Helmut Schmidt — Chancellor of West Germany, 1974-1982. The article is based on a speech he gave at the InterAction Council in Berlin in June 2002.

Let us imagine that some foreign terrorists abduct two fully occupied wide-body passenger aircraft and crash them into the banking center in Frankfurt and into the Parliament building in Berlin, thereby killing a thousand people. What in such a case would be the psychological and political reaction in the German nation? Or if it happened in Paris or in London? Or in Tokyo or in Beijing? Or in Moscow? Or in Cairo or Mecca or Islamabad? Or in Lagos/Nigeria or in Rio de Janeiro? What in such case would be the reactions in those nations? And what would the respective governments do?

Once we try to imagine the impact of such a colossal crime on any of our own nations and try to imagine the reactions of our own governments, we will probably derive some understanding for the American nation’s psychological and domestic political situation, which obviously does at present dominate the American foreign policy.

Clash of Civilizations

The strategies of the U.S. are criticized by quite a few (and I, for one, am among the critics). But among my worries there is also the concern that quite many people (and many Muslims in particular) are blindly criticizing America and quite harshly. They are thereby contributing to the possibility of a so-called clash of civilizations.

One cannot exclude the possibility that such an impact might cause a considerable negative change in the global political situation. Obviously all governments concerned are aware of the conceivable eventualities.

But the job of a “global tour d’horizon” ought not to exclusively concentrate on the consequences of September 11, however grave they may turn out to be. Instead, I will try to sketch out some of the other present factors which, foreseeably, will have a heavy bearing on global developments over the next one or two decades.

At first there is the population explosion in Asia, Africa and Latin America, which has no precedent in the 19th or any earlier century. One hundred years ago we numbered one and a half billion human beings; we have since quadrupled our numbers to more than 6 billion. And within a few decades we will reach 9 billion. Already today, there is only one quarter of the space left, that had been available per person a hundred years ago. The space per person will shrink further and the growing density of population in those three continents will make the maintenance of social order, justice and peace ever more difficult.

Global warming will continue. The key factor of our burning coal, petrol and gas is indisputable; but as yet it is not calculable quantity-wise. Our globe has seen ice-periods and warm periods for millions of years. We do not as yet have reliable forecasts as to the climatic and physical living conditions in various parts of the globe, but we do know that they will change. We do know, for example, that the level of the oceans will rise and will force millions of humans to move who today live only a few feet above sea levels.

Population explosion plus climatic changes and shrinking living space on the Earth, will cause many more conflicts and wars – both inside individual states and between states in Africa and Asia, possibly also in Latin America. They will result in growing numbers of people being killed and in growing pressure of migration. We have been witnessing the gruesome examples in Ruanda, in Somalia and in other African countries, in South-West Asia, also in the Middle East. In almost all such conflicts ethnic and religious and also ideological factors do and will play an instigating role.

Most of the attempts to quell these armed conflicts by military intervention from the outside will at best have a temporary effect – like the militarily underpinned Western protectorates on the Balkan Peninsula – but they cannot of course eliminate the underlying causes.

In regard of the underlying cause of birth rates that are too high in global terms, one could theoretically dampen the population explosion. But with the noteworthy exception of China and India, most governments do not pay much attention to that. The same goes for most spiritual leaders of the great religions of Islam, Christianity, Hinduism and Judaism. The same is true, more or less, of all official development aid (ODA), whether by donor states or by the World Bank.

In regard of the underlying cause of global warming, we cannot influence the physics of the Earth; but we can diminish our additive human contribution to the foreseen greenhouse effect. In this field, moreover, at present the perspectives are globally not encouraging, due to the repudiation of the Kyoto Protocol by Washington.

A Ruthless Capitalist Ideology

A global tour d’horizon must of course take account of the continuing ongoing so-called economic globalization. During the last two decades the number of those human beings has almost doubled, whose lives are, directly or indirectly, under strong influence of the global markets – in the main due to the opening of China and of almost 30 states which hitherto had been dominated by the Soviet Union.

