Thank you very much. President [Klaus] Schwab [President, World Economic Forum], it's a pleasure for me to be here. Ladies and gentlemen, I was just asked the rhetorical question, "Why in the world would you want to talk about national security when you're here to talk about business?" And the fact of the matter, as all of you know, is that business follows the flag. Where there is stability and security, there is likely to be investment. And when there is instability and conflict, those capital flows go in one direction; they're usually out of the country. And so business has a very direct stake in the security of the world.
Now I'm told that yesterday you had lunch at the Benjamin Franklin Room. And I was there recently, last week, and I couldn't help but think of one of Franklin's comments, when he said, "Here comes the orator, with a flood of words and a drop of reason." [Laughter.] And I thought today I would skip the oratory and try to provide more than a drop of reason.
Since this is likely to be something of a news-making day, which I will mention in a moment, I'd like to share a few newspaper excerpts with you. This comes from the Washington Post. "Our scientific and intellectual activity has gone beyond our wildest dreams." The San Francisco Examiner: "The oceans are obliterated. London and Paris and New York are our neighbors." This is from the New York Times, which declares that "the unprecedented economic expansion has caused a virtual panic of prosperity on Wall Street," and calls the United States "the envy of the world."
These are not from today's headlines. They were from the headlines of the last century when he world was looking with unbridled optimism at that time to a brave new world of globalization. It is one of those periods in time in which the hoped-for prosperity and the greatest promise in human history slipped into two of the greatest slaughters in human history. This is not to say that we are like condemned, as Auden would say, to float as flotsam on "the dangerous flood of history."
But it does remind us at least that we cannot be passive. We cannot simply rely upon our laurels, or indeed on lasers or our new technology, in order to prevent us from repeating some of these past mistakes.
First of all, I would like to thank the Chamber from a national security point of view, because the Chamber has been so instrumental in urging employers, especially those of small business, around this country, to provide the kind of protection that's necessary for our Guardsmen and Reservists, who are called upon to go on active duty for as much as six months at a time. As a result of the Chamber's initiative, we have had tremendous cooperation from so many employers. It allows us to have this Total Force that we deploy globally, and that's what I'd like to talk to you a little bit about this morning.
I know that you are interested in asking some questions. Hopefully, I can give you some answers, although as Craig has reminded me, your previous panel has reduced anything I might say to something on the trivial nature, in view of the exciting prospects for the future.
We in the United States are often accused of three basic things. Number one, we are accused of suffering from Superpower Fatigue, that after a half-century of global leadership we are fatigued. Secondly, [it is said] that when we act, we tend to act militarily first and think about diplomacy last. The third basic charge is that, whenever we act, we act unilaterally and not multilaterally. And I would like just to take a moment or two to address each of these suggestions.
There is, in fact, something of a, I would say, schizophrenic attitude toward the United States that I see in my world travels. We are either charged with being overbearing or overcautious, that we suffer from dominance or defeatism, that we are either imperialistic or we are indifferent. I expressed my frustrations to one of the conferences I attend in Europe, in Brussels, at a NATO meeting. And I heard a reply from, George Robertson, now the Secretary-General of NATO, which has stayed with me. He, in his formidable brogue, said, "Bill, you don't understand. If you can't ride two horses at once at the same time, what the hell are you doing in the circus in the first place?" [Laughter.]
That comment of his has stayed with me because I think it's fine that we ride two horses at the same time, provided they are going in parallel directions. [Laughter.] And that has been the problem, I think, in terms of identifying what our national security interests are and to make sure that we do not suffer from superpower fatigue.
So I would ask you this question, rhetorically: Does a nation which has 100,000 troops forward-deployed throughout the Asia Pacific region appear to you to be suffering from superpower fatigue? Does a nation that has roughly 100,000 troops deployed through the European theater suffer from superpower fatigue? Does a country that has more than 23,000, as many as 27,000 people in the [Persian] Gulf region on any given day, or some 37,000 troops on the border, inside Korea, sound like a nation that is suffering from fatigue? Does it sound like a nation that's suffering from fatigue who has a secretary of Defense who travels to 10 countries in 11 days, who has traveled almost 700,000 miles in three years? Does that sound like a nation that's willing to step back into the shadows of inferiority and let others dominate the world scene? I would suggest to you it's not.
We are not going gently into that good night. We remain actively engaged on crucial issues. I think about this when I have to go up to Capitol Hill, which I am going to do later this morning. I think we are a unique country in the world. I have asked for and have received the support from the President of the United States for $112 billion over and above our budget for the next five years. Does that sound like a country that is somehow willing to slip into the backwater of as a secondary power? I don't think so. In fact, I don't find any other country that's willing to put that kind of material on the line, be it in terms of personnel or in terms of resources. So I think the charge about superpower fatigue is without merit.
Do we resort to military action instead of diplomacy? Wherever we are today, we are engaged in diplomacy. We are not resorting to military action first. It's always last. In fact, we are criticized, for the most part, because we don't engage more actively in military action. But whenever we can, we try to work it out with our allies or resolve our differences with our adversaries in a diplomatic fashion.
Do we act unilaterally versus multilaterally? Wherever we can and whenever we can, we engage our allies to act multilaterally. You may recall there was a war going on last year at this time in Kosovo. There, you had 19 NATO countries engaging in a major air conflict with Slobodan Milosevic. Many criticized that, saying it was too slow, and I would be the first to agree that if the United States were to act unilaterally, we would do it differently. But that presumes that the United States could have acted unilaterally, which it could not have.
