Europe

The Reawakening of the Russian Bear

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NAFAC Week

By Jared Russell

The Danger of a Declining Power: Reckless Courage in the Face of Oblivion

It seems as if a day does not pass without seeing a news article analyzing the relations between the United States and Russia. It remains undisputed that Vladimir Putin has successfully solidified his position of leadership amidst the Russian hierarchy, and the world waits in wonder of what he may do next. The troubling, and occasionally overlooked, variable of this situation is that Putin is not commanding a thriving nation. Rather, Russia has experienced considerable decline in terms of market economics since the collapse of the Soviet Union, losing global power and failing to compete with the torchbearers of globalization. Thus, it is evident that Russia is not an emerging power in the global landscape, and furthermore, it is safe to assert that they are not ‘reawakening’ under any conditions. Instead, amidst their decline (or possibly even within the monotony of stability via mediocrity), the United States must be cautious of the dangers posed by a disruptive nation that acts like it has nothing to lose. Let us begin by debunking the notion that Russia is an emerging power before moving on to analyze the dangers associated with declining powers.

The National Intelligence Council’s Global Trends 2030 predicts the misfortune of Russia. The report proposes in relation to Russia’s economy that it is “likely to continue [its] slow relative decline.”1 The report continues, “[A] Russia which fails to build a more diversified economy and more liberal domestic order could increasingly pose a regional and global threat.”2 The threat here would be exhibited in the form of trying to obtain resources and other market shares from neighboring countries, conflicts that may extend so far as to provoke NATO. Russia, for so long, has relied upon the oil industry to fuel its economy, failing to diversify fully into other areas within the market economy. By failing to fully embrace the liberal order of modern markets, Russia has not achieved the success of its counterparts. With the prices of crude oil currently dropping to just under $50 per barrel, it looks as if the Russian economy is far from sustainable, especially considering it is pillared on a resource that is subject to exhaustion.3

In his article, “The Illusion of Geopolitics,” G. John Ikenberry categorizes Russia as a “part time spoiler,” citing that they are not worthy of the title of “revisionist power.”4 In this context, revisionist powers are understood to be emerging authorities that seek the throne of global hegemon. These authorities would seek to abolish/revise the pluralistic, democratic, and capitalistic practices that have been established in many nations throughout the world under the tutelage of the United States—going as far to usurp the U.S. from its seat as global hegemon. Russia, according to Ikenberry in his response to Walter Russell Mead, is clearly not a revisionist power, deducing this from observing Russia’s willingness to maintain its status amongst the global institutions (i.e. the UN Security Council, IMF, World Bank, etc.). Moreover, Ikenberry notes that Russia’s stance on international relations is “mainly about the search for commerce and resources, the protection of their sovereignty, and, where possible, regional domination,” and continues, “[t]hey have shown no interest in building their own orders or even taking full responsibility for the current one and have offered no alternative visions of global economic or political progress.”5 Thus, Russia recognizes the importance of the global market system and the role that it plays in its success. Beyond trade, though, is a concern for geopolitics, preventing Russia from expanding their order to contend for global supremacy.

I believe that Ikenberry’s analysis of Russian prioritization in modernity hits the mark, but his overall optimism of the United States’ position having a certain degree of permanency is poorly founded. In attempting to solidify the position of the United States atop the global ladder, Ikenberry fails to adequately account for geopolitics as he attempts to undermine the importance of geopolitics by conceding its existence as negligible. It is on this point that I must agree with Mead in part, as geopolitics would appear to play a considerable role in global power dynamics—but, that is not to say that engaging in geopolitics warrants a position equitable to a revisionist power. Over the past several years in Crimea and South Ossetia, we have seen Russia take holdings in Ukraine and Georgia, land that was once part of the Soviet Union. This behavior, though, is not an attempt at the building of a new order. It appears to be an effort to disrupt democratic political institutions that have been established to respond to such situations. One must wonder: is this Russia’s advance at cementing their power on the global scale or is it an exhibition of a dying country that is so desperately trying to stay relevant?

