The Economic Instrument of National Power and Military Operations: A Focus on IRAQ

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WITH ONE EXCEPTION--the post-World War II Marshall Plan for the reconstruction of Germany and Japan-Winston Churchill's statement was prophetic in describing American post-war experiences. It has proven particularly true of the current war with Iraq.

In its pursuits of national objectives, the U.S. uses diplomatic, informational, military, and economic (DIME) instruments of national power to influence other nations: The diplomacy component involves negotiating with other nations to settle differences. It is the job of statesmen, and it is most successful when supported by the other instruments of power. The information component comprises strategic communication, public diplomacy, and the collection, analysis, and dissemination of information about potential adversaries. The military component involves military activities ranging from peacekeeping, humanitarian assistance, and nation-building to large-scale combat operations. The economic component encompasses financial activities that run the gamut from providing foreign aid and market access to imposing trade sanctions.

In the past, when diplomacy and informational campaigns have failed to resolve a conflict, the U.S. has responded by imposing economic sanctions, and when these have failed, it has resorted to military options. Especially recently, the use of the military component of national power has been the subject of much discussion. Relatively little has been said, however, about how we have employed our economic power. This discussion is long overdue, for in our estimation, the economic arm has been ineffectively and even counterproductively employed in recent conflicts. Miscalculations or mistakes in its use have contributed greatly to the U.S.'s inability to terminate wars with a workable peace.

First, economic moves--usually sanctions--rarely, if ever, work as intended. They do not lead to concessions by the targeted government, and they do not stimulate citizens to seek their government's overthrow. In fact, sanctions usually cause the parties in conflict to harden their positions, and, by adding to the misery already imposed on people whose government the U.S. is attempting to influence, they portray the U.S. in a bad light. Both negative results have been evident in the cases of North Korea, Cuba, and post-Desert Storm Iraq.

Second, with the U.S. increasingly using the economic component coercively as a key part of its security strategy, it must begin to fund economic programs (e.g., foreign aid) much more robustly than it does at present. The economic objectives of our national security strategy and the funding needed to realize them must be more closely aligned.

Third, a nation considering war needs to make an honest, objective effort to assess how much the war and ensuing operations will cost. Politicians have historically lowballed war-cost estimates, even grossly, a tendency that stifles real preparation and invites eventual disillusionment. Neither of these augur well for a successful outcome. Additionally, as it assesses possible costs, a would-be combatant must be sure to take the effects of its pre-conflict economic moves, especially sanctions, into account. In particular, it must fully consider the implications such interventions will have for stability and reconstruction operations (SRO) should war (and victory) ensue. When sanctions precede war, nation-building can become a vastly more expensive and protracted proposition than it might have otherwise been.

Fourth, given the tremendous costs of SRO in the wake of sanctions and war, leaders should assume that they will need the financial assistance of international economic institutions and other nations. They need to lay the groundwork necessary to garner this assistance. The U.S. conspicuously did not do this prior to invading Iraq.

And fifth, only rarely has the U.S. employed all its components of national power in a synchronized, synergistic way when trying to influence other nations. …