Dr. Henry Kissinger
Speaking Remarks
with
Introduction by George T. Shaheen
11 June 1997
Global Consulting Seminar
Orlando, Florida

## Introduction by George T. Shaheen

At this years Global Consulting Seminar, we've talked a lot about the changes that Andersen Consulting will need to embrace if we are to maintain our marketplace leadership position. All of us realise that change is an ever-present part of our lives - and it will continue to be so.

So this morning, we are very fortunate to have with us a person who has mastered our changing world - someone who knows how to negotiate the sensitive balance that enables countries, corporations and people to co-exist, each in their own ways.

Dr. Henry Kissinger is arguably the best-known American diplomat in recent history. He brought to modern politics a keen sense of how an action in one part of the world would reverberate in another.

And throughout his political career, much of that "reverberation" was calmed by his skills, his political finesse and his insightful decision-making and not surprisingly, his principles and ethics can be traced to his youth. In 1938, Dr. Kissinger arrived in the United States from Germany with his immediate family, fortunately escaping the horrors of the Nazi holocaust. Consequently, he is entirely familiar with the very human desires for respect and tolerance.

I think one of the most telling stories of Kissinger reveals his broad sense of justice and order. As a young man in post-World War II Germany, he served with counter-intelligence with the occupation U.S. Army.

During his role in helping to track down former Gestapo operatives, he once reprimanded an interpreter who was being abusive to a civilian couple. "You lived under the Nazis!" he said, "You know how abusive they were. How can you turn around and abuse these people the same way?"

With his innate intellectual brilliance, coupled with his sense of human respect, it is little wonder that the benevolent soldier Kissinger returned to the United States destined for a spot in history.

He went on to Harvard where he distinguished himself, first as a student, and later as an instructor for more than 20 years.

Then, he began the role of his lifetime when President Nixon tapped him for national service in 1969.

In his capacities first as national security advisor and then as Secretary of State for Presidents Nixon and Ford, Dr. Kissinger always maintained a clear-eyed approach to the maintenance of global balance and foreign diplomacy. He played a major role in the formulation of U.S. foreign policy during a period of unprecedented global change and conflict.

He arranged Nixon's remarkable visit to mainland China in 1972 and he shared the Nobel Peace Prize for negotiating the North Vietnamese cease-fire.

He also helped arrange another cease-fire in the 1973 Arab-Israeli War. For those and many other accomplishments, Kissinger was awarded the nations highest civilian award, the Presidential Medal of Freedom in 1977.

Part of Kissingers success in politics and in his life can be found in the fact that he knew the value of bringing people together, of negotiating change that allowed people to maintain their basic self respect. He knew how to manage change so that everyone could go home a winner.

So this morning, as Andersen Consulting faces its own challenges of change, it gives me great pleasure to introduce to you one of the worlds greatest masters of change.

Please join me in welcoming Dr. Henry Kissinger.

Dr. Henry Kissinger

Mr. Shaheen, ladies and gentlemen, they have taken away these plaques (slides on screen) of Delivery in Excellence in front of everybody else, but it is right here on my monitor and I am just wondering whether the great will come up next to deliveries as I proceed through my discussion!

Since Mr. Shaheen referred to so much of my biographical material, I think it might be interesting for you to understand how arrogant Harvard professors really can be.

When President Nixon invited me to be national security adviser, I had never in fact met him. My only contact with him had been in the entourage of Nelson Rockefeller while opposing him through three primary campaigns. I once spoke to the reunion of Rockefeller accolades and said, "A book is going to be written about us. We found more ways to lose primary elections than have ever been described before." And we came up with a new one each time.

At any rate, here was Nixon offering me the second or third most important job in the government and I said to him, You know, most of my friends at Harvard are very opposed to you and I would really like a little time to check with them to see whether I can take this job without losing my friends. Why he didn't tell me to get lost at that point I will never know. He said, "Take a week."

