China’s Economic Reckoning
The Price of Failed Reforms
U.S. President Donald Trump’s decision to go it alone in responding to the coronavirus pandemic is but the latest manifestation of the United States’ waning global leadership. Even before the virus struck, there was broad bipartisan agreement that Washington should reduce its commitments abroad and focus on problems at home. The economic and social toll of the pandemic will only reinforce that position. Many Americans—and not just the president’s supporters—believe that the United States’ allies have taken advantage of the country. They think that the costs associated with international leadership have been too high. They have lost patience with endless wars and foreign interventions.
The United States remains the most powerful country in the world, in both economic and military terms. Yet nearly three decades since its victory in the Cold War and the collapse of the Soviet Union, it faces challenges on multiple fronts. China and Russia are strengthening their militaries and seeking to extend their influence globally. North Korea poses an increasingly sophisticated nuclear threat in East Asia, and Iran remains a determined adversary in the Middle East. After 19 years of war, thousands of U.S. troops remain in Afghanistan and Iraq, and the Islamic State (or ISIS) continues to conduct terrorist attacks. Deep divisions have beset the United States’ strongest allies in Europe. And now, nearly every country on earth is grappling with the devastating consequences of the pandemic.
Without a return of U.S. leadership, these challenges will only grow, moving us closer to a dog-eat-dog, might-makes-right world and further from one shaped by international cooperation and the peaceful resolution of differences. But such a return would depend on first addressing the fundamental flaws in U.S. foreign policy since the end of the Cold War. Washington has become overly dependent on military tools and has seriously neglected its nonmilitary instruments of power, which have withered and weakened as a result. And it has attempted to develop and implement policy using a national security structure and bureaucracy that was designed for the Cold War and has changed remarkably little since the 1940s. Without greater military restraint and far-reaching institutional restructuring and reform, U.S. politicians and policymakers will have an increasingly hard time persuading Americans to support the global leadership role so essential to protecting the security and economy of the United States. And without American leadership, there will be truly dark days ahead.
A strong military underpins every other instrument of American power, and so every president must ensure that the U.S. military is the strongest and most technologically advanced in the world, capable of dealing with threats from both nonstate actors and great powers. Fulfilling that responsibility will become ever more difficult as the pandemic pushes the government toward curbing defense spending.
As essential as it is to build and maintain a strong military, it’s just as—or more—important to know when and how to use it. When facing a decision of whether to use the military, presidents must better define the objective. What are troops expected to do, and are the resources adequate for the mission? If the mission changes, as it did in Somalia under President Bill Clinton (from famine relief to peacemaking and improving governance) and in Iraq under President George W. Bush (from toppling Saddam Hussein to occupation, fighting an insurgency, and nation building), is there a commensurate change in the resources applied? Is there a mismatch between U.S. aspirations and U.S. capabilities, as in Afghanistan?
Finding the right answers to these questions has proved difficult in recent decades. The objective of any military intervention must be clear, and the strategy and resources committed must be adequate to fulfill the objective. Sensitive to domestic politics, presidents sometimes are tempted to use just enough military force to avoid failure but not enough to achieve success. Such an approach is not only strategically unwise but also immoral. The lives of American men and women in uniform must not simply be thrown at a problem and squandered in halfhearted or impulsive efforts. In the use of military force, the words of Yoda from Star Wars apply: “Do. Or do not. There is no try.”
Presidents must be especially wary of mission creep, the gradual expansion of a military effort to achieve new and more ambitious objectives not originally intended. Often, once they have achieved the established objectives, leaders feel emboldened to pursue broader goals. Such overreach is what happened under Clinton after the United States sent troops into Somalia in 1993 to forestall humanitarian disaster and after it overthrew the military dictatorship in Haiti in 1994, and it is what happened under Bush after the United States toppled the Taliban in Afghanistan in 2001 and Saddam in Iraq in 2003.
Presidents must be wary of mission creep.
