commission.pdf - Paul, Weiss

U.S. Commission on National Security/21st Century

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Phase 1 (July 1998 - August 1999)

Major Themes And Implications

Supporting Research And Analysis

Phase 2 (August 2000 – April 2000)

Seeking A National Strategy: A Concert For Preserving Security And Promoting Freedom

Phase 3 (April 2000 – February 2001)

Roadmap For National Security: Imperative For Change

NEW WORLD COMING:AMERICAN SECURITY IN THE 21ST CENTURY

MAJOR THEMES AND IMPLICATIONS

The Phase I Report on the Emerging Global Security Environmentfor the First Quarter of the 21st Century

The United States Commission on National Security/21st Century

September 15, 1999

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Preface

In 1947, President Harry Truman signed into law the National Security Act, the landmark U.S.national security legislation of the latter half of the 20th century. The 1947 legislation has servedus well. It has undergirded our diplomatic efforts, provided the basis to establish our military capa-bilities, and focused our intelligence assets.

But the world has changed dramatically in the last fifty years, and particularly in the lastdecade. Institutions designed in another age may or may not be appropriate for the future. It is themandate of the United States Commission on National Security/21st Century to examine precise-ly that question. It has undertaken to do so in three phases: the first to describe the world emergingin the first quarter of the next century, the second to design a national security strategy appropri-ate to that world, and the third to propose necessary changes to the national security structure inorder to implement that strategy effectively. This paper, together with its supporting research andanalysis, fulfills the first of these phases. As co-chairs of the Commission, we are pleased topresent it to the American people.

Gary Hart

Warren B. Rudman

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Gary HartCo-Chair

Anne ArmstrongCommissioner

John DancyCommissioner

Leslie H. GelbCommissioner

Lee H. HamiltonCommissioner

Donald B. RiceCommissioner

Harry D. TrainCommissioner

Warren B. RudmanCo-Chair

Norman R. AugustineCommissioner

John R. GalvinCommissioner

Newt GingrichCommissioner

Lionel H. OlmerCommissioner

James SchlesingerCommissioner

Andrew YoungCommissioner

U.S. COMMISSION ON NATIONAL SECURITY/21st CENTURY

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MAJOR THEMES AND IMPLICATIONS 1


This paper consists of four parts: a con-textual introduction; an articulation of

twelve basic assumptions and observations;fourteen key conclusions about the global envi-ronment of the next quarter century; and astatement of their essential meaning forAmerican national security strategy in the 21stcentury. The U.S. Commission on NationalSecurity/21st Century will build upon thisfoundation to recommend a new strategy forthe advancement of American interests andvalues. It will then propose, as necessary, newstructures and processes for U.S. foreign andsecurity policies in order to implement thatstrategy.

IntroductionIn the next century, the spread of knowl-

edge, the development of new technologies,and an increasing recognition of commonglobal problems will present vast opportunitiesfor economic growth, regional integration, andglobal political cooperation. The size of theworld’s middle class may increase many timesover, lifting literally tens of millions of peoplefrom the depredations of poverty and disease.Authoritarian regimes will increasinglyfounder as they try to insulate their populationsfrom a world brimming with free-flowinginformation, new economic opportunities, andspreading political freedoms. We may thus seethe rise of many new democracies and thestrengthening of several older ones. Howeverfragile this process may be, it holds the hope ofless conflict in the world than exists today.

Realizing these possibilities, however, willrequire concerted action on the part of theUnited States and other mature democraciesaround the world. Active American engage-ment cannot prevent all problems, but wisepolicies can mitigate many of them. The UnitedStates and governments of kindred spirit must

work harder to prevent conflicts as well asrespond to them after the fact. Otherwise, thepromise of the next century may never berealized, for greater global connectedness canlead to an increased possibility of misfortune aswell as benefit.

The future is one of rising stakes. Whilehumanity has an unprecedented opportunity tosuccor its poor, heal its sick, compose its dis-agreements, and find new purpose in commonglobal goals, failure at these tasks couldproduce calamity on a worldwide scale. Thanksto the continuing integration of global financialnetworks, economic downturns that were oncenormally episodic and local may become moresystemic and fully global in their harmfuleffects. Isolated epidemics could metastasizeinto global pandemics. The explosion in scien-tific discoveries now under way bears thepotential of near miraculous benefit forhumanity; misused, in the hands of despots, thenew science could become a tool of genocideon an unprecedented scale. During the next 25years, dilemmas arising from advances inbiotechnology increasingly will force somecultures to reexamine the very foundations oftheir ethical structures. As society changes, ourconcept of national security will expand andour political values will be tested. In everysphere, our moral imaginations will be exer-cised anew.

For all that will be novel in the nextcentury, some things will not change. Historicalprinciples will still apply. There will still begreat powers, and their interaction in pursuit oftheir own self-interests will still matter. As ever,much will depend on the sagacity and goodcharacter of leadership. Misunderstandings,misjudgments, and mistakes will still occur, butso will acts of bravery borne on the insight ofexceptional men and women.

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NEW WORLD COMING2

Today, and in the world we see emerging,American leadership will be of paramountimportance. The American moment in worldhistory will not last forever; nothing wroughtby man does. But for the time being, a heavyresponsibility rests on both its power and itsvalues. It is a rare moment and a special oppor-tunity in history when the acknowledgeddominant global power seeks neither territorynor political empire. Every effort must be madeto ensure that this responsibility is dischargedwisely. It is to this end that our study is ulti-mately directed.

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Our View of the Future

As we look to the future, we believethat:

1. An economically strong United States islikely to remain a primary political,military, and cultural force through 2025,and will thus have a significant role inshaping the international environment.

2. The stability and direction of Americansociety and politics will help shape U.S.foreign policy goals and capacities, andhence the way the United States may affectthe global future.

3. Science and technology will continue toadvance and become more widely availableand utilized around the world, but theirbenefits will be less evenly distributed.

4. World energy supplies will remain largelybased on fossil fuels.

5. While much of the world will experienceeconomic growth, disparities in incomewill increase and widespread poverty willpersist.

6. The international aspects of business andcommerce (trade, transportation, telecom-munications, investment and finance,manufacturing, and professional services)will continue to expand.

7. Non-governmental organizations (refugeeaid organizations, religious and ethnicadvocacy groups, environmental and othersingle-issue lobbies, international profes-

sional associations, and others) willcontinue to grow in importance,numbers, and in their international role.

8. Though it will raise important issues ofsovereignty, the United States will findit in its national interest to work withand strengthen a variety of internation-al organizations.

9. The United States will remain the prin-cipal military power in the world.

10. Weapons of mass destruction (nuclear,chemical, and biological) and weaponsof mass disruption (informationwarfare) will continue to proliferate toa wider range of state and non-stateactors. Maintenance of a robust nucleardeterrent therefore remains essential aswell as investment in new forms ofdefense against these threats.

11. We should expect conflicts in whichadversaries, because of cultural affini-ties different from our own, will resortto forms and levels of violenceshocking to our sensibilities.

12. As the United States confronts a varietyof complex threats, it will often bedependent on allies; but it will findreliable alliances more difficult toestablish and sustain.

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4 NEW WORLD COMING

ConclusionsOn the basis of the foregoing beliefs, and

our understanding of the broad context of theinternational security environment that willemerge over the next quarter century, weconclude that:

1. America will become increasingly vulner-able to hostile attack on our homeland,and our military superiority will notentirely protect us.

The United States will be both absolutely andrelatively stronger than any other state or com-bination of states. Although a global competitorto the United States is unlikely to arise over thenext 25 years, emerging powers—either singlyor in coalition—will increasingly constrainU.S. options regionally and limit its strategicinfluence. As a result, we will remain limitedin our ability to impose our will, and we will bevulnerable to an increasing range of threatsagainst American forces and citizens overseasas well as at home. American influence willincreasingly be both embraced and resentedabroad, as U.S. cultural, economic, and politi-cal power persists and perhaps spreads. States,terrorists, and other disaffected groups willacquire weapons of mass destruction and massdisruption, and some will use them. Americanswill likely die on American soil, possibly inlarge numbers.

2. Rapid advances in information andbiotechnologies will create new vulnera-bilities for U.S. security.

Governments or groups hostile to the UnitedStates and its interests will gain access toadvanced technologies. They will seek tocounter U.S. military advantages through thepossession of these technologies and theiractual use in non-traditional attacks. Moreover,as our society becomes increasingly dependent

on knowledge-based technology for producinggoods and providing services, new vulnerabili-ties to such attacks will arise.

3. New technologies will divide the world aswell as draw it together.

In the next century people around the world inboth developed and developing countries willbe able to communicate with each other almostinstantaneously. New technologies willincrease productivity and create a transnationalcyberclass of people. We will see much greatermobility and emigration among educated elitesfrom less to more developed societies. We willbe increasingly deluged by information, andhave less time to process and interpret it. Wewill learn to cure illnesses, prolong and enrichlife, and routinely clone it, but at the same time,advances in bio-technology will create moraldilemmas. An anti-technology backlash ispossible, and even likely, as the adoption ofemerging technologies creates new moral,cultural, and economic divisions.

4. The national security of all advancedstates will be increasingly affected by thevulnerabilities of the evolving globaleconomic infrastructure.

The economic future will be more difficult topredict and to manage. The emergence orstrengthening of significant global economicactors will cause realignments of economicpower. Global changes in the next quarter-century will produce opportunities andvulnerabilities. Overall global economicgrowth will continue, albeit unevenly. At thesame time, economic integration and fragmen-tation will co-exist. Serious and unexpectedeconomic downturns, major disparities ofwealth, volatile capital flows, increasing vul-nerabilities in global electronic infrastructures,labor and social disruptions, and pressures for

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increased protectionism will also occur. Manycountries will be simultaneously more wealthyand more insecure. Some societies will find itdifficult to develop the human capital andsocial cohesion necessary to employ new tech-nologies productively. Their frustrations will beendemic and sometimes dangerous. For mostadvanced states, major threats to nationalsecurity will broaden beyond the purelymilitary.

5. Energy will continue to have major strategic significance.

Although energy distribution and consumptionpatterns will shift, we are unlikely to seedramatic changes in energy technology on aworld scale in the next quarter century.Demand for fossil fuel will increase as majordeveloping economies grow, increasing mostrapidly in Asia. American dependence onforeign sources of energy will also grow overthe next two decades. In the absence of eventsthat alter significantly the price of oil, the sta-bility of the world oil market will continue todepend on an uninterrupted supply of oil fromthe Persian Gulf, and the location of all keyfossil fuel deposits will retain geopolitical sig-nificance.

6. All borders will be more porous; some willbend and some will break.

New technologies will continue to stretch andstrain all existing borders—physical and social.Citizens will communicate with and form alle-giances to individuals or movements anywherein the world. Traditional bonds between statesand their citizens can no longer be taken forgranted, even in the United States. Many coun-tries will have difficulties keeping dangers outof their territories, but their governments willstill be committed to upholding the integrity oftheir borders. Global connectivity will allow

"big ideas" to spread quickly around the globe.Some ideas may be religious in nature, somepopulist, some devoted to democracy andhuman rights. Whatever their content, the stagewill be set for mass action to have social impactbeyond the borders and control of existingpolitical structures.

7. The sovereignty of states will come underpressure, but will endure.

The international system will wrestle constant-ly over the next quarter century to establish theproper balance between fealty to the state onthe one hand, and the impetus to build effectivetransnational institutions on the other. Thisstruggle will be played out in the debate overinternational institutions to regulate financialmarkets, international policing and peace-making agencies, as well as several othershared global problems. Nevertheless, globalforces, especially economic ones, will continueto batter the concept of national sovereignty.The state, as we know it, will also face chal-lenges to its sovereignty under the mandate ofevolving international law and by disaffectedgroups, including terrorists and criminals.Nonetheless, the principle of national sover-eignty will endure, albeit in changed forms.

8. Fragmentation or failure of states willoccur, with destabilizing effects on neigh-boring states.

Global and regional dynamics will normallybind states together, but events in major coun-tries will still drive whether the world ispeaceful or violent. States will differ in theirability to seize technological and economicopportunities, establish the social and politicalinfrastructure necessary for economic growth,build political institutions responsive to theaspirations of their citizens, and find the lead-ership necessary to guide them through an era

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6 NEW WORLD COMING

of uncertainty and risk. Some important statesmay not be able to manage these challengesand could fragment or fail. The result will be anincrease in the rise of suppressed nationalisms,ethnic or religious violence, humanitarian dis-asters, major catalytic regional crises, and thespread of dangerous weapons.

9. Foreign crises will be replete with atroci-ties and the deliberate terrorizing ofcivilian populations.

Interstate wars will occur over the next 25years, but most violence will erupt from con-flicts internal to current territorial states. As thedesire for self-determination spreads, and manygovernments fail to adapt to new economic andsocial realities, minorities will be less likely totolerate bad or prejudicial government. In con-sequence, the number of new states,international protectorates, and zones ofautonomy will increase, and many will be bornin violence. The major powers will struggle todevise an accountable and effective institution-al response to such crises.

10. Space will become a critical and competi-tive military environment.

The U.S. use of space for military purposes willexpand, but other countries will also learn toexploit space for both commercial and militarypurposes. Many other countries will learn tolaunch satellites to communicate and spy.Weapons will likely be put in space. Space willalso become permanently manned.

11. The essence of war will not change.

Despite the proliferation of highly sophisticat-ed and remote means of attack, the essence ofwar will remain the same. There will be casual-ties, carnage, and death; it will not be like a

video game. What will change will be thekinds of actors and the weapons available tothem. While some societies will attempt tolimit violence and damage, others will seek tomaximize them, particularly against those soci-eties with a lower tolerance for casualties.

12. U.S. intelligence will face more challeng-ing adversaries, and even excellentintelligence will not prevent all surprises.

Micro-sensors and electronic communicationswill continue to expand intelligence collectioncapabilities around the world. As a result of theproliferation of other technologies, however,many countries and disaffected groups willdevelop techniques of denial and deception inan attempt to thwart U.S. intelligence efforts—despite U.S. technological superiority. In anyevent, the United States will continue toconfront strategic shocks, as intelligenceanalysis and human judgments will fail todetect all dangers in an ever-changing world.

13. The United States will be called upon fre-quently to intervene militarily in a time ofuncertain alliances and with the prospectof fewer forward-deployed forces.

Political changes abroad, economic considera-tions, and the increased vulnerability of U.S.bases around the world will increase pressureson the United States to reduce substantially itsforward military presence in Europe and Asia.In dealing with security crises, the 21st centurywill be characterized more by episodic "possesof the willing" than the traditional World WarII-style alliance systems. The United States willincreasingly find itself wishing to form coali-tions but increasingly unable to find partnerswilling and able to carry out combined militaryoperations.

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7MAJOR THEMES AND IMPLICATIONS


14. The emerging security environment in thenext quarter century will require differentmilitary and other national capabilities.

The United States must act together with itsallies to shape the future of the internationalenvironment, using all the instruments ofAmerican diplomatic, economic, and militarypower. The type of conflict in which thiscountry will generally engage in the firstquarter of the 21st century will require sus-tainable military capabilities characterized bystealth, speed, range, unprecedented

accuracy, lethality, strategic mobility,superior intelligence, and the overall will andability to prevail. It is essential to maintainU.S. technological superiority, despite theunavoidable tension between acquisition ofadvanced capabilities and the maintenance ofcurrent capabilities. The mix and effective-ness of overall American capabilities need tobe rethought and adjusted, and substantialchanges in non-military national capabilitieswill also be needed. Discriminating and hardchoices will be required.

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8 NEW WORLD COMING

Seeking an American NationalSecurity Strategy

In many respects, the world ahead seemsamenable to basic American interests andvalues. A world pried open by the informationrevolution is a world less hospitable to tyrannyand more friendly to human liberty. A moreprosperous world is, on balance, a world moreconducive to democracy and less tolerant offatalism and the dour dogmas that often attendit. A less socially rigid, freer, and self-regulatingworld also accords with our deepest politicalbeliefs and our central political metaphors—thechecks and balances of our Constitution, the“invisible hand” of the market, our social creedof E Pluribus Unum, and the concept of feder-alism itself.

Nevertheless, a world amenable to ourinterests and values will not come into being byitself. Much of the world will resent and opposeus, if not for the simple fact of our preeminence,then for the fact that others often perceive theUnited States as exercising its power with arro-gance and self-absorption. There will also bemuch apprehension and confusion as the worldchanges. National leaderships will have theirhands full, and some will make mistakes.

As a result, for many years to comeAmericans will become increasingly lesssecure, and much less secure than they nowbelieve themselves to be. That is because manyof the threats emerging in our future will differsignificantly from those of the past, not only intheir physical but also in their psychologicaleffects. While conventional conflicts will still bepossible, the most serious threat to our securitymay consist of unannounced attacks onAmerican cities by sub-national groups usinggenetically engineered pathogens. Another may

be a well-planned cyber-attack on the air trafficcontrol system on the East Coast of the UnitedStates, as some 200 commercial aircraft are tryingto land safely in a morning’s rain and fog. Otherthreats may inhere in assaults against an increas-ingly integrated and complex, but highlyvulnerable, international economic infrastructurewhose operation lies beyond the control of anysingle body. Threats may also loom from anunraveling of the fabric of national identity itself,and the consequent failure or collapse of severalmajor countries.

Taken together, the evidence suggests thatthreats to American security will be more diffuse,harder to anticipate, and more difficult to neutral-ize than ever before. Deterrence will not work asit once did; in many cases it may not work at all.There will be a blurring of boundaries: betweenhomeland defense and foreign policy; betweensovereign states and a plethora of protectoratesand autonomous zones; between the pull ofnational loyalties on individual citizens and thepull of loyalties both more local and more globalin nature.

While the likelihood of major conflictsbetween powerful states will decrease, conflictitself will likely increase. The world that lies instore for us over the next 25 years will surely chal-lenge our received wisdom about how to protectAmerican interests and advance American values.In such an environment the United States needs asure understanding of its objectives, and acoherent strategy to deal with both the dangersand the opportunities ahead. It is from the Phase IReport—both this document and the research andanalytical study from which it is drawn—that thisCommission will seek to develop that understand-ing, and build that strategy, in Phase II. We willunveil that strategy in April 2000.

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NEW WORLD COMING:AMERICAN SECURITY IN THE 21ST CENTURY

SUPPORTING RESEARCH AND ANALYSIS

The Phase I Report on the Emerging Global Security Environmentfor the First Quarter of the 21st Century


September 15, 1999

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Table of Contents

Foreword, Gary Hart and Warren Rudman ................................................................................................iv

Preface, Charles G. Boyd..............................................................................................................................v

Introduction ....................................................................................................................................................1

I: Global Dynamics ........................................................................................................................................5

The Scientific-Technological Future: “What Will People Learn and Build?” ....................................5

Global Economics: “How Is Wealth Created?”..................................................................................21

The Socio-Political Future: “How Will the World Be Governed?”....................................................38

The Military-Security Domain: “How Will Societies Protect Themselves?” ....................................46

II: A World Astir ..........................................................................................................................................58

Greater Europe ......................................................................................................................................58

East Asia ................................................................................................................................................70

The Greater Near East ..........................................................................................................................81

Sub-Saharan Africa................................................................................................................................95

The Americas........................................................................................................................................102

III: The U.S. Domestic Future..................................................................................................................116

Social Trends ........................................................................................................................................116

Technology Trends................................................................................................................................120

Economic Trends..................................................................................................................................122

Values, Attitudes, and National Will....................................................................................................124

Trends Affecting National Security ....................................................................................................128

IV: Worlds in Prospect ............................................................................................................................131

A Democratic Peace ............................................................................................................................131

Protectionism and Nationalism ..........................................................................................................133

Globalization Triumphant....................................................................................................................134

Division and Mayhem..........................................................................................................................135

A Patchwork Future ............................................................................................................................136

V: Major Themes and Implications ........................................................................................................138

Commission and Study Group Staff Rosters ........................................................................................143

Acknowledgements ....................................................................................................................144

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Foreword

Over 50 years ago, President Harry Truman signed into law the National Security Act of 1947, the landmark U.S. nationalsecurity legislation of the latter half of the 20th century. That Act brought the U.S. Armed Forces together under the Secretary

of Defense and established the National Security Council to integrate all aspects of our nation’s power. The 1947 legislation has servedus well, providing us a template with which to deal with our primary challenge of the last half of the century—the Soviet Union. It un-dergirded our diplomatic efforts, provided the basis to establish our military capabilities, and focused our intelligence assets.

Some things do not change. The survival and security of the United States remain our priority, we still cherish our freedom andthe promise of a good life, and we remain committed to our friends and allies. But in the future our national security system will haveto consider a world of chemicals and biological agents as well as nuclear weapons and conventional armies. We will find ourselveschallenged with protecting the information networks on which our banking systems and public services will depend, the disruption ofwhich could paralyze our economy and pose literally life-threatening dangers. Our potential adversaries will range from great militarypowers to “rogue” states to international criminals to malicious hackers. Future battlefields may extend beyond the air, the land, andthe sea into both outer space and cyberspace.

We are changing as a nation, as well, as our human complexion, values, and skill-sets evolve. Economic recessions, environmentaldegradation, and the spread of disease all have the potential to tear at our nation’s social fabric, which is the very foundation upon whichwe stand.

The thinking behind the 1947 law was rooted in the experiences of the Second World War and the earliest days of the Cold War.Fifty years without fundamental revision is a long time for any policy structure to endure, particularly during a period of such vastchange. In 1997, U.S. lawmakers recognized that the country needed to conduct a thorough study of U.S. national security processesand structures. In mid-1998, that study was chartered by the Secretary of Defense under the provisions of the Federal AdvisoryCommission Act and endorsed by the White House and Congressional leadership. Thus was the U.S. Commission on National

Security/21st Century (USCNS/21) born.

The Commission held its first business meeting in October 1998. Since then, it has conducted its effort in three phases, the lattertwo each designed to build upon what has come before:

New World Coming: The first phase, represented by this Report, explores the world developing between now and 2025. It identi-fies what we can anticipate, as well as areas that may remain uncertain or subject to dramatic change. It also tries to understand whatwe will look like as a nation over the next 25 years, and how we will fit into the world at large.

Seeking a National Strategy: The second phase will develop an overview of U.S. strategic interests and objectives for the next 25years. It will describe an overall national security philosophy and a strategy to support those interests and objectives.

Building for Peace: The third phase of the effort will examine our current legislation, government structure, and policy integra-

tion process to determine the extent to which the system inspired in 1947 supports our needs for the 21st century. To the extent that itdoes not, changes will be proposed for implementation.

This Report represents the culmination of phase I of our efforts. We trust that it will prove to be the sturdy foundation we needto build the rest of the study. We believe it is that foundation.

Warren Rudman Gary Hart

iv

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Preface

The United States Commission on National Security/21st Century was chartered to provide the most comprehensive govern-ment-sponsored review of U.S. national security in more than 50 years. The Commission’s tasks are three:

First, to analyze the emerging international security environment;

Next, to develop a U.S. national security strategy appropriate to that environment;

Finally, to assess the various security institutions for their current relevance to the effective and efficient implementation of thatstrategy, and to recommend adjustments as necessary.

In sum, this Commission seeks to promote the security interests of the nation and its citizens at home and abroad, to safeguardAmerican institutions and values, and, ultimately, to preserve the independence and well being of the United States for succeeding gen-erations of Americans.

It has fallen to us, just as it has to all generations since the founding of the Republic, to “provide for the common defense.” Wedo so, moreover, at a time when the international landscape is changing rapidly in the wake of the Cold War. Our security institutions,fashioned in an earlier era under conditions that no longer exist, may not be able to respond to circumstances their designers did notforesee. The first step in assessing the current suitability of those institutions is to anticipate the emerging conditions under which theymust function. But how, as one classical historian put it, are we “to divine the unseen future that lies hidden in the present?”

Broadly speaking, there are three methods of contemplating the future. One assumes that the future will mirror the past. A secondenvisages abrupt change and tries to hedge against it. A third attempts to discern the underlying causes of current trends, in order toanticipate how those causal forces will shape the future. Each has its merits and limitations. The problem, of course, is to understandwhich method is most appropriate to the particulars of time, place, and subject.

Had a study similar to our own been undertaken in 1956, anticipating the quarter century to come, the first method would haveworked best. From 1956 until 1981, much of the world was divided, geo-strategically and ideologically, into two hostile camps. TheUnited States, the Soviet Union, the United Kingdom, Germany, France, and Japan were the centers of economic and military-indus-trial power. Nuclear weapons prevailed in the strategic arsenals of the world’s great military powers; their surface combatants andsubmarines continued to roam the seas, artillery and main battle tanks dominated land operations in warfare, and air power was ubiquitous. Despite many changes in the world, both the political alignments and military technology that dominated in 1956 stillremained in 1981. The world grew accustomed, uneasily, to continuity.

Had a study begun in 1925, pointing to 1950, the second method, which envisages abrupt change, would have been best. As thatera began, Germany and the Soviet Union were weak powers, and Asia and Africa were still largely controlled by the great and wealthyimperial powers of Europe. The United States had recoiled from world politics following the frustrations of the Great War and its aftermath. Battleships were the capital ships of the world’s great navies, infantry doctrine defined armies, and the airplane was seenprimarily as a tool to support land forces. By 1950, however, European economies were just emerging from ruin, their overseas colonialempires were dying, the Soviet Union and the United States had become rival superpowers, and America was committed by treaty tothe defense of Western Europe. The military domain had absorbed at least two major revolutions: the full exploitation of the third dimension through air power, and the advent of nuclear weapons. Warfare for the United States had changed dramatically throughunifying the operations of land, sea, and air forces, and would never be the same again.

Given the magnitude of change now clearly underway, our study primarily adopts the third way to contemplate the next 25 years.We have attempted to distinguish the determinants of current trends so as to anticipate their effect on the future. As before, the com-ponents of change will be technological, economic, political, and military.

No one, of course, can predict exactly how that next quarter century will unfold. Through available lenses, we can foresee somethings with reasonable clarity—demographic patterns, for example. Other phenomena, however, are rather more opaque. Nonetheless,we have used every analytical tool we could find to discern and analyze the emerging world. Finally, we have tried to find a properbalance between confidence and humility, both being important in any effort of this kind. We trust we have achieved that balance, andthat its result will prove to be a sturdy foundation and an illuminating guide for the next two phases of the Commission’s effort.

Charles G. Boyd

Executive Director

v

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DisclaimerThis document reflects the work of the National Security Study Group, a collection of national

security scholars and practitioners whose task it has been to provide basic research and analyticalsupport for the chartered task of the United States Commission on National Security/21st Century.From this document, the Commissioners have drawn fourteen major conclusions that they havepublished separately under the title, New World Coming: American Security In The 21st Century,Major Themes and Implications. Not every proposition or nuance in this analysis is endorsed byevery Commissioner.

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SUPPORTING RESEARCH AND ANALYSIS


Introduction

The future, in essence, is this: TheAmerican “moment” in world politics,

which combines bloodless victory in the finalstage of the Cold War with the apparent globaltriumph of fundamental American ideals, willnot last forever. Nothing wrought by man does.In the next 25 years, the United States willengage in an increasingly complex world toassure the benefits that we—and most of theworld with us—derive from American leader-ship.

As powerful as the United States may wellbe over the next 25 years, the world will not betidily managed, whether from Washington orfrom anywhere else. History has not ended,mankind’s cultural diversity endures, and boththe will to power and the pull of passionateideas remain as relevant as ever in political lifeboth within and among nations.

A diffusion of power thus stands before us,but not necessarily one of the classical sort. Anew balance of power may arise that would beintelligible even to the statesmen of the 18th and19th centuries, but something more, and some-thing different, will overlap and perhapsoverwhelm it. The ever tighter harnessing ofscience to technological innovation, and of thatinnovation to global economic integration, ischanging the rules of international engagement.It is even affecting the identity of its engagingparties. The sway of state power has alwaysfluctuated within society, and states have oftencompeted with other institutions for influencebeyond their borders. But the challenges nowbeing mounted to national authority andcontrol—if not to the national idea itself—areboth novel and mighty.

It is not a foregone conclusion that the roleof the state will be permanently diminished, or

the system of sovereign states reformed orreplaced on account of these challenges. Butboth the system and its member units arecertain to change as a consequence, as theyhave always changed from having been tested.In the years ahead, borders of every sort—geo-graphical, communal, and psychological—willbe stressed, strained, and compelled to recon-figuration. As the elements and vulnerabilitiesof national power shift, they will often leavecurrent institutional arrangements at logger-heads with reality. Already the traditionalfunctions of law, police work, and militarypower have begun to blur before our eyes asnew threats arise.

Notable among these new threats is theprospect of an attack on U.S. cities by indepen-dent or state-supported terrorists usingweapons of mass destruction.1 Traditional dis-tinctions between national defense anddomestic security will be challenged further asthe new century unfolds, and both conventionalpolicies and bureaucratic arrangements will bestretched to and beyond the breaking pointunless those policies and arrangements arereformed.

The future is also one of rising stakes, forgood and for ill. Humanity may find ways tocompose its disagreements, succor its poor,heal its sick, and find new purpose in commonglobal goals. But if it fails at these tasks, itstands to fail more spectacularly than ever. Thatis because greater global connectedness leadsone way to benefit and another way to misfor-tune. Economic downturns that have usuallybeen episodic and local may become, thanks tothe integration of global financial markets,more systemic in their origins and hence moreglobal in their effects. The greater wealth thatmay be expected to flow from global economic

1 See William S. Cohen, “Preparing for a Grave New World,”

Washington Post, July 26, 1999, p. A19.

71730_DAPS_RSRCH.qx 9/22/99 4:19 PM Page 1


2 NEW WORLD COMING

integration will nevertheless produce growinginequality within and among nations. Themarch of science and technology, too, willprovide ever more powerful tools—tools thatcan be used for benefit in the right hands, butthat may pose even genocidal dangers shouldthey fall into the wrong ones. The next 25 yearsmay well force mankind back to first principlesover the ethical dilemmas inherent in biotech-nology. Our concept of national security willexpand. Our political values will be tested asour society changes. In every sphere, our moralimaginations will be exercised anew.

Some things, however, will not change. Wewill no doubt revisit many times the threeoldest questions of political life: How is legiti-mate authority constituted? What is fair insocial and economic life? How do we reconciledisagreements? Historical principles will stillapply as we ponder these and other questions.There will still be great powers, and theirmutual engagement will still matter. As ever,much will depend on the sagacity and goodcharacter of leadership. Misunderstandings,misjudgments, and mistakes will still occur, butso will acts of brave leadership borne on theinsight of exceptional men and women.

The upshot of the changes ahead is thatAmericans are now, and increasingly willbecome, less secure than they believe them-selves to be. The reason is that we may noteasily recognize many of the threats in ourfuture. They will differ significantly from thedangers to which history has accustomed us:ranting dictators spouting hatred, vast armies onthe march, huge missiles at the ready. They mayconsist instead of unannounced attacks by sub-national groups using genetically engineeredpathogens against American cities. They mayconsist of attacks against an increasingly inte-grated and vulnerable international economicinfrastructure over which no single body exer-

cises control. They may consist, too, of an un-raveling of the fabric of national identity itself,leading several important countries to fail ordisintegrate, generating catalytic regional crisesin their wake.

The main policy challenge in all suchcases, diverse as they may be, is the same:How does an American national leadershipbring the country together and marshal its re-sources to both seize new opportunities anddeal with novel threats? But we are gettingahead of ourselves. Before moving to argu-ments and evidence, let us first briefly describeways and means.

“No man can have in his mind a con-ception of the future, for it is not

yet,” wrote Thomas Hobbes in Leviathan, “Butof our own conceptions of the past we make afuture.” Hobbes meant two things by this state-ment: most obviously, that the past is the onlybasis upon which to forecast the future; moresubtly, that social life tends to freeze into itselfthe conceptions we have of it. Hobbes wastwice right. Absent the gift of prophecy,history’s recurrent patterns, discontinuities, andintimations about human nature compose ouronly means of reckoning ahead. It remains true,as well, that the very act of probing the futuretends to shape it, for we often act on our antic-ipations in ways that invite their arrival.

It is therefore no mean feat, and an act ofno little consequence, to describe the interna-tional environment for U.S. national security 25years hence. Let anyone who doubts the diffi-culty inherent in the task look back as far as thisstudy looks ahead.2

In the late summer of 1974, just 25 yearsago, the United States had just passed thedeepest throes of a major constitutional and po-

2 See Study Addenda, part 1.


SUPPORTING RESEARCH AND ANALYSIS 3


litical crisis. Its economy was more anemicthan it had been at any time since the GreatDepression and it had just lost a war, a processaccompanied by deep social divisions and amassive loss of faith in the national purpose.America’s most serious global adversary, theSoviet Union, was steadily augmenting itsstrategic military clout and pursuing territorialencroachment by proxy from Africa to CentralAmerica. Meanwhile, America’s key allies inEurope and Asia were hedging their bets overAmerican leadership and seemed set toovertake the United States economically. Faithin the future of democracy and the health ofmarket economies declined both at home andabroad. Not many predicted then that just 25years later, the United States would be standingat a pinnacle of national prosperity and interna-tional power, its institutions very much intactand its core political values vindicated on aglobal scale.

Clearly, the U.S. national trajectory in theworld has pointed upward since 1974. Over thenext 25 years, however, it could point otherways. Nevertheless, our point of departure inthis study is an assumption that the UnitedStates, a primary political, military, economic,and cultural force in the world today, willremain such a force through 2025. Its size,wealth, power, cultural sway, and diplomaticreputation render it inevitable that the UnitedStates will retain a significant role, and be asignificant factor, in shaping the internationalsecurity environment.

We also make three key methodological as-sumptions: that the definition of nationalsecurity must include all key political, social,cultural, technological, and economic variablesthat bear on state power and behavior; thatfuture projections based solely on today’strends are liable to be misleading; and thatwhile forecasting a range of futures is possible,

predicting a specific one is not. The reason forthis last assumption is critical, and it is this: thefuture is contingent. Human history does notjust happen; it is made. The state of globalaffairs in 2025 will be determined by an arrayof decisions, large and small, most of whichhave not yet been made. Our problem, there-fore, is not how far we can see out on the roadahead with the best of analytical tools. Theproblem is that the road is not straight, and noteven the highest power binoculars allow us tosee around curves.

However difficult looking into the futuremay be, it is both necessary and irresistible. Itis necessary because the stakes are so high thateven an imperfect effort is better than none atall. It is irresistible because we are humanbeings: curious, emotionally engaged,beckoned to challenge. We have organized NewWorld Coming in five parts. Part I, “GlobalDynamics,” sketches an overview of the rangeof major systemic changes we see arising overthe next 25 years. These are organized, in turn,according to four basic categories: scientific-technological, economic, socio-political, andmilitary-security. Part II, “A World Astir,” looksat regional trends in light of global dynamics.

Part III, “The U.S. Domestic Future,” examineswhat the United States itself will be like overthe next quarter century. American resourcesand social cohesion will influence how muchpower the state will have at its disposal, andAmerican domestic political culture will helpshape how the United States exercises thatpower in the world at large.

Part IV, “Worlds in Prospect,” translates theanalyses of the three foregoing sections intofour global scenarios. The purpose is not topredict which of these worlds will come intobeing, but rather to offer heuristic devices tohelp us encapsulate the forces that will drive



4 NEW WORLD COMING

the world toward one of several alternativefutures over the coming 25 years. The scenariosdescribe the interplay of developments in tech-nology and economics with associated social,political, and military environments. These fourscenarios are followed by a speculation that thefirst quarter of the 21st century will be a patch-work of these four worlds.

Part V, “Major Themes and Implications,”is a summation of the Commission’s findings.




I: Global Dynamics

The future is an enigma wrapped in fa-miliarities. If we were suddenly

transported back 25 years to 1974, we wouldfeel much at home, yet we still could notforesee the world of 1999. We could not predictthe end of the Cold War, the information revo-lution, the sustained economic growth of the1990s, or the specific collection of conflictsthat have lately roiled international politics. So,too, even though we are liable to feel at homein 2025—if only because our arrival there willbe so comfortingly gradual—many things willhave changed that we cannot foretell.

Social change involves not a single but atwin puzzle. To the one side is the ceaselessbuzz of natural and human activity that seem-ingly amounts to nothing of real significance.But to the other side, we suddenly awake togreat transformation in domains where we havesensed no activity at all. Just as we do not feelthe earth turning on its axis despite the consid-erable speeds and distances involved, weusually do not “see” social or political changeas it occurs.

There are grand theories of social changethat grapple with this twin puzzle, but we needonly recognize that social reality has multipleand interactive sources. Some are proximate,such as those animated by personalities, intellec-tual fashions, and happenstance. Others are moreremote, including those embedded in thephysical environment, the biological constitutionof the species, and the perdurable patterns ofhuman culture. We proceed here by examiningscientific-technological trends and prospectivepatterns in the global economy, then move to thesocio-political dynamics affecting and affectedby both, and conclude with a discussion of theinternational military-security domain.

The Scientific-Technological Future:“What Will People Learn and Build?”

The tools that Americans and othershave built in this century alone have

wrought major social and political changes intechnologically advanced countries, most ofthem unanticipated. Mass electrification trans-formed economies by revolutionizing bothmanufacturing techniques and consumptionpatterns. Extensive private ownership of auto-mobiles led to vastly increased labor mobility,to new spatial patterns in residential life and,particularly in the United States, to the adventof the suburbs. Suburban life, in turn, accelerat-ed the integration of diverse communities into anew mainstream, changed voting patterns andpurchasing behavior, accelerated the separationof generational cohorts within extendedfamilies, and altered the social functions andeconomics of major cities. Antibiotics begot ademographic revolution and, with otheradvances in medical science, contributed to thetransformation of religious sensibilities.Television brought a nascent commercialculture still at the margins of social conscious-ness in the mid-1940s into the core of sociallife. Birth control technologies have alteredgender roles and family patterns.

The political impact of these developmentsis virtually incalculable. Skill-sets and civicvalues, even the foci of national identity, haveall been altered. If the point that technology in-fluences social and political life is notsufficiently clear at the national level, considerthe epic struggles of the 19th and 20th centuriesbetween various forms of socialism and liberaldemocracy. The basis for those struggles wasthe enormous social and psychological disconti-nuities unleashed by the Industrial Revolution,since it was that Revolution that turned the so-cialist idea into programmatic ideologies. Newsocial and political discontinuities will surely



6 NEW WORLD COMING

flow from the major scientific discoveries andtechnological innovations that await us in thenext century. Indeed, so vast are their implica-tions that we can only hint at them here.

What technologies will emerge overthe next 25 years? The general char-

acteristic that stands out with respect to newtechnology is a major shift in paradigms ofscale. Until the 1970s, the reigning industrial-

technological paradigm was one in whichfactories grew larger to serve global markets;buildings grew taller, concrete spread wider,and continents were linked by ever largerjumbo jets. Gigantic rockets lifted men to themoon and, with multi-megaton warheads, un-derwrote the nuclear standoff. Efficiency andstatus lay in large scale. Now, however, minia-turization, adaptability, and speed are primarytraits. Ever more capacity is being placed on

tiny silicon wafers, and we are beginning tomimic the molecular assembly capabilities ofbiological systems.

The most striking innovations of the nextquarter century will occur in three basic cate-gories, and combinations thereof. Thesecategories are information technology, biotech-nology, and micro-electromechanics (MEMs).

Great strides in information technologywill continue, and the social impact will begreat. Internet use is increasing dramaticallyaround the globe and will continue to do so.

Computing power will grow and costsper unit of value will decline. Networks willbe ubiquitous, software will be smarter, andcomputers will assume more “human” char-acteristics in terms of voice and visual

Internet Users Are Increasing




capacities. There will be near-universalaccess to information and many forms of ex-pertise on a global scale by 2025, if notbefore. The entire world will be linked, so thatfrom any stationary or mobile station it will bephysically possible to send and receive near-instantaneous voice, video, and other serialelectronic signals to any other station. If themillennium about to pass into history is re-membered as the time when humanity firstrecognized its common planetary space, thefirst century of the coming millennium may beremembered as that in which humanityachieved the potential, if not the reality, of fullconnectedness in real time. We will witness,as it has been called, the death of distance.3

Information technology will make much ofour environment interactive, both with respectto devices that respond to our wishes, and withrespect to other people. By 2025, vast numbersof people—large majorities in advanced soci-eties—will carry their own personalinfospheres with them, perhaps wearing themin their clothing and powering them with themere kinetic motion of walking.4 Most peopleand vast amounts of information will be acces-sible at all times, in all places, in a world wherea tailored virtual work environment will ac-company us whenever we wish. When wetravel, our cars will have GPS receivers net-worked to central databases, allowing for aconstant update of map and traffic information.Upon arriving home, the environment willadjust to our presence thanks to linked, pro-grammable appliances. Entertainment will takeon a more cosmopolitan flavor since it willreflect global connectivity. We will be able toassociate “virtually” with any person or groupsharing our interests in hobbies, politics, eth-nicity, or religion.

Even more dramatic than new innovationsin information technology, major developments

await us in biotechnology. By 2010, biotech-nology may overtake information technology interms of economic investment; whether it doesor not, it will almost certainly overtake it interms of macro-social impact.5 Both businessand, to a lesser but not small extent, govern-ments will sustain large research anddevelopment funding in biotechnology. Thisfunding, along with parallel advances ingenetic engineering and tissue-growth research,will spur rapid innovation and related economicgrowth.

Capabilities could be startling by today’sstandards. If governments permit, genetic engi-neering will allow sex and specific traitselection in infants. Cloning human organs willbe possible, and in some instances common.Many viral diseases will be better understood,and stem-cell technology could allow treat-ments for many degenerative neurologicalailments. Treatments to enhance the humanimmune response against diseases will bepossible. “Farmaceuticals” will be readilyavailable, with cows, pigs, and sheep withaltered genes providing proteins with medicalvalue in their meat and milk. Agriculture willbe transformed by higher productivity, nutri-tion- and vaccine-enhanced foods, and greaterplant resistance to (known) pests. Takentogether, these innovations suggest that thehuman life span in the developed world couldshift from the present average of about 75years to at least 85 years—and perhaps to as3 Coined by Frances Cairncross, The Death of Distance: How

the Communications Revolution Will Change Our Lives(Boston: Harvard Business School Press, 1997).

4 MIT’s Lincoln Lab is experimenting with a sneaker-bornebattery powerful enough to drive integrated circuits.Merely walking produces sufficient energy. See T. Starner,“Human-powered Wearable Computing,” IBM SystemsJournal, Vol. 35, Nos. 3&4, 1996.

5 See Forecast `98: A Vision for Advanced Research andTechnology (Fort Meade, MD: National Security Agency,1998), p. 29; and The U.S. Biotechnology Industry, Officeof Technology Policy, 1997.



8 NEW WORLD COMING

much as 120 years—within the next quartercentury.

Between now and 2025, cheap, high-density microelectronics will proliferate in thetools and the physical environment of thoseliving in technologically advanced societies.We will become familiar with MEMs: micro-electromechanical devices in which sensors,transmitters, receivers, or actuators (switchesthat activate mechanical devices) have beenminiaturized to the size of a transistor. Suchtechnologies will affect our lives in many ways.Should we become sick, our doctors will knowas soon as, or even before, we do, for micro-sensors will constantly monitor our health.Smaller, more capable sensor devices will helpinsure the safety of both home and work.Energy bills will drop due to the use of lowpower devices. Airplane wings will feature mi-croscopic sensors on their surfaces, allowingfor faster travel at more efficient speeds. MEMsmay also allow far more intrusive and cost-ef-fective exploration of outer space, withunknown economic, political, and possiblymoral implications.

Dramatic new capabilities in MEMs deviceswill appear as the long awaited nanotechnologyrevolution takes hold. In nanotechnology,devices are manufactured using molecular fabri-cation techniques not unlike those found in thehuman body. Many new technological advanceswill be based on bio-mimicry—the deliberateattempt to capitalize on what nature has learnedthrough millions of years of evolution. Toborrow from Eric Drexler, one of the foundingfathers of nanotechnology, we will be engagingthe “engines of creation” to alter the tools weuse.6

Current developments indicate that nano-technology, though in its early stages, willdevelop rapidly. In July a research team was

able for the first time to fashion simple com-puting components no thicker than a singlemolecule.7 This is a breakthrough that, in retro-spect, may come to rival in importance EnricoFermi’s nuclear chain reaction in a squash courtat the University of Chicago in 1942.

The implications of nanotechnology areparticularly revolutionary given that such tech-nologies will operate at the intersection ofinformation technologies and biotechnologies.This merging and melding of technologies willproduce smaller, more stable, and cheaper cir-cuitry that can be embedded, and functionallyinterconnected, into practically anything—in-cluding organic life forms. The implications ofsuch a fundamental innovation for advances inmaterials science, medicine, transportation,energy, manufacturing, and agriculture are si-multaneously huge and still mostly unknown.8

What is clear is that such basic innovationwill allow for more sophisticated scientific ex-plorations of our environment. It will facilitatethe gathering of information and advance ourunderstanding of complex distributed systems.Such technologies may also merge with, andaid, major advances in theoretical physics, par-ticularly in the areas of complexity and chaostheory. The results will not be just theoreticaland intellectual, but will have dramatic impli-cations for creating new technologicalsynergies and for developing ever more so-phisticated applications of our new tools.

6 Eric Drexler, Engines of Creation (New York: Anchor-

Doubleday, 1987). Many of Dr. Drexler’s concepts await

experimental verification. 7 John Markoff, “Tiniest Circuits Hold Prospect of Explosive

Computer Speeds,” New York Times, July 16, 1999, p. 1.8 There are several ongoing projects that estimate technological

innovation. See, for example, William E. Halal, Michael

D. Kull, and Ann Leffman, “Emerging Technologies:

What’s Ahead for 2001-2030,” The Futurist, Nov.-Dec.

1997.




However dramatic such potential break-throughs may be, they will not

revolutionize everything within a 25-yearperiod.

The belief in a revolutionary shift in worldenergy patterns will not die. Many scientistshold faith in nuclear fusion, or in a hydrogen-based energy economy. Some believe thatenergy may one day be mined from thevacuum of space—zero-point energy, socalled. Still others believe that substitutingethanol for standard gasoline can make a majorimpact on energy balances, and that geneticengineering can radically increase the biomassavailable to make ethanol, thus radicallyreducing the price.9

The problem with these prognostications,save for the last one, is that they offer noviable solution for the inertia inherent inexisting fossil fuel infrastructures. Even if amajor innovation does come from the labora-tory, it will take most of a 25-year period tocreate the supportive production, transporta-tion, and marketing infrastructures necessaryto make a major difference on a global scale.We should expect steady advances in the labsand important practical innovation, not somuch in energy sources as in the efficiencywith which new devices use energy. Majoradvances in batteries are a near certainty, andurban-use automobiles that run on fuel cellsare likely, too. As the economies of manyadvanced countries become more knowledge-based, and as telecommuting, telemarketing,and e-commerce become more prevalent,energy consumption patterns may change forthe better, as well.

But unless the ethanol solution transformsthe global energy industry, fossil fuels andtheir locations will still matter economicallyand in the political calculus of major powers.

Indeed, demand for fossil fuels will grow asthe economies of Asia and other parts of thedeveloping world expand.10 American depen-dence on foreign sources will also grow overmost of the next quarter century. If pricesremain moderate enough to depress the ex-ploitation of marginal or difficult-to-extractfossil fuel reserves—as may well be the caseover the next two and one-half decades—thenthe importance of Persian Gulf producers willactually grow back to levels reminiscent of themid-1970s.

This is not the place to detail all thevarious innovations in science and

technology that will shape our lives in the next25 years, or to speculate about those that willnot. In any event, what matters for the purposesof this study is less the devices themselves andmore their social and political impact, and herethe prospects are mixed. While new scientific dis-coveries and technological innovations hold outthe promise of enormous benefits, they will alsopresent many challenges, some of them cognitiveand practical, others moral and philosophical.

One reason to expect new challenges is thatchange will come upon us faster than ever. Thespeed with which new technological innova-tions enter the commercial and thus the socialmainstream will continue to increase, leavingsociety less time to adjust. It was with great and

9 See R. James Woolsey and Richard G. Lugar, “The New

Petroleum,” Foreign Affairs, Jan./Feb. 1999. The Clinton

Administration endorsed major research in this area in

August 1999.10 See Energy Information Administration, Annual Energy

Outlook 1999 (Washington, DC: Department of Energy,

December 1998); Geoffrey Kemp, Energy Superbowl:

Strategic Politics and the Persian Gulf and Caspian Basin

(Washington, DC: Nixon Center for Peace and Freedom,

1997); and Anthony H. Cordesman, The Changing

Geopolitics of Energy (Washington, DC: Center for

Strategic and International Studies, August 12, 1998).



10 NEW WORLD COMING

justified anticipation that Thomas Alva Edisonthrew the switch that electrified Pearl Street inlower Manhattan in 1882, but it took anotherthirty years before the commercial and socialimplications of electricity hit full stride in theUnited States. Nowadays, moving from thegerm of a scientific breakthrough to the main-streaming of new devices may take little morethan a year.

There are good reasons for the picking upof this pace. First, basic science is increasing-ly wedded to technological innovation, andthis new conjunction in turn is increasinglywedded more closely to industry than to gov-ernment defense labs. One result is thatconsiderably more research and developmentinvestment is flowing to basic science, in bothuniversities and commercial labs, than everbefore. This trend, almost certain to widen andaccelerate, means that the propensity forbreakthroughs has been virtually systematized.

Second and closely related, in much of theworld, and particularly in the United States,markets allow for the rapid commercializationof new technologies, and populations havebecome used to ceaseless innovation. Theresult is a cultural propensity to accept andadapt to innovation, which in turn works as anaccelerator to innovation itself.

Third, information technology acceleratesinnovation because it is simultaneously aproduct and marketing device. The first thingthat television advertising stressed was thepurchase of more televisions, so that the tech-nology became self-replicating in marketterms. The array of new commercial informa-tion technologies, from personal computers toInternet nodes to GPS devices to cell phones,trumps the self-replicating capacity of televi-sion by orders of magnitude. This technologyis its own infrastructure and its own commer-

cial multiplier effect—and it will be used in thefuture to market other innovations, many ofwhich will doubtless be linked with informa-tion technology and biotechnology.11

Fourth, the technologies of the future willbe far more knowledge-based than physicalresource-based, and the constraints imposedby extracting and processing bulk materialswill shrink proportionately. What oncerequired tons of steel and concrete to create agiven increment of GDP growth now requiresa tiny fraction of that weight in plastic andsilicon. While the presumed “de-materializa-tion” of the world can be exaggerated,knowledge-based innovation is freer to moveahead rapidly, constrained only by the avail-ability of human capital and the organizationalcapacities of society to marshal and exploitthat capital.

One of the inevitable consequences ofan increased pace of innovation

married to an interweaving of basic sciencefields is that our capacity to anticipate specificdevelopments shrinks. In a way, we becomesmarter and dumber at the same time. We seethis already in the way that the informationrevolution has played out in the last twodecades; while very few wish to turn back theclock, there is no denying the disruptions inbusiness and personal lives that many have ex-perienced.

Information technologies have already hada significant impact on most individuals in theUnited States and other technologicallyadvanced countries. We already have a rudi-

11 See Daniel A. Losk and Randall P. Nottingham, “Global

Market Penetration of Communications Equipment:

Computers, Telephones, and Televisions,” Standard &

Poor’s DRI World Economic Outlook, First Quarter 1999,

p. 39.




mentary personal infosphere: witness thenumber of people driving down the freewayusing cell phones and staying in daily contactwith relatives and business associates via e-mail. We know, too, that individuals intechnologically advanced societies are in manyrespects more powerful than ever before. Theyknow more, and, by extending their sensesmore effectively, are more efficacious than anygeneration before them. They are more long-lived than any previous generation, as well.

The domain of the personal infosphere willgrow over the next 25 years, both verticallyand horizontally. In other words, the sophisti-cation of such spheres will rise, and thenumber and types of people who have themwill proliferate over much of the world. As aresult, the physical boundaries of our neigh-borhoods and business locations will becomeless relevant as individuals create virtual com-munities of common interests—“communitiesof choice” or “hobby tribes,” some have calledthem—by electronic means. Through our com-puters we will visit any business site or readthe latest in science and culture as we choose,or communicate with others who share our in-terests anywhere at virtually any time. TheInternet will provide interactive rather thanmainly passive information; it will become atutor rather than just a reference resource insubjects of our own choosing. In that sense ifnot also others, as one observer put it, “timezones will become more important thanborders.”12

This prospective technological environ-ment will pose certain problems. Individualswill have to cope with new levels of complex-ity. No one will fully understand theenvironment or be able to master the massive,continuous flow of information about it. Oneof the key social implications of the technolo-gies in our future is that they will tend to

confound all attempts at centralized control,not unlike the logic of the marketplace. Tosucceed, as individuals and as organizations,will mean adapting to a life of continuous edu-cation and operational redesign. Newinformation/knowledge tools will become ourtutors and guides. Compared to the present,everything will be hurled into relative motion.Some people and some organizations will copebetter than others in such circumstances, andthose left behind will suffer economically. Inshort, new technologies will create new filtersfor sifting out winners and losers in society.

Adding to the press of complexity and in-formation overload will be the pressure ofshort reaction times. The Internet alreadyallows us to do things globally in near real timethat used to take weeks or months. In the pastwe have always had time to prepare and react,and to weigh the potential consequences of ouractions. In the future, we may process more in-formation but, held in thrall by the grip of thetechnology itself, we may actually be prone tothink less about it. Many will learn the hardway the differences between data, information,and knowledge. Hard as this challenge will beon individuals, it will be even harder on largeorganizations and especially on governments.

As a consequence, we may be headed for aconsiderably more stressful cognitive environ-ment. While stress is a subjective notion tosome extent, it does have an objective physio-logical basis, and potential health implicationsflow from it. Disease patterns could shift; wemight learn to cure many forms of cancer onlyto be plagued by a host of cardiovascular andpsychological maladies that rest today at thefringes of our health concerns. Stress may alsolead some people to seek more predictability in

12 Walter B. Wriston, “The Third Technological Revolution,”

Foreign Affairs, Sept./Oct. 1997, p. 172.



12 NEW WORLD COMING

their lives and to compensate for uncertainty insome realms by magnifying certainty inothers.13

But it is not a foregone conclusion that ahigh-technology future will be more stressfulfor most people. More prosperous and healthi-er people with more recreational time on theirhands may well be under far less stress. If, inaddition, telecommuting saves countless hoursof being stuck in traffic and allows more peopleto live in idyllic environs, then, rather ironical-ly, more people would experience more ofnature thanks, in essence, to high technology.

New technologies will also affect develop-mental and educational issues. As with anyyoung animal, a human child’s neural networksform as a function of the pace and nature of thestimuli the child encounters in the environment.Some neurophysiologists believe that a childwho has spent hundreds of hours watching“action” television and playing fast-pacedcomputer games before reaching age six mayhave a hard time sitting still in a standard class-room, where the pace of activity is far slower.This does not necessarily mean that there isanything inherently wrong with the technologyor the games. But this technology does bear im-plications for better understanding controversiesover the definition and treatment of hyperactivi-ty, or attention deficit disorders, in pre-adolescentchildren, and for educational methods general-ly.14 There is a good prospect that educationalmethods will be revolutionized for the betteronce we fully understand and learn how to applythe new technologies at our disposal.

Families as well as individuals will have tocope with new circumstances. The denizens ofthe most advanced countries will face new re-sponsibilities as parents and citizens in managingand utilizing the information age. As the naturallimits and disciplines imposed by physical and

social borders shift and sometimes dissolve, indi-viduals will have to accept more responsibilityfor their own mental and moral balances. As oneobserver put it, a totally open and unfilterednetwork, operating amid the frenetic pace of con-temporary life, means that “the most importantthing parents need to understand about preparingtheir kids for the Internet world is that it requiresnot more whiz-bang high-tech skills, but rathermore old-fashioned fundamentals” such as goodparenting, a functional family life, and highquality basic education.15

Borders between generations and sexeswill shift, too. As to the former, the

faster the rate of technological innovation, themore likely that younger people will be at theforefront of it as “technological generations”grow ever shorter. This is despite the fact that somany people living longer and healthier livesmay compose a “new middle-aged”—thosebetween, say, 55 and 75—who may be far moreactive and productive as a group than ever before.The relatively greater economic utility and statusof young people may have enormous social im-plications in many societies.

For much of human history, advanced agesignified deeper knowledge in nearly every

13 Some believe that the growing popularity of gated communi-ties owes something to this motive, particularly for thoseinvested in the fast-paced, high-stress corporate world. SeeRobert D. Kaplan, An Empire Wilderness: Travels intoAmerica’s Future (New York: Random House, 1998), pp.33-5; and Edward J. Blakely and Mary Gail Snyder,Fortress America: Gated Communities in the United States(Washington, DC: Brookings, 1997).

14 Empircal research relevant to this connection is detailed inJane N. Healy, Your Child’s Growing Mind: A Guide toLearning and Brain Development from Birth toAdolescence (New York: Doubleday, 1994). See also,“Understanding TV’s Effects on the Developing Brain,”AAP News, May 1998; and Committee onCommunications, American Academy of Pediatrics,“Children, Adolescents, and Television (RE9538),”American Academy of Pediatrics, October 1995.

15 Thomas Friedman, “Are You Ready?” New York Times, June1, 1999, p. A23.




society. Old people used to be relatively rare,and it has always made a certain evidentialsense that the more experience someone has thewiser they are liable to be. The nature ofprospective technological processes turns thistradition on its head. With younger minds moreflexible and absorptive, and hence morevaluable to a continuously innovating society,the continued veneration of elders will makeless evidential sense, particularly as populationpyramids invert and there are more elderly thanyoung. This may be especially problematic inConfucian societies, but it will have an impacton Western ones, as well.

As to gender differences, as we head into aknowledge-based economy driven by technolo-gies characterized by smallness and speed, therelevance of males’ greater size and physicalstrength will further diminish. Historically, thelarger average size and strength of males deter-mined the division of labor in families. As firstanimal and then machine calories were substi-tuted for those of human muscle, the economicrelevance of gender distinctions and divisionsbegan to fade. The lag time between economicreality and culture has been considerable, butculture has been catching up. The next few gen-erations of technology should close the gapfurther, and one implication is that women willmove in greater numbers into positions ofpublic authority.

There are honest differences as to what thisimplies, but most speculation on the pointexceeds the grasp of current evidence.16 It isclear, however, that women’s issues are themain barometer of social change in many non-Western societies, and in some places thevanguard force in breaking down patterns ofsocial stasis.17 So while the impetus for sexualequality has been mainly a Western phenome-non in this century—and while technology hashad a good deal to do with it—its main global

impact in the next century is likely to be in non-Western domains. The arrival and acculturationof new information technologies in such areasare likely to greatly reinforce this impact, aswomen have an equal chance as men to makethemselves master over such tools.

Several divisive issues will arise onaccount of some new biotechnologies

that will affect gender and other human traits.Many ethical problems reside in the growingtechnical ease with which parents may choosethe sex, and other traits, of their children.Similar ethical—and practical—problems willalso inhere in the use of increasingly precisemeans of altering mental states, including newpsychopharmacological methods of inducinghappiness, self-esteem, and other emotions,entirely divorced from any behaviors in theworld.

Many problems will also be raised by theprospect of radically prolonged life spans. Firstand foremost is the question of access: Whowill get to use such technologies, and who willnot? How will scarce medical resources be ap-portioned if everyone claims a right to aradically lengthened life? Should finite re-sources be spent on prolonging life when thoseresources are needed for saving younger livesfrom the ravages of disease? How willadvanced countries deal with social policyissues concerning retirement age and benefits,pension funds and medical insurance?

16 See Helen Fisher, The First Sex: The Natural Talents of

Women and How They Are Changing the World, (New

York: Random House, 1999); Francis Fukuyama, “Women

and the Evolution of World Politics,” Foreign Affairs,

Sept./Oct. 1998; and the response to Fukuyama by

Barbara Ehrenreich and Katha Pollitt in the Jan./Feb. 1999

issue.17 For one example, see Celia W. Dugger, “India’s Poorest Are

Becoming Its Loudest,” New York Times, April 25, 1999,

(Week in Review), p. 3.



14 NEW WORLD COMING

Individuals, too, may confront totally novelissues, such as how to relate to their grandchil-drens’ grandchildren.

All of this has an international dimension,as well. Those few Americans who haverecently been able to choose the sex of theirchildren have preferred females to males, butthe cultural bias in most other parts of theworld, particularly the Far East, is theopposite.18 If choosing the sex of childrenbecomes widespread, it could in time createsharply divergent population profiles in dif-ferent societies. Moreover, the resentmenttoward advanced societies by those fartherbehind is likely to grow if, for example,people in the Near East or Latin Americacome to have average life spans severaldecades shorter than those in more technolog-ically advanced societies. The lack ofavailability of advanced medical technologiescould prove a stimulus for immigration fromthe developing world.

The boundaries of communities andworkplaces will shift, too. As to the

former, virtual communities may replaceactual ones to some extent, the limit definedby the instinctual human proclivity to socia-bility and social order.19 If virtualcommunities proliferate very widely at theexpense of real ones, then our public spaceitself may contract. The Internet, and themerging of the Internet with commercial en-tertainment culture, will allow individuals tovirtually select their own news. That may re-inforce preexisting biases, and it may narrowpeople rather than broaden them, leadingthem to be less concerned about society-at-large rather than more.20 If so, our publicspace may shrink, and democracy may behollowed out from the inside, even as all of itsoutward forms still appear normal.

On the other hand, local communitiescould flourish in reaction to the proliferationof virtual communities. People who spendmore time at home as they telecommute maytake a greater interest in local concerns andlocal politics. That, in turn, could revivifycommunities and nurture higher levels of po-litical participation at the grassroots.21

As to the latter, telecommuting will notmake workplaces obsolete, for workplaceshave an indissoluble human dimension andneed such a dimension to function effectively.But it will change how workplaces function.22

The fact that many people will be freer to livefarther from a central workplace will alsoaffect residential patterns, and could have sig-nificant implications for land and water use.Closely related, if, as many expect, e-commerce composes half or more of allcommercial transactions before the year 2025,there are implications for the spatial and socialcompositions of city and suburb. The ratio ofresidential to commercial uses of real estatewill rise as fewer stores are necessary to sellsimilar volumes of goods. Labor profiles willchange, too: There will probably be fewer

18 Note the data in Nicholas Eberstadt, “Asia Tomorrow, Gray

and Male,” The National Interest, No. 53 (Fall 1998),

pp. 63-5.19 See also Francis Fukuyama, The Great Disruption: Human

Nature and the Reconstitution of Social Order (New York:

Free Press, 1999), and David Whitman, “More Moral,”

The New Republic, 22 Feb. 1999, pp. 18-9. 20 Andrew Shapiro, “The Internet,” Foreign Policy, Summer

1999, p. 25.21 There are signs that this is already happening in the United

States. See Deconstructing Distrust: How Americans View

Government (Washington, DC: Pew Research Center,

1998), pp. 15-6. 22 Hamish McRae, The World in 2020: Power, Culture, and

Prosperity (Boston: Harvard Business School Press,

1994), p. 179.




retail clerk jobs in stores, but more delivery,sales, and inventory management jobs.

The new economy will transform entertain-ment culture as well as residential and businesspatterns. Here, too, there are implications forthe spatial layout of communities. New placeswill allow for new social mixing and new ideas;new vocabularies will form and new culturalsymbols will evolve. This matters because thespatial features of community—human geogra-phy, so to speak—have always had politicalimplications.23

Telecommuting, telemarketing, and e-commerce are also parts of a wider realitythat is introducing new patterns into work-and marketplaces alike. The ability to bypasstraditional lines of communication has intro-duced new efficiencies in business—the muchdiscussed “flat,” non-hierarchical organiza-tion. The wealth-producing potential of whatamounts to a new way to use human capital isenormous, and we have probably seen onlythe beginning of it so far.24 But new techno-logical patterns have created a need fordifferent organizational structures andprocesses to allow decision making authori-ties to function. It has not always been easy todevise them, nor will it get much easier in thefuture. Obviously, a completely flat organiza-tion is not an organization at all, but just anagglomeration. Moreover, what privatebusiness can do, public bureaucracies in de-mocratic countries cannot do as easily, for thelatter do not measure success in keeping thepublic trust by standard accounting methods.Nor can they, or should they, override therules of accountability essential to demo-cratic governance.

A related technology-driven issue thatwill have an impact on both individuals andsociety at large concerns privacy and secrecy.

Privacy will be more difficult to maintain.Ever expanding capabilities to monitor indi-vidual workers, to intercept messages ormonitor conversations, and to obtain personaldata from databases may conflict with indi-vidual rights in democratic countries. Secretswill be difficult to keep—whether individual,business, or governmental—but individualsand organizations will still try hard to keepthem. We do not yet know who will win therace between encryption and decoding, but itis likely that more basic information will beavailable to those who wish others ill. Therewill be a pervasive tension between divulginginformation, so that one may benefit from thesocial networks of the future, and holdingback information to foil the efforts of thosewho would abuse such networks.

As to the physical environment itself,the future is likely to bring a mixed

picture. No one doubts that human activity hasaltered the biosphere. The expansion ofhuman numbers and habitations has changedthe face of the planet, although there is muchdebate over particulars and over the moralbalance inherent in human activity. Pollutionis bad for humans and other animals, buteconomic growth lifts people out of miseryand the condition of a life nasty, brutish, andshort. Moreover, the technology of environ-mental remediation is now keeping pace withthe damage that industrialization causes inadvanced countries, and it will be increasing-ly available in developing countries as well.

23 For historical examples, see Michael Vlahos, “Entering the

Infosphere,” Journal of International Affairs, Spring 1998.24 For a brief review of the debate over the relationship

between information technology and gains in productivity,

see Steve Lohr, “Computer Age Gains Respect of

Economists,” New York Times, April 14, 1999,

pp. A1, C14.



16 NEW WORLD COMING

Still, even with advances in remediationtechnology, limits to resources are real, in-cluding the availability of fresh water aspopulations grow. There is also a probleminherent in sharp reductions in biodiversityowing to anthropogenic activity.25 Theselimits represent a major challenge to posterity.That said, there is fierce disagreement overseveral major environmental issues. Many arecertain that global warming will produce majorsocial traumas within 25 years, but the scientif-ic evidence does not yet support such aconclusion. Nor is it clear that recent weatherpatterns result from anthropogenic activity asopposed to natural fluctuations.

There is no doubt that natural disasters willroil the future as they have always roiled thepast. It is also clear that as population pressuresand other factors drive large numbers of peoplein developing countries to build homes in riverflood plains and coastal areas, the human tollfrom such disasters will rise.26 Some 40 of the50 fastest growing cities in the world are inearthquake zones. Already half the world’spopulation lives in coastal zones prone toflooding and to the spread of malaria and otherdiseases. Environmental refugees now accountfor more than half of all refugees worldwide,and that percentage may grow.27 There isdoubt, however, about the severity of futuretrends, depending on how one reads the pace,depth, and source of climate change.

Socio-economic borders will also bestressed by new technologies. The new

requirements of an information-based economymay create novel social divisions with seriouspolitical implications. For example, interna-tional connectivity will allow job competitionover an increasingly wide geographical area.The good news here is that efficiencies willrise, and greater efficiency in business trans-lates overall into more wealth in society. But

there is a downside, too. British Telecom nowuses operators located in New Zealand becausethey are wide awake when most people aresnoozing in England; that brings lower costsand greater efficiency to the company butgreater employment pressures in Manchesterand Leeds. Such changes are likely to affectwhite-collar jobs as much or more than blue-collar ones that are physically bound to aparticular place.

The polarization of work forces is also apotentially serious social issue. Those membersof society who are not adept at symbol manip-ulation may have difficulty adjusting to the newtechno-economic environment. It is not clear,for example, that there will be enough low-skillservice jobs for those echelons of the popula-tion that require them for independentsustenance. If there are not, the sprawling andvery liberally defined American middle class—and the middle classes of other formerlyindustrial societies, too—will split, with theupwardly mobile joining the internationalcyber-economy and the rest headed towardmore marginal economic domains.

Moreover, whenever educational segmen-tation reflects racial or ethnic segmentation, thenew geography of labor stratification may ex-acerbate existing social divisions. This could bea particularly volatile issue in those societies,including that of the United States, that have a

25 This activity includes the burning of rain forests for seden-

tary agriculture, the destruction of estuaries and

mangroves, desertification, and the overuse of pesticides

in conjunction with monocultural methods in agriculture.26 See Steve Lonergan, “The Roles of Environmental

Degradation in Population Displacement,” Environmental

Change and Security Project, The Woodrow Wilson

Center, Issue 4 (Spring 1998), pp. 5-15.27 International Federation of Red Cross and Red Crescent

Societies, World Disaster Report 1999 (New York: IFRC,

1999).




relatively benign history of social mobility.New technologies may also affect socialpatterns related to socio-economic stratifica-tion. Already in advanced countries the adventof automated service devices such as automat-ed tellers at banks and voice mail in offices hasreduced the number of face-to-face encountersbetween people of different socio-economicechelons. The social and political implicationsof increased isolation among socio-economicgroups is unclear, but it is not something to betaken lightly in mass democracies.

Clearly, then, technological drivers willaffect social patterns and raise questions ofsocial justice. Such questions will doubtlessbecome major items on the political agendas ofadvanced societies. This is already so to someextent. Over the last several decades there hasbeen a greater skewing of income distributionin the United States, as well as in many otheradvanced societies. Some blame regressive taxpolicies for this, but more likely we have wit-nessed a technology-driven asset expansionamong the wealthy not different in essencefrom the basic economic dynamic of the GildedAge. As before, this asset-driven expansion ofwealth is likely in time to generate a wage-driven expansion, and there is some indicationthat it already has done so. The democratizationof capital that seems to be inherent in the newtechnological environment could also lead to agreater leveling of income and status amid agreater prosperity for all. But we do not yetknow how new technologies, and their effectson domestic and international economicarrangements, will remix opportunity andeconomic achievement in various societies.Most likely, there will be more polarization insome domains and less in others.

A concern with social justice is not the onlymacro-social area liable to be put to new testsby technological dynamics. Changes ahead will

threaten all vested interests whose powerresides in the familiarities of the status quo. Forthose who have achieved high incomes andstatus, the prospect of rapid change can bethreatening, and those who have “made it” veryoften have the power to arrest or even derailchange—at least for a while. One manifestationof such fears is the way in which technologicalinnovation is often depicted by tenured elites.National politicians extol the promise of theInternet, for example, and then turn their atten-tion to ways of limiting it through regulation,censorship, and taxation.

Depending on the wider cultural milieu,some tenured elites do better at resisting changethan others. All of this suggests that the culturewars of advanced societies will shift over time asnew technologies work their way down and intosocial patterns. We may stop arguing so muchover abortion, gun control, and the coarseness ofentertainment culture, and more over eviscerationof public space, the ethics of selling synthetic life-forms for profit, and government regulation ofcyberspace. But argue we shall and, as we do,new content will fill the vessels of our politicalvocabulary, changing what it means to be liberalor conservative, progressive or reactionary.

New knowledge-based technologiescould also divide societies in terms of

basic values. Some unknown percentage ofadults in advanced societies may opt out of alife characterized, in their view, by a freneticpace of cognitive demand, a lack of privacy, thedissolution of comforting boundaries, and themisapplications of human priorities. Somecitizens will be actively hostile to the new cy-berworld, perhaps violently so.

This suggests that the adversary cultures ofadvanced societies will form new ideologies onthe basis of opposition to the sort of technology-driven social changes outlined above. One seessuch signs already at the fringes of the environ-



18 NEW WORLD COMING

mental movements in many technologicallyadvanced countries. This is a trend likely togrow in intensity, and it has potential securityimplications in the form of eco-terrorism, a tasteof which we have already experienced both inNorth America and in Europe.

While some will rue the new machines, andwhile environmental concerns will doubtlesstake many forms, others will relish the personalempowerment that the new technology willprovide to those ready and able to embrace it.But this, too, poses a potential social challenge,and one with profound implications for demo-cratic political cultures. The growing sense ofpower that will accrue to many individuals, notto speak of societies and states, as their sensesare extended by technology could corrupt moralbalances and erode moral discipline. If thatwere to happen on an extensive basis, it couldundermine the very sources of the culturalsystem that has facilitated such individual em-powerment in the first place.28 It could threatenthe balance of healthy civic habits that havelong sustained democratic communities.

International borders will become moreporous, too. States will find it increas-

ingly difficult to prevent the flow of ideas,economic goods, and dangers into their territo-ries.29 At the interstate level, technologyportends a sharp leveling effect in the ability todo harm to others across territorial borders. Itwill no longer require a major investment inscientific and industrial infrastructure for smallstates and even reasonably well-heeled groupsand individuals, whether they be criminal syn-dicates or terrorists, to get their hands on verydangerous technologies.

As important, while all societies will beexposed to technology and its effects, not all so-cieties will master them equally. While theimplements of new innovations will be more

widely diffused, the benefits may be moreunevenly distributed than ever. Some countries,and groups within countries, will embrace tech-nological innovation, while many others will gothrough life in a technological environment thatis pre-1940s by Western standards. Thus, newtechnologies will divide the world as well asdraw it together.

This is extremely important for the longrun. All major technological-economic revolu-tions have tended to empower some groups anddiminish others. As we move ever deeper into atime of knowledge-based power, those nations,societies, and groups that excel at educationand human capital generally will find them-selves with daunting relative advantages overthose that do not. This is already obvious insome respects through the postwar examples ofHong Kong, Singapore, and Israel, small andnatural resource-poor places that have never-theless been able to generate considerablewealth and relative power. This is why educa-tion, as well as social capital and cohesion, willbe increasingly important components ofnational power in the future.

In this regard, the Internet may play apowerful role. On the one hand, the Internet hasconsiderable potential to spur greater literacy inmuch of world, and to bring knowledge tomillions who might otherwise not have the op-portunity to learn. That is all to the good. But aglobal Internet culture may also produce farmore half-educated people. The proverb that alittle knowledge can be a dangerous thing maybe trite, but that does not make it false. Whenone recalls that some of the most dangerousleaders, and followers, in the 20th century havebeen half-educated men—Stalin, Hitler, Mao,

28 Daniel Bell, The Cultural Contradictions of Capitalism

(New York: Basic Books, 1976).29 See Human Development Report 1999, United Nations

Development Program, pp. 29-30




and Pol Pot come readily to mind—the possi-bility begins to take on a worrisome dimension.

This is a potential problem not just at thelevel of national leadership, but at a level fardeeper in society. The Internet is already full ofinformation, but not necessarily of knowledge—and it is utterly unfiltered. For those who lack asolid basic educational grounding, it is difficultto distinguish accurate from false information,serious ideas from half-baked ones, practicalproposals from those both dangerous andfanciful. After all, any person, even a child, canuse the Internet to visit with “hate” groups, or beunwittingly influenced by many sundry forms ofunhealthy or just unusual propaganda from anyof the four corners of the earth. It is as easy to getthe Aryan Nation website up on a computer as itis to load Amazon.com. “Big ideas” hatchedanywhere on earth may rush around the worldfar more quickly than ever before—both goodand not so good “big ideas.” The potential for thegrowth of an international “know-nothing”populism cannot be ruled out just because theweb will also facilitate coordination amonggroups lobbying for peace and human rights.

Nor can it be assumed that essentially anti-modern forces will abjure using the Internet. Insome Muslim societies, religious fundamental-ists are often the first to seize upon moderntechniques of communication to spread theirmessages. The quasi-religious martial arts soci-eties of China, though mystical and anti-modernat heart, may do so as well if their leaders arguethat they need to use technology in order to“humanize” technology.

New technologies may also affect thebonding strength of national identities.

Through the Internet, Americans and othercitizens of technically sophisticated societieswill have far greater exposure to peoples ofother nations, and greater levels of interactionwith them.30 Tourism may become the world’s

largest industry by 2025, as interest in otherclimes and the ease of getting to them bothincrease, and the costs of doing so decline.Technology may also allow a near-universallanguage translation capability, resulting in thepotential for a far wider exchange of ideas. Inmany countries, this will likely create a greatersense of something like a global citizen, and itmay change dramatically how people identifythemselves and how they see their country’splace in the world. Americans, and other tradi-tionally patriotic nationals, could come todevelop strong associations both above thelevel of existing national identification—that ofthe “world citizen”—and below it, with ethnic,sectarian, or otherwise local communitysymbols. In other words, we may witness thebirth of the post-modern state, a phenomenonwith potentially huge implications for interna-tional politics.31

This is a crucial uncertainty because majorchanges in the global political order haveoccurred historically only under two conditions:when the nature of legitimate political unitschanges (for example, from empires to nation-states in the 19th and 20th centuries), and whennew values generate the redefinition of personalidentifications and loyalties. It is hard to sayhow much eroded the idea of the unitarynational state may be over the next quartercentury, but the splaying of political associa-tions both upward and downward from the levelof the state is already in evidence in Europe.Skeptics doubt the possibility of building aneconomy in order to build a state, and a state inorder to build a nation—which is the logic of a

30 See the special issue on the impact of the Internet in the

Indiana Journal of Global Studies, Spring 1998.31 See James Kurth, “The Post-Modern State,” The National

Interest, No. 28 (Summer 1992); and John Lewis Gaddis,

“Living in Candlestick Park,” The Atlantic Monthly, April

1999, pp. 65-74.



20 NEW WORLD COMING

federated Europe from the European elite pointof view. But what would never have worked inthe old world may work in the new; alreadymany Germans, Dutch, and Portugueseyounger than age 30 think of themselves asEuropean as much as they do German, Dutch,and Portuguese.32 And if it does work, it will doso largely because, thanks in part to new tech-nologies, the sinews of intersocialcommunications will break down existingcultural as well as economic borders in favor ofnew ones.33

Oddly enough, too, but still quite logical,existing national units are more likely to breakdown in circumstances where an overarchingtransnational edifice is in place, or is seen to becoming into being. Thus will forms of integra-tion and fragmentation coexist. The slogan ofthe Scottish National Party (SNP), forexample, in this past spring’s first election fora modern Scottish parliament, was “Scotlandindependent in Europe.” The SNP did not winthe day, but in the future it might; and roughlysimilar logic applies to places such as Corsica,Lombardy, Wallonia, Catalonia, and theBasque country.

We may also face, as a species, newethical and philosophical challenges

to human civilization itself thanks to theprospects of biotechnology. While biotechnol-ogy harbors tremendous potential for good, thepotential for permanent damage to humanityand the biosphere is also a reality. This tech-nology, for example, will allow for the creationof ever deadlier and harder to detect weaponsof potentially genocidal dimensions. Thelinkage between biotechnology and nanotech-nology methods poses dilemmas even moreprofound. For example, it will soon be possibleto connect human brain cells to silicon chips.34

It will also be possible to alter more precisely

human behavior through genetic engineer-ing.35

While such abilities hold out promisingtechniques for healing many mental andphysical illnesses, and for a very advancedform of robotics, it also suggests that the veryconstituency of humanity may change—notjust from altering the human genome throughgenetic engineering, but also from mixing itwith non-organic mechanics. When philoso-phers have spoken of the co-evolution of manand machine, until now they have spokenmetaphysically. Notions of “androids,”“cyborgs,” and “bionic” men and women havedwelled exclusively in the realm of sciencefiction. But at least the beginnings of such ca-pabilities could literally exist within thelifetime of today’s elementary school children.

The implications of such developmentsshould not be underestimated. Our understand-ing of all human social arrangements is based,ultimately, on an understanding of humannature. If that nature becomes subject to sig-nificant alteration through human artifice, thenall such arrangements are thrown into doubt.36

It almost goes without saying, too, that todelve into such matters raises the deepest ofethical issues: Can humanity trust itself with

32 But still not most, according to the European Commission’s

Eurobarometer 50, cited in Dominique Moisi, “Dreaming

of Europe,” Foreign Policy, Summer 1999, p. 49.33 See John Newhouse, “Europe’s Rising Regionalism,”

Foreign Affairs, Jan./Feb. 1997.34 Scientists have already grown brain cells from a rat on a

silicon chip, the result exhibiting certain characteristics of

each. A photograph may be found in Business Week’s

special Summer 1999 issue on innovation, p. 106.

35 This has already been achieved with mice. See “Social

Behavior Transformed With One New Gene,” Science

Daily, August 19, 1999, p. 1.36 Argued by Frances Fukuyama, “Second Thoughts: The Last

Man in a Bottle,” The National Interest, No. 56 (Summer

1999).




such capabilities? Should it? How can it knowbefore the fact? Who gets to decide?

There have always been technologicalpessimists among us, yet despite the

disruptions of several iterations of major tech-nological innovation over the past fewcenturies, the lives of the vast majority arelonger, healthier, happier, and more secure as aconsequence.37 Most likely, the new discover-ies and devices of the next quarter century willalso tend to enhance life in quality andquantity. Still, there is growing unease that weare upping the ante to the point that a singlemistake or a single act of sheer evil could leavea potentially fatal wound. So it may be thatmankind will come face to face with techno-logical choices that make us think twice beforewe plunge ahead. If so, then we will havereached a new and higher stage of civilizationin which man as a tool-making animal andman as a moral being will devise an explicitreconciliation between these two core facets ofhis nature.

Global Economics: “How Is WealthCreated?”

In its essence, economics comes down toa simple question: How is wealth

created, distributed, and used? But the answerto that question is anything but simple. Wehave moved far beyond undifferentiated sub-sistence means for making ends meet. Local,regional, national, and international economicdynamics have become extraordinarilycomplex, involving matters of matching re-sources, sophisticated production techniques,education and human capital, marketing,finance, trade, and the corpus of custom andlaw that binds all of these activities together.

As far as the next 25 years are concerned,most important in any consideration of U.S.

national security is the extent to which theglobal economic system will continue its pathtoward integration. That is because such inte-gration will affect the distribution ofeconomic, political, and, ultimately, militarypower in the world. Some countries willprosper more than others, and some alert de-veloping countries, such as China, mayprosper most of all.

Continued integration promises greaterwealth for most countries, including theUnited States, but it also promises a host ofnovel vulnerabilities. If integration stalls or isreversed, however, other problems will cometo the fore. Beyond the broad distribution ofwealth and power, political destabilizationcould arise from the tendency of knowledge-based economies to exacerbate divisionswithin and among states. Economic interde-pendence will create vulnerabilities for theU.S. economy. Capital markets and trade maywell be exploited by others for purposes atodds with U.S. interests. New economicpatterns may also affect national identities andthe capacities of states to govern.

Most observers believe that the inter-national economic system is in a

state of rapid transition, but they often disagreeabout where this transition is leading. That ispartly because outside the domains of profes-sional economists—and sometimes withinthem—prescriptive disagreements shape mostdiscussions of globalization. Nevertheless, areasonably objective picture of the new globaleconomy can be drawn. It requires first a graspof structural changes in the internationaleconomy having to do with its financial andproduction dimensions, and how worldeconomic cycles are being influenced as a

37 The optimist-pessimist debate goes on. See Virginia Postrel’s

The Future and Its Enemies (New York: Free Press, 1998),

which describes the contest as it takes the optimists’ side.



22 NEW WORLD COMING

result. It means understanding the connectionbetween trade and capital flows, especially inthe developing world. And it means understand-ing the various barriers to economic change.

A key to the changing global economic en-vironment is the explosion in the volume ofinternational capital flows. The basic data tellthe tale. In 1990, the first full year of the post-Berlin Wall epoch, developing countries

absorbed a little over $100 billion in total long-term capital flows. More than half of thesereflected official aid and assistance from gov-ernments or multilateral institutions such as theWorld Bank. By 1998, the contrast was stark.Total long-term capital flows to the developingworld increased to $275 billion. Of that amount,private capital flows both from internationalmarkets and foreign direct investment account-ed for over 80 percent.38

Perhaps as important as the increased capitalflows are the changes in the nature of the privateparties participating in the market, and how theyare doing so. There have been dramatic increas-es in the numbers and types of participants in themarket, the size of discrete transactions, thetypes of instruments and funds involved, and theoverall speed at which trading takes place. Large

commercial banks still play a major role inglobal capital flows, and in their volatility. Butthe sources of investment have expanded toinclude pension and insurance funds as well asindividual portfolios.39 In sum, the global finan-cial system has grown from a small core set ofplayers to a much larger and more disparate setof investors and creditors. This has created newvested interests across a wide range ofeconomic, financial, and political domains

worldwide who are wagering increasingly largersums for investment and short-term speculation.

Technology has been an important enablerin this development. Advances in informationtechnology have made it possible for financial

38 According to the World Bank, international capital markets

consist of bonds, loans, and portfolio equity flows.

Foreign direct investment consists of the sum of equity

capital, reinvestment of earnings, other long-term capital,

and short-term capital, as shown in the balance of

payments. Official flows consist of the sum of net flows of

long-term debt from official creditors such as multilateral

institutions and governments.39 According to the Organisation for Economic Co-operation

and Development (OECD), pension fund assets invested in

capital markets increased from $4.9 billion to $8.2 billion

between 1990 and 1995. OECD, The World in 2020:

Towards a New Global Age (Paris: OECD, 1997), p. 52.

Capital Flows to Developing Countries




institutions and individual investors alike tocollect, analyze, and act on information aboutmarkets with unprecedented speed. This trendwill grow because, as the technologies spread,others around the world will be able to partici-pate in global markets just as ever moreindividual and corporate investors in developedcountries like the United States do today.

Technology has had an even more profoundeffect on production itself. Technologicaladvances have changed the way companies arebeing run in terms of operation, size, andlocation. On the one hand, it is now possible—and will become increasingly so—for manybusinesses to be truly global. On the other hand,information technology facilitates the shapingof specific production to specific markets. Thisphenomenon, known as niche production, willexpand in coming years as the diffusion ofknowledge about production techniques, and ofsmart machines themselves, merges with a farmore specific and near-instantaneous knowl-edge of the market. This is true for old productareas, such as textiles, and for new productdomains that technology itself helps bring intobeing. In different ways, the globalizing ofbusiness organization, the expansion of interna-tional markets, and the advent of nicheproduction will force the restructuring of indus-trial and service sectors alike. It will also tend toimprove standards and quality, and to put apremium on achieving speed, efficiency, andknowledge-based processes at every level andfor every kind of business activity.

Information technology has also influencedinventory strategies, and these too have nationalsecurity implications. Inventories are expensiveto carry, and businesses prefer to maintainlighter loads in that regard. The problem is thatdisruptions in supply for whatever reason—notleast war—leave dependent countries vulnera-ble. For example, should China attempt to seize

Taiwan by force, and in the process cut theeconomic links between Taiwan and the UnitedStates, American industry might well find itselfshort of important economic components.

Then there is the Internet, which is revolu-tionizing traditional methods of marketing anddistribution. The Internet already provides anovel source of commercial advertisement—less for particular products than for classes ofproducts—and its influence in that domain willgrow exponentially over the next quartercentury.40 It also lowers the cost of entry to newmarkets, facilitating the expansion of smallerenterprises into international business. TheInternet is allowing markets to become trulyglobal, with fewer middlemen taking profit andslowing transaction times. Not only is the inter-national market becoming larger, it is alsobecoming less hierarchical, and that has signifi-cant implications for the structure of commerceand competition across both the service and in-dustrial sectors of the global economy.

The integration of the world economynow afoot is different from earlier

episodes of economic integration. First, the ratioof trade to global GDP, at least according tosome measures, is at historically high levels.41

States today benefit more from economic inter-action with other states than at any other timein the modern age, and they are also more de-pendent on those interactions to maintain

40 See Matthew Symonds, “The Net Imperative,” and “When

Companies Connect,” The Economist, June 26-July 2,

1999.41 Trade as a percentage of world GDP approached 15 percent

in 1992. Trade as a percentage of GDP in the pre-World

War I era was just over 9 percent. But see Benjamin J.

Cohen, “Phoenix Risen: The Resurrection of Global

Finance,” World Politics, January 1996, and Mark

Hallenberg, “Tax Competition in Wilhelmine Germany

and Its Implications for the European Union,” World

Politics, April 1996.



24 NEW WORLD COMING

levels of growth and consumption. An everlarger number of countries, including theUnited States, increasingly relies on importsfor consumer goods, export assembly, andtechnology inputs. In addition, the prosperityof domestic companies, financial institutions,and individuals is increasingly tied to thesuccess of overseas operations.

Second, trade is less dominated by theexchange of commodities and manufacturing,having spread to include the export ofservices. It also now encompasses a far widerrange of the world’s countries. This spreadingof international commerce has been particu-larly profound in the developing countries,the traditional suppliers of commodities tomore industrialized states, which haveemerged as important sources for a range ofmanufactured goods.42

Third, the cross-border reach of multina-tional corporations and other businessproduction networks has accelerated. Largecorporations can create truly global productionnetworks, seeking out the lowest productioncosts worldwide for major components as wellas whole products. U.S.-based corporations areincreasingly shifting their operations overseas,depending more on global markets for revenuesand production. More important, perhaps,multinational corporations are increasinglybecoming transnational corporations, the dif-ference being in the extent to which ownershipand the flow of revenues internal to the corpo-ration tend to coalesce at one hub as opposed tomany hubs around the world.

Fourth, stock markets have been createdthroughout the world, and many of them havealready become important engines of savingsand investment. The most significant long-term implication of these new equity marketslies in their capacity to allocate investment re-

sources according to market-based criteria. Inmany countries this is an important new phe-nomenon, serving to advance other economicand also political reforms.

Fifth, international and multilateral insti-tutions hold a prominence in today’seconomy unparalleled in the global economicsystems of the past. These institutions are re-sponsible for resolving trade disputes anddesigning national financial policies, amongother functions, and these functions willexpand as the global economy becomes in-creasingly integrated.

Sixth, expectations themselves are impor-tant. Large numbers of people in mostcountries are well aware of the economicbenefits of a more integrated world. Theyhave reason to pressure their governments toremove impediments, such as barriers to theinflow of capital, that stand between them andthe presumed benefits of global economic in-tegration.

Additionally, an increasingly integratedglobal economy is speeding the spread of inter-national best practices. When economies arelinked closely to world financial markets, gov-ernments cannot so easily maintain protectionistpolicies, and they must increasingly respect thediscipline of the market. This is a good thing notjust for bankers and financiers, but also forordinary people, who have suffered far morefrom bad government than from the herding in-stincts of international investors.

Taken together, these changes suggest animportant political implication. That so manypeople might be spared the miseries ofpoverty, and even become downright wealthy,opens up the possibility of more pluralist

42 For details, see OECD, The World in 2020, p. 37.




politics and less violence over more of theglobe. The wealthier a country is and thedeeper its integration into the globaleconomy, the stronger its incentives to avoidmajor conflicts with its neighbors. Of course,economic logic does not necessarily coincidewith political interests, and states have oftendone economically irrational things for polit-ical purposes. But such incentives do matter.

It would seem, then, that the prospect ofan increasingly integrated global

economy lies before us. The integrativeprocess, however, is not so simple. There areseveral reasons to doubt that global economicintegration will proceed rapidly or smoothly.It may not even proceed at all, and it mayeven retreat in some areas. Let us visit thepossibilities.

Resistance to change can be strong, andresistance to rapid change stronger still.Global integration, to the extent that anysociety engages in it, necessarily increases itsexposure to market forces through the reduc-tion of trade and investment barriers and thederegulation of the domestic economy. Whilethe market tends over time to reallocate re-sources from less to more productiveendeavors, it also disrupts local communitiesand traditional patterns of commerce. Itrequires wrenching structural shifts within acountry’s industrial base and employmentprofile.43 Alterations in the patterns of wealthproduction, and consumption invariablydestabilize the location of social status andboth political and moral authority.44 Sincethose who have status and authority are gen-erally reluctant to part with it, someresistance to change is inevitable.

Resistance to the spread of globaleconomic integration can take many forms.One historic form is protectionism. Whereas

the benefits of international trade are general,the costs are frequently distributed morenarrowly among a country’s less competitiveindustrial sectors. As an industry feels thebrunt of international competition, politicalpressure is often generated to shelter it. In thedeveloped world, perceptions that competi-tion with the lower-wage developingeconomies will threaten traditional but rela-tively uncompetitive industries, and thuscause downward pressure on wages, are likelyto engender protectionist sentiment over thelong term.

Support for protectionism has also beendeveloping in the United States, which is notsurprising since free trade and globalizationare the main reasons for the decline of high-paying manufacturing jobs. Protectionistsentiment has manifested itself in proposalsto raise tariffs on imported steel and in oppo-sition to extending presidential fast-trackauthority in negotiating trade agreements. Allthis is occurring at a time of record employ-ment, high growth rates, and ebullienteconomic optimism. That poses a troublingquestion; as former Labor Secretary RobertReich put it: "If free trade inspires this muchantipathy now, when the economy is surging,

43 Some of these shifts are the function of oscillating exchange

rates, which make products either cheaper or more dear

without any reference to the objective productivity base of

the industry. See Dani Rodrik, “Has Globalization Gone

Too Far?” California Management Review, Spring 1997,

pp. 29-53.44 Mexico is lately a stellar example, from the banishing of

U.S.-educated technocrats from the upper echelons of

party politics to the largest student strike in 40 years. See

Sam Dillon, “Mexico’s Presidential Hopefuls Are All New

Breed,” New York Times, June 24, 1999; and Julia Preston,

“Student Strike in Capital Jarring All of Mexico,” New

York Times, June 25, 1999.



26 NEW WORLD COMING

what will happen when the economy slows,as it inevitably will?"45

Elements of protectionism can come in mul-tilateral as well as bilateral form. Regional tiesare expanding and serving as a basis foreconomic growth, particularly through group-ings such as Mercosur, the European Union, andNAFTA. So far, too, these groupings havetended to reduce trade barriers not only withintheir borders but also, with the exception ofagricultural products, to the world at large.Nevertheless, should these blocs turn into defacto regional cartels when times get rough,world growth would be threatened instead ofboosted. Competing regional trading blocs couldmute, not encourage, the integration of newmarkets and resources in the global economy asa whole.

We can already see examples of protec-tionist proclivities within regional tradingblocs. Tensions between the EU and theformer Soviet satellites in eastern and centralEurope owe much to this problem. EU agri-cultural goods are subsidized and thus bribedinto export to places like Poland and theCzech Republic, putting great pressure onPolish and Czech farmers. Meanwhile, manyeast European goods are effectively kept outof EU markets by tariffs and quotas thatspecifically target those east Europeanproducts that are competitive within EUmarkets. Obviously, in such a case trade islimited as a whole by what amounts to aregional cartel.

Culture, too, can be a source of resis-tance to economic integration.

Resistance to change is liable to be morevigorous to the extent that the cultural carrierof that change is thought to be alien and dan-gerous. The implements of modern technologyare overwhelmingly Western, and many equate

the emerging information society withAmerican culture. In some societies, and par-ticularly among younger generations, thisculture is widely embraced. In other societies,however, this pop global culture is muchresented, and it often divides generations in away that irritates and worries national elites.Such resentment is discernable not only amidobviously reactionary forces—say, theTaliban—but is also widely present in Europeand in other countries that Americans presumeto be their allies and friends.

Like it or not, we are entering an era ofglobal culture conflict, the contours of whichwill be shaped by the pattern of how differentcultures assimilate new technologies and availthemselves of emerging global economicpatterns. Experience and common sense teachthat it is frequently more difficult to acquirethe attitudes—the social software, so tospeak—that underlay a successful openeconomy than it is to acquire the capital andthe desire to build one. Just as hopes weredashed 35 years ago that “technologytransfer” would generate widespread sponta-neous indigenous economic growth in theThird World, so today it takes more than atechnical process for major social innovationto set roots and succeed.46 Culture matters. Aswith the diffusion of technology, parts of theworld are as likely to be pulled apart asbrought closer together in the process ofglobal economic integration.

Those peoples who do not benefit from amore integrated global economy are unlikely

45 See Robert B. Reich, “Trading Insecurities,” Financial

Times, May 20, 1999.46 Note Thomas Sowell, Migrations and Cultures: A World

View (New York: Basic Books, 1996); and Lawrence E.

Harrison, “The Cultural Roots of Poverty,” Wall Street

Journal, July 13, 1999.




to blame their own lack of social capital; theyare more likely to sense conspiracy and feelresentment. That, in turn, prompts thequestion: Can a world half-integrated throughWestern techniques and technologies and aworld half-alienated by them stand together inan era of dissolving borders? If the issuecomes to be not just one of “haves” and “havenots,” but “wants” and “want nots,” can thelatter successfully spoil the brew for theformer?

Adeterioration of the security situationin a given country or region would also

radically affect the economic prospects of thatarea—possibly of the whole world if the regionis large or important enough. It almost goeswithout saying that war obstructs commerce,destroys human capital and infrastructure, anddiverts investment from productive to destruc-tive sectors; capital withdraws to safer zones,undermining development and employment,thereby creating the conditions for still more in-stability and violence. Zones of the world that,for whatever reason, fail to stem the tide ofviolence, will fall ever farther behind in the 21st

century. The result will be even greater discrep-ancies between rich and poor, not just amongregions and countries, but also within them.Bouts of warfare between major powers wouldthreaten the entire global economic system.

A major disruption in global energymarkets could also have a profound impacton economic growth and integration world-wide. Developing economies will have alarge appetite for energy as they seek to jointhe new global economy. Asia’s energy con-sumption will likely increase over 250percent between 1996 and 2020.47 The avail-ability of abundant cheap oil from thePersian Gulf has been the major contributorto the sustained low prices of the past decade.If this supply is somehow threatened or

limited, then growth in developing countriescould be stymied. Many regimes in the de-veloping world might not survive theeconomic shocks resulting from an unstableoil market.

Still other discontinuities could affecteconomic integration. One, possibly anoffshoot of biotechnology gone awry, couldbe major unexpected epidemics; anothercould be the further massive spread of AIDSto countries such as India or China. Shouldthe world face the threat of pandemics, allbets would be off with respect to projectingeconomic growth rates. Human capital, popu-lation distributions, and the economicinterconnectedness of the planet itself couldall shift dramatically.

Clearly, then, further global economicintegration is not a certainty. Nor can

we assume the absence of a major systemiccrisis over the next 25 years. Another major“boom-bust” cycle in the developing world,such as was experienced in 1997-98, couldundermine political support for the market-based policies upon which the emergingglobal economy is based. But of all thedangers to the new economic arrangementswe see aborning, the most critical, at least forthe near term, concerns the health of the U.S.economy.

For the next five to ten years, the contin-ued strong performance of the U.S. economywill be crucial to avoiding a systemic crisis.In the aftermath of the financial crisis of1997-98, the United States is the only majoreconomy continuing to experience robusteconomic growth. A sharp downturn in theU.S. economy, were it to occur before thedemand for goods and services picked up sig-

47 International Energy Outlook 1999 (Washington, DC:

Energy Information Administration, 1999), p. 141.



