Keynote Address

THE HON. DR. HENRY A. KISSINGER

Former Secretary of State of the United States of America

Alun, ladies and gentlemen, let me say first of all how delighted I am to be here. Lord Chalfont has been a dear friend of mine for, I am almost ashamed to say, over 20 years, (which shows that we have both stopped being the promising 'young men' which is how I recall we were introduced to each other), and his judgment, wisdom and friendship have meant a great deal to me.

I am always grateful when I escape from the introduction of a distinguished Britisher without being lacerated too severely. I can never forget the British reviewer who wrote about one of my books: "I don't know whether Mr. Kissinger is a great writer, but anyone finishing this book is a great reader".

I have been asked to give a general overview of the Asian situation, or the Pacific situation and I will not be presumptuous enough to do this from the point of view of an expert on Asia. I think the most useful thing to do will be for me to discuss it from the point of view of an American deeply concerned with the foreign policy of my country. So the perspective that I will put before you is a particular American perspective — I say a particular American perspective for the sanity and peace of mind of the Consul-General of the United States who may be in this room. I want to make absolutely clear that I speak as a private citizen, not as an official representative of the United States.

I am a friend and supporter of President Reagan and a friend and supporter of all of his associates in the National Security area. But, nevertheless, they express the views of our Government. I express the views of a friendly outside analyst and I want to make sure that you understand the distinction.

Before I go into specifics, let me make one general observation about American foreign policy that I do not believe is always understood. Whenever I travel and wherever I travel, I am asked questions about American foreign policy, as if there were a long-range basic design of a profoundly Machiavellian character, that reflects individual American actions. The fundamental thing to understand about American foreign policy is that the post-World War II period has been traumatic for us. For Britain in the 19th century, the balance of power required no explanation. It was in the bloodstream, so to speak. Every British leader understood that it was against Britain's interest to have a unified continent under hostile control. There was never any debate on that subject in Britain.

In America, due to the fact that until 1945 our security was really taken care of by the British Navy and geographic distances, a very particular approach to foreign policy developed. There has been and continues to be, an enormous reluctance to think in terms of power and in terms of geopolitics — which may sound very strange to individuals used to a local Press that describes everything in terms of American geostrategic designs. Those of you who follow the American domestic debate will understand that it is usually divided between those who think foreign policy is a subdivision of psychiatry and others who believe that foreign policy is a subdivision of theology. There is a group which thinks that relations among people and among states are like relations amongst individuals, and that there is some impartial jury that judges the moral merit of our actions. There is another group that believes that if the walls of Jericho have not yet crumbled, it is because the right trumpet has not yet been blown, and that looks for a liturgical expression of those groups to whom we are opposed.

I must say in relation to Grenada, (which I am sure I will be asked about by the Press, and which I will not cover in my remarks), I read in the Press that some people are arguing that we have lost our moral advantage in the world. If we had such an advantage that could be translated into operational policy, I confess it was well-hidden from me until earlier this week, and I did not find any of those critics, who

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now so deplore the loss of our purity, rushing to our defence on the issues that were before the international community at the time.

But to get back to my basic point. If you read the real American Debate you will find an enormous reluctance to think in long-range strategic political or geo-political terms. I mention this for one fundamental reason. The essence of statesmanship is to act on the basis of assessments you cannot prove true when you make them. When the scope of action is greatest, the knowledge on which to base such action is at a minimum. When the knowledge is greatest, the scope for creative action has often disappeared and I suspect this is true in all fields of endeavour, including business.

In 1936, one French Division could have stopped the Nazis — and the world would still have been debating whether Hitler was a misunderstood nationalist or a maniac bent on world domination. Five years later everybody knew and it cost 20 million lives. This is the essence of a statesman. And it is in this sense that I would like to make some observations about how the Pacific looks to me. I may say that while I have obviously many friends in America, I also have many critics, both on the Left and on the Right: because the Right thinks I am insufficiently liturgical against communism, and the Left believes I am excessively concerned with power — which indicates the dilemma in our domestic debate that I described.

Let me begin by saying that I agree very much with the basic premise of the Conference. The centre of gravity of world affairs, is in my view, shifting from the Atlantic to the Pacific. Of course the North Atlantic Treaty Organisation remains, and will remain for the foreseeable future, a key element of American foreign policy. Culturally, emotionally and politically, our ties to Europe are an absolutely central aspect of any foreign policy in any Administration. Yet, if one looks at the dynamic and growing areas of the world, one finds those in the societies that ring the Pacific.