Nelson Rockefeller had been traveling. He came back two days later and I told him what I had done. He said, "You must be out of your mind." "He(Nixon) is taking a much bigger chance on you than you're taking on him" - which I would like to say, had occurred to me as well. Then he said, you go right to that phone and tell him you'll take the job and no further discussions. At any rate, that is how it happened.

Now let me talk to you about the international situation as I see it in three parts: a few words about the United States, something about China and Hong Kong, and something about Europe. The management was determined that there should be no question period because they didn't know what you might say if you ever got hold of the microphone. At any rate, let me talk about those subjects first.

First about the United States. We are in an extraordinarily complicated position for two reasons: 1) the United States faces an international environment for which it has no historical or intellectual preparation. If you compare what American leaders were saying around 1950 and what came to pass, we achieved practically everything we set out to do at the end of the Second World War. George Bernard Shaw once said, There are two tragedies in life: to fail to fulfill your heart's desire; and to fulfill your heart's desire. What do we do now?

The post-World War II situation was very much in accord with our historical experience. America is the only major country in the world that has never had a powerful neighbor, it is the only major country populated entirely by immigrants or their descendants, and the only country that could pretend to itself that the choice of whether or not to be involved in international

affairs was entirely up to it. So when we did engage ourselves -
in World War I and World War II - we defined it as
dealing with an absolute evil which, once eradicated, would
enable us to return to our previous policies. Even during World
War II, Roosevelt said to Churchill, Don't ask me to keep any
American troops in Europe because they cannot be kept for more
than a maximum of 18 months after the war ends. That was the
perception during World War II.

Then we were projected into world affairs but in a very special
way. We had an atomic monopoly; we had nearly 15 to 50 percent
of the world's gross national product. For us, the conduct of
foreign policy appeared in the guise of domestic policy. Every
major American initiative had a terminal date. Last week, there
were great state celebrations of the Marshall Plan. But the
fact is that the Marshall Plan was a five-year program. After
that there was supposed to be no further need to engage in a
consistent European policy requiring a lot of resources.

Starting with the Vietnam War, we came up against some limits.
We came up against situations which we could not overwhelm with
resources alone. And starting with the collapse of communism, we
are now in a world that is familiar to many other nations-- but
not to us. There is no clear cut ideological enemy. No clear
cut strategic enemy. There is no clear cut terminal point for
what we are doing. We are now part of the system and we have to
think of accumulating rewards and penalties to move events in a
desirable direction, and without being able to describe an end to
that process.

Now for British or French or Chinese foreign office specialists,
it would be a waste of time even to talk about this because they
have never known any different world. But for the United States,
this is unprecedented. And you see it now in the weird debate
going on in the United States. When I was in office, as well as
both before and after me, people were talking about bi-partisan
foreign policies. The assumption was that the administration had
a policy and that the Opposition Party, if it was patriotic,
would try to make it work. Today, that is no longer possible.
Because the most determined opponent of President Clinton is the
minority leader of the Democratic party in the House of
Representatives--Congressman Gephardt.

The Republican party is equally split between internationalists
like me and populists and semi-isolationists. like those who are
now trying to organize opposition to MFN for China. And so
conducting foreign policies has become extraordinarily complex.
It has become even more complex because the international
environment is changing at a pace for which there is no previous

experience. Even the categories of the international environment
are different from any that came before.

Economics are global, communications instantaneous, but politics
are national, even ethnic. That every complicated economic
problem has to be translated operationally into some sort of
national or regional dispensation puts a tremendous burden on
decision-makers, both in government and in business. This is the
general environment in which we find ourselves.

Then there is one other aspect, which is the change in
generations. Now it always happens that the older generation
believes that it has wider experience while the younger
generation believes it is endowed with new insights. That is
inevitable. But what we are now witnessing is a change in human
consciousness.

My generation was the last one that was brought up entirely on books. If you're brought up on books, you know you can never encompass all the knowledge that has been accumulated in books, and that if you want to operate effectively, you have to develop concepts.

