National Security Consequences of U.S. Oil Dependency, a report by the Council on Foreign Relations Independent Task Force on Energy, directed by David G. Victor, director of FSI's Program on Energy and Sustainable Development (PESD), concludes that the "lack of sustained attention to energy issues is undercutting U.S. foreign policy and U.S. national security." The report goes on to examine how America's dependence on imported oil - which currently comprises 60 percent of consumption - increasingly puts it into competition with other energy importers, notably the rapidly growing economies of China and India.

Excerpted from Foreign Affairs, September/October 2006

Preventing the unthinkable ongoing crisis with Tehran is not the first time Washington has faced a hostile government attempting to develop nuclear weapons. Nor is it likely to be the last. Yet the reasoning of U.S. officials now struggling to deal with Iran’s nuclear ambitions is clouded by a kind of historical amnesia, which leads to both creeping fatalism about the United States’ ability to keep Iran from getting the bomb and excessive optimism about the United States’ ability to contain Iran if it does become a nuclear power.

A U.S. official in the executive branch anonymously told the New York Times in March 2006, “The reality is that most of us think the Iranians are probably going to get a weapon, or the technology to make one, sooner or later.” Military planners and intelligence officers have reportedly been tasked with developing strategies to deter Tehran if negotiations fail.

Both proliferation fatalism and deterrence optimism are wrong-headed, and they reinforce each other in a disturbing way. As nuclear proliferation comes to be seen as inevitable, wishful thinking can make its consequences seem less severe, and if faith in deterrence grows, incentives to combat proliferation diminish.

Deterrence optimism is based on mistaken nostalgia and a faulty analogy. Although deterrence did work with the Soviet Union and China, there were many close calls; maintaining nuclear peace during the Cold War was far more difficult and uncertain than U.S. officials and the American public seem to remember today. Furthermore, a nuclear Iran would look a lot less like the totalitarian Soviet Union and the People’s Republic of China and a lot more like Pakistan, Iran’s unstable neighbor—a far more frightening prospect.

Fatalism about nuclear proliferation is equally unwarranted. Although the United States did fail to prevent its major Cold War rivals from developing nuclear arsenals, many other countries—including Japan, West Germany, South Korea, and more recently Libya—curbed their own nuclear ambitions.

THE REASONS WHY

The way for Washington to move forward on Iran is to give Tehran good reason to relinquish its pursuit of nuclear weapons. That, in turn, requires understanding why Tehran wants them in the first place.

Iran’s nuclear energy program began in the 1960s under the shah, but even he wanted to create a breakout option to get the bomb quickly if necessary. One of his senior energy advisers recalled, “The shah told me that he does not want the bomb yet, but if anyone in the neighborhood has it, we must be ready to have it.” At first, Ayatollah Ruhollah Khomeini objected to nuclear weapons on religious grounds, but the mullahs abandoned such restraint after Saddam Hussein ordered chemical attacks on Iranian forces during the Iran-Iraq War.

The end of Saddam’s rule in 2003 significantly reduced the security threat to Tehran. But by then the United States had taken Iraq’s place. In his January 2002 State of the Union address, President Bush had denounced the governments of Iran, Iraq, and North Korea as members of an “axis of evil” with ties to international terrorism. After the fall of Baghdad, an unidentified senior U.S. official told a Los Angeles Times reporter that Tehran should “take a number,” hinting that it was next in line for regime change.

Increasingly, Bush administration spokespeople advocated “preemption” to counter proliferation. When asked, in April 2006, whether the Pentagon was considering a potential preventive nuclear strike against Iranian nuclear facilities, President Bush pointedly replied, “All options are on the table.”

AGREED FRAMEWORK IN FARSI

A source of inspiration for handling Iran is the 1994 Agreed Framework that the United States struck with North Korea. The Bush administration has severely criticized the deal, but it contained several elements that could prove useful in the Iranian nuclear crisis.

After the North Koreans were caught violating their NPT commitments in early 1993, they threatened to withdraw from the treaty. Declaring that “North Korea cannot be allowed to develop a nuclear bomb,” President Clinton threatened an air strike on the Yongbyon reactor site if the North Koreans took further steps to reprocess plutonium. In June 1994, as the Pentagon was reinforcing military units on the Korean Peninsula, Pyongyang froze its plutonium production, agreed to let IAEA inspectors monitor the reactor site, and entered into bilateral negotiations.

The talks produced the October 1994 Agreed Framework, under which North Korea agreed to eventually dismantle its reactors, remain in the NPT, and implement full IAEA safeguards. In exchange, the United States promised to provide it with limited oil supplies, construct two peaceful light-water reactors for energy production, “move toward full normalization of political and economic relations,” and extend “formal assurances to [North Korea] against the threat or use of nuclear weapons by the U.S.”

“The way for Washington to move forward on Iran is to give Tehran good reason to relinquish its pursuit of nuclear weapons.”By 2002, the Agreed Framework had broken down, not only because Pyongyang was suspected of cheating but also because it believed that the United States, by delaying construction of the light-water reactors and failing to start normalizing relations, had not honored its side of the bargain. When confronted with evidence of its secret uranium program, in November 2002, Pyongyang took advantage of the fact that the U.S. military was tied down in preparations for the invasion of Iraq and withdrew from the NPT, kicked out the inspectors, and started reprocessing plutonium.

President Bush famously promised, in his 2002 State of the Union address, that the United States “will not permit the world’s most dangerous regimes to threaten us with the world’s most destructive weapons.” Yet when North Korea kicked out the IAEA inspectors, Secretary of State Colin Powell proclaimed that the situation was “not a crisis.” Bush repeatedly declared that the United States had “no intention of invading North Korea.” The point was not lost on Tehran.

If Washington is to offer security assurances to Tehran, it should do so soon (making the assurances contingent on Tehran’s not developing nuclear weapons), rather than offering them too late, as it did with North Korea (and thus making them contingent on Tehran’s getting rid of any existing nuclear weapons). As with North Korea, any deal with Iran must be structured in a series of steps, each offering a package of economic benefits (light-water reactors, aircraft parts, or status at the World Trade Organization) in exchange for constraints placed on Iran’s future nuclear development.

Most important, however, would be a reduction in the security threat that the United States poses to Iran. Given the need for Washington to have a credible deterrent against, say, terrorist attacks sponsored by Iran, a blanket security guarantee would be ill advised. But more limited guarantees, such as a commitment not to use nuclear weapons, could be effective. They would reassure Tehran and pave the way toward the eventual normalization of U.S.–Iranian relations while signaling to other states that nuclear weapons are not the be all and end all of security.

Peaceful coexistence does not require friendly relations, but it does mean exercising mutual restraint. Relinquishing the threat of regime change by force is a necessary and acceptable price for the United States to pay to stop Tehran from getting the bomb.

A new era is under way for global high-technology innovation and entrepreneurship, marked by the rise of Greater China. During the past several decades, Taiwan, Singapore, and others have developed as centers in key information communications technology (ICT) industries. More recently, from Beijing to the Pearl River Delta, markets for new products are expanding, competencies in new technologies are growing, and a new generation of high-technology regions is emerging. All these signs point toward China as a rising powerhouse, accelerating the shift of locus for the global high-technology arena across the Pacific.

The contours of the nature and pace of this change are already evident in some ICT industries but have yet to be fully analyzed. The Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE) (SPRIE) is leading a research program to advance the understanding of the dynamic systems of innovation and entrepreneurship that drive China’s ascendance in high technology and its implications for the global knowledge economy.

CHINA'S QUEST FOR INDEPENDENT INNOVATION

No longer satisfied with China’s role as the world’s factory, Chinese government leaders have declared that zizhu chuangxin (“homegrown” innovation) is the watchword for the future. They are sounding an urgent call to reduce dependence on foreign technology and build China into an “innovation-driven economy.” As President Hu Jintao said, “homegrown innovation” is the “core of national competitiveness”— the path to sustainable economic prosperity and global leadership.

