War by Other Means
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27. U.S.-India Joint Statement, White House Office of the Press Secretary, September 30, 2014.
28. Author interview with Dr. Alyssa Ayres, April 2014.
29. “Putin’s War of Words,” New York Times, December 4, 2014.
30. Some are of the view that NATO should be more assertive in its response than it has been to date. Regardless of one’s view on this question, the point here is simply that, based on a survey of the response the United States and European Union have mounted to date, the overwhelming focus has been limited to NATO activities, together with sanctions coordination efforts.
31. At a November 2014 exhibition of armored personnel carriers in Moscow, Mr. Putin observed how “you can do a lot more with weapons and politeness than just politeness,” an unsubtle reference to the “polite” Russian soldiers who appeared in Crimea earlier that year. Central Asian and Eastern European nations are increasingly aware of the potential repercussions if Putin’s Novorossiya is realized, and they are looking to the United States as an alternative to Russian and Chinese investment. For instance, securing closer trade and investment ties with the United States has been a primary focus of Kazakh foreign minister Erlan Idrissov’s portfolio. “Putin’s War of Words,” New York Times, December 4, 2014 (quoting Putin). For more on Kazakhstan’s efforts to increase economic ties with the United States, see generally “Joint Statement of the Third U.S.-Kazakhstan Strategic Partnership Dialogue,” U.S. Department of State, December 10, 2014; Robert Guttman, “Kazakhstan Foreign Minister and U.S. Senior Officials Reaffirm and Strengthen Strategic Partnership,” TransAtlantic Magazine, July 14, 2013.
32. One of the clearest examples came in December 2014, as Russia found itself in the grip of a full-blown currency crisis. Despite stunning interventions by the Russian central bank—including hiking deposit rates from 10 percent to 17.5 percent in the course of a single overnight period—the ruble continued a steep slide, losing more than half of its value since the start of 2014. See, e.g., David Herzenshorn and Neil Irwin, “Interest Rate Raised to 17% in Russia,” New York Times, December 15, 2014.
33. Many of these recommendations are from Meghan L. O’Sullivan, “North American Energy Remakes the Geopolitical Landscape: Understanding and Advancing the Phenomenon,” Goldman Sachs, May 31, 2014.
34. Energy ties should, as Elizabeth Rosenthal aptly notes, be used alongside trade as leverage to strengthen regional relationships. Elizabeth Rosenthal, “Energy Rush: Shale Production and U.S. National Security,” Report of the Unconventional Energy and U.S. National Security Task Force, Center for a New American Security, February 2014.
35. As Locklear put it, upheaval from a warming planet “is probably the most likely thing that is going to happen … that will cripple the security environment, probably more likely than the other scenarios we all often talk about.” Continued Locklear, “I’m into the consequence management side of it. I’m not a scientist, but the island of Tarawa in Kiribati, they’re contemplating moving their entire population to another country because [it] is not going to exist anymore.” Bryan Bender, “Chief of U.S. Pacific Forces Calls Climate Biggest Worry,” Boston Globe, March 9, 2013.
36. Overviews of problems the United States has encountered with Egypt’s Ministry of International Cooperation include Thalia Beaty, “U.S. Aid and Egypt: It’s Complicated,” Carnegie Endowment for International Peace, October 23, 2012; Max Strasser, “Can USAID Be a Force for Good in Egypt?,” Nation, July 22, 2011.
37. For a brief overview of recent developments in the U.S.-Tunisia relationship, see U.S. Department of State, Bureau of Near Eastern Affairs, “U.S. Relations with Tunisia,” fact sheet, August 22, 2013.
38. Riddhi Dasgupta, “An Arab Spring Success Story: Tunisia’s New Constitution,” CNN Money, February 19, 2014; Tarek Amara, “Tunisia Sees Elections in 2014, Despite Delays,” Reuters, March 26, 2014.
39. Allison Good, “Could the Next U.S. Free Trade Agreement Be with Tunisia?,” Foreign Policy, July 12, 2012.
40. “Arab Stabilization Plan: Expanded White Paper,” Stimson Center, 2012, http://www.stimson.org/images/uploads/arab_stabilization_plan_final_expanded_white_paper.pdf.