Concepts enable you to recognize comparable situations and
project them into the future. Great statesmen, from my study of
them, are not more intelligent than their environments but have a
better ability to project trends and for a longer period of time.
The generation following mine has, at an accelerating pace,
been learning not from books but from pictures. It has been
brought up on computers. It can call up a range of knowledge
that was unimaginable previously, and can get it instantaneously.
So in dealing with any one problem, they have available to them a
much better information base than my book generation did.

On the other hand, they have never had to wrestle with
recognizing comparable situations because the problems are always
presented to them on their merits, so-to-speak. I believe that
their ability to project into the future is far less, though
there is probably a heightened ability to deal with immediate,
technical, problems and a lesser ability to deal with long-range
problems. And that seems to be the case in every society that I
know, we Americans being a little bit ahead on that curve.

Frankly, when I read statements by our current President, I tear
my hair out. It isn't that I disagree with him but that there is
no historic basis to them, being for the most part tactical. I
like to console myself and think that this is peculiar to one
person. But I think it may be the congenital defect of the
societies that are emerging. So these are the challenges. Now
let me deal with a few concrete situations.

Let me take the case of China and Hong Kong. The essence of foreign policy decision-making - and of any other decision-making - is to recognize what the problem is, to get some grasp of the range of possible approaches to the problem, select one, and then act on it. So first of all, what is China?

China has the longest uninterrupted history of any nation in the world, spanning five thousand years of recorded history. And it has managed to get through all but 200 of those without significant advice from the United States. It is hardly self-evident to the Chinese that we should prescribe to them what their domestic institutions should be. Moreover, they have experienced over the last 150 years colonial humiliation, hence Westerners trying to tell them how to arrange themselves domestically will have a terrible time getting such arguments accepted on their merits.

Take the case of Hong Kong. In our press and certainly in the public statements of our politicians, it is described as if it were a flourishing democracy being turned over to the communists. The fact is, in the Chinese mind, a British colony is being returned that was once carved out of China. It has an altogether different significance to them than it ever will to the outsider. In fact, outsiders should be very careful about reading too many lectures in public because these might bring about exactly the opposite result of what they intend. I'll get back to this.

There is another aspect to China, as those of you who do business there know. If I ask anyone in this room when something happened, you will give me a date. When you ask a Chinese when something happened, he will give you a dynasty.

Of the 14 dynasties in Chinese history, ten have lasted longer than the entire history of the United States. So once you know the dynasty, you're within about 200 or 600 years of when something occurred. It represents a totally different perspective of time.

And of course when you travel in China you rarely come to a province that does not have a larger population than the largest European country. All of this imposes a different scale of perception.

When Nixon met Mao, one of the first things Nixon said to Mao was, The Chairman's teaching has changed civilization. Mao said, No. I have only changed Beijing and a few of its suburbs. I thought this was ridiculous at the time. Yet now, when we see what it takes to govern this huge country, we realize that there is a lot of merit in what Mao was saying; because the nightmare

of every Chinese ruler has been how to get his huge mass of
individualistic, family-oriented people to cooperate together.

So now in America we are having an intense political debate.
There are some people who admit that what they're trying to do is
to recreate a coalition of all the right-wing, Christian,
anti-abortionist, human rights advocates. The only thing they
don't know is, for what precise purpose? What is the end gain?

There are four levels to the Chinese issue. One is: is China a
strategic threat? Second, do we have disagreements with China?
Third, what about Hong Kong and Taiwan? And fourth, what about
human rights?

First, on the strategic threat. There is no doubt that China has
grown at the rate of ten percent a year since 1979. And any of
you who do business in China or visit there have to be almost
awed by the spectacular achievement and the unbelievable
transformation that has occurred. Especially in the parts that
we are most likely to see, not necessarily in the rural areas.

The China GNP is a tenth of the American GNP. Therefore, a ten
percent increase in the China GNP is a little less than a one
percent increase in the America GNP. That means the gap between
us at this moment is still increasing. The Chinese are devoting
1 to 2 percent of their GNP to defense; we are devoting 3 to 4
percent of our GNP to defense. Militarily, the gap between us is
increasing.

