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Saturday, May 31, 2008

Entrenched, Embedded, and Here to Stay: The Pentagon's Expansion Will Be Bush's Lasting Legacy

From Tom Dispatch:

Entrenched, Embedded, and Here to Stay
The Pentagon's Expansion Will Be Bush's Lasting Legacy
By Frida Berrigan

A full-fledged cottage industry is already focused on those who eagerly await the end of the Bush administration, offering calendars, magnets, and t-shirts for sale as well as counters and graphics to download onto blogs and websites. But when the countdown ends and George W. Bush vacates the Oval Office, he will leave a legacy to contend with. Certainly, he wills to his successor a world marred by war and battered by deprivation, but perhaps his most enduring legacy is now deeply embedded in Washington-area politics -- a Pentagon metastasized almost beyond recognition.

The Pentagon's massive bulk-up these last seven years will not be easily unbuilt, no matter who dons the presidential mantle on January 19, 2009. "The Pentagon" is now so much more than a five-sided building across the Potomac from Washington or even the seat of the Department of Defense. In many ways, it defies description or labeling.

Who, today, even remembers the debate at the end of the Cold War about what role U.S. military power should play in a "unipolar" world? Was U.S. supremacy so well established, pundits were then asking, that Washington could rely on softer economic and cultural power, with military power no more than a backup (and a domestic "peace dividend" thrown into the bargain)? Or was the U.S. to strap on the six-guns of a global sheriff and police the world as the fountainhead of "humanitarian interventions"? Or was it the moment to boldly declare ourselves the world's sole superpower and wield a high-tech military comparable to none, actively discouraging any other power or power bloc from even considering future rivalry?

The attacks of September 11, 2001 decisively ended that debate. The Bush administration promptly declared total war on every front -- against peoples, ideologies, and, above all, "terrorism" (a tactic of the weak). That very September, administration officials proudly leaked the information that they were ready to "target" up to 60 other nations and the terrorist movements within them.

The Pentagon's "footprint" was to be firmly planted, military base by military base, across the planet, with a special emphasis on its energy heartlands. Top administration officials began preparing the Pentagon to go anywhere and do anything, while rewriting, shredding, or ignoring whatever laws, national or international, stood in the way. In 2002, Defense Secretary Donald Rumsfeld officially articulated a new U.S. military posture that, in conception, was little short of revolutionary. It was called -- in classic Pentagon shorthand -- the 1-4-2-1 Defense Strategy (replacing the Clinton administration's already none-too-modest plan to be prepared to fight two major wars -- in the Middle East and Northeast Asia -- simultaneously).

Theoretically, this strategy meant that the Pentagon was to prepare to defend the United States, while building forces capable of deterring aggression and coercion in four "critical regions" (Europe, Northeast Asia, East Asia, and the Middle East). It would be able to defeat aggression in two of these regions simultaneously and "win decisively" in one of those conflicts "at a time and place of our choosing." Hence 1-4-2-1.

And that was just going to be the beginning. We had, by then, already entered the new age of the Mega-Pentagon. Almost six years later, the scale of that institution's expansion has yet to be fully grasped, so let's look at just seven of the major ways in which the Pentagon has experienced mission creep -- and leap -- dwarfing other institutions of government in the process.

1. The Budget-busting Pentagon: The Pentagon's core budget -- already a staggering $300 billion when George W. Bush took the presidency -- has almost doubled while he's been parked behind the big desk in the Oval Office. For fiscal year 2009, the regular Pentagon budget will total roughly $541 billion (including work on nuclear warheads and naval reactors at the Department of Energy).

The Bush administration has presided over one of the largest military buildups in the history of the United States. And that's before we even count "war spending." If the direct costs of the wars in Iraq and Afghanistan, as well as the Global War on Terror, are factored in, "defense" spending has essentially tripled.

As of February 2008, according to the Congressional Budget Office, lawmakers have appropriated $752 billion for the Iraq war and occupation, ongoing military operations in Afghanistan, and other activities associated with the Global War on Terror. The Pentagon estimates that it will need another $170 billion for fiscal 2009, which means, at $922 billion, that direct war spending since 2001 would be at the edge of the trillion-dollar mark.

As New York Times columnist Bob Herbert has pointed out, if a stack of bills roughly six inches high is worth $1 million, then a $1 billion stack would be as tall as the Washington Monument, and a $1 trillion stack would be 95 miles high. And note that none of these war-fighting funds are even counted as part of the annual military budget, but are raised from Congress in the form of "emergency supplementals" a few times a year.

With the war added to the Pentagon's core budget, the United States now spends nearly as much on military matters as the rest of the world combined. Military spending also throws all other parts of the federal budget into shadow, representing 58 cents of every dollar spent by the federal government on "discretionary programs" (those that Congress gets to vote up or down on an annual basis).

The total Pentagon budget represents more than our combined spending on education, environmental protection, justice administration, veteran's benefits, housing assistance, transportation, job training, agriculture, energy, and economic development. No wonder, then, that, as it collects ever more money, the Pentagon is taking on (or taking over) ever more functions and roles.

2. The Pentagon as Diplomat: The Bush administration has repeatedly exhibited its disdain for discussion and compromise, treaties and agreements, and an equally deep admiration for what can be won by threat and force. No surprise, then, that the White House's foreign policy agenda has increasingly been directed through the military. With a military budget more than 30 times that of all State Department operations and non-military foreign aid put together, the Pentagon has marched into State's two traditional strongholds -- diplomacy and development -- duplicating or replacing much of its work, often by refocusing Washington's diplomacy around military-to-military, rather than diplomat-to-diplomat, relations.

Since the late eighteenth century, the U.S. ambassador in any country has been considered the president's personal representative, responsible for ensuring that foreign policy goals are met. As one ambassador explained; "The rule is: if you're in country, you work for the ambassador. If you don't work for the ambassador, you don't get country clearance."

In the Bush era, the Pentagon has overturned this model. According to a 2006 Congressional report by Senator Richard Lugar (R-IN), Embassies as Command Posts in the Anti-Terror Campaign, civilian personnel in many embassies now feel occupied by, outnumbered by, and subordinated to military personnel. They see themselves as the second team when it comes to decision-making. Even Defense Secretary Robert Gates is aware of the problem, noting as he did last November that there are "only about 6,600 professional Foreign Service officers -- less than the manning for one aircraft carrier strike group." But, typically, he added that, while the State Department might need more resources, "Don't get me wrong, I'll be asking for yet more money for Defense next year." Another ambassador lamented that his foreign counterparts are "following the money" and developing relationships with U.S. military personnel rather than cultivating contacts with their State Department counterparts.

The Pentagon invariably couches its bureaucratic imperialism in terms of "interagency cooperation." For example, last year U.S. Southern Command (Southcom) released Command Strategy 2016, a document which identified poverty, crime, and corruption as key "security" problems in Latin America. It suggested that Southcom, a security command, should, in fact, be the "central actor in addressing… regional problems" previously the concern of civilian agencies. It then touted itself as the future focus of a "joint interagency security command... in support of security, stability and prosperity in the region."

As Southcom head Admiral James Stavridis vividly put the matter, the command now likes to see itself as "a big Velcro cube that these other agencies can hook to so we can collectively do what needs to be done in this region."

The Pentagon has generally followed this pattern globally since 2001. But what does "cooperation" mean when one entity dwarfs all others in personnel, resources, and access to decision-makers, while increasingly controlling the very definition of the "threats" to be dealt with.

3. The Pentagon as Arms Dealer: In the Bush years, the Pentagon has aggressively increased its role as the planet's foremost arms dealer, pumping up its weapons sales everywhere it can -- and so seeding the future with war and conflict.

By 2006 (the last year for which full data is available), the United States alone accounted for more than half the world's trade in arms with $14 billion in sales. Noteworthy were a $5 billion deal for F-16s to Pakistan and a $5.8 billion agreement to completely reequip Saudi Arabia's internal security force. U.S. arms sales for 2006 came in at roughly twice the level of any previous year of the Bush administration.

Number two arms dealer Russia registered a comparatively paltry $5.8 billion in deliveries, just over a third of the U.S. arms totals. Ally Great Britain was third at $3.3 billion -- and those three countries account for a whopping 85% of the weaponry sold that year, more than 70% of which went to the developing world.

Great at selling weapons, the Pentagon is slow to report its sales. Arms sales notifications issued by the Pentagon's Defense Security Cooperation Agency (DSCA) do, however, offer one crude way to the take the Department of Defense's pulse; and, while not all reported deals are finalized, that pulse is clearly racing. Through May of 2008, DSCA had already issued more than $9.1 billion in arms sales notifications including smart bomb kits for Saudi Arabia, TOW missiles for Kuwait, F-16 combat aircraft for Romania, and Chinook helicopters for Canada.

To maintain market advantage, the Pentagon never stops its high-pressure campaigns to peddle weapons abroad. That's why, despite a broken shoulder, Secretary of Defense Gates took to the skies in February, to push weapons systems on countries like India and Indonesia, key growing markets for Pentagon arms dealers.

4. The Pentagon as Intelligence Analyst and Spy: In the area of "intelligence," the Pentagon's expansion -- the commandeering of information and analysis roles -- has been swift, clumsy, and catastrophic.

Tracing the Pentagon's take-over of intelligence is no easy task. For one thing, there are dozens of Pentagon agencies and offices that now collect and analyze information using everything from "humint" (human intelligence) to wiretaps and satellites. The task is only made tougher by the secrecy that surrounds U.S. intelligence operations and the "black budgets" into which so much intelligence money disappears.

But the end results are clear enough. The Pentagon's takeover of intelligence has meant fewer intelligence analysts who speak Arabic, Farsi, or Pashto and more dog-and-pony shows like those four-star generals and three-stripe admirals mouthing administration-approved talking points on cable news and the Sunday morning talk shows.

Intelligence budgets are secret, so what we know about them is not comprehensive -- but the glimpses analysts have gotten suggest that total intelligence spending was about $26 billion a decade ago. After 9/11, Congress pumped a lot of new money into intelligence so that by 2003, the total intelligence budget had already climbed to more than $40 billion.