41. Adopted in 1994, the Bogor goals aim for free and open trade and investment first by 2010 for industrialized economies and by 2020 for developing economies in the Asia-Pacific region. Member countries agreed to pursue these goals by reducing barriers to trade and investment and by promoting the free flow of goods, services, and capital. See Asia-Pacific Economic Cooperation, “Bogor Goals,” fact sheet, www.apec.org/About-Us/About-APEC/Fact-Sheets/Bogor%20Goals.aspx. Citing the value of learning from the experiences of other countries, Hany Dimian said: “We are not going to reinvent the wheel—countries have diagnosed the economic problems and they know the solutions and the measures that need to be taken. The safest way … is to implement what has been tested elsewhere.” “IMF Promotes Debate on Economic Change in the Middle East,” IMF Survey Magazine, April 16, 2014.
42. The current deficiencies of the U.S. Agency for International Development are explored in Christopher Holshek, “Why Is the United States Letting Its Best Foreign Aid Tool Fall Apart?,” Foreign Policy, June 22, 2015.
43. Mirjam Gehrke, “New Era Possible in EU Development Aid,” Deutsche Welle, February 3, 2014.
44. Kim Mackrael, “Commercial Motives Driving Canada’s Foreign Aid, Documents Reveal,” Globe and Mail, January 8, 2014.
45. David Petraeus and Robert Zoellick, “Perfect Partners: North America’s Shared Future,” Foreign Affairs, February 18, 2014.
46. The United States currently has FTAs with every country of the alliance except Ecuador. Canada has stepped up its engagement with the alliance by establishing a Trade and Development Facility to negotiate, implement, and benefit from trade and investment agreements between Canada and the member countries. Membership will help both countries to integrate the Pacific Alliance countries more quickly into the TPP or other multilateral agreements. “Join the Club,” Economist, April 29, 2013; “Baird Announces New Trade Initiative at Pacific Alliance Meeting,” Canadian Office of Foreign Affairs—Trade and Development, press release, June 20, 2014.
47. Robert Zoellick, “A Presidency of Missed Opportunities,” Wall Street Journal, August 10, 2014.
48. OPIC has returned money to U.S. taxpayers for thirty-seven straight years. See Overseas Private Investment Corporation, “OPIC 2014 Annual Report,” www.opic.gov/sites/default/files/files/opic-fy14-annual-report.pdf. The Annual Management Report of the Overseas Private Investment Corporation for Fiscal Year 2014 put OPIC’s 2014 investments at $2.96 billion with $358 million returned to the taxpayer. See, “Annual Management Report of the Overseas Private Investment Corporation for Fiscal Year 2014,” OPIC, November 17, 2014, https://www.opic.gov/sites/default/files/files/fy2014-management-report.pdf.
49. See Venture for America’s website, ventureforamerica.org.
50. See David Gordon and Stephen Krasner, “How to Bring Bashar Assad to the Table,” Politico, May 29, 2012; Charles Kenny, “Odious Obligations,” Foreign Policy, March 19, 2012.
51. For a compelling account of the central role that corruption plays in virtually all of America’s top national security challenges, see Sarah Chayes, Thieves of State (New York: W.W. Norton, 2015). See also, Rachel Kleinfeld, “The Corruption Connection,” The Hill, July 24, 2013.
52. Akin to the way the GATT offered a global solution to the problem of tariffs, we might consider a new present-day counterpart—an agreement, binding among parties, that would seek to confront the most salient forms of protectionism skewing playing fields today. This agreement would function similarly to existing trade agreements, complete with binding negotiations and agreed-upon enforcement mechanisms and remedies, but rather than liberalizing tariffs and investment as a principal aim, it would instead focus on addressing government market distortions and other competitiveness issues. Open to all comers who meet the standards, and offering a set of norms and discipl
ines for non-tariff-related market distortions, such an agreement could grow to function as a near-counterpart to the GATT.
53. See, e.g., Clyde Prestowitz, “China’s Not Breaking the Rules. It’s Playing a Different Game,” Foreign Policy, February 17, 2012.
54. OCO funding was later expanded for fiscal year 2015 to include uses pertaining to Yemen and Syria. See Julian Pecquet, “Congress Balks at War on Terror Funding for Syria,” Al-Monitor, April 16, 2014; “Analysis of the President’s FY15 International Affairs Budget Request,” U.S. Global Leadership Coalition, March 4, 2014.
