Nicholas Burns has served three US Presidents over 27 years as a diplomat, including as deputy secretary of state to George W. Bush. He also served as Bill Clinton’s ambassador to Greece and Bush’s ambassador to Nato, and now teaches at Harvard University. He sat down with FinanceAsia on the sidelines of the Credit Suisse annual Asian investor conference in Hong Kong to discuss the intersection of geopolitics and globalisation.
In Europe, Russia has forcibly annexed another country’s territory. In the South China Sea, the US has advised its commercial airlines to comply with China’s demands for flight notification. Is Pax Americana dead?
The international system is very much alive. This system developed after the Second World War and has been dominated by the United States but it is also this system that has allowed China to rise and become wealthy. It is this system that has enabled other countries to develop and prosper, such as India and Brazil. It is a system based around rules and free commerce, with a United Nations Security Council that regulates international disputes, and with international financial institutions such as the World Bank and the IMF to provide stability and aid. The system is built on the premise of powerful countries working together.
But are powerful countries working together to uphold the international system?
The system is alive but it is fraying. It needs repair and it needs renewed leadership, particularly at the UN Security Council. The system designed after the Second World War was based on a directorship of the five permanent members of the Security Council. Their composition is not relevant to today’s world. It doesn’t make sense, in today’s world, not to include Japan or Brazil; there’s not a single African country represented on it. This needs to be modernised.
We have yet to see any agreement, however, among the existing permanent members on who else to admit. So what can be done in the meantime?
One of the most important ways to preserve international peace and security is to follow the rules. In annexing Crimea, Vladimir Putin has violated the UN Charter, the Helsinki Final Act and the Budapest Declaration of 1994 – that was a treaty signed by Boris Yeltsin and the Ukrainian government, in which Russia promised to respect Ukrainian territorial integrity in return for Ukraine giving up its nuclear weapons.
Therefore there has to be cost to Russia, in the form of isolation and sanctions. That is how to preserve the integrity of the international system. This rules-based system has for 60 years preserved peace among the great powers, enabled common global prosperity and allowed hundreds of millions of people to be lifted out of poverty. None of that would have been achieved if the world [was] anarchic and without rules or leadership.
But the response by the Chinese and the Indians to the Russian actions in Crimea has been acquiescent.
I’m intrigued by the Chinese response, actually. China abstained from the UN Security Council resolution condemning Russia and the Chinese ambassador’s statements were very nuanced. India’s reaction is the one at variance with the rest of the world. It’s worth noting that Putin had options. If he wanted Crimea to come back to Russia after 60 years, he could have asked for UN oversight of a free and fair referendum. Putin has challenged peace and security in Europe, a threat that most people had thought had vanished.
There is a perception in Asia that the US is in a strategic retreat, particularly with respect to the Middle East, which raises questions about its commitments in East Asia.
We can’t be in retreat. We can’t isolate ourselves. We have to play a leadership role, economically, politically and militarily. The US has just fought two long wars, the longest in our history. Both have been problematic and bitter experiences for our country and our military. Plus we had the Great Recession of 2008. So for the public there has been an inclination to pull back. But this isn’t 1814 or even 1914; we exist in a globalised world. The US still has by far the world’s most effective military, the greatest amount of soft power and the world’s largest and most innovative economy.
For the sake of maintaining the world order, and for its own self-interest, the US can’t retreat from the Middle East. With violence and instability in Iraq and Egypt, the Iranian nuclear issue, the desire to see a two-state solution for Israel and Palestine, and the Syrian civil war, we have to be involved.
You mentioned US self-interest. To what extent is the international order preserved for the general interest or just for the US? Because there are some voices, in China for example, that say the international order mainly serves US interests.
That’s not the tone I hear representing all of the Chinese leadership. The US-China bilateral relationship will be the most important in the world for the next 50 years. Both countries have a stake in global financial stability, in growth, in the future of the world’s trading system, in dealing with climate change and international crime. The world cannot succeed unless the US and China engage on a daily basis in making the international system work.