In 2004, the 9/11 Commission highlighted the intelligence failures of the Central Intelligence Agency and others in the alphabet soup of the U.S. Intelligence Community charged with collecting and analyzing information on threats to the country. Congress then passed an intelligence "reform" bill, establishing the Office of the Director of National Intelligence, designed to manage intelligence operations. Thanks to stiff resistance from pro-military lawmakers, the National Intelligence Directorate never assumed that role, however, and the Pentagon kept control of three key collection agencies -- the National Security Agency, the National Geospatial-Intelligence Agency, and the National Reconnaissance Agency.

As a result, according to Tim Shorrock, investigative journalist and author of Spies for Hire: The Secret World of Intelligence Outsourcing, the Pentagon now controls more than 80% of U.S. intelligence spending, which he estimated at about $60 billion in 2007. As Mel Goodman, former CIA official and now an analyst at the Center for International Policy, observed, "The Pentagon has been the big bureaucratic winner in all of this."

It is such a big winner that CIA Director Michael Hayden now controls only the budget for the CIA itself -- about $4 or 5 billion a year and no longer even gives the President his daily helping of intelligence.

The Pentagon's intelligence shadow looms large well beyond the corridors of Washington's bureaucracies. It stretches across the mountains of Afghanistan as well. After the U.S. invaded that country in 2001, Defense Secretary Rumsfeld recognized that, unless the Pentagon controlled information-gathering and took the lead in carrying out covert operations, it would remain dependent on -- and therefore subordinate to -- the Central Intelligence Agency with its grasp of "on-the-ground" intelligence.

In one of his now infamous memos, labeled "snowflakes" by a staff that watched them regularly flutter down from on high, he asserted that, if the War on Terror was going to stretch far into the future, he did not want to continue the Pentagon's "near total dependence on the CIA." And so Rumsfeld set up a new, directly competitive organization, the Pentagon's Strategic Support Branch, which put the intelligence gathering components of the U.S. Special Forces under one roof reporting directly to him. (Many in the intelligence community saw the office as illegitimate, but Rumsfeld was riding high and they were helpless to do anything.)

As Seymour Hersh, who repeatedly broke stories in the New Yorker on the Pentagon's misdeeds in the Global War on Terror, wrote in January 2005, the Bush administration had already "consolidated control over the military and intelligence communities' strategic analyses and covert operations to a degree unmatched since the rise of the post-Second World War II national-security state."

In the rush to invade Iraq, the civilians running the Pentagon also fused the administration's propaganda machine with military intelligence. In 2002, Undersecretary of Defense Douglas Feith established the Office of Special Plans (OSP) in the Pentagon to provide "actionable information" to White House policymakers. Using existing intelligence reports "scrubbed" of qualifiers like "probably" or "may," or sometimes simply fabricated ones, the office was able to turn worst-case scenarios about Saddam Hussein's supposed programs to develop weapons of mass destruction into fact, and then, through leaks, use the news media to validate them.

Former CIA Director Robert Gates, who took over the Pentagon when Donald Rumsfeld resigned in November 2006, has been critical of the Pentagon's "dominance" in intelligence and "the decline in the CIA's central role." He has also signaled his intention to rollback the Pentagon's long intelligence shadow; but, even if he is serious, he will have his work cut out for him. In the meantime, the Pentagon continues to churn out "intelligence" which is, politely put, suspect -- from torture-induced confessions of terrorism suspects to exposés of the Iranian origins of sophisticated explosive devices found in Iraq.

5. The Pentagon as Domestic Disaster Manager: When the deciders in Washington start seeing the Pentagon as the world's problem solver, strange things happen. In fact, in the Bush years, the Pentagon has become the official first responder of last resort in case of just about any disaster -- from tornadoes, hurricanes, and floods to civil unrest, potential outbreaks of disease, or possible biological or chemical attacks. In 2002, in a telltale sign of Pentagon mission creep, President Bush established the first domestic military command since the civil war, the U.S. Northern Command (Northcom). Its mission: the "preparation for, prevention of, deterrence of, preemption of, defense against, and response to threats and aggression directed towards U.S. territory, sovereignty, domestic population, and infrastructure; as well as crisis management, consequence management, and other domestic civil support."

If it sounds like a tall order, it is.

In the last six years, Northcom has been remarkably unsuccessful at anything but expanding its theoretical reach. The command was initially assigned 1,300 Defense Department personnel, but has since grown into a force of more than 15,000. Even criticism only seems to strengthen its domestic role. For example, an April 2008 Government Accountability Office report found that Northcom had failed to communicate effectively with state and local leaders or National Guard units about its newly developed disaster and terror response plans. The result? Northcom says it will have its first brigade-sized unit of military personnel trained to help local authorities respond to chemical, biological, or nuclear incidents by this fall. Mark your calendars.

More than anything else, Northcom has provided the Pentagon with the opening it needed to move forcefully into domestic disaster areas previously handled by national, state and local civilian authorities.

For example, Northcom's deputy director, Brigadier General Robert Felderman, boasts that the command is now the United States's "global synchronizer -- the global coordinator -- for pandemic influenza across the combatant commands." Similarly, Northcom is now hosting annual hurricane preparation conferences and assuring anyone who will listen that it is "prepared to fully engage" in future Katrina-like situations "in order to save lives, reduce suffering and protect infrastructure."

Of course, at present, the Pentagon is the part of the government gobbling up the funds that might otherwise be spent shoring up America's Depression-era public works, ensuring that the Pentagon will have failure aplenty to respond to in the future.

The American Society for Civil Engineers, for example, estimates that $1.6 trillion is badly needed to bring the nation's infrastructure up to protectable snuff, or $320 billion a year for the next five years. Assessing present water systems, roads, bridges, and dams nationwide, the engineers gave the infrastructure a series of C and D grades.

In the meantime, the military is marching in. Katrina, for instance, made landfall on August 29, 2005. President Bush ordered troops deployed to New Orleans on September 2nd to coordinate the delivery of food and water and to serve as a deterrent against looting and violence. Less than a month later, President Bush asked Congress to shift responsibility for major future disasters from state governments and the Department of Homeland Security to the Pentagon.

The next month, President Bush again offered the military as his solution -- this time to global fears about outbreaks of the avian flu virus. He suggested that, to enforce a quarantine, "One option is the use of the military that's able to plan and move."

Already sinking under the weight of its expansion and two draining wars, many in the military have been cool to such suggestions, as has a Congress concerned about maintaining states' rights and civilian control. Offering the military as the solution to domestic natural disasters and flu outbreaks means giving other first responders the budgetary short shrift. It is unlikely, however, that Northcom, now riding the money train, will go quietly into oblivion in the years to come.

6. The Pentagon as Humanitarian Caregiver Abroad: The U.S. Agency for International Development and the State Department have traditionally been tasked with responding to disaster abroad; but, from Indonesia's tsunami-ravaged shores to Myanmar after the recent cyclone, natural catastrophe has become another presidential opportunity to "send in the Marines" (so to speak). The Pentagon has increasingly taken up humanitarian planning, gaining an ever larger share of U.S. humanitarian missions abroad.

From Kenya to Afghanistan, from the Philippines to Peru, the U.S. military is also now regularly the one building schools and dental clinics, repairing roads and shoring up bridges, tending to sick children and doling out much needed cash and food stuffs, all civilian responsibilities once upon a time.

The Center for Global Development finds that the Pentagon's share of "official development assistance" -- think "winning hearts and minds" or "nation-building" – has increased from 6% to 22% between 2002 and 2005. The Pentagon is fast taking over development from both the NGO-community and civilian agencies, slapping a smiley face on military operations in Iraq, Afghanistan, and beyond.

Despite the obvious limitations of turning a force trained to kill and destroy into a cadre of caregivers, the Pentagon's mili-humanitarian project got a big boost from the cash that was seized from Saddam Hussein's secret coffers. Some of it was doled out to local American commanders to be used to deal with immediate Iraqi needs and seal deals in the months after Baghdad fell in April 2003. What was initially an ad hoc program now has an official name -- the Commander Emergency Response Program (CERP) -- and a line in the Pentagon budget.

Before the House Budget Committee last summer, Gordon England, the Deputy Secretary of Defense, told members of Congress that the CERP was a "particularly effective initiative," explaining that the program provided "limited but immediately available funds" to military commanders which they could spend "to make a concrete difference in people's daily lives." This, he claimed, was now a "key part of the broader counter insurgency approach." He added that it served the purpose of "complementing security initiatives" and that it was so successful many commanders consider it "the most powerful weapon in their arsenal."

In fact, the Pentagon doesn't do humanitarian work very well. In Afghanistan, for instance, food packets dropped by U.S. planes were the same color as the cluster munitions also dropped by U.S. planes, while schools and clinics built by U.S. forces often became targets before they could even be put into use. In Iraq, money doled out to the Pentagon'ssectarian-group-of-the-week for wells and generators turned out to be just as easily spent on explosives and AK-47s.

7. The Pentagon as Global Viceroy and Ruler of the Heavens: In the Bush years, the Pentagon finished dividing the globe into military "commands," which are functionally viceroyalties. True, even before 9/11, it was hard to imagine a place on the globe where the United States military was not, but until recently, the continent of Africa largely qualified.

Along with the creation of Northcom, however, the establishment of the U.S. Africa Command (Africom) in 2008 officially filled in the last Pentagon empty spot on the map. A key military document, the 2006 National Security Strategy for the United States, signaled the move, asserting that "Africa holds growing geo-strategic importance and is a high-priority of this administration." (Think: oil and other key raw materials.)

In the meantime, funding for Africa under the largest U.S. military aid program, Foreign Military Financing, doubled from $10 to $20 million between 2000 and 2006, and the number of recipient nations grew from two to 14. Military training funding increased by 35% in that same period (rising from $8.1 million to $11 million). Now, the militaries of 47 African nations receive U.S. training.

In Pentagon planning terms, Africom has unified the continent for the first time. (Only Egypt remains under the aegis of the U.S. Central Command.) According to President Bush, this should "enhance our efforts to bring peace and security to the people of Africa and promote our common goals of development, health, education, democracy, and economic growth in Africa."

Theresa Whelan, assistant secretary of defense for African affairs, continues to insist that Africom has been formed neither to facilitate the fighting of wars ("engaging kinetically in Africa"), nor to divvy up the continent's raw materials in the style of nineteenth century colonialism. "This is not," she says, "about a scramble for the continent." But about one thing there can be no question: It is about increasing the global reach of the Pentagon.

