Does Seapower Pay?

July 23, 2013 Guest Author 2 Comments

Daniel Drezner is an International Politics professor at Tufts University with an informative and entertaining blog at Foreign Policy. He recently published an article in the journal International Security asking whether “military primacy yields direct economic benefits.”

This is an important issue for seapower advocates, with organizations like the U.S. Navy traditionally claiming that American dominance at sea is part of the bedrock foundation of a smoothly running international economic system. The 2007 Cooperative Strategy for 21st Century Seapower argues that the “maritime domain…carries the lifeblood of a global system that links every country on earth,” and that “United States seapower will be globally postured to secure our homeland and citizens from direct attack and to advance our interests around the world that relies on free transit through increasingly urbanized littoral regions.”

The 2010 Naval Operations Concept similarly envisions U.S. naval forces that “effectively conduct the full range of maritime security operations and are instrumental in building the capacity, proficiency and interoperability of partners and allies that share our aspiration to achieve security throughout the maritime commons.”

The current strategy document for the U.S. sea services, a Cooperative Strategy for 21st Century Seapower — The current strategy document for the U.S. sea services, *A Cooperative Strategy for 21st Century Seapower*

Drezner examines three potential ways in which a state’s military primacy could provide tangible benefits:

1. Geoeconomic Favoritism: “Military preeminence” may spur private sector investment both domestically and from abroad, as “all else being equal, a country is far more likely to attract foreign capital if it is secure from foreign invasion.”

2. Geopolitical Favoritism: Weaker states may “provide voluntary economic concessions to the dominant security actor.”

3. The Public Goods Benefit of Military Primacy: Military “primacy facilitates the creation of global public goods” with “a wide range of international relations theorists” claiming “that a liberal hegemon is a necessary and sufficient condition for the creation of an open global economic order.”

The particular potential benefits of U.S. seapower in its current, globally-deployed state would most likely be realized in terms of the “Public Goods Benefit.” The particular hypothesis which Drezner is trying to test here is whether “by acting as a guarantor of the peace in hotspots such as the Middle East and Pacific Rim, the United States keeps the international system humming along-which in turn yields significant benefits to the United States itself.”

In terms of concrete examples of how the U.S. military has secured the global economy by protecting the sea-lanes, Drezner cites naval operations in the Middle East, an area of both political instability and significant economic importance due to the need to securely ship oil out of the region as well as the recent multi-national campaign against Somali pirates. However, he then proceeds to question whether naval or military power can be credited with minimizing energy market disruptions or defeating piracy, pointing out that “world oil markets” can be relatively resilient and are capable of adjusting to severe price changes, and that “improved private security on board” merchant shipping may have been a more important factor in the decreased threat from Somali pirates. With his focus being military power in general, however, he does not provide a detailed discussion of seapower’s role in the global economy other than his brief discussion of oil and piracy.

Keeping the trucks rollin' — Keeping the trucks rollin’

Drezner claims that if “unipolarity” and military primacy worked as predicted, China should have been “pacified” by the various manifestations of U.S. policy towards the Far East as part of the the 2011 “pivot,” but instead has acted increasingly aggressive towards its neighbors. Unaddressed in this article, yet probably at the top of the list of factors impacting and/or justifying continued U.S. naval hegemony in the Pacific, is the tangible impact of growing Chinese strength afloat. It is often assumed by China-phobes that a China with a strong navy acting assertively in regards to its claims over the surrounding oceans would be bad for the international system (presumably through somehow limiting freedom of navigation in the region), hence justifying continued American military presence in the Pacific. However, there is no empirical evidence to prove that case yet (because it has not happened), and advocates of both sides are forced to rely on hypotheticals. Drezner has asked the right macro-level questions, but it is unclear if there is specific enough data to generate a definitive answer regarding the tangible benefits of specifically American (or Chinese) naval primacy in East Asia.

Drezner concludes that military primacy is an important resource for a Great Power, but that “military preeminence” alone does not produce “significant economic gains.” Although primacy can be an “an important adjunct to the creation of an open global economy and the reduction of militarized disputes and security rivalries,” a hegemon whose economic strength is declining may not be capable of reaping the benefits of the economic system it has established and protected.