55. See, e.g., Daniel Byman and Matthew Waxman, The Dynamics of Coercion: American Foreign Policy and the Limits of Military Might (Cambridge: Cambridge University Press, 2002).
56. The changes would double the IMF’s quota to $720 billion, shift six percentage points of total quota to emerging markets, and move two of the twenty-four IMF directorships from European to developing countries. See Robin Harding, “G20 Gives U.S. Ultimatum over IMF Reform,” Financial Times, April 11, 2014.
57. Richard N. Haass, Foreign Policy Begins at Home: The Case for Putting America’s House in Order (New York: Basic Books, 2014).
10. Geoeconomics, U.S. Grand Strategy, and American National Interests
1. In disclosure, one of this book’s authors was a chief architect of the Clinton Economic Statecraft agenda.
2. Hillary Rodham Clinton, “Economic Statecraft,” speech at the Economic Club of New York, October 14, 2011.
3. See “Delivering on the Promise of Economic Statecraft,” remarks by Hillary Rodham Clinton at Singapore Management University, November 17, 2012.
4. Robert Zoellick, “A New U.S. International Economic Strategy,” Wall Street Journal, February 5, 2013.
5. Jonathon Weisman, “At Global Economic Gathering, U.S. Primacy Is Seen as Ebbing,” New York Times, April 17, 2015.
6. Graham Allison and Robert Blackwill, America’s National Interests: A Report from the Commission on America’s National Interests, July 2000.
Index
Aaviksoo, Jaak, 61
Abe, Shinzo, 109, 127
ADIA, 56–57
Afghanistan: Soviet invasion of, 27, 171–172; U.S. military actions in, 35, 46, 254
Africa: China Africa Development Fund, 139; Chinese geoeconomics in, 4, 27, 43–45, 56, 74, 96, 137–138, 138–139, 140, 243, 274n55; economic assistance to, 71, 74, 140, 242–245; energy industry in, 205; Libyan investment in, 56; U.S. geoeconomics impacting, 242–245. See also specific countries
Ahmadinejad, Mahmoud, 199
AidData, 138
Airbus Industrie, 26, 41
Alaska, purchase of, 156
Albright, Madeleine, 255
Alcoa, 62
Alexander, Keith, 67
Algeria: energy policies in, 85, 218
Allegheny Technologies, 62
Alliance of the Pacific, 34
al-Qa’ida, 35, 174, 175, 254
Angell, Norman, 19, 31, 262n6
Angola: Chinese geoeconomics impacting, 147; contracts bolstering autocratic regimes in, 45, 46; energy industry in, 207, 208; geoeconomics of, 39; Soviet-Cuban involvement in, 170
Apple, 136, 301n57
Aquino, Benigno, III, 114
Araújo, Heriberto, 151
Argentina: Chinese economic conflicts with, 42; curbing influence of, 34; energy industry in, 43, 218; U.S. geoeconomics impacting, 189
Armenia: economic assistance to, 69–70; energy industry in, 85; Russian financial status impacting, 198
Ashcroft, John, 196
Asian Infrastructure Investment Bank, 4, 74, 84, 114–115, 126, 187, 243
Asia-Pacific Economic Cooperation (APEC), 117, 233, 241–242
Aslund, Anders, 42
Assange, Julian, 40
Association of Southeast Asian Nations (ASEAN), 113, 114, 115, 117, 230, 233
Atambayev, Almazbek, 34
Australia: Chinese geoeconomics impacting, 273n48; cyberattacks against, 63; energy industry in, 205; financial and monetary policy in, 84; PALM participation by, 110
Azerbaijan: economic assistance to, 70; energy industry in, 6
Bahrain: energy policy in, 87; U.S. geoeconomics impacting, 175
Baker, James, 251, 252
Baldwin, David, 7, 17, 22–23, 28, 32, 161, 177, 189, 264n23, 267n45
Ball, George, 165
Ball Report, 165