Last May, SPRIE co-sponsored Greater China's Innovative Capacities: Progress and Challenges, a two-day, invitation-only workshop at Tsinghua University in Beijing that attracted scholars from Europe, the U.S., and Asia, as well as Chinese industry leaders and government policymakers. More than 70 participants tackled topics such as indicators of innovative capacity (patent data and journal citations, for example), reforms of Chinese research institutions to spur commercially useful innovation, and the changing roles for innovation of the state, multinational corporations (MNCs), and domestic firms.

A few numbers illustrate China’s progress over the past decade. Total R&D spending nearly tripled, reaching 1.3 percent of GDP in 2005, even while GDP doubled. China is now ranked third worldwide in overall R&D spending (after the U.S. and Japan), with targets to increase spending to 2 percent of GDP by 2010. Science and engineering PhDs more than doubled between 1996 and 2005. And China’s growth rate of U.S. patents granted has eclipsed Japan, Taiwan, or Korea, with an even steeper trajectory in Chinese-authored science and technical publications in international journals.

Yet, according to SPRIE Co-Director Henry S. Rowen, “the highest value-added work in China still is done largely in foreign-invested companies and increasingly in firms led by returnees who have been educated and worked abroad. Currently most R&D is focused on incremental improvements of existing products and services. Nevertheless, the key building blocks are in place for increasing technology contributions.” At MNC R&D centers like Nokia and Microsoft, top Chinese teams are beginning to contribute to worldwide product design and research. Through interviews at more than 75 firms in Beijing and Shanghai, SPRIE researchers have identified emerging competencies at some of the best domestic research labs and companies, ranging from multimedia chip design to communication equipment.

Huawei, the telecommunications networking giant with 2005 revenues of $5.9 billion, reports consistently spending more than 10 percent of sales on R&D. Boasting more than 10,000 researchers in China plus R&D centers in Bangalore, Silicon Valley, Dallas, Stockholm, and Moscow and 3,600 patent applications in 2005, the company epitomizes China’s growing pursuit of low-cost innovation, not just low-cost manufacturing and services.

However, obstacles to China’s drive for innovation are not trivial. Many Chinese institutions, though improving, still fail to provide an environment conducive for innovation, including a competitive and open system for R&D funding or effective intellectual property protection. As SPRIE associate director Marguerite Gong Hancock observes, “The current gold rush mentality for quick profits runs counter to breakthrough technology innovation that is typically the result of patient investments in research with long-term and uncertain payoffs. To date, some of the most innovative bright spots are not in disruptive technologies but in processes, services, and business models.”

One notable obstacle confronting Chinese high-tech firms is a leadership talent shortage, a problem that is the focus of another SPRIE research initiative.

HIGH-TECHNOLOGY LEADERSHIP IN GREATER CHINA

Since 1999, founders have led 24 Chinese firms to IPOs on NASDAQ. From this unprecedented number of startups to a rising class of billion-dollar giants going global, high-tech companies in China have a dramatically intensifying need for leadership.

To examine how China’s high-tech executives are facing this challenge, SPRIE partnered with Heidrick & Struggles, a leading executive search firm, to conduct more than 100 interviews with executives at both domestic and multinational high-tech firms operating in China.

Leaders face what Nick Yang (MS ’99), founder of wireless service provider KongZhong, described as “uncharted waters.” They must create a cadre of top leaders and managers in the face of an acute shortage of seasoned managers and globally capable executives. As John Deng, founder and CEO of Vimicro (a fabless semiconductor company with $396 million market cap), said, “I don’t lack other things, such as funding, infrastructure, or government relations. What I lack now is people.”

SPRIE Co-Director William F. Miller commented, “Interestingly, not one interviewee expressed an intention to adopt a management model that diverges significantly from the dominant global model,” a model defined by competencies well documented as key among U.S. and European executives. Based on the SPRIE-Heidrick study, some of these competencies currently are both more critical and more difficult to find in China: the ability to drive results, achieve customer orientation, provide visionary leadership, create organizational buy-in, model key values, and delegate and empower. The best leaders not only are seeking these competencies in senior executives but also cascading these attributes throughout their organizations.

The impact ripples throughout the talent pipeline, from recruiting to retaining to developing key people. High-tech leaders in China are deploying a wide range of new tactics. Miller noted, “To address pressing leadership shortages, executives are devoting an unusually large amount of their time and attention to talent and human resource issues.” As Mary Ma, CFO of computer giant Lenovo, stated, “I have become an HR manager. I spend 30 percent of my time on people and succession issues.” And the best companies are systematically using their best leaders to mentor and mold the next generation of professionals—the mid-level managers and team leaders, who are mobile, scarce, and frequently lack the full set of skills needed to drive results.

Emerging trends in leadership among China’s hightech executives may be a good harbinger, pointing to how and where this influential generation of China’s high-tech leaders are steering their firms—firms that have been charged with the task of leading China’s future economic growth.

In a 1999 article profiling six of “China’s bright young stars,” the New York Times described Junning Liu as “one of China’s most influential liberal political thinkers.” Today, sitting in a delegate-style conference room, Liu wants to add a point to Thomas C. Heller’s discussion of risk assessment and the role of law in doing business. If assets are not protected by legal institutions, Heller argues, foreign direct investment becomes a riskier prospect and economic growth suffers as a result. Except, he points out, in China. The legal system doesn’t manage risk but China is growing extremely fast.

“There are more businesspeople in Chinese prisons than dissidents,” Liu says evenly, with a suggestion of a smile. “So you see … Chinese people mind the situation more than you [the foreign investors] do.”

Liu is one of 26 change-makers from developing democracies who were selected from more than 800 applicants to take part in this year’s Stanford Summer Fellows on Democracy and Development Program, which is offered by FSI’s Center on Democracy, Development, and the Rule of Law (CDDRL). His colleagues in the program are presidential advisors and attorneys general, journalists and civic activists, academics and members of the international development community. They traveled to Stanford from 21 countries in transition, including Iraq, Afghanistan, Iran, Pakistan, China, Russia, Egypt, and Nigeria. And like their academic curriculum during the three-week program, which examines linkages among democracy, economic development, and the rule of law, their professional experiences and fields of study center on these three areas, assuring that each fellow brings a seasoned perspective to the program’s discussions.

“For most of the fellows … democracy is seen not as a luxury or an option, but rather as a necessity for achieving broad-based development and a genuine rule of law.”The curriculum for the first week focused on democracy, with leading comparative democracy scholars Michael A. McFaul, Larry Diamond, and Kathryn Stoner team-teaching the morning seminars. Using selected articles and book chapters as starting points for discussion, McFaul, Diamond, and Stoner-Weiss began the weeklong democracy module with an examination of what democracy is and what definition or definitions might apply to distinguish electoral democracy, liberal democracy, and competitive authoritarianism. Another question discussed was whether there was such a thing as Islamic democracy, Asian democracy, Russian democracy, or American democracy.

As the week progressed, fellows and faculty discussed institutions of democracy, electoral systems, horizontal accountability, development of civil society, democratic transitions, and global trends in democracy promotion. Fellows led sessions themselves in the afternoons, comparing experiences and sharing insights into how well political parties and parliaments constrained executive power and how civil society organizations contributed to democratic consolidation and/or democratic transitions.

In addition to discussing their personal experiences with democracy promotion, fellows met with a broad range of practitioners, including USAID deputy director Maria Rendon, IREX president Mark Pomar, MoveOn.org founder Joan Blades, Freedom House chairman and International Center on Nonviolent Conflict founding chair Peter Ackerman, International Center on Nonviolent Conflict president Jack DuVall, Otpor cofounder Ivan Marovic, A Force More Powerful documentary filmmaker Steve York, and Advocacy Institute cofounder David Cohen. Guest speakers talked about their fieldwork, offered practical advice, and answered fellows’ questions. This component grounded the classroom discussions in a practical context. “It was important for our visiting fellows to interact with American practitioners, both to learn about innovative techniques for improving democracy practices but also to hear about frustrations and failures that Americans also face in working to make democracy and democracy promotion work more effectively,” explains McFaul. “We Americans do not have all the answers and have much to learn from interaction with those in the trenches working to improve governance in their countries.”