While members of the sea services or naval enthusiasts generally embrace the notion that seapower is an important element of protecting the international system and prosperity both at home and abroad as undisputed truth and gospel, the jury is still out on whether military power is always worthwhile in economic terms, and Drezner questions those often reflexive assumptions here. In an era of budget uncertainty, the Navy needs to have good tangible answers to justify its continued existence when these types of questions are asked in the future.

Lieutenant Commander Mark Munson is a Naval Intelligence officer currently serving on the OPNAV staff. He has previously served at Naval Special Warfare Group FOUR, the Office of Naval Intelligence, and onboard USS Essex (LHD 2). The views expressed are solely those of the author and do not reflect the official viewpoints or policies of the Department of Defense or the U.S. Government.

Strategic Outlook

Budget Spin for Dummies

July 22, 2013 Guest Author 14 Comments

Not that we’re calling you a dummy…

In his talk at the U.S. Naval Warfare Development Command last Friday, CDR Bryan McGrath (ret.) made some important assertions about the affordability of our Navy in the context of the Federal Budget. At about the five minute point, he describes what he envisions as the ideal Navy to meet the United States’ security needs and proposes that it would cost about $25 Billion more than what we currently spend. He then goes on to place $25 Billion in context:

$25 Billion Dollars is:

4.6% of the base Defense budget
1.9% of the National budget
0.16% of projected GDP

“…so don’t tell me we can’t afford a bigger Navy,” commands McGrath. “We can afford it. We choose not to have a bigger Navy.”

If we’re going to talk about government spending, it is important to make sure we’re all reading from the same sheet of music. DoD advocates like CDR McGrath assert that the portion of national treasure we’re willing to invest in Defense is approaching record lows. Defense spending critics suggest that even in spite of cuts, we are throwing more money at DoD than at almost any point in history, to include the heights of the Cold War arms races. They are all correct; whether we are at a low point or a high point in defense spending is entirely subject to the frame of reference. Which reference we choose will invariably be determined by our motives.

Discussions of Defense spending are generally framed in one of three ways:

1. Defense Spending as a Function of Dollars Spent

It’s hard to argue with cold hard cash. The money we spend on Defense has grown at an accelerating rate over the last century:

However convincing this graph is at first glance, you’ll find that only the most hyperbolic of critics of Defense spending will rest their argument on it. It is based on nominal or “actual” dollars spent, which do not account for the erosion of purchasing power that is inflation. We can correct for inflation by selecting a “base year” and then adjusting the dollar amounts at every other point to the purchasing power of an equivalent sum of money in the base year. Using 2014 as the base year, our corrected graph of defense spending looks more like this:

The blue line indicates what Defense spending would have been if the purchasing power of a dollar had always been equal to its 2014 value. While spending has oscillated pretty widely, the overall trend is positive: the price, presumably, of steady growth in things like technological complexity, personnel benefits, veteran health care, and administrative overhead. One major source of contention when framing arguments around inflation-adjusted dollars is exactly which rate of inflation is correct. Economists do not all agree, and DoD claims yet another rate of inflation from the economy at large due to a variety of factors.

2. Defense Spending as a Function of Resource Allocation

We’ve all seen a graph like this:

We can’t even balance the budget, and we’re spending over half of it on the military!? Preposterous!

Are we really, though? Pay attention to the title: this graph shows “Discretionary Spending,” which is that portion of the federal budget that is determined by Congress through an appropriations bill. This is opposed to “Mandatory Spending,” which is the outlay of government funds required by law. If we include Mandatory Spending, allocation of federal spending will look more like this:

Mandatory Spending is effectively made up of entitlement programs. It is important to point out that in the fiscal sense, “entitlement” is not the sense of privilege attributed to Millennials by the previous generations. Entitlement is a technical term which describes expenditures which are not limited by any budget, but instead are a function of the number of people who qualify for them and the expenses incurred by the services promised. Because they don’t need to be re-approved every year, unlike discretionary spending, most entitlement expenditures will grow uncontrollably without a change in the law.