Intervention to prevent the slaughter of innocent civilians became one of the more frequent reasons for the use of force after the end of the Cold War. But such conflicts raise thorny questions of their own. Before intervening militarily, leaders must assess whether core U.S. interests are really threatened, how realistic the objectives are, the willingness of others to help, the potential human and financial costs of intervention, and what might go wrong when U.S. troops hit the ground. These are hard questions, but they must be addressed with eyes wide open. The bar for the use of the U.S. military for purposes short of protecting vital national interests should be very high.
Some on the left are convinced that the United States should intervene to safeguard civilians, as in Libya, Sudan, and Syria. Some on the right advocate the use of force against China, Iran, or North Korea or want to provide large-scale military assistance to Ukraine or to the opposition in Syria. A president who ignores one or the other camp is considered either morally bereft or a wimp.
The consequences of an insufficiently planned military intervention can be devastating. Take, for example, the U.S. intervention in Libya in 2011, which I opposed. Once President Barack Obama decided to go in, the administration made two strategic mistakes. The first was agreeing to expand the original NATO humanitarian mission from simply protecting the people of eastern Libya against the forces of Libyan President Muammar al-Qaddafi to toppling the regime. NATO could have drawn a proverbial line in the sand somewhere between the capital, Tripoli, and the eastern city of Benghazi; a no-fly zone and attacks on Qaddafi’s ground forces could have protected the rebels in the East without destroying the government in Tripoli. Under those circumstances, perhaps some kind of political accommodation could have been worked out.
As I said at the time, Qaddafi had given up his nuclear program and posed no threat to U.S. interests. There is no question he was a loathsome and vicious dictator, but the total collapse of his government allowed more than 20,000 shoulder-fired surface-to-air missiles and countless other weapons from his arsenal to find their way across both Africa and the Middle East, sparked a civil war in 2014 that plunged Libya into years of turmoil, opened the door to the rise of ISIS in the country, and created the opportunity for Russia to claim a role in determining Libya’s future. The country remains in a shambles. As happened in Somalia, Haiti, Afghanistan, and Iraq, expanding the U.S. military mission in Libya beyond the original objective created nothing but trouble.
The second strategic mistake was the Obama administration’s failure to plan in any way for an international role in reestablishing order and a working government post-Qaddafi. (This is ironic in light of Obama’s earlier criticism of Bush’s alleged failure to plan properly for a post-Saddam Iraq.) Drawing on nonmilitary tools, the government could have taken a number of useful steps, including sending a U.S. training mission to help restructure the Libyan army, increasing the advisory role of the UN Support Mission in Libya, helping design a better electoral system that would not have inflamed social and regional divisions, and restraining Egypt and the Gulf states from their meddling in the lead-up to and after the outbreak of the 2014 civil war.
The United States did provide limited assistance to Libya after Qaddafi fell, much of it for treating victims of the fighting and locating weapons stockpiles. A September 2012 Wilson Center report suggested 30 different nonmilitary U.S. programs to help Libya, focusing on areas such as developing a new constitution, building a transparent judicial system, improving financial governance, promoting economic growth, and improving chemical weapons security and destruction. But the U.S. government never put together sufficient funding for these measures, even though their estimated cost, according to the Wilson Center, for the three years between the intervention in 2011 and the beginning of the civil war in 2014 was $230 million. By comparison, the cost of U.S. military operations in Libya between March and October 2011 was about $1 billion. If ever there was a mismatch between the importance of the nonmilitary mission and its available funding, this was it.
There were a number of nonmilitary ways in which the United States (and its allies) might have been able to stop the fighting and help stabilize Libya in the summer and fall of 2011. But there was no plan, no funding, and no desire. Washington’s use of nonmilitary instruments of power, as so often after the Cold War, was hesitant, inadequately funded, and poorly executed. The NATO-Arab coalition bombed Libya and then just went home, leaving Libyans to fight over the ruins and thus creating another source of instability in the region and a new base for terrorists. Obama himself supplied the harshest judgment about the intervention, characterizing the failure to plan for a post-Qaddafi Libya as the worst mistake of his presidency.