The comparative advantage enjoyed by Europe in the 19th century was a monopoly on energy, a head-start on industrialisation and a compact method of political organisation which corresponded with the technology of the time. These comparative advantages have either diminished or disappeared. It is in the Pacific that economies are growing at an extraordinary rate, even in the face of a world recession, and it is here that the major changes are taking place. Even in the United States, there has been a shift of internal power from the Eastern, so-called Establishment that conducted foreign policy for the first 30 years after World War II, to leaders mostly born in the West and in the South West, who by geography and upbringing look as much across the Pacific as across the Atlantic.

When I was in office, I proposed a new dialogue between us and Europe because I warned that a new generation would grow up to whom the emotional ties of the previous 30 years might not be so meaningful. For a variety of reasons, including impetuosity on my part in putting it forward, that dialogue never prospered, and maybe objective conditions would have made it difficult in any event. The fact is that we are meeting here in the area of the world which, without any question, will become increasingly significant in the decades ahead, and the area of the world which — without diminishing our commitment to Europe — will receive more and more of the attention of the United States.

I would like to discuss the problems of this area under three headings:

First, under the heading of relations of the Super-Powers.

Second, in terms of political and strategic issues, and

Third, in relation to economic issues.

The problem of the so-called Super-Powers reflects a phenomenon peculiar to our age. Until the end of World War II, it was generally true that political, military and economic power were homogeneous. It was very rare, and I can think of no example, that a country could be economically extremely powerful but militarily extremely weak, or that a country could be politically significant without corollary economic and military strength. In the post-World War II period as a result of technology, the destructiveness of weapons and the enormous impact of ideology, these elements are no longer necessarily coherent.

A country like Japan is economically enormously powerful, yet its military strength bears no relation to its economic power, and its political influence is somewhere in between those two posts.

A country like China is politically extremely influential but, by its own assertion, is only in the process of economic development and has clearly given that development priority over its military build-up.

Similar observations could be made about other countries. But my main point is that the attribute of the Super-Powers is not only that they possess nuclear weapons, but also that there is some coherence between the various elements of their power. To some extent the rivalry of the Super-Powers affects the politics and the economics of all other areas of the world; but having said this, I would like to emphasise a very strange phenomenon...

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That strange phenomenon is that the Soviet Union has managed to convey the impression of being a Super-Power without really meeting all the criteria that I have described. The role and the impact of the Soviet Union reflects a factor of will, not a factor that on cool analysis one would describe as a real element of strength. The Soviet Union is militarily extremely powerful, and it has for 70 years devoted a disproportionate share of its resources to the elaboration of its military strength. But is a strange phenomenon.

First, it is run by a system of Government that could not be sustained in any modern corporation, and would certainly be in need of adjustment in the decades ahead. A self-sustained semi-feudal group of rulers that cannot be replaced by any normal processes that can be expressed in any constitutional form, has led to a situation in which a country, priding itself on scientific materialism, has managed to produce exactly four General-Secretaries of the Communist Party in 70 years. And a situation in which there seems to be no system of alternation that the human mind can fathom in the Politburo, or in the top positions. The shifting alliances of personalities dominate the scene.

I mention this because it explains the extraordinary rigidity of Soviet policy. It explains why such an event as the shooting-down of the Korean airliner was handled in such a provocative manner. Other countries have made mistakes, which I believe was the case in that shooting-down, but few countries would turn it into a provocative challenge that affects fundamental relationships, when they know very well that the United States could not possibly use a Korean civilian airliner for an indescribable intelligence mission.

Their economy, except for the military field, (and frankly I believe even in the military field, for all we know), has produced a standard of living that bears absolutely no relationship to the resources of the country. It is an amazing phenomenon that a country that can produce inter-continental missiles has not been able to compete on world markets with any product produced by any market economy and indeed by some other Socialist economies. That is an example of bankruptcy, which sooner or later will have to be adjusted.

Now, I will not go into a long elaboration of the dilemmas of the Soviet system except to say two things. It produces in the Soviet Union a contradiction, if I could use Marxist terminology. The contradiction is this: on the one hand the system is absolutely in need of reform. It cannot continue as it does without in a strange way falling behind the evolution of history — exactly the opposite of what its internal theory teaches. And yet the overwhelming temptation is to continue doing what it does best, which is accumulating military weapons. On the one hand, thoughtful Russians must know that there is a profound need to modernise their system. On the other hand the existing bureaucracy tends to persist in the status quo. The big decision the Soviet Union has to make is whether it is a country or a cause. If it is a country, rules of co-existence can be devised, with difficulty, but with skilful diplomacy. If it is a cause — if it builds military bases wherever possible, if it uses the every embarrassment of every country to encircle it and weaken it — then crises are inevitable.

