Speech by NATO Secretary General, Jaap de Hoop Scheffer

“Today’s NATO, and why it matters”

LloydÂ’s City Dinner

London, 5 September 2007

Lord Levene, Distinguished Guests, Ladies and Gentlemen,

            Let me begin by thanking you for the invitation to speak here this evening, and for your very kind introductory remarks.

Lord Levene, in your introductory remarks, you quite rightly raised the question of why a NATO Secretary General should address a dinner hosted by a world-renowned insurance company.  I think the answer is pretty clear to us all. 

Like LloydÂ’s, NATO is in the insurance business.  Like LloydÂ’s, we spend a lot of time assessing global risks – political, military, even environmental.  We invest heavily in diminishing risk, for Allies but also for our global partners.  And, like with LloydÂ’s, when disaster does strike, somewhere in the world, often the first call is made to NATO to deal with the consequences. 

Also like LloydÂ’s, most people in the world know our name.  Unfortunately, not as many really have any idea of what we do in the Atlantic Alliance these days, and I suspect that applies to some of you sitting here tonight.  So IÂ’m glad to have the opportunity to explain, not just what NATO does today, but what more I think NATO can do together with the people here in the this room – because we have more in common than you might think.

LetÂ’s use the City as an example of what I mean.  The City of London is one of the greatest instruments of wealth creation in human history.  I believe the 335,000 people working here create almost nine percent of the GDP of the United Kingdom.  In fact, I suspect that the annual bonuses from a few successful City bankers, added together, would come to more than the entire NATO Civil Budget.

But the CityÂ’s future prosperity, and continued ability to stimulate investment worldwide, rest on some critical foundations: stability, predictability and transparency, not just here in the UK, but in the international environment more broadly. 

It is a cliché to say that we live in a globalised world.  No one lives that more than the people working here.  It is equally a cliché to say that there is a dark side to globalization: increased vulnerability to problems that seem far away on the map, but hit home in our back yards.  Those of you feeling the effects of the US sub-prime mortgage problems know that the ripples are being felt in every part of the markets, and in every part of the world.

The September 11^th attacks, almost 6 years ago today, were another clear example.  Three buildings were hit in the US.  Beyond the tragedy of the lives lost, what were the costs?  I saw one assessment for the US alone which looked at property damage, lost production of goods and services, and the loss of stock market wealth, and put the price tag at 2 trillion dollars.  Again, for the US alone.  And that doesnÂ’t include the costs to the global airline and tourism industries, the investments in security infrastructure, etc etc.  I wonÂ’t go on, but you get the point.

Managing that dark side of globalization is become harder every day – whether you are a City fund manager, a LloydÂ’s underwriter, and certainly if you are the Secretary General of NATO.  I can tell you, it was a lot simpler when I was, as Peter mentioned, a young second secretary at NATO in the 1970Â’s.  One opponent.  One clear threat.  A clear plan to follow to defend ourselves. 

Today, the threats have mutated, in ways that are difficult to predict and even more difficult to manage.  They have gone from visible to invisible.  Terrorism is the most obvious example.  

From localized risks, they have become global dangers that respect no borders.  Look at Afghanistan.  Until 2001, it seemed to many of us to be farther away than the other side of the world.  It was the classic “faraway place about which we knew little”, to paraphrase a former UK Prime Minister.  But the cancer growing there, in the shadows, metastised into a terror organization that planned in Germany, trained in Africa, and struck in the US, and has struck around the world since. 

I could also mention the proliferation of weapons of mass destruction.  AQ Khan, in Pakistan, was like a nuclear Tesco with a home delivery service.  By the time he was stopped, nuclear technology was in hands that should not have it, most obviously North Korea.

The range of threats has also expanded, from classic military challenges to new ones.  Peter mentioned cyber-attacks.  He was right to.  Estonia put up a stout and skilled defence of its IT infrastructure, and weathered the storm.  IÂ’m not sure every NATO country could defend itself so well.

  Cyber attacks can take out a power grid, a banking system, and government services.  While the attacks take place in cyber-space, the effects are very real. And while they are not military in the traditional sense, they have a clear security dimension, along with  -- and linked to - -their economic impact.

I am sure that all of you here have, in one way or another, taken steps to adapt to this new world, in your business lives.   Almost every company has beefed up its IT defences.  Business continuity planning – what to do in case we lose access to what we need every day to work – is now essential.  Needless to say, the insurance business has had to make major adjustments.  I know that some companies even avoid certain hotels, or minimize air travel, to protect their staff from possible terrorist threats.

            NATO, too, has transformed fundamentally to meet these new security challenges.  Going into this new century, we had a rock-solid foundation:  members that included some of the most influential countries in the world; half a century of commitment to one anotherÂ’s defence; a forum for 24/7 political consultation between Europe and North America on security matters; and an unmatched ability to generate military power.

            We have built on that foundation: first and foremost, by recognizing that static defence is no defence at all anymore.    Of course, beefing up homeland security is essential:  intelligence services, police, border monitoring, security cameras.  But we also need sometimes to go to the problem before it comes to us.

