-11-

With this as a background and me turn to my principal theme: This brings me to my next theme, the political future of the Middle East and the Persian Gulf, which are today the focus of the world's concern not only for energy, but for the precarious conditions of international security and peace.

## The Middle East and the Persian Gulf

Throughout history, the Middle East and the Gulf have been considered strategically crucial. It is a region of profound passions, remarkable personalities, and almost perpetual ferment. Its stark landscape and vast skies draw man to infinity; it is no accident that three of the world's great monotheistic religions had their origins there--as well as several of the world's recent wars. Even beyond the crucial concern for oil, it is a cauldron of political and strategic conflict.

There are three aspects to the region's political turmoil: the (area's relationship to) the global balance of power; the interaction between the moderate and the

-12-

radical forces in the area; and the Arab-Israeli conflict.

It is not possible to deal with the region's problems by
addressing one of these aspects in isolation; they must be
understood any
only

dealt with concurrently or the chaos will multiply.

**First, the global balance of power.** History and personal
experience both endow Middle East leaders with a highly-
developed instinct for the nuances of the global balance of
power. They may proclaim the conventional litany of non-
alignment, but they understand perfectly well that their
security depends on an overall equilibrium of military strength.
A global imbalance of power enables expansionist countries to black-
mail them, to interfere with diplomatic efforts for peace,
to subvert domestic structures, or in the final analysis
to repeat the pattern of Afghanistan: military intervention.
They know that the only counterweight to these pressures
is American power. Understandably, some leaders who
cannot themselves contribute a great deal to a global balance

-13-

might wish to keep aloof from the day-to-day diplomacy by
which the East-West contest is played out. They would be
horrified, however, if the West took their statements at
face value.

Thus it is disturbing that Proclamations of non-alignment by Middle East leaders are echoed by (have their counterpart in) assertions of (renunciation in this country. We have been told for too long that the problems in the so-called "arc of crisis" have complex socio-economic causes, that they are not essentially military problems, that not every upheaval is of direct concern to us, and that we do not really have that much influence over events anyway. Much of this is true but irrelevant; a posture of abdication makes such prophecies self-fulfilling. The Administration has already had to reverse its position in the Persian Gulf from announcing that heaven by 180 degrees, that we did not need a policeman in the area to proclaiming ourselves as the policeman. The crises in Iran and Afghanistan have illuminated the West's military vulnerability, to the

-18-

The military posture of the industrial democracies
is still too much influenced by the strategic doctrine
of the 1950's, when strategic nuclear weapons were
considered capable of preventing every foreseeable
challenge including attacks on such regions as the
Middle East. Obviously, strategic equivalence is
the precondition of all security and it will require
to ensure.
major efforts. But it must not blind us to the fact
that we can never return to the conditions of the

1950's. Even if we succeed in maintaining
Fifties. Precisely because the tendency of strategic
one of most urgent
weapons is towards parity, the overwhelming
military problems of the next decade will be the

crucial vulnerability of vital regions such as the Middle East. Unless determined efforts are made to restore regional military balances, by American power and aid to allies, the pressure on countries close to the Soviet periphery is bound to increase. The already pervasive insecurity will deepen. Radicals allied with the Soviet Union or backed by it will grow bolder and we will face new challenges. States known for their traditional friendship with the West will become demoralized and frightened, isolated, and threatened.

And in those circumstances it will be almost impossible to conduct a responsible dialogue with even the moderate oil producers. Restoring the military balance is not the sole road towards a constructive policy; but no constructive policy is possible without it.

-15-

by Soviet weapons, Soviet friendship treaties, Soviet proxy troops, or outright Soviet invasion. The Cuban army has imposed solutions in at least two African conflicts, and from the Horn of Africa threatens the security of moderate governments in the Arabian peninsula. There have been two invasions of Zaire from Communist-held territory. Morocco is under pressure from Communist-armed guerrillas; Tunisia has been threatened by Libya. A strong pro-Western government collapsed in Iran, not as the direct result of Soviet pressures but with consequences nevertheless devastating to the regional balance of power. In Southeast Asia the army of Communist Vietnam, stocked with Soviet weapons and backed by a Soviet friendship treaty, occupies Cambodia and threatens Thailand. The resulting sense of insecurity has affected the perceptions of many key countries--slowing down the Mideast peace process, removing Soviet inhibitions to the point that it felt safe to invade Afghanistan, driving traditional friends like Pakistan to

-16-

reject our assistance and to embrace neutralism.

This is the context which explains the lack of enthusiasm for the so-called Carter Doctrine among those supposed to be protected by it - supposed beneficiaries. The principal obstacle is the pervasive conviction that we lack the means or perhaps the will to implement it. Leaders in the area understand from centuries of national experience the importance of an unsentimental appreciation of the balance of power; they do not believe that their countries' security can be maintained by declarations of nonalignment or of solidarity with other (Islamic) countries equally unable to protect themselves. Their dissociation from us reflects, rather, a dismal assessment of the trend in the global balance.