Meanwhile, should the Earth not be enough, there are always the heavens to control. In August 2006, building on earlier documents like the 1998 U.S. Space Command's Vision for 2020 (which called for a policy of "full spectrum dominance"), the Bush administration unveiled its "national space policy." It advocated establishing, defending, and enlarging U.S. control over space resources and argued for "unhindered" rights in space -- unhindered, that is, by international agreements preventing the weaponization of space. The document also asserted that "freedom of action in space is as important to the United States as air power and sea power."

As the document put it, "In the new century, those who effectively utilize space will enjoy added prosperity and security and will hold a substantial advantage over those who do not." (The leaders of China, Russia, and other major states undoubtedly heard the loud slap of a gauntlet being thrown down.) At the moment, the Bush administration's rhetoric and plans outstrip the resources being devoted to space weapons technology, but in the recently announced budget, the President allocated nearly a billion dollars to space-based weapons programs.

Of all the frontiers of expansion, perhaps none is more striking than the Pentagon's sorties into the future. Does the Department of Transportation offer a Vision for 2030? Does the Environmental Protection Agency develop plans for the next fifty years? Does the Department of Health and Human Services have a team of power-point professionals working up dynamic graphics for what services for the elderly will look like in 2050?

These agencies project budgets just around the corner of the next decade. Only the Pentagon projects power and possibility decades into the future, colonizing the imagination with scads of different scenarios under which, each year, it will continue to control hundreds of billions of taxpayer dollars.

Complex 2030, Vision 2020, UAV Roadmap 2030, the Army's Future Combat Systems – the names, which seem unending, tell the tale.

As the clock ticks down to November 4, 2008, a lot of people are investing hope (as well as money and time) in the possibility of change at 1600 Pennsylvania Avenue. But when it comes to the Pentagon, don't count too heavily on change, no matter who the new president may be. After all, seven years, four months, and a scattering of days into the Bush presidency, the Pentagon is deeply entrenched in Washington and still aggressively expanding. It has developed a taste for unrivaled power and unequaled access to the treasure of this country. It is an institution that has escaped the checks and balances of the nation.

Frida Berrigan is a Senior Program Associate at the New America Foundation's Arms and Security Initiative. She is a columnist for Foreign Policy in Focus and a contributing editor at In These Times magazine. She is the author of reports on the arms trade and human rights, U.S. nuclear weapons policy, and the domestic politics of U.S. missile defense and space weapons policies. She can be reached at

Copyright 2008 Frida Berrigan

Scandal and Stupidity, Home and Abroad by William Pfaff

Scandal and Stupidity, Home and Abroad

William Pfaff

Paris, May 29, 2008 – The U.S. Defense Department's auditors last week told the House of Representatives Committee on Oversight and Government Reform that virtually none of the $8.2 billion disbursed by the U.S. Army to contractors in Iraq was spent according to established federal rules, and little of it now can be accounted for.

Among their examples: a cash payment of $320.8 million made on the basis of an invoice saying "Iraqi salary payment" bearing one signature; $11.1 million paid to an American contractor identified as "IAP" in exchange for a voucher with no indication of what the money was for.

Nearly two billion dollars in frozen Iraqi assets were paid out on pallets of packaged Iraqi currency for no identified reason. An earlier report by the independent federal Special Inspector General for Iraq Reconstruction had already reported that $8.8 billion in Iraq oil money and seized assets could not be accounted for.

All this money was either seized public funds of the Iraqi state and state corporations or American public funds. The Defense Department also made payments overseas of $68.2 million to the United Kingdom, $45.3 million to Poland and $21.3 million to South Korea. The auditors cannot find out what these payments were for.

Please note that we are not talking about the first days after the invasion of Iraq, when money lying about might be expected to disappear in the fog of battle, as they say, or "be liberated." The auditors' work covered the entire period from April 2001 to June 2006.

Anthony Cordesman of the Center for Strategic and International Studies in Washington offers as explanation that the Pentagon had allowed itself "to become more and more dependent on contractors in peacetime. We were unprepared to use contractors in wartime, and all of this had an immense impact."

But surely peacetime contractors were expected to identify what the money was for before they were paid? And the payment was not handed over as pallets loaded with bundles of currency taken from another government's vaults, or shrink-wrapped bundles of hundred-dollar bills.

Among the formal payments in Iraq were a U.S. Treasury check in the amount of $5,674,075, written to the Al Kasid Specialized Vehicles Trading Company in Baghdad, for items not described; and $6,268,320.07 went to the contractor Combat Support Associates with no explanation at all.

Let us suppose that all of this money was paid by upright American military officers and civilian officials for real supplies and services honestly furnished, but no one had the time to keep track of where the money was going, or why. And after all, the disappeared $8.2 billion amounts to petty cash in the total expenditure of the war, which now runs into the trillions. What does total irresponsibility and incompetence matter in carrying out a great national undertaking?

"When I was in this man's army," the old veteran complains, "you couldn't get the supply sergeant to issue you a broom without signing a chit in triplicate." On payday the company executive officer who handed out the dollars demanded signatures, and had a cocked .45 pistol on the desk in front of him to deter the larcenous.

In explaining what has happened, I would be inclined to extrapolate from the implication of Cordesman's comment, who follows military matters closely: that privatizing the military services and the wars they fight has not been a good idea. Let us say that it has not produced the predicted efficiencies.

Rather, I would surmise that in addition to benefiting the stockholders of America's great corporations, whose executives play golf with Dick Cheney, it has opened the floodgates of grand and petty chiseling all the way up, and all the way down.

I would go with that explanation were it not for another recent item in the news. It concerned the powerful and ever-alert Homeland Security Department of the U.S. government, created by the Bush administration with great fanfare after 9/11, to amalgamate a dozen or more seemingly functional and reasonably efficient existing federal agencies like the Coast Guard and the FBI into a monstrous and dysfunctional security apparatus.

Its management was confided to Republican political cronies, and it has focused on making mothers traveling with small children and elderly invalids disrobe, throw away their water bottles, shaving tools, nail scissors, reading matter and Milky Ways before boarding airplanes, in order to thwart global terrorism.

The item I saw said that Homeland Security currently refuses to disburse to its state counterparts the full amount of federal money due them until they present plans to protect their states from IEDs.

Yes, IEDs – improvised explosive devices, as in war in Iraq. Rhode Island, Idaho, and Iowa can't have their federal money until they show they are prepared to protect vacation motorists from attack by bands of bearded al Qaeda, planting IEDs along the highways of America.

Aside from the lunatic irrelevance of this demand is the consideration that nobody in Iraq, or in the military-industrial complex, has found a way to reliably identify and disable IEDs. Maybe America's hometown tinkerers and backyard inventors can do it.

However from considering these two reports together, one asks oneself if America in this misbegotten war suffers more from swindlers, large or small, than from bunglers and incompetence. The stupidity at the top that would conceive and launch such a war by now has leaked down, contaminating every aspect of the affair.

© Copyright 2008 by Tribune Media Services International. All Rights Reserved.

Enabling Nuke Proliferation

Enabling Nuke Proliferation

by Gordon Prather Surely you already knew – without reading Scott McClellan's mea culpa – that the Cheney Cabal came to power in January, 2001, determined to firmly establish by any means an American Hegemony, removing or destroying any opposition regimes.

But, how to rationalize to you the absolute necessity for "removing" those pesky regimes? And how to justify to you the use of nukes – if "necessary" – to effect those removals?

Well, within days of the spectacularly successful second attack by al-Qaeda on the World Trade Center Towers, the Cheney Cabal had formulated their game plan.

And in his first State of the Union Address, President George W. Bush, already the self-anointed Commander-in-Chief of the War on Terror, outlined it.

After singling out the pesky regimes then in place in North Korea, Iran and Iraq, Bush declared that –

"States like these, and their terrorist allies, constitute an axis of evil, arming to threaten the peace of the world. By seeking weapons of mass destruction, these regimes pose a grave and growing danger. They could provide these arms to terrorists, giving them the means to match their hatred. They could attack our allies or attempt to blackmail the United States.

"In any of these cases, the price of indifference would be catastrophic.I will not wait on events, while dangers gather. I will not stand by, as peril draws closer and closer. The United States of America will not permit the world's most dangerous regimes to threaten us with the world's most destructive weapons."

For reasons perhaps known only to Bush, himself, within hours of the Twin Towers coming down, he had directed that plans be drawn up to invade and occupy Iraq.

In August 2003, Walter Pincus and Barton Gellman at the Washington Post revealed to you that the White House Iraq Group had been established by President Bush's chief of staff in August 2002, to essentially "market" to you gullible consumers what was – as we now know, thanks to the Downing Street Memos – Bush's impending war of aggression against Iraq.

WHIG – which met weekly in the White House Situation Room – included the president's political adviser Karl Rove, National Security Adviser Condi Rice, her deputy Stephen Hadley, Vice President Cheney's Chief of Staff Scooter Libby, and various congressional-relations and media-relations flacks.

The rationale for the upcoming invasion and occupation of Iraq was to be the (known to be non-existent) threat to you and yours of "mushroom clouds."

Known to be non-existent?

You better believe.

Way back in 1998 the Director-General of the International Atomic Energy Agency had reported to the UN Security Council that

"The verification activities have revealed no indications that Iraq had achieved its programme objective of producing nuclear weapons or that Iraq had produced more than a few grams of weapon-usable nuclear material or had clandestinely acquired such material.

"Furthermore, there are no indications that there remains in Iraq any physical capability for the production of weapon-usable nuclear material of any practical significance. In February 1994, IAEA completed the removal from Iraq of all weapon-usable nuclear material – essentially research reactor fuel – under IAEA safeguards."

Furthermore, IAEA inspectors continued to visit Iraq at least once each year, including 2002, to verify that nothing had changed; that Iraq was still in compliance with its Safeguards Agreement.

Worse still, every other state the Cheney Cabal had targeted for regime change (because they were allegedly seeking nuclear weapons) were subject to IAEA Safeguards agreements – as required by the Treaty on Non-Proliferation of Nuclear Weapons – and were, at least annually, verified by IAEA inspectors to be in "compliance."