The following two weeks would focus in turn on development and the rule of law, but democracy continued to serve as the intellectual lynchpin of the program, with economies and legal institutions analyzed vis-à-vis their relationship to the development of democratic systems.

“For most of the fellows, who come from national circumstances which once suffered (or still do suffer) prolonged authoritarian rule, democracy is seen not as a luxury or an option, but rather as a necessity for achieving broad-based development and a genuine rule of law,” says Diamond. “Unless people have the ability to turn bad rulers out of office, and to hold rulers accountable in between elections through a free press and civil society, countries stand a poor prospect of controlling corruption, protecting human rights, correcting policy mistakes, and ensuring that government is responsive to the needs and aspirations of the people.”

Among the fellows, this idea of democracy as a “necessity,” a fundamental platform from which to pursue economic and legal reforms, was widely recognized. “It appears that like-minded people were selected to participate,” notes Sani Aliyu, a broadcast journalist and interfaith mediator from Nigeria. “Each of us is interested in the development of humanity, and it appears that we have accepted that democracy seems to be the vehicle through which human development can be accessed reasonably. We share this."

As the program’s curriculum shifted to development issues for week two, the all-volunteer assemblage of Stanford faculty expanded to include professors and professional research staff from Stanford Law School, the Graduate School of Business, and the Department of Economics. Avner Greif established the context for the development module with an overview of institutional foundations of politics and markets, followed by discussions of growth restructuring in transitional economies with GSB professor Peter B. Henry and Stanford Center for International Development deputy director Nicholas Hope. Terry L. Karl analyzed corruption in developing economies and the “resource curse,” and Carl Gershman, president of the National Endowment for Democracy, joined Diamond, McFaul, and Karl in discussing how the spectrum of democratic to autocratic systems of government affected a country’s development.

Another salient component of the development module centered on the role of media in promoting democracy and development. The field trip to San Francisco, which included a session with KQED Forum host Michael Krasny, a briefing on international reporting at the San Francisco Chronicle, and a discussion of media strategies at the Family Violence Prevention Fund, provided particularly rich practical content, as did the fellows’ roundtable on maintaining media independence in semi-autocracies.

At KQED Radio, Cuban-born Raul Ramirez, the executive producer of Forum, talked with fellows about the concept of “civic journalism” and KQED’s goal of creating space for civic discussion. Forum host Michael Krasny and Ramirez, who runs workshops on civic journalism at the European Journalism Centre in Maastricht, then fielded a barrage of questions from fellows: How does KQED maintain independence from government and commercial funding? If Rush Limbaugh attacked you, would you respond in your program? Is it possible to have neutral, nonpartisan public radio? How do you manage to deal with political issues, particularly when you start to affect the power structures with your programming? Are there any words, like “terrorist,” that you are banned from using on the air?

“Discussion of this kind is of great importance to both media professionals and the audience,” notes Anna Sevortian, a journalist and research coordinator at the Center for Development of Democracy and Human Rights in Moscow. “It helps you to clarify how a particular newspaper, TV, or radio station is dealing with matters of public policy or of political controversy.”

The third week’s curriculum layered rule-of-law issues onto the conceptual modules of democracy promotion and economic development, drawing on the teaching caliber of constitutional scholar and Stanford president emeritus Gerhard Casper, Erik Jensen, Helen Stacy, Allen S. Weiner, Tom Heller, and Richard Burt. After establishing a theoretical framework through discussions of the role of law, constitutionalism, human rights, transitional justice, the role of law in business and economic development, and strategies for promoting the rule of law, fellows compared experiences defending human rights, met with American immigration and civil liberties lawyers, and had a session with Circuit Court Judge Pamela Rymer on judging in federal courts. Field trips to Silicon Valley-based Google and eBay again put into practical context the free market, rule-of-law components discussed theoretically in the classroom.

Despite the intellectual rigor of the coursework and discussion, and the exploration of practical applicability with guest speakers and field trips, the Stanford Summer Fellows on Democracy and Development Program was designed as much to stimulate connections among field practitioners and to provide a forum in which to exchange ideas. Weekend dinners, stretching late into the evening at the homes of Diamond and Stoner-Weiss, helped to gel the collegiality developing in the classroom. Led by Violet Gonda, a Zimbabwean journalist living in exile in London, and Talan Aouny, director of a major Iraqi civil society development program, the fellows organized a multicultural party, a potluck-style affair in which guests made a dish from their home country to share with their colleagues and friends of the program.

Program directors McFaul and Stoner-Weiss hope this social network will endure well into the weeks and months after the program. “We envision the creation of an international network of emerging political and civic leaders in countries in transition who can share experiences and solutions to the very similar problems they and their countries face,” says Stoner-Weiss. To ensure they fulfill their goal of building a small but robust global network of civic activist and policymakers in developing countries, CDDRL recently launched its Summer Fellows Program Alumni Newsletter. The newsletter is based on an interactive website that will allow the center to strengthen its network of leaders and civic activists and facilitate more groundbreaking policy analysis across academic fields and geographic regions, the results of which will be promptly fed back to its activist alumni in a virtual loop of scholarship and policymaking.

Earlier this year, CDDRL also moved to professionalize the Stanford Summer Fellows on Democracy and Development Program by hiring a program manager, Laura Cosovanu, an attorney with experience in foundations and other nonprofit organizations, to oversee its advancement. The logistical acrobatics Cosovanu performed throughout the three weeks quickly became the object of good-natured teasing for some of the fellows, all of whom seemed to realize and appreciate the work required to get fellows and faculty into the same room.

As Kenza Aqertit, a National Democratic Institute for International Affairs field representative from Morocco, told program faculty at the graduation dinner, “You’ve done a great job and you should be proud of all your efforts. Plus you’ve won so many friends in so many autocracies and semi-autocracies.

On November 16, 2006, FSI convened its annual international conference, A World at Risk, devoted to systemic and human risk confronting the global community. Remarks by Stanford Provost John Etchemendy, FSI Director Coit D. Blacker, former Secretary of State Warren Christopher, former Secretary of Defense William J. Perry, and former Secretary of State George Shultz set the stage for stimulating discussions. Interactive panel sessions encouraged in-depth exploration of major issues with Stanford faculty, outside experts, and policymakers.

“When I was a child, the world was a simpler place,” stated Stanford Provost John Etchemendy. “What has changed is not the risk, but the number and complexity of problems that face the world today.” The complex challenges of the 21st century require that universities change, as well. The International Initiative, led by FSI, was launched “to identify key challenges of global importance and to contribute to their solutions by leveraging the university’s academic strength and international reach.”

Invoking Jane and Leland Stanford’s desire to educate students to become useful, contributing citizens, Etchemendy said, “We can best serve that mission today by producing graduates well-versed in the complex problems of a world at risk and willing to make the difficult choices that might lead to their solution.”

“It has been acutely apparent to us at FSI that we must actively engage a world at risk,” stated FSI director Coit D. “Chip” Blacker, “risk posed by the growing number of nuclear issues on the international agenda; the insurgency in Iraq; global poverty, hunger, and environmental degradation; the tensions of nationalism versus regionalism in Asia; infectious diseases; terrorism; and the geopolitical, financial, and ecological risks of the West’s current energy policies, especially its voracious appetite for oil.”

Introducing three Stanford luminaries, Blacker said, “One of the remarkable things about Stanford is the privilege of working with some of the outstanding intellects and statesmen of our time. Warren Christopher, William Perry, and George Shultz tower among them.”