If we were to accept the former, in that Russia was trying to cement its power, we would be accepting the argument of John Mearsheimer. Richard Betts weighed in on the topic, channeling Mearsheimer when he advances, “Bucking the tide of optimism, [Mearsheimer] argued that international life would continue to be brutal competition for power it had always been…[his] vision is especially telling because it is an extreme version of realism that does not see any benign actors in the system and assumes that all great powers seek hegemony: ‘There are no status quo powers…save for the occasional hegemon that wants to maintain its dominating position.”6 But does this viewpoint encapsulate the current state under which Russia operates? I am certain that Russia yearns to be the global hegemon, but all of the evidence that we have reviewed thus far suggests that they could not be farther from actualizing that goal.

Russia, even with their antics over the course of the past ten years, has been unable to disrupt the fabric of humanity. Instead, they have elected to directly challenge democratic institutions in Europe and the United States. Alas, it seems as if we have reached the pinnacle of our dilemma, and we can identify it as a continuance of a problem outlined by George Kennan during the Cold War. Kennan posits the necessary response, “it will be clearly seen that the Soviet pressure against the free institutions of the western world is something that can be contained by the adroit and vigilant application of counter-force at a series of constantly shifting geographical and political points, corresponding to the shifts and maneuvers of Soviet policy, but which cannot be charmed or talked out of existence.”7 It appears as if Russia, even in its decrepit post-USSR state, is trying to apply pressure against the free institutions of the western world. Kennan had advocated for a response that is economic and political to such disruption, as a military conflict with Russia will yield no winners—and most likely a world of losers. If the United States responds to Russia’s disruption militarily, then we may truly have a discussion about the ‘reawakening’ of the Bear.

Ultimately, we settle upon the realization that we must recognize our differences with Russia in terms of ideals, values, and institutions–transcending beyond the traditional military disputes that marked the history of our relationship until the finale of the Cold War. To say that Russia is reemerging into the global political scene as a contender for the position of global hegemon appears to be entirely fallacious. For Russia, their economy and the diversity of their resources point toward an overall declination in global power. Let it be clear, though, that reemergence is not a necessary condition of danger. As we tread into the future, we must account for Russia’s incessant desire to maintain its standing near the top of the global battleground. If Russia does, in fact, face impending oblivion, the United States must remain cautious to falling into the traps of reckless courage exuded by the falling Bear.

Jared Russel is a junior from Colorado College majoring in political science and philosophy and will be graduating in 2018.

References

1.“Global Trends 2030: Alternative Worlds,” National Intelligence Council, 2012, iv.

2. “Global Trends 2030: Alternative Worlds,” National Intelligence Council,2012, ix.

3. “Crude  Oil Index,” NASDAQ, Accessed March 22, 2017, http://www.nasdaq.com/markets/crude–‐oil.aspx.

4. G. John Ikenberry, “The Illusion of Geopolitics: The Enduring Power of the Liberal Order, “ in Foreign Affairs: The New Global Context, 2015, 16.

5. G. John Ikenberry, “The Illusion of Geopolitics: The Enduring Power of the Liberal Order,” in Foreign Affairs: The New Global Context, 2015, 24.

6. Richard Betts, “Conflict or Cooperation: Three Visions Revisited,” in Foreign Affairs: The Clash at 20, 2013, 72.

7. George Kennan, “The Sources of Soviet Conduct,” in Foreign Affairs, 1947, Part III.

Bibliography

Betts, Richard. “Conflict or Cooperation: Three Visions Revisited.” In Foreign Affairs: The

Clash at 20, 69-80, 2013.

“Global Trends 2030: Alternative Worlds.” National Intelligence Council, 2012.

Ikenberry, G. John. “The Illusion of Geopolitics: The Enduring Power of the Liberal Order. “ In

Foreign Affairs: The New Global Context, 16-24, 2015.

Kennan, George. “The Sources of Soviet Conduct.” In Foreign Affairs, Parts I-IV, 1947.

