Is the Economic Crisis a Security Threat Too?

Is the Economic Crisis a Security Threat Too?

Could the deepening global recession boost the flagging efforts
of Osama bin Laden to challenge the established global order? Probably not.
But the signs are there that, as President Barack Obama’s intelligence chief
Admiral Dennis Blair warned last week, the economic crisis may be the source
of the primary threat to global security right now. Security experts note
that the economic downturn is already creating social unrest and political
instability in some strategic hot spots around the world, and they warn that
a prolonged slump could undermine U.S. and Western security interests.

Blair, addressing the Senate Intelligence Committee on Feb. 12, prioritized
the global recession as America’s “primary near-term security concern” and
warned that the threat level would increase as the slump endures. “The
longer it takes for the recovery to begin, the greater the likelihood of
serious damage to U.S. strategic interests,” Blair warned, emphasizing the
danger of political instability in countries allied with Washington.
“Economic crises increase the risk of regime-threatening instability if they
persist over a one-to-two-year period.”

Part of the strategic challenge posed by the downturn lies in the realm of
the economy itself. Emerging powers such as China or India could take the
opportunity presented by U.S. economic weakness to extend their own
influence in regions traditionally dominated by the U.S. China, in
particular, has already established itself as a major player in Latin
America and Africa, and it is investing heavily in extractive industries across
the globe right now, procuring energy supplies — most recently in new oil
deals inked with Russia, Venezuela and Brazil — and other natural
resources for its industrial economy.

A second economically driven security threat lies in rising nationalism,
which can translate into effects ranging from anti-immigrant violence in
industrialized countries to rising protectionism that further limits
international trade, imperiling prospects for a global economic recovery. A
third risk, says Bruno Tertrais, a senior research fellow and strategic
and security expert at the Foundation for Strategic Research in Paris, is a
spike in the activities and power of organized crime groups controlling
parallel economies that tend to flourish with rising unemployment.

But like Blair, Tertrais sees the biggest security threat posed by a
prolonged recession as the collapse of regimes vital to maintaining
international order. In the same way the collapse of the Somali state
has spawned the peril of piracy in key international shipping lanes off the
Horn of Africa, authoritarian regimes elsewhere that keep the peace on behalf
of the West could be toppled if they lose the funds they
distribute to placate their restive populations. The riots triggered in
Egypt last year by sharp increases in the price of wheat were a reminder of
that danger, while Pakistan’s basket-case economy could act as a significant
multiplier on the instability that already plagues the troubled
nuclear-armed nation. Pakistan was rocked by food riots last year, and its
foreign-currency reserves are now exhausted, leaving the government
dependent on International Monetary Fund support at a moment when the domestic Taliban challenge is
growing among the impoverished and marginalized sections of society.

“The risk of [state] failure exists for fragile countries as
diverse as Yemen or Pakistan, or even Mexico, where governments could find
themselves heading toward failure if the recession proves long and hard,”
Tertrais says. “The potential for failure is particularly troublesome in the
case of Yemen, which already has a relatively large population of Islamist
radicals and is increasingly unstable. Falling oil prices might be the straw
that breaks the camel’s back. If state breakdown happened there, we’d likely
see the country become a full-fledged haven for extremists.”

European security officials, however, don’t believe that economic decline is
likely to significantly raise the terrorism threat level from its current

“You always prefer an atmosphere of tranquility over grimness and concern in
any security situation, but there’s nothing about a recession that will
cause us or those we’re battling to alter our objectives or methods
radically,” says a French counterterrorism official. He agrees with
Tertrais that the greatest danger is the possibility of collapse in Yemen
or an expanded crisis in Pakistan, which could potentially give global
jihadists a base for export-oriented operations.

“The risk of prolonged recession to the West in security terms is based
mostly in the Muslim countries we rely on to keep their own extremists under
control,” the French official says, noting that there has been no sign of
the recession swelling the ranks of European jihadists nor sapping police
forces tracking them. “The economic constriction isn’t spiking the rate of
radicalization, hardening intent to strike or causing security or
intelligence budgets to be slashed.”

Terrorism, however, is not the primary security concern raised by the
recession. Blair warned that 1 in 4 countries of the world have already
experienced some degree of instability as a result of the downturn, and
those effects aren’t confined to exotic hot spots. On Feb. 20, for example,
growing social unrest and violence spawned by the economic crisis brought
down the government of Latvia, a member nation of the European Union and
NATO. A month earlier, Iceland’s government collapsed in the face of a
banking crisis — and in a sign of the shifting geopolitics that the slump
could drive, the staunch NATO member was forced to turn to Russia for
billions of dollars in bailout funds.

Such unrest is becoming more common in Europe. Greece was rocked by weeks of
rioting in December, while in January, 2.5 million people took to the
streets of France during a general strike to protest government handling of
the economic crisis. Just last weekend, 120,000 marchers brought downtown
Dublin to a standstill in protest of government austerity measures.

There was a time, of course, when the West was haunted by the specter of
extreme movements such as communism and fascism, and social unrest fueled by
economic deprivation carried the potential to be transformed into a
revolutionary challenge to the state. But Tertrais reminds us that those
days are long gone. “As difficult as this recession is shaping up to be,
we’re not looking at a repeat of the 1930s, so we’re also not looking at a
potential for movements looking to seriously challenge the established
social and political order,” he argues. “In general terms, it’s been the
lower classes that have fueled protests, while it has been the middle
classes that have powered revolutions.” Today, he says, that middle class is
more inclined to seek government help to pay its mortgages than to imagine a
new social system. Even if the economic crisis accelerates a shift in the
global balance of economic power, it won’t alter the fundamentals of the
global economic system. See 25 people to blame for the financial crisis. See pictures of the global financial crisis.