28 NEW WORLD COMING

nificantly in Europe and Asia, would lead to aworld recession.48 That would radically altercurrent rosy projections of U.S. and global pros-perity.

How likely is a severe downturn? Few seriouseconomists believe that the United States canmaintain its current brisk rate of economicgrowth, with little or no inflation, over a 25-yearperiod. There will be downturns. The crucialquestion is how severe they will be, and that inturn raises the question of what might cause them.

Some experts believe that the current vulner-ability of the U.S. economy relates to theovervaluation of the U.S. stock market and unsus-tainable levels of consumer spending. Othersdisagree, believing that real gains in productivity,thanks to the cumulative impact of the informa-tion revolution, presage a surge of real growthsuch that the market may be undervalued. Otherssee vulnerabilities in the trade deficit on the onehand and the capacity of the United States overtime to attract sufficient overseas investment tofinance its national debt. If, for example, realeconomic reform in Japan led to greater Japaneseconsumer spending, that would reduce theamount of capital the United States could borrow.Conjoined to the further development of a eurobond market, the United States might have toraise interest rates to attract capital.49 That couldhave a serious recessionary impact that might alsoaffect world growth rates.

But a “hard landing” is not inevitable. TheU.S. current account deficit is only about 2percent of GNP, not an extreme number, andlower than was the case during much of the1980s. Moreover, the current period of highdeficits has also been a period of high investment.But if there is a “hard landing”—in which a de-preciated U.S. dollar results in a compression ofU.S. imports, lower foreign financing of the U.S.deficit, and higher domestic interest rates—its

impact on the rest of the world could be consider-able.

There is a related issue. The global economyas a whole is dependent on the willingness of theprivate capital markets to continue their primaryrole in circulating savings from capital rich coun-tries to capital poor ones. As it happens, themajority of the funds in those capital markets isnow either American money or foreign moneymanaged by American firms—although thatcould change fairly quickly. Thus, what happensin the U.S. economy will have an effect on thewillingness and the capacity of private capitalmarkets to function. Economic conditions in theworld’s major economies, and particularly theU.S. economy, will still matter most in determin-ing the size and nature of private capital flows.50

Some further volatility in capital markets islikely—how much, no one knows. But if therewere an extended retrenchment of capital fromdeveloping countries, prospects for economicgrowth in many individual countries and theglobal economy as a whole would be reduced.51

Without sustained economic growth, theprospects for political stability would dim inmany places. While growth cannot solve allproblems, it works well enough as a political pal-

48 Japan’s economy has already picked up. See Stephanie

Strom, “Japan Grows 1.9%, to Economists’ Disbelief,”

New York Times, June 11, 1999, p. C1.49 See C. Fred Bergsten, “America and Europe: Clash of

Titans?” Foreign Affairs, March/April 1999.50 Foreign direct investment is the exception to this. FDI flows

to developing countries dropped less than 5 percent

between the crisis years of 1997 and 1998. Global

Development Finance, p. 14.51 Capital flows to the developing world have been unevenly

distributed. Therefore, since most of the flows have been

concentrated in only a few large developing markets, it is

misleading to lump all developing countries together

insofar as the significance of global capital flows is con-

cerned.




liative much of the time. And of course, theproblem is circular: the more social and politicalinstability, the poorer the economic prospects, andthe poorer the economic prospects, the more po-litical and social instability—at least once peoplehave gotten a taste of what they are missing.

But what is most likely to happen?Continuing global economic integra-

tion, a slowing or stalling out of the recent pace ofchange, or even retrogression?

Barring a major disruption of the globaleconomic or political system, the major trends inglobal finance, manufacturing, transportation,telecommunications, and trade described abovewill not be reversed anytime soon. The cross-border web of global networks will deepen andwiden as strategic alliances and affiliates increasetheir share of production and profits.52 The inter-nationalization of production networks will alsocontinue. But the speed at which other parts of theglobe join the integrative process, and the inclu-siveness with which countries are transformed asa result, is likely to be uneven, and in many casesmuch slower than anticipated.

What will this imply for the global economicsystem of the next century? Savings in the devel-oped world will continue to finance growth in atleast some of the developing world—unlessmajor countries suck up too much of the world’sinvestment capital. The judgments of markets andkey market institutions, such as the major debtrating services, will remain critical in determiningthe size and sustainability of capital flows to all e-conomies, not just to large developing ones suchas Russia, Mexico, and Brazil. As important, theability of developing economies to gain access tothese funds will play a major role not only in howthey fare, but also in how advanced ones fare,because their fortunes are increasingly linked.

Further global economic integration alsomeans that there will be global economic growth,a remark that sounds rather banal but, on historicalreflection, is not. Annual economic growth inseveral non-OECD economies (Brazil, China, andIndia) could average between roughly 5 and 7percent. Today’s OECD countries will averageannual growth between 2 and 3 percent. Thus, thenon-OECD share of world GDP is likely to risefrom 44 percent to between 56 and 67 percent, de-pending on whether growth rates tend toward thehigher or lower end of growth predictions. Thanksto its very large population, projected moderate tohigh growth rates, and a particular method ofmaking economic comparisons, some have madethe surprising assertion that China’s economycould overtake that of the United States as the

world’s largest in absolute terms by 2020.53

52 For example, the National Association of Securities Dealers

announced in June that it would team up with the

Softbank Corporation to develop an electronic version of

its electronic Nasdaq Stock Market in Japan to trade both

U.S. and Japanese stocks. This will create literally a 24-

hour market, and it is only the first of many likely joint

enterprises of this sort. See Edward Wyatt, “Market

Place,” New York Times, June 16, 1999, p. C11.53 In order to make this projection, the OECD uses a metric for

comparing countries’ economies called the Purchasing

Power Parity (PPP) standard. PPP is used now for GDP

output comparisons by the CIA, the Department of

Commerce, the World Bank, and the IMF as well as by the

OECD. While this method avoids the distortions of using

exchange rates to compare economies, it introduces distor-

tions of its own. For details, see Murray Weidenbaum,

“China’s New Economic Scenario: The Future of Sino-

American Relations,” Orbis, Spring 1999, pp. 223-4.

More conventional measures suggest that China would

have to grow at an average of 12.4 percent per year for 25

years to equal the size of the U.S. economy—obviously an

impossibility. Finally, it almost goes without saying that

OECD and other professional institutional estimates of

economic growth have often proven fallible in the past.



30 NEW WORLD COMING

These general trends are hugely important.For at least the last century, global economicpower and influence have resided in the largecountries of western Europe, North America,and Japan. The global economic system in2025, however, will be multipolar. In both lowgrowth and high growth scenarios, China, India,and Brazil could become significant economiccenters and attractive export markets for OECDand non-OECD countries alike.54 This will rep-

resent a major realignment in the patterns ofglobal economic influence and power. Increasedtension is possible in consequence as thesestates try to assert their newfound influence invarious arenas. They are bound to want to influ-ence the rule-making processes in internationaleconomic regimes, processes that are dominatedtoday by the United States and its allies.

Coincident with these likely trends in theeconomic future will be ongoing

debates at the regional and international levelsconcerning the integration and regulation of this

increasingly complex and still volatile globaleconomic system. The volatility of today’scapital markets, well illustrated by recent crisesin Asia, Russia, and Brazil, has led to wide-spread demands for a “new financialarchitecture.” Such an architecture must meshpolicymakers’ demands for stability withmarket requirements for flexibility, and comingup with an acceptable formula has been tricky.55

We are therefore likely to witness a continuing

54 For the purposes of the graphic, Europe is defined as the 15

countries of the EU plus Iceland, Norway, and Sweden.

The high and low growth scenarios differ primarily with

respect to whether trade barriers and export taxes/subsi-

dies decline to 50 percent or to zero, whether fiscal

consolidation and labor market reforms take place, and

what increases occur in energy efficiency, oil prices, and

population growth. See OECD, The World in 2020, p. 63.55 A major new study from the Council on Foreign Relations

takes a stab at the problem. See Safeguarding Prosperity

in a Global Financial System: The Future International

Financial Architecture, Report of an Independent Task

Force (New York: Council on Foreign Relations,

September 1999).

An Emerging Multipolar Economic World

Source: OECD, The World in 2020, p. 92.




debate over how to keep international capitalflowing, while, at the same time, reducing thevolatility of those flows.

One school of thought likens infant interna-tional economic institutions to immaturenational ones. According to this argument, weshould expect several sharp fluctuations in in-ternational business cycles before the muchmore difficult task of coordinating policyamong many countries moves far forward. Afterall, the IMF was created at a time when mostexperts worried more about managing tradeflows than capital flows and currency fluctua-tions.56 But others oppose the notion ofregulating international capital flows fromabove.57 The more unfettered a market, themore liable it is to produce both extraordinarysuccesses and extraordinary excesses. The wayto tilt reality in the former direction, manyargue, is not solely through regulation, but byforcing actors to learn best practices, and byexposing them to the penalties of occasionallygetting it wrong.

This argument will not soon run its course.Future international financial crises are there-fore inevitable; but of what magnitude andduration we do not know. As for their location,the developing world is the most likely epicen-ter, for that is where banking systems andinternal regulatory regimes governing capitalflows are most fragile. Since the pain of disrup-tions can be severe, the temptation to restrictcapital movements will continue to exist. Wehave seen such a temptation at work inMalaysia’s application of capital controls in1998. Nevertheless, given the importance of at-tracting capital for economic development,attempts to limit the freedom of financialmarkets are unlikely to be applied to anythingbut short-term capital flows.

The volatility of capital markets has impor-tant security implications. First of all, thegrowing magnitude and nature of capital flowssuggests a potential for ever bigger global wavesin the movement of capital—bigger at their crestsand also bigger at their troughs.58 It is as thoughregional business cycles that were not harmo-nious in the past may become so in the future. Ifso, such waves can be large enough to capsizeentire governments and destabilize entireregions. Second, and even more important, thenature of future regulations on capital volatility,and how they evolve, will set the tone for howstates interact and for how technology and wealthare used. In other words, the process could shapethe results such that getting there—to a new in-ternational economic architecture—could benearly tantamount to being there—in a stablesecurity environment.

Adifferent approach to ameliorating thenegative effects of huge and sudden

flows in capital focuses on currency blocs.Some experts believe that by 2025 the worldwill be dominated by dollar and euro currencyzones, and that such zones may be an effectiveway to allow smaller economies to enjoy thebenefits of increasing global capital mobility

56 Such efforts may go hand in hand with debt reduction for the

developing world, for the size of that debt not only harms

those who owe, but ultimately also those who are owed.

See Bob Davis, “G-7 Moves to Revamp Financial

Systems,” Wall Street Journal, June 21, 1999, p. A23.57 Some even propose abolishing the IMF, whose task has

metastasized since the end of the era of fixed exchange

rates. This includes former Secretary of State and Treasury

George Shultz. See his testimony before the Joint

Economic Committee of the U.S. Congress, May 5, 1998. 58 This is not an entirely new development. The movement of

“hot money” in the 1930s raised similar problems. See

Harry Gelber, Sovereignty Through Interdependence

(London: Klewer Law International, 1997), especially

chapter 2.



32 NEW WORLD COMING

while avoiding some of its hazards.59 Throughthe course of the Mexican Peso crisis of 1995and the 1997-98 financial crisis, fixed exchangerates became increasingly associated withdamaging exchange-rate volatility. Whileeven large economies are not immune fromsuch volatility, the small size of many devel-oping economies’ financial markets—oftenno bigger than a regional bank in the UnitedStates—makes it harder for them to avoiddamage in a world of ever increasing capitalflows. Some developing countries may seekexchange-rate stability by creating currencyboards that fix the exchange rate to a givencurrency or basket of currencies. More radi-cally, however, they can join with othercountries to create a new currency (such asthe euro), or they can adopt the currency ofanother country, as Panama has done with theU.S. dollar.60

The widespread implementation of any ofthese options would likely signify the de factoreturn to a largely fixed exchange rate system.61

But there are problems. Should Argentinaformally adopt the U.S. dollar, for example, ashas been widely discussed in recent months, itwould make the U.S. Federal Reserve theultimate arbiter of Argentine monetary policyand reduce significantly the sovereign power ofthe Argentine state.62 The Federal Reservebristles at the former now, and the Argentinegovernment would no doubt bristle at the latterin the fullness of time.

The debate over currency blocs has onlyjust begun, and it will probably not end formany years. That is because, at base, interna-tional monetary policy involves a relationshipamong three factors—capital mobility, the exis-tence of independent monetary policies, and aninclination to fixed or at least stable exchangerates—that seems impervious to permanent set-

tlement. While it is too soon to say how thecurrency bloc debate will turn out, it is not toosoon to conclude that it will be a major arena ofpolicy discussion and experimentation over thenext quarter century.

What will be the implications for U.S.national security of global economic

shifts? As noted above, these can be summedup by reference to four basic phenomena:greater disparities; increased interdependence;the exploitation of both trade and privatecapital markets for parochial purposes; andchallenges to the identity of nations and henceto the capacities of states to rule them.

The harnessing of ideas, knowledge, andglobal resources has the capacity to increaseworld economic output tremendously, but withit will also come greater disparities in wealthand income. Such disparaties will appearamong countries, with significant implicationsfor relative national power.63

Knowledge-based economies will alsocontinue to create internal divergences in whichthe wealthy, well-educated, and well-placedwill tend to get richer while the poor will tendto stay poor or get poorer. Middle classes, suchas they are, will tend to split.64 This trend is dis-cernable already in those countries in thevanguard of knowledge-based economies. For

59 See Zanny Minton Beddoes, “From the EMU to AMU? The

Case for Regional Currencies,” Foreign Affairs,

July/August 1999, pp. 8-13.60 “Global Financial Survey,” The Economist, January 30,

1999, p. S15.61 Ibid.62 Argentina has already made the Federal Reserve the de facto

arbiter of Argentine monetary policy.63 The key conclusion of the United Nations Human

Development Report, 1999.64 See Peter F. Drucker, “The Age of Social Transformation,”

Atlantic Monthly, November 1994.




roughly twenty years, nearly 60 percent of theU.S. population has experienced falling realwages.65 It is also in keeping with recent trendsin economic history, where disparities in percapita income within developed countriesoutpaced those in both economies in transitionand in developing countries.66

Internationally, the pockets of povertyamid wealth will also be more closely inter-

laced than is the case today. Some regions ofthe world are still almost entirely devoid of theaccoutrements of the information revolution;the huge and densely populated area within acircle drawn at a radius of 1,600 miles aroundKabul is a good example. That will almost cer-tainly change over the next 25 years. Once theworld is fully “wired” together, skilled laborwill be far more mobile, both literally and interms of who people can choose to work forfrom computer stations in their home regions.

Economic disparities will be more visible tomore people, which could be a new source offrustration and social tension.

Second, interdependence will characterizerelatively open economies, including theUnited States. Those U.S. companies, in-vestors, and consumers that depend onoverseas production, imports, and revenueswill be implicated by all those events overseas

65 For a brief discussion of recent trends, see Laura D’Andrea

Tyson, “Wages and Panic Buttons,” New York Times,

August 3, 1999.66 As defined by the United Nations, developed countries

include Canada, the United States, the EU, Iceland, Israel,

Malta, Norway, Switzerland, Australia, New Zealand, and

Japan. Economies in transition include Russia,

Southeastern Europe, the Baltics, the Czech Republic,

Hungary, Poland, and the CIS. Developing countries

include all other countries in Africa, Latin America and

the Caribbean, and Asia, including China.

Per-Capita Income Disparities



34 NEW WORLD COMING

that affect major companies, affiliates, andsuppliers. The key point is that a globalizedeconomy renders all participating states morevulnerable to exogenous shocks and disrup-tions, whatever their sources. The channels oftransmission for such shocks are simplygrowing faster than our understanding ofthem.

Very much related, as multinational cor-porations become increasingly international incharacter, the link between the corporationand its country of origin will be rendered moreambiguous. National governments, includingthat of the United States, will be increasinglysubject to competing interests with constituen-cies that represent cross-border interests andalliances. Such competing interests couldinvolve sensitive technology: transnationalcompanies will seek minimal restriction insourcing, selling, and licensing technologyworldwide, but the U.S. and other govern-ments will maintain an interest in controllingand regulating dual-use technology formilitary-security reasons. An already difficultproblem may get worse.

Even more portentous, as global anddomestic infrastructures become indispens-able to modern life, their disruption can haveliterally life-threatening consequences. Suchinfrastructures, including crucial transporta-tion, health, sanitation, and financial systems,are bound to become targets of the disgrun-tled, the envious, and the evil—individuals,groups, and potentially hostile countries alike.They will be very difficult targets to defend.Cyberwar, the attempt to shut down sophisti-cated systems with sophisticated means, is aserious threat, well worth worrying about.67

Complex systems can also be disabled byprimitive explosives detonated at the “right”time and place. And if we turn to genetic en-gineering to enhance yields from cereal and

other crops, we make those crops uniformlyvulnerable to deliberate attempts to ruinthem—as well as to the lucky insect, fungal,or bacterial pest.68

Athird national security problemconcerns the potential exploitation of

the new scale and nature of private capitalmarkets. The transformation of internationalfinancial markets allows governments as wellas companies to raise money in different waysand from different sources than was the casewhen governments and commercial bankssupplied the lion’s share of such financing.Since the end of the Cold War, importantstates have taken advantage of this new envi-ronment. Russia, for example, has raisedconsiderable sums through private capitalmarkets, transfers that have been facilitated byU.S. policy and international lending institu-tions such as the International Monetary Fund.It is unclear whether the money has helpedadvance fundamental reform in Russia; somebelieve that it may have hindered reform byrendering it less urgent. Worse, since money isfungible, it is possible that funds raised frombond offerings in the United States can beused in ways that violate the spirit of U.S.laws.

Even if such activities are not technicallyillegal, they can be politically sensitive.Clearly, we are entering an era in which major

67 The White House, “Protecting America’s Critical

Infrastructures: PDD 63,” May 22, 1998; Critical

Infrastructure Assurance Office, White Paper on Critical

Infrastructure Protection, May 1998; and the Marsh

Commission Report itself, called the President’s

Commission on Critical Infrastructure Protection, Critical

Foundations: Protecting America’s Infrastructures

(Washington, DC: GPO, October 1997).68 For an edifying fright, see Paul Rogers, Simon Whitby, and

Malcolm Dando, “Biological Warfare against Crops,”

Scientific American, June 1999, pp. 70-5.




“private” financial transactions have major po-litical implications.69 China has issued some134 bonds in global markets since 1980,totaling some $26 billion. Of this $26 billion,$10.5 was dollar-denominated, and of thesenearly 60 percent was offered by just threeentities, all of which may be implicated eitherin espionage directed against the United Statesor in military activities inimical to U.S.national security interests.70

The Russian and Chinese governmentshave made extensive use of the private marketmainly because that is where most of themoney is. They have done so, as well, becauseborrowing from such sources is often less ex-pensive overall, for there are no underlyingtrade transactions or projects involved to befinanced. This, in turn, makes it easier todivert funds for non-productive or even nefar-ious purposes. Until fairly recently, the use ofprivate capital markets also made it easier toavoid conditionality, transparency, investmentdiscipline, or the provision of collateralcompared to using government-to-governmentfunds or large commercial banks. Moreover, itis easier to recruit new sources of funding,such as insurance companies, pension funds,and securities firms.

The use of private financial markets alsoenables the cultivation of powerful politicalconstituencies in both recipient and investorcountries. Many experts have argued that the“bailout” packages put together for Mexico,Korea, and Russia have encouraged creditors,investors, and some private sector borrowersto think that if they stumble, the governmentsof the affected states, along with assorted mul-tilateral institutions, will also bail them outwith public funds and politically motivatedloan forgiveness packages.

The use of private capital markets in theUnited States for purposes at variance withU.S. economic or security interests willcontinue. What is less clear is how to deal withsuch problems without placing new restric-tions on capital flows.

Finally, global economic integrationmay bear important implications for

the nature of states and the state system itself.Here, too, there is disagreement as to whatthose implications might be.

Some believe that the internationalizationof economic life will affect the very founda-tion of political identity. Commercialorganizations are becoming global, it isargued, and so are the science and technologybases of those operations and their associatedlabor markets. If people’s livelihoods becomeincreasingly international in source, it followsthat their sense of emotional attachment to thestate will wane. This will be particularly thecase where there is no obvious physical or ide-ological threat at the state level over anextended period. The implications for civil-military relations, broadly construed, canhardly be overstated: unless they feel them-selves directly at risk, citizens will not risk

69 More accurately, perhaps, re-entering such an era, for the

same phenomenon was common before the present

century. The manner in which Benjamin Disraeli obtained

the Suez Canal for Great Britain from the penurious

Khedive Ismail is a picturesque case in point, but only one

of many.70 Figures are taken from “The National Security Dimensions

of the Global Capital Markets,” remarks of Roger W.

Robinson before the Alaskan World Affairs Council, May

7, 1999; and “Can We Prevent U.S. Credit Flows From

Fueling Russian Proliferation,” remarks of Roger W.

Robinson before the Non-Proliferation Policy Education

Center, May 19, 1999



36 NEW WORLD COMING

their lives for a state with which they feel littleor no emotional bond.71

While emotional bonds to the state mayerode, demands made upon the state mayincrease in an era of great economic and socialdislocation. This will put many states in aserious bind, with simultaneously less le-gitimacy from which to draw and lesspower to influence increasingly salientglobal economic issues. This condition, itis averred, will come to define the verycrucible of national security policies inmost advanced countries: greater socialdemands and expectations with respect tomajor economic stresses, combined with lessstate influence over the issues at hand. Manystates, it is suggested, will not be able tosurvive such conditions, at least not as they arepresently constituted.

How convincing is this view? Parts of itcertainly make sense. It is true, for example,that most states’ control over economic powerand policy has been reduced from that of theCold War era. Six reasons come to mind.72

First, while governments still matter ineconomic policy, the private sector now domi-nates more than ever the sources of economicgrowth, employment, and technological inno-vation. As governments rely more on privatefinancing and market perceptions, their abilityto manage fiscal policy without imposingpenalties on the cost and availability of capitaldecreases. Second, the adoption of internation-al standards that augur for liberalized andimproved regulatory regimes translates intoless capacity for states to manipulate nationaleconomic policy. Third, the pressures ofeconomic and political decentralization couldpush many national governments toward thefurther empowerment of local governments.Fourth, increased economic dependence on

others makes it harder for governments to plan,predict, and control their financial futures.

Fifth, interest groups operating acrossborders, often in broad coalitions, can influencethe strategies of private sector entities as well asthe policies of governments. Already suchprivate activities—those of the SorosFoundation, Amnesty International, DoctorsWithout Frontiers, Alert International, andmany others—dwarf the organizational and fi-nancial capacities of many of the states inwhich they operate. Such activity could growsharply if government regulatory regimescannot keep pace with business activities, asmay well be the case in many countries. Cross-border uses of mass action to police businessactivities may grow in rough proportion to thedecline in governmental capabilities. The po-tential exists for millions of individualdecisions to shape the future without the medi-ation of existing political institutions.73 Sixth,most governments will experience continuedpressures to reduce budgets, improve the trans-parency of decision-making, and developpolicies that leverage private sector resources.All else equal, this will make it harder for gov-ernments to assist directly in incomeredistribution and provide social safety nets tovulnerable segments of their populations.

But will this mean that most states—andeven great powers—will necessarily be con-strained from implementing policies thatmaterially interfere with this growing web ofeconomic interdependence? No, it will not.Pressures against state authority and control

71 See Peter F. Drucker, “The Global Economy and the Nation-

State,” Foreign Affairs, Sept./Oct. 1997, pp. 159-71.72 See Saskia Sassen, Losing Control? Sovereignty in an Age of

Globalization (New York: Columbia University Press,

1996).73 Noted in Jean-Marie Guéhenno, “The Impact of

Globalization on Strategy,” Survival, Winter 1998/99.




may be taken for granted, but states will fighthard to retain their role as the ultimate arbitra-tor of sovereign economic policies. They havedone so many times in the past, and usuallysuccessfully. This suggests that the struggle fornew forms of national maintenance and controlwill become the key to renewed state power.

The evidence thus far in our own erasuggests that at least some states have a goodchance to manage the process of economicchange effectively.74 One reason is that soci-eties need them to succeed. The state is, afterall, an expression of political community, withall its historical and emotional associations, aswell as a vehicle of economic functionality.Those states that rule over coherent nationsenjoy a store of symbolic capital against whichthey can draw. It is thus misleading to read intoa reduction of state prerogatives over economicissues a reduced role of the state overall, or toassume that the core principle of state sover-eignty is necessarily put at risk by increasingglobal economic integration. What does seemunarguable, however, is that if economic issuesbecome more important, those states thatmanage to master the processes of change willsee their relative international power increaseover those that do not. National power is not thesame as state power, the latter being that shareof the former that governments learn to collect,manage, and deploy. The formula for translat-ing national power into state power is changing,but it is not beyond mastery.

In a way, too, the state’s role in shaping itsdomestic environment to achieve market basedeconomic growth is even more vital in an in-creasingly integrated global economy than ithas been in the past. The state will be responsi-ble for maintaining appropriate fiscal andmonetary policies, establishing coherent andmarket based regulatory regimes, maintainingsocial policies that ensure the effective educa-

tion of its population, and developing anadequate physical infrastructure. Increasinglycaught between local social forces, internation-al business interests, and perceived nationalinterests, states will retain their legitimacy bydelivering on their citizens’ expectations forsecurity and economic prosperity. As impor-tant, those dislocated by new global marketforces will inevitably turn to the state for help,and the state, if it expresses a true nationalcommunity, will want to respond. All of thissuggests that the role of the state may be differ-ent in future, but not necessarily smaller, fromwhat it is today.

It also suggests that a greater polarizationof state power will probably result from theuneven capacities of states to manage andcontrol economic change. Regional powerbalances may shift and some states might betempted to push their new advantages. Othersmay elect to use force preemptively againstthose seen to be rising above the pack. Thus,while some vectors suggest that globaleconomic integration will bring the worldcloser together, others suggest that it will bedriven farther apart.

Much is at stake in the argument overhow the state will react to global

economic integration, and much needs sortingout. It is usually assumed in the West thatdemocracy and free-market economics aremutually supportive. But the state is the onlysecure locus of democracy as we know it. Sowhat does it mean to say that the future willbeget a world in which states are increasinglybeholden to other authorities—that of the

74 See Linda Weiss, The Myth of the Powerless State (Ithaca,

NY: Cornell University Press, 1998). Weiss analyzes in

detail several case studies, including South Korea, Taiwan,

Japan, Sweden, and Germany, and concludes that states

can learn to reimpose effective governance over economic

policy.



38 NEW WORLD COMING

market, that of transnational organizations—and at the same time to celebrate theanticipated expansion and solidification ofdemocracy that the triumph of market econom-ics ought to support? Could it be that theliberalization of commerce on the global levelwill undermine and not support the spread ofdemocracy—that one devoutly held Westernprinciple would work at cross-purposes withanother, equally cherished one? Quite possibly,yes.

There is plenty that we do not know aboutthe global economic future, that we cannotknow, and that we will not know in time tomake a policy difference. Clearly, what peoplethink and do over the next 25 years will deter-mine the answers to most of the questionsraised here. Ultimately, these thoughts will bepolitical as well as economic in nature, and sowill the acts that produce the world stretchedout ahead of us. And that brings us to the keyquestions of society and politics.

The Socio-Political Future: “How Willthe World Be Governed?”

Individuals have historically granted theirallegiance to the state in return for

domestic peace, economic well-being, andsecurity from external threats. Sometimes theyhave done so in the context of a national politi-cal community, where the state is an organicexpression of social life among kindred people.More often these days, states are composed ofmore than one ethnic, social, and religiousgroup, leaving the essential social contract ofgovernment to rely either on more abstract con-tractual arrangements, such as those exemplifiedby the U.S. Constitution, or on more coercivemeans of implementation. Sometimes theysurvive mainly by the weight of habit.

The point is that there is nothing immutableabout the present arrangements wherein certainpeoples are ruled within certain fixed territorialunits. It was not always so in the past, and itmay not be so in the future. The ties that bind in-dividual or group loyalty to a state can changeand even unravel, and the next 25 years portenda good deal of unraveling.

As illustrated above, new technologies willchange the way that people do business, onmany levels. In some cases, those changes willenhance international cooperation and regionalintegration; in others, they will divide statesand peoples. Many states will lose much oftheir control over many economic decisions,limiting the means by which they can providedomestic economic growth or domestic peaceand security. Violence may increase as disaf-fected individuals and groups within statesattack the agents of change. And the territorialborders of states will not as easily keep dangersat bay as they once did, given the technologicaladvances in weaponry and the global characterof potential threats. In all cases, the changesahead have the potential to undermine the au-thority of states, and the political identities andloyalties of citizens over the next quartercentury will be put through a series of unan-nounced, and sometimes undetected, tests.

Many observers think that several stateswill not pass such tests. Some suggest that theprinciple of state sovereignty itself, and ofthe state system, is wasting away.75 The sov-ereign state as the key actor in internationalpolitics is said to be undermined by all of thefollowing: globalization, defined as techno-logical connectivity coupled withtransnational economic integration; frag-mented nationalism and a return to tribalism;

75 Wolfgang H. Reinicke, “Global Public Policy,” Foreign

Affairs, Nov./Dec. 1997, p. 137.




ecological pressures; international terrorism;an "outbreak" of stable peace; and morebesides. Of all these, clearly, globalization isthe most widely discussed and debated.

For some, globalization is basically goodnot only because it encourages globaleconomic growth, but because it may be avehicle to transcend the system of state sover-eignty, seen to be the font of the war-systemthat plagues humanity. Globalization thusrepresents for some the withering away of thestate by the advent of other means. But othersoppose the sovereignty-eroding elements ofglobalization on ideological grounds. Some doso because the state is the only reliable locus ofpolitical accountability, others because global-ization is destructive of local community andcommunity control, and still others becausethey believe that the market theology behindglobalization is being used by the corporaterich to grow still richer at nearly everyoneelse’s expense.76

Evocative as these arguments may be tosome, and as ideologically attractive as theyare to others, the contention that the state isabout to be overwhelmed as the main orga-nizational principle of global politics is notconvincing. The state—whether as multina-tional empire, nation-state, or any of severalother kinds of political entities thatpreceded them both—has never been atcomplete equipoise with other social forces.Its role has ebbed and flowed before otherchallenges many times over the years.Indeed, the centralized state of the 20th

century is an historic anomaly, and thosewho foresee the end of the system of sover-eign states too often take as their model ofthe state a highly centralized and fixedentity that does not rest comfortably withhistorical realities.77 For all the challengesahead, the principle of sovereignty, as

vouchsafed within the territorial state, willremain the key organizing principle of inter-national politics for the next quarter centuryand probably for long after that as well.

That said, the challenges ahead are manyand varied, and they go right to the heart ofthe core relationships between states, andamong the state, the nation, and the individ-ual citizen. Even as many states facediminished control and authority over theirpopulations, demands on the state are rising.What will this mean for global politics?

One challenge is demographic innature. Populations are growing in

many developing countries. At the sametime, the populations of nearly all devel-oped countries—and some developingcountries, too, such as China—are rapidlyaging.78

As a result of demographic change,many states will have very different socialbalances in 25 years than they do today. Laborshortages will bring a rising demand for immi-grant workers to older and wealthier societies,accentuating social and cultural tensions. Still,the bulk of the dependent population world-

76 Critics of different persuasions include John Gray, False

Dawn: The Delusions of Global Capitalism (London:

Granta, 1998); William Greider, One World, Ready or Not:

The Manic Logic of Global Capitalism (New York: Simon

& Schuster, 1997); and Zygmunt Bauman, Globalization:

The Human Consequences (New York: Columbia

University Press, 1998).77 Note Peter F. Drucker, “The Rise, Fall and Return of

Pluralism,” Wall Street Journal, June 1, 1999.78 While today’s ratio of working taxpayers to non-working

pensioners in the developed world is 3:1, in thirty years,

absent reform, the ratio could fall to 1.5:1 or even lower,

costing an additional 9-16 percent of GDP to finance

benefits for the elderly. Peter G. Peterson, “Gray Dawn:

The Global Aging Crisis,” Foreign Affairs, Jan./Feb. 1999,

p. 46.



40 NEW WORLD COMING

wide will remain children rather than the aged.If these young people are educated and able tofind productive employment, economies willbenefit; if not, social unrest could follow.

As suggested above, the policies requiredfor economic growth, especially amid highpopulation growth, may result in significantdislocation within a state and directly challengelong-held political or social values. Economic

growth will frequently be accompanied bygrowing disparities in income and wealth, andthose with economic and political influencewill find that influence under siege. This isbound to generate significant social and politi-cal strains within both developed anddeveloping states. It may also lead to increasedcorruption, including among justice andsecurity officials, which would undermine ef-fective government. Rapid urbanization willaccelerate in many developing countries, aswell, severely straining many states’ ability to

provide basic social services, particularlyhealth care, sanitation, and education.

If these tensions and dislocations are suffi-ciently severe and prolonged, some states couldunravel. It was no coincidence that the Asiancrisis of 1997-98 was soon followed not onlyby the collapse of the Suharto government inIndonesia, but by increased strains on unity.Malaysia, too, suffered a political crisis that

nearly led to mass upheaval—and still may.Even such major states as China, India,Pakistan, South Africa, the DemocraticRepublic of Congo, Kenya, and Mexico—all ofwhich have large and growing populations—are not immune from partial or even completecollapse.79

79 See Secretary of Defense William S. Cohen, Annual Report

to the President and the Congress, 1999; Edward Warner,

Assistant Secretary of Defense for Strategy and Threat

Reduction, Testimony to the House National Security

Committee, January 29, 1998; and 1998 Strategic

Assessment: Engaging Power for Peace (Washington, DC:

National Defense University, 1998), pp. 15-6.

Population Growth in the Developing World

Source: U.S. Bureau of the Census, International Data Base.




But there is also good news. An inte-grated global information network

may presage the expansion of political plural-ism.

Consider in this regard the collapse of theSoviet Union. There are many ways to accountfor that collapse—not least the effectiveness ofthe U.S. strategy of containment over severaladministrations. But the inability of a closed

political system to accommodate itself toeconomic imperatives based on openness, theflow of information, and new market demandswas a major complementary factor. If this wastrue for an age of television and relatively prim-itive personal computers, the age of the Internetmay doom nearly all closed political systems tothe ash heap of history. In short, vast new pres-sures for democratization are likely to be feltand, where those pressures succeed, it willmake states more responsive to the needs oftheir citizens. In most cases, at least, thatsuggests both better and more legitimate gover-nance.

The steady progress in Asia, Africa, andLatin America in mass education and literacyalso comes into play here. After all, the diffu-sion of information technology can only carrysocial clout to the extent that people can read

and write. As one scholar has put it with refer-ence to the Muslim world, “The combination ofmass education and mass communications istransforming the Muslim majority world. . . .Multiple means of communication make theunilateral control of information and opinionmuch more difficult than it was in prior erasand foster, albeit inadvertently, a civil societyof dissent. . . .The result is the collapse of hier-archical notions . . . and the emergence of a new

common public space.” The emergence of acivil society is a precondition for genuinedemocracy, and by “multiplying the possibili-ties for creating communities and networksamong them,” civil society tends to advancedemocracy’s way.80

One must be careful here, for literacy doesnot guarantee democracy, and mass educationand authoritarian political styles can co-existfor a long time. Nevertheless, seen together, thespread of mass communications, broadprogress in education and literary, improvingeconomic well being, and the growth of politi-cal liberalism on a global scale have potentially

Population 60 Years and Over

80 Dale Eichelman, “The Coming Transformation of theMuslim World,” The 1999 Templeton Lecture on Religionand World Affairs, Foreign Policy Research Institute, June9, 1999.



42 NEW WORLD COMING

huge implications. Economic logic may alsojoin with and magnify an important socialimpact of 20th century technology. Citizens ofthe advanced states are increasingly lesswilling to fight or support messy wars partlybecause technology has made life much lessrisky and frail than it once was. Since life isno longer so “cheap,” casualties have becomefar more expensive.81 The spread of suchcharacteristics to more of the world couldhave a similar effect, the sum being to makewar less frequent and bloody. Some evenbelieve that, for this and other reasons, majorwar will soon become obsolete.82

Acombination of increasing wealth,personal security, education, and

more widespread democracy may indeedherald a new era, not one created by grandtreaties and the solemn inauguration of multi-lateral institutions, but one that grows fromindividual hearts and minds. But even if peaceand democracy do not triumph worldwide—and it is not very likely that they will in thenext 25 years—autocrats and dictators willfind it more difficult to control their citizenryfor a new reason as well as for older ones.Beyond the inability of authoritarian govern-ments to control the flow of informationwithin their borders, individuals and groupswill be able to act internationally without ref-erence to the state in a way and at a levelheretofore unimaginable. Mass action acrossborders is already establishing new interna-tional norms, and there is a good prospect thatnon-governmental organizations and grass-roots interest groups will have influenceacross even those frontiers guarded by au-thoritarians.83

In democratic states, such developmentsmay promote stability by facilitating greatercitizen participation in the political and civic

life of the state. Possibly, however, such devel-opments can have less than sanguine effects.Democracy can have an illiberal and even ademagogic side, and new democracies seemprone to aggressive behavior. Pressure fordemocracy in heterogeneous states can alsoportend their fragmentation into smaller unitsthat better reflect cultural, ethnic, or religiousidentities. Sometimes this fragmentation willoccur without violence, but often enough it willnot—and when it does not, catalytic regionalcrises could follow in its wake. Pressures fordemocracy in Indonesia contributed to seces-sionist movements in East Timor, Aceh, IrianJaya, and the South Molucca Islands. Pressurefor democracy in China, too, will likely stokeindependence movements in Tibet and inXinxiang province. Not only will there likelybe a wider economic polarization betweenhaves and have-nots, but also a wider polariza-tion of legitimacy between democraticallygoverned polities and authoritarian ones.

States unable to provide economic well-being, political liberty, or domestic security

81 A point nicely put, with some supporting data, in Janna

Malamud Smith, “Now That Risk Has Become Our

Reward,” New York Times, July 25, 1999 (Week in

Review), p. 15. This does not mean that citizens of

advanced societies are casualty averse in any absolute

sense. The data show that most Americans will accept

high casualties if they can be justified on the basis of

threats to key interests. See John Mueller, “The Common

Sense,” The National Interest, No. 47 (Spring 1997).82 See, for example, John Mueller, Retreat from Doomsday:

The Obsolescence of Major War (New York: Basic Books,

1989), and Michael Mandelbaum, “Is Major War

Obsolete?” Survival, Winter 1998-99.83 A brief but vivid account, with some examples, is Barbara

Crossette, “The Internet Changes Dictatorship’s Rules,”

New York Times, August 1, 1999 (Week in Review), pp. 1,

16. See also Akita Iriye, Cultural Internationalism and

World Order (Baltimore, MD: Johns Hopkins University

Press, 1997).




for their citizens may also be subject to sig-nificant emigration, particularly of their mosteducated citizens. Advanced states may needmore technically educated workers, too, thecombination giving rise to unprecedentedlevels of emigration among educated elitesfrom those states that do not work to thosethat do. This will make successful states morediverse and cosmopolitan, and others moreprone to failure.

Clearly, then, there are forces at workstraining the mythic fabric that links

society to the state. Other strains may rendthe link between the individual and theanchors of authority in society itself.

During periods of great tumult, peoplefrequently turn to religion or ideology toexplain change and to gain some psychologi-cal security from its disruptions. As notedabove, the dislocations of the IndustrialRevolution helped produce the socialist ide-ologies of the 19th and 20th centuries. On alesser scale, the dislocations of the post-World War II era in Western societies createdparallel social and political perturbations inmany countries: the undermining of urbaneconomies; rising divorce, suicide, and crimerates; and a significant decline in voting andother forms of political participation.84 Itmakes sense, then, to ask what similar reac-tions we might expect from the tumult in ourcollective future, and what those reactionsmight mean for state cohesion and effective-ness.

Since different societies begin from dif-ferent circumstances, their reactions to rapidchange will surely differ. Many in the Westthink that its notion of modernity, where thesacred is privatized and secular values pre-dominate, is a model that other societies mustinvariably follow. But this is not so. The re-

placement for an enfeebled Iranian royalregime in the 1970s did not come from radicalleftist groups, but from the pre-modern Shi`areligious community. So, too, we have seen aturn to pre-modern forms in much of theMuslim world, among some Jews within andoutside of Israel, and within India in the formof Hindu nationalism. Pressures toward secu-larization inherent in the Western technologythat will flood much of the world over thenext 25 years will not necessarily overcometraditional ways, but might instead reinvigo-rate them. One consequence of psychologicaldislocation in individuals may be to drivethem closer to their own social mores, and tothe extent that the state is seen as a legitimateexpression of those mores, closer to the stateas well.

In short, some states may elect not to joinin rapid technological innovation or an inte-grated global economy. Among such stateshistory will not have ended, and the world ofcontending “isms” will remain very muchalive. There is a chance, too, that those statesmight ally to oppose these developments.Geopolitics could become, in essence, a formof culture politics.85 The conflicts one mightexpect from such culture politics would notexactly fit the definition of a religious war,but there could be some striking similarities.

Even if secularization does make manyinroads, the vistas along the path will not bethe same in all cases. Every culture thataccepts, or cannot resist, a synthesis of theold and the new, or between the West and therest, will find its own way to cope withconflict. What seems clear, as well, is that in-

84 Fukuyama, The Great Disruption.85 This possibility is, of course, consonant with Samuel

Huntington’s The Clash of Civilizations and the Remaking

of World Order (New York: Simon & Schuster, 1996).



44 NEW WORLD COMING

dividuals in societies will have more optionsas individuals than before. They will havegreater access to other ways of thinking, theywill know more about other cultures than didpreceding generations, and they will havegreater opportunity to experience them first-hand. Hence, it seems likely that in morecases than ever before, an individual’s or agroup’s identification with the state may besuperseded by other forms of associationsbeyond the state, as well as within it in theform of ethnic, religious, ideological, or tribalbased organizations.

It also stands to reason that states lackinga secular cultural and historical heritage willbe particularly vulnerable to the increasedporosity of cultural boundaries. Most modernWestern polities are culturally as well as po-litically pluralist. Most traditional,non-secular cultures tend not to be either.

What are we to make of all this? Themost persuasive conclusion that

emerges from looking at the pressures liableto be brought to bear on states, and on howstates of different capacities may respond tothose pressures, is that we will have a mosaicof consequences—as we have always had.States will differ in various ways, in theirpower and influence, their histories, and thedegree to which their citizens give them theirallegiance. They will differ in their economicdevelopment, strength of social and politicalinstitutions, and demographic profile. Theywill differ, too, in the extent to which thenational identities in their midst predisposethem to exist as nation-states, as multination-al empires, or as stateless nations within anevolving international system.

The role and characteristics of states inthe next century will depend on how theyrespond to the challenges that will confront

all countries. Some will be able to seize tech-nological and economic opportunities, whileothers will find themselves threatened. Somewill be able to establish the regulatoryregimes and the social and political infra-structure necessary for economic growth, andsome will be able to introduce political insti-tutions that are responsive to the newdemands of their citizens. But others will not.Some will wish to resist change but fail, gar-nering the worst of all worlds. And perhapsmost important, only some will find the lead-ership they need to guide them through an eraof considerable uncertainty.

The result will be that some states willsucceed in meeting the multiple challenges ofglobal economic integration—we know thisbecause some have already found formulas todo so.86 Some states will survive, but havesuch serious difficulties that their citizensturn to other groups (ethnic, cultural) to giveallegiance and seek shelter, which will furtherundercut the state’s authority and capacity torespond to challenges. Some states will disap-pear, and new ones will be formed on thebasis of ethnic, national, or religious identi-ties. Some states will fail, and in failing fallinto social and political chaos, exportingrefugees, famine, disease, and violence acrossneighboring borders.

The ideal of universal human rightswill also challenge the traditional

concept of state sovereignty. A small army ofcertain NGOs is carrying forward the old ideathat state sovereignty is more a menace to in-dividual human rights than a protector ofthem, and this idea is gradually being armed

86 See again Weiss’ The Myth of the Powerless State; and “The

Thing That Won’t Go Away,” The Economist, July 31,

1999, pp. 8-10.




institutionally, most significantly in theproposal to create an International CriminalCourt. The contentious case of AugustoPinochet, too, has illustrated the “sponta-neous” evolution of international law towardviews that undermine sovereignty in favor ofundifferentiated human rights criteria. Andwhile the legal spillover of the NATO militarycampaign against Serbia on behalf of theKosovar Albanians is still evolving, it may es-tablish a powerful precedent in validating theascendancy of the right to self-determinationover that of sovereignty within the UnitedNations Charter, which, famously, includesboth.87 Whatever the full range of its motiva-tions, the campaign in Kosovo was theclearest example in modern times of a majorpower or alliance intervening militarily intothe internal affairs of another sovereign state,avowedly on behalf of minority rights.

Honest people disagree over whether thisis a benign legacy or not. There are those whobelieve that a minimally decent world ordercannot arise so long as depredations such asthose of Kosovo can go on with impunityanywhere in the world. They applaud theerosion of sovereignty over such questions, aswell as others.88 There are other observers,however, who point out that international sta-bility depends on respect for the prerogativesof the state. And many object to Americansassuming the right to decide unilaterallywhen some other country’s behavior exceedsAmerica’s self-defined moral standards.89

Moreover, others worry that the denaturing ofsovereignty begs the question of who gets todecide when a depredation is internationallyactionable—in other words, who gets to saywhat is and is not a “just war”? Nor is it at allclear what line of democratic accountabilityat the transnational level will substitute forthat of the state.90 Can a host of international

civil servants, professional human rights lob-byists and lawyers, and aid organizationtrustees—formally accountable to no one—really be trusted to know what is best in everycase, or any case?

This is a question recently born as far asthe history of international relations goes. Itwill mature rapidly over the next 25 years, aswill several others. For example, it maybecome necessary to design some sort of legalpersonality for political entities that are lessthan states but more than mere groups of in-dividuals—such as Kosovo and the Kurdishareas of northern Iraq. If we are to see moreefforts by minorities to establish zones ofautonomy for themselves, as seems likely,then how will an increasingly salient numberof non-national institutions, such as the WorldBank, the International Criminal Court(should one come into being), or UNESCO,deal with such ambiguous entities?

In any event, there is little doubt thattransnational actors of other sorts will grow innumber over the next 25 years. Some will rep-resent positive responses to technological,economic, and political challenges (multina-tional corporations, non-governmentalorganizations) and others negative responses(drug cartels, terrorist networks, and criminal

87 Chapter 1, Article 1, paragraph 2, as opposed to Chapter 1,

Article 2, paragraph 7.88 See Marianne Heiberg, ed., Subduing Sovereignty:

Sovereignty and the Right to Intervene (London: Pinter,

1994). 89 See Samuel Huntington, “The Lonely Superpower,” Foreign

Affairs, March/April 1999; and David Sanger, “America

Finds It’s Lonely At the Top,” New York Times, July 18,

1999 (Week in Review), p. 1.90 Some of these issues are discussed in David Rieff, “The

Precarious Triumph of Human Rights,” New York Times

Magazine, August 8, 1999.



46 NEW WORLD COMING

cells). In some cases, these latter groups willtake on certain aspects of statehood, control-ling territory, levying taxes, even raisingarmies.

States will also find themselves in need ofcooperation with other states, if they are toseize the opportunities presented by globalchanges and respond to the dangers. Of thiswe may be sure. What we do not know iswhether and how regional groupings ofvarious sorts may emerge, and with whatkinds of responsibilities and authorities. Wedo not know whether the United Nations andother global political institutions willcontinue to exist as creatures of states, orwhether they will be empowered to act incertain areas in place of states. We do notknow whether regional or global regimes willbe established to prevent the spread of dan-gerous technologies and weapons, and if theywill have the authority and ability to enforcetheir mandates.

This is a lot not to know, and there isyet more. At the risk of seeming

quaint, it behooves us to note a final uncer-tainty. Not all of what befalls the world ofstates over the next quarter century will be afunction of how leaderships and populationsadjust to the challenges of new technologiesor accelerating global economic integration.The beginning of wisdom is perhaps to recog-nize that what counts is not only what ischanging, but also what is not. There is stillthe old-fashioned problem of geopolitics, andnowhere does this problem look clearer—andmore dangerous—than in the Pacific rim,where the triangular relationship betweenChinese, Koreans, and Japanese holds the keyto peace or war.

Within the logic of geopolitics is the un-predictability of personality and the

happenstance of illness and death amongleaders. Not every historian is convinced, butmost believe that had it not been for thehypnotic political skills of Adolph Hitler,World War II would never have happened.While Hitler is the 20th century’s mostobvious example of evil enthroned, historybears other examples from this century andother centuries, too. It is not possible to ruleout the rise of “crazy states”91 with psycho-logically aberrant or evil leaders in the future,and the shock to the system that such a leadercan produce should never be underestimated.In the future, it may be that, with weapons ofmass destruction more widely available, eventhe unglued leader of a relatively small statewill exceed the threshold of danger to thesystem as a whole.

The Military-Security Domain: “HowWill Societies Protect Themselves?”

The military-security environment ofthe next 25 years will be shaped by a

unique and substantially unfamiliar set of po-litical, economic, technological, social, andcultural forces described elsewhere in thisstudy. As in the past, conflict will be drivenby perturbations in the political order, socialdislocation, passionately held beliefs,economic competition, and cultural division.In this section, however, the purely militaryand security dimensions of the future arebrought into focus. Societies will still need toprotect themselves in 2025, and they willhave to do so against an unprecedented rangeof threats and actors.

As with most periods of rapid change,both the actors and the means by which

91 Yehezkel Dror, Crazy States: A Counterconventional Strategy

(Lexington, MA: Heath Lexington Books, 1971).




violence is used in pursuit of political goalsmay shift abruptly. Non-state actors, individ-uals as well as groups, will gain power andinfluence, and many will have at theirdisposal alarming means of destruction.Many states may see the coherence ofnational identification lose its grip at the indi-vidual level, with critical implications fortheir ability to mobilize and fight, as well asfor the structure of their civil-military rela-tions.

Even in a world in which major wars areless frequent, and in which growing prosperi-ty adds incentive for the peaceful resolutionof disputes, there will still be enough unset-tling change to touch off any number of wars,internal upheavals, incidents of terrorism, andgeneral mayhem. The end of the Cold War didnot mean the end of all conflict and, with adecade to ponder the emerging evidence, nosentient person can doubt the potential lethal-ity of future conflict.

We explore these trends and patterns inthree parts. First, we look at what sorts ofstates, groups, or individuals will incline touse force. Second, we look at what kinds ofmilitary capabilities are likely to be on theloose for such use. And third, we look at theenvironment likely to be formed by the con-junction of the two.

Interstate wars will not disappear overthe next 25 years.92 Developed nations

will be loath to fight each other, but as provenin 1914, neither the bonds of interdependencenor a taste for affluence can guarantee peaceand stability indefinitely. Major powers—Russia and China are two obviousexamples—may wish to extend their regionalinfluence by force or the threat of force.Conflicts among old adversaries maycontinue, such as between India and

Pakistan.93 Misperception or miscalculationwill remain possibilities and both may be ex-acerbated by the introduction of new militarytechnologies. Conflicts could arise out ofefforts to right perceived wrongs or to gain s-trategic advantage, and wars will still befought over disputed borders, resources, andirredentist claims. The history of the 1930sremains instructive, too, for the reversion toassertive nationalism by leaders faced withunsettled social and economic conditions isnot beyond imagination. Conventional war—ships, tanks, and planes—will remain themost relevant modus operandi for most ofthese conflicts.

Violence within states, on the other hand,could reach unprecedented levels. Generatedby ethnic, tribal, and religious cleavages, andexacerbated by economic fragmentation anddemographic shifts, such violence will formby far the most common type of conflict inthe next quarter century. Brutish, nasty, notnecessarily short, and potentially genocidal inscope, these conflicts—mostly but notentirely in non-Western domains—couldresult in major disruptions, killing hundredsof thousands of people each year.94

Undisciplined tribal or ethnic based paramili-tary groups will often be the primary agentsof such conflicts, which will involve soldiersand civilians alike. They may also take place

92 See the arguments in “Is Major War Obsolete: An

Exchange,” Survival, Summer 1999, pp. 139-52.93 As noted below, a war involving India, Pakistan, and

possibly Iran is not so very unlikely, but analysts differ

over whether such powers should be defined as “major.”94 Not that the toll from such wars is vastly different now from

Cold War times, despite a common perception to the

contrary. See Yahya Sadowski, The Myth of Global Chaos

(Washington, DC: Brookings INstitutino Press, 1998), p.

121; and Shashi Tharoor, “The Future of Civil Conflict,”

World Policy Journal, Spring 1999, pp. 1-11.



48 NEW WORLD COMING

in urban areas or in other terrain that tends toneutralize the current technological advantagesof modern militaries.

While such conflicts need not disrupt thecore strategic interests of major powers, theywill do so if they trigger larger interstate con-flicts, grossly violate internationally acceptednorms, or create massive flows of refugees,disease, and environmental degradation. Thelatter is particularly likely since such conflictsoften generate humanitarian disasters that arehard to ignore in an age of mass communica-tions. Yet major powers cannot intervene forhumanitarian purposes without also interveningin the underlying politics that create suchtroubles in the first place. The Somalias,Bosnias, Rwandas, Kosovos, and Haitis of theworld will not disappear, and neither will thedilemmas they pose.

There will also be a greater probabilityof a far more insidious kind of violence

in the next millennium: catastrophic terror-ism.95 While terrorism itself is nothing new, thenature of terrorism and the means available totomorrow’s terrorists are changing.

Future terrorists will probably be even lesshierarchically organized, and yet better net-worked, than they are today. Their diffusenature will make them more anonymous, yettheir ability to coordinate mass effects on aglobal basis will increase. Teamed with statesin a regional contingency, they could becomethe “ultimate fifth column.”96 Terrorism willappeal to many weak states as an attractiveasymmetric option to blunt the influence ofmajor powers. Hence, state-sponsored terroristattacks are at least as likely, if not more so, thanattacks by independent, unaffiliated terroristgroups. Still, there will be a greater incidenceof ad hoc cells and individuals, often moved byreligious zeal, seemingly irrational cultish

beliefs, or seething resentment. Terrorists cannow exploit technologies that were once thesole preserve of major states and pose attacksagainst large domestic population centers.

The growing resentment against Westernculture and values in some parts of the world—as well as the fact that others often perceive theUnited States as exercising its power with arro-gance and self-absorption—is breeding abacklash that can take many forms. Terrorism,

95 Government studies on this topic include: Combating

Proliferation of Weapons of Mass Destruction, Report of

the Commission to Assess the Organization of the Federal

Government to Combat the Proliferation of Weapons of

Mass Destruction, July 14, 1999; “Executive Summary,”

Report of the Commission to Assess the Ballistic Missile

Threat to the United States, July 15, 1998; Transforming

Defense: National Security in the 21st Century, Report of

the National Defense Panel, December 1997; and W.

Cohen, Proliferation: Threat and Response, OSD Report

to Congress, November 1997. Major private research

studies include: Fred C. Iklé, Homeland Defense

(Washington, DC: CSIS, 1999); and William Webster, et

al., Wild Atom: Nuclear Terrorism (Washington, DC:

CSIS, 1998). Key periodical literature includes: Fred C.

Iklé, “The Problem of the Next Lenin,” The National

Interest, No. 46, Spring 1997; and Walter Laqueur, “The

New Face of Terrorism,” The Washington Quarterly,

Autumn 1998. Recent books include: Joshua Lederberg,

ed., Biological Weapons: Limiting the Threat (Cambridge,

MA: MIT Press, 1999); Richard Danzig and Pamela

Berkowsky, Biological Weapons—Limiting the Threat

(Cambridge, MA: MIT Press, 1999); Jessica Stern, The

Ultimate Terrorists (Cambridge, MA: Harvard University

Press, 1999); Richard A. Falkenrath, et al., America’s

Achilles’ Heel (Cambridge, MA: MIT Press, 1998); Philip

B. Heyman, Terrorism and America: A Commonsense

Strategy for a Democratic Society (Cambridge: MIT Press,

1998); Ken Alibeck with Stephen Handelman, Biohazard:

The Chilling True Story of the Largest Covert Biological

Weapons Program in the World (New York: Random

House, 1999), and Bruce Hoffman, Inside Terrorism (New

York: Columbia University Press, 1998).96 Hoffman, Inside Terrorism, p. 196.




however, appears to be the most potentiallylethal of such forms. Therefore, the UnitedStates should assume that it will be a target ofterrorist attacks against its homeland usingweapons of mass destruction.97 The UnitedStates will be vulnerable to such strikes.

If that were not a sobering enoughprospect, most advanced conventional

military weapons and systems will also bemore broadly distributed between now and2025. Domestic political and economic incen-tives will lead to the development and sales ofadvanced aircraft, modern ground fightingvehicles, and new naval systems throughout theworld. Only cutting-edge systems will remainclosely held.

It is not even clear whether the major armsexporters will cooperate to prevent the sales ofsuch weapons systems to states and othergroups that pose major potential threats toregional stability and peace. A minimal exportcontrol regime already in operation, theWassenaar Arrangement, could be enhanced,but this depends on the positive evolution of theinternational political climate. It also dependsto some degree on the ability of the exportingstates to find alternatives to legacy industriesstill heavily in the business of manufacturingweapons.

Conventional weapons systems will be char-acterized by an increasing emphasis on speed,stealth, lethality, accuracy, range, and networkedoperations. The era of Industrial Age platformsoperating with impunity in the open may becomeoutdated, as long-range precision capabilitiesproliferate in all dimensions of warfare (air, sea,and land).98 There will be a greater premium onhighly integrated and rapidly deployable forces.The age-old interaction of capabilities andcounter-measures will continue, of course, andphysics probably favors detection and the

ultimate demise of stealthy systems and largeplatforms. But “ultimate” can mean a long time,and, as opponents try to defeat existing U.S. tech-nologies, new technologies and ways ofemploying these weapons will abet the continua-tion of current U.S. advantages. The widespreadadoption of MEMs into U.S. military technology,for example, may provide significant new quali-tative advantages over a broad range ofcapability. New intelligence capabilities derivedfrom biotechnology, including the use of insectsfor selected purposes, may also be at hand.

Nonetheless, many states will pursuestrategies to acquire today’s modern weapons.These weapons will no longer be cutting-edgetechnology by the 2015-2025 timeframe, butthey may be widely available and, in local wars,could prove decisive.99 Just as likely, the rela-tively rapid spread of modern conventionalweapons could destabilize several troublezones and make regional wars both more likelyand far more destructive.100 The acquisition ofsuch weapons will probably be pursued withalacrity by military regimes and other regimes

97 See Ian O. Lesser, Bruce Hoffman, John Arquilla, David

Ronfeldt, and Michele Zanini, Countering the New

Terrorism (Santa Monica, CA: RAND, 1999); and Zalmay

Khalilzad, David Shlapak, and Ann Flanagan, “Overview

of the Future Security Environment,” Sources of Conflict

in the 21st Century: Regional Futures and U.S. Strategy,

Zalmay Khalilzad and Ian O. Lesser, eds. (Santa Monica,

CA: RAND, 1998).98 See Michael G. Vickers, Warfare in 2020: A Primer

(Washington, DC: Center for Strategic and Budgetary

Assessments, 1996).99 Obtaining equipment is one thing, assimilating it intelligent-

ly is another. See Chris C. Demchak, Military

Organizations, Complex Machines: Modernization in the

U.S. Armed Services (Ithaca, NY: Cornell University

Press, 1991).100 See John Weltman, World Politics and the Evolution of War

(Baltimore, MD: Johns Hopkins University Press, 1995).



50 NEW WORLD COMING

for whom robust military capabilities play amajor role in internal security.

While the market for 20th century conven-tional weapons will remain brisk, someimportant states will choose acquisition strate-gies to compete asymmetrically against majorpowers. These potential adversaries will investin relatively inexpensive systems intended todeny the United States the advantages that nat-urally accrue with technological superiority.Weapons of mass destruction would serve thispurpose.101 Developing such weapons does notrequire a large industrial base or extensive sci-entific research support as it once did. Theinternational norms against the spread of theseweapons are being challenged, and the globalexport control regimes covering nuclear,chemical, and biological weapons will not ef-fectively keep them from state and non-stateactors that are determined to acquire them.102

Some countries will supply these weapons, orcomponents for them, for commercial and po-litical purposes. Problems will also exist inensuring the security of these weapons andweapons components in individual countries.

The extent to which nuclear, biologi-cal, and chemical weapons will be

developed and used will depend on a varietyof factors. Nuclear materials and technologyare available, but the cost of producingnuclear weapons is high, as are the risks ofdetection. The development and use of radio-logical weapons would be easier and cheaper.By pairing conventional explosives with ra-dioactive materials like plutonium, such aweapon could generate both a major explo-sion and contaminate a large surrounding areafor an extended period.

Chemical weapons are much easier toproduce than nuclear and radiologicalweapons, but they are harder to store and use

effectively. Their effectiveness is subject touncontrollable climatic elements and thelethality of chemical weapons per unit ofweight is generally low.103 This makeschemical weapons generally suitable for usein attacking conventional armies concentratedin the field, or against small groups of sur-prised or immobile civilian populations. Butsuch weapons are unlikely to be a preferredtool for terrorizing entire cities.

Biological weapons are the most likelychoice of means for disaffected states andgroups of the 21st century. They are nearly aseasy to develop as chemical weapons, they arefar more lethal, and they are likely to becomeeasier to deliver.104 At present, many biologi-cal agents require special technical expertise todistribute them effectively, such as droneaircraft that are capable of dispersing agents inthe right concentrations at the right altitudes andunder the right meteorological conditions. Thisis not simple, as extensive but unimpressiveIraqi efforts in the 1990s have shown. On theother hand, given enough time, perfectingmethods of dispersal will take far less technicalsophistication than that required to build anuclear bomb.

Moreover, bio-weapons can be produced atsmall, dual-use facilities, and then reproduced

101 Cohen, “Preparing for a Grave New World.”102 SECDEF address at the Conference on Terrorism, Weapons

of Mass Destruction, and U.S. Strategy, University of

Georgia, April 28, 1997; SECDEF News Conference,

Release of OSD Report on WMD Proliferation, November

25, 1997; SECDEF Annual Report to the President and the

Congress, March 1998, p. 26; and Acting CIA Director

George Tenet, Testimony to the Senate Armed Services

Committee, February 5, 1997.103 There are some exceptions, VX being the most important.104 Weight for weight, microbial agents such as anthrax are

thousands of times more potent than nerve gasses such as

sarin. Lederberg, p. 286.




in mass quantities using technologies and pro-cedures common to micro-breweries andcivilian pharmaceutical labs. A bio-weaponarsenal can be acquired for as little as $10,000-$100,000.105 Several countries are pursuingbiological agents, and some are getting helpfrom outside their borders. Biological weaponsexperts formerly employed by the Soviet Unionhave testified that the extent of the Sovietprogram was massive, but that control of thephysical and intellectual assets of the formerprogram is virtually nonexistent. Accordingly,a variety of improved toxins and biologicalagents are becoming more widely available.Technological developments in genetics andbiotechnology portend even more sinisteradvances with the design and deployment ofgenetically engineered pathogens that couldthwart most antibiotics and vaccines, andreadily outcycle our detection, antidote devel-opment, and distribution timelines. These couldinclude genetically-altered smallpox.106

Given such circumstances, the preventionof the proliferation of biological weaponsthrough treaties and a regime of export controlsis unlikely to be effective. A BiologicalWeapons Convention (officially, the Conventionon the Prohibition of the Development,Production and Stockpiling of Bacteriological[Biological] Toxin Weapons and on TheirDestruction) has been signed and ratified by 140countries. But since the treaty was open to sig-nature in April 1972, the number of countriesknown to have or suspected of having biologicalweapons has doubled.107 The BWC has no en-forcement or inspection mechanism, althoughnegotiations are underway to provide for them.

U.S. deterrence policy will remain effec-tive against acknowledged nuclear states, andthe deliberate use of these weapons willremain a low probability. But as other statesacquire nuclear weapons, that probability will

likely increase. Whether states take such a stepwill be a function of many factors, primarilyrelated to the threats they see within their ownregion. The literal costs of developing nuclearweapons, the political costs associated withtheir use, and the difficulty of hiding their de-velopment, make them less likely to emerge asa primary instrument of state policy. Still,given their vast destructive power, the UnitedStates will continue to deal with the threatposed by nuclear weapons throughout the next25 years. There will be no abolition, and eventhe existence of the Non-Proliferation Treatyand wide ratification of test ban treaties willnot significantly reduce the problem.

Non-state actors will also use theseweapons in direct attacks. Such attacks exposethe Achilles’ heel of the modern world. Allopen societies are vulnerable to extensive psy-chological and physical harm from weapons ofmass destruction. The potential for covertdelivery of these sinister products will be high,much higher than during the last half century.Covert threats are more likely than overt onessince they avoid easy attribution and hencelikely reprisal. The immense lethality, portability,and accessibility of WMD will be major sourcesof concern over the whole of the next quartercentury.

Missile threats will also continue to pro-liferate. While the regime of missile

producers, known as the Missile TechnologyControl Regime (MTCR), will survive and may

105 Falkenrath et al., p. 112.106 See Richard Preston, “The Demon in the Freezer,” The New

Yorker, July 12, 1999, pp. 44-61.107 J.D. Holum, Remarks for the Fourth Review Conference of

the Biological Weapons Convention (Geneva: U.S. Arms

Control and Disarmament Agency, November 26, 1996).

See also Robert P. Kadlec, Allan P. Zelicoff, and Ann M.

Vrtas, “Biological Weapons Control: Prospects and

Implications for the Future,” in Lederberg, pp. 95-111.



52 NEW WORLD COMING

be strengthened, it is becoming increasingly easyfor states not party to the MTCR to master thetechnology necessary for such production. If Iran,Iraq, North Korea, Pakistan, and India can foil thebest efforts of the MTCR, the prospect is that evenless technologically sophisticated states may beable to do so in future.

Ballistic and cruise missiles are liable to bethe long-range weapons of choice, given their ca-pabilities to threaten land and sea targets fromafar. The accuracy and lethality of such systemswill increase significantly between now and 2025,even for the delivery of conventional ordnance.108

The competition between missile developmentsand defensive systems will be a key operationalchallenge over the next several decades. Large-scale missile attacks will be able to overwhelmdefensive systems, despite considerable improve-ments to them. American bases abroad willbecome vulnerable to these weapons.109

Additionally, a number of new lethal and non-lethal technologies will be developed and fielded,including microwave, directed energy, andchemical/biological agents that could give smallpowers the ability to thwart power projection op-erations by any major power.

In addition to “traditional” weapons of massdestruction, new forms of Strategic InformationWarfare (SIW) will be developed and perhapsused as a new form of offensive warfare. SIWinvolves cyber-attacks against major nationalcommand systems and military-related operatingsystems.110 Bytes will not replace bullets andbombs in conflict, but those who cannot matchthe conventional strength of major powers willhave strong incentives for such asymmetricattacks. Given that the commercial world, notgovernments, is developing these technologies,and that military telecommunications are heavilydependent on commercial access, the potentialexists for serious disruption of routine militaryoperations in both peacetime and war. TheUnited States and its allies are particularly vul-

nerable to such methods since our economiesand military forces are heavily, and increasingly,reliant on advanced information technologies.While countermeasures can be developed, thisnew form of warfare will be an important part ofthe military landscape for some time.

In addition to weapons of mass destruction,there is a new concept—the “weapon of massdisruption”—to which modern societies, ratherthan their militaries, are increasingly vulnera-ble.111 As noted above, the computational andinformation processing capacities generated bythe computer revolution are critical to modern fi-nancial, banking, energy, telecommunications,medical, and transportation networks. The health,welfare, and prosperity of the citizens of the de-veloped world depend upon this infrastructure.But that infrastructure is an enticing target to dis-affected states and terrorists, who can achievealmost as much damage with a keyboard as witha bomb. Imagine, for example, a well-planned

108 Center for Counterproliferation Research, The NBC Threat

in 2025 (Washington, DC: National Defense University,

1997).109 See Paul Bracken, “America’s Maginot Line,” The Atlantic

Monthly, December 1998, pp. 85-93; and Paul Kugler,

Changes Ahead: Future Directions for the U.S. Overseas

Military Presence (Santa Monica, CA: RAND, 1998).110 See Frank J. Cilluffo, et al., Cybercrime, Cyberterrorism,

Cyberwarfare….Averting an Electronic Waterloo

(Washington, DC: CSIS, 1998); and Roger C. Molander,

Peter A. Wilson and Robert H. Anderson, "U.S. Strategic

Vulnerabilities: Threats Against Society," in Zalmay M.

Khalilzad and John P. White, Strategic Appraisal: The

Changing Role of Information in Warfare (Washington,

DC: RAND, 1999), pp. 253-80.111 Including the United States. See Preparing for the 21st

Century, Commission on the Roles and Capabilities of the

United States Intelligence Community, 1996, p. 27;

Organisation for Economic Cooperation and Development,

21st Century Technologies—Promises and Perils of a

Dynamic Future (Paris: OECD, 1998), pp. 14-5; and

Walter B. Wriston, “Bits, Bytes, and Diplomacy,” Foreign

Affairs, September/October 1997, p. 172.




attack against the air-traffic control network onthe east coast of the United States as more than200 commercial aircraft are trying to land in rainand fog on any given weekday morning.

Numerous incidents of computer penetrationhave already occurred, often mounted byteenagers using relatively unsophisticatedsystems. Better educated or well-financed“automata assassins” could do far more damage,especially if they are abetted by insider person-nel. A plethora of new tactics and techniques to“infovade” critical systems now exist. Modernhacker techniques such as “sniffers,” logicbombs, mutating viruses, and Trojan horses, areincreasingly common. The innate complexityand connected nature of information-basedsystems generate opportunities for hackers, ter-rorists, or antagonistic states to cause mischiefand harm. Our increased reliance on these infor-mation systems ensures that disruption to themwill create serious dislocations within oursociety. No nation in the world is more vulnera-ble in this regard, or has more to lose, than theUnited States.

Outer space, as well as cyberspace, willbecome a warfare environment. Space-

based systems are increasingly critical to bothinternational commerce and military capabilities.By the early 21st century, such systems will offersuch an invaluable advantage that continuedaccess to space will be considered synonymouswith national security. Space access will becomeas important as access to the open seas was formajor powers in the 18th, 19th, and 20th centuries.Not surprisingly, therefore, there are complica-tions ahead.

The benefits to global commerce derivedfrom space have vastly increased investment inspace technology and expertise, a trend that willno doubt continue. The national security implica-tions of such investments are dramatic.112 Withmore than $100 billion invested today, the UnitedStates has a clear economic interest in ensuring

its own continued access to space.113 But thenumber of states and groups capable of exploit-ing space as an environment is expanding as aresult of commercialization. More than two-thirds of today’s 600 satellites are foreign-owned,and of the more than 1,500 new vehicles that willbe launched over the next decade, most will beinternationally owned or operated by variousconsortia. This raises a major intelligence chal-lenge, for, as space systems proliferate, it will bemore difficult to determine their capabilities andwho has access to their data.

Since satellites are the ultimate pre-posi-tioned asset and, because they are so central tomilitary operations, what happens in space willbe critical.114 Most likely, weapons will bedeployed in space. Some systems may becapable of direct fires from space againsttargets on earth. It is possible that internationaltreaties will ban such weapons, as is the casetoday for weapons of mass destruction, butthat is not assured. What is clear is that spacewill become permanently manned.

Space will also enter into competitiveplanning and strategies in ways that arebarely conceived today. Future adversaries

112 See Lt. Gen. Patrick M. Hughes, Director, Defense

Intelligence Agency, “Global Threats and Challenges to

the United States and Its Interests Abroad,” Statement for

the Senate Select Committee on Intelligence, February 5,

1997. 113 Institute for National and Strategic Studies, Strategic

Assessment 1999 (Washington, DC: National Defense

University, 1999)114 See Thomas T. Bell, Weaponization of Space:

Understanding Strategic and Technological Inevitabilities,

Occasional Paper No. 6 (Air University, Maxwell Air

Force Base: Center for Strategy and Technology, Air War

College, January 1999); Dana J. Johnson, Scott Pace, and

C. Bryan Gabbard, Space Emerging Options for National

Power (Santa Monica, CA: RAND, 1998); and

Christopher Lay, “Can We Control Space?” presentation to

Electronics Industry Association, October 1997.



54 NEW WORLD COMING

will realize that assured access to informationis a key component of U.S. military strategyand, specifically, to the sort of military oper-ations envisioned by the Joint Chiefs ofStaff.115 Thus, negating U.S. conventional su-periority through the denial or negation ofinformation sources based in space is anobvious and lucrative strategy for some coun-tries or groups to employ.

All of this suggests that information superi-ority will be relative. While the United States willretain relative superiority in C4ISR (command,control, communications, computers, intelli-gence, surveillance, and reconnaissance) systemsdevelopment and integration, the nature of infor-mation technologies and their ubiquity in thecommercial market place make any presump-tions about assured information superiorityunwise. Globally, military forces will rely onhighly networked, space-based and ground-basedintelligence and reconnaissance systems, butbackup systems will be available to protectagainst successful anti-space operations. Due tothe wide availability of commercial sources ofspace-supported information, by 2025 the UnitedStates will no longer enjoy a monopoly in space-based C4ISR. It will, however, maintain apreponderant edge, using its technical systems toproduce timely and usable information.116

What do these developments portendfor the strategic environment of the

future? Most essentially, they mean that bothconventional and nuclear deterrence willremain a priority in the coming century, butwill be harder to achieve than ever before. Thepredictability of deterrence cannot be assumedbased on Cold War experience for severalreasons.

First, the convenience of focusing on asingle antagonist has been eclipsed, along withthe comforting knowledge that deterrence was

essentially a bilateral interaction between twosuperpowers with shared vulnerabilities andknown capabilities. Such conditions no longerexist, nor will they in future. A wide diffusionof actors and destructive capabilities willinstead characterize the context of deterrence.Exactly who is being deterred, exactly whichvalue hierarchies and decision systems need tobe affected, what relative costs and benefits areat issue, and what behaviors are supposed to beshaped by deterrence, will all be very problem-atic questions.117 Rogue irrationality and thepotential for misperception or ignoranceremain possibilities, as well. In short, Cold Warconcepts will have to be revised, adapted, or insome cases abandoned in the face of new cir-cumstances.

Of crucial importance, too, the deterrenceproblem is also likely to be inverted and thrownback at the United States by many actors and inseveral forms. It is one thing for the United Statesto deter others by threatening use of nuclearweapons or massive force, and to make suchthreats not only credible to others but also ac-ceptable to Americans. But it is an entirelydifferent matter to avoid being deterred by threatsto use weapons of mass destruction against theUnited States, against U.S. forces abroad, oragainst U.S. allies. While the United States willremain superior to all rivals in measurablemilitary capabilities over the next 25 years, thereare ways that “bronze” technology in the handsof a potential adversary can blunt “gold” technol-ogy in our own hands. If more countries acquireweapons of mass destruction, and the ability to

115 U.S. Department of Defense, Joint Chiefs of Staff, Joint

Vision 2010 (Washington, DC: USGPO, 1996).116 See Roger C. Molander, Peter A. Wilson, David A.

Mussington, and Richard F. Mesic, Strategic Information

Warfare Rising (Washington, DC: RAND, 1998).117 Keith Payne, Deterrence in the Second Nuclear Age

(Lexington: University of Kentucky Press, 1996).




deliver those weapons in a wide variety ofvenues, the flexibility and credibility of U.S.regional security policies could be sharplylimited despite overall U.S. military superiori-ty. This is the problem of inverted deterrence.

We should also expect to be bothstrategically and tactically surprised

despite our prowess in the information revolu-tion. History is in many ways little more than acavalcade of such surprises. As suggestedabove, no amount of technology will ensureperfect intelligence about the capabilities or in-tentions of every possible opponent.Generating knowledge and insight from rawdata requires the analytical capacity of thehuman mind, and human intelligence willremain a key component of any first-rate intel-ligence operation. We should remain humbleabout the ability to predict events or the reac-tions of adversaries to our own initiatives. Therange of variables is endless, and our potentialenemies will be both intelligent and adaptive.They will try to deny or distort any informationthat we may process into useful intelligence. Ifhistory is any measure, specific predictions willnever unfold exactly as foretold.

One underlying reason for this is cultural.Strategic surprise is abetted by mirror imaging—viewing future opponents as having similarvalues or beliefs to one’s own when they in factdo not. Some leaders and societies are motivatedby values and goals that are different if not anti-thetical to our own, and their resort to extremeviolence—often against civilian populations—will doubtless surprise and shock us in the futureas it has in the past. We may not comprehendeither the stakes or the commitments that someopponents may make in using such violence.Since conflicts frequently occur from miscalcu-lations borne of ignorance or misperceptionabout opposing views, knowledge of foreigncultures is a necessary component of strategic

intelligence and a bulwark against catastrophicsurprise in the future. Antagonists who share ourstrategic culture and values, who have similarpolitical institutions, and who maintain the samesense of proportionality or rationality about theirinterests and the means employed to securethem, are not our likeliest adversaries in thefuture. To assume otherwise, as one strategisthas noted, reflects "an a priori detachment fromthe well-springs of conflict and violence in themodern world."118

While new actors and new weaponswill change the character of conflict

in the next century, the essence of war willremain the same. States, groups within states,and extra-national organizations will still relyon force and the threat of force to pursue avariety of political, economic, and militaryaims. Asymmetries in both capabilities and ob-jectives will be exploited in the onset,prosecution, and termination of conflict. Sincehuman emotions will still infuse warfare,conflict will not be limited to purely rationalgoals, nor can we count on rough proportional-ity between ends and means. Fear, uncertainty,risk, and ambiguity will still characterizeconflict despite the advent of unprecedentedlevels of information technology.119 That isbecause, not least, clever and determined ad-versaries will find new methods of deceptionand denial to thwart superior U.S. technical ca-pabilities—such as burying communicationscables so that U.S. intelligence assets cannot“hear” from space. Ultimately, as in the past,the character and conduct of future conflictwill be influenced by who is fighting whom,how, and over what. Surprise will remain a

118 Lawrence Freedman, "The Revolution in Strategic Affairs,"

Adelphi Papers 318, 1998, p. 77.119 See Barry Watts, Clausewitzian Friction and Future War,

McNair Paper 52 (Washington, DC: National Defense

University, October, 1996).



56 NEW WORLD COMING

risk, not because technology will fail us, butbecause our judgments may not anticipate thefull range of strategic contingencies.120

Nevertheless, presuming continued invest-ment at roughly today’s resource levels, nostate will acquire the strategic mobility and ex-peditionary capabilities that currently providethe United States with global reach and sus-tained combat power. But U.S. militarysuperiority will continue to rest on the perfor-mance of educated and well-trained militaryforces and appropriate military doctrines aswell as modern equipment. While technologyis a crucial enabler, it is only one component ofmilitary capability.121 Military power is morethan the sum of the various armed services orthe size of the defense budget. Continuednational support for the military and thepreservation of the political will to pursuenational interests will remain necessary ingre-dients of success.

The United States will also retain its tradi-tional advantage in high technology, but theblurring of man, machines, and informationsystems will accelerate.122 As has always beenthe case, having new devices is one thing, andintegrating them into the human subculture ofthe military is another. American commercialsuccesses should also keep the United Statesthe leader in command and intelligence systemdevelopment, systems integration, and infor-mation management.

At the same time, however, America’s coali-tion partners will lag behind American collectiveachievements in high technology and the inte-gration of advanced computational capabilitiesinto advanced military systems. This will lead towidening gaps in compatibility and interoper-ability that will affect the ability of allies tooperate with the United States in an integratedfashion. In addition to technologically-driven

gaps, potential challenges to alliance relation-ships could also arise from burden sharing andrisk sharing disputes. As always, unequalburdens and risks will make creating coalitionsof the willing more difficult.

Nor will the causes of war change in theiressence. Men have always fought for reasonsthat some other men could not understand.That will still be the case. New forms of ideo-logical struggle cannot be ruled out, andneither will religion disappear. Such motiva-tions will generate intense passions and willensure that tomorrow’s conflicts are not foughtsolely according to American definitions andrules of conflict. War will not be like a videogame, and although American forces may facesome contingencies with dispassion, wecannot count on our adversaries taking thesame attitude.123

Clearly, there are new challenges in ourfuture, especially for a U.S. military

strategy that has relied on forward-based andforward-deployed forces as a key component ofthat strategy. The permanent stationing of U.S.forces abroad will become more difficult tosustain. The political cost of such bases withinAmerican alliances will likely rise, as will thevulnerability of such forces to attack with bal-

120 See “Making Intelligence Smarter: The Future of U.S.

Intelligence,” Report of an Independent Task Force,

Council on Foreign Relations, February 1996.121 For eloquent testimony to this point, see Stephen Ambrose,

Citizen Soldiers (New York: Simon & Schuster, 1997).122 But this will not happen automatically, and there are bu-

reaucratic impediments to its progress. See Andrew

Krepinevich, “Emerging Threats, Revolutionary

Capabilities, and Military Transformation,” Testimony

before the Senate Armed Services Committee on

Emerging Threats and Capabilities, March 5, 1999.

123.See Robert H. Scales, Future Conflict (Carlisle, PA: U.S.

Army War College, 1999).




listic missiles, cruise missiles, terrorism, andweapons of mass destruction. The latter cir-cumstance may erode support for such basesfrom the home front. Taken together, the pres-sures against the permanent forward basing ofU.S. military forces have profound implica-tions for U.S. strategy, power projectioncapabilities, and alliance relationships.

The future strategic environment will there-fore be one of considerable turbulence. Stabilitymay simply not be achievable at small cost—orat any cost—and riding out the storm at anchoris not an option. The international system will beso fluid and complex that even to think intelli-gently about military issues will mean taking anintegrated view of political, social, technologi-cal, and economic developments. Only a broad

definition of national security is appropriate tosuch a circumstance.

In short, we have entered an age in whichmany of the fundamental assumptions thatsteered us through the chilly waters of the ColdWar require rethinking. In the decade since thefall of the Berlin Wall a start has been made, buta start is not good enough. The very facts ofmilitary reality are changing, and that bearsserious and concentrated reflection. The reflex-ive habits of mind and action that were thefoundation for U.S. Cold War strategy andforce structures may not be appropriate for thecoming era. How the United States and otherstates respond to these changing dynamics willdetermine the relative peace and security of thenext century.



58 NEW WORLD COMING

II: A World Astir

If nothing else, the intellectual investmentrepresented by the preceding section

proves that the world is a vast and complicatedplace about which our knowledge is limited andour powers of forecasting uncertain. But it offersmore than that. A composite picture of globaldynamics suggests a plausible range of influ-

ences that will affect regions and countries. Itsuggests, too, that regions will not be as self-contained in 2025 as they are today.

Nevertheless, global dynamics are notwholly determinative, and they are not uniformacross the globe. That is why a regional analysis,

undertaken below in five sections, is still neces-sary to capture the shape of the world ahead.

Greater Europe

During the past century, Europe has hada very significant impact on U.S.

national security. The United States fought twoworld wars and sustained a 40-year Cold Warwith the Soviet Union to prevent Europe from

being dominated by a power with interestsinimical to its own. In so doing, the UnitedStates expended enormous financial andmilitary resources and risked its own survivalas a state.


European Union manages to transform itselfinto a federal state with a unitary foreign andsecurity policy, or whether a failed effort to doso leads to re-nationalized security policies.128

Second, Russia’s post-communist future couldmire Europe in pressing security concerns ifthat future produces either chaos and disinte-gration or a reborn authoritarianism prone toimperial ambition. A third source of troublecould come from the states located betweenwestern Europe and Russia, where theprospects of economic and political reformvary markedly.



Greater Europe—which includes the coun-tries of western Europe, eastern and centralEurope, and Russia—will retain lasting impor-tance for U.S. security interests in the nextquarter century for an array of reasons.124

Greater Europe will have a population of ap-proximately 761 million by 2025.125 Aneconomically integrated European Unionwould have an economy slightly larger thanthat of the United States.126 This region willremain an important center of internationaltrade and finance, a pivot of scientific and tech-nological innovation, a region capable ofdeploying sophisticated military capabilities,and a significant actor in global politics.

Europe’s importance to the United Statesalso rests on cultural factors. Most Americanstrace their historical and cultural roots toEurope, and will continue to do so throughoutmost of the early 21st century. More important,America’s political institutions and philoso-phies are essentially European, and the regionwill remain the largest and strongest communi-ty of states sharing the basic democratic valuesthat undergird U.S. political culture. It is alsothe region of the world most tightly bound tothe United States by an unprecedented array ofeconomic, cultural, and political ties.127

For all these reasons, Greater Europe’s evo-lution in the 21st century and its relationshipwith the United States will be as important toU.S. national security interests as it has everbeen. But there is yet another reason why thisregion is liable to be important: it could becomea major source of trouble—trouble that couldtake three intersecting forms.

First, the evolution of west European insti-tutions over the next quarter century will likelyspark economic competition, diverging politi-cal interests, and serious tensions with theUnited States. This will be so whether the

124 In this study we use “western Europe,” not “Western

Europe,” and the same goes for eastern and central

Europe. We have a specific reason for so doing.

Capitalization of these terms, which settled into a pattern

during early Cold War times, indicated a political/ideolog-

ical disposition: West meant democratic and East meant

Communist. This made sense, for through capitalization

English usage gave us the ability to distinguish between

the merely geographical and the abstract. Today, obvious-

ly, this distinction no longer applies—although we still use

the cultural phrase the West, as distinct from the geo-

graphical term the west, to indicate the domain of

free-market democratic countries whose intellectual

origins are to be found in the Renaissance and the

Enlightenment.125 U.S. Bureau of the Census figures and projections, 1999.126 1996 base GDP figures by country are drawn from 1998

World Development Indicators (Washington, DC: The

World Bank, 1998), pp. 180-2. For growth rates used to

derive 2025 figures, see OECD, The World in 2020, p. 92.

It is worth noting that these OECD statistics were

compiled before the 1997-98 Asia crisis. But at the time of

this writing, there is no inclusive post-crisis data set from

which to draw.127 See Paul S. Schroeder, “The New World Order?”

Washington Quarterly, Spring 1994; and Daniel Deudney

and G. John Ikenberry, “The Logic of the West,” World

Policy Journal, Winter 1994.128 See generally Robert Blackwill, ed., The Future of

Transatlantic Relations: Report of an Independent Task

Force (New York: Council on Foreign Relations, February

1999).



60 NEW WORLD COMING

In the coming decades, three criticalmacro-social, economic, and political

forces will strongly affect the states of GreaterEurope. First will be changing demographicpatterns and the resulting need for new socialpolicies.

With the exception of Turkey, no state inEurope today even maintains a population re-placement rate, and this trend is unlikely to

change through 2025. Aging populations strainexisting pension provisions as the number ofworkers paying into the system declinesrelative to the number of retirees.129 Fears ofpolitically unsettling migrations from the EU’speriphery are likely to yield immigrationpolicies far more restrictive than those in oper-ation today, closing off one available means ofcountering prevailing demographic trends. It isnot even clear that unrestricted immigrationwithin the EU will last 25 years, due in part todifferent historical and cultural dispositionstoward immigration.

East of the European Union, a similar de-mographic story yields a different set ofpossible outcomes. Russia’s population willboth age—25 percent of the population will be

over 60 by 2025—and shrink from approxi-mately 148 million in 1995 to approximately139 million in 2025 largely due to low birthrates and acute health and environmentalcrises.130 Russia’s aging population willincrease pressures for social spending, butproblems of unemployment and a non-func-tional tax collection system will make it hard toraise adequate funds. Worse, Russia’s direeconomic conditions will probably stymie the

adoption of anything more than stopgapmeasures across the range of social policy.Moscow’s inability to address such problemswill add to those social tensions, reducingfurther the legitimacy of the central govern-ment.

In the states of eastern and central Europe,the critical challenge will be two-fold: whethergovernments can rebuild the social safety netsthat were destroyed after the fall of the Berlin

129 Sheetal K. Chand and Albert Jaeger, IMF Occasional Paper

147: Aging Populations and Public Pension Schemes

(Washington, DC: International Monetary Fund, 1996),

p. 12.130 All population figures, here and below, are drawn from the

U.S. Census Bureau’s International Database.




Wall; and whether societies can maintain theirnascent democratic political cultures in the faceof episodic economic stress.

Second, economic growth rates will be amajor factor in the region’s prospects. Theachievement of a common EU foreign andsecurity policy, as well as the success of theeuro, will require a growth rate at the upper endof the current OECD forecast range—anaverage of 2.5 percent or better over 25years.131 Lower growth rates could limit theEuropean Union to the creation of commoneconomic, fiscal, and monetary policies, and itcould possibly doom the euro. These lowergrowth rates could also place at risk the abilityof current members or EU aspirants to attainthe economic targets required by the Union—acondition states may be unwilling to resolvethrough difficult structural adjustments.

For the west Europeans, it will be especial-ly critical whether they find a way to reconciletheir deeply embedded views on welfare withthe new macroeconomic orthodoxy sweepingthe world. The future of the euro may well be atstake. Some believe that the initial fall in theeuro’s value over the first six months of 1999was mainly the result of an expectation thatU.S. interest rates would rise. Others, however,have seen a structural cause in the relationshipbetween the size of Europe’s welfare functionand the foreign exchange value of its currency.Expensive welfare states tend to have lowgrowth economies, which leads central bankersto lower interest rates in order to stimulate theeconomy. That creates trade surpluses, but italso devalues the currency, making efforts to re-structure the EU’s approach to welfare crucialto the future economic success of the EuropeanUnion.

Economic growth rates will also have amajor impact elsewhere on the continent. The

relationship between improving economicprospects and the institutionalization of demo-cratic governance is to some extent circular.Economic prosperity cannot guarantee politicalstability—but it helps. So whether in Russia orRomania or Latvia or Poland, good times willmake it easier for reformers to gain support fortheir future visions, and lean times will make itharder. The level of integration between easternand central Europe, including Russia, with therest of the world will also play an importantrole in the area’s prospects. If global economicdynamics are essentially healthy, there will be agreater impetus to adopt international bestpractices, and that will spur positive policiesfor the region. If international economicdynamism stumbles, such incentives will beweaker and their positive impact smaller.

Third, political leadership will play a vitalrole in determining the region’s future. For theEuropean Union, bold leaders reared mostly inthe post-Cold War period could build on theirexperience with a common European currencyand the unimpeded movement of goods andpersons across state boundaries to create acommon foreign and security policy. Absentsuch leadership, states in the European Unionmay be unwilling to yield sovereignty to asupra-national body.

While Russia’s political system willprobably not achieve a fully institutionalizeddemocracy, strong leadership committed to de-mocratic ideals will be crucial to preventdisastrous backsliding. Such leadership wouldenable the central government to retain somemeasure of control over newly empoweredregions. It could also help to ensure continuedaid and investment from the OECD countriesand international financial institutions to whatwill remain a precarious economic and political

131 OECD, The World in 2020, p. 92.



62 NEW WORLD COMING

system. Without a democratically orientedleadership, Russia may disintegrate, or a strongauthoritarian leadership may emerge in itsstead.

The danger posed by poor or divided lead-ership elsewhere in Europe will be a freezing ofnational futures in limbo between the democra-tic West and the problematics of Russia. TheCzech Republic, Poland, and several otherstates “in the middle,” so to speak, have deepWestern cultural roots, whether through theimpact of religion, history, geographicalpropinquity, or all three. Others, to one extentor another, do not. At the outer edge of the ColdWar, all these societies are being pulled towardthe West, but not equally or with similar results.The quality of political leadership over the next25 years will be critical to determining whichof these societies find the will and way tochange themselves into the states they nowwish to be, and which will not. The result willmark a new cultural and political boundary forthe future.

What follows is an analysis of a range ofplausible alternative futures for GreaterEurope. It begins by depicting a regionenjoying relative stability and prosperity andassays the conditions conducive to such goodfortune. It next turns to less positive alterna-tives from the U.S. point of view, similarlyseeking to isolate likely causal factors.

In one view of the region’s future, theEuropean Union would continue to be at

the forefront of many of the positive trendshighlighted in the discussion of globaldynamics. It will continue to be the prototypi-cal case of a group of states, committed tomarket-based liberal democracy, that relinquishincreasing degrees of sovereignty to achievegreater economic success. That effort, in turn,would result in the EU assuming a more signif-

icant leadership role within the internationalarena.

If the political integration and economicexpansion of the EU go as planned, it couldhelp to institutionalize democratic governanceand market economies in at least some neigh-boring countries to the south and east. Asimportant, it would finally put to rest any lin-gering fears that the major European countrieswould ever again go to war with each other.Many believe that it would also create a like-minded and similarly powerful partner for theUnited States with which to share the burden ofglobal leadership.

By 2025, a mature European Union couldbe a successful economic, monetary, and tradeunion, with a common justice and legal struc-ture. It would pursue a common foreign andsecurity policy under the leadership of itsSecretary-General of the European Council andHigh Representative for the Common Foreignand Security Policy. It would assume primaryresponsibility for Europe’s own security, basedon a unified headquarters and staff for an all-European defense force. It would most likelyinclude some twenty states, with new memberscoming from central and eastern Europe. Thereis no more than a fifty-fifty chance, however,that Turkey will become a member of the EUduring this period.

Uncertain is whether the EU will invite theBaltic States or Ukraine to join, given theirproximity and historical ties to Russia.Economically, the Baltic States will probablymeet the criteria, but Ukraine probably will not.Russian opposition will be a significantobstacle, especially as the EU accrues seriousmilitary-strategic functions. If the EU takes inthe Baltic States and Ukraine, it risks a signifi-cant further deterioration of its relationship




with Russia. If it does not take them in, it per-petuates a series of unsettled relationships.

Whatever its precise size, a matureEuropean Union would be a global

political, economic, and technological force.Annual growth rates averaging over 2.5 percent,and concomitant productivity gains, would drivea successful euro and rival U.S. GDP growth.132

If this occurs, the euro would become a mainreserve currency and unit of internationalexchange. Unless the euro appreciated toorapidly against the dollar, this would further EUcompetitiveness in international trade andfinance. Such economic success would provide asound basis for addressing social welfareproblems brought on by aging populations.

The EU would be responsible for thedefense of its members and capable of re-sponding effectively to regional securitythreats. It would have developed the ability toconduct multi-divisional peace enforcement,peacekeeping, and humanitarian assistance op-erations within Europe. Most EU states wouldhave small, professional militaries. Their forcestructures would be bifurcated between high-readiness forces available for such missions aspeacekeeping and larger national defenseforces requiring significant reconstitution to beeffective. Because of the newness of theEuropean Union’s common security policiesand stronger military capabilities, its policieswould probably have a regional focus aimed toprevent the spilling over of instabilities andchaos on its periphery.

In such a world, NATO’s future would beuncertain. It is hard to see how a truly integratedand independent European defense force couldcoexist with NATO, as it is presently constituted.NATO could remain formally the ultimate guar-antor of European security, based on Article 5 ofthe North Atlantic Treaty. But in this case,

NATO’s operational military command struc-tures would gradually disappear. The U.S.military presence would probably diminishsharply, though the United States might stillremain engaged in peacetime through periodicdeployments. The political entry to Europe thatU.S. leadership of NATO provides today woulddiminish.

Even if the EU were to build a unified andindependent military structure, a significantmilitary technology gap would exist betweenthe United States and its European allies. TheUnited States would continue to spend more ondefense than its EU associates combined. Theestablishment of a single, integrated Europeandefense industry could increase European self-sufficiency in defense, but only if the Europeanswere prepared to expand their defense spendingand procure their arms and equipment almostexclusively from this industry.

Over the period through 2025, Russia isunlikely to achieve a fully institutional-

ized democracy. The time is not at hand forcorruption-free political and economic institu-tions, investment-fueled economic development,and a foreign policy oriented toward full integra-tion with the democratic world. But Russiacould evolve in such a way as to be neither agreat democratic success nor a great threat toEurope. That is a condition well described aseither status quo-plus or status quo-minus.

While still facing enormous problems,Russia in a condition of status quo-plus wouldhave acquired a post-sclerotic leadership

132 The OECD under a high-growth scenario predicts long-

term U.S. GDP growth rates to be 2.6 percent per annum.

A weighted average of high-growth estimates for current

EU members and for the newly admitted states envisioned

by this paper yields a GDP growth rate for the European

Union of 2.6 percent, as well. See OECD, The World in

2020, p. 92.



64 NEW WORLD COMING

capable of some political and psychologicaldynamism. It will also have created a governingpolitical party able to accomplish institutionalreform. An active and reasonably popular pres-ident, supported by his party in the Duma,would finally be in a position to firmly estab-lish the rule of law, privatize land, and enact taxlegislation that could give the government astable expectation of essential resources. As aresult, Russia’s increasingly autonomousregions would likely be drawn back toward thecenter. This is not beyond possibility over a 25-year period, and it could occur far more quicklythan that. Even under such conditions, however,Russia could not grow economically at morethan 2 percent a year. But at least the malaise sopervasive today would lift, and a new post-Communist generation could begin to inheritsocial and economic power in an environmentdotted with islands of hope and progress.

Why would growth be so slow even if amore propitious political environment werecreated? Because Russia faces an enormousproblem in renewing and diversifying its indus-trial and commodity base after 70 years ofdistorted markets and under-investment. It isalso likely to continue to suffer chronic unem-ployment, pervasive corruption, and massivetax evasion even under the best of circum-stances. In such an environment, statusquo-minus is just as likely as status quo-plus. Inthis case, Russia’s share of global GDP wouldcontract and growth would stall, with occasion-al periods of severe economic contraction,between now and 2025. This would hamperRussia’s ability to attract private foreign invest-ment, causing continued reliance on assistancefrom international lenders such as the IMF.

In this view of Russia’s future, mostly un-treated health and environmental problemswould grow very serious. The spread of Multi-Drug Resistant Tuberculosis (MDRTB) and

HIV/AIDS would debilitate the work force,lower national morale, and cost large sums ofscarce capital to control, if not resolve. Healthrisks owing to environmental conditions willgrow. Thousands of former biological, chemical,and nuclear weapons sites will exist, but littlemoney will be available for remediation.Chemicals and toxins in the soil and water leftover from industrial processes now abandonedwill have direct and possibly serious effects onthe health of Russians as well as many north andeast Europeans.

The result of the combination of economic,health, and environmental trends could be anincrease in Russia’s existing political and socialstrains. In some regions, such strains couldspark backlashes against the country’s formalbut largely dysfunctional experiment in democ-racy.