But we are also global competitors, especially in the area of military power in Asia. The US has been the predominant military power in Asia since 1945 and it has a string of alliances. China has become more assertive in reinforcing its own power. The question is how do we manage the peace and avoid conflict? How do we balance this strategic competition with the need to maintain peace and prosperity?
It seems that while on some issues, such as climate change, both the US and China can find common ground. But in geostrategic terms, in military terms in Asia, their interests seem mutually exclusive.
The US has to engage with China but it also must maintain its system of alliances in Asia – for its own interests. But that system has also been good for China. In practical terms President [Barack] Obama and President Xi [Jinping] have been working on this but we need much better communication, especially between our militaries. We should be meeting, training together, doing joint exercises, sending officers to each other’s war colleges.
How dangerous is the island dispute between China and Japan? Leaders in both countries have alluded to the outbreak of the First World War.
It is too glib to say this is like 1914 but the lesson is that a remote event in a corner of the Austro-Hungarian empire led to a general war that killed millions of people around the world. China and Japan are vying over the Senakaku Islands in the East China Sea. It’s a combustible situation because their militaries are brushing up against each other. If something happens it is important that the presidents of the US and China, or the chairman of the [US] Joint Chiefs of Staff and his Chinese counterpart, can immediately get on the phone.
Does Obama or the Pentagon necessarily know who to call in China? Is the leadership in Beijing always sufficiently agreed or coordinated to take such a call?
It’s a problem given China’s opaque political system. There doesn’t seem to be clear or daily oversight of the [People's Liberation Army]. But these things evolve. The US didn’t have a National Security Council until 1947. The NSC provides the president direct, daily oversight and control over the military and the intelligence community. China’s Third Plenum [leadership meeting] last year included the announcement that President Xi would oversee a new security council. I hope that institution will develop and that it will evolve to communicate with national security organisations in Japan, South Korea and other countries.
South Korea’s President Park Geun-hye recently met with Japanese Prime Minister Shinzo Abe, but it was a pretty frigid meeting. How broken is this relationship?
These countries have deeply rooted histories. Our hope is that the Japanese government would be more open with its Asian neighbours and that it would elect to do what Japanese governments have done in the past: make unequivocal and clear statements about Japanese conduct during the Second World War. The US helped to facilitate that summit in the Hague between President Park and Prime Minister Abe because we need to deal with the North Korea problem, among other things, and that requires South Korea and Japan working together.
That said, I do think Abe is providing the leadership the US has wanted to see. He is making bold moves to strengthen the economy and the military and [is] taking a more active role in regional affairs. That is all positive. But it was unfortunate to see Abe visit the Yasukuni shrine, and other Japanese officials – not Abe himself – have made some outrageous statements about the war.
Some people think North Korea’s Kim Jong-un is trying to usher in reform or change. Do you view his new regime as positive or negative?
It’s bad and ugly. North Korea remains among the most likely events that could disrupt markets, trade and peace. It is a opaque and brutal regime that engages in wildly inconsistent behaviour toward its neighbours. We are working to contain that country’s leadership. The US needs to be very clear about threats to the security and territorial integrity of both South Korea and Japan. We are not dealing with a normal government. Kim is a young, untested and irresponsible leader. China and the US have found it easier to work together responsibly on this.
Despite these threats, the global economy and trading system seems robust, at least now that we’re recovering from the global financial crisis. But there are growing forces of fragmentation that are challenging globalisation. What’s your view?
There are some positive trends. We are seeing recovery from the Great Recession in most industrialised countries. If we continue to lower barriers to trade – if the Trans-Pacific Partnership can be successfully negotiated and implemented – it will be a great driver of growth and investment. The same is true for our trade talks with Europe. If China’s growth story continues, and if India can resume its growth story, I’d say there’s hope that we are entering a period of global prosperity.
There are threats to that, however: North Korea disturbing the peace, conflict in the East China Sea, Putin continuing his aggression in eastern Ukraine or Moldova, and many fires burning in the Middle East that could disrupt energy production.
It is the job of the major powers to work within the international system to limit these conflicts while advancing the more positive trends.