Featured Image: Members of the armed forces of the separatist self-proclaimed Donetsk People’s Republic drive a tank on the outskirts of Donetsk, Ukraine, in this January 22, 2015 file photo. (Reuters/Alexander Ermochenko)

Capability Analysis

The Middle Way: A Balanced Approach to Growing America’s Navy

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NAFAC Week

By Riley Jones

During the 2016 presidential election, then-candidate Donald Trump made the size and strength of America’s naval force a key aspect of his defense platform, arguing that the fleet should be increased in order to give policy-makers a diverse array of options to deal with threats and emergencies.1 Others stress that the size of the Navy is completely sufficient to deal with any and all potentialities, particularly given the fact that the United States currently possesses the only 10 nuclear-powered supercarriers in the world; this advantage precludes any serious challenge from the likes of near-peer competitors and ensures American dominance of the seas for the foreseeable future.2 However, these extremes fail to recognize the realities of a constrained and competitive national budgetary environment and the growing inadequacies of the current fleet to deal with limited-scope challenges from rising near-peer states. The United States Navy should adopt an intermediate approach to growing the fleet in order to maintain a favorable balance of power while also making efficient use of limited budgetary resources.

Critics of a proposed buildup in naval forces often focus on the current advantage that the United States enjoys over every other nation, particularly the fact that all supercarriers are currently American. They note that America possesses an overwhelming dominance in terms of “carriers, nuclear submarines, naval aviation, surface firepower, assault ships, missiles and logistics.”3 However, they fail to take into account what the most likely conflicts with China and other near-peers like Russia would look like. Carl von Clausewitz distinguished between warfare waged in order to obtain the complete annihilation of the enemy’s military capability and warfare waged in order to shift and renegotiate the balance of power between two sides.4

An engagement with China, for example, would likely be limited in scope and not involve either side seeking the total or even significant destruction of the other’s military force, let alone the use of nuclear weapons.5 During such an engagement, there would be a focus from the enemy on the deployment of anti-access, area-denial weaponry to push American carriers out of aircraft range of the mainland and immediate coastal waters, as well as potential sea lanes; this would deny America the ability to rapidly retaliate, leaving U.S. allies without key air defenses and vulnerable to a blockade by Chinese forces.6

Those who wish to maintain the current status quo in naval forces or even implement a reduction also fail to realize the dangers of the current operational tempo to the long-term health of the fleet. In order to ensure three supercarriers are on deployment continuously throughout the world, it is necessary to maintain a fleet of twelve, as for each carrier on assignment, three are heading to replace it or are training, returning home from deployment, and undergoing maintenance, yet the Navy has been deferring maintenance and lengthening deployments in order to accomplish the same mission with only 10 carriers.7

Conversely, some argue that the United States must engage in a drastic naval build-up. President Trump’s current proposal includes an increase in the number of carriers to 12 and of the total ships to 350.8 Such a force, he maintains, is necessary for the United States to be able to meet any rising security threats across the globe and to continue to ensure the freedom of the seas. Rear Admiral Thomas Moore stated that the Navy is “an 11 carrier Navy in a 15 carrier world.”9 While aircraft carriers, as outlined previously, are rightfully integral to America’s vision for its navy, there is a danger in building such an expansively large force.

The first is the danger of spreading resources too thin and exacerbating current budgetary instability. The Ford-class aircraft carries costs upwards of $10 billion per ship, while the Virginia-class attack submarine and littoral combat ships have price tags of $3 billion and $500 million respectively.10 The Defense Department must already compete for funding and such a large increase in the naval force would result in even greater budget deficits or cuts to domestic spending, neither of which are tenable in the long-term. These unpopular solutions may reduce political support for the continuance of such a large force in the future and the additional maintenance of non-vital vessels will prevent investment in technologies that will ultimately allow the United States to counter measures such as anti-access, area denial.11

Second, growing the fleet more than necessary to maintain America’s ability to field three carriers and project power across the world would be seen by near-peers as a sign of aggression, likely to cause an escalation of tensions. While maintenance of naval capability may be seen as the United States holding ground and taking a primarily defensive posture in relation to its role in world affairs, a large build-up of naval forces will be depicted as aggressive because it would enable the United States to, in their view, become more involved in world affairs.12 Naval forces are difficult to classify as either offensive or defensive in nature because of their mobility and the differing nature of naval warfare regarding territorial possession, but an increase beyond the current strategy of three deployed carriers would exacerbate tensions because of the perception that the United States was seeking to further tip the balance of power in its favor, rather than maintain its current advantage.13 Much like those who would maintain or shrink the force, proponents of such a large growth ignore the reality that an engagement would have a “limited aim” which would not be the total defeat of opposing forces, but to maintain the balance of power for America and, for our enemies, to encourage a retreat of American forces.14 We should therefor prepare our forces to be able to dominate in this “trial of strength” with our competitors so that they conclude challenging the status quo the United States maintains is too costly for them.15

Riley Jones is a junior at Indiana University from Marion, Indiana. He is studying Political Science and Anthropology with a minor in German. After graduation, he hopes to serve his nation as a United States Marine Corps Officer.