It is absolutely absurd in my view to speak of a Chinese
strategic threat against the United States. There is a book that
says, if the Chinese have 30 intercontinental missiles aimed at
the United States, they can do horrendous damage. That is
undoubtedly true. As a result, since we have about 20,000
warheads, they would be totally wiped out and at the end would
have brought about their worst nightmare. And the worst nightmare
of the Chinese is, in my experience, not the United States but
invasion from powerful neighbors. Thus nobody has yet explained
why the Chinese should prostrate themselves in order to bring
about their worst nightmare.

Certainly China will become increasingly strong, but so will its
neighbors; Japan, for one, has a much larger military budget. I
do not believe that the myth of a Chinese invasion against all
its neighbors is possibly realistic for 25 years, and I cannot
prescribe policies for today on the basis of what could
conceivably be a threat in 25 years since I don't really believe
that will happen or is now foreseeable.

The second issue is, do we have disagreements with the Chinese? Absolutely. It cannot continue that the trade balance is as one-sided as it is. Even though most of the Chinese manufacturers do not take jobs away from American industry - because they're on the lower end of the skills cycle - still it is not going to be politically sustainable to have a deficit of this size.

The proliferation of Chinese weapons is another problem. And if they tried to affect our elections, that would certainly be inappropriate. But none of this requires confrontation. For all of these issues, there are diplomatic and other pressures available as the means for dealing with them. And they are certainly issues to be dealt with.

Third: Hong Kong, China and Taiwan. I believe that the Chinese intend to have a smooth takeover of Hong Kong. I do not believe that the Chinese, insofar as they can control it, have any intention of ending the present situation in Hong Kong. I don't say this because I believe they are great humanists. I say it because it is overwhelmingly in the Chinese self-interest. Why should they want to destroy their biggest hard currency earner? Why should they want to destroy the possibility of a bridge to Taiwan in which one country and two systems might conceivably work by a blatant breaking of the Agreement with Britain? So on the basis of Chinese self-interest and my own conversations with them, I am convinced that what they would like to do is to carry out the Agreement.

There are four obstacles. The first is what they would like to do. Do they know how to do it? Can they learn to run a pluralistic system? They're trying to handle it by turning it over to a Hong Kong administration under a Hong Kong government and by keeping the existing administration in place. But we'll have to see whether the bureaucrats in Beijing can keep their hands off it -- not because of any evil intentions but because that is their nature.

Likewise, is it possible to keep the administration of Hong Kong as free of corruption as it has been under British rule? That too, remains to be seen.

Third, will the opponents of the agreement in Hong Kong keep their protest below a level that would produce a kind of Chinese retaliation and would, in turn, spark a lot of foreign intervention?

Fourth, what will Taiwan do? Will they want to make it work (which I doubt)? Just how far will they push their opposition?

Those are the four uncertainties. On balance, I'm quite optimistic about the immediate future of Hong Kong. What happens after two, three, or four years? It depends a lot on the general international environment as it develops in the meantime.

On the question of human rights, I could be talking here forever. It is really a philosophical question, to the degree to which one can make the internal behavior of a foreign country the subject of sanctions and of foreign pressures. This is a philosophical point. I do not believe that formal pressure will work, and also that the changes in China, as a result of industrialization, are bound to produce some political changes - not to speak of the one-child family which, for the first time in Chinese history, is producing a situation where there are no extended families, no cousins, no nephews, no brothers or sisters. Now I don't pretend to know what this will mean, but it will certainly change Chinese life.

So this is my view of China: if the United States can bring itself to deal with China on a basis the Chinese understand - which is mutual self-interest - none of the issues we currently disagree about should be a source of confrontation.

If we don't manage this, it's going to be a tough world in Asia. The United States in confrontation with China would - and all of you who know Asia know this - have no allies, not as in Europe. And it would be a long, drawn out struggle.