Major countries will not be defeated without noticing it and when they notice it, they will somewhere along the line resist. Imagine what the world would say if we poured military equipment into countries that had been traditionally close to the Soviet Union — the way the Soviet Union is doing in Cuba, or in Nicaragua. What is the necessity of Soviet military bases in South East Asia encircling China and threatening other countries? Those are the fundamental factors that need remedy.

It goes without saying that while the United States has made many mistakes in its foreign policy (largely for the reasons I gave at the beginning), the United States is not a nation in which the military can possibly play such a dominant role. The United States is not a country that would not be prepared to negotiate rules of co-existence based on mutual restraint — quite the opposite. This is the context in which I would now like to make some observations about Asia.

If I am correct about the trend of Soviet policy, then some of the observations made in the early statements between the People's Republic of China and the United States reflected reality. These observations were that whatever our differences, we had a common interest in preventing hegemony. It is not a common interest peculiar to China and the United States, it is a common interest peculiar to all nations. Negotiations require some kind of equilibrium and without equilibrium there can be no negotiation. When you read about the debates that go on right now about the intermediate missiles in Europe, the mind boggles at the technical complexity, and it reminds me of an observation Lord Palmerston made about the Schleswig-Holstein crisis in the 19th century. He said there were only three people who had ever understood the issue: one was dead, the second was in a lunatic asylum and he was the third and he had forgotten it.

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I will not go into the technical complexities of that issue. I would like to call your attention to one fundamental fact. In 1979 when that issue first came up, the Soviets had 50 SS 20s and they claimed that this reflected an equilibrium. In 1981 when the negotiations started, they had 150 SS 20s and they claimed that reflected an equilibrium. Now they have over 350 and they still say this reflects an equilibrium — and we haven't built one yet. This suggests that whatever exists, they call an equilibrium and this is the nature of the security problem.

Now in this respect we deal here in Asia with many different phenomena. First let me make a few observations about Japan. Japan, like many Asian nations, is very difficult for Americans to understand. We have never encountered a society so homogeneous, that is so conscious of its cultural peculiarities. We could never operate a political system by the method of consensus so special to the Japanese.

When I first became a Minister, I used to deal with Japanese the way we deal with other societies. I tried to find somebody to make a decision and to try and persuade him to agree with me; but being Japanese he was too polite to tell me that he didn't have that much authority. So terrible misunderstandings arose. The system of consensus by which the leading personalities achieve an intangible agreement impossible to express to foreigners, is one of the great assets and most impenetrable mysteries of the Japanese. If I may say so, it enables them to avoid discussion until they are ready, and to move with great decisiveness when they have all achieved agreement.

Because of the cultural peculiarity of the Japanese, Japanese history reflects many rapid shifts based on the proposition that the Japanese can preserve their essence whatever the circumstances. Therefore the Japanese subconscious assessment of the balance of power is of great consequence in determining their long-range policy.

It is a miracle that two countries as different as Japan and the United States should ever have been able to form an alliance, and I think it is an event of great importance. It is important, not because without it Japan would not be defended; it is important because it reflects the political and historical realities of this area.

At the risk of sounding impolite, I would like to state the fact that the historical memories of many parts of Asia would be severely jarred by a Japan that sought to achieve its security entirely by its own national efforts, and at the same time it is absolutely inconceivable that a country, whose economy today is as large as that of the Soviet Union and with thousands of years of history of independence, would possibly abdicate from the security field altogether. So Japan will either be in alliance with the United States or it will build up a very large military machine sooner or later. So the alliance with the United States is of crucial importance for the internal balance of Japan, and for the equilibrium of Asia — and wise Asians recognise this.

In this connection let me say something which will show you that I do not speak here as a representative of our Government. Even though I support the major thrust of its policies, I do not think it is wise for the United States to press Japan to build up its defence forces. Of course Japan is a sovereign country with a long and distinguished history and, of course, it has every right to build up whatever defence forces it considers necessary for its own purposes. But I do not think it is wise for us to become part of that debate and we have to keep in mind that political trends can be unleashed, which the dominant forces in Japan today would themselves not welcome. I repeat: what Japan does in its own perception of its defence is a Japanese matter. I am talking strictly of the American component in it.

Now, when we speak of the defence of other areas of Asia, we reach more complicated circumstances. I have had, at least on my side, a rather special relationship with the People's Republic of China — a country unique in the continuity of its self-government and also in the role it has played in this area. China has never had to conduct a policy of sovereign equality towards its neighbours, because it has been — both by size and by cultural achievement — in a very special relationship.