What is so striking about the overmilitarization of the period following the Cold War is just how much U.S. policymakers failed to learn the lessons of the seven previous decades. One of the United States’ greatest victories of the twentieth century relied not on military might but on subtler tools of power. The Cold War took place against the backdrop of the greatest arms race in history, but there was never actually a significant direct military clash between the two superpowers—despite proxy wars in Korea, Vietnam, and elsewhere. Indeed, most historians calculate that fewer than 200 U.S. troops died due to direct Soviet action. Because nuclear weapons would have made any war between the two countries catastrophic for both sides, the U.S.-Soviet contest was waged through surrogates and, crucially, through the use of nonmilitary instruments of power.
Most of those instruments have withered or been abandoned since the end of the Cold War. But as the great powers today expand and modernize their militaries, if the United States is smart, and lucky, the long competition ahead with China, in particular, will play out in the nonmilitary arena. Those nonmilitary instruments must be revived and updated.
Like a strong military, diplomacy is an indispensable instrument of national power. For many years now, Congress has starved the State Department of sufficient resources (except for brief periods under the George W. Bush administration), and the White House has often sidelined the agency and failed to support its budgetary needs. The State Department’s critics, including those inside the department, are right that the organization has become too bureaucratic and requires far-reaching reform. Still, any effort to strengthen the United States’ nonmilitary toolkit must position a stronger State Department at its core.
The United States’ economic power offers further nonmilitary means of courting partners and pressuring rivals. After World War II, the United States presided over the creation of institutions designed to strengthen international economic coordination largely on American terms, including the International Monetary Fund and the International Bank for Reconstruction and Development (later part of the World Bank). Throughout the Cold War, the United States was a principal advocate for free trade and a more tightly knit global trading system.
The State Department has become too bureaucratic and requires reform.
Attitudes changed, however, in the early 1990s. It became increasingly difficult to get Congress to approve free-trade agreements, even when they were negotiated with friendly countries such as Canada and Mexico. U.S. presidents came to see economic power mainly as an instrument to mete out punishment. Since the end of the Cold War, Washington has applied economic sanctions—mostly in the form of targeted trade and financial restrictions—against dozens of countries in an effort to alter their behavior. Trump, in particular, has been hostile to nearly all multilateral organizations and has weaponized U.S. economic power, starting tariff wars with both allies and rivals.
The Trump administration has also tried to slash foreign aid. Such assistance remains a useful tool, even though the public has always been skeptical of spending money abroad rather than at home. With little popular support, the U.S. Agency for International Development has shrunk since the end of the Cold War. When I retired as director of the CIA, in 1993, USAID had more than 15,000 employees, most of them career professionals, many working in developing countries in dangerous and inhospitable environments. When I returned to government as secretary of defense, in 2006, USAID had been cut to about 3,000 employees, most of whom were managing contractors.
In shrinking USAID, the United States unilaterally gave up an important instrument of power. By contrast, China has been especially adept at using its development projects to cultivate foreign leaders and buy access and influence. Its boldest gambit on this front has been the Belt and Road Initiative, which in 2019 encompassed projects in 115 countries with an estimated cost of over $1 trillion.
Another casualty of the collapse of the Soviet Union was the U.S. Information Agency and the United States’ overall strategic communications capabilities. During the Cold War, the USIA established a global network of libraries and outposts stocked with books and magazines about democracy, history, American culture, and a broad array of other subjects. The agency’s Voice of America broadcast news and entertainment around the world, presenting an objective view of current events to millions who would otherwise have been dependent on government-controlled outlets. The USIA and its many outlets and programs reached every corner of the planet. It was a sophisticated instrument, and it worked.