The impact of these shifting strategic realities is not to have their effect on confined to political relationships; it extends as well to the price of oil. Even at the reduced levels dictated by OPEC, some several moderate oil producers in the Middle East are still producing more oil than their own economic necessities warrant

"Reduced levels" means production, not price. Make it clearer.

-17-

and absorbing more revenues than their development programs require. The present exorbitant oil price would, thus, be even higher were not some OPEC countries willing to produce beyond their purely economic needs, as the price for Western and particularly American political and military protection. However, to the extent that the global balance of power is perceived to shift--or, to put it another way, to the extent that America's capacity to deter foreign aggression or domestic upheaval is perceived to decline--our persuasive-ness on even seemingly purely economic decisions such as the price of oil is also profoundly eroded.

For all these reasons it is imperative for the United States to, presently & soon, restore its overall military strength. The President was correct to declare our strategic stake in the security of the Persian Gulf. Now that he has done so, a bipartisan, needed to give effect to, we have an obligation to create rapidly the forces to implement this inescapable commitment. Our policy.

Choose

-20-

The second dimension of the geopolitics of energy is instability in the Middle East and the Gulf. In contest, struggle, and the balance between the moderates and the radicals in the area, the Middle East. The area stretching from Morocco to Pakistan, has seen a decade of great turmoil and upheaval.

The process of domestic change is inevitable and irrepressible, especially, we are often told, we have to get on the side of the forces of change. There is merit in these propositions. But we must never lose sight of a crucial distinction: We have a vital stake in the nature of that change. The success of those who support peaceful change and ties with the West is of crucial importance; anti-Western radicals who are driven by ideology, will not be charmed out of their hostility to us by professions of our goodwill. At stake in the contest between these two groups is, among other things, the world's energy future.

The disintegration of the pro-Western government in Iran was the principal cause of the oil crisis of 1979: the long

gas lines and the doubling of oil prices that is still
wreaking havoc with the world economy. Iran has sharply
reduced its oil production, for many reasons: internal
chaos, the departure of foreign technicians, the abandonment
of the previous government's development and defense
programs. And the fall of the Shah affected the calculations
of other OPEC members, because the collapse of a friend
of America of four decades--and our vacillating and
inhuman reaction to raised doubts in the minds of
other rulers associated with us about the value of American
friendship. Many moderate oil producers in the area know
only too well that their domestic practices are not better--
if as good--as Iran's. They fear the same fate from a
combination of domestic pressures and American disinterest. No wonder
OPEC meetings have increasingly seen the moderates hesitant,
on the defensive, fearful of exerting their power for
restraint. The definition of moderation has become the
minimum price radicals would accept.

-22-

There is no doubt that there are forces at work beyond our capacity to channel. But the art of policy-making is to identify the range of effective action available to us. The conventional wisdom, in some circles at least, is that our difficulties arise because we have always associated ourselves with the wrong groups, with leaders who lack public support, and that we should make an effort to ally ourselves with the "popular will." But the test is whether it is governments, not subject to unequally distributed power, in the end, is much more complicated. First, many so-called "progressive" regimes maintain domestic order, the test apparently applied to determine the loyalty of the population--by more effective repression; by this standard the "right side" becomes that which is not inhibited in its repression by association with us, and is more successful at it. Marxist totalitarians, who have beenincerely forces, states, and through the ages have been exempt from human rights strictures as currently practised.

The text of this is supposed to give the fact a lift.

Reading this, I wonder if governments around the world.

-23-

What we consider "normal"--constitutional democracy--
is in fact a rarity both in the sweep of history and on
the breadth
of the planet. This is no accident. Constitutional
rests
democracy places authority in an abstraction: obedience to
law. But constitutionalism can function only if law is
believed either to reflect an absolute standard of truth
or at least to grow out of a generally accepted political
process. In most parts of the world and in most periods
of time, these conditions have not existed. Law has been
the product
verdict of personal authority, not of constitutional
viewed
arrangements; the political process has been conceived
as determining who has the right to issue orders. Personal
mitigated
authority has either been made bearable by a concept of
reciprocal obligation as in feudal societies, or been limited
by custom as that of kings who claimed to rule by divine
right. In each case, tradition was a limiting factor; certain
exactions were impossible not because they were forbidden

-24-

but because they had no precedent. No ruler of
eighteenth-century Europe could levy income taxes or
conscript his subjects. Authoritarianism, in short,
was usually quite precisely circumscribed.

It was paradoxically the emergence of popular
government that expanded the scope of what authorities
could demand. The people by definition could not oppress
itself; hence its wishes--as expressed in elective
assemblies or rulers in its name--were absolute.