Through the greater part of its history, it dealt with many of its neighbours by applying the maxim of a German philosopher probably totally unknown in China. Nietsche, in the 19th century said: 'in the face of moral and cultural superiority, the only defence is love' — and this has been very often China's relations with the rest of its neighbours. So the impact of foreigners with superior technology in the 19th century was bound to be a particularly shattering event in China. And in the contemporary period, China inevitably pursues a policy of independence and relative aloofness which has characterised its history.

I have always believed that the security and independence of China is of vital American interest. I would like to add that no Chinese has ever asked us for that assurance. I would like to stress that what I have said here does not reflect any negotiations (that I am aware of), going on between us and the People's Republic of China. What it reflects is a fundamental reality, which it is that the balance of power in the

which we are so often told, is that we are not alone in this, and that we are not the only ones who are in a position to affect the course of events in Asia. And we are not the only ones who are interested in the security and independence of China. And we are not the only ones who have the power to make the course of events in Asia be as we want it to be.

[L.C]

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world would be as irrevocably overturned by an assault on China, as it would be by an assault on Europe. This is a fact America cannot ignore and must take into consideration, regardless of what it formerly said and regardless of the day-to-day policies.

A Chinese friend asked me the other day what I thought of the policy of equidistance that China proposes to conduct between us and the Soviet Union. I said 'I am perfectly relaxed as long as you are measuring the distance, and you define what you mean by equality.' Because after all, nothing is going to shorten the frontiers of the countries involved. A country that has been independent for 3000 years needs no instructions from the United States as to the nature of its real security threats, nor in the labels it gives to the policies it chooses to pursue.

Our relations with China have undergone three phases since 1971. There was a romantic phase in which at least the Americans were intoxicated by discovering a culture that they had defined as irreconcilably hostile. I tend to believe that the Chinese, having dealt with foreigners defined as barbarians for thousands of years, were not quite as carried away as we were; but at any rate, it was a relationship that could not last in that form. Then there was a period of exaggerated friction in which, for a while, neither side took fully into account the political necessities of the other. And I think we are now in a period of a rather mature relationship which does not guarantee that we will agree on all topics, but in which the relative weights of both countries in the world scene are understood by both sides; and if they are properly understood, they require no formal affirmation.

So when we talk about equilibrium and hegemony and the balance of power, it is quite possible that two countries can have, for limited objectives, parallel views and pursue parallel objectives without being in any sense in any alliance — as we are not and should not be in. As I have said, and as I believed even before relations were established, the independence of a great nation is a vital American interest, whatever we say about it in any legal or formal sense. What it imposes on us, and on both sides, is the need to conduct steady, reliable policies — and I believe that is now taking place.

Whatever we may say about the problem of security in North East Asia, there is no serious person who can question what the real threat is; they may not want to announce it, but they cannot doubt it. And in North East Asia, I would call attention to the crucial importance also of Korea. We cannot keep sweeping Korea under the rug: everybody has an obligation to make sure that the balance now existing on the Korean Peninsula should not be disturbed by either side. What has happened in Germany must also happen in Korea, because efforts to undermine one side or the other can involve consequences that could easily get out of control. Many years ago there was a proposal that each side, and the allies of each side, recognise the Government associated with the other. I still believe that this is the best route for an interim period before the Koreans can themselves, in a negotiation among themselves, settle the issues.

Let me turn now to South East Asia. It would be understood that in South East Asia the security problem is seen in exactly the same way. Some countries fear the Soviet Union; a few countries, because of their national composition, fear the long-term impact of China. I think all countries fear Vietnam.

South East Asia has had the most astonishing progress of all the regions, in the sense that at the end of the Vietnam war, there was a sense, a feeling, of despair. South East Asia has, as far as the United States is concerned, governments that are neither allied, nor are they considered strictly neutral. They are countries with which we have a very friendly relationship.

From the security point of view, our bases in the Philippines are indispensable, not just for the defence of the Philippines, but for the defence of all of South East Asia — a factor that must be understood in assessing the scope of our actions in relation to political changes that may be under discussion there. In several of the key countries of South East Asia, political transformations are going to be a likely feature of the next decade. Not in the sense of changes of the system, but in the sense that the leaders who have achieved the extraordinary progress that we all see, are reaching an age where it is logical to think that, within this decade, adjustments will be imposed by nature if not by deliberate decision. In all of these countries, new generations are coming into office and into prominence who require a new dialogue and a new sense of co-operation.

As far as the United States is concerned, there is no partisan dispute about the importance of the independence and the security of this area. As far as the danger from Vietnam is concerned, one has the impression that China, without any consultation from us, has reached similar conclusions. So we have here an example of a balance of power operating that is not a formal feature of the scene, but an important aspect of the future.