I remember Mao once telling me how a Romanian had come to compose his differences with a Russian. Mao said to him, I'll struggle against him for 5,000 years. And the Romanian said, Well, fellow communist, can't you talk through a more conciliataorily means? Mao said, O.K. 4,000 years. When the Romanian complained again, Mao said, I'll cut it down to 3,000. Then, when the Romanian still complained, Mao said, I've made my last concession. So this is what we would be up against. I don't think it is necessary, and I hope that in the debate that emerges in this country, common sense will prevail.

Now let me say a few words about Europe, since I have gone on too long about China. Europe faces three issues: 1) its own internal arrangements 2) its relations with the United States 3) its relations with Russia. Let me say a word about the internal arrangements of Europe.

In the 19th century, the European nation-state was the ideal size for the state of technology that then existed, and it represented the ideal balance between the size of the state and the task that

[L.C]

it had to accomplish. Therefore, they made huge, rapid progress in industrialization and dominated the world.

But with all the European achievements, they have had one characteristic that has not been paralleled to the same extent in any other part of the world: a degree of competitiveness leading to internal civil wars that have built into the consciousness of these societies a degree of commitment to the nation-state that makes it very hard to overcome today.

And so the attempt to unify Europe has gone far but has not yet reached a cohesiveness that enables Europe to act as a unit. Maastricht was intended to bring this about by creating a common currency. And I suppose if everything had worked smoothly, it might have succeeded. But in order to get a common currency, criteria have been developed that are almost impossible for the various participating countries to meet and almost surely impossible to maintain even if they were to meet them on some magic date for entry into the Common Market.

Secondly, to meet these criteria involves such a degree of intervention in the fiscal policies of most states that it has became a huge issue in Britain and is now a significant issue in France. On the other hand, for the continental countries, if the European project is abandoned, there is no anchor to their policy at all. There is no other foreign policy. They cannot return to the competitive policies of the nation-state. They cannot advance without having some degree of unification. So I believe that some way will have to be found to bring about something approximating Maastricht. It probably will not have the same criteria and will have a somewhat weaker currency than they envisioned. On the other hand, a European currency, once it exists, will enter the portfolios of so many investment trusts and will be used for hedging in so many parts of the world that it should become a reserve currency of some kind. And that will bring about a new relationship with the United States.

How this happens is complicated by the fact that I have difficulty visualizing how Kohl can get re-elected under present circumstances in Germany. And even if he can get re-elected, how he can move with great assurance before his election. And I have the gut feeling that something will happen - as when the European army was rejected by France in '54 and that then led to a new construction.

I cannot believe that the European project will be abandoned in Europe because then the European countries would be without any rudder at all. Then the problem is, what is going to be the relationship with the United States? What is going to be the relationship with Europe? The temptation, for at least

the French-oriented Europeans, is to try to develop an identity
by distinguishing themselves from the United States. And if that
happens, then the European project will get into great
difficulties because the Germans will never go along with it.
And I think if the Germans have to choose between France and
America, they will surely choose America. I don't want this to
happen because I think it is in the American interest to have a
more coherent Europe. Since we already have to manage the
relationships in Asia, on top of it to have to manage, or become
part of, the European balance of power would be beyond the
technical capacity of the United States government.

Thus I would prefer a coherent Europe tied to the United States
in some kind of North Atlantic free trade area. I think this is
a project that could find support in Europe. The difficulty is
that many of the Vietnam generation in the United States, who are
now in power, really find it very difficult to relate themselves
to Europe in this manner. They are much more interested in
closer relations with Russia. That is what we have now in this
debate about NATO expansion, in which the United States has
advocated a structure that, on the one hand expands NATO but on
the other turns it into such a rapid rate system of UN-type
collective security that the major emphasis is on relations with
Russia.

