- Browse by Issue:
Economic issues are now front and center for the world's political leaders, topping the agenda of both domestic and foreign policy concerns. While the major international security issues of the last quarter-century are still with us-the competition in strategic nuclear arms, the struggle of differing political systems, the confrontation of massively armed alliances in Europe, the menace of great-power involvement in local conflict-these are now being overshadowed by the risk that the operation of the international economy may spin out of control. For if this happens there will be no graver threat to international stability, to the survival of Western democratic forms of government, and to national security itself.
The tendency of Americans to think of foreign policy in universal terms goes back to the beginning of the Republic. As George Kennan has pointed out most forcefully, from "no entangling alliances" to "making the world safe for democracy" to the Truman Doctrine, the argument over what to do abroad has habitually been conducted as if it concerned the acceptance or rejection of some single touchstone principle or slogan. Temperament and geography joined to form this tendency; we were a nation set apart both physically and in the perceived roots of our national identity. And history decreed that in its terms of time we should move with breathtaking speed from a nation seemingly unaffected by the wars and struggles of others to one that has seen itself, at least since 1941, deeply affected by any substantial conflict anywhere in the world.
In mid-November of last year, I concluded an article for Foreign Affairs on the October War and the future of the Arab-Israeli conflict by saying that a resolution of the conflict had at last become a real possibility for the parties directly concerned, and an imperative necessity for all the outsiders that have been involved in it. I added that a successful wedding of the outside powers' need to the possibilities latent in the situation required sensitivity to the fundamental concerns of the parties, imaginative diplomacy, and statesmanlike timing. In the nine months that have elapsed since I wrote those words, the United States, Europe and Japan, and up to this point the Soviet Union, have given ample evidence of their eagerness for peace. The United States in particular has taken the lead in trying to promote an Arab-Israeli settlement, and Secretary of State Kissinger has twice treated the world to breathtaking experiments in diplomacy, shuttling between half a dozen capitals to sustain two "campaigns" of negotiations of hitherto unprecedented intensity.
In 1954 the United States began, innocently enough, to share its nuclear resources with the world. Since the start of the Atoms for Peace program we have supplied nuclear technology and materials to 29 countries in an effort to extend the benefits of peaceful atomic power to all mankind. In the intervening years, other nations have developed their own nuclear capabilities, or have received assistance from U.S. licensees in other countries, such as France, or through sharing arrangements such as Euratom and the International Atomic Energy Agency (IAEA). All told today, over 500 nuclear reactors are in operation in 45 countries. By 1985, the number of operating power reactors throughout the world is expected to quadruple.
India detonated a nuclear explosive below the surface of the Rajasthan desert on May 18 of this year. If we were hoping that the world's nuclear club could be limited to the five nations that have possessed the bomb since 1964, that possibility is thus now gone.
Never throughout history has there been a time when there has not been a devastating famine in some part of the world. In our lifetime, widespread starvation in Asia, Europe, Africa and Latin America has taken the lives of millions of men, women and children. We know that somewhere, this year, there will be a new famine-the result of war or a major national catastrophe. Already there is starvation in the Sahel area south of the Sahara, and the threat of renewed serious crop failure in the Indian subcontinent. The presently bad-and worsening-state of the total world food supply, particularly the depletion of grain reserves in the United States and the shortage of the fertilizers needed to maintain the "green revolution" as a result of high oil prices, leads one to expect that the extent of any new famine will indeed be catastrophic. Historically we have proved ourselves ill-prepared to cope with famines. How well can we hope to deal with them in an even less propitious situation?
Four assumptions are commonly made in the discussion of multinationals and the developing countries-by friends and enemies alike of the multinational company. These assumptions largely inform the policies both of the developing countries and of the multinational companies. Yet, all four assumptions are false, which explains in large measure both the acrimony of the debate and the sterility of so many development policies.
Canada will now permit new foreign direct investments only when they bring "significant benefit" to Canada. The determination of "significant benefit" is explicitly to be a policy decision of the cabinet, based on five criteria: the contribution of the proposed investment to "the level and nature of economic activity in Canada," including employment, use of Canadian components, and exports; the degree and significance of Canadian participation in the enterprise; the effect on productivity, technological development and innovation in Canada; the effect on industrial competition; and the compatibility of the investment with the economic and industrial policies of the national and provincial governments.
As dramatic as the rise of the multinational corporation has been its increased political prominence. The very term implies a political visibility not associated with the words "direct investment" that were used a decade ago. In the past two years the role of these spreading enterprises has been debated in the International Labour Organisation, the Organization for Economic Cooperation and Development, the European Community, the U.S. Senate and the U.N. General Assembly. During 1973 a "Group of Eminent Persons" met under the auspices of the U.N. Economic and Social Council to study the role of multinational corporations in international relations and the process of development.