The growth of state power has gone hand-in-hand with the
expansion of populist claims.

In this context, modern totalitarianism is a carica-
ture, a *reductio ad absurdum* of democracy; modern authori-
tarianism--a quite different phenomenon--is an aberration
of traditional personal rule. This is why some authoritarian
governments--like Spain or Portugal or Greece--have been
complete in their evolution from constitutional democracies.
No totalitarian state

-25-

has ever navigated that passage.

The American dilemma is that in <u>most</u> developing countries, authority is personal. We seem obsessed with "reforming" authoritarian governments friendly to us. While only totalitarian states hostile to us are ruled out of bounds for our interventionism, The tragedy is that we seem to have no idea how to effectuate the delicate transition to constitutionalism--a process that in <u>most of</u> the West took centuries. What we do have is a predilection for harassing friendly governments, the result of which has been to encourage not the moderate constitutionalists but the radical totalitarians who emerge in the form of terrorists or guerrillas. The outcomes have been disastrous; we are in <u>danger of making the world safe not for democracy</u> and not <u>totalitarian radicalism</u>. A vicious circle is created. Evolution of constitutional rule has historically required a period of tranquility and of at least moderate economic progress. These are inevitably thwarted when terrorists or guerrillas mark a society for assault. The government is tempted into acts of repression

tyranny. Another favorite recipe for Americans is to urge
This, too, was attempted in Iran as well as in Indochina.
a coalition government. Yet the possibility of compromise--
constitutional
the essence of democratic government--is the first victim
of such a struggle; civil wars almost without exception
end in victory or defeat, never in coalitions. The time for
nonviolence

concessions
reform is before civil disorders break out, in order to
preempt them--a lesson often neglected in recent decades
but until
and that does not always work when the insurrection is
inspired, financed and trained from outside the country.

The next occasion for reform is after victory, but Western
inhibitions and authoritarian incompetence usually combine
to prevent the testing of this hypothesis. This was the
tragedy of Indochina, as well as of Iran. Concessions during a crisis only
encourage the radicals and accelerate the assault.

I have dedicated so much space to these theoretical
reflections to point out that while America has sometimes
settled too readily for the status quo, recently the
American pressure for change has more often accelerated

-28-

the process of domestic disintegration than arrested it. Convinced that our model is of universal validity, we have sought to implant it without regard to historical or the likely consequences. In truth we know next to nothing of the circumstance. dynamics of other societies, perhaps least of all those in the oil-producing areas; for all our tinkering with "reform," we have given little useful advice on how to navigate the tricky passage to more liberty without wrecking authority. Hard-pressed governments beset by an implacable domestic enemy are often reduced to paralysis by advice which they know is dangerous but which they dare not reject

because they have counted on our support.

Conventional Western academic wisdom has taken it for granted that economic development automatically would produce political stability, as it had in Europe and Japan after 1945. But in those societies political institutions

From p. 29

to
year of
p. 24

education and women's rights; they found fertile ground
for agitation in the peasants that migrated from the
villages to the industrial cities and were rootless, isolated,
and restless cut off from their traditional family ties.
all found moral sustenance in a religious fervor directed
against the secular modernism of the West--and, to some
extent, also against the Marxism of the East. Marxism
has flourished, in much of the Third World not because
it fulfills economic or moral necessities--which it
clearly does not--but because it provides a rationale
for centralized political power once other structures collapse.
more recently, Islamic theocracy has now emerged as a reaction to moderniza-

tion in all its forms, Western or Marxist. Their combined
its long-term viability has yet to be determined.

impact of these forces, however different, is to undermine
*especially in the Middle East*
That remain in the Third World, with obvious geopolitical consequences.
all pro-Western governments, The consequence of radical

The minimum result of radical

*varying* ascendancy--however different its origins--is to reduce

America's
our influence over events and shrink our scope for creative
action--as it has already hindered the Mideast peace process.

To
p.31

Now in the face of close one billion traditional friends of the United States, a neither of their stands nor their intentions can be considered in the light of their phone and confided

The Shah clearly erred in not developing his political
institutions as Iran developed economically; he failed
to give the new middle class a financial stake in the
system. But none--including us--expected that his opposition
would be led by those who objected to what he was doing wrong.

The American
eight administrations --

-30-

-33-

realities of their situation. They must be given reason
for confidence that we are prepared to cooperate with
them and, finally, to stand by them. For their own
survival, they must be willing to modernize not only
~~and to reform~~ political
their economy but also their institutions. At the

same time, ~~we~~ of our knowledge of their
same time, they must understand the limits beyond which
situation, and the price we have paid for our clumsy experiments.
we will not push them.

