Atlantic Review

Top Four Arms Exporters: USA, Russia, Germany and France

2008-05-15T22:43:17Z

Observing Hermann has posted a revealing article that references the Stockholm International Peace Research Institute’s (SIPRI) most recent survey on global arms transfers (HT: Joe Noory):

The survey says that the USA, Russia and Germany are the world’s leading weapons exporters, with Germany’s latest weapons export piece of the pie profits coming in at around $3.395 billion. Damn, just think of all the ploughshares you could buy with that.

Taking a look at the numbers more closely reveals some interesting facts:

In 2007:
• The USA, Russia, and Germany held 31, 19, and 14 percent of global exports respectively

• France was the fourth largest arms exporter, with 11% of the global market

From 2006 to 2007:
• Russia’s market share dropped 25% to 19%

• Germany’s market share rose 11% to 14%

• France’s market share rose 6% to 11%

The chart above shows Germany's global arms exports have increased steadily over the past few years. This is interesting considering Germany's resistance to take on an active combat role in Afghanistan, instead preferring to focus on reconstruction projects. As Observing Hermann wryly states:

All I can say is that it’s good to know that all of these German weapons are being used for goodness and niceness and purely defensive purposes (did you know that Wehrmacht meant defensive force?), not like some other countries’ weapons out there, if you know what I’m sayin’. Otherwise a whole lot of people in this country wouldn’t be able to sleep well at night.

Related posts on Atlantic Review:
•    Afghanistan: Merkel has “No Time” for Burden Sharing Proposals
•    Afghanistan: NATO Crisis Gets Worse
•    War for Dummies: Step 1, Fighting is Necessary
•    Afghanistan: Fighting is Not Most Important

Empower the People of Myanmar to Help Themselves

2008-05-13T06:42:55Z

My sister Daphne Wolf studied Burmese music in Yangon. Her music school is organizing relief aid. Daphne wrote this guest blog post:

Small and local aid agencies are best equipped to help the victims of cyclone Nargis because they are already operating on the ground. Donations to these agencies are more effective since big aid organizations are still struggling to access the affected areas.
Local relief groups such as the Music School Gitameit, are providing the most urgently needed first-aid supplies.

For two years I lived in Yangon, studying Burmese traditional music and teaching classical flute at the Gitameit Music Center, a private school founded by the American pianist Kit Young in 2003. I returned to Berlin in December 2007 to finish my masters in Musicology and Southeast Asian Studies.

My friends, former colleagues, and students all tell me that Yangon, the old capital, is widely devastated and that the fertile delta of the Irrawaddy River is still flooded:

Continue reading "Empower the People of Myanmar to Help Themselves"

German NSC Sparks Controversy

2008-05-13T06:23:52Z

This is a guest blog post by our long-time reader and commenter Pat Patterson:

The blog Coming Anarchy has a balanced piece concerning the recent proposal by Chancellor Merkel and the CDU to create a German National Security Council that argues, "It is for these reasons that a seemingly innocuous and in fact logical step like creating a national security council has again sparked debate among citizens and politicians alike." And that, "Over the past few years though with the changes in both the domestic and international security situation, debate has been ongoing about whether Germany needs a National Security Council based more on the American model for example."

Something similar was argued by the SPD in 1998 but very little in the way of change was made to the Bundessicherheitsrat (Federal Security Council) other than advising on the domestic state of affairs of the countries that were purchasing arms from Germany. But the current proposal goes much farther and states:

"In order to guarantee coherent and effective interagency work combining domestic and foreign security, a national security council is necessary as a center for political analysis."

But the immediate opposition came from the SPD's Frank Walter-Steinmeier, the German Foreign Minister, mainly because the new proposal was similar to the US's National Security Council and thus, "This cannot be the model for us." (Deutsche Welle)

A longer description of the proposal and the introduction of the idea that this new body would also be not only carrying out the instructions of the Chancellory but advising on the ".national interests" of Germany. The International Herald Tribune also mentions that the creation of this body would essentially bypass the Foreign Ministry which obviously would weaken the SPD presence in the government. As well as a quote from Karl-Heinz Kamp of the NATO college,

The fact that the conservatives decided to do without their coalition partners,.is impressive because it would have been watered down. The basic idea is not bad at all.