But Russia has its own problems, the most important of which is
whether it can get used to the borders in which it finds itself.
For the first time in 400 years, its borders in Europe are those
of Peter the Great. Now Russia extends from St. Petersburg to
Vladivostok through eleven time zones. St. Petersburg is closer
to New York than it is to Vladivostok. Vladivostok is closer to
Seattle than it is to Moscow. One would think there would be no
reason to suffer from claustrophobia.

The problem is-- can they bring themselves to accept more or less
the borders within which they find themselves? If they do, then
the relationship with America and Europe can evolve quite
rapidly. If they go back to their historic policy of pressing in
all directions, which to some extent they're still doing from a
very weak base, then we will have a problem. For all these
reasons, I believe American politics should give priority
to Europe and wait on the issue of Russia's integration until
Russia's own internal situation becomes a little clearer. At any
rate, we actually will not be able to discuss these issues in
detail here.

What I want to leave you with is this: never in recorded history
have so many elements been fluid at the same time. Never has a
country been in the position that the United States now finds
itself in - of being able to shape events in so many different

parts of the world. But at this particular moment we
unfortunately are consumed by domestic politics. At the end of
World War II, we had a leadership group that had had deep
convictions about the world in which they then found themselves.
People like Atkinson, Marshall, McLloyd, David Brewers. We
don't have a similar leadership group now.

When I was a young professor, I worked on a paper on post-war
politics. I called on President Truman and asked him what he was
most proud of in his period in office. He said, What I was most
proud of was that we totally defeated our enemies and then
brought them back to the community of nations as equals. I would
like to think that only Americans could have done that.

Now that is a generous and big view and it was not a composite of
every pressure group that could organize five congressmen for
some special pleading, because there was nothing self-evidently
beneficial to us in doing what Truman described, or in creating
economic competitors to ourselves - which in fact, we did in
Europe and Japan. This is the challenge we face now.

I have a Chinese friend who claims that there exists the
following Chinese proverb - I say claims because I'm not
absolutely sure that there exist as many Chinese proverbs as they
lay upon us. And it goes like this: When there is turmoil under
the heavens, little problems are dealt with as if they were big
problems, and big problems are not dealt with at all. When there
is order under the heavens, big problems are reduced to small
problems, and small problems should not obsess us.

That is the real challenge of this period. But lest you get too
impressed by the proverb, let me tell you one more. I was in
China and the man who taught me the proverb was Lee Kuan Yew,
former prime minister of Singapore. I told a Chinese
acquaintance about this proverb and added that I didn't know
whether it was a real proverb. And he said, Next time Lee Kuan
Yew tells you a proverb, tell him this: there is an ancient
Chinese proverb that says Lee Kuan Yew invents Chinese proverbs.

Thank you very much.

(Applause)

Shaheen: Maybe I'll ask you one question. Would you take one
question?

Kissinger: Sure.

Shaheen: Since we are not set up for questions, and knowing Dr. Kissinger like I do, I know that he relishes that opportunity, I thought I might ask him one. He's agreed to take it -- he has no idea what it is, but I don't think it's more insightful perhaps than tough. But I would ask you, that if you were advising, and close to the President of the United States today, and you had one issue to focus our President on, to concentrate on and perhaps address and resolve, what would that issue be?

Kissinger: I would probably tell him that the thing he has to define for himself is: what kind of structure he wants to see emerge in the world, and not deal with each issue tactically. And my view is that the world is really divided into at least two types of problems -- probably more, but let us for the moment say two - Western Europe, Western Hemisphere and North America. When we are dealing with democratic countries, he should remember that they are all market-oriented and contain no possibility of military conflict. In Asia, we are dealing with big countries that relate to each other in the same way that 19th century European countries did - principally as strategic rivals. In the democratic world, we have to create community. In the Asian world, we have to create equilibrium. So the President has to get his people organized to do these two different things and not wait for the manifestation of individual issues to arise. Otherwise, he will spend all his time on tactics.

If you look around the world today - at Bosnia, Korea - you see lingering time-bombs for which there is no real framework for attending to them. That is what I would try to tell the President to do. And he wouldn't know what I was talking about.

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