The Arab-Israeli conflict is without doubt a principal
factor in the turbulence of the Middle East. It does not
follow that resolving it is the sole key to peace. A
dangerous escapism has developed in the West, the illusion
that solving the West-Bank problem is the *deus ex machina*
that will defuse all the region's other tensions. A
West Bank solution is important, but whether it contributes
to the solution of other problems depends on the nature of

anti-American and anti-Western policies: its close
affiliation with and occasionally leadership of all radical
democracies (including those
forces hostile to us in the Middle East
Iranians holding our hostages); its training of terrorists
on a global basis; and its intimate cooperation with Soviet
intelligence organizations. The PLO in its present incarna-
tion is not simply an implacable enemy of Israel; it supports
all forces hostile to the United States. Why we should
respond as strongly as possible to any attempt toarisefrom
asymmetrically annihilation. As long as it pursues such a course it deserves our opposition, not our sympathy. We should

I see no sign that such a group, with its ideology and its affiliations, believe that only to become its pacifist reformers in a demilitarized West Bank emirate. The Israeli government is not self-evident.

The prevailing theory is that the PLO would become more
Secondly, far from becoming moderate after its
I see no evidence for this; indeed all evidence is to the contrary.
demands are satisfied. A PLO state in current circumstances
will have every incentive to attempt to subvert nearby
moderate governments, especially Jordan, if only to escape
the inevitable demilitarization provisions without which
no Israeli withdrawal of any extent is conceivable. The

-39-

I also believe that ~~the effort to solve the West Bank problem~~ in one grand ~~gesture, defining all frontiers~~ and all relationships, is almost certain to fail. And a prolonged inconclusive effort is bound, in its turn, to compound the tensions in the area. ~~If~~ In the current negotiations based on the Camp David autonomy scheme do not produce the desired outcome, I hope other avenues will be attempted, including a Jordanian-Israeli negotiation. These should aim at the rapid achievement of some interim partial step, for example returning Arab populated areas quickly to the jurisdiction of Jordan; further Israeli withdrawals and final borders would be the subject of continuing negotiations to which all parties would be ~~committed. [The political evolution of the populated Arab areas in Jordan would then become an Arab, not a Jordanian, problem.]~~

I think Israel will insist on some assurances that Jordan doesn't just turn it over to the PLO. ~~and not an American, European, or Israeli problem.~~

It is in the common interest that we not chase abstractions but begin a process that can lead to some result. In this manner progress can be made in the West Bank ~~without~~

contributes to further undermining the political stability of the area in the face of blocks, constraints, rather than pressures and unleashing, further radical tendencies.

## Response to the Energy Crisis

Since the first price explosion of 1973, we have learned that the energy crisis is not a mere problem of transitional economic adjustment; it is a grave challenge to the structure of the free world's political and economic institutions.

The world's postwar financial system and mechanisms of cooperation were never designed to handle so abrupt a price rise in so vital a commodity or such massive shifts of wealth. The problem will not go away by simply letting inflation proceed; on the contrary, runaway inflation is part of the vicious circle which drives up oil prices. Nor can the financial imbalance be overcome by permitting the debt of consumers to expand indefinitely, even though this is what has been happening. The gradual impoverishment of the industrialized world is certain to end in financial

-44-

to interfere with our doing it is a demonstration of why

it is essential. No country has a right to demand that

we remain eternally subject to blackmail. Strenuous
efforts must be made to build up a reserve.

But to overcome the vulnerability requires major diplo-

disappointing than consumer cooperation. Since the establishment of the Inter-

national Energy Agency in 1974, cooperation among the
industrial democracies has not been adequate to the

instead of holding concerted action
challenge. Too many of the industrial democracies have pre-

ferred currying favor with the OPEC countries, competing for
some transitory special position or dissociating from our

negotiating efforts in the Middle East conflict. Competition

for preferential oil deals advertises vulnerability
and invites new pressures. Once the principle is admitted
that political conditions can be exacted for favorable
consideration on oil, political demands will accelerate.

Any special position gained by one country can be rapidly

-45-

transferred to another that outbids it. Such a course is
in fact against the interest of the moderate oil producers,
the claimed beneficiaries of this political self-abandonment
Once the principle that a political price can be exacted,
is established, they will become the first victim of radical
pressures to raise the political price. The moderates
cannot stand fast if the industrial democracies do not.
thereby doom themselves to undermining the very countries
on which their survival depends.

We thus return to the need for solidarity among the
oil-consuming nations. This has been my consistent urging
since 1973. I do not accept the proposition that it is
proper for the producers to organize but a confrontation
if the consumers seek to cooperate with each other.

Solidarity is needed to cope with so-called Third

World. The developing countries are caught in an impossible
bind. Higher oil prices absorb most of their export
situation. Higher oil prices absorb most of their export
earnings; the bill for other imports mounts because of the
global inflation fueled by the energy crisis; and their own

capacity to export is reduced because of the recession
in the industrialized countries which is another result
of the energy crisis. Thus a reexamination of the
development needs of the new nations is imperative. The
devastation of the developing world's hopes for progress
is a grim omen for the future of international politics.