Nevertheless, the USIA was abolished in 1999, with its residual efforts folded into the State Department. That had real consequences. By 2001, U.S. public diplomacy was a pale shadow of its Cold War self. Unlike China and Russia, the United States now lacks an effective strategy for communicating its message and countering those of its competitors.
Governments have always tried to interfere in other countries’ affairs. What is new today is the availability of technology that makes earlier tools seem prehistoric. Russia, for example, mounted sophisticated hacking and disinformation campaigns to interfere in the 2016 Brexit vote in the United Kingdom, the 2016 presidential election in the United States, and the 2017 presidential election in France. The United States possesses the same the technologies; it just lacks a strategy for applying them.
Cyberwarfare has become one of the most powerful weapons in a nation’s arsenal, giving countries’ the ability to penetrate an adversary’s military and civil infrastructure, interfere with democratic processes, and aggravate domestic divisions. The Russians are particularly skilled in this arena, having launched cyberattacks against Estonia, Georgia, Ukraine, and others. The United States is developing the capability to defend itself against cyberattacks, but it also needs to take the offensive from time to time, especially against its primary adversaries. Authoritarian governments must get a taste of their own medicine.
U.S. policymakers have many nonmilitary tools at their disposal. But those tools will remain inadequate for the challenges ahead if Washington does not overhaul its outdated national security apparatus. The current structure, established by the National Security Act of 1947—which created the Department of Defense, the U.S. Air Force (as a separate military service), the CIA, and the National Security Council (NSC)—has outlived its usefulness. Under the current structure, for example, there is no formal place at the table for any of the departments or agencies overseeing international economic policies. Presidents have routinely invoked a “whole-of-government approach” to tackle problems, suggesting that all relevant departments and agencies will bring their vast resources to bear in a shared effort. But apart from when it involves military matters, this collective action is largely smoke and mirrors. The government in fact has little ability to orchestrate all its instruments of power.
The State Department should be the central nonmilitary instrument of U.S. national security policy. Although the State Department and USAID traditionally have been staffed by some of the most talented people in government, in organizational terms, the two entities are nightmares. The State Department has a stultifying bureaucracy that frustrates its best people and greatly impedes its agility. It doesn’t always allocate its resources well—for instance, it still has too many people in comfortable postings such as Berlin, London, Paris, and Rome and not nearly enough in Ankara, Beijing, Cairo, or New Delhi or in the capitals of other key developing countries. The bureaucratic culture stifles creativity, which explains why more than a few secretaries of state have, for all practical purposes, walled themselves off from the professionals in the department. To gain strength, the State Department must reform the way it recruits and trains people and change its culture so as to attract young independent thinkers. The State Department needs a dramatic bureaucratic restructuring and cultural shakeup—and then significantly more funding and personnel.
A restructured and strengthened State Department would serve as the hub for managing all the spokes of the government involved in directing nonmilitary resources to address national security problems. A good example of how this might work is George W. Bush’s project to combat HIV/AIDS in Africa, in which a number of agencies had a role to play but the president empowered a single officer in the State Department to control the budget and coordinate all the agencies in an effective campaign. Some might argue that the NSC and its staff should play this role. Having worked on the NSC staff under four presidents, I disagree. The kind of integration and centralization needed must involve day-to-day management and operational and budgetary integration and coordination—endeavors beyond the capabilities and writ of the NSC.
Successive U.S. presidents have been frustrated by the inadequacies and failures of USAID. That was one reason why Bush established the Millennium Challenge Corporation in 2004 as a separate entity, to provide assistance that would reward countries that were “ruling justly, investing in their people, and encouraging economic freedom.” Even if the MCC doesn’t take over all U.S. development assistance efforts, as some conservatives have called for, the principles it uses to guide the selection of recipient countries and projects ought to be adopted more broadly. If the recipients of American aid were subjected to greater vetting, particularly when it comes to their values and attitudes toward the United States, then Congress might prove more willing to support such programs. Self-interest in apportioning scarce resources for development would not be a sin (although the United States must continue to offer humanitarian assistance after natural disasters or emergencies wherever it is needed).