3. Defense Spending as a Function of Economic Output

Described in terms of Gross Domestic Product, or the total economic output of the United States, Defense spending looks something like this:

The graph illustrates a downward trend in economic capacity committed to the military. Most DoD budget people will describe Defense spending in terms of GDP, ostensibly because it most accurately conveys economic burden. Bryan McGrath described his ideal Navy in terms of dollars, and then convincingly justified his position in terms of GDP.

Critics argue that using GDP as a yardstick merely serves the purposes of those who would seek more money by obfuscating actual dollar costs. Making sense of what is spent is made even more difficult by fluctuations in the denominator: GDP can vary wildly from year to year, which would appear on this graph as drastic changes to Defense spending. Yet another argument against measuring spending by GDP is that GDP is an estimate at best, and there is much disagreement between economists as to how it should be measured.

Bringing it All Together

If we lay out the various methods of describing Defense spending on the same graph, we get something like this:

As you can see, Defense spending can look completely different depending on how it is framed. It can be described as a dollar cost, a portion of federal spending, or a portion of economic output. Each perspective illustrates important information that the others fail to address, and each one can be abused to promote an agenda.

LT Will Spears, USN, is an Active duty submariner; post-JO shore duty type. His last tour was aboard a WESTPAC Fast-Attack; he is now at NPS focusing on family and personal development. He is the author of the leadership blog JO Rules.

Note: The views expressed above are solely those of the author and do not necessarily represent those of the U.S. Navy, the Department of Defense, or the Center for International Maritime Security.

Strategic Outlook

What NATO Must Do After ISAF

July 22, 2013 Guest Author 1 Comment

While some question NATO’s relevance, and even its need to exist after Afghanistan, there are, in fact, many jobs left to be done.

Deterrence and Defense

In Germany, few people understand that defense and deterrence are still tasks for NATO. We are surrounded by friends. But talk to our allies from Norway, Eastern Europe, and Turkey and you find their feelings are quite different. Norwegians and Eastern Europeans fear Russia. The Turks have worried about Iran and are now concerned about Syria. NATO’s Patriot deployment to the Turkish-Syrian border proves wrong all who argued that the era of collective defense and deterrence is over.

In addition, “nuclear sharing” is still appropriate, even if Germans with their excessive desire for disarmament do not like it. If some of our allies sleep better due to U.S. tactical nukes based on our soil this is a price we have to pay. In an alliance based on the all-for-one principle, nuclear sharing is necessary as long as a single ally considers it important for his security.

Range of Saudi CSS 2 missiles (Source)

Deterrence by denial will provide NATO more workload. The latter means to prevent an adversary from acting aggressive by making his means useless through one’s own capabilities. In particular, this applies to missile defense, but not only with regard to Iran. Saudi Arabia also has sophisticated medium-range missiles. If Saudi Arabia falls apart and “turns Egypt,” it can hardly be guaranteed that Saudi MRBMs will not fall into a bad guy’s hands. Moreover, Russia’s fears about missile defense are nonsense. U.S. missile defense’s final phase in Europe has just been cancelled. In addition, the U.S. is almost broke, and it is unclear how much new government revenue the “Shale Gas revolution” actually brings. It is therefore very unlikely that Congress would approve a new budgetary disaster.

Nordic Air Policing

The Baltic countries lack their own air forces. Thus, NATO is providing security for their airspaces. Moreover, Russia is increasing its number of assertive air patrols in the Baltic and the Arctic, while all NATO/EU countries in the High North have budgetary problems to sustain numbers and operational readiness of their fighter aircraft.

Hence, it would make sense for operational and for strategic reasons to establish a Nordic Air Policing mission from the Baltic over Denmark, Norway, and Iceland to Greenland, maybe even including the UK as lead nation. Non-NATO-members Sweden and Finland should receive an offer to join. Moreover, the positive side effect would be the outward-drifting UK could be linked to European security.