Georgia Conflict: Should NATO Marry the Small Kid on the Playground?

2008-05-10T16:58:30Z

Tiny Georgia has become the front line in West-Russia tensions for the past month. It began at the NATO Bucharest Summit in early April, when NATO members rebuked immediate progress toward full NATO membership for Georgia, due largely to protests from Russia – while nonetheless promising future membership.

In the month since Bucharest, Russia-Georgia relations have spiraled quickly. Multiple Georgian unmanned aircraft are claimed to have been shot down over the breakaway region of Abkhazia, though disinformation (i.e. – blatant lies) coming from Russia, Georgia, Abkhazia, or all three, have blurred the facts. Russia has also deepened ties with Georgia’s separatist regions of Abkhazia and South Ossetia, and increased its number of “peace-keepers” there despite protests from the EU and NATO. At the same time, Russia is accusing Georgia of preparing an invasion into Abkhazia, and Georgia has pulled out of an air-defense treaty with Russia.

While both Russia and Georgia are contributing to escalating tensions, Russia undoubtedly initiated the latest downturn as a response to Georgia's bid for NATO membership.
Continue reading "Georgia Conflict: Should NATO Marry the Small Kid on the Playground?"

NATO Burden Sharing

2008-05-10T15:10:00Z

In an op-ed written for the Strategic Studies Institute, LTC Raymond A. Millen analyses the historical and recent development of commitments to common defense in NATO (thanks to Pamela for the submission):

Few recall the contentious deliberations at the beginning of the Cold War between the United States and its European allies regarding military contributions to the Alliance. The Truman administration expected the European powers to reconstitute their armies once they had recovered economically. But, having little faith in the American security guarantee, European statesmen refused to raise sufficient forces for defense without a tangible commitment from the United States. With no movement on the matter, the United States relented, deploying several divisions to NATO in 1949. Yet, the European reciprocal pledge did not materialize.
With security assured through collective defense and the U.S. nuclear umbrella, European states progressively invested in social welfare programs that demanded a greater portion of gross domestic products (GDP). And social welfare states are voraciously self-indulgent. During this transformation, an interesting pattern of behavior manifested. Rather than share collective defense equitably, member states attempted to shift security burdens subtly to other members. Other than voicing annoyance, the United States, as a global superpower in a bipolar world, accepted this behavior because the larger goal of peace in Europe remained intact.

A quick review of historic defense expenditure shows that the picture Millen gives of free-riding Europeans was at least delayed. The UK and France spent a larger percentage of their GDP on defense in 1950 than the USA, and their share of defense expenditure only really started to decline between 1960 and 1970.
Continue reading "NATO Burden Sharing"

Europe Lacks a Risk Culture

2008-05-09T18:24:38Z

InformationWeek:

London may be eclipsing Wall Street as the world financial capital, and the euro is trouncing the dollar, but Europe has yet to prove the equal of the United States in technological innovation.

Author and engineer Hervé Lebret thinks he knows why. "There is a risk culture that's missing. We don't have an environment to be more ambitious and risk-taking." His book, Start-Up: What We Can Learn from Silicon Valley, argues that Europeans need to recognize the value of risk -- and failure. "In the U.S. it's not that people like failure, but it's seen as a way to learn," he says. "In Europe, if you fail you aren't given a second chance to try again. So it's viewed very differently."

Sounds familar. See "Germany's Innovation Dilemma" on Atlantic Community.

Has Sarkozy Met US Expectations?

2008-05-06T22:27:00Z

When Nicolas Sarkozy was elected president one year ago today, the US media was full of praise for him and expected a big improvement in transatlantic relations.