“As Stanford University’s primary forum for the consideration of the major international issues of our time, we at FSI are dedicated to interdisciplinary research and teaching on some of the most pressing and complex problems facing the global community today.” – Coit D. “Chip” Blacker, Director, Freeman Spogli Institute“The Middle East has descended into hate, violence, and chaos,” said Warren Christopher, the nation’s 63rd secretary of state. “It really is a dangerous mess.” Discussing the Israeli incursion into Lebanon, the war in Iraq, and Iran’s regional and nuclear ambitions, he said the U.S. has aggravated these threats by “action and inaction.” Nonetheless, the U.S. remains the most influential foreign power in the region. “We must not give up on the Middle East,” he said. “We have to return to old-fashioned diplomacy with all its frustrations and delays.”

“We live in dangerous times,” stated William J. Perry, the nation’s 19th secretary of defense and an FSI senior fellow. “Last month about 1,000 of our service personnel in Iraq were killed, maimed, or wounded; the Taliban is resurging in Afghanistan; North Korea just tested a nuclear bomb; and Iran is not far behind. China’s power is rising and Russia’s democracy is falling.” As Elie Wiesel wrote, he said, “Peace is not God’s gift to its children. Peace is our gift to each other.” Comparing major security issues of 1994 to today, Perry assessed the nuclear arms race, North Korea, Iran, and Iraq. He noted that the Clinton administration had eliminated more than 10,000 nuclear weapons and urged that the work continue, because “the danger of terrorists getting a nuclear bomb is very real.”

Citing North Korea’s 2006 missile and nuclear tests, Perry said he was concerned that a robust North Korean nuclear program will stimulate a “dangerous arms race in the Pacific” and increase “the danger of a terrorist group getting a nuclear bomb.” “Iran is moving inexorably toward becoming a nuclear power,” Perry said. “We are facing new dangers,” he concluded, “and we must adjust our thinking accordingly.”

“The world has never been at a more promising moment than it is today,” said George Shultz, the nation’s 60th secretary of state. “All across the world, economic expansion is taking place. The U.S. is giving fantastic leadership to the global economy.” For Shultz, the imperative is to prevent the security challenges “from aborting all these fantastic opportunities.”

“The Middle East has descended into hate, violence, and chaos. The U.S. remains the most influential foreign power in the region. We have to return to old-fashioned diplomacy with all its frustrations and delays.” – Former Secretary of State Warren ChristopherU.S. leadership should inspire the world, Shultz said, advocating four initiatives. We should aspire to have a world with no nuclear weapons. We should take a different approach to global warning, based on the Montreal Protocols. “This is a gigantic problem we need to do something about and can do something about,” he said. We should build greater understanding of the world of Islam. We must combat rising protectionism. The postwar system reduced tariffs and quotas, promoting trade and growth. “The best defense is a good offense,” Shultz stated. “We need a lot of leadership in that arena.”

Plenary I, chaired by Chip Blacker, examined systemic risk. Elisabeth Paté-Cornell, Burton and Deedee McMurtry Professor and Chair of Management Science and Engineering, discussed how scientists measure risk, asking what can happen, what are the chances it will, and what are the consequences? “The good news is that the worst is not always the most certain,” she noted. Citing challenges of intelligence analysis, she said, “Certainty is rare; signals are imperfect; there is a tendency to focus on one possibility (groupthink) and underestimate others; and it is difficult to assess and communicate uncertainties.” “Success is not guessing in the face of uncertainties,” she said. “It is describing accurately what is known, what is unknown, and what has changed.”

Scott D. Sagan, professor of political science and director of CISAC, examined “Iran and the Collapse of the Global Non-proliferation Regime?” The crux of the issue, Sagan noted, is the emergence of two dangerous beliefs, “deterrence optimism” and “proliferation fatalism.” In Sagan’s view, too little attention has been given to why Iran seeks a nuclear weapon. Arguing that U.N. sanctions are unlikely to work and military options are problematic, Sagan said a negotiated settlement is still possible if the U.S. offers security guarantees to Iran, contingent on Tehran’s agreement to constraints on future nuclear development. As Sagan concluded, “Instead of accepting what appears inevitable, we should work to prevent the unacceptable.”

Siegfried S. Hecker, CISAC co-director, tackled the challenge of “Keeping Fissile Materials out of Terrorist Hands.” Although nuclear terrorism is an old problem, today there is easier access to nuclear materials, greater technological sophistication, and a greater proclivity toward violence. The greatest risk, he said, “is an improvised nuclear device built from stolen or diverted fissile materials.” “Given a few tens of kilograms of fissile material, essentially a grapefruit-sized chunk of plutonium,” he stated, “terrorists will be able to build and detonate an inefficient, but devastating Hiroshima- or Nagasaki-like bomb.” The most likely threat is a so-called “dirty bomb,” he said, which would be a “weapon of mass disruption, not destruction,” but still able to cause panic, contamination, and economic disruption, making risk analysis imperative to mitigate its consequences.

“We are facing new dangers and we must adjust our thinking accordingly. As President Lincoln said, ‘The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew.’” – Former Secretary of Defense William J. PerryTurning to human risk, Michael Osterholm, director of the University of Minnesota’s Center for Infectious Disease Research and Policy, addressed “Pandemic Influenza: Harbinger of Things to Come?” “The risk is one that a pandemic is going to happen,” he told a riveted audience. Comparing the great influenza of 1918 with the pandemics of 1957 and 1968, he noted that pandemics have differed in season of onset, mortality rates, and number of cases. Avian influenza has a 65 percent mortality rate and could affect 30–60 percent of the world’s 6.5 billion people, producing 1.6 billion deaths worldwide and 1.9 million deaths in the U.S. Inevitably, mutation will reduce its lethality.

“It is not a matter of if, just when and where” the pandemic will strike, said Osterholm. Noting that vaccines will not be available in numbers needed, he argued for measures to safeguard families, communities, and essential infrastructure, such as police, firefighters, and health-care workers. Just-in-time inventory practices, he said, have increased vulnerability to disruptions in food supply, transportation, equipment, and communications, making it vital to plan in earnest, now.

Plenary II, chaired by FSI deputy director Michael A. McFaul, assessed risks to humans from “Natural, National, and International Disasters.” Stephen E. Flynn, Jeane J. Kirkpatrick Senior Fellow at the Council on Foreign Relations and a trade and transportation security expert, decried the “artificial firewalls between homeland and national security.” The Hart-Rudman Commission of 1998 warned of a catastrophic attack on U.S. soil, yet we did not rethink national security even after 9/11. We must approach security as a transnational issue, with no clear “domestic” and “international” lines, he urged. More than 65 percent of critical infrastructure is privately owned and has been given inadequate attention by federal authorities. Hurricane Katrina exposed the vulnerabilities. “We face more threats from acts of God than acts of man,” Flynn stated. We need to move from a concept of “security” to one of “resiliency,” he said, greatly improving our ability to withstand a man-made or natural disaster.

David G. Victor, FSI senior fellow and professor of law, addressed three faces of energy security: oil, natural gas, and climate change. Oil prices are volatile, future fields are in places difficult to do business, and the global supply infrastructure is vulnerable, posing the risk of a one- to six-month supply disruption. For Victor, who directs FSI’s Program on Energy and Sustainable Development, the big threat is less supply than a potential demand-side shock, driven by the U.S. and China. Europe relies on an unreliable Russia for 25–30 percent of its natural gas needs, making it imperative to switch to cheaper, more reliable LNG from North Africa and the Middle East. Oil and gas price volatility has driven further dependence on coal-fired plants, with dire consequences for carbon emissions. New coal plant lifetime emissions, Victor said, are equal to all historic coal emissions, making it critical to invest in advanced technology to protect the environment.