Bibliography

Donnelly, Thomas. “You Say You Want a Revolution?” American Enterprise Institute, March 15, 2017. https://www.aei.org/publication/you-say-you-want-a-revolution/.

Easterbrook, Gregg., “Our Navy is Big Enough,” New York Times, March 9, 2015, https://www.nytimes.com/2015/03/09/opinion/our-navy-is-big-enough.html?_r=0.

Friedberg, Aaron L., Ross, Robert S., “Here Be Dragons: Is China a Military Threat?” The National Interest, 103. September/October 2009.

Kraig, Michael R., “Military Planning for East Asia: A Clausewitzian Approach,” Strategic Studies Quarterly, Spring 2017.

Larter, David B., “Donald Trump wants to start the biggest Navy build-up in decades,” Navy Times, November 15, 2016, https://www.navytimes.com/articles/donald-trumps-navy-bigger-fleet-more-sailors-350-ships.

Levy, Jack S., “The Offensive/Defensive Balance of Military Technology,” in Conflict After the Cold War. ed. Richard K. Betts (Columbia University, Pearson Press. 2012). p. 444

McGrath, Bryan., Eaglen, Mackenzie., “America’s Navy needs 12 carriers and 3 hubs,” American Enterprise Institute, March 11, 2014, https://www.aei.org/publication/americas-navy-needs-12-carriers-and-3-hubs/.

Shear, Michael D., “Touring Warship, Trump Pushes Plan to Expand Military,” New York Times, March 2, 2017, https://www.nytimes.com/2017/03/02/us/politics/trump-navy-warship-military-spending.html.

1. David B. Larter, “Donald Trump wants to start the biggest Navy build-up in decades,” Navy Times, November 15, 2016, https://www.navytimes.com/articles/donald-trumps-navy-bigger-fleet-more-sailors-350-ships.

2. Gregg Easterbrook, “Our Navy is Big Enough,” New York Times, March 9, 2015, https://www.nytimes.com/2015/03/09/opinion/our-navy-is-big-enough.html?_r=0.

3. Gregg Easterbrook, “Our Navy is Big Enough,” New York Times, March 9, 2015, https://www.nytimes.com/2015/03/09/opinion/our-navy-is-big-enough.html?_r=0.

4. Michael R. Kraig, “Military Planning for East Asia: A Clausewitzian Approach,” Strategic Studies Quarterly, Spring 2017. p. 102.

5. Aaron L. Friedberg, Robert S. Ross, “Here Be Dragons: Is China a Military Threat?” The National Interest, 103. September/October 2009. p. 22

6. Ibid. p. 23

7. Bryan McGrath, Mackenzie Eaglen, “America’s Navy needs 12 carriers and 3 hubs,” American Enterprise Institute, March 11, 2014, https://www.aei.org/publication/americas-navy-needs-12-carriers-and-3-hubs/.

8. Michael D. Shear, “Touring Warship, Trump Pushes Plan to Expand Military,” New York Times, March 2, 2017, https://www.nytimes.com/2017/03/02/us/politics/trump-navy-warship-military-spending.html.

9. David B. Larter, “Donald Trump wants to start the biggest Navy build-up in decades,” Navy Times, November 15, 2016, https://www.navytimes.com/articles/donald-trumps-navy-bigger-fleet-more-sailors-350-ships.

10. Ibid.

11. Thomas Donnelly. “You Say You Want a Revolution?” American Enterprise Institute, March 15, 2017. https://www.aei.org/publication/you-say-you-want-a-revolution/.