Sarkozy's pro-American rhetoric was very much appreciated, because it was a big contrast to Gerhard Schroeder's US critical election campaigns. With Schroeder replaced by Angela Merkel and Chirac now replaced by Sarkozy, many Americans were looking forward to a new era in transatlantic relations led by a younger generation of pro-American leaders in Europe.

I did not buy all this hype, but have been very critical of Sarkozy (and to a lesser extent of Merkel) and concluded in November that we are witnessing Better Transatlantic Relations in Style, but not in Substance. Kyle has been frustrated by Sarkozy as well: Sarkozy Makes Premature, Unnecessary, Familiar Statement on Kosovo.

In the last few months, however, President Sarkozy announced some policy changes that indicate more support for US interests, so perhaps I should reconsider my position on Sarko. Gaelle Fisher has written a very balanced analysis on the question "Has Sarkozy truly improved the state of transatlantic relations and earned his reputation as the most pro-American president France has ever had?" She presents three arguments in favor and three against in a pro & con feature on Atlantic Community: Sarkozy l' Américain? Here is a snippet:

Sarkozy has agreed to increase France's contribution to the war effort in Afghanistan by adding 1500 to 1700 to the existing French contingent of 1600, sending combat troops to the East, and providing military arsenal. Yet the main new element of French military cooperation with the United States is Sarkozy's commitment to reintegrating France into NATO's military wing.

Or is that Trojan horse?

On Sarko's first anniversary in power, the French are very critical of his domestic policies (and his style), but I wonder what Americans think of his foreign policy. Has he met your expectations? Has he repaired the damage in transatlantic relations as expected by many in the US media? Whether you are an American or not, I appreciate your comments here and on Atlantic Community.

German Banks and the US Mortgage Crisis

2008-05-06T06:43:00Z

Deutsche Bank got a lot of negative press coverage in the United States. David Vickrey, who used to work on corporate finance transactions at Deutsche Bank Securiites and Barclays Capital, has written extensively in his blog Dialog International about the involvement of German banks in the US mortgage crisis. Here are a couple of posts in chronological order (latest on top):

Karma and Bad Times for Deutsche Bank in America (April 27, 2008)

Greed and Fear: US Subprime Crisis Takes Its Toll in Germany (April 9, 2008)

The Subprime Crisis Leads to Mad Mergers in Germany (April 1, 2008)

German Government: Please Sue Deutsche Bank (March 10, 2008)

Deutsche Bank: America's Foreclosure King (January 24, 2008)

Pentagon on Afghanistan: We Got to Go it Alone, Basically...

2008-05-03T21:14:13Z

Due to a shortfall in contributions from NATO allies, the Pentagon is considering sending as many as 7,000 more US troops to Afghanistan, write Steven Lee Myers and Thom Shanker in the New York Times:

[Senior Bush administration officials] said the step would push the number of American forces there to roughly 40,000, the highest level since the war began more than six years ago, and would require at least a modest reduction in troops from Iraq.

The planning began in recent weeks, reflecting a growing resignation to the fact that NATO is unable or unwilling to contribute more troops despite public pledges of an intensified effort in Afghanistan from the presidents and prime ministers who attended an alliance summit meeting in Bucharest, Romania, last month.

What Schadenfreude?

2008-05-02T06:52:00Z

German Bundesbankers expect a gradual slowdown of the economy as a result of weaker global growth, higher oil prices and a stronger euro. They are not concerned about any direct fallout from the US mortgage crisis, writes Ralph Atkins in the Financial Times.

The article's headline is "Schadenfreude stirs in resilient Germany," but Atkins only claims once that "across Germany, a sense of schadenfreude has even started to emerge." His only indication is that "Peer Steinbrück, finance minister, has long maintained that a run on a bank, as seen with Northern Rock in the UK, would not happen in Germany." Well, many Germans are scared about their jobs and worry about poverty in their later retirement. Many are so concerned about the financial markets that they do not invest their savings, but keep them on a bank account with low interest, which is bad for retirement plans and for the economy. That's why the finance minister tries to reassure the public. That's not Schadenfreude. Perhaps the folks at the Financial Times felt compelled to use a German word in their headline. Next time write "Blitzkrieg" or "Kindergarten" or address people as "Herr Steinbrück" rather than "Mr. Steinbrück" (a weird habit of some).