“The world has never been at a more promising moment than it is today. All across the world economic expansion is taking place. Poverty is being reduced dramatically as China and India expand, along with Brazil.” – Former Secretary of State George ShultzPeter Bergen, CNN terrorism analyst and producer of Osama bin Laden’s first television interview, offered the dinner keynote, “Successes and Failures of the War on Terrorism Since 9/11.” Assessing negatives, Bergen noted that al Qaeda continues to carry on attacks from its base in Pakistan; Afghanistan is beset by instability; more than 20 million Muslims in Europe remain dangerously un-integrated; bin Laden has not been apprehended and continues to inspire followers through terrorist attacks; Iraq is an unstable breeding ground for jihad; and anti-Americanism is on the rise. Enumerating positives, there has been no follow-on attack on the U.S.; the government has made the country safer; many Muslims have rejected jihad; plots have been foiled and suspects apprehended across the globe. Weighing whether fighting the terrorists abroad has made the U.S. safer here, Bergen was equivocal: The U.S. can identify and eliminate only so many people and cannot stay in Bagdad forever. A network of educated, dedicated terrorists remains, he warned, capable of bringing down commercial aircraft or deploying a radiological bomb.

“You should remove ‘agricultural worker’ from the list of options of parents’ occupations in Question 11,” said the senior government bureaucrat. He explained, “It is impossible for the child of a farm laborer to enter an engineering college.” That statement was made on May 8 in Delhi this year, while he – the chief advisor on higher education to the national government – reviewed a questionnaire for final year engineering students. The questionnaire is to be filled by the graduating cohort of engineering students at various Indian universities this coming year. Its purpose is to discover job mobility across generations and relate that to the cost of education, location, public versus private provision, and various other factors. It is part of a broader study supported by FSI that colleagues at Stanford University and I, along with research groups in India, China and Russia, have initiated to compare the quality of the engineering workforce in three countries – China, India and Russia – with each other and with the United States.

A few days later, on May 14, I was with the head of a medium-sized private college in Bangalore, which had administered the pilot version of the questionnaire to graduating students. As he handed me 450 completed forms, I glanced at the first few. There, right on top, I read the first student’s response to Question 11. A female, she had chosen “agricultural worker” as the father’s occupation. Combined with information on her family’s income (which was in the lowest tier), this was clearly someone who contradicted the bureaucrat’s assumption.

As heartwarming as it was to see that response on the questionnaire, it reminded me, not for the first time, about how little government officials can sometimes know about their constituents. In 2004, I had studied, jointly with a division of the Ministry of Information Technology, how rural users might best use information technology. Our expectation (prior to the study) was that e-mail for personal and business purposes and Internet searches and transactions for farm work would be the main uses.

Instead, what people wanted was government services – health care and other welfare services, postal services, accessing titles and other official records, and government jobs. When I presented our findings to the country’s Minister for Information Technology, he insisted that we were wrong and that our initial hypotheses were correct. It was only when his own division head, who had conducted the study jointly with me, stated (firmly) that he stood by the results that the Minister started to change his views.

Perhaps one should not be too harsh on a bureaucrat when a political master, the minister, could be so ignorant! But, there is another reason for leniency: the higher education revolution in India has still not been understood, even within India, perhaps because of the speed of its happening. A revolution it undoubtedly is. For example, in engineering studies, the number of students enrolled in full-time 4-year undergraduate degree programs has risen from 250,000 in 1997 to 1.5 million in 2007, and is currently growing at 25% annually. Most surprisingly, the higher education sector has moved from a primarily state-provided service to private provision within a decade. 95 per cent of the above increase comes from enrollment in privately-run colleges, which now account for 80% of total enrolment. The storied state-owned Indian Institutes of Technology, which made up 10% of national engineering enrolment in 1990, now account for less than 2%, and graduate 5,000 students a year.

How this happened is too long a story to go into here. Briefly, the national government has increasingly yielded control over higher education to the individual states over the past ten years. The states have, in turn, allowed the private sector in, something that the national government resisted when it was in charge.

One of the desirable outcomes is, as demonstrated by the response to Question 11 above, increased access. Ten years ago, the child of an agricultural worker was, if educated through secondary school, likely to have studied only in the vernacular – and would thus have been excluded from the higher education engineering degree, which is taught only in English. Even if there was money in the family till to pay for tuition, the nearest college was probably too far to allow the student to stay at home; even if she had the money for staying away from home, competition for the limited number of available seats would likely exclude her from even the least meritorious college.

Today, even though the private colleges charge, on average, fifty thousand rupees ($1250) a year for tuition, which is three times the tuition fees at the comparable state college, affordability has increased. This is for two reasons. First is the proliferation of colleges. Thanks to the blanket coverage being provided by the private sector, there is a college, most likely two or three, in most small towns. Bangalore, with 290 engineering colleges – almost all private – tells the story of the rest of the country.

So, even small-town students no longer need to live away from home, thus saving on living costs. This can be a significant savings: in Bangalore, rent for a single room more than makes up the difference in private and state tuition fees. Second, the private colleges have built linkages with banks, so bank loans will usually cover half the tuition costs.

The democratization of higher education in India has removed the impending shortage of talent for the IT exporting sector. It has also brought into question the importance of the IITs to the eco-system, which – according to the recruiters I have interviewed over the years – was always overstated. Let’s examine both of these in the current context.

For the top IT exporting firms in India, such as TCS, Infosys and Wipro, the private providers are a boon. Together, the top three firms will, even in today’s difficult global economic environment, add 70,000 persons to their payrolls (net of attrition) in 2008. 70 per cent of these recruits will be fresh graduates. Private college graduates will account for the overwhelming majority of their recruits, followed by state colleges (not IITs).

Of course, these firms would like to recruit the top IIT graduates. However, the best IIT graduates either go abroad to study or work (a third do so, though that ratio is declining), another third join an MBA program in India, and the rest are recruited by the Indian operations of western firms like Google or Yahoo!, or join Indian startups like Tejas Networks or Telsima. Such firms pay starting salaries that are double the $7,500 starting wage offered by the Indian IT majors.

Is this a big loss for the Indian IT industry? No, say the recruiters, pointing out that the IIT graduating cohort was always a small proportion of their recruits because of overseas migration. What is important, they point out, is that other providers are rapidly catching up with the IITs in quality. Given their reliance on fresh graduates and their scale of recruitment (for example, between June and August of this year, TCS will make one thousand job offers a week and recruit 85% of its offerees), the Indian IT firms make precise calibrations of schools and rank them. The top quartile of the graduates of the top local private colleges in Bangalore are now considered equal in quality to those at the 50th percentile in the IITs. The top quartile at national colleges, such as the National Institutes of Technology, are deemed equal to the 75th percentile of the IITs.

The rank is based on various factors: alumni recruited by them in earlier years, internal factors such as laboratory and library infrastructure, and course content, their interaction with faculty in research projects, and student performance in internships. A thousand colleges (of the four thousand that offer engineering degrees in India) are deemed to meet the standards of the top three IT firms and their graduates are thus eligible for recruitment. According to one of the IT firms I spoke to, a decade ago, there were only fifty colleges that met their standards.

In consequence, in states where they are concentrated, eg., Infosys and Wipro in the state of Karnataka (whose capital is Bangalore) and TCS in Tamil Nadu (whose capital is Chennai), the ranking by the top 3 IT firms is critical for the colleges. A corporate recruiter from a smaller firm seeking IT talent from a Chennai college will demand to know its “TCS ranking."

This, in turn, is invaluable information to incoming students, which, in its turn, influences how colleges invest in faculty and infrastructure. As a result, in a way that was unforeseen by government planners and even the World Bank (which, in 2000, argued that market failure was likely in case private provision in India became important), a thriving market for engineering education has been created and quality has improved.