Given Russia’s importance to Europe, themajor European countries as well as the UnitedStates are likely to persevere in their efforts tohelp Russia develop institutionalized democra-cy, a more robust civil society, and a moreeffective economy. But even extensive externalaid is likely to achieve little more than a roughpreservation of the status quo—whether plus orminus—and it could end up holding off justenough pain in Russia to delay real reform.

Under most any circumstance, the Russiangovernment’s control of its national borderswill be problematic. Central authority couldwell be limited to matters of national defensepolicy, monetary policy, and the coordinationof inter-regional transportation and communi-cations. Political violence within Russia andalong its periphery will likely attract and subse-quently coexist with widespread, highlyentrepreneurial criminal syndicates that maydevelop strong economic and political ties toregional and local elites. These dynamics, in




combination with the lack of financial re-sources available to maintain the quality andprofessionalism of its military and nuclearforces, will cause continuing concern withinEurope and the United States. “Loose nukes”and “loose bugs” are obvious problems, but sois the lack of effective oversight for the manystill functioning Chernobyl-design nuclearenergy plants.

Some of Russia’s regions could becomepolitical power centers in their own right, per-forming most vital public functions. In theevent that Moscow cannot exert effectivecontrol over its own federation, regional eliteswill play a major role in the selection ofmilitary commanders and their staffs. Regionalleaders would most likely develop their ownforeign policies as well, seeking closer ties towealthier neighboring powers and other poten-tial allies. The Far East regions may gravitatetoward Korea and Japan, and those in CentralAsia (such as Tatarstan) may move closer totheir Muslim neighbors, particularly Turkey,Iran, Pakistan, and Uzbekistan. The regionsclosest to Europe would most likely seekcloser ties to the European Union and toGermany in particular, but also with the Balticstates, Ukraine, and other Slavic states(Bulgaria, and even Belarus) that may be doingbetter than Russia. The question of Russia’sstability and national cohesion will have amajor impact on the security calculus of all thestates on Russia’s periphery. Russia will havebecome the “sick man” of early 21st centuryEurasia—sick enough to worry everyone, butneither so deathly ill nor so imperially healthyas to pose the kind of threat to the rest ofEurope that could decisively throw it off track.

In this view of Greater Europe’s future,most of the states between the European

Union and Russia would improve economical-ly and politically—in absolute terms—from

where they are today. The OECD expects anaverage economic growth rate over this periodof 4.9 percent.133 Such growth, if it occurs,will likely be facilitated by continued invest-ment by EU countries, the United States, andother global economic players who willcontinue to view the future of a market ofabout 194 million people as an important in-vestment priority. Free from Communismonly about five years, their combined GDP in1996 amounted to about $423 billion—around2 percent of the global share.134 In the coming25 years, this region will very likely increaseits global standing in GDP and othereconomic terms.

Politically, most of central and easternEurope will benefit from the positive trends ofdeepening democracy and expanded interna-tional commerce, even if many states do notachieve full global competitiveness. Many, ifnot most, central and eastern European stateswill have mature democratic systems by 2025.There will be regular fair elections, the insti-tutionalization of the rule of law, democraticand civilian control over military institutions,respect for civil liberties, and a willingness topursue peaceful solutions to territorialdisputes and irredentist claims. Even if someare not full members, most of the these stateswill be linked politically with both theEuropean Union and NATO.

At the same time, the situation in theBalkans will remain tenuous even in therosiest of futures. Only Slovenia and Greecehave a good chance to escape economic stag-nation and political instability, because theyare relatively stable democracies and haveenough highly educated people to succeed in

133 OECD, The World in 2020, p. 92.134 World Development Indicators (Washington, DC: The

World Bank, 1998), pp. 180-2.



66 NEW WORLD COMING

an age of economic integration.135 Bulgaria,Romania, Serbia, and Croatia face greaterchallenges but may still succeed. But else-where, Balkan countries will continue toexperience economic dislocations and morethan occasional bad government, complete withcorruption, manipulation of state finances, sup-pression of the media, and a lack of eliteconcern for pressing national problems.

No enduring settlements to the conflicts inBosnia or Kosovo are likely to emerge from theU.S. and NATO-brokered agreements thatended the wars there. As a result, ethnictensions and the security fears that go withthem will remain, regularly threatening to eruptinto outright conflict. Moreover, with Bosniaand Kosovo stuck in a state of suspended polit-ical animation, problems in Macedonia,Montenegro, and Albania will become morelikely. As a result, it is highly improbable thatany of these countries will be integrated intowestern Europe’s political and economic insti-tutions within the next quarter century.

Amore dour future for Greater Europe isalso possible. It would turn on three

basic elements of potential bad fortune. Thefirst is that the European Union collapses,leading to the rise of re-nationalized economicand possibly security policies. The second isthat the Russian state disintegrates altogether oracquires a revanchist authoritarian leadership.The third is that the lands between the EU andRussia fall into a pattern of economic failure,governmental ennui, internal violence, andcross-border wars sufficient to generate asteady stream of strategic and humanitariancrises for most of the next 25 years. Any one ofthese developments could encourage the othertwo.

A collapse of the European Union couldresult from a failure to sustain annual economic

growth at rates of at least 2 percent. Such slowgrowth could arise from a loss of confidence,growing disillusionment among politicalleaders and their citizens, and likely popular re-sistance to further funding any joint policies. Acollapse could occur, as well, as a result ofshifts in leadership with a concurrent reluc-tance to yield national sovereignty over criticalpolitical and economic policies. The unwilling-ness of a population to endure the pain ofmeeting economic targets, or of undertakingstructural changes to address failures in thesocial safety net, might also serve as occasionfor leadership changes.

Another possibility is the specter that a co-alescing governmental authority at the EU levelmight be essentially undemocratic. Currently,the European parliament does not have bindingauthority over national member governments,but the EU bureaucracy in Brussels does inselected policy areas. Already the creation of aEuropean central bank and currency has greatlydiminished the power of national legislatures toaffect crucial pocketbook issues such as interestrates and money supply, which in turn dimin-ishes the significance of citizens’ votes forthose legislatures. Unless EU political institu-tions manage to keep pace with economic andsecurity ones, a significant popular and elitebacklash against integration could ensue, espe-cially in times of economic adversity.

More than that could go wrong, as well, inthe form of external pressures on young EU in-stitutions. Conflict in North Africa could resultin the movement of large numbers of migrantsto southern Europe and points north, upsettingpolitical equilibria and fracturing common im-migration and social policies. A significantsecurity threat from Europe’s periphery, from

135 We use the term Balkans here in a strictly geographical

sense.




Russia or the Balkans, might empower a strongpreference for NATO—which is to say,American—leadership, and sharply diminishinterest in pan-European solutions and institu-tions.

Regardless of the precipitating events, theimplications of lost European confidence in theinevitability of a federated Europe would besignificant. Outside Europe, the euro wouldlose value as demand waned for holdingEuropean assets. Lower growth rates and aweaker euro would limit domestic consump-tion, while higher interest rates would dampeninvestment. In the face of this loss of confi-dence and resulting economic effects, and withno alternative plan in place, the EU could beginto unravel. Germany would probably reassertits national interests politically, economically,and possibly even militarily both within andoutside Europe. France might move sharply tothe right as it finds that it can no longer use in-ternational processes and institutions to limitGermany’s return to independent major powerstatus. The far right would probably prospermore generally, too, in countries such as Spain,Portugal, Italy, and Austria. Additionally, theUnited Kingdom might attempt to separateitself from Europe and focus instead on itsspecial relationship with North America andthe wider English-speaking Commonwealth.

If any of these events occurred singly or incombination, competition among Europeanstates would most likely become the norm, withsignificant undertones of national chauvinismand regional and global economic protection-ism. Elements of the re-nationalization ofEuropean defense would soon emerge, if not onthe scale of the pre-World War II period, thenmuch more vigorously than in the post-WorldWar II period.

While such a situation might increase theimportance of the U.S. dollar, of NATO, and ofthe U.S. role in Europe, many negative conse-quences would flow as well. The collapse of theeuro could send major shocks through the in-ternational financial system. A failure of theEuropean Union would also send a signal, andat worst deal a mortal blow, to other morenascent regional organizations trying to achievefree trade and other common arrangements.The United States might be forced to undertakemuch of NATO’s financial burden. Tensionsbetween a Europe perceived to be shirking itsfinancial responsibilities and a United Statesbeing asked to contribute more to Europeandefense would strain the trans-Atlantic linkdespite a U.S. willingness to pay and do more.Alliance coherence would be harder tomaintain during the transition period as oldnational biases and animosities resurfaced.

The second concern at the more dourend of our continuum is two-fold:

either the collapse of the Russian state or therise of a new authoritarianism. Both could bedisastrous, albeit in different ways.

Russia’s disintegration would have seriousconsequences. Unemployment in Russia wouldreach severe levels. Corruption and inadequatetax collection efforts would leave insufficientfunds for even basic social services. Economicgrowth would plummet to negative rates oversustained periods. The magnitude of its socialand economic problems would probably be sogreat, and the decentralized power of theregions so comparatively strong, that Russia’scentral government might essentially disappear.Regional and ethnic tensions, compounded bysharp economic disparities, would fuel erup-tions of conflict and the mass migration ofcivilians fleeing instability and violence.Military forces, including tactical nuclearweapons, might come under the control of local



68 NEW WORLD COMING

military commanders and political warlords.The last Russian civil war and collapse, from1917 to 1921, was horrible. A future one mightbe even worse, and not just for Russians.

A significant Eurasian power vacuumwould flow from a Russian collapse, encourag-ing states with ties to various Russian regions,such as Iran, Turkey, and Japan, to seek meansof furthering their own interests in the face ofRussian weakness. Faced with Russian disinte-gration and the unlikely possibility of restoringRussian central authority, the European Unionand NATO might draw the Baltic States andUkraine into their organizations, in effect re-dividing Europe in order to prevent the spilloverof Russian instability into other areas of Europe.Diplomatically and economically, the UnitedStates and other countries would have to negoti-ate with multiple entities and factions withclaims to statehood, and deal simultaneouslywith massive economic dislocations. Finally,the dangers associated with wildly diffusedcontrol over nuclear weapons, fissile materials,and biological agents would present a securitycrisis of the first order.

The resurrection of an imperial Russia, onthe other hand, however much it strains theimagination to credit the possibility, wouldpose other dangers. It would feature centralizedcontrols and a new leadership that would tapinto rekindled nationalist sentiments and nos-talgia for Russia’s great power prerogatives.Political structures and the creation ofeconomic dynamics designed to provide forbasic human and social needs would be gov-ernmental priorities, but at the expense ofdemocratic values.

Authoritarian control in Russia could resultin greater internal stability, if it were to succeedin maintaining near full-employment and inproviding essential welfare needs. It might be

able to crack down successfully on corruptionand organized crime. But this is not clear. Sucha regime might be such an international pariahthat it could not successfully connect to the in-ternational economy, making its economicprospects dire. If the government were not ableto solve the unemployment problem or ensuredomestic security, it is hard to see how any such“solution” could produce stability. Such a“solution” would also be likely to generate sep-aratist movements in non-Slavic areas of theRussian Federation, particularly in theCaucasus.

This would be particularly true given that apost-“democratic” Russia would probably beresentful of those who tried to help the Yeltsinregime. In such a scenario, the already wide-spread belief that Western aid was part of a plotto keep Russia weak and to invade its geo-graphical spheres of traditional influencewould likely become accepted truth. Not onlywould such a Russia be a nuclear power, itmight also elect to emphasize military spendingas a means to national industrial regeneration.After all, what remains of the old Sovietmilitary-industrial complex is today virtuallythe only Russian economic sector still breath-ing, if barely so. It would be a natural focus ofinvestment and political patronage for a new,and nationalistic, authoritarian Russian regime.

While such a regime could not crediblythreaten Europe as a whole with conventionalmilitary force, it could nevertheless poseobvious new threats to Russia’s closest neigh-bors. Russia could turn Peronist, or it couldturn fascist, and the difference in the implica-tions for the world at large is not trivial. A weakcorporatist regime would be unlikely to do verymuch harm outside Russia’s borders, but a formof Russian national socialism, emboldened by arevived form of pan-Slavism, could doenormous harm over all of Eurasia and beyond.




In either event, Russia would cast a signifi-cant political shadow over the region in a waythat it does not do now, and in a way that neithermuddling along or disintegration wouldproduce. An authoritarian Russia could pose aneffective challenge to the West and act to rein-force its image as a power whose geostrategicinterests and calculations must be taken intoconsideration. If this future develops, the UnitedStates will have lost its investment in fosteringliberal democracy and in creating the economicpreconditions of a free-market system in Russia.The apparently conclusive failure of democracyin Russia might even trigger a reconsiderationof the presumed universality of core Americanprinciples and beliefs—with unknown conse-quences for our own future.

Finally, the third misfortune that mightplague Europe in the 21st century

concerns those very diverse lands in betweenthe European Union and Russia. The Balkanshave furnished a nearly non-stop political andhumanitarian crisis since the early 1990s, andthings might get even worse despite the EU’s re-doubled determination to funnel major amountsof aid to the region. Albania, Macedonia,Montenegro, Bosnia, and Serbia are ripe forfurther violence and chaos. Belarus, Moldova,and especially Ukraine are new states withunproven track records and many problems.Romania has made only sporadic progressdespite the end of the Ceaucesçu regime, andboth Slovakia and Bulgaria have struggled hardto get even a little ahead of where they were in1989. Ethnic and border questions aplentyremain unresolved, and the quality of futureleadership is unknown.

If the global economy falters, all of thesecountries would be hit hard. If NATO acquires areluctance to intervene in such domains after theexperiences of Bosnia and Kosovo, the potentialfor on-going violence and cross border wars can

only rise. Obviously, too, the specter of re-na-tionalized security policies in western Europeseeking agents and allies to the east—repeatingthe patterns of the interwar years—will notmake things any easier. Nor will a Russia in thethroes of collapse, exporting refugees, crimi-nals, drugs, and weapons westward.

Amid the various possibilities sketchedout above, the most dramatic changes

are probably the least likely. The EU will neithercollapse nor achieve a fully unified foreign andsecurity policy. Habit and hope will prevent theformer, while British reluctance, differences ofinterest, and an unwillingness to buy the militaryassets necessary to undergird such a policy willbrake the latter. Hence, a rebalanced NATO islikely to remain the premier institution ofAtlantic relations and the main instrument ofU.S. power in Europe. The political andeconomic profile of the EU is likely to rise,however, and insofar as there are differences inU.S. and European perspectives, it will make thepolitical management of trans-Atlantic relationsa more challenging task.136 Similarly, in all like-lihood, Russia will muddle through. In centraland eastern Europe, what is today a very mixedpicture will likely change in its particulars, butremain mixed in its overall circumstances.

American policies will clearly be impor-tant to Greater Europe over the next

quarter century. Keeping the trans-Atlantic linkalive even as Europe bears more responsibilityfor its own security will require tact and forbear-ance on all sides. It will be worth a major effort,for Greater Europe will remain very important tothe United States. U.S. political leadershipthrough NATO has been a vehicle to organize thecontinent’s overall security and to mollify jeal-

136 See Peter W. Rodman, Drifting Apart? Trends in U.S.-

European Relations (Washington, DC: The Nixon Center,

1999).



70 NEW WORLD COMING

ousies and historical fears among the Europeanmembers. American military forces in Europehave been instrumental to these purposes.Determining the extent and nature of the U.S.military presence in Europe will therefore be oneof the key issues for the United States and itsallies over the next 25 years. The general tenor ofthe U.S.-EU relationship will determine whetherthis and other critical alliance issues are managedin a relatively cooperative or a more adversarialmanner.

U.S.-European cooperation will also becrucial in the case of Russia, which will dependupon the continued willingness of internationalinstitutions to provide financial and other kindsof assistance. Without it, the potential foreconomic collapse will loom larger and makethe emergence of an undemocratic future morelikely. On the other hand, overly vigorous U.S.involvement in the management of Russia’sproblems may risk provoking a backlash. Acareful balance will be critical.

American policy will also be critical to thefuture of the countries of eastern and centralEurope. If the United States remains economi-cally engaged, it could help offset thein-between status that these states are liable tohave with the EU for many years ahead. And ifthe United States remains culturally and politi-cally engaged, it will continue to buttress theevolving democratic political cultures in manyof these countries. The American example, aswell as that of the EU states, is crucial to theirevolution as democracies. It is all the more im-portant, then, that U.S. policy deal with states intheir own right, rather than cast them as strategicadjuncts of Russia to the one side and its NATOpartners to the other.

The range of futures for Greater Europe iswide indeed, but even the most positive

view that one could reasonably take of the future

is far from ideal. Russia will not be robustly de-mocratic and prosperous, a unified EuropeanUnion will present challenges as well as oppor-tunities, and eastern and central Europe willcompose a patchwork of successes and failures.The alternatives, on the other hand, providewarning as to how bad things could get—andthis is in the part of the world that most closelyshares U.S. values and civilization, and that is asadvanced economically and politically as anyother continent. It is a sobering visage.

East Asia

East Asia—here defined as includingNortheast Asia, Southeast Asia,

Australasia, and all their oceanic appendages—contains not only upwards of a third of theworld’s population, but also what is widely takento be the most likely future politico-military near-peer competitor for the United States (China),two of its most critical allies (Japan and SouthKorea), and one of its most intractable problems(North Korea). The region’s importance to theUnited States will grow between now and 2025,whether due to its successes and strengths, or tothe problems it could generate from weaknessand strife. Asia, and particularly Northeast Asia,is the region of the world most likely to witness amajor war. It is the only region in which signifi-cant territorial disputes among major powersexist, in which the use of military force wouldalter the regional balance, and in which an alter-ation of the regional balance would invariablyaffect the world as a whole.

Recent trends suggest that East Asiaembodies vast potential for economic growth,peaceful development, and scientific as well ascultural achievement in the decades ahead. In thelast quarter of the 20th century we have wit-nessed a stunning, if lately stunted, economicperformance there. With it has come significantsocial change, much of it tumultuous but most of




it positive. There have been notable improve-ments in education and basic health care, as wellas more equal opportunity for citizens of mostnations irrespective of gender or ethnic origin.We have also seen the transformation of some ofthe region’s erstwhile dictatorships into fledg-ling democracies, and, not least, East Asia hasmanaged to avoid major interstate violence.137

In short, we have witnessed strikingly suc-cessful modernization over most of a vast region,and we have seen it take place mainly on its owncultural terms—while influenced by those of the

West. This is a major datum, for aside from a fewisolated examples (Turkey, Japan, Finland,Israel), no cultural area as vast as East Asia hasheretofore replicated the sharp growth of livingstandards occasioned by the IndustrialRevolution. The last four decades of East Asianhistory prove that economic modernity comes inmore than one cultural form.

137 The Vietnamese invasion and occupation of Cambodia

(1979-89), and the Sino-Vietnamese border war of 1979

are the partial and somewhat peculiar exceptions.



72 NEW WORLD COMING

These accomplishments represent only aforetaste of the harvest of prosperity and intellec-tual and cultural achievements that could arise inEast Asia by 2025. By then the region may wellbe the largest and most powerful economicgrouping in the world.138 East Asian economiesmay grow at an annual average of about 6percent over the next two decades, more rapidlythan any other area.139 If so, the region’s shareof global GDP could increase to slightly less

than one-third, with Europe, the next largestregional economy, accounting for about one-fifth. Significant Asian trade and investmentamong the countries in the region as well aswith the United States, Europe, the Near East,and Latin America would be assured. East Asiais also likely to be the largest source of capitalfor international markets.

At the same time, energy consumption indeveloping Asia will surpass that of North

America by 2020. Almost half the world’s in-crement in energy consumption will come fromdeveloping Asia.

No doubt, the proven facility of East Asianpeoples to adapt and develop science-driventechnologies will lie at the heart of the region’seconomic dynamism—if it comes to pass. If theinformation revolution continues its long marchthrough the economic institutions of the world,

138 Population expansion will in part drive the absolute size of

East Asian economies. The populations of the five largest

states in the region in 2025 will have changed from 1999

roughly as follows: China from 1.2 to 1.4 billion;

Indonesia from 213 to 288 million; Japan from 126 down

to about 120 million; the Philippines from roughly 80 to

121 million; and Vietnam from 76 to about 104 million

people. East Asia’s population as a whole in 2025 will be

4.84 times the size of that of North America, and 6.56

times the size of the European Union’s.139 OECD, The World in 2020, p. 92.

Source: International Energy Outlook 1996, Washington, DOE, EIA-0484(96), May 1996, p. 92, andInternational Energy Outlook 1997, April 1997, DOE/EIA-484(97), Reference Case, p. 119.

Increased Demand for Oil in Asia Will Outpace World




and if an essentially liberal global economicorder is maintained, then it is clear that ex-tremely lucrative cutting-edge technology ofvirtually every kind will be available in EastAsia. Japan is likely to be a leading global in-novator and manufacturer of technologies suchas micro-electromechanical systems (MEMS),artificial intelligence (AI), robotics, and com-puters. Japan’s commercial space industry willprovide launch capability to many states andprivate licensees worldwide. Korea and Taiwanwill continue to produce world-class communi-cations and information technology, in somecases challenging U.S. and Japanese technolog-ical superiority and marketing success.

Australia, New Zealand, Singapore, thePhilippines, Thailand, Vietnam, Indonesia, andMalaysia may also play major secondary rolesin the region’s technology-driven growth byproviding a mix of raw materials, humancapital, financial services, affordable labor, andmajor expanding local markets. Rural areas aswell as the cities and major towns of the regionwill be even more deeply linked electronicallythan they are today, providing an importanteconomic multiplier effect. As these economiesgrow, they will be able to afford infrastructuresthat provide wide access to regional and globalcommunication grids and media resources. As aresult, expectations regarding quality of life areliable to rise steadily. First in cities and later inrural areas, people will aspire to better publicservices, education, environmental quality,crime control, medical care, and job-training.In addition, greater access to media and infor-mation will whet appetites for political newsand participation. In short, new and expandingmiddle classes will want what such classesalways want: economic stability and a piece ofthe political action.

Greater information linkages within theregion will also encourage labor migrations

from less developed and urbanized countries ofthe region to more rapidly developing ones.140

Such labor migrations could also boost the ed-ucational levels of the migrants, allowing themin turn to raise the labor and educational stan-dards of their home countries.

Barring major political upheaval andeconomic collapse, China will compete withU.S. firms in space launches, and have severalworld-class high-technology firms engaging ina wide range of corporate partnerships world-wide. China will also most likely bewell-linked into the global communicationsgrid, and will be in a position to use surveil-lance, communications, and positioningtechnologies for commercial and military ap-plications. Also, under almost any imaginablepolitical regime, China is likely to pursuebiotechnology for commercial, medical, andmilitary purposes.

Along with economic and technologicaldynamism, East Asia over the next 25 yearscould become a zone of relatively peaceful re-lations, characterized by predominatelydemocratic governments well connected to arange of global economic and political institu-tions. The Association of Southeast Asian

140 By 2025 more than half of the region’s population will live

in cities, up from 35 percent in 1999. The graying of East

Asian populations is a major phenomenon to be coped

with in the next 25 years. Between 1995 and 2025, the

numbers of 15-64 year olds per person 65 years and older

will have fallen as follows: China, from 11 to 6; Japan,

from 5 to 2; Indonesia, from 14 to 8; South Korea, from

12 to 4; North Korea, from 14 to 6; Australia/New

Zealand, from 6 to 4; Malaysia, from 14 to 8; and the

Philippines, from 17 to 10. For more detail and some

likely social implications, see Nick Eberstadt, “Asia

Tomorrow, Gray and Male,” The National Interest, No. 53

(Fall 1998), pp. 56-65. On Japan specifically, see Milton

Ezrati, Kawari: How Japan’s Economic and Cultural

Transformation Will Alter the Balance of Power Among

Nations (Reading, MA: Perseus Books, 1999).



74 NEW WORLD COMING

Nations (ASEAN), the ASEAN RegionalForum (ARF), and the Asia-Pacific EconomicCooperation (APEC) forum will have maturedand expanded their functions. Multilateral insti-tutions could arise to address new transnationalissues. It is possible, too, that East Asia will atleast begin to develop security and arms controlarrangements comparable to those in Europe.

Problems and tensions will persist. Themutual suspicions bequeathed by some hardhistory will not disappear. Not every state willbe a democracy, and very destructive weaponswill be available to ambitious leaders withouttheir countries having to first establish a largeor sophisticated industrial and scientific infra-structure. Economic competition could getnasty between similarly endowed nations.Vested political leaderships with a lot to losefrom rapid change could fail occasionally torise to enlightened levels, and the socialstresses of modernization could still over-whelm some of them even if they areenlightened.

But there is a good prospect that, with somuch more to lose, governments in the regionwill find ways to bound their difficulties shortof war and beggar-thy-neighbor economicpolicies—as has been the case in westernEurope for the past half century. Presumably,too, such an evolution in East Asia would beencouraged by timely help from the UnitedStates and other major global players with aninterest in the region’s peace and prosperity—again, just as Europe’s postwar success is partlyexplained by U.S. policy during the Cold War.

Finally in this view of East Asia’s future,a growth in living standards, higher educa-tional levels supporting a technologicallydriven economy, and the relative openness ofgovernments required to sustain an entrepre-neurially-minded business culture, would all

conduce to positive changes in the social atti-tudes of younger generations. This does notimply that economic modernization points toone set and one set only of attitudinalpatterns—i.e., Western ones. But many tradi-tional East Asian attitudes—the emphasis oncommunity and extended family as opposedto the individual; toward social hierarchiesexpressed through traditional occupational,age, and gender roles; toward educational in-stitutions; toward paternalist social authorityvested in government—would probablychange. Thus, East Asian cultures could cometo accept, on indigenous cultural terms,values more harmonious with representativedemocracy and greater personal liberty thanhas heretofore been the case.

If East Asia develops in such a fashion, orsomething like it, nearly everyone in the

region and beyond it will be better off, and U.S.national security concerns with East Asia willprobably be modest. But there is no guaranteethat it will develop so benignly. Plenty of thingscould go wrong, and some of them probablywill.

An optimistic appraisal of East Asia’sfuture is predicated in large part on an assump-tion: that the rising tide of economicdevelopment, buoyed by both a dynamisminfused by major technological innovations anda more integrated international economy, willbring benign political and social developmentsin its wake. There are plenty of examples inhuman history, however, of parochial politicalinterests—if not sheer irrationality, ideologicalrigidity, and myopic leadership—foiling suchscenarios. After all, if enabling globaleconomic patterns and a skilled populationwith an affinity for science and technologywere all that really mattered, then it would beimpossible to explain the Japanese economicdoldrums of the past eight years. Sclerotic in-




stitutions and poor executive decisions clearlymatter.

So what could go wrong for East Asia overthe next quarter century? Three things come tomind: economic meltdown, major upheaval inChina, and a serious spiraling downward ofgeopolitical stability among China, Japan, andKorea. Let us take them in turn.

Alarge-scale Asian or global recessioncould occur, leading to widespread

unemployment, social instability, increasingnationalism and protectionism, and heightenedpolitical repression in several East Asian coun-tries. To see how the latter could occur, all oneneed do is examine the case of Indonesia. AsIndonesia’s economy began its free fall in late1997, the wheels were set in spin for the fall ofits government, murderous attacks on its ethnicChinese minority, and the rise or reanimation ofseveral secessionist movements.

In contemplating the social and politicalvolatility that could issue from an economicdownturn in East Asia, one must start not fromtheoretical speculations but from the actual sit-uation extant today. Despite recent signs ofrecovery, large parts of the region remain indisastrous shape following the financial crisisof 1997, with falling incomes and sharplyrising poverty levels. Meanwhile, the rapidsocial change and attendant dislocations causedby earlier bouts of globalization, urbanization,and rising educational and economic expecta-tions continue to flow through the affectedsocieties. Seen against the dashed hopes ofrecent years, another cycle of boom and bustcould touch off significant violence and a sharpbacklash against enemies of the region, per-ceived or real, between now and 2025. That, inturn, would amount to a huge waste of humanpotential. Lives preoccupied by fearful, embat-tled conditions rather than engaged in scientific,

commercial, and cultural pursuits would trans-late at the least into fewer gains from trade,fewer investment opportunities, and fewer EastAsian children nurtured to contribute positivelyto global knowledge and culture.

Widespread East Asian economic troublecould also lead to virulent anti-Americanism. Abacklash against the United States could bebased on claims of U.S. insensitivity to EastAsian suffering or to U.S. “cultural imperial-ism,” particularly as expressed through U.S.influence over International Monetary Fund(IMF) and World Bank policies. U.S. publicopinion, in turn, could move increasingly againstliberalized trade in view of mounting U.S. tradedeficits and losses of American jobs, as EastAsians once again try to export their way out oftheir economic problems. U.S. protectionismwould worsen any regional or incipient globaleconomic recession many times over, leading toa vicious downward spiral.141 Protectionist sen-timents, were they to be deep and long lastingenough, could also encourage isolationistimpulses, and lead the United States to disen-gage from East Asia.

How likely is that possibility? An answermay start from the simple observation that theAsian economic crisis that began in July 1997 isstill under the analytical knife. Some argue thatstructural defects in East Asian economiescaused the crash, and that once bloated to a suf-ficient level, the bubble economies of the regioninevitably had to burst. Others argue that theherd instincts and poor risk management ofWestern speculators and financiers were princi-pally to blame. And still others believe that theinternational economic policies of the U.S. gov-ernment were insufficiently attentive to thelimits of East Asian institutions, and that IMF

141 See Peter Schwartz and Peter Leyden, “The Long Boom: A

History of the Future, 1980-2020,” Wired, July 1997.



76 NEW WORLD COMING

policies made things worse than they otherwisewould have been. Depending on which explana-tion one accepts, divergent explanations for whysome countries were not hit as hard as others,and why some have recovered faster than others,follow in turn. Proposals over how to regulate in-ternational financial exchanges and reform theIMF also invariably raise contentious debate, allof which shows that there is no consensus aboutwhat went wrong or how to prevent it from hap-pening again. Since the urgency of reform haswaned as many countries have managed to setthemselves aright, even without fixing most oftheir structural flaws, it could very well happenagain.

But of all the potential problems thatcould throw East Asia for a proverbial

loop, none is as portentous or controversial asthe future of China. China is so huge, evenrelative to its Japanese and Korean neighbors,that it is bound to affect East Asia’s future. IfChinese authoritarianism decompresses as percapita income reaches around $7,000, (as severalobservers have predicted), and the politicalsystem moves toward bounded pluralism even ifnot genuine democracy, optimism about EastAsia’s future would receive a major boost.142 IfChina undergoes major political reform after theterminal but essentially peaceful crisis of thecommunist system, leading to the creation of aparliamentary system no less democratic thanthat in Taiwan, then so much the better still.

Under either scenario, with its state-ownedenterprises and its banking system successfully,if painfully, reformed, China’s GDP could be thelargest in the world in absolute terms in 2025.143

China’s share of global GDP could shoot upfrom about 8 percent in the late 1990s to about14 percent. China would also be a major sourceof international financial liquidity. With depen-dencies and economic interests around the

globe, China would conduct itself as a majorworld power, with active policies outside ofAsia.

Such a China would not necessarily have ir-reconcilable conflicts of interest with the UnitedStates or other major powers. Presumably, evena China energized by broad, rekindled national-ist sentiment would be constrained by its manycrucial linkages with international economic andpolitical institutions. China will require anenormous amount of energy, more than twicewhat it consumed in the late 1990s when itburned one of every three tons of coal world-wide. Even with better-developed hydroelectric,coal, and domestic oil resources as principalsources, China’s requirements for imported oilwill rise from a projected 1.4 million barrels aday in 2000 to 5.2 million barrels a day by2020.144 The parade of supertankers streamingto Chinese ports would be vulnerable to inter-diction in a crisis. China would share with othermajor oil importers in East Asia, such as Japan,a strong interest in keeping oil flowing from keysources and keeping strategic sea-lanes open.Beijing might also foster positive economic, po-litical, and security relationships with key oilproducers around the globe, especially inCentral Asia, Russia, and the Near East. Thatmay lead China to fashion policies toward theseregions similar to those of the west Europeancountries; namely, a policy aimed at appeasingmajor regional actors in search of preferred com-mercial status.

142 For example, Minxin Pei, “Is China Democratizing?”

Foreign Affairs, Jan./Feb. 1998, and Henry Rowen,

“China: A Short March to Democracy?” The National

Interest, No. 45 (Fall 1996).143 See note 53 for references and detail.144 International Energy Outlook 1999 (Washington, DC:

Energy Information Administration, 1999), Tables A4, D1.




Still, historically, rising economic powershave often caused the most trouble politically,and nations sometimes put national pride andplace before objective material goals. Even a rel-atively liberal China will require Americanvigilance. Should China spend most of the nexttwo and a half decades focusing on economicdevelopment rather than military modernization,it will still be a major regional military power by2025. It will possess a strategic nuclear arsenal,a robust theater missile capability, and regionalpower projection capabilities in the form of alimited blue water navy and an enhanced airforce. As a result, China will be a natural focusof security concern for all states in the region aswell as for the United States. In consequence,relative economic prosperity would enable otherstates in the region, including Indonesia, thePhilippines, Vietnam, and perhaps even Japan toincrease spending on conventional weapons soas to expand their regional power projection ca-pabilities as a hedge against China.

In such a circumstance, a liberalized, if stillnot fully democratic China, would enjoy a mixedrelationship with the United States, one not rad-ically different from that of the past decade.Sino-U.S. ties would feature some cooperativebilateral agreements, including most likely con-fidence-building measures in the securityarena, arms control agreements, trade and in-vestment, and scientific and cultural exchanges.At the same time, the relationship would becharacterized by vigorous competition andperiodic episodes of significant mutual suspi-cion over issues such as managed trade,intellectual property rights, arms sales policies,industrial and security-related espionage, andhuman rights. Chinese regional power, as itapplies to the Spratly Islands and the SouthChina Sea more generally, or to Taiwan, or toChina’s geostrategic competition with India,will also be part of the broader picture.

So will China’s relationship with Russia.Should Russia develop a form of nationalist au-thoritarianism as it picks itself up from itspresent state of political lethargy and economicdecay, China may resume a strategic ententewith the United States. The logic of doing sowould be a variant on that which defined theSino-American relationship between 1972 and1989. Especially under circumstances in whichChina was drawing heavily on U.S., European,and Japanese resources and institutions totackle its internal problems, Beijing mightassume a generally benign leadership role inEast Asian security affairs and in the UnitedNations. In other words, China could becomean incipient great power with a moderately orfundamentally more liberal political order.

But there are at least two other possibil-ities for China’s future, and they are

far less positive from a U.S. perspective.

One is that China continues to get rich, butChinese authoritarianism remains. For risingincome levels to translate into political plural-ism, an intervening process must occur: thecreation of a middle class ready and willing toarticulate its interests. For a variety of reasons,this might not happen in China.145 The countrycould instead metastasize from what was acommunist command economy into a loosercorporatist system, bound together by anetwork of interwoven political, military, andeconomic elites, and sustained at large byappeals to nationalism. Such a polity, foundedon the greed of the elite, the will to power, andthe manipulation of the masses, would notendear itself to the leadership of other majoreconomic powers. Nor could it expect particu-larly close and sustained linkages to the

145 See David Zweig, “Undemocratic Capitalism: China and

the Limits of Economism,” The National Interest, No. 56

(Summer 1999).



78 NEW WORLD COMING

growing international economy. Should it failto deliver the goods economically, such aregime could all the more easily end up fallinginto aggressive regional policies, as have pastcorporatist and especially fascist and neo-fascist states.

Such a new nationalist China could becomedecidedly hostile to the United States, and thathostility could be reciprocated. Several triggersfor such hostility exist even today, and they willnot go away soon. One is a crisis over Taiwanin which the United States strongly sides withTaipei, a crisis made much more likely byTaiwan’s renouncing of its “one China” policyin July 1999. A second is a Chinese movementto seize the Spratly or the Diaoyu islands, ac-companied by clashes against Filipino,Vietnamese, or Japanese forces. A third is an ag-gressive Chinese military armament program. Afourth is domestic turmoil that Chinese politicalimpresarios rush to blame on the United States.A fifth is the bloody repression of political re-formers or ethnic minorities. And another is aspate of U.S. policies that make small irritantsworse instead of major problems better.

In this degenerative case, the United Stateswould probably seek to balance a hostile Chinaby strengthening bilateral security agreementswith regional states and seeking additionalbasing facilities in the area. The United Statesmight also sharply limit private sector trade, in-vestment, and transfers of technology to China,as well as place sharp limits on U.S. travel toChina and on the numbers of Chinese nationalsstudying in the United States. Whether U.S.allies in or outside of Asia would support suchactions is uncertain, absent a major Chineseprovocation. For this reason alone, and alsobecause there would be only a limited commu-nist ideological component to Sino-Americanhostility, it would be misleading to analogizesuch a situation as a “new Cold War” or a newform of “containment.”

Another possibility is that China collapsespolitically and violence erupts. Elements of a po-tential collapse are not hard to find. They includeall of the following: the loss of ideological legit-imacy on the part of the Communist Party,massive corruption among the political andeconomic elites, the pressure of separatism inTibet and Xinjiang, a failure to reform the state-owned enterprises that produce simultaneously abudget default and massive unemployment, in-creasing economic demands from a grayingpopulation, the continued rise of anti-modern re-ligious/martial arts cults, and a series of poorpolitical judgments. A collapse could produce areturn to warlordism, economic disaster, human-itarian catastrophe, the potential scattering ofChina’s weapons of mass destruction, terrorism,and massive black markets run by organizedcriminals with links to crime syndicates outsideof China. Just as Russian weakness has come toplague U.S. national security policy, so acuteChinese weakness might do the same.

No one knows what China will look likeover the next 25 years. The only thing that seemstruly clear is that the status quo cannot persist.The notion that China could grow economicallybetween 6 and 10 percent each year for 25 yearsand still be governed by a sclerotic ChineseCommunist Party is simply beyond credence.Something has to give, but the predicates forwhat that something will be remain unclear.

Aside from a regional or globaleconomic downturn and the possible

transformation of China into a major problem, athird worry is rather old-fashioned: the destabi-lization or mismanagement of the regionalbalance of power.

In East Asia, three nations form the truepivot of regional geopolitics: China, Japan, andKorea. It may seem odd to minimize the impor-tance of such major states as Indonesia (213million people), the Philippines (78 million




people), and Thailand (60 million people), toname just three. And yet it is true.

Of course, this does not mean that othercountries are of trivial significance. Indonesia isthe world’s fourth most populous country andhome to the world’s largest Muslim population.It has played pivotal roles in ASEAN, ARF, andAPEC, has supported UN peacekeeping opera-tions, has been involved in global disarmamentefforts, is rich in oil, and straddles some of theworld’s most critical sea lines of communica-tion.146 The outcome of Indonesia’s economicand political restructuring will play an impor-tant role in the future stability of East Asia. Ademocratic Indonesia that peacefully resolvesseparatist claims could capitalize on its demo-graphic and economic potential and be astabilizing force in the region. Conversely, ifIndonesia’s military turns against the democ-ratic process or if separatist movementsmultiply and undermine the cohesion of thestate, this archipelago could inundate itsneighbors with refugees and become a harborfor international criminal and other elements.The break-up of the country, or its collapseinto a multifaceted civil war, would be both apolitical and humanitarian nightmare for theentire region.

Southeast Asia, too, is important to U.S. in-terests. Not only is this region likely to play amore important global economic role, but it isan area to which competition among China,India, Japan, and Korea could flow, especiallyif the area itself becomes unstable. It is also anarea in which elite attitudes toward democracyare very mixed, and it may thus become an im-portant stage of ideological drama over the nextquarter century.

Nevertheless, the geopolitical triangleformed by China, Korea, and Japan mattersmost to the United States. It is an extraordinar-

ily complex, yet familiar, triangle. In a worldwhere global economic integration and techno-logical dynamism take rhetorical pride of place,and where economics is often believed to trumpthe hoariest political legacies, geopoliticsseems to grow pale. But the level of mistrustand outright fear among these three countries isa reality that will endure. Chinese politicalelites and intellectuals resent Japanese success-es and yearn to reestablish Chinese nationaldignity, somewhat at Japan’s expense. Nearlyall Koreans resent Japan as well, but fearmoving too close to China. The Japanese fearChinese and Korean revanchism, and theirpacific and generally mercantilist attitudessince World War II have been unable to fullyovercome historical legacies. Added to this mixis the influence of both Russia and the UnitedStates, which for reasons both geographical andhistorical are bound to and will invariably in-fluence this triangle.

The spark that could ignite a conflagrationamong this triangle could fly from a nationalis-tic and aggressive China, a nationalistic andnuclear-armed reunified Korea, or a militarilyassertive Japan. It could also arise from asteady accretion of Chinese strategic militarypower that comes to undermine the credibilityof both explicit and implicit U.S. security guar-antees to Japan, Korea, the Philippines, andother countries. But as historical analysisteaches us, the timing and the order of suchshifts would be crucial, and knowing thattiming and order beforehand is virtually im-possible.

Korea seems the most likely starting pointfor major change. But we do not know exactlywhat change in Korea will look like. If theaging Stalinist regime in North Korea

146 U.S. Department of Defense, The United States Security

Strategy for the East Asia-Pacific Region 1998, p. 36.



80 NEW WORLD COMING

suddenly collapses under the weight of itsown atavisms, and a new leadership inPyongyang essentially throws itself upon themercies of the government in Seoul, Koreanreunification will still be a mammoth task. Itwould be even greater, however, if reunifica-tion is preceded by a desperate war launchedby a panicky North Korean leadership.Japanese reactions to such a war would eithervindicate or deeply erode the U.S.-Japanesesecurity relationship.

It does not take much imagination toenvision a major shift in the East Asiangeopolitical triangle if Korea does not dis-mantle the North’s nuclear weapons programupon reunification. That shift would be evengreater in magnitude if Japan and the UnitedStates part ways as a result of the events sur-rounding Korean unification. Under suchcircumstances, Japan would face pressures tobecome a nuclear weapons state. The trianglecould then be composed of three mutuallysuspicious, nuclear-armed states.

It is not hard to see the predicates for a“go it alone” scenario in Tokyo, even though,on balance, it is not very likely to occur. Itcould go something like this. Under the bestof circumstances, Japan’s share of globalGDP will have dropped from about 8 percentin the late 1990s to roughly 4.5 percent by2025.147 For a political culture that has basedits self-image almost exclusively on economicsuccess since 1946, this is not good news.

But the best of circumstances cannot beguaranteed. The economy may shrink dramati-cally if Japanese leaders fail to introduceeffective economic and financial reforms. Thepolitical system could remain essentially para-lyzed. After years of negative economicgrowth and a severe pension crisis touched offby Japan’s graying population, the political

stasis in Tokyo might finally break open.Having persuaded the country to reemphasizeJapan’s military traditions, a new party couldcome to power dedicated to restoring nationalpride and competing with a rising China. Sucha coalition of conservative leaders would breakJapan’s bilateral security agreement with theUnited States. Meanwhile, American leaderscould miss the early signs of major change,frustrating the Japanese even further and con-tributing to their alienation from the postwarpartnership.

So a shift in the triangular relationshipmight commence from a point other thanKorean unification. It is also altogetherpossible that Korean unification could bedelayed for another 20 years or more. Beyondrebuilding the economic infrastructure, theSouth understands the huge task of integratingsuch a poor population of 25 million people,not to speak of the enormous difficulty of de-mobilizing, retraining, and employing thehosts of a 1,144,000-man North Koreanstanding military force. And unlike Germany,where nationalism drove reunification, Koreannationalism sits better historically with adivided peninsula. Seoul may thus be contentto let the United States and others tend to adecrepit North Korea as an international ward,a tack the North Korean leadership would un-147 The Ministry for International Trade and Industry (MITI)

estimates that even if Japan emerges from its current

eight-year recession, it cannot expect more than a 1.8

percent growth rate between 2000 and 2010, and a paltry

0.8 percent thereafter. These estimates, which take into

account Japan’s sharply aging population, its bank debts,

and its decline in productivity are optimistic. The well-

regarded nonprofit affiliate of the Nikkei newspaper group

in Tokyo, the Japan Center for Economic Research,

projects near zero growth through 2003, and then a long,

gradual shrinkage in GDP after that out to 2025. See Peter

Harcher, The Ministry (Cambridge: Harvard Business

School Press, 1998).




doubtedly prefer to the “East German alterna-tive” of closing up shop for good. If thathappens, Korean unification could be a veryprotracted, perilous, and expensive task.

If the tectonics of this triangle do shift, itwill set off major changes with which theUnited States, by dint of the entanglements ofpostwar history, will have to deal. This isbecause the United States remains the onlycountry external to the region with both thepower and the desire to balance off local statesand promote stability through reassurances toall three countries. The U.S. presence in EastAsia has been, and will continue to be, criticalto the region’s stability and prosperity.Regional fears of China could lead to a con-tinuing and even an expanded U.S. militarypresence in East Asia. Yet a host of regionaland national changes could place pressure onthe United States to reduce or withdraw thatpresence. It is even possible that pressures forand against the U.S. military presence in Asiawill be brought to bear simultaneously.

One general source of pressure forreducing the U.S. military presence is thatoverseas basing is becoming more vulnerableto a wider number of countries that could useballistic missiles armed with weapons of massdestruction. That could make U.S. bases po-tential sources of danger rather than bulwarksagainst it, and raise their political andmonetary costs.148 Overlapping political pres-sures could also arise. As noted, a major seachange in Japanese politics could lead to asharp reduction or even an elimination of U.S.bases in Japan. A reconciliation on the Koreanpeninsula would eliminate the most obviousand immediate justification for U.S. basesthere.149 Reunification could also stoke Koreannationalism, and simultaneously convinceAmerican public opinion and the Congress that

a U.S. military presence in East Asia is nolonger a necessary or a wise investment.

Ultimately, however, whether thepositive potential of East Asia is

realized, or whether a less sunny future is inprospect, depends less on U.S. policy than onthe initiative, discipline, and foresight ofEast Asians themselves. Those prospects willalso be affected powerfully by the course ofthe global economy, over which U.S. govern-ment policy has an important but limitedinfluence. It will also be affected by whetherthe potential for significant internal and in-ternational violence in the region isrestrained, and here the skill with which theUnited States serves as an engaged balancercould be a major factor.

Clearly, a reduction of U.S. commitmentand engagement in East Asia, especially if itis simultaneously abrupt and deep, willincrease the likelihood of instability as statesstruggle to define a new regional balance ofpower. From a strategic point of view, the es-sential U.S. choice may boil down to this:either remain engaged at greater short-termperil and political cost to ourselves, or disen-gage at the potential cost of greater long-termperil to everyone.

The Greater Near East

The Greater Near East—defined here asthe Arab world, Israel, Turkey, Iran,

Central Asia, the Caucasus, and theSubcontinent—is the site of the world's largestsupply of fossil fuels and a place where severalambitious powers actively seek regional

148 See Bracken, “America’s Maginot Line.”149 It would also put U.S. forces in a country with a land

border with China, obviously affecting the political inter-

pretation of those forces.



82 NEW WORLD COMING

hegemony. It is a region where the UnitedStates has key allies as well as important inter-ests, and where weapons of mass destructionare being actively developed. Not entirely bycoincidence, too, it is the place where theUnited States fought its last major war, in 1991,and it is the only region of the world wheremore or less permanent U.S. forward-basedmilitary deployments have expanded since theend of the Cold War.

Hence, the Greater Near East is appreciat-ed in the West as a region of great importancebut also great trouble. This is undoubtedly so,even if one sketches the region without refer-ence to U.S. interests. Despite unprecedentedprospects for Arab-Israeli reconciliation, thearea still exhibits many and sundry depreda-tions. It has a high concentration of despoticregimes and, aside from Israel, India, andTurkey, no institutionalized democracies. It is

also the site of politically radical, militarizedIslam, which, if not a mortal threat to its hostsocieties and to neighbor states alike, is at leasta significant irritation and source of instability.Several parts of the region—Lebanon’s Bek`avalley at one end and south central Afghanistantoward the other end—supply a large volume ofillicit drugs to many parts of the world. Thearea is also a cauldron of sectarian rivalriesamong Sunni and Shi`a Muslims; between

Muslims and Hindus, Jews, Coptic Christians,and Bahais; and between Hindus and Buddhistsin Sri Lanka. Ethnic violence within and amongcountries involving Kurds, Turks, Arabs,Persians, Armenians, Azeris, Singhalese,Tamils, and others is bountiful. Finally, one ishard pressed to think of any 25-year period inthe documented history of this diverse regionwhen there has not been at least one majorspasm of civil or cross-border warfare.




As one looks toward the future, such alegacy is perhaps disheartening. But

there is yet more. Beyond the region’s check-ered past, the next 25 years pose potentiallywrenching and destabilizing change. Thatchange will come in at least three forms.

First, whenever a great empire collapses itproduces a shatterbelt of instability around itsperiphery, one that usually lasts for many years.

The headlong collapse of Russian power is apertinent example for the Greater Near East.For the first time in more than three centuries,three core countries of the region no longerdirectly abut Russian power: Afghanistan, Iran,and Turkey. Traditional commercial andcultural contacts between lands south of theOxus River and those beyond it in Central Asiahave been restored after nearly a century of in-terruption. The Silk Road is slowly beingrevived, and patterns of exchange have begun

to appear more reminiscent of the 15th and 16th

centuries than of the 18th or 19th. Not only haveMuslim Central Asia and the Muslim peoplesof the Caucasus been reunited with the rest ofthe Near East, so to some extent have theMuslims of the Balkans thanks to the extreme-ly painful slow-motion collapse of Yugoslavia.

Farther east, the collapse of the SovietUnion left India without a superpower patron to

balance China, which in turn acceleratedIndia’s desire to demonstrate open nuclearweapons possession. This is a fact of geopoliti-cal life no less clear than the fact that the Sovietcollapse has allowed China to rebalance itsmilitary attentions away from the Russianborder and toward the South China Sea. India’stest was also the spark for Pakistan’s publicnuclear arrival, and that, in turn, has madeIranian aspirations to acquire a strategicbalancer virtually impossible to slake—and

Areas of Conflict



84 NEW WORLD COMING

that aside from the threat to Iran from the alltoo obvious Iraqi efforts to obtain weapons ofmass destruction.

So far, the post-Communist shatterbelt hasproduced or prolonged war “only” in theBalkans, the Caucasus, Tajikistan, andAfghanistan. By historical standards,however, it is still too soon to conclude thatthe dust has settled. The number of wars,small and not-so-small, that even reasonablysanguine analysts may justifiably expect tosee in this region over the next 25 years islarge. Several could be attributed to the after-shocks of the Soviet collapse.

A second source of change has been notedabove: demography. For the first half of theperiod out to 2025, most of the countries ofthe Greater Near East will experience rapidpopulation growth and a significant drop inthe mean population age. A youth bulge ismaking its way through many populations inthe region, due in part to health and sanitationimprovements and in part to the demographicmomentum from an earlier population boomin the 1970s and 1980s. Such populationdynamics pose severe challenges for many so-cieties. They strain the natural and socialenvironments through the need for potablewater, housing, education, and medicalservices.150 Unemployment, income dispari-ties, and ethnic tensions generated by suchproblems may also contribute to significantinternal migrations, largely from countrysideto towns and cities, and some cross-border mi-gration as well—including into Europe.151

Toward the middle of this period through2025, increased urbanization and femaleliteracy will probably cause birth rates to pro-gressively drop, and pressures on services willsubside to some extent.

A third source of change has been re-hearsed in some detail above: the tumult wemay expect from the continuing economic in-tegration of the globe. Even a mainly benign,successful process of integration will introducemany stresses to the non-Western cultures ofthis area. Secularization is but one; new neo-universal norms of Western origin concerninghuman rights, minority rights, and particularlywomen’s rights are another. Should globaleconomic integration produce repeated cyclesof boom and bust, should it produce patchworkpolarizations of success stories and failureswithin regions and countries, or should itempower certain states and groups militarilyso as to produce sudden perturbations insecurity relations, the region could succumb tovery harrowing times.

One might gather from the foregoingthat the Greater Near East will not be

a prime zone for enterprising Americans,Japanese, or Europeans to go sell insurance ortake leisurely vacations. Not necessarily. Justas in Greater Europe and East Asia there areoptimistic as well as pessimistic possibilitieswith which one may view the future, such isalso the case in viewing the Greater Near East.

What could go right amid so many possi-bilities for trouble? The answer is plenty, andone of the main reasons, interestingly enough,lies in the social power of religion to absorbthe shocks of globalization.

Some large and important countries in theregion may well break the spell of étatism andtie themselves more fully into the global

150 See Population and the World Bank: Adapting to Change

(Washington, DC: The World Bank, 1999), pp. 8-9.151 Of the 170 million people living around the Mediterranean

in 2025, 10 percent will be European, 22 percent will be

Turkish, and about 68 percent will be Arab.




economic system. At the least, the top manage-rial echelons of business and government willbe fully up-to-date in nearly all oil-rich coun-tries and most others as well. Israel and a fewof the Arab states (most likely Qatar and theUnited Arab Emirates, and possibly Iraq andSaudi Arabia as well) will feature fully moderneconomies; India, Iran, Egypt, Turkey, and afew other regional states will have, at the least,very modern sectors within their economies. Asa result, both extra-regional and intra-regionaltrade as a percentage of national gross domesticproduct will climb from late 20th centurylevels. Several countries in North Africa—Morocco, Tunisia, a recovered Algeria, and apost-Qadaffi Libya—may attract substantialfunds from East Asia both as investment intheir energy resources and as ways to penetrateinto Europe via European Union trade agree-ments with North African states.

Led by a new generation of mainlyWestern-educated elites, some countries—es-pecially but not exclusively oil-richcountries—may also become both successfulniche producers and major international finan-cial hubs, following the 1990s model of theUnited Arab Emirates. Economic restructuringand advancement could transform severalregional states into important capital markets,and better than 4 percent yearly growth rates inGDP are not out of the question even for themajority of regional states. The establishmentof an effective Middle East Development Bankthat would help stabilize the region’s oil have-nots is not out of the question either.

One result of rapid growth, no doubt, willbe greater economic disparity among regionalstates between those that are plugged into theworld economy and those that are not.Whereas in the last quarter of the 20th century,intra-regional economic differences were ex-plained mostly by the chance occurrence of

fossil fuel deposits, in the first quarter of the21st century even greater differences will beexplained mainly by different levels achievedin the development of human capital,economic openness, and political dynamism.But the most important thing is that all coun-tries in the region will see that real change, andreal success, are possible. If Saudi Arabia,Iran, Turkey, Israel, Egypt, and India, to namethe major players, achieve an economic take-off in tandem with the tides of global economicintegration, the region will never again be thesame.

There is no question, in any event, that theraw resources will be in place to finance suchgrowth. Some $500 billion in Arab money restin banks and investments outside the Arabworld. If economic rationalization can bringmost of that money back into the region, thepool of investment funds will be enormous.Turkey may attract funds as well from otherTurkic-speaking regions: Turkmenistan, richin natural gas, Azerbaijan, which sits on oiland gas, and even Uzbekistan, the largest andperhaps in the future the most economicallydynamic of the Turkic-speaking states ofCentral Asia. India is so large that it cangenerate most of its own capital, although itstremendous infrastructure requirements couldeasily absorb all its capital and more. Israelwill attract funds from the world over due toits special richness in human capital attuned tothe information age.

And that is not all. Japan, Europe, India,China, and most of developing East Asia willremain heavily dependent on oil and natural gasfrom this region. Chinese dependence on bothPersian Gulf and Caspian Basin oil and gas willgrow sharply. Investment in the Near East byEast Asians should also expand. In short, therewill be plenty of money around to finance realgrowth.



86 NEW WORLD COMING

Moreover and more important, newwealth may have significant positive

political implications. Virtually all national elites,and much of the middle class strata, will be con-nected technologically to the developed world.The demonstration effect of such new technolo-gy, including its pop cultural forms, will initiallyexacerbate social divisions within countries andmake the task of authoritarian control more diffi-cult. New wealth will also likely spawn new

corruption, and new reactions to that corruption.Also, to the extent that growing literacy rates andurbanization connect over time with increasedcomputer literacy and the availability of technol-ogy for large numbers of people, authoritariancontrol will grow more difficult still.152 This isbecause such a connection may challenge bothtraditional government control of significantcommerce as well as traditional attitudes towardeducation and educational authority; significant

Global Shares of Oil Production

152 The Al-Jazira television network, based in Doha, Qatar, has

become enormously popular in the 22 Arab countries

where it can be viewed. It has also generated much fear

and loathing among authoritarian governments for whom

objective news programming and intellectual openness is a

threat.

Sources: Adapted from International Energy Outlook 1999 (Washington, DC: Energy InformationAdministration, 1999), Appendix D; and British Petroleum, Statistical Review of World Energy, 1997.




anti-authoritarian social implications flow fromboth. The weakening and potential transforma-tion of Near Eastern autocracies, if it does notcome too suddenly, stands to do enormous goodfor the region.

The political implications of such a weaken-ing, however, could include a danger of populistdemagoguery as well as greater political plural-ism. But if the latter should dominate the next 25years, the politics of the region will have taken amajor step forward. The very dangers of socialdisruption will perhaps furnish the incentive tochange if economic, social, and demographicpressures are strong enough to persuade govern-ments to open up, but not strong enough tooverwhelm them before their new approachescan bear fruit. Political liberalization largelydriven by economic reform could well take rootin a number of Arab countries (Morocco, Jordan,and Tunisia are likely near-term candidates),leading to still further pressures against authori-tarianism in neighboring states.

Governments may also usefully employ thegrowing social authority of Islam to reinforce po-litical community rather than try to control,manipulate, or extirpate Islam as many have donein the past. As one country after another opens upwithout triggering massive political tumult, othersare more likely to follow suit. With prudenteconomic and political encouragement fromoutside the region, each opening would reinforcethe other economically and psychologically, andin time the large majority of regional societieswould find ways to adjust to new circumstances.Their Islamic societies cohere, and by and largetheir governments, sensitive to religious strictures,would work.

One cannot stress too much the potentialsignificance of religious culture here.

Islam is an increasingly significant social forcethroughout the Muslim states within the region,

but mostly in the form of neo-orthodoxy, not fun-damentalism—and the differences between themare crucial. Islamic neo-orthodoxy is neithermilitant nor expressly political in nature, butexerts an increasingly powerful social force inseveral societies (including current U.S. alliessuch as Pakistan, Egypt, and Turkey) thatstrongly influences—and at times embodies—political movements, alignments, and moods.Meanwhile, highly politicized fundamentalistchallenges to states are waning, and no Muslimcountries, beyond Iran, Afghanistan, and Sudan,are likely to develop theocratic governments overthe next quarter century.

Contrary to what some outside the regionthink, there is no plausible means of social man-agement and adjustment to vast change in theMuslim world outside of Islam. For thesecultures, the process of secularization, associatedorganically in the West with the Enlightenment,the Reformation, and the Industrial Revolution,simply never happened, and so carries almost nosocial resonance.153 But Islam is potentiallycapable of supplying such a means of adjust-ment. Judging by what engaged middle classesin almost all regional societies are reading anddebating nowadays—where a tremendousinterest in adapting religion to modernity isunderway—there is some prospect that thesetraditions will be up to the task.154 Add to that

153 See Ernst Gellner, Nationalism (Washington Square, NY:

New York University Press, 1997), chapter 13. 154 There is foremostly the remarkable example of Muhammed

Shahrur’s Al-Kitab wa-l-Qur’an (“The Book and the

Qur’an”), which has sold tens of thousands of copies

throughout the Arab world since it was published in 1992.

Shahrur, a Syrian engineer, argues for a reformist Islam

that comes to terms as equal partners with modernity.

Some clerics have banned it and pronounced it heresy, but

that has not stopped people from reading and discussing it

in unprecedented numbers. Similar phenomenon may be

noted in Turkey, Bangladesh, Indonesia, Morocco, Egypt,

and elsewhere



88 NEW WORLD COMING

the impact of mass education and mass commu-nication, and it becomes clear that vast andpotentially very positive changes are afoot in theregion where it matters most: on the street.

One crucially important aspect of changewithin Islamic cultures over the past severaldecades concerns the role of women withinIslam. This has become the touchstone socialand theological issue in many societies, andone that is widely misunderstood outside theMuslim world. When an Egyptian, Turkish, orPakistani woman chooses to don a headscarf, itdoes not necessarily mean that she or herhusband has become an “Islamic fundamental-ist.” More likely, this is an example ofneo-orthodoxy in action. She usually does it notbecause her mother and grandmother did, butbecause they did not. In other words, suchbehavior today is generally associated withupward mobility, urbanization, and greaterliteracy. Increased personal piety is thus often afunction of the movement from a mimetic to atextual reading of religious tradition. Thismovement is aided not only by increasedliteracy but also by urbanization, for urbaniza-tion represents the shift from theSufi-influenced folk-religion of the countrysideto the “high” literate Islamic traditions of thecity.155 Neo-orthodoxy is not socially regres-sive, nor is it primarily political in motive. Italso suggests more, not less, participation inpublic life by women, particularly as the per-centage of literate women continues to increasethroughout the Muslim world.

If Islamic reformism, propelled bychanges in technology, economy, and

society, comes to dominate the politicalprocesses of most majority Muslim cultures, itis at least possible that no major war will haveoccurred in the majority Muslim states of theregion by 2025. That would create a sense ofoptimism and security that can further trans-

form the landscape. One reason for thinking thispossible is the vast generational change nowtaking place throughout the region. Sometime inthe next 25 years, for example, there will begenerational change in the political leadershipsof Iraq and Iran (as well as those in Egypt, SaudiArabia, and Syria), following recent successionsin Jordan and Morocco. If those changes are aprelude to reform and political moderation, bothcountries could come to focus more on internaleconomic and political development and less onregional rivalries and investments in armaments.

It is also possible—even likely—that theIranian theocracy will collapse in the nextquarter century. Iran is an Islamic Republic atpresent, but it cannot remain both for long: itwill either stop being a republic and descendinto truly medieval-style rule, or it will stopbeing an Islamic theocracy. The battle for thatfuture has already been joined, but how it willturn out no one knows. Should the currentregime collapse, however, it would send shockwaves through the Islamic world and under-mine radical Islamist movements everywhere.It would open the way for a U.S.-Iranian rap-prochement that could have broadly positiveeffects in the region and beyond. In turn, if thetheocratic regime in Iran and the Ba’athiregime in Iraq are deposed or sharply moder-ated before they acquire and deploy nuclear orbiological weapons, the pressures on otherstates to match step may dissipate. The threatto use all such weapons would also decline ifregional political disputes fall to diplomaticamelioration. The status of weapons of massdestruction would suffer, and the diplomatic

155 Here see Ernst Gellner, Post-Modernism, Reason, and

Religion (London: Routledge, 1992). A similar phenome-

non in the movement from mimetic to literary tradition

has been occurring in Judaism, with some parallel effects.

See Haim Soleveichik, “Rupture and Revolution: The

Transformation of Modern Orthodoxy,” Tradition 28:4

(Summer 1992).




and domestic political costs of building themmight come to exceed the presumed benefits.

The last stages of the Arab-Israeli conflictcould finally be set to rest with an agreementthat creates a semi-independent Palestinianstate. Peace would not be warm, and not allPalestinians or Israelis would be reconciled tothe compromises involved. But the ongoingdispute would be effectively isolated frommore portentious regional considerationslargely by dint of an Israeli-Jordanian under-standing supported by the United States.

Neither peace nor war will probablycontinue between Israel and Syria, as Syrianpolitics remains in Alawi hands and Lebanon,for all practical purposes, remains in Syrianhands. A real peace would be likely onlyshould there be a regime change in Syria, butat present there is no discernable and effectiveopposition to Alawi rule. On the other hand,were peace agreements with Syria andLebanon to occur along with political normal-ization with Saudi Arabia—allowed by asymbolic compromise over Muslim holyplaces in Jerusalem—Israel might agree tolimit its nuclear program. It might even openit to international inspection.

Whether Israel makes peace with Syria ornot, closer economic and security ties betweenIsrael and Turkey are likely. An even wider as-sociation that might include Jordan, Azerbaijan,and Kazakhstan is also possible.

Even reconciliation between India andPakistan is conceivable, not least because thethreat of nuclear destruction may force bothparties to ultimately transform their enmity, orat least to pursue it by non-violent means. That,in turn, could lead to restraints on the part ofboth countries in their further deployment ofnuclear weapons and missiles. Mutual agree-

ment between India and Pakistan to abolishtheir nuclear weapons is not likely, unlesssomehow China and others would agree to dothe same—which is even less likely. But theirconstraint could be formalized, and the UnitedStates and the EU might play important roles inhelping the two sides come to agreement.

Positive domestic developments may also bein store for India. Many analysts believe thatIndia might be able to maintain economic growthrates between 6 and 9 percent for most of theperiod. If so, its aggregate economic strength willequal that of the present day Chinese andASEAN economies combined. By 2025, Indiawill be more populous than China and, despiteappalling poverty, will have the largest educatedmiddle class in the world in absolute terms.156

India may also remain a democracy, a techno-logically innovative society, and a proud andconfident cultural entity despite its manyenduring problems. Under such circumstances,India will play a larger and more varied role inthe region, one that could find itself in generalconsonance with U.S. interests. Israel andIndia might also become important allies.157

Having paid our dues to optimism, wewould be remiss not to note the more pessimisticpossibilities for the region. As suggested above,there are many.

The Greater Near East is a place—notunlike many others—where a very few positivebut seminal developments can go a long way to

156 India also has, however, a large majority of the world’s illit-

erate—nearly 500 million people. For a brief demographic

sketch, see Barbara Crossette, “In Days, India, Chasing

China, Will Have a Billion People,” New York Times,

August 5, 1999.157 Israeli-Indian cooperation has grown markedly, if quietly,

since 1994. See Ze’ev Schiff, “The Complex Israel-India

Connection,” Ha’aretz, August 19, 1998; and “India and

Israel vs Pakistan,” Foreign Report, June 11, 1998.



90 NEW WORLD COMING

insure peace and stability, but a few negativeones can similarly cause enormous trouble. Thekey to which direction the future will takecomes down to a relatively small number ofcontingent events, namely whether major warscan be avoided and whether regime changes inmajor countries can proceed peaceably.

Avoiding major warfare and the occasion-al violent regime collapse will not be easyover the next 25 years. There are manypitfalls along the way. More than one majorregional war will probably occur, causing adeterioration of the general regional securityenvironment, and making it more difficult forany power or combination of powers tomoderate political enmities and minimizelocal arms races. Consider the following list,set down in rough order of the seriousness ofthe potential conflicts. These conflicts arediscussed in conditional terms because, whilethe potential exists for all of them to occur, itis not possible to predict exactly which ofthem will occur.

Iran and Afghanistan could well findthemselves at war over Taliban policiestoward Afghanistan's Shi'a Hazara population,drug and weapons running, interpretations ofIslam, and sheer geostrategic rivalry. Such awar might also involve Tajikistan andUzbekistan, each thinking to absorb the ethnicTajik and Uzbek populations of Afghanistannorth of the Hindu Kush, where the writ of themainly Pashtun Taliban does not run deep. Itcould also pull in Pakistan, which in turncould help destroy that country in its currentterritorial configuration. The collapse of anuclear-capable Pakistan would quicklybecome an urgent international security issue.Such events, too, might then open the way foran Indo-Iranian competition over the Punjab,Sind, and Baluchistan. Both countries couldhave nuclear capabilities by the time such a

contest would develop. In all this we see aquintessential example—one of a greatmany—of the mixing of internal conflict withpossible cross-border violence.

India and Pakistan might fall into a majorwar as a result of miscalculation when fightingerupts in Kashmir—as it did in June 1999.Another Sino-Indian border war is also possible;India believes that a slice of Kashmir is occupiedby China.

Iran and Iraq will likely remain generallyhostile to each other and might again fightover historical and ethno-religious enmity aswell as territorial disputes. Iraq and Turkeycould find themselves at war over some com-bination of the Kurdish issue, water rights,and the ownership of Mosul and its oil richenvirons. Syria and Turkey could also fall toblows over some combination of Kurdishissues, water rights, and the future of Hatay. AGreco-Turkish war over the future of Cyprus,too, might subsequently lead Syria andpossibly Iraq to launch a revanchist militarycampaign against Turkey.

In Central Asia, Kazakhstan and Russiamight struggle over northern Kazakhstan,which is overwhelmingly ethnic-Russian inpopulation. The post-Soviet states of CentralAsia could also become roiled in conflict overthe fertile and ethnically mixed FerghanaValley. Uzbek nationalism may become disrup-tive, clashing with a rising Tajik nationalismsupported by Iran. Uzbekistan’s relations withKyrgyzstan might decline over water disputes,and the Kyrgyz may turn to a closer relation-ship with China for this and other reasons.Turkey and Iran could find themselves support-ing proxy warfare between Uzbek and Tajikinterests, or being drawn into war themselvesover spheres of influence and client relation-ships in Central Asia. In the Caucasus, the




Azeri-Armenian war over Ngorno-Karabakhcould flare up again, for it is unlikely to befinally settled soon. Continuing Russianmeddling in Georgia and Tajikistan cannot beruled out. Iranian-Azeri conflict over Azeri ir-redentist claims is not out of the question either.

Existing Arab-Israeli political arrange-ments could also collapse. Egypt might defectfrom the peace arrangement with Israel onaccount of a change of regime in Cairo. A civilwar could erupt in the area of the PalestinianAuthority after the passing of Yasir Arafat,with the consequent reshaping of Israeli andJordanian regional strategies. Contrarily, an ir-redentist Palestinian state might manage toovershadow and envelop Hashemite Jordan,and make common cause with both a post-Alawi Syria and with a post-Saddam Iraq torecreate an eastern front against Israel. Israelmight also be attacked by either Iraq or Iran ina missile war over existential religious andhistorical issues.

Even small wars could have serious con-sequences depending on where they are orwho fights them. A Saudi-Yemeni war overthe still disputed region of Asir is an example.So would be fighting inside the Persian Gulfbetween the United Arab Emirates, possiblywith Bahraini and ultimately Saudi support,against Iran over Abu Musa and the Greaterand Lesser Tunbs Islands, UAE territoryoccupied by Iran since 1971.

It is highly unlikely that all or most ofthese conflicts will actually break out over thenext 25 years. But it is even less likely thatnone of them will.

As for regime change and national co-herence, here we must return to the

sources of social and political instability

noted above, and examine their potentialdownside.

It is possible that generational leadershipsuccessions occur throughout the Arab world,Iran, Central Asia, the Caucasus, and SouthAsia, but the political characteristics andglobal orientations of the major regimes nev-ertheless remain basically unchanged.Currently autocratic regimes may well remainautocratic without having instituted signifi-cant changes in their political structures. Theymay resist pressures to change, and catalyzeno little violence in the process. Thus,episodic social unrest, religious violence, andethnic conflict could characterize the domesticconditions of several states in the region.

That unrest would most likely be trig-gered in part by high population growth, butalso by economic stagnation. The elites ofmajor states may react to globalization pres-sures with new forms of corruption and fake,crony privatization schemes. This is alreadythe case in some respects, and it is not hard tosee why.158 Many regional elites are simplydoing what they have always done—taking,not making—in accordance with an attitudetoward civic duty embedded deeply in thefabric of the local political economy. Herestates have more often than not functioned ac-cording to a rentier model. While in mostcountries citizens pay taxes to the state and thestate provides services, in many Arab countriesthe flow of money has been the other wayaround. States accrue resources from externalsources—oil revenues, port fees, bankingservices, and so forth—and then distribute themoney as patronage down into the population.The rentier model functions as a means of

158 See Ali R. Abootalebi, “Middle Eastern Economies: A

Survey of Current Problems and Issues,” Middle East

Review of International Affairs (Ramat Gan), September

1999.



92 NEW WORLD COMING

control for the state elite, but it vitiates theties of citizenship produced by a morestandard model of reciprocal obligationbetween citizen and government. 159

This is an important factor militatingagainst elite support for any form of technol-ogy-driven entrepreneurship that the elitecannot control. All non-hierarchical forms ofsocial power would upset traditional arrange-ments, and most elites will oppose it even atthe cost of overall economic stagnation.

It is even possible that at least somenervous governments will seek to maintain anear total insularity against social pressuresand external allurements alike. They mightsimply refuse to condone, let alone advance, amore open attitude toward the outside world.They may shun foreign investment despite theknowledge that they may miss a great wave ofregional prosperity. If such an attitude islimited to countries like Afghanistan, Yemen,or Oman, the implications would be modest.If it should come to influence Saudi Arabia,Iran, and even an Islamist Pakistan, thatwould be another matter altogether.160

It is also possible that Islam will notprovide a means to soften and advance socialchange. One could argue that Islamic soci-eties tend to cling to the two anchors of socialauthority they best know and trust to ward offchaos: religion and extended family. Butthese anchors cannot solve the demographicand social problems before them, and adownward spiral of insularity and dysfunc-tional government may end up dividing suchsocieties ever further from the world’s suc-cessful models of development.

While it is not likely, it is possible that oiland natural gas supplies from the region willno longer figure prominently in global

markets, either because turmoil and conflicthave disrupted their flow or because alterna-tive sources of energy are developed. If thatwere to happen, these countries could becomedramatically poorer, and the stability of theseeconomies and regimes would eventuallybecome less important to the United Statesand other major advanced countries, theirown lingering investment portfolios notwith-standing. In any event, some of the smallerGulf producers may reach the bottom of theirreserves over the next 25-years, and if theyhave not managed to diversify by then, theywill go bust.

Contrarily, the absence of energy alterna-tives, set against the inexorable limits of fossilfuel reserves, could lead to another sharp risein prices between now and 2025. Oil-richcountries might then use bloated revenues topursue regional political and military compe-titions, as they did in the 1970s. Corruptionwould likely increase, as would resentmentagainst elites. Surely, another oil shock wouldsend the international economy, or much of it,once again into the doldrums, and that in turnwould again spell disaster for the non-oil richstates of the region.

Very bad things could happen in thebroader security sphere as well. The

Greater Near East will remain heavily armed,and could be the region where the majority of

159 See Lisa Anderson, “Obligations and Accountability:

Islamic Politics in North Africa,” Daedelus, Summer

1991. The same is true to a certain extent in India, where

only a quarter of 1 percent of the population pays taxes.160 Oman and Saudi Arabia have been the two most deliberate-

ly insular Arab states in modern times. Oman began

reducing its insularity in the 1970s; as a sign of the times

in Saudi Arabia, in the fall of 1998 it became possible for

the first time for foreigners to get a tourist visa into the

country.




new nuclear states emerge. Iran and Iraq arereal possibilities. Other states, too, such asEgypt, Syria, Libya, Algeria, Saudi Arabiaand Morocco are keeping their options open,even while remaining parties to the Non-Proliferation Treaty. Prospects also exist forstates and terrorist groups in the region toacquire chemical and biological weapons.Long range missiles are under development inmany countries as well. Over the coming 25years, we should expect that such weaponswill be used in regional conflicts, as well as inattacks against Americans abroad andpossibly at home.

Extra-regional influences might also alterthe course of regional engagement for theworse. Such forces, consisting mainly of theUnited States, Russia, Japan, China, Turkey,and the EU, might engage in sharp competi-tion over regional energy resources andpolitical loyalties, leading local states to actrecklessly and violently.

Political changes in regimes, especiallythose in major states such as India, Egypt,Saudi Arabia, Turkey, Pakistan, Iraq, and Iran,could also lead to dramatic shifts in militarybalances. This is a concern because, except inIndia and Turkey, the processes of politicalsuccession are not well institutionalized.Some of these regimes could be overthrownby revolution. It could be, for example, thatafter two generations of a flowering of Islamicneo-orthodoxy, the stage will have been set forthe reemergence of fundamentalist move-ments amid economic depression and thefailure of secular political parties to provideviable political leadership. Regime upheavalsmight therefore produce several ultra-conserv-ative religious regimes in the region, eachsuccessive case gaining moral and possiblyliteral support from the ones before. Egypt,Turkey, Saudi Arabia, or Pakistan—or several

of these states—might suffer major politicalupheaval and be transformed into activelyanti-U.S. regimes. In addition, and possibly si-multaneously, the internal stability of Pakistancould come unglued in the face of politicalparalysis and economic distress, with Pashtun,Baluch, and even mohajir groups seeking theirown states.

An anti-American regime in SaudiArabia, one so antagonistic that it wouldrefuse to sell its oil abroad, is not very likely.But were it to come to pass and be allowed tostand, it would represent a major blow to theliberal economic order brought into beingafter World War II.

It is also possible that the internal stabili-ty of India will decline sharply as Hindunationalism roils the implicit social compactof the multiethnic, multisectarian state. Eventhough the electorate may turn the ultra-na-tionalists out of office, they may not acceptthe verdict, but instead resort to extra-parlia-mentary violence that severely underminesIndian democracy. India could even breakdown as a national state, generating enormouspolitical and humanitarian crises over theentire region for an extended period.Obviously, a failure to prevent a major warwith Pakistan or China could trigger such adisaster.

Beyond these two major potentialreasons for pessimism—the possibil-

ity of regional wars and destabilizing regimechange—there is a specific cause for concernin the coming conflicts over water resources.

Such conflicts are particularly likelybetween Turkey on the one hand and Syria andIraq on the other, and also potentially amongEgypt, Sudan, and Ethiopia. There is little po-tential for agricultural expansion in Egypt,



94 NEW WORLD COMING

which already achieves some of the highestproductivity-per-acre rates in the world, andthere is much potential for both drought andfor more Nile water being used by upstreamriparians.161

Water stress in the Jordan/Yarmouk valleysystem among Israel, Jordan, and thePalestinian Authority will likely be ameliorat-ed by some combination of regionalcooperation on infrastructure modernization,economic restructuring away from irrigated a-griculture, sewage water recycling, waterimports, and desalination programs. Evenwith present technology and at current costs,it would cost about $4 billion (including themajor initial capital investments) to produce700,000 million cubic meters of drinkingquality water through desalination for the firstyear, and much less for each succeeding year.That amounts to about half of the annual dis-charge of the Jordan river system, and wouldmake up most of the region’s prospectivewater deficit. $4 billion is a lot of money fora small region, but it pales besides the amountof money spent on arms imports. If humanneeds truly require it, governments and soci-eties will find it affordable.

It is also possible that within 25 years e-conomically sound ways will be found to tapinto large resources of fossil water deepbelow the surface. Some geologists estimatethat beneath the the Negev and Sinai desertsthere may be reserves of potable fossil watersufficient to last the entire Levant for morethan 250 years at current rates of utilization.

Finally, it almost goes without sayingthat U.S. policy in the region will

make a difference. One possibility is that U.S.policies, similar to current ones, will lead tofurther pacification of the Arab-Israelidispute, but not to a stable natural balance of

power in the Persian Gulf or Southwest Asia.Domestic political turbulence would continueto exacerbate interstate, inter-sectarian, andinter-ethnic relations. As a result, the UnitedStates would retain a significant militarypresence and diplomatic profile in the region.

But two other possibilities exist. In one,the United States would not only persist withcurrent policies, but either definitivelysucceed or fail with them. In the second, theUnited States would choose not to persist.

If the United States persists and succeeds,it will mean that U.S. policies will havebrought stable peace not only between Israeland all the major Arab states, but also inhelping to shepherd transitions to peacefulpolities in Iran and Iraq, and a peaceful reso-lution of the Indo-Pakistani conflict. Successwould allow the United States to substitutemuch or most of its military presence in theregion for a more robust diplomatic, cultural,and commercial presence. Contrarily, U.S.policies could fail to prevent more seriousthreats from arising, and the United Statesmight then increase its military presenceeither to support a beleaguered Israel, tocontain the rise of a regional hegemon, orprevent certain countries from acquiringweapons of mass destruction. From such afailure the United States would risk, or go to,war.

The major alternative is that the UnitedStates might pull back from involvement in theregion. Two interwoven sources for such achange exist. A lessening of common purposewith the regional states is one. An unwilling-ness on the part of the American public to

161 See Arnon Soffer, Rivers of Fire: The Conflict Over Water

in the Middle East (New York: Rowman & Littlefield,

1999), pp. 49-50.




support expeditionary military deployments isanother. That unwillingness could follow ter-rorist attacks on Americans or from perceptionsof U.S. vulnerabilities to missile attacks fromsuch countries as Iran, Iraq, Egypt, Pakistan,and India. In short, the possibility exists that wemight not persist, succeed, or fail, but ratherdisengage.

Sub-Saharan Africa

Sub-Saharan Africa’s last four decades,the decades of the independence

period for most of the countries in the region,have been characterized by rampant instabili-ty, mostly despotic military rule, andcorruption unsurpassed in its sheervenality.162 The region has experiencedfrequent violent conflicts, including genocideof Africans by Africans. While bloodydisputes over colonially drawn borders havebeen less frequent than might have beenexpected, such conflicts have taken place andhave recently grown in frequency and scale.They pale only in comparison to the hugenumber of internal upheavals, lately evi-denced by major troubles in Angola, theDemocratic Republic of the Congo, Rwanda,Burundi, Mozambique, Sierra Leone, Liberia,and elsewhere. The continent has also beenhome to massive organized criminal activity.Infectious disease, malnutrition, and both en-vironmental and refugee problems havesoared to catastrophic levels.163 Access toquality education has been a rare privilege inmost countries. Shortages of fundamental in-frastructure—roads, telephone services,power, clean water, health care facilities andtrained personnel, trustworthy police forces—have been chronic and severe in cities andvillages throughout the region. Today, forexample, there are more telephones in theBorough of Manhattan, or in central London,

than in all of sub-Saharan Africa.164 Andeconomic growth has been anemic for themost part, as populations have grown rapidly.

Such conditions are headlines for the all-too-familiar bleak African story. Yet there isanother story to be told. If one takes thelonger view, the independence period in sub-Saharan Africa can be seen as a movementfrom mostly single-party governmentbackward to no-party military rule, and thenfrom military rule forward to more democrat-ic rule and more open societies. Potentiallyfar-reaching positive changes have been oc-curring in many African states in recent years.Countries such as Benin, Botswana, CapeVerde, Malawi, Mali, Mauritius, Namibia,Uganda, Ghana, Kenya, Tanzania, andSwaziland have been cultivating more demo-cratic, market-based institutions.165

Reformist leaders in these states are empha-sizing the criticality of high standards ofgovernance, and they are plainly dedicated tothe serious improvements in the quality of life

162 Many African states fall near the bottom of global “corrup-

tion” rankings. See, for example, the “1998 Corruption

Perception Index” prepared by Transparency International

and Goettingen University’s Internet Center for Corruption

Research.163 Current HIV/AIDS cases in sub-Saharan Africa are estimat-

ed at about 14 million, fully two thirds of the world

estimated total of 21.8 million. See UNAIDS Program

data, World Almanac, 1998, p. 840. As to refugees, 35

percent of the people of greatest concern to the UN High

Commission of Refugees (UNHCR) globally are in sub-

Saharan Africa, the largest regional percentage by far.

UNHCR, The State of the World’s Refugees: A

Humanitarian Agenda (Oxford: Oxford University Press,

1997), p. 3.164 Susan Rice, “Bram Fischer Memorial Lecture,” Rhodes

Scholars’ Southern Africa Forum, May 13, 1999.165 See Freedom in the World 1997-1998 (New York: Freedom

House, 1998), pp. 600-1; and the 1999 Index of Economic

Freedom (Washington, DC: Heritage Foundation, 1999).



96 NEW WORLD COMING

for their countrymen. They are also oftenasking for the best international advice inbuilding transparent, rule-of-law-based systemsof governance. As a result, these economies areattracting important outside investments166 andhave been growing at very respectable rates, inseveral cases 7 percent or more a year.167 Inlight of these accomplishments, some observersnow herald an African renaissance.

There is still more good news. Literacyrates are growing throughout the continent andthe communications revolution is underway.While urbanization strains the capacity of gov-ernment to deliver services, it can also be acrucial element in the building of nationalidentity. When people leave their regions, theyleave the pull of clan and tribal authoritybehind as well. While tribal groups tend to livein certain districts of cities, in time they tend tomix together far more thoroughly than ispossible in rural areas. In some parts of Africa,too—most notably the Sahel—urbanization in-

troduces people to new consumption patternsfor food, clothing, and other goods. The resulthas been to stimulate demand, and that hasaided economic growth in several countriesover the past decade.

Beyond the successes of several small andmedium sized countries, there are also encourag-ing developments in two sub-Saharan giants—South Africa and Nigeria.168 South Africa is by

166 During 1990-94 the average annual return on book value of

U.S. direct investment was nearly 28 percent, about three

times the rate of worldwide return in that period. See

Department of State, “U.S. Trade and Investment in Sub-

Saharan Africa,” December 1997.167 For example, 1998 GDP growth for Mauritius was over 10

percent, Botswana’s was about 7 percent, and Ghana’s

about 6 percent. IMF, World Economic Outlook, October

1998, p. 188.168 The approximate populations of these two states in 1999

were: Nigeria (113 million), South Africa (43 million).

Democratic Republic of Congo (50 million) and Ethiopia

(59 million) are the other very populous non-Arab states

on the continent.




far the economically dominant state in theregion.169 Nonetheless, it is experiencing sig-nificant problems: very high unemploymentrates, the highest (and still rising) crime rate inthe world, and a majority of the population stillin poverty. Moreover, the post-apartheid periodis only six years old, and those six years werespent under the remarkable influence of NelsonMandela. It is therefore too soon to make de-finitive judgments about the future. But thereare also positive events and trends. SouthAfrica is making the transition to a multi-racialdemocracy. A peaceful, second democraticpresidential election took place in June 1999.Developments in South Africa have also aidedthe settlement of the civil war in Mozambique.

For the first time in many years, too,Nigeria—a country with more than three timesthe population of South Africa although a GDPonly one-third as large—has at least a crediblechance to move away from an era of pervasivecorruption, human rights abuse, and economicmismanagement. Important positive develop-ments are in the works. The newly electedpresident, Olusegun Obasanjo, has committedhimself to breaking Nigeria’s crippling cycle ofcorruption, to introducing fair governance prac-tices, and to reviving the economy. Hisambitious agenda includes designing and sus-taining an effective federal system, balancingthe interests of diverse regions with that of thecentral government; bringing the military undercivilian control; establishing an independent ju-diciary; and ensuring a continued pattern ofopen and fair elections. He will need help fromthe international community, and current indi-cations suggest that he is ready to accept it.Nigeria’s oil resources are a huge potential aid,as is the cooperation of the companies that areinvolved in the exploitation of that oil.170 IfNigeria can get on track, and has the help andgood fortune to remain on track, in 25 years it

would become the economic engine of WestAfrica, and a benign security presence for theregion as well.

In short, things may well come together.Political and economic shifts of this

kind—toward democratic, market-based insti-tutions—could potentially transform large partsof Africa over the next 25 years, providing thebasis for effective integration into the globaleconomy. The small and medium sized corestates, which have already achieved a degree ofdemocracy and made progress against corrup-tion, can serve both as magnets for moreforeign investment in Africa and as role modelsof successful governance and economicpolicies for other regional states. If SouthAfrica continues to make strong economic andpolitical progress, and if Nigeria can move de-cisively toward a more open, democraticsystem and a vigorous economic revival, thenthe prospects for this region could brighten sig-nificantly.

Crafting institutions of governance that areviewed with confidence by Africans will be acomplex task. Harnessing the capabilities inthis region for effective democratic institutionsand free market development will depend over-whelmingly on the leadership abilities ofAfrican statesmen, civil servants, businessmen,and scholars. Strong leaders could construct ef-fective coalitions both within the states andwith other governments and internationalagencies. Regional role models of integrity andcommitment to good governance, with effec-

169 South Africa’s 1998 GDP was $306.5 billion (in Purchasing

Power Parity terms), about one-third of Sub-Saharan

Africa’s total (of $903 billion). The sub-Saharan African

country with the next largest GDP in 1998 was Nigeria,

with $112 billion170 A short but interesting feature on Chevron’s relationship

with Nigeria is Norimitsu Onishi, “Deep in the Republic

of Chevron,” New York Times Magazine, July 4, 1999.



98 NEW WORLD COMING

tive civilian control over the military, could beshared throughout the continent, and builtupon.

One means of achieving effective informa-tion sharing is through regional and sub-regionalorganizations. Such groupings, particularlythose with a small number of similar states in thesame sub-region, provide some of the best op-portunities for furthering and supportingdemocratic and economically liberal policies. Atpresent, these groupings are very fragile.However, if they are reinforced by bold Africanleadership and by proper incentives from abroad,then the region could potentially develop into amarkedly more important and constructiveplayer in the global economy.

For the region as a whole, 4 percent realgrowth per year through 2010, and potentially 5to 6 percent real growth per year from thenthrough 2025 is plausible.171 To achieve this,African statesmen and businessmen must workhard to attract and nurture partnerships withprivate investors—to take full advantage of whatthe global economy has to offer. If they can, thenthey will also have a real chance to stanch andeven reverse the current “brain drain” oftalented, educated Africans that has so seriouslycrippled states such as Nigeria over the last fewdecades. If South Africa and Nigeria makestrong, steady progress in governance, stability,infrastructure development, and economicreform, then aggregate growth rates in the 7-8percent annual range may be possible for theregion. Sub-regional or even regional commonmarkets can certainly help significantly here;they can help exploit economies of scale andprovide the advantage of what amounts to acommon currency.

Significant improvements in Africa’s stan-dards of living, infrastructure, education, andhealth between now and 2025 will clearly be

much harder to achieve, given the increase inthe number of children there will be to nurture.Africa’s population is projected to nearlydouble by 2025—from 620 million people toabout 1.1 billion—even despite the AIDSepidemic that is sweeping through much of thecontinent. In that case, Africa would be almostas populous as China today. Sensible familyplanning, and far-reaching educationalprograms to facilitate such planning, thusappear to be indispensable elements in astrongly positive evolution for Africa over thenext quarter century. It is not clear that suchprograms will be forthcoming, but the adventof good government throughout the region rad-ically improves the chances that they will beundertaken.

For a positive future, too, the epidemics thatnow plague Africa need to be brought underbetter control. Unfortunately, AIDS, as well as avariety of other major diseases, are likely toremain major problems even in the best case forthe region.172 Of the 34 countries currently mostplagued by AIDS, 29 are in sub-SaharanAfrica.173 Making significant headway willrequire that children as well as adults be treatedon a massive scale. Strong help from interna-tional health organizations, both governmentaland private, will be essential.

Central to this positive evolution will alsobe stemming the conflict and instability

that has wracked so much of the region for toolong. This instability has come in a variety offorms: intra-state crises as in Rwanda; statefailures in such West African states as Sierra

171 See IMF, Global Economic Prospects, October 1998, p.

189.172 For details, see the United Nations population figures for

1998.173 Noted in “The Demographic Impact of HIV/AIDS,” United

Nations Population Division, 1998.




Leone and Liberia; and protracted civil wars, asin Sudan. Taken together, such conflicts have dis-placed upwards of 4 million people.174 All ofthese types of conflict may well continue throughthe first part of the 21st century. Together withrising domestic crime in many states and the in-creasing prevalence of transnational problemssuch as narcotics and money laundering, theyclearly pose serious security challenges to allAfrican states. Indeed, the general problem ofcorruption—at the top as well as elsewhere in

society—may be the region’s most seriousproblem.

Progress in addressing fundamental politi-cal and social problems can help resolve theroot causes of many conflicts in the region.Here, too, there have also been a number of en-couraging conflict resolution initiatives—bothfrom within the region as well as by other con-cerned parties—that will need to be reinforcedfor this positive evolution to have any realchance. Several African inter-governmental or-ganizations have expanded their traditional

political and economic foci to include securityconcerns. The OAU’s Conflict ResolutionCenter, the Southern African DevelopmentCommunity’s Political, Defense and SecurityOrganization, and the Economic Community ofWest African States’ operation in Liberia holdpromise for promoting African solutions toregional conflicts and security concerns. Futureefforts can advance intra-regional cooperationwhile seeking to spread positive political-economic gains throughout sub-regional areas.

At the same time, Africa will need to beengaged with states outside the region to takefull advantage of global opportunities for devel-opment and security—through bilateralrelationships and constructive partnerships in in-ternational organizations. The United States hasestablished programs such as the African CrisisResponse Initiative and the new African Centerfor Security Studies. Such relationships can

174 UNHCR, The State of the World’s Refugees: A

Humanitarian Agenda (New York: Oxford University

Press, 1997), pp. 286-7.

Source: UNAIDS, AIDS Epidemic Update, December 1998.

AIDS Deaths and HIV InfectionsTotal Cases to Date



100 NEW WORLD COMING

provide a basis for strengthening trends towarddemocracy and economic liberalization, whileproviding additional forums in which to seekconflict resolution.

The overall challenges for Africa areclearly daunting. Looking out to 2025,

a number of pessimistic futures are not difficultto envision. Things might not come together,but fly further apart.

One or more of the populous states in theregion, especially Nigeria or South Africa, butalso Kenya or Tanzania, may fail to makeeconomic and political progress. The all toofrequent conflicts in the region may persist orintensify. HIV/AIDS may not be brought undercontrol. Soaring population growth rates maycontinue despite the ravages of disease.

Emerging patterns of democratic governancemay not survive. At worst, some of these statescould become havens for organized criminalsand political/religious extremist groups in pos-session of increasingly lethal weapons.

African economic growth, moreover, willhave a difficult time keeping pace with theregion’s rapidly growing population. Economicgrowth at levels around 6 to 7 percent per

annum will be necessary in many countries justto keep up with population growth. Thus, someof the robust figures on African economicgrowth in recent years are deceptive. Grosseconomic activity always increases with popu-lation, but it is per capita figures that mattermost, and in this regard Africa’s progress is farless impressive.

Areas of Conflict




Such adverse outcomes would, of course,represent an enormous waste of Africa’shuman and natural resources. If significantheadway cannot be made on many of thesefronts, the United States and the rest of theworld could face terrorist threats, refugeeproblems, an increase in organized crime, andhealth epidemics spilling out of the sub-con-tinent to climes far and wide.

Perhaps the central problem that mayarise in and from sub-Saharan Africa

is the splitting asunder of state frontiers.Social pressures, bad government, and thespread of various transnational dangers couldfracture many of the territorial states thathave been basically stable since the indepen-dence period. The war in and over theDemocratic Republic of the Congo may rep-resent a major watershed for the worse in thisrespect. In no regional fracas before thecollapse of Mobutu’s Zaire has there been somuch serious and varied military interventionby African states into the internal affairs ofanother. The interests of Zimbabwe, Uganda,Angola, and other states are so sharply atvariance, and the Congo’s ethnic diversityand geographical swath are such challengesto state-building, that the Congo may nevercome back together as a single political unitin the shape it held in 1995.

The ongoing war between Ethiopia andEritrea is another cautionary example.Eritrean independence was achieved inunison with the Ethiopian government thatoverthrew the heinous regime of MengistuHaile Mariam. But even though Ethiopia’sborders were changed by consent, and eventhough the two leaderships professed friend-ship and peace toward each other, it was notvery long before the two countries fell into aruinous border war.

Events in the Democratic Republic ofCongo and Ethiopia have violated the tabooagainst the violent changing of frontiers inAfrica. This could lead to more conflict.Among those most vulnerable to ethnic con-flagration and territorial reconfiguration aresome major ones, including Kenya, Uganda,Senegal, Angola, Tanzania, South Africa, andSudan—the last of which has suffered frommore than 20 years of a civil war that stillshows little sign of ending.

It is also possible that the examples of theDemocratic Republic of Congo and Ethiopiawill strengthen the will of African elites tomaintain the territorial status quo, having nowseen the costs of change. But if that does nothappen, the weakening of respect for theexisting territorial state system in sub-Saharan Africa could trigger civil wars in asmany as half a dozen African states. Suchstrife could easily spill across borders asvarious ethnic groups seek to unite them-selves under a single flag. Once the fightingstopped, such a reconfiguration of states intomore homogeneous ethnic units could makesubsequent attempts at nation-building mar-ginally easier. But the long-termconsequences could be disastrous, for elitesthat can more easily build nations on the basisof ethnic solidarity can also more easily takethem to war against alien groups.

The humanitarian fallout from such warswould be dramatic, easily overwhelming theexisting capacities of non-governmental orga-nizations to manage them. As a world leader,the problem would doubtless queue up to theU.S. foreign policy agenda and, given thenature of American society and contemporaryelectronic media culture, the U.S. governmentwould have to take up that agenda at least tosome extent. This would be so even if no




concrete national interest, narrowly con-strued, were at risk.

Another real possibility, probably morelikely than the collapse of the territorial statusquo, is that the information revolution inAfrica will make borders increasingly mean-ingless. State capacities are modest in thisregion, and they are unlikely to keep up withnew patterns of licit and illicit commerce. Theadvent of mass communications in Africa willhasten the expansion of business competencefar faster than the expansion of governmentcompetence. Thus, Africa is likely to be aprime example of states losing control over thelevers of economic life, and having their legit-imacy and longevity called into question as aconsequence.

It is not at all clear whether sub-SaharanAfrica’s future will turn out to be bright

or tenebrous. It could well be mixed, withsome states achieving their goals of peace,prosperity, and cultural renaissance, whileothers descend into the pit of bad governmentand social decay. In any event, as is usually thecase, the future is up to the peoples of theregion, and their leaderships. In a world whereregions no longer have automatic strategic sig-nificance on account of the global competitionamong great powers, outsiders will not makeor break Africa’s future. Nevertheless, the po-tential for cooperation is great because Africanstates may need and warrant outside assis-tance, and because the Western countriescould, and should, see such assistance as self-interested as well as charitable. An Africa inchaos is in no one’s best interest.

The Americas

The Americas—defined here as LatinAmerica, Canada, and the Caribbean—is aregion of unique importance to the United

States. The region is home to the two largestU.S. trading partners—Canada and Mexico—and the destination of over 40 percent of allU.S. exports. The United States imports naturalresources from the region, including petroleumfrom Mexico, Venezuela, and Trinidad.Additionally, cultural ties between the UnitedStates and Latin America are strong; the UnitedStates has the fifth-largest Spanish-speakingpopulation in the world, now some 17.3 millionstrong.175 At the same time, the geographicalpropinquity of Canada, the Caribbean, Mexico,and Central America to the United States oftenmakes the problems of one country a domesticconcern for others—the United States included.

Latin America, the Caribbean, and Canadaare very distinct from each other. LatinAmerica’s cultural and political roots weremolded by their Spanish and Portuguese colo-nizers. The mix of indigenous tribes withEuropeans created the social base that exists inLatin America today, but the mixing is differ-ent in different countries. Less than onepercent of Costa Rica’s population is made upof indigenous people, for example, but indige-nous groups constitute 44 percent of thepopulation of Guatemala, and substantial per-centages also in Mexico, Peru, Bolivia, andEcuador.176

In contrast, the Caribbean islands tracetheir roots primarily to English, French, andDutch colonizers, and also to the institution ofslavery as practiced by Europeans from the17th through the early 19th centuries.Parliamentary systems are the norm in theCaribbean and, unlike Latin America, the

175 The number of Hispanics in the United States is even

larger—22 million—but not all Hispanics, a catchall term

meaning those whose forebears came from Spanish-

speaking countries, speak Spanish.176 CIA World Factbook, 1998.




primary language is English. Canada also hasa parliamentary system based on British tradi-tions.