Otherwise the article is good and describes what has been going on:

Germany's recent economic history has been the mirror image of the US's. Instead of enjoying a consumer and housing boom over the past decade, Germany has experienced a period of painful adjustment to the costs of reunification in the early 1990s and the effects of globalisation on a high-wage economy. By the time the global financial crisis struck, extensive private-sector restructuring had restored cost competitiveness, while consumers had retrenched financially - with house prices flat or even falling. The result was an economy driven not by consumer spending but by its powerful export motor, with industry producing high-quality goods that appear relatively insensitive to the higher exchange rate.

Atkins ends with an FT typical conclusion:

But that is not the same as saying Germany has the better long-term prospects. Whereas the US's financial system and more flexible labour markets appear to booms and busts, Germany's economic growth rates traditionally remain steadier - but lower.

I believe "steadier but lower" is the very much preferred model in economic (and political) matters over here.

Global Oil Panic: The United States of America

2008-04-30T09:49:20Z

Oil prices are on the up and up, setting new records at the pump. Each time this happens, a spate of panicky reactions in national politics, all isolated from each other, burst up. First, a brief look at the state of the debate in the USA:

In the USA, McCain has proposed reacting to the higher oil prices by temporarily cutting taxes. This is in keeping with the Republican solution to everything -- cut taxes. Hillary Clinton has jumped on the McCain tax cutting train, hoping to draw more contrasts with Barack Obama. Meanwhile, Obama finds himself in the same camp as George W. Bush in opposing a symbolic tax holiday. A few paragraphs from the New York Times, via Drezner:

At a meeting with voters in North Carolina on Monday, Mr. Obama said lifting the gas tax for three months would save the average consumer no more than $30, a figure confirmed by Congressional analysts. Mr. Obama has previously dismissed Mr. McCain’s proposal as a “scheme.”

“Half a tank of gas,” Mr. Obama told his audience. “That’s his big solution.”

President Bush’s spokeswoman essentially sided with Mr. Obama in saying that tax holidays and new levies on oil companies would not address the long-term problems of dependence on foreign oil.

Dana Perino, the White House spokeswoman, said gasoline prices were “entirely too high, but I think it would be disingenuous and unfortunate for American consumers for them to be led to believe that there is a short-term fix.”

Continue reading "Global Oil Panic: The United States of America"

Sarkozy's Tradeoff: France Considering NATO Reintegration

2008-04-28T05:34:30Z

France has signaled over the past few months that it may pursue reintegration into the NATO command structure, which President Charles de Gaulle fitfully left in 1966. A sympathetic member of the French National Assembly published an article in Newsweek arguing this move is, “no less than a revolution for NATO and transatlantic relations.” The article explains Sarkozy's proposed tradeoff:

By showing that France is America's trusted friend again, Sarkozy hopes to gain influence on American policy, and, in particular, on lifting the longtime U.S. veto on European defense.

This is an interesting proposal: France will rejoin NATO if it can pursue its own parallel EU military structures. Many in the US defense establishment have long been concerned that a more autonomous European Security and Defense Policy is intended to act as a counterweight to the United States, or that it will duplicate/detract from NATO programs and assets. As Soeren Kern of the Madrid-based Grupo de Estudios Estratégicos states in World Politics Review:

… most of Sarkozy's proposals seem to be geared toward creating a rival European defense structure that over time will duplicate but not double NATO resources… Indeed, some of the more U.S.-leaning European states suspect that France's renewed interest in rejoining NATO is in fact a Trojan horse designed, ultimately, to destroy the Atlantic Alliance from within.