As recently as 2001, a report on IT education (which included a study of the IITs) by the Ministry of Human Resource Development noted that “The barest minimum laboratory facilities are available in many of the institutions and very little research activity is undertaken…Engineering institutions have not succeeded in developing strong linkages with industry…The curriculum offered is outdated and does not meet the needs of the labor market.” Around that time, when I had interviewed the director of one of the IITs, he had supported this finding, noting that almost all the engineering students at that IIT did their final year thesis projects in laboratories within the IIT (rather than, as intended, in companies).

Today, an engineering graduate from any of the thousand colleges that the IT services industry deems eligible for recruitment will always have completed several internships with industry prior to graduation, including the final semester thesis project – in other words, this is a sea change from just a few years ago.

Of course, there are caveats to the story of higher education. One of the concerns stated by regulators is that, as control has shifted from New Delhi to the states, the weak states have not been able to keep up with the strong states, thus increasing the intellectual gap between them. This appears to be true, on first impression. My conversations with recruiters of IT firms in Bangalore in May indicated increasing regional selectivity. Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Delhi, Maharashtra and West Bengal were the regions of choice, while weak states such as Bihar and Uttar Pradesh were falling behind.

A second genuine concern of policymakers is that the private colleges have no research agenda. Of course, what policymakers do not state is that the IITs have historically had no research agenda either. The good part of the present situation is that, with the burden of providing mass education off its backs, the national government is using its limited resources to support centers of excellence for research.

A final caution is on replicability in other countries. The higher education system that has resulted in India was not foreseen and caught the nation’s education planners by surprise. No one expected that the private sector would respond as it did. Planners designed the system to allow only non-profit private providers. Planners expected that those private providers that would enter the system would be philanthropic. They would exist at the margins of the then larger state-system. Accordingly, planners encouraged them, through incentives, to set up their institutions in smaller towns.

Instead, the private providers stormed into the big cities first, preferring to ignore the incentives, and have only recently spread to smaller towns. They have made profits through the back-door (by charging an upfront fee, the capitation fee).

A key factor was rising federalism: strong states like Karnataka and Tamil Nadu were able to provide the regulatory support that made private sector entry possible. The second key factor was the IT industry’s willingness to be the market maker, as described above. In this, the role of the large Indian IT firms, as noted, was critical. It is unlikely that an industry characterized by a large numbers of small firms would have been able to play the role of market maker.

So, there are some unique factors in India. China offers an alternative, perhaps more replicable, model: an entirely state-run system in which tuition fees, which average $800 per annum, pay for 50 per cent of costs. It, too, has grown rapidly: for example, 5 million students are currently enrolled in undergraduate engineering programs. The share of the burden per student appears to be higher in India. In India, the state and “aided” private colleges (these are privately owned and managed, but accept state-aid to pay for costs such as infrastructure and faculty salaries – in return, they must charge the same tuition fees as state-run institutions) account for 40% of total enrollment and charge fees that cover 30 per cent of costs. The unaided schools, as noted earlier, recover full costs through tuitions (endowments insignificant). Hence, the share of total national costs of education borne by students in the system is over 70%. This may be important for achieving long-term sustainability, although, in the short-term, it may adversely affect enrollment.

For the moment, though, the Indian IT industry, earlier starved of talent, has been saved by one of its own – the for-profit private education sector.

“Preparing the next generation of leaders and creating more informed elementary and secondary students means changing and improving curricula, setting higher standards, and ensuring that content is based on current research relevant to the world’s critical problems and urgent issues.” Coit “Chip” Blacker, FSI Director and Co-Chair, International Initiative

SPICE was established more than 30 years ago and serves as a bridge between FSI and elementary and secondary schools in the United States and independent schools abroad. SPICE’s original mission in 1976 was to help students understand that we live in an increasingly interdependent world that faces problems on a global scale. For 30 years, SPICE has continued to address this original mission and currently focuses its efforts primarily in three areas:

1. curriculum development for elementary and secondary schools;
2. teacher professional development; and
3. distance-learning education.

SPICE hopes to continue to educate new generations of leaders by addressing five key initiatives of The Stanford Challenge, announced by President Hennessy last fall.

Initiative on Human Health / 1

SPICE is working with the School of Medicine and the Center for Health Policy on a high school curriculum unit that focuses on HIV/AIDS. SPICE is collaborating with Drs. Seble Kassaye, David Katzenstein, and Lucy Thairu of the School of Medicine’s Division of Infectious Diseases & Geographic Medicine. Using an epidemiological framework, students will be encouraged to consider the many issues involved in the pandemic, including but not limited to poverty, gender inequality, and biomedical research and development. Two Stanford undergraduates, Jessica Zhang and Chenxing Han, are working with the physicians on this unit.

Initiative on the Environment and Sustainability / 2

SPICE recently completed a curriculum unit called 10,000 Shovels: China's Urbanization and Economic Development. 10,000 Shovels examines China’s breakneck growth through a short documentary that integrates statistics, video footage, and satellite images. The documentary, developed by Professor Karen Seto of the Center for Environmental Science and Policy, focuses on China’s Pearl River Delta region while the accompanying teacher’s guide takes a broader perspective, exploring many current environmental issues facing China. Stanford’s School of Earth Sciences is helping to promote this unit and documentary.

The International Initiative / 3

All of SPICE’s curriculum units focus on international topics. Two of SPICE’s most popular units are Inside the Kremlin: Soviet and Russian Leaders from Lenin to Putin and Democracy-Building in Afghanistan. Inside the Kremlin introduces students to key elements of Soviet and Russian history through the philosophies and legacies of six of its leaders—Lenin, Stalin, Khrushchev, Gorbachev, Yeltsin, and Putin. The unit includes (on DVD) six lectures by six FSI faculty members, including FSI director Coit D. Blacker; professors David Holloway and Gail W. Lapidus, CISAC; professor and deputy FSI director Michael A. McFaul; history professor Norman M. Naimark; and history professor Amir Eshel, Forum on Contemporary Europe.

Democracy-Building in Afghanistan is a teacher’s guide for a film called Hell of a Nation. The film’s lead advisor and SPICE’s key advisor was former CDDRL fellow J. Alexander Thier. Hell of a Nation documents the lives of two Afghans participating in the political process to develop a new constitution for Afghanistan—illustrating the “human face” of democracy-building and elucidating the complexities and difficulties of democratic construction in a divided and historically conflict-ridden nation.

Arts and Creativity Initiative / 4

Following 9/11, SPICE decided to develop a unit called Islamic Civilization and the Arts, which introduces students to various elements of Islamic civilization through a humanities approach. Lessons on art, the mosque, Arabic language and calligraphy, poetry, and music provide students with experience analyzing myriad primary source materials, such as images, audio clips, sayings of Muhammad, and excerpts from the Quran. In each lesson, students learn about the history, principles, and culture of Islam as they pertain to particular forms of art.

SPICE recently completed a new unit called Along the Silk Road, which explores the vast ancient network of cultural, economic, and technological exchange that connected East Asia to the Mediterranean. Students learn how goods, belief systems, art, music, and people traveled across such vast distances to create interdependence among disparate cultures. This was a collaboration with the Silk Road Project, the Art Institute of Chicago, Stanford’s Cantor Arts Center and Center for East Asian Studies, and the Shorenstein Asia-Pacific Research Center.

The K-12 Initiative / 5

SPICE develops curriculum based on FSI scholarship, conducts teacher professional development seminars locally, nationally, and internationally, and also offers a distance-learning course called the Reischauer Scholars Program to U.S. high school students. At seminars at Stanford, FSI faculty members offer lectures to the teachers and SPICE curriculum writers give curriculum demonstrations that draw upon the content presented in the lectures. Last summer, Stanford professor Al Dien (Asian Languages) and the SPICE staff gave a workshop for 80 teachers in the Chicago Public Schools. World-renowned cellist Yo-Yo Ma performed at the workshop.