Let me make a few observations about the Indian sub-continent in this connection. You will hear, all

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of you later this morning, a speech on the subject of South West Asia. I will simply make a few brief comments about the security aspect.

The paradox for America has always been that the independence and integrity of the sub-continent against major power intrusions has been understood by all American leaders through the entire post-War period. At the same time, what has been less understood is the passionate divisions within that sub-continent which sometimes over-ride any perceptions of outside danger.

To many in India, the existence of Pakistan has been, from the beginning, a threat to the notion of a secular state that contains so many different nationalities and religions, and there has been an almost subconscious hostility to the concept. This has been compounded by disputes such as Kashmir. At the same time America in the 50s began to arm Pakistan against a threat of great power incursions into the sub-continent: a decision which was obviously given a totally different significance in India.

American relations with India have oscillated between ambivalent extremes. For a long time, influenced excessively by Indian students and professors residing in the United States, there were many Americans who believed that India, alone among the nations of the world, conducted a policy totally separated from the concept of national interest and was a kind of a moral judge that passed an award on the basis of the merits of the argument — which incidentally is the secret dream of Americans: we would like to do that too. It was a shock to find that India was like other nations and could not be interested in issues very far away from itself. India has had its own ambivalence.

This week I asked a prominent Indian about Prime Minister Gandhi's attitude towards the so-called Super-Powers, and he said 'it is wrong for you to think that she is pro-Soviet; what she is, is anti-American'. Now I am not saying that this gentleman was necessarily right, but it is a distinction that eludes some of our people. It is based, I believe, on the realisation that if our worst fears came to pass we would have no choice except to defend in some manner the integrity of the sub-continent; and that until these worst fears come to pass, why should India get itself into the front line of a confrontation, when it has so many pre-occupations in its immediate area?

Now let me leave, at the risk of exceeding my allotted time, the security area and make a few observations about the economic field. It seems to me that the areas I have mentioned each contain a peculiar aspect of contemporary economic policy. All areas in Asia, even the sub-continent, are growing at a remarkable rate but each of them presents a special problem of economic policy. Let me talk first about Japan.

The frictions produced between a country conducting an effective national industrial policy and one that does not or has not had this capacity, can be read in the business section of every newspaper. Every year or two, there is some dispute over some item in which the Japanese relative competitive position becomes intolerable to American economic interest. That view becomes more acute because, as a victim of it, I must say I admire the Japanese negotiating tactics when confronted with our challenge. What has happened, in my experience, is the Japanese will agree to the principle of the negotiation and prolong the negotiation for an extreme period while they are shifting out of the contentious area into some other one. Then they will grant us the principle that we have put forward — at which point they have gained a competitive advantage in a new area that we haven't thought about. So we inherit in effect, an empty shell.

I say this not in any particular criticism of the Japanese. In fact, I say it in admiration as a victim of the method during the textile negotiations of the 1970s. I say it to make another point: there is in the world today the following anomaly — everybody professes his devotion to free trade. All the ministers meet periodically to assert their dedication to this concept, and yet the fact of the matter is that too many nations — dare I say almost all nations — are conducting policies that in previous periods would have been considered mercantilistic. Even the International Monetary Fund is encouraging this trend.

How is it possible that all nations are encouraged to increase exports and restrict imports: this is technically an impossibility. Yet this is the remedy of all these various debt-rescheduling schemes, and it is — let us face it — the policy of many countries. Now it is strenuously denied that the floating exchange system can be manipulated, or is being manipulated, or that these policies are in fact being pursued. But those of you in the economic field know much better than I as a non-economist, that exchange rates may be affected by fiscal and monetary policies without direct intervention, and that if countries conduct subtle industrial policies, they can come close to a mercantile future.

I mention this, because if indeed the world is heading towards a combination of free trade and mercantilism, it is important to have serious discussion. Now as between Japan and the United States, it is absolutely dangerous that year after year we are in some negotiations about some specific issue: how much telephone equipment can be sold in Japan, how much the Japanese will restrict their automobile

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several countries in Asia, especially China, are considering the possibility of building a nuclear power plant in China. This would be the first nuclear power plant in the world, and would add to the 11 nuclear power plants in operation a total of 23 nuclear power plants. The United States has also announced its intention to build a nuclear power plant in Hawaii, a move which would bring the number of operating nuclear power plants in the United States to 50. The addition of these new plants would increase the total number of operating nuclear power plants in the United States to 111, which would be the largest nuclear power fleet in the world, with 111 nuclear power plants and 111 operating nuclear power plants.