NATO's Senior
Defense Economist Adrian Kendry has recorded an exclusive
video on the interaction of economic and security challenges. Then
atlantic-community.org members submitted questions about maintaining security
despite austerity. We will now present Mr. Kendry's answers in two parts.
In the first part Adrian Kendry describes the combination of declining defense
spending and growing economic and social insecurity as "a potentially grave
threat to the well-being and stability of the Alliance." Moreover, "the prospect
that certain segments of the population will become more alienated and
disaffected from the economic crisis, and therefore more vulnerable to
targeting and recruitment by terrorist organisations is to be taken seriously."
He points out
that NATO's Founding Treaty encourages
economic collaboration between member states and describes the target of defense spending at 2% of Gross Domestic Product
as "a demonstration of solidarity among the member states" and in a sense a "Club
Fee".
Adrian
Kendry, who works in the Emerging Security Challenges Division,
concludes that "the
vitality and resilience of a transatlantic alliance that has guaranteed
stability, security, and the conditions for economic prosperity, for some
sixty-three years must be sustained by ensuring that the investment in defense
and security is not neglected and recognised as being fundamental to
maintaining the Alliance and its member states."
Read
his answers and the questions from our members in full context:
Hanna-Kerli Metsala, MA
Student Security and Diplomacy, Tel Aviv University, Israel-Estonia: Mr.
Kendry, you mention in your video statement the need for NATO to maintain a
strong defense capability in order to prevent the economic crisis becoming a
military crisis in the case of unpredictable shocks to the society. When can we
say that a critical point has been reached in an economic crisis for it to be considered
a security threat? In light of a practical example, what characteristics
(events, trends) need to appear in Spain that would invite a reaction from
NATO? And what in practical terms would this "action" entail?
Adrian Kendry: The NATO Strategic Concept "Active
Engagement, Modern Defence" adopted by the NATO Heads of State and Government
at the Lisbon Summit in November 2010 addressed part of this extremely
important question. The Strategic Concept is built on three fundamental pillars
of mutual security. Firstly, Collective
Defence designed to deter and to defend NATO's interests, individually or
collectively, when and where they are threatened by aggression or emerging security challenges. Secondly, Crisis management mechanisms developed
to ensure that NATO will use its political and military tools to mitigate, manage,
end and stabilise crises and developing crises that might undermine Alliance
security. And thirdly, the building of Cooperative
Security that involves active engagement in partnership with relevant
countries and other international organisations in order to enhance
international security.
However,
the scale and scope of the economic and financial crisis of the past two years
has prompted Defence Ministers and Senior Military Officers to warn that the
economic crisis threatens to become a security crisis. When would a critical
point be reached? The combination of declining defence spending and growing
economic and social insecurity pose a potentially grave threat to the
well-being and stability of the Alliance. Although NATO is not a law
enforcement organisation, it has a vital role to play in a rapidly changing and
complex world to ensure that the Alliance, as a multinational organisation,
stays strong in supporting freedom, peace, security and the shared democratic
values of its member states. It should be remembered that Article 2 of NATO's
Founding Treaty from 1949 emphasised the importance of its (then 12) members
eliminating conflict in their international economic policies and encouraging economic
collaboration between them. Sixty-three years later, this link between economic
stability and international security is just as important. The restoration of
economic stability and prosperity is fundamental for the security of all
members of the Alliance. A prosperous and stable NATO will be better able to
respond to challenges coming from unpredictable shocks and also help maintain
the cohesion and stability of Alliance member states as they respond to the
most serious global economic crisis since the 1930s.
John A. Hughes, Graduate Student, Dr.
Colette Mazzucelli's class "IR Theory in the Post-Cold War," New York
University - USA: Since the global financial crisis,
many NATO countries have witnessed domestic protests movements in response to
austerity measures implemented by their respective governments. Do you view
these protest groups as being ‘potential' recruiting targets for terrorist
organisations?