The Reischauer Scholars Program is a distance-learning course sponsored by SPICE. Named in honor of former ambassador to Japan Edwin O. Reischauer, a leading educator and noted scholar on Japanese history and culture, the RSP annually selects 25 exceptional high school juniors and seniors from throughout the United States to engage in an intensive study of Japan. This course provides students with a broad overview of Japanese history, literature, religion, art, politics, and economics, with a special focus on the U.S.-Japan relationship. Top scholars affiliated with the Shorenstein Asia-Pacific Research Center (including Ambassador Michael H. Armacost, Professor Daniel I. Okimoto, and Professor Gi-Wook Shin), leading diplomats, and young professionals provide web-based lectures as well as engage students in online dialogue. These lectures and discussions are woven into an overall curriculum that provides students with reading materials and assignments.

SPICE has for many years focused on the initiatives that have been identified by President Hennessy to be at the core of The Stanford Challenge. By continuing to focus on these initiatives, the SPICE staff hopes to continue to make FSI scholarship accessible to a national and international audience of educators and students, with the ultimate goal of empowering a new generation of leaders with the tools needed to deal with complex problems on a global scale.

FSI faculty members discussed global risk, democracy, and security issues this spring before Stanford alumni and friends in San Francisco and New York City. Elizabeth and Joe Mandato, parents ’03, hosted a faculty panel in San Francisco and Ruth Porat ’79 and Anthony Paduano welcomed FSI faculty and friends to their home in New York.

In San Francisco, Scott D. Sagan, professor of political science and co-director of the Center for International Security and Cooperation; Larry Diamond, senior fellow at the Hoover Institution and coordinator of the democracy program at FSI’s Center on Democracy, Development, and the Rule of Law; and Rosamond L. Naylor, Julie Wrigley Senior Fellow and director of the Program on Food Security and the Environment at FSI, joined a panel moderated by FSI Director Coit D. Blacker.

Sagan spoke about North Korea and commented on the recent conclusion of the six party talks that resulted in an agreement by North Korea to suspend nuclear weapons production. He argued that the United States will be most successful in containing North Korea’s nuclear ambitions by taking regime change off the table. Diamond addressed conditions on the ground in Iraq and the limited choices now facing U.S. policymakers. He argued that they should focus on securing a viable political agreement among the Kurds, Sunnis, and Shiites in Iraq, but warned that the danger of chaos is great. Naylor emphasized the ways in which hunger and malnutrition jeopardize security and create havoc for women, children, and governments worldwide. She examined the “deadly connections” that link food security, climate risk, poverty, and civil conflict— challenges whose resolutions are critical to human survival over the long term.

In New York, faculty members from FSI’s Center on Democracy, Development, and the Rule of Law addressed Democracy, Security, and the National Interest: Dealing with Iraq, Iran and Russia. Michael A. McFaul, deputy director of FSI and director of CDDRL, and Kathryn Stoner, associate director for research at CDDRL, joined Diamond for the discussion. Blacker moderated, and Stephen D. Krasner, professor of political science and former director of CDDRL who just stepped down as director of policy planning at the U.S. State Department, commented.

As in San Francisco, Diamond offered his view of the Bush administration’s policy in Iraq. He stressed the need for a coherent strategy for extracting U.S. troops from Iraq and urged that the United States make conclusion of a power-sharing agreement among Sunni, Shiite, and Kurdish factions a top priority. McFaul discussed two options for America in shaping policy with Iran: pursue regime change or make a deal to disarm the regime. He argued that while both goals are worthwhile, the only way to change the regime and stop Iran from developing nuclear weapons is to actively engage it. Stoner-Weiss discussed trends in Russia away from democracy under President Putin. She argued that while Putin has posed as a democracy reformer, he has systematically undermined democracy and consolidated political and economic power. Krasner reviewed some of the conceptualizations and longer-term policy initiatives that characterize policy planning and reflected on the high degree of uncertainty policymakers face in the current international environment.

An FSI presentation to alumni and friends in London in June, on the topic of The Future of the Trans-Atlantic Relationship, completed the institute’s outreach events for this academic year, as FSI actively supports a key goal of The Stanford Challenge: to bring Stanford to the world.

Walking down a side street in Shanghai’s French Concession, a partially preserved corner of that city’s gloried and turbulent past, visitors come upon an ivy-covered house that served as the headquarters for the Shanghai branch of the Communist Party in the 1940s. Here the spartan quarters of Mao’s second in command, Zhou Enlai, are carefully preserved, the narrow beds and wooden desks evoking a simpler, revolutionary China.

A short ride away, across the murky waters of the Huangpu River, monuments to the new China are being erected in what was farmland less than two decades ago. The Pudong New Area, with its clusters of highrise office towers and multi-story shopping malls, is emblematic of the rush to wealth and economic power that now drives China.

These were among the images from a visit to China by a delegation of scholars from the Walter H. Shorenstein Asia-Pacific Research Center from April 8–14, 2007. Though time was short, the group managed to visit Shanghai, Hangzhou, and Beijing.

Fulfilling Shorenstein APARC’s mission to carry its work “into Asia,” the delegation met senior officials from government and business and held wide-ranging exchanges with Chinese scholars and policymakers at leading universities and research institutions. The conversation ranged from China’s development strategy to the current state of relations between China and its longtime rival and neighbor, Japan.

The delegation was led by Shorenstein APARC director and professor of sociology Gi-Wook Shin and by professor of political science Jean C. Oi, who has launched the center’s new China studies program. The group included Shorenstein distinguished fellow Ambassador Michael H. Armacost, associate director for research Daniel C. Sneider, and senior program and outreach coordinator Neeley Main. In Beijing, Freeman Spogli Institute director Coit D. Blacker joined the delegation, as did Shorenstein APARC’s Scott Rozelle.

The trip started in Shanghai, a dynamic center of finance and industry that has drawn in many Stanford graduates. State-owned enterprises such as Baosteel, one of the world’s largest steel producers, are in the midst of becoming players in the global marketplace. From Baosteel’s sprawling complex of docks, blast furnaces, and rolling mills along an estuary of the Yangtze River, products are now being dispatched around the world. In a meeting, the leadership of the Baosteel Group expressed an eagerness to tap into the educational and training opportunities offered at Stanford University.

Shanghai is not only the business capital but also a political center, rivaling Beijing. The Shanghai Institute for International Studies is an unofficial foreign relations arm of the Shanghai government. Shanghai Institute scholars are also players in national policy debate on many key issues facing China, such as relations with Taiwan, with Japan, and even with the Korean peninsula.

The scholars presented their views on a wide range of issues, from the preparations for the 17th Congress of the Communist Party this coming fall to emerging structures of regional integration in East Asia. Professor Xu Mingqi, who is also a senior leader of the Shanghai Academy of Social Sciences, explained that China’s development strategy is shifting toward a more balanced approach. Whereas local government officials previously were pressed to meet targets for GDP growth, foreign investment, and export volume, now they must also raise employment levels, close the growing income gap, and provide social security.

Hangzhou, considered one of the most beautiful cities in China, is a two-hour drive south of Shanghai. The modern roadway passed a tableau of the suburbanization of this part of China’s countryside, with multi-story brick homes mushrooming amidst the fields. The delegation arrived at Zhejiang University, considered among the best of China’s provincial higher educational institutions and growing rapidly in size and scope.

The Shorenstein APARC delegation met with faculty members from Zhejiang’s social science departments, who briefed the delegation on their research work in areas such as distance education, international relations, Chinese history, even a school of Korean studies. Zhejiang is also the site of a new research institution, the Zhejiang Institute for Innovation (ZII), founded by Stanford engineering graduate Min Zhu, a Silicon Valley entrepreneur who is determined to bring the lessons of Stanford and the valley to his home province and his undergraduate alma mater. ZII aims to foster applied research that can tie the university to the vibrant entrepreneurial culture of Zhejiang province. Shorenstein APARC researchers may soon be carrying out fieldwork in this laboratory of change, based at ZII.