In the last 20 years, Latin America hasundergone profound transformations.

All of the 35 countries in the region have de-mocratically elected governments, with theexception of Cuba. Free market economics

has replaced protectionism in most countriesas the chosen path for long-term economicgrowth, a major shift in attitude from twodecades ago. Steps have been taken towardeconomic integration, most notably throughthe Southern Cone Common Market orMercosur, whose members are Brazil,Argentina, Paraguay, and Uruguay. This hasearned the region much respect from in-




vestors worldwide; some $40 billion per year,on average, entered the area in the 1990s.177

Human rights abuses in the region have beensignificantly curtailed, and several insurgen-cies in Central America have been ended bynegotiation. Armies have for the most partstayed in their barracks, another shift in his-torical patterns. In short, Latin America hasgone far in transforming itself from an areadominated by authoritarian regimes withclosed economic policies into a model of pro-gressive political and economic development.

Despite these positive trends, many LatinAmericans have yet to see the fruits of change.Income disparities in the region are the greatestof anywhere in the world. A quarter of allnational income is in the hands of 5 percent of thepopulation, and the top 10 percent absorb 40percent of the wealth.178 The poorest 30 percentof the population receive only 7.5 percent ofnational income, and only a small middle classexists in most countries.179 Social conflictbetween native populations and those ofEuropean origin is endemic in many countries,including Bolivia, Colombia, Ecuador,Nicaragua, Mexico, Peru, Guatemala, Honduras,and Brazil.

Meanwhile, violence and crime are perva-sive. The region also suffers from high levels ofgovernmental corruption and graft. Witheconomic growth uneven in most countries, thepossibility of economically failed states—statesthat cannot reliably provide rudimentaryservices and that default on their internationalobligations—cannot be ruled out over the next25 years.

Perhaps most important, Latin Americandemocratization is still fragile, except in Chile,Costa Rica, and Uruguay. The rule of law,respect for basic civil liberties, the existence ofmass-based political parties, the de-politiciza-

tion of military institutions, and the rights tofree speech and organization are still tendershoots in many of the area’s formal democra-cies. A sign of this fragility is the difficulty thatfree media have had conducting objective polit-ical polling in many countries.180 The citizenryin many Latin American countries have notbecome fully comfortable with the attitudes, the“habits of the heart,” that ultimately undergird ademocratic polity.

Notwithstanding this mixed situation, theAmericas will be an increasingly importantregion for the United States over the next twodecades. U.S. trade and investment will increase.Latin America and the Caribbean are projected tohave over 690 million people by 2025, roughlytwice the size of the European Union. An OECDstudy projects growth rates for Brazil’s economyas high as 5.6 percent over the next 20 years.181

Should this projection prove accurate, Brazil willemerge as a major global economic power, witha GDP roughly equivalent to Japan’s today. Inaddition, U.S. cultural ties with Latin Americawill grow stronger in the coming decades. In2025, the Hispanic population in the UnitedStates will be the largest minority group in thecountry.

What, then, will the future hold for theAmericas, and how will that future affect theUnited States? Four factors will be mostcritical: how the economies of the major

177 Figure cited in Abraham Lowenthal, “Latin America in a

Time of Global Financial Turmoil,” March 1999 (unpub-

lished draft).178 Inter-American Development Bank Report, Economic and

Social Progress in Latin America: Facing Up to Inequality

in Latin America (Washington, DC: 1998), p. 1.179 Ibid.180 See here Humphrey Taylor, “Pollution,” The National

Interest, No. 51 (Spring 1998).181 Projections based on data in OECD, The World in 2020.




players fare in the context of the new globaleconomy; whether liberal democratic and freemarket principles prevail; how Mexico andBrazil evolve politically; and what role theUnited States plays. We take these in turn,looking at both optimistic and pessimistic pos-sibilities.

Recent trends suggest that LatinAmerica will enter the 21st century

from a positive economic base. Reforms initi-ated as a result of the region-wide debt crisis ofthe 1980s have resulted in greater fiscal andmonetary discipline, lower inflation, a com-pressed public sector, and diminished barriersto international and regional trade. If theregion can sustain annual growth rates of 6percent, as some observers have projected, itscountries will be better able to address wide-spread poverty, poor educational and healthsystems, and other problematic social condi-tions.

Latin America has a demographic“window of opportunity” with which to attainthese goals. Fertility rates are dropping andpopulation growth rates are decreasing.Between 1995 and 2025, average annual popu-lation growth rates are projected to fall from1.73 percent to 1.07 percent in Mexico, from1.33 percent to 0.76 percent in Brazil, andfrom 2.71 percent to 1.41 percent inHonduras.182 As a result, the number ofworking age people will rise in proportion tothe number of children. A shrinking youthbulge, a larger work force, and a yet-to-haveaged population suggest a smaller financialburden on state resources and the chance to ac-cumulate domestic capital needed to financeeducation and other social projects.

The prospects for expanding free trade arealso good, particularly given the importance ofinternational commerce in the region.183 Trade

accounts for over 40 percent of Mexico’s GDPand over 50 percent of Chile’s.184 Both theCentral American Common Market (CACM)and the Caribbean Common Market(CARICOM) have shown interest in strength-ening their ties with NAFTA, which could leadto their accession to the trade pact. The UnitedStates, Latin America, the Caribbean, andCanada have already agreed on a concept of aFree Trade Area of the Americas. Mercosurwill probably add new members over the next25 years.185

Hemispheric free trade is also progressingon a bilateral basis. Chile has free trade agree-ments with nearly every country in theAmericas, including Canada. Mexico has nego-tiated a number of free trade agreements inaddition to NAFTA, including ones with CostaRica, Chile, Venezuela, and Brazil.

Since successful trade associations haveoften been associated with positive politicaloutcomes, an Americas region tied together byfree trade might also cooperate effectively indealing with other transnational issues such asdrugs, crime, and the environment. Also,regional economic interdependence mightlessen the possibility of interstate conflict,although history is replete with cases wherethis has not happened.

182 The World Bank, World Development Indicators 1998.183 Knight Kiplinger, World Boom Ahead: Why Business and

Consumers Will Prosper (Washington, DC: Kiplinger

Books, 1998), pp. 94-8.184 1996 figures. Trade accounts for 75 percent of Canada’s

GNP.185 The other regional associations are the Andean Group

(Bolivia, Colombia, Ecuador, Peru, and Venezuela) and the

Central American Common Market (Guatemala,

Honduras, Nicaragua, El Salvador, Panama, and Costa

Rica.




In addition to trade integration, theAmericas will experience greater monetary in-tegration. Proposals for dollarization are beingdebated by the public and/or private sectors inArgentina, Mexico, and El Salvador. Currently,Latin Americans hold a majority of theirsavings in dollars, and 70 percent of bankingassets and liabilities are dollar-denominated inArgentina, Bolivia, Peru, and Uruguay.186

While dollarization is likely to be hotly debatedboth domestically and abroad, global trendsindicate that a regional currency bloc is a strongpossibility by 2025. If a currency bloc in LatinAmerica does emerge, it could prove to be astrong source of economic stability and helpfurther unify the region.

Hurdles to the region’s positiveeconomic future should not be under-

estimated, however. The most important is theprospect that globalization will widen social di-visions and abet economic polarization.Existing class divisions in most Latin Americancountries could be increased. The rich and wellplaced would be in a position to acquire theknowledge-based skills, the technologicaldevices, and the international contacts thatwould propel them into the world of cyber-pros-perity. Meanwhile, the majority of thepopulation would remain in the barrios, gettingpoorer and more distant from the opportunitiesof the early 21st century. This is a formula forsocial and political upheaval, and hence, ulti-mately, for economic instability as well.

Even more daunting, sharp income differ-entiation divides many Latin American statesalong cultural lines. Many of the rural poor inLatin America are members of indigenousgroups who remain largely outside the politicalspectrum and represent a large portion of thepopulation in countries such as Bolivia, Peru,Mexico, Guatemala, and Ecuador. Whetherthese groups are incorporated into the political

and economic mainstream will help determineif stability or conflict characterize these soci-eties in the future.

On a different level, many countries in theregion depend heavily on commodity exports,and in some cases on only a single commodity.The volatility of the commodity market leavesthese economies vulnerable to the whims of theglobal economic environment. Moreover, manycountries lack the resources necessary to movebeyond a commodity-based economy and areunlikely to develop them over the next 25 years.

Second, the region suffers from a scarcityof capital and is likely to remain significantlydependent on external sources of capital overthe next 25 years. This dependency is aggravat-ed by the fact that the bond rating agencies donot give most states in the region high marks.The more positive climate for business that isdeveloping in Argentina, Uruguay, Bolivia,Peru, Ecuador, Panama, El Salvador, CostaRica, and Chile has improved their economicfreedom rankings over the last five years.Higher bond ratings may well follow.187

Nevertheless, while sound fiscal policy is pro-ducing somewhat higher rates of domesticsavings, these rates are not likely to increasesignificantly. Moreover, any increases inincome will tend to go toward relieving theburdens of protracted sacrifice rather than tocapital savings.

Third, most Latin American countries aresaddled with inefficient tax structures and highrates of tax evasion. Therefore, the region’seconomic future will partly be determined byits success in broadening the tax base and im-proving collection.

186 David Ignatius, “Dollarization in Latin America,”

Washington Post, April 28, 1999, p. A25.187 Kiplinger, World Boom Ahead, p. 95.




Finally, in order for national and intra-regional trade in Latin America to flourish, theregion will need to develop a more effectivetransportation infrastructure. Good roads are inshort supply; many of them are so rough thatlarge trucks and automobiles cannot drive onthem during the long rainy season. There arefew trains connecting interstate trade centersand, as a result, Latin American producersoften have difficulty getting their goods tomarket. New projects take time and cost muchmoney, and even the seemingly successfulones, such as the Hidrovia waterway involvingmainly Argentina, Uruguay, and Brazil, churnup opposition and many opportunities for graft.It is also the case that, as with other parts of theLatin American economy, infrastructure invest-ment relies heavily on foreign money.

The next 25 years will determinewhether Latin America’s march toward

democracy is successful or not, and the consol-idation of democracy is probably the mostimportant overall determinant of the region’sprospects for security and stability. The rela-tionship between democratic governance andeconomic growth is complex. In the case ofLatin America, its prosperity may well be con-nected to the capacity of its countries to openthemselves to the world economy. That isbecause international best practices tend toreward accountability, transparency, and con-sistency—all hallmarks of democratic ratherthan authoritarian governance.

One important sign that Latin Americandemocracy may prosper in the years ahead hasbeen the transformation of military institutions.Many military leaders in Latin America havedonned civilian clothes and turned to electoralpolitics in order to wield legitimate power,which is a long way from the strongman(caudillo) style of the past. The military itselfhas shunned intervention over the last decade

and has typically left matters under civiliancontrol. They have accepted post-transitiondefense reforms and budget cuts. They haveadopted new roles, including participation inpeacekeeping operations. The border betweenEcuador and Peru, for example, is monitoredby a multilateral peacekeeping force thatincludes soldiers from Argentina, Brazil, andChile. In short, most Latin American militaryleaders have come to understand the impor-tance of maintaining a democracy in order fortheir country to be an accepted and respectedmember of the international community.

The democratization process has also beeneffective in reducing conflict in the region. Ithas facilitated the peace process in CentralAmerica by enabling former guerrillas in ElSalvador, Nicaragua, and Guatemala to usepolitics as a means to voice their concerns.Gross human rights abuses committed underclosed, authoritarian regimes have been signif-icantly reduced as democratically electedgovernments have chosen dialogue with oppo-sition groups over repression. Aside from alimited war between Ecuador and Peru, thecontinent has been at peace ever since its de-mocratic turn accelerated in the 1980s.

Latin American militaries will not likely becalled upon to save their countries from aggres-sive neighbors in the future. On balance, majorinterstate conflicts are unlikely over the next 25years. Border problems may still lead to tensionand even small skirmishes, as we have seen inthe recent past between Ecuador and Peru. Butthe chances for such conflicts are dwindling,symbolized by the fact that Argentina and Chilefinally managed in the spring of 1999 to de-marcate their border to mutual agreement aftermore than a century of dispute. For the mostpart, too, any such border problems will not betraditional conflicts over territory as such, but




rather over water rights, pollution, and migra-tion issues.

As a result, the major security threats toregional states will generally not be from theirneighbors, but rather from domestic insurgen-cies, drug trafficking, organized crime, andnatural environmental disasters such as hurri-canes and earthquakes. These natural disasters,of course, are exacerbated by human foibles:deforestation and excessive building in flood-prone areas. But except for natural disasters,progress on the economic front and strong de-mocratic institutions will be more important foraddressing these challenges than militaryforces.

Defense budgets will probably continue tofall in real terms and as a percentage of GNP.188

In some cases, these budget trends will makesignificant military modernization impossible.Weapons of mass destruction programs are alsovery unlikely to commence. In the 1980s andearly 1990s, Brazil and Argentina eliminatedtheir nuclear programs and no other state(except for Cuba) is even suspected of wantingto develop weapons of mass destruction of anykind.

Unfortunately, not all signs are positivefor the development of democracy. If

Latin American engagement in the globaleconomy widens inequalities, democracy couldfall before the deepening of oligopoly as vestedelites try to protect themselves from change. Ordemocracy could fall before a potentiallyviolent populism that would reverse marketreforms, and whose own respect for democrat-ic norms is shallow.

Venezuela may provide a test case. Thecurrent president, elected as a populist inDecember 1998, promised to widen thecountry’s political system to include those

beyond the tight, if formally democratic, elitethat has run the country since 1960. But hisown democratic credentials are unclear, and hissympathy for protectionist economic policies iswell known. It is still unclear whether he istrying to consolidate power in order to bring thefruits of democracy to all of Venezuela’speople, or to re-establish authoritarian ruleunder his own fist.

Perhaps the most vexing challenge to thedevelopment of Latin American democracy, aswell as society as a whole, is the proliferationof crime, corruption, and illegal drug traffick-ing. In countries such as Colombia and Mexico,organized crime groups have penetrated theupper echelons of government. Corruption inLatin America stems mainly from the practiceof clientilism, an historic patron-client relation-ship where some members of the elite obtainpublic office by trading promises of patronageand largesse. Consequently, some state officialsoften accept bribes or promotions as commonto doing business, a practice that tends to mis-allocate resources and to undermine thelegitimacy of state institutions. Latin Americandrug cartels have turned drug trafficking into aprofitable and highly developed industry,netting them hundreds of millions of dollars ayear. While Latin American politicians ac-knowledge the gravity of these problems, manyLatin Americans view their governments as ap-athetic and ineffective in combating thesethreats. The result in the future could be socialunrest, a greater centralization of governmentcontrol, and even calls for strong presidents torule by decree.

188 See Stockholm International Peace Research Institute,

SIPRI Yearbook 1998:Armaments, Disarmament and

International Security (Oxford: Oxford University Press,

1998), p. 214.




The United States has an interest inLatin America as a whole, but two

countries are especially critical: Brazil, becauseit is so large, and Mexico, because it is so close.

Brazil is responsible for approximately 40percent of Latin America’s total GDP. A deepand prolonged economic recession in Brazilwould have serious effects on the regionaleconomy, especially for its Mercosur tradingpartners. Even in the more positive future,several factors may obstruct Brazil’s achievingthe economic success many have predicted forit: deeply entrenched vested interests withinstate and federal levels of government thatcomplicate economic policymaking; the poten-tial for monetary instability; dependence onexternal capital; and the worst distribution ofincome of any nation in the world.

While Brazil has moved to correct theseproblems and is likely to make much progressover the next 25 years, investor confidencecould still plummet, sending Brazil’s economyspiraling downward as foreign and domestic in-vestors shift to lower-risk environments. First,doubts persist about the viability of Brazil’sbanking system. Second, the Brazilianeconomy could stumble if the privatization ofstate-owned enterprises either falters or fails toincrease industrial efficiency and global com-petitiveness. Third, poor exchange rate policycould result in an overvalued real. Lastly, therichest one percent of Brazilians control nearlyhalf the land; land reform is critical, but it is byno means clear that it will occur.189

Furthermore, Brazil’s economic stability isdependent on market perceptions, given itshigh level of dependence on external capital tofinance its current account deficit.190 If in-vestors lose confidence in the Brazilianeconomy, it could provoke a serious economiccrisis. Excessive capital flight could force

Brazil to devalue the real and raise interestrates. Credit could then dry up, limiting invest-ment and forcing the economy into a recession.Steep interest rates would increase the numberof non-performing loans and could push thebanking sector to collapse. The hardest hitwould be the poor and the middle class, de-stroying the ability of the latter to generate thedomestic savings necessary to reduce Brazil’sdependence on foreign capital. A severeeconomic downturn in Brazil is a real possibil-ity, well within 25 years.

Extended negative GDP growth in LatinAmerica’s largest economy also would haveregion-wide repercussions. Lack of investorconfidence in Brazil would likely result in lessinvestment for all Latin American countries asdomestic and foreign investment seeks saferhavens. This could result in a region-wide re-cession, which in turn could affect Americancommercial ventures in Latin America andreduce U.S. exports to the region.

In sum, Brazil’s economic well-beingremains a key question mark over LatinAmerica’s future, and would affect U.S.economic well-being, too. If the country is ableto perform to its potential, it can help drive theregion toward a more prosperous future. If theBrazilian economy falters, the entire regionwill suffer the consequences.

Mexico has made many economic andpolitical strides over the past two

decades. It has replaced its import substitutionindustrialization strategy with free marketoriented policies, culminating with its acces-sion to NAFTA in 1994. Additionally, its

189 Allen Hammon, Which World? Scenarios for the 21st

Century (Washington, DC: Island Press, 1998), p. 131.190 According to World Bank figures, Brazil’s current account

deficit in 1996 was $24.3 billion before official capital

transfers.




political system has gradually liberalized,becoming more pluralistic and competitive.Both of these developments have madeMexico’s economy more robust, as demonstrat-ed by its successful weathering of the recentAsian and Russian financial crises.

Nevertheless, Mexico remains vulnerableon several fronts. The economy is not solid. Itwill take years to develop a well-regulatedbanking sector, as a result of the carelesslending that preceded the 1995 debt crisis. LikeBrazil, Mexico’s financial well-being is alsohighly dependent on external capital.Furthermore, its fiscal stability is overly depen-dent on the world oil market. As a result, anumber of internal weaknesses and externalshocks could cause severe economic difficultyfor Mexico over the next 25 years.

Mexico could also face acute political in-stability, either through an over-centralizationor a decentralization of power. For the past 70years, power has been centralized within thepresidency under the control of the PRI(Partido Revolucinario Institucional). In the1990s, Mexico moved toward a multipartydemocracy, with opposition parties winning anumber of state governorships and control ofthe lower house of the national legislature. Butthe PRI has not relinquished the Presidencysince it took power in 1929. While some otherparty might win a presidential election, theruling party is still strong and, faced with poli-tical defeat, it could execute an internalcoup—an autogolpe—to keep itself in power.That may have already happened once: manyMexicans believe that Carlos Salinas stole the1988 presidential election from CuauhtémocCárdenas.

If the PRI were to hijack a future nationalelection, the sizeable and well organized oppo-sition that has developed in recent years could

mount widespread and effective protests. Thatcould seriously strain U.S.-Mexican politicaland economic relations. If the cycle of protestand repression were to get out of hand, it couldsend many more Mexicans across theirnorthern border than are liable to come anyway.

On the other hand, and probably just aslikely if not more so, democratization couldcontinue on its current path, with more powerdevolving from the executive to other federalbranches and the states. Given Mexico’s het-erogeneous character, such a devolution couldeventually result in the country’s break-up.State governors might take on greater responsi-bilities for providing public services anddomestic security. While not very likely,Mexico might even split into northern andsouthern parts. Today, the income generation ofthe northern border states largely subsidizes thepoorer southern states. If the northern statesgained more control over their tax dollars, it ispossible that they would be less interested inshouldering the economic burden of theirsouthern brethren.

Another closely related realm of poten-tial instability is social in nature.

Mexico has one of the highest measures ofincome inequality in Latin America and hasalready faced a number of uprisings in thelargely rural southern states of Chiapas,Oaxaca, and Guerrero over poor standards ofliving, lack of job opportunities, and govern-ment disinterest in the well-being of peasantsand indigenous peoples. Urban unrest is also apossibility as more people move to the citiesand frustrations mount because their rising ex-pectations cannot be met. The combination of arestive rural and urban population that per-ceives the federal government as failing to meetits economic needs or provide sufficiently forits personal security, could be a volatile mix.191




Clearly, the United States cares deeplyabout acute instability to its immediate south.Mexico is the second largest trading partner ofthe United States, and economic chaos therewould depress American exports. Profits of thenumerous commercial ventures in Mexicowould shrink. Economic or political instabilityin Mexico would increase pressures for moremigration to the United States and evokeAmerican resistance in many forms. Moreover,

lack of political control and economic hardshipwould also encourage the drug trade to flourish,along with other criminal enterprises, andwould certainly infest the U.S.-Mexican borderregion with crime and violence.

Political, economic, and social instabilityin Mexico would arguably be the most seriousnational security threat to the United States thatcould emanate from Latin America. GivenMexico’s size, such a debilitated environmentwould be difficult to contain and could evenraise the specter of a U.S. military interven-tion in tandem with the Organization of

American States. But such an extreme contin-gency is very unlikely over the next 25 years.

Finally the role of the United States willbe important to how this region

develops in the future. Latin America will notbe a major strategic-military concern, but thepolitical and economic future of the region willmatter a great deal. The United States will careas to whether free trade and democratic institu-

tions survive. It will also wish to avoid anymajor polarization between the northern andsouthern parts of the hemisphere.

There are several ways free trade could bethreatened. If global economic integrationcomes unstuck and a prolonged economicmeltdown occurs, Latin American leaders

191 The number of crimes reported to the police grew 36

percent from 1994 to 1995 and 14 percent more in 1996,

but most crimes in Mexico go unreported. See “A Stain

Spreads Across Latin America,” Los Angeles Times, April

25, 1999.

U.S. Trade with NAFTA Increasing

Source: U.S. Census Bureau, U.S. Trade in Goods and Services - Annual Revision for 1991-1998, May 1999.

Note: NAFTA went into effect Jan. 1, 1994.




might look inward for economic growth,adopting protectionist economic policies toshield their countries from external threats. Aprotectionist regional policy could also emergeas a result of growing popular resentment toexternal prescriptions for the region’s ailing e-conomies. Many of the IMF and World Bankpolicies include politically unpopular measuressuch as cutting subsidies and improving taxcollection practices. Or South Americanleaders could become increasingly disenchant-ed with U.S. trade policy, and shift their tradinglinks to Europe. Currently, over 27 percent ofMercosur’s exports go to Europe. Imports fromthe European Union to Mercosur increased 104percent between 1993 and 1996—32 percentmore than imports from the United States.192

There is also a broad political route totrouble. Inward looking economic policies couldemerge as a result of weak economic perfor-mance over a prolonged period of time,bolstering the notion that free market tradepolicies hinder rather than promote incomeequality and poverty reduction. At a popular levelthis view could generate support for political can-didates who adopt less globalist and moreprotectionist platforms.193

Resentment against neoliberal policiescould be channeled through the political systemand outside of it. Radical political parties mightdevelop more support and polarize a politicallandscape generally dominated by two eliteparties. These radical parties might also havemilitary arms much akin to IRA or the ETA,which have committed terrorist attacks toattract public attention. Popular anger towardthe state could also be channeled outside thepolitical spectrum through armed guerrillamovements. Increasing financial and popularsupport for new and existing guerrilla groupscould foment violent attacks against the stateand civilians alike.

Such instability would create an opportuni-ty for nationalist political leaders. Suchaspirants will likely be populist, guaranteeingtangible results, while also appealing to LatinAmerica’s traditional sense of personal politics.Even today, populism has shown a resurgencein Venezuela, where Hugo Chavez utilizes ref-erendums, social promises, and a packedconstituent assembly to govern.

The election of a nationalist LatinAmerican president under such circumstancescould have an important economic side effect.Whether for domestic political reasons orsimply a desire to change economic directions,populist leaders might pursue protectionisteconomic policies to shield themselves fromU.S. and world influence. That could signifi-cantly reduce trade between Latin America andthe United States, Europe, and Japan.

Relations between the United States and aprotectionist Latin American country (or sub-region) could become particularly strained.Latin American leaders would reduce ties to theUnited States and other developed countries toplacate domestic political opinion. The lack ofeconomic cooperation could also hamper coop-eration on immigration, drugs, pollution, andother transnational issues.

The most likely area where such negativedevelopments could occur is the Andeanregion. Today the Andes is one of the mosteconomically depressed areas of South

192 Sam Laird, “Mercosur: Objectives and Achievements,”

World Trade Organization paper, May 23, 1997.193 In brief, populism has led to economic failure in the past

for Latin America mainly because the state did not have

enough revenue to support service-driven political

policies. A single country could not implement these sorts

of policies if capital inflow dried up and loans were not

available. It is conceivable, however, that this capital could

come from the growing regional trade now taking place.




America. If poverty and social inequalitycontinue at the current pace, by 2025 theAndean region could be wracked with violence,corruption, and instability. In the last 40 years,guerrilla movements have been prominent inthe region, including an insurgency in Bolivialed by Che Guevara, and, more recently, the ac-tivities of the Sendero Luminoso and TupacAmaru in Peru.

Given the rough terrain and poorly guardedfrontiers in the region as a whole, there are fewconstraints on guerrilla movement back andforth across state borders. That raises the possi-bility of non-state actors re-aggravatinghistorical grievances and sparking a broaderregional conflict. The fact that armed guerrillasin Colombia have already violated the borderwith Panama and Venezuela illustrates theproblem. Additionally, it is possible for apopulist government, elected through democra-tic means, to evolve into an authoritarianregime as a result of societal stresses and ageneral loss of confidence in democracy.

An uncooperative relationship between theUnited States and Latin America could arisenot only from poor economic performance, butalso due to resentment stemming from U.S. po-litical and economic policies in the region.Leaders in Peru, Bolivia, Ecuador, Colombia,or the Caribbean could become increasinglyfrustrated with U.S. drug policies. Combinedwith popular nationalist sentiment, this frustra-tion could produce a widespread anti-Americanattitude. Countries like Chile could also exudean anti-American position due to its mountingfrustration with U.S. economic policies. Apowerful South American economic pact mighteven put its principal members in a position todemand political and economic concessionsfrom the United States, and to threaten to takeits business to the EU if Washington demurs.

Finally, a few words about the Caribbeanand Canada.

The states of the Caribbean are, for themost part, very different culturally from LatinAmerica. Except for Cuba and the DominicanRepublic, Spanish is not the language of mostof its lands. Their economies are small, as is thesize of most countries’ land masses, and theirresources are generally scant—save for oil inTrinidad. Democracy is widespread but oftenfragile, and population and social pressures aremany and growing. Also, the Caribbean isunique in that a few of its islands are stillruled as colonies of France, Great Britain,and the Netherlands.194

For the most part, this nearby area ofthe world poses non-traditional securityproblems for the United States. One concernsillegal immigration and another the role of theislands in the drug trade and money laundering.If there is reason to worry about criminalityoverwhelming relatively large states such asRussia or Nigeria, there is even more reason toworry about the Caribbean, where governmentcapacities are small relative to the syndicatesthey sometimes face. There is even a questionof fundamental viability for many of thesmaller island states in the region, and this isreflected in the growing number of shiprider a-greements that have been negotiated with theUnited States. Such agreements allow local of-ficials to board U.S. Navy or Coast Guardvessels operating in their own territorial watersagainst smugglers and thieves—to deputize

194 Specifically, French possessions in the Western hemisphere

are Martinique, Guadaloupe (and, much farther north, St.

Pierre y Miquelon); the Dutch include Aruba and the

Dutch Antilles (Curaçao, Bonaire, Saba, St. Eustatius, and

part of St. Martin); and the British possessions are the

Falklands, Montserrat, the Cayman Islands, Anguilla,

Bermuda, the Turks and Caicos Island, and the British

Virgin Islands.




them, so to speak.195 There are also gangs fromvarious islands residing in the United Stateswho are used by friends at home to smugglegoods and launder money.

Haiti is a special problem. Its condition ispoor in almost every regard, and that is despitemarked improvement since the end of theDuvalier era. Political violence and related im-migration pressures could recur at any time,and the likelihood that they will sometime inthe next quarter century is high.

Cuba is a special problem, too, but in a dif-ferent way. Haiti and Cuba have in common thefact that their difficulties get translated into U.S.domestic, not foreign, politics thanks to sizeableémigré communities resident in the UnitedStates. What happens in Cuba over the next 25years will not have dramatic national securityimplications for the United States. There will beno foreign military bases on Cuban soil, nofearsome Cuban weapons program, no export ofvenomous anti-Americanism from a revived,post-Fidel communist vanguard. But thecountry is a political lightning rod, not justbecause of pressures from the Cuban-Americancommunity, but also because of Cuba’s emo-tional Cold War legacy.

Various scenarios are possible. RaúlCastro, Fidel’s brother and leader of Cuba’sarmed forces, is Castro’s heir apparent. Hewould likely rule indirectly by selecting apliable civilian to run Cuba’s daily affairs,while he maintained control over the thecountry’s military and internal security forcesas well as the levers of economic power. Cuba’satavistic Communism would probably evolveinto some form of “institutionalized commu-nism” without ideological pretense or energy. Itwould become a one-party authoritarian state,not unlike China and Vietnam, that would be

prepared to expand further its economic andpolitical ties with the international community.

But Raúl may not succeed Fidel, and in thiscase, post-Castro Cuba could fall into a bitterpower struggle between traditionalists and itswould-be reformers. Although the length and in-tensity of such a struggle is uncertain, it wouldengender short-term, and possibly longer-term,instability. Organized criminal groups could takeadvantage of such instability to establish them-selves on the island, using Cuba as a base forimmigrant and narcotic smuggling to the UnitedStates. If the reformers were to come out on top,the prospects for democratic politics in Cubawould rise, even in a struggle fought ostensiblyover the proper path to socialism. But such astruggle could lead to economic collapse, socialviolence, and massive, panic-driven attempts toemigrate on the part of tens of thousands ofpeople. The Florida Straits would once againbecome a mixed scene of misery and heroism,and the United States could be forced once againto take action.

A third post-Castro Cuba envisions Cuba’sexpatriate population in the United Statestaking control of the island. But this would nothappen easily, and it is on balance unlikely. TheCuban population of the United States that hasits eyes and heart set on ruling Cuba after Fidelcame largely from the pre-Communist elite.While most Cubans are less than thrilled withCommunism, they do not remember the Batistadictatorship and those associated with it withfondness either. They consider those who left tobe something less than fully patriotic, battle-scarred, and worthy of political power. To theextent that the expatriot community appearspowerful in the context of a post-Castro Cuba,

195 See Elliott Abrams, “The Shiprider Solution: Policing theCaribbean,” The National Interest, No. 43 (Spring 1996).




it may even convince various factions in Cubato avoid exploitable divisions.

As for the rest of the region—the islands—it is possible that state failure and colonialfatigue in London, Amsterdam, and even Pariswill enjoin the United States to take a moreactive security role in the region than it doesnow. Even the U.S. acquisition of territory aswell as responsibility by mutual consentcannot be ruled out. Since the Danish VirginIslands were sold to the United States in 1918,the political status quo of the region has notchanged from a strictly U.S. perspective.While not very likely, in the next 25 years itjust might.

The same might even be the case withregard to Canada. It is alarming to

contemplate, but within 25 years the Canadianconfederation might collapse. It is not only theissue of Quebec that might cause such a thing,although it is the most likely catalyst.196

Despite different political traditions, thewestern provinces of Canada are already moreclosely attached, economically and even cul-turally, to their cousins in the western UnitedStates than they are to Canada’s easternprovinces. Vancouver is pulled in many waysmore toward Seattle, as well as to Tokyo andHong Kong, than it is toward Ottawa.

Canada’s breakup, which even manyCanadians concede is possible, could send strongshock waves through the United States. After all,there is no society in the world more like our ownthan Canada’s, and its dissolution may addfissures to American solidarity. Already western-ers of both countries speak about the “imperialcapitals” in Washington and Ottawa. Whileunlikely, it is at least possible that BritishColumbia, Alberta, and Saskatchewan mightbecome part of the United States within 25years.197 Perhaps as likely, if not more so, the

poorer eastern maritime provinces of Canada—Nova Scotia, New Brunswick, and PrinceEdward Island—might seek such a course out ofa mix of desperation and self-interest. And unlikesome small Caribbean islands, which have fewsignificant natural resources, Canada has largefossil fuel deposits, rich minerals, fisheries andtimber preserves, and, perhaps most valuable ofall, about 20 percent of the world’s fresh waterresources. Given the stakes involved for theUnited States, it is a matter worthy of someserious thought.

It is, of course, very unlikely that any U.S.government would seek such an outcome. It isa long way from 1812, and if the United Stateshas a best friend, and a partner in spirit as wellas basic interest, it is Canada. Canada is mostlikely to cohere and to prosper, and because itdoes some things differently from the UnitedStates, it may serve as a most helpful mirrorfor us in many policy areas. The likelihood thatthe United States and Canada would furthercoordinate foreign and security policy overglobal humanitarian and environmental issuesof mutual interest is also very high.

197 Perhaps Manitoba, the Yukon, and the Northwest

Territories, too. The combined population of British

Columbia, Alberta, Saskatchewan, Manitoba, the Yukon,

and the Northwest Territories is about 9.3 million.

196 Technically, this is already the case, for Quebec never

signed the 1982 constitution.




III. The U.S. Domestic Future

The United States will likely remain themost powerful country in the internation-

al arena over the next quarter century, and it will bebound to the rest of the world through a web of po-litical, cultural, technological, and economic ties.Hence, the future U.S. domestic environment willineluctably influence the world around it, just asevents outside U.S. borders will affect the environ-ment here.

America, then, will be in and of the world, butwhich America? Who will we be? What will wewant as a nation, for ourselves and for others? Willwe have the means, the social cohesion, and therequisite leadership to achieve our aims?

Analyzing the impact of future domestic con-ditions on U.S. national security is a formidableundertaking. While some of the domestic determi-nants of national security are obvious—economiccapacity, for example—others are more subtle anddifficult to measure. A lack of social cohesion, forexample, would affect national morale and, ulti-mately, the economic performance of the country,as well. Changes in deeper values and attitudescould affect the willingness of Americans to sacri-fice for national goals. As always, too, publicopinion will play a role, and here the evolution ofthe American media culture in shaping thatopinion is obviously relevant.

This latter issue, which amounts to forecastingthe popular will at any given moment some yearshence, is notoriously difficult to handle. Whilevalues and attitudes change only slowly, publicopinion over particular issues or courses of actioncan oscillate abruptly in response to unforeseenevents. If history and experience are any guide, itsurely will oscillate, because in the future no lessthan in the past, American society will experienceany number of shocks and surprises.

The sensible place to begin a forecast of theAmerican domestic future is by examining the de-mographic, social, technological, economic, andpolitical trends emerging today. What follows issuch an examination, tempered by an awareness ofpossible discontinuities. That examination isfollowed, in turn, by a brief discussion highlight-ing the key trends affecting U.S. national security.

Social Trends

Some aspects of social change are morepredictable than others, and the elemental

point of departure for examining social reality isthus usually the demographic one. This is becausepeople form political communities, and theirnumbers and nature are crucial to any forecastabout those communities.

The central datum about the American popu-lation is that it is expanding and will continue togrow over each of the next 25 years. This mayseem a banal statement, but it is not, for most otheradvanced societies will experience stable or di-minishing populations during the same period.Today, the American population numbers about273 million; by 2025 it should grow to some 335million.198

The growth of the American population hasimportant economic implications, one of whichconcerns the aging of the nation. Between 1990and 1998 the median age of Americans rose 10percent to a record high of 35.2.199 By 2025, thenational median age will rise another 10 percent iflife spans follow recent trends—though medicaladvances could raise the median even higher.200

198 U.S. Bureau of the Census, International Data Base at

www.census.gov/ipc/www/idbprint.html.199 “Americans’ Median Age Is 35.2, the Highest Ever,” New

York Times, June 15, 1999.200 “Global Aging in the 21st Century,” U.S. Bureau of the

Census (Washington, DC: U.S. Department of Commerce,

December 1996).




While the United States will be the last of thedeveloped nations to experience the aging ofits population, by 2025 nearly 18 percent ofall Americans will be over the age of 65.201

As a result, the ratio of those in the work-force for every person receiving retirementbenefits will drop to about 2.3 to 1 from 3.9to 1 in 1995.202

Other trends will offset some of the effectsand costs of an aging America, however. One is

immigration, but the extent to which it will doso is a function of yet to be determined immi-gration policies. Another is a likely shift in theretirement age as more Americans remainhealthy and active for longer periods. There isalso the venerable American tradition of privateplans to supplement the retirement income ofmiddle- and upper-income families.203 Butproblems will persist. Health care costs willcontinue to increase on account of both anaging population and the advent of new treat-ments made possible by scientific discoveriesand technological innovations.204 In 2010, thefirst of the baby-boom generation will become

eligible for Medicare, and by 2030 Medicarewill be the primary insurer for one out of fourAmericans.205 As the country ages, costs forhealth care will constitute an increasing fiscalburden and will stand in competition with otherspending, including spending for defense andforeign policy.

201 Peter G. Peterson, Gray Dawn: How the Coming Age Wave

Will Transform America—and the World (New York:

Random House, 1999), p. 29.202 Marilyn Moon, "Medicare, Medicaid, and the Health Care

System," Life in an Older America, Robert N. Butler,

Lawrence K. Grossman, and Mia R. Oberlink, eds. (New

York: The Century Foundation Press, 1999), p. 42.203 In 1970 the foreign born percentage of the U.S. population

stood at 4.7 percent; by 1997, it was 7.9 percent.

Campbell J. Gibson and Emily Lennon, Historical Census

Statistics on the Foreign-Born Population of the United

States: 1850-1990 (Washington, DC: U.S. Bureau of the

Census, February 1999).204 Peterson, Gray Dawn.205 Moon, “Medicare, Medicaid, and the Health Care System,”

p. 41.

The Aging of the U.S. Population

Source: Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050 (Washington, DC:U.S. Bureau of the Census, 1996), p. 12.




The racial and ethnic composition ofAmerica will also change. Minority

racial and ethnic groups will constitute a largerproportion of the population as the non-Hispanic white category falls from 72 percentto 62 percent of the total population in 2025.206

Hispanics will become the largest minoritygroup by 2025, increasing their percentage ofthe population from around 11 percent tonearly 18 percent. The Asian/Pacific Islander

population will increase from almost 4 percentto more than 6 percent. The black percentage ofthe population is projected to remain fairlystable, rising from about 12 to 13 percent. Atthe same time, intermarriage is also changingthe country’s racial mix. Demographic datasuggest considerable intermarriage betweenHispanics and non-Hispanic whites andbetween Asians and non-Hispanic whites.Intermarriage rates are much lower betweenblacks and other groups. Taken together, thesedata suggest a more racially mixed Americansociety by 2025.

What these data do not tell us is whethersuch changes will be accompanied by greateror less social harmony. Objective realities withregard to relations between racial and ethnicgroups do not always match the perceptions ofthose groups. For example, while nearly everysocio-economic and attitudinal indicator showsthe considerable progress made by blackAmericans over the past four decades, pollsshow that large numbers of blacks believe that

their relative situation is worse than it used tobe.207 Perceptions matter, and they have poten-tial national security implications. Those whofeel alienated from others in their society are, onbalance, less likely to sacrifice for the commonwelfare.

206 All data in this paragraph are drawn from Population

Projections of the United States by Age, Sex, Race, and

Hispanic Origin: 1995 to 2050 (Washington, DC: U.S.

Bureau of the Census, 1996).207 Analyzed in Orlando Patternson, The Paradox of

Integration (Washington, DC: Civitas, 1997).

.

Increasing U.S. Ethnic Diversity

Source: Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050 (Washington, DC:U.S. Bureau of the Census, 1996), p. 12.




Education, too, will be a critical factor inAmerican social life, for it will affect

the quality of leadership in all spheres as wellas the technological competitiveness ofAmerican society. Here the trends are mixed.The United States ranks first among the indus-trialized countries in the size, scope, andexcellence of its undergraduate and graduate e-ducation. Hundreds of thousands of foreignstudents are enrolled in American universities,making U.S. schools the most sought after inthe world. Indeed, large numbers of Ph.D.students in natural sciences and engineeringprograms are foreign born—in excess of 30percent in mathematics, computer science,chemistry, physics, chemical engineering, elec-trical engineering, and mechanicalengineering.208 Many graduates stay in theUnited States after completing their studies.These general trends are projected to continueover the next 25 years.

At the same time, below the universitylevel U.S. education compares poorly with thatin other countries in several key aspects. Inmathematics and science, for example, U.S.high school seniors have scored well below theinternational average, with students from theNetherlands, Sweden, Iceland, France, Canada,Israel, Slovenia, Germany, Russia, and theCzech Republic regularly outperformingAmericans.209 The poor U.S. performance inhigh school math and science may jeopardizeAmerica’s future economic and technologicalcompetitiveness. More worrisome, the percent-age of American students who take collegedegrees in the hard sciences, mathematics, andengineering is declining.210

Significant problems also remain withadult illiteracy, with future effects that are hardto quantify but that could be severe. Roughlyone-fifth of American adults have only rudi-mentary reading and writing skills, and 4

percent are functionally illiterate. Unlessprogress is made in this regard, the transforma-tive potential of the information revolution willbe proportionately limited.211

American society is experiencing somepositive social trends, among them sharplyfalling crime rates and strong job creation thathas permeated all social strata. But otherproblems loom. The number of children beingreared without both parents has grownmarkedly in recent years, tracking with both in-creased divorce rates and out-of-wedlockbirths. In 1970, 14.8 percent of children did notlive with both parents; today, this figure standsat 42 percent—nearly a tripling in less than 30years.212 This trend is especially pronouncedin some minority communities, where as manyas 80 percent of all children will spend a sig-nificant part of their childhood with a singleparent.213

This trend is worrisome because numerousstudies have shown that children from singleparent households are far more likely to bepoor, inadequately educated, and involved incriminal activities than those that grow up withboth parents. Some 45 percent of childrenliving with a single parent live in povertycompared to less than 10 percent in two-parent

208 National Science Foundation, National Science Board,

Science and Engineering Indicators, 1998, NSB-98-1,

1998, pp. 3-19.209 National Center for Education Statistics, “The Condition of

Education 1999 (NCES1999-022),” (Washington, DC:

U.S. Department of Education, 1999), p. 6.210 Ibid., p. 122211 See National Center for Education Statistics, 1992 National

Adult Literacy Survey (Washington, DC: U.S. Department

of Education, 1992).212 Current Population Reports P20-496 (Washington, DC:

U.S. Bureau of the Census, 1996).213 Noted in Michael Kelly, “A National Calamity,”

Washington Post, June 16, 1999, p. A37.




households.214 Such children are more likely tosuffer malnutrition and lack adequate medicaltreatment. Children from single-parent house-holds also do less well academically, are morelikely to drop out of high school, suffer from in-creased levels of depression, stress, anxiety,and aggression, and are far more likely to beimprisoned.215

The sharp spike in the numbers of single-parented children over the past 30 years suggeststhat as these children become adults betweennow and 2025, the level of social dysfunctionmay rise proportionately. Such social problemsaffect the nation’s overall health and socialcohesion and therefore will capture the energies,attention, and financial resources of variouslevels of government, the national security com-munity included.

Technology Trends

American preeminence in science andtechnology will continue into the

coming century. At the same time, global trendsin technology will deeply influence Americansociety.

With over 60 percent of the world’s Internetusers located in North America, the United Statesplays a central role in the global network.216 Nocountry is as widely “wired” as America, or as de-pendent on information systems for basiceconomic and social functions. Many moreAmerican households and businesses will be con-nected in the future as extensive high-capacityfiber optic lines are laid across the continent andalong our coasts.217 Increased amounts of infor-mation will be available at decreasing costs. TheInternet will not only have a major impact on education, research, and business life in America,but it will also alter patterns of social interactionwithin the United States, and those betweenAmericans and the world.

American society is likely to remain in theforefront of the information revolution. Most ofthe seminal scientific research and technologicalinnovation is done in the United States, andAmerican society and the economy are veryreceptive to new innovations. Nevertheless,America’s relative lead in this field will likelydecrease as other societies adapt to the informa-tion age. Already, some other countries haveshown a special talent and affinity for a “wired”world, among them Finland, Australia, Israel,Japan, and Taiwan. But the spread of informationculture around the world will not harm the UnitedStates; more likely its leading role will helpspread its influence.

Biotechnology will redefine the meaning of“old,” but it will do more than extend life spansand revolutionize medicine. As noted above, it israpidly developing the potential to change humannature itself in fundamental ways, as well as sig-nificantly modify many species of plants andanimals.218 Biotechnology is keeping Americaon the innovative edge of the agricultural,medical, and chemical industries, which willmaintain the United States as a dominant actor inthese sectors for at least the next quarter century.214 Eileen Poe-Yamagata, “Children in Single-Parent Homes,

1970-1996, adapted from the 1996 Green Book

(Washington, DC: U.S. Congress, 1998); and Current

Population Reports P20-496 (Washington, DC: U.S.

Bureau of the Census, 1996).215 Studies noted in Jason Fields and Kristin Smith, “Poverty,

Family Structure, and Child Well-Being Indicators From

the SIPP” (Washington, DC: U.S. Bureau of the Census,

1998).216 See “Internet Development” in International

Telecommunications Union, Challenges to the Network

(Geneva: ITU, 1997), chapter 2.217 See Thomas P.M. Barnett and Pat A. Pentland, “Digital

Weave: Future Trends in Navigation, Telecommunications,

and Computing,” CAB 98-52, Center for Naval Analyses,

June 1998.218 See the special feature issue of Scientific American, “Your

Bionic Future,” Fall 1999.




However, it will also raise basic and divisiveethical questions such as those involving accessto new and expensive technologies.

Another divisive issue will concern the in-creasingly blurred line between medicalnecessity and “cosmetic” or elective remedialprocedures. It will be particularly difficult forexperts in medical ethics, insurance companyexecutives, doctors, and government administra-tors—separately and especially together—todecide how to allocate limited medical resourcesto a population deeply desirous of securingaccess to new means of longevity.219 The inter-national dimension to this problem may be just astroublesome. How will the United States andcertain other fortunate countries manage the po-litical and diplomatic implications of thewidening gap between life spans in their midstand those in other countries?

Similarly, those countries that are able tofabricate and apply MEMs (micro-electro-mechanical devices) and nanotechnology arelikely to have a significant economic andmilitary edge over those who cannot. Americanscientists and engineers will compete with theirJapanese counterparts to lead the drive tominiaturization through micro-fabrication. Sorevolutionary is the potential for nanotechnolo-gy that it may propel U.S. economic growthrates above the high-mark predictions of mostexperts.

Taken together, these trends in science andtechnology could change America in fundamen-tal ways, from the way we get our food and ournews to how our national culture itself develops.Even the cohesion of the nation—the emotionalbonds that link us to our past and to each other—will not be immune from these trends. If, assuggested earlier, technological trends narrowour public space, eviscerate democracy, andisolate social classes from each other, national

cohesion will suffer. If, on the other hand, thesetrends are guided in such a way as to increase po-litical participation on the local level, bolster theeconomy, and reverse income inequality, thensocial cohesion may grow stronger.

What we can predict with fair assurance isthat America’s overall edge in military andmilitary-related technologies will endure for thenext 25 years. This is directly related to the sizeof U.S. military research and developmentspending, which amounted to $32 billion in1996, nearly 70 percent of military R&D invest-ments worldwide.220 There is no reason to expectdramatic changes in such trends. Moreover, sinceR&D spending in general has shifted away fromgovernment and toward industry—and since theU.S. lead in private sector R&D investment isalso considerable221 —the relative U.S. techno-logical edge may actually grow overthe next quarter century. Still, whether the U.S.government will succeed in applying that edgeintelligently to its military capabilities remains

219 This technology is growing rapidly. Note Nicholas Wade,

“New Study Hints at Way to Prevent Aging,” New York

Times, August 27, 1999.220 Frank Killelea, “International Defense Trends and Threat

Projections: R&D Spending Trends,” briefing at the Johns

Hopkins University Advanced Physics Laboratory,

February 26, 1999.221 According to National Science Foundation and OECD sta-

tistics, all non-governmental spending on science and

technology R&D in the United States (including business,

higher education, and private non-profit investment)

amounted to about $159 billion (in 1990 dollars) in 1997.

By way of comparison, Japan invested in total about $70

billion, Germany invested about $33 billion, France about

$25 billion, the United Kingdom about $20 billion, Italy

about $11 billion, and Canada about $9 billion. In other

words, U.S. non-governmental R&D investment nearly

equaled the total R&D investment of its next six closest

competitors. See National Science Foundation, Science

and Engineering Indicators, 1998, Appendix A, table 4-

42; and “Basic Science and Technology Statistics” at

www.oecd.wash.org.




to be seen. This may depend on developing newways to insure that America’s burgeoningprivate-sector technological assets are properlyinventoried, shared, and utilized for the overallnational good.

Economic Trends

The most dramatic effect of new tech-nology on American society is likely

to be felt through its impact on the economy.A stream of new innovations could spur verystrong economic growth over much, if notall, of the next 25 years.

U.S. gross domestic product (GDP) in1998 exceeded $8.5 trillion.222 As to thefuture, one group of experts predicts 3percent annual growth as the likely upperlimit of American economic expansion overthe next 25 years, which would double thesize of the American economy by 2025. Ifcorrect, this forecast would mean that theGDP would reach at least $16 trillion by2025, creating the possibility of retiring theentire national debt before 2025.223 Othersspeculate that growth could even be higherowing to the revolutionary technological in-novations in our future, and recent studiesshowing the effect of the information revolu-tion in gains in productivity tend to bolstersuch speculation.224

On the other hand, sharply curtailedeconomic performance in the United States isnot impossible. A massive technologicalfailure, the advent of unexpected pandemics,a major war, or consistently bad economicpolicies could all produce much slowergrowth—under 2 percent per annum.Moreover, American growth rates depend atleast to some extent on economic perfor-mance in the rest of the world, a phenomenon

over which we have little control and one thatcannot be predicted with any assurance.

What can be predicted is the growing in-ternationalization of the U.S. economy. U.S.investment will remain a major factor in theglobal economy, and the international shareof the U.S. economy will increase because ofa growing dependence on foreign trade, in-vestment, and foreign ownership of U.S.economic assets. Between 1994 and 1998,foreign direct investment in the United Statesrose from $45 to $189 billion.225 U.S. foreigntrade as a percentage of GNP rose from 11percent in 1970 to 24 percent in 1998.226 Thisupward trajectory will continue so long asglobal economic growth continues to averageat least 2 to 4 percent over the next 25 years.

Despite likely strong economic growth,problems of income distribution within theUnited States could become significant.Trends in income distribution matter becauseperceptions of basic fairness may affectAmerican social cohesion. Americans tradi-tionally feel some ambiguity about extreme

222 U.S. Department of Commerce, Bureau of Economic

Analysis, “National Data Accounts,” August 26, 1999.223 President Clinton first raised this possibility publicly on

June 28, 1999. See David E. Sanger, “Clinton Sees the

Possibility of Zero U.S. Debt by 2015,” New York Times,

June 29, 1999.224 See Lohr, “Computer Age Gains Respect of Economists.”225 Department of Commerce, Bureau of Economic Analysis,

“International Investment Data, Foreign Direct Investment

in the United States: Capital Flows,” at www.

bea.gov/bea/di1.htm.226 “U.S. Aggregate Foreign Trade Data, GDP and U.S.

International Trade in Goods and Services, 1987-98,” U.S.

Department of Commerce, Bureau of Economic Analysis,

at www. ita.doc.gov/industry/otea/usfth/tabcon.html.226

“U.S. Aggregate Foreign Trade Data, GDP and U.S.

International Trade in Goods and Services, 1987-98,” U.S.

Department of Commerce, Bureau of Economic Analysis,

at www. ita.doc.gov/industry/otea/usfth/tabcon.html.




disparities in income: they resent the rich andlong to emulate them at the same time. Aslong as the gains of the wealthy are perceivedto be made fairly, on the basis of equality ofopportunity, their achievements have beenrespected by most in the past. They alsotend to be tolerated more easily if thefortunes of those lower down on the socio-economic ladder are also improving. Thereis no reason to suspect that these basic atti-tudes will change in the future.Nevertheless, wider income disparitiesincrease pressures for social servicespending, potentially limiting the resourcesavailable for other domestic and militaryprograms. What does the future look like inthis regard?

Between 1968 and 1994, the difference inincome levels between the wealthiest and thepoorest Americans grew 22.4 percent.227 In1947, the top 5 percent of American familiesowned 15.5 percent of the national income; by1967 that figure reached 16.4 percent, and by1994 20.1 percent. Put another way, the datashow the inflation-adjusted income of thebottom fifth of working families in Americadropped by 21 percent between 1947 and 1995,while the income of the top fifth rose by 30percent.228 As important, real wages for asizable percentage of the American populationwere stagnant for the better part of the last 15years. Recent data suggest that both of thesetrends may have been halted and evenreversed.229 But these new trend lines are toonew to project them confidently into the future,and there is reason to doubt their continuation.

Global economic trends, in particular, maycontribute to a worsening of income inequalityin the United States. First, the continuedmovement of the workforce away fromphysical labor related to traditional industryand toward information-age jobs in the service

sector could leave many Americans in thelurch.230 Not everyone is equally adept at acquiring the skills that are most important inknowledge-based economies, and not everyonewill have access to quality education. Second,the internationalization of labor sources and in-vestment opportunities could direct new joband wage growth overseas, thus contributing tothe sharpening of class divisions and incomedisparities in the United States.

Beyond that, emerging domestic invest-ment trends influenced largely byopportunities in new technologies appear tohave a mixed impact on income inequality. Onthe one hand, new business start-ups and thejob creation that goes with them will probablyremain strong, contributing to continuing, or

227 This metric defines the average national income and looks

at the distribution of people making more than the

average, relative to those making less. Establishing any

year arbitrarily as a base, the index counts the movement

of income distribution from one side of the mean to the

other.228 Daniel H. Weinberg, Current Population Reports: A Brief

Look at Postwar U.S. Income Inequality (Washington, DC:

U.S. Census Bureau, June 1996).229 Noted in Tyson, “Wages and Panic Buttons.”230 As of 1996, about 2.8 percent of Americans were engaged

in agriculture, fisheries, and forestry. About 23.8 percent

were engaged in manufacturing, and the rest, some 73.3

percent, were engaged in services (including public

services at the federal, state, and local level). See OECD,

Labor Force Statistics, 1976-1996 (Paris: OECD, 1997).

The Bureau of Labor Statistics projects that by 2006 high-

tech employment will be nearly 16 percent of total

employment. Employment generated by the purchases of

goods and services by high-tech industries for use as

inputs in their production process will grow faster than

high-tech employment, increasing by 54 percent between

1996-2006. See, Daniel Hecker, “High-technology em-

ployment: a broader view,” Monthly Labor Review, June

1999, pp. 18-28, and especially U.S. Department of

Commerce, Falling Through the Net: Defining the Digital

Divide (Washington, DC: USGPD, 1999).




increasing, social mobility.231 This could leadto a greater equalization of income over timewithin the top half to two-thirds of the U.S.labor force. But that might not translate intosignificant numbers of new jobs at lowereconomic echelons since much new technolo-gy is aimed at minimizing low-end humanparticipation in commercial processes. Hence,an American economic underclass will notdisappear and may even grow. It is too early tosay whether such trends will increase unrest orsocial fragmentation in American communi-ties, but the possibility will doubtlesscommand the attention of America’s leader-ship in the years ahead.

Values, Attitudes, and National Will

The cohesiveness of a society, its will,and its civic consciousness form the bedrockof national power. The United States isunusual among nations in that its nationalidentity hinges more on shared ideals ratherthan common ethnicity. But while the founda-tion of U.S. national power might appear lesssecure than in more ethnically homogeneoussocieties, experience does not bear out thatprognosis. For all our disagreements and divi-sions, Americans have demonstratedhistorically that they possess a strong collec-tive identity and that they rise to challengeswhen necessary. The key question for thefuture is this: When we are next challenged,perhaps in a manner beyond our historical ex-perience and powers of anticipation, will oursocial cohesion endure or will it erode? Thereis considerable disagreement over the answer.

Some observers are quite worried, basedon the view that American society hasbecome dangerously fragmented alongethnic, racial, and sectarian lines. In this view,the growing cultural emphasis on the multi-

cultural facets of American society has ledover time to a growing inclination for manyAmericans to think of themselves as membersof social subgroups. A shift toward celebrat-ing differences, rather than commonalities,among Americans has changed the balancebetween national and sub-group identities.Paradoxically, as America has become lessstrictly “color” conscious over the past 40years, it may have become more ethnicallyconscious. The unrestrained assertion of dif-ferences could push a benign impulse towardpluralism into fragmentation, underminingthe sense of a shared national purpose.232

The effect on foreign policy, some argue, isalready evident. As James Schlesinger has putit: “Rather than reflecting a hammered-outvision of the national interest, America’spresent policy consists largely of the staplingtogether of the objectives of individual con-stituencies. . . .The new intellectual fashionsweaken and, in a sense, delegitimize thesearch for [a] common purpose. They abet thefragmentation of society.”233

There is concern, too, about changes in theattitudes of younger generations. The strength-ening of group consciousness has not expungedindividualism as a principal American trait, butthe members of Generation X—those bornbetween 1965 and 1978—seem to exhibit anindividualism of a different sort. According tosome observers, it is a more cynical individual-

231 Entrepreneurship in the United States far outpaces that in

most other societies. In the case of Europe, American

business start-ups per capita overshadow those in EU

countries by a factor of more than 4 to 1. See 1999 Global

Entrepreneurship Monitor, summarized in Julia Flynn,

“Gap Exists Between Entrepreneurship in Europe, North

America, Study Shows,” Wall Street Journal, July 1, 1999.232 See Arthur Schlesinger, Jr., The Disuniting of America

(New York: W.W. Norton, 1992).233 James Schlesinger, “Fragmentation and Hubris,” The

National Interest, No. 49 (Fall 1997), pp. 4, 6.




ism aimed at shielding the young from whatthey often perceive to be the excessive hypeand hypocrisy of contemporary Americanculture.234 Such “ragged” as opposed to“rugged” individualism may not be conduciveto a healthy engagement in civil society. The1998 Final Report of the National Commissionon Civic Renewal, co-chaired by William J.Bennett and Sam Nunn, noted a significantdecline in the nation’s willingness to participatein civic activities over the last 25 years, partic-ularly among the young, and warned that “weare in danger of becoming a nation of specta-tors.”235 Harvard political scientist RobertPutnam, too, has argued that civic engagementis diminishing. He notes that voter participationin national elections has declined by 25 percentover the last 30 years, and that 75 percent ofAmericans said in 1992 that they had little orno trust in the federal government—an increaseof about 45 percent since the mid-1960s.236

That fact that political participation at local andstate levels may be increasing, though goodnews in some important respects, does not nec-essarily augur well for the coherence of policyat the national level.237

In addition, some fear that the propensity ofthe average American to identify with thiscountry and its government may be waning.Several reasons are cited, one being that asAmerica’s economic life becomes increasinglyinternationalized, political loyalties will followthe source of paychecks. Others point to thediminution of overt acts of national identifica-tion, such as school children saying the pledgeof allegiance, voting, attending a July 4th cele-bration, the traditional observance of MemorialDay, the willingness to serve on a jury, andsaying a prayer for the country in one’s house ofworship. Relatedly, others fear that public edu-cation in the United States does not emphasizethe teaching of civics as it once did, and still

others that without any explicit ideologicalchallenge to American values, as there wasduring the Cold War, there is less reason tolearn and to cherish those values. Others notethat as the heroic generation of World War IIpasses from the scene, ever fewer Americanswill have models of those who served inuniform in an unambiguously “good war.” AsStephen Ambrose has written: “My greatestfear about today’s young people is that theywill grow to adulthood without the sense of acommon past or a common experience.”238

Finally, many of those worried about thefuture coherence of American society find littleto comfort them in the American foreign policytradition itself. The United States has little ex-perience of an active foreign policy strategyoutside this hemisphere except under condi-tions of national emergency or ideologicalmobilization. We have had the luxury of beingable to protect our security through strategiesthat were primarily responsive to foreignthreats. In the absence of such a threat, we haveexperienced mostly periods of heated but in-conclusive debate over the American mission inthe world. Some observers believe that, withthe end of the Cold War, we are headed backinto such a period—this despite the fact thatglobal trends suggest that threats to Americansand their homeland are increasing. As a result,some believe, foreign policy questions are as

234 See Ted Halstead, “A Politics for Generation X,” The

Atlantic Monthly, August 1999.235 A Nation of Spectators: How Civic Disengagement Weakens

America and What We Can Do About It, Final Report of

the National Commission on Civic Renewal (Washington,

DC: June 1998).236 Robert Putnam, “Bowling Alone: America’s Declining

Social Capital,” Journal of Democracy, January 1995.237 See Deconstructing Distrust: How Americans View

Government.238. Stephen Ambrose, “The End of the Draft, and More,”

National Review, August 9, 1999.




likely to divide us as bring us together, andheated argument as likely to emaciate thenational will as fortify it.

Taken together, multicultural fragmenta-tion, the internationalization of the economy,shifts in generational attitudes, the decline inovert manifestations of national identification,and our traditional inattention to foreign policyissues in the absence of a crisis, suggest tosome a serious undermining of Americanidentity and national will. If so, we would thusbehold a country that, though strong andwealthy, would be less willing to sacrifice forthe common good.

The jury is still out, however, as to thetrue extent of the problem—and its

future. Despite lower voting numbers, somescholars see little decline in volunteerism andcommunity involvement.239 There has been nofundamental change in basic civic values,either. As in the past, Americans remain anation of “joiners” who have excelled incoming together in “intermediate organiza-tions” to enrich the relationship betweenindividual citizens, their communities, and thelarger national society. Americans are moreinvolved in volunteer, philanthropic, and com-munity organizations per capita than any otherpeople in the world.240

Individual identity with the country, as ex-pressed through individual expressions ofconcordance with fundamental Americanvalues, also seems to be strong. Survey datashow that Americans have not ceased seeingtheir country as exceptional, have not stoppedhonoring those who have served in uniform,and have not abandoned the conviction thatAmerica is a benign force in the world.Americans today seem to place no less impor-tance in the rule of law, democratic governance,and the protection of liberty than they ever did.

The dignity and worth of the individual stillcounts, and commitment to social justiceremains robust. The entrepreneurial spiritremains strong, as does the belief that hardwork pays off. As a nation of immigrants,Americans still exalt merit over the happen-stance of birth. Polling data also suggests thatAmericans remain generally positivelydisposed toward themselves, regarding thenation as a generous, moral, and just one that iswell worthy of emulation by others.241

Still others note that organized religion alsoprovides a basis for social cohesion, and itremains a powerful force across the country. Asthe Founding Fathers understood, communityreligious life brings people together, transmitsmoral values across and among generations,encourages community action, and supportsfamily life. The data show clearly thatAmericans actively participate in organized re-ligious organizations more than any people inthe developed world.242

Insofar as the American diplomatic tradi-tion is concerned, many argue that even here

239 John Hall and Charles Lindholm, Is America Breaking

Apart? (Princeton: Princeton University Press, 1999).240 See James E. Curtis, Douglas E. Baer, and Edward G.

Grabb, “Voluntary Association Membership in Fifteen

Countries: A Comparative Analysis,” American

Sociological Review, Vol. 57 (1992), pp. 139-52; and

Virginia A. Hodgkinson and Murray S. Weitzman, Giving

and Volunteering in the United States (Washington, DC:

Independent Sector, 1996).241 Relevant polling data may be found in Gallup polls. See,

for example, “Satisfaction with U.S.,” and “Religion:

Gallup Social and Economic Indicators, 1999,” at

www.gallup.com.242 See American Religious Data Archive, Lilly Endowment,

Dept. of Sociology and Anthropology, Purdue University,

Queens 1996 Survey. Also see Richard Cimino and Don

Lattin, “Choosing My Religion,” American Demographics

Magazine, April 1999, and Shelly Reese, “Religious

Spirit,” American Demographics Magazine, August 1998.




there is cause for optimism. In the past, it istrue, U.S. expeditionary military forces andforeign commitments were downsized or endedas soon as a foreign danger had passed. But, sothe argument goes, it has been a long time sincethat pattern was visible. It was overshadowedfollowing World War II, and now that the ColdWar is over, America’s economic and politicalcommitments have cast it as the apparent guar-antor of global stability. In recent years, anddespite the military downsizing that followedthe Cold War, U.S. troops have operated in overone hundred different countries.

The American people appear to support thatposture. One recent survey notes that Americansprefer a policy of “guarded engagement”:clearly committed to American participation inworld affairs when such participation is seen tobe in pursuit of their own interests.243 Otherstudies characterize public support for an activeAmerican role in the world as one of “support-ive indifference.” In other words, the bodypolitic evinces little feeling for or against mostforeign policy or defense issues as long as theyexact no great cost in blood. This appears to beborne out now by more than a decade’s experi-ence. Since the end of the Cold War, the UnitedStates has embarked on nearly four dozenmilitary interventions in the past decade asopposed to only 16 during the entire period ofthe Cold War.244 Many of these interventions,such as those in Somalia, Haiti, Bosnia, andKosovo, were launched into areas traditionallyconsidered marginal to U.S. interests. Nonerallied the national will nor captured the publicimagination even in the way the Gulf War did,and few post-Cold War interventions have hadthe support of the majority of the public. Yetonly one ended abruptly due to a lack of politi-cal support.

In the face of this debate, we simply donot know the extent to which American

society might fragment or lack the will forcommon action when it is required in thefuture. It would depend on how current trendsevolve, on the nature of the challenge thatAmerica will confront, and on the qualities ofAmerican leadership between now and then.

That we fear fragmentation is probably ahealthy thing—as long as we do not go over-board—for it leads us to guard against it. In anyevent, this is our legacy: For good reason, thefear of fragmentation has a long history inAmerican political and social thought.245 Thereality, however, may not be so dire. For all ofour problems, one fact stands out: Largenumbers of people around the world still longto come to America, and they long to becomeAmericans. It is not just the prospect of greatermaterial wealth that attracts so many, but theprospect for freedom and human dignity thatgoes along with it. This suggests that Americanculture retains at least some degree of coher-ence and underlying unity.

Finally, it almost goes without saying thatthe American national will to remain an activeforce in global affairs depends to some degreeon the state of the world. The emergence of arelatively benign international environmentwould sit well with American values, self-image, and assumptions about how the worldworks. In circumstances where American power

243 John E. Rielly, ed., American Public Opinion and U.S.

Foreign Policy (Chicago: Chicago Council on Foreign

Relations, 1999).244 For the list as it stood before the Bosnia and Kosovo inter-

ventions, see Richard F. Grimmett, Instances of the United

of United States Armed Forces Abroad, 1798-1995,

Congressional Research Service Report 96-119F, February

6, 1996, pp. 18-25.245 See Barry Glassner, The Culture of Fear (New York: Basic

Books, 1999), and David Whitman, The Optimism Gap:

The I’m OK-They’re Not Syndrome and the Myth of

American Decline (New York: Walker and Co., 1998).




can advance the values we hold to be universalin application, an active global U.S. role isassured. The challenge would be to leavenAmerican exuberance with patience andprobity. But in a world that mocks our values,deflates our optimism, threatens our life andlimb, and seems unresponsive to our best effortsto help, a return of the isolationist impulse is notbeyond imagination. Rather than an America radiating light from Governor Winthrope’s “cityon a hill,” Americans may convince themselvesthat Hobbes’ adjectives for political life in astate of nature, “nasty, brutish, and short,” farbetter describe global realities and decide thatall forms of charity should indeed begin athome. This is an important difference, for whatAmericans believe about the world and theirrole in it will constitute a major datum in theglobal story that will unfold over the next 25years.

Trends Affecting National Security

The social, economic, and technologi-cal trends noted above suggest that, in

a broad sense, America will not want formeans. We will be wealthy, and we will behealthy. But they suggest that social problemsand a general inattention to issues of nationalsecurity could systematically prejudicenational budgets away from investments innational defense. Both of those potentialproblems would in turn worsen a third, struc-tural problem: the way we organize militarymanpower.

Since the nation abolished conscription aquarter century ago, our military forces havedepended successfully on volunteers. Recentdata indicate that the American populationwill not be as obliging as in the past, especial-ly if the economy continues to prosper. For avariety of reasons, recruiting has been asteadily growing problem for nearly two

decades. Short thousands of recruits, theservices have lowered entrance standards andreinvigorated recruiting efforts, prompting arenewed debate about mandatory nationalservice and the return of the draft. Retention isalso problematic. A booming economy and aheightened operational tempo are siphoningoff large numbers of trained personnel andlowering re-enlistments, as has been particu-larly the case with pilots in recent years.

In the future, challenges to recruitment andretention will be formidable, although thesewill depend to a considerable extent on deci-sions made about force structure and readinessrequirements. The Pentagon’s most recentattitude surveys show that the willingness of16 to 21-year old men to serve—especiallyAfrican-American men, who have constituteda disproportionate percentage of the all-volun-teer force for the last quarter century—hasdropped sharply over the past decade.Moreover, Hispanics, the fastest growingsegment of the American population, aregreatly underrepresented and show no signs ofincreasing their inclination to serve.246

Although the percentage of women in thearmed forces will continue to rise, theirnumbers are unlikely to make up for the declinein male enlistments. Data show that 45 percent ofthe women who enlist leave the military beforethe end of their first tour of duty, as comparedwith the average of 34 percent of men. They arealso less deployable, at least under current oper-ational guidelines.247 Efforts to further“outsource” certain military functions to civilian

246 See David Segal, Jerald Bachman, Peter Freedman-Doan,

and Patrick O’Malley, “Propensity to Serve in the U.S.

Military: Temporal Trends and Subgroups Differences,”

Armed Forces & Society, Spring 1999, p. 421; and Lloyd

Matthews, “Primer on Future Recruit Diversity,” in

Population Diversity and the U.S. Army (Carlisle, PA: U.S.

Army War College, 1999), pp. 1-6.




contractors cannot compensate for the recruitingshortfall in military combat specialties, most ofwhich women and civilians cannot fulfill undercurrent policy. It is not clear how the military es-tablishment, then, will sustain the volunteerforce over the next generation, and particularly,how it will manage to recruit and retain enoughhighly skilled personnel to meet the increasingtechnical needs of an advanced military.

These trends portend—and in some waysreflect—a growing distance between Americaand its military. With ever fewer Americansserving in the military, society’s understandingof the military’s purpose and relationship to thecountry and the government is bound toweaken. While the military remains one of themost admired public institutions in America, itis admiration from afar—appreciation from amostly non-participating populace. The impactof this divide may be felt most keenly at elitelevels. The number of leaders in almost everywalk of American public or private life whohave served their country in uniform is rapidlydeclining. The profile of national leadersdealing with strategic affairs reflects thesetrends. The House of Representatives had 320veterans in 1970, but fewer than 130 in 1994.For the first time in the 20th century, the per-centage has now fallen below the percentage ofveterans in the population at large. If thesetrends continue, a small professional militarywill stand increasingly apart from the countryand its leaders. Such a civil-military balancecould further divorce Americans from theirgovernment and serve to loosen identificationwith, and participation in, a common nationalpurpose.

The changing role of the American militaryis part of this picture, both in terms of civil-military relations and in terms of readiness. Therelationship between the military and societycould be affected by the use of the armed forces

in domestic missions such as drug interdiction,law enforcement, or border security. In certaincircumstances, however, such as the protectionof the homeland from a clear threat, that rela-tionship could be enhanced. Assigningdomestic missions to the armed forces couldalso erode military readiness for wartime oper-ations abroad. There are formidable legalhurdles to the assigning of such missions, aswell, but some American leaders seem willingto jump them.248

A weaker societal understanding of themilitary, combined with the downtrend in re-cruiting, has led some prominent Americans tosuggest a return to conscription, programs ofnational service, or a militia-based force.249

Others, while acknowledging that such ap-proaches would strengthen civic participation,point out that a conscript military might limitan active foreign policy that frequently putsconscripted American soldiers, sailors, airmen,and marines in harm’s way.

The ability to carry out effective foreignand military policies requires not only a skilledmilitary, but talented professionals in all formsof public service as well. Government institu-tions face similar challenges as they competefor people with the corporate sector.

247 See Military Attrition: Better Data, Coupled with Policy

Changes, Could Help the Services Reduce Early

Separations, GAO Report NSIAD-98-13, September 1998;

and F. E. Garcia, K. S. Lawler, and D. L. Reese, Women

at Sea: Unplanned Losses and Accession Planning, Center

for Naval Analyses Research Memorandum 98-182,

March 1999.248Sam Nunn proposed domestic roles for the U.S. military in

1992 and Bob Dole and Lamar Alexander made similar

proposals during the 1996 presidential campaign. See

Charles Dunlap, “The Origins of the American Military

Coup of 2012,” Parameters, Winter 1992-93, pp. 2-20.249 One example is Gary Hart, The Minuteman: Restoring an

Army of the People (New York: Free Press, 1998).




Employment trends for those entering the fieldof international relations show that growingnumbers of graduates of foreign affairsprograms are entering the private rather thanthe public sector.250

What does all of this come to? Oneobservation is unarguable: the sta-

bility and direction of American society andpolitics will shape U.S. foreign policy goalsand capabilities, and hence the way the UnitedStates will affect the world's future. Beyondthat, one other major theme stands forth.

The United States has a certain spirit, andit is the spirit of the first and greatest massdemocracy in history. And yet since the end ofthe Cold War we have taken on, however reluc-tantly and even absent-mindedly, a world rolethat requires much potential sacrifice and themobilization of substantial national resourcesand will. Can this role coexist for very longwith an America that does not feel threatened,and that is focused instead on domestic issues?Perhaps it can, but if so, it must be shown, notassumed, to be the case. That is a challenge notyet seriously taken up at the level of nationaldebate.

Notwithstanding the post-Sputnik dangersof a nuclear missile attack from afar, U.S.national security policy in the 20th century has

been something that mainly happened “there,”in Europe or Asia or the Near East. Domesticsecurity was something that happened “here,”and it was the domain of law enforcement andthe courts. Rarely did the two mix. The distinc-tion between national security policy anddomestic security is already beginning to blur,and in the next quarter century it could alto-gether disappear. If it does, if such threatsbecome reality, or even if they merely becomemore apparent, Americans are likely toabandon their attitude of “supportive indiffer-ence.” That would affect demands onleadership to respond to such threats, and itwould likely affect national budgetary priori-ties, as well. Depending on the nature of suchthreats, very divisive arguments could eruptover the proper role of the military in internalsecurity operations.

If the stakes rise in such a fashion, onething is likely to become vividly clear: TheAmerican people will be ready to sacrificeblood and treasure, and come together to do so,if they believe that fundamental interests areimperiled. But they will not be prepared tomake such sacrifices over indirect challenges,or over what seem to them to be abstract moralimperatives. That is the history of American re-sponses to foreign challenges, and that appearsalso to be its future.

250 Over the 1991-1997 period, the proportion of those gradu-

ates entering the private sector increased 10 percent (up

from 32 percent to 42 percent), and student demand for

business and finance courses in these programs is on the

rise. Although the number of candidates taking the U.S.

State Department’s foreign service exams has shown little

change, those entering the Foreign Service are serving

shorter tours due to increasing competition with private

industry.




IV: Worlds in Prospect

As we noted at the outset of this study,human history is contingent. We

cannot know what the world will look like overa quarter century away because many of the de-cisions that will shape that world have not yetbeen made. Moreover, there are too many dif-ferent interactive causal factors involved,encompassing geophysical, economic, politi-cal, social, and military elements, to knowwhich single, composite “world” will issueforth from them. Alas, perfect knowledge of thefuture is impossible, and Nietzsche came closeto hitting on the reason: “No one can dreammore out of things, books included, than healready knows. A man has no ears for thatwhich experience has given him no access.” Inother words, our repertoire of expectations islimited by our repertoire of knowledge.

One way to overcome this difficulty is totease our imaginations into walking ahead ofour experience. We can do this by constructinglogical models of alternative futures, in thiscase, by building global scenarios. We do thisnot at random, but by defining clusters of like-lihood derived from what we know about howthe world works. The scenarios can then beused as heuristic devices to help us understandthe ways in which the world may evolve overthe coming 25 years.

The global scenarios that follow describethe integrated interplay of developments intechnology and economics with the social, po-litical, and military environments. By giving usessentially real-time connectivity with anyoneanywhere, technology has provided a venue forunifying the world and influencing eventsglobally. Yet the adoption of new technologiesgenerates pressures to transform or even over-throw existing political and social orders. The

emergence of a global economy encourages in-ternational cooperation and interdependency,but it can also lead to economic competitionand even disintegration. States will succeed orfail depending on whether they are able to seizethe opportunities of globalization and at thesame time deal with the accompanying disloca-tions. In the social world, the integrating forcesof secularization may or may not win out overthe divisive forces of parochial nationalism andother ideologies. Global security will beenhanced if economies grow and political liber-alism expands, or endangered if the worlddivides amid major tensions and conflicts.

The different ways in which these uncer-tainties are resolved form the basis for fourworlds: The Democratic Peace; Protectionismand Nationalism; Globalization Triumphant;and Division and Mayhem. The first two areevolutionary scenarios, one tilted toward theoptimistic side of life, the other toward themore pessimistic. The last two are revolution-ary scenarios, also tilted in positive andnegative directions. To a great extent, the thirdscenario is an extension of the first, and thefourth extends the second. These are, in turn,followed by a speculation that the first quarterof the 21st century will be a patchwork of thefour worlds.

A Democratic Peace

Afuture world of a Democratic Peacehas three essential elements. First,

democratic norms predominate, and these areconducive to economic cooperation andgeneral prosperity. Second, sharp ideologicalconflict does not exist, and while cultural dif-ferences remain real, they appear to beconverging rather than widening. Third, anadvanced level of political cooperation amongstates is achieved and maintained. War amongmajor powers would be unlikely, and war




among most democracies even moreunlikely.251 The principle of national sover-eignty is tested by new problems and eclipsedsomewhat by the introduction of new interna-tional arrangements. But the principleendures.

Economically, moderate growth isassumed, with developed countries averagingaround 2-3 percent annually and developingcountries averaging 4 to 5 percent annually.Economic crises continue to occur in develop-ing countries, but their severity is lessenedthrough improved transparency and regulatorymeasures gradually introduced over time, andthrough essentially benign pressure fromreformed and increasingly well respected inter-national financial institutions. Key countries,rather than international institutions or multina-tional corporations, still control globaleconomic policies, but multilateral economiccooperation is expanded through the IMF, theWorld Bank, the WTO, and a G-9 grouping thatincludes China.

The information revolution continues anddeepens, creating a world of integrated intra-nets existing on the overall edifice of the globalInternet. States adopt new standards to helpimprove protection of the critical informationinfrastructure. The revolution in biotechnologyproceeds, with most governments—and all themajor ones on whose soil biotechnologicalresearch is proceeding—having managed to es-tablish minimum controls over areas ofparticularly contentious ethical concern.

There will still be plenty to worry about insuch a world. Global inequalities will provevexing. Economic infrastructures will be vul-nerable to attack. Some dangerous technologieswill still evade control. The few remainingholdouts from the increasingly institutionalized

normative order will be able to do far morephysical harm than heretofore.

But a world characterized by greater op-portunities for cooperation among major stateswill be a world in which multilateral action isthe rule rather than the exception. At the globallevel, states will advance the formulation andenforcement of normative international law.The United Nations is a chief instrument in re-solving transnational issues. Regional tradeentities will increasingly coordinate theirforeign and security policies. Multilateralefforts stress conflict prevention. Major statesdevise ways to deal with the demands of ag-grieved ethnic or sectarian minorities.Like-minded governments cooperate, and insti-tutionalize that cooperation, to respond to“rogue” regimes or armed terrorists.

In the absence of significant securitytensions, military power functions more toreassure and deter than to compel. Militaryspending worldwide declines as a share ofGDP, but not precipitously so. Governmentsmaintain modest research and developmentefforts in leading edge technology areas, suchas space exploration. But modernization willhave slowed down and military arsenals willhave been reduced. The proliferation ofweapons of mass destruction is curbed and, insome cases, rolled back.

This world is a positive evolution oftoday’s world. The United States continues toemphasize support for democracy and freemarkets. It remains militarily strong, whileadapting its force posture to this more peaceful

251 This scenario should not be equated directly with the

version of the political theory of the same name that

argues that war between democracies is virtually impossi-

ble. Charles Dunlap, “The Origins of the American

Military Coup of 2012,” Parameters, Winter 1992-93,

pp. 2-20.




world. U.S. self-restraint helps prevent a peercompetitor or regional grouping of powersfrom arising to challenge the United States.

Protectionism and Nationalism

The stalling of global economic integra-tion, the eventual creation of regional

power blocs, and the rise of nationalism char-acterize a world of Protectionism andNationalism. Such a world comes into being onaccount of a protracted global financial crisis, amajor environmental or technological disaster,or widespread political and social backlashagainst globalization and Western—and specif-ically American—pretensions to hegemony.

There is global economic growth, butliving standards in much of the developingworld decline. The failure of governments todeliver on social needs, as populations growand resources dwindle, produces social unrestin many countries. Latin America, Asia, andAfrica are particularly hard hit, given their highdependence on external financing and exportmarkets.

The so-called Washington Consensus,based on the belief in the saving power ofglobal commerce and international economicinstitutions, has come to an end. States insteadseek to protect their citizens from the ill effectsof unfettered trade, capital movements, and thespread of technology. Many states, includingpossibly the United States, abandon interna-tional trade agreements, such as the WTO. Afundamental ingredient for global growth—therelatively free flow of trade and capital acrossborders—is significantly decreased in scope,given the increased risks to capital and the in-troduction of protectionist trade barriers.

Cross regional alliances emerge, perhaps aNAFTA-Europe political and economic pact or

a Latin American regional grouping. Given itssignificant domestic savings rate and growingpopulations, Asia seeks to provide its ownregional source of growth. Assuming greaterglobal dependence on fossil fuels, the NearEast becomes a pivotal focus of global courtingand potential contention. But protectionismmingled with parochial nationalism has morebaneful effects within regions, and that iswhere the danger of conflict and violence isgreatest.

With protectionism on the rise, many statesimpose controls and other regulations on thespread of technology. That feeds the economicslowdown and limits somewhat the “interna-tionalizing” effects of the informationrevolution. The Internet fragments globally andbecomes localized in the developed countries.Governments, corporations, and individuals seelittle benefit to being connected. Rather thansharing information, they hoard it.

In this world, economic, social, and politi-cal dislocations are widespread. Nationalismand ethnic rivalries increase in number and im-portance. Significant political changes occur insome key states, leading to the creation ofhighly nationalistic, fundamentalist religious,and even fascist political regimes. Some impor-tant states fragment or fail, giving rise toviolence, humanitarian disasters, major catalyt-ic regional crises, and the spread of dangerousweapons.

Military capabilities and alliances increasein importance. Spending on military forcesrises as states placed renewed emphasis on ac-quiring and using military force. Developmentsin military technology have produced advance-ments in nanotechnologies, miniaturization,stealth, and anti-stealth. Weapons of mass de-struction proliferate to a number of smallerregional powers. Space is weaponized and




becomes a locus of competition and conflictamong the more technically advanced coun-tries.

This world is a negative evolution of today’sworld. Initially, the United States is unequalledin economic and military power. However,within 15 years, a number of regional economiccompetitors arise, as well as a peer competitoror hostile coalition with the military means tochallenge the United States. The United Statesretains a large military force capable of re-sponding to a range of contingencies, includingfuture inter-state conflicts.

Globalization Triumphant

In a world of Globalization Triumphant,the world economy grows at an unprece-

dented pace. Modern technology spreadsworldwide. All national economies, with fewexceptions, are networked into the globalmarket. Trade in goods and services along withcapital flows expand globally, as do multilater-al institutions and international agreementsdesigned to manage the new economy.

On the national level, states will have beenable to design and introduce responsive systemsof governance capable of preventing majoreconomic dislocations and social tensions. Theywill have adopted policies conducive toeconomic growth, including appropriate legalsystems and economic regulations. Despitesome lingering tensions, governments aroundthe world will have continued to move towardfree trade, advancing overall global prosperityand supporting political liberalization.

Economically, growth in the developedworld is assumed to be at or above 2 percent ayear, and in the developing world 5-6 percent ayear. The share of global GDP held by devel-oping countries comes to exceed that of

developed countries. Tariffs are eased and tradeincreases globally. Global energy prices remainstable or drop due to major technological inno-vation. No major protracted downturn in anymajor industrialized country or region occurs,and no major conflicts between states or withinstates arise to destabilize the global economy orfinancial flows. Some transnational threats stillremain, including those from cultists, terrorists,drug traffickers, and other criminals. Economicinfrastructures also are vulnerable, but withfewer disgruntled groups and more effectivevoluntary controls on trade in dangerous sub-stances, that vulnerability is modest andreceding.

The combination of global economic inte-gration and the diffusion of technology leads toa fundamental change in the ability of states toinfluence events on the world stage. In essence,information and economic power become trulyglobalized, while military and diplomaticpower remain the prerogatives of states. Inaddition, supra-national organizations and non-governmental organizations increase theirinfluence.

Individuals and governments in this worldshare such goals as a reasonably equitable dis-tribution of income, equal educational and jobopportunities, the peaceful resolution of con-flicts, sustainable environmental policies, andindividual human rights. Nearly everyoneaccepts as second nature the benefit of being in-tegrated and connected, and, like the web itself,political and economic structures are increas-ingly decentralized. That offers a greateropportunity for local political participation ofindividual citizens.

Security establishments around the world,including that of the United States, are facedwith a dilemma. Technological advancementsand economic growth create new possibilities




for advanced weaponry. But the world hasevolved in such a way that dramatic reductionsin threats have occurred and interstate wars havebecome increasingly unlikely. The UnitedNations or a similarly representative bodyassumes a central role in conflict prevention andresolution. As resources shift to social programsand the protection of critical infrastructures,there is tremendous downward pressure ondefense budgets. Classic conventional militaryforces atrophy. Space becomes a realm of coop-eration. International regimes have establishedfar more effective controls on the proliferation ofweapons of mass destruction.

The United States is an active “partner”with states around the world in promoting co-operation through international institutions. Inits military posture, the United States focusesprimarily on defensive measures aimed at re-sponding to the few remaining threats. AsAmericans exercise influence through coopera-tive international mechanisms, resentment ofAmerican and Western culture subsides.

Division and Mayhem

Aworld of Division and Mayhem couldcome about by any of several routes.

One is uncontrolled technological diffusionthat outpaces the legal, moral, and ethical stric-tures of societies around the world. A second isthe accentuation of strains in the globalizationprocess, to the point of touching off a world-wide economic recession and, in time, globalchaos. A third is a compound global environ-mental crisis. The three sources of division andmayhem could occur simultaneously, each rein-forcing the other two.

In this world, however it comes to be,global economic growth plummets. Privatesector investors worldwide experience a deepcrisis in confidence. Investment is limited, and

trade is vastly reduced with the drop in marketdemand and dramatic increase in protectionistpolicies. International lending institutions lackfunds. The world is characterized by the cohab-itation of a small cluster of relatively rich,developed—and mainly Western—states, and alarge group of struggling and often very poorstates. These states also experience extensiveuncontrolled urbanization, environmentaldegradation, and political fragmentation.

The lofty internationalist principles behindthe Internet are rejected; information ismarketed and hoarded instead of cultivated andshared. Most developing countries are deniedaccess to technological innovations, eitherbecause they cannot afford them, or for fearthat they cannot control them properly. In thedeveloped world certain technological develop-ments, especially in biotechnology, outpace theethical debate over their implications. A newclass of biotechnology criminals and cyberter-rorists appears and is linked to officials indemoralized and divided governments.Disaffected individuals and groups acquire thetechnologies necessary to develop the mostdangerous weapons, and some are used.

Many states fragment along ethnic,cultural, and religious lines. Disparities in re-sources lead to or aggravate conflict betweengroups within societies and among regionalstates. Increased numbers of displaced personsproduce extensive humanitarian disasters andexacerbate environmental problems. Militaryconflict between and especially within statesincreases.

Private and non-state militaries are on therise, while the United Nations and other collec-tive security organizations decline. Militaryestablishments around the world confront avariety of threats. Some are well-funded butothers are not, giving rise to abruptly shifting




balances of power, miscalculations, andruinous wars.

While frequently called on to conduct hu-manitarian missions and operations other thanwar, the U.S. military also confronts a numberof states, acting alone or in alliance, seeking thefinal removal of American military power andinfluence from their respective regions.Throughout this period, the United Statesinvests heavily in military modernization, butlow economic growth limits the size of militarybudgets. In this environment U.S. foreign anddefense policy establishments are under in-creasing strain. The United States also findsitself increasingly isolated and overstretched inattempting to meet its security needs both athome and abroad.

Under such circumstances, deadly attackson U.S. cities by a terrorist group usingweapons of mass destruction cause a sharp re-orientation of basic U.S. policy. The UnitedStates reaches out in anger to punish and to rootout future sources of such attacks but otherwisepulls back from its commitments in the world atlarge. Thus deprived of American good will andactive involvement in global leadership, aworld already plagued by division and mayhemfalls further into a spiral of poverty, violence,and fear.

A Patchwork Future

The foregoing scenarios are clusters oflikelihood designed to stimulate our

imagination. They do not exhaust all the possi-bilities in our future. Just as the world todaysimultaneously evinces integration and frag-mentation, so too may we expect that futuretrends will combine to produce a patchwork ofconsequences rather than any single, logicallycoherent whole.

The Democratic Peace is the world thatcould exist for those states where today democ-racy has firm roots and where economicpolicies are based on market principles. It maybe that certain parts within that domain evenmove into the world of GlobalizationTriumphant. States in these domains willcontinue to have differences, and some seriousthreats will remain. But these will be amenableto peaceful resolution. The prospects for majorinterstate war would be small.

But a more pessimistic future is alsopossible for democratic, free-market states, andit is more likely for the rest of humanity.Societies and governments will find themselvestorn between new opportunities and old habits.Particularly critical will be what happens overthe next quarter century in major countries suchas Russia, China, India, Indonesia, thePhilippines, Vietnam, North Korea, Malaysia,Thailand, Egypt, Iran, Turkey, Pakistan,Mexico, Brazil, South Africa, and Nigeria.These states could find themselves in regionscharacterized by the world of Nationalism andProtectionism or even by the world of Divisionand Mayhem. The prospect for major interstatewar in these domains would be large.

In short, all four scenarios would play out,but in parts. Taken together, the world in thecoming 25 years would be regionalized, not ineconomic terms, but in terms of overarchingperformance.

Perhaps what matters most will be theworld’s elemental trajectory. Today’s

world is divided more or less between a zone ofdemocratic peace and a zone of chronic trouble.Will many members of the former world fallaway into the latter, or will many members ofthe latter find their way into the former? Andwhat will be the relationship between the partsof such a divided world? Can a zone of pros-




perity and relative tranquility remain isolatedfrom the pain, the heartbreak, the refugees, andpossibly the diseases of the zone of hardshipand turmoil? Answers to all of these questionscannot be known with certainty. They willdepend importantly on the policies and strate-

gies to be adopted by countries around theworld. The role that the United States will playwill be critical as well. But here we must stop,for that is the subject of this Commission’sPhase II Report.




V: Major Themes andImplications

The foregoing analysis leads us to thefollowing general conclusions about

the world that is now emerging, and theAmerican role in it for the next 25 years.

1. America will become increasingly vul-nerable to hostile attack on ourhomeland, and our military superioritywill not entirely protect us.

The United States will be both absolutely andrelatively stronger than any other state or com-bination of states. Although a global competitorto the United States is unlikely to arise over thenext 25 years, emerging powers—either singlyor in coalition—will increasingly constrainU.S. options regionally and limit its strategicinfluence. As a result, we will remain limitedin our ability to impose our will, and we will bevulnerable to an increasing range of threatsagainst American forces and citizens overseasas well as at home. American influence will in-creasingly be both embraced and resentedabroad, as U.S. cultural, economic, and politi-cal power persists and perhaps spreads. States,terrorists, and other disaffected groups willacquire weapons of mass destruction and massdisruption, and some will use them. Americanswill likely die on American soil, possibly inlarge numbers.

2. Rapid advances in information andbiotechnologies will create new vulnera-bilities for U.S. security.

Governments or groups hostile to the UnitedStates and its interests will gain access toadvanced technologies. They will seek tocounter U.S. military advantages through thepossession of these technologies and their

actual use in non-traditional attacks. Moreover,as our society becomes increasingly dependenton knowledge-based technology for producinggoods and providing services, new vulnerabili-ties to such attacks will arise.

3. New technologies will divide the world aswell as draw it together.

In the next century people around the world inboth developed and developing countries willbe able to communicate with each other almostinstantaneously. New technologies willincrease productivity and create a transnationalcyberclass of people. We will see much greatermobility and emigration among educated elitesfrom less to more developed societies. We willbe increasingly deluged by information, andhave less time to process and interpret it. Wewill learn to cure illnesses, prolong and enrichlife, and routinely clone it, but at the same time,advances in bio-technology will create moraldilemmas. An anti-technology backlash ispossible, and even likely, as the adoption ofemerging technologies creates new moral,cultural, and economic divisions.

4. The national security of all advancedstates will be increasingly affected by thevulnerabilities of the evolving globaleconomic infrastructure.

The economic future will be more difficult topredict and to manage. The emergence orstrengthening of significant global economicactors will cause realignments of economicpower. Global changes in the next quarter-century will produce opportunities andvulnerabilities. Overall global economicgrowth will continue, albeit unevenly. At thesame time, economic integration and fragmen-tation will co-exist. Serious and unexpectedeconomic downturns, major disparities ofwealth, volatile capital flows, increasing vul-




nerabilities in global electronic infrastructures,labor and social disruptions, and pressures forincreased protectionism will also occur. Manycountries will be simultaneously more wealthyand more insecure. Some societies will find itdifficult to develop the human capital andsocial cohesion necessary to employ new tech-nologies productively. Their frustrations will beendemic and sometimes dangerous. For mostadvanced states, major threats to nationalsecurity will broaden beyond the purelymilitary.

5. Energy will continue to have majorstrategic significance.

Although energy distribution and consumptionpatterns will shift, we are unlikely to seedramatic changes in energy technology on aworld scale in the next quarter century.Demand for fossil fuel will increase as majordeveloping economies grow, increasing mostrapidly in Asia. American dependence onforeign sources of energy will also grow overthe next two decades. In the absence of eventsthat alter significantly the price of oil, the sta-bility of the world oil market will continue todepend on an uninterrupted supply of oil fromthe Persian Gulf, and the location of all keyfossil fuels deposits will retain geopolitical sig-nificance.

6. All borders will be more porous; somewill bend and some will break.

New technologies will continue to stretch andstrain all existing borders—physical and social.Citizens will communicate with and form alle-giances to individuals or movements anywherein the world. Traditional bonds between statesand their citizens can no longer be taken forgranted, even in the United States. Many coun-tries will have difficulties keeping dangers outof their territories, but their governments will

still be committed to upholding the integrity oftheir borders. Global connectivity will allow"big ideas" to spread quickly around the globe.Some ideas may be religious in nature, somepopulist, some devoted to democracy andhuman rights. Whatever their content, the stagewill be set for mass action to have social impactbeyond the borders and control of existing po-litical structures.

7. The sovereignty of states will comeunder pressure, but will endure.

The international system will wrestle constant-ly over the next quarter century to establish theproper balance between fealty to the state onthe one hand, and the impetus to build effectivetransnational institutions on the other. Thisstruggle will be played out in the debate overinternational institutions to regulate financialmarkets, international policing and peace-making agencies, as well as several othershared global problems. Nevertheless, globalforces, especially economic ones, will continueto batter the concept of national sovereignty.The state, as we know it, will also face chal-lenges to its sovereignty under the mandate ofevolving international law and by disaffectedgroups, including terrorists and criminals.Nonetheless, the principle of national sover-eignty will endure, albeit in changed forms.

8. Fragmentation or failure of states willoccur, with destabilizing effects onneighboring states.

Global and regional dynamics will normallybind states together, but events in major coun-tries will still drive whether the world ispeaceful or violent. States will differ in theirability to seize technological and economic op-portunities, establish the social and politicalinfrastructure necessary for economic growth,build political institutions responsive to the as-




pirations of its citizens, and find the leadershipnecessary to guide them through an era of un-certainty and risk. Some important states maynot be able to manage these challenges andcould fragment or fail. The result will be anincrease in the rise of suppressed nationalisms,ethnic or religious violence, humanitarian dis-asters, major catalytic regional crises, and thespread of dangerous weapons.

9. Foreign crises will be replete with atroc-ities and the deliberate terrorizing ofcivilian populations.

Interstate wars will occur over the next 25 years,but most violence will erupt from conflictsinternal to current territorial states. As the desirefor self-determination spreads, and many gov-ernments fail to adapt to new economic andsocial realities, minorities will be less likely totolerate bad or prejudicial government. In conse-quence, the number of new states, internationalprotectorates, and zones of autonomy willincrease, and many will be born in violence. Themajor powers will struggle to devise an account-able and effective institutional response to suchcrises.

10. Space will become a critical and compet-itive military environment.

The U.S. use of space for military purposes willexpand, but other countries will also learn toexploit space for both commercial and militarypurposes. Many other countries will learn tolaunch satellites to communicate and spy.Weapons will likely be put in space. Space willalso become permanently manned.

11. The essence of war will not change.

Despite the proliferation of highly sophisticat-ed and remote means of attack, the essence ofwar will remain the same. There will be casual-

ties, carnage, and death; it will not be like avideo game. What will change will be thekinds of actors and the weapons available tothem. While some societies will attempt tolimit violence and damage, others will seek tomaximize them, particularly against those soci-eties with a lower tolerance for casualties.

12. U.S. intelligence will face more challeng-ing adversaries, and even excellentintelligence will not prevent all surprises.

Micro-sensors and electronic communicationswill continue to expand intelligence collectioncapabilities around the world. As a result of theproliferation of other technologies, however,many countries and disaffected groups willdevelop techniques of denial and deception inan attempt to thwart U.S. intelligence efforts—despite U.S. technological superiority. In anyevent, the United States will continue toconfront strategic shocks, as intelligenceanalysis and human judgments will fail todetect all dangers in an ever-changing world.