12. Jack S. Levy, “The Offensive/Defensive Balance of Military Technology,” in Conflict After the Cold War. ed. Richard K. Betts (Columbia University, Pearson Press. 2012). p. 444

13. Ibid., 446

14. Michael R. Kraig, “Military Planning for East Asia: A Clausewitzian Approach,” Strategic Studies Quarterly, Spring 2017. p. 102

15. Ibid. 120

Featured Image: ARABIAN GULF: Sailors on the flight deck of the aircraft carrier USS Dwight D. Eisenhower (CVN 69) (Ike) participate in the Out of the Darkness Community Walk to increase awareness for suicide prevention. (U.S. Navy photo by Mass Communication Specialist 3rd Class Casey J. Hopkins)

Asia-Pacific

A Balancing Act: U.S. and the Cross-Strait Relation

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NAFAC Week

By Jenny Chau Vuong

A growing China is shifting the balance of power in East Asia. The question remains: Should the U.S. engage or contain China’s rise? Containing a country of 1.3 billion people will be a costly option, economically and militarily. Joseph Nye at Harvard University warns that if the U.S. continues to treat China as the enemy, then they are certain to have an enemy.1 Thus, it is in the United States’ best interest to pursue positive relation with China.

One of the most pressing issues that stands between the U.S.-China relation is Taiwan. Reunification with Taiwan is deeply rooted within Chinese nationalism, and many see the island as stolen land that needs to be returned to China. On the other hand, with a growing national identity and political differences, Taiwan aims for independence. There are three most likely outcomes in this conflict: Taiwan declaring independence, maintaining the status quo, or reuniting with China. In order to maintain positive relation with China, the U.S. should not bolster Taiwan’s confidence to declare independence.

Cross-Strait Relation: War as a Last Resort

China is bent on reunification because it is essentially their unfinished civil war. Zhu Bang Zao, the spokesperson for the Chinese Foreign Ministry, made their stance very clear: “Taiwanese independence is equal to war.”2 Zhu reaffirms that China wants a peaceful solution to reunify with Taiwan. For that reason, they are patiently relying on the forces of economic integration.

At the same time, the survey conducted by National Chengchi University in Taiwan reports that 80 percent of the respondents prefer the “status quo”3 in relation with China; however, Taiwanese are not willing to pursue independence at all cost. When asked to choose either establishing formal independence or maintaining economic ties with China, 83 percent chose the latter. It is clear that although both parties articulated different futures for Taiwan, neither want an armed conflict. The commitment to a nonviolent solution forces both Taiwan and China to operate within a gray area of quasi-independence. It is not the U.S.’ job nor is it in the U.S.’ interests to define that gray area. U.S. military intervention could ignite a global conflict and push China to be more aggressive than it actually is.

The U.S. Role in the Cross-Strait Relation

Until now, the U.S.’ stance towards Taiwan is best described as a balance of optimism and realism. The United States accepted the One China policy but signed a treaty to defend against Chinese military aggression. Deputy Secretary of State Antony J. Blinken stated that Taiwan “showed the world what a mature, Chinese-speaking democracy looks likes.”4 The U.S. hopes that this beacon of democracy can influence China’s transformation. That is also the exact reason why China is fixed on reclaiming Taiwan – Taiwanese independence threatens the current regime. Despite the admiration, the U.S. is not committed to going to war with China over Taiwan, and for good reasons. Thus, the U.S. should not bolster Taiwan’s confidence by overpromising and underdelivering in the future.

In the foreseeable future, it will be difficult for Taiwan to obtain full independence based on recent trends. Taiwan’s economy has become deeply intertwined with China in the past 15 years. The British Office reported that in 2015, China absorbed around 30 percent of exports, making it the largest trading partner for Taiwan.5

Additionally, China is said to be capable of launching a military invasion by 20206, but that does not mean that they will. Furthermore, China’s actions are consistent with its commitment to a nonviolent solution in Taiwan by adopting the Nuclear No-First-Use policy and relying on the slow but steady economic integration. As Erik Eckholm, Beijing bureau chief for the New York Times states, “the number one principle – if you are a Chinese leader – is not that you have to regain Taiwan in the next five years. It’s that you can’t lose Taiwan.”

