___________________________________________ What's going on in your world? Find Out. Visit Stratfor's Global Intelligence Center http://www.stratfor.com/world/default.htm ___________________________________________ OTHER FEATURES ON STRATFOR.COM Russian Budget Reflects Priority Shift http://www.stratfor.com/CIS/commentary/c9910102330.htm Egyptian Succession Issue Unlikely to Cause Chaos http://www.stratfor.com/MEAF/specialreports/special14.htm Thailand Rescues Embassy Situation http://www.stratfor.com/asia/commentary/m9910091500.htm __________________________________ STRATFOR.COM Global Intelligence Update Weekly Analysis October 11, 1999 Eurasian Instability and a New American Strategy Summary: The post-Cold War world is over and a new U.S. strategy is evolving. The system of solving all strategic problems through fostering Russian and Chinese prosperity has failed. As instability emerges in Eurasia, Russia and China struggle to make the center hold. A balance-of-power strategy will emerge in the United States that will force other countries, particularly Germany and Japan, into more assertive roles. It will solve the immediate problem and also create a world in which Germany and Japan will be powerful and perhaps, share common interests. Analysis: Last week's Quarterly Forecast - [ http://www.stratfor.com/services/giu/4q1999.asp ] - focused on the intensifying Eurasian crisis, from the Carpathians to the Pacific. The fundamental question throughout Eurasia has been the same for centuries: can the center hold? Can Moscow reassert its control over both its social dynamics and the geography of the former Soviet Union? Can China contain the forces of social and political decentralization put into motion by its intense interaction with global capitalism? The situation in place throughout most of the 1990s is unsustainable. How will the United States respond to all of this? The United States is the most powerful military and economic force in the world. It is impossible for the United States not to interact in some way with events in Eurasia. As uncertainties mount in Russia and China, what will be the American response to events there? The United States is entering a presidential campaign for which all signs indicate foreign policy issues will play a role only if Pat Buchanan uses his platform to refight World War II. Given this reality, how will the United States generate a response to critical events in Eurasia? Let us consider some issues that may arise: * Russia controls Kaliningrad (the former German Konigsberg) but has access to it only through the territory of Lithuania, an independent country. Assume a more assertive Russia will demand a Russian-controlled corridor through Lithuania or reabsorption of Lithuania into the Russian sphere of influence. What is U.S. policy on the Baltics? * Under the same scenario, Russian forces build up along the Polish frontier. The pro-NATO government, under challenge from neutralists, asks for NATO troops. Will the U.S. participate? * Slovakia, now excluded from NATO, signs a mutual defense pact with Russia and Russian troops deploy into Slovakia. What does the U.S. do? * The United States has substantial investments in Central Asia. Russian troops linked with pro-Russian elements move to reintegrate the region with Russia, threatening U.S. investments. Will the U.S. defend its interests? * Russia and China, now allied, begin providing North Korea with military technology intended to tie down U.S. forces in the region and suck additional forces into the Northwest Pacific. What does the U.S. do? * China begins a campaign to harass shipping in and out of Taiwan, using air and naval forces to sink or seize Taiwanese ships. Does the U.S. intervene? * China follows Russia into internal disintegration. Western investments in the coastal region, as well as westerners, are in danger. Does the United States provide assistance to anti-Beijing forces in Shanghai? This is a sampling of the issues that might confront the United States over the upcoming years, or even months. The potential areas of engagement range throughout Eurasia. The locations of crises are not only unpredictable, but depend partly on internal decision making in Moscow or Beijing. In some scenarios, the threat doesn't arise from decision making at all but from its break down. This means that the U.S. will be operating from reflex, rather than controlling events. We are not talking about a return to the Cold War. The Cold War was a confrontation with a highly unified Soviet Union that had the potential to control Eurasia. Neither Russia nor China, nor an alliance between the two, has the ability to control Western Europe or the Asian archipelago in the coming generation. Russia and China pose two different sets of challenges. If they maintain political cohesion, they have the ability to pose serious regional challenges along their peripheries. If they disintegrate, they can threaten U.S. interests inside their borders or allow the United States opportunities to expand influence. What we have is a series of disjointed potential threats that could challenge important, but not fundamental, U.S. interests. The United States has operated under a strategy essentially carried over from the Cold War. During that period, the United States created an alliance system to prevent the Soviet Union and China from conquering Eurasia. The alliance rested