13. The United States will be called uponfrequently to intervene militarily in atime of uncertain alliances and with theprospect of fewer forward-deployedforces.

Political changes abroad, economic considera-tions, and the increased vulnerability of U.S.bases around the world will increase pressureson the United States to reduce substantially itsforward military presence in Europe and Asia.In dealing with security crises, the 21st centurywill be characterized more by episodic "possesof the willing" than the traditional World WarII-style alliance systems. The United States willincreasingly find itself wishing to form coali-tions but increasingly unable to find partnerswilling and able to carry out combined militaryoperations.




14. The emerging security environment inthe next quarter century will require dif-ferent military and other nationalcapabilities.

The United States must act together with itsallies to shape the future of the international en-vironment, using all the instruments ofAmerican diplomatic, economic, and militarypower. The type of conflict in which thiscountry will generally engage in the firstquarter of the 21st century will require sustain-able military capabilities characterized bystealth, speed, range, unprecedented accuracy,lethality, strategic mobility, superior intelli-gence, and the overall will and ability toprevail. It is essential to maintain U.S. techno-logical superiority, despite the unavoidabletension between acquisition of advanced capa-bilities and the maintenance of currentcapabilities. The mix and effectiveness ofoverall American capabilities need to berethought and adjusted, and substantial changesin non-military national capabilities will alsobe needed. Discriminating and hard choiceswill be required.

In many respects, the world ahead seemsamenable to basic American interests

and values. As to interests, the spread of know-ledge, the development of new technologies,and the expansion of global cooperation willpresent vast opportunities for economic growthand the rise of political liberalism. The size ofthe world’s middle class may increase manytimes over, lifting literally tens of millions ofpeople from the depredations of poverty anddisease. Authoritarian regimes will founder asthey try to insulate their populations from aworld brimming with free-flowing information.We may thus bear witness to the rise of newdemocracies and the strengthening of olderones. Taken together, these developments couldreduce sharply the prospects for violent

conflict, and augur for a more peaceful world.All of that is very much in the Americaninterest and provides real opportunities for theUnited States in the future.

As to values, a world opened up by the in-formation revolution is a world less hospitableto tyranny and friendlier to liberty. A lesssocially rigid, freer, and self-regulating worldmay also be in prospect, a joint result of theanti-hierarchical implications of the informationrevolution and the post-Cold War normative tidetoward representative government. If so, such aworld would accord with our deepest politicalbeliefs and our central political metaphor—thatof the dynamic equilibrium— which finds ex-pression in the “invisible hand” of the market,our social ideal of E Pluribus Unum, the checksand balances of our Constitution, and in theconcept of federalism itself.

Nevertheless, a world amenable to Americaninterests and values will not come into being byitself. Much of the world holds different interestsand values. They also resent and oppose us forthe simple fact of our preeminence, and becausethey often perceive the United States as exercis-ing its power with arrogance and self-absorption.There will also be much apprehension and con-fusion as the world changes. Fragmentation andintegration will proceed simultaneously at differ-ent levels, as will centralization andde-centralization. Our vocabularies will fail us asold boundaries blur: between homeland defenseand foreign policy; between sovereign states anda spectrum of protectorates and autonomouszones; between virtual and literal communities.

All of this suggests that threats to Americansecurity will be more diffuse and harder to an-ticipate than ever before. While the likelihoodof major conflicts between powerful states willdecrease, conflict itself will likely change incharacter and increase in frequency. Deterrence




will not work as it once did. In many cases itmay not work at all.

In navigating the new world, the UnitedStates will need to find a proper balancebetween activism and self-restraint. No power,no matter how strong, will be able to manage orcontrol international politics. American prag-matism and historic optimism have their limits.To overreach is to fall prey to hubris, and if weseek to exercise control over events beyondwhat reality can bear, we will end in frustration,recrimination, and ruin.

But humility is not a prescription for policypassivity. If we are agile in the new century thatstands before us, change will be our ally. Itmakes sense for the United States to bias the s-trategic environment in its favor to the extentpossible and prudent, and to try harder to

prevent conflict so that there will be less needfor diplomatic triage after the fact. A greatnation that does not try to influence the futuremay end up as its victim. That will be as truefor the next 25 years as it has been for at leastthe last 2,500.

The world that lies in store for us over thenext quarter century will surely challengereceived wisdom about how to protectAmerican interests and advance Americanvalues. In such an environment, the UnitedStates needs a sure understanding of its objec-tives, and a coherent strategy to deal with boththe dangers and the opportunities ahead. It isfrom this Phase I Report that the U.S.Commission on National Security/21st Centurywill develop that understanding, and build thatstrategy. We do so from what we believe is afirm foundation.




Richard HaassKeith HahnJohn HillenFrank HoffmanRobert Killebrew Richard KohnBill LewisMartin Libicki Jim LocherCharles MoskosWilliamson MurrayBarry PosenPeter RodmanBarbara SamuelsKori SchakeJames Thomason Ruth Wedgwood

Research Associates Mark BurlesErin ConatoChris DishmanWilliam FosterChristopher HallKelly LiebermanWilliam LippertGeoffrey MegargeePhilip RitchesonKathleen RobertsonRachel SchillerBetsy Schmid

Support Staff

Marilyn Bridgette, Administrative OfficerElizabeth Ellingboe, Travel Coordinator Jamie Finley, Executive Assistant to

Executive DirectorMarvin Goodwin, Contract AdministratorJohn Gardner, Information Management SpecialistJames Harris, Budget Manager Michele Hutchins, Administrative SpecialistDonald Kinder, Supply Specialist Diane Long, Commissioner LiaisonJonathan Nemceff, Director, Information

Management Tom Prudhomme, Security ManagerCynthia Waters, Study Group Liaison

Co-ChairsGary HartWarren Rudman

CommissionersAnne ArmstrongNorm AugustineJohn DancyJohn GalvinLeslie GelbNewt GingrichLee HamiltonLionel OlmerDonald RiceJames SchlesingerHarry TrainAndrew Young

Executive DirectorCharles G. Boyd

Deputy Executive DirectorArnold Punaro

Chief-of-StaffHank Scharpenberg

Study Group Director–Phase OneLynn Davis

Study Group CoordinatorPat Allen Pentland

Study Group MembersPatti Antsen Lyntis Beard Jeff Bergner Coit BlackerBarry BlechmanChris BowieIvo DaalderJacquelyn DavisRhett DawsonKeith DunnCharles FreemanAdam Garfinkle

Commission and Study Group Staff RosterU.S. Commission on National Security/21st Century




Many U.S. government agencies assisted inPhase One of the study. Within the Departmentof Defense, we especially note the Office of theSecretary of Defense staff to include organiza-tions in the Under Secretary of Defense forPolicy, the Joint Staff, especially J5, and allService staffs; the Defense IntelligenceAgency; National Defense University and theInstitute for National Strategic Studies; theArmy War College; Joint Theater Air andMissile Defense Organization; and the DefenseInformation Security Agency. Department ofDefense assistance was also received from:U.S. European Command; U.S. PacificCommand; U.S. Atlantic Command; U.S.Central Command; U.S. Southern Command;U.S. Space Command; U.S. StrategicCommand; U.S. Special Operations Command;U.S. Transportation Command; U.S. ForcesKorea; the U.S. Mission to the North AtlanticTreaty Organization; the George C. MarshalEuropean Center for Security Studies; the Asia-Pacific Center; and the Center of Excellence inDisaster Management and HumanitarianAssistance.

The Department of State provided supportfor the many regional workshops and assistedwith trip itineraries and clearances for theCommission’s foreign travel. The Commission’sinternational trips depended on critical assis-tance from the American embassies, consulates,institutes, missions, and country teams at the fol-lowing locations: Hong Kong, Shanghai,Beijing, Taipei, Seoul, Tokyo, London, Paris,Geneva, Rome, Bonn, Berlin, Brussels, Kiev,Moscow, Ankara, Istanbul, Tel Aviv, Cairo,Baku, Tbilisi, Islamabad, Lahore, New Delhi,Bangalore, Singapore, and Jakarta.

The Department of Justice and the FederalBureau of Investigation assisted with severalworkshops, as did the Department of theTreasury. Other government agencies whoassisted with the work of this commissionincluded: the National Security Council; theCentral Intelligence Agency and the NationalIntelligence Council; the National SecurityAgency; the National Reconnaissance Office;the U.S. Coast Guard; the National Institutes ofHealth; the Center for Disease Control; theOffice of National Drug Control Policy; theOffice of Emergency Preparedness; and theCritical Infrastructure Assurance Office.

Foreign government ministries and minis-ters, as well as opposition parties andnon-governmental organizations and businessleaders, were also crucial in providing inputs tothe Commission. We especially note those fromthe United Kingdom, France, Italy, Germany,Belgium, the Russian Federation, Ukraine, thePeople’s Republic of China, Taiwan, SouthKorea, Japan, Turkey, Georgia, Azerbaijan,Israel, Egypt, Pakistan, India, Singapore, andIndonesia. Other officials from the WesternEuropean Union, the North Atlantic TreatyOrganization, the United Nations HighCommission for Refugees, and the InternationalCommittee of the Red Cross also provided assis-tance.

The Commission and Staff worked withmany non-profit organizations, corporations,and public policy institutions. These include:the International Institute for Strategic Studies;the Woodrow Wilson Center; the Nixon Center;the Brookings Institution; RAND; the Centerfor Naval Analyses; the Institute for DefenseAnalyses; the Center for Strategic andInternational Studies; the Center for Strategic

Acknowledgements

Commission and Study Group Staff Roster




and Budgetary Assessments; the CarnegieCorporation; the National Institute for PublicPolicy; the CATO Institute; the Center forDefense Information; Toffler Associates;Science Applications International Corporation;Global Business Network; DFI International;Lockheed-Martin Corporation; the World Bank;the International Monetary Fund; Organisationfor Economic Co-operation and Development;Standard and Poors’ DRI Group; WhartonEconomic Forecasting Associates; the NationalGuard Association; the East-West Center; andthe International Foundation for ElectionSystems.

The Commission met with many individu-als from governments as well as public andprivate organizations in the United States andoverseas in the course of workshops, seminars,and interviews. Others assisted the Commission

with itineraries and contacts, and countlessothers provided information, made presenta-tions, or reviewed draft papers.

Thousands of people in this country andaround the world have also assisted us over ourinteractive website. Since the site opened to theworld in March 1999, it has been “hit” over700,000 times. We have also received morethan 400 archived substantive comments fromall over the country and some from outside thecountry as well. The “Future Tech Forum” wasespecially helpful in generating sources of in-formation for this report. This is the first timethat any U.S. national commission has devel-oped a means of communicating interactivelywith the American public-at-large during theactive research phase of a study. The websitewill remain open and operating for the durationof the Commission’s work at www.nssg.gov.


http://www.nssg.gov

SEEKING A NATIONAL STRATEGY:

A CONCERT FOR PRESERVING SECURITY AND PROMOTING FREEDOM

The Phase II Report on a U.S. National Security Strategy for the 21st Century


April 15, 2000

Introduction

“We must disenthrall ourselves,Ó saidAbraham Lincoln, at a time of

much greater peril to the Republic than we facetoday. As the times are new, said Lincoln, Òso wemust think anew.Ó At the dawn of this new cen-tury, the nation faces a similar necessity. No con-cern of American society is more in need of cre-ative thinking than the future security of thiscountry, but in no domain is such thinking moreresistant to change. The very term ÒsecurityÓsuggests caution and guardedness, not innova-tion. We know that major countries rarely engagein serious rethinking and reform absent a majordefeat, but this is a path the United States cannottake. Americans are less secure than they believethemselves to be. The time for reexamination isnow, before the American people find them-selves shocked by events they never anticipated.

During the last half century, the nationalsecurity strategy of the United States wasderived largely from, focused on, and commit-ted to the containment of Soviet Communism.Since the fall of the Berlin Wall in 1989, and thedramatic transformation of world politics result-ing from the dissolution of the Soviet Uniontwo years later, our leaders have been searchingfor a unifying theme to provide a strategicframework appropriate to current and future cir-cumstances. That search has not been easy.

The U.S. Commission on National Security/21st Century has been tasked with thinkinganew about AmericaÕs national security for thenext 25 years.1 In this report, we suggest thestrategic precepts that should guide the formula-tion of U.S. strategy, and then take a fresh lookat U.S. national interests and priority objectives.On that basis, we propose the framework of anew national security strategy.2 This report isintended to contribute to a new consensus onnational security strategy to carry the UnitedStates forward into a challenging future.3

Thinking about Strategy

This CommissionÕs Phase I reportpointed to two contradictory trends

ahead: a tide of economic, technological, andintellectual forces that is integrating a globalcommunity, amid powerful forces of social andpolitical fragmentation.4 While no one knowswhat the mix of these trends will produce, thenew world coming will be dramatically differ-ent in significant respects. Governments areunder pressure from below, by forces of ethnicseparatism and violence, and from above, byeconomic, technological, and cultural forcesbeyond any governmentÕs full control. We arewitnessing a transformation of human societyon the magnitude of that between the agricul-tural and industrial epochsÑand in a far morecompressed period of time.

Such circumstances put a special premi-um on strategic wisdom, particularly for acountry of the size and character of theUnited States. In this Commission’s view, theessence of American strategy must compose a


1 This Commission, established to examine comprehensivelyhow this nation will ensure its security in the next 25 years,has a threefold task. Phase I, completed on September 15,1999, described the transformations emerging over the nextquarter-century in the global and domestic U.S. securityenvironment. Phase II, concerning U.S. interests, objec-tives, and strategy, is contained in this document. Phase III,which will examine the structures and processes of the U.S.national security apparatus for 21st century relevancy, willbe delivered on or before February 15, 2001.

2In the interest of brevity, this Commission has compressed con-siderable discussion and detail into this document. Furtherdiscussion of the implications of several main themes inthis report will be presented in the CommissionÕs Phase IIIfindings.

3 This report is built upon a consensus involving all members ofthe Commission, but not every Commissioner subscribeswith equal enthusiasm to every statement contained herein.

4See New World Coming: American Security in the 21st Century

(Washington, DC: U.S. Commission on NationalSecurity/21st Century, September 15, 1999).

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balance between two key aims. The first is toreap the benefits of a more integrated world inorder to expand freedom, security, and prosper-ity for Americans and for others. But, second,American strategy must also strive to dampenthe forces of global instability so that thosebenefits can endure. Freedom is the quintes-sential American value, but without security,and the relative stability that results there-from, it can be evanescent.American strategyshould seek both security and freedom, and itmust seek them increasingly in concert withothers. Hence our title: A Concert for Pre-serving Security and Promoting Freedom.

Our assessment of the new worldemerging, and the core interests and

values of the American people, lead us to offerthe following precepts as a guide to the formu-lation of national strategy:

Strategy and policy must be groundedin the national interest. The national inter-est has many strandsÑpolitical, economic,security, and humanitarian. National inter-ests are nevertheless the most durable basisfor assuring policy consistency. Gaining andsustaining public support for U.S. policy isbest achieved, too, when American princi-ples are coupled with clearly visible nation-al interests. Moreover, a strategy based onnational interest, properly conceived,engenders respect for the interests of others.

The maintenance of America’s strengthis a long-term commitment and cannotbe assured without conscious, dedicatedeffort. If America does not make wiseinvestments in preserving its own strength,well within 25 years it will find its powerreduced, its interests challenged even morethan they are today, and its influence erod-ed. Many nations already seek to balanceAmericaÕs relative power, and the sinews of

American strengthÑsocial, military, eco-nomic, and technologicalÑwill not sustainthemselves without conscious nationalcommitment. Assuring American prosperi-ty is particularly critical; without it, theUnited States will be hobbled in all itsefforts to play a leading role internationally.

The United States faces unprecedentedopportunities as well as dangers in thenew era. American strategy must rise topositive challenges as well as to negativeones. Working toward constructive rela-tions among the major powers, preservingthe dynamism of the new global economyand spreading its benefits, sharing responsi-bility with others in grappling with newtransnational problemsÑthis is a diplomat-ic agenda that tests American statesman-ship and creativity. As in the late 1940s, theUnited States should help build a new inter-national system in which other nations,freely pursuing their own interests, find itadvantageous to do so in ways that coincidewith American interests.

Since it cannot bear every burden, theUnited States must find new ways to joinwith other capable and like-mindednations. Where America would not actitself, it retains a responsibility as the lead-ing power to help build effective systems ofinternational collaboration. America musttherefore overcome its ambivalence aboutinternational institutions and about thestrength of its partners, questioning themless and encouraging them more.

This nation must set priorities andapply them consistently. To sustain publicsupport and to discipline policy, Americamust not exhaust itself by limitless com-mitments. Especially with respect to mili-tary intervention abroad, a finer calculus of


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benefits and burdens must govern.Resisting the ÒCNN effectÓ may be one ofthe most important requirements of U.S.policymaking in the coming period.

Finally, America must never forget thatit stands for certain principles, mostimportantly freedom under the rule oflaw. Freedom is today a powerful tide inthe affairs of mankind, and, while themeans chosen to serve it must be temperedby a realistic appreciation of limits, it is notÒrealismÓ to ignore its power. At the sametime, if America is to retain its leadershiprole, it must live up to its principles consis-tently, in its own conduct and in its rela-tions with other nations.

The National Interest in a NewCentury

The first of these precepts is the mostcrucial of all: American national secu-

rity strategy must find its anchor in U.S. nation-al interests, interests that must be both protect-ed and advanced for the fundamental wellbeing of American society. We define theseinterests at three levels: survival interests, with-out which America would cease to exist as weknow it; critical interests, which are causallyone step removed from survival interests; andsignificant interests, which importantly affectthe global environment in which the UnitedStates must act. There are, of course, othernational interests, though of lesser importancethan those in the above three categories.

U.S. survival interests include AmericaÕssafety from direct attack, especially involvingweapons of mass destruction, by either states orterrorists. Of the same order of importance isthe preservation of AmericaÕs Constitutionalorder and of those core strengthsÑeducational,

industrial, scientific-technologicalÑthat under-lie AmericaÕs political, economic, and militaryposition in the world.

Critical U.S. national interests include thecontinuity and security of those key internation-al systemsÑenergy, economic, communica-tions, transportation, and public health (includ-ing food and water supplies)Ñon which thelives and well being of Americans have come todepend. It is a critical national interest of theUnited States that no hostile power establishitself on U.S. borders, or in control of criticalland, air, and sea lines of communication, orÑin todayÕs new worldÑin control of access toouter space or cyberspace. It is a critical nation-al interest of the United States that no hostilehegemon arise in any of the globeÕs majorregions, nor a hostile global peer rival or a hos-tile coalition comparable to a peer rival. Thesecurity of allies and friends is a critical nation-al interest of the United States, as is the abilityto avert, or check, the proliferation of weaponsof mass destruction into the hands of actors hos-tile or potentially hostile to the United States.

Significant U.S. national interests includethe deepening and institutionalization abroad ofconstitutional democracy under the rule of law,market-based economics, and universal recogni-tion of basic human rights. The United Statesalso has a significant interest in the responsibleexpansion of an international order based onagreed rules among major powers to managecommon global problems, not least thoseinvolving the physical environment. It is a sig-nificant national interest of the United States thatthere be economic growth abroad, to raise theliving standards of the poorest and to mitigateeconomic and political conflict. It is a significantnational interest of the United States that inter-national terrorism and criminality (includingillicit drug trade) be minimized, but withoutjeopardizing the openness of international eco-


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nomic and cultural exchanges. It is a significantnational interest of the United States that neithermass murder nor gross violations of humanrights be acceptable in the worldÕs political life.It is a significant national interest of the UnitedStates that immigration across American bound-aries not be uncontrolled. Finally, the free andsafe movement of American citizens abroad is asignificant national interest of the United States.

Key Objectives

The United States seeks to assure itsown freedom under law, its safety, and

its prosperity. But Americans recognize thatthese goals are best assured in a world whereothers achieve them, too. American strategy,therefore, must engage in new waysÑand inconcert with othersÑto consolidate andadvance the peace, prosperity, democracy, andcooperative order of a world now happily freefrom global totalitarian threats. At the sametime, howeverÑalso in concert with othersÑAmerican strategy must strive to stabilize thoseparts of the world still beset by acute politicalconflict. To fulfill these strategic goals in a newage, AmericaÕs priority objectivesÑand keypolicy aimsÑmust be these:

FIRST, TO DEFEND THE UNITED STATES AND

ENSURE THAT IT IS SAFE FROM THE DANGERS OF

A NEW ERA.

In light of the new dangers arising fromthe proliferation of weapons of mass

destruction and terrorism, the United Statesmust focus anew on how to maintain a robustand powerful deterrent to all forms of attack onits territory and its critical assets. Non-prolifer-ation of weapons of mass destruction is of thehighest priority in U.S. national security policyin the next quarter century. A higher priority,too, should be given to preventing, throughdiplomatic and other means, unconventional

attacks on all states. But should prevention anddeterrence fail, the United States must havemeans of active defense against both mortaldanger and blackmail. U.S. military, lawenforcement, intelligence, economic, financial,and diplomatic means must be effectively inte-grated for this purpose.

The United States should seek enhancedinternational cooperation to combat the grow-ing proliferation of weapons of mass destruc-tion. This should include an effective andenforceable international ban on the creation,transfer, trade, and weaponization of biologicalpathogens, whether by states or non-stateactors. Also, when available and implementedwith rigor, cooperative programs to deal withexisting stockpiles of nuclear, biological, andchemical weapons are cost-effective and polit-ically attractive ways to reduce the dangers ofweapons and weapons mat�riel proliferation.

The United States should also strive todeepen the international normative consensusagainst terrorism and state support of terrorism.It should work with others to strengthen coop-eration among law enforcement agencies, intel-ligence services, and military forces to foil ter-rorist plots and deny sanctuary to terrorists byattacking their financial and logistical centers.

The United States should build comprehen-sive theater missile defense capabilities. Itshould also build national defenses against alimited ballistic missile attack to the extenttechnically feasible, fiscally prudent, and polit-ically sustainable. As cruise missile and othersophisticated atmospheric technologies spread,the United States must address the problem ofdevising defenses against such capabilities.The United States must also develop methodsto defend against other, covert means of attack-ing the United States with weapons of massdestruction and disruption.


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The United States must also have specializedforces capable of combating threats and black-mail from those possessing weapons of massdestruction and from terrorism. The magnitude ofthe danger posed by weapons of mass destructioncompels this nation, as well, to consider careful-ly the means and circumstances of preemption.

The protection of U.S. and internationalaccess to outer space and cyberspace mustbecome a high priority of U.S. security plan-ning. Outer space and cyberspace are the mainarteries of the worldÕs evolving informationand economic systems, and the ability to moveideas and information through them freely is aprerequisite for expanding global freedom andprosperity. Secure access to outer space andcyberspace is also now the sine qua non of theU.S. militaryÕs ability to function effectively.Through both technological and diplomaticmeans, the United States needs to guard againstthe possibility of ÒbreakoutÓ capabilities inspace or cyberspace that would endanger U.S.survival or critical interests.

Despite the political obstacles, the UnitedStates should redouble its efforts to deal multi-laterally with the diffusion of dangerous dual-use technologies. It must improve its capabilityto track the destinations and final uses of itsown high-technology exports, and it must beprepared to aid allies in similar efforts.

To deal medically and psychologically withpotentially large losses of American lives inattacks against the American homeland, U.S.public health capabilities need to be augmented.In addition, programs to ensure the continuity ofConstitutional government should be bolstered.

SECOND, TO MAINTAIN AMERICA’S SOCIAL

COHESION, ECONOMIC COMPETITIVENESS,TECHNOLOGICAL INGENUITY, AND MILITARY

STRENGTH.

To ensure the vitality of all its core insti-tutions, the United States must make it

a priority of national policy to improve the qual-ity of primary and secondary education, partic-ularly in mathematics and the sciences. More-over, in an era when private research and devel-opment efforts far outstrip those of government,the United States must create more advancedand effective forms of public/private partner-ships to promote public benefit from scientific-technological innovation.

The United States must strive to reduce itsdependence on foreign sources of fossil fuelenergy that leaves this country and its alliesvulnerable to economic pressures and politicalblackmail. Steady development of alternativesources of energy production, and greater effi-ciencies in energy transmission and conserva-tion, are thus national security as well as eco-nomic and environmental necessities.

The United States must strengthen thebonds between the American people and thoseof its members who serve in the armed forces. Itmust also strengthen government (civil and mil-itary) personnel systems in order to improverecruitment, retention and effectiveness at alllevels. Executive-Legislative relations regard-ing national security policy need to foster effec-tive collaboration.

THIRD, TO ASSIST THE INTEGRATION OF KEY

MAJOR POWERS, ESPECIALLY CHINA, RUSSIA,AND INDIA, INTO THE MAINSTREAM OF THE

EMERGING INTERNATIONAL SYSTEM.

The United States should engage Chinaconstructively and with a positive atti-

tude, politically and economically. But it mustrecognize that the potential for competitionbetween the United States and China mayincrease as China grows stronger. ChinaÕsincreasing adherence to global economic, legal,


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and cultural institutions and norms will be apositive factor, and the United States shouldencourage and assist this process of integration.At the same time, the United States shouldmaintain its deterrent strength and its alliancesystem in the Asia/Pacific region. It shouldremain committed to the peaceful resolution ofthe Taiwan question, consistent with the termsof the three Sino-American Communiqu�s andthe Taiwan Relations Act.

The United States should support Russianeconomic reform and democratic politicaldevelopment on a realistic basis, recognizingthat these goals are first and foremost forRussians themselves to accomplish. It is also inthe U.S. interest to assist Russian integrationinto global economic institutions, no less thanis the case with China.

Clearly, too, relations with Russia should beappropriate to its importance as a major power.It does not benefit the United States to pursuepolicies that weaken or humiliate Moscow. Still,the United States must assert its own interestswhen they are affected adversely by RussianpoliciesÑas they are, for example, by policiesthat encourage or allow the proliferation ofweapons of mass destruction. The United Statesand its allies should also support the continuedpolitical independence and territorial integrityof the newly independent former Soviet states.

In addition, arms control remains an impor-tant facet of U.S. national security policy. Butthe United States needs a new calculus fordeveloping future strategic nuclear arms controlstrategy beyond START II. Such a calculusmust include analysis of the implications of theincrease in the number and prospective capabil-ities of nuclear weapons powers in the world. Itmust take account of new Chinese and Russiannuclear weapons capabilities. It must also takeinto account both the potential U.S. need to

respond to chemical and biological threats withnuclear weapons and the U.S. commitment toprotect non-nuclear states from blackmail andattack by nuclear weapons states.

India is the worldÕs largest democracy andsoon will be the worldÕs most populous coun-try. Therefore, India is and must be dealt withas a major power. Pakistan, too, remains a piv-otal country in its own right, and good U.S.relations with Pakistan are in the U.S. nationalinterest. The United States should also encour-age India and Pakistan to settle their differ-ences short of violence, and should make itsgood offices available to that end.

It is unlikely that American policy can per-suade any Indian or Pakistani government toabandon its nuclear capacity. But the UnitedStates, together with other major powers, canplay a more active role in discouraging futuretesting and the further production of fissilematerials not under safeguards. The UnitedStates should also encourage mutual adoptionof measures to ensure the safety and security ofboth countriesÕ nuclear capabilities.

Beyond its efforts to bring these threemajor states into the mainstream of a newcooperative international order, the UnitedStates has a strong interest in limiting the fur-ther proliferation of sophisticated conventionalweapons around the world. It should thereforeseek support for a multilateral approach todevising limitations on such proliferation firstwith its closest allies and friends, and thereafterwith Russia, China, India, and other significantarms producing countries.

FOURTH, TO PROMOTE, WITH OTHERS, THE

DYNAMISM OF THE NEW GLOBAL ECONOMY AND

IMPROVE THE EFFECTIVENESS OF INTERNATION-AL INSTITUTIONS AND INTERNATIONAL LAW.


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The United States, in concert with theG-7, must strive to manage the ele-

ments of turbulence that accompany economicglobalization in order to spread its benefits,while minimizing social and political disloca-tions and the systemÕs vulnerability to financialcrisis. This must include building politicallegitimacy as well as an economic architecture.

Continuing trade liberalization remains akey to global economic advance, particularly forthose regions, countries, and selected economicsectors in advanced countriesÑincluding theUnited StatesÑwhose trade remains shackledby protectionist policies. Bilateral and regionalapproaches (in addition to the global systemrepresented by the WTO) should be encouraged.Environmental concerns and labor rights mustbe addressed, although not in a manner thatblocks or reverses trade liberalization.

Similarly, economic sanctions should notunduly inhibit trade. But, while this Com-mission is skeptical of the efficacy of broad andespecially unilateral U.S. economic sanctions,specifically targeted financial sanctions, partic-ularly when employed multilaterally, have a bet-ter chance of working. As the United States andits closest allies erect a new financial architec-ture, the capability to impose financial sanctionsshould be built into the system.

The United States, in cooperation with oth-ers, must continue to ensure that the price andsupply of Persian Gulf and other major energysupplies are not wielded as political weaponsdirected against the United States or its alliesand friends.

Because this Commission believes that pub-lic diplomacy is an important part of Americandiplomacy, the United States should help spreadinformation technology worldwide, to bring thebenefits of globalization and democracy to those

parts of the world now cut off from them. TheUnited States should also employ new technolo-gies creatively to improve its public diplomacyin the new Information Age.

The United States should continue to pro-mote strong international efforts against statecorruption and transnational criminality, andshould help the international communityrespond more effectively to humanitarian reliefcrises. To do this will require not only working innew ways with other governments but also withthe burgeoning community of non-governmentalorganizations (NGOs), particularly in areaswhere U.S. official representation is sparse.

The United States should, as it has tradi-tionally, support the growth of internationallaw and remain willing to subscribe to interna-tional agreements where they promote overallU.S. interests. But the United States mustalways reserve the right to define its own inter-ests, even if it requires withdrawing fromÑbutnot violatingÑselected treaty obligations. U.S.policy coherence and democratic accountabili-ty under the Constitution must be preserved.

The United States has a strong stake in areformed and more effective United Nationssystem, and should engage constructively tothat end. The UN, when properly supported,can be an effective instrument for the enhance-ment of international stability and humanitari-an ends. In addition, the United States must bewilling to lead in assembling ad hoc coalitionsoutside UN auspices if necessary.

FIFTH, TO ADAPT U.S. ALLIANCES AND

OTHER REGIONAL MECHANISMS TO A NEW ERA

IN WHICH AMERICA’S PARTNERS SEEK GREATER

AUTONOMY AND RESPONSIBILITY.

The cornerstone of AmericaÕs regionalpolicies must be the maintenance and


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enhancement of existing U.S. alliances andfriendships. By strengthening relations withallies and friends, the United States extendsboth its influence and the zone of peace andstability.

In Europe, the United States should be pre-pared to support the evolution of an independ-ent European Union defense policy in a mannerconsistent with the unity of the AtlanticAlliance. Forward-stationed forces, as theembodiment of overall U.S. capabilities andcommitments in Europe, should remain anessential ingredient in that regional securityalliance. The United States should also pro-mote the concept of a Transatlantic Free TradeArea (TAFTA), as well as encourage the inte-gration of East and Central European democra-cies into Atlantic and European economic insti-tutions based on free trade.

The United States should expand the NorthAmerican Free Trade Agreement (NAFTA) toall the democracies of the Western Hemisphere.It should deepen its ties within this hemisphereand seek to strengthen the Organization ofAmerican States (OAS). Whatever the meritsof ÒexportingÓ democracy, there can be littledoubt that helping to bolster democracieswhere they have come to exist of their ownexertions should be high on the list of U.S. pri-orities. Nowhere is such an effort more impor-tant than in the Western Hemisphere.

In the Asia/Pacific area, the U.S.-Japanalliance should remain the keystone of U.S. pol-icy. The United States should seek a more equalstrategic partnership and a free trade agreementwith Japan. In a region where old rivalries per-sist and reconciliation and integration have notadvanced as far as they have in Europe, U.S.alliance and security ties with Korea, Australiaand New Zealand, Thailand, Singapore, thePhilippines, and others remain critical. Such ties

compose a regional security community restingsolidly on the assurance provided by U.S.engagement and power. The United Statesshould also support the growth of multilateralinstitutions for regional security and prosperity,including the Association of Southeast AsianNations (ASEAN), the ASEAN RegionalForum (ARF), and the Asia-Pacific EconomicCooperation (APEC ).

The United States should plan now for thepossibility of Korean reunification. SomeAmerican troops should remain in a unifiedKorea as a factor of reassurance and stability inthe region, including for the purpose of ensur-ing that a unified Korea remains withoutnuclear weapons.

The United States has a continuing criticalinterest in keeping the Persian Gulf secure, andmust accept its share of the burden for so doing.In that light, it must be a high priority to preventeither Iraq or Iran from deploying deliverableweapons of mass destruction. The United Statesshould also support the emerging collaborationof friendly statesÑnotably Israel, Turkey, andJordanÑand seek to broaden such a collabora-tion to include Egypt and Saudi Arabia, amongothers. Assisting the diplomatic settlement of theArab-Israeli dispute will advance that prospect.

In collaboration with other OECD coun-tries, the Organization of African Unity (OAU),and international development institutions, theUnited States should assist sub-Saharan Africato build stronger economies and strengtheninstitutional cohesion and democratic ideals. Inthe economic field, emphasis should be put onpromoting private investment, helping to devel-op West AfricaÕs offshore energy resources, andproviding debt relief and humanitarian aid(including resources to combat the AIDS epi-demic). The United States should promote theprofessionalization of African militaries within


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a framework of democratic values, and encour-age African governments to engage their mili-taries in constructive tasks of infrastructurebuilding. Major emerging democracies such asSouth Africa and Nigeria will be key players aspartners with the United States and its allies.

SIXTH, TO HELP THE INTERNATIONAL COM-MUNITY TAME THE DISINTEGRATIVE FORCES

SPAWNED BY AN ERA OF CHANGE.

The disruptive new forces of globaliza-tion are subjecting many governments

to extraordinary pressures. In many states,what used to be governmental monopolies onthe use of force, on law making, and over thesupply of money are now ÒprivatizedÓ in vari-ous ways. Even the spread of the idea of free-dom, while positive in the long run, is oftenaccompanied by destabilization. The disruptionof the political and territorial status quo inmuch of the world will be one of the distinctivefeatures of international affairs over the nextquarter century.

To address these spreading phenomena ofweak and failed states, ethnic separatism andviolence, and the crises they breed, the UnitedStates needs first to establish priorities. Notevery such problem must be primarily a U.S.responsibility, particularly in a world whereother powers are amassing significant wealthand human resources. There are countrieswhose domestic stability is, for differing rea-sons, of major importance to U.S. interests(such as Mexico, Colombia, Russia, and SaudiArabia). Without prejudging the likelihood ofdomestic upheaval, these countries should be apriority focus of U.S. planning in a mannerappropriate to the respective cases.

For cases of lesser priority, the UnitedStates should help the international communitydevelop innovative mechanisms to manage the

problem of failed states. One such mechanismshould include standing procedures to facilitateorganizing peacekeeping operations and UNÒconservatorships.Ó

In all cases, the United States should resortfirst to preventive diplomacy: acting with polit-ical and economic tools, and in concert withothers, to head off conflict before it reaches thethreshold of mass violence.

Preventive diplomacy will not alwayswork, however, and the United States should beprepared to act militarily in conjunction withother nations in situations characterized by thefollowing criteria:

¥ when U.S. allies or friends are imperiled; ¥ when the prospect of weapons of massdestruction portends significant harm tocivilian populations; ¥ when access to resources critical to theglobal economic system is imperiled; ¥ when a regime has demonstrated intent todo serious harm to U.S. interests;¥ when genocide is occurring.

If all or most of these conditions are pres-ent, the case for multilateral military action isstrong. If any one of these criteria is seriousenough, however, the case for military actionmay also be strong.

Implications for National Security

The strategy outlined here bears impor-tant implications for the political, eco-

nomic, and military components of U.S. nation-al security policy. From the political perspec-tive, American diplomacy must recognize thatthe increasingly integrated nature of globalexchanges will render traditional analyticaldivisions of the world obsolete. While impor-tant relations will continue to take place on a


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bilateral basis, many more international phe-nomena will be increasingly regional in natureand more will be fully global. The proliferationof non-state actors will also strain the tradition-al categories within which American diplomacyis organized.

As this Commission emphasized in itsPhase I report, the economic dimensions ofstatecraft are also becoming more important.Among the democracies in what is known asthe Òzone of democratic peace,Ó economicissues can rival the importance of militaryones. But economic issues are also of criticalimportance to the prospect that other emergingor developing states will succeed or fail withfundamental political and social reform.American strategy must also recognize theimportance of technology as the basic under-pinning of economic health and militaryprowess the world over.

All this means that the integrating functionof U.S. policymaking processes will be chal-lenged as never before. Traditional nationalsecurity agencies (State, Defense, CIA, NSCstaff) will need to work together in new ways,and economic agencies (Treasury, Commerce,U.S. Trade Representative) will need to workmore closely with the traditional national secu-rity community. In addition, other playersÑespecially Justice and TransportationÑwillneed to be integrated more fully into nationalsecurity processes. Merely improving the inter-agency process around present structures maynot suffice.

Moreover, the U.S. government must learnto build more effective partnerships with stateand local governments, and government as awhole must develop new partnerships with non-governmental organizationsÑthough withoutsacrificing its ultimate responsibility andaccountability for determining national policy.

As to military implications, the worldwe see emerging, and the strategy

appropriate to that environment suggest thatthe United States needs five kinds of militarycapabilities:

¥ nuclear capabilities to deter and protectthe United States and its allies from attack;¥ homeland security capabilities;¥ conventional capabilities necessary towin major wars;¥ rapidly employable expeditionary/inter-vention capabilities; and¥ humanitarian relief and constabularycapabilities.

Fundamental to U.S. national security strat-egy is the need to project U.S. power globallywith forces stationed in the United States, andthose stationed abroad and afloat in the forwardpresence role. Owing to the proliferation of newdefense technologies in the hands of otherstates, effective power projection will becomemore difficult for the U.S. armed forces in the21st century. U.S. forces must therefore possessgreater flexibility to operate in a range of envi-ronments, including those in which the enemyhas the capability to employ weapons of massdestruction. U.S. forces must be characterizedby stealth, speed, range, accuracy, lethality,agility, sustainability, reliabilityÑand be sup-ported by superior intelligenceÑin order todeal effectively with the spectrum of symmetri-cal and asymmetrical threats we anticipate overthe next quarter century.

This Commission believes that the Òtwomajor theater warsÓ yardstick for sizing U.S.forces is not producing the capabilities neededfor the varied and complex contingencies nowoccurring and likely to increase in the yearsahead. These contingencies, often calling forexpeditionary interventions or stability opera-


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tions, require forces different from thosedesigned for major theater war. We believe thesecontingencies will occur in the future with suffi-cient regularity and simultaneity as to oblige theUnited States to adapt portions of its force struc-ture to meet these needs. The overall forcewould then have the ability to engage effective-ly in contingencies ranging from humanitarianassistance and disaster relief, to peace and expe-ditionary combat operations, to large-scale,high-intensity conventional warfare. Finally, werecommend that the force structure designed toaddress these needs be developed on the basis ofreal-world intelligence assessments rather thanillustrative scenarios.

In short, the capabilities mandated by theserequirements will result in forces able to deployrapidly, be employed immediately, and prevaildecisively in expeditionary roles, prolonged sta-bility operations, and major theater wars; a forceto deter wars, to preclude crises from evolvinginto major conflicts, and to win wars rapidlyand decisively should it become necessary.

America must also enhance the civil (thatis, non-military) aspects of homeland security.These functions must be adequately funded andorganized along appropriate lines of authority,responsibility, and accountability. The NationalGuardÑsuccessor to the militia, and acknowl-edged in the Second Amendment as the historicdefender of the RepublicÑmust be trained andequipped to assume, among its other responsi-bilities, a significant role in defending thehomeland in the 21st century.

It is imperative, too, that the United Statesdevelop and fund these five kinds of capabili-ties consistent with the level of need created bychanging political and security realities. Giventhe demands now placed upon this nationÕsmilitary, or those anticipated in the next quartercentury, it is evident that modern forces equal

to these demands cannot be sustained by cur-rent levels of spending.

To Phase III—Building for Peace

The strategy articulated here requiresthat the United States lead in the con-

struction of a world balanced between theexpansion of freedom, and the maintenance ofunderlying stability. To do so it must concert itsefforts with others and, to the extent possible,in a way consistent with the interests of others.

Having become a global power, the UnitedStates now holds a responsibility it will notabandon, both for the safeguarding of Americaninterests and the broader interests of globalpeace and security. The United States is the firstnation with fully global leadership responsibili-ties, but there are more and less effective waysto lead. Tone matters. Leadership is not thesame as dominance; everyone elseÕs businessneed not also be AmericaÕs. Just as riches with-out integrity are unavailing, so power withoutwisdom is unworthy. As Shakespeare put it:

O, it is excellent To have a giantÕs strength; but it is

tyrannousTo use it like a giant.5

The strategy outlined here for U.S.national security differs from the

strategic habits of the past half-century. It putsnew emphasis on the economic and other non-military components of national security; itfocuses on opportunities as much as on threats;and it reminds us of the domestic foundationsof U.S. international strength. It attempts toclarify U.S. strategy and purposes, and tomatch them to a prudent sense of limits. It is


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5 Measure for Measure, Act II, Scene 2.

not clear to us that the U.S. government is noworganized in such a way that it can execute thisstrategy, or any other strategic concept thatdeparts significantly from past practices. Theworld is changing fast, and if the U.S. govern-ment does not change with it, it may find itselfforced into one bewildered reaction afteranother. If the United States loses the capacityto respond to dynamic change, the day willcome when we will regret it dearly.

In Phase III of its work, therefore, thisCommission will examine current structuresand processes to determine their relevance tothe 21st century. We will apply the followingcriteria:

First, the U.S. government needs to beadept at anticipating national security chal-lenges. This requires the best possible systemof intelligence, from collection to analysis todissemination to policy review.

Second, the U.S. government needs theability to calculate the longer-term implicationsof intervention abroad. It is not enough to beselective; we must be wisely selective, whichrequires a better matching of the instruments ofnational power to the problems at hand.

Third, the U.S. government needs to inte-grate effectively all non-traditional elements ofnational security policy with traditional ones.

Fourth, the U.S. government needs theagility to adapt rapidly to changes in the globalenvironment.

Fifth, the U.S. government needs neworganizational mechanisms to manage theincreased blurring of lines among military,police, and legal jurisdictions, and among newforms of warfare.

Sixth, the U.S. government needs effectivemeans to assess critically its own performance,draw lessons from its experience, and adjustresources, as appropriate.

Seventh, the U.S. government needs coher-ence between domestic policies with corenational security implications and nationalsecurity policies directed outside U.S. borders.

Phase III of this CommissionÕs work willoffer recommendations for enhancing the U.S.governmentÕs ability to function effectively in arapidly changing political and technologicalenvironment. As with any kind of travel, clari-ty with respect to destination and route willprove unavailing if oneÕs vehicle is not up tothe journey. It is to that vehicleÑthe structuresand processes of the U.S. national securityapparatusÑthat this Commission now turns itsattention.


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Road Map for National Security: Imperative for Change

The Phase III Report of

the U.S. Commission on National Security/21st Century


February 15, 2001

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U.S. Commission on National Security/21st Century1

Gary Hart Warren B. Rudman Co-Chair Co-Chair

Anne Armstrong Norman R. Augustine Commissioner Commissioner

John Dancy John R. Galvin Commissioner Commissioner

Leslie H. Gelb Newt Gingrich Commissioner Commissioner

Lee H. Hamilton Lionel H. Olmer Commissioner Commissioner

Donald B. Rice James Schlesinger Commissioner Commissioner

Harry D. Train Andrew Young Commissioner Commissioner

1 Disclaimer: This Commission has striven successfully to achieve consensus on all major issues, and each Commissioner stands by all the major recommendations made in this report. However, as is to be expected when discussing complex issues, not every Commissioner agrees completely with every statement in the text that follows.

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Contents

Foreword, Gary Hart and Warren B. Rudman………………………...………………………….iv Preface, Charles G. Boyd…………...….………………………………………….……………....v

EXECUTIVE SUMMARY……………………………………………………………………....…..viii Introduction: Imperative for Change………..……..……………………………………...……2

I. Securing the National Homeland ……………………..………………………………….….10

A. The Strategic Framework……….…………………………………………..………...11 B. Organizational Realignment…….…………………………………………………….14 C. Executive-Legislative Cooperation……………………………………….………..…26

II. Recapitalizing America’s Strengths in Science and Education…………………………...30 A. Investing in Innovation…………………………………………….………….……...31 B. Education as a National Security Imperative ……….………………………….…….38

III. Institutional Redesign…………………………..………..…. …...………..………………..47 A. Strategic Planning and Budgeting………..…………………………………………...48 B. The National Security Council………………….…...………………………………..49 C. Department of State…………………………………..…………………….…………52 D. Department of Defense………………………………..……………………………...63 E. Space Policy……………………………………………..……………………………78 F. The Intelligence Community……………………………..…………………………...81

. IV. The Human Requirements for National Security…………………………………………86 =

A. A National Campaign for Service to the Nation………….……………………....…..88 B. The Presidential Appointments Process………………………………………………89 C. The Foreign Service……………………………………………………...…………...94 D. The Civil Service………………………………………………….………….……....96 E. Military Personnel…………...……………………………………………...…….…102

V. The Role of Congress……………………………………………………………….……...110 A Final Word……………….…………………………………………………………………..116 Index…………………………………………………………………………………………….118

Appendix 1: The Recommendations………..…………………………………………….……..124 Appendix 2: The USCNS/21 Charter…………………………….………………………….…..130

Appendix 3: Commissioner Biographies and Staff Listing………………………..…………….135

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Foreword

merican power and influence have been decisive factors for democracy and security throughout the last half-century. However, after more than two years of serious

effort, this Commission has concluded that without significant reforms, American power and influence cannot be sustained. To be of long-term benefit to us and to others, that power and influence must be disciplined by strategy, defined as the systematic determination of the proper relationship of ends to means in support of American principles, interests, and national purpose.

This Commission was established to redefine national security in this age and to do so in

a more comprehensive fashion than any other similar effort since 1947. We have carried out our duties in an independent and totally bipartisan spirit. This report is a blueprint for reorganizing the U.S. national security structure in order to focus that structure’s attention on the most important new and serious problems before the nation, and to produce organizational competence capable of addressing those problems creatively.

The key to our vision is the need for a culture of coordinated strategic planning to

permeate all U.S. national security institutions. Our challenges are no longer defined for us by a single prominent threat. Without creative strategic planning in this new environment, we will default in time of crisis to a reactive posture. Such a posture is inadequate to the challenges and opportunities before us.

We have concluded that, despite the end of the Cold War threat, America faces distinctly

new dangers, particularly to the homeland and to our scientific and educational base. These dangers must be addressed forthwith.

We call upon the new President, the new administration, the new Congress, and the

country at large to consider and debate our recommendations in the pragmatic spirit that has characterized America and its people in each new age.

Gary Hart Warren B. Rudman Co-Chair Co-Chair

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Preface

he U.S. Commission on National Security/21st Century was born more than two years ago out of a conviction that the entire range of U.S. national security policies and

processes required reexamination in light of new circumstances. Those circumstances encompass not only the changed geopolitical reality after the Cold War, but also the significant technological, social, and intellectual changes that are occurring.

Prominent among such changes is the information revolution and the accelerating

discontinuities in a range of scientific and technological areas. Another is the increased integration of global finance and commerce, commonly called “globalization.” Yet another is the ascendance of democratic governance and free-market economics to unprecedented levels, and another still the increasing importance of both multinational and non-governmental actors in global affairs. The routines of professional life, too, in business, university, and other domains in advanced countries have been affected by the combination of new technologies and new management techniques. The internal cultures of organizations have been changing, usually in ways that make them more efficient and effective.

The creators of this Commission believed that unless the U.S. government adapts itself to

these changes—and to dramatic changes still to come—it will fall out of step with the world of the 21st century. Nowhere will the risks of doing so be more manifest than in the realm of national security.

Mindful of the likely scale of change ahead, this Commission’s sponsors urged it to be

bold and comprehensive in its undertaking. That meant thinking out a quarter century, not just to the next election or to the next federal budget cycle. That meant searching out how government should work, undeterred by the institutional inertia that today determines how it does work. Not least, it meant conceiving national security not as narrowly defined, but as it ought to be defined—to include economics, technology, and education for a new age in which novel opportunities and challenges coexist uncertainly with familiar ones.

The fourteen Commissioners involved in this undertaking, one that engaged their

energies for over two years, have worked hard and they have worked well.2 Best of all, despite diverse experiences and views, they have transcended partisanship to work together in recognition of the seriousness of the task: nothing less than to assure the well-being of this Republic a quarter century hence.

This Commission has conducted its work in three phases. Phase I was dedicated to

understanding how the world will likely evolve over the next 25 years. From that basis in prospective reality, Phase II devised a U.S. national security strategy to deal with that world. Phase III aims to reform government structures and processes to enable the U.S. government to implement that strategy, or, indeed, any strategy that would depart from the embedded routines of the last half-century.

Phase I concluded in September 1999 with the publication of New World Coming:

American Security in the 21st Century.3 Phase II produced the April 2000 publication, Seeking a

2 See Appendix 3 for Commissioner biographies and a staff listing. 3 Publication consisted of two documents: Major Themes and Implications and Supporting Research and Analysis.

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National Strategy: A Concert for Preserving Security and Promoting Freedom. Phase III, presented in these pages, is entitled Road Map for National Security: Imperative for Change. This report summarizes enough of the Commission’s Phase I and Phase II work to establish an intellectual basis for understanding this Phase III report, but it does not repeat the texts of prior phases in detail. For those seeking fuller background to this report, the Commission’s earlier works should be consulted directly.4

n Road Map for National Security, the Commission has endeavored to complete the logic of its three phases of work, moving from analysis to strategy to the redesign of

the structures and processes of the U.S. national security system. For example, in Phase I the Commission stressed that mass-casualty terrorism directed against the U.S. homeland was of serious and growing concern. It therefore proposed in Phase II a strategy that prioritizes deterring, defending against, and responding effectively to such dangers. Thus, in Phase III, it recommends a new National Homeland Security Agency to consolidate and refine the missions of the nearly two dozen disparate departments and agencies that have a role in U.S. homeland security today.

That said, not every Phase I finding and not every Phase II proposal has generated a

major Phase III recommendation. Not every aspect of U.S. national security organization needs an overhaul. Moreover, some challenges are best met, and some opportunities are best achieved, by crafting better policies, not by devising new organizational structures or processes. Where appropriate, this report notes those occasions and is not reluctant to suggest new policy directions.

Many of the recommendations made herein require legislation to come into being. Many

others, however, require only Presidential order or departmental directive. These latter recommendations are not necessarily of lesser importance and can be implemented quickly.

The Commission anticipates that some of its recommendations will win wide support.

Other recommendations may generate controversy and even opposition, as is to be expected when dealing with such serious and complex issues. We trust that the ensuing debate will ultimately yield the very best use of this Commission’s work for the benefit of the American people.

rganizational reform is not a panacea. There is no perfect organizational design, no flawless managerial fix. The reason is that organizations are made up of people, and

people invariably devise informal means of dealing with one another in accord with the accidents of personality and temperament. Even excellent organizational structure cannot make impetuous or mistaken leaders patient or wise, but poor organizational design can make good leaders less effective.

Sound organization is important. It can ensure that problems reach their proper level of

decision quickly and efficiently and can balance the conflicting imperatives inherent in any national security decision-system—between senior involvement and expert input, between speed and the need to consider a variety of views, between tactical flexibility and strategic consistency. President Eisenhower summarized it best: “Organization cannot make a genius out of a dunce. But it can provide its head with the facts he needs, and help him avoid misinformed mistakes.”

Most important, good organization helps assure accountability. At every level of

organization, elected officials—and particularly the President as Commander-in-Chief—must be 4 All of this Commission’s reports may be found on its web page at www.nssg.gov.

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able to ascertain quickly and surely who is in charge. But in a government that has expanded through serial incremental adjustment rather than according to an overall plan, finding those responsible to make things go right, or those responsible when things go wrong, can be a very formidable task. This, we may be sure, is not what the Founders had in mind.

This Commission has done its best to step up to the mandate of its Charter. It is now up to

others to do their best to bring the benefits of this Commission’s effort into the institutions of American government.

Charles G. Boyd, General, USAF (Ret.) Executive Director

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Executive Summary

fter our examination of the new strategic environment of the next quarter century (Phase I) and of a strategy to address it (Phase II), this Commission concludes that

significant changes must be made in the structures and processes of the U.S. national security apparatus. Our institutional base is in decline and must be rebuilt. Otherwise, the United States risks losing its global influence and critical leadership role.

We offer recommendations for organizational change in five key areas: ● ensuring the security of the American homeland; ● recapitalizing America’s strengths in science and education; ● redesigning key institutions of the Executive Branch; ● overhauling the U.S. government’s military and civilian personnel systems; and ● reorganizing Congress’s role in national security affairs. We have taken a broad view of national security. In the new era, sharp distinctions

between “foreign” and “domestic” no longer apply. We do not equate national security with “defense.” We do believe in the centrality of strategy, and of seizing opportunities as well as confronting dangers. If the structures and processes of the U.S. government stand still amid a world of change, the United States will lose its capacity to shape history, and will instead be shaped by it.

Securing the National Homeland

he combination of unconventional weapons proliferation with the persistence of international terrorism will end the relative invulnerability of the U.S. homeland to

catastrophic attack. A direct attack against American citizens on American soil is likely over the next quarter century. The risk is not only death and destruction but also a demoralization that could undermine U.S. global leadership. In the face of this threat, our nation has no coherent or integrated governmental structures.

We therefore recommend the creation of an independent National Homeland Security

Agency (NHSA) with responsibility for planning, coordinating, and integrating various U.S. government activities involved in homeland security. NHSA would be built upon the Federal Emergency Management Agency, with the three organizations currently on the front line of border security—the Coast Guard, the Customs Service, and the Border Patrol—transferred to it. NHSA would not only protect American lives, but also assume responsibility for overseeing the protection of the nation’s critical infrastructure, including information technology.

The NHSA Director would have Cabinet status and would be a statutory advisor to the

National Security Council. The legal foundation for the National Homeland Security Agency would rest firmly within the array of Constitutional guarantees for civil liberties. The observance of these guarantees in the event of a national security emergency would be safeguarded by NHSA’s interagency coordinating activities—which would include the Department of Justice—as well as by its conduct of advance exercises.

The potentially catastrophic nature of homeland attacks necessitates our being prepared

to use the extensive resources of the Department of Defense (DoD). Therefore, the department

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needs to pay far more attention to this mission in the future. We recommend that a new office of Assistant Secretary for Homeland Security be created to oversee DoD activities in this domain and to ensure that the necessary resources are made available.

New priorities also need to be set for the U.S. armed forces in light of the threat to the

homeland. We urge, in particular, that the National Guard be given homeland security as a primary mission, as the U.S. Constitution itself ordains. The National Guard should be reorganized, trained, and equipped to undertake that mission.

Finally, we recommend that Congress reorganize itself to accommodate this Executive

Branch realignment, and that it also form a special select committee for homeland security to provide Congressional support and oversight in this critical area.

Recapitalizing America’s Strengths in Science and Education

mericans are living off the economic and security benefits of the last three generations’ investment in science and education, but we are now consuming capital.

Our systems of basic scientific research and education are in serious crisis, while other countries are redoubling their efforts. In the next quarter century, we will likely see ourselves surpassed, and in relative decline, unless we make a conscious national commitment to maintain our edge.

We also face unprecedented opportunity. The world is entering an era of dramatic

progress in bioscience and materials science as well as information technology and scientific instrumentation. Brought together and accelerated by nanoscience, these rapidly developing research fields will transform our understanding of the world and our capacity to manipulate it. The United States can remain the world’s technological leader if it makes the commitment to do so. But the U.S. government has seriously underfunded basic scientific research in recent years. The quality of the U.S. education system, too, has fallen behind those of scores of other nations. This has occurred at a time when vastly more Americans will have to understand and work competently with science and math on a daily basis.

In this Commission’s view, the inadequacies of our systems of research and education

pose a greater threat to U.S. national security over the next quarter century than any potential conventional war that we might imagine. American national leadership must understand these deficiencies as threats to national security. If we do not invest heavily and wisely in rebuilding these two core strengths, America will be incapable of maintaining its global position long into the 21st century.

We therefore recommend doubling the federal research and development budget by

2010, and instituting a more competitive environment for the allotment of those funds. We recommend further that the role of the President’s Science Advisor be elevated to

oversee these and other critical tasks, such as the resuscitation of the national laboratory system and the institution of better inventory stewardship over the nation’s science and technology assets.

We also recommend a new National Security Science and Technology Education Act to

fund a comprehensive program to produce the needed numbers of science and engineering professionals as well as qualified teachers in science and math. This Act should provide loan

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forgiveness incentives to attract those who have graduated and scholarships for those still in school and should provide these incentives in exchange for a period of K-12 teaching in science and math, or of military or government service. Additional measures should provide resources to modernize laboratories in science education, and expand existing programs aimed at helping economically-depressed school districts.

Institutional Redesign

he dramatic changes in the world since the end of the Cold War have not been accompanied by any major institutional changes in the Executive Branch of the U.S.

government. Serious deficiencies exist that only a significant organizational redesign can remedy. Most troublesome is the lack of an overarching strategic framework guiding U.S. national security policymaking and resource allocation. Clear goals and priorities are rarely set. Budgets are prepared and appropriated as they were during the Cold War.

The Department of State, in particular, is a crippled institution, starved for resources by

Congress because of its inadequacies, and thereby weakened further. Only if the State Department’s internal weaknesses are cured will it become an effective leader in the making and implementation of the nation’s foreign policy. Only then can it credibly seek significant funding increases from Congress. The department suffers in particular from an ineffective organizational structure in which regional and functional policies do not serve integrated goals, and in which sound management, accountability, and leadership are lacking.

For this and other reasons, the power to determine national security policy has steadily

migrated toward the National Security Council (NSC) staff. The staff now assumes policymaking roles that many observers have warned against. Yet the NSC staff’s role as policy coordinator is more urgently needed than ever, given the imperative of integrating the many diverse strands of policymaking.

Meanwhile, the U.S. intelligence community is adjusting only slowly to the changed

circumstances of the post-Cold War era. While the economic and political components of statecraft have assumed greater prominence, military imperatives still largely drive the collection and analysis of intelligence. Neither has America’s overseas presence been properly adapted to the new economic, social, political, and security realities of the 21st century.

Finally, the Department of Defense needs to be overhauled. The growth in staff and staff

activities has created mounting confusion and delay. The failure to outsource or privatize many defense support activities wastes huge sums of money. The programming and budgeting process is not guided by effective strategic planning. The weapons acquisition process is so hobbled by excessive laws, regulations, and oversight strictures that it can neither recognize nor seize opportunities for major innovation, and its procurement bureaucracy weakens a defense industry that is already in a state of financial crisis.

n light of such serious and interwoven deficiencies, the Commission’s initial recommendation is that strategy should once again drive the design and

implementation of U.S. national security policies. That means that the President should personally guide a top-down strategic planning process and that process should be linked to the allocation of resources throughout the government. When submitting his budgets for the various

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national security departments, the President should also present an overall national security budget, focused on the nation’s most critical strategic goals. Homeland security, counter-terrorism, and science and technology should be included.

We recommend further that the President’s National Security Advisor and NSC staff

return to their traditional role of coordinating national security activities and resist the temptation to become policymakers or operators. The NSC Advisor should also keep a low public profile. Legislative, press communications, and speech-writing functions should reside in the White House staff, not separately in the NSC staff as they do today. The higher the profile of the National Security Advisor the greater will be the pressures from Congress to compel testimony and force Senate confirmation of the position.

To reflect how central economics has become in U.S. national security policy, we

recommend that the Secretary of Treasury be named a statutory member of the National Security Council. Responsibility for international economic policy should return to the National Security Council. The President should abolish the National Economic Council, distributing its domestic economic policy responsibilities to the Domestic Policy Council.

ritical to the future success of U.S. national security policies is a fundamental restructuring of the State Department. Reform must ensure that responsibility and

accountability are clearly established, regional and functional activities are closely integrated, foreign assistance programs are centrally planned and implemented, and strategic planning is emphasized and linked to the allocation of resources.

We recommend that this be accomplished through the creation of five Under

Secretaries with responsibility for overseeing the regions of Africa, Asia, Europe, Inter-America, and Near East/South Asia, and a redefinition of the responsibilities of the Under Secretary for Global Affairs. The restructuring we propose would position the State Department to play a leadership role in the making and implementation of U.S. foreign policy, as well as to harness the department’s organizational culture to the benefit of the U.S. government as a whole. Perhaps most important, the Secretary of State would be free to focus on the most important policies and negotiations, having delegated responsibility for integrating regional and functional issues to the Under Secretaries.

Accountability would be matched with responsibility in senior policymakers, who in

serving the Secretary would be able to speak for the State Department both within the interagency process and before Congress. No longer would competing regional and functional perspectives immobilize the department. At the same time, functional perspectives, whether they be human rights, arms control, or the environment, will not disappear. The Under Secretaries would be clearly accountable to the Secretary of State, the President, and the Congress for ensuring that the appropriate priority was given to these concerns. Someone would actually be in charge.

We further recommend that the activities of the U.S. Agency for International

Development be fully integrated into this new State Department organization. Development aid is not an end in itself, nor can it be successful if pursued independently of other U.S. programs and diplomatic activities. Only a coordinated diplomatic and assistance effort will advance the nation’s goals abroad, whether they be economic growth, democracy, or human rights.

The Secretary of State should give greater emphasis to strategic planning in the State

Department and link it directly to the allocation of resources through the establishment of a

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Strategic Planning, Assistance, and Budget Office. Rather than multiple Congressional appropriations, the State Department should also be funded in a single integrated Foreign Operations budget, which would include all foreign assistance programs and activities as well as the expenses for all related personnel and operations. Also, all U.S. Ambassadors, including the Permanent Representative to the United Nations, should report directly to the Secretary of State, and a major effort needs to be undertaken to “right-size” the U.S. overseas presence.

The Commission believes that the resulting improvements in the effectiveness and

competency of the State Department and its overseas activities would provide the basis for the significant increase in resources necessary to carry out the nation’s foreign policy in the 21st century.

s for the Department of Defense, resource issues are also very much at stake in reform efforts. The key to success will be direct, sustained involvement and

commitment to defense reform on the part of the President, Secretary of Defense, and Congressional leadership. We urge first and foremost that the new Secretary of Defense reduce by ten to fifteen percent the staffs of the Office of the Secretary of Defense, the Joint Staff, the military services, and the regional commands. This would not only save money but also achieve the decision speed and encourage the decentralization necessary for any organization to succeed in the 21st century.

Just as critical, the Secretary of Defense should establish a ten-year goal of reducing

infrastructure costs by 20-25 percent through steps to consolidate, restructure, outsource, and privatize as many DoD support agencies and activities as possible. Only through savings in infrastructure costs, which now take up nearly half of DoD’s budget, will the department find the funds necessary for modernization and for combat personnel in the long-term.

The processes by which the Defense Department develops its programs and budgets as

well as acquires its weapons also need fundamental reform. The most critical first step is for the Secretary of Defense to produce defense policy and planning guidance that defines specific goals and establishes relative priorities.

Together with the Congress, the Secretary of Defense should move the Quadrennial

Defense Review (QDR) to the second year of a Presidential term. The current requirement, that it be done in an administration’s first year, spites the purpose of the activity. Such a deadline does not allow the time or the means for an incoming administration to influence the QDR outcome, and therefore for it to gain a stake in its conclusions.

We recommend a second change in the QDR, as well; namely that the Secretary of

Defense introduce a new process that requires the Services and defense agencies to compete for the allocation of some resources within the overall defense budget. This, we believe, would give the Secretary a vehicle to identify low priority programs and begin the process of reallocating funds to more promising areas during subsequent budget cycles.

As for acquisition reform, the Commission is deeply concerned with the downward spiral

that has emerged in recent decades in relations between the Pentagon as customer and the defense industrial base as supplier of the nation’s major weapons systems. Many innovative high-tech firms are simply unable or unwilling to work with the Defense Department under the weight of its auditing, contracting, profitability, investment, and inspection regulations. These regulations also impair the Defense Department’s ability to function with the speed it needs to keep abreast of

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today’s rapid pace of technological innovation. Weapons development cycles average nine years in an environment where technology now changes every twelve to eighteen months in Silicon Valley—and the gap between private sector and defense industry innovation continues to widen.

In place of a specialized “defense industrial base,” we believe that the nation needs a

national industrial base for defense composed of a broad cross-section of commercial firms as well as the more traditional defense firms. “New economy” sectors must be attracted to work with the government on sound business and professional grounds; the more traditional defense suppliers, which fill important needs unavailable in the commercial sector, must be given incentives to innovate and operate efficiently. We therefore recommend these major steps:

● Establish and employ a two-track acquisition system, one for major acquisitions and a “fast track” for a modest number of potential breakthrough systems, especially those in the area of command and control. ● Return to the pattern of increased prototyping and testing of selected weapons and support systems to foster innovation. We should use testing procedures to gain knowledge and not to demonstrate a program’s ability to survive budgetary scrutiny. ● Implement two-year defense budgeting solely for the modernization element (R&D/procurement) of the defense budget and expand the use of multi-year procurement. ● Modernize auditing and oversight requirements (by rewriting relevant sections of U.S. Code, Title 10, and the Federal Acquisition Regulations) with a goal of reducing the number of auditors and inspectors in the acquisition system to a level commensurate with the budget they oversee. Beyond other process reforms for the Defense Department, the Commission offers its

suggestions on the force structure process. We conclude that the concept of two major, coincident wars is a remote possibility supported neither by actual intelligence estimates nor by this Commission’s view of the likely future. It should be replaced by a new approach that accelerates the transformation of capabilities and forces better suited to the security environment that predominantly exists today. The Secretary of Defense should direct the DoD to shift from the threat-based, force sizing process to one which measures requirements against recent operational activity trends, actual intelligence estimates of potential adversaries’ capabilities, and national security objectives as defined in the new administration's national security strategy.

The Commission furthermore recommends that the Secretary of Defense revise the

current categories of Major Force Programs (MFPs) used in the Defense Program Review to correspond to focus on providing a different mix of military capabilities.

Ultimately, the transformation process will blur the distinction between expeditionary

and conventional forces, as both types of capabilities will eventually possess enhanced mobility. For the near term, however, those we call expeditionary capabilities require the most emphasis. Consequently, we recommend that the Defense Department devote its highest priority to improving and further developing its expeditionary capabilities.

here is no more critical dimension of defense policy than to guarantee U.S. commercial and military access to outer space. The U.S. economy and military are T

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vitally dependent on communications that rely on space. The clear imperative for the new era is a comprehensive national policy toward space and a coherent governmental machinery to carry it out. We therefore recommend the establishment of an Interagency Working Group on Space (IWGS).

The members of this interagency working group would include not only the relevant parts

of the intelligence community and the State and Defense Departments, but also the National Aeronautics and Space Administration (NASA), the National Oceanic and Atmospheric Administration (NOAA), the Department of Commerce, and other Executive Branch agencies as necessary.

Meanwhile, the global presence and responsibilities of the United States have brought

new requirements for protecting U.S. space and communications infrastructures, but no comprehensive national space architecture has been developed. We recommend that such responsibility be given to the new interagency space working group and that the existing National Security Space Architect be transferred from the Defense Department to the NSC staff to take the lead in this effort.

he Commission has concluded that the basic structure of the intelligence community does not require change. Our focus is on those steps that will enable the full

implementation of recommendations found elsewhere within this report. First in this regard, we recommend that the President order the setting of national

intelligence priorities through National Security Council guidance to the Director of Central Intelligence.

Second, the intelligence community should emphasize the recruitment of human

intelligence sources on terrorism as one of its highest priorities, and ensure that existing operational guidelines support this policy.

Third, the community should place new emphasis on collection and analysis of

economic and science/technology security concerns, and incorporate more open source intelligence into its analytical products. To facilitate this effort, Congress should increase significantly the National Foreign Intelligence Program (NFIP) budget for collection and analysis.

The Human Requirements for National Security

s it enters the 21st century, the United States finds itself on the brink of an unprecedented crisis of competence in government. The declining orientation toward

government service as a prestigious career is deeply troubling. Both civilian and military institutions face growing challenges, albeit of different forms and degrees, in recruiting and retaining America’s most promising talent. This problem derives from multiple sources—ample private sector opportunities with good pay and fewer bureaucratic frustrations, rigid governmental personnel procedures, the absence of a single overarching threat like the Cold War to entice service, cynicism about the worthiness of government service, and perceptions of government as a plodding bureaucracy falling behind in a technological age of speed and accuracy.

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These factors are adversely affecting recruitment and retention in the Civil and Foreign Services and particularly throughout the military, where deficiencies are both widening the gap between those who serve and the rest of American society and putting in jeopardy the leadership and professionalism necessary for an effective military. If we allow the human resources of government to continue to decay, none of the reforms proposed by this or any other national security commission will produce their intended results.

We recommend, first of all, a national campaign to reinvigorate and enhance the

prestige of service to the nation. The key step in such a campaign must be to revive a positive attitude toward public service. This will require strong and consistent Presidential commitment, Congressional legislation, and innovative departmental actions throughout the federal government. It is the duty of all political leaders to repair the damage that has been done, in a high-profile and fully bipartisan manner.

Beyond changes in rhetoric, the campaign must undertake several actions. First, this

Commission recommends the most urgent possible streamlining of the process by which we attract senior government officials. The ordeal that Presidential nominees are subjected to is now so great as to make it prohibitive for many individuals of talent and experience to accept public service. The confirmation process is characterized by vast amounts of paperwork and many delays. Conflict of interest and financial disclosure requirements have become a prohibitive obstacle to the recruitment of honest men and women to public service. Post-employment restrictions confront potential new recruits with the prospect of having to forsake not only income but work itself in the very fields in which they have demonstrated talent and found success. Meanwhile, a pervasive atmosphere of distrust and cynicism about government service is reinforced by the encrustation of complex rules based on the assumption that all officials, and especially those with experience in or contact with the private sector, are criminals waiting to be unmasked.

We therefore recommend the following: ● That the President act to shorten and make more efficient the Presidential appointee process by confirming the national security team first, standardizing paperwork requirements, and reducing the number of nominees subject to full FBI background checks. ● That the President reduce the number of Senate-confirmed and non-career SES positions by 25 percent to reduce the layering of senior positions in departments that has developed over time. ● That the President and Congressional leaders instruct their top aides to report within 90 days of January 20, 2001 on specific steps to revise government ethics laws and regulations. This should entail a comprehensive review of regulations that might exceed statutory requirements and making blind trusts, discretionary waivers, and recusals more easily available as alternatives to complete divestiture of financial and business holdings of concern. Beyond the appointments process, there are problems with government personnel

systems specific to the Foreign Service, the Civil Service, and to the military services. But for all three, there is one step we urge: Expand the National Security Education Act of 1991 (NSEA) to include broad support for social sciences, humanities, and foreign languages in exchange for civilian government and military service.

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This expanded Act is the complement to the National Security Science and Technology

Education Act (NSSTEA) and would provide college scholarship and loan forgiveness benefits for government service. Recipients could fulfill this service in a variety of ways: in the active duty military; in National Guard or Reserve units; in national security departments of the Civil Service; or in the Foreign Service. The expanded NSEA thus would provide an important means of recruiting high-quality people into military and civilian government service.

An effective and motivated Foreign Service is critical to the success of the Commission’s

restructuring proposal for the State Department, yet 25 percent fewer people are now taking the entrance exam compared to the mid-1980s. Those who do enter complain of poor management and inadequate professional education. We therefore recommend that the Foreign Service system be improved by making leadership a core value of the State Department, revamping the examination process, and dramatically improving the level of on-going professional education.

The Civil Service faces a range of problems from the aging of the federal workforce to

institutional challenges in bringing new workers into government service to critical gaps in recruiting and retaining information technology professionals. To address these problems, the Commission recommends eliminating recruitment hurdles, making the hiring process faster and easier, and designing professional education and retention programs worthy of full funding by Congress. Retaining talented information technology workers, too, will require greater incentives and the outsourcing of some IT support functions.

The national security component of the Civil Service calls for professionals with breadth

of experience in the interagency process and with depth of knowledge about policy issues. To develop these, we recommend the establishment of a National Security Service Corps (NSSC) to broaden the experience base of senior departmental managers and develop leaders who seek integrative solutions to national security policy problems. Participating departments would include Defense, State, Treasury, Commerce, Justice, Energy, and the new National Homeland Security Agency—the departments essential to interagency policymaking on key national security issues. While participating departments would retain control over their personnel, an interagency advisory group would design and monitor the rotational assignments and professional education that will be key to the Corps’ success.

With respect to military personnel, reform is needed in the recruitment, promotion,

compensation, and retirement systems. Otherwise, the military will continue to lose its most talented personnel, and the armed services will be left with a cadre unable to handle the technological and managerial tasks necessary for a world-class 21st century force.

Beyond the significant expansion of scholarships and debt relief programs recommended

in both the modified National Security Education Act and the newly created National Security Science and Technology Education Act, we recommend substantial enhancements to the Montgomery GI Bill and strengthening recently passed and pending legislation that supports enhanced benefits—including transition, medical, and homeownership—for qualified veterans. The GI Bill should be restored as a pure entitlement, be transferable to dependents if desired by career service members, and should equal, at the very least, the median tuition cost of four-year U.S. colleges. Payments should be accelerated to coincide with school term periods and be indexed to keep pace with college cost increases. In addition, Title 38 authority for veterans benefits should be modified to restore and substantially improve medical, dental, and VA home ownership benefits for all who qualify, but especially for career and retired service members.

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Taken as a package, such changes will help bring the best people into the armed service and persuade quality personnel to serve longer in order to secure greater rewards for their service.

While these enhancements are critical they will not, by themselves, resolve the quality

recruitment and retention problems of the Services. We therefore recommend significant modifications to military personnel legislation governing officer and enlisted career management, retirement, and compensation—giving Service Secretaries more authority and flexibility to adapt their personnel systems and career management to meet 21st century requirements. This should include flexible compensation and retirement plans, exemption from “up-or-out” mandates, and reform of personnel systems to facilitate fluid movement of personnel. If we do not decentralize and modernize the governing personnel legislation, no military reform or transformation is possible. We also call for an Executive-Legislative working group to monitor, evaluate and share information about the testing and implementation of these recommendations. With bipartisan cooperation, our military will remain one of this nation’s most treasured institutions and our safeguard in the changing world ahead.

The Role of Congress

hile Congress has mandated many changes to a host of Executive Branch departments and agencies over the years, it has not fundamentally reviewed its own

role in national security policy. Moreover, it has not reformed its own structure since 1949. At present, for example, every major defense program must be voted upon no fewer than eighteen times each year by an array of committees and subcommittees. This represents a very poor use of time for busy members of the Executive and Legislative Branches.

To address these deficiencies, the Commission first recommends that the Congressional

leadership conduct a thorough bicameral, bipartisan review of the Legislative Branch’s relationship to national security and foreign policy. The House Speaker, Majority, and Minority leaders and the Senate Majority and Minority leaders must work with the President and his top aides to bring proposed reforms to this Congress by the beginning of its second session.

From that basis, Congressional and Executive Branch leaders must build programs to

encourage members to acquire knowledge and experience in national security. These programs should include ongoing education, greater opportunities for serious overseas travel, more legislature-to-legislature exchanges, and greater participation in wargames.

Greater fluency in national security matters must be matched by structural reforms. A

comprehensive review of the Congressional committee structure is needed to ensure that it reflects the complexity of 21st century security challenges and of U.S. national security priorities. Specifically we recommend merging appropriations subcommittees with their respective authorizing committees so that the new merged committees will authorize and appropriate within the same bill. This should decrease the bureaucratic redundancy of the budget process and allow more time to be devoted to the oversight of national security policy.

An effective Congressional role in national security also requires ongoing Executive-

Legislative consultation and coordination. The Executive Branch must ensure a sustained effort in consultation and devote resources to it. For its part, Congress must make consultation a higher priority, in part by forming a permanent consultative group composed of the Congressional leadership and the Chairpersons and Ranking Members of the main committees involved in

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national security. This will form the basis for sustained dialogue and greater support in times of crisis.

he Commission notes, in conclusion, that some of its recommendations will save money, while others call for more expenditure. We have not tried to “balance the

books” among our recommendations, nor have we held financial implications foremost in mind during our work. We consider any money that may be saved a second-order benefit. We consider the provision of additional resources to national security, where necessary, to be investments, not costs, in first-order national priorities.

Finally, we strongly urge the new President and the Congressional leadership to

establish some mechanism to oversee the implementation of the recommendations proffered here. Once some mechanism is chosen, the President must ensure that responsibility for implementing the recommendations of this Commission be given explicitly to senior personnel in both the Executive and Legislative Branches of government. The press of daily obligations is such that unless such delegation is made, and those given responsibility for implementation are held accountable for their tasks, the necessary reforms will not occur. The stakes are high. We of this Commission believe that many thousands of American lives, U.S. leadership among the community of nations, and the fate of U.S. national security itself are at risk unless the President and the Congress join together to implement the recommendations set forth in this report.

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Introduction: Imperative for Change

he U.S. Commission on National Security/ 21st Century was chartered to be the most comprehensive examination of the structures and processes of the U.S. national

security apparatus since the core legislation governing it was passed in 1947. The Commission’s Charter enjoins the Commissioners to “propose measures to adapt existing national security structures” to new circumstances, and, if necessary, “to create new structures where none exist.” The Commission is also charged with providing “cost and time estimates to complete these improvements,” as appropriate, for what is to be, in sum, “an institutional road map for the early part of the 21st century.”5

This Phase III report provides such a road map. But Phase III rests on the first two phases

of the Commission’s work: Phase I’s examination of how the world may evolve over the next quarter century, and Phase II’s strategy to deal effectively with that world on behalf of American interests and values.

In its Phase I effort, this Commission stressed that global trends in scientific-

technological, economic, socio-political, and military-security domains—as they mutually interact over the next 25 years—will produce fundamental qualitative changes in the U.S. national security environment. We arrived at these fourteen conclusions:

● The United States will become increasingly vulnerable to hostile attack on the American homeland, and U.S. military superiority will not entirely protect us. ● Rapid advances in information and biotechnologies will create new vulnerabilities for U.S. security. ● New technologies will divide the world as well as draw it together. ● The national security of all advanced states will be increasingly affected by the vulnerabilities of the evolving global economic infrastructure. ● Energy supplies will continue to have major strategic significance. ● All borders will be more porous; some will bend and some will break. ● The sovereignty of states will come under pressure, but will endure as the main principle of international political organization. ● The fragmentation and failure of some states will occur, with destabilizing effects on entire regions. ● Foreign crises will be replete with atrocities and the deliberate terrorizing of civilian populations. ● Space will become a critical and competitive military environment. ● The essence of war will not change.

5 See Appendix 2 for the full text of the Charter.

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● U.S. intelligence will face more challenging adversaries, and even excellent intelligence will not prevent all surprises. ● The United States will be called upon frequently to intervene militarily in a time of uncertain alliances, and with the prospect of fewer forward-deployed forces. ● The emerging security environment in the next quarter century will require different U.S. military and other national capabilities. The Commission’s stress on communicating the scale and pace of change has been borne

out by extraordinary developments in science and technology in just the eighteen-month period since the Phase I report appeared. The mapping of the human genome was completed. A functioning quantum computing device was invented. Organic and inorganic material was mated at the molecular level for the first time. Basic mechanisms of the aging process have been understood at the genetic level. Any one of these developments would have qualified as a “breakthrough of the decade” a quarter century ago, but they all happened within the past year and a half.

This suggests the possible advent of a period of change the scale of which will often

astound us. The key factor driving change in America’s national security environment over the next 25 years will be the acceleration of scientific discovery and its technological applications, and the uneven human social and psychological capacity to harness them. Synergistic developments in information technology, materials science, biotechnology, and nanotechnology will almost certainly transform human tools more dramatically and rapidly than at any time in human history.

While it is easy to underestimate the social implications of change on such a scale, the

need for human intellectual and social adaptation imposes limits to the pace of change. These limits are healthy, for they allow and encourage the application of the human moral sense to choices of major import. We will surely have our hands full with such choices over the next quarter century. In that time we may witness the development of a capacity to guide or control evolution by manipulating human DNA. The ability to join organic and inorganic material forms suggests that humans may co-evolve literally with their own machines. Such prospects are both sobering and contentious. Some look to the future with great hope for the prospect of curing disease, repairing broken bodies, ending poverty, and preserving the biosphere. But others worry that curiosity and vanity will outrun the human moral sense, thus turning hope into disaster. The truth is that we do not know where the rapidly expanding domain of scientific-technological innovation will bring us. Nor do we know the extent to which we can summon the collective moral fortitude to control its outcome.

hat we do know is that some societies, and some people within societies, will be at the forefront of future scientific-technological developments and others will be

marginal to them. This means more polarization between those with wealth and power and those without—both among and within societies. It suggests, as well, that many engrained social patterns will become unstable, for scientific-technological innovation has profound, if generally unintended, effects on economic organization, social values, and political life.

In the Internet age, for example, information technologies may be used to empower

communities and advance freedoms, but they can also empower political movements led by

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charismatic leaders with irrational premises. Such men and women in the 21st century will be less bound than those of the 20th by the limits of the state, and less obliged to gain large industrial capabilities in order to wreck havoc. For example, a few people with as little as a $50,000 investment may manage to produce and spread a genetically-altered pathogen with the potential to kill millions of people in a matter of months. Clearly, the threshold for small groups or even individuals to inflict massive damage on those they take to be their enemies is falling dramatically.

As for political life, it is clear that the rapidity of change is already overwhelming many

states in what used to be called the Third World. Overlaid on the enduring plagues of corruption and sheer bad government is a new pattern: information technology has widened the awareness of democracy and market-driven prosperity, and has led to increasing symbolic and material demands on government. These demands often exceed existing organizational capacities to meet them. One result is that many national armies do not respond to government control. Another is that mercenaries, criminals, terrorists, and drug cartel operators roam widely and freely. Meanwhile, non-governmental organizations (NGOs) along with global financial institutions sometimes function as proxy service and regulatory bureaucracies to do for states that which they cannot do for themselves—further diminishing governmental control and political accountability.

As a result of the growing porosity of borders, and of the widening scope of functional

economic integration, significant political developments can no longer be managed solely through the vehicle of bilateral diplomatic relations. A seemingly internal crisis in Sierra Leone, carefully observed, implicates most of West Africa. A problem involving drug cultivation and political rebellion in Colombia cannot be addressed without involving Panama, Venezuela, Bolivia, Ecuador, Peru, Brazil, and Mexico. Financial problems in Thailand tumble willy-nilly onto Russia, Brazil, Japan, Indonesia, Malaysia, and the United States.

Demography is another major driver of global political change. Population growth tends

to moderate with increased literacy, urbanization, and especially changes in traditional values that attend the movement of women into the workplace. Thanks to these trends, the world’s rate of population increase is slowing somewhat, but the absolute increases over the next quarter century will be enormous and coping with them will be a major challenge throughout much of the world. In some countries, however, the problem will be too few births. In Japan and Germany, for example, social security and private pension systems may face enormous strain because too few young workers will be available to support retirees living ever-longer lives. The use of foreign workers may be the only recourse for such societies, but that raises other political and social difficulties.

Yet another driver of change may be sustained economic growth in particular parts of the

world. Asia may well be the most economically dynamic region on earth by 2025. Much depends on China’s ability to reform further the structure of its economy and on India’s ability to unleash its vast economic potential. But if these two very large countries achieve sustained economic growth—and if the economies of Japan, Korea, Taiwan, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam also grow—the focus of world power will shift away from the dominant Western centers of the past five centuries. While America is itself increasingly diverse, it still shares more philosophically and historically with Europe than with Asia. The challenge for the United States, then, may rest not only in a geostrategic shift, but in a shift in the cultural fabric of international politics itself.

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n Phase II the Commission moved from describing objective conditions to prescribing a strategy for dealing with them. Subtitled A Concert for Preserving Security and

Promoting Freedom, the Commission stressed that America cannot secure and advance its own interests in isolation. The nations of the world must work together—and the United States must learn to work with others in new ways—if the more cooperative order emerging from the Cold War epoch is to be sustained and strengthened.

Nonetheless, this Commission takes as its premise that America must play a special

international role well into the future. By dint of its power and its wealth, its interests and its values, the United States has a responsibility to itself and to others to reinforce international order. Only the United States can provide the ballast of global stability, and usually the United States is the only country in a position to organize collective responses to common challenges.

We believe that American strategy must compose a balance between two key aims. The

first is to reap the benefits of a more integrated world in order to expand freedom, security, and prosperity for Americans and for others. But second, American strategy must also strive to dampen the forces of global instability so that those benefits can endure and spread.

On the positive side, this means that the United States should pursue, within the limits of

what is prudent and realistic, the worldwide expansion of material abundance and the eradication of poverty. It should also promote political pluralism, freedom of thought and speech, and individual liberty. Not only do such aims inhere in American principles, they are practical goals, as well. There are no guarantees against violence and evil in the world. We believe, nonetheless, that the expansion of human rights and basic material well-being constitutes a sturdy bulwark against them. On the negative side, these goals require concerted protection against four related dangers: the proliferation of weapons of mass destruction; international terrorism; major interstate aggression; and the collapse of states into internal violence, with the associated regional destabilization that often accompanies it.

These goals compose the lodestone of a U.S. strategy to expand freedom and maintain

underlying stability, but, as we have said, the United States cannot achieve them by itself. American leadership must be prepared to act unilaterally if necessary, not least because the will to act alone is sometimes required to gain the cooperation of others. But U.S. policy should join its efforts with allies and multilateral institutions wherever possible; the United States is wise to strengthen its partners and in turn will derive strength from them.

The United States, therefore, as the prime keeper of the international security commons,

must speak and act in ways that lead others, by dint of their own interests, to ally with American goals. If it is too arrogant and self-possessed, American behavior will invariably stimulate the rise of opposing coalitions. The United States will thereby drive away many of its partners and weaken those that remain. Tone matters.

o carry out this strategy and achieve these goals, the Commission defined six key objectives for U.S. foreign and national security policy:

First, the preeminent objective is “to defend the United States and ensure that it is safe

from the dangers of a new era.” The combination of unconventional weapons proliferation with the persistence of international terrorism will end the relative invulnerability of the U.S. homeland to catastrophic attack. To deter attack against the homeland in the 21st century, the

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United States requires a new triad of prevention, protection, and response. Failure to prevent mass-casualty attacks against the American homeland will jeopardize not only American lives but U.S. foreign policy writ large. It would undermine support for U.S. international leadership and for many of our personal freedoms, as well. Indeed, the abrupt undermining of U.S. power and prestige is the worst thing that could happen to the structure of global peace in the next quarter century, and nothing is more likely to produce it than devastating attacks on American soil.

Achieving this goal, and the nation’s other critical national security goals, also requires

the U.S. government, as a second key objective, to “maintain America’s social cohesion, economic competitiveness, technological ingenuity, and military strength.” That means a larger investment in and better management of science and technology in government and in society, and a substantially better educational system, particularly for the teaching of science and mathematics.

The United States must also take better advantage of the opportunities that the present

period of relative international stability and American power enable. A third key objective, therefore, is “to assist the integration of key major powers, especially China, Russia, and India, into the mainstream of the emerging international system.” Moreover, since globalization’s opportunities are rooted in economic and political progress, the Commission’s fourth key U.S. objective is “to promote, with others, the dynamism of the new global economy and improve the effectiveness of international institutions and international law.”

A fifth key objective also follows, which is “to adapt U.S. alliances and other regional

mechanisms to a new era in which America’s partners seek greater autonomy and responsibility.” A sixth and final key objective inheres in an effort “to help the international community tame the disintegrative forces spawned by an era of change.” While the prospect of major war is low, much of the planet will experience conflict and violence. Unless the United States, in concert with others, can find a way to limit that conflict and violence, it will not be able to construct a foreign policy agenda focussed on opportunities.

Achieving all of these objectives will require a basic shift in orientation: to focus on

preventing rather than simply responding to dangers and crises. The United States must redirect its energies, adjust its diplomacy, and redesign its military capabilities to ward off cross-border aggression, assist states before they fail, and avert systemic international financial crises. To succeed over the long run with a preventive focus, the United States needs to institutionalize its efforts to grasp the opportunities the international environment now offers.

An opportunity-based strategy also has the merit of being more economical than a

reactive one. Preventing a financial crisis, even if it involves well-timed bailouts, is cheaper than recuperating from stock market crashes and regional recessions. Preventing a violent conflict costs less than responsive peacekeeping operations and nation-building activities. And certainly, preventing mass-casualty attacks on the American homeland will be far less expensive than recovering from them.

hese six objectives, and the Commission’s strategy itself, rest on a premise so basic that it often goes unstated: democracy conduces generally to domestic and

international peace, and peace conduces to, or at least allows, democratic politics. While this premise is not a “law,” and while scholars continue to study and debate these matters, we believe they are strong tendencies, and that they can be strengthened further by a consistent and determined national policy. We know, that a world characterized by the spread of genuine

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democracy would not be flawless, nor signal “the end of history.” But it is the best of all possible worlds that we can conceive, and that we can achieve.

In Phase I, this Commission presented four “Worlds in Prospect,” agglomerations of

basic trends that, we believed, might describe the world in 2025. The Democratic Peace was one. Nationalism and Protectionism was a second, Division and Mayhem a third, and Globalism Triumphant the fourth. We, and presumably most observers, see the Democratic Peace as a positive future, Nationalism and Protectionism as a step in the wrong direction, Division and Mayhem as full-fledged tragedy. But the Globalism Triumphant scenario divides opinion, partly because it is the hardest to envision, and partly because it functions as a template for the projection of conflicting political views.

Some observers, for example, believe that the end of the nation-state is upon us, and that

this is a good thing, for, in this view, nationalism is the root of racism and militarism. The eclipse of the national territorial state is at any rate, some argue, an inevitable development given the very nature of an increasingly integrated world.

We demur. To the extent that a more integrated world economically is the best way to

raise people out of poverty and disease, we applaud it. We also recognize the need for unprecedented international cooperation on a range of transnational problems. But the state is the only venue discovered so far in which democratic principles and processes can play out reliably, and not all forms of nationalism have been or need be illiberal. We therefore affirm the value of American sovereignty as well as the political and cultural diversity ensured by the present state system. Within that system the United States must live by and be ready to share its political values—but it must remember that those values include tolerance for those who hold different views.

broader and deeper Democratic Peace is, and ought to be, America’s aspiration, but there are obstacles to achieving it. Indeed, despite the likely progress ahead on many

fronts, the United States may face not only episodic problems but also genuine crises. If the United States mismanages its current global position, it could generate resentments and jealousies that leave us more isolated than isolationist. Major wars involving weapons of mass destruction are possible, and the general security environment may deteriorate faster than the United States, even with allied aid, can redress it. Environmental, economic, and political unraveling in much of the world could occur on a scale so large as to make current levels of prosperity unsustainable, let alone expandable. Certain technologies—biotechnology, for example—may also undermine social and political stability among and within advanced countries, including the United States. Indeed, all these crises may occur, and each could reinforce and deepen the others.

The challenge for the United States is to seize the new century’s many opportunities and

avoid its many dangers. The problem is that the current structures and processes of U.S. national security policymaking are incapable of such management. That is because, just below the enormous power and prestige of the United States today, is a neglected and, in some cases, a decaying institutional base.

The U.S. government is not well organized, for example, to ensure homeland security. No

adequate coordination mechanism exists among federal, state, and local government efforts, as well as those of dozens of agencies at the federal level. If present trends continue in elementary and secondary school science and mathematics education, to take another example, the United States may lose its lead in many, if not most, major areas of critical scientific-technological

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competence within 25 years. We are also losing, and are finding ourselves unable to replace, the most critical asset we have: talented and dedicated personnel throughout government.

Strategic planning is absent in the U.S. government and its budget processes are so

inflexible that few resources are available for preventive policies or for responding to crises, nor can resources be reallocated efficiently to reflect changes in policy priorities. The economic component of U.S. national security policy is poorly integrated with the military and diplomatic components. The State Department is demoralized and dysfunctional. The Defense Department appears incapable of generating a strategic posture very different from that of the Cold War, and its weapons acquisition process is slow, inefficient, and burdened by excess regulation. National policy in the increasingly critical environment of space is adrift, and the intelligence community is only slowly reorienting itself to a world of more diffuse and differently shaped threats. The Executive Branch, with the aid of the Congress, needs to initiate change in many areas by taking bold new steps, and by speeding up positive change where it is languishing.

he very mention of changing the engrained routines and structures of government is usually enough to evoke cynicism even in a born optimist. But the American case is

surprisingly positive, especially in relatively recent times. The reorganizations occasioned by World War II were vast and innovative, and the 1947 National Security Act was bold in advancing and institutionalizing them. Major revisions of the 1947 Act were passed subsequently by Congress in 1949, 1953, and 1958. Major internal Defense Department reforms were promulgated as well, one in 1961 and another, the Department of Defense Reorganization Act (Goldwater-Nichols) in 1986. The essence of the American genius is that we know better than most societies how to reinvent ourselves to meet the times. This Commission, we believe, is true to that estimable tradition.

Despite this relatively good record, resistance will arise to changing U.S. national security structures and processes, both within agencies of government and in the Congress. What is needed, therefore, is for the new administration, together with the new Congress, to exert real leadership. Our comprehensive recommendations to guide that leadership follow.

First, we must prepare ourselves better to defend the national homeland. We take this up

in Section I, Securing the National Homeland. We put this first because it addresses the most dangerous and the most novel threat to American national security in the years ahead.

Second, we must rebuild our strengths in the generation and management of science and

technology and in education. We have made Recapitalizing America’s Strengths in Science and Education the second section of this report despite the fact that science management and education issues are rarely ranked as paramount national security priorities. We do so to emphasize their crucial and growing importance.

Third, we must ensure coherence and effectiveness in the institutions of the Executive

Branch of government. Section III, Institutional Redesign, proposes change throughout the national security apparatus.

Fourth, we must ensure the highest caliber human capital in public service. U.S. national

security depends on the quality of the people, both civilian and military, serving within the ranks of government. If we are unsuccessful in meeting the crisis of competence before us, none of the other reforms proposed in this report will succeed. Section IV, The Human Requirements for National Security, examines government personnel issues in detail.

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Fifth, the Congress is part of the problem before us, and therefore must become part of

the solution. Not only must the Congress support the Executive Branch reforms promulgated here, but it must bring its own organization in line with the 21st century. Section V, The Role of Congress, examines this critical facet of government reform. Each section of this report carries an introduction explaining why the subject is important, identifies the major problems requiring solution, and then states this Commission’s recommendations. All major recommendations are boxed and in bold-face type.6 Related but subordinate recommendations are italicized and in bold-face type in the text.

As appropriate throughout the report, we outline what Congressional, Presidential, and Executive department actions would be required to implement the Commission’s recommendations. Also as appropriate, we provide general guidance as to the budgetary implications of our recommendations but, lest details of such consideration confuse and complicate the text, we will provide suggested implementation plans for selected areas in a separately issued addendum. A last word urges the President to devise an implementing mechanism for the recommendations put forth here.

Finally, we observe that some of our recommendations will save money, while others call

for more expenditure. We have not tried to “balance the books” among our recommendations, nor have we held financial implications foremost in mind during our work. Wherever money may be saved, we consider it a second-order benefit. Provision of additional resources to national security, where necessary, are investments, not costs, and a first-order national priority.

6 The recommendations are listed together in Appendix 1, pp. 124-129.

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I. Securing the National Homeland

ne of this Commission’s most important conclusions in its Phase I report was that attacks against American citizens on American soil, possibly causing heavy

casualties, are likely over the next quarter century.7 This is because both the technical means for such attacks, and the array of actors who might use such means, are proliferating despite the best efforts of American diplomacy.

These attacks may involve weapons of mass destruction and weapons of mass disruption.

As porous as U.S. physical borders are in an age of burgeoning trade and travel, its “cyber borders” are even more porous—and the critical infrastructure upon which so much of the U.S. economy depends can now be targeted by non-state and state actors alike. America’s present global predominance does not render it immune from these dangers. To the contrary, U.S. preeminence makes the American homeland more appealing as a target, while America’s openness and freedoms make it more vulnerable.

Notwithstanding a growing consensus on the seriousness of the threat to the homeland

posed by weapons of mass destruction and disruption, the U.S. government has not adopted homeland security as a primary national security mission. Its structures and strategies are fragmented and inadequate. The President must therefore both develop a comprehensive strategy and propose new organizational structures to prevent and protect against attacks on the homeland, and to respond to such attacks if prevention and protection should fail.

Any reorganization must be mindful of the scale of the scenarios we envision and the

enormity of their consequences. We need orders-of-magnitude improvements in planning, coordination, and exercise. The government must also be prepared to use effectively—albeit with all proper safeguards—the extensive resources of the Department of Defense. This will necessitate new priorities for the U.S. armed forces and particularly, in our view, for the National Guard.

he United States is today very poorly organized to design and implement any comprehensive strategy to protect the homeland. The assets and organizations that

now exist for homeland security are scattered across more than two dozen departments and agencies, and all fifty states. The Executive Branch, with the full participation of Congress, needs to realign, refine, and rationalize these assets into a coherent whole, or even the best strategy will lack an adequate vehicle for implementation.

This Commission believes that the security of the American homeland from the threats of

the new century should be the primary national security mission of the U.S. government. While the Executive Branch must take the lead in dealing with the many policy and structural issues involved, Congress is a partner of critical importance in this effort. It must find ways to address homeland security issues that bridge current gaps in organization, oversight, and authority, and that resolve conflicting claims to jurisdiction within both the Senate and the House of Representatives and also between them.

7 See New World Coming, p. 4, and the Report of the National Defense Panel, Transforming Defense: National Security in the 21st Century (Washington, DC: December 1997), p. 17.

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Congress is crucial, as well, for guaranteeing that homeland security is achieved within a framework of law that protects the civil liberties and privacy of American citizens. We are confident that the U.S. government can enhance national security without compromising established Constitutional principles. But in order to guarantee this, we must plan ahead. In a major attack involving contagious biological agents, for example, citizen cooperation with government authorities will depend on public confidence that those authorities can manage the emergency. If that confidence is lacking, panic and disorder could lead to insistent demands for the temporary suspension of some civil liberties. That is why preparing for the worst is essential to protecting individual freedoms during a national crisis.