Special Operations Forces

Due to the political hazard of Iraq and Afghanistan, along with austerity, the era of major NATO land campaigns is over. Syria tells us that Western decision makers will try to avoid at any cost sending combat troops to foreign ground. Training and support missions, as the EU is doing in Mali and Somalia, will be the West’s approach, at least until the end of the decade. While the EU is doing well with training missions, it lacks experience with special operation forces (SOF). However, NATO’s SOF headquarter is running very well. Therefore, there is considerable potential for NATO-EU work-sharing. The Union could do basic military training, while the Alliance focuses on SOF training including partnerships with Non-NATO-countries.

Future Western land campaigns – if ever given a go by decision-makers – will follow a “light footprint” approach, which perfectly suits SOF. They will mainly carry the operational burdens. It is in all member states’ interest that NATO provides the framework for interoperable SOF.

Maritime Security and Naval Operations

The Standing NATO Maritime Groups are an unparalleled, but unnoticed success story. Since their creation beginning with SNMG 1 in 1968, the two SNMGs and two Standing NATO Mine Countermeasures Groups (SNMCMGs) have done their job without causing any political tensions. Instead, they were ready to go when called, like the 1999 Allied Harvest mine-clearance effort in the Adriatic Sea after the Yugoslav bombing campaign, or in front of Libya during Operation Unified Protector in 2011.

Naval operations are a niche where NATO is preeminent, due to operational experience and U.S. assets as a backup. However, the EU could try to seek a way into this niche by playing on the lessons learned from Operation Atalanta. Plagued by failures in security policy (e.g. Mali and its battlegroups), some EU fans may conclude that naval operations are a sector where the EU could better play of its success. But the EU does not have such operational experience in maritime affairs as NATO does, nor has it any access to U.S. assets. If things go wrong, NATO would receive a U.S. military bailout, the EU would not. Thus, naval operations should be left to NATO, while the EU focuses on the civilian side. In times of austerity, we do not need two organizations competing in the same field. Operation Unified Protector showed the enduring worth of the capability for rapid maritime crisis response. With a look on the instability in Tunisia, Libya, and Egypt, scenarios for new maritime operations in front of North African shores cannot be ruled out. Hence, SNMGs and SNMCGs should be excluded from defense spending cuts. Beside the Strait of Gibraltar, the focus of NATO’s maritime presence should be the Eastern Mediterranean. Trouble is likely due to the civil war in Syria and tensions between Turkey, Lebanon, Cyprus, and Israel about offshore gas. Russia is seeking to implement an anti-access/area-denial strategy by its largest naval expeditionary operation since the USSR’s collapse. Thus, a show of force and demonstration of political will by NATO is a necessity. After 2014, the Eastern Mediterranean is going to be the operational area for NATO’s seaborne missile defense on U.S. Aegis-destroyers.

We are right at the beginning of an Indo-Pacific-Century. Thus, when it comes to maritime security – I am explicitly not talking about air and ground forces – NATO should look more East-of-Suez. The Alliance has been present at the Horn of Africa since 2008 to protect the World Food program’s vessels and to fight piracy. NATO outreach to Asian navies, in particular China, has already begun. It would not make sense to cut these tiny, but very important strategic ties by ending NATO’s navel presence at the Horn of Africa.

British warships East of Suez in 2012 (Source)

Right now, Britain and France are pursuing their own track in the Indo-Pacific, while the EU is not taken seriously there in terms of security issues. However, as NATO’s present Maritime Groups will busier in the Mediterranean, a considerable option is to base a new third SNMG in Djibouti. The strategic values would be; permanent protection of vital sea-lanes; ability of rapid power projection and crisis response towards the Persian Gulf; quickly available means for disaster relief; mutual trust building by naval diplomacy with emerging maritime powers like China or India; a virtual capacity to reach out east of Malacca.

Of course, in many member states, especially Germany, such ideas about new NATO forward presence would be extremely out-of-favor. Thus, a more realistic approach is just to never end Ocean Shield. Open discussions about the operation should be avoided. While little attention is given, the mission can evolve in the ways mentioned and, hence, create irreversible facts.

The Arctic, however, should not be subject to military considerations other than Air Policing. Engaging Russia and new Asian stakeholders in the High North is a political question. The worst possible mistake would be to militarize and thereby to complicate Arctic politics.