on two principles. The first was collective security. The United States guaranteed aid to its allies if attacked. In return, U.S. allies armed themselves to participate in their own defense and placed their territory in harm's way in the event of a Soviet attack. The second principle was the trade regime created at the end of World War II. Allies systematically benefited from their economic relationship with the United States. They were permitted access to the American market and permitted to protect their own. The United States created a maritime-based alliance system that reinforced this structural tilt. Historically, maritime trading alliances prosper disproportionately, compared to landlocked alliances. The relative performances of the American alliance compared to the Soviet alliance showed this inequality, quite apart from the inherent inefficiencies of communism. The grand strategy of the United States after the fall of communism was the integration of both the former Soviet Union and China into its global economic system, coupled with alliance based ad hoc interventions. The premise was that if the former Soviets and Chinese participated in the international economic system forged during the Cold War, they would inevitably prosper. If they prospered, they would have no interest or need to engage in geopolitical exercises. There were two problems with this analysis. First, Russia's inclusion into the Western financial system triggered a massive depression rather than an economic boom. Second, the general Asian economic meltdown not only dragged down China, but magnified the pernicious effects of a communist system that had not been dismantled. Forgotten in the core strategy was that (a) capitalism hurts, particularly in its early stages, (b) capitalism has down as well as up cycles and (c) capitalism requires a political system sufficiently mature to survive through bad times. As a result, the post-Cold War strategy of the United States is now in shambles. The attempt by the United States to extend Cold War institutions to the post-Cold War world has reached its limits. A new strategy is needed. There are clear foundations for that strategy. The United States fought World War I, World War II and the Cold War with a single goal in mind: to prevent the unification of Eurasia under any single power. The logic was simple: if any single power could marshal Eurasia's resources, the global balance of power would tilt dramatically against the United States. U.S. maritime security could no longer be guaranteed. Therefore, when it became apparent in the two world wars that Germany might well dominate all of Eurasia by itself or in alliance with Japan, the U.S. intervened, albeit at the latest moment possible. During the Cold War, the U.S. intervened from the beginning, having taken away the lesson from World War II that Europe could not maintain its balance of power by itself, and that late intervention by the United States increased the cost to the United States, along with the risk. Things are very different now. There is no threat of a single Eurasian hegemon. Russia has its hands full recovering what it has lost. China, even without its own stability problems, has nowhere to expand - unless it wants to challenge Russian power in the Central Asian states, whose governments oppose an alliance with Russia. It has limited naval power, since the Himalayas block it in the southwest and Siberia is not particularly appetizing. Instead, China and Russia will pose problems along their peripheries. They do not pose a challenge to Eurasia as a whole and therefore do not threaten the global system dominated by the United States. In this context, the United States has three strategic options: * Attempt a strategy of destabilization designed to fragment Russia and China even more; * Follow a strategy of containment in which the United States responds to regional threats from Russia and China through direct military intervention; * Follow a balance-of-power strategy in which nations indigenous to the region deal with regional threats from Russia and China. The United States will not follow the first option. This would require more effort and thought than the U.S. political elite is currently capable of exerting on foreign policy. Second, and much more important, Russia and China are massive entities. They move along on their own trajectories. No outside power has the mass to shift those trajectories. No outside power has the ability to shape Russian and Chinese history. At most, the outside world can exert some limited influence. This leaves a choice between active containment and balance-of- power strategies. The United States during the past 10 years has become addicted to direct interventions. However, these have been against small, isolated countries. The risk of casualties and escalation has been limited, and the United States has been accompanied by allies. The United States is risk- and casualty- averse. Blocking Russian interests in Lithuania or Chinese interests in the Straits of Formosa might involve serious risk. This is not Haiti. More important, the United States does not have the needed resources. The United States declined a heavy involvement in East Timor precisely for this reason. Major ground interventions against large military powers that can reinforce themselves, even if with inferior equipment and low morale, is another