Legislative guidance for planning among federal agencies and state and local authorities

must take particular cognizance of the role of the Defense Department. Its subordination to civil authority needs to be clearly defined in advance.

In short, advances in technology have created new dimensions to our nation's economic

and physical security. While some new threats can be met with traditional responses, others cannot. More needs to be done in three areas to prevent the territory and infrastructure of the United States from becoming easy and tempting targets: in strategy, in organizational realignment, and in Executive-Legislative cooperation. We take these areas in turn.

A. THE STRATEGIC FRAMEWORK

homeland security strategy to minimize the threat of intimidation and loss of life is an essential support for an international leadership role for the United States.

Homeland security is not peripheral to U.S. national security strategy but central to it. At this point, national leaders have not agreed on a clear strategy for homeland security, a condition this Commission finds dangerous and intolerable. We therefore recommend the following:

● 1: The President should develop a comprehensive strategy to heighten America’s ability

to prevent and protect against all forms of attack on the homeland, and to respond to such attacks if prevention and protection fail.

In our view, the President should: ● Give new priority in his overall national security strategy to homeland security, and make it a central concern for incoming officials in all Executive Branch departments, particularly the intelligence and law enforcement communities; ● Calmly prepare the American people for prospective threats, and increase their awareness of what federal and state governments are doing to prevent attacks and to protect them if prevention fails; ● Put in place new government organizations and processes, eliminating where possible staff duplication and mission overlap; and ● Encourage Congress to establish new mechanisms to facilitate closer cooperation between the Executive and Legislative Branches of government on this vital issue.

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We believe that homeland security can best be assured through a strategy of layered defense that focuses first on prevention, second on protection, and third on response.

Prevention: Preventing a potential attack comes first. Since the occurrence of even one

event that causes catastrophic loss of life would represent an unacceptable failure of policy, U.S. strategy should therefore act as far forward as possible to prevent attacks on the homeland. This strategy has at its disposal three essential instruments.

Most broadly, the first instrument is U.S. diplomacy. U.S. foreign policy should strive to

shape an international system in which just grievances can be addressed without violence. Diplomatic efforts to develop friendly and trusting relations with foreign governments and their people can significantly multiply America's chances of gaining early warning of potential attack and of doing something about impending threats. Intelligence-sharing with foreign governments is crucial to help identify individuals and groups who might be considering attacks on the United States or its allies. Cooperative foreign law enforcement agencies can detain, arrest, and prosecute terrorists on their own soil. Diplomatic success in resolving overseas conflicts that spawn terrorist activities will help in the long run.

Meanwhile, verifiable arms control and nonproliferation efforts must remain a top

priority. These policies can help persuade states and terrorists to abjure weapons of mass destruction and to prevent the export of fissile materials and dangerous dual-use technologies. But such measures cannot by themselves prevent proliferation. So other measures are needed, including the possibility of punitive measures and defenses. The United States should take a lead role in strengthening multilateral organizations such as the International Atomic Energy Agency.

In addition, increased vigilance against international crime syndicates is also important

because many terrorist organizations gain resources and other assets through criminal activity that they then use to mount terrorist operations. Dealing with international organized crime requires not only better cooperation with other countries, but also among agencies of the federal government. While progress has been made on this front in recent years, more remains to be done.8

The second instrument of homeland security consists of the U.S. diplomatic, intelligence,

and military presence overseas. Knowing the who, where, and how of a potential physical or cyber attack is the key to stopping a strike before it can be delivered. Diplomatic, intelligence, and military agencies overseas, as well as law enforcement agencies working abroad, are America’s primary eyes and ears on the ground. But increased public-private efforts to enhance security processes within the international transportation and logistics networks that bring people and goods to America are also of critical and growing importance.

Vigilant systems of border security and surveillance are a third instrument that can

prevent those agents of attack who are not detected and stopped overseas from actually entering the United States. Agencies such as the U.S. Customs Service and U.S. Coast Guard have a critical prevention role to play. Terrorists and criminals are finding that the difficulty of policing the rising daily volume and velocities of people and goods that cross U.S. borders makes it easier for them to smuggle weapons and contraband, and to move their operatives into and out of the United States. Improving the capacity of border control agencies to identify and intercept potential threats without creating barriers to efficient trade and travel requires a sub-strategy also with three elements. 8 See International Crime Threat Assessment (Washington, DC: The White House, December 2000).

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First is the development of new transportation security procedures and practices designed

to reduce the risk that importers, exporters, freight forwarders, and transportation carriers will serve as unwitting conduits for criminal or terrorist activities. Second is bolstering the intelligence gathering, data management, and information sharing capabilities of border control agencies to improve their ability to target high-risk goods and people for inspection. Third is strengthening the capabilities of border control agencies to arrest terrorists or interdict dangerous shipments before they arrive on U.S. soil.

These three measures, which place a premium on public-private partnerships, will pay for

themselves in short order. They will allow for the more efficient allocation of limited enforcement resources along U.S. borders. There will be fewer disruptive inspections at ports of entry for legitimate businesses and travelers. They will lead to reduced theft and insurance costs, as well. Most important, the underlying philosophy of this approach is one that balances prudence, on the one hand, with American values of openness and free trade on the other. 9 To shield America from the world out of fear of terrorism is, in large part, to do the terrorists’ work for them. To continue business as usual, however, is irresponsible.

The same may be said for our growing cyber problems. Protecting our nation’s critical

infrastructure depends on greater public awareness and improvements in our tools to detect and diagnose intrusions. This will require better information sharing among all federal, state, and local governments as well as with private sector owners and operators. The federal government has these specific tasks:

● To serve as a model for the private sector by improving its own security practices; ● To address known government security problems on a system-wide basis; ● To identify and map network interdependencies so that harmful cascading effects among systems can be prevented; ● To sponsor vulnerability assessments within both the federal government and the private sector; and ● To design and carry out simulations and exercises that test information system security across the nation’s entire infrastructure. Preventing attacks on the American homeland also requires that the United States

maintain long-range strike capabilities. The United States must bolster deterrence by making clear its determination to use military force in a preemptive fashion if necessary. Even the most hostile state sponsors of terrorism, or terrorists themselves, will think twice about harming Americans and American allies and interests if they fear direct and severe U.S. attack after—or before—the fact. Such capabilities will strengthen deterrence even if they never have to be used.

Protection: The Defense Department undertakes many different activities that serve to

protect the American homeland, and these should be integrated into an overall surveillance system, buttressed with additional resources. A ballistic missile defense system would be a useful addition and should be developed to the extent technically feasible, fiscally prudent, and 9 Note in this regard Stephen E. Flynn, “Beyond Border Control,” Foreign Affairs (November/December 2000).

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politically sustainable. Defenses should also be pursued against cruise missiles and other sophisticated atmospheric weapon technologies as they become more widely deployed. While both active duty and reserve forces are involved in these activities, the Commission believes that more can and should be done by the National Guard, as is discussed in more detail below.

Protecting the nation’s critical infrastructure and providing cyber-security must also

include: ● Advanced indication, warning, and attack assessments;

● A warning system that includes voluntary, immediate private-sector reporting of potential attacks to enable other private-sector targets (and the U.S. government) better to take protective action; and ● Advanced systems for halting attacks, establishing backups, and restoring service. Response: Managing the consequences of a catastrophic attack on the U.S. homeland

would be a complex and difficult process. The first priority should be to build up and augment state and local response capabilities. Adequate equipment must be available to first responders in local communities. Procedures and guidelines need to be defined and disseminated and then practiced through simulations and exercises. Interoperable, robust, and redundant communications capabilities are a must in recovering from any disaster. Continuity of government and critical services must be ensured as well. Demonstrating effective responses to natural and manmade disasters will also help to build mutual confidence and relationships among those with roles in dealing with a major terrorist attack.

All of this puts a premium on making sure that the disparate organizations involved with

homeland security—on various levels of government and in the private sector—can work together effectively. We are frankly skeptical that the U.S. government, as it exists today, can respond effectively to the scale of danger and damage that may come upon us during the next quarter century. This leads us, then, to our second task: that of organizational realignment.

B. ORGANIZATIONAL REALIGNMENT

esponsibility for homeland security resides at all levels of the U.S. government—local, state, and federal. Within the federal government, almost every agency and

department is involved in some aspect of homeland security. None have been organized to focus on the scale of the contemporary threat to the homeland, however. This Commission urges an organizational realignment that:

● Designates a single person, accountable to the President, to be responsible for coordinating and overseeing various U.S. government activities related to homeland security; ● Consolidates certain homeland security activities to improve their effectiveness and coherence; ● Establishes planning mechanisms to define clearly specific responses to specific types of threats; and

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● Ensures that the appropriate resources and capabilities are available. Therefore, this Commission strongly recommends the following:

● 2: The President should propose, and Congress should agree to create, a National Homeland Security Agency (NHSA) with responsibility for planning, coordinating, and integrating various U.S. government activities involved in homeland security. The Federal Emergency Management Agency (FEMA) should be a key building block in this effort. Given the multiplicity of agencies and activities involved in these homeland security

tasks, someone needs to be responsible and accountable to the President not only to coordinate the making of policy, but also to oversee its implementation. This argues against assigning the role to a senior person on the National Security Council (NSC) staff and for the creation of a separate agency. This agency would give priority to overall planning while relying primarily on others to carry out those plans. To give this agency sufficient stature within the government, its director would be a member of the Cabinet and a statutory advisor to the National Security Council. The position would require Senate confirmation.

Notwithstanding NHSA’s responsibilities, the National Security Council would still play

a strategic role in planning and coordinating all homeland security activities. This would include those of NHSA as well as those that remain separate, whether they involve other NSC members or other agencies, such as the Centers for Disease Control within the Department of Health and Human Services.

We propose building the National Homeland Security Agency upon the capabilities of the

Federal Emergency Management Agency (FEMA), an existing federal agency that has performed well in recent years, especially in responding to natural disasters. NHSA would be legislatively chartered to provide a focal point for all natural and manmade crisis and emergency planning scenarios. It would retain and strengthen FEMA’s ten existing regional offices as a core element of its organizational structure.

hile FEMA is the necessary core of the National Homeland Security Agency, it is not sufficient to do what NHSA needs to do. In particular, patrolling U.S. borders,

and policing the flows of peoples and goods through the hundreds of ports of entry, must receive higher priority. These activities need to be better integrated, but efforts toward that end are hindered by the fact that the three organizations on the front line of border security are spread across three different U.S. Cabinet departments. The Coast Guard works under the Secretary of Transportation, the Customs Service is located in the Department of the Treasury, and the Immigration and Naturalization Service oversees the Border Patrol in the Department of Justice. In each case, the border defense agency is far from the mainstream of its parent department’s agenda and consequently receives limited attention from the department’s senior officials. We therefore recommend the following:

● 3: The President should propose to Congress the transfer of the Customs Service, the

Border Patrol, and Coast Guard to the National Homeland Security Agency, while preserving them as distinct entities.

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Bringing these organizations together under one agency will create important synergies. Their individual capabilities will be molded into a stronger and more effective system, and this realignment will help ensure that sufficient resources are devoted to tasks crucial to both public safety and U.S. trade and economic interests. Consolidating overhead, training programs, and maintenance of the aircraft, boats, and helicopters that these three agencies employ will save money, and further efficiencies could be realized with regard to other resources such as information technology, communications equipment, and dedicated sensors. Bringing these separate, but complementary, activities together will also facilitate more effective Executive and Legislative oversight, and help rationalize the process of budget preparation, analysis, and presentation.

Steps must be also taken to strengthen these three individual organizations themselves.

The Customs Service, the Border Patrol, and the Coast Guard are all on the verge of being overwhelmed by the mismatch between their growing duties and their mostly static resources.

The Customs Service, for example, is charged with preventing contraband from entering

the United States. It is also responsible for preventing terrorists from using the commercial or private transportation venues of international trade for smuggling explosives or weapons of mass destruction into or out of the United States. The Customs Service, however, retains only a modest air, land, and marine interdiction force, and its investigative component, supported by its own intelligence branch, is similarly modest. The high volume of conveyances, cargo, and passengers arriving in the United States each year already overwhelms the Customs Service’s capabilities. Over $8.8 billion worth of goods, over 1.3 million people, over 340,000 vehicles, and over 58,000 shipments are processed daily at entry points. Of this volume, Customs can inspect only one to two percent of all inbound shipments. The volume of U.S. international trade, measured in terms of dollars and containers, has doubled since 1995, and it may well double again between now and 2005.

Therefore, this Commission believes that an improved computer information capability

and tracking system—as well as upgraded equipment that can detect both conventional and nuclear explosives, and chemical and biological agents—would be a wise short-term investment with important long-term benefits. It would also raise the risk for criminals seeking to target or exploit importers and cargo carriers for illicit gains.10

The Border Patrol is the uniformed arm of the Immigration and Naturalization Service.

Its mission is the detection and prevention of illegal entry into the United States. It works primarily between ports of entry and patrols the borders by various means. There has been a debate for many years about whether the dual functions of the Immigration and Naturalization Service—border control and enforcement on the one side, and immigration facilitation on the other—should be joined under the same roof. The U.S. Commission on Immigration Reform concluded that they should not be joined.11 We agree: the Border Patrol should become part of the NHSA.

The U.S. Coast Guard is a highly disciplined force with multiple missions and a natural

role to play in homeland security. It performs maritime search and rescue missions, manages vessel traffic, enforces U.S. environmental and fishery laws, and interdicts and searches vessels

10 See the Report of the Interagency Commission on Crime and Security in U.S. Seaports (Washington, DC: Fall 2000). 11 See the Report of the U.S. Commission on Immigration Reform (Washington, DC: 1997).

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suspected of carrying illegal aliens, drugs, and other contraband. In a time of war, it also works with the Navy to protect U.S. ports from attack.

Indeed, in many respects, the Coast Guard is a model homeland security agency given its

unique blend of law enforcement, regulatory, and military authorities that allow it to operate within, across, and beyond U.S. borders. It accomplishes its many missions by routinely working with numerous local, regional, national, and international agencies, and by forging and maintaining constructive relationships with a diverse group of private, non-governmental, and public marine-related organizations. As the fifth armed service, in peace and war, it has national defense missions that include port security, overseeing the defense of coastal waters, and supporting and integrating its forces with those of the Navy and the other services.

The case for preserving and enhancing the Coast Guard’s multi-mission capabilities is

compelling. But its crucial role in protecting national interests close to home has not been adequately appreciated, and this has resulted in serious and growing readiness concerns. U.S. Coast Guard ships and aircraft are aging and technologically obsolete; indeed, the Coast Guard cutter fleet is older than 39 of the world's 41 major naval fleets. As a result, the Coast Guard fleet generates excessive operating and maintenance costs, and lacks essential capabilities in speed, sensors, and interoperability. To fulfill all of its missions, the Coast Guard requires updated platforms with the staying power, in hazardous weather, to remain offshore and fully operational throughout U.S. maritime economic zones.12

The Commission recommends strongly that Congress recapitalize the Customs Service,

the Border Patrol, and the Coast Guard so that they can confidently perform key homeland security roles.

HSA’s planning, coordinating, and overseeing activities would be undertaken through three staff Directorates. The Directorate of Prevention would oversee and

coordinate the various border security activities, as discussed above. A Directorate of Critical Infrastructure Protection (CIP) would handle the growing cyber threat. FEMA’s emergency preparedness and response activities would be strengthened in a third directorate to cover both natural and manmade disasters. A Science and Technology office would advise the NHSA Director on research and development efforts and priorities for all three directorates.

Relatively small permanent staffs would man the directorates. NHSA will employ

FEMA’s principle of working effectively with state and local governments, as well as with other federal organizations, stressing interagency coordination. Much of NHSA’s daily work will take place directly supporting state officials in its regional offices around the country. Its organizational infrastructure will not be heavily centered in the Washington, DC area.

NHSA would also house a National Crisis Action Center (NCAC), which would become

the nation’s focal point for monitoring emergencies and for coordinating federal support in a crisis to state and local governments, as well as to the private sector. We envision the center to be an interagency operation, directed by a two-star National Guard general, with full-time representation from the other federal agencies involved in homeland security (See Figure 1).

12 See Report of the Interagency Task Force on U.S. Coast Guard Roles and Missions, A Coast Guard for the Twenty First-Century (Washington, DC: December 1999).

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Figure 1: National Homeland Security Agency NHSA will require a particularly close working relationship with the Department of

Defense. It will need also to create and maintain strong mechanisms for the sharing of information and intelligence with U.S. domestic and international intelligence entities. We suggest that NHSA have liaison officers in the counter-terrorism centers of both the FBI and the CIA. Additionally, the sharing of information with business and industry on threats to critical infrastructures requires further expansion.

HSA will also assume responsibility for overseeing the protection of the nation’s critical infrastructure. Considerable progress has been made in implementing the

recommendations of the President’s Commission on Critical Infrastructure Protection (PCCIP) and Presidential Decision Directive 63 (PDD-63). But more needs to be done, for the United States has real and growing problems in this area.

U.S. dependence on increasingly sophisticated and more concentrated critical

infrastructures has increased dramatically over the past decade. Electrical utilities, water and sewage systems, transportation networks, and communications and energy systems now depend on computers to provide safe, efficient, and reliable service. The banking and finance sector, too, keeps track of millions of transactions through increasingly robust computer capabilities.

The overwhelming majority of these computer systems are privately owned, and many

operate at or very near capacity with little or no provision for manual back-ups in an emergency.

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National HomelandSecurity Agency

Directorates

PreventionCritical Infrastructure Protection

Emergency Preparedness & Response

National CrisisAction Center

Coast GuardCustoms Service Border Patrol

Regional Offices

Regional Offices

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Moreover, the computerized information networks that link systems together are themselves vulnerable to unwanted intrusion and disruption. An attack on any one of several highly interdependent networks can cause collateral damage to other networks and the systems they connect. Some forms of disruption will lead merely to nuisance and economic loss, but other forms will jeopardize lives. One need only note the dependence of hospitals, air-traffic control systems, and the food processing industry on computer controls to appreciate the point.

The bulk of unclassified military communications, too, relies on systems almost entirely

owned and operated by the private sector. Yet little has been done to assure the security and reliability of those communications in crisis. Current efforts to prevent attacks, protect against their most damaging effects, and prepare for prompt response are uneven at best, and this is dangerous because a determined adversary is most likely to employ a weapon of mass disruption during a homeland security or foreign policy crisis.

As noted above, a Directorate for Critical Infrastructure Protection would be an integral

part of the National Homeland Security Agency. This directorate would have two vital responsibilities. First would be to oversee the physical assets and information networks that make up the U.S. critical infrastructure. It should ensure the maintenance of a nucleus of cyber security expertise within the government, as well. There is now an alarming shortage of government cyber security experts due in large part to the financial attraction of private-sector employment that the government cannot match under present personnel procedures.13 The director’s second responsibility would be as the Critical Information Technology, Assurance, and Security Office (CITASO). This office would coordinate efforts to address the nation’s vulnerability to electronic or physical attacks on critical infrastructure.

Several critical activities that are currently spread among various government agencies

and the private sector should be brought together for this purpose. These include: ● Information Sharing and Analysis Centers (ISACs), which are government-sponsored committees of private-sector participants who work to share information, plans, and procedures for information security in their fields; ● The Critical Infrastructure Assurance Office (CIAO), currently housed in the Commerce Department, which develops outreach and awareness programs with the private sector; ● The National Infrastructure Protection Center (NIPC), currently housed in the FBI, which gathers information and provides warnings of cyber attacks; and ● The Institute for Information Infrastructure Protection (I3P), also in the Commerce Department, which is designed to coordinate and support research and development projects on cyber security. In partnership with the private sector where most cyber assets are developed and owned,

the Critical Infrastructure Protection Directorate would be responsible for enhancing information sharing on cyber and physical security, tracking vulnerabilities and proposing improved risk management policies, and delineating the roles of various government agencies in preventing, defending, and recovering from attacks. To do this, the government needs to institutionalize better its private-sector liaison across the board—with the owners and operators of critical 13 We return to this problem below in Section IV.

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infrastructures, hardware and software developers, server/service providers, manufacturers/producers, and applied technology developers.

The Critical Infrastructure Protection Directorate’s work with the private sector must

include a strong advocacy of greater government and corporate investment in information assurance and security. The CITASO would be the focal point for coordinating with the Federal Communications Commission (FCC) in helping to establish cyber policy, standards, and enforcement mechanisms. Working closely with the Office of Management and Budget (OMB) and its Chief Information Officer Council (CIO Council), the CITASO needs to speak for those interests in government councils.14 The CITASO must also provide incentives for private-sector participation in Information Sharing and Analysis Centers to share information on threats, vulnerabilities, and individual incidents, to identify interdependencies, and to map the potential cascading effects of outages in various sectors.

The directorate also needs to help coordinate cyber security issues internationally. At

present, the FCC handles international cyber issues for the U.S. government through the International Telecommunications Union. As this is one of many related international issues, it would be unwise to remove this responsibility from the FCC. Nevertheless, the CIP Directorate should work closely with the FCC on cyber issues in international bodies.

he mission of the NHSA must include specific planning and operational tasks to be staffed through the Directorate for Emergency Preparedness and Response. These

include: ● Setting training and equipment standards, providing resource grants, and encouraging intelligence and information sharing among state emergency management officials, local first responders, the Defense Department, and the FBI; ● Integrating the various activities of the Defense Department, the National Guard, and other federal agencies into the Federal Response Plan; and ● Pulling together private sector activities, including those of the medical community, on recovery, consequence management, and planning for continuity of services. Working with state officials, the emergency management community, and the law

enforcement community, the job of NHSA’s third directorate will be to rationalize and refine the nation’s incident response system. The current distinction between crisis management and consequence management is neither sustainable nor wise. The duplicative command arrangements that have been fostered by this division are prone to confusion and delay. NHSA should develop and manage a single response system for national incidents, in close coordination with the Department of Justice (DoJ) and the FBI. This would require that the current policy, which specifies initial DoJ control in terrorist incidents on U.S. territory, be amended once Congress creates NHSA. We believe that this arrangement would in no way contradict or diminish the FBI’s traditional role with respect to law enforcement.

14 The Chief Information Officer Council is a government organization consisting of all the statutory Chief Information Officers in the government. It is located within OMB under the Deputy Director for Management.

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The Emergency Preparedness and Response Directorate should also assume a major resource and budget role. With the help of the Office of Management and Budget, the directorate’s first task will be to figure out what is being spent on homeland security in the various departments and agencies. Only with such an overview can the nation identify the shortfalls between capabilities and requirements. Such a mission budget should be included in the President’s overall budget submission to Congress. The Emergency Preparedness and Response Directorate will also maintain federal asset databases and encourage and support up-to-date state and local databases.

EMA has adapted well to new circumstances over the past few years and has gained a well-deserved reputation for responsiveness to both natural and manmade disasters.

While taking on homeland security responsibilities, the proposed NHSA would strengthen FEMA’s ability to respond to such disasters. It would streamline the federal apparatus and provide greater support to the state and local officials who, as the nation’s first responders, possess enormous expertise. To the greatest extent possible, federal programs should build upon the expertise and existing programs of state emergency preparedness systems and help promote regional compacts to share resources and capabilities.

To help simplify federal support mechanisms, we recommend transferring the National Domestic Preparedness Office (NDPO), currently housed at the FBI, to the National Homeland Security Agency. The Commission believes that this transfer to FEMA should be done at first opportunity, even before NHSA is up and running.

The NDPO would be tasked with organizing the training of local responders and

providing local and state authorities with equipment for detection, protection, and decontamination in a WMD emergency. NHSA would develop the policies, requirements, and priorities as part of its planning tasks as well as oversee the various federal, state, and local training and exercise programs. In this way, a single staff would provide federal assistance for any emergency, whether it is caused by flood, earthquake, hurricane, disease, or terrorist bomb.

A WMD incident on American soil is likely to overwhelm local fire and rescue squads, medical facilities, and government services. Attacks may contaminate water, food, and air; large-scale evacuations may be necessary and casualties could be extensive. Since getting prompt help to those who need it would be a complex and massive operation requiring federal support, such operations must be extensively planned in advance. Responsibilities need to be assigned and procedures put in place for these responsibilities to evolve if the situation worsens. As we envision it, state officials will take the initial lead in responding to a crisis. NHSA will normally use its Regional Directors to coordinate federal assistance, while the National Crisis Action Center will monitor ongoing operations and requirements. Should a crisis overwhelm local assets, state officials will turn to NHSA for additional federal assistance. In major crises, upon the recommendation of the civilian Director of NHSA, the President will designate a senior figure—a Federal Coordinating Officer—to assume direction of all federal activities on the scene. If the situation warrants, a state governor can ask that active military forces reinforce National Guard units already on the scene. Once the President federalizes National Guard forces, or if he decides to use Reserve forces, the Joint Forces Command will assume responsibility for all military operations, acting through designated task force commanders. At the same time, the Secretary of Defense would appoint a Defense Coordinating Officer to provide civilian oversight and ensure prompt civil support. This person would work for the Federal Coordinating Officer. This response mechanism is displayed in Figure 2.

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NHSADirector

NationalCrisis Action

Center

USJFCOM

JTFCivil

Support

State/Local Officials(incl. National Guard)

Federal CoordinatingOfficer

DefenseCoordinating

OfficerOther FederalSupport: (EPA,H&HS, DOE,DOJ, etc.)

Secretary ofDefense

CJCSASDHLS

RegionalDirectors

Local Response

Federal Response

Figure 2: Emergency Response Mechanisms

To be capable of carrying out its responsibilities under extreme circumstances, NHSA will need to undertake robust exercise programs and regular training to gain experience and to establish effective command and control procedures. It will be essential to update regularly the Federal Response Plan. It will be especially critical for NHSA officials to undertake detailed planning and exercises for the full range of potential contingencies, including ones that require the substantial involvement of military assets in support.

HSA will provide the overarching structure for homeland security, but other government agencies will retain specific homeland security tasks. We take the

necessary obligations of the major ones in turn. Intelligence Community. Good intelligence is the key to preventing attacks on the

homeland and homeland security should become one of the intelligence community’s most important missions.15 Better human intelligence must supplement technical intelligence, especially on terrorist groups covertly supported by states. As noted above, fuller cooperation and more extensive information-sharing with friendly governments will also improve the chances that would-be perpetrators will be detained, arrested, and prosecuted before they ever reach U.S. borders. 15 We return to this issue in our discussion of the Intelligence Community in Section III.F., particularly in recommendation 37.

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The intelligence community also needs to embrace cyber threats as a legitimate mission

and to incorporate intelligence gathering on potential strategic threats from abroad into its activities.

To advance these ends, we offer the following recommendation:

● 4: The President should ensure that the National Intelligence Council: include homeland security and asymmetric threats as an area of analysis; assign that portfolio to a National Intelligence Officer; and produce National Intelligence Estimates on these threats. Department of State. U.S. embassies overseas are the American people’s first line of

defense. U.S. Ambassadors must make homeland security a top priority for all embassy staff, and Ambassadors need the requisite authority to ensure that information is shared in a way that maximizes advance warning overseas of direct threats to the United States.

Ambassadors should also ensure that the gathering of information, and particularly from

open sources, takes full advantage of all U.S. government resources abroad, including diplomats, consular officers, military officers, and representatives of the various other departments and agencies. The State Department should also strengthen its efforts to acquire information from Americans living or travelling abroad in private capacities.

The State Department has made good progress in its overseas efforts to reduce terrorism,

but we now need to extend this effort into the Information Age. Working with NHSA’s CIP Directorate, the State Department should expand cooperation on critical infrastructure protection with other states and international organizations. Private sector initiatives, particularly in the banking community, provide examples of international cooperation on legal issues, standards, and practices. Working with the CIP Directorate and the FCC, the State Department should also encourage other governments to criminalize hacking and electronic intrusions and to help track hackers, computer virus proliferators, and cyber terrorists.

Department of Defense. The Defense Department, which has placed its highest priority

on preparing for major theater war, should pay far more attention to the homeland security mission. Organizationally, DoD responses are widely dispersed. An Assistant to the Secretary of Defense for Civil Support has responsibility for WMD incidents, while the Department of the Army’s Director of Military Support is responsible for non-WMD contingencies. Such an arrangement does not provide clear lines of authority and responsibility or ensure political accountability. The Commission therefore recommends the following:

● 5: The President should propose to Congress the establishment of an Assistant Secretary

of Defense for Homeland Security within the Office of the Secretary of Defense, reporting directly to the Secretary. A new Assistant Secretary of Defense for Homeland Security would provide policy

oversight for the various DoD activities within the homeland security mission and ensure that mechanisms are in place for coordinating military support in major emergencies. He or she would work to integrate homeland security into Defense Department planning, and ensure that adequate

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resources are forthcoming. This Assistant Secretary would also represent the Secretary in the NSC interagency process on homeland security issues.

Along similar lines and for similar reasons, we also recommend that the Defense

Department broaden and strengthen the existing Joint Forces Command/Joint Task Force-Civil Support (JTF-CS) to coordinate military planning, doctrine, and command and control for military support for all hazards and disasters.

This task force should be directed by a senior National Guard general with additional

headquarters personnel. JTF-CS should contain several rapid reaction task forces, composed largely of rapidly mobilizable National Guard units. The task force should have command and control capabilities for multiple incidents. Joint Forces Command should work with the Assistant Secretary of Defense for Homeland Security to ensure the provision of adequate resources and appropriate force allocations, training, and equipment for civil support.

On the prevention side, maintaining strong nuclear and conventional forces is as high a

priority for homeland security as it is for other missions. Shaping a peaceful international environment and deterring hostile military actors remain sound military goals. But deterrent forces may have little effect on non-state groups secretly supported by states, or on individuals with grievances real or imagined. In cases of clear and imminent danger, the military must be able to take preemptive action overseas in circumstances where local authorities are unable or unwilling to act. For this purpose, as noted above, the United States needs to be prepared to use its rapid, long-range precision strike capabilities. A decision to act would obviously rest in civilian hands, and would depend on intelligence information and assessments of diplomatic consequences. But even if a decision to strike preemptively is never taken or needed, the capability should be available nonetheless, for knowledge of it can contribute to deterrence.

We also suggest that the Defense Department broaden its mission of protecting air, sea,

and land approaches to the United States, consistent with emerging threats such as the potential proliferation of cruise missiles. The department should examine alternative means of monitoring approaches to the territorial United States. Modern information technology and sophisticated sensors can help monitor the high volumes of traffic to and from the United States. Given the volume of legitimate activities near and on the border, even modern information technology and remote sensors cannot filter the good from the bad as a matter of routine. It is neither wise nor possible to create a surveillance umbrella over the United States. But Defense Department assets can be used to support detection, monitoring, and even interception operations when intelligence indicates a specific threat.

Finally, a better division of labor and understanding of responsibilities is essential in

dealing with the connectivity and interdependence of U.S. critical infrastructure systems. This includes addressing the nature of a national transportation network or cyber emergency and the Defense Department’s role in prevention, detection, or protection of the national critical infrastructure. The department’s sealift and airlift plans are premised on largely unquestioned assumptions that domestic transportation systems will be fully available to support mobilization requirements. The department also is paying insufficient attention to the vulnerability of its information networks. Currently, the department's computer network defense task force (JTF-Computer Network Defense) is underfunded and understaffed for the task of managing an actual strategic information warfare attack. It should be given the resources to carry out its current mission and is a logical source of advice to the proposed NHSA Critical Information Technology, Assurance, and Security Office.

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National Guard. The National Guard, whose origins are to be found in the state militias authorized by the U.S. Constitution, should play a central role in the response component of a layered defense strategy for homeland security. We therefore recommend the following:

● 6: The Secretary of Defense, at the President’s direction, should make homeland security

a primary mission of the National Guard, and the Guard should be organized, properly trained, and adequately equipped to undertake that mission. At present, the Army National Guard is primarily organized and equipped to conduct

sustained combat overseas. In this the Guard fulfills a strategic reserve role, augmenting the active military during overseas contingencies. At the same time, the Guard carries out many state-level missions for disaster and humanitarian relief, as well as consequence management. For these, it relies upon the discipline, equipment, and leadership of its combat forces. The National Guard should redistribute resources currently allocated predominantly to preparing for conventional wars overseas to provide greater support to civil authorities in preparing for and responding to disasters, especially emergencies involving weapons of mass destruction.

Such a redistribution should flow from a detailed assessment of force requirements for

both theater war and homeland security contingencies. The Department of Defense should conduct such an assessment, with the participation of the state governors and the NHSA Director. In setting requirements, the department should minimize forces with dual missions or reliance on active forces detailed for major theater war. This is because the United States will need to maintain a heightened deterrent and defensive posture against homeland attacks during regional contingencies abroad. The most likely timing of a major terrorist incident will be while the United States is involved in a conflict overseas.16

The National Guard is designated as the primary Department of Defense agency for

disaster relief. In many cases, the National Guard will respond as a state asset under the control of state governors. While it is appropriate for the National Guard to play the lead military role in managing the consequences of a WMD attack, its capabilities to do so are uneven and in some cases its forces are not adequately structured or equipped. Twenty-two WMD Civil Support Teams, made up of trained and equipped full-time National Guard personnel, will be ready to deploy rapidly, assist local first responders, provide technical advice, and pave the way for additional military help. These teams fill a vital need, but more effort is required.

This Commission recommends that the National Guard be directed to fulfill its historic

and Constitutional mission of homeland security. It should provide a mobilization base with strong local ties and support. It is already “forward deployed” to achieve this mission and should:

● Participate in and initiate, where necessary, state, local, and regional planning for responding to a WMD incident; ● Train and help organize local first responders;

● Maintain up-to-date inventories of military resources and equipment available in the area on short notice;

16 See the Report of the National Defense University Quadrennial Defense Review 2001 Working Group (Washington, DC: Institute for National Strategic Studies, November 2000), p. 60.

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● Plan for rapid inter-state support and reinforcement; and ● Develop an overseas capability for international humanitarian assistance and disaster relief.

In this way, the National Guard will become a critical asset for homeland security. Medical Community. The medical community has critical roles to play in homeland

security. Catastrophic acts of terrorism or violence could cause casualties far beyond any imagined heretofore. Most of the American medical system is privately owned and now operates at close to capacity. An incident involving WMD will quickly overwhelm the capacities of local hospitals and emergency management professionals.

In response, the National Security Council, FEMA, and the Department of Health and

Human Services have already begun a reassessment of their programs. Research to develop better diagnostic equipment and immune-enhancing drugs is underway, and resources to reinvigorate U.S. epidemiological surveillance capacity have been allocated. Programs to amass and regionally distribute inventories of antibiotics and vaccines have started, and arrangements for mass production of selected pharmaceuticals have been made. The Centers for Disease Control has rapid-response investigative units prepared to deploy and respond to incidents.

These programs will enhance the capacities of the medical community, but the

momentum and resources for this effort must be extended. We recommend that the NHSA Directorate for Emergency Preparedness and Response assess local and federal medical resources to deal with a WMD emergency. It should then specify those medical programs needed to deal with a major national emergency beyond the means of the private sector, and Congress should fund those needs.

C. EXECUTIVE-LEGISLATIVE COOPERATION

olving the homeland security challenge is not just an Executive Branch problem. Congress should be an active participant in the development of homeland security

programs, as well. Its hearings can help develop the best ideas and solutions. Individual members should develop expertise in homeland security policy and its implementation so that they can fill in policy gaps and provide needed oversight and advice in times of crisis. Most important, using its power of the purse, Congress should ensure that government agencies have sufficient resources and that their programs are coordinated, efficient, and effective.

Congress has already taken important steps. A bipartisan Congressional initiative

produced the U.S. effort to deal with the possibility that weapons of mass destruction could “leak” out of a disintegrating Soviet Union.17 It was also a Congressional initiative that established the Domestic Preparedness Program and launched a 120-city program to enhance the capability of federal, state, and local first responders to react effectively in a WMD emergency.18 Members of Congress from both parties have pushed the Executive Branch to identify and

17 Sponsored by Senators Sam Nunn and Richard Lugar. 18 Public Law 104-201, National Defense Authorization Act for FY 1997: Defense Against Weapons of Mass Destruction. This legislation, known as the Nunn-Lugar-Domenici Amendment, was passed in July 1996.

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manage the problem more effectively. Congress has also proposed and funded studies and commissions on various aspects of the homeland security problem.19 But it must do more.

A sound homeland security strategy requires the overhaul of much of the legislative

framework for preparedness, response, and national defense programs. Congress designed many of the authorities that support national security and emergency preparedness programs principally for a Cold War environment. The new threat environment—from biological and terrorist attacks to cyber attacks on critical systems—poses vastly different challenges. We therefore recommend that Congress refurbish the legal foundation for homeland security in response to the new threat environment.

In particular, Congress should amend, as necessary, key legislative authorities such as the

Defense Production Act of 1950 and the Communications Act of 1934, which facilitate homeland security functions and activities.20 Congress should also encourage the sharing of threat, vulnerability, and incident data between the public and private sectors—including federal agencies, state governments, first responders, and industry.21 In addition, Congress should monitor and support current efforts to update the international legal framework for communications security issues.22

Beyond that, Congress has some organizational work of its own to do. As things stand

today, so many federal agencies are involved with homeland security that it is exceedingly difficult to present federal programs and their resource requirements to the Congress in a coherent

19 We note: the Rumsfeld Commission [Report of the Commission to Assess the Ballistic Missile Threat to the United States (Washington, DC: July 15, 1998)]; the Deutch Commission [Combating Proliferation of Weapons of Mass Destruction (Washington, DC: July 14, 1999)]; Judge William Webster’s Commission [Report on the Advancement of Federal Law Enforcement (Washington, DC: January 2000)]; the Bremer Commission [Report of the National Commission on Terrorism, Countering the Changing Threat of International Terrorism (Washington, DC: June 2000)]; and an advisory panel led Virginia Governor James Gilmore [First Annual Report to the President and the Congress of the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction (Washington, DC: December 15, 1999)]. 20 The Defense Production Act was developed during the Korean War when shortages of critical natural resources such as coal, oil, and gas were prioritized for national defense purposes. [See Defense Production Act of 1950, codified at 50 USC App. § 2061 et seq. Title I includes delegations to prioritize and allocate goods and services based on national defense needs.] Executive Order 12919, National Defense Industrial Resources Preparedness, June 6, 1994, implements Title I of the Defense Production Act. Congressional review should focus on the applicability of the Defense Production Act to homeland security needs, ranging from prevention to restoration activities. Section 706 of the Communications Act of 1934 also needs revision so that it includes the electronic media that have developed in the past two decades. [See 48 Stat. 1104, 47 USC § 606, as amended.] Executive Order 12472, Assignment of National Security and Emergency Preparedness Telecommunications Functions, April 3, 1984, followed the breakup of AT&T and attempted to specify anew the prerogatives of the Executive Branch in accordance with the 1934 Act in directing national communications media during a national security emergency. It came before the Internet, however, and does not clearly apply to it. 21 For more than four years, multiple institutions have called on national leadership to support laws and policies promoting security cooperation through public-private partnerships. See, for example, the President’s Commission on Critical Infrastructure Protection, Critical Foundations, Protecting America’s Infrastructures (Washington, DC: October 1997), pp. 86-88 and Report of the Defense Science Board Task Force on Information Warfare (Washington, DC: November 1996). 22 This includes substantial efforts in multiple forums, such as the Council of Europe and the G8, to fight transnational organized crime. See Communiqué on principles to fight transnational organized crime, Meeting of the Justice and Interior Ministers of the Eight, December 9-10, 1997.

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way. It is largely because the budget is broken up into so many pieces, for example, that counter-terrorism and information security issues involve nearly two dozen Congressional committees and subcommittees. The creation of the National Security Homeland Agency will redress this problem to some extent, but because of its growing urgency and complexity, homeland security will still require a stronger working relationship between the Executive and Legislative Branches. Congress should therefore find ways to address homeland security issues that bridge current jurisdictional boundaries and that create more innovative oversight mechanisms.

There are several ways of achieving this. The Senate’s Arms Control Observer Group and

its more recent NATO Enlargement Group were two successful examples of more informal Executive-Legislative cooperation on key multi-dimensional issues. Specifically, in the near term, this Commission recommends the following:

● 7: Congress should establish a special body to deal with homeland security issues, as has

been done effectively with intelligence oversight. Members should be chosen for their expertise in foreign policy, defense, intelligence, law enforcement, and appropriations. This body should also include members of all relevant Congressional committees as well as ex-officio members from the leadership of both Houses of Congress. This body should develop a comprehensive understanding of the problem of homeland

security, exchange information and viewpoints with the Executive Branch on effective policies and plans, and work with standing committees to develop integrated legislative responses and guidance. Meetings would often be held in closed session so that Members could have access to interagency deliberations and diverging viewpoints, as well as to classified assessments. Such a body would have neither a legislative nor an oversight mandate, and it would not eclipse the authority of any standing committee.

At the same time, Congress needs to systematically review and restructure its committee

system, as will be proposed in recommendation 48. A single, select committee in each house of Congress should be given authorization, appropriations, and oversight responsibility for all homeland security activities. When established, these committees would replace the function of the oversight body described in recommendation 7.

n sum, the federal government must address the challenge of homeland security with greater urgency. The United States is not immune to threats posed by weapons of mass

destruction or disruption, but neither is it entirely defenseless against them. Much has been done to prevent and defend against such attacks, but these efforts must be incorporated into the nation’s overall security strategy, and clear direction must be provided to all departments and agencies. Non-traditional national security agencies that now have greater relevance than they did in the past must be reinvigorated. Accountability, authority, and responsibility must be more closely aligned within government agencies. An Executive-Legislative consensus is required, as well, to convert strategy and resources into programs and capabilities, and to do so in a way that preserves fundamental freedoms and individual rights.

Most of all, however, the government must reorganize itself for the challenges of this

new era, and make the necessary investments to allow an improved organizational structure to work. Through the Commission’s proposal for a National Homeland Security Agency, the U.S. government will be able to improve the planning and coordination of federal support to state and

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local agencies, to rationalize the allocation of resources, to enhance readiness in order to prevent attacks, and to facilitate recovery if prevention fails. Most important, this proposal integrates the problem of homeland security within the broader framework of U.S. national security strategy. In this respect, it differs significantly from issue-specific approaches to the problem, which tend to isolate homeland security away from the larger strategic perspective of which it must be a part.

We are mindful that erecting the operational side of this strategy will take time to

achieve. Meanwhile, the threat grows ever more serious. That is all the more reason to start right away on implementing the recommendations put forth here.

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II. Recapitalizing America’s Strengths in Science and Education

he scale and nature of the ongoing revolution in science and technology, and what this implies for the quality of human capital in the 21st century, pose critical national

security challenges for the United States. Second only to a weapon of mass destruction detonating in an American city, we can think of nothing more dangerous than a failure to manage properly science, technology, and education for the common good over the next quarter century.

Current institutional arrangements among government, higher education, and business

have served the nation well over the past five decades, but the world is changing. Today, private proprietary expenditure on technology development far outdistances public spending. The internationalization of both scientific research and its commercial development is having a significant effect on the capacity of the U.S. government to harness science in the service of national security and to attract qualified scientific and technical personnel. These changes are transforming most facets of the American economy, from health care to banking to retail business, as well as the defense industrial base.

The harsh fact is that the U.S. need for the highest quality human capital in science,

mathematics, and engineering is not being met. One reason for this is clear: American students know that professional careers in basic science and mathematics require considerable preparation and effort, while salaries are often more lucrative in areas requiring less demanding training. Non-U.S. nationals, however, do find these professions attractive and, thanks to science, math, and technical preparation superior to that of many Americans, they increasingly fill American university graduate studies seats and job slots in these areas. Another reason for the growing deficit in high-quality human capital is that the American kindergarten through 12th grade (K-12) education system is not performing as well as it should. As a result too few American students are qualified to take these slots, even were they so inclined.

This is an ironic predicament, since America’s strength has always been tied to the spirit

and entrepreneurial energies of its people. America remains today the model of creativity and experimentation, and its success has inspired other nations to recognize the true sources of power and wealth in science, technology, and higher education. America’s international reputation, and therefore a significant aspect of its global influence, depends on its reputation for excellence in these areas. U.S. performance is not keeping up with its reputation. Other countries are striving hard, and with discipline they will outstrip us.

This is not a matter merely of national pride or international image. It is an issue of

fundamental importance to national security. In a knowledge-based future, only an America that remains at the cutting edge of science and technology will sustain its current world leadership. In such a future, only a well-trained and educated population can thrive economically, and from national prosperity provide the foundation for national cohesion. Complacency with our current achievement of national wealth and international power will put all of this at risk.

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A. INVESTING IN INNOVATION

any nations in the world have the intellectual assets to compete with those of the United States. However, as many leaders abroad recognize, their social, political,

and economic systems often prevent them from capitalizing on these intellectual assets. The creative release of individual energies for the public good is not possible without a political, social, and economic system that frees talent and nurtures innovation.23

We have before us the negative example of the former Soviet Union. Its state scientific establishment was the largest in the world and very talented, yet the attitudes and institutions required to nurture and disseminate innovation in a broad sense were missing, and it never fulfilled its potential. Today, many national leaders around the world are determined not to repeat the Soviet failure. They are studying the American business and innovation environment in hopes of extracting its secrets. Lessons are being learned and adopted throughout the world. As a result, global competition is growing significantly and will continue to do so.

Meanwhile, however, many critical changes are occurring within the United States: ● While basic research remains primarily a government-funded activity, private and proprietary technology development in the United States is increasing relatively and absolutely compared to that of the government. ● The internationalization of basic science and technology (S&T) activities, assets, and capabilities is accelerating, and current U.S. advantages in many critical fields are shrinking and may be eclipsed in the years ahead. ● New classes of defense-relevant technologies are developing in which the major U.S. defense companies and national labs have scant experience. There are far fewer institutional linkages between government scientists and those innovative businesses generating and adapting cutting-edge technologies (e.g., genetic engineering, materials science, nanotechnology, and robotics).

uring the 1980s, America recognized the need to change business models that had roots in the Industrial Age. It embarked on a path of deregulation and

experimentation that has led to the networked economy that is still taking shape today. While U.S. reform at the microeconomic level has been primarily a private sector achievement, government has played an important role. It is also clear the government and the private sector will have to continue to work in concert to fill many critical needs: e.g., telecommunication and cyber-infrastructure policies; information assurance and protection; and policies to preserve the defense industrial base. This nation must increase its public research and development budget in order to remain a world leader. But opportunity and resources will not come together by themselves. Wise public policies are needed to enhance creative investment and promote intense experimentation.

23 This is why it is not possible to establish a direct correlation between educational achievement and either productivity or economic growth indices. For the last two decades, for example, U.S. educational achievements have lagged behind those of many other countries even as U.S. productivity and growth measures have outdistanced them.

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In particular, we need to fund more basic research and technology development. As is clear to all, private sector R&D investments in the United States have increased vastly in recent years. That is good, but private R&D tends to be more development-oriented than research-oriented. It is from investment in basic science, however, that the most valuable long-run dividends are realized. The government has a critical role to play in this regard, as the “spinoff” achievements of the space program over the years illustrate. That role remains not least because our basic and applied research efforts in areas of critical national interest will not be pursued by a civil sector that emphasizes short- to mid-term return on investment.

If the United States does not invest significantly more in public research and

development, it will be eclipsed by others. Recent failures in this regard may return to haunt us. The decision not to invest in a large nuclear accelerator, the Superconducting Super Collider, already means that the most significant breakthroughs in theoretical physics at least over the next decade will occur in Europe and not in the United States. The reduction of U.S. research and development in basic electronics engineering has ensured that the next generation of chip processors and manufacturing technology will come from an international consortium (U.S.-German-Dutch) rather than from the United States alone.

We must not let such examples proliferate in the future, nor should we squander the

enormous opportunities before us. We stand on the cusp of major discoveries in several interlocking fields, and we stand to benefit, as well, from major strides in scientific instrumentation. As a result, the way is clear to design large-scale scientific and technological experiments in key fields—not unlike the effort of the International Geophysical Year in 1958, the early space program, or the project to decode the human genome. In the judgment of this Commission, the U.S. government has not taken a broad, systematic approach to investing in science and technology R&D, and thus will not be able to sustain projects of such scale and boldness. We therefore recommend the following:

● 8: The President should propose, and the Congress should support, doubling the U.S.

government’s investment in science and technology research and development by 2010. Building up an adequate level of effort for major, long-term research for the public good

will require an increased investment on the order of 100 percent over the next decade. In other words, a government-wide R&D budget of about $160 billion by fiscal year 2010 would be prudent and appropriate.

t would not be prudent or appropriate, however, to combine the government’s science and technology capabilities into a single agency, as some have suggested doing, or to

entirely centralize the government’s research and development budget. But we do need to infuse within the U.S. national R&D program a sense of responsible stewardship and vision. The government has to better coordinate its own public research and development efforts among the more than two dozen government departments and agencies that play major roles in the field.24 24 The President’s FY2001 budget allocates U.S. government research monies to its major players as follows: 43 percent NIH, 12 percent NASA, 12 percent DoE, 11 percent DoD, 8 percent NSF, 4 percent USDA, 10 percent all others. See AAAS Report XXV, Research and Development FY2001 (Washington, DC: American Association for the Advancement of Science, 2000), p. 35. These are research budget figures only, not total R&D accounts.

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The coordinating body for that purpose, the White House Office of Science and Technology Policy (OSTP), which houses within it the National Science and Technology Council (NSTC). The White House OSTP has three main functions: to help design the public R&D budget in conjunction with the Office of Management and Budget (OMB); to facilitate interagency efforts involving science and technology and research and development; and to win support for the administration’s science and technology initiatives in Congress.

The National Science and Technology Council, which includes virtually every cabinet

official and Executive Branch agency head, has a committee structure designed to facilitate interagency cooperation. Committees are headed by OSTP personnel, but the participants from other departments and agencies have other, usually more pressing duties. Hence, with the exception of their chairmen, NSTC committees are populated by part-timers.

The President may also use the President’s Council of Advisors on Science and

Technology (PCAST), composed of non-governmental experts, to help him decide science and technology policy. Its use, as with the use of the NSTC, is largely dependent on the interests and inclinations of the President. The relationships among the OSTP, the NSTC, and the PCAST vary from administration to administration.

While these coordinating and advisory bodies do exist, they are inadequately staffed,

funded, and utilized to carry out their significant functions. The current OSTP is not small by White House standards, but it will increasingly be unable to keep up with its mandate as science and technology issues become more important to the national welfare. The NSTC permanent administrative staff is too small to support its committee work, and it has no permanent science and technology professional staff at all. The NSTC itself meets relatively rarely and only episodically takes on specific subjects of interest; e.g., more fuel-efficient automobiles or nanotechnology research. 25

One main reason to improve these organizations, in this Commission’s view, is to enable

the Executive Branch to strengthen its grip on the R&D process. Three changes are required: ● The R&D budget has to be rationalized, and in order to do that a much better effort at physical and human/intellectual inventory stewardship is required. ● Those organizations responsible for rationalizing and managing the R&D process should more systematically review and redesign, as necessary, the science and technology personnel profile of Executive Branch agencies. ● The R&D budget has to be allocated through a more creative and competitive process than is the case today.

We take these issues in turn.

he ability of the White House Office for Science and Technology Policy, together with OMB and other relevant agencies, to rationalize R&D investment presupposes

25 There is, in addition, a Federally-Funded Research and Development Center mandated by Congress—the Critical Technologies Institute located within RAND—that acts as a think-tank for the OSTP. It plays a useful role and should be preserved, but it cannot substitute for a more capable OSTP itself.

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the ability to identify the best, generative opportunities for the investment of government R&D monies. Unfortunately, this is not the case.

Rationalizing the way that public R&D money is spent must include better accounting of both human and physical capital. It is not possible to spend $80 billion wisely each year, let alone twice that much, unless we know where research bottlenecks and opportunities exist. There is no one place in the U.S. government where such inventory stewardship is performed. Rather, elements are dispersed in the National Science Foundation, in the Commerce Department (the Patent and Trademark Office, the National Technical Information Service, and the National Institute of Standards and Technology), in the Departments of Defense, Energy, Agriculture, Health and Human Services, and in parts of the intelligence community. We believe that collating and analyzing this information in one place, and using the conclusions of that analysis to inform the R&D budget process, is the sine qua non of a more effective public R&D effort.

Moreover, without such a basic inventory of the nation’s science and technology

“property,” the United States could lose critical knowledge-based assets to competitors and adversaries without ever knowing it, and without understanding the implications of their loss. In an age when private, proprietary technology development outpaces publicly-funded R&D, high-end science and technology espionage is a growth industry in which both foreign corporations and governments participate. The United States therefore needs to take seriously the protection of such assets to the extent possible and practical—but it cannot protect what it cannot even identify.26

To achieve effective inventory stewardship for science and technology, we recommend

that OSTP, in conjunction with the National Science Foundation—and with the counsel of the National Academies of Science27—design a system for the ongoing basic inventory stewardship of the nation’s capital knowledge assets. The job of inventory stewardship could be vouchsafed to the National Science Board, the governing body of the National Science Foundation, were it to be provided staff for this purpose.

n addition, this Commission urges a more systematic effort at functional budgeting for R&D so that we know how we are spending the public’s money in this area. More

effective R&D portfolio management for research is needed with emphasis on critical R&D areas with high potential long-term benefits. We therefore recommend the following:

● 9: The President should empower his Science Advisor to establish non-military R&D

objectives that meet changing national needs, and to be responsible for coordinating budget development within the relevant departments and agencies.

This budget, we believe, should emphasize research over development, and it should aim at large-scale experimental projects that can make best use of new synergies between theoretical advances and progress in scientific instrumentation.

26 We believe that the creation of a counterintelligence “czar,” announced by the out-going Clinton Administration on January 4, 2001, is a step in the right direction for this purpose. But proper inventory stewardship is a precondition for such a “czar” to be effective. 27 Founded in 1863 by Abraham Lincoln, the National Academy of Sciences today consists of four parts: the National Academy of Science, the National Academy of Engineering, the Institute of Medicine, and the National Research Council. The NAS advises the government, but it is not a government organization.

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We also believe that the President, in tandem with strengthening the White House Office

of Science and Technology Policy, should raise the profile of its head—the Science Advisor to the President. The Science Advisor needs to be empowered as a more significant figure within the government, and we believe the budget function we have recommended for him will be instrumental for this purpose.

here is yet another task that a strengthened OSTP should adopt. As things stand today, more than two dozen U.S. government agencies have science and technology

responsibilities, meaning that they have personnel slots for science and engineering professionals and budget categories to support what those professionals do. (Of the several thousand such personnel in government, some 80 of these slots are for senior scientists and engineers who must be appointed by the President and confirmed by the Senate.)

Despite the significant numbers of science and technology (S&T) personnel and their

obvious criticality, there is no place in the U.S. government where S&T personnel assets as a whole are assessed against changing needs. In the past two decades, the Congressional Research Service, the General Accounting Office, and the now-defunct Office of Technology Assessment have all explored this issue. The Office of Management and Budget, too, has looked regularly at individual departments and agencies, but not at the government’s S&T personnel structure as such. It appears, then, that no one above the departmental level examines the appropriateness of the fit between missions and personnel in this area as a whole.

Dealing with government S&T personnel issues in a disaggregated manner is no longer

adequate. It is hard for senior department and agency managers—and for the Office of Personnel Management (OPM) or the OMB staff—who are themselves not scientists or engineers, to know if they are operating with the right numbers and kinds of science and technology professionals. Hence, the Commission recommends that the President, with aid from his Science Advisor directing NSF’s National Science Board, should reassess and realign, as necessary, government needs for science and technology personnel for the next quarter century.

Indeed, such a review ought to be made routine. The Science Advisor with the National

Science Board and OPM, in consultation with the National Academies of Science, should periodically reevaluate Executive Branch needs for science and technology personnel. They should also suggest means to ensure the recruitment and retention of the highest quality scientists, engineers, and technologists for government service—a general subject we have noted above, and to which we return below in Section IV in the context of recommendation 42.

t present, as we have said, the U.S. government spends more than $80 billion each year in publicly funded R&D, of which about half is defense related. Much of the

budgeting, however, still reflects legacies of the Cold War and the Industrial Age. We do not suggest that this money is being wasted in any direct sense, but its benefits are not being maximized. For example, we believe that defense-related R&D should go back to funding more basic research, for in recent years it has tilted too much toward the “D” over the “R” in R&D.28

28 Research accounts for approximately ten percent of DoD’s $38 billion R&D budget for fiscal year 2001. See AAAS Report XXV, Research and Development FY 2001, p. 71.

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More important, we could derive more benefit from our investment in non-defense R&D if the context for it were a more competitive one. The Commission holds competition to be an important ingredient for the creative use of new ideas. Though we believe centralization of budget development is unnecessary, tailoring the various R&D budgets to meet overall national objectives would be beneficial. Different organizations address different needs and bring different perspectives, as do those working in different scientific disciplines. We therefore recommend that the President’s Science Advisor, beyond his proposed budget coordination role, should lead an effort to revise government R&D practices and budget allocations to make the process more competitive.

One barrier to a more competitive, opportunity-based environment for R&D is

institutional inertia. The current structure of public R&D funding is partly a result of inherited arrangements. We do not suggest disrupting important relationships between particular government agencies and, say, the Lincoln Laboratory at M.I.T., for the turbulence created would not be worth the advantages. But if innovation is to be encouraged, we need greater competition for government R&D funds. Hence, we propose that the government foster a “creative market” for a greater number of research institutions to bid on government research funds.

To create a more competitive market means narrowing the gap between the two tiers of

research institutions that currently exist: the relatively small number of high-prestige major schools with ample endowments, and the larger number of less capable institutions. There are several ways to do this. One is through direct federal investment in or subsidization of second-tier institutions. Another is to encourage second-tier institutions to concentrate effort on new fields of inquiry in which older, more established institutions do not have comparative advantages. We see no reason, as well, to prevent amateurs from competing, because the history of science and technology is laden with the genius of the professionally uninitiated.

In addition, we recommend that a strengthened and more active National Science and

Technology Council preside over an on-going effort to multiply creative, targeted R&D programs within government. The Council’s enlarged professional staff should identify areas of priority research that the private sector is unlikely to pursue, and challenge those government agencies with R&D capabilities to form coalitions to bid on R&D monies set aside for such purposes. To meet such challenges, the National Aeronautics and Space Administration and the Defense Advanced Research Projects Agency might combine talents, in league with their associates outside of government, to bid against a Department of Energy-NSF team. The national laboratory system should also be involved in such competitions—a topic to which we now turn.

he U.S. national laboratory system is badly in need of redefinition and new investment. The national laboratories, though vestiges of the Cold War, remain a

national R&D treasure. Unfortunately, they are a treasure in danger of being squandered. Without any compelling force analogous to that of the Cold War to drive government

funding and the direction of R&D, the labs have been left to drift. Nuclear research has given way mostly to maintenance of the nation’s nuclear arsenal and efforts to dismantle nuclear weapons and manage their radioactive wastes. But however important, these are tasks that a single major laboratory can handle. Many of the other large and small laboratories within the system no longer have the sense of purpose and shared vision that drove the tremendous scientific accomplishments that advanced national security during the Cold War.

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Compounding the labs’ identity problem is the fact that the highest rewards and most interesting scientific and technical work now take place in the private sector. The Commission found broad consensus that the labs are no longer competitive in attracting and keeping new scientific talent. The physical circumstances in which lab professionals work have also deteriorated, in many instances, to unacceptable levels.29 The security breaches and the subsequent series of investigations in recent years have produced a serious morale problem—and made recruitment and retention problems even more acute. If this cycle is not broken, our national advantage in S&T will suffer further.

The labs remain critical in fulfilling America’s S&T national security needs and in

addressing S&T issues pertinent to the public good. Each major laboratory needs a clearly defined mission area. The smaller labs, among the several hundred that exist, need to be better connected to one another so that their staffs share a sense of common purpose; in some cases, smaller labs may benefit from consolidation. The Commission therefore recommends the following:

● 10: The President should propose, and the Congress should fund, the reorganization of

the national laboratories, providing individual laboratories with new mission goals that minimize overlap. The President’s Science Advisor, aided and advised by the OSTP, the NSTC, the

PCAST, and the National Academy of Science, should lead this effort. For example, one lab could focus on nuclear weapons maintenance, while others could specialize in such fields as energy and environmental research, biotechnology, and nanotechnology. Whatever goals are determined, more resources are clearly needed to ensure that the national laboratories remain world class research institutions, with facilities, resources, and salaries to fulfill their missions.

inally, the potential for good and ill stemming from many of the recent developments in the scientific and technical domain is at least as great, if not greater, than that of

atomic energy in 1945-46. As this Commission stressed in its Phase I report, new scientific discovery and innovation in information technologies, nanotechnology, and biotechnologies will have a major impact on social, economic, and political life in the United States and elsewhere.

It is not in the public or the national interest to allow these impacts to be determined

exclusively by the private sector. The United States prides itself on having a system of government that does not smother or try to shape the social or moral life of the nation. But we have always granted government a role in managing science and technology under special or extreme circumstances—as for example in the creation of the U.S. Atomic Energy Commission after World War II. As was the case then, a public-trust institution is needed to gather knowledge and to develop informed judgment as the basis for public policy. We especially need a permanent framework that brings public sector, private sector, and higher education together to examine the implications of today’s technological revolution.

Now as then, there is a pointed national security dimension to this requirement. As was

the case in the late 1940s, if the United States does not maintain leadership in this area, the country will forefeit its ability to protect itself from those countries that do.

29 About 43 percent of the labs’ physical facilities is more than forty years old, and 73 percent is more than twenty years old.

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At present, there is a National Bioethics Advisory Commission to study the moral

implications of bioscience. This commission is composed of distinguished and committed members. But the composition of that commission is narrow, consisting only of bioethicists. It meets only episodically, operates on a small budget, has no permanent professional staff aside from its executive director, works on a limited mandate, and is soon scheduled to go out of existence. In practice, this commission cannot influence or communicate as an equal with the National Institutes of Health, the Food and Drug Administration, the Department of Agriculture, or other government bodies that play major roles in monitoring and regulating the products of bioscience. Nor can it spend time anticipating issues when its meetings and reports are consumed almost entirely with responding to concerns that have already been raised. In short, the vehicle we now have to deal with the social, ethical, and public safety dimensions of biotechnology is inadequate for the task.

We need an institution that provides a forum for the articulation of all responsible

interests in the implications of new biotechnology and other new technologies. Without such a forum, it is doubtful whether public confidence in the progression of bioscience can be sustained amid all the controversies it will surely provoke over the next 25 years. We need a place where government officials, scholars, theologians, and corporate executives can meet regularly to discuss issues of concern. We need an institution that can deal effectively with the other governmental agencies regularly involved in these issues; otherwise its findings will remain peripheral to the actual processes of decision. We therefore recommend that Congress transform the current National Bioethics Advisory Commission into a much strengthened National Advisory Commission on Bioscience (NACB).

The NACB should focus on the intersection of bioscience with information science and

nanotechnology for, as we have said, it is this intersection that will form the pivot of major transformation. Such change will affect a wide range of public policy issues, including health, social security, privacy, and education. Nor should the NACB’s mandate be limited to ethical questions. It should concern itself, as well, with the social and public safety implications of bioscience.

For now, we envision no regulatory authority for such a strengthened commission such as

that possessed by the Atomic Energy Commission. However, should the Executive and Legislative Branches together come to believe that an institution along such lines is needed for biotechnology, this strengthened commission could serve as a basis for it.

B. EDUCATION AS A NATIONAL SECURITY IMPERATIVE

he capacity of America’s educational system to create a 21st century workforce second to none in the world is a national security issue of the first order. As things

stand, this country is forfeiting that capacity. The facts are stark:

● The American educational system needs to produce significantly more scientists and engineers, including four times the current number of computer scientists, to meet anticipated demand.30

30 National Commission on Mathematics and Science Teaching for the 21st Century, Before It’s Too Late (Washington, DC: September 27, 2000), p. 12.

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● To do this, more than 240,000 new and qualified science and mathematics teachers are needed in our K-12 classrooms over the next decade (out of a total need for an estimated 2.2 million new teachers).31 ● However, some 34 percent of public school mathematics teachers and nearly forty percent of science teachers lack even an academic minor in their primary teaching fields.32 ● In 1997, Asia alone accounted for more than 43 percent of all science and engineering degrees granted worldwide, Europe 34 percent, and North America 23 percent. In that same year, China produced 148,800 engineers, the United States only 63,000.33 Education is the foundation of America’s future. Quality education in the humanities and

social sciences is essential in a world made increasingly “smaller” by advances in communication and in global commerce. But education in science, mathematics, and engineering has special relevance for the future of U.S. national security, for America’s ability to lead depends particularly on the depth and breadth of its scientific and technical communities.

At the base of American national security, clearly, is the strength of the American

economy. High-quality preparation of Americans for the working world is more important than ever. The technology-driven economy will add twenty million jobs in the next decade, many of them requiring significant technical expertise. The United States will need sharply growing numbers of competent knowledge workers, many of them in information sciences, an area in which there are already significant shortages.34 But it is misleading to equate “information science” with “science” itself. It was basic science and engineering excellence that brought about the information revolution in the first place and, over the next quarter century, the interplay of bioscience, nanotechnology, and information science will combine to reshape most existing technologies. The health of the U.S. economy, therefore, will depend not only on professionals that can produce and direct innovation in a few key areas, but also on a populace that can effectively assimilate a wide range of new tools and technologies. This is critical not just for the U.S. economy in general, but specifically for the defense industry, which must simultaneously develop and defend against these same technologies.

he American educational system does not appear to be ready for such challenges and is confronted by two distinct yet inter-related problems. First, there will not be

enough qualified American citizens to perform the new jobs being created today—including technical jobs crucial to the maintenance of national security. Already the United States must search abroad for experts and technicians to fill positions in the U.S. domestic economy, and Congress has often increased category limits for special visas (H-1B) for that purpose. If current trends are not stanched and reversed, large numbers of specialized foreign technicians in critical positions in the U.S. economy could pose security risks. More important, however, while the United States should take pride in educating, hosting, and benefiting from foreign scientific and

31 Ibid., p. 21. 32 U.S. Department of Education, National Center for Education Statistics, 1993-1994 Schools and Staffing Survey (Teacher Questionnaire) (Washington, DC: 1997), p. 26. 33 National Science Board, Science and Engineering Indicators—1998 (Arlington, VA: National Science Foundation, 1998), p. A-36. 34 We discuss these shortages and their implications for government below in Section IV.

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technical expertise, it should take even more pride in being able to educate American citizens to operate their own economy at its highest level of technical and intellectual capacity.

Our ability to meet these needs is threatened by a second problem—that we do not now have, and will not have with current trends, nearly enough qualified teachers in our K-12 classrooms, particularly in science and mathematics. The United States will need roughly 2.2 million new teachers within the next decade.35 A continued shortage in the quantity and quality of teachers in science and math means that we will increasingly fail to produce sufficient numbers of high-caliber American students to advance to college and post-graduate levels in these areas. Therefore we will lack not only the homegrown science, technology, and engineering professionals necessary to ensure national prosperity and security, but also the next generation of teachers of science and math at the K-12 level.

A chronic shortage of teachers presages severe consequences in all fields, but is

especially hurtful in science. Too few teachers means teaching loads and class sizes that exceed optimum levels. Having too many classes and too many students invariably translates into insufficient time to prepare, which is a critical variable in effective teaching—especially so in hands-on science classrooms. It also means the necessity to press into service teachers who are not adequately prepared for classroom rigors.

The broad effect of the shortages in science and math teachers, and of other deficits in

curricula and method, is already evident. Mathematics and science exam scores for U.S. students have been rising, but not fast enough to keep up with a large number of other countries. The lag is particularly significant for the nation’s high school students. Americans have performed relatively well in both mathematics and science at the 4th grade level, and slightly above the international average at the 8th grade level, but show a sharp relative decline in the high school years.36 The most recent test shows a relative decline at the 8th grade level as well.37 This, as former Secretary of Education William Bennett has pointed out, creates the impression that the longer students remain in the American education system, the poorer their relative performance becomes.

Another major concern is that not all American citizens have the benefits of an adequate

education. Wide economic disparity persists among K-12 public school districts. Fully 34 percent of the total public school student population (seventeen million children) is being educated in economically-depressed school districts that face the greatest shortages of teachers. Many teachers in these districts are not qualified by a degree in the field they teach, and many lack teaching certification as well. The disparity in the availability of qualified science and math teachers between regular and economically-depressed school districts is particularly alarming.

35 This is because the majority of public school teachers are currently in their forties, with the normal retirement age being around 65 years old. U.S. Department of Education, National Center for Education Statistics, “Schools and Staffing Survey.” 36 In 1995, the Third International Mathematics and Science Study (TIMSS) ranked the performance of American 12th graders in general mathematics and science knowledge among the lowest of all participating countries. Americans placed 19th out of 21 in general mathematics and 17th out of 21 in general science. In advanced mathematics and physics knowledge, American 12th graders placed 15th out of 16 in mathematics and dead last in physics. In all content areas of physics and advanced mathematics, the American students’ performance was among the lowest of all the nations participating in the TIMSS. Some observers question the utility of these tests on the grounds that in many other countries only the brightest students take the test because children are separated into vocational and college tracks at an early age. Most believe, however, that the test results are instructive of general trends. 37 See Diana Jean Schemo, “Students in U.S. Do Not Keep Up in Global Tests,” The New York Times, December 6, 2000, pp. A1, A18.

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n short, our problems in this area are becoming cumulative. The nation is on the verge of a downward spiral in which current shortages will beget even more acute future

shortages of high-quality professionals and competent teachers. The word “crisis” is much overused, but it is entirely appropriate here. If the United States does not stop and reverse negative educational trends—the general teacher shortage, and the downward spiral in science and math education and performance—it will be unable to maintain its position of global leadership over the next quarter century.

Resolving these cumulative problems will require a multi-faceted set of solutions. Educational incentive programs are needed to encourage students to pursue careers in science and technology, and particularly as K-12 teachers in these fields. Yet such incentives alone will not be adequate to avert the looming teacher shortage. Therefore, a set of additional actions must be taken to restore the professional status of educators and to entice those with science and math backgrounds into teaching. Only by addressing the systemic need to increase the number of science and math teachers will we ensure the supply of qualified science and technology professionals throughout our economy and in our national security institutions, both governmental and military.

As a major first step, we therefore recommend the following:

● 11: The President should propose, and Congress should pass, a National Security Science and Technology Education Act (NSSTEA) with four sections: reduced-interest loans and scholarships for students to pursue degrees in science, mathematics, and engineering; loan forgiveness and scholarships for those in these fields entering government or military service; a National Security Teaching Program to foster science and math teaching at the K-12 level; and increased funding for professional development for science and math teachers. Section one of the National Security Science and Technology Education Act should

provide incentives for students at all levels—high school, undergraduate, graduate, and post-graduate—to pursue degrees in the fields of science, mathematics, and engineering.

Section two should provide substantial incentives to bring talented scientists,

mathematicians, and engineers into government service—both civil and military. [The social science complement to this section is discussed in recommendation 39.]

Section three should address the need to recruit quality science and math teachers at the

K-12 level. To accomplish this goal, Congress should create a National Security Teaching Program through which graduates and experienced professionals in the fields of science, math, and engineering will commit to teach in America’s public schools for three to five years. In return, NSTP Fellows will receive fellowships to an accredited education certification program, a loan repayment or cancellation option, and a signing bonus to supplement entry-level salaries. A national roster of districts in need of qualified teachers should be compiled and matched with the roster of NSTP Fellows.

The National Security Teaching Program will place teachers in the classroom who have

both a teaching certification and a degree in their field. It will also encourage experienced professionals to teach, bringing deep subject matter expertise and a wealth of experience into

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America’s classrooms.38 These lateral entrants might be Ph.Ds who have not found other suitable professional niches and “young” retired people, such as those who leave the military in their forties and fifties.39 Enabling this latter group to teach will also require further changes in tax laws so that those receiving retirement and pension benefits are not penalized unduly for taking on a second educational career.

Section four must emphasize professional development focused on the needs of science

and mathematics teachers. On-going professional development for science teachers is particularly important, as they must prepare their students to contend with the rapidly evolving pace of scientific innovation and discovery. The Eisenhower Program run by the Department of Education to meet the professional development needs of science and math teachers is a good example of a program that works.40 It should be expanded and resourced accordingly.

Professional development that involves a substantial number of contact hours over a long

period has a stronger impact on teaching practice than professional development of limited duration. Today, however, more than half of all science teachers in the United States report receiving no more than two days of professional development per year.41 For this reason, we believe the emphasis of the National Commission on Mathematics and Science Teaching for the 21st Century (the Glenn Commission) on continuing professional education is right on the mark. The Glenn Commission emphasized Summer Institutes as well as Inquiry Groups and distance learning through a dedicated Internet portal for on-going professional education.42

Congress should also establish and fund a National Math & Science Project to provide

additional support for continuing professional development. Such a program can be modeled after the National Writing Project, an outstanding example of university/district collaboration. Its goal has been to improve student writing and learning in K-12 and university classrooms by providing schools, colleges, and universities with an effective professional development model. The National Writing Project also suggests itself as a model because it has been both cost-effective and has focused significant resources on traditionally-neglected impoverished areas.43

All fifty states should also fund professional enrichment sabbaticals of various durations

for science teachers, and should do so wherever possible in concert with local universities, science museums, and other research institutions. The federal government should strongly

38 The National Academy of Sciences/National Research Council, through its Center for Science, Mathematics, and Engineering Education, has completed the Defense Reinvestment Initiative (DRI) funded by the Department of Defense. The program worked with the Los Angeles Unified School District to build a model for the transition of professional scientists, mathematicians, and engineers from military duty, defense-related and aerospace industries, and national laboratories into careers teaching secondary school science and mathematics. See the Final Report to the U.S. Department of Defense on the Defense Reinvestment Initiative, Defense Reinvestment Initiative Advisory Board, National Research Council, 1999. http://www.nap.edu. 39 As recommended by the National Academy of Science in Attracting Science and Mathematics Ph.Ds to Secondary School Education (Washington, DC: National Academy Press, 2000). 40 The Eisenhower Professional Development Program (Title II of the Elementary and Secondary Education Act, as amended by the Improving America’s Schools Act of 1994) focuses on the professional development of mathematics and science teachers. See U.S. Department of Education, Office of the Under Secretary, Planning and Evaluation Service, Designing Effective Professional Development: Lessons from the Eisenhower Program, Executive Summary (Washington, DC: 1999). 41 “ETS Report Discusses Teacher Quality,” NSTA Reports, Dec. 2000-Jan. 2001, p. 11. 42 Before It’s Too Late, pp. 19, 26-30. 43 National Writing Project, 1999 Annual Report.

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encourage and support the states in such endeavors. A more widespread sabbatical system for science educators would also improve liaison between secondary school teachers of science and math and university faculties adept in such subjects. Some metropolitan areas in the United States have developed excellent working relationships between high school teachers and both university and science museum faculties, and we encourage Education Department officials to carefully study and model these success stories.

We recognize that the widespread institution of enrichment sabbaticals for science

teachers would be expensive, for it would require a personnel “float” to compensate for teachers who are on sabbatical. But this should be a long-term goal for science educators in at least grades 7-12, which should come to resemble professional standards at universities to the extent possible.

hile the National Security Science and Technology Education Act would provide educational benefits and ongoing professional development opportunities for those

who choose to teach, a range of additional actions are needed to improve both teacher recruitment and retention and the overall strength of school districts.

The anticipated shortage of quality teachers is a challenge, but it also offers tremendous

opportunity. As we renew our pool of teachers, we can produce and train the best teachers with the best curricula, the best texts, and the best teaching methods. It is clear, too, that if the general national teacher shortage problem is not addressed, efforts to address deficiencies in the science and mathematics arena will not be met either. One cannot significantly improve the quality of science and math education without improving education in general. After all, science and math are taught in the same buildings, working under the same systems and budgets, and in the same general environment as that in which all other subjects are taught. That is why ensuring a superior scientific and technical community, one that satisfies both national economic and security needs, must start with reforming the educational system as a whole.

In this light, the Commission recognizes the need to take immediate steps, beyond the

National Security Teaching Program, to attract much greater numbers of qualified graduates into the teaching profession, and to raise the quality of professional achievement across the board. We therefore recommend:

● 12: The President should direct the Department of Education to work with the states to

devise a comprehensive plan to avert a looming shortage of quality teachers. This plan should emphasize raising teacher compensation, improving infrastructure support, reforming the certification process, and expanding existing programs targeted at districts with especially acute problems.

First, we must raise salaries for teachers, science and mathematics teachers in particular,

to or near commercial levels.44 As long as sharp salary inequities exist between what science and math teachers are paid and what equivalently-educated professionals make in the private sector, the nation’s schools will lack the best qualified teachers in science and mathematics. Given the exigencies of the market, we see no reason why science and math teachers should not earn more than other teachers even in the same school system.

44 In lieu of or in addition to raising salaries, which may be restricted in some places by issues of inter-jurisdictional equity and union complications, signing bonuses can be used to attract people to teaching.

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While increased funding from the federal and state governments is needed to achieve this, public-private and community-wide partnerships that link universities and businesses with local school districts could help fulfill both faculty and student needs through endowments and other programs.45 Endowments are a proven means for enhancing professional competitiveness. Beyond their contribution to funding higher teacher salaries, they involve corporate and private philanthropy more effectively in improving American education. K-12 education should develop a resource base similar to that of higher education with which to meet educational needs. The federal government—through the Department of Education, the National Science Foundation, and the National Research Council—can also help by standing ready to provide supplementary or matching funds for communities that take bold local initiatives to recruit and retain quality teachers. National, state, and local leaders should encourage corporate and private philanthropists to match disbursed endowment money, and Congress should work to ensure enhanced corporate tax benefits for monies provided for NSSTEA science/math education purposes of all sorts.

Endowment and other partnership programs could be used in several important ways, in

addition to raising teacher salaries. They can provide the up-to-date laboratory facilities that are essential to effective discovery-based learning, and that are usually more expensive than most local school districts choose to bear. Without investment by the federal government and through these partnership programs in the modernization of high school laboratory facilities, even the highest quality science teachers will be unable to maximize their talents. Funds could also be used to develop innovative uses for technology such as up-to-date modular texts in science that can be conveyed nationwide through the Internet.

Finally, these programs can provide student incentives to choose science and math

careers. This may be through summer co-op programs—somewhat analogous to co-op programs on the university level—where students take summer jobs or internships related to their interests at companies and foundations that help endow the schools. Alternatively endowments might be used to pay students at the high school level for taking courses in science and math beyond minimal requirements. Some believe that it is foolish to let students work at fast food chains, for example, when they could be induced for similar rewards to study physics and calculus. In lieu of, or in addition to, direct payment, students may be offered scholarship money to be set aside for university tuition.

Second, we must improve infrastructure support. Other knowledge-workers in the

general economy are the beneficiaries, on average, of ten times the basic infrastructure investment than that afforded to teachers. This is a national disgrace. Beyond the laboratory facilities already mentioned, administrative support and resources are needed to ensure a disciplined and safe environment, and to provide such seemingly basic services as desk space, telephones, and copying facilities. This will not only help provide a better educational environment but, along with salary increases, will also help restore full professional status to the teaching profession. This will go a long way toward attracting and retaining high-quality teachers.

45 We note the successful example of the Long Beach Unified School District. Over the past five years, it has partnered with California State University Long Beach (CSULB), and Long Beach City College, in collaboration with additional local, regional, and national partners, to developed a seamless (preK-18) approach that has aligned content standards, learning methodology, and assessment from pre-school through the masters level. The aim is to ensure coherent exit and entry expectations among the three institutions. They have collaborated to address curriculum, preparation, and professional development issues as well.

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Third, we must create more flexible certification procedures to attract lateral entrants into education. We have already discussed the benefits of encouraging experienced professionals to become K-12 educators and certification procedures should reflect these benefits. In general they should be changed to emphasize teacher mastery of substance over matters of pedagogy at least at the grade 7-12 level.

Fourth, we should supplement these measures by expanding existing specially-targeted

federal programs for geographical and socio-economic zones with especially acute problems. Through the National Security Teaching Program, we should strengthen federal loan repayment and cancellation options for recent college graduates engaged in these programs and increase their salary and housing benefits. Supplementary teacher training and certification programs should be provided, as well, in exchange for an additional commitment to teaching in selected public school systems. At the same time, we recommend the following:

● 13: The President and Congress should devise a targeted program to strengthen the

historically black colleges and universities in our country, and should particularly support those that emphasize science, mathematics, and engineering.

Clearly, serious educational improvement will cost money. It will also require changes in

attitudes toward education professionals. But if the American people want quality education and a truly professional environment in schools that is conducive to educational success, they will have to demand it, pay for it, and show greater respect to those professionals who deliver it.

We believe, however, that while more money for is a necessary condition for major

improvement in the education system, it is not a sufficient condition. Despite significant investments in special programs, much professional attention, and significant expenditure of resources, many results of the educational system are still disappointing. New and creative approaches are needed, including approaches that harness the power of competition. As important, local communities must be empowered and involved more fully in education, for nothing tracks more directly with high student performance as parental involvement in their children’s education.

n addition to the previous recommendations, this Commission believes that core secondary school curricula should be heavier in science and mathematics, and should

require higher levels of proficiency for all high school students. Many specialists believe that tracking math and science students sometimes leads to a sharp deterioration of expectations, and hence discipline, in the lower tracks. According to nearly all professional evaluations, such a deterioration of expectations is lethal to the attitudes necessary to make the classroom experience work.46 Given the exigencies of advanced 21st century economies, it is not good enough that we produce a sufficient elite corps of science, math, and engineering professionals. We must raise levels of math, science, and technology literacy throughout our society. Among other things, that means changing enduring perceptions that taking four years of science and math in high school is only for the “brainy” elite. This is a perception that, ultimately, could cause an economic disaster in this country.

46 “New Study Examines Why Minnesota Eighth Graders Scored High in TIMMS,” NSTA Reports, Dec. 2000-Jan. 2001, p. 23.

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Finally in this regard, as with nearly every other commission and professional study that has looked at this problem, we favor more rigorous achievement goals for both American teachers and students in science and math, and we favor making both accountable for improvements. We also believe that science curricula, in particular, must be better designed to teach science for what it is: a way of thinking and not just a body of facts. In our judgment, too much high school science curricula is still distorted by inappropriate evaluation methods. If testing and evaluation methods for science education better reflect the reality of science as a discovery-based rather than as a fact-based activity, it would be easier to reform curricula in an appropriate fashion as well.

ne related matter must be addressed. As noted earlier, increasing numbers of the qualified engineers and scientists educated in the United States are coming from

outside U.S. borders. Far from being negative, the cycle of their coming and going to and from the United States helps sustains U.S. needs. However, should they stop coming, or further accelerate their return home, the American population alone may not be able to sustain the needs of the U.S. economy over the next decade.

Fully 37 percent of doctorates in natural science, 50 percent of doctorates in mathematics and computer science, and 53 percent of doctorates in engineering at U.S. universities—the best in the world—are awarded to non-U.S. citizens.47 However, the percentage of science and engineering doctoral recipients with firm plans to stay in the United States is declining.48 The growing emphasis on science and technology in many foreign countries is enticing many U.S-trained foreign students to return to their countries of origin, or to go to other parts of the world. They are doing so in increasing numbers.

Given the uncertainty as to whether U.S. nationals alone can fill U.S. economic needs,

Congress should adjust the appropriate immigration legislation to make it easier for those non-U.S. citizens with critical educational and professional competencies to remain in the United States, and to become American citizens should they so desire. The White House Office of Science and Technology Policy, along with the Immigration and Naturalization Service and the appropriate Congressional committees, is the proper place to design such adjustments.

e believe strongly that America’s future depends upon the ability of its educational system to produce students who constantly challenge current levels of innovation

and push the limits of technology and discovery. They are the seed corn of our future. Presidential leadership will be critical in addressing the initiatives in education addressed by this Commission. That is why the Commission is heartened to learn that the new administration has declared education to be its first priority. It is the right choice.

47 National Science Board, Science & Engineering Indicators 2000, National Science Foundation, 2000 (NSB-00-1). 48 Ibid. According to the best estimates available, the numbers are 47.9 percent for China, 27.5 percent for Taiwan, 22.6 percent for Korea, 54.7 percent for India, 52.6 percent for the United Kingdom, and 40.5 percent for Germany.

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III. Institutional Redesign

eyond the pressing matter of organizing homeland security, and of recapitalizing core U.S. domestic strengths in science and education, this Commissions recommends

significant organizational redesign for the Executive Branch. This redesign has been conceived with one overriding purpose in mind: to permit the U.S. government to integrate more effectively the many diverse strands of policy that underpin U.S. national security in a new era—not only the traditional agenda of defense, diplomacy, and intelligence, but also economics, counter-terrorism, combating organized crime, protecting the environment, fighting pandemic diseases, and promoting human rights worldwide.

The key component of any Executive Branch organizational design is the President. As

one of only two elected members of the Executive Branch, the President is responsible for ensuring that U.S. strategies are designed to seize opportunities and not just to respond to crises. He must find ways to obtain significantly more resources for foreign affairs, and in particular those resources needed for anticipating threats and preventing the emergence of dangers. Without a major increase in resources, the United States will not be able to conduct its national security policies effectively in the 21st century.

To that end, the nation must redesign not just individual departments and agencies but its

national security apparatus as a whole. Serious deficiencies exist that cannot be solved by a piecemeal approach.

● Most critically, no overarching strategic framework guides U.S. national security policymaking or resource allocation. Budgets are still prepared and appropriated as they were during the Cold War. ● The power to determine national security policy has migrated toward the National Security Council (NSC) staff. The staff now assumes policymaking and operational roles, with the result that its ability to act as an honest broker and policy coordinator has suffered. ● Difficulties persist in ensuring that international political and security perspectives are considered in the making of global economic policy, and that economic goals are given proper attention in national security policymaking. ● The Department of State is a crippled institution that is starved for resources by Congress because of its inadequacies and is thereby weakened further. The department suffers in particular from an ineffective organizational structure in which regional and functional goals compete, and in which sound management, accountability, and leadership are lacking. ● America’s overseas presence has not been adjusted to the new economic, social, political, and security realities of the 21st century. The broad statutory authority of U.S. Ambassadors is undermined in practice by their lack of control over resources and personnel. ● The Department of Defense has serious organizational deficiencies. The growth in staff and staff activities creates confusion and delay. The failure to outsource or privatize many defense support activities wastes huge sums of money. The programming and

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budgeting process is not guided by effective strategic planning. The weapons acquisition process is so hobbled by excessive laws, regulations, and oversight strictures that it can neither recognize nor seize opportunities for major innovation, and it stifles a defense industry already in financial crisis. Finally, the force structure development process is not currently aligned with the needs of today’s global security environment. ● National security policymaking does not manage space policy in a serious and integrated way. ● The U.S. intelligence community is adjusting only slowly to the changed circumstances of the post-Cold War era. While the economic and political components of statecraft have assumed greater prominence, military imperatives still largely drive the collection and analysis of intelligence. We offer recommendations in several areas: strategic planning and budgeting; the

National Security Council; the Department of State; the Department of Defense; space policy; and the intelligence community. We take these areas in turn.

A. STRATEGIC PLANNING AND BUDGETING

trategic planning is largely absent within the U.S. government. The planning that does occur is ad hoc and specific to Executive departments and agencies. No overarching

strategic framework guides U.S. national security policy or the allocation of resources. Each national security department and agency currently prepares its own budget. No

effort is made to define an overall national security budget or to show how the allocation of resources in the individual budgets serves the nation’s overall national security goals. The Office of Management and Budget (OMB) does on occasion consider tradeoffs in the allocation of resources among the various national security departments and agencies, but this is not done systematically. Nor are department budgets presented in a way that Congress can make these tradeoffs as it fulfills its responsibilities in the budgeting process.

There is an increasing awareness of this deficiency throughout the national security

community but, so far, only very preliminary steps have been taken to produce crosscutting budgets. These preliminary steps have been limited to special transnational issues such as counter-terrorism. At present, therefore, neither the Congress nor the American people can assess the relative value of various national security programs over the full range of Executive Branch activities in this area.

To remedy these problems, the Commission’s initial recommendation is that strategy

should once again drive the design and implementation of U.S. national security policies:

● 14: The President should personally guide a top-down strategic planning process and delegate authority to the National Security Advisor to coordinate that process. Such a top-down process is critical to designing a coherent and effective U.S. national

security policy. In carrying out his strategic planning responsibilities on the President’s behalf, the National Security Advisor must enlist the active participation of the members and advisors of the National Security Council. This group should translate the President’s overall vision into a set

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of strategic goals and priorities, and then provide specific guidance on the most important national security policies. Their product would become the basis for the writing of the annual, legislatively-mandated U.S. National Security Strategy.

Carrying out this guidance would rest with the senior-level deputies in the departments

and agencies, facilitated by the NSC staff. They would be specifically responsible for designing preventive strategies, overseeing how the departments carry forward the President’s strategic goals, and reviewing contingency planning for critical military and humanitarian operations.

The Commission believes that overall strategic goals and priorities should also guide the

allocation of national security resources, and therefore recommends the following:

● 15: The President should prepare and present to the Congress an overall national security budget to serve the critical goals that emerge from the NSC strategic planning process. Separately, the President should continue to submit budgets for the individual national security departments and agencies for Congressional review and appropriation. The OMB, with the support of the NSC staff, should undertake the task of formulating

this national security budget. Initially, it should focus on a few of the nation’s most critical strategic goals, involving only some programs in the departmental budgets. Over time, however, it could evolve into a more comprehensive document. Homeland security, counter-terrorism, nonproliferation, nuclear threat reduction, and science and technology should be included in the initial national security budget. This process should also serve as a basis for defining the funds to be allocated for preventive strategies.

Such goal-oriented budgets would help both the administration and Congress identify the

total level of government effort as well as its composition. Gaps and duplication could be more readily identified. Such budgets would also enable the Congress to prioritize the most critical national security goals when they appropriate funds to departments and agencies.

To modernize the nation’s strategic planning and budgeting process, greater coordination

and connectivity is required among all executive departments and agencies. For this purpose, the President should call for the creation of a national security affairs network analogous to the Secret Internet Protocol Router Network (SIPRNET) of the Department of Defense.

The President would be able to implement these recommendations on his own authority

as they involve White House staff activities. As far as the budgetary implications go, this reform would not cost money but, by rationalizing the strategy and budgeting process, go far toward assuring that money is spent more efficiently and wisely.

B. THE NATIONAL SECURITY COUNCIL

n exercising his Constitutional power, the President’s personal style and managerial preferences will be critical in how he relates to his Cabinet secretaries and in how he

structures his White House staff. But the organization and the characteristics of the national security apparatus will importantly affect the policies that emerge.

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The National Security Council was created as part of the 1947 National Security Act to advise the President on the integration of domestic, foreign, and military policies, and to help coordinate the activities of the national security departments and agencies. Its statutory members currently include the Vice President, the Secretary of State, and the Secretary of Defense. The Director of Central Intelligence and the Chairman of the Joint Chiefs of Staff are statutory advisers. The NSC staff authorized by the 1947 Act has evolved over time into a major instrument of Presidential governance, wielded by the Assistant to the President for National Security Affairs (the National Security Advisor or NSC Advisor), not specified in any statute, who has become increasingly powerful.

Obviously, this evolution has been affected by the degree of Presidential involvement in

foreign and national security policy as well as by their various personalities and leadership styles. Over the past decade, Presidents have increasingly centralized power with the NSC staff for the making and execution of national security policy. In many ways, the NSC staff has become more like a government agency than a Presidential staff. It has its own views and perspectives on the myriad of national security issues confronting the government. It has its own press, legislative, communication, and speechmaking “shops” to enable it to conduct ongoing relations with the media, Congress, the American public, and foreign governments. Aside from staffing the President, the NSC staff’s primary focus has become the day-to-day management of the nation’s foreign and national security policy.

Why has this centralization of power occurred? First, with the end of the Cold War,

national security issues now involve even more policy dimensions—financial and trade issues, environmental issues, international legal issues, for example—and each dimension has proponents within the Executive Branch. It has become harder, therefore, to assign any one department as the leading actor for a given policy area. The traditional dividing lines between foreign and domestic policy have also blurred further. Of all the players, only the NSC staff, in the name of the President, is in a position to coordinate these disparate interests effectively.

Second, foreign policy is also now very politicized. Few, if any, issues are easily

separated from domestic political debate: not military intervention, not diplomatic relations, and certainly not trade and economic interactions with the outside world. Political oversight of these policies naturally falls to the White House, with the NSC staff acting as its foreign policy arm.

Finally and most importantly, the State Department over the past few decades has been

seriously weakened and its resources significantly reduced. Foreign aid programs, as well as representational responsibilities, are now dispersed throughout the government. It therefore has fallen to the NSC staff to manage the conduct of America’s foreign policy that was once the prerogative of the Department of State.

This description of the origin of the problem clearly illustrates a key principle in any

attempt to set it aright; namely, that the NSC Advisor and staff cannot be redirected unless the Department of State is also set aright.

The Commission views with alarm the expansion of the role of the NSC staff and

recommends the following:

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● 16: The National Security Council (NSC) should be responsible for advising the President and for coordinating the multiplicity of national security activities, broadly defined to include economic and domestic law enforcement activities as well as the traditional national security agenda. The NSC Advisor and staff should resist the temptation to assume a central policymaking and operational role.

The National Security Advisor and NSC staff should give priority to their traditional and

unique roles, namely coordinating the policymaking process, so that all those with stakes are involved, and all realistic policy options are considered and analyzed.49 The NSC Advisor and staff should provide advice privately to the President and oversee the implementation of Presidential decisions. They should also assume those roles that are unique to the President’s staff, such as preparations for overseas trips and communications with foreign leaders.

At the same time, the NSC advisor and staff should resist pressures toward the

centralization of power, avoid duplicating the responsibilities of the departments, and forego operational control of any aspect of U.S. policy. Assuming a central policymaking role seriously detracts from the NSC staff’s primary roles of honest broker and policy coordinator.

The National Security Advisor should also keep a low public profile. Legislative, press,

communications, and speech writing functions should reside in the White House staff. These functions should not be duplicated separately in the NSC staff as they are today.

The President, not his personal staff or advisors, is publicly accountable to the American

people. To the degree that the role of the National Security Advisor continues to be one of public spokesman, policymaker, and operator, the Commission wishes the President to understand that pressure is growing in the Congress for making the National Security Advisor accountable to the American people through Senate confirmation and through formal and public appearances before Congressional committees. Returning to a lower-profile National Security Advisor will be difficult, but such an approach will produce the best policy results and deflate this pressure.

very President in the last thirty years has devised some organizational approach to integrating international economic policies with both domestic economic policies and

national security considerations. Many methods have been tried. Most recently, in 1993 the Clinton Administration created the National Economic Council (NEC) as a parallel coordinating institution to the NSC.

The NEC experiment has been a disappointment. The Treasury Department dominates global financial policy, and its decisions have often neglected broader national security considerations—most critically, for example, in the early stages of the recent Asian economic crisis. Meanwhile, the United States Trade Representative (USTR)—and not the NEC—retains responsibility for coordinating trade policies and negotiations. The small NEC staff, as well, finds itself bureaucratically weaker than the NSC staff and (even when the staffers are dual-hatted) the NSC perspective has predominated.

49 These recommendations parallel those of the Tower Commission. See Report of the Tower Commission (Washington, DC: February 1987), pp. 90-93.

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The policy process should ensure that the coordination of national security activities reflects the new centrality of economics. This Commission therefore offers the following two recommendations:

● 17: The President should propose to the Congress that the Secretary of Treasury be made

a statutory member of the National Security Council.

Consistent with our strong preference for Cabinet government, this Commission believes the Secretary of the Treasury should be the President’s right arm for international economic policy. But the Treasury’s actions should be coordinated within the National Security Council process. In the NSC system of supporting subcommittees, Treasury should chair an interagency working group that manages international economic and financial policies (including managing financial crises), but it is a Presidential interest that decisions be fully coordinated with other relevant national security agencies. We understand that Secretaries of the Treasury have been routinely invited to National Security Council meetings. But designation as a statutory member of the NSC would signify the importance of truly integrating economic policy into national security policy.

● 18: The President should abolish the National Economic Council, distributing its domestic

economic policy responsibilities to the Domestic Policy Council and its international economic responsibilities to the National Security Council. The NSC staff should assume the same coordinating role for international economic

policy as for other national security policies. To emphasize its importance, the Commission recommends the appointment of a Deputy National Security Advisor with responsibility for international economics. We also believe that to integrate properly the economic component of statecraft in the NSC staff system, more experts in international economics need to be recruited and placed in offices throughout the NSC staff. To ensure the integration of domestic and international economic policies, the staffs of the Domestic Policy Council, the Council of Economic Advisers, and the NSC will need to work together very closely.

C. DEPARTMENT OF STATE

ver the past few decades, the Department of State has been seriously weakened as many of its core functions were parceled out to other agencies. The Agency for

International Development, Treasury, and Defense assumed responsibility for foreign assistance programs, the USTR took over trade negotiations, and the Commerce Department began to conduct foreign commercial activities. For many years, too, arms control and public diplomacy were managed by separate agencies. Other departments, as well as the NSC staff, have also acquired foreign policy expertise and regularly pursue representational activities all around the world.

The State Department’s own effort to cover all the various aspects of national security

policy—economic, transnational, regional, security—has produced an exceedingly complex organizational structure. Developing a distinct “State” point of view is now extremely difficult and this, in turn, has reduced the department’s ability to exercise any leadership.

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Over the past decade, the impulse to create individual functional bureaus was useful substantively and politically; e.g., in the cases of human rights, democracy, law enforcement, refugees, political-military affairs, and nonproliferation. The problem is that overall organizational efficiency and effectiveness have been lost in the process.

More fundamentally, the State Department’s present organizational structure works at

cross-purposes with its Foreign Service culture. The Foreign Service thinks in terms of countries, and therein lies its invaluable expertise. But the most senior officials have functional responsibilities. The department’s matrix organization makes it unclear who is responsible for policies with both regional and functional elements. The department rarely speaks with one voice, thus reducing its influence and credibility in its interactions with the Congress and in its representation abroad.

As a result of these many deficiencies, confidence in the department is at an all-time low.

A spiral of decay has unfolded over many years in which the Congress, reacting to inefficiencies within the department, has consistently underfunded the nation’s needs in the areas of representation overseas and foreign assistance. That underfunding, in turn, has deepened the State Department’s inadequacies. This spiral must be reversed.

oreign assistance is a valuable instrument of U.S. foreign policy, but its present organizational structure, too, is a bureaucratic morass. Congress has larded the

Foreign Assistance Act with so many earmarks and tasks for the U.S. Agency for International Development (AID) that it lacks a coherent purpose. Responsibility today for crisis prevention and responses is dispersed in multiple AID and State bureaus, and among State’s Under Secretaries and the AID Administrator. In practice, therefore, no one is in charge.

