of the IMF rescues, and the importance of "moral hazard."
Herewith, a politically realistic plan to bridge the gaps and gird for
the next, inevitable disaster.
A SELF-HELP GUIDE FOR EMERGING MARKETS Martin Feldstein 93
The global financial crisis of 1997-98 was neither the first of its
kind nor the last. But this time, even the virtuous were not immune.
The stricken countries desperately need a plan for protection in the
future. The IMF is too strapped and its program too flawed to serve as
an effective international lender of last resort. Instead, emerging
markets must learn to inoculate themselves against future currency
attacks by increasing liquidity, such as foreign currency reserves, so
they can fight back the powerful forces of market speculation on their
own. While self-help is expensive, it is far less painful than the
turmoil of currency crises. Emerging markets must take their fate into
their own hands.
DEALING WITH THE BOMB IN SOUTH ASIA Strobe Talbott 110
India's and Pakistan's nuclear tests last May were a double setback:
for security on the subcontinent and worldwide nonproliferation
efforts. U.S. attempts to forge warmer relations with both countries
were also casualties of the blasts. The tests could spark a chain of
withdrawals from the Nuclear Nonproliferation Treaty, undermining the
international consensus against the spread of nuclear arms. Cold War
brinkmanship is no model for diplomacy. For their sake as well as the
world's, India and Pakistan need to stabilize their nuclear rivalry at
the lowest possible level, ban further tests, and embrace frequent,
high-level bilateral talks to ease tensions.
REVIEWS
SOROS' SPLIT PERSONALITY Jeffrey A. Frankel 124
In his new book, George Soros the philanthropist argues that markets
are too volatile and need regulation. But the speculator is short on
specifics.
IT COULD HAPPEN HERE Gideon Rose 131
A raft of new books confronts a very real threat-the terrorist use of
weapons of mass destruction-and propose vital, though moderate,
responses.
RECENT BOOKS ON INTERNATIONAL RELATIONS 138
Lucian Pye on Lee Kuan Yew; Stanley Hoffmann on I Will Bear Witness;
Gail Gerhart on genocide in Rwanda; Richard Cooper on the third way;
Eliot Cohen on Israel and the Bomb; Robert Legvold on Martin Malia.
LETTERS TO THE EDITOR 160
Paul Wolfowitz and Steven J. Solarz, Derek Chollet, and Robert Satloff
and others on ousting Saddam; Kenneth Roth on the International
Criminal Court; the National Association of Manufacturers defends
itself over sanctions; and others.
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