matter. The simple fact is that land-based intervention in Eurasia is not possible on an ongoing basis without a huge mobilization. The strategic interests of the United States simply do not justify that mobilization. That leaves the United States with one strategy: allowing the balance of power to maintain itself. This strategy achieves the fundamental U.S. interest, which is preventing the unification of Eurasia. Rather than constantly deploying U.S. forces in response to events outside U.S. control, it reserves those forces in the event the Eurasian balance of power cannot be maintained. The United States can then commit forces in a concentrated and decisive manner, rather than in piecemeal interventions with limited, nonstrategic goals. This is a strategy that forces Europeans to deal with European problems, and Asians with Asian problems. It holds the door open to U.S. intervention as U.S. interests dictate, without compelling the United States to act reflexively. Europe and Asia will have to develop leadership capable of carrying out the mission. If the United States stops intervening, that leadership will inevitably emerge, just as it will never emerge while the United States absorbs the risks and the burdens. As the U.S. propensity for risk taking declines, regional powers will emerge. The two obvious powers: Germany in Europe and Japan in Asia. And that's where this strategy gets dicey. The balance-of-power strategy is the most rational course the United States can follow over the next 10-20 years. But it is a strategy that is predicated on the re-emergence of Germany and Japan as regional powers leading regional economic, political and above all, military systems designed to control events in their regions. There is no question but that Germany and Japan have the resources. There is also no question but that each is reluctant to undertake the role. Nor is there any question but that their neighbors would be appalled at the prospect. But that is their neighbors' problem and their own. It is not an American problem. There is no question but that in danger - which we see rapidly approaching - each will be forced to undertake the revolution in domestic politics necessary to protect its national interests. Their neighbors will be forced to live with it. The question is not whether the United States should or should not permit this to happen. We think it is inevitable. The United States is not in a position, politically or strategically, to support force levels that will allow it to guarantee Lithuanian independence and Indonesian stability. That is simply not an option. As the crescent of instability surrounding Russia and China spreads and intensifies, the United States lacks the force to control events and the interest to take the risks. Nations in the region do have the interest and the resources. They will have to develop the power. The United States has three great interests. First, to maintain and extend its technological lead over other countries while sustaining the unprecedented growth of its economy. Second, to maintain the U.S. Navy's control over the world's oceans so that no power can project forces against North America. Finally, to maintain U.S. control of space so that U.S. intelligence permits early warnings of threats and so that U.S. aerospace power can be targeted as necessary. These are three mutually supporting interests. Patrolling the frontiers of the Russian and Chinese empires is not part of this cluster of interests, except as they intersect other interests, such as sea-lane control. The problem at hand is the management of an increasingly dangerous situation in Eurasia without undue exposure to risks. The United States will back off from managing regional risks in Eurasia, because the domestic politics of the United States will not tolerate it and because the United States lacks the resources needed for ongoing power projection on the scale required. The Europeans and Asians will move into the gap. The United States will not disappear from the global scene by any means. American fleets will still patrol the oceans; American satellites will still monitor the world. But we expect the balance of power in Eurasia proper to be maintained by regional powers and not the United States. Remember always that we are talking about the United States. Strategy will not be clearly debated or enunciated. It will simply unfold over time. We can already see it unfolding in the silences of the presidential campaigns, in the things that are left unsaid by the major candidates. The United States does not stage coherent foreign policy debates. It prefers to ignore the issues or shout them as simplistic slogans: Isolationist vs. Internationalist, Hawk vs. Dove. Shows like Crossfire offer two opposing viewpoints, rather than the finely nuanced thinking required for serious strategy. Yet remarkably, in spite of all of this, the United States has historically generated coherent, powerful and effective foreign policies. How this happens is a story in itself and not a simple one. That it happens is historically obvious. Shifts happen. One is starting to take place now. It will take awhile to show itself and longer still to be recognized as a shift. But once in place it will last for a long time and have profound consequences that will resonate throughout the 21st century. 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