On top of that we are witnessing some major qualitative leaps. Satellites, computers, television and the Internet have brought about a globalization of instantaneous information (and also some misinformation). This has led to the globalization of almost all technologies. Most advanced scientific and technological know-how nowadays is available all over the world. At the same time instantaneous information plus a rather rapid process of financial liberalization in many countries has led to a globalization of financial markets, including of very short-term capital.

As a consequence of these three qualitative catalysts, a quickly growing number of private enterprises and corporations in the industries of banking, of information and of manufacturing, and also in commerce have globalized their activities, including the spreading of a rather ruthless and extremely greedy capitalist ideology. This qualitative phenomenon is inviting the criticisms of the anti-globalization movement and its transnational non-governmental organizations.

When we ask ourselves: Who is winning under globalization and who is losing?, the answer is threefold.

The winners so far are almost all of the highly developed industrialized countries: the U.S., Canada, the European Union, Japan and Australia.

Among the developing countries the winners are mainly those who have been or still are being governed by economically enlightened governments, but governed in a strictly authoritarian way. China is the outstanding example, along with a few of the smaller oil-exporting countries. One might as well point to the formerly so-called four little tigers: Singapore, Hong Kong, Taiwan and South Korea.

The U.S., the European Union and Japan still today are very egoistic sinners. They preach free trade but they never seem to obey their own sermon, instead they are indulging as deeply as ever before in protecting their own farmers, steel makers and so on. On top of that many developing countries have been persuaded to open their economies for foreign short-term credits and short-term money, to liberalize their current account, thereby opening their countries to all kinds of speculation from the outside and also getting deeply into foreign indebtedness.

The South-East Asian credit and currency crisis more than five years ago should have taught a lesson to the International Monetary Fund (IMF) and World Bank. Most of their rescue operations – from Indonesia to Mexico, including even Russia! – have to a lesser degree bailed out the recipient developing countries but to a greater degree they have benefitted private Western financial institutions, which thereby received the backlog of interest due and dividends and got most of their money back.

There is a parallel between NATO and the IMF. Since the Soviet threat has disappeared a decade ago, NATO is searching for a new enemy. Likewise the IMF. Since the Bretton Woods System of fixed parities between currencies was abandoned three decades ago, the IMF has searched for a new mission, digressing deeply into the socio-economic policies of sovereign states and into the field of the World Bank as well.

It seems about time to redefine the tasks of the IMF (and for that purpose it would be helpful if the 12 states of Euro-land would bundle their shares and their voting rights in the IMF, because the influence of the largest shareholder hitherto has been far too big). The enormous current volume of transnational flows of capital and of money, the wave of psychotic speculation, the spreading of the ridiculous ideology of shareholder value plus the manifold fraudulent manipulations to boost share prices, also the mergermania in the fields of private financial institutions, all that calls for better monitoring and regulation.

It might be a good idea to give the IMF the major mission to develop a new concept for fair order and stability in the globalized financial markets. Almost all of our states and economies do need better and internationally compatible standards for financial systems, for regulations and monitoring, and compatible codes for banks, funds, insurances, etc. The IMF ought not to be regarded as an ever ready lender of last resort all over the globe. Instead its major role should be in monitoring, in providing transparency and in stabilizing the globalized financial markets. It is my impression that the present management of the IMF is indeed moving in that direction.

The Dollar Is a Threat to Security

It is important to mention the fact that the two largest economies are not in good financial shape. The U.S. is sucking in foreign capital in the order of about $400 to $500 billion every year; that is the net amount by which capital imports overshoot American capital exports. Or in other words: The annual deficit in the American current account steadily increases the foreign indebtedness of the American economy. Or in yet other words: To the order of $400 to $500 billion annually the impressive growth rates of the American economy are financed by foreigners; this capital, owned by foreigners, is not available for their domestic economy. At present this situation is a great advantage for America; but it implies some dangers, that is a threat to future dollar exchange rates and thereby to stable global currency relations and to the stability of all globalized financial markets.