Another subject requiring urgent attention is the
recycling of financial surpluses. By 1983 the financial
claims of the oil producers on the OECD countries will
reach half a trillion dollars. That amount cannot
be recycled by the commercial banking system; it will lead
to the bankruptcy and instability of many developing
nations; it will overtax the financial institutions of
even developed nations. Recycling is easiest precisely
into those countries that need it least; it will not abate
the devastating impact of current prices on nations whose
export earnings and foreign assistance are now largely

# POLITICAL DIMENSIONS OF THE ENERGY CRISIS

## Evolution of the Energy Crisis

The last three decades have been a history of our increasing dependence on imported energy, until today our economy and our well-being are hostage to decisions taken by a group of nations thousands of miles away.

In 1950, the United States was virtually self-sufficient in oil. In 1960, our reliance on foreign oil was still only 16 percent of our requirements. During this period, our domestic oil industry was producing far short of capacity; our imports represented a strategic decision to leave our oil in the ground undepleted while buying foreign production. In an emergency we could have done without oil imports.

Our surplus capacity overhanging the world market helped stabilize the price of oil, keep the price low; we were always in a position to reduce our imports while the political use of oil, the world price, by increasing our own production.

So long as these conditions existed, the United States not only had a major influence over the world oil price;

9

In short, the energy crisis has placed at risk the
entire range of our foreign policy objectives. It has
and left our foreign policy subject to pressures;
mortgaged our own economy, it has weakened the industrial
democracies economically, politically and potentially
militarily. It has undermined the world economy, and it has
frustrated the hope for progress of most of the new nations.
The passage of time has made the crisis worse and the dangers greater. We are entering a period of pervasive instability, and we face potential catastrophe.

In 1973 and 1974, after the first price explosion, occurred, it was considered axiomatic that the total oil bill--it was then $30-40 billion for the industrialized countries, at about $12 a barrel--was excessive and could not be sustained for an indefinite period of time. The financial problem seemed to be solved, however, largely through recycling by commercial banks. But the second crisis, in 1979, has caused the oil bill to more than double again. As Walter Levy has pointed out in an illuminating article in the spring issue of *Foreign Affairs*, the financial crisis may not be soluble this time, and our future is now at the mercy of our allies.

10

of a precarious political status quo in what is probably the
most volatile, unstable and crisis-prone region of the
world.

In the abnormal effective duration, high
The oil producers can sustain almost any price simply
reducing
by cutting their production. At the same time, their power
over price and production is undermining the structure of the
Western societies on which they ultimately depend for their
security and for their development. Thus, ominously,
Frequently,
even the moderate producers are now caught up in an
infinite
Flight of internal stability is related
circle. The moderate producers in OPEC, who for political
Tfey lead
reasons have some understanding of our necessities and a
+ stability, yet they
stake in our strength, are dragged along by the radicals. Eager
to destroy the current international order.
Back OPEC meeting, seems to be a stylized drama in which the
successive
tum into
moderates oppose a price increase; the radicals insist on
as a compromise, over the successor
one, a two-tiered system is created, and then afterwards, the
level
second tier gradually slides toward the radicals' higher
price. At the next OPEC meeting they go through the same

12

landscape and vast skies draw man to infinity; it is no
accident that three of the world's great monotheistic
religions had their origins there--as well as several of the
world's recent wars. Even beyond the crucial concern for
oil, it is today a cauldron of (potential) political and
strategic conflict.

There are three aspects to the region's political
tumult: the area's relationship to the global balance
of power; the interaction between the moderate and the radical
forces in the Middle East; the Arab-Israeli conflict; and
the efforts to resolve it. I do not believe it is possible
to deal with the region's problems by addressing one of these
aspects in isolation, they must be dealt with commensally
or each will be the result of the chaos will multiply
Arab-Israeli conflict.

First, the global balance of power. It is important to
understand that Middle East leaders have a highly-developed
instinct for sensing the nuances of the global balance of

13

power. They may clothe themselves in the conventional mantle
of non-alignment, but they understand perfectly well that
their security depends on an overall external equilibrium.

They, the only counterweight
Those nations friendly to us know that America's ability

to prevent pressure by other major powers is crucial. A

global imbalance of power puts mables

expansionist countries at risk

in a position to blackmail them,

to achieve peace,

to interfere with diplomatic efforts to subvert their

the pattern of Afghanistan's outside intervention. Under-

a great deal to a global balance might wish to keep aloof

is played out. They run the risk, however, that the West

might take their statements of disinterest at face value.

