Our economic and national security decision-making processes have for too long been largely disconnected. Despite the fact that the Treasury Department has a seat at the principals table at the National Security Council, these two pillars of American governance have been viewed through very disparate lenses. But the financial crisis has changed this mentality, reinforcing the view long held by progressives, that the two are intrinsically linked.
Reflecting this new view, Director of National Intelligence Dennis Blair told Congress in February that the financial crisis was the primary near-term security concern, actually surpassing terrorism as the greatest threat to America. If anything, this crisis served the critical purpose of reminding the country, the world and most importantly our policymakers that our national security can only be as strong as our economic security.
It is essential that this convergence continues to inform how we advance our economic and national security policy priorities moving forward.
Because the financial crisis has affected our global leadership position, changes are needed in how we manage our economy and handle our interactions with the global economy. We must be prepared to limit the damage to our national security caused by the financial crisis, as well as be prepared to prevent future unanticipated security challenges arising from the financial crisis. There are several steps policymakers should consider making to proactively address this issue.
First, policymakers must ensure that our bottom-line financial situation is robust and sustainable. We must have a financial structure that promotes stability and long-term viability. Second, forums for international economic cooperation (the World Bank and the International Monetary Fund) should be updated to ensure that ascendant countries are contributing appropriately while also having their concerns taken more clearly into account. Third, international economic development should remain a top priority, as it is essential to limiting the pressures that foster global instability.
The recent financial crisis exposed serious national security vulnerabilities in our economic architecture. For instance, it has provided openings for hostile nations to use the economic situation in the U.S. as a propaganda tool, inflating the purported weakness of America. While we remain strong economically in comparison to other countries, our economic strength must be sustained and continuous. That is why serious reforms are needed domestically. Effective financial sector reforms must have the goal of preventing large economic swings ones that affect both Wall Street and Main Street to ensure that the economic bedrock of our national security is solid. When our economy is strong and certain, so is our national security.
Next, the international global architecture, which was designed more than 60 years ago, is in need of a revamping. While American centrality in this system buttressed by the IMF, the World Bank and a variety of trade agreements has led to significant global economic growth, it has also shown itself to be a major global liability when prospects turn sour. Other key nations, such as China, India and Brazil, which recently played a significant role in stabilizing the global economy, do not have a seat at the table that reflects their importance. It is essential that international institutional arrangements be updated to ensure that international cooperation and obligations are consistent and predictable, with clear rules adhered to by all countries.
For example, the announcement late last month that the G-20 will become the new locus of international economic diplomacy is welcome news and fits this objective. This group of countries represents nearly 90 percent of global economic activity. By upgrading their role, these countries, which have made important contributions to global growth and stability, will be called on to design and adhere to global financial rules. What is true in the political and military arenas that emerging powers need recognition and roles that challenge them to be stabilizers and reward them for doing so is also true in the economic sphere.
Finally, it is crucial that the United States strengthen its commitment to global economic development. Since the financial crisis began, almost 90 million new people have fallen into extreme poverty. Governments in the developing world are vulnerable to social unrest resulting from such poverty. Underdevelopment can also foster transnational threats and terrorism. These difficult situations, which have been exacerbated by the financial crisis, will inevitably become security challenges for our country.
The current financial crisis has clearly demonstrated that we cannot view our national security interests as separate from our economic health. Policymakers across the spectrum from economic experts to those in our national security apparatus therefore have an obligation to take economic policy issues more actively into account. By promoting sound financial policies, fostering effective global partnering and rule-making, and strengthening our commitment to global development, we can have a comprehensive economic strategy that acknowledges the crucial effect the economy has on our national security.
Joel Rubin is chief operating officer and deputy executive director of the National Security Network.