            Obviously, Afghanistan is the clearest example.  There is no mystery about what will happen in Afghanistan if we do not succeed in helping the elected Government establish security in that country.  The Taliban will be back.  So will Al Qaeda.  And we know what that means for our security here at home – not to mention what it would mean for the Afghans.

            That is why we must and will carry out the mission assigned by the UN to NATO in Afghanistan.  I will not spend too much time on this subject in my remarks – if someone wishes to discuss it further in the question and answer session, I will be happy to.

            But let me commend the work of the UK troops in the field.  I have met them many times in Afghanistan.  I stood on the Kajaki Dam and spoke to a young Royal Marine who knew exactly why he was there, and what his role was.  He was also very proud of what the UK and his NATO Allies were accomplishing there.  I left impressed, and encouraged by the quality of soldiers NATO and our Partners – 37 countries in all -  have out in the field.  

Yes, every day is tough.  The UK has lost many soldiers, as have Canada, the US, Germany, Spain, the Netherlands and many more countries in the ISAF mission.  But we are making progress – in making development possible, in building legitimate Afghan institutions, in helping grow the economy. 

There could certainly be more progress in some areas – countering poppy production is one clear example.  But the answer cannot be, as some suggest, to throw up our hands and walk away.  Because there is no industry quite as globalised as the drug industry.  The poppies being grown halfway around the world are being turned into the heroin that is in LondonÂ’s schools and back streets.  The fight in Helmand province is a fight for our childrenÂ’s security right here and right now.

Terrorism and drugs – new threats that NATO is fighting, in new ways, in Afghanistan.  There are other new challenges with which we are just starting to come to grips in the Alliance.

One example:  energy security.  As some of you know, there are virtual pipelines of LNG tankers across the high seas.  Tokyo, for example, needs one LNG tanker every 8 hours to keep the lights on.  Those virtual pipelines are vulnerable.  Could NATO, with its maritime fleets, add value, in times of crisis, to protect them?  Personally, I think so.  I also think NATO might play a role in protecting critical energy infrastructure when there is a specific, high level threat.  Again, only where NATO can add value.

Maritime security, more generally, is an area where the Alliance might have a greater role to play.  As we speak, one NATO naval force is patrolling the Mediterranean to deter terrorism.  Another NATO naval force is circumnavigating Africa, conducting training, and demonstrating NATO capability to uphold security and international law on the high seas – in areas, such as the Niger Delta, that enjoy neither.

I also mentioned cyber defence.  In 2004, NATO set up a centre focused precisely on cyber defence.  When Estonia was hit by cyber attacks, that NATO centre sent personnel to help.  As the military has had years of learning how to protect IT infrastructure, and because there is clearly an advantage to sharing best practices, I believe you will see more of a role for NATO in this area as well.

Let me mention, finally, missile defence.  There is quite a debate underway across the Euro-Atlantic area about whether to build defences against possible missile attack; if so, how and where; and what role NATO might play. It is a highly political and politicized discussion, I can tell you. 

My bottom line is this.  There is a growing threat from missiles – look at Iran.  In fact, in the last thirty years, the number of countries possessing ballistic missiles has almost tripled.  We simply cannot afford not to have a discussion about missile defence – amongst Allies, and with the Russians too.  The Cold War is long over.  We shouldnÂ’t be hobbled by Cold War thinking when it comes to this issue.

In all these ways – through constant consultation between Europe and North America; pro-active military operations; and new defences and against new threats – NATO is helping to maintain the stable, predictable international environment you need to do business.  And because we know that security has globalised, NATO has taken in new members, and built partnerships with countries around the globe, from Sweden to Ukraine to Morocco to Australia and Japan – about 60 countries in all.  As my illustrious predecessor, Lord Robertson, used to say, “This ainÂ’t your daddyÂ’s NATO”. 

Ladies and Gentlemen,

I said, at the beginning of my remarks, that I would mention not only what NATO does, but what we can do together.  Let me make two final points.

First: Afghanistan needs investment.  The TalibanÂ’s best recruiting sergeant is the economy – they pay unemployed young men to fight for them. If those boys had a job that paid them a reasonable amount, they would not risk dying for 10 dollars a day.  Coca Cola has a major bottling plant in Afghanistan.  I doubt very much if the Taliban recruits well among the staff. 

Second, let your voices be heard, here in the UK, in support of your military, in support of defence spending, in support of NATO.  I firmly believe that these support you, every day, by creating a climate in which you can work effectively.  But they need your support too.  With security, as with so many other things, you get what you pay for.  It cannot be bought on the cheap.

Lord Levene, Peter, a former UK Prime Minister once said, “IÂ’m an optimist, but I carry an umbrella”.  For many, many people, LloydÂ’s is their umbrella.  In a sense, I see NATO, too, as an umbrella: for the people of this country, of all the 26 Allies, and for the international community more broadly.  One that we need more than ever, in this very challenging new century.

Once again, thank you for the invitation.  I look forward to your questions.