Well, obviously, the entire NPT-based nuke proliferation-prevention regime had to be totally discredited, and Bonkers Bolton – then UnderSecretary of State for Non-Proliferation and later Acting Ambassador to the United Nations – was the Cheney Cabal designated "point man."

The NPT-based regime had three major components.

First, there was the Treaty itself, which required all signatories not already having nukes to negotiate a Safeguards Agreement with the IAEA "for the exclusive purpose" of ensuring that no weapons-grade plutonium or uranium ever got diverted to a military purpose.

The NPT, itself, has no enforcement mechanism.

Second, there was the IAEA, established within the United Nations, with a primary mission of facilitating "the contribution of atomic energy to peace, health and prosperity throughout the world."

But the IAEA was also charged with ensuring "so far as it is able" that no materials or activities subject to IAEA Safeguards agreements were ever used to "further a military purpose."

Now, the IAEA Statute does provide an enforcement mechanism. The IAEA is to report to the UN Security Council any such "diversions."

Third, there was the Security Council, which under Article 39 of the UN Charter is empowered to "determine" whether there exists "any threat to the peace." Having made such a determination in accord with Article 40, the Council is then to decide what measures "shall" be taken in accordance with either Article 41 – which cannot involve the use of force – or Article 42, which can.

Bonkers Bolton's legacy is that he has thoroughly undermined the NPT and the UN Charter, by strong-arming and corrupting both the IAEA Board of Governors and the Security Council itself.

In the case of Iran, Director-General ElBaradei has consistently reported to the IAEA Board that he can find "no indication" that any NPT-proscribed materials have ever been "diverted" to any purpose, military or otherwise.

Therefore, the IAEA Board is acting corruptly, contrary to its own Statute, when it repeatedly requires Iran to essentially "prove" to ElBaradei that it does not have a nuclear weapons program, never had a nuclear weapons program, and does not intend to ever have a nuclear weapons program.

Similarly, the Security Council is acting corruptly, contrary to the UN Charter, when it imposes Article 41 sanctions on Iran without ever making a determination under Article 39 that Iran's IAEA Safeguarded uranium-enrichment program constitutes a "threat to the peace"!

Such sanctions to remain in force until Iran satisfies ElBaradei that it does not have, never had, and never intends to have a nuclear weapons program. Talk about Mission Impossible.

Nevertheless, contrary to what you may have seen "reported" in the so-called Mainstream Media, ElBaradei's report of 26 May to the IAEA Board and the Security Council begins by noting that

"The Agency has been able to continue to verify the non-diversion of declared nuclear material in Iran. Iran has provided the Agency with access to declared nuclear material and has provided the required nuclear material accountancy reports in connection with declared nuclear material and activities."

Were there any surprises in ElBaradei's still "confidential" report?

Yes, there was this; you remember that 15-page document the IAEA found while searching through Iran's files, which, among other things, sketched a process for casting uranium-metal into "hemispheres"? The Iranians claimed that document must have been included amongst many other documents supplied them, gratis, in association with their purchase of drawings of Pakistan's second generation gas-centrifuges.

Well, guess what. In response to a formal request by ElBaradei, Pakistan has confirmed "that an identical document exists in Pakistan."

Friday, May 30, 2008

Mr. Kinzer Goes to Washington, Seeking Real Diplomacy with Iran

It's not about who will meet with whom. It's about whether, and under
what circumstances, the United States will countenance the enrichment
of uranium on Iranian soil; and whether and when the United States
will accept that Iran is a regional power that the U.S. can't simply
push around.

Mr Market combats the Taliban

Mr Market combats the Taliban
Reduced opium production in Afghanistan as a result of soaring wheat prices points the way both for the conduct of war in poor countries, and perhaps more importantly, handling emerging environmental issues. Change that is led by the markets will prove more sustainable than any that's thrust by war. (May 30, '08)

US terror drive stalled in political quagmire

US terror drive stalled in political quagmire
With rumors swirling in Pakistan that President Pervez Musharraf is about to step down, and the two leading parties in the ruling coalition at odds, the country's efforts in the United States-led "war on terror" have all but ceased. Across the border in Afghanistan, Taliban-related developments have also taken a turn away from US designs. - Syed Saleem Shahzad (May 30, '08)

How the Pentagon shapes the world

How the Pentagon shapes the world

This may be the most important American story of the new century: the Pentagon's massive expansion on just about every front during US President George W Bush's two terms in office. On seven major fronts, the Pentagon has expanded its power and its powers, nationally and globally. These include the Pentagon as budget buster, diplomat, arms dealer, intelligence analyst and spy, domestic disaster manager, humanitarian caregiver, and global viceroy as well as ruler of the heavens. And it is still aggressively expanding. - Frida Berrigan (May 30, '08)

In the Driver's Seat: Condoleezza Rice and the jettisoning of the Bush Doctrine by Stephen Hayes, The Weekly Standard

In which our president is accused of attempting reality-based diplomacy....

The Weekly Standard

In the Driver's Seat
Condoleezza Rice and the jettisoning of the Bush Doctrine.
by Stephen F. Hayes
06/02/2008, Volume 013, Issue 36

Shortly before 10 A.M. on October 9, 2006, George W. Bush read a statement from the Diplomatic Reception Room at the White House. He fixed his face to look resolute. The previous day, in spite of its many promises over many years to discontinue its nuclear program, North Korea had tested a nuclear weapon.

"The United States condemns this provocative act," Bush declared. "Once again North Korea has defied the will of the international community, and the international community will respond."

The American response came three weeks later, on October 31, when Christopher Hill, the assistant secretary of state for East Asian and Pacific Affairs and the government's chief negotiator on North Korea's nuclear program, met privately in Beijing with Kim Gye Gwan, North Korea's deputy foreign minister. The meeting itself was a major concession. Although Hill's boss, Secretary of State Condoleezza Rice, had given him wide latitude for his negotiations she had not authorized a one-on-one meeting. The North Koreans had been pushing for bilateral negotiations with the United States since the beginning of the Bush administration. The president had repeatedly and categorically rejected any direct talks with the North Koreans.

In fact, he had reiterated this position at a press conference on October 11:

And my point to you is, in order to solve this diplomatically, the United States and our partners must have a strong diplomatic hand, and you have a better diplomatic hand with others sending the message than you do when you're alone. And so, obviously, I made the decision that the bilateral negotiations wouldn't work, and the reason I made that decision is because they didn't.

In order to facilitate discussions with the North Koreans Bush had agreed in 2003 to participate in multilateral negotiations, the so-called "six-party talks." Administration officials say the president was as clear in private White House conversations as he had been at his press conference: The United States would deal with this problem multilaterally. There would be no bilateral talks with North Korea.

Christopher Hill didn't care. He had been authorized to meet with the North Koreans on the condition that the Chinese representative was also present. But when the Chinese diplomat conveniently left for an extended period of time, Hill continued the talks. The North Koreans wanted the United States to ease the financial pressures resulting from year-old sanctions on a bank in Macau involved in shady North Korean transactions. Hill gave them his word.

"The [North Koreans were] especially concerned that we address the situation of the financial measures that has, in their view, held up the talks for about a year now," Hill said following his meetings. "We agreed that we could--that we will find a mechanism within the six-party process to address these financial measures, that we would--it would probably be some kind of a working group to deal with this, and that we would try to address it that way."

Hill did not receive--indeed, did not ask for--any assurances that North Korea would refrain from conducting further tests. He did, however, get the North Koreans to return to the six-party talks. Hill characterized the meetings as "positive" and "very constructive." He seemed to be particularly encouraged that the North Koreans had reaffirmed their commitment "to the denuclearization of the Korean Peninsula." But in a passing acknowledgment that the nuclear test three weeks earlier might have undermined the claim, Hill conceded that he was not yet ready to celebrate. "I have not broken out the cigars and champagne quite yet, believe me."

While the North Koreans did return to the six-party talks in December, they were not willing to cut any deals. From the outset they made clear that they were interested only in talking about easing the financial pressure that Hill had promised to address.

In January, Hill quietly set up another informal bilateral meeting with the North Koreans, this time with the blessing of his boss. Planning for the meeting, and for other aspects of North Korea policymaking, was limited to a small number of officials sympathetic to the softer line favored by Hill and Rice. Vice President Dick Cheney opposed the bilateral talks. He was joined by several key staffers on the National Security Council, at the Pentagon, and at the State Department. But "the North Korea process has been run outside the normal interagency," says a senior Bush administration official involved in the issue. Compared to other national security issues, this official says, the North Korea "policy does not get subjected to the same level of questioning in front of the president."

In a May 9, 2008, interview, Rice denied to me that she deliberately closed the circle of presidential advisers on North Korea. "I don't cut out people of my team," she said. "Anything that I've done with the president, I've done with [national security adviser] Steve Hadley, the vice president, and now, Bob Gates. So this has been very much an administration effort."

But confirmation of this gambit came from a reliable--if unexpected--source: Chris Hill. The busy diplomat made time to talk to Mike Chinoy, a former CNN reporter, forMeltdown: The Inside Story of the North Korean Nuclear Crisis, a book to be published in August. Chinoy had access to many of the key characters in the drama that has unfolded over more than a decade. Despite his consistent condemnations of the U.S. government for its failure to be more conciliatory and his attempts to rationalize North Korean irrationality, Chinoy's book is very well sourced and impeccably reported. And though Hill is portrayed sympathetically, the narrative is unintentionally damning.

"To Hill, the Bush administration was still full of people who were opposed to negotiations, and who felt the mere act of speaking with foreigners displayed weakness," writes Chinoy. "So the leading hardliners--Vice President Cheney's office, the office of the secretary of defense, Robert Joseph, the outgoing undersecretary for arms control--were kept in the dark." According to Hill, documentation of the policy deliberations was discouraged, and in some cases the demands for secrecy originated with Rice. "Some of the minimal paperwork business is coming directly from the secretary," Hill told Chinoy. "She said, 'Bring it only to me.' "

But Rice did more than just approve Hill's proposal for another bilateral meeting with his North Korean counterparts. She took it directly to George W. Bush and sought to persuade him to reverse his unequivocal and very public rejection of such direct talks just three months earlier.