At the same time, the United States has been pushing Europe to build stronger military capabilities since the Alliance was born, based on a plea for "burden sharing." One common sentiment, although often expressed with reserve, is that “it doesn’t matter where the forces come from, so long as they come.” By rejoining NATO, Sarkozy may be able to strike a balance of confidences between what on the face appears to be double-think: convincing America of France’s commitment to Atlanticism, while concurrently pursuing greater European military autonomy.

However, Soeren Kern points out that even if Sarkozy’s intentions are Atlanticist in nature, they will probably not outlast his term of presidency:

For most of the French ruling elite (the anti-American Left and the nationalist Right), the United States is considered to be the main problem in international affairs because of its reluctance to share its power. The only solution, in their view, is a French-led EU superstate that can counterbalance America on the global stage. And a unified EU foreign and defense policy that is completely independent of NATO (i.e., the United States) is essential to achieve equal status. Until then, anti-Americanism will continue to be the preferred means to accelerate the process of loosening the transatlantic link.

Related posts on Atlantic Review:
• Europeans View China as the Biggest Threat to Global Security
• Europe is a Threat to the United States

US Allies: Are Asians so Different from Europeans?

2008-04-28T04:36:00Z

NYT Columnist Roger Cohen wrote Europe Votes Democrat, but Asia Tends Republican and Michael J. Green, who served on the National Security Council staff from 2001 to 2005, claims that the Iraq war has been good for US interests in South East Asia. He writes in The Washington Quarterly:

If anything, most major powers in Asia have used the war on terrorism and the conflict in Iraq to align more closely with the United States in order to balance rivals within the region or to advance their global standing.

Greg Sheridan agrees with this analysis and adds in The Australian (HT: Joe Noory):

Australian commentators almost universally mimic the European critique or more often the liberal American critique of the Bush administration and all its works. What is clear is that they have almost no sense of the Asian context at all.

Other conservatives, however, worry about the US standing in in East Asia: Michael Austin from the American Enterprise Institute opines that appeasement politics weaken US credibility in Asia: "Some of America's most important bilateral alliances are at risk of coming unmoored."

European Biofuel Producers Attack US Subsidies

2008-04-26T22:47:12Z

From the Wall Street Journal's Environmental Capital blog:

Europe's biofuel industry has long complained about U.S. subsidies. Friday, it took its case to the European Union but the chances of winning a victory look slim. EU biodiesel producers have been simmering about the $1 per gallon tax credit American biodiesel producers get. EU producers say that distorts the market and, in the words of the biodiesel trade group, created a severe injury to the EU biodiesel industry.

The Guardian is a bit more optimistic regarding the European Biodiesel Board's case.

Rising threat from Jihadists, according to Dutch Intelligence

2008-04-25T15:43:24Z

The Dutch intelligence agency AIVD has released its annual report, in which it warns of a resurgence in jihadist networks, and in industrial espionage. Radio Netherlands reports:

The AIVD describes the truly violent sector as "jihadist networks". In the Netherlands, "after a period of relative calm", these have become rather more active again, although the report says they don't represent any specific threat. This would seem to contradict the "increased threat" which AIVD head Gerard Bouman referred to during the presentation of the report.

Partly on the basis of AIVD information, the terrorist threat level was recently raised from "limited" to "substantial". This was due both to increased activity on the part of jihadist networks elsewhere in Europe (including foiled attacks) and the commotion surrounding the film Fitna made by Dutch MP Geert Wilders. The head of the AIVD praised the Dutch Muslim community for what he described as its "restrained reaction" to the film.

The AIVD also claims to have extradited foreign spies from Russia and from China on multiple occassions. Russian spies were said to be most interested in the energy sector, and China is accused of more broadly enlisting Chinese immigrants for industrial espionage.

The thematic focus of the report itself (nl) is on cooperation between intelligence agencies. As the report explains, there are effective existing structures for cooperation between intelligence agencies and it is a misunderstanding to want to force cooperation through new institutions. Any new institution has to prove its added value. This scepticism of institutional fixes has become widespread in the Dutch government and bureaucracy.