International Economics and National Security

The list of international economic problems that will trouble policymakers in the 1990s is long and diverse. Among the most important issues for U.S. national security are three that pertain primarily to relations among the developed countries: encouraging stability and reform in the Soviet Union, maintaining a cooperative U.S.-Japanese relationship, and avoiding vulnerabilities from the globalization of America's defense industrial base. Three more major issues facing the United States have a North-South dimension: reducing dependence on oil from the Persian Gulf, moderating the impact on the Third World of the prolonged debt crisis, and limiting the damage from the narcotics trade.

Clearly this list is not exhaustive; it could be lengthened without difficulty. Several issues that deserve emphasis in purely economic terms-from the outcome of the multilateral trade negotiations, to the competitiveness of American industry, to the future of the U.S. budget deficit-weave their way in and out of the entire list.

In the six primary areas examined here, U.S. national security policy in the 1990s faces a challenge of a different order than that confronted during the Cold War period: not clear and present dangers requiring great sacrifices, but dim and distant dangers calling for small sacrifices. The array of threats to American well-being on today's horizon is no less real than in earlier periods and in some cases may turn out to be even more troublesome. But meeting these threats will require a new kind of leadership: the management of the mundane.

Before turning to the broader theme of economic policy and the evolving strategic concerns of the United States, it is important to look closely at each issue on its own terms.

II

Does the United States have an interest in joining with other countries to provide large-scale financial support to the Soviet Union as that country struggles to transform its economy?