Small Wars

This Week at War: Moral Hazard at NATO

Europe may not be able to rely on America's free security guarantee forever.

JOHN THYS/AFP/Getty Images
JOHN THYS/AFP/Getty Images

In blasting NATO, Gates explains what moral hazard feels like

In what he termed his "last policy speech as U.S. defense secretary," Robert Gates ripped into his policymaking peers at NATO headquarters in Brussels last week for allowing "significant shortcomings in NATO in military capabilities, and in political will" to occur. Gates noted that although the non-U.S. alliance members have more than 2 million troops in uniform, these countries struggle to deploy 40,000 soldiers into an effective military campaign. Gates also pointed to NATO’s embarrassing performance in Libya, noting that European members, despite having a multitude of officers collecting paychecks at frivolous staff billets, have failed to generate the intelligence support and command capabilities needed to wage an effective air campaign. Gates warned of a "dismal future for the transatlantic alliance."

Gates’s frustration was no doubt sparked by the realization that his department has become the victim of moral hazard. The United States provides a free security guarantee to Europe. Europeans, meanwhile, have responded in an economically rational way by taking greater risk with their external defense. With the collapse of the Soviet Union removing the last plausible military threat, it was logical for European policymakers to avoid spending on expensive space, communications, and intelligence systems that the United States was largely providing for free. Gates and many other U.S. policymakers see an alliance with too many free riders; Gates noted that only five of the 28 allies spend more than the agreed target of 2 percent of GDP on defense.

In the short term, Gates fears that the United States will have to bail out the Libya operation. This week, Adm. Mark Stanhope, Britain’s top naval officer, warned that budget limits and unit rotation requirements could force NATO combatants over Libya to soon have to choose between Libya and Afghanistan. Should a shortfall of European forces in either campaign result, Gates undoubtedly fears that the United States will have to make up the gap.

Over the longer term, the moral hazard issue extends beyond NATO into the Western Pacific, the South China Sea, and soon the Persian Gulf. For example, the United States has a great interest in signaling to China that it has strong security commitments to its partners in the region. Washington likewise wants those partners to share the defense burden and to also avoid provocative behavior. The stronger the signal it sends to China, the less incentive the partners have to do their part. In the Middle East, the United States will likely respond to the emerging Iranian nuclear threat with a security guarantee for its Sunni Arab allies on the west side of the Persian Gulf. It is just as likely that a future exasperated U.S. defense secretary will someday tour that region, reprising Gates’s final speech to NATO and pleading with the Arab allies to do more for themselves. Of course, the United States could opt not to issue the Persian Gulf security guarantee and risk either a regional nuclear arms race or watch another major power to move into the region with its own guarantee. No U.S. administration would tolerate these outcomes.

Gates concluded his speech by warning Europe’s leaders that the next generation of U.S. leaders lacks nostalgia for the Cold War struggle and could walk away from the NATO alliance. In the future, Europe will undoubtedly have to do more for its external defense. That doesn’t seem like a problem now since there is no apparent external threat. But should they have to more fully insure themselves, European defense planners should consider how they would rebuild their defenses. They should consider how much time it would take to mobilize political and budgetary authority to prepare for these threats and how long it would take to rebuild the required military forces. Most notable in this regard is the risk of losing both a defense industrial base and functioning military institutions, which once gone might never be restored, at least within a relevant time frame.

Gates’s speech displayed his frustrations with the decision to intervene in Libya, which quite possibly will see the United States having to pay up on an insurance policy that Gates never wanted to write in the first place. More broadly, the military security guarantees the United States has issued to Europe and elsewhere are risk-management tools that come with benefits and annoying costs. Gates has warned Europe that its insurance policy may be cancelled. If that happens, the continent’s leaders will have to think about their security risks in old and unfamiliar ways.

The U.S. government sends its civilians to fight in Yemen

In last week’s column, I discussed how the U.S. government is inexorably "civilianizing" its military operations in response to irregular adversaries who have adopted a civilian appearance to gain an advantage. The U.S. government will increasingly find itself assembling its own civilianized army comprised of covert intelligence operatives, paramilitary groups, and local militias to battle modern irregular opponents. This week U.S. officials revealed that the next test of this game-plan will occur in Yemen, where it will now have to track down al Qaeda without the help of the Yemeni government.

According to the Washington Post, there will be a large buildup of CIA assets for the Yemen mission. This buildup will include CIA-operated Predator drones, which will fly from a new airbase now under construction somewhere in the region. This expanded CIA effort in Yemen will supplement and perhaps supersede a small counterterrorism operation that has thus far been run by the Pentagon’s Joint Special Operations Command (JSOC).

The recent collapse of government authority in Yemen accounts for the reshuffled U.S. counterterrorism command structure. JSOC operated in Yemen with the permission of the Yemeni government and in support of its counterterrorism units. But with the departure of  President Ali Abdullah Saleh, who was wounded in a rocket attack, government authority seems to have collapsed. Yemeni counterterrorism teams have also apparently abandoned the hunt for al Qaeda. With local government support to the JSOC operation either withdrawn or effectively suspended, it has become necessary to start a covert operation under CIA authority to continue the hunt for al Qaeda.

This is the future of irregular warfare, at least in the world’s most difficult, ungoverned spaces. The first preference of the U.S. government is to deal with other legitimate governments and their institutions. Over the past decade, when there was no such government, it was U.S. policy to "nation-build" a suitable sovereign counterpart that could control its territory and work with U.S. government officials. But after the costs of such efforts in Iraq and Afghanistan, there is little chance the United States is going to attempt similar efforts in ungoverned al Qaeda hangouts like Yemen or Somalia.

Instead, the United States will have to fall back to a long-term strategy of cultivating useful relationships with tribal leaders, warlords, and other local powers. If the U.S. government wants to find targets for drones and chase al Qaeda in other ways, it will have to give up on nation-building and go straight to local sources instead.

The arc of the U.S.-Pakistani relationship over the past decade is another illustration of a transformation from military to civilian warfare. At the beginning of this period, the United States hoped to assist the Pakistani military to fight al Qaeda and other radicals inside Pakistan. But as the relationship has collapsed, the U.S. has had to civilianize its military effort inside Pakistan. Gone are U.S. military trainers for the Frontier Corps. Instead, the United States will have to rely more on its unilateral covert intelligence effort to support the CIA’s drones, bypassing the Pakistani government — as it also did to track down Osama bin Laden.

The forthcoming CIA operation against al Qaeda in Yemen will thus utilize techniques the agency has already had to adopt in Pakistan. Legally, it will be a deniable covert action which will put the CIA in the lead. The CIA’s drone air force looks set to expand. And the agency’s clandestine service and paramilitary officers will likely be in the lead on the ground, developing targets for the drones and others. The Pentagon’s JSOC will play a supporting role, as it did in the raid on bin Laden. But it seems like the war in Yemen will be run and fought — on both sides — by civilians.

Robert Haddick is managing editor of Small Wars Journal.