Banking industry: Asian Infrastructure Investment Bank changes to, 4, 74, 84, 114–115, 126, 187, 244; cyberattacks against, 29, 34, 47, 61, 64, 66–67; diplomatic and market changes in, 41; economic assistance via, 73–74; sanctions and, 58, 59, 198; state-owned banks, 55, 73–74, 106, 131, 139–140, 183; World Bank role in, 4, 73–74, 107, 115, 139, 142, 230, 241, 243. See also specific banks and financial institutions
Bank of America, 66
Bank of Dandong, 106
Bank of International Settlements, 142
Barboza, David, 62
BASF, 36
Bashar al-Assad regime, 130
Behrendt, Sven, 281n58
Belarus: contracts bolstering autocratic regimes in, 45; economic assistance to, 73; Eurasian Union involvement of, 34, 70; Russian investment in, 34; sanctions against, 196
Belgium: financial and monetary policy in, 79–80; SWIFT domiciled in, 58
Bergdahl, Bowe, 72
Bergsten, Fred, 141, 182, 266n36
Bernanke, Ben, 147
BHP Billiton Ltd., 63
Bhutan, 127
Bienen, Henry, 172
Bilateral development assistance, 68, 70–73, 102–104, 242–245
Bilmes, Linda, 35
bin Laden, Osama, 122–123
Boeing, 26, 41, 272n40
Bolivia: economic assistance to, 242
Bowles, Erskine, 227
Boycotts, 107, 108–109, 110, 158
BP, 36, 42, 54
Brazil: BNDES in, 73, 131, 242, 314n7; Chinese contracts with, 40–42; curbing influence of, 34; energy industry in, 205; investment policy in, 53, 56; state capitalism in, 36
Brende, Borge, 129
Bretton Woods Agreement, 3, 161, 168, 178, 184
Brezhnev, Leonid, 170
BRIC countries. See Brazil; India; Russia; and Chinese entries
BRICS Bank, 74, 243
Britain. See United Kingdom
Brown, Kerry, 136
Brunei: Chinese geoeconomics impacting, 111, 114; Trans-Pacific Strategic Economic Partnership with, 181
Burki, Javed, 125
Burns, Nicholas, 25
Bush, George H. W., 80, 170, 173, 253, 272n40
Bush, George W./Bush administration, 175, 198
Cairo Declaration, 71
Cambodia: Chinese geoeconomics impacting, 111, 114, 116, 117–118, 120, 309n174
Canada: Chinese geoeconomics impacting, 148; economic assistance/development aid by, 242; NAFTA with, 180, 181, 230–231, 293n201; North American energy revolution in, 206, 207, 209–210, 236
Cardenal, Juan Pablo, 151
Carswell, Robert, 190
Carter, Jimmy, 27, 170–172, 173, 190
Chad: Chinese geoeconomics impacting, 147
Chandler, Marc, 79–80
Chavez, Hugo, 45
Chen Shui-bian, 97, 99, 102
Chiang Kai-Shek, 95, 163
Chile: Pacific Alliance with, 242; Trans-Pacific Strategic Economic Partnership with, 181
Chi Mei, 99
China Africa Development Fund (CADF), 139
China-ASEAN Free Trade Agreement, 115
China Development Bank (CDB), 73–74, 131, 139–140, 242, 273n48, 275n60
China Huiyuan Juice Group, 63
China International Water and Electric Corporation, 116
China Investment Corporation (CIC), 137
Chinalco, 63, 273n48
China National Offshore Oil Corporation, 54, 86, 147–148, 314n6
China National Petroleum Corporation, 54, 118, 137, 213
China North Indu
stries Corporation, 119
China Overseas Investment Company, 105
China Overseas Ports Holding Company, 124
Chinese foreign policy: geoeconomics in (see Chinese geoeconomics); geopolitically motivated deals impacting, 43–45; Indian and Pakistani relations in, 94, 120–128, 311n197, 313n237; Japanese relations in, 4, 94, 106–110, 112, 135, 304n102; military power and actions in, 44, 46, 58, 62, 95, 96, 110, 112, 121, 122–123, 134; North Korean relations in, 93–94, 102–106; overview of, 93–95; South and East China Seas aggression as, 46, 86, 110, 111–120, 131, 134, 135, 145, 147, 183, 231; Southeast Asia relations in, 94, 111–120, 131, 145, 147–148; Taiwan stance in, 4, 46, 56, 84, 93, 95–102, 130, 135, 137, 140–141, 143, 301n57; territorial sovereignty claims in, 106, 107, 108–109, 110, 111–120; Tibet stance in, 4, 129–130; World War II-era, 159