Currently, Taiwan spends less than 2 percent of their GDP on military spending.7 Thus, the small island will be relying on foreign powers to come to its defense. If Taiwan, convinced of U.S. support, declares independence, this will lead to war with China. There are two paths with one likely outcome. One, the U.S. fails to come to Taiwan’s defense, and China invades Taiwan, forcing reunification under Chinese terms. In this outcome, the U.S. will lose credibility among allies in the region, and it can cause China to become more belligerent. Two, the U.S. enters the fight to protect Taiwan, draws in the rest of the world, and starts another global conflict. No matter the victor of the war, Taiwan’s economy and infrastructure will be destroyed. It will break the U.S.-China relation, causing an economic slowdown in the global economy. Considering the consequences, the two countries are dedicated to peaceful solution, and the U.S. should follow suit.

In the meantime, the U.S. should avoid instigating aggression from the Chinese towards Taiwan. The U.S. should honor the Taiwan Relation Act in 1979 and promote diplomatic, cultural, and economic exchange; however, the U.S. must not directly engage in armed conflict with China. The U.S. can continue helping Taiwan maintain the status quo by selling weapons and expanding trade treaties. Taiwan has some time to build up their defense and economy to stand on equal footing with China, giving Taiwan more power when negotiating with China about how to define the gray area.

This strategy allows the U.S. to maintain a salvageable relationship with China without completely abandoning Taiwan. The U.S. can rely on regional allies to develop a check against Chinese power by strengthening defense treaties and diplomatic ties. If China throws their weight around, it will naturally encourage check and balance behavior from their neighbors. But without U.S. presence in the region, they are likely to jump on the Chinese bandwagon.

Conclusion

As China grows stronger, it will be more difficult for Taiwan to gain independence. The cost of defending Taiwan will also increase for the United States. The best scenario for Taiwan would be to accept the one country, two systems policy, while negotiating for better terms. The United States’ presence plays a large role in helping Taiwan maintain the status quo. But recognizing that the island’s de facto rule will not last forever, the United States needs to be prepared to lose Taiwan or fight China. Both economies will suffer greatly in an armed conflict. Thus, maintaining good relations with China is a better outcome for everyone. However, losing Taiwan doesn’t mean the U.S. will lose their foo hold in East Asia. As long the U.S. focuses on strengthening ties with regional countries, the U.S. can still plant its feet firmly in East Asia.

Born to Chinese parents in Vietnam, Jenny Vuong naturally developed an interest for international affairs. At the University of California Irvine, Jenny is the student ambassador in the Dean’s Council for the School of Social Sciences. She is also the Resident Advisor to the freshmen Global Perspectives hall. During her second year, Jenny studied abroad in South Korea for a year, where she interned for People for Successful Corean Reunification Organization (PSCORE). In Fall 2017, Jenny will study abroad again in Yokohama, Japan. She is looking to pursue a Ph.D. in international relations with a focus in East Asia. In her free time, Jenny enjoys cooking, learning new languages, and playing tennis.

Bibliography

114th Congress, 2d sess. “Reaffirming the Taiwan Relations Act and the Six Assurances as Cornerstones of United States-Taiwan relations.” Congress. 17 May, 2016. Web. 28 Mar. 2017.

Bang-Zao, Zhu. ” Why the Taiwan Issue is so Dangerous.” Interview. PBS. September 2001.

Keck, Zachary. “China Can Attack Taiwan by 2020, Taipei Says.” The Diplomat. 9 Oct. 2013. Web. 29 Mar. 2017.

Lin, Adela, and Ting Shi. “Taiwan Plans Military Spending Surge to Counter Rising China.” Bloomberg. 16 Mar. 2017. Web. 29 Mar. 2017.

Nye, Joseph. “Only China Can Contain China.” Huffington Post, 2014.

Taiwan Economy: 2016 Q1. Report. British Office. May 24, 2016. Web. 28 Mar. 2017.

Wang, Austin Horng-en, Brian Hioe, Fang-Yu Chen, and Wei-ting Yen. “The Taiwanese see themselves as Taiwanese, not as Chinese.” The Washington Post. January 02, 2017. Web. 29 Mar. 2017.