Beijing, however, is still the place that matters most in China, not only in the realm of government but also when it comes to academic scholarship. The delegation met with two of Shorenstein APARC’s longtime corporate affiliates in China—PetroChina, the state-owned oil and gas giant, and the People’s Bank of China. Shorenstein APARC dined with a lively group of Chinese journalists, organized by former Stanford Knight fellow Hu Shuli, the editor of Caijing Magazine, considered China’s leading independent business publication.

The substantive task was to forge new ties with key research institutions. The current state of China’s development strategy was again on the agenda when the delegation met with senior officials from the National Development and Reform Commission (NDRC), formerly China’s State Planning Commission. Alongside the NDRC, the delegation met as well with the leadership of an offshoot of China’s State Council, the China Development Research Foundation, which is doing important work in promoting good governance in areas such as poverty alleviation, nutrition, and budgeting. Those conversations were echoed later in our meetings with scholars from Peking University’s School of Government.

Shorenstein APARC’s own China program, as Oi explained, is focused on understanding the tensions that arise as China grapples with the consequences of its rapid economic development. Out of the meetings in Beijing, an ongoing dialogue has begun, to be advanced this summer with a visit from a NDRC delegation and in the fall with an international conference at Stanford on China’s Growing Pains.

The delegation also engaged in frank and useful exchanges on a variety of international relations issues. We had an extended meeting with scholars and leaders of the China Reform Forum (CRF), a think-tank associated with the Communist Party’s Central Party School, the premier institution for training party leaders and officials. The CRF is credited with authoring important concepts such as the foreign policy doctrine of China’s “Peaceful Rise.” These discussions were followed by a visit and exchange with scholars from Peking University’s widely respected School of International Studies.

The scholars shared analysis of the current state of the North Korean nuclear negotiations, as well as evaluating the outcome of Chinese Premier Wen Jibao’s visit that week to Japan. Over dinner with CRF Vice Chairman Ding Kuisong, the conversation turned to the American presidential politics and the future direction of U.S. foreign policy.

Professors Blacker, Shin, and Oi also met with senior officials of Peking University, as part of an ongoing dialogue about cooperation between these two premier institutions of higher education.

 

What nuclear threats do we face today? America went to war because its leadership believed Iraq had nuclear and other weapons of mass destruction. We are reminded daily of the potential dangers of Iran turning its quest for nuclear energy into a weapons capability. We are locked in a deep struggle to get North Korea to give up its nuclear status demonstrated in last fall’s test. Concerns about Russia’s nuclear arsenal are resurfacing. And, we are constantly reminded that we must wage America’s “war on terror” to avoid the nexus of international terrorism and nuclear weapons.

All nuclear threats are not alike. How do these and other nuclear threats compare in terms of severity or likelihood? And how can we effectively address them? It is useful to think of today’s nuclear threats at three levels. First is an all-out exchange of nuclear warheads—hundreds of them—that would destroy civilization as we know it. Next is a limited, but still disastrous exchange—tens of warheads —that would create levels of destruction not seen since World War II. The third level is the use of one or several nuclear bombs, which would threaten our way of life. Reframing the nuclear threat in this way allows us to gauge our level of concern and formulate meaningful preventive strategies.

An all-out nuclear exchange could occur today only between the United States and Russia, which still maintain many thousands of warheads in their nuclear inventories. A nuclear war between these two countries represents the only existential threat to the United States.

The end of the Cold War rendered this threat highly improbable but not impossible. An accidental or unauthorized launch followed by a response is still possible. To eliminate this threat, the United States and Russia should follow through on detargeting and commit to de-alerting their nuclear forces—to remove them from high alert status that allows a launch within minutes to pre-identified targets.

The two nations should commit to making major reductions in their nuclear stockpiles and eventually eliminating them. In the midst of the Cold War, President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev reduced their stockpiles and even came close to an agreement to lead the world in abolishing nuclear weapons. Last January in a Wall Street Journal op-ed, George Shultz, William J. Perry, Henry Kissinger, and Sam Nunn called for a renewal of that vision by outlining steps to be taken now.

To move more rapidly toward much smaller numbers, I would add that leaders in both nations should undertake a zero-base nuclear assessment that would answer this question: If you were creating a stockpile from scratch today, how many weapons would you need to meet the current threat? Such a calculus would yield much lower numbers than trying to decide how many weapons you can live without. U.S. and Russian nuclear postures toward China should also carefully avoid provoking a Chinese nuclear buildup.

An exchange of tens of nuclear warheads is somewhat less improbable than nuclear war between Russia and the United States. But at this level, potential confrontations include nuclear exchanges between India and Pakistan, or between the United States and China—over Taiwan, for example, or on Russia’s southern border, or in the Middle East, between Israel and possibly Iran in the future. To limit the possibilities, it is crucial to stop more countries from acquiring nuclear weapons. The fewer fingers on the nuclear trigger, the better.

The United States should play a leading role in reinforcing the nuclear nonproliferation regime, centered on the 37-year-old Non-Proliferation Treaty (NPT), which allows a country to come within a whisker of building a bomb. A global expansion of nuclear power will pose additional challenges to the system. We need new rules of engagement for expanding nuclear power, including viable international controls on uranium enrichment and plutonium reprocessing.

To encourage non-nuclear weapon states to keep their end of the NPT bargain and refrain from acquiring the bomb, the five nuclear weapon states must show a greater commitment to working in good faith toward eventual elimination of their arsenals, as pledged under Article VI of the treaty.

Security guarantees from the United States and other nuclear weapon states can help curb some countries’ nuclear ambitions by alleviating fears of invasion by major world powers or by regional foes. India and Pakistan—two nuclear weapon states that aren’t parties to the NPT—should continue to pursue confidence-building measures to avoid miscalculation and potential nuclear war. We should help realize the nuclear-free zones that states are calling for in the Middle East, on the Korean peninsula, in Central Asia and in as many other regions as possible.

The United States and other states with nuclear weapons can also lower the risk of limited war by declaring a no-first-use policy, reserving nuclear weapons only as weapons of last resort.

The use of one or several nuclear bombs today is more likely than it was during the Cold War. If detonated in a big city, the damage would be catastrophic. Humankind would survive such a catastrophe, but it could gravely threaten our way of life. A country or a terrorist group in possession of a rudimentary nuclear bomb could deliver such a weapon in a van, boat, or plane. North Korea could do so, in desperation; Israel could do so in response to an existential threat; and under current doctrine, the United States or Russia could do so in response to a chemical, biological, or radiological attack. More likely, and hence of greater concern, is that terrorists would use a nuclear bomb, if they could get one.

The most likely route for terrorists to acquire a bomb is to devise one from stolen or diverted fissile materials. Theft or diversion of a ready-made weapon is far less likely.Building a rudimentary bomb is not easy but is judged to be within the capabilities of some sophisticated terrorist groups if they are able to obtain fissile materials.

Although it is widely recognized that keeping bomb materials out of terrorists’ hands is essential, the difficulty of doing so, especially from a technical standpoint, is not well understood. Only a few tens of kilograms of plutonium or highly enriched uranium are required for a bomb, yet almost 2 million kilograms of each exist in the world today, and some of it is not adequately secured. Securing these materials requires greater commitment to nuclear materials safeguards by all countries that possess them. It calls for greater urgency to protect and eventually eliminate highly enriched uranium in research reactors and facilities around the world. Bilateral or multilateral sting operations to intercept nuclear black market trade may help locate material already outside of state control. International cooperation in building databases and detection systems will improve nuclear forensics and attribution.

Each level of nuclear threat implies a different strategy of prevention. But three common aspects emerge as priorities for national and international policymaking:

• The fewer nuclear weapons, the better.
• The fewer fingers on a nuclear trigger, the better.
• Keeping fissile materials out of terrorists’ hands is essential.

Finally, this is not a problem for the United States alone to solve. It can only be solved through international cooperation.