Export and Guarantee Stability in Europe

After the Cold War’s end, the export of stability to Eastern Europe and the Balkans has been an outstanding success. While the Nobel Peace Prize has been given to the EU for incomprehensible reasons, it was NATO that connected past adversaries into its framework of peace, stability, and security. Macedonia and Montenegro should join NATO, once all membership criteria are met. In the medium term, the door should also be open to Bosnia, Serbia, and Kosovo. The more Balkan countries in NATO, the better, because it significantly decreases the likelihood of conflict in the region.

Georgia and Ukraine are not yet close to NATO membership, but the door should not be closed. The Georgians have a pretty tough road ahead. They will never join NATO as long as there are Russian troops on Georgian territory. Thus, either they find a way for the Russians to leave (which Moscow will not do) or they have to give up Abkhazia and South Ossetia as a prize for their way into NATO and EU (which Tibilisi will reject).

With regard to Russia’s resurgence and emerging assertiveness, Sweden and Finland should be offered closer partnerships or full memberships, if they so choose. To prevent Cyprus from becoming a Russian proxy, it would be a great idea to bring them into NATO. Unfortunately, Turkey would not let that happen. If they really go for independence, membership for Greenland, Scotland and Catalonia in NATO should be granted. (Although the Spanish stance on Catalan NATO/EU-membership after a succession would be quite interesting to watch).

EU youth unemployment 2013 (Source)

Europe’s crisis has been managed, but is far from being solved. In 2009/10 – surprise, surprise – the trouble in Greece occurred a few weeks after the German elections. We will see what happens after Merkel has been re-elected on September 22 or after the elections to the European Parliament in May 2014. It is an open secret in Berlin that Greece needs a second haircut. New bailouts for Cyprus, Portugal, Spain, and Italy are still on the table, but before September 22 nobody wants to talk about such issues. The fatal consequences of the huge youth unemployment have not occurred much yet, but they will eventually. Last but not least, when the United States is back on track with an economy running “full steam ahead,” France will still be discussing retirement in the age of 62. After ISAF’s end, one of NATO’s main missions is to be a backup for stability in Europe, if turmoil in the Euro Zone or even EU takes charge.

Keep the Russians and Chinese Out

There are these debates about Chinese bases in the Atlantic – which the author has been part of – and a new Russian naval presence in the Mediterranean including a base in Cyprus. There are reasonable arguments for the position that these debates are not kind of close to reality. However, the fact that such debates are now possible, which they would never have been ten years ago, should raise one’s attention.

Except the Soviet/Russian Westgroup from 1990-94 in Germany, a Non-NATO/EU-country has never had a permanent military presence in a NATO/EU-country. If Russia, China or someone else finds a way to set up a permanent military presence in a NATO or EU country, it would a dramatic signal for Western decline. NATO’s decision makers and strategists are tasked to prevent that from happening at any cost.

Felix Seidler is a PhD candidate at the Institute for Security Policy, University of Kiel, Germany, and a German security affairs writer. This article appeared in original form at his website, Seidlers Sicherheitspolitik.

Strategic Outlook

Speak Softly and Carry a Big Stick When Dealing With Future North Korean and Iranian Threats

July 19, 2013 Guest Author Leave a comment

In the wake of Hassan Rowhani’s landslide victory as Iran’s new president, some foreign policy mavens now believe that Rowhani’s presidency may augur a positive shift in Iran’s hitherto hostile policy towards the West. However, despite a glimmer of hope that Rowhani’s election may translate into moderate policies towards the West, others have “adopted a cautious ‘wait-and-see’ posture,” citing Rowhani’s past affiliation with the Ayatollah.

For East Asian experts, Rowhani’s election warrants attention because it remains to be seen whether Iran will retain its current alliance with Kim Jŏng-ŭn even if it chooses to reconcile with the West. After all, some have alleged that Iran has played a major role in the DPRK’s successful testing of its Ŭnha-3 rocket last December. More importantly, Rowhani’s future stance towards the West deserves attention because it may determine whether or not the United States must revise its strategy to adapt to new geostrategic realities. Indeed, it can be argued that the aforementioned factors are not mutually exclusive but intricately intertwined.