1. Nye, Joseph. “Only China Can Contain China.” Huffington Post, 2014.

2. Bang-Zao, Zhu. ” Why the Taiwan Issue is so Dangerous.” Interview. PBS. September 2001.

3. Wang, Austin Horng-en, Brian Hioe, Fang-Yu Chen, and Wei-ting Yen. “The Taiwanese see themselves as Taiwanese, not as Chinese.” The Washington Post. January 02, 2017. Web. 29 Mar. 2017.

4. 114th Congress, 2d sess. “Reaffirming the Taiwan Relations Act and the Six Assurances as Cornerstones of United States-Taiwan relations.” Congress. 17 May, 2016. Web. 28 Mar. 2017.

5. Taiwan Economy: 2016 Q1. Report. British Office. May 24, 2016. Web. 28 Mar. 2017.

6. Keck, Zachary. “China Can Attack Taiwan by 2020, Taipei Says.” The Diplomat. 9 Oct. 2013. Web. 29 Mar. 2017.

7. Lin, Adela, and Ting Shi. “Taiwan Plans Military Spending Surge to Counter Rising China.” Bloomberg. 16 Mar. 2017. Web. 29 Mar. 2017.

Featured Image: Supporters of Taipei’s mayoral candidate from Taiwan’s ruling party, the KMT, wave flags during a campaign stop on Oct. 26, 2014. (SAM YEH/AFP/GETTY IMAGES)

Current Operations, Middle East

Multinational Corporations in the Oil Industry

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NAFAC Week

By Monica Sullivan 

Diplomacy is not only a function of the military and the federal government, but it is very much an integral facet of multinational corporations. The diplomatic agenda pushed by American multinational organizations is one focused on building trust between nations as a way by which to further national security aims. Additionally, the spread of American businesses overseas allows for the introduction of business ventures into areas otherwise untouched by basic capitalist ideas. Since American multinational corporations are predominantly apolitical forces, their primary purpose is not to force a political agenda, as seen in other diplomatic outlets. However, multinational corporations still have the abilities to introduce other countries to the basic tenets of American democracy through the business interactions that take place. Due to the extent of interactions between American multinational business and other countries, these businesses are one of the most important outlets when it comes to shaping the perception of America abroad. For the scope of this paper, the interactions of American multinational oil companies will be examined. As multinational corporations are involved in the development of foreign infrastructure, their relationships abroad should be considered as a viable alternative for diplomatic action when military and state actors fail.

Within the oil industry, the presence of American multinational corporations have allowed the growth of otherwise improbable relationships and the promotion of U.S. values abroad. The presence of U.S. oil companies in the Middle East have allowed a line of communication to bridge the gap between the starkly different Western and Islamic worlds. American involvement in the Middle Eastern oil prospects began in post-World War I period as American business was eventually permitted under the British mandate. It was evident that U.S. military and economic power would be beneficial as the Middle East was unstable and its future looked to be volatile.1 Since the U.S. became involved in the oil scene in the 1920s, it has only used this connection to strengthen bonds between itself and Saudi Arabia. Despite the inherent benefits attributed to the multinational nature of oil companies, there are some considerable downfalls that must be taken into account.

With the power of oil companies as influential multinational corporation comes the risk associated with such a unique diplomatic tool. Foremost, oil is a constantly dwindling natural resource that doubles as a crucial economic commodity. Since the United States is not a primary source of oil production, it must rely on other foreign oil producers. Any fluctuation in foreign industry can plunge the world into recession. The delicacy of oil dependence in the world is not as apparent as it was during the Arab Oil Embargo of 1973. The sanctions forced upon the U.S. by OPEC as retribution for allying with Israel crippled America’s supply of oil. In turn, this also drove up the price of oil and gasoline to quadruple the price prior to the sanction.2 This crisis demonstrated the power Saudi Arabia derived from its oil production and the United States’ lack of oil control. Although the United States reduced its dependency on Arab oil after this incident, it became apparent the importance of American corporations maintaining viable and open relationships with foreign countries. The economic and military relevance of oil was underscored once more in 2002, as Saddam Hussein used his control of oil processing as leverage during military campaigns. His threats to destroy oil platforms were met with the response of special warfare to ensure that his rogue actions would not cause an economic recession in the midst of the Iraqi conflict.3