It worked. The president changed his mind. So three months after Bush threatened serious consequences for North Korea's continued intransigence, Hill and his team feted their North Korean counterparts with "friendly toasts" at a dinner in a private room at the Hilton Hotel in Berlin. "We pulled out all of the stops," a member of Hill's team told Chinoy, "because we wanted to demonstrate we were serious and sincere."

In many ways, George W. Bush's reluctant acceptance of bilateral talks with the North Koreans is the story of the latter half of his presidency.

Bush began his second term with the kind of bold, uncompromising vision that had characterized his first four years in office. The ultimate goal of U.S. policy, he proclaimed in his second inaugural address, is "ending tyranny in our world." Bush said: "My most solemn duty is to protect this nation and its people against further attacks and emerging threats. Some have unwisely chosen to test America's resolve, and have found it firm."

But that speech is better understood in retrospect as a coda to his first term than a bridge to the current one. In the second term, those who have chosen to test America's resolve--the Iranians, the Syrians, the North Koreans--have often found it less than firm.

There are several reasons for this. Most obviously, the effects of the war in Iraq. At first, the ripple effects from that intervention seemed to have been what the Bush team predicted. Just as the fall of Baghdad after three weeks demonstrated the dominance of American military power, the decision to remove Saddam Hussein indicated the willingness of George W. Bush to make good on his threats. Syria's Bashar al-Assad, worried that he would be next, authorized his intelligence services to increase their assistance to the CIA. Libya's Muammar Qaddafi voluntarily gave up his own WMD programs, telling Italian prime minister Silvio Berlusconi that he did not want to be the next Saddam Hussein. Egyptian President Hosni Mubarak hinted at more open elections, and there were municipal elections in Saudi Arabia. But the troubles in Iraq mounted--from the intelligence failures on weapons of mass destruction to the continued presence of more than 100,000 U.S. troops--and seemed to limit the Bush administration's options.

So Bush has lowered his expectations and, more than three years later, has mostly abandoned the tough-guy rhetoric that characterized his first term. No one has played a larger role in this shift than Condoleezza Rice, who has been the most influential member of Bush's foreign policy and national security team since her promotion to the post of chief diplomat. "Her influence on the president is total," says one senior Bush administration official.

In a Foreign Affairs article she authored back in 2000 as a representative of the Bush presidential campaign, Rice criticized the Clinton administration for a foreign policy so obsessed with diplomacy that it seemed to disregard U.S. national interests. "Multilateral agreements and institutions should not be ends in themselves," she warned. Today, her critics claim that Rice has lost sight of her own admonition. "We have gone from a policy of preemption to a policy of preemptive capitulation," says a disillusioned State Department official.

Rice began the first term at a disadvantage among the members of Bush's national security team. Cheney, Colin Powell, and Donald Rumsfeld each brought decades of foreign policy and national security experience at the highest levels of U.S. government. Rice, a Russia specialist, came to the administration from Stanford University, where she was provost. She was a distinguished academic, but her highest level of government service came when she served on the staff of the National Security Council under George H.W. Bush.

But September 11, 2001, blurred such distinctions. After the service at the National Cathedral on September 14, 2001, Rice flew by helicopter to Camp David with Rumsfeld to join Powell and Cheney. Bush had suggested that this group--Cheney, Powell, Rumsfeld, and Rice--spend the evening discussing the coming war and the challenges they would face together. They started over buffalo steak and continued for hours.

"We had dinner together, and there was a kind of, you know, it was a kind of sense that these were people who had been together before, you know, they'd seen a lot together before, but they hadn't seen this," Rice recalled to me in an interview in August 2006.

This was different, and it was palpable in the room, in the conversation. It wasn't so much anything was spoken, because it was sharing stories about the Gulf War, sharing stories--but you could just .  .  . I think I could sense there was .  .  . I'm trying to find the right word. Tension isn't the right word, but anxiety. Anxiety."

I asked about her place in the group, and whether she felt left out because Cheney, Powell, and Rumsfeld knew each other well. She cut me off before I could finish the question.

I'd been through the collapse of the Soviet Union. You know, that's not bad. No, in fact, remember that I had--he had--the vice president had been secretary of defense when I was a special assistant to Bush 41 and Colin Powell had been chairman. Don and I have known each other for years, going back to Republican politics in Chicago and some corporate work. So, no. Not at all. But I was--you know, I'm a generation younger and so I was sort of standing out--well, maybe not a full generation [she laughed and corrected herself], half a generation, half a generation. So yeah, I stood back a little bit from it to kind of observe it.

Rice was not a bystander in the administration deliberations in the weeks and months after 9/11, but she did little to shape the major decisions that came in response. She was, in effect, a referee mediating the now-legendary disputes that featured on one side Powell, Deputy Secretary of State Richard Armitage, and the State bureaucracy, and, on the other, Cheney, Rumsfeld, Deputy Secretary of Defense Paul Wolfowitz, and the Pentagon bureaucracy. (In reality, of course, the sides did not always line up quite as neatly as the early narrative histories would suggest. There were plenty of times when, say, Cheney and Rumsfeld disagreed, and many more when Rumsfeld and Wolfowitz found themselves on opposite sides of one strategic decision or another. Rice, though, was almost always the referee.)

Part of this was a function of her job; the national security adviser runs the process. But according to several officials who worked with her, Rice had a deep insecurity about her own views. Several current and former colleagues criticized her management, accusing her of trying to find agreement among senior officials where there was none. "One day there would be a fight about something and the next day she would say there was an 'emerging consensus.' But it was a false consensus. She tried to protect the president by keeping him from making hard decisions and overruling his advisers. That's what a president does."

Rice, though, grew increasingly close to Bush. Their professional relationship blossomed into a warm personal friendship. Unmarried and without close family, Rice often spends holidays and weekends with George and Laura Bush. No one in the Bush administration has socialized with the president as much as Rice. "She was at Camp David nearly every weekend they were there," says an administration official.

Bush is comfortable around Rice. He will raise his voice to her in a way that he would never consider with Robert Gates or Cheney. "It's almost like a platonic boyfriend-girlfriend relationship," says one close observer. "It's very emotional." Rice showed a knack for anticipating where Bush would end up on an issue and getting there first, in effect advising him to do what he was almost certain to do. "She was a mirror," says an official who worked closely with her.

On January 18, 2005, Rice sat calm and poised at a long table before more than a dozen U.S. senators arrayed in a semicircle in front of her. Two months earlier, the president had nominated her to be secretary of state. The crowd in the hearing room--216 of the Hart Senate office building--was standing room only. After a brief introduction from then-Senate Foreign Affairs Committee chairman Richard Lugar, a much longer series of extemporaneous remarks from Joseph Biden, and an effusive endorsement from Democratic senator Dianne Feinstein from California, it was finally Rice's turn to talk.

It was a difficult balance. She had to defend President Bush, and most especially his decision to remove Saddam Hussein--a decision that was increasingly unpopular. She needed to demonstrate an understanding that the war was not going well but, as a member of the national security team responsible, be careful about giving ammunition to critics of the president. She gave a masterful performance, displaying a strong grasp of the issues she was likely to face and offering a spirited defense of the Bush administration and her role in it.

"The time for diplomacy is now," she declared, articulating each word carefully for emphasis. (It was not the only time she would use the phrase.) It was a clever message, open to different interpretations. One thing, however, was not ambiguous: Rice intended to signal a new American attitude toward the world and coming changes in the way the Bush administration would conduct foreign policy. She had added the words to her opening statement herself, and it is clear that she meant them.

When asked about the accomplishments of her time as secretary, Rice demurs, saying it's too early for judgments. "I think we'll wait until we're done to see where we end up," she says.

Pressed for three areas of improvement, Rice begins with the big picture and moves to specifics. "I think we have changed dramatically both the alignment in the Middle East and the expectations of what the Middle East should be and will be," she says. "I would be the first to say that we won't be able to deliver the fully formed, different Middle East. But I think what's expected of it and where it's headed is fundamentally different than when we came. And it's been turbulent and it's been difficult. But when I hear people talking about the stable Middle East that we've disrupted, I have to ask them, 'What stability was that?' "

She goes on,

I think we have stronger relations with Japan, South Korea than we've ever had, and yet a working relationship with China despite differences, and through the six-party talks, a mechanism for cooperation on what could have been an area of conflict between the powers. I just think we're at a very strong position in Northeast Asia.

And finally, I think that the administration's work on--I'll give you two more--Africa. I think it's extraordinary, the transformation of the relationship there. And finally, NATO. I think this is just a different alliance. Our European--our relations with our European allies are--traditional allies, are very good. And I think they weren't in 2005. And--but as importantly, I think we've--through the continuous policy of enlargement of NATO, now 12 of the 26 NATO members are former captive nations, and it has fundamentally transformed the nature of the alliance.

Is the improvement in our relations with our European allies due to the fact that we have pursued more conciliatory--some might say, more European--diplomatic policies since the beginning of her tenure? Rice sees more continuity than change. "The first term set up what we've been able to do in the second term."

Among the first challenges for the new secretary of state and her new diplomacy in the second term was an old problem: Iraq. "I know people didn't like the fact that we liberated Iraq," she said to me in May. "It was the right thing to do. But in 2005, we weren't dealing with questions of whether we should have liberated Iraq; we were dealing with questions of how to help the political transition in Iraq and reintegrate Iraq into the international system."

Getting support from erstwhile U.S. allies on Iraq proved difficult. And although the Iraqis held three successful elections in 2005 and began to stumble their way towards democracy, the worsening security problems there meant that the State Department necessarily played a secondary role to the Pentagon. While State was in the process of establishing a huge presence in Baghdad, across Iraq the uniformed military were America's de facto diplomats.

In 2006, faced with mounting security problems and increasing ethnic violence among Iraqis, President Bush began to consider a wholesale change of strategy in Iraq. Proposals ranged from a reduction and redeployment of troops mostly outside of Iraq (not unlike the plan pushed by several Democrats) to a "surge" of troops to Iraq and significant changes in the mission. Cheney favored the surge; Rice did not.