We have been told for too long by our own government
that the problems in the so-called "arc of crisis" have

15

compounded over 20 years means a tripling of that capacity,

while the West's defense efforts have been impeded by domestic

divisions or lassitude. And we have failed to uphold the

by *invariably* en bloc *communism* geopolitical as well as the military balance.

In the last five years, beginning with the collapse
of Indochina and the fiasco of Angola, almost every signif-
icant change in the world has been produced by Soviet
weapons, Soviet friendship treaties, Soviet proxy troops, or
outright Soviet invasion. The Cuban army has imposed solu-
tions in at least two African conflicts, and from the Horn
of Africa threatens the security of moderate in the Middle
*peninsula*.

East. There have been two invasions of Zaire from Communist-
held territory. Morocco is under pressure from Communist-
armed guerrillas; Tunisia has been threatened by Libya. A
strong pro-Western government collapsed in Iran, not *directly*.
as the result of Soviet pressures but with consequences
nevertheless devastating to the regional balance of power.

17

essentially political reasons, *this is the price they are* still willing to pay for Western and particularly American political + military protection. However, *To the extent that the global balance of power is perceived to shift--or, to put it another way,* to the extent that America's

-19-

(N)

restore its overall military capacity, and to develop the
<u>strength</u>
capacity to protect areas of the world essential to our unity.

The President was correct to declare our strategic stake in
the security of the Persian Gulf. Now that he has done
we have an obligation to protect
so, it is a bipartisan obligation of both Congress and the
 Executive Branch to develop a concept for its implementation
and provide the means to do so.

The military posture of the industrial democracies is
still too much influenced by the strategic doctrine of
the 1950's when strategic nuclear weapons were considered
capable of preventing every foreseeable challenge including
attacks on such regions as the Middle East. Obviously,
we must ensure that strategic equivalence is maintained.

This is the precondition of all security and it will require
major efforts. But doing so will help us cope with only
we can never return to the conditions of the 1950s.

It must not blind us to the fact that
one of our perils: the danger of an all-out attack on the
Prenarily because the tendency of strategic weapons is to over-
United States and perhaps on Europe. However, the over-
whelming military problem of the next decade will be the

-20-

crucial vulnerability of other areas under conditions of
<u>strategic parity</u>. Unless determined efforts are made to restore
regional military balances, by American power or aid to allies,
the pressure on countries close to the Soviet periphery
is bound to increase. The already pervasive insecurity will
grow. Radicals allied with the Soviet Union or backed by
it will grow bolder and we will face new challenges. States
known for their traditional friendship with the West will
<u>and</u>
grow demoralized, frightened.

And in those circumstances it will be almost impossible
to conduct a responsible dialogue with even the moderate
oil producers. Restoring the military balance is not the
sole road towards a constructive policy; but no constructive
policy is possible without it.<u> [typical examples]</u>

The second dimension of the geopolitics of energy is
<u>the balance between the moderates and the radicals</u> in the
Middle East. <u>In the area stretching from Morocco to Pakistan,</u>
<u>a decade of</u>
<u>the past decade has seen</u> great turmoil and upheaval.

22

of other rulers associated with us about the value of American friendship. Many moderate oil producers know only too well that their domestic practices are not better--if as good--as Iran's. They fear the same fate from a combination of domestic pressures and American disinterest. OPEC meetings have increasingly seen the moderates hesitant, on the defensive, fearful of exerting their power for restraint. The definition of moderation has become the minimum price radicals would accept.

There is no doubt that there are forces at work beyond our capacity to channel. But the art of policy-making consists of identifying the range of effective choice available to us. The conventional wisdom, in some circles at least, is that our difficulties arise because we have always associated ourselves with the wrong groups, with leaders who lack public support, and that we should make an effort to ally ourselves with the "popular will."

24

by authority, not ~~by~~ constitutional arrangements; the
political process has been conceived as determining who
~~Renaissance~~ has the right to issue orders. Authority has ~~been~~ either
made bearable by a concept of reciprocal obligation as in
feudal societies, or been limited by custom as ~~in the case~~ of
~~claimed to~~ kings who ruled by divine right. In each tradition was
a limiting factor; certain exactions were impossible not
because they were forbidden but because they had no
precedent. No ruler of eighteenth-century Europe could
levy income taxes or conscript his subjects; authoritarianism,
in short, was usually quite precisely circumscribed.

It was paradoxically the emergence of popular govern-
ment that expanded the scope of what authorities could demand.

wishes--as expressed in elective assemblies--were absolute.

27

guerrilla movement. The government is tempted into acts of repression which undermine its authority, and the chaos it divides the society so that the premise of the democratic process--that the loser accepts his defeat and in return is given an opportunity to win on another occasion--cannot be realized. The victims of terrorist attacks are usually the ablest and most dedicated officials, leaving the corrupt in place whose transgressions multiply as they attempt to compensate for the peril of their station by accumulating the maximum material compensations.