Prior to the U.S. invasion of Iraq, American multinational oil corporations were involved in humanitarian aid efforts to try to quell the mistreatment of the civilian population. However, this initiative, known as the Oil for Food program, devolved into an international scandal in which American corporations like Chevron received illegal kickbacks which undermined the goal of transmitting food to a population crippled by United Nations’ sanctions.4 The fact that Chevron was manipulating this program to its benefit demonstrates the possible risks associated with using multinational corporations as means for diplomacy.5 Multinational corporations are subject to the whims of their executives, thereby allowing for their private ethical perspectives to drive the corporation’s representation of American ideals in foreign states. Despite the bad reputations evoked by some multinational corporations, the overall purpose of these businesses is grounded in their desire to spread American interests abroad.

One of the most influential examples of the positive power of multinational corporations is direct advancement of African civilizations in Chad by ExxonMobil. American interests in Africa peaked following World War I, but were overshadowed in the years since, until 9/11. Africa was not of strategic interest to the U.S. until it was determined that it was a breeding ground for radicalized terrorists. Prior to the unfolding of 9/11, ExxonMobil explored Chad as an option for oil extraction. These plans for extraction detailed that how the country was to develop its infrastructure, education, and healthcare through the use of the money received from taxes and royalties from the oil produced.6 By investing in Chad, Exxon-Mobil was able to provide about $4.2 billion dollars of aid, whereas the United States was only providing about $3 million dollars of aid to the area.7 The United States’ positive presence in the area allowed for a smooth transition of American military and state presence in the years following 9/11, as the CIA established stations in the area to monitor and track terrorist cells thought to have been left over from Bin Laden’s time in Sudan during the 1990s. Whereas the military and state was primarily focused on missions regarding terrorist activity, Exxon was involved in turning their business aims into an opportunity for eliminating poverty in the region. The bonds forged between Exxon and the local population prior to the introduction of American operatives in the region made this transition much easier than if Chadians had no prior interactions with American people. This may be just one case study of the impact of the diplomatic power of an American multinational corporation, but it exhibits the mindset of the American business owners to further American ideals abroad. 

Multinational oil corporations do not only have to form relationships with other states, but they have to coordinate with each other. Looking to the future, American oil corporations will be faced with the challenge of competing with Saudi Aramco, the largest multinational corporation in the world. As this one entity has more power than any other American based company, it has the power to bend the U.S. to their will. The question that remains is: How will the American values modeled by multinational corporations abroad continue future diplomatic relations?

Monica Sullivan is a 3/C Midshipman at the United States Naval Academy. She majors in Political Science with a minor in Spanish language. In her free time, Monica enoys singing with the Protestant Chapel Choir.

Works Cited

Coll, Steve. Private empire: ExxonMobil and american power. London: Penguin, 2013.

“Q&A: Oil-for-food scandal.” BBC News. September 7, 2005. Accessed March 31, 2017. http://news.bbc.co.uk/2/hi/middle_east/4232629.stm.

“Chevron to Pay $30 Million to Settle Charges For Improper Payments to Iraq Under U.N. Oil For Food Program.” U.S. Securities and Exchange Commission. November 14, 2007. Accessed March 30, 2017. https://www.sec.gov/news/press/2007/2007-230.htm.

Myre, Greg. “The 1973 Arab Oil Embargo: The Old Rules No Longer Apply.” NPR. October 16, Accessed March 30, 2017. http://www.npr.org/sections/parallels/2013/10/15/234771573/the-1973-arab-oil-embargo-thE-old-rules-no-longer-apply.

Yergin, Daniel. The Prize: The Epic Quest for Oil, Money & Power. London: Simon & Schuster, 2012.

References

1. Daniel Yergin. The Prize: The Epic Quest for Oil, Money & Power. 196

2. “The 1973 Arab Oil Embargo: The Old Rules No Longer Apply.”

3. Steve Coll. Private Empire, 154-176.

4. “Chevron to Pay $30 Million to Settle Charges For Improper Payments to Iraq Under U.N. Oil For Food Program.”

5. “Q&A: Oil-for-food scandal.”

6. Steve Coll. Private Empire, 154-176.

7. Steve Coll. Private Empire, 154-176.

Featured Image: Ed Kashi/Corbis

Fostering the Discussion on Securing the Seas.