Over $4 billion is spent on the State Department’s bilateral assistance programs

(Economic Support Funds) and AID’s sustainable development programs. Neither the Secretary of State nor the AID Administrator is able to coordinate these foreign assistance activities or avoid duplication among them. More important, no one is responsible for integrating these programs into broader preventive strategies or for redeploying them quickly in response to crises. The Congress, too, has no single person to hold accountable for how the monies it appropriates are spent. Moreover, the majority of AID funding is expended through contracts with non-governmental organizations (NGOs) who often lobby Congress over various AID programs, further undermining the coherence of the nation’s assistance programs.

Take the case of a potential response to a humanitarian disaster in Africa, similar in

nature and scale to the 1999 floods in Mozambique. Today, should some such disaster recur, three AID bureaus would be involved: those dealing with Africa, Global Programs, and Humanitarian Response. Responsibility would be dispersed among at least three Under Secretaries of State (Global Affairs, Political Affairs, and International Security Affairs), and four State bureaus (Africa; Democracy, Human Rights, and Labor; Population, Refugees, and Migration; and Political-Military). Neither the Secretary of State nor the AID Administrator would be in a position to commit the resources found to be necessary, or to direct related humanitarian and refugee assistance operations. As Figure 3 on page 57 suggests, other government agencies, and especially the Defense Department, would be at a loss to know where and how to coordinate their activities with those of the State Department.

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his Commission believes that the Secretary of State should be primarily responsible for the making and implementation of foreign policy, under the direction of the

President. The State Department needs to be fundamentally restructured so that responsibility and accountability are clearly established, regional and functional activities are closely integrated, foreign assistance programs are centrally planned and implemented, and strategic planning is emphasized and linked to the allocation of resources. While we believe that our NSC and State Department recommendations make maximal sense when taken together, the reform of the State Department must be pursued whether or not the President adopts the Commission’s recommendations with respect to the NSC Advisor and staff.

Significant improvements in its effectiveness and competency would provide the

rationale for the significant increase in State Department resources necessary to carry out the nation’s foreign policy in the coming quarter century. In our view, additional resources are clearly needed to foster the nation’s critical goals: promoting economic growth and democracy, undertaking preventive diplomacy, providing for the security of American officials abroad, funding the shortfalls in personnel and operating expenses, and installing the information technologies necessary for the U.S. national security apparatus to operate effectively in the 21st century. The United States will be unable to conduct its foreign policy in all its dimensions without the commitment of such new resources. A failure to provide these funds will be far more costly to the United States in the long term.

ore specifically, then, this Commission strongly recommends the following State Department redesign:

● 19: The President should propose to the Congress a plan to reorganize the State

Department, creating five Under Secretaries, with responsibility for overseeing the regions of Africa, Asia, Europe, Inter-America, and Near East/South Asia, and redefining the responsibilities of the Under Secretary for Global Affairs. These new Under Secretaries would operate in conjunction with the existing Under Secretary for Management.

The new Under Secretaries, through the Secretary of State, would be accountable to the President and the Congress for all foreign policy activities in their areas of responsibility. Someone would actually be in charge. On behalf of the Secretary, the new Under Secretaries would formulate a “State” view and represent the department in NSC meetings. They would appear before Congressional committees. They would be positioned to orchestrate preventive diplomatic strategies as well as crisis responses. They would oversee the implementation of all the various assistance programs (development aid, democracy building, and security assistance) and explain them coherently before Congress. They would assemble the various political and security considerations that need to be factored into U.S. government decisions on global financial crises and other international economic policies. They would be able to tailor public diplomacy to policy goals and integrate these activities with other aspects of America’s diplomacy. They would be able to liaise effectively with the growing number of NGOs engaged in national security activities. (To show how this would work, we have provided below illustrative responsibilities for a regional Under Secretary and for the Under Secretary for Global Affairs.)

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Under Secretary Regional—Asia

Illustrative Responsibilities

ECONOMIC &TRANSNATIONAL POLITICAL AFFAIRS SECURITY AFFAIRS AFFAIRS China-human rights Japan Taiwan arms sales Investment treaties China China nonproliferation Economic sanctions North Korea Japan base negotiations Asian currency crisis ASEAN Security assistance China Ex-Im bank loans Indonesia Burma counter-narcotics Indonesia economic assistance Taiwan N. Korea Framework Links with NGOs APEC

Under Secretary Global Affairs

Illustrative Responsibilities

ECONOMIC &TRANSNATIONAL POLITICAL AFFAIRS SECURITY AFFAIRS AFFAIRS Oceans, environment UN General Assembly Conference on Disarmament Refugees, humanitarian assistance UN Security Council Nonproliferation regimes Paris Club debt negotiations Intl. Labor Organization Law enforcement International relief organizations Defense trade controls Assistance to multilateral banks Counter-terrorism Global climate change—Kyoto Crisis management AID’s global assistance programs UN peacekeeping Fulbright’s exchange programs International narcotics UNHCR

As Figure 4 on page 58 shows, each Under Secretary would have a Deputy, so as to

provide depth in crisis situations, or to take on critical diplomatic assignments. Three bureaus would support the Under Secretaries, each organized to achieve functional goals (political affairs, security affairs, and economic and transnational affairs). The new Under Secretary for Global Affairs would be designated as the third-ranking official in the department to emphasize the importance of global issues and activities. Consistent with past practice, this designation would not represent another organizational layer; the Under Secretary for Global Affairs would simply be the one designated as Acting Secretary when the Secretary and Deputy Secretary are away. The functions of the Under Secretary for Management would need to be redefined in light of the responsibility being given for programs and budgets to the other Under Secretaries.

his reorganization should be accompanied by, and will be strengthened by, the full integration of the nation’s foreign assistance activities into the overall framework of

U.S. national security. We therefore recommend strongly that:

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● 20: The President should propose to the Congress that the U.S. Agency for International Development be consolidated into the State Department. Development aid is not an end in itself, nor can it be successful if pursued independently

of other U.S. programs and activities. It is part of the nation’s overall effort to eradicate poverty, encourage the adoption of democratic norms, and dampen ethnic and religious rivalries. To be effective, U.S. development assistance must be coordinated with other diplomatic activities, such as challenging corrupt government practices or persuading governments to adopt more sensible land-use policies. Only a coordinated diplomatic and assistance effort will advance the nation’s goals abroad, whether they be economic growth and stability, democracy, human rights, or environmental protection.

Such a fundamental organizational redesign must have a strategic planning and budgetary

process aligned with it. We therefore recommend the following:

● 21: The Secretary of State should give greater emphasis to strategic planning in the State Department and link it directly to the allocation of resources through the establishment of a Strategic Planning, Assistance, and Budget Office. This office would work directly for the Secretary of State and represent the department in

NSC-led government-wide strategic planning efforts. Within that framework, the office would define the department’s overall foreign policy goals and priorities. It would plan and prioritize all the department’s assistance programs. It would be responsible for coordinating the budget planning process and adjudicating any differences among the Under Secretaries.

Take the case of a Congressional appropriation involving worldwide population

programs. This new office would ask the Under Secretary for Global Affairs to make the initial recommendation as to how the funds would be distributed. The regional Under Secretaries would then have an opportunity to appeal. Once the Secretary decided, the Under Secretary for Global Affairs would have line responsibility for implementing those programs destined for international organizations, and the other Under Secretaries for programs within their regions.

By integrating strategic and resource planning, the Secretary of State would have a more

effective means for managing the activities of the department as well as U.S. embassies abroad. This office would essentially combine the offices of Resources, Plans & Policy, and

Policy Planning in the current organizational set-up, eliminating the major design flaw of segregating planning from resource allocation. But it would retain the responsibility for housing and encouraging a small group of officers to do longer-range and strategic thinking, as has been the principal task of the Policy Planning Staff for half a century.

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Figure 3. Current Organization of Department of State50

50 Administrative and management offices are not included in Figures 3 & 4. For the official organization chart of the U.S. Department of State, see www.state.gov; for USAID, see www.usaid.gov.

U.S. PermanentRepresentative toUnited Nations

USAIDAdministrator

Asia & the Near East

Latin America & theCaribbean

Europe & Eurasia

Africa

Humanitarian Response

Global Programs

Business, &Agriculture

U/SEconomics,

Affairs

Economic& BusinessAffairs

U/SPoliticalAffairs

African

European

Near EasternWesternHemisphere

South AsianInternationalOrganizations

East Asian& Pacific

U/SArms

Control& Int’l

Security

ArmsControl

PoliticalMilitary

Verification& Compliance

PublicAffairs

U/SGlobalAffairs

Law Enforcement

Oceans, International

Democracy, HumanRights, & Labor

Int’l Narcotics &

Environment, & Science

Population, Refugees,& Migration

Counselor U/SManagement

Non-proliferation

PublicDiplomacy/

PublicAffairs

U/SResources, Plans,& PolicyPolicy Planning

Legal Adviser

LegislativeIntelligence &Research

Counter Terrorism

New IndependentStates

Educational &Cultural Affairs

Int’lInformationPrograms

Secretary of StateDeputy

Deputy

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Figure 4: Proposed Organization of Department of State

t follows from a reform that integrates many of the nation’s foreign policy activities under the Secretary of State that a similar logic should be applied to the State

Department budget. We therefore recommend the following:

● 22: The President should ask Congress to appropriate funds to the State Department in a single integrated Foreign Operations budget, which would include all foreign assistance programs and activities as well as all expenses for personnel and operations. The State Department’s International Affairs (Function 150) Budget Request would no

longer be divided into separate appropriations by the Foreign Operations subcommittee on the one hand, and by a subcommittee on the Commerce, State, and Justice Departments on the other. The Congressional leadership would need to alter the current jurisdictional lines of the Appropriations subcommittees so that the Foreign Operations subcommittee would handle the entire State Department budget. Such a reform would give the administration the opportunity to:

—Allocate all the State Department’s resources in a way to carry out the President’s overall strategic goals;

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Legislative Affairs

Public Affairs

Legal Adviser

Strategic Planning,Assistance, andBudget Office

Intelligence &Research

U/SGlobal Affairs

U/SEurope

U/SAfrica

U/SInter-American

Affairs

U/SNear East &South Asia

U/SAsia

U/SManagement

Political Affairs

Inspector General

Economic &Transnational Affairs

Security Affairs

Secretary of StateDeputy

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—Ensure that the various assistance programs are integrated, rather than simply a collection of administrations’ political commitments and Congressional earmarks; and —Replace the existing budget categories with purposeful goals.51

e cannot emphasize strongly enough how critical it is to change the Department of State from the demoralized and relatively ineffective body it has become into the

President’s critical foreign policymaking instrument. The restructuring we propose would position the State Department to play a leadership role in the making and implementation of U.S. foreign policy, as well as to harness the department’s organizational culture to the benefit of the U.S. government as a whole. Perhaps most important, the Secretary of State would be free to focus on the most important policies and negotiations, having delegated responsibility for integrating regional and functional issues to the Under Secretaries.

Accountability would be matched with responsibility in senior policymakers, who in

serving the Secretary would be able to speak for the State Department both within the interagency process and before Congress. No longer would competing regional and functional perspectives immobilize the department. At the same time, those functional perspectives, whether human rights, arms control, or the environment, would not disappear. The Under Secretaries would be clearly accountable to the Secretary of State, the President, and the Congress for ensuring that the appropriate priority was given to these functional tasks.

By making work on functional matters a career path through the regional hierarchy, the

new organization would give Foreign Service officers an incentive to develop functional expertise in such areas as the environment, arms control, and anti-drug trafficking. Civil servants in the State Department would have new opportunities to apply their technical expertise in regional settings. The ability to formulate and integrate U.S. foreign policies in a regional context, too, will give their skills greater coherence and improve their professional effectiveness.

The Under Secretary for Global Affairs, as redefined, would give priority and high-level

attention to working with international organizations. In particular, this office would consolidate humanitarian and refugee assistance programs, thereby remedying the lack of leadership and coordination in past operations. This new organization would bring together all the department’s crisis management operations: counter-terrorism Foreign Emergency Support Teams (FEST) teams, humanitarian assistance Disaster Assistance Response Teams (DART) teams, and military over-flight clearances.

The overall restructuring of the State Department would vastly improve its management.

It would rationalize the Secretary’s span of control through a significant reduction in the number of individuals reporting directly to the Secretary, and it would abolish Special Coordinators and Envoys. The duplication that exists today in the regional and functional bureaus would be eliminated. The number of bureaus would be reduced significantly. One new Under Secretary would be created, but the AID Administrator position would be eliminated.

51 Today, the Function 150 budget categories are defined in terms of titles such as Export and Investment Assistance, Bilateral Economic Assistance, Military Assistance, and Multilateral Economic Assistance. More purposeful titles should be put in their place; e.g., economic development or international security.

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e are aware that our proposed restructuring of the State Department will give rise to the concern that such functional goals as nonproliferation and human rights will be

diminished in importance. Indeed, the primary motivation for establishing the functional Under Secretaries and their bureaus was to counter the prevailing culture of the department, which tends to give priority to maintaining good bilateral relations rather than pressing foreign governments on these contentious matters.

But in the restructuring reform offered here, proponents for these functional goals will

still exist. Indeed, they will be in a better position to affect policies by being involved in their formulation early on in the process, and not at the last moment by intercession with the Secretary. The Under Secretaries will be responsible for ensuring that the priorities of the President, Secretary, and Congress are being achieved. If these involve counter-terrorism, refugees, the environment, or some other functional goal, it is hard to imagine that they would be neglected.

Another possible concern is that organizing in terms of regional Under Secretaries is

inconsistent with globalizing trends. The Commission’s Phase I Report forecasts that global forces, especially economic ones, will continue to challenge the role and efficacy of states. More important, however, it affirms that “the principle of national sovereignty will endure.”52 States will remain the main venue for diplomatic activity for a long time. This restructuring proposal is based on the reality that the United States will need to continue to deal with states around the world while being able, as well, to integrate policies in both regional and global contexts. The new Strategic Planning, Assistance, and Budget Office, along with the Global Affairs Under Secretary and Assistant Secretaries, will also be available to ensure that global perspectives are given sufficient attention.

Defining the geographical coverage of the regions will necessarily be somewhat arbitrary,

but the same problem exists under any arrangement. Russia will be integrated again into Europe and South Asia joined again with the Middle East. The most difficult decisions will involve where to place Turkey; whether to keep India and Pakistan in the same region or separate them; how to divide up the newly independent states of the former Soviet Union; and whether northern Africa is part of the Middle East or Africa. Setting up the new organization will provide an opportunity to make these decisions anew in light of prospective developments in the coming decades, and, if at all possible, to build in some degree of flexibility for the years ahead.

Issues will certainly arise that span regions or require the integration of regional and

global perspectives. Planning for G-8 meetings, for example, will have to involve all the Under Secretaries. The Under Secretaries of Global Affairs, Europe, the Americas, and Asia would have a role in policies bearing on national missile defense. Global financial crises would almost certainly engage more than one Under Secretary. Jurisdictional disputes may well arise that the Secretary (or the Deputy Secretary) will have to address. What the restructuring will have done, however, is to make the number of those cases requiring intervention far fewer than today. That is how senior management is most effectively employed in any successful private corporate organization; so why not in the U.S. Department of State?

Another concern that some may have is that development programs will be neglected if

AID is integrated into the State Department. Some may worry, as well, that the State Department will direct foreign assistance to programs promising immediate political returns. This is not so. In the new organization, the Secretary of State could directly instruct the Strategic Planning, Assistance, and Budget Office to ensure that priority is given to development aid—if that is the 52 New World Coming, p. 38.

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wish of the President and the Congress. The demise of AID would also mean that no single person, apart from the Secretary of State, would be accountable for the implementation of development programs. It is true that each Under Secretary would oversee development aid for only their area of responsibility. But they would be able to integrate these activities with all the other regional or global assistance programs far more effectively than is the case today.

Indeed, AID’s current decentralized structure would fit well with the overall State

restructuring. AID’s regional and global offices would become part of the new Economic and Transnational Bureaus. AID regional and global planning and budgeting offices would be retained as part of the Under Secretaries’ staffs. AID’s budget officials would join the Strategic Planning, Assistance, and Budget Office, and their procurement and contracting officials would be integrated into State Department offices with similar responsibilities. The actual planning and administration of AID programs would be very similar to current practices.

he United States is represented overseas in 160 countries, with over 250 embassies, consulates, and missions. Over 14,000 Americans and about 30,000 foreign nationals

are employed in these posts. More than thirty U.S. government agencies operate overseas. This Commission believes that the U.S. overseas presence has been badly short-changed by shortsighted budget cuts to the point where the security and prosperity of the American people are ill-served. But it also believes that the U.S. presence must be adjusted to new and prospective economic, social, political, and security realities. Only with such changes will Congressional confidence be restored, and the necessary funding provided, to support these critical activities.

We also believe that in order for the State Department to run efficiently in an increasingly

“wired world,” its worldwide information technology assets must be updated. There has been progress in this area, but more could be done. This Commission urges Congress to provide sufficient funding to ensure the full completion of this effort.53

U.S. Ambassadors and embassies play critical roles in promoting U.S. national security

goals overseas. We therefore recommend that all other Ambassadors, including the U.S. Permanent Representative to the United Nations, be brought under the authority of the Secretary of State for policymaking and implementation, without altering their representational role on behalf of the President.

The President should also take steps to reinforce the authorities of all U.S. Ambassadors.

Ambassadors should be responsible for planning and coordinating the activities of all the agencies at each mission, including U.S. assistance and law enforcement activities. The Ambassadors should formulate a comprehensive, integrated mission plan and recommend to the Cabinet secretaries an integrated country budget. The new State Department Under Secretaries should be advocates for their Ambassadors’ budget priorities in Washington’s interagency budget deliberations. We further recommend the following:

53 The Commission supports the recommendation of the Overseas Presence Advisory Panel to upgrade immediately the State Department’s information and communications technologies by providing all overseas staff with Internet access, e-mail, a secure unclassified Internet website, and shared applications, permitting unclassified communications among all agencies around the globe. See the Report of the Overseas Presence Advisory Panel, America’s Overseas Presence in the 21st Century (Washington, DC: November 1999), p. 7.

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● 23:The President should ensure that Ambassadors have the requisite area knowledge as well as leadership and management skills to function effectively. He should therefore appoint an independent, bipartisan advisory panel to the Secretary of State to vet ambassadorial appointees, career and non-career alike. This Commission also believes that the Secretary of State, on behalf of the President,

should pursue urgently the process of “right-sizing” all American posts overseas. The process must ensure that embassy activities are responsive to emerging challenges and encourage greater flexibility in the size and concept of embassies and consulates to serve specialized needs.54 Embassies should also be reorganized into sections reflecting the new State Department organization: political, security, and economic/transnational affairs.

egions will become more important in the emerging world of the 21st century. State borders no longer contain the flow of refugees, the outbreak of ethnic violence, the

spread of deadly diseases, or environmental disasters. Humanitarian and military operations will often depend on access rights in many different countries. As regional political and economic organizations gradually evolve outside Europe, they may begin to take on roles in fighting such transnational dangers as crime, drugs, and money laundering. The United States needs flexible ways to deal with these regional problems.

Today, U.S. Ambassadors are accredited to individual states. No mechanism exists for

them to coordinate their activities regionally. The unified military commands are regionally based, but their planning and operations are focused primarily on military contingencies. Every regional Commander-in-Chief (CINC) does have a Political Adviser from the State Department, but there is no systematic civilian foreign policy input into military planning. When a crisis occurs, coordinating the various civilian activities (humanitarian assistance and police forces) with military activities (transport or peacekeeping operations) remains very uneven. More fundamentally, a gap exists between the CINC, who operates on a regional basis, and the Ambassador, who is responsible for activities within one country.

In light of these circumstances, and fully mindful of the need to reinforce the goals of the

new State Department organization proposed above, the Commission encourages the departments and agencies involved in foreign operations—State, Defense, Treasury, Commerce, and Justice—to cooperate more fully in regional planning. Specifically the President should:

● Establish NSC interagency working groups for each major region, chaired by the respective regional Under Secretary of State, to develop regional strategies and coordinated government-wide plans for their implementation; ● Direct the Secretary of Defense to have regional CINCs institute a process through their Political Advisers to involve the Ambassadors in their region in their military planning; and

54 The Overseas Presence Advisory Panel made this recommendation in November 1999. The Panel concluded that significant savings are achievable from right-sizing U.S. embassies; e.g., a ten percent reduction in all agencies’ staff would save almost $380 million annually. The Secretary of State has taken steps to implement this recommendation.

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● Direct the Secretary of State to instruct the regional Under Secretaries to meet at least semi-annually with the ambassadors located in their region (with one such meeting each year being held in the same general location as the regional CINCs).

he implementation of these recommendations concerning the Department of State in all its various aspects, and their budgetary implications, is a complex undertaking. As

noted, the Commission’s recommendations involving the NSC processes and staff could be implemented immediately. The problem will be that, to have any chance of returning to the NSC’s more traditional roles, the State Department needs to be strengthened well beyond the designation of a strong Secretary of State. Congressional action will be required to implement the proposed reorganization. With respect to the U.S. overseas presence, the President has the authority to carry out the Commission’s recommendations. We urge him to use that authority forthwith.

D. DEPARTMENT OF DEFENSE

he Department of Defense (DoD) protects the American people and advances the nation’s interests and values worldwide. It also plays a critical role in maintaining

global peace. And it stands in dire need of serious reform. DoD’s current organization, infrastructure, business practices, and legal and regulatory

structure evolved during the Cold War in ad hoc and incremental ways. Many commissions have addressed DoD structure over the years and offered recommendations for reform. Some have been implemented, but this Commission believes that much still needs to be done. In particular:

● DoD’s policy organization is outdated and overly complex; ● Major staff roles and responsibilities are ill-defined, with duplication and redundancy the rule, not the exception; ● Supporting infrastructure is highly inefficient and consumes a major portion of the DoD budget; ● The present process for programming and budgeting military forces generates strategic postures not very different from those of the Cold War despite vastly changed strategic realities; ● The weapons acquisition process, which is slow, inefficient, and burdened by excessive regulation and politicization, has become a burden on a defense industry is already in the midst of a financial crisis; and ● The process by which force structure planning occurs is not appropriately aligned with the current global security realities. The key to the success of any program of reform will be direct, sustained involvement

and commitment to defense reform on the part of the President, Secretary of Defense, and Congressional leadership. The new Secretary of Defense will need to be personally engaged. The challenges are too great to delegate responsibility to others. His central task will be to persuade Congress to accord him the flexibility he needs to carry out the Commission’s recommendations,

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and to contain Congress’ desire to micro-manage DoD processes through crippling laws and regulations.

Resource issues are also at stake in Defense Department reform. America’s global

commitments are so extensive, and the costs of future preparedness are so high, that significantly more resources will be required to match means to ends. The potential mismatch ahead between strategy and resources can be mitigated in the longer run by generating savings from within the Defense Department through extensive management reform. Not only will the Defense Department save money that it needs for its core responsibilities, it may also increase Congress’ willingness to shrink the mismatch between means and ends in the nearer term.

Policy Reform

he Under Secretary of Defense for Policy supports the Secretary of Defense in his role as a member of the National Security Council, and helps him to ensure that the

multiplicity of DoD’s defense and military activities are guided by the President’s overall national security policies. The structure of the Policy staff has evolved over many years as a result of the wishes of individual Secretaries and various Congressional mandates. Today, the office retains its traditional focus on security assistance and alliance relations. It has also expanded its mandate to foster defense relationships throughout the world as well as to participate in such functional activities as nuclear threat reduction, humanitarian assistance, and counter-drug efforts. At the same time, such policy activities as export controls and arms control verification have been given to the recently consolidated Defense Threat Reduction Agency.

The most recent reorganization places little emphasis on strategic planning, though the

Strategy and Threat Reduction office is involved to some extent in defense strategy and contingency planning. Regional and functional responsibilities are dispersed among Policy’s three offices. The office of International Security Affairs covers Europe, Asia, Middle East, and Africa. A Congressionally-mandated assistant secretary deals with Special Operations and Low-Intensity Conflict (SOLIC) as well as Inter-American affairs, terrorism, drugs, peacekeeping, and humanitarian operations. The Strategy and Threat Reduction office focuses on the functional areas of nuclear weapons and missile defense, counter-proliferation and threat reduction, and the regional areas of Russia, Ukraine, and Eurasia. The result is a very complex structure that makes coordination difficult within the Defense Department and with other government agencies.

This Commission therefore recommends some modest but important reforms, as follows:

● 24: The Secretary of Defense should propose to Congress a restructuring plan for the Office of the Under Secretary of Defense for Policy that would abolish the office of the Assistant Secretary for Special Operations and Low-Intensity Conflict (SOLIC), and create a new office of an Assistant Secretary dedicated to Strategy and Planning (S/P).

We believe that a separate Assistant Secretary of Defense for Special Operations and

Low Intensity Conflict is no longer needed, for these activities are now widely integrated into U.S. strategy, plans, and forces. Special operations can and should be addressed like all other mature missions within the department’s Major Force Program process. The other regional activities of SOLIC would be transferred to other parts of the policy office. But a new office of Strategy and Planning (S/P) should be created, with responsibility for leading and coordinating

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DoD planning processes. This office would also support the Secretary of Defense in the NSC-led strategic planning process as well as the Joint Staff’s military contingency planning process. Structural Reform

ast efforts to reform the Defense Department have emphasized the following three general principles.55 DoD civilian and military staffs need to focus on their core roles

and responsibilities. The department should eliminate unnecessary layers, avoid duplication of activities, and encourage the delegation of authority. Many defense support activities should be outsourced to the private sector and others fully privatized. The Commission supports these overall goals and, more specifically, recommends the following:

● 25: Based on a review of the core roles and responsibilities of the staffs of the Office of the

Secretary of Defense (OSD), the Joint Staff, the military services, and the CINCs, the Secretary of Defense should reorganize and reduce those staffs by ten to fifteen percent.56 A comprehensive review of staff sizes and structures must follow from clear definitions

of each staff’s mission, and core competencies should be established around those missions. All activities peripheral to a staff’s main missions should be curtailed or eliminated.57 In the Commission’s view, mandatory reductions will force the staffs to eliminate redundancies among them and unnecessary layers within them. Staff activities that can be downsized include:

—OSD program management involving special operations, humanitarian assistance, and counter-drug programs; —Joint Staff regional and manpower offices, as well as their use of the Joint Requirements Oversight Council (JROC) and the Joint Warfighting Capability Assessment (JWCA) processes, to evaluate infrastructure and service support programs; —Service regional planning offices, some acquisition oversight, as well as the duplicate manpower activities of the military and OSD staffs; —CINC program analysis activities and some sub-unified and component command headquarters.

55 Many studies have endorsed such principles, including GAO studies in 1976, 1978, 1996, 1999, and 2000, as well as the Rockefeller Committee, the Rice Report, the Packard Commission, the Senate Armed Services Committee study leading up to Goldwater-Nichols, the Commission on Roles and Missions, the Hicks & Associates study, the Defense Reform Initiative, and the BENS (Business Executives for National Security) Tail-to-Tooth Commission. 56 We are speaking only of these specific staff roles, not of DoD civilian personnel in general. We are aware that, in this more general category, there has been a reduction of approximately 35 percent since 1990. 57 At the same time, our discussion of the Civil Service in Section IV.D, specifically in recommendation 42, calls for a 10-15 percent personnel float to allow for adequate professional training should be introduced in civilian staff offices within OSD. In other words, while we advocate cutting staff slots by 10-15 percent, the actual number of civilian employees working in OSD staffs need not change significantly.

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In the case of Joint Forces Command (JFCOM), the Commission strongly urges that its responsibilities be carefully defined and limited. Many Joint Staff activities have been divested to JFCOM and new missions have been added, including homeland security, joint training, and joint experimentation. Some have suggested further that JFCOM represent the CINCs in the requirements definition process. Since the JFCOM commander is already dual-hatted as NATO’s Supreme Allied Commander-Atlantic (SACLANT), a span of control problem looms with the steady expansion of his duties.

ut realigning these staffs is not enough. DoD’s supporting infrastructure needs to be reduced as well, both because it holds the promise of giving better support to the

nation’s military forces and because it will free up significant resources for modernization.58 Roughly half of DoD’s infrastructure falls into two categories: central logistics and

installation support. More than 75 percent of DoD’s infrastructure resides within the military services and, in this fiscal year, will consume $134 billion. This system consists of approximately two-dozen defense agencies and field activities whose accounts are scattered across various program and budgeting elements.

Since these infrastructure activities do not operate according to market forces, it should

come as no surprise that business costs and practices are not competitive with the civilian sector. Most defense agencies place little emphasis on achieving performance goals based on measurable outputs. Many also suffer from conflicting supervision from OSD and the military services, while at the same time receiving strong advocacy from the Congress bent on protecting local constituent jobs and installations. Several defense agencies and field activities have a combat support role, which adds the difficulty of having to harmonize business efficiency with military effectiveness.

Efforts over the years to reduce DoD’s infrastructure have focused in part on outsourcing

various activities to the private sector. Outsourcing guidelines are found in OMB Circular A-76, but the process is cumbersome and bureaucratic, often taking two to four years to complete for each major initiative. Moreover, the Circular A-76 process involves competition between the private sector and an ongoing government activity. The “competition” is inherently biased against private business because the government’s “bid” deflates true operating costs and hides overhead expenses. This sharply limits the applicability of the Circular A-76 process.

Given the significant obstacles to reducing, consolidating, and restructuring the Defense

Department’s supporting infrastructure, the Commission recommends the following:

● 26: The Secretary of Defense should establish a ten-year goal of reducing infrastructure costs by 20 to 25 percent through outsourcing and privatizing as many DoD support agencies and activities as possible. Given the political sensitivities surrounding such steps, an independent and bipartisan

commission should be established to produce a plan to achieve this goal. We propose that implementation of the plan rely on a joint Executive-Legislative Branch mechanism similar to the Base Realignment and Closures (BRAC) process.

58 Infrastructure is defined as non-combat activities and support services that commonly operate from fixed locations (e.g., installation support, central training, central medical, central logistics, acquisition infrastructure, central personnel, and central command, control, and communications.)

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In putting together such a plan, this new commission will need to explain to Congress

what the process will entail. This plan should develop common definitions of what constitutes a “support activity.” It should include all the various categories of supporting infrastructure, including both Service and civilian DoD agencies. It should then define in general terms what should remain government owned and operated, what should be outsourced, and what should be privatized.59 In principle, it would seem that intelligence, acquisition, and criminal investigation should be consolidated, but remain government owned and operated. Some aspects of health, personnel, and many support functions on local installations should be outsourced. Logistics, accounting, auditing, aspects of defense communications, military exchanges, and commissaries should be privatized.60 Finally, the plan should lay out a five-year road map for accomplishing the outsourcing, and a ten-year road map for privatization—recognizing that outsourcing can be a useful step toward privatization.

In the meantime, DoD and the Office of Management and Budget need to revamp the

Circular A-76 guidelines in ways to make the selection process quicker and the competition more equitable. This will require working with Congress, because steps to privatize substantial portions of the DoD infrastructure will invite intense Congressional scrutiny.

The failure to significantly reduce DoD’s infrastructure could prove very injurious in the

long run. Attempts to save money merely by squeezing savings from the current system—but without fundamentally restructuring that system—will eventually jeopardize the provision of adequate funding for core needs such as modernization and personnel. If the Congress will not provide the funding needed to compensate for departmental inefficiencies, then it will need to explain why it also obstructs the department’s own efforts to become more efficient.

Process Reform

hree major areas of DoD responsibility cry out for particular scrutiny: the programming and budgeting process, the acquisition process, and the force planning

process. We take these in turn. For the past thirty years, the Defense Department has produced its budget through its

Planning, Programming, and Budgeting System (PPBS) process. Theoretically, the PPBS process is top-down in design, beginning with the National Security Strategy (NSS) as guidance for both the National Military Strategy (NMS) and the Defense Planning Guidance (DPG).61 In reality, however, the PPBS process is predominantly a “bottom-up” system driven by existing programs and budgets.

The problems of the PPBS process are well known. The PPBS phases operate semi-

autonomously rather than supportively, creating unnecessary turbulence and encouraging the 59 Outsourcing combines government ownership with private contracting. Privatization means reducing or eliminating government ownership and getting DoD out of the process of competing with private industry. Outsourcing can achieve 10 percent savings; privatization may achieve savings of up to 20 percent in some sectors. 60 Commissaries and exchanges would still exist, but they would be privately owned and operated. 61 Goldwater-Nichols mandated the National Security Strategy as a way for the President to describe the country’s broad national security directions. Required by law every January, the NSS is habitually late, and its objectives and goals have never been prioritized. By this Commission’s definition, the NSS is not a “strategy” document because it fails to relate ends to means.

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repeated revisiting of prior decisions. Guidance to the Services and other DoD components for program and budget development tends to be both vague and late. Major program decisions are often delayed until the end of the budget development phase, in turn causing hurried and often inaccurate adjustments to budgets and to the Future Years Defense Program (FYDP). Frequently, long-term modernization plans are disrupted during annual budget cycles. Minor details receive inordinate attention. As a result, the PPBS process fails to provide the Secretary with the means to guide the budget process strategically. It has contributed much to the department’s tendency to replicate existing force structure and its inability to advance the transformation of U.S. forces to deal with a post-Cold War environment.

The PPBS must be restructured to link it directly to strategic goals and to reduce its

obsession with mundane program and budgeting details. The department’s planning should be informed by the strategic guidance emanating from the President and NSC principals, as specified above in Section III.A, and then the Secretary of Defense should translate that guidance into the various internal DoD processes that produce Defense Department programs and budgets.

The most critical step is for the Secretary of Defense to produce defense policy and

planning guidance that defines specific goals and establishes relative priorities. He needs to do this through a departmental process that involves serious analysis and debate of the most critical issues. Real strategic choices must be defined and decisions made. The program review phase of the PPBS could then measure progress in achieving his policy and planning objectives. This Secretarial guidance would also provide the basis for defining the National Military Strategy and for conducting the Quadrennial Defense Review (QDR).

The Commission believes that the QDR should then become the foundation of the PPBS.

To be truly effective, we recommend:

● 27: The Congress and the Secretary of Defense should move the Quadrennial Defense Review to the second year of a Presidential term. By statute, the QDR is to be completed in the first year of a new administration. Such a

deadline, however, does not allow the time or the means for an incoming administration to influence the QDR’s outcome. The Presidential appointment process now extends six to nine months.62 The new President’s overall vision and strategic goals also take time to develop and so cannot inform the review. Meanwhile, the new team inherits the supporting analysis from the previous administration and Joint Staff. Past practice suggests that the DoD bureaucracy has figured out how to use the QDR process to preserve the status quo, while outgoing senior officials have rarely acquired any stake in the process. Postponing the QDR until the second year would remedy these problems, and would still be available in time to influence the second of four budgets that an administration develops entirely on its own.

For the department to be able to develop true strategic alternatives, it will need to focus

on resources. We therefore recommend a second change in the QDR. Despite the end of the Cold War and the emergence of a newer, less certain strategic

environment, the percentage of budget resources that is allotted to the Services and defense agencies—called Total Obligation Authority (TOA) in the defense budget—has not changed appreciably over the last ten years. Only minor force structure alternatives have been generated;

62 In our discussion of Presidential appointments in Section IV, we recommend shortening this period.

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defense programs remain essentially unchanged, and modernization funding keeps getting pushed into the future. Therefore, we recommend the following:

● 28: The Secretary of Defense should introduce a new process that would require the

Services and defense agencies to compete for the allocation of some resources within the overall Defense budget. A structured process of competition for resources, moored within the QDR process and

focused on the allocation of TOA, would produce innovative choices to fill broad mission requirements. One way this competition could be accomplished is for OSD to retain five to ten percent of the TOA and then reallocate it during the QDR to promising systems and initiatives—be they those of the Services, DARPA, or Joint programs. The Secretary must accompany the TOA holdback with the identification of his high-priority strategic requirements that must be funded. Moreover, in this process, the Services and defense agencies would be required to identify their highest and lowest priority programs.63 This would give the Secretary a means of killing low-priority programs and reallocating the resulting savings to more promising areas during subsequent PPBS cycles.

For any TOA reallocation process to be viable, two things must happen. First, the

Secretary will need to rely on his OSD staff, and not rely only on the Service and Joint Staffs. The OSD staff will also need to coordinate the analysis that will inform the discussion of the alternatives. OSD internal reforms will be key to its ability to carry out these tasks.

The Commission proposes a final change to improve the QDR process. The QDR should

be restructured so that it defines defense modernization requirements for two distinct planning horizons: near-term (one to three years) and long-term (four to fifteen years). The CINCs should have primary influence on readiness in the near-term execution horizon. The Services should focus on modernization, personnel, and infrastructure throughout the long-term planning horizon. The Joint Staff should focus on joint issues and force interoperability planning. The OSD staff would exercise broad oversight and ensure that QDR planning followed the President’s and the Secretary’s strategic guidance and was based on realistic political and resource assumptions.

Flowing from the QDR process, the PPBS process must be reoriented in ways to conform

to political reality and achieve better coordination among the civilian and military staffs. To do this, the calendar should be revamped. Policy and planning guidance should be issued biennially and prior to when the Services start building their initial programs and budgets. The Joint Staff and OSD would then develop the most critical issues for review by the Secretary in the April to August time frame. Final decisions would then be postponed until after Congress had done its markup of the previous year’s budget, so as to integrate their decisions into the upcoming budget. Final Presidential approval would occur by the end of the year. High-speed computers now allow the programming and budgeting phases to be compressed and to take account of Congressional action. The PPBS need not be wholly linear in execution.

he United States equips its military forces through a complex process that depends to a large degree on the private sector, but also involves an enormous number of laws

63 Note the Services and defense agencies must identify “programs,” rather than “funds.” Otherwise they will stretch programmed procurement to free budget year “funds,” but increase future unit costs by doing so.

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and regulations that compose a thick web of government oversight. The acquisition process is a hybrid process, with characteristics of both a free enterprise system and a government arsenal system. Operating within this environment is a small group of primarily defense-oriented companies, a larger number of basically commercial companies with some involvement in defense procurement, and a growing number of companies, particularly high-tech companies, to which dealing with the Department of Defense is an anathema. Importantly, all of these companies must compete in the open marketplace for both financial capital and skilled workers and managers.

A worrisome number of studies in recent years have pointed to the precarious health of

many of the nation's most critical defense suppliers.64 Many businesses are unable to work profitably with DoD under the weight of its auditing, contracting, profitability, investment, and inspection regulations. These regulations also impair DoD’s ability to keep abreast of the current pace of technological innovation. Weapons development cycles today average nine years in an environment where technology changes markedly every twelve to eighteen months in Silicon Valley—and the trend lines continue to diverge.

Competition is essential within the defense sector to achieve both affordability and

innovation. Yet the current low level of modernization activity often makes competition impractical. In addition, competition is affected adversely by the exacting social and ethical standards to which DoD is held. Such standards impose restrictions that make it virtually impossible for DoD to be efficient and aggressive in achieving cost savings.

Despite some recent improvements, the trends of the last decade are very troubling and,

if they continue, could severely endanger America’s long-term military capability. A strategy of standing back and totally relying on the forces of the marketplace will likely fail. The United States must look to the health of the U.S. defense industrial base just as it takes responsibility for the viability of its Army, Navy, Air Force, Marine Corps, and Coast Guard. This does not mean government management of the defense industrial base. It does mean creating an environment where good performers can succeed and prosper.

In place of a specialized “defense industrial base,” the nation needs a national industrial

base for defense composed of a broad cross-section of commercial firms as well as the more traditional defense firms. The “new technology” sectors must be attracted to work with the government on sound business and professional grounds; the more traditional defense suppliers, who fill important needs unavailable in the commercial sector, must be given incentives to innovate and operate more efficiently.

f this is to be accomplished, the defense acquisition process will need fundamental reform. To guide this reform, the Commission offers these overarching principles.

64 See John Harbison, Thomas Moorman Jr., Michael Jones, and Jikun Kim, “U.S. Defense Industry Under Siege—An Agenda for Change,” Booz-Allen & Hamilton Viewpoint, July 2000; “Preserving a Healthy and Competitive U.S. Defense Industry to Ensure our Future National Security,” Defense Science Board Task Force briefing to USCNS/21, June 2000; “U.S. Space Industrial Base Study,” DoD and NRO Co-sponsored Study by Booz-Allen & Hamilton, briefed to USCNS/21, June 2000; “The National Crisis in the Defense Industry,” study briefed by the Scowcroft Group and DFI International to USCNS/21, June 2000.

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● The nation needs to restore the balance of funding among modernization, readiness, and force structure. The procurement “holiday” affecting modernization has produced a highly unbalanced force for the future. ● The government should encourage small, agile, high-tech companies to enter defense competitions, as they represent both a source of innovation and an inspiration to new efficiencies. ● The department’s overall modernization strategy should give priority to fundamental research; substantially increase prototyping; stress the evolutionary upgrading of platforms throughout their life; and keep commitments to long-term, stable production. ● To the extent practicable, the acquisition system needs to be open to continuous competition, and open to new ideas from companies of all sizes. It should focus on “outputs”—i.e., measurable products, time, and cost—as opposed to “process.” ● The weapons development process should rely on competition to solve performance problems and keep down costs, with commensurate rewards for those who succeed. ● The acquisition system should use the market to decrease system costs and improve schedule and system performance. The current system of centralized planning, the inappropriate use of government agencies to perform commercial tasks, and the lack of managerial accountability stifles efficiency. ● The government, not the private sector, should pay the costs that result from explicit government demands and requirements in the acquisition process. At the same time, companies deserve no proprietary entitlement to publicly-financed designs and technology. Turning to more specific recommendations, this Commission is concerned that the

current acquisition system does not support the timely introduction of new technologies. Developing and producing weapon systems takes too long.65 Some major systems are not even completed before the parts they depend on from the commercial sector are outmoded and no longer available. Worse, while the commercial world is shortening cycle times, DoD is not—so the gap between commercial and government practice continues to widen. This is the case in large part because of the inflexibility built into federal regulations. We therefore recommend the following:

● 29: The Secretary of Defense should establish and employ a two-track acquisition system,

one for major acquisitions and a second, “fast track” for a limited number of potential breakthrough systems, especially in the area of command and control. The two-track system would accept an accelerated, higher-risk approach to the

development of breakthrough capabilities, especially in areas undergoing rapid change in the state of the art. Simultaneously, a more conservative approach is appropriate for more conventional programs. One size does not fit all.

65 In DoD acquisition jargon, the period from requirement definition to production of a weapon system is referred to as its “cycle time.”

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The Commission also believes that the development of new technologies must be emphasized and properly financed. Development programs should generally be administered through contracts that pay for the costs plus a fee, with the fee being tied not only to system performance but also to meeting the schedule within costs. We must eliminate the pressures whereby firms need to recover R&D costs and losses during the production phase. Full funding of R&D programs is an essential part of the acquisition process. Correspondingly, fixed-price contracts are appropriate for programs whose scope and risk are well understood and manageable. As we have already suggested in Section II above, the nation must also invest heavily in basic research in university, corporate, and government laboratories.

rototyping of a weapon system, which allows the possibility that some attempts will fail, and then developing and producing the most promising concepts, will get the

“kinks” out of systems early and shorten the development cycle time. The initial costs are higher to the Services, which is why prototyping is often resisted, but the total program costs promise to be lower. In addition, it will help create and maintain viable defense suppliers and their critical design teams, even in a low-production environment. We therefore recommend the following:

● 30: The Secretary of Defense should foster innovation by directing a return to the pattern

of increased prototyping and testing of selected weapons and support systems. Prototyping should be paired with incremental delivery and evolutionary upgrades of

existing operational systems. This will allow the product to remain current with continuing technological developments. It has the further advantages of reducing the time needed to deliver a new capability to the war fighter and of decreasing production risks significantly.

The Defense Department cannot depend entirely on speeding up its integration with the

commercial sector. The nation also needs to invest in selected research programs where military systems have no commercial counterparts. Unfortunately, large and complex DoD research and development projects generally suffer from a distortion of cost competition since companies often underbid the R&D phase in hopes of securing funding in more profitable production phases. The Commission thus recommends that the laws prohibiting the use of Independent R&D (IR&D) funding for program support be more broadly interpreted and more strictly enforced.

rogram turbulence, often stemming from lack of funds or from budgetary instability, is the primary cause of inefficiencies and cost overruns in DoD programs. This

budgetary instability has several sources. One is the current reality of the resource allocation process itself within DoD, which unfortunately often takes all resources into account during budget reductions—including acquisition programs. This normally results in a known and deliberate underfunding of previously approved programs. Another problem is the acquisition system itself, which suffers from cost overruns and program extensions. Lastly, the Congress often uses small “takes” from large programs to reallocate funds to other priorities without realizing or understanding the problems this creates in having to reprogram funds, write new contracts, and establish new schedules.

We realize that many commissions, and ever more studies, over the past several years

have recommended two-year budgeting and multiyear procurement as a way of limiting program turbulence. If these forms of budgeting were introduced, the disincentive to disrupt acquisition programs would appropriately be very high. We also know that Congress has doggedly refused to

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take such proposals seriously. Congress lacks confidence in DoD’s ability to execute such a budget given past weapons cost overruns. Furthermore, appropriating funds on a yearly basis gives Congress a greater ability to influence the Defense Department’s policies and programs.

Therefore, rather than propose two-year budgeting across the entire Department of

Defense, we focus on the single area where two-year budgeting makes the most sense and stands to do the most good. We recommend the following:

● 31: Congress should implement two-year defense budgeting solely for the modernization

element of the DoD budget (R&D/procurement) because of its long-term character, and it should expand the use of multiyear procurement. Such steps would markedly increase the stability of weapons development programs and

result in budgetary savings in the billions of dollars. For this to happen, however, the Secretary of Defense must impose discipline in the decision-making process. It is already difficult to start new engineering development programs. It should be made even more demanding, ensuring that the military requirements are understood and enduring, and that the technology, concepts, and funding are all well in hand. Once a program is approved, it should be equally difficult to change it. The Commission also notes that it is sometimes better to eliminate some programs early than to absorb the costs of constantly extending programs and procuring limited numbers of weapons at high unit costs. To accomplish this, Congress will need to let decisions to kill programs stand as well as support DoD budgeting and procurement reforms.

If the government will not take the measures to improve program stability by introducing

two-year budgeting in modernization and R&D accounts, and more broadly adopt multiyear funding, it cannot expect private industry to obligate itself to suppliers, or to assume risks on its own investments with little prospect of long-term returns.

stimating costs is very difficult, especially in the early stages of weapons development. As a result, costs often escalate significantly. Introducing immature

technologies and concepts into engineering development can lead to a major waste of resources. Constant modifications in program specifications can significantly drive up costs. The acquisition system today is characterized by underfunding, turbulence, occasional lack of competition, and a propensity to follow routine processes rather than focus on producing on-time results. In addition, the current system gives incentives to program offices to spend all their annual appropriation regardless of need. We therefore recommend that the Defense Department allocate resources for weapon development programs by phase rather than in annual increments.

This approach to resource allocation within DoD should include the provision of financial

reserves to resolve unanticipated problems, as is common commercial practice. This can be accomplished by providing contingency funds in advance to deal with program uncertainties. To ensure their proper use, such funds should be placed not in the program office, but under the control of the Service acquisition official. Fully funding programs during each phase—and especially the early phases—will decrease program turbulence and provide a basis for more reliable budget and schedule forecasting. It will also allow better program management and produce significant cost savings.

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obust experimentation and exploration of innovative technologies are essential, but there must also be an effective screening process for the selection of mature,

affordable technologies before entering full-scale development. DoD currently uses a complex acquisition schedule, where problems associated with technology generation, prototyping, and engineering development often migrate into production. The acquisition system inadequately addresses concurrent risk. Worst of all, testing procedures are generally viewed (and feared) as report cards in the weapon development process. This discourages program managers from using tests to attain knowledge, demonstrate technology maturity, and assure the viability of key manufacturing processes.

We therefore recommend that the recently adopted three-phase acquisition process be

institutionalized. Those three phases are technology development, product development, and production. Testing should be a key part of the technology development process as well as the last two phases.

A three-phase system would focus on maturing robust technologies prior to decisions on

development, and then on identifying problems earlier in engineering development to minimize risk and cost in production. Some overlap between phases is inevitable, but steps can be taken to control the concurrent risk. This will require that DoD adopt a “knowledge-based” evaluation and testing procedure to establish technology maturity, to evaluate risks, costs, and operational limitations. Testing should follow commercial practices, which test early, hard, and often to identify problems, to generate “knowledge,” and to guide subsequent program development. Commercial testing is also more systematic. Subcomponents are thoroughly tested before they are combined into components, components are thoroughly tested before they are combined into subsystems, and so forth.

We believe that a clear three-phrase process—with bright red stop signs erected to

prevent premature entry into subsequent phases—will help in every respect, and we applaud DoD’s recent move in this direction. More importantly, this Commission recommends that program reviews focus on the need, merit, and maturity of the program, and not be used to reopen past debates about the wisdom of the original program approval.

ongress and others have put in place an accumulation of laws and regulations to protect against fraud, waste, and abuse, the net effect of which is to create a system

of requirements and acquisition oversight that creates the very waste it was intended to prevent. The “regulation cost” in DoD and the defense industry has been estimated by various

observers to be on the order of 30 percent of the acquisition budget, while the indirect management and oversight burden in the nation’s commercial sector ranges from 5 to 15 percent—and is falling. The Defense Contract Audit Agency (DCAA) and the Defense Contract Management Command (DCMC) employ a “division equivalent” of auditors, and these are complemented by multitudes of various Service auditing organizations. They create costly inefficiencies and often lead to inferior products.

Moreover, the DoD oversight process, by engendering an adversarial system, encourages

timid decision-making and forces industry to go to extremes in accounting and business procedures. This system, which is based on institutional and individual distrust, needs to be replaced with one that conforms better to normal business practices. The Defense Department needs to mimic the nation’s private sector—again, to the extent possible—in reducing costs, improving product development cycles, and adapting rapidly to new technologies.

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Specifically, federal acquisition regulations must no longer weigh down business with so

much gratuitous paperwork and regulation that they discourage firms from doing business with the government. While the requirement for public accountability can never allow the defense acquisition system to mirror image the private sector completely, excess regulation can and should be significantly reduced. We therefore recommend the following:

● 32: Congress should modernize Defense Department auditing and oversight requirements

by rewriting relevant sections of U.S. Code, Title 10, and the Federal Acquisition Regulations (FARs). The goal should be to reduce the numbers of auditors and inspectors for the DoD

weapons acquisition system to a level commensurate with the marginal benefits produced by such auditing and inspection. Compared to leading companies in the commercial sector, this would entail an approximate reduction within DoD of 50 to 60 percent.

Rewriting the FARs should be premised on two principles. First, the government must

pay for the legitimate costs that it causes to be incurred for what it demands in the acquisition process. The government must reimburse legitimate costs so that contractors may invest in new technology. The government must also share cost savings to create incentives for efficiency. Progress payments, covering a legitimate cost of business, should be automatically indexed to interest rates. Second, the FARs must encourage competition and provide incentives for timely production. The rewritten FARs must have the flexibility that promote a profit policy under which firms that perform well are rewarded well—and firms that perform poorly are penalized or terminated, or both.66

To make this recommendation work, DoD will have to exercise significant leadership and

work with Congress and industry to change the existing culture throughout the acquisition and procurement infrastructure. But that is not the only problem. Both industry and government officials often fail to take advantage of flexibilities in government regulations because it is less risky for them to follow old procedures. Positive actions taken in the past decade have paid off only when both DoD program managers and industry changed their way of doing business.

DoD’s goal to expand participation in the defense industrial base will be helped

significantly by introducing competition, placing emphasis on timely output versus process, increasing the funding for technology experimentation, transitioning more quickly from technology development into production, fostering program stability, reducing the oversight burden, changing regulations, and revamping the penalty focus of today’s system.

inally, beyond the other structure and process recommendations, this Commission would offer its suggestions on the force structure process. As the Commission

indicated in its Phase Two report, the concept of fighting two major theater wars (2MTW) near-simultaneously, the current threat basis for U.S. military force planning, is not producing the

66 It might be appropriate for the revised FARs to test a modified version of the award fee process tied to schedule, cost, and performance. This discretionary award could range from a higher-than-present level to a moderately negative level. The determining evaluation would be based upon separate periodic input from the program manager, the contractor, and outside auditors who would advise either the Service acquisition official or an independent board with authority to determine the fee.

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military capabilities this nation requires.67 It is difficult to envision, at this period in history, two opponents capable of challenging the United States at the theater level of conflict, although we see the value in maintaining the capability to deter opportunists who might seek advantage while the United States was otherwise engaged. Indeed, the commitment for concurrent, all-out engagement in two regions of the world, without strategic prioritizing and sequencing of campaigns, is in itself an extraordinary notion. We believe it more useful to plan and retain readiness for a major conflict, while also securing the homeland and responding to small or medium-scale conflicts, international terrorism, peacekeeping, humanitarian actions, and other commitments requiring U.S. military support.

We conclude that the concept of two major, coincident wars is a remote possibility

supported neither by actual intelligence estimates nor by this Commission’s view of the likely future. Thus, it is no longer an appropriate basis for U.S. force structure planning and should be replaced by a new approach that accelerates the transformation to capabilities and forces better suited to the present and prospective security environment.

The Commission believes that the military challenges of the next ten to twenty years will

be an extension of those of the last decade. The United States will have no peer competitor, but it will face increasing threats to its homeland from a widening array of actors on the global stage with access to weapons of mass destruction and disruption. The likelihood of interstate conflict threatening to U.S. interests will remain diminished, while intrastate conflict in areas important to U.S. security will increase.

This Commission believes the United States should maintain full capabilities of the kind

it now possesses to prevail against the possible emergence of a theater-level opponent. The United States, however, must further improve its ability to deal with small to medium violent conflicts, often occurring simultaneously, which require very rapid, forced entry response capabilities, as well as long-term stability operations in tense, post-conflict scenarios. We should thus strive to achieve land, sea, and air capabilities suitable to this security environment that possess speed, agility, lethality, ease of deployment and sustainment, and highly networked connectivity. Demand for peacekeeping and humanitarian duties will likely continue, with their inherent constabulary requirements, and the United States must organize and train for these missions. Finally, new emphasis must be placed on the special needs of homeland security. Accordingly, the Commission recommends that:

● 33: The Secretary of Defense should direct the DoD to shift from the threat-based, 2MTW

force sizing process to one which measures requirements against recent operational activity trends, actual intelligence estimates of potential adversaries’ capabilities, and national security objectives once formulated in the new administration’s national security strategy. In such a capability-based sizing process, force structure planning would proceed from a

strategic vision of the current and projected security environment and the national security objectives the new administration seeks to achieve. Sizing would take into account intelligence projections of potential adversary’s capabilities plus actual operational activity trends, reflecting recent demands. Finally, adoption of updated modeling techniques, which this Commission

67 While the military departments have never defined the term MTW, we infer it to require all forms of military capability (land, sea, air) on the scale equivalent to the Gulf War or that envisioned in the past for North Korea.

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recommends, would value the synergistic effects of joint forces with modern weapons that are employable in a networked environment.

It would be inappropriate for the Commission to dictate the exact number and type of

divisions, wings, and naval battle groups that this nation needs to execute its strategy. We can, however, provide guidance and a mechanism to help the Department move in the necessary direction. Accordingly, the Commission recommends that the Secretary should revise the current categories of Major Force Programs (MFPs) used in the Defense Program Review to focus on providing a different mix of military capabilities. Given the need for transformation, the Major Force Programs should be updated, and new ones created corresponding to the five military capabilities the Commission prescribed in its Phase II report. We expand on those capabilities below.

Strategic nuclear forces must retain the capability to perform the classic role of nuclear

deterrence. The future security environment and probable strategic nuclear arms reduction efforts, however, likely will call for appropriately lower numbers of nuclear weapons and delivery systems.

Homeland security forces must possess the ability to deter, protect, and respond to threats

to the American homeland. Homeland security is not just a military function; it requires the capabilities and expertise of numerous government agencies, best integrated by this Commission’s proposed National Homeland Security Agency. For DoD’s contribution to this vital mission, the Commission recommends that reserve component forces should be assigned a primary role. They should be trained and equipped to respond as deployable forces to natural, manmade, and/or WMD-triggered disasters. Active duty military forces should be trained to perform these missions in augmenting the reserve component forces.

Conventional forces must be sized and tailored to threats defined by realistic needs and

updated force modeling. For the near future, conventional forces of the types now possessed can provide this capability. Fewer such forces, however, will be required to dominate potential threats than have been previously required by current assumptions and models. Given likely limitations on strategic air mobility assets, fast sealift and pre-positioned equipment in regions at risk should receive higher funding priority.

Expeditionary capabilities should be distinguished from “current conventional

capabilities” insofar as they are designed to respond to crises very rapidly, operate with much lower logistic requirements in a network-centric environment, and possess technological superiority to dominate any potential adversary in the foreseeable future. Rapid power projection with forced entry ability, from forward locations and afar, must characterize these capabilities which, in the Commission’s view, describes few of the forces the U.S. military now possesses.

Humanitarian relief and constabulary operations will involve all the military services,

including the support that has been customarily provided by naval, air, and ground forces. Other government and non-government organizations will undoubtedly be involved, and this should be anticipated in preparing for such missions. The constabulary capabilities should be vested primarily in Army and Marine Corps elements trained and equipped with weapons and mobility resources that will enhance the conduct of such missions, which should be additive to other force structure requirements.

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his Commission recognizes the transformation process will produce these five capabilities over time, yet some must mature at a faster rate. Ultimately, the

transformation process will blur the distinction between expeditionary and conventional forces, as both types of capabilities will eventually possess enhanced mobility. For the near term, however, those we call expeditionary capabilities require the most emphasis. Consequently, we recommend that: ● 34: The Defense Department should devote its highest priority to improving and further

developing its expeditionary capabilities. This Commission has identified what the U.S. military needs to achieve for the future—

how to get there is best left to the responsible experts. We may discover that a transformed U.S. force structure will require a resource and capabilities baseline that is higher than that derived through the current 2MTW construct. Moreover, these transformed forces will be the ones this nation uses to fight all its conflicts, large and small, one at a time or simultaneously. Clearly, the transformation process will require a reprioritization of current resources. Ultimately, the result may be a larger force, or a smaller one, but we are confident that it will be a better force, appropriate to the environment in which it must serve.

E. SPACE POLICY

n its earlier work, this Commission has recognized space as a critical national security environment.68 In so doing, it affirms current U.S. National Security Strategy, which

considers “unimpeded access to and use of space” a vital national interest.69 The United States relies on space for the viability of both its economy and its national

defense. Space technologies, such as the Global Positioning System, are already revolutionizing several major industries. The nation’s military and intelligence activities, too, depend increasingly on space. U.S. superiority in space makes possible a military doctrine based on information superiority. U.S. military forces exploit space as the “high ground” for command, control, computers, communications, intelligence, surveillance, and reconnaissance (C4ISR) activities. The U.S. military cannot undertake any major operation, anywhere in the world, without relying on systems in space. Key elements of the U.S. strategic deterrent posture will be maintained in space as will the nation’s ISR systems critical to avoiding strategic surprise. Space will also be a crucial component to any layered defense the United States may construct in the next quarter century against ballistic missiles.

That is why the nation’s space architecture—the infrastructure required to conduct space

activities—must serve a multiplicity of commercial, civil, military, and intelligence purposes. Its protection must also be assured against threats that are clearly on the horizon.

Unfortunately, the superiority the United States enjoys today in space is unlikely to

persist. Many countries have space capability or access to space. A few states already have the satellite and weapons technology to threaten U.S. space assets, and more will acquire such technology in due course.

68New World Coming, pp. 53-4, and Seeking a National Strategy, p. 9. 69A National Security Strategy for a New Century (Washington, DC: The White House, December 1999), pp. 12.

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In terms of defining its space strategy, the United States must balance two related goals.

On the one hand, it seems prudent for the United States to seek space superiority, defined by the Defense Department as “that degree of dominance in space of one force over another, which permits the conduct of operations by the former and its related land, sea and air forces at a given time and place without prohibitive interference by the opposing force.”70 On the other hand, the United States should continue to support general international norms that protect space as an international domain where all participants are free to pursue peaceful activities. The problem is that unilateral U.S. steps taken to assure military superiority in space may be seen by others as implying an ability to deny access to space and freedom of action there. Even if that ability is never used, it could complicate the ability of the United States to shape a benign international environment. The United States recognizes space as a global commons, but if it does so without qualification, it risks being surprised and overtaken militarily in a crucial environment by some future adversary.

At the very least, this Commission believes that the United States should pursue a robust

ground- and space-based C4ISR capability.71 Because space capabilities take a long time to develop, the United States must also take, in the near- and middle-term, the steps necessary to protect its space assets within the current international legal framework should the need arise.72

n our view, now is the time to reevaluate how both space activities and assets serve broader U.S. national security needs, and then how the U.S. government is organized to

manage these assets. The first is required because science and technology are generating a rapid rate of innovation, and that innovation has both commercial and military implications the interplay of which we do not yet fully comprehend. The second is required because, frankly, the current state of affairs is inadequate.

As it happens, other commissions or boards have recently addressed or are currently

addressing space issues, and they are doing so in a more comprehensive way than this Commission.73 We endorse their work and offer recommendations that bear, in particular, on issues of structure and process.

Most important, this Commission finds serious problems with the way the existing

interagency procedures in the U.S. government deal with space. No standing interagency process for space exists. Neither the NSC staff nor the White House Office of Science and Technology Policy is adequately manned to coordinate space issues. This means that space issues are addressed as they arise on an ad hoc basis. Neither the NSC, the National Science and

70This is how the 1999 DoD promulgated space policy defined space superiority. 71 See Report of the Defense Science Board Task Force on Space Superiority (Washington, DC: Office of the Under Secretary of Defense for Acquisition and Technology, February 2000.) 72 The Outer Space Treaty bans only the deployment of weapons of mass destruction in space, and the ABM Treaty only limits interference with national means of verification with respect to arms control agreements. Meanwhile, even the United Nations Charter, in Article 51, states explicitly that no nation is precluded from taking appropriate defensive measures in any environment. 73 Recent or ongoing examinations of space issues include: Report of the Defense Science Board Task Force on Space Superiority (Washington, DC: Office of the Under Secretary of Defense for Acquisition and Technology, February 2000); “U.S. Space Industrial Base,” Booz-Allen Hamilton report to the NRO and DoD, June 2000; and the Congressionally-mandated “Commission to Assess United States National Security Space Management and Organization.”

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Technology Council (NSTC), or the National Economic Council (NEC) integrates U.S. space activities. Hence, the Commission recommends the following:

● 35: The President should establish an Interagency Working Group on Space (IWGS) at

the National Security Council to coordinate all aspects of the nation’s space policy, and place on the NSC staff those with the necessary expertise in this area. Such a working group would include key representatives from the Executive Office of

the President (NSC, OSTP, OMB) and stakeholder representatives: the Departments of Defense, State, Transportation, and Commerce, the Director of Central Intelligence, and the Chairman of the Joint Chiefs of Staff.74 The creation of the IWGS would allow space to be considered systematically and consistently as a critical element of U.S. national security policy.

he global presence and responsibilities of the United States, and the demands of the information age, have placed enormous new requirements for space and information

infrastructures. These will create major demands for resources in both the Defense Department and the intelligence community. The problem is that the nation has not developed the concept of a comprehensive national space architecture to guide the allocation of resources.75

A national intelligence Future Imagery Architecture (FIA) does exist, but it has been

given woefully inadequate means either to fully process or to disseminate the information collected for its clients in the intelligence community, DoD, and other agencies.76 Rectifying these problems is estimated to cost several billion dollars and no funds have so far been earmarked for this purpose. At present, then, the system for national intelligence imagery collection, processing, and dissemination is not fully integrated. The National Reconnaissance Office (NRO) and the National Imagery and Mapping Agency (NIMA) have failed to provide imagery capability that meets U.S. security needs.77 As currently envisioned, too, the National Missile Defense (NMD) architecture focuses solely on engagement, not on an architecture that integrates the entire spectrum of national and defense-related intelligence, or that covers pre-engagement and post-strike assessments and reconstitution activities. Other space activities, such as those of NASA and NOAA, have been given little attention in thinking about the nation’s space architecture. This is also the case for commercial space activities.

There is within the Defense Department a National Security Space Architect (NSSA)

with responsibility for the design and oversight of the nation’s defense and intelligence space infrastructure.78 But this official lacks the means to affect the non-DoD/intelligence space

74 The representation of relevant agencies would be achieved through their departments; e.g., FAA representation through the Department of Transportation, and that of the National Oceanic and Atmospheric Administration (NOAA) through the Department of Commerce. 75 A more detailed definition of space architecture includes: the on-orbit force structure and missions; configurations to include type of sensors, on-board processing, and dissemination; ground control systems and downloading/processing capabilities; frequency spectrum use and deconfliction; multi-mission capabilities; and system protection measures and security requirements. 76 The national Future Imagery Architecture [FIA] is sponsored by the National Reconnaissance Office (NRO). 77 The NRO is responsible for satellite, constellation, and ground operations design and acquisition; NIMA is responsible for imagery product development and dissemination. 78 The NSSA currently reports to the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence ASD(C3I) for DoD-related issues, and coordinates with the Deputy

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architecture, much less influence decisions in other departments and agencies. The NSSA does not directly influence programs and budgets and, hence, cannot influence the allocation of resources. This Commission therefore recommends that the existing National Security Space Architect (NSSA) should be transferred from DoD to the NSC staff and take the lead in this effort. Moreover, the problem of organizing for space policy must also be addressed at levels below the interagency. In the Department of Defense, responsibility for space policy and oversight is dispersed among various elements of the Office of the Secretary of Defense’s (OSD) staff. We recommend establishing one office responsible for oversight of the department’s R&D, acquisition, and launch/operation of its space assets. Coordination of military intelligence activities and long-range intelligence requirements, both within the department and with the intelligence community, should reside in this office. This official would therefore develop all defense-specific space, intelligence, and space architecture policy for DoD, and coordinate these issues at the interagency level. Accordingly, we recommend the Department of Defense create an Under Secretary of Defense for Space, Intelligence, and Information by consolidating current functions on the OSD staff.79

ne of the nation's most valuable forms of critical infrastructure is its space-based satellite constellation and ground support facilities. It is also our most vulnerable.

Nowhere else does our defense capability rest on such an insecure firmament, even though warning and imagery are unquestionably critical. The concept of critical infrastructure protection highlighted in Section I must be extended to U.S. space networks as well. In light of U.S. reliance on these assets and the present dearth of means to protect them, the Commission endorses the conclusions of the recent Commission to Assess U.S National Security Space Management and Organization, and recommends increased investment in the protection of U.S. space assets, including deployment of a space-based surveillance network.

Such a network will require, first, that the United States be able to detect when its

systems are being attacked and then respond. Protective methods must be developed and fielded. Second, the nation's access to space must be expanded in ways that are more cost-effective. The more robust U.S. space launch capability, the more able the United States will be to retain its space superiority, reconstitute systems after attack, and reduce its vulnerabilities. The Commission strongly recommends that the modernization of the nation’s space-launch capability be accelerated.

F. THE INTELLIGENCE COMMUNITY

he basic structure of the U.S. intelligence community does not require change. The community has implemented many of the recommendations for reform made by other

studies. This Commission’s focus is on those changes in intelligence policy, operations, and resources needed for the full implementation of recommendations found elsewhere within this report.

Director of Central Intelligence (DDCI) and the DDCI for Collection Management on intelligence-related issues. 79 The primary elements would come from the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)), and the Assistant Secretary of Defense for Command, Control, Computers, and Intelligence (ASD(C3I)). In essence ASD(C3I) would transfer to the proposed reorganization.

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While the intelligence community is generally given high marks for timely and useful

contributions to policymaking and crisis management, it failed to warn of Indian nuclear tests or to anticipate the rapidity of missile developments in Iran and North Korea. U.S. intelligence has, at times, been unable to respond to the burgeoning requirements levied by more demanding consumers trying to cope with a more complex array of problems. Steep declines in human intelligence resources over the last decade have been forcing dangerous tradeoffs between coverage of important countries, regions, and functional challenges. Warfighters in theater are often frustrated because the granulated detail of intelligence that they need rarely gets to them, even though they know that it exists somewhere in the intelligence system.

It is a commonplace that the intelligence community lost its focus when the Berlin Wall

fell. Since then, three other problems have compounded its challenges. First, the world is a more complex place, with more diffuse dangers requiring different kinds of intelligence and new means of acquiring them. Second, its resources—personnel and monetary—have been reduced. Third, the dangers of terrorism and proliferation, as well as ethnic conflicts and humanitarian emergencies, have led to a focus on providing warning and crisis management rather than long-term analysis.

The result of these three developments is an intelligence community that is more

demand-driven than it was two decades ago. That demand is also more driven by military consumers and, therefore, what the intelligence community is doing is narrower and more short-term than it was two decades ago. Given the paucity of resources, this means that important regions and trends are not receiving adequate attention and that the more comprehensive analytical tasks that everyone agrees the intelligence community should be performing simply cannot be done properly.

This Commission has emphasized that strategic planning needs to be introduced

throughout the national security institutions of the U.S. government. We have also emphasized the critical importance of preventive diplomacy. Both require an intelligence community that can support such innovations, but current trends are leading in the opposite direction.

This Commission has also stressed the increasing importance of diplomatic and

especially economic components in U.S. statecraft. The intelligence community as a whole needs to maintain its level of effort in military domains, but also to do much more in economic domains. In a world where proprietary science and technology developments are increasingly the sinews of national power, the intelligence community needs to be concerned more than ever with U.S. technological security, not least in cyberspace. And here, too, the trends within the intelligence community point not toward, but away from, the country’s essential needs. Resources devoted to handling such economic and technical issues are not increasing, but declining.

o respond to these challenges, some have recommended strengthening the Director of Central Intelligence (DCI) through organizational changes, such as vesting greater

budgetary authority in him and giving him greater control over personnel throughout the community. We believe, however, that current efforts to strengthen community management while maintaining the ongoing relationship between the DCI and the Secretary of Defense are bearing fruit. We recommend no major structural changes, but offer certain recommendations to strengthen the DCI’s role and the efficiency of the process.

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The National Security Act of 1947 gave the National Security Council responsibility for providing guidance with respect to intelligence functions. In practice, however, administrations have varied widely in their approach to this function—sometimes actively setting priorities for intelligence collection and analysis and sometimes focusing simply on coordinating intelligence response in times of crisis.

To achieve the strategy envisioned in our Phase II report, and to make the budgetary

recommendations of this section most effective, more consistent attention must be paid to the setting of national intelligence priorities. To do this, we recommend the following:

● 36: The President should order the setting of national intelligence priorities through

National Security Council guidance to the Director of Central Intelligence. In recommending this, we echo the conclusion of the Commission on the Roles and

Capabilities of the United States Intelligence Community (the Brown-Rudman Commission). While we do not want to dictate how future Presidents might use the National Security Council, we believe this is a crucial function that must be filled in some way. The President’s authority to set strategic intelligence priorities should be exercised through continuous NSC engagement with the DCI, from which the DCI can establish appropriate collection and analysis priorities. Such an approach would ensure consistent policymaker input into the intelligence effort and, if policymakers come to feel a part of the intelligence process, it should enable greater support for the intelligence community, as well. We believe that this function would be best fulfilled by a true strategic planning staff at the NSC—as per our recommendation 14. The point is that policy and strategic guidance for intelligence should be formulated in tandem.

e have emphasized the importance of securing the homeland in this new century and have urged, specifically in recommendation 4, that it be a higher intelligence

priority. Making it so means greatly strengthening U.S. human intelligence (HUMINT) capability. This involves ensuring the quality of those entering the community’s clandestine service, as well as the recruitment of foreign nationals as agents with the best chance of providing crucial information about terrorism and other threats to the homeland.

Along with the National Commission on Terrorism, we believe that guidelines for the

recruitment of foreign nationals should be reviewed to ensure that, while respecting legal and human rights concerns, they maximize the intelligence community’s ability to collect intelligence on terrorist plans and methods. We recognize the need to observe basic moral standards in all U.S. government conduct, but the people who can best help U.S. agents penetrate effectively into terrorist organizations, for example, are not liable to be model citizens of spotless virtue. Operative regulations in this respect must balance national security interests with concern for American values and principles. We therefore recommend the following:

● 37: The Director of Central Intelligence should emphasize the recruitment of human

intelligence sources on terrorism as one of the intelligence community’s highest priorities, and ensure that operational guidelines are balanced between security needs and respect for American values and principles.

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he DCI must also give greater priority to the analysis of economic and science and technology trends where the U.S. intelligence community’s capabilities are

inadequate. While improvements have been made, especially in the wake of the Asian financial crisis, the global economic and scientific environments are changing so rapidly and dramatically that the United States needs to develop new tools merely to understand what is happening in the world. The Treasury Department has made important strides in this regard, but it has a long way to go. Treasury and CIA also need to coordinate better efforts in this critical area. We therefore recommend the following:

● 38: The intelligence community should place new emphasis on collection and analysis of

economic and science/technology security concerns, and incorporate more open-source intelligence into analytical products. Congress should support this new emphasis by increasing significantly the National Foreign Intelligence Program (NFIP) budget for collection and analysis. In order to maintain U.S. strength in traditional areas while building new capabilities, the

President and the Congress should give priority to economic and science/technology intelligence. We need to increase overall funding in these areas significantly and the DCI needs to emphasize improvement in the collection and analysis of this intelligence. This will require, in turn, a major investment in the community’s long-term analytical capacities, but these capacities are crucial in any event to supporting the strategic planning that we have emphasized throughout this report.

Better analysis in non-military areas also means ensuring that open-source intelligence is

a vital part of all-source analysis. Many new challenges, but especially economic, scientific, and technological ones, call for greater attention to the wealth of openly available information. Analyses of the failure of the community to anticipate India’s nuclear tests, when clear indications were available in open-source publications, demonstrate that this capability has relevance for traditional security issues as well.

e thus urge the strengthening of HUMINT capabilities, the broadening of analytical efforts across a range of issues, and the incorporation of more open-source

information into all-source analysis. Meeting the nation’s future intelligence needs, however, will also require changes in the community’s technological capabilities.

Technological superiority has long been a hallmark of U.S. intelligence. Yet some

agencies within the National Foreign Intelligence Program spend as little as three to four percent of their budget on all aspects of research and development, and as little as one percent on advanced research and development. This reflects a decline in overall intelligence expenditures in real terms, while salaries and benefits for intelligence personnel have been on the rise. Concerted effort is needed to ensure that research and development receive greater funding.

At the same time, the intelligence community must think about its technological

capabilities in new ways. During the Cold War, the National Security Agency (NSA) and other agencies derived a great wealth of information through signals and communications intelligence. In today’s Internet age, global networks, cable, and wireless communications are increasingly ubiquitous, with attendant improvements in encryption technologies. Together these trends make signal intelligence collection increasingly difficult. The United States must possess the best platforms and capabilities to ensure that it can collect necessary information consistent with respecting Americans’ privacy. It must also have high-quality technical and scientific personnel

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able to respond to future challenges. To these ends, we recommend that the DCI should provide the President a strategic assessment of the effectiveness of current technical intelligence capabilities to ensure the fullest range of collection across all intelligence domains, particularly as they relate to cyberspace and new communications technologies.

Should the U.S. intelligence community lack a full-spectrum capability either in

collection or analysis, the United States would forfeit the depth of intelligence coverage it enjoyed during the Cold War. Maintaining this edge will require greater funding and expertise in the information and communication sciences. We must also pursue innovative approaches with the private sector to establish access to new technologies as they become available.

his Commission, in sum, urges an overall increase in the NFIP budget to accommodate greater priority placed on non-military intelligence challenges. Military

intelligence needs also remain critical, however, so a simple reallocation of existing resources will not suffice. To ensure the continuing technological strength of the community, and to build cutting-edge intelligence platforms, there is no escaping the need for an increase in overall resources for the intelligence community.

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IV. The Human Requirements for National Security

s it enters the 21st century, the United States finds itself on the brink of an unprecedented crisis of competence in government. The maintenance of American

power in the world depends on the quality of U.S. government personnel, civil and military, at all levels. We must take immediate action in the personnel area to ensure that the United States can meet future challenges.

In its Phase I report, this Commission asserted that “the ability to carry out effective

foreign and military policies requires not only a skilled military, but talented professionals in all forms of public service as well.”80 We reaffirm here our conviction that the quality of personnel serving in government is critically important to U.S. national security in the 21st century. The excellence of American public servants is the foundation upon which an effective national security strategy must rest—in large part because future success will require the mastery of advanced technology, from the economy to combat, as well as leading-edge concepts of governance. We therefore repeat our conclusion from the Phase II report, that the United States “must strengthen government (civil and military) personnel systems in order to improve recruitment, retention, and effectiveness at all levels.”81

In this light, the declining orientation toward government service as a prestigious career

is deeply troubling. The problem manifests itself in different ways throughout various departments, agencies, and the military services, yet all face growing difficulties in recruiting and retaining America’s most promising talent. These deficits are traceable to several sources, one of which is that the sustained growth of the U.S. economy has created private sector opportunities with salaries and advancement potential well beyond those provided by the government. This has a particular impact in shaping career decisions in an era of rising student debt loads. The contrast with the private sector is also organizational. In government, positions of responsibility and the ability to advance are hemmed in by multiple layers, even at senior levels; in the private sector, both often come more quickly. Rigid, lengthy, and arcane government personnel procedures—including those germane to application, compensation, promotion, retirement, and benefits systems—also discourage some otherwise interested applicants.

Another source of the problem is that there is no single overarching motivation to entice

patriotic Americans into public service as there was during the Cold War. Careers in government no longer seem to hold out the prospect for highly regarded service to the nation. Meanwhile, the private and non-profit sectors are now replete with opportunities that have broad appeal to idealistic Americans who in an earlier time might have found a home within government service. Government has to compete with the private sector not only in salary and benefits, then, but often in terms of the intrinsic interest of the work and the sense of individual efficacy and fulfillment that this work bestows.

At the same time, the trust that Americans have in their government is buffeted by

worrisome cynicism. Consistent criticism of government employees and agencies by politicians and the press has magnified public dissatisfaction and lowered regard for the worthiness of

80 New World Coming, p. 130. 81 Seeking a National Strategy, p. 9.

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government service. Political candidates running “against Washington” have fueled the impression that all government is prone to management and services of a quality below that of similar organizations in the private sector. This is not the case, but virtually every Presidential candidate in the past thirty years has deployed campaign rhetoric criticizing “the bloated bureaucracy” as a means of securing “outsider” status in the campaign. Neither critics nor their audiences often differentiate between performance failures based on political maneuvering and the efforts of apolitical professional public servants striving to implement policy. The cumulative effect of this rhetoric on public attitudes toward the government is demonstrated in a 1999 study highlighting American frustration with “the poor performance of government” and “the absence of effective public leadership.”82

A final reality is that today’s technological age has created sweeping expectations of

speed, accuracy, and customization for every product and service. Government is not immune to these expectations, but its overall reputation remains that of a plodding bureaucracy. Talented people seeking careers where they can quickly make a difference see government as the antithesis to best management practices, despite many government improvements in this area. Part of the recruitment and retention problem, therefore, flows from the image of overall government management and must be addressed by making government more effective and responsive at every level.

The effect of these realities on recruiting and retention problems is manifest. The number

of applicants taking the Foreign Service entrance exam, for example, is down sharply and the State Department shows signs of a growing retention problem. The national security community also faces critical problems recruiting and retaining scientific and information technology professionals in an economy that has made them ever more valuable. The national security elements of the Civil Service face similar problems, and these problems are magnified by the fact that the Civil Service is doing little recruiting at a time when a retirement wave of baby-boomers is imminent.

For the armed services, the aforementioned trends have widened the cultural gap between

the military and the country at large that continues to be affected by the abolition of the draft in the 1970s. While Americans admire the military, they are increasingly less likely to serve in it, to relate to its real dangers and hardships, or to understand its profound commitment requirements. With a total active strength of 1.4 million, only one-half of one percent of the nation serves in the military. Military life and values are thus virtually unknown to the vast majority of Americans.

The military’s capabilities, professionalism, and unique culture are pillars of America’s

national strength and leadership in the world. Without a renewed call to military service and systemic internal personnel reform to retain quality people, the requisite leadership and professionalism necessary for an effective military will be in jeopardy. For this reason, the Commission asserted in its Phase II report that the “United States must strengthen the bonds between the American people and those of its members who serve in the armed forces.”83 We reaffirm that assertion here.

82 Panel on Civic Trust and Citizen Responsibility, A Government to Trust and Respect: Rebuilding Citizen-Government Relations for the 21st Century (Washington, DC: National Academy of Public Administration, 1999), p. iii. 83 Seeking a National Strategy, p. 9.

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A. A NATIONAL CAMPAIGN FOR SERVICE TO THE NATION

o remedy these problems, the Commission believes that a national campaign to reinvigorate and enhance the prestige of service to the nation is necessary to attract

the best Americans to military and civilian government service. The key step in such a campaign must be to revive a positive attitude toward public service. It has to be made clear from the highest levels that frustrations with particular government policies or agencies should not be conveyed through the denigration of federal employees en masse. Calls for smaller government, too, should not be read as indictments of the quality of government servants. Instead, specific issues should be addressed on the merits, while a broader campaign should be waged to stress the importance of public service in a democracy.

Implementing such a campaign requires strong and consistent Presidential commitment,

Congressional legislation, and innovative departmental actions throughout the federal government. We know this is a tall order, but we take heart in previous examples of such leadership. The clarion call of President John F. Kennedy, encompassed in but a few well-chosen remarks spread over several speeches, had enormous impact and inspired an entire generation to public service. We also remember how President Ronald Reagan reinvigorated the spirit of the U.S. military after the tragedies of the Vietnam War and subsequent periods of low funding and plummeting morale. What the President says, and how he says it, matters. Moreover, only the President can shape the Executive Branch agenda to undertake the changes needed in U.S. personnel systems.

While the President’s involvement is central, other leaders must help build a new

foundation for public service. Congress must be convinced not only to pass the legislative remedies proffered below, but also to change its own rhetoric to support national service. It must work with department heads and other affected institutions to ensure that a common message is conveyed, and that Executive departments and agencies have the flexibility they need to make real improvements.

Rhetoric alone, however, will not bring America’s best talent to public service. The

Commission believes that unless government service is made competitively rewarding to 21st century future leaders, words will surely fade to inaction. Section II of this report highlighted the urgent national need for outstanding science and technology professionals. So, too, does government need high-quality people with expertise in the social sciences, foreign languages, and humanities. The decreased funding available for these programs from universities and foundations may threaten the ability of the government to produce future leaders with the requisite knowledge—in foreign languages, economics, and history to take several examples—to meet 21st century security challenges.

Therefore this Commission proposes a complement to the National Security Science and

Technology Education Act (NSSTEA) presented in recommendation 11 of this report. As in the case of the NSSTEA, which applies to math and hard science majors, we would extend scholarship and debt relief benefits to those social science, foreign language, and humanities students who serve the nation. We therefore make the following recommendation:

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● 39: Congress should significantly expand the National Security Education Act (NSEA) to include broad support for social sciences, humanities, and foreign languages in exchange for military and civilian service to the nation.84 The current National Security Education Act (NSEA) of 1991 provides limited

undergraduate scholarships and graduate fellowships for students to study certain subjects, including foreign language and foreign area studies. The Act also allows the use of funds at institutions of higher learning to develop faculty expertise in the languages and cultures of less commonly studied countries. Recipients of these funds incur an obligation either to work for an office or agency of the federal government involved in national security affairs, or to pursue careers as educators for a period equal to the time covered by the scholarship.85

An expanded Act would increase the subjects currently designated for study, offering

one- to four-year scholarships good for study at qualified U.S. universities and colleges. Upon completion of their studies, recipients could fulfill their service in a number of ways: in the active duty U.S. military; in National Guard or Reserve units; in national security departments and agencies of the Civil Service; or in the Foreign Service. To prepare students to fulfill their service requirements, the scholarship program should include a training element. One model of this training might be a civilian equivalent of the Reserve Officers Training Corps (ROTC) or Platoon Leader Course (PLC).86

The Act should also provide for those who choose government service after completing

their education. In those cases, the Act could offer several sorts of incentives in lieu of scholarships foregone. One such incentive would be the deferral of educational loan repayment while individuals serve in government. Another would reduce school loan principal amounts by a set percentage for every year the individual stays in government service up to complete repayment.87 In such cases, the government would assume the financial obligations of the graduate, so that neither financial nor educational institutions suffer.

The Commission believes the combination of the NSSTEA for math and science, and for

other majors this significantly expanded NSEA will prepare Americans for many forms of service and more generally help recruit high-quality civil service and military personnel.

B. THE PRESIDENTIAL APPOINTMENTS PROCESS

concerted campaign to improve the attractiveness of service to the nation is the first step in ensuring that talented people continue to serve in government. However,

fundamental changes are also needed to personnel management systems throughout the national

84 Our model is the National Defense Education Act of the late 1950s and 1960s, which provided loan forgiveness incentives for those willing to serve in the military or teach in schools with disadvantaged students or in disadvantaged areas. That act provided scholarships to those studying hard sciences and mathematics, as well as those studying critical foreign languages where the country at large confronted significant deficiencies. 85 National Security Education Act 1991 (Public Law 102-183—December 4, 1991.) 86 The Marine Corps PLC scholarship program is similar to the ROTC program, but is not affiliated with a particular learning institution and is not tied to an actual cadre unit at a specific school. 87 A limited version of this loan reduction concept is currently under development in a portion of the Civil Service. See “Proposed Rules—Repayment of Student Loans,” Federal Register, June 22, 2000, pp. 38791-38794.

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security agencies of government. Not least among the institutions needing reform is the Presidential appointments system.

The problem with government personnel starts at the top. Unlike many other countries,

the United States staffs the high levels of its national government with many outside, non-career personnel. The most senior of these are Presidential appointees whose positions require Senate confirmation. While career personnel provide much-needed expertise, continuity, and professionalism, Presidential appointees are a source of many valuable qualities as well—fresh ideas, experience outside government, specialized expertise, management skills, and often an impressive personal dynamism. They also ensure political accountability in policy execution, by transmitting the President’s policies to the departments and agencies of government. Indeed, the tradition of public-spirited citizens coming in and out of government is an old and honorable one, serving the country well from the days of George Washington. This infusion of outside skills is truly indispensable today, when the private sector is the source of so much of the country’s managerial and technological innovation.

What a tragedy, then, that the system for recruiting such outside talent has broken down.

According to a recent study, “the Founders’ model of presidential service is near the breaking point” and “the presidential appointments process now verges on complete collapse.”88 The ordeal to which outside nominees are subjected is so great—above and beyond whatever financial or career sacrifice is involved—as to make it prohibitive for many individuals of talent and experience to accept public service. To take a vivid recent example: “The Clinton Administration . . . had great difficulty filling key Energy Department positions overseeing the disposal of nuclear waste because most experts in the field came directly or indirectly from the nuclear industry and were thus rejected for their perceived conflicts of interest.”89 The problem takes several forms.

First, there are extraordinary—and lengthening—delays in the vetting and confirmation

process. On average, the process for those appointees who required Senate confirmation has lengthened from about two and one-half months in the early 1960s to an extraordinary eight and one-half months in 1996—suggesting that many sub-cabinet positions in the new administration will be fortunate to be in place by the fall of 2001.90 As Norman Ornstein and Thomas Donilon point out: “The lag in getting people into office seriously impedes good governance. A new president’s first year—clearly the most important year for accomplishments and the most vulnerable to mistakes—is now routinely impaired by the lack of supporting staff. For executive agencies, leaderless periods mean decisions not taken, initiatives not launched, and accountability not upheld.”91 The result is a gross distortion of the Constitutional process; the American people exert themselves to elect a President and yet he is impeded from even beginning to carry out his mandate until one-sixth of his term has elapsed.

Second, the ethics rules—conflict of interest and financial disclosure requirements—have

proliferated beyond all proportion to the point where they are not only a source of excessive delay but a prohibitive obstacle to the recruitment of honest men and women to public service. 88 Paul C. Light and Virginia L. Thomas, The Merit and Reputation of an Administration: Presidential Appointees on the Appointments Process (Washington, DC: The Brookings Institution and The Heritage Foundation, April 28, 2000), p. 3. 89 Norman Ornstein and Thomas Donilon, "The Confirmation Clog," Foreign Affairs, November/December 2000, p. 91. 90 Defense Science Board, Final Report of the Defense Science Board Task Force on Human Resources Strategy (Washington, DC: Office of the Secretary of Defense, February 2000), p. 41. 91Ornstein and Donilon, p. 89.

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Stacks of different background forms covering much of the same information must be completed for the White House, the Senate, and the FBI (in addition to the financial disclosure forms for the Office of Government Ethics). These disclosure requirements put appointees through weeks of effort and often significant expense. The Defense Department and Senate Armed Services Committee routinely force nominees to divest completely their holdings related to the defense industry instead of exploring other options such as blind trusts, discretionary waivers, and recusals.92 This impedes recruiting high-level appointees whose knowledge of that industry should be regarded as a valuable asset to the office, not reason for disqualification.

The complexity of the ethics rules is not only a barrier and a time-consuming burden

before confirmation; it is a source of traps for unwary but honest officials after confirmation. This is despite the fact that the U.S. federal government is remarkable for the rarity of real corruption in high office compared to many other advanced societies. Yet we proliferate “scandals” because of appearances of improprieties, or inadvertent breaches of highly technical provisions. Worse, these rules are increasingly matters of criminal rather than administrative remedies. It appears to us that those who have written these conflict of interest regulations themselves have little conflict of experience in such matters.

Third, and closely related, are the post-employment restrictions that a new recruit knows

he or she must endure, particularly appointees subject to Senate confirmation. We will simply cease to attract talented outsiders who have a track record of success if the price for a few years of government service is to forsake not only income but work in the very fields in which they had demonstrated talent and found success. The recent trend has been to add to the restrictions. However, we applaud the recent revocation of Executive Order 12834 as an important step in removing some unnecessary restrictions.93

A fourth dimension of the problem is the proliferation of Presidential-appointee

positions. In the last 30 years, the number of Senate-confirmable Presidential-appointee positions throughout the federal government has quadrupled, from 196 to 786. Within the Defense Department, the figure has risen from 31 to 45 during the same period.94 The growing number of appointees contributes directly to the backlog that slows the confirmation process. It also makes public service in many of these positions less attractive; as the Defense Science Board noted in the case of the Defense Department, “an assistant secretary post may be less attractive buried several layers below the secretary than as a number two or three job.”95 Moreover, Presidential appointments can hardly serve as a transmission belt of Presidential authority if multiple layers of political appointees diffuse accountability and make departments and agencies more cumbersome and less responsive. And it runs glaringly counter to the trend in today’s private sector toward flatter and leaner management structures.

92 Defense Science Board, p. D-6. 93 The recently-rescinded Executive Order 12834, signed by President Clinton on January 20, 1993, his first day in office, extended to five years the previous one-year ban on an ex-official’s appearance before his or her former agency. This restriction was placed on the most senior presidential appointees. All former employees face certain limitations, but Senate-confirmable employees paid at the EL-V or EL-IV level (and non-career SES appointees whose salaries fall within this range) face additional regulations potentially very harmful to their post-service careers. Under Executive Order 12834, they could not lobby their former agency for five years, while other appointees are restricted only for one year. See Defense Science Board, p. D-7 and the relevant section of the U.S. Code, 18 USC §207. 94 Defense Science Board, pp. 42-43. 95 Ibid., p. 43.

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Finally, the appointments process feeds the pervasive atmosphere of distrust and cynicism about government service. The encrustation of complex rules is based on the presumption that all officials, and especially those with experience in or contact with the private sector, are criminals waiting to be unmasked. Congress and the media relish accusations or suspicions, whether substantiated or not. Yet the U.S. government will not be able to function effectively unless public service is restored to a place of honor and prestige, especially for private citizens who have achieved success in their chosen fields.

We need to rebuild the present system nearly from the ground up, and the beginning of a

new administration is the ideal time to start. Our recommendations support those made in the Defense Science Board’s Human Resource Study, in the joint survey undertaken by the Brookings Institution and the Heritage Foundation, and by Norman Ornstein and Thomas Donilon. We therefore recommend the following:

● 40: The Executive and Legislative Branches should cooperate to revise the current

Presidential appointee process by reducing the impediments that have made high-level public service undesirable to many distinguished Americans. Specifically, they should reduce the number of Senate confirmed and non-career SES positions by 25 percent; shorten the appointment process; and moderate draconian ethics regulations. Reducing non-career positions would, as the Defense Science Board has noted, “allow

more upward career mobility for Senior Executive Service employees and provide greater continuity and corporate memory in conducting the day-to-day business affairs of the Defense Department during the transition between administrations.”96 Recommendation 43 below to create a National Security Service Corps should help ensure that career employees develop the qualifications to be eligible to hold senior positions throughout the government.

The aim of reducing the number of Presidential appointees is not to weaken Presidential

political authority over the bureaucracy, but to eliminate the excessive layering that clogs the government’s functioning in addition to slowing the appointment process. That said, an exact balance between political and career appointees cannot be specified in the abstract. Both groups include skilled and talented people. But Presidents should be held to a qualitative standard—that political appointees, whether for Ambassadors or for policymaking positions in Washington, should be chosen for the real talents they will bring and not the campaign contributions they brought. [See recommendation 23]

To streamline and shorten the current appointment process, the President and leaders of

the new Congress should meet as soon as possible to agree on the following measures. ● CONFIRM THE NATIONAL SECURITY TEAM FIRST. By tradition, the Senate Foreign Relations, Armed Services, and Intelligence committees hold hearings before inauguration on the nominees for Secretaries of State and Defense and the Director of Central Intelligence, and vote on inauguration day. This practice should continue. Future Presidents should also present to the Senate no later than inauguration day his nominees for the top ten positions at State and at Defense and the top three posts at CIA. Leaders of the relevant committees should agree to move the full slate of appointments to the full

96Ibid., p. 44.

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Senate within 30 days of receiving the nomination (barring some serious legitimate concern about an individual nominee).97 ● REDUCE AND STANDARDIZE PAPERWORK REQUIREMENTS. The “Transition to Governing Project” jointly undertaken by the American Enterprise Institute and the Brookings Institution is developing software that will enable appointees to collect information once and direct it to the necessary forms. The new President should direct all relevant agencies and authorities to accept these computerized forms and to streamline the paperwork requirements for future appointees.98 ● REDUCE THE NUMBER OF NOMINEES SUBJECT TO FULL FBI BACKGROUND CHECKS. Full field investigations should be required only for national security or other sensitive top-level posts. Most other appointees need only abbreviated background checks, and part-time or lesser posts need only simple identification checks.99 The risks to the Republic of such an approach are minor and manageable, and are far outweighed by the benefit that would accrue in saved resources and expedited vetting. ● LIMIT ACCESS TO FULL FBI FILES. Distribution of raw FBI files should be severely restricted to the chairman and ranking minority member of the confirming Senate committee.100 Nothing deters the recruitment of senior people more than the fear that their private lives will be shredded by the leakage of such material to the national media. To significantly revise current conflict-of-interest and ethics regulations, the President and Congressional leaders should meet quickly and instruct their top aides to make recommendations within 90 days of January 20, 2001. This Commission endorses retention of basic laws and regulations that prevent bribery and corrupt practices as well as the restrictions in the U.S. Code that ban former officials from lobbying their former agencies for one year. We also endorse lifetime prohibitions against acting as a representative of a foreign government and against making a formal appearance in reference to a “particular matter” in which he or she participated personally and substantially, or a matter under his or her official responsibilities. However, the Commission recommends two important actions: ● Conduct a comprehensive review of the regulations and statutory framework covering Presidential appointments to ensure that regulations do not exceed statutory requirements. ● Make blind trusts, discretionary waivers, and recusals more easily available as alternatives to complete divestiture of financial and business holdings of concern. The conflict of interest regime should also be decriminalized. Technical or inadvertent

misstatements on complex disclosure forms, or innocent contacts with the private sector, should not be presumptively criminal. The Office of Government Ethics should be enabled and 97 Ornstein and Donilon, p. 97. We also advocate accelerating the appointment process for the 80 key science and technology personnel in government. See Section II above, and Science and Technology in the National Interest: The Presidential Appointments Process (Washington, DC: National Academies of Science, June 30, 2000). The 80 positions of which we speak are listed on p. 8. 98Ornstein and Donilon, p. 94. 99 Ibid., p. 95. 100 Former FBI (and CIA) Director William Webster has noted that these files are “often freighted with hearsay, rumor, innuendo, and unsubstantial allegations.” Quoted in ibid., p. 95.

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encouraged to enforce the disclosure and post-employment statutes as civil or administrative matters; to decide questions expeditiously; and to see its job as clearing the innocent, as well as pursuing wrongdoers.

These recommendations can be accomplished through Executive Branch action, such as

that which rescinded Executive Order 12834. Other recommendations, however, will require Congressional concurrence and action. We therefore urge the new President to take the initiative immediately with Congress to agree on future statutory reforms.

C. THE FOREIGN SERVICE

n effective and motivated Foreign Service is critical to the success of the Commission’s restructuring proposal for the State Department [see Section III

above].Yet among career government systems, the Foreign Service, which is set apart from other civilian personnel systems by its specialized entrance procedures and up-or-out approach to promotion, is most in need of repair.

While some believe the Foreign Service has retained much of its historical allure and

cachet, many close observers contend that the Foreign Service no longer attracts or retains the quality of people needed to meet the diplomatic challenges of the 21st century. Overall educational competence in areas crucial to a quality Foreign Service—including history, geography, economics, humanities, and foreign languages—is declining, resulting in a shrinking pool of those with the requisite knowledge and skills for this service.101 The proposed revision to the National Security Education Act [recommendation 39 above] is one response to this deficit.

Data indicate that recruitment is currently the Foreign Service’s major concern.102 There

are now 25 percent fewer people taking the entrance exam as there were in the mid-1980s. Other careers, in corporations and non-governmental organizations, now offer many of the same opportunities on which the Foreign Service used to hold the monopoly: living overseas, learning foreign languages, and developing negotiating experience. These other opportunities generally pay better, do not entail the same level of austerity and danger often faced by Foreign Service officers posted abroad, and do not impose the same constraints on two-career families.