Several current and former Bush administration officials say that Rice opposed the surge and favored a reduction in U.S. troops in Iraq. In interagency deliberations Rice frequently suggested the surge would do little more than antagonize Bush's allies--domestic and foreign--and result in higher casualties. Philip Zelikow, a top aide to Rice and former State Department counselor, circulated a strategy paper that proposed among other things reducing U.S. troop presence and pulling back from urban areas.

I recently asked Rice if she opposed the surge and advocated a pullback of American troops.

First of all--look, I have never been in favor of pulling back any--pulling ourselves back from Iraq. Look, I am fundamentally a believer in what we did in Iraq. I believe we did the right thing. I believe we have to win. I believe we are winning. The question that I've had--that I had at the time when we were looking at different options, because what we were doing in Iraq was not working, was if we were going to have more forces, what were they going to do?

If there was going to be a surge, what were they going to do? And, could we define our national interest clearly enough that we knew that additional American forces would be successful? Because I did believe that if we surged forces and it didn't make an effect--didn't have an effect, that that was a very, very bad thing.

Pressed on whether it was inaccurate to say that she was opposed to the surge, she responded:

I had a lot of questions about the surge. I was initially skeptical as to whether or not we could surge American forces and what would it mean to deliver population security. I'll have to say that when .  .  . when, you know, Ray Odierno, who I knew well--he had worked with me--and Dave Petraeus were .  .  . believed that we could do it that was very affirming to me. And I then spent most of my time trying to figure out how we could surge civilians and turn this building around to actually support on the civilian side. But yeah, I had a lot of questions about whether we should surge forces. A lot.

On January 10, 2007, in a national address from the White House library, Bush announced the surge. The failure to secure Baghdad, he said, came because there were not enough U.S. troops and too many restrictions on the ones there. Bush told the nation that he would be sending 20,000 additional troops--five brigades--to Iraq. It is one of the few major policy battles Rice has lost during the second term. But by then Rice had other equally pressing priorities: resolving the nuclear standoffs with North Korea and Iran and pushing forward on the creation of a Palestinian state.

Trying to broker Middle East peace is of course something that secretaries of state do almost as a matter of course as their time in office comes to an end. But by taking on the diplomatic challenges presented by North Korea and Iran, Rice was revisiting issues that had generated some of George W. Bush's most uncompromising positions of the first term, expressed in some of his most aggressive rhetoric. It took a war to eliminate the threat presented by the first member of the "axis of evil," and five years later American troops are still fighting to allow Iraqis to consolidate that victory. Rice's ambitious objective was to handle the remaining two-thirds of that ignominious group with words.

Bush had accompanied his warning about the "axis of evil" with a solemn pledge. "The United States of America will not permit the world's most dangerous regimes to threaten us with the world's most destructive weapons," he vowed. "Time is not on our side," he cautioned.

In the race to prevent Iran and North Korea from going nuclear, nothing is more important than time. And six years is a lot of time. In the period since Bush made those comments there has been a seemingly endless series of multilateral negotiations aimed at retarding these programs or ending them altogether. There has been the EU-3, the P-5+1, the six-party talks, and numerous other ad hoc negotiating partnerships. And while these have undeniably made efforts more difficult for both rogue states, the fact is that six years after Bush's speech, North Korea is a nuclear power and Iran is either on the brink, if you believe the Israelis and the French, or making substantial progress, if you believe the CIA.

In both cases, despite our increasingly desperate attempts to convince them to take these negotiations seriously, their behavior became more provocative. And in each case, the State Department has gone out of its way to avoid dealing with these provocations lest they jeopardize our diplomacy.

Iran has been arming, equipping, and training insurgents in Iraq. Their support for anti-coalition forces began before the war, when they allowed foreign fighters to transit freely between Iran and northern Iraq. For the last two years, the U.S. military has been laying out evidence of Iranian terrorist activity in Iraq. The State Department, too, has accused Iran of supporting terrorism that is killing American soldiers. "The Iranians are supplying very sophisticated IED technology to Shia insurgent and Shia terrorist groups that has, in turn, been used against American and British soldiers, and has led to the death of some of our soldiers over the last six to eight months," said Undersecretary of State for Political Affairs Nicholas Burns, the department's third-ranking official, back in October 2006.

These are, of course, acts of war. But, while State Department officials have joined the rest of the Bush administration in publicizing the Iranian activity, there have been few signs that the Iranians are paying a price for killing our soldiers. For the most part, the Bush administration has been content to decouple Iran's support for terror--in Iraq and more broadly--from its pursuit of nuclear weapons, to make a "distinction between terrorists and those who knowingly harbor or provide aid to them" that the president said in 2002 we would never make.

At a speech in Davos in January 2008, Rice made sharp distinctions.

We have no conflict with Iran's people, but we have real differences with Iran's government--from its support for terrorism, to its destabilizing policies in Iraq, to its pursuit of technologies that could lead to a nuclear weapon.

Although she listed three "real differences" with the Iranian regime, she suggested such differences might be manageable and offered the prospect of a "new, more normal relationship" if Iran would address just one of them.

Should Iran suspend its uranium enrichment and reprocessing activities--which is an international demand, not just an American one--we could begin negotiations, and we could work over time to build a new, more normal relationship--one defined not by fear and mistrust, but growing cooperation, expanding trade and exchange, and the peaceful management of our differences.

In our recent interview, I asked her directly if we would negotiate with Iran even while they are killing American soldiers in Iraq.

THE WEEKLY STANDARD: President Bush said in September of 2001, we will not negotiate with terrorists, you're either with us or against us. And we are now negotiating with the state that you called the central banker of terror?

SECRETARY RICE: Yeah, and they are. And the good thing is we're doing something about it. Because by designating Bank Sepah and Bank Melli and the Quds Force and the IRGC and looking at what their central bank is doing, not only did we declare them the central bank for terrorism, we're treating them like it. And we have been really tough on designating their banks and it's causing them enormous problems in the international financial system.

So one of the lead elements of our policy that Treasury and State worked out together is that they will not use the international financial system for ill-gotten gains of terrorism. We're not actually negotiating with them. You know, we have a minimal contact between Ryan Crocker and his counterpart in Iraq, where we let them know exactly what we think about what they're doing and where we've delivered the message on a number of occasions that their people will not be safe in Iraq if they're trying to kill our soldiers. And we've acted on it, which is why the Quds Force commander, for instance, who was picked up in Irbil, is a real victory for that policy. And . . .

TWS: What other ways have we acted on that, would you say?

RICE: Well, those are two very major ways. But we have gotten three Security Council resolutions against them, which doesn't permit the Iranian--you know, part of this is that you don't want the Iranian people to feel like this is aimed at them. And so the fact that there are three Security Council resolutions, deprives the Iranian government, the Iranian regime, of the argument that this is just the United States hostile toward Iran and its great culture. And we say, no, this is the world, not against Iran and the Iranian people, but against that horrible regime that's oppressing its own people. And so we're not negotiating with them. We're acting. We will negotiate with them if they suspend their enrichment and reprocessing activities and start down a different road. But--

TWS: That's irrespective of whether they're continuing to support insurgents in Iraq?

RICE: Well, we've said we would talk about everything, all right. But talking about--

TWS: But if they're killing--sorry to interrupt.

RICE: Yes.

TWS: If they're killing our soldiers? I mean, you know, when I was listening to the president in September of 2001, the last thing I thought--not to minimize the importance of what we're doing financially--huge--but the last thing I thought was that we'd be sitting across the table from them saying, "Please don't kill our soldiers."

RICE: We're not saying, "Please don't kill our soldiers." We're saying, "Don't kill our soldiers or your people won't be safe in Iraq." That's a slightly different message. And not only are we saying that, we're doing it.

TWS: Are there other examples besides the capture in Irbil where we are saying to Iran not only don't do this, but, "Here are the consequences. Look, you can see the consequences"?

RICE: Well, there are lots of consequences, I mean, many of which, of course, happen in military operations that I'm not going to talk about. But we're on the hunt for them all the time.

Iran was not the only rogue state eager to test the Bush administration. For more than a decade, North Korea has been developing nuclear weapons and lying to the world about it. Each new supposed "deal" with the North Koreans results in real concessions from the West--fuel oil, food aid, and the like--and phony concessions from the regime of Kim Jong Il. The Clinton administration worked under "The Agreed Framework," a deal that delivered generous assistance in exchange for North Korea shutting down its plutonium efforts at a nuclear reactor at Yongbyon and submitting to monitoring and verification from the International Atomic Energy Agency. The Agreed Framework fell apart in 2002 when the U.S. confronted North Korea about the fact that it had launched a clandestine effort to enrich uranium, a program that had existed for years without detection. It was not North Korea's only clandestine operation.

In April 2007, the director of national intelligence called the ranking members of congressional intelligence and foreign affairs committees in for a meeting. They were not told what was on the agenda--a fact that suggested it was serious. It was.

Despite strong warnings from the United States in the past, the North Koreans had provided assistance to Syria in its efforts to build a nuclear reactor. Information was sketchy, but the facility looked to be modeled after the North Korean reactor at Yongbyon and construction appeared to be in advanced stages. There was no question that the North Koreans were at least sharing nuclear technology with the Syrians. The congressional leaders were told to keep the information "close hold" and forbidden from sharing it with their colleagues on the intelligence and foreign affairs committees. They agreed, and over the course of the summer attended additional briefings.

Bush administration officials were divided about what, if anything, to do in response. The Israelis communicated a strong inclination to take out the Syrian facility that heightened the disagreements on Bush's national security team. Rice was concerned about the diplomatic consequences of approving a preemptive strike. Cheney, who once signed a photograph to Israeli general David Ivri thanking him for taking out Iraq's Osirak nuclear reactor in 1981, favored it.

On September 6, 2007, Israeli jets bombed the Syrian facility. The initial news reports were maddeningly vague and very few people understood what had happened and why. Inside the U.S. government, the debate intensified. The congressional leaders who had been briefed on the program wanted to learn more about the strikes and wanted to be able to share what they knew with their colleagues. Bush administration officials, however, continued to insist that the information be restricted to the small group that had been previously briefed.

In internal deliberations, Hill and Rice, concerned that public disclosure of North Korea's involvement could derail the six-party talks, argued for keeping the information secret. Stephen Hadley, Rice's former deputy and current national security adviser, broke the news to the lawmakers.