Some foreign policy mavens have construed recent events in the Korean peninsula and Iran as encouraging “game-changers.” After all, both Koreas have begun talks to ratchet down the ongoing tension. Furthermore, experts on Iran agree that Rowhani’s victory was prompted by a universal desire for positive change after years of economic hardships and political repression under Ahmedinejad.

However, geostrategic realities on the Korean peninsula and in the Persian Gulf might be more complex than they appear. On the peninsula, the two Korean states evinced deep-seated rancor and mutual distrust in their latest talk held at P’anmunjŏm despite having reached an agreement to reopen the Kaesŏng Industrial Complex. As Miha Hribernik and I wrote previously, “Should miscommunication problems and distrust persist, the consequences for the Korean Peninsula and the regional security environment may be dire.” As for Iran, it recently claimed to have improved the accuracy of its anti-ship ballistic missile, the Khalij-e Fars (Persian Gulf). Further, Rowhani’s election may have little effect on Iran’s existing nuclear policy because ultimately, “it is Khamenei who will make the final decision on the nuclear program.” In other words, both the DPRK and Iran may continue their existing partnership, or even lash out against the United States, if they believe that their collective interests are threatened.

So how can the United States successfully recalibrate its existing strategy in ways that reflect current geostrategic realities in the Persian Gulf and on the Korean peninsula? Dealing with the DPRK and Iran may require a flexible combination of deft diplomacy on one hand, and a show of strength on the other. In simple terms, the United States should “speak softly and carry a big stick” when dealing with future threats posed by the DPRK-Iran alliance.

Diplomacy may be the best option that the Obama Administration has to proactively deter the two “outlier” states from coalescing. Indeed, Vali Nasr recommends offering sanctions relief to Iran so as “to break the logjam over nuclear negotiations.” Even better, the United States can thaw relations with Iran and the DPRK by granting diplomatic recognition to both countries. In addition to “reducing dangers” stemming from miscalculations and enabling the United States to gather intelligence on both countries, normalization may prevent the outbreak of a fratricidal war on the Korean peninsula and may hold Rowhani and Kim Jŏng-ŭn accountable to international norms.

Nevertheless, in order for diplomatic endeavors to be sustainable in the long-run, they must be backed up by a credible threat of coercion. While many defense analysts and strategists remain fixated on countering Iran and China’s A2/AD tactics, the U.S. military can no longer afford to operate alone in the face of drastic sequestration cuts. It can, however, exercise firmness by “leading from behind” in working with allies and proxies. One such example is that of a “proxy strategy” implemented by General James Mattis, whereby Iran’s Sunni neighbors would supposedly vie for influence in the Persian Gulf region to deter, if not contain, Iran’s rise as a regional power. Another option, as I’ve proposed earlier, would be to form a combined fleet composed of the U.S. Pacific Fleet (PACFLT), the ROK Navy, and the Japanese Maritime Self-Defense Force (JMSDF) to proactively deter future DPRK provocations. Third, given that the United States still faces aggression from afar in the face of improved missile capabilities possessed by Iran and the DPRK, the United States must be prepared to defend itself at home by bolstering its missile defense systems. Last, and perhaps most important, since the world has converged into a smaller community by way of globalization, we must take the fight to our adversaries by “recogniz[ing] that it takes a network to confront another network…[and, therefore, must] follow the money [to upend] threat financing” internationally and at home.

LCDR B. J. Armstrong wrote that there “would be changes to tactics, and the requisite adjustments to operational planning” when dealing with adversaries who threaten America’s strategic dominance abroad. To this, one should add that flexible strategic responses, whereby the United States readily wields a combination of carrots and sticks to deal with refractory pariah states, may be needed to guarantee America’s continued strategic dominance and peace in the Persian Gulf and in East Asia.

(This article was republished by permission of the United States Naval Institute Blog and appeared in its original form on July 18th here.)

Fostering the Discussion on Securing the Seas.