What if financial sector, military industry and tax havens have serious impact on global security?

NATO is changing and the world is changing. 65 years ago, when NATO was established, its key defined objective was to “safeguard the freedom and security of its members by political and military means”. However, over these years, not only security concept has expanded significantly, but the content and relevance of political and military means available to NATO to address the security challenges also has changed. If the threats change, weapons and tactics should be changed accordingly too.

Military aggression and threats is not the one and only security problem anymore. National governments and security experts have identified several new security challenges we face in the 21st century; as the most common ones are: cyber attacks, terrorism, energy security and environmental challenges.

However, in my opinion, one of the most overlooked security challenges by the transatlantic community is the liberalized financial sector and commercialized military/ defense sector. Many of the NATO members are strong proponents of free market economies, financial liberalization and host some of the largest financial centres in the world. Therefore, one may even argue that my statement contradicts with the Alliance’s values and spirit of freedom.

But let me highlight just some of the most detrimental aspects of liberalized financial sector and commercialized defense sector and their impact on the global security:

  1. Comparatively unregulated banking sector with the tax havens at the forefront nurtures abusive, undemocratic, corrupt regimes allowing political leaders and elite to carry out corruptive, money laundering as well as tax evasion activities; sooner or later this leads to destabilization of the country or the region and due to negative effects on society and legitimacy of political leadership, it can create security risks within particular country and abroad. Moreover, ability to hide millions and billions of USD in bank accounts of Western banks make such leaders fearless and untouchable. No matter what they would do, their bank accounts would remain safe (think about Gaddafi or Putin, for example, or 35billion USD which leave Africa each year as a result of tax evasion and other illicit financial transactions via tax havens).
  2. The same tax havens and secrecy jurisdictions (Switzerland, Lichtenstein, Cayman islands etc) facilitate, promote and profit from illicit money flows which can allow terrorists, rebel groups and extremists directly or through under-cover organizations to accumulate and transfer funds which can be then used to purchase weapons, carry out terrorist attacks etc.
  3. Commercialization and liberalization of military industry over the last decades offers only two incentives – to produce more arms, to sell more arms and to make greater profits. Military industry, which is one of the biggest lobby groups in the USA and UK, is probably one of the most subsidized business sectors and has developed a very asymmetric and dangerous demand/ supply relationship with the state. Outsourcing of defense services to the military industry, which cant exist without conflicts and problems, may per definition mean that conflicts remain unresolved. Moreover, business/ profit interests of military industry may jeopardize political and diplomatic efforts to solve conflicts. Just recently, only because of massive international pressure, French military company stopped delivery of military equipment to Russia, which had just occupied Ukraine. How effective NATO campaign defending its ally Ukraine and its sovereignty can be, if one of its members is selling arms to the aggressor?
  4. Since the governments have been required to commit to military spending at 2% of its GDP, the less important aspect has become the quality of spending. Afghanistan is one of the examples where practitioners from the field have openly been questioning the cost-effectiveness and impact of the military spending.

It’s not a rocket-science, what is required from the current and future global political leaders; it is 1) long term thinking and 2) courage to compromise their own individual country interests (boosting GDP through billion-worth military industry business and keeping tax havens going as a result of massive lobbying from the financial industry) to achieve global peace. Growing GDP through arms manufacturing is inhuman. Praising boosting global financial centres in London, New York, Frankfurt etc which may contribute to world’s instability and insecurity, is cruel.

Security should not be viewed only as a defense and preparation for the attack. Security should equally mean prevention and proactive mitigation of risks. Security should mean peacebuilding not only manufacturing of more weapons. No innocent human being should die as a consequence of misused freedom of liberalized market.

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