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Saturday, December 24, 2016

Rex Tillerson: The Next George Shultz?

Over the past several weeks, President-elect Trump’s selection of Exxon CEO Rex Tillerson for Secretary of State has brought much rebuke from the left for his dealings in Russia and close relationship with President Putin. Notwithstanding the other 100 plus leaders Mr. Tillerson has met with during his esteemed professional career, Tillerson would complement President-elect Trump’s efforts in much the same way George Shultz complemented President Reagan’s.

After serving in the Marine Corps during Second World War, Shultz earned a Ph.D. in economics at the prestigious Massachusetts Institute of Technology (MIT). He taught economics at MIT (1948-57) and the University of Chicago (1957-68).

In 1955, he worked as an economist on President Eisenhower’s Council of Economic Advisors. He served in the Nixon administration as Secretary of Labor (1969-1970), OMB Director (1970-1972), and Secretary of the Treasury (1972-1974), before returning to the private sector as the President of the Bechtel Group.

Shultz’s background in economics was critical to President Reagan’s strategy of pressuring the Soviet Union to end the Cold War. At the time, some Washington insiders questioned Shultz’s work at Bechtel and its influence on his judgment; however, history has demonstrated that such concerns were unfounded.

In his book Doomed to Succeed, Dennis Ross wrote:

When Shultz replaced Haig, there was no reason to expect Shultz and [Reagan Defense Secretary Caspar] Weinberger to be at odds on the Middle East; they had worked together at the Bechtel Corporation, which had major construction contracts in Saudi Arabia. But their attitudes, particularly toward Israel, could not have been more different. For Weinberger, Israel was a problem and he felt no commitment toward it. For Shultz, it was a special country.

The unhinged and unwarranted attacks on Mr. Tillerson’s patriotism have been relentless, but not unprecedented. George Shultz faced similar criticisms during his confirmation hearing in 1982.

For example, then-Senator Alan Cranston (D-CA) attacked Shultz by implying that Bechtel’s projects abroad were undermining American foreign policy. Shultz sternly shot back, “I resent what I regard as a kind of smear on Bechtel.” Ultimately, the Senate agreed with him and he was unanimously confirmed. He served as Secretary of State for almost seven years.

President Reagan won the Cold War because he had a capable staff led by Secretary George Shultz. Shultz established a good working relationship with General Secretary Mikhail Gorbachev and his Foreign Minister Eduard Shevardnadze.

Reagan’s negotiation strategy with the Soviets was significantly more successful than Obama’s current strategy with Iran because Reagan and Shultz refused to separate human rights and economics from arms control.

Reagan firmly believed that “nations do not distrust each other because they’re armed; they arm themselves because they distrust each other.” Just prior to the Geneva Summit, he repeated this idea in an address to the nation:

The rights of the individual and the rule of law are as fundamental to peace as arms control. A government which does not respect its citizens’ rights and its international commitments to protect those rights is not likely to respect its other international undertakings. And that’s why we must and will speak in Geneva on behalf of those who cannot speak for themselves.

Before Reagan left for Geneva, he had a “four-part agenda” that included arms control, human rights, bilateral issues, and regional issues. Secretary Shultz was instrumental in convincing Gorbachev that human rights must be added to the agenda.

Secretary Shultz first met with Foreign Minister Shevardnadze in Helsinki in July, 1985. Shevardnadze couldn’t wrap his head around why human rights should be included in the summit agenda. During the meeting, Shevardnadze complained, “When I come to the United States, should I talk about unemployment and blacks?”

“Help yourself,” replied Shultz.

Shevardnadze would later admit that on human rights, “George, we might do some of the things you want, but not to please you. We’ll only do them if they are to our advantage.” This point struck a chord with Shultz. For the months leading up to the Geneva Summit, Shultz would argue that improving human rights was in the Soviets’ national interest.

Shultz went to Moscow to meet with Gorbachev on November 4, 1985, two weeks prior to the Geneva Summit. Both sides had ample reason to worry that the summit would end in failure.

Shultz used his knowledge of economic theory to insist that human rights were a critical part of the agenda and firmly within the Soviet’s national interest. He argued:

Science and technology are moving quickly, and this affects everything including military weaponry, but it also affects how we produce things and how we live. We have left the era of the industrial age and have moved into what we might think of as the information age, in which we will have to think about new ways of working, new ways of making decisions. Society is beginning to reorganize itself in profound ways. Closed and compartmentalized societies cannot take advantage of the information age. People must be free to express themselves, move around, emigrate and travel if they want to, challenge accepted ways without fear. Otherwise they can’t take advantage of the opportunities available. The Soviet economy will have to be radically changed to adapt to the new era.

Gorbachev was receptive to the argument telling Shultz, “The next time you come to Moscow you should forget about your government duties and come as a businessman and economist.”

Gorbachev knew he had no choice but to embrace reform or watch his country fall hopelessly behind. At the end of the meeting, Gorbachev accepted the fact that human rights would be discussed at the summit.

Today, having a distinguished businessman, like Rex Tillerson, could be helpful in convincing Putin that it is in his country’s national interest to improve human rights. He has done it before.

In 2008, Tillerson spoke about the rule of law at the prestigious St. Petersburg International Economic Forum. With many of Russia’s elite present, Tillerson said, Russia “must improve the functioning of its judicial system and its judiciary. There is no respect for the rule of law in Russia today.”

The head of Exxon-Mobil understands better than anyone that Russia’s economic future is vulnerable to the ebbs and flows of oil prices. Russia needs to modernize its economy and that cannot happen without freedom and the rule of law.

Reagan and Shultz complemented each other. Shultz managed to convince Gorbachev that the Soviet economy would not advance without improving human rights while Reagan impressed upon him the U.S.’s sincerity in ending the Cold War. Just as Obama’s weakness mirrors Carter, we wholeheartedly believe that the Trump-Tillerson team will follow the Reagan-Shultz approach in dealing with Putin.

The last three presidents (Clinton, Bush, and Obama) have had minimal success improving relations with Russia. Having a seasoned businessman with an ear at the Kremlin provides Team Trump the inroads to finish the job that President Reagan and Secretary Shultz began in 1985.

During their first summit, Ronald Reagan made it abundantly clear to Mr. Gorbachev that although he didn’t want an arms race, the United States would surely win one. Reagan would later say that Gorbachev’s expression said it all: that he too realized that an arms race was not in the Soviet’s national interest. This mutual realization would shift the tone for the remainder of the summit and led to a mutual respect between the two men.

In just an hour, Gorbachev seemed to change his perception of Reagan. The meeting was a masterful performance and proved once again that Reagan was the “Great Communicator.” Both men seemed to have formed a common basis for continued discussion, even during their heated discussions on Reagan’s Strategic Defense Initiative.

Rex Tillerson already has a solid relationship with President Vladimir Putin that is similar to George Shultz’s relationship with Gorbachev. It is based on mutual trust, respect, and the belief that both countries greatly benefit from improved relations.

Tillerson’s expertise on the Russian economy, as well as his business acumen, makes him the perfect choice to advance the cause of human rights in Russia. More than anyone else, Tillerson knows what it is like to be locked in heated discussions with Russian negotiators and come out having achieved an amicable deal. He will evoke this same strength when necessary to advance America’s interests.

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