The case of Japan is quite different. Japan is the greatest net exporter of capital. But the Japanese banking system is in a shaky situation. And the domestic debt of the government has reached such a high volume that – if Japan was a European country – Japan could not be admitted to participation in the common European currency.

In about three decades’ time China will have reached a share in global trade that meets the order of magnitude of the share of foreign trade of the European Union or of the U.S.A. By that time we will have three world currencies: The American dollar, the Euro and the Chinese yuan. There might then evolve a sort of an triangular equilibrium. But for the time being the looming volatility of the dollar does require attention. Both the American and the Japanese governments are not only burdened with financial responsibility vis-a-vis their own nation and economy but as well vis-a-vis the global economy.

Regarding the World Bank and official development aid (O.D.A.) as a whole, financial transfers alone will never overcome poverty and misery in great parts of Africa, also in parts of Latin America and Asia, except under two conditions: Only if the governments make planned parenthood practicable. Otherwise the growth of population in many places is outpacing the growth of the gross national product.

The other condition is the reduction of military expenditure. In many poor developing countries, the military’s share of GNP is six, seven or even ten times greater than the total amount of O.D.A. that the country does receive. And in quite a few cases parts of the received development aid are only a disguise for the financing of the purchase of weapons from the donor country. There still is a lot of idealism on the side of many donor countries but also a lot of interference and selfish meddling.

All over the globe, including the developing countries, the emphasis of most governments on strong military capabilities is still unchanged, despite the end of the Cold War. Arms trade and traffic, the proliferation of conventional means of warfare, particularly of small firearms all over the globe, is going on as ever before. It is today easier than ever for organized terrorism and for organized crime to get hold of almost any kind of weapons.

The Dangers of War

It is true that we have seen reductions of forces and weapons in most parts of Europe and in Russia. Presidents George Bush and Vladimir Putin have to some degree lived up to their obligations under the Non-Proliferation Treaty, which for three decades their predecessors had neglected, by agreeing to dismantle (not to destroy!) several thousands of their superfluous nuclear weapons. This agreement is more of a psychological than of factual importance.

But then the acute conflict in Kashmir reminds us of the fact that both India and Pakistan do possess rockets with nuclear warheads. One can only hope that outside mediation – possibly by Moscow and Beijing or by Washington – will help to dampen the danger. And the fear!

The tensions across the Taiwan Strait recently appear to have mellowed somewhat, due to prudence on either side. The East Timor conflict appears to be solved for the time being. The danger of North Korea provoking a war does appear to me to have been overemphasized by Washington. Pyongyang does make threatening gestures from time to time, but quite obviously this utterly poor country has nothing to gain by war; the assistance by the Soviet Union has ended and the assistance by China is not much more than nominal.

By the way: few people outside the U.S. accept the wisdom of the phrase of an “axis of evil,” reaching from North Korea via Iran to Iraq. The three of them have little in common and have almost no connection between them.

The greatest dangers of war appear presently in the Middle East. The conflict between Israel and her immediate neighbors in Palestine, Lebanon, Iraq and Syria, with terrorist activities on all sides, has dangerously escalated in recent months. It can eventually burst out into open warfare. Already for years it has been fuelling anger and emotions in Israel and in many Arab countries, particularly among the younger generations. They understandably resent the Israelian forces of occupation on the West Bank and in Gaza. And quite a few want to totally eliminate the state of Israel.

Of course, Israel does rely on the backing of the U.S. The U.S. has friendly relations with Israel and also with Saudi Arabia and Egypt and some other Arab states. Therefore, and also due to the American military and technological and financial leverage Washington is in a unique position to mediate. But for decades American policies in the Middle East have not been very consistent, nor are they rigorous. The repetition of public threats against Iraq in the American media and the quest for a removal of Saddam by military force is not helpful either – except for the motivation of Islamist extremists and terrorists.

It is noteworthy that the former war against Iraq, called Desert Storm, had been triggered by Saddam’s attempt to conquer a neighboring sovereign state, and that the war was authorized by a valid decision of the UN Security Council. Also the war in Afghanistan against Al-Qaeda and their wilful Taliban-hosts is based on a Security Council decision.