Two of the Republicans who had been briefed, Representatives Peter Hoekstra and Ileana Ros-Lehtinen, took the unprecedented step of venting their frustrations in the pages of theWall Street Journal. They opened the article by noting that the State Department had been publicly touting its diplomatic progress with North Korea. Then they wrote:

Early last month, Israel conducted an airstrike against a facility in northern Syria that press reports have linked to nuclear programs by North Korea, Iran or other rogue states. If this event proves that Syria acquired nuclear expertise or material from North Korea, Iran or other rogue states, it would constitute a grave threat to international security for which Syria and any other involved parties must be held accountable.

Their language tracked closely with the warning Bush had given the North Koreans immediately after their nuclear test in 2006. "The transfer of nuclear weapons or material by North Korea to states or nonstate entities would be considered a grave threat to the United States," Bush had said, "and we would hold North Korea fully accountable." When I asked Rice about this on May 9, I started by making the simple observation that we're in the middle of some pretty intense times with North Korea. The previous day, the Wall Street Journal editorial page had criticized Rice on North Korea. She jumped in before I could ask a question.

Let me--let me just start by saying I have not lost my understanding of the North Korean regime. Okay? Nobody believes that this is a regime that you can believe. The question is: Is this a regime that, under the right set of incentives and disincentives, is prepared to make some fundamental choices about its nuclear program that would ultimately put the United States and the rest of the world in a safer position vis-à-vis the Korean Peninsula and, most importantly, vis-à-vis proliferation? That's the question.

The U.S. continues to ship massive amounts of fuel oil to North Korea, under the agreement that shut down the Yongbyon reactor, while the State Department attempts to coax further cooperation by raising the possibility that sanctions on North Korea imposed through the "Trading with the Enemy Act" might be lifted and that North Korea could be taken off the list of countries that sponsor terror, a move that would open the doors to billions in aid and loans with the potential to breathe life into the anemic North Korean economy.

We are sending other conciliatory messages, too. Earlier this year, the State Department helped make arrangements for the New York Philharmonic to perform in Pyongyang, an unprecedented bit of cultural diplomacy with Kim Jong Il's regime. And just last week, the United States announced 500 metric tons of food aid to North Korea.

But what about proliferation and the full accountability President Bush threatened after North Korea's nuclear test? Will they be punished? Rice says that while they've been worried for a long time about North Korea's nuclear proliferation, she is looking forward.

The issue there is what kind of mechanism are we going to use to prevent further circumstances like that or to learn whether there might be other circumstances like that. And, frankly, I would rather have the Chinese and the South Koreans in the room on a verification mechanism. And so my trip to Beijing, my last trip to Beijing, was actually to say to the Chinese we have a problem because the North Koreans have been doing something very bad; and if we're going to move forward in the six-party framework, you, China, are going to have to work with us on verification of proliferation activities, monitoring of verification--monitoring, and, presumably, acting if something is wrong. And that's why we're setting up a monitoring and verification working group for the six-party talks, in addition to the other things we've done like the PSI, Proliferation Security Initiatives.

While these issues are not insignificant, to many analysts they reflect the myopia of diplomats so eager for a deal that they are missing the big picture. "In the six-party talks we are ready to declare preemptive victory without any serious change in North Korea's direction, including on nuclear weapons and programs, proliferation, and human rights or wrongs," says David Asher, former coordinator of the State Department's North Korea Working Group. "A declaration that only tells us what we already know--perhaps because someone has coached them on what to say--is worthless, as is a deal that looks past the existential threats that matter most to our security--weapons, proliferation, and clandestine production."

And Pete Hoekstra, the vice chairman of the House Intelligence Committee, still has lots of questions. "If they're proliferating to Syria, who else? Where else could there be a North Korea-designed reactor that we don't know about? What else might North Korea be doing?"

A senior Republican in the House says the Bush administration is too focused on getting a deal and offers this blunt assessment: "We've been down this road before--Clinton did it, now Bush is doing it. It doesn't seem to matter for the State Department. These are legacy deals, and legacy deals are bad deals."

There are times that the president seems to understand this. One of those moments came back on October 11, 2006, at a press conference after the North Korean nuclear test. Bush was defending his commitment to diplomacy and spoke of the need to work with allies. When "dangerous regimes" fail to honor their prior commitments or serially reject generous offers to strike new ones, he said, "It ought to say to all the world that we're dealing with people that maybe don't want peace."

Rice believes we are now in the early stages of a new, important historical moment, not unlike the one that came with the end of the Cold War. "I was lucky enough the last time around to be here at the end of a big, historical transformation," she says. "And of course, it's very heartening, and heady even, to complete the liberation of Eastern Europe or complete the unification of Germany or, ultimately, complete the collapse of the Soviet Union. But you recognize the foundation for that was laid in the 1940s."

The Bush administration is pursuing policies now, she says, that will lay the groundwork for big things to come. "I tend to think of foreign policy, particularly when you're at the beginning of a big, historical transformation, as being something" where you try to lay "a foundation rather than trying to complete." The question remains, with Iran's nuclear ambitions unchecked, with North Korea a successful nuclear blackmailer, with Hezbollah's success in Lebanon and Hamas's in Gaza, with authoritarians like Chávez and Putin and Hu Jintao flourishing, with mass murder unchecked in Sudan and democracy thwarted in Zimbabwe: a foundation for what?

Stephen F. Hayes, a senior writer at THE WEEKLY STANDARD, is the author ofCheney: The Untold Story of America's Most Powerful and Controversial Vice President(HarperCollins).
© Copyright 2008, News Corporation, Weekly Standard, All Rights Reserved.

The Case for Nukes

The Case for Nukes

A solution to the energy crisis has been under our nose for decades.
By Elizabeth Spiers, contributor

Interactive map:
Power Trip

See the stops along the author's route, as he toured America's nuclear plants.
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NRG: Nuclear is the way to govideo
NRG: Nuclear is the way to go

(Fortune Magazine) -- When Goldman Sachs analysts suggested last week that oil could hit $200 a barrel, I expected someone somewhere to express horror at the possibility. But the reaction was a tiny, resignation-filled sigh. Relentless fuel-price increases have so exhausted consumers that we don't have the energy to be outraged anymore. So we feel helpless as we watch oil sprint past the $130 mark on its way to price-prohibitive territory and wonder whether it's too late to bring back the horse and buggy. Our sense of helplessness is an illusion: There are things we can do. We got ourselves into this mess, mostly through multiple administrations of politically comfortable but shortsighted decision-making. And inasmuch as we're willing to stand a little political discomfort, we can get ourselves out.

One uncomfortable way to mitigate the energy crisis has been under our nose since the 1950s: nuclear energy. It's one of the cleanest and most efficient alternatives to coal- and natural-gas-based electricity production, and it's responsible for less than 20% of domestic electricity production. The most recent numbers (2006) indicate that coal-based production was the largest contributor, at 48%. Increasingly expensive petroleum and natural gas account for 22%. All three are replaceable.

It may not be fashionable to suggest that the French know what they're doing with regard to anything but wine and cheese, but spend some time in Provence and note the remarkably clean air and cheap electricity, 75% of which is produced by nuclear power plants. Most of the plants were built after the 1970s oil shocks that sent France's economy into a tailspin because it was almost completely dependent on foreign oil, as we are now. Nuclear energy doesn't produce the air pollution that burning coal does, and even waste products are recyclable, though it hasn't been done thanks to an also potentially shortsighted Carter-era decision to ban it over fears of nuclear terrorism.

Although the ban has been reversed, the fears still linger. But irrational fear of improbable safety breaches is responsible for most opposition to nuclear power in this country. The unlikely culprit? Pop culture. We've seen "The China Syndrome," and we worry that nuclear-reactor employees may be bumbling Homer Simpsons, capable of accidentally pushing the red button. Chernobyl and Three Mile Island - the former of which killed 36 people and the latter of which killed none - have become so outsized in the American imagination that our perception of actual risk has been completely distorted. We're willing to tolerate the health risks and environmental repercussions of other fuels to avoid the infinitesimally small and comically improbable possibility of a catastrophic accident that resembles something out of a 1979 Jane Fonda movie, the likes of which have never happened in the history of nuclear power.

We also cognitively associate nuclear power with bombmaking and having seen what atomic radiation can do to people; we think of it as being exponentially worse than exposure to fire, poisonous gases, and pollution - the likely repercussions of large-scale accidents at conventional power plants. As with anything that's exotic, potentially dangerous, and little understood, it becomes more frightening in mythology. Silhouettes of cooling towers on the horizon seem sinister because we've seen the imagery from Chernobyl - an accident that was exacerbated because it was left burning for five days, which would never happen now.

Are there downsides? Yes. Nuclear waste has to be stored somewhere, and consistent with human behavior since the beginning of time, no one wants it in his own backyard. But at some point we have to weigh the necessity of energy independence against the cost of uncomfortable fixes like nuclear energy. As oil climbs to the point where no one can afford it and we're forced to stop buying it- what Goldman analysts euphemistically call "demand destruction," as if it were intentional- we may find that we have no choice. We can't afford to be afraid anymore.

More coverage on the nuclear industry.
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Bill Clinton and the Rich Women by Jeffrey St. Clair

Jeffrey St. Clair
Bill Clinton and the Rich Women

The Most Lucrative Incentive for Nuclear Power in the History of the United States

Karl Grossman
The Most Lucrative Incentive for Nuclear Power in the History of the United States

China's New Formula by Peter Marsh

China's new formula

By Peter Marsh

Published: May 29 2008

The Financial Times

At a sprawling plant in Nanjing, engineers working for BASF are finalising ambitious plans. The site - a joint venture between the German chemicals manufacturer and Sinopec, the Chinese energy group - is set to receive $900m (€571m, £455m) in investment, a scheme intended to boost output by 25 per cent over the next three years. BASF hopes it will soon rival the huge production complex in Ludwigshafen as the focal point for its global operations.

But more than this, says Martin Brudermüller, head of BASF's Asia activities, the Nanjing operation will aim to gain expertise in combining China's famed low costs with the development of new design and production skills. If all goes to plan, this will involve importing ideas from BASF's operations around the world and linking these with concepts developed by BASF's 6,000-strong staff in China, including a team of 100 research and development engineers.

