May 31, 2012

TSG IntelBrief: The Effect of Falling BRICs on International Intervention

As of late May 2012, the relative slowing of the economies of Brazil, Russia, India, and China — known collectively as the BRIC nations — could have a substantial influence on the willingness and ability of such international organizations as the United Nations, the European Union, and NATO to intervene in crises that threaten regional and global stability. This holds true even though none of the BRIC countries are members of NATO, and is unrelated to any track record of support for intervention as members of the U.N.

The connection emerges instead as a consequence of a progressively globalized and interconnected economy. The BRIC countries — individually and collectively — are increasingly influential in the day-to-day affairs of the world's largest economies, to include both the U.S and EU. Realistically, while there is justified international concern focused on dangerously weak EU economies such as Greece or Spain, the prospect of a BRIC-wide slowdown (which, in part, could be a result of the ongoing EU crisis) would more deeply endanger the economies of NATO, EU, and the larger U.N. member nations. Such an economic downturn would materially diminish their financial ability — and therefore their willingness — to quell regional conflicts that, if unchecked, could cause widespread instability that could, in turn, lead to further economic disruption and stagnation.


The Tension Between Willingness and Ability

While chronic budget problems do not reduce the probability of military interventions to zero — and history is clear on that point — it does provide substantial and arguably irrefutable financial reasons against intervention, reasons that will likely become much more prominent even if nations are hesitant to acknowledge such calculations. This will place an increased burden on diplomatic and intelligence-driven solutions that are both problematic and, more importantly, vulnerable to budget realities (although such options are much less expensive than military intervention).

The slowdown in the BRIC economies is just that, a slowdown — not a recession, stagnation or contraction as is the case with many Western economies (with the notable exception of the growing markets in Latin and South America). Yet given the interconnectedness and interdependencies between the U.S., the EU and the BRICs, any slowdown has a magnified effect, especially on fragile economies. Growth forecasts for the BRIC economies have all dropped (China's to 8.2%, India's to 6.9%, Russia's to 4.2%, and Brazil's to 2.9%). These numbers, which are the envy of most other nations, spell potential trouble for the rest of the global economy because, in many ways, the new BRIC growth numbers are a lagging indicator, a result of pre-existing lowered demand and spending from normally high-consuming nations. Adjustments taken by the BRICs to address their respective budgetary issues will ripple outwards, and one of the by-products could be a diminished capacity — and willingness — of member nations in NATO and other international security organizations to intervene in conflicts that threaten stability and growth.


A New Model of Intervention?

The 2011 U.N-approved mission in Libya has been held up as an exemplar of the new "intervention-lite" model, since the participating nations did not place troops on the ground. While the intervention was successful from the standpoint of removing Libyan leader Muammar al-Gaddafi from power, it's relatively modest cost was still enough to cause political turmoil in the United States, Canada, and other NATO countries. The U.S., for example, spent more than US $1 billion in what was billed as a non-leading role, with Canada investing US$ 100 million, both substantial amounts in times of shrinking budgets and negative economic forecasts. As was seen most recently in the NATO conference earlier this month in Chicago, member nations are growing weary of their ongoing personnel and financial commitments to Afghanistan, which make it even less likely they will support additional interventions and commitments in the near term.

Just as the end in Afghanistan is somewhat in sight — which gives participating nations some hope of freeing up a part of their budget — the BRICs are slowing down, threatening to reduce or eliminate any "peace dividend" long before it materializes. Government policymakers across the board will need to adjust their own budget forecasts downward, to include funding military endeavors, if the BRICs join the ranks of weakening economies. A possible glimpse of the lengths governments will go to avoid costly intervention can be observed in the ongoing Syrian crisis.

Syria is a vastly different situation than was Libya, and it would be incorrect to suggest that financial reasons are the sole (or even a primary) reason for the reluctance on the part of the international community to intervene. However, the manner in which similar conflicts might play out in the future can be viewed through the lens provided by the unfolding scenario in Syria. The various approaches taken to address this crisis, while avoiding military intervention, might very well be a viable template for future conflicts. The military intervention is often the last option, but in the new fiscal reality, it will be ever more so. And it is possible that both current and future dictators and tyrants sense this.

An argument could be made that Syrian president Assad clings to power because he believes the international community's will and financial ability to remove him in the manner of Gaddafi have been greatly diminished, and will continue to be undermined if the global economy deteriorates further. How the international community counters this perception — perhaps through more effective financial and diplomatic pressures, or broader coalitions that more fully represent global positions — will go a long way in determining whether the current and future economic crises will lead to a paralysis of intervention...and an increase in instability.



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