In recent crises of this sort, the American tendency has been to force its ally to "save itself" by authorizing government to best maintain itself by accelerating democratic reform. But once matters have reached the point of guerrilla war, reform is often seen as a sign of weakness. Nor do the guerrilla forces generally seek democracy. What they want is power. The possibility of compromise--the essence of democratic government--is the

Another favorite recipe for Americans is to use a coalition government.

Yet

30

the mass that migrated from the villages to the industrial cities and found themselves rootless, isolated, and spiritually threatened. They all found moral sustenance in a religious fervor directed against the materialism of the West--and, to some extent, also against the Marxism of the East.

No Conventional Western academic wisdom has taken it for granted that economic development automatically would produce political stability as it had in Europe and Japan after 1945. But in those societies political institutions had a long history; the threat to stability was the gap between economic expectation and reality. As this gap was closed, the underlying political reality asserted itself. In developing societies, by contrast, rapid modernization undermines traditional social structures and patterns and therefore produces political instability. Men and women are uprooted from the countryside and find themselves in depersonalized cities, resentful at one and the same time

(N)

2
p29

Rep
(above)

31

of the government that lured them into this cauldron
and the Western technology which symbolizes it. Marxism
has flourished in the Third World not because it fulfills
economic or moral necessities--which it clearly does not--
but because it provides a rationale for centralized political
power. Islamic theocracy seems to have emerged as a reaction

to modernization in all its forms, Western or Marxist,
has yet to be determined. The unmitigated impact of the forces inherent in all its forms is serious.

The West has so far supplied no answers to this dilemma.

It oscillates between sentimental invocations of its good
intentions and a purely strategic analysis. Neither approach
is adequate. The upshot is that as the price of oil leaps
and oil wealth multiplies, radical countries use their new-
found wealth against us while all the incentives of the
moderate regimes will be to reduce oil production, since they
fear the disruptive consequences of modernization that de-
royed the Shah. Both developments spell disaster for the West,

The conflict between moderates and radicals within the

32

developing world is thus a central issue of our time. Not every radical regime is the same, of course. Some, like South Yemen, are clearly pro-Soviet and *de facto* Soviet military bases. Libya, while not pro-Soviet in its domestic orientation, is operationally a Soviet ally in its foreign policy; it supplies arms to every anti-Western country or movement or terrorist group in the Middle East and Africa.

Iran is a radical regime with clerical bias; it is hardly pro-Soviet but it is certainly anti-American for its own reasons and a supporter of other radical groups in the area.

Then there are radical governments such as Iraq or Syria, of more secular orientation.

The problem we face is that however different their motives, whatever judgment one makes of their long-term prospects or the degree of Soviet influence in any one of them, the combined impact of the radical regimes is to undermine all those forces in the region that have relied on the West and believe in peaceful evolution. The consequence and close monitoring with the individual democracies

CHOOSE

34

world safe for anti-American radicalism. What kind of
groups will take over from governments friendly to us who do
not meet Jeffersonian standards of virtue? What do we tell
some of the key oil-producing countries lies down the road
if they follow our reformist advice? What help can they expect if
they maintain their traditional structures?

Until we have answers to questions such as these,
we have no possibility of a sensible dialogue with the
oil-producing countries, even those friendly to us, on either
oil prices or domestic reform. Our natural allies are not
radical groups and forces but the moderate groups which
affirm peaceful change and leave room for market economies.
are not to dissociate from us, (or disappear from the face of the earth)
They must know, first of all, that we understand the
realities of their situation. They must be given reason for
confidence that we are prepared to cooperate with them and,
finally, to stand by them. They must be willing to modernize
not only their economy but also their institutions. At the same time
they must understand the limits beyond which we will not push them.

Don't
rest it on
market
economies

sexual jabs

(N)

35

The Arab-Israeli conflict is without doubt a principal factor in the turbulence of the Middle East. It does not follow that it is the sole key to peace. A dangerous capitalism has developed in the West, the illusion that solving the West Bank problem is the *deus ex machina* that will defuse all the region's other tensions. A West Bank solution is important, but whether it contributes to the solution of other problems depends on the nature of the settlement and the auspices under which it is achieved. The outcome must not be one that tempts constantly new demands; it must create incentives for moderation rather than be seen as a reward for *radicalism*.

I do not believe that the status quo on the West Bank can or should be maintained; I do not agree with Israel's settlement policy. But, given my analysis of the strategic and ideological sources of the tensions in the area, it is essential -- as a matter of paramount principle -- that we *not* (let ourselves) be driven by radical pressures. Those hostile

36

to us must not be given the message that we yield to blackmail.

On the contrary, it is healthy if they learn that such pressure is self-defeating. A West Bank outcome that seems to reward blackmail and anti-Western radicalism will only accelerate catastrophe in the military and geopolitical dimensions of the Mideast crisis, leave increase the vulnerability of our moderate even more vulnerable, friends, and compound our energy problems.