Beyond this lack of flexibility, many of the State Department’s own policies are

detrimental to attracting and keeping the highest quality people. The recruiting process is exceedingly slow, often taking two years from written exam to the first day of work. At a time when potential officers have many other career choices they may elect, this is a fatal weakness. 101 According to the National Center for Education Statistics, 30 to 35 percent of students at three different grade levels performed below the “basic” level of civics knowledge. 38 percent at the 4th grade level, 41 percent at the 8th grade level, and 59 percent at the 12th grade level performed below the “basic” level of U.S. history knowledge. Roughly 30 percent of students at all grade levels performed below the “basic” level in geography. 102 There are indications that retention may be a looming concern as well. According to data provided by the State Department, while most Foreign Service entering classes have shown attrition rates between 12 and 17 percent by the eighth year of service, two recent classes show figures at 23 and 32 percent. These indications are not conclusive but they are supported by two major studies on departmental talent management, one completed by McKinsey & Company for the department and the other by the Overseas Presence Advisory Panel. Both found that while qualified applicants valued faster advancement and greater autonomy, it is precisely those things, along with quality management and respect for their family situations, they found lacking once in the Foreign Service.

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The oral exam also works at odds with the goal of attracting those with the range of

knowledge (foreign policy, economics, cultural studies) and skills (languages, leadership, technology) necessary to an effective Foreign Service. The exam’s “blindfolding” policy, whereby the examiners who decide who enters the Service know nothing about an applicant’s background, has the admirable goal of ensuring a level playing field. But it runs completely counter to common sense in selecting the most qualified applicants.

The lack of professional educational opportunities currently afforded Foreign Service

officers is also a problem both for the quality of those who stay and as a reason for those who leave. While the Foreign Service certainly needs more training in languages and emerging global issues, recent studies find an additional problem involving the lack of effective management and leadership throughout the State Department.103 We therefore recommend the following:

● 41: The President should order the overhauling of the Foreign Service system by

revamping the examination process, dramatically improving the level of on-going professional education, and making leadership a core value of the State Department. In order to revamp the exam process, changes must be made to shorten the hiring

process dramatically without compromising the competitiveness of the system. The Commission is encouraged by the use of the shorter Alternative Examination Program (AEP) which allows applicants (now limited to current government employees) to advance to the oral examination on the basis of their professional experience. Contingent upon evaluation of its success, this program should be broadened and other innovative approaches encouraged. If the written exam is retained, it might be administered by computer, allowing applicants to sit for the test at different times throughout the year.

In addition, the oral exam’s blindfolding policy should end. While we sympathize with

the aim of fair consideration for all, and with the State Department’s eagerness to avoid legal harassment, this approach seriously damages the effectiveness of the examination process. It omits consideration of the professional and other experiences candidates may bring to the Foreign Service. It also makes it impossible for examiners to counsel applicants on the appropriateness of their backgrounds to particular cones (political, economic, consular, public diplomacy, or administrative). There is no legal requirement for this practice.

A successful Foreign Service also requires officers who are consistently building new

knowledge and skills. As we recommend below for the Civil Service, the Commission endorses a 10-15 percent increase in personnel to allow for that proportion of the overall service to be in training at any given point.104 Current State Department professional development, focused mostly on languages, must be greatly expanded to ensure a diplomatic corps on the cutting edge of 21st century policy and management skills. We agree with the recommendations of McKinsey 103 The State-commissioned report by McKinsey & Company, The War for Talent: Maintaining a Strong Talent Pool, emphasized that for the State Department to sustain its talent base, it must improve talent management. The final report of the Overseas Presence Advisory Panel built on McKinsey’s finding and highlighted that “private sector managers were almost twice as likely as public-sector managers to give high performers the best development opportunities and fast-track growth. More than 70 percent of the private-sector managers viewed motivating and attending to people as a prime priority, while less than 30 percent of State Department managers interviewed considered it a top priority.” [Overseas Presence Advisory Panel, p. 52.] 104 Ibid., p. 55.

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and the Overseas Presence Advisory Panel that call for a full range of mandatory educational courses in functional topics, languages, leadership, and management. Training milestones should be met in advance of promotions or advancements to supervisory positions.

Beyond problems with the exam process and the lack of professional development

programs, all levels of the State Department suffer from a lack of focus on leadership and management. Improvements will require a cultural shift that must flow from the top. We urge future Presidents and Secretaries of State in selecting senior State Department officials to consider management strengths and departmental leadership abilities in addition to substantive expertise. Our proposal for restructuring the State Department [recommendation 19] is also aimed at fostering better management skills.

At lower levels, too, the State Department must develop sound talent management

practices. We endorse many of the McKinsey report’s findings: allow leaders more discretion in making key talent decisions; reduce time-in-grade requirements to allow the best performers to advance more quickly; and improve feedback to allow managers to gain from insights provided both from above and below.

Most of these problems can be handled effectively by the State Department without

additional legislative mandate; yet some of these changes, particularly promoting professional education, require Congress to appropriate additional funds. The Department of State estimates that it would cost $200 million annually to create a 10-15 percent training float. The Commission endorses such an investment.

Additionally, the Commission believes we must restore the external reputation of those

who serve our nation through diplomatic careers. As a means of achieving this, we recommend changing the Foreign Service’s name to the U.S. Diplomatic Service. This rhetorical change will serve as a needed reminder that this group of people does not serve the interest of foreign states, but is a pillar of U.S. national security.

D. THE CIVIL SERVICE105

hile there is disagreement as to the extent of the crisis in Civil Service quality, there are clearly specific problems requiring substantial and immediate attention.106

These include: the aging of the federal workforce; the institutional challenges of bringing new workers into government service; and critical gaps in recruiting and retaining information technology professionals and those with less-common language skills. Most striking is how many of these problems are self-inflicted to the extent that departmental authority already provides some remedy if only the institutional will and budgetary resources were also available. Fixing these problems will make a major contribution to improving recruitment and retention.

105 The Commission considers personnel from the Departments of State (excluding the Foreign Service), Defense, Commerce, Justice, and Treasury and members of the Intelligence Community to constitute the core national security members of the Civil Service. Members of the Intelligence Community are governed by separate personnel regulations and authorities. 106 On the general question, compare the pessimistic study led by Paul Volcker [The National Commission on the Public Service, Leadership for America: Rebuilding the Public Service (Washington, DC: The National Commission on the Public Service, 1989)] with the more optimistic assessment of Joel D. Aberbach and Bert A. Rockman [In the Web of Politics: Three Decades of the U.S. Federal Executive (Washington, DC: Brookings Institution Press, 2000).]

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A prominent problem confronting all of the Civil Service is its aging workforce. The post-World War II baby-boomer generation heeded President Kennedy’s call to government service in unprecedented numbers, but the first of this age cohort will turn 55 in 2001. A retirement wave that will continue for the next eighteen years will reach crisis proportions in many departments. Nearly 60 percent of the entire civilian workforce is eligible for early or regular retirement today.107 Within that overall figure, 27 percent of the career Senior Executive Service (SES) is eligible for regular retirement now; 70 percent will be eligible within five years.108 This growing retirement wave is exacerbated by the small numbers of employees in their twenties and thirties in most agencies. When agencies such as the Department of Defense and those within the Intelligence Community chose to downsize through hiring freezes, they contributed to this trend.

While some have argued that the “Generation X” cohort is less inclined toward

government employment, our analysis suggests that this cohort does see government as one of several desirable career tracks. If recruiting were resumed, many within this age group would seek federal jobs. This is suggested by the fact that the one current mechanism for bringing graduate students into government—the Presidential Management Internship program—has remained highly competitive.109

Yet there are still two major problems in converting interest in government positions to

actual service. First, many young adults have completed or are enrolled in graduate school, and thus carry a much heavier student loan burden than their predecessors. Our recommendations for expanding student loan forgiveness programs [recommendations 11 and 39] should help mitigate this problem.

Second, the length and complexity of most application and security clearance processes is

devastating in an economy where private sector firms can make on-the-spot offers. In a survey of employees from the Departments of Commerce and the Treasury, fully 54 percent of Treasury respondents and 73 percent of Commerce respondents reported that it took at least four months to receive an offer from the time they submitted an application.110 Departments must shorten the appointment and security clearance process.

Yet a third major problem for the civil service is the difficulty of attracting and retaining

information technology (IT) professionals who are in great demand throughout the economy. To meet expected demand, the nation will need an additional 130,000 new IT workers each year through at least 2006. The federal government will also need more IT capability, requiring constant hiring to keep up with requirements. The strong demand for IT professionals in the private sector will insure a continuing pay gap between public and private opportunities, making 107 U.S. Office of Personnel Management, The Fact Book: Federal Civilian Workforce Statistics (Washington, DC: Office of Personnel Management, September 1999). 108 U.S. Office of Personnel Management and Senior Executives Association, Survey of Senior Executive Service (Washington, DC: Office of Personnel Management, 1999); United States General Accounting Office, Senior Executive Service: Retirement Trends Underscore the Importance of Succession Planning (Washington, DC: General Accounting Office, May 2000), p. 2. This latter document offers startling figures for individual departments: 77 percent of those at the Department of Commerce, 74 percent of those at the Department of Defense, and 71 percent of those at the Department of the Treasury will be eligible for regular retirement by 2005 (p. 46). 109 The Office of the Secretary of Defense has received between 100 and 140 applications each year since 1997 for six to eight open PMI positions. Data provided by the OSD, July 7, 2000. 110 Booz-Allen & Hamilton, Inc., Employee Recruitment and Retention Survey Results, August 30, 2000, pp. 33.

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it even more difficult for the government to attract needed talent. This is compounded by a growing “speed-to-seat metric”—a measure of the time taken to recruit, hire, and place an employee. It means that some government IT projects with compressed life-cycles, including some too sensitive to contract out, may expire before a new hire can even start the project.111

Beyond recruiting difficulties, the federal government faces significant IT retention

challenges. Deficiencies in governmental occupational structures and position descriptions contribute to the loss of IT personnel to the private sector. Corporations can alter the role of IT personnel rapidly as technology advances, while government position structures are comparatively sluggish. As a result, IT position descriptions in the government often do not match those in the private sector.112

These trends pose particular problems for the national security community. IT

professionals are needed not only for crucial support functions but also to help run sophisticated intelligence platforms. Lengthy security clearance processes and less competitive compensation packages make recruiting high-quality IT personnel for these purposes very difficult. There are also retention problems as younger IT civil servants are lured away by the private sector. The National Security Agency (NSA) reports growing attrition rates particularly among young professionals, the group most skilled in new technologies and most in demand.113

There is a corresponding problem, though of lesser magnitude, for less common (“low

density”) languages. The United States faces a broader range of national security challenges in the post-Cold War world, requiring policy analysts and intelligence personnel with expertise in more countries, regions, and issues. The people most likely to bring these skills are native speakers of other languages with direct cultural experiences; yet members of this group often face the greatest difficulties in getting a security clearance. We therefore recommend the following:

● 42: The President should order the elimination of recruitment hurdles for the Civil

Service, ensure a faster and easier hiring process, and see to it that strengthened professional education and retention programs are worthy of full funding by Congress. The federal government must significantly increase recruiting programs through

programs like the National Security Education Act [recommendation 39], which will link educational benefits to a service requirement. To anticipate the coming bow wave of retirements, the government needs to adopt a range of policies that make hiring and promotion practices more flexible.

Some progress has been made, particularly in the IT field, in shortening the length of the

hiring process. This is crucial to improving government competitiveness. Organizations like the Central Intelligence Agency (for its non-clandestine employees) have authorized recruiters to negotiate on-the-spot offers—including compensation packages—contingent upon successful completion of background investigation and polygraph requirements. These programs should be generalized throughout the national security community, not least for critical science and technology personnel.

111 CIO Council, Meeting the Federal IT Workforce Challenge (Washington, DC: CIO Council, June 1999), p. 15. 112 Ibid., p. 11. 113 Evidence provided by the National Security Agency.

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The security clearance process itself must be revamped to provide for more efficient and timely processing of applications. There are several ways to go about this. One is to re-code intelligence community positions to allow some employees to start work before receiving the most sensitive security clearances. A bipartisan Executive-Legislative commission could be helpful in examining other methods of streamlining the security clearance process, while maintaining the rigor required for national security positions.

The U.S. Office of Personnel Management (OPM) and individual agency personnel

offices have designed many incentive programs to recruit and retain quality employees.114 But many departments and agencies have not used these programs for lack of funds. Because all incentive programs are drawn from the same pool of money as that for salaries, administrators must trade off incentives for some employees against the ability to hire additional personnel. Additional funds must be provided to maximize agencies’ options in recruiting and retaining high-quality personnel.

Similarly, existing authorities provide funds for professional education. Such

opportunities are crucial in maintaining a knowledgeable cadre of national security professionals. Supporting employees’ desire for professional development is also a means of ensuring retention. Yet the degree of downsizing in national security agencies has yielded a system whereby the workload of an employee on training must be split among others in the office, creating a powerful disincentive for managers to allow their best employees to pursue these opportunities. As a complement to proposals made for the Foreign Service, the Commission would apply the recommendation of the U.S. Overseas Presence Panel to all national security departments and agencies: that “the workforce structure and resources available for staff should take into account the 10-15 percent of employees who will be in training. . .at any given time.”115 Thus “full staffing” of a department or agency should be defined as a number ten to fifteen percent greater than the number of available positions.

e also need to give special priority to measures to secure and retain information technology (IT) talent in the most mission-critical areas while finding ways to

outsource support functions. For the mission-critical areas, this means using existing and seeking additional

authorities to allow direct-hiring and to provide for more market-based compensation. While the government cannot completely close the pay gap with the private sector, higher salaries, signing bonuses, and performance rewards can narrow it. Some agencies have begun this effort by paying senior IT professionals market-based salaries.116

Further, the Commission endorses the recommendation of the CIO Council, a group of

departmental and agency Chief Information Officers, to use and expand existing OPM authorities 114 Examples include recruitment and retention bonuses, the use of special pay scales for specific types of professionals, and pay banding whereby agencies would have greater flexibility in allocating personnel funds among employees of different quality and skills. New regulations currently under review at OPM would allow departments to repay federally funded student loans by $6,000 a year up to a maximum of $40,000. See “Proposed Rules—Repayment of Student Loans.” 115 Overseas Presence Advisory Panel, p. 55. 116 The Director of Central Intelligence (DCI) currently has the authority and funding to conduct a five-year pilot program through which he can hire up to 39 technical specialists in critical functions and pay them on the basis of market standards rather than on the federal pay scale. The Federal Bureau of Investigation has a similar program.

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to lift pay cap restrictions on former Civil Service and military employees.117 For entry-level talent, we recommend expanding the newly authorized Cyber Corps, akin to the Reserve Officer Training Corps (ROTC) program, whereby the government would pay for two years of a student’s schooling in exchange for two years of governmental IT service.

Efforts to retain young IT professionals should recognize that their career plans will

likely not include a 30-year or even a ten-year stint in government service. OPM developed departmental flexibility for Y2K programs, including temporary appointments (one to four years) within the competitive service.118 We believe such authorities should be instituted and expanded for IT professionals. In its own interest, the government needs to maximize the ease with which transitions can be made between government service and the private sector. Young employees’ interest in staying may be prolonged through performance-based retention bonuses and through the establishment of a unique and adaptive career path for IT professionals that includes rotational assignments and better opportunities for education and responsibility. Such an effort might also permit the government to move IT capabilities more fluidly across departments and agencies.

Where appropriate, outsourcing IT support functions is still needed. NSA has already

turned development and management of non-classified technology over to a private-sector contractor, allowing NSA to focus its in-house IT talent on developing and overseeing core intelligence technologies. More programs like this can be used to supplement the other steps outlined here.

The implementation of these proposals for the civil service will require a multifaceted

approach. We believe the endorsement of these recommendations by the President would set a proper tone of importance and urgency. Because many recommendations will affect many departments, an interagency coordinating group should be convened to help OPM develop new provisions. From there, heads of departments and agencies can take steps to implement them. We know that some recommendations, such as improving the recruitment and retention of IT professionals, cannot be fully implemented in the near term. In such cases, we urge departments to set timelines for reaching goals and, for those issues that cross agency lines such as IT needs, departments and agencies should work collaboratively.

These recommendations also presuppose greater Congressional appropriations devoted to

making these changes possible. The preceding analysis demonstrates that, in order to allow for critical professional education, agency end-strengths must be increased by 10-15 percent, requiring a significant increase in personnel funding.

Beyond training, an aggressive recruitment campaign will require additional funds as

well. In proposing the information technology “cyber corps” program, the Clinton Administration requested $25 million annually to pay for two years of college for 300 students. IT positions that pay close to market rates will have considerably higher salaries than is currently the case; however, this group would be relatively small. Finally, IT outsourcing proposals are likely to save the government money on a net basis since the cost of contracted labor is less than that of paying civil servant salaries, benefits, and retirement contributions.119

117 CIO Council, p. 13. On the CIO Council, see note 14 in Section I. 118 Ibid., p. 15. 119 Recent NSA outsourcing is estimated to save the government $1 billion over the ten-year life of the contract.

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he national security component of the Civil Service is faced with an additional problem: the need to develop professionals with breadth of experience in the

interagency process, and with depth of knowledge about substantive policy issues. Both elements are crucial to ensuring the highest quality policy formulation and analysis for the United States across a range of issues. They are also key to maintaining a robust national security workforce as professionals seek a diversity of experiences along their career paths.

The Commission’s Phase II report argued that “traditional national security agencies

(State, Defense, CIA, NSC staff) will need to work together in new ways, and economic agencies (Treasury, Commerce, U.S. Trade Representative) will need to work closely with the national security community.”120 Better integration of these agencies in policy development and execution requires a human resource strategy that achieves the following objectives: expanded opportunities to gain expertise and to experience the culture of more than one department or agency; an assignment and promotion system that rewards those who seek broad-based, integrative approaches to problem solving instead of those focused on departmental turf protection; and the erasure of artificial barriers among departments.

The current Civil Service personnel system does not achieve these objectives because

career civilians in the national security field rarely serve outside their parent department.121 We therefore recommend the following:

● 43: The Executive Branch should establish a National Security Service Corps (NSSC) to

enhance civilian career paths, and to provide a corps of policy experts with broad-based experience throughout the Executive Branch.

Such a National Security Service Corps would broaden the experience base of senior departmental managers and develop leaders skilled at producing integrative solutions to U.S. national security policy problems.

Participating departments would include Defense, State, Treasury, Commerce, Justice,

Energy, and the new National Homeland Security Agency—the departments essential to interagency policymaking on key national security issues. Members of the NSSC would not hold every position within these departments. Rather, each department would designate Corps positions. Members of the participating departments could choose to stay in positions outside the NSSC without career penalty. They would continue to be governed by the current Civil Service system.

In order to preserve the firewall that exists between intelligence support to policy and

policymaking, intelligence community personnel would not be part of the NSSC. A limited number of rotational spots, however, should be held in selected interagency intelligence community centers (such as the Non-Proliferation Center and the Counter-Terrorism Center) to allow members of the Corps to understand better intelligence processes and products.

While the Foreign Service will remain separate from the NSSC, an organic relationship

between the Foreign Service and the NSSC needs to exist. Members of the Corps would be 120 Seeking A National Strategy, p. 14. 121 For example, a recent OPM survey of SES personnel indicates that only nine percent of those surveyed have changed jobs to work in another agency since becoming an SES member, despite the fact that 45 percent said that mobility would improve job performance. See U.S. Office of Personnel Management and Senior Executives Association, pp. 27-8.

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eligible to compete for all policy positions at the Department of State’s headquarters while Foreign Service officers would be able to compete for NSSC positions in all the participating departments. In addition, NSSC personnel could fill select positions in some overseas embassies and at military unified commands. Over time, the difference between the Foreign Service and the NSSC could blur.

A rotational system and robust professional education programs would characterize the

NSSC. In designating positions for Corps members, departments will need to identify basic requirements in education and experience. Rotations to other departments and interagency professional education would be required in order to hold certain positions or to be promoted to certain levels.122 Of course, a limited number of waivers could be granted to allow departments to fill particular gaps as necessary.

While the participating departments would still retain control over their personnel and

would continue to make promotion decisions, an interagency advisory group will be key to the NSSC’s success. This group would ensure that promotion rates for those within the NSSC were at least comparable to those elsewhere in the Civil Service. They would help establish the guidelines for rotational assignments needed for a Corps member to hold a given position and for the means of meeting the members’ educational requirements. Such guidance and oversight will help ensure that there are compelling incentives for professionals to join the NSSC. For this type of interagency program to be successful, employees must see it as being in their own best interest to meet these new requirements.

The Commission believes such a Corps can be established largely through existing

departmental authorities and through new regulations from OPM. Specific legislative authority is not necessary.

E. MILITARY PERSONNEL

oday the military is having even greater difficulty recruiting quality people than the civilian sector of the government. Despite significant post-Cold War force reductions

in recruiting goals, the Services have missed their quotas in some recent years.123 Moreover, recruiting costs have risen by nearly one-third over the last four years, while DoD quality indicators of those enlisting have declined by 40 percent.124 Some Services, struggling to fill ROTC programs with officer candidates, will continue to fall short for the next three years despite a much larger college population and reduced quotas for officer accessions.125

122 For example, departments might designate that personnel must hold one assignment outside his or her parent department in order to become a member of the SES and another such assignment to be promoted to SES-4. [SES pay scales are numbered one through six. An additional rotation is suggested for promotion to SES-4 because this is the pay grade at which many SES members serve during their final tours, when they generally have the highest level of responsibility for interagency activities.] 123 Data provided by the Office of the Secretary of Defense, showing both active and reserve recruiting results, July 2000. See also William S. Cohen, Annual Report to the President and the Congress (Washington DC: Department of Defense, 2000), chapter 4. 124 Statement of the Honorable Rudy De Leon, Under Secretary of Defense (Personnel and Readiness) before the Military Personnel Subcommittee of the Armed Service Committee, “Sustaining the All-Volunteer Force: Military Recruiting and Retention,” March 8, 2000. 125 Department of Defense, Quarterly Readiness Report to Congress, January-March 2000.

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Even more ominous are the problems in retaining quality personnel. Increased operational commitments are being carried out by a smaller number of military forces, which—along with aging equipment, stringent budgets, depleted family benefits, healthcare deficiencies, and spousal dissatisfaction—has engendered an atmosphere of widespread frustration throughout military ranks.126 Job satisfaction has declined significantly, and increasing numbers of quality people are leaving military service well in advance of retirement, or, in other cases, are retiring as soon as they are eligible.127 Moreover, data indicate that it is not just the junior officers who are leaving; retention of senior non-commissioned officers (NCOs) has declined as well.128

The Commission believes retention in the Services is a growing problem in part because

the triple systems of “up-or-out” promotion, retirement, and compensation do not fit contemporary realities. The Defense Officer Personnel Management Act (DOPMA) of 1980129 mandates retirement at a specific time in an officer’s career depending on rank,130 or, in many cases, separation before retirement in cases of non-promotion up until the grade of O-4. This system itself stems, in part, from a 1947 assumption of a virtually unlimited pool of manpower geared for total war mobilization. The current environment, however, is very different. The supply of incoming personnel is limited and the skills required more specialized. Moreover, older people are not “unfit” for many of today’s critical military tasks, and the country cannot afford to squander the investment in training and experience that military professionals possess. The military services do not need to retain everyone, but they do need most of all to retain superior talent for longer periods.

Without decentralizing the career management systems, introducing new compensation

incentives, and providing an array of institutional rewards for military service, the Commission

126 Some numbers illustrate the problem. The Navy is nine hundred pilots short of necessary levels, while the Air Force reported the largest peacetime pilot shortage in its history (1,200 pilots short of operational requirements). The Air Force pilot loss rate is projected to double by 2002 [William Taylor, S. Craig Moore, and C. Robert Roll, Jr., The Air Force Pilot Shortage: A Crisis for Operational Units? (Washington, DC: RAND, 2000, pp. iii and 1]. Over the past ten years, the Army has experienced a 58 percent increase in the percentage of Captains voluntarily leaving the military before promotion to Major [Information Paper TAPC-ARI-PS, October 22, 1999]. High-quality junior officers are also leaving military service earlier. In 1987, 38 percent of the Army’s West Point graduates left military service before ten years of active duty—the best retention rate among all Army commissioning sources. In 1999, 68 percent of West Point graduates left before the ten-year point, the lowest retention rate among all Army commissioning sources. [DMDC West DoD Officer Retention Data, July 2000, verified by Army Personnel Branch, July 2000]. High-quality Lieutenant Colonels/Colonels and their Navy equivalents (O-5s and O-6s who have had Department/Battalion/Squadron/Ship-level commands in their careers) are leaving early, as well. The Navy reports that both post-department officers and post-squadron Commanders are separating at a rate three times higher than a decade ago. 127 See “Spring 1999 Sample Survey of Military Personnel: Career Intent,” U.S. Army Research Institute for the Behavioral and Social Sciences Survey Report, October 1999. 128 Garnered from ten-year point junior officer retention data provided by Defense Manpower Data Center to USCNS/21, July 2000. 129 DOPMA Public Law 96-513. 130 Those Majors/Lieutenant Commanders not selected for promotion must normally retire at twenty years; Lieutenant Colonels and Navy Commanders must retire at 28 years if not selected for promotion to Colonel/Captain; Colonels, and Navy Captains have until the 30-years point to make promotion to flag officer rank before mandatory retirement; and most flag officers that remain in grade have a 35-year limit of commissioned service. It should be noted that most Colonels/Navy Captains know by the time of their promotion to O-6 whether they have a chance at further promotion. Most do not, and the incentives currently in place encourage those officers to retire at the earliest possible time. The result is a significant talent drain of officers who, under the current system, could have served at least five or six additional years.

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believes that the United States will be unable to recruit and retain the technical and educated professionals it needs to meet 21st century military challenges.

hese problems call for four sets of changes. First, the enhancement of the professional military must proceed hand in hand with the reinvigorization of the

citizen soldier. Indeed, confronting many threats to our national security, including those to the American homeland, will necessarily rely heavily on reserve military components, as we have specified above in Section I, recommendation 6 in particular.

Second, we must change the ways we recruit military personnel. This means putting

greater effort into seeking out youth on college campuses and providing grants and scholarships for promising candidates. The military must also innovate in such areas as rapid promotion, atypical career paths and patterns, and flexible compensation to attract and retain talented candidates. The Services must also offer a greater variety of enlistment options, including short enlistments designed to appeal to college youth, and far more attractive educational inducements.131 This may include scholarships, college debt deferral and relief, and significantly enhanced GI Bill rewards in exchange for military service.

Third, we must change the promotion system. Promotion has been, and remains, a

primary way to reward performance. But the rigidity of the promotion system often has the effect of either taking those with technical specialties away from the job for which they are most valuable, or failing to provide timely and sufficient incentives for quality personnel to stay in military service. In the Commission’s view, the promotion system needs to be more flexible. Current law states that promotion rates must comply with Congressionally-mandated grade tables, which specify the number of personnel permitted in each grade by Service.132 This denies needed flexibility. Moreover, promotion should be only one of many rewards for military service. The Services need the flexibility, beyond new forms of fair and competitive compensation, to provide institutional benefits, including more flexible assignments, incentive retirement options, advanced education, alternative career paths, negotiable leaves of absence, and rewards for career-broadening experiences.

The fourth set of changes must address the military retirement system, which is centered

on a twenty-year career path. If one serves fewer than twenty years or fails promotion to minimum grades, no retirement benefits are forthcoming either for officers or those in the enlisted ranks.133 In this “all-or-nothing” system, junior personnel have to commit themselves to a long-duration career. For those who make a twenty-year career choice, the system induces them to

131 Charles Moskos, Military Recruitment Survey, Northwestern University Students,” report prepared for the Commission, March 2000. 132 See DOPMA Public Law 96-513 §3202, 8202, 5444, 5442. 133 Military Retirement Act of 1986 (Public Law 99-348). This authorizes military benefits for personnel after twenty years of service at 40 percent of their five years’ highest basic pay. Effective October 1, 1999, the Military Retirement Act of 1986 (REDUX), U.S. Code, Title 10, §1409(b), was repealed by the National Defense Authorization Act 1999 (Public Law 106-65; U.S. Code, Title 10, §1409 (b) which restored to the military service members who entered military service after July 31, 1986, 50 percent of the highest three years average basic pay for twenty years of active duty service, rather than 40 percent under REDUX. Also, it provided for full cost of living adjustments (COLAs) rather than the Consumer Price Index (CPI) minus one percentage point under REDUX.

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leave the military in their early forties.134 In other words, the current system either requires separation at mandatory points for each grade, or actively entices all personnel who do make it to twenty years of service to leave at or just beyond that point.135

Talented people in uniform, generally in their early forties, thus confront a choice

between working essentially at “half pay,” or beginning a second career at a time when they are generally most marketable.136 To those with particularly marketable skills (e.g., pilots, information technology professionals, and medical personnel), the inducements to leave often prove irresistible. But such cases are only the most visible portion of a widespread problem that induces high performers of every description to abandon the military profession. Thus the armed services lose enormous investments in training, education, and experience at the very moment that many mid-grade officers and mid-grade and senior NCOs are poised to make their most valuable contributions.

We urge the President and the Congress to give the Services the flexibility to adapt and

dramatically reshape their personnel systems to meet 21st century mission needs. The 1947/1954/1980 legislation137 that defines military career management, coupled with legislation that governs military retirement and compensation, gives the Services too little authority to modernize and adapt their personnel systems at a time of accelerating change.138 Mandatory promotion rates, officer grade limitations for each Service, required separation points under “up-or-out,” rigid compensation levels, special pay restrictions and retirement limits, collectively bind the Services to the point of immobility. Similar restrictions and disincentives apply to enlisted careers and particularly affect senior NCOs and technical specialists.

Earlier in this section we strongly recommended a major expansion of the National

Security Education Act (NSEA), as well as the creation of the National Security Science and Technology Education Act (NSSTEA), to provide significantly better incentives for quality personnel to serve in government—civil and military. The Commission believes that these Acts are especially relevant to the recruitment of high-caliber military personnel. In particular, programs offering either college scholarships or college loan repayments in exchange for service after graduation will make uniformed service more attractive to all segments of the population.

In addition to the enactment of an expanded NSEA and the creation of a NSSTEA, we propose the following complement:

● 44: Congress should significantly enhance the Montgomery GI Bill, as well as strengthen

recently passed and pending legislation supporting benefits—including transition, medical, and homeownership—for qualified veterans.

134 There is 2.5 percent increase in the retirement percentage of base pay for each year of service past twenty years, which stops at 30 years. In addition, 26 years of service is where the last bi-yearly longevity salary increase occurs. 135 DOPMA Public Law 96-513, §633 requires that Lt. Colonels and Navy Commanders who are not listed for promotion to the next higher grade be retired upon completion of 28 years of active commissioned service. 136 Half-pay is a term of art referring to the fact that after twenty years’ service, a soldier is entitled to 50 percent of pay upon retirement. Since a soldier would get half pay even if he were not still in service, staying in service can be characterized as working for the other 50 percent—hence the phrase “working for half pay.” 137 See Bernard Rostker, Harry Thie, James L. Lacy, Jennifer H. Kawata, and S.W. Purnell, The Defense Officer Personnel Management Act of 1980: A Retrospective (Santa Monica, CA: RAND, 1993). 138 Defense Science Board, p. 79

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The current version of the Montgomery GI Bill (hereafter GI Bill) is an educational

program in which individuals first perform military service and then are eligible for educational benefits. While in military service, participants must authorize deductions from their salaries, to which the government then adds its contribution.139 To receive benefits while still in service, service men and women must remain on active duty for the length of their enlistment. To receive benefits after service, one must receive an honorable discharge. The GI Bill is both a strong recruitment tool and, more importantly, a valuable institutional reward for service to the nation in uniform.

Another important source of reward for military service is Title 38, which provides a

range of veterans’ benefits including medical and dental care, transition training, and authorization for Veterans Administration (VA) homeownership loans. Collectively, VA benefits are an institutional reward for honorable military service and integral to the covenant between those who serve in the military and the nation itself. Given the historical value, relevance, and proven utility of these programs, we recommend restoration and enhancements to them as a way of rewarding and honoring military service.

GI Bill entitlements should equal, at the very least, the median education costs of four-

year U.S. colleges, and should be indexed to keep pace with increases in those costs.140 Such a step would have the additional social utility of seeding veterans among the youth at elite colleges. The Bill should accelerate full-term payments to recipients, extend eligibility from ten to twenty years, and support technical training alternatives. The GI Bill’s structure should be an institutional entitlement that does not require payments or cost-sharing from Service members. It should allow transferability of benefits to qualified dependents of those Service members who serve more than fifteen years on active duty. In addition, it should carry a sliding scale providing automatic full benefits for Reserve and National Guard personnel who are called to active duty for overseas contingency operations.

We also believe that funding for these GI Bill institutional entitlements is not sufficient

and should be separated within the defense budget to give the department more flexibility.141

139 The program is administered by the Veterans Administration, under agreements with the Secretary of Defense and the Secretary of Transportation, who submit an annual request to Congress detailing the necessary appropriations. Funds are transferred to the Veterans Administration from the Department of Defense Education Benefits Fund administered by the Treasury Department, or from appropriations made to the Department of Transportation in the case of the Coast Guard. 140See Veterans Administration web site October 2000, Summary of Educational Benefits under the Montgomery GI Bill Active Duty Educational Assistance Program, Chapter 30 of Title 38 U.S. Code and Selected Reserve Educational Assistance Program Chapter 1606 of Title 10 U.S. Code. Active duty servicemen and women can elect a $100/month reduction in pay for twelve months in exchange for up to 36 months of educational entitlements. The maximum entitlement rate is $552 per month. However, servicemen do not necessarily receive the full $552. Monthly rates are calculated according to the cost of tuition. Recipients are entitled to a full 36 months of benefits, not the compounded total of $552 for 36 months. Reservists do not contribute $100 per month, but receive a maximum of only $263 per month. Bill S1402, currently pending Presidential approval, would increase the Active Duty Rate to $650 per month in educational entitlements. In the event of death, the $1,200 reduction in pay is refunded, but benefits are non-transferable. 141 The College Board, Trends in College Pricing 2000. The College Board report indicates 2000-01 annual costs for a commuter student at a public four-year institution is $9,229 and $7,024 for a two-year institution. This far exceeds the current maximum GI Bill entitlement of $552 per month for active duty members.

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Additionally, Title 38, should be modified to reinforce medical, transition, and VA homeownership benefits for career and retired service members. We support recently proposed legislation on this and other veterans benefits, but believe that additional measures are still needed.

Taken together, such changes would fulfill the nation’s promise of real educational

opportunities and place greater value on the service of military personnel. In addition, those in uniform are likely to serve longer to secure these greater benefits.

he laws that make military personnel systems rigid and overly centralized must be altered to provide the required flexibility to meet 21st century challenges. The

Commission recommends the following:

● 45: Congress and the Defense Department should cooperate to decentralize military personnel legislation dictating the terms of enlistment/commissioning, career management, retirement, and compensation. Specifically, revised legislation should include the following acts: ● 1980 DEFENSE OFFICER PERSONNEL MANAGEMENT ACT (DOPMA): Provide Service Secretaries increased authority to selectively exempt personnel from “up-or out” career paths, mandatory flight assignment gates, the double pass-over rule,142 mandatory promotion and officer/enlisted grade sizes, the mandatory retirement “flowpoints” by grade, and active duty service limits. The individual Services should be funded to test alternative career and enlistment paths that are fully complemented by modified compensation, promotion, and retirement/separation packages. ● 1999 NATIONAL DEFENSE AUTHORIZATION ACT: Permit testing of a conversion of the defined benefit systems to a partial defined contribution system, as well as early vesting schedules and other progressive alternatives to the current military retirement system. Allow the Services to shape modified retirement plans to complement alternative career paths and specialty service. ● U.S. CODE TITLE 37 (Compensation): Correct immediately the pay compression of senior NCOs in all the Services and test merit pay systems and alternative pay schedules based on experience, performance, and seniority.143 Allow Service Secretaries discretion concerning continued flight pay for pilots undergoing non-flying career-broadening billets by modifying the 1974 Aviation Career Incentive Act.

142 The double pass over rule refers to officers who have been in the primary zone for promotion to the next higher grade but who have been passed over for promotion for two consecutive years. Once such officers are passed over twice, they become subject to DOPMAs mandatory “up-or-out” exit flowpoints. 143 In 1964 senior enlisted leader (E-8s) pay was by comparison to junior enlisted (E-2’s) pay a 7:1 ratio. With the pay increases associated with the All-Volunteer Force, the ratio of senior to junior enlisted pay is currently 3:1. In other words, in relation to the junior personnel they supervise, senior enlisted service members are paid significantly less than senior NCOs were in the draft military. In addition, the advent of large enlistment and reenlistment bonuses for junior enlisted personnel menas that ratio of senior to junior enlisted pay has compressed even further.

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● SYSTEM INTEGRATION: Reconcile a new DOPMA system (active duty) with ROPMA (Reserves), with the Technician Act (1968), the Guard AGR Act (National Guard), and with Civil Service personnel systems to facilitate and encourage increased movement among branches.

his Commission understands that implementing these recommendations will take time and require the support of the President, Congress, senior military officers, and

Defense Department civilian leadership. We urge the creation of an Executive-Legislative working group that would set guidelines for service-centered trial programs. The working group should also evaluate new forms of enlistment options, selective performance pay, new career patterns, modified retirements for extended careers, and other initiatives that may support the Services. The group should undertake to estimate the projected costs as well as assess any unintended consequences that may result. At the same time, the Congressional Budget Office should further define and detail the costs of our proposed enhancements to the GI Bill and other veterans’ benefits.

These recommendations will cost money. Treating the GI Bill’s benefits as an

entitlement, indexing tuition allotments with rising education costs, extending benefits to dependents, and enhancing veteran benefits to include medical, dental, and homeownership benefits will incur substantial costs. But we believe that the cost of inaction would be far more profound. If we do not change the present system, the United States will have to spend increasingly more money for increasingly lower-quality personnel.

Moreover, balanced against the initial costs of an enhanced National Security Education

Act and a National Security Science and Technology Education Act would be long-term gains in recruiting and retaining quality personnel that would more than offset these costs. A 1986 Congressional Research Service study indicated that the country recouped between $5.00 and $12.50 for every dollar invested in the original GI Bill enacted after World War II.144 We believe this would also be the case under our proposed legislation. Moreover, there will be significant budgetary savings associated with reducing high first-term attrition, as well as with improving the retention of both mid-level enlisted personnel and junior officers, particularly in technical specialties.145

n sum, the Commission recommends major personnel policy reforms for both the civilian and the military domains. For the former, we emphasize the urgent need to

revamp the Presidential appointment process for senior leadership, to attract talented younger cohorts to government service, to fix the Foreign Service, and to establish a National Security Service Corps that strengthens the government’s ability to integrate the increasingly interconnected facets of national security policy. With respect to military personnel, our recommendations point to increasing the attractiveness of government service to high-quality youth, providing enhanced rewards for that service, and modernizing military career management, retirement, and compensation systems. Each of this Commission’s recommendations in the area of the human requirements for national security aims to expand the pool of quality individuals, to decrease early attrition, and to increase retention.

144 This resulted from increased taxes paid by veterans who achieved higher incomes made possible by college education. 145 About one-third of all recruits do not complete their initial military obligation.

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The need is critical, but these reforms will go along way to avert or ameliorate the crisis. In a bipartisan spirit, we call upon the President and Congress to confront the challenge. Let it be their legacy that they stepped up to this challenge and rebuilt the foundation of the nation’s long-term security.

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V. The Role of Congress

his Commission has recommended substantial change in Executive Branch institutions, change that is needed if America is to retain its ability to lead the world

and to assure the nation’s safety. A number of prominent leaders have exhausted themselves and frustrated their careers by too aggressively seeking to reform the House or Senate. The Legislative Branch, however, must change as well.

It is one thing to appeal to Congress to reform the State Department or the Defense

Department, quite another to call on Congress to reform itself. Over the years since World War II, the Legislative Branch has been reformed and modernized much less than the Executive Branch. Indeed, the very nature of power in Congress makes it difficult for legislators to reform their collective institution. Yet American national security in the 21st century, and the prominent role of daily global involvement that is the nature of American life in our generation, mandates a serious reappraisal of both the individual and collective efforts of Congress and its members.

Such a reappraisal must begin with a shared understanding of the Legislative Branch’s

role in the development and assessment of post-Cold War foreign policy. Divided Constitutional responsibilities require the Executive and Legislature to work together in order for U.S. foreign policy to have coherence. Yet the Executive Branch has at times informed rather than consulted Congress. It has often treated Congress as an obstacle rather than as a partner, seeking Congressional input mostly in times of crisis rather than in an ongoing way that would yield support when crises occur. For its part, Congress has not always taken full responsibility for educating its members on foreign policy issues. It is not often receptive to consultation with the Executive Branch, as well, and has sustained a structure that undermines rather than strengthens its ability to fulfill its Constitutional obligations in the foreign policy arena.

Several measures are needed to address these shortcomings and they are described below.

But as an immediate first step we recommend that:

● 46: The Congressional leadership should conduct a thorough bicameral, bipartisan review of the Legislative Branch relationship to national security and foreign policy. The Speaker of the House, the Majority and Minority leaders of the House, and the

Majority and Minority leaders of the Senate should form a bipartisan, bicameral working group with select staff and outside advisory panels to review the totality of Executive-Legislative relations in the real-time global information age we are entering. Only by having the five most powerful members of the Congress directly involved is there any hope of real reform. They should work methodically for one year and, by the beginning of the second session of this Congress, they should report on proposed reforms to be implemented by the next Congress. The President, the Vice President, the National Security Advisor, and senior cabinet officers should work directly with this unique panel to rethink the structure of Executive-Legislative relations in the national security and foreign policy domains.

With that as a basis, reforms can and must be undertaken in three crucial areas:

improving the foreign policy and national security expertise of individual members of Congress; undertaking organizational and process changes within the Legislative Branch; and achieving a sustained and effective Executive-Legislative dialogue on national security issues.

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espite the range of foreign policy challenges facing the United States, many current members of Congress are poorly informed in this area. Their main electoral

priorities are generally within domestic policy; foreign policy concerns are often limited to issues of concern to special interests or to prominent ethnic groups in their districts. Once in office, attention to foreign policy issues generally focuses on pending votes and looming crises. To build a broad base of informed and involved members on foreign policy issues, we recommend the following:

● 47: Congressional and Executive Branch leaders must build programs to encourage

individual members to acquire knowledge and experience in both national security and foreign policy. In particular, this means that: ● The Congressional leadership should educate its members on foreign policy and national security matters beyond the freshman orientation provided for new members. Such education should emphasize Congress’ foreign policy roles and responsibilities. We must reinforce the principle of minimal partisanship on foreign policy issues: that politics stops at the water’s edge. Effective education of members will ensure a more knowledgeable debate and better partnership with the Executive Branch on foreign policy issues. It also will allow members to become more effective educators of their constituencies about the importance of national security concerns. ● Members should be encouraged to travel overseas for serious purposes and each member should get letters from the President or from the head of their body formally asking them to undertake trips in the national interest. A concerted effort should be made to distinguish between junkets (pleasure trips at taxpayer expense) and the serious work that members need to undertake to learn about the world. A major effort should be made to ensure that every new member of Congress undertakes at least one serious trip in his or her first term, and is involved in one or more trips each year from the second term on. ● Legislature-to-legislature exchanges and visits should be encouraged and expanded. More funding and staffing should be provided to both accommodate foreign legislators visiting the United States and to encourage American legislators and their spouses to visit foreign legislatures. Much is to be gained by strengthening the institutions of democracy and by improving understanding among elected officials. This should get a much greater emphasis and much more institutional support than it currently does. ● The wargaming center at the National Defense University should be expanded so that virtually every member of Congress can participate in one or more war games per two-year cycle. By role-modeling key decision-makers (American and foreign), members of Congress will acquire a better understanding of the limits of American power, and of the reality that any action the United States takes invariably has multiple permutations abroad. Giving members of Congress a reason to learn about a region, about the procedures and systems of Executive Branch decision-making, and about crisis interactions will lead eventually to a more sophisticated Legislative Branch. On occasion, particularly useful or insightful games should lead to a meeting between the participating Congressmen and Senators and key Executive Branch officials.

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embers’ increased fluency in national security issues is a positive step but one that must be accompanied by structural reforms that address how Congress organizes

itself and conducts its business. Several recommendations concerning Congressional structure have already been made in this report: to create a special Congressional body to deal with homeland security issues (recommendation 7); to consider all of the State Department’s appropriations within the Foreign Operations subcommittee (recommendation 22); and to move to a two-year budget cycle for defense modernization programs (recommendation 31). To meet the challenges of the next quarter century, we recommend Congress take additional steps.

● 48: Congress should rationalize its current committee structure so that it best serves U.S.

national security objectives; specifically, it should merge the current authorizing committees with the relevant appropriations subcommittees. Our discussion of homeland security highlights the complexity and overlaps of the

current committee structure. The Congressional leadership must review its structure systematically in light of likely 21st century security challenges and of U.S. national security priorities. This is to ensure both that important issues receive sufficient attention and oversight and the unnecessary duplication of effort by multiple committees is minimized.

Such an effort would benefit the Executive Branch, as well, which currently bears a

significant burden in terms of testimony. The number of times that key Executive Branch officials are required to appear on the same topics in front of different panels is a minor disgrace. At a minimum, we recommend that a public record should be kept of these briefings and published annually. If that were done, it would become obvious to all observers that a great deal of testimony could be given in front of joint panels and, in some cases, bicameral joint panels. While we emphasize the need for strong consultation with the Legislative Branch, we need a better sense of what constitutes a reasonable amount of time that any senior Executive Branch official should spend publicly educating Congress.

Specifically, in terms of committee structure, we believe action must be taken to

streamline the budgeting and appropriations processes. In 1974, Congress developed its present budget process as a way of establishing overall priorities for the various authorizations and appropriations committees. Over time, however, the budget process has become a huge bureaucratic undertaking and the authorization process has expanded to cover all spending areas. In light of this, there is no longer a compelling rationale for separate authorization and appropriations bills.

This is why we believe that the appropriations subcommittees should be merged with

their respective authorizing committees. The aggregate committee (for example, the Senate Armed Services Committee) should both authorize and appropriate within the same bill. This will require realigning appropriations subcommittees. For example, appropriations relating to defense are currently dealt with in three subcommittees (defense, military construction, and energy and water); under this proposal, all appropriations would be made within the Senate Armed Services Committee.

This approach has at least two important merits. First, it furthers the aim of rationalizing

committee jurisdiction because all appropriating and authorizing elements relating to a specific topic are brought within one committee. Second, it brings greater authority to those charged with oversight as well as appropriations. In the current system, power has shifted from the authorizing committees to the appropriating committees with a much-narrower budgetary focus. By

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combining the two functions, more effort may be paid to examining how foreign policy laws have been implemented, what their results have been, and how policy objectives can be better achieved. Finally, this new structure may facilitate adoption of two-year budgeting if efforts such as those proposed for defense modernization programs prove successful. The merged committee could authorize, in less detail, for the two-fiscal-year period while appropriating, in greater detail, for the first fiscal year.146

If this important reform were undertaken, then the budget committees in each house of

Congress would consist of the Chairman and ranking member of each new combined committee. As part of the budget function, these two committees would distribute the macro-allocations contained in the budget resolution.

nce Congress has gotten its own house in order, it still remains to ensure that there is ongoing Executive-Legislative consultation and coordination. Efforts to do so are

beneficial not only so that both branches can fulfill their Constitutional obligations but also because effective consultation can improve the quality of U.S. policy. We have acknowledged this, for example, in our Defense Department planning recommendation, which defers detailed program and budget decisions until Congress has marked up the previous year’s submission.147 Because Congress is the most representative branch of government, Executive Branch policy that considers a range of Congressional views is more likely to gain public support. The objections raised by differing Congressional opinions can refine policy by forcing the administration to respond to previously unconsidered concerns. Finally, Congress can force the President and his top aides to articulate and explain administration policy—so the American people and the world can better understand it.

Given these benefits, efforts must be undertaken to improve the consultative process.

Indeed, a coherent and effective foreign policy requires easy and honest consultation between the branches. The bicameral, bipartisan panel put forward in recommendation 46 is a good first step in this process, but additional processes must be established to ensure that such efforts are ongoing. Therefore, we recommend the following:

● 49: The Executive Branch must ensure a sustained focus on foreign policy and national

security consultation with Congress and devote resources to it. For its part, Congress must make consultation a higher priority and form a permanent consultative group of Congressional leaders as part of this effort. A sustained effort at consultation must be based on mutual trust, respect, and partnership

and on a shared understanding of each branch’s role. The Executive Branch must recognize Congress’ role in policy formulation and Congress must grant the Executive Branch flexibility in the day-to-day implementation of that policy. Congress must also ensure that if it is consulted and its criticisms are taken seriously, it will act with restraint and allow the Executive Branch to lead. For his part, the President must convey to administration officials the importance of ongoing, bipartisan consultation and dialogue. Efforts must not be limited to periods of crisis. Further, administration officials should take into consideration the differences in knowledge and perspective among members.

146 Two-year budgeting specifically for DoD modernization accounts would entail authorization and appropriation for both fiscal years simultaneously, if our recommendation 31is adopted. 147 See the discussion on page 69 following recommendation 28.

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Beyond these general principles, specific mechanisms can facilitate better consultation: ● Congress should create a permanent consultative group composed of the Congressional leadership and the Chairmen and ranking members of the main Congressional committees involved in foreign policy. Other members with special interest or expertise could join the group’s work on certain issues. The group would meet regularly—in informal and private sessions—with representatives of the Executive Branch. While these may regularly be Cabinet officials, they may often be at the Under Secretary level. This will make possible a regular dialogue with knowledgeable administration officials, allowing the Congressional group not only to respond to crises but to be part of the development of preventive strategies. The agenda for these meetings would not be strictly limited, allowing members to raise issues they are concerned about. The group would also meet on an emergency basis whenever the President considers military action abroad or deals with a foreign policy crisis. ● Beyond this interaction between the leadership of both branches, the administration must reach out to consult with a broader Congressional group. This will involve increasing the number of administration representatives working to consult with Congress and assigning high-quality people to that task. The Executive must send mid-level, as well as high-level, officials to Capitol Hill and keep closer track of the foreign policy views and concerns of every member of Congress. Only through such concerted efforts, combined with the aforementioned education initiatives, will there be a critical mass of members knowledgeable of and engaged in foreign policy issues. ● Finally, in order for Congress to be most effective in partnering with the Executive Branch, it must undertake its own consultation with a broad group of leaders in science, international economics, defense, intelligence, and in the high-technology, venture-capital arena. Congress is far more accessible to this expertise than the Executive Branch and should work to bring these insights into consultations. To do this, however, Members of Congress need regular and direct dialogue with experts without the screen of their staffs. The best experts in these fields are vastly more knowledgeable than any Congressional staff member, and there needs to be a routine system for bringing members of Congress in touch with experts in the areas in which they will be making decisions.148 All four parts of the National Academies of Science should play key roles in bringing the most knowledgeable scientists and engineers in contact with members of the Legislative Branch.149 Policy institutions with deep reservoirs of expertise on defense and foreign policy, too, can help build Congressional fluency with these issues with a measure of detachment and independent perspective. Similar institutions need to be engaged in other areas.

n effective national security policy for the 21st century will require the combined resources of the Executive and Legislative Branches. While much of this report has

rightly focused on the needs for reform within Executive Branch structures and processes, corresponding efforts must be undertaken for Congress. We believe that a tripartite effort focused on the foreign policy education of members, the restructuring of the Congressional committee

148 A problem well described years ago in C.P. Snow, Science and Government (Cambridge, MA: Harvard University Press, 1961). 149 Note 27 in Section II, on page 34, lists these four constituent parts.

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system, and stronger Executive-Legislative consultative efforts will go a long way to ensuring that the United States can meet any future challenges.

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A Final Word

ased on its assessment of the next 25 years (Phase I), this Commission has devised a strategy (Phase II) and a program of reform to aid in the achievement of that strategy

(Phase III). We propose significant change, and we know that change takes time. We also know that some proposals, however insightful and practical they may be, are never implemented for lack of determined leadership or appropriate method.

We are optimistic that the new administration and the new Congress will pursue the

recommendations made here because we believe those recommendations are persuasive on the merits. We are also mindful that, following the 2000 election, the opportunity for the Executive and Legislative Branches together to concentrate on bipartisan efforts to advance the national interest will be particularly appealing. Our recommendations, from a Commission composed of seven Democrats and seven Republicans, fall entirely into that category.

ut what of a method? The President may choose any of several models for implementing this Commission’s recommendations: an independent advisory

commission overseen by the Vice President or some other senior official; a prestigious Special Advisor working with the Executive Office of the President; a joint Executive-Legislative commission with one co-chairman appointed by the President and one by the House and Senate leadership; a group of “Wise Men” drawn from former high government officials of both parties and from the private sector; a special NSC committee; or some combination of these possibilities.

The specific method adopted, however, is a secondary matter. What is crucial is that the

President create some mechanism to ensure the implementation of the recommendations proffered here. We therefore recommend the following:

● 50: The President should create an implementing mechanism to ensure that the major

recommendations of this Commission result in the critical reforms necessary to ensure American national security and global leadership over the next quarter century. The reason this is necessary is that the President, along with all of his top national

security advisors, will be busy enough dealing with immediate policy issues. Unless the job of implementing reform is taken seriously, and unless the chosen mechanism designates senior officials to be responsible and accountable for guiding reform, the momentum for real change will quickly dissipate.

In our view, this would be tragic. The difference, for example, between a properly

reformed Defense Department and the one we have today may be measured in tens of billions of dollars saved each and every year. The difference between a more effective organization for the Department of State and the crippled organization of today may be measured by opportunities lost in preventing devastating crises abroad that affect American interests and values alike. The difference between a better way of managing science and education and the way it is done now may be measured by the capacity for U.S. global leadership a quarter century hence. The difference between a government personnel system that can attract and keep the highest caliber human capital and one that cannot may be measured by the success or failure of the full range of U.S. national security policies. The difference between modern government organization for

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homeland security and the diffuse accretion of agencies and responsibilities we have today may be measured in tens of thousands of American lives saved or lost. The stakes of reform are very high.

This Commission has done its best to propose serious solutions for deadly serious

problems. It is now up to others to do their best to ensure that our efforts are put to their best use for the sake of the American people. That is a task measured in leadership.

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Index 2 MTW, 76, 78 Acquisition process, x, 8, 63, 70, 71, 73, 74, 75, 78 Agency for International Development, U.S., xi, 52, 53, 54, 59, 60, 61 Agriculture, Department of, 34, 38 Ambassadors, United States, xii, 23, 47, 61, 62, 92, see also United Nations, Permanent Representative to the Appropriations subcommittees, xvii, 58, 111 Arms control, 12, 52 Army, 77 Atomic Energy Commission, U.S., 37-38 Authorizing committees, xvii, 111 Ballistic-missile defense, see National Missile Defense Base Realignment and Closures (BRAC), 66 Bioscience, 38-39, see also National Advisory Commission on Bioscience Biological agents, 11, 16 Biotechnology, 2, 3, 7, 37-38 Border Patrol, viii, 15-18 Brown-Rudman Commission (Commission on the Roles and Capabilities of the United States Intelligence Community), 83 Budget, 16, 47, 48, 55, 59 functional budgeting, 34 Department of Defense budget, 68, 73, see also Planning, Programming, and Budgeting System (PPBS) two-year budgeting, xiii, 73, 112 Department of State budget, 55-56 National Foreign Intelligence Program (NFIP) budget, xiv, 84 national security budget, 49 R&D budget, 32, 33, 34; Centers for Disease Control, 15, 26 Central Intelligence Agency (CIA), 18, 84, 92, 98, 101 Chemical agents, 16 Circular A-76, see Office of Management and Budget (OMB) Citizen soldier, 104 Civil liberties, 11 Civil Service, xv, xvi, 86, 87, 89, 95, 97, 98, 100, 101, 108 Civilian personnel, see Personnel, civilian Clinton Administration, 90, 100 Coast Guard, U.S., viii, 12, 16, 17, 18 Commander-in-Chief (CINC), regional, 62-63, 65-66, 69 Supreme Allied Commander-Atlantic (SACLANT), 66 Commerce, Department of, xiv, xvi, 34, 52, 58, 62, 80, 97, 101 Congress, x, xi, xvii, xviii, 8-11, 17, 26-28, 32, 39, 42, 47, 49, 53, 54, 58-59, 63-64, 66- 67, 72-75, 78, 84, 88, 92, 94, 98, 100, 107-108, 110-116 Congressional Reform, viii, 110-117 Congressional leadership, xvii, 110 Congressional Budget Office, 108 Congressional Research Service, 35 Counter-terrorism, see terrorism

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Critical infrastructure, 10, 13, 14, 18, 19, 23, 24, 81 Critical Infrastructure Assurance Office (CIAO), 19 President’s Commission on Critical Infrastructure Protection (PCCIP), 18 Customs Service, viii, 12, 15-18 Cyber, 10, 13, 14, 17, 19, 23, 31, 82 Cyber Corps, 100 Defense, Department of, viii, x, xii, xiii, xiv, xvi, 8, 10-11, 13, 18, 20, 23-25, 34, 47-48, 52-53, 62-81, 91-92, 94, 101-102, 107-108, 110, 113, 116 Secretary of, xii, xiii, 21-22, 25, 63, 65-66, 68-69, 71-73, 92 Office of the Secretary of Defense (OSD), 23, 65, 76, 81 Assistant Secretary of Defense for Strategy and Planning, 64 Office of the Under Secretary for Policy, 64 Special Operations Low-Intensity Conflict (SOLIC) Under Secretary for Space, Intelligence, and Information, 81 See also homeland security, Assistant Secretary of Defense for Defense Advanced Research Projects Agency (DARPA), 36, 69 Defense industrial base, xii, xiii, 30, 31, 70 Defense Officer Personnel Management Act (DOPMA), 103, 107, 108 Defense Planning Guidance (DPG), 67 Defense Program Review, 77 Defense Threat Reduction Agency (DTRA), 64 Director of Central Intelligence, see intelligence Domestic Policy Council, xi, 52 Economics, v, xi, 47, 51-52, 88, 94, 95, 113 Education, science and mathematics, v, viii, 30-46, 47 Department of Education, 42, 43, 44, 116 Endowments, 36, 44 Educational incentives, see National Security Science and Technology Education Act and National Security Education Act of 1991 Energy, Department of, xvi, 2, 22, 34, 36, 90, 101 Engineering, see science and technology Environmental Protection Agency, 22 Executive Branch, ix, x, xviii, 8-11, 16, 26-28, 33, 47-48, 50, 88, 92, 101, 110-116 Executive-Legislative, xvii, 11, 26, 28, 66, 99,108, 109, 112, 114, 115 Executive Order 12834, 92 Federal Acquisition Regulations (FARS), xiii, 75 Federal Bureau of Investigation (FBI), 18-21, 91, 93 Federal Communications Commission (FCC), 20, 23 Federal Emergency Management Agency (FEMA), viii, 15, 17, 21, 26 Federal Response Plan, 20, 22 Food and Drug Administration, 38 Force Structure, 48, 63, 68, 71, 76-78, 99 Foreign assistance programs, 50, 52-53, 55-56, 58-59, 61 Foreign Operations subcommittee, 58, 112 Foreign Service, xv, xvi, 52, 59, 87, 89, 94-96, 102, 108, see also U.S. Diplomatic Service General Accounting Office, 35 Glenn Commission (National Commission on Mathematics and Science Teaching for the 21st Century), 42 Health and Human Services, Department of, 15, 22, 26, 34 Historically Black Colleges and Universities, 45 Homeland security, vi; xi, 10-29, 49, 76

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Assistant Secretary of Defense for, ix, 23, 24 Congressional role in, ix, 26-29, 112 Medical Community, role in, 20, 26 National Homeland Security Agency (NHSA), vi, viii, xvi, 15, 17-20, 25, 28, 77, 101 Critical Information Technology, Assurance, and Security Office (CITASO), 19, 20, 24 Directorate for Critical Infrastructure Protection, 17-20, 23 Directorate for Emergency Preparedness and Response, 18, 20-21, 26 Directorate of Prevention, 17-18 Defense Coordinating Officer, 21-22 Federal Coordinating Officer, 21-22 House of Representatives, 10, 110, 116 House leadership, see Congressional leadership Immigration and Naturalization Service, Department of, 15, 16, 46 Information technology (IT), 16, 24, 37, 61, see also personnel, information technology Information Sharing and Analysis Centers (ISACs), 19, 20 Institutional Redesign, viii, x-xiv, 47-85 Intelligence, 3, 12-13, 16, 18, 20, 22, 24, 28, 47, 78-79, 81, 114; community, x, xiv, 8, 11, 22-23, 48, 80, 82-85, 97, 101; Director of Central Intelligence, xiv; 49, 80, 82, 84, 92 human intelligence (HUMINT), 22, 83-84 intelligence estimates, 23, 76 National Intelligence Council, 23 technical intelligence, 22, 84-85 International Affairs Budget (Function 150), 58 Joint Chiefs of Staff, Chairman of the, 49, 80 Joint Forces Command, 21, 24, 66 Joint Requirements Oversight Council (JROC), 65 Joint Staff, xii, 65, 69 Joint Task Force-Civil Support, 22, 24 Joint Warfighting Capability Assessment (JWCA), 65 Justice, Department of, viii, xvi, 15, 20, 22, 58, 62, 101 Law enforcement, 11, 17, 20, 28, 50, 52 Legislative Branch, xviii, 11, 16, 28, 92, 110, 114-116 Major Force Programs, xiii, 64, 77 Marine Corps, 77 Military, xiv, xv, xvi, 41-42, 49, 62, 65-66, 70, 78-79, 87 Military Personnel, see personnel, military Montgomery GI Bill (GI Bill), xvi, 104, 106-108, see also personnel, military Nanotechnology, 3, 31, 33, 37, 39 National Academy of Science, 34, 35, 37, 114 National Advisory Commission on Bioscience, 38 National Aeronautics and Space Administration (NASA), xiv, 36, 81 National Bioethics Advisory Commission, 38 National Crisis Action Center (NCAC), 17, 18, 21, 22 National Defense University, 111 National Domestic Preparedness Office, 21 National Economic Council, xi, 51, 52, 80 National Foreign Intelligence Program (NFIP), see budget National Guard, ix, xvi, 10, 14, 17, 20, 21, 24, 25, 26, 89, 106, 108

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Army National Guard, 25 National Imagery and Mapping Agency (NIMA), 80 National Infrastructure Protection Center (NIPC), 19 National Institutes of Health, 37 National Institute of Standards and Technology, 34 National Intelligence Council, see intelligence National laboratories, ix, 37 National Math and Science Project, 42 National Military Strategy (NMS), 67-68 National Missile Defense (NMD), 13, 80 National Oceanic and Atmospheric Administration (NOAA), xiv, 81 National Reconnaissance Office (NRO), 80 National Research Council, 44 National Science Board, 34, 35 National Science Foundation, 34, 44 National Science and Technology Council, 33, 36-37, 80 National Security Act of 1947, 8, 49, 83 National Security Advisor, xi, 48, 50-51, 53, 110 Deputy National Security Advisor, 52 National Security Agency (NSA), 98, 100 National Security Council (NSC), viii, x, xi, xiv, 15, 24, 26, 48-49, 51-53, 62-64, 68, 80, 83, 116 National Security Council staff, 47, 49-50, 80-81, 101 National Security Education Act of 1991 (NSEA), xv, xvi, 89, 94, 98, 105, 106, 108 National Security Science and Technology Education Act, ix, xvi, 41, 43, 44, 86, 88-89, 97, 104-106, 108 National Security Service Corps (NSSC), xvi, 92, 101, 102, 108 National Security Space Architect (NSSA), 81 National Security Strategy (NSS), 67, 78 National Security Teaching Program, 41-43, 45 National Technical Information Service, 34 National Writing Project, 42-43 Navy, 17 New World Coming, see Phase I Non-Commissioned Officers (NCOs), 103, 105, 107 Non-governmental organizations (NGOs), 3, 53, 54 nonproliferation, 12, 49, 52, 60 Non-Proliferation Center, 102 Quadrennial Defense Review, xii, 68-69 Office of Government Ethics, see Presidential appointment process Office of Management and Budget (OMB), 20-21, 33-35, 48-49, 67, 80 Circular A-76, 66-67 Office of Personnel Management (OPM), 35, 99, 100, 102 Office of Science and Technology Policy (OSTP), 33-35, 37, 46, 80 President’s Science Advisor, ix, 35-37 Office of the Secretary of Defense (OSD), see Defense, Department of Overseas Advisory Presence Panel, 96, 99 Patent and Trademark Office, U.S., 34 President’s Commission on Critical Infrastructure Protection (PCCIP), see critical infrastructure Personnel, 19, 35, 86-109, 116 civilian, 86-89, see also Civil Service, Foreign Service, National Security Service Corps, and Presidential appointment process

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information technology, 96-100 military, 86, 88-89, 102-109 recruitment 86-87, 89 retention, 103, 109 professionalism, 86, 90, 104 recruitment, 86-88, 90, 94, 98, 102 retention, 86-89, 103, 109 scientific and technical personnel, 30, 35 Phase I, v, vi, viii, 2, 6, 10, 60, 86, 116 Phase II, v, vi, viii, xiii, 2, 5, 77, 83, 86-87, 101, 116 Planning, Programming, and Budgeting System (PPBS), 67-69 Political appointment process, see Presidential appointment process President, x-xii, xv, xviii, 14-15, 21, 25, 32, 35, 46-50, 52, 55, 58, 61-63, 68-69, 80, 83- 84, 88, 90, 93-94, 96, 98, 108, 110, 113-114, 116 Presidential appointment process, xv, 68, 89-94 Presidential Decision Directive 63 (PDD-63), 18 Public-private, 12, 13 Research and development, 30-34, 36, 72-73, 84 Reserves, xvi, 21, 89, 104, 106, 108 Reserve Officer Personnel Management Act (ROPMA), 108 Reserve Officer Training Corps (ROTC), 89, 100, 103 Science and technology, viii, 11, 17, 30-46, 49, 84, 86-88, 114, 116 President’s Council of Advisors on Science and Technology (PCAST), 33, 37 See also National Science and Technology Council (NSTC), National Security Science and Technology Education Act (NSSTEA), and White House Office of Science and Technology Policy (OSTP) Seeking a National Strategy, see Phase II Senate, 10, 90, 91, 110, 116 Services Armed Services Committee, 91, 112 Senate Arms Control Observer Group, 28 Senate leadership, see Congressional leadership Senior Executive Service (SES), 92, 97 Service, government, 86-109 Institutional rewards for, Space, xiv, 2, 8, 48 Space Policy, 78-81 Interagency Working Group on Space, xiv, 80 National Security Space Architect, xiv, 81 State, Department of, x-xi, xiv, xvi, 8, 23, 47-48, 50, 52-63, 80, 87, 94-96, 101-102, 110, 112, 116 Secretary of, xi- xii, 49, 53-55, 57-59, 62-63, 92, 96 Strategic Planning, Assistance, and Budget Office, 56, 58, 60-61 Under Secretaries of State, 53-54, 57-60 Strategic planning, iv, viii, xi-xii, 48-49, 55, 64, 82, see also State, Strategic Planning, Assistance, and Budget Office Teachers, 39-46 National Security Teaching Program, 41-43, 45 Terrorism, xiv, 5, 12-14, 16, 21-23, 25, 26, 81 Counter-terrorism, xi, 18, 28, 47-49, 59 Counter-Terrorism Center, 102 Trade Representative, United States (USTR), 51, 52, 101

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Transportation, Department of, 15, 80 Treasury, Department of, xvi, 15, 51-52, 84, 97, 101 Secretary of, xi, 51-52, 62 United Nations, Permanent Representative to the, xii, 61 “Up or Out” personnel systems, 94, 103, 105, see also personnel U.S. Agency for International Development, see Agency for International Development, U.S. U.S. Code, 93 Title 37, 107 Title 38, 106-107 U.S. Diplomatic Service, 96 Veterans, xvi, 105, 106, 108 Veterans Administration (VA), 106-107 Weapons of mass destruction, 5, 7, 10, 12, 18, 21, 23, 25-28, 30, 77 Weapons of mass disruption, 10, 28 White House staff, 49-51, 91

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APPENDIX 1 The Recommendations

his appendix lists all of the Phase III Report’s major recommendations in order of their presentation. The recommendations are numbered sequentially and grouped by

Section. The page on which the recommendation appears in the report is noted in the box. Those recommendations in red type indicate recommendations on which Congressional action is required for implementation. Those in blue type can be implemented by Executive Order. Those in green type can be implemented by the head of an Executive Branch department or agency, or by the Congressional leadership, as appropriate.

Securing the National Homeland

1: The President should develop a comprehensive strategy to heighten America’s ability to prevent and protect against all forms of attack on the homeland, and to respond to such attacks if prevention and protection fail. (p. 11) 2: The President should propose, and Congress should agree to create, a National Homeland Security Agency (NHSA) with responsibility for planning, coordinating, and integrating various U.S. government activities involved in homeland security. The Federal Emergency Management Agency (FEMA) should be a key building block in this effort. (p. 15) 3: The President should propose to Congress the transfer of the Customs Service, the Border Patrol, and Coast Guard to the National Homeland Security Agency, while preserving them as distinct entities. (p. 15) 4: The President should ensure that the National Intelligence Council: include homeland security and asymmetric threats as an area of analysis; assign that portfolio to a National Intelligence Officer; and produce National Intelligence Estimates on these threats. (p. 23) 5: The President should propose to Congress the establishment of an Assistant Secretary of Defense for Homeland Security within the Office of the Secretary of Defense, reporting directly to the Secretary. (p. 23) 6: The Secretary of Defense, at the President’s direction, should make homeland security a primary mission of the National Guard, and the Guard should be organized, properly trained, and adequately equipped to undertake that mission. (p. 25) 7: Congress should establish a special body to deal with homeland security issues, as has been done with intelligence oversight. Members should be chosen for their expertise in foreign policy, defense, intelligence, law enforcement, and appropriations. This body should also include members of all relevant Congressional committees as well as ex-officio members from the leadership of both Houses of Congress. (p. 28)

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Recapitalizing America’s Strengths in Science and Education 8: The President should propose, and the Congress should support, doubling the U.S. government’s investment in science and technology R&D by 2010. (p. 32) 9: The President should empower his Science Advisor to establish non-military R&D objectives that meet changing national needs, and to be responsible for coordinating budget development within the relevant departments and agencies. (p. 34) 10: The President should propose, and the Congress should fund, the reorganization of the national laboratories, providing individual laboratories with new mission goals that minimize overlap. (p. 37) 11: The President should propose, and Congress should pass, a National Security Science and Technology Education Act (NSSTEA) with four sections: reduced-interest loans and scholarships for students to pursue degrees in science, mathematics, and engineering; loan forgiveness and scholarships for those in these fields entering government or military service; a National Security Teaching Program to foster science and math teaching at the K-12 level; and increased funding for professional development for science and math teachers. (p. 41) 12: The President should direct the Department of Education to work with the states to devise a comprehensive plan to avert a looming shortage of quality teachers. This plan should emphasize raising teacher compensation, improving infrastructure support, reforming the certification process, and expanding existing programs targeted at districts with especially acute problems. (p. 43) 13: The President and Congress should devise a targeted program to strengthen the historically black colleges and universities in our country, and should particularly support those that emphasize science, mathematics, and engineering. (p. 45)

Institutional Redesign 14: The President should personally guide a top-down strategic planning process and delegate authority to the National Security Advisor to coordinate that process. (p. 48) 15: The President should prepare and present to the Congress an overall national security budget to serve the critical goals that emerge from the NSC strategic planning process. Separately, the President should continue to submit budgets for individual national security departments and agencies for Congressional review and appropriation. (p. 49)

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16: The National Security Council (NSC) should be responsible for advising the President and for coordinating the multiplicity of national security activities, broadly defined to include economic and domestic law enforcement activities as well as the traditional national security agenda. The NSC Advisor and staff should resist the temptation to assume a central policymaking and operational role. (p. 51) 17: The President should propose to the Congress that the Secretary of Treasury be made a statutory member of the National Security Council. (p. 52) 18: The President should abolish the National Economic Council, distributing its domestic economic policy responsibilities to the Domestic Policy Council and its international economic responsibilities to the National Security Council. (p. 52) 19: The President should propose to the Congress a plan to reorganize the State Department, creating five Under Secretaries, with responsibility for overseeing the regions of Africa, Asia, Europe, Inter-America, and Near East/South Asia, and redefining the responsibilities of the Under Secretary for Global Affairs. These new Under Secretaries would operate in conjunction with the existing Under Secretary for Management. (p. 54) 20: The President should propose to the Congress that the U.S. Agency for International Development be consolidated into the State Department. (p. 56) 21: The Secretary of State should give greater emphasis to strategic planning in the State Department and link it directly to the allocation of resources through the establishment of a Strategic Planning, Assistance, and Budget Office. (p. 56)

22: The President should ask Congress to appropriate funds to the State Department in a single integrated Foreign Operations budget, which would include all foreign assistance programs and activities as well as all expenses for personnel and operations. (p. 58) 23: The President should ensure that Ambassadors have the requisite area knowledge as well as leadership and management skills to function effectively. He should therefore appoint an independent, bipartisan advisory panel to the Secretary of State to vet ambassadorial appointees, career and non-career alike. (p. 62)

24: The Secretary of Defense should propose to Congress a restructuring plan for the Office of the Under Secretary of Defense for Policy that would abolish the office of the Assistant Secretary for Special Operations and Low-Intensity Conflict (SOLIC), and create a new office of an Assistant Secretary dedicated to Strategy and Planning (S/P). (p. 64) 25: Based on a review of the core roles and responsibilities of the staffs of the Office of the Secretary of Defense, the Joint Staff, the military services, and the CINCs, the Secretary of Defense should reorganize and reduce those staffs by ten to fifteen percent. (p. 65)

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26: The Secretary of Defense should establish a ten-year goal of reducing infrastructure costs by 20 to 25 percent through outsourcing and privatizing as many DoD support agencies as possible. (p. 66) 27: The Congress and the Secretary of Defense should move the Quadrennial Defense Review to the second year of a Presidential term. (p. 68) 28: The Secretary of Defense should introduce a new process that would require the Services and defense agencies to compete for the allocation of some resources within the overall Defense budget. (p. 69) 29: The Secretary of Defense should establish and employ a two-track acquisition system, one for major acquisitions and a second, “fast track” for a limited number of potential breakthrough systems, especially those in the area of command and control. (p. 71) 30: The Secretary of Defense should foster innovation by directing a return to the pattern of increased prototyping and testing of selected weapons and support systems. (p. 72) 31: Congress should implement two-year defense budgeting solely for the modernization element of the DoD budget (R&D/procurement) because of its long-term character, and it should expand the use of multiyear procurement. (p. 73) 32: Congress should modernize Defense Department auditing and oversight requirements by rewriting relevant sections of U.S. Code, Title 10, and the Federal Acquisition Regulations. (p. 75) 33: The Secretary of Defense should direct the DoD to shift from the threat-based 2MTW force sizing process to one which measures requirements against recent operational activity trends, actual intelligence estimates of potential adversaries’ capabilities, and national security objectives once formulated in the new administration’s national security strategy. (p. 76) 34: The Defense Department should devote its highest priority to improving and furthering expeditionary capabilities. (p. 78) 35: The President should establish an Interagency Working Group on Space (IWGS) at the National Security Council to coordinate all aspects of the nation’s space policy, and place on the NSC staff those with the necessary expertise in this area. (p. 80) 36: The President should order the setting of national intelligence priorities through National Security Council guidance to the Director of Central Intelligence. (p. 83)

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37: The Director of Central Intelligence should emphasize the recruitment of human intelligence sources on terrorism as one of the intelligence community’s highest priorities, and ensure that operational guidelines are balanced between security needs and respect for American values and principles. (p. 83) 38: The intelligence community should place new emphasis on collection and analysis of economic and science/technology security concerns, and incorporate more open source intelligence into analytical products. Congress should support this new emphasis by increasing significantly the National Foreign Intelligence Program (NFIP) budget for collection and analysis. (p. 84)

The Human Requirements for National Security 39: Congress should significantly expand the National Security Education Act (NSEA) to include broad support for social sciences, humanities, and foreign languages in exchange for military and civilian service to the nation. (p. 89) 40: The Executive and Legislative Branches should cooperate to revise the current Presidential appointee process by reducing the impediments that have made high-level public service undesirable to many distinguished Americans. Specifically, they should reduce the number of Senate confirmed and non-career Senior Executive Service (SES) positions by 25 percent; shorten the appointment process; and revise draconian ethics regulations. (p. 92) 41: The President should order the overhauling of the Foreign Service system by revamping the examination process, dramatically improving the level of on-going professional education, and making leadership a core value of the State Department. (p. 95) 42: The President should order the elimination of recruitment hurdles for the Civil Service, ensure a faster and easier hiring process, and see to it that strengthened professional education and retention programs are worthy of full funding by Congress. (p. 98) 43: The Executive Branch should establish a National Security Service Corps (NSSC) to enhance civilian career paths, and to provide a corps of policy experts with broad-based experience throughout the Executive Branch. (p. 101) 44: Congress should significantly enhance the Montgomery GI Bill, as well as strengthen recently passed and pending legislation supporting benefits—including transition, medical, and homeownership—for qualified veterans. (p. 106) 45: Congress and the Defense Department should cooperate to decentralize military personnel legislation dictating the terms of enlistment/commissioning, career management, retirement, and compensation. (p. 107)

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The Role of Congress

46: The Congressional leadership should conduct a thorough bicameral, bipartisan review of the Legislative Branch relationship to national security and foreign policy. (p. 110) 47: Congressional and Executive Branch leaders must build programs to encourage individual members to acquire knowledge and experience in both national security and foreign policy. (p. 111) 48: Congress should rationalize its current committee structure so that it best serves U.S. national security objectives; specifically, it should merge the current authorizing committees with the relevant appropriations subcommittees. (p. 112) 49: The Executive Branch must ensure a sustained focus on foreign policy and national security consultation with Congress and devote resources to it. For its part, Congress must make consultation a higher priority and form a permanent consultative group of Congressional leaders as part of this effort. (p. 113) 50: The President should create an implementing mechanism to ensure that the major recommendations of this Commission result in the critical reforms necessary to ensure American national security and global leadership over the next quarter century. (p. 116)

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APPENDIX 2

Charter of the U.S. Commission on National Security/21st Century

SEC. 1. ESTABLISHMENT AND PURPOSE.

The Department of Defense recognizes that America should advance its position as a strong, secure, and persuasive force for freedom and progress in the world. Consequently, there is a requirement to: 1) conduct a comprehensive review of the early 21st Century global security environment, including likely trends and potential "wild cards"; 2) develop a comprehensive overview of American strategic interests and objectives for the security environment we will likely encounter in the 21st Century; 3) delineate a national security strategy appropriate to that environment and the nation's character; 4) identify a range of alternatives to implement the national security strategy, by defining the security goals for American society, and by describing the internal and external policy instruments required to apply American resources in the 21st Century; and 5) develop a detailed plan to implement the range of alternatives by describing the sequence of measures necessary to attain the national security strategy, to include recommending concomitant changes to the national security apparatus as necessary. A Commission, the U.S. Commission on National Security/21st Century (USCNS/21), will be established to fulfill this requirement, supported by a Study Group. Two individuals who have national recognition and significant depth of experience and public service will oversee the efforts of this Commission and serve as its Co-chairpersons. The study effort shall be conducted by a Study Group, composed of individuals who will be appointed as Department of Defense (DoD) personnel, in accordance with Section VI below. Based on the results of this study and the Commission's consideration thereof, the USCNS/21 will advance practical recommendations that the President of the United States, with the support of the Congress, could begin to implement in the Fiscal Year 2002 budget, if desired. SEC. II. BOARD OF COMMISSIONERS

(a) CO-CHAIRPERSONS.- The Secretary of Defense, in consultation with the Assistant to the President for National Security Affairs and the Secretary of State, shall select two Co-chairpersons to oversee the study effort and to co-chair the U.S. Commission on National Security/21st Century. The Co-chairpersons shall be prominent United States citizens, with national recognition, significant depth of experience, and prior public service.

(b) MEMBERSHIP.- The Secretary of Defense, in consultation with the Assistant to

the President for National Security Affairs and the Secretary of State, shall select 15-17 individuals to serve as a board of Commissioners to the study, drawing on accomplished and prominent United States citizens and reflecting a cross-section of American public and private sector life.

(c) OPERATION.- The Commissioners shall meet at the discretion of the

Co-chairpersons to provide visionary leadership and guidance for the study effort, and to consider appropriate recommendations to the Secretary of Defense and the President, based on the results of the study. The Co-chairpersons shall provide oversight for the study effort.

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The USCNS/21 will be chartered separately and operated as a Federal advisory committee in accordance with the Federal Advisory Committee Act (Public Law 92-463), as amended.

(d) PERIOD OF APPOINTMENT; VACANCIES.- All Commissioners shall be

appointed for the life of the study effort. Vacancies shall be filled in the same manner as the original appointment, in accordance with the Commission's charter.

SEC. III. DUTIES.

(a) COMPREHENSIVE REVIEW.- The study will define America's role and purpose in the first quarter of the 21st Century through an integrated analysis, and identify the national security strategy in political, economic, military, societal, and technological terms that must be implemented for America to fulfill that role and achieve its purpose. This study shall include the following:

(1) A description of the national security environments that the United States will

likely encounter in the 21st Century, and an evaluation of the security threats which can be reasonably expected in political, economic, military, societal, and technological terms.

(2) A comprehensive overview of American domestic and international strategic

interests and objectives for the security environment we will likely encounter in the 21st Century. (3) Delineation of the national security strategy that must be implemented to

achieve America's objectives in the 21st Century. (4) Identification of the range of alternatives to implement the national security

strategy, by defining the domestic security goals for American society, and by describing the internal and external policy instruments required to apply American resources in the 21st Century.

(5) Development of a detailed plan to implement the range of alternatives by

describing the sequence of measures necessary to attain the national security strategy.

(b) MATTERS TO BE CONSIDERED.- In carrying out the study, the USCNS/21 shall develop specific findings and recommendations for each of the following:

(1) Identification of nations, supranational groups, and trends that may assist the

fulfillment of U.S national security strategy. (2) Identification of nations, supranational groups, and trends that may pose military,

economic, or technological threats to fulfillment of the United States national security strategy. (3) Identification of societal forces that enable the attainment of United States national

security strategy, and recommendations to exploit those forces. (4) Identification of societal forces that inhibit the attainment of the United States

national security strategy, and recommendations to overcome those inhibitors. (5) Identification of the roles to be played by the Armed Forces and Federal civilian

agencies of the United States in attainment of the United States national security strategy.

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(6) The adequacy of the current national security apparatus to meet early 21st Century security challenges, and recommendations to modify this apparatus as necessary.

(7) Examination of existing and/or required international security arrangements, to

include recommendations for modification, as appropriate. (8) Recommended course(s) of action to secure the active support of an informed

American public for the implementation of our national security strategy in the 21st Century.

SEC. IV. METHODOLOGY. The USCNS/21 will accomplish its mission in three phases, as set forth below.

(a) PHASE ONE.- Phase One will examine and describe the kind of nation the United States will be in the early 21st Century and the range of likely international security environments that we can reasonably anticipate. The goal will be to establish the domestic and international contexts in which the United States will exist in the next century. The study will seek to identify the most likely domestic and international trends, taking account of less likely or "wild card" events, such as the spread of weapons of mass destruction, technological breakthroughs, natural disasters, or regime changes abroad. This phase will predict the possible international security environments with consideration of the interrelationships of the various sectors involved. Phase One will terminate with the submission by the Co-chairpersons, after consultation with the board of Commissioners, of a report to the Secretary of Defense describing the range of potential domestic and international environments as they relate to national security.

(b) PHASE TWO.- Existing national interests and objectives will be reviewed and

analyzed for applicability in the early part of the next century. If appropriate, modifications will be recommended to bring the policy objectives into line with the anticipated global environment. Where necessary objectives and interests have not yet been clearly articulated for security arenas in which the United States must function in the future, the USCNS/21 will recommend appropriate objectives. These objectives should encompass all critical American security concerns. Delineation of national security strategy (or strategies) for the early part of the 21st Century will complete Phase Two of the study. A proposed strategy will be constrained by only the following factors: it must support attainment of our national security objectives, it must be acceptable to the American people, and it must be feasible within current (or projected) resource availability. (For the purposes of this study, an acceptable national security strategy is one that is reasonably consistent with the projected values and desires of the American people, taking into account the ability of confident national leaders to move public opinion in the direction of rational responses to new national challenges). The goal of Phase Two is to describe America’s interests and objectives in a comprehensive, attainable, and supportable national security strategy that gives the Executive and Legislative Branches policy options for allocation of national resources and for domestic and international strategic initiatives. Phase Two will terminate upon the submission by the Co-chairpersons, after consultation with the board of Commissioners, of a report to the Secretary of Defense which meets this goal.

(c) PHASE THREE.- As needed, the USCNS/21 will propose measures to adapt existing

national security structures or to create new structures where none exists. These measures must be appropriate to the range of anticipated international environments identified in Phase One and the national security objectives identified in Phase Two. Selected measures may require some modification of certain institutions, processes and structures in order to improve their relevance in the first two decades of the 2lst Century and enhance their positive impact upon the national security process. When appropriate, cost and time estimates to complete these improvements and

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a recommended sequence of actions will be provided. The end result of Phase Three will be an institutional road map for the early part of the 21st Century, provided as a report from the U.S. Commission on National Security/21st Century to the Secretary of Defense, with detailed recommendations for each major segment of the United States government's national security apparatus. SEC. V. REPORTS.

All reports shall be submitted in unclassified form, but may include classified annexes. The Secretary of Defense will transmit a copy of each report to the Congress.

(a) PHASE ONE.- The Co-chairs shall submit to the Secretary of Defense a report on

Phase One of the study, as outlined in Section IV(a), not later than September 15, 1999. (b) PHASE TWO.- The Co-chairs shall submit to the Secretary of Defense a report on

Phase Two of the study, as outlined in Section IV(b), not later than April 14, 2000. (c) FINAL REPORT.- The Co-chairs shall submit to the Secretary of Defense a final

report, including assessments and recommendations and the institutional road map outlined in Section IV(c), not later than February 16, 2001.

SEC.VI. PERSONNEL AND ADMINISTRATIVE SUPPORT.

(a) ADMINISTRATIVE AND SUPPORT SERVICES.- The U.S. Commission on National Security/21st Century will be supported by the Study Group and its staff. The Study Group, as a DoD organizational element, will receive administrative and other support services from the Director, Administration and Management, including four individuals detailed to support the Study Group, consistent with the budgetary parameters established in Section VIII. Additional administrative and support services requested by the Co-chairpersons or the Executive Director (which position is provided for in paragraph (d)(1), below) in support of the USCNS/21 will be furnished by DoD as necessary and appropriate. These support requirements will be administered by the Director, Administration and Management, in conjunction with other DoD officials, as appropriate.

(b) SECURITY CLEARANCES.- Insofar as expeditious processing of personnel security

clearances is essential to the timely completion of the study, DoD will expedite personnel security clearance procedures for access to classified information for Study Group personnel and staff to the extent permitted by law and Executive Order, when requested by the Executive Director.

(c) BOARD OF COMMISSIONERS APPOINTMENT AND COMPENSATION.-

Commissioners of the USCNS/21, including the Co-chairpersons, who are not full-time officers or employees of the United States shall be appointed by the Secretary of Defense as special government employees. Such members may serve with or without compensation and shall be allowed travel expenses, including per diem in lieu of subsistence, in accordance with the Board's charter.

(d) STUDY GROUP APPOINTMENT AND COMPENSATION.

(1) EXECUTIVE DIRECTOR.- The Secretary of Defense, upon advice of the Co-chairpersons, shall select an Executive Director. The Executive Director shall be appointed to a limited term (not to exceed three years), Senior Executive Service position within DoD. The Executive Director shall supervise the Study Group and its staff, with full authority, in accordance with applicable law and regulations, and merit system principles.

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(2) MEMBERSHIP.- The Secretary of Defense, in consultation with the

Assistant to the President for National Security Affairs, the Secretary of State and the Executive Director, will select sufficient individuals with diverse experience and expertise to fill positions as members of the Study Group. All Study Group members shall be United States citizens with widely-recognized expertise in fields relevant to the Study Group's national security objectives. Members should be innovative and creative practitioners or strategists in their respective fields of endeavor. The Study Group members shall be appointed under an appropriate authority which allows for an assignment of a temporary duration. Terms for such appointments shall not exceed the length of the study, but may be such shorter period of time as determined by the Executive Director. Vacancies shall be filled by the Executive Director, with the approval of the Secretary of Defense.

(e) STAFF APPOINTMENT AND COMPENSATION.- The Executive Director may

select for appointment as DoD employees, in accordance with paragraph VI(a), above, and applicable Civil Service laws and regulations and DoD policies, up to twelve individuals. Selectees who are not currently full time DoD military or civilian personnel will be given limited term appointments for up to the length of the study, in accordance with section VI(a) above, to support the study Group.

(f) TEMPORARY AND INTERMITTENT SERVICES.- The Executive Director may

procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at a rate of pay not to exceed the daily rate of pay for a GS-15, step 10 in accordance with such title.

SEC. VII. TERMINATION OF THE STUDY.

The study will terminate not later than 30 days after the Co-chairpersons submit the final report to the Secretary of Defense, or no later than March 15, 2001, whichever is earlier.150 SEC. VIII. FUNDING.

Except as provided herein, the operating costs of the study, including the compensation, travel, and per diem allowances for the Commissioners and the Study Group members and staff, will be paid by the Department of Defense. The overall cost for this project (excluding the cost of the four detailees described in section VI(a) above) may not exceed $10.44 Mil, without prior approval by the Secretary of Defense or designee. These funds are expected to be obligated as follows: FY 1999-$1.43 Mil; FY 1999-$3.76 Mil; FY 2000-$3.73 Mil; and FY 2001-$1.52 Mil.

William S. Cohen, Secretary of Defense SEPT 2, 1999

150 The termination date of the study was moved to July 31, 2001 in October 2000.

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APPENDIX 3

Commissioner Biographical Sketches and Staff Listing

Anne Armstrong, Regent, Texas A&M University System and Trustee and Chairman of the Executive Committee, Center for Strategic and International Studies. Previous positions and affiliations: Counselor to the President under the Nixon and Ford Administrations; U.S. Ambassador to the United Kingdom; Chairman, President’s Foreign Intelligence Advisory Board; Commissioner, Commission on the Organization of Government for the Conduct of Foreign Policy; Commissioner, Commission on Integrated Long-Term Strategy. Norman R. Augustine, Chairman, Executive Committee Lockheed Martin Corporation. Previous positions and affiliations: Under Secretary of the Army; Assistant Director of Defense Research and Engineering, Office of the Secretary of Defense; Chairman, American Red Cross; Chairman, National Academy of Engineering; President, Boy Scouts of America; Chairman, Defense Policy Advisory Committee on Trade; Chairman, Defense Science Board; Member of Faculty, Princeton University. John Dancy, Director of International Media Studies and Visiting Professor of Communications, Brigham Young University. Previous positions and affiliations: Chief Diplomatic Correspondent, NBC News; Congressional Correspondent, NBC News; Senior White House Correspondent, NBC News; Member, Federal Advisory Committee on Gender-Integrated Training and Related Issues; Fellow, Joan Shorenstein Center for Press, Politics, and Public Policy, Harvard University. John R. Galvin, Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts University. Previous positions and affiliations: General, United States Army (Retired); Supreme Allied Commander Europe; Commander in Chief, United States European Command; Commander in Chief, United States Southern Command; State Department Special Envoy (Rank of Ambassador) negotiations, Bosnia; Olin Distinguished Professor of National Security, United States Military Academy; Distinguished Policy Analyst, Mershon Center, Ohio State University. Leslie H. Gelb, President, Council on Foreign Relations. Previous positions and affiliations: Editor, New York Times Op-Ed page; Columnist for New York Times; New York Times National Security and Diplomatic Correspondent; Senior Associate, Carnegie Endowment for International Peace; Assistant Secretary of State, Director of the Bureau of Politico-Military Affairs; Director of Policy Planning and Arms Control for International Security Affairs at the Department of Defense.

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Newt Gingrich, CEO of The Gingrich Group, an Atlanta based management consulting Firm; political commentator for FOX News Network; Senior Fellow at The American Enterprise Institute in Washington, D.C.; distinguished Visiting Fellow at The Hoover Institution at Stanford University in Palo Alto, California. Previous positions and affiliations: Former Speaker of the United States House of Representatives; United States House of Representatives, Georgia; former Professor of History and Environmental Studies, West Georgia College. Lee H. Hamilton, Director, Woodrow Wilson International Center for Scholars and Director of The Center on Congress at Indiana University. Previous positions and affiliations: United States House of Representatives, Ninth District, Indiana; Ranking Democratic Member, Committee on International Relations; Member and Former Chairman, Joint Economic Committee; Former Chairman, Committee on Foreign Affairs; Joint Committee on the Organization of Congress; October Surprise Task Force; Select Committee to Investigate Covert Arms Transactions with Iran; Permanent Select Committee on Intelligence. Gary Hart, Counsel to Coudert Brothers. Previous positions and affiliations: United States Senator, Colorado; Senate Armed Services Committee; Senate Intelligence Committee; Author: America Can Win: The Case for Military Reform (with William S. Lind, 1985), and The Minuteman (1998). Lionel H. Olmer, Senior partner in the law firm of Paul, Weiss, Rifkind, Wharton & Garrison. Previous positions and affiliations: Undersecretary of Commerce for International Trade; Executive Secretary, President’s Foreign Intelligence Advisory Board; international business development associations; U.S. Navy officer specializing in cryptology. Donald B. Rice, President and CEO of UroGenesys, Inc. Previous positions and affiliations: Secretary of the Air Force; President and Chief Executive Officer, the RAND Corporation; President and Chief Operating Officer, Teledyne, Inc.; Assistant Director, Office of Management and Budget; Deputy Assistant Secretary of Defense (Resource Analysis); Director of Cost Analysis, Department of Defense; President, Institute of Management Sciences; Director of the Defense Resource Management Study; Chairman, National Commission on Supplies and Shortages; Director of Amgen, Inc.; Wells Fargo & Company, Vulcan Materials Company, Scios Inc. (Chairman of the Board), Unocal Corp., and Pilkington Aerospace. Warren B. Rudman, Partner in the law firm of Paul, Weiss, Rifkind, Wharton and Garrison; Chairman, President’s Foreign Intelligence Advisory Board; Co-chair of the Concord Coalition; Member, Sharm el-Sheikh Fact Finding Committee (examining the recent crisis between the Israelis and Palestinians). Previous positions and affiliations: United States Senator, New Hampshire; Chairman, Special Oversight Board for DoD Investigations of Gulf War Chemical and Biological Incidents; Vice Chairman, Commission on Roles and Capabilities of the U.S. Intelligence Community; Co-author of

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1985 Gramm-Rudman-Hollings Deficit Reduction Law; Vice-Chairman of Senate Select Committee Investigating Arms Transfers to Iran; Chair, Senate Ethics Committee; Senate Appropriations Committee; Senate Intelligence Committee; Senate Government Affairs Committee and Senate Permanent Subcommittee on Investigations; Attorney General of New Hampshire; President, National Association of Attorneys General; United States Army (Captain, Retired); Platoon Leader and Company Commander during the Korean War. James R. Schlesinger, Senior Advisor to Lehman Brothers and Chairman of the MITRE Corporation. Previous positions and affiliations: Secretary of Defense; Secretary of Energy; Director, Central Intelligence Agency; Chairman, Atomic Energy Commission; Assistant Director, Bureau of the Budget (OMB); Director of Strategic Studies, RAND Corporation; Professor of Economics, University of Virginia. Harry D. Train II, Manager, Hampton Roads Operations, Science Applications International Corporation. Previous positions and affiliations: Admiral, United States Navy (Retired); Commander-in-Chief, United States Atlantic Command NATO Supreme Allied Commander, Atlantic; Commander-in-Chief, United States Atlantic Fleet; Commander, United States Sixth Fleet; Director of Joint Staff; Senior Fellow, Joint & Combined Warfighting School, Joint Forces Staff College; Member of Defense Science Board Task Force on Information Warfare Defense; Mentor, Defense Science Studies Group. Andrew Young, Chairman of GoodWorks International and President-Elect of the National Council of Churches. Previous positions and affiliations: U.S. Ambassador to the United Nations; Chairman, Southern Africa Enterprise Development Fund; United States House of Representatives, Fifth District, Georgia; Mayor of Atlanta; Co-Chairman, Centennial Olympic Games; Executive President, Southern Christian Leadership Conference.

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National Security Study Group Staff Listing

Executive Director Research Staff

Charles G. Boyd Erin C. Conaton, Research Staff Director Chris Dishman Deputy Executive Director Garrick Groves

Arnold Punaro Christopher Hall Mark Kohut Chief-of-Staff Kelly Lieberman

Hank Scharpenberg William Lippert Kathleen Robertson Study Group Coordinator Rachel Schiller

Pat Allen Pentland Betsy Schmid Senior Study Group Advisor Support Staff

Lynn E. Davis James Freeman, Administrative Officer Annette Atoigue

Study Group Members Carmen Augustosky Patti Benner Antsen Marilyn Bridgette Lyntis Beard Jamie Finley Jeff Bergner John Gardner Coit Blacker Marvin Goodwin Chris Bowie Michele Hutchins Ivo Daalder Diane Long Rhett Dawson Jonathan Nemceff Keith A. Dunn Gerald Posey Charles Freeman Tom Prudhomme Adam Garfinkle Paula Siler Richard Haass Cynthia Waters Keith Hahn Frank Hoffman Charles Johnson Robert Killebrew Richard Kohn Bill Lewis Jim Locher Charles Moskos Williamson Murray Barry Posen Peter Rodman Barbara Samuels Kori Schake James Thomason Ruth Wedgwood

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National Security Study Group Advisors, Contractors, and Consultants

Senior Military Advisors

General (ret) Michael P.C. Carns General (ret) William Hartzog Vice Admiral (ret) Richard D. Herr Admiral (ret) Joseph Lopez General (ret) Richard I. Neal

Contractors Barry Blechman, Darcy Noricks, Mary Locke, and the DFI International team Fred Frostic, George Raach, Maria Alongi, David Dye, Kristin Craft, and the Booz-Allen & Hamilton team William M. Wise

Consultants Charles Barry Daniel Byman Lieutenant General (ret) Patrick M. Hughes Major General (ret) William E. Jones James Lindsay Paul Byron Pattak General (ret) Daniel Schroeder Jeremy Shapiro Charles D. Vollmer Lee Zeichner

commission.pdf - Paul, Weiss

Documents

Transcript of commission.pdf - Paul, Weiss