Chinese geoeconomics: African support as, 4, 27, 43–45, 56, 74, 96, 137–138, 138–139, 140, 243, 274n55; Argentinian conflicts with, 42; Asian Infrastructure Investment Bank in, 4, 74, 84, 114–115, 126, 187, 244; backfires in, 12, 134, 138; Bank of Dandong in, 106; boycotts in, 107, 108–109, 110; Brazilian contracts as, 40–42; BRICS Bank in, 74, 244; China Africa Development Fund in, 140; China-ASEAN Free Trade Agreement in, 115; China Development Bank in, 73–74, 131, 139–140, 242, 273n48, 275n60; China International Water and Electric Corporation in, 116; China Investment Corporation in, 137; China National Offshore Oil Corporation in, 54, 86, 147–148, 314n6; China National Petroleum Corporation in, 54, 118, 137, 213; China Overseas Investment Company in, 105; China-Pakistan Economic Corridor in, 124–125; contracts bolstering autocratic regimes in, 45–46; Cross-Strait Services Trade Agreement in, 101; cyberattacks in, 60, 61–63, 65, 68, 101–102, 109, 136, 191–192; diplomatic and market changes related to, 41–43, 95–96; domestic market features in, 89, 134–135, 136, 149–150; domestic problems impacting, 131; Economic and Technical Cooperation Agreement in, 118; economic assistance in, 70, 73–74, 102–104, 118, 125–126, 138–141, 200; Economic Cooperation Framework Agreement in, 97, 98; embargoes against, 164; energy industry and, 42–43, 44–46, 53–54, 85–86, 87, 90, 103, 118–119, 131, 137, 147–148, 149–150, 183, 207, 212–213, 218, 236, 314n6, 323nn119–120, 342n36; evaluating effectiveness of, 129–131, 134–151; financial and monetary policy in, 78–80, 82–84, 100, 109, 120, 136–137, 141–147, 151, 181–182, 318n64, 321n100; in foreign policy (see Chinese foreign policy); geoeconomic instruments unavailable to Western countries in, 40–41; geopolitically motivated deals via, 43–45; Indian and Pakistani relations in, 94, 120–128, 311n197, 313n237; Industrial and Commercial Bank of China in, 41, 45; investment policy in, 27, 43–46, 53–54, 55, 56, 58, 97, 99, 101, 104–105, 115–117, 119–120, 125, 134–138, 148–149, 244, 274n55; Japanese relations in, 4, 94, 106–110, 112, 135, 304n102; licensing requirements in, 135–136; loans in, 40, 45, 73–74, 79–80, 118, 125, 139–140, 275n60; New Silk Road in, 84, 94, 118, 124–125, 149; North Korean relations in, 93–94, 102–106; policy choices enabled by, 39–40; Project 863 in, 61–62; rare earth bans in, 107–108, 301n57, 304n102; Russian alliances related to, 39, 40, 54, 83, 130, 150, 213, 323nn119–120; sanctions in, 59, 96, 105–106, 109, 138; security and economic tensions reinforcing one another in, 47; Southeast Asia relations in, 94, 111–120, 131, 145, 147–148; State Asset Foreign Exchange in, 137, 148–149; state capitalism in, 36, 37, 55, 88, 116–117, 131, 137, 139–140, 147–148, 148–149, 183; State Grid Corporation of China in, 116; strength of, 4, 11–12, 21, 22, 34, 93, 129–131, 134–151, 179–180; Taiwan stance in, 4, 46, 56, 84, 93, 95–102, 130, 135, 137, 140–141, 143, 301n57; Tibet stance in, 4, 129–130; trade policy in, 97–98, 101, 107–109, 112–113, 115, 119–120, 131, 134–138, 175–176, 189, 330n101; United Nations influenced by, 4, 44, 46, 105, 130, 137, 138; U.S. bilateral investment treaty in, 136; U.S. foreign policy challenges due to, 94, 96, 98, 106–110, 111–112, 113–114, 121–123, 179–183, 186–187, 224–225, 231–232, 236, 256, 330n101