Successive U.S. presidents have been frustrated by the inadequacies and failures of USAID.
Reviving and restructuring U.S. development assistance is all the more urgent in light of China’s Belt and Road Initiative and its other efforts to bring developing countries into its orbit. The establishment, in 2019, of the U.S. International Development Finance Corporation, an independent government agency that helps finance private-sector investment in development projects was a good start to expanding U.S. efforts to encourage private investment in developing countries. China may be able to loan billions of dollars to countries, but the United States has a vastly more powerful private sector that can not only invest in but also select economically viable projects that will truly serve the long-term interests of the recipient countries. The United States is well practiced in the art of economic punishment, but it needs to get a lot smarter about using economic tools to win over other countries.
In the United States’ nonmilitary competition with China and Russia, U.S. officials also need to look at how to reform the alliances and international organizations Washington helped create to make them better serve U.S. objectives today. When it comes to NATO, for example, the United States should keep pressuring other members to spend more on defense but also help allies find ways to collaborate in modernizing their military capabilities. The International Monetary Fund and the World Bank also merit a hard look. There is no reason to leave them, but the United States should be aggressive in making sure that they serve U.S. interests and that they are operating effectively and fairly.
In addition, if the United States wants to compete effectively with authoritarian governments, it will have to overhaul its public messaging. The current effort is an embarrassment. Many entities have a hand in strategic communications, including the White House, the State Department, the Defense Department, the Treasury Department, the CIA, and the U.S. Agency for Global Media, but for the most part, each goes its own way. The result is many lost opportunities. The United States has failed to appeal to the nationalist sentiments of people in Europe and elsewhere to resist Chinese and Russian efforts to interfere in the internal affairs of their countries. U.S. policymakers have also done a lousy job communicating to the rest of the world the scale and impact of U.S. development assistance and humanitarian assistance programs, including programs that have benefited people ruled by enemy governments. Who knew, for example, that in 1999, during the North Korean famine, the United States provided more food aid than the rest of the world combined and three times what China offered? The United States needs to trumpet its foreign aid, to act less like a monastic order and more like Madison Avenue.
What’s needed is a new top-level organization—akin to the USIA on steroids and located within the State Department but empowered by the president—to enable consistent strategic communication using all available venues. It would oversee all traditional and electronic messaging, including social media, and all public statements and other communication efforts by other parts of the U.S. government relating to foreign policy.
Strengthening the nonmilitary tools of U.S. foreign policy would advance U.S. national interests and create new, more cost-effective, and less risky ways to exercise American power and leadership internationally. Americans want the strongest military in the world, but they want it used sparingly and only when vital national interests are at stake. Across the political spectrum, there is a belief that post–Cold War presidents have turned too often to the military to resolve challenges abroad. The United States must always be prepared to defend its interests, but in order to revive domestic support for the United States’ global leadership role, U.S. leaders must exercise greater restraint in sending the world’s finest military into combat. It should not be the mission of the U.S. military to try to shape the future of other countries. Not every outrage, every act of aggression, every oppression, or every crisis should elicit a U.S. military response.
Finally, most Americans want their country to stand for something beyond just military strength and economic success. They want it to be seen admiringly by others as the world’s strongest advocate for liberty. In formulating a foreign policy that the American public will support, U.S. leaders should recognize that it is important to use every nonmilitary instrument of power possible to encourage both friends and rivals to embrace freedom and reform, because those objectives serve the U.S. national interest. With restructuring and more resources, Washington’s nonmilitary instruments can contribute to a remarkable symphony of power. These tools will be essential as the United States faces the prospect of a long and multifaceted competition with China. But even if U.S. officials get all the right military and nonmilitary tools in place, it will still be up to American leaders, American legislators, and the broader American public to understand that the long-term self-interest of the United States demands that it accept the burden of global leadership.