But, on the other hand, the military intervention in Kosovo by NATO and the U.S.A. and the bombing of Belgrade was a clear violation of the UN’s Charter. Such violation should not be repeated. The UN Charter permits the use of military force against another state in case of self-defense against attack – and otherwise only and exclusively in case of a valid decision by the Security Council.

Murder and other violent acts of terrorism for political purposes have been with us for millennia. Terrorism has been carried out by legitimate princes or by their opponents, by tyrants and dictators, by guerillas and partisans, also by commanders of regular troops, by occupational forces as well as by resistance fighters against them, by revolutionaries and by suppressed minorities. Presently we are witness to several transnational terrorist activities across borders of sovereign states, from Manhattan and Washington D.C. to the Middle East, from the Basque region in Spain to Northern Ireland, also in India, in some African regions and as well in Chechnya or on the Balkan Peninsula. We Germans had to endure organized murderous terrorism, transnationally assisted, from the early seventies onwards, over almost two decades.

Most of all the various national, transnational and international terrorist activities are differing in their psychological and political origins. One therefore needs quite different methods and means to fight terrorists, dependent on the specific circumstances in each case. One can fight Al-Qaeda and the Taliban in Afghanistan by military operations. But if, for instance, one would detect clandestine Al-Qaeda pockets inside other states, the governments of which are not successful in eliminating it, you will be utterly reluctant to interfere from the outside with military means or by warfare. One as well cannot fight the IRA in London by military warfare against Northern Ireland.

I do know from my own experience that a government, which has to fight murderous terrorists, must not lay open its plans, its preparations and all of its current activities, because such openness would offer better calculability to the terrorists and thereby would be self-defeating. But, on the other hand, one has to establish a high degree of confidence between oneself and those whose active cooperation is indispensable.

Having said that I would add: The political and administrative cooperation of the world powers — China and Russia, of almost all the European states, of many states in Asia and in the Middle East with America and its fight against Al-Qaeda is in the worldinterest. But this so-called anti-terrorist coalition will not be maintained for ever; it will dwindle the earlier the longer America’s further plans remain unclear. Many people say: “September 11 has changed the world.” I don’t think this to be correct, but obviously it has deeply changed the perspectives under which the Americans do perceive the world outside. They had been told and did believe their country to be the one and only superpower, but, despite all their power, for the first time in their national history they had to suffer from a violent attack on their own soil.

The Unilateralism of a Great Power

During the Clinton administration the term “rogue states” had become fashionable. Already then did a new defense agreement with Japan and in 1998 the solemn declaration of a “New NATO” convey the impression that people in Washington were eager to create instruments for policing the globe. At that time one had to consider the possibilities of a new Cold War, this time against China, and as well of a geographic extension of the military purpose of the formerly purely defensive Atlantic Alliance.

The visits which George W. Bush has paid to various European capitals including Moscow were intended to assuage other nations’ concerns, all of Bush’s speeches were well done and also well received. But speeches are one thing, the reality today is: America is tending towards taking foreign political and strategic decisions unilaterally.

History tells us that unilateralism of a great power is by no means a new phenomenon. It also is not new in America; the isolationist Monroe Doctrine, which dominated America’s foreign policy during the XIX century, has in a way been a forerunner. The isolationist desire not be bothered by other states and by events outside one’s borders is still strong today, in many quarters of America, also in Congress. After World War I the nation rejected the League of Nations which had been created in the main by Woodrow Wilson, who believed in an attitude of liberal and solicitous internationalism. By contrast this internationalism did prevail after the end of World War II. We do thankfully remember the creation of the U.N., the IMF, World Bank, development aid, the Marshall Plan etc., altogether an all embracing, well-meaning and relatively unselfish effort, aiming at a multilateral order of the world.

All these three basic trends, isolationism, internationalism and unilateralism have always co-existed in America, sometimes one of them, at other times another one did prevail. Most people in Asia, Africa, Latin America and Europe would of course prefer American internationalism or multilateralism. They will try to influence America in that direction. My guess is that we will have to live with a considerable degree of American unilateralism for quite a while.

