Is the Economic Crisis a Security Threat Too?

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Brynjar Gunnarsson / AP

The global economic crisis triggered protests in Iceland — and the collapse of its government

Could the deepening global recession boost the flagging efforts of Osama bin Laden to challenge the established global order? Probably not. But the signs are there that, as President Barack Obama's intelligence chief Admiral Dennis Blair warned last week, the economic crisis may be the source of the primary threat to global security right now. Security experts note that the economic downturn is already creating social unrest and political instability in some strategic hot spots around the world, and they warn that a prolonged slump could undermine U.S. and Western security interests.

Blair, addressing the Senate Intelligence Committee on Feb. 12, prioritized the global recession as America's "primary near-term security concern" and warned that the threat level would increase as the slump endures. "The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests," Blair warned, emphasizing the danger of political instability in countries allied with Washington. "Economic crises increase the risk of regime-threatening instability if they persist over a one-to-two-year period." (See pictures of the global food crisis.)

Part of the strategic challenge posed by the downturn lies in the realm of the economy itself. Emerging powers such as China or India could take the opportunity presented by U.S. economic weakness to extend their own influence in regions traditionally dominated by the U.S. China, in particular, has already established itself as a major player in Latin America and Africa, and it is investing heavily in extractive industries across the globe right now, procuring energy supplies — most recently in new oil deals inked with Russia, Venezuela and Brazil — and other natural resources for its industrial economy.

A second economically driven security threat lies in rising nationalism, which can translate into effects ranging from anti-immigrant violence in industrialized countries to rising protectionism that further limits international trade, imperiling prospects for a global economic recovery. A third risk, says Bruno Tertrais, a senior research fellow and strategic and security expert at the Foundation for Strategic Research in Paris, is a spike in the activities and power of organized crime groups controlling parallel economies that tend to flourish with rising unemployment.

But like Blair, Tertrais sees the biggest security threat posed by a prolonged recession as the collapse of regimes vital to maintaining international order. In the same way the collapse of the Somali state has spawned the peril of piracy in key international shipping lanes off the Horn of Africa, authoritarian regimes elsewhere that keep the peace on behalf of the West could be toppled if they lose the funds they distribute to placate their restive populations. The riots triggered in Egypt last year by sharp increases in the price of wheat were a reminder of that danger, while Pakistan's basket-case economy could act as a significant multiplier on the instability that already plagues the troubled nuclear-armed nation. Pakistan was rocked by food riots last year, and its foreign-currency reserves are now exhausted, leaving the government dependent on International Monetary Fund support at a moment when the domestic Taliban challenge is growing among the impoverished and marginalized sections of society. (See pictures of the battle against the Taliban.)

"The risk of [state] failure exists for fragile countries as diverse as Yemen or Pakistan, or even Mexico, where governments could find themselves heading toward failure if the recession proves long and hard," Tertrais says. "The potential for failure is particularly troublesome in the case of Yemen, which already has a relatively large population of Islamist radicals and is increasingly unstable. Falling oil prices might be the straw that breaks the camel's back. If state breakdown happened there, we'd likely see the country become a full-fledged haven for extremists."

European security officials, however, don't believe that economic decline is likely to significantly raise the terrorism threat level from its current levels.

"You always prefer an atmosphere of tranquility over grimness and concern in any security situation, but there's nothing about a recession that will cause us or those we're battling to alter our objectives or methods radically," says a French counterterrorism official. He agrees with Tertrais that the greatest danger is the possibility of collapse in Yemen or an expanded crisis in Pakistan, which could potentially give global jihadists a base for export-oriented operations.

"The risk of prolonged recession to the West in security terms is based mostly in the Muslim countries we rely on to keep their own extremists under control," the French official says, noting that there has been no sign of the recession swelling the ranks of European jihadists nor sapping police forces tracking them. "The economic constriction isn't spiking the rate of radicalization, hardening intent to strike or causing security or intelligence budgets to be slashed."

Terrorism, however, is not the primary security concern raised by the recession. Blair warned that 1 in 4 countries of the world have already experienced some degree of instability as a result of the downturn, and those effects aren't confined to exotic hot spots. On Feb. 20, for example, growing social unrest and violence spawned by the economic crisis brought down the government of Latvia, a member nation of the European Union and NATO. A month earlier, Iceland's government collapsed in the face of a banking crisis — and in a sign of the shifting geopolitics that the slump could drive, the staunch NATO member was forced to turn to Russia for billions of dollars in bailout funds.

Such unrest is becoming more common in Europe. Greece was rocked by weeks of rioting in December, while in January, 2.5 million people took to the streets of France during a general strike to protest government handling of the economic crisis. Just last weekend, 120,000 marchers brought downtown Dublin to a standstill in protest of government austerity measures.

There was a time, of course, when the West was haunted by the specter of extreme movements such as communism and fascism, and social unrest fueled by economic deprivation carried the potential to be transformed into a revolutionary challenge to the state. But Tertrais reminds us that those days are long gone. "As difficult as this recession is shaping up to be, we're not looking at a repeat of the 1930s, so we're also not looking at a potential for movements looking to seriously challenge the established social and political order," he argues. "In general terms, it's been the lower classes that have fueled protests, while it has been the middle classes that have powered revolutions." Today, he says, that middle class is more inclined to seek government help to pay its mortgages than to imagine a new social system. Even if the economic crisis accelerates a shift in the global balance of economic power, it won't alter the fundamentals of the global economic system.

See 25 people to blame for the financial crisis.

See pictures of the global financial crisis.