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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?


To: Thomas M. who wrote (1003)5/3/1999 5:32:00 AM
From: CIMA  Respond to of 1301
 
Weekly Analysis -- The World After Kosovo

Summary:

Whether in a week or a month, the Kosovo crisis is drawing to a
close. The basic outlines of the settlement are already visible.
The question now is what the world will look like afterwards. We
expect a much more sober, cautious, and even mildly isolationist
U.S., facing the fact that tremendous power is not the same as
omnipotence. We see a dramatic decline in European confidence in
American leadership. Germany was particularly concerned about
Russia's reactions and is likely to concentrate on maintaining
its relations with Moscow independent of NATO's decisions. The
big winner was Russia, a country that got money, respect, and the
position of honest broker. The most extraordinary outcome of
Bill Clinton's Kosovo adventure was that it turned Boris Yeltsin
into a statesman, with his representative, Chernomyrdin, taken
more seriously in Bonn and Rome than Clinton's Strobe Talbott.
That was no small feat for the Clinton foreign policy team.

Analysis:

The Kosovo conflict is drawing to a close. Whether a settlement
will take a day or a month, the key elements are now clear. There
will be a cease-fire prior to the implementation of any
agreement. The Serbs will continue to control Kosovo, and
Serbian police will retain some sort of presence. A lightly
armed international peacekeeping force will be permitted into
Kosovo. Some NATO members will send forces, several non-NATO
members, including Russia, will also send forces. The command
structure of the force will remain deliberately vague. It will
be agreed that Albanians will be able to return to their homes in
Kosovo in stages. Many will refuse to go, hoping to be resettled
elsewhere. Others will return. Yet others will try to return
but will find it impossible. An ineffective peacekeeping force
will remain in place for a very long time, with an unclear
mission. But the bombing will end; the abuse of Albanians will
end. The world will go on.

It is time to think about what that world will look like after
Kosovo. Let's begin by considering carefully what has happened
in Kosovo. The United States' government had received reports
that it found credible of a terrible genocide underway in Kosovo
and decided that it had to intervene to stop it. The U.S. began
by attempting to dictate terms to the Belgrade government,
drafting a document now called the Rambouillet Accords. It
gathered around itself its NATO allies, and demanded that all
sides agreed to those Accords. There was substantial hesitancy
on all sides, but in the end, the Albanians agreed. The Serbs
did not. Leading NATO, the United States announced that unless
the Serbs agreed to the Accords, precisely as stated with no
further negotiation, NATO would begin a bombing campaign against
the Serbs. The United States said this with full confidence that
Belgrade would capitulate. Belgrade did not. Now, finding that
NATO refuses to launch a ground war against Serbia, and finding
that it lacks sufficient air power to crush Serb resistance, the
United States will eventually be forced to accept a compromise
and call it victory.

This will end an era that began with the Iraqi invasion of Kuwait
in August 1990. The United States, under President Bush,
determined that the Iraqi invasion was unacceptable. His precise
reasoning was not as clear as one might think. Part of the
reasoning was strategic. Part of it was his repugnance at one
nation seizing another. But the core of the intervention was
that in a global, strategic sense, it was risk free. Certainly,
there was a risk of casualties. However, there were two
assumptions on which the intervention rested. The first was that
if the United States chose to intervene, it could create, at
will, an international coalition to carry out the invasion. The
second assumption was that this coalition could in fact liberate
Kuwait. In other words, the issue that framed Bush's decision
was whether such an intervention was desirable and not whether
such an intervention was possible.

The intervention in Iraq was the first of a series of
interventions that included Somalia, Haiti, Bosnia, and now
Kosovo. Not all of these ended well. Somalia was, by any
measure, a failure. The Haitian invasion displaced the former
government but no one would argue that Haiti has been lifted out
of its misery. Bosnia was intended to be a short-term
intervention but has become a permanent presence. But none of
these interventions have forced the United States to face the
core question: what are the limits of American power? The
Clinton administration faced the intervention in Kosovo as a
question of whether the United States would intervene and whether
we would permit Serbia to retain sovereignty over Kosovo. It
failed to ask the more important question of whether the United
States and its allies had the military power in place to achieve
its political ends, and whether the amount of military power
required should be spent in a place like Kosovo. The United
States simply assumed, without the meticulous analysis required,
that it had the needed power. It did not.

Thus, the decade begun in Kuwait ends in the skies over Serbia.
No American government will, in the near future at least, simply
assume that it has the military power needed to impose its will.
This is, obviously, a healthy lesson to learn. There is a vast
difference between being the greatest military power in the world
and omnipotence. The United States rules the seas and can,
wherever it chooses, rule the skies. This is not the same as
being able to compel other nations to capitulate on matters of
fundamental national importance. It must always be remembered
that demographics never favor intervention in Eurasia. American
ground forces are always outnumbered whenever they set foot in
Eurasia. Sometimes air and naval superiority along with superior
technology and training can compensate for this demographic
imbalance. Sometimes it cannot. Sometimes it can compensate
only after a build-up taking many months, as in Desert Storm.
The casual assumption that the general superiority of U.S.
military power inevitably translates into quick victory in any
specific circumstance is obviously wrong and the point has been
finally driven home.