So we try to engage our allies, be they in Europe, be they on a bilateral basis throughout the Asia Pacific region, be they in South America. We are always trying to look for ways in which we can act on a multilateral basis, and then always have the option to act unilaterally when we have to.
There are two or three other issues I will touch upon. I don't know how much time you have for questions, but I'd like to touch upon what we're doing now from a diplomatic point of view in terms of trying to engage two major countries: Russia and China.
The president will go next week to meet with President Putin to talk about strategic issues: whether or not we can reach lower levels of nuclear arms, whether there's any potential for modifying the ABM Treaty to accommodate a limited National Missile Defense system to protect the United States, and those who wish to participate in such a system, against the threat of nuclear blackmail by a rogue nation. So he will go there to engage in a very serious and hopefully substantive series of discussions with this new Russian leader.
We engage them on a regular basis with something called the Cooperative Threat Reduction Program. We've spent several billion dollars to help Russia reduce and eliminate its nuclear weapons stockpile as well as chemical weapons. And so there is another area that we seek to cooperate with and engage a major nation in a constructive fashion.
As you know, there's a vote coming up on China today. And it is my hope and, I would say, expectation, but it's only a hope at this point that the House and the Senate will approve Permanent Normal Trading Relations with China. I believe it's in our security interests. I think the economics speak for themselves, and perhaps you had Charlene Barshefsky already address those issues. But clearly the economic issues favor the United States on this vote.
From a national security point of view it also favors us, because I have found that when we have a constructive engagement with China, willing to challenge them on issues where we differ, but also willing to find areas of compromise where we can, that that also solidifies our bilateral relations with virtually every other country in the Asia-Pacific region. And so if they see that we have great tensions with China that are caused by arbitrary policies or policies that they do not see as being rational, responsible, then it causes some reduction in the strength of those relations with all of the Asia- Pacific countries. And so it is in our national security interest to engage China in a positive way. From my perspective, given the economic arguments that are made on behalf of this vote, a rejection would send a very strong signal that we intend to treat China as a potential adversary and as the new cold warrior of the 21st Century. That will not be in our national security interest to do so.
I will sum up the strategy that we have for our military. Our national security strategy is captured in three words: shape, respond, prepare. We try to shape the political international environment in ways that are favorable to the interests of the United States and that of our allies by being forward deployed. That's why we have the 100,000 in Asian Pacific and why we have the 100,000 in Europe and why we are deployed in the Gulf and also maintaining strong bilateral relations with Australia and others.
We try to be able to respond to any kind of contingency. I just met Jim Kimsey [co-founder, America Online] briefly before coming in here, a former Army vet, served two tours in Vietnam, and I think he'll be the first to tell you that a soldier has to be prepared to do virtually everything. There is some notion that perhaps we could just take a small, select group and train them as peacekeepers and start sending peacekeepers out to various regions that are in a state of chaos or conflict. But peacekeeping can go to combat in a matter of seconds.
And so what we do is we train our soldiers, sailors, airmen, Marines, and Coast Guardsmen -- they play a major role in our drug war as well -- to be able to conduct what we call NEO operations, non-combatant evacuation operations, humanitarian rescue missions, when there are floods that are threatening to overwhelm any particular area or country, all the way up to small-scale contingencies, to major air campaigns against a Slobodan Milosevic, all the way to deterring any major power from challenging our homeland. We have to do all of it. We train our men and women accordingly. That's why we think that they are the best-trained, best-led, best-equipped force in the world. So that's part of the response.
Then we have to have something for the future, called prepare, and that's where we have been deficient in recent years, because at the end of the Cold War, there was tremendous pressure on this country, on our Congress and on our presidential leaders, as a matter of fact, to have a peace dividend. We saw the end of a major cold war, now we had to cut defense, and we did. We cut the size of our forces by roughly a third, and we reduced our procurement budget by almost two-thirds. And so we found ourselves in a situation where we had been living off the build-up.
In the early '80s when Ronald Reagan took over in president, we had a major spike in defense spending, and we have been living off that for the past 20 years. Now we're at a state where we couldn't go any lower. And when I took over in 1997, we had a procurement budget that was roughly $43 billion yearly. Our goal was to get at $60 billion, and it kept always evading us. It was a mirage. We would get to it one year and it would fade because we had to put money into operation and maintenance. But we now have a budget that has achieved the $60 billion mark on an annual basis, going up to $70 billion within another four years. And it will go higher, because it has to go higher.
So we have this shape, respond, prepare strategy which we are carrying out. I believe as a result of U.S. leadership that we have, in fact, promoted stability and security, enabling you, the business community, to make the kind of investments that will, in fact, anchor and solidify the burgeoning democracies all over the world.
You may recall at the end of the Cold War that Francis Fukuyama came out with a thesis and said it was the end of history, that we would see a sweep of democratic liberalism and capitalism sweeping across all of the continents. And that produced a reaction by Peter Vale, a South African academician. He said, "Rejoice, my friends, or weep with sorrow. What California is today the world will be tomorrow." [Light laughter.] Then, of course, you read about Samuel Huntington's book also called The Crash of Civilizations.
Neither one of them has come through at this point, but we have to constantly take a leadership role, working with our allies, trying to build stable, secure environments so that you can invest in those environments and create prosperity, and that prosperity will reinforce democratic values. So I come here today to thank you for the invitation, and I look forward to your questions. [Applause.]