Such an approach, says Mr Brudermüller, is required as China's economy starts to mature. "A lot of our customers [in China] are switching from a copycat philosophy to [one that emphasises] more innovative product areas. This puts pressure on us to devise more advanced materials to meet their requirements."

BASF's strategy in Nanjing is part of a wider phenomenon. Known for its rapid progress to become the world's joint-second most productive manufacturing nation, China is now going through a more subtle phase. It is becoming a giant test bed for manufacturing ideas, building on its existing strengths in low-cost production by using the efforts of engineers and developers not just in China but from around the world.

Jimmy Hexter, a director at the Beijing office of the McKinsey strategy company, says the companies that work out how to do this most effectively - through "networking" approaches that link different groups in different countries efficiently - will be poised to gain substantial commercial rewards. They will, he says, find they are in a good position to push ahead competitively not just in China but in other parts of the world where marrying a decent level of technical sophistication with low costs is important - which means just about everywhere. "Companies will find they need to win in China - or risk losing globally," says Mr Hexter.

China has become a more stable environment for manufacturers over the past four years, according to David Chang, president of China at Philips, the Dutch electronics group. Mr Chang is referring to what he sees as a greater respect for intellectual property - which means western companies have to spend less time worrying about Chinese rivals copying their ideas - and tougher and more rigidly enforced government regulations in such areas as environmental protection and the hiring and firing of workers. "As a place for manufacturing, China has become more mature, more transparent and easier to predict," says Mr Chang.

Added to this is the growing expectation that for the remainder of this decade, China could be one of the few bright spots in the world economy, with gross domestic product continuing to expand at a healthy rate even as western economies deteriorate.

China has emerged as a manufacturing superpower only very recently. According to Global Insight, a US economic consultancy, it accounted for 5 per cent of global manufacturing value-added output in 1995; by last year, this share had risen to 14 per cent, putting the country in joint-second place - with Japan - in the world league table of manufacturers ranked by production. Both countries are well behind the US, which in 2007 accounted for a quarter of global manufacturing output, but a long way ahead of Germany and Britain, whose shares have dwindled to 7 per cent and 3 per cent respectively.

Much of China's manufacturing expansion has been built on low costs. Even after a period of strong wage growth, labour costs in the country remain up to 95 per cent lower than in high-wage nations such as Germany and the US. Many kinds of manufactured goods can be made 10-30 per cent more cheaply in China than in high-wage nations, giving China-based manufacturers a big competitive advantage.

Even so, company officials in China worry that a strategy based around low costs is becoming less tenable. Minoru Yokota, director of a plant in Wuxi near Shanghai run by Nichicon, a Japanese maker of specialist capacitors for electronics, says: "In 2004, the differential [in wages] between our Chinese and Japanese plants was 1:10. Now it is 1:7."

Rising costs are one reason why manufacturers in China - both domestic companies and inward investors - have beenputting a new accent on technology and design. These efforts have been largely successful, says Steve Bertamini, who has just stepped down from running the China operations of General Electric, the US industrial group, to become head of consumer products for Standard Chartered, the UK bank which does much of its business in Asia. "In the past four years, the technical competence of the Chinese manufacturing base - as manifested by the component suppliers that we deal with - has improved considerably," Mr Bertamini says.

The greater sophistication of GE's Chinese suppliers is one reason why it hopes that within five years, China-based manufacturers will be capable of supplying about 16 per cent of the company's worldwide requirement for manufactured parts, up from half this figure now. GE will gain the most use from these low-cost components, says Mr Bertamini, if the company can make the best connections between the suppliers of the parts and its product development staff in China and elsewhere. Then, he says, GE's competitiveness in a number of the products that it makes and sells around the world - from switchgear to hospital scanners - is likely to be considerably enhanced.

"Everyone thinks that low-cost products, which are perhaps less technically sophisticated than the top-of-the-range products made in the US or western Europe, are primarily of interest to consumers and industrial users in emerging economies," says Mr Bertamini. "But in reality there are a lot of potential customers for products made in this way in high-cost countries too."

Another company trying to yoke together product development and low-cost manufacturing at a number of centres around the world is Lenovo, the Chinese computer maker. While its manufacturing is predominantly in low-cost countries - it has five plants in China, two in India and one each in Poland and the US - the company employs 2,000 staff in design and development in three widely spread centres, in Beijing, Tokyo and Raleigh, North Carolina. Its effort in this field was helped by the company's acquisition four years ago of the personal computer division of IBM, the US technology company, which brought with it a cadre of mainly US-based development engineers.

Angela Qiu, the head of a 90-strong group employed by Lenovo in Beijing to inquire into long-term trends in fields such as new materials and software that could make computers easier to use and more versatile, says: "If Lenovo is to move ahead as a company, it's vital for the company to make decisive advances in design and innovation."

Fountain Set Holdings, a Hong Kong textile maker which runs four plants in China, now employs 100 people in design and development, compared with none a decade ago. The team - based in two Chinese factories and a plant in Sri Lanka - works in areas such as new knitting, printing and dyeing techniques, as well as the development of novel fabric that absorbs odours for use in clothing in hot climates. Gordon Wen, director of Fountain Set, says: "In the past, customers [in the clothing industry] would come to China with a specification of what they wanted to be made. Now they are coming and asking: 'What have you got for us [in design and development]?' They are interested in buying the products that we've made using our own design resources."

Mindray, a maker of medical equipment, is another Chinese company to have moved in this direction. The company has 1,000 development engineers, many of them involved with "cost-down" projects, in which they study, for example, patient monitoring systems sold in western countries for about $6,000 and work out how to make the equivalent product in China for as little as $1,000.

"We look at what parts we can standardise, where we can reduce the level of technical sophistication without comprising quality, and in what instances we can substitute software for electronic components," says Joyce Hsu, Mindray's chief financial officer. The result, she says, is often a low-cost product that may not have so many features as an equivalent piece of equipment made in western Europe or the US but which satisfies requirements in hospitals - in China and elsewhere - that are trying to cut back on costs.

Following a similar line is Candy, an Italian company that is one of Europe's biggest makers of domestic appliances. Two years ago it set up its first factory in China, through purchasing a plant in the southern port city of Jiangmen. Aldo Fumagalli, Candy's president, admits the company has found adapting to China more difficult than he imagined. "It's all so different; we've found we can apply [to Candy's China operations] very little of what we already knew from [our experiences in] Europe." But, he says, the eventual pay-offs promise to be large. He reckons the plant will give Candy a base for designing and selling low-cost washing machines and other products that will prove valuable not just in China but in other parts of the world where the market for these products seems set to grow, for example South America.

Luxembourg-based Element Six, the world's biggest maker of artificial diamonds used in industry, which is part owned by De Beers, the South African diamond miner, is another company trying to learn from China's experiences in low-cost production. In 2006 it set up a plant in Suzhou, near Shanghai, expressly to copy the techniques of Chinese rivals in making artificial diamond, produced through compressing graphite under high pressures. Christian Hultner, Element Six's chief executive, says: "Most manufacturers are concerned about the Chinese taking their ideas; we decided to do things the other way round. [In the Suzhou plant] we used Chinese management, Chinese workers and Chinese machines. We put into this plant not an iota of technology [from outside China]. But we succeeded in finding out a lot about the Chinese way of organising manufacturing in this field, which has been highly useful in the rest of our worldwide production operations."

By deliberately not putting its best global technology into its China plant, Element Six has avoided the risk of its best secrets leaking out (see below). Mr Hultner says the company takes a far from sanguine view on this. He admits that he would never sanction the shift to China of Element Six's most technically advanced production processes for artificial diamond - which are located in a small production facility in the Isle of Man, off the coast of northern England. "I feel that on this island the technology is fairly safe," he says.

For all such concerns, it seems the approach for most global manufacturers will be to push on with marrying their own design concepts with ideas developed inside the country. It will probably become all the more vital to tap into the engineering potential of China as the country's economic development widens and deepens, particularly as infrastructure investments in its less developed western regions bear fruit. In this environment, the companies that do most to make a success of the manufacturing test bed that China is turning into may indeed find they have produced an advantage when it comes to competing globally.

Innovators avoid the copyright risk

A big worry for many western and Japanese manufacturers in China is that their technical secrets developed in other parts of the world might be copied by China-based rivals. That prompts companies to hold back from making their most advanced products in China or putting a big engineering development effort into the country. The inhibitions linger on in spite of reforms over the level of intellectual property protection in China, many of them linked to the country's 2001 accession to the World Trade Organisation.

Nichicon, a Japan-based maker of electronic capacitors, is one. It refuses to site in China a top-secret production process for refining the aluminium foil used in these devices - even though by having its Chinese plants import the foil from Japan, where the process features in several of the company's home-based plants, costs of its Chinese production are significantly increased. "This technology is important to us," says Kazuo Nakamura, deputy director at Nichicon's plant in Wuxi, near Nanjing. "By keeping the process in Japan we feel we can protect it better."

Some multinationals are, however, finding different and creative ways to get around the problem. Trumpf of Germany, one of the world's two biggest makers of machine tools, is for instance setting up in China not one but three plants to make some of its top-of-the-range laser-cutting equipment. "We feel that if we split up our parts production and manufacturing processes in three centres around China rather than put them all in one place, it will be harder for competitors to find out about them and replicate our technical concepts," says Nicola Kammüller-Leibinger, Trumpf's president.

According to Charles Ingram, managing director of the Chinese operations of JCB, the UK construction equipment maker, many Chinese companies are "desperate" to increase the technical sophistication of their products. But the way most of them go about this, he adds, is not by stealing other companies' designs but through alliances with those western businesses commonly regarded as leaders in technology and design. Partnerships of this kind feature in many areas of Chinese manufacturing, including in construction machines.

David Michael, head of the China practice at Boston Consulting Group, says that although the fear of copying is a legitimate concern for many companies, often the best way to confront this is to "participate fully" in developing products in China, coupled with a policy of robustly defending legal rights over intellectual property when it appears copying has taken place.

Failing to engage in product and process development in China because of the worry about violations of intellectual property is not the way to proceed, says Mr Michael. "For many companies it is vital to be present in China, not just in sales but in engineering development. If they do not do this, they will find their global competitiveness is affected."

Copyright The Financial Times Limited 2008