I have consistently supported the Camp David process and the Egyptian-Israeli peace treaty. I hope that the Egyptian-Israeli autonomy negotiations will succeed. Nothing I am about to say should be construed as a criticism of them, because they deserve a reasonable chance. But it is important for all of us to remember that the central dispute is over political control of the West Bank and Gaza not over the allocation of technical functions such as land use, water, transportation or other municipal services. Sooner or later the central problem must be addressed, either in the Camp David process or in some other context if the stalemate proves unbreakable.

["-2-", "35\n38", "United States; it is also against the interests of ~~all other~~ moderate Arab states in whose well-being we have a stake.", "These countries understand this perfectly well, whatever their public statements, but our flirtation with the PLO compounds their vulnerability.", "Therefore, peace", "Fourthly, negotiations should be conducted by existing states. The United States should promote this not only by inviting Jordanian participation but by demonstrating that any other route will lead to ~~the frustration of all hopes for certain failure.~~", "peace.", "If I also believe that", "the effort to solve", "Fifth, ~~the West Bank problem in one grand gesture, defining all frontiers and all relationships, is almost certain~~\n\nto fail. And a prolonged inconclusive effort is bound, in its\nturn, to compound the tensions in the area.", "Sixth, ~~Our European allies will encourage radicalism and~~\n\n~~when they push schemes incapable of realization.~~\n\nstalemate ~~by pushing~~ schemes incapable of realization. ~~while~~\n\n~~have a stake in diplomatic progress; but ~~only efforts that have produced~~\n\n~~erroneously~~, implying ~~they must meet~~, ~~not clarify~~, ~~they may need~~ progress ~~are those conducted by~~ the United States, ~~and~~ will ~~demand~~, ~~and support for~~ the Arab States, ~~in the light of~~ the Bay of Biscay. ~~In the light of~~ the Bay of Biscay, ~~they will~~, ~~will not be able to act~~, ~~will act~~, ~~will not act~~, ~~will act~~, ~~will not act~~, ~~will act~~, ~~will act~~, ~~will act~~,

-39-

David autonomy scheme do not produce the desired outcome, I
hope other avenues will be attempted, including a Jordanian-
Israeli territorial negotiation. These should be pushed rapid-
ly towards some interim partial step, for example returning
Arab populated areas rapidly to the jurisdiction of Jordan;
further Israeli withdrawals and final borders would be the
subject of follow-on negotiations as part of a continuing pro-
 committed.
The political evolution of the Arab populated areas
from then on would be primarily an intra-Arab problem and not
an American, European, or Israeli problem.

It is in the common interest that we not chase abstrac-
tions but begin a process that can lead to some result. In
this manner progress can be made in the West Bank without fur-
ther undermining the political stability of the area and un-
leashing further radical tendencies.

-41-

stringent conservation measures, develop new supplies, and alternative sources,

strengthen

establish collaboration among the consumer nations, devise means

address

poorest

to overcome the plight of the developing nations, and seek a
more reliable long-term relationship with the producers.

Conservation, which is essential to any energy program, is
painful and therefore not easy to bring about in a representative

democracy.

No matter how energically pursued, it cannot

do the job by itself. Even if it should reduce our reliance
on imported oil to 1973 levels — a tall order requiring a
reduction of over 15% of our consumption — it would still

leave us highly vulnerable to embargoes and politically motivated
production restrictions.

## Measures such as

Automobile fuel-efficiency regulations are important, but they will take years to have a major effect. There is no law of nature that says our domestic gasoline price must be kept down to half of what it is in Europe. We thereby effectively subsidize consumption and discourage domestic production. A higher price for gasoline is inevitable. What is not imposed by taxation

-42-

will be inflicted on us by OPEC price increases.

But In the long run, an increase in supply is the most reliable answer. In 1975, Vice President Nelson Rockefeller proposed a hundred-billion-dollar facility to help finance new sources of energy. Something like it has just been passed five years later, in the form of a synthetic fuels facility.

Decontrol of domestic oil prices has been favored by at least two administrations, but then runs into ideological objections to not only the burden on consumers but the possibility of profits for those who produce. At some point we have to sort out our priorities. Every delay increases our vulnerability.

But I am not here to testify about a detailed domestic energy plan. I simply wish to point out the disastrous international consequences of our continuing vulnerability, and urge that the problem be dealt with as a matter of highest urgency.

Aside from our military defense, there is no project of more crucial importance to our national security and indeed our

-48-

Decisive measures to surmount the energy crisis would transform the international environment--dispelling the clouds of political demoralization, reinvigorating the world economy, and strengthening our security. Thus will freedom be vindicated and the democracies flourish, bequeathing to our children a world not of crisis but of hope.