Challenges of the Global Century
   Report of the Project on Globalization and National Security

Section 1

Globalization and Security: A Growing Challenge

Globalization describes the era that is emerging from the shattered glacis of the old Cold War divide. Helping shape this era is an energetic economy powered by the accelerating pace of transport, telecommunications, and information technology. Defined broadly, globalization is the process of growing international activity in many areas that is creating ever-closer ties, enhanced interdependence, and greater opportunity and vulnerability for all. Events at the far corners of the earth are now affecting each other, countries and regions are being drawn closer together, key trends are interacting as never before, and the pace of change is accelerating. Because of it, the 21st century will be the first truly Global Century.

Mastering the challenges of the Global Century will require governments everywhere to see, think, and act globally--in ways never demanded of them before. In previous centuries, the course of world history was determined largely by events in only a few regions, particularly Europe and North America. Now, the future is shaped by the actions and interactions of countries and people all over the world. Nobody knows what globalization will produce, but it is here to stay. If it is to bring progress, rather than trouble, its powerful dynamics must be channeled in constructive directions by sound government policies.

Demonstrators at World Bank and IMF meetings in Washington. AP Wide World Photos (Rick Bowmer)

The emerging global system is rapidly eroding old boundaries between foreign and domestic affairs as well as between economics and national security. Developments in one sphere are increasingly having rapid and sometimes surprising effects on others. Despite the power of markets, the role of government remains crucial. Indeed, a peaceful security climate must first be created in most regions before globalization can take hold in ways that bring economic prosperity, democracy, and multilateral community-building. Creating such a security climate is, first and foremost, the job of diplomacy, foreign policy, and defense planning--not the job of markets, trade, and finances.

Protesters at meetings of the International Monetary Fund (IMF) around the world have painted globalization as a form of exploitation, with devastating consequences for the developing world. By contrast, defenders of globalization portray it as a largely positive force that fosters peaceful integration. Our assessment is that globalization's effects are mixed and uneven across different regions and within various countries. For example, the new ease of global communication and transportation has boosted trade and growth. Flows of U.S. trade and investment are now equivalent to more than 30 percent of U.S. gross domestic product (GDP). These flows contributed substantially to the extraordinary levels of economic growth and job creation that marked the 1990s. But these same innovations have facilitated the growth in transnational crime and weapons proliferation. A large percentage of the cases being handled by the Federal Bureau of Investigation today, from telemarketing fraud to car theft to money laundering, have an international dimension.¹

On balance, where democratic and other responsive and adaptive governments are in place, globalization is fostering stability and prosperity. However, most countries with weak or authoritarian governments must now struggle mightily just to keep pace in the global marketplace. The widening gap between them and the rest of the world feeds internal turmoil and regional instability. Still others are falling further below the norm, unable to compete in the global economy and buffeted by many of globalization's negative consequences. The resulting economic and social disparities have sometimes exacerbated ethnic tensions and inter-communal grievances. They have also helped to spawn terrorism and armed conflicts that place new demands on international and regional institutions. A few examples illustrate globalization's impact:

• The Asian financial crisis of 1997-1998 intensified ethnic tensions and instability in Indonesia, catalyzing the independence movement in East Timor and threatening the territorial integrity of the rest of the country.
• During and after the Kosovo war, ethnic Albanians used the Internet to raise substantial funds for the Kosovo Liberation Army, while Serbian reformers used it to skirt government censorship and build opposition to the Milosevic regime.
• Criminal gangs in Sierra Leone have financed their insurrection through sales of diamonds on the international market.

Welcome to the Global Century.

Greek soldiers guarding ballot boxes during elections in Bosnia. 1st Combat Camera Squadron
(Andy Dunaway)

The challenge for the United States and other countries is to take advantage of globalization's opportunities while minimizing its dangers. Addressing this challenge requires a better understanding of globalization and its effects. It also requires more integrated policy approaches and mechanisms for decisionmaking that will foster sound policies.

Notes

¹Louis J. Freeh in a statement submitted for the record to the Subcommittee on Foreign Operations, Senate Committee on Appropriations, Washington, DC, April 21, 1998. [BACK]