National security - free world security - is as much if not more dependent on economic stability as it is on military strength. The last leader to give that connection its due was Secretary of State George Marshall.
In 1947, proposing the plan that was to bear his name, he explained that real security is not only military; it is also economic. "Without normal economic health in the world," he said, "there can be no political stability and no assured peace."Today, more than at any time since the 1940s, we need a new version of what Secretary Marshall prescribed for the world: A plan that captures the spirit of the Marshall Plan - a plan that I have been calling the Global Security Initiative.
Of course, there are differences between conditions now and those that Secretary Marshall addressed in the late 1940s. One obvious difference is that the United States is not in a position to lead a new Marshall Plan, as it did before.
Not only does the United States suffer from an enormous budget deficit, but it is the United States that has taken the brunt - in the industrialized world - of the debt crisis. This was particularly true between 1981 and 1983, when - thanks to Internation Money Fund austerity programs imposed on the lower developed countries - U.S. exports to Latin America fell $17 billion, accounting for about half of our trade balance deterioration.
Resolving the debt problem so that world trade can regain appropriate growth is obviously important for U.S. business and for our own country's national security interest. But if the United States isn't in a position to lead the charge - who is?
I suggest that Japan, the world's second-largest economy, is well positioned to lead a major new economic initiative - a Global Security Initiative.
Essentially, the Global Security Initiative is a program of investments. Japan, West Germany, and other chronic capital and trade-surplus nations are already making investments anyway, in the form of their net capital outflows, both public and private.
The initiative would simply take advantage of these capital outflows, using them to strengthen and stabilize the free world's trade and monetary systems, and catalyze growth in the LDCs.
It's worth remembering that the Marshall Plan, in today's dollars, would be on the order of some $75 billion. That amount is also roughly equal to the gap - the difference - between the percentage of GNP spent by the United States and Japan on defense. Bear in mind, also, that Japan's gross capital exports for 1986 will exceed $100 billion.
Now, how could these monies be invested? In support of our world institutions, for one thing. Japan is already negotiating to increase its contribution to the World Bank. Incidentally, it may now be time for a Japanese to assume the leadership of the IMF.
Japan could also become the principal funder behind a global investment guarantee agency, as suggested in the Baker Plan. Now, the Baker Plan also, and quite properly, calls for the LDCs to reduce their structural trade
barriers and to revise their foreign investment laws.
I see real opportunities here for win/win kinds of linkages. LDCs adopting open market policies could be first on the list to benefit from such an investment guarantee agency. The austerity stick would be replaced by the initiative carrot.
Japan could do other things as well; for example, its Export/Import Bank has begun financing LDC exports into Japan, and Japanese private capital is being invested in direct producing facilities in the United States and elsewhere, rather than in hot money alone.
Why should we expect the Japanese to take the lead in the Global Security Initiative? Simply put, because they need access to world markets - world markets that could close should protectionism get out of hand. Furthermore, Japan is the world's largest creditor and has the second-largest net foreign investment account in the world. Obviously, Japan has much to protect in a business sense, as well as in a national security sense.
The bottom line is that any chronic trade-surplus country, like West Germany, has a responsibility to act in a way that supports the total trading system. Zero-sum games simply can't continue.