Adrian
Kendry: The fiscal
policies that have been, and are being, implemented to bring under control the
large budget deficits and increasing national debts in the European economies
are very controversial. Even though the stance of monetary policy is very
permissive, with low interest rates and central bank interventions to provide
"quantitative easing" (injecting liquidity into the economy), fiscal austerity
inevitably adds to the slow (and in some cases declining) economic output in
NATO European states with persistent and high unemployment (notably among young
people) and wage freezes (or reductions) creating considerable economic and
social misery. In these circumstances, the fear that social and economic
instability is being translated into not only domestic protests but also rising
criminality is one to be taken seriously. The linkages between corruption,
organised crime and terrorism are complex. In some cases, terrorist
organisations can collaborate with criminal networks to achieve separate goals
but mutual benefits. The prospect that certain segments of the population will
become more alienated and disaffected from the economic crisis, and therefore
more vulnerable to targeting and recruitment by terrorist organisations is to
be taken seriously. However, terrorist strategy, behaviour and actions are
motivated much more by the reinforcing of a set of ideological beliefs through
targeted messaging and indoctrination.
Dr Ian Davis, Director NATO Watch,
Gairloch - United Kingdom: Secretary General Rasmussen
repeatedly warns against defense cuts that are too large and disproportionate,
but what is the impact of defense cuts that are too small and inconsequential,
as could be argued has been the case in NATO's largest economy, the United
States?
Adrian Kendry: Having
reached 9.4% of Gross Domestic Product (GDP) during the Vietnam War, the
defense spending of the United States had fallen to some 3.7% of GDP in Fiscal
Year 2000. Even after the attacks of 9/11 the average defense spending as a
proportion of GDP during Fiscal Years 2002-2007 was just below 4.0%. During the
Fiscal Years 2008-2011 the share of defence spending (taking account of the
increasing scale of operations in Afghanistan and the presence of US combat
forces in Iraq until August 2012) increased the share of defense spending to
4.7% in 2011. President Obama has
proposed that defense spending should fall to the 2000 figure of 3.7% of GDP by
2018 (this proposal does not allow for the impact on defense spending of the
so-called "Fiscal Cliff" impact arising from a failure of Congress to agree on
a deficit-reduction package by the end of 2012). Should this ambition be
realised then the United States would experience, on current trends, a fall in
its share of world military expenditures from 42% to fewer than 30%. Of course,
as suggested in the question, is this a case of defense spending reductions
that are too little and too late? As Dr. Davis well understands, the reality of
United States defense spending and its conduct of the "Wars against Terrorism"
since 9/11 is that the United States accounts for more than 70% of all NATO
defense spending. In an unpredictable and complex world, many would argue that
this is not the time to be making even larger reductions in defense spending in
the United States.
Mari-Liis
Mäevere, Student of International Relations, Estonian School of Diplomacy, Talinn-Estonia: Estonia has remained one of the few countries
whose defense spending is 2 percent of its gross domestic product. How can it
be assured that other NATO member countries contribute in the same
amount?
Adrian Kendry: The commitment to achieve
a target of defense spending at 2% of Gross Domestic Product is an important
political signal and demonstration of solidarity among the member states of the
NATO Alliance. In a sense it can be thought of as a "Club Fee" (drawing upon
the ideas of the Nobel prize-winner in Economics, James Buchanan) that enables
the member state to meet the requirements for being a capable and effective
member of "the club". However, it can be argued that this is only a necessary
and not sufficient condition for investing in security. Ensuring that equipment
spending and research and development are developed and sustained are critical
to the production and maintenance of defence outputs and the capabilities that
result. At a time of severe economic pressure and great pressure on public
finances and budgets, defence spending has to compete with education, health,
welfare and other social expenditures that have claims on tax revenues (that
are themselves under pressure because of low growth and in some cases economic
recession). Therefore there can be no absolute reassurance concerning the
commitment to 2%. However, the vitality and resilience of a transatlantic
alliance that has guaranteed stability, security, and the conditions for
economic prosperity, for some sixty-three years must be sustained by ensuring
that the investment in defense and security is not neglected and recognised as
being fundamental to maintaining the Alliance and its member states.
The editorial team
would like to thank all participants in this Q&A and especially Mr. Kendry
for taking the time to answer them in such detail.
UPDATE: Part 2 of Mr. Kendry's responses have been published as well.
- 7
December 13, 2012
John A. Hughes, members of the international relations learning & research community taught by Professor Mazzucelli at New York University, (6)