We would be very surprised if the Clinton Administration
attempted another humanitarian intervention after Kosovo.
Indeed, one of the lessons learned by all future administrations
is that interventions should never be casually undertaken until,
and unless, the military is given time to plan and implement the
intervention, as Bush permitted in Desert Storm. Moreover, since
the implementation of an intervention in Eurasia is always costly
and time-consuming, what appeared to be a good idea at first
glance, might well turn out to be a very bad idea in the long
run. Merely wanting to do something does not mean that something
can be done. Moral obligations are easy to assume. They are
sometimes impossible to carry out. This is a hard lesson to
learn. Put differently, talk is cheap. War is hard.

We expect two parallel processes to emerge after Kosovo. We will
see a much more passive, indeed, isolationist United States. The
hair-trigger assumption of responsibility for Eurasian problems
will be replaced by a much more cautious calculation not only of
moral considerations, but also of costs and the national
interest. The second process, paradoxically, will be a
substantial increase in American defense spending. The Kosovo
exercise has clearly demonstrated that the draw-down in U.S.
military forces has limited American military effectiveness.
Military options that were available to President Bush are simply
not available, in anywhere near as lavish a quantity, to
President Clinton. There is no question of any further cuts in
defense spending. The only issue now is how much defense
spending will be increased?

The United States will be withdrawing from its aggressive
leadership position not solely because it wishes to do so. It
will be withdrawing because it has seriously lost the trust of
many of its NATO allies. Except for the UK, the rest of NATO has
been simply appalled by the U.S. management of the entire affair.
The end game is being crafted by Germany, Italy, and Russia
because the United States simply locked itself into a position
from which it could neither retreat nor go forward. It very
quickly became apparent that the air war was not going to force a
Serbian capitulation. Rather than commence compensating
maneuvers, the United States insisted on rigidity and
bellicosity, without developing a crushing military strategy.

German policy is particularly likely to shift after Kosovo.
Germany has a fundamental interest in maintaining good relations
with the Russians. From a geopolitical and a financial sense, a
hostile Russia is the last thing that Germany needs. The near-
confrontation between NATO and Russia over Kosovo was a sobering
experience for the Germans. For a few days, they looked into the
abyss and the abyss stared back at them. Members of the Red-
Green coalition in Bonn are inherently suspicious of both the
United States and military adventures. They spent the last month
trying to demonstrate that they could be good citizens of NATO,
putting aside their ingrained, 1960s sensibilities. They emerged
with a clear sense that they were right to mistrust American
leadership and to worry about military adventures. One of the
consequences of Kosovo is that the Europeans in general, and the
Germans and Italians in particular, are going to be extremely
cautious in agreeing to future creative uses of NATO.

The big winner in all of this is, of course, Russia. It not only
got $4.5 billion but it also got everyone's attention, which it
didn't have since the good old days of summits with Ronald
Reagan. It has not only reminded Europe of its very real
military power, thereby setting up the process for extracting
money from the West, but it maneuvered itself into the position
of being an honest broker, trusted by both Germany/Italy and the
Serbs. Indeed, the Russians came out of the crisis looking like
sober statesmen, working toward peace and stability. Now, when
Boris Yeltsin can be made to look like a sober statesman and
facilitator, something has gone dramatically wrong in American
foreign policy.

We believe that the Kosovo conflict will become a definitive
event in European history. The failure in Kosovo will cause the
United States to recoil from casual interventions. More
important, U.S. clumsiness in Kosovo will cause the Europeans to
shy away from American leadership, particularly concerning
European matters. The likelihood of an American administration
herding NATO into another military adventure in Europe is
minimal. This is a crucial change. There has been a tremendous
asymmetry between Europe as a politico-military entity and Europe
as an economic entity. NATO has been the primary politico-
military expression of Europe, the EU the primary economic
entity. This has made it extremely difficult for Europe to
express a coherent viewpoint. The EU and NATO were simply not
congruent.

The Europeans do have a vehicle for politico-military thinking,
the Western European Union, which excludes the United States and
is, therefore, far more congruent with the EU. But even that
doesn't get to the heart of the problem. Germany's interests are
specifically German. France's interests are French. The UK's
interests are the UK's and are quite different from the other
two. We expect two results from Kosovo. First, a strengthening
of purely European institutions at the expense of NATO. Second,
a greater caution by individual nations toward multinational
commitments, including purely European ones.

Kosovo will undoubtedly bring to a close what we might call the
era of casual intervention for the United States. There is
nothing like failure to increase sobriety. We suspect that this
is the last major foreign policy adventure for the Clinton
Administration and would not be surprised to see Albright, Berger
and Holbrooke accepting private sector positions in the near
future. Most importantly, Kosovo closes what we regard as the
interregnum between eras. The Cold War was not replaced by a
unipolar world. That was a temporary anomaly. The new era of
one superpower and several great powers, loosely united to limit
U.S. power, is now beginning.

We'll tentatively christen this the New World Disorder while we
wait for the new era to name itself.

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