If one looks at the engagement between the U.S.A. and NATO, on the one hand, and Russia, on the other, it could appear as if America thereby was extending its strategic influence into the East. Together with new American military presence in some Central Asian states it could irritate the Chinese leadership. Therefore Vladimir Putin will have to pay cautious and friendly attention to his Chinese neighbors. My impression is that Moscow understands its recent agreements as a medium-term move to gain some strategic alleviation and thereby increase the room for domestic changes. If that assumption is correct neither China nor India or Pakistan need to worry.

Over the longer run, I still do expect to see three world powers: besides the U.S.A. also China and Russia. Perhaps in approaching the middle of this century, India will join as No. 4 and possibly also Brazil. It is also conceivable that the European Union by that time will have emerged as an operational entity and thereby as a world power.

As regards China, the economic and technological progress over the last twenty years is almost unbelievable. I first went to China at the time of the horrible cultural revolution and if I compare my impressions in the middle 1970s with what I see today, then the achievements appear as almost incredible. If we consider the dignified age of the Chinese civilization, about four millennia of history, as well as China’s weakness and humiliations in the XIX century and until the middle of the XX century, then the sudden burst of vitality is phenomenal. Of course China does still have enormous problems inside her borders. The government will have to concentrate on them (I think any Japanese fear of China has little rational legitimacy. Japan’s relations with China – and as well with Korea and other Asian nations depend in the main on Japan herself.)

As regards Russia, her domestic economic and social problems, inherited structural, constitutional and cultural problems are not smaller than those of China. But the enormous territory will, differing from China or India and others, prevent any overpopulation. The modernization of Russia may take one or more generations. It seems though that in recent years there is more progress under way than ever during former decades. Today Russia’s importance to the world is not so much a consequence of its military and space and nuclear capabilities but more so of its long borders in Europe and in Asia, its vast territory and of course the hitherto unexploited riches of minerals and fossile fuel in Siberia.

Islan and The West

When we were younger, some of us may have read Arnold Toynbee (or even Oswald Spengler’s “Decline of the West”); rather recently many of us will have noticed Samuel Huntington’s theses on the “Clash of Civilizations.” But it seems to be a fact that only very, very few leaders do know about a religion other than their own and about other religiously molded cultures or civilizations. This is at least true for Christians. I do not know about relations and tensions between Buddhism and Confucianism, or between Hinduism and Islam. But I do have understanding that there does exist a considerable, dangerous gap of knowledge and of understanding between Islam and the West as a whole (whether Western Christians or just nominal Christians or Jews or non-believers).

Given this Western lack of knowledge in regard of the various Islamic civilizations and their different histories, it is easy to mistake the activities of some Islamic extremists to be typical for the world religion of Islam. At least some important facts ought to be understood.

First: The Koran and Islamic traditions do not distinguish between religious authority and political authority. The same is true of the Thora or the Old Testament, but in the course of more than a milliennium Christians and also Jews have come to accept a rather clear divide between the realm of the church or of the synagogue and, on the other hand, the realm of the political authority, be it formerly the hereditary emperor or king and nowadays the elected government. By contrast, in many Islamic countries such divide is not established as yet; Iran is the outstanding example.

Second: Who is to blame in countries that do owe their borders only to the chances of Western colonial conquest and do owe their existence as a state not to a long history of evolution but only to the fact that the colonial rule, two or three generations ago, was either voluntarily abandoned or – in most cases – was forced to leave by uprisings. That goes for Indonesia, for India or Pakistan, for Bangladesh, and for most states with Islamic majorities or considerable Islamic minorities.

Third: In many states of Arab Islamic populations there does exist an Arab identity but hardly a national one. There are great distinctions between an Islamic state of considerable historical legitimacy (like, for example, Iran) and, on the other hand, a state, which is the artificial creation of the victorious European powers who after World War I divided the Ottoman empire between themselves – Iraq is one of those.