Southern California

International Review
Volume 3, Number 1 • Spring 2013

Southern California International Review
scinternationalreview.org

Staff
Editor-in-Chief:
Samir Kumar
Assistant Editor-in-Chief:

Andrew Ju
Editors:

Natalie Tecimer
Matthew Prusak
Dhwani Thapar

Taline Gettas
Rebecca Braun
Cristina Patrizio

Layout: Rebecca Braun

Cover: Samir Kumar

The Southern California International Review (SCIR) is a bi-annual interdisciplinary print and online journal of scholarship in the field of international
studies generously funded by the School of International Relations at the
University of Southern California (USC). In particular, SCIR would like
to thank the Robert L. Friedheim Fund and the USC SIR Alumni Fund.
Founded in 2011, the journal seeks to foster and enhance discussion between
theoretical and policy-oriented research regarding significant global issues.
SCIR is managed completely by students and also provides undergraduates
valuable experience in the fields of editing and graphic design.

Copyright © 2013 Southern California International Review.
All rights reserved. No part of this publication may be reproduced or transmitted in any
form without the express written consent of the Southern California International
Review.
Views expressed in this journal are solely those of the authors themselves and do not necessarily
represent those of the editorial board, faculty advisors, or the University of Southern California.

ISSN: 1545-2611

Contents

1.

The Political Economy of Mad Cow Disease and U.S.-Japan Trade Relations
Daye Shim Lee

11

2.

Why Did the United States Enter the 1991 Persian Gulf War?
A Study of Psychological Theory and Offensive Realism
Leyla Tosun

27

3.

The Macroeconomic Trajectory of Myanmar
A Predictive Analysis
MoeMoe Chaee and Matthew Prusak

41

4.

Regionalism and European Integration
A Complementary Process
M. Beau Feibus

63

Dedicated to Professor John Odell

Editor’s Note:
Dear Reader,
It is with great pleasure that I introduce the fifth issue of the Southern California International
Review (SCIR). This bi-annual undergraduate research journal based at the University of
Southern California is a unique opportunity for students to spread their ideas to a wider
audience. By fostering such dialogue between students of international relations and related
fields throughout the country, SCIR seeks to promote a better understanding of the global
challenges facing our world today. The need to not only study, but also interrogate, international relations and related disciplines, has never been more important. Thus, this journal
desires to contribute fresh ideas to this fascinating and essential field of study.
The pieces contained in the journal are written by undergraduate students and were chosen
by our eight-member editorial board through a rigorous review process. The graphics, templates, and formatting were also done by our editorial board. In an effort to not restrict students in their submissions, SCIR welcomed submissions on a wide variety of topics in the
realm of international studies, thereby emphasizing our commitment to interdisciplinary
learning.
The articles included in this issue span international studies, from a political economy perspective on the rising and trendy Myanmar to a multi-theoretical look at the 1991 Gulf
Crisis, the structure of the questions asked in these articles shows the breadth of the discipline we represent. As you read, ask yourself, “Why is this article important?” My hope is
that your question is answered, and you find yourself with a host of more incisive questions
that would incite enthralling answers. Keep an eye out for the authors you read, for they
might soon be in a position to influence the very issues that they have examined!

SCIR would not exist without the generous funding provided by the Robert L. Freidheim
Memorial Endowment, and the support of the School of International Relations. Significant
appreciation goes to the Director, Dr. Robert English, and the wonderful faculty and staff
that have assisted us over the past three years. I would particularly like to thank Linda Cole
for her unwavering support at each step of the journey.
Finally, we would love to hear your feedback on this issue. Please send us your comments,
questions, and suggestions at scinternationalreview@gmail.com, and we will take these into
account or offer a thoughtful reply.
Sincerely,
Samir Kumar
Editor-in-Chief

The Political Economy of Mad Cow Disease and
U.S.-Japan Trade Relations
Daye Shim Lee

Since the first American case of bovine spongiform encephalopathy (BSE or “Mad Cow” disease) in 2003, beef trade has been one of the most sensitive issues in U.S.-Japan trade relations.
Japan immediately banned the import of all U.S. beef and refused to resume the trade until
2006. Even then, Japan made the stringent age limit a prerequisite for the lifting of the ban.
However, following the discovery of mad cow disease in California last April, Japan voluntarily
announced that it would not suspend any U.S. beef imports. Moreover, Japan decided to ease
the age restrictions that had been in place for more than six years. This paper examines the
stark contrast between Japanese responses to U.S. Mad Cow cases in 2003 and 2012, and raises
questions about Tokyo’s underlying rationale for its trade policies. Based on the broader understanding of realist theory in international relations, this paper argues that Japan’s policies
on U.S. beef imports were motivated by specific national interests, and that Mad Cow disease
in the United States provided the Japanese government with political leverage to pursue those
goals.

Introduction
Japan’s policies on U.S. beef imports since the U.S. outbreak of bovine spongiform encephalopathy (BSE or Mad Cow disease) have been driven by factors beyond food safety
concerns. When the first American case of Mad Cow disease broke out in 2003, Japan
banned the import of U.S. beef entirely and refused to resume trade until the U.S. Congress
threatened to take retaliatory measures in 2006. Even then, Japan eased the ban only for
meat from cattle of twenty months or younger.1 Following the discovery of Mad Cow disease in California this April, however, Japan voluntarily announced not to suspend U.S.
beef imports.2 It also decided to ease the age restrictions that had been in place for more
than six years. The stark contrast between Japanese responses to U.S. Mad Cow cases in
2003 and 2012 raises questions about Japan’s underlying rationale for its trade policies. This
paper argues that the inconsistency in Japan’s policies on U.S. beef imports is often driven
by specific national interests, and that Mad Cow disease in the United States provided the
1  Stephanie Strom and Hiroko Tabuchi, “A Break for Embattled Ranchers,” The New York Times, January 29, 2013, accessed
March 21, 2013, http://www.nytimes.com/2013/01/29/business/global/japan-to-ease-restrictions-on-us-beef.html.
2  Aya Takada, “Japan Has No Plan to Halt U.S. Beef Imports on Mad-Cow Case,” Bloomberg, April 25, 2012, accessed
December 7, 2012, http://www.bloomberg.com/news/2012-04-25/japan-has-no-plan-to-halt-u-s-beef.

Daye Shim Lee is a junior in Georgetown University’s Edmund A. Walsh
School of Foreign Service studying International Politics.

12

Daye Shim Lee

Japanese government with diplomatic leverage to pursue those goals: the 2003 ban sought
to protect the Japanese beef industry in the aftermath of Japan’s own Mad Cow outbreak
in 2001, while the 2012 decision aimed to win the U.S. support for Japan’s bid to join the
Trans-Pacific Partnership (TPP). In order to demonstrate these points, this paper examines
the effects of Mad Cow disease on U.S.-Japan beef trade and provides the political and economic analyses of Japanese responses in 2003 and 2012. It then concludes by discussing the
implications of Japan’s beef policies for the contemporary U.S.-Japan trade relations from a
realist perspective.

Beef Politics in Japan and the United States
Even before the outbreak of Mad Cow disease, beef trade negotiations between Japan
and the United States had been heavily influenced by domestic politics in each country. In
Japan, agriculture has traditionally been one of the most politically powerful and highly
protected sectors.3 Three factors empower Japanese farmers to maintain the government’s
support in achieving their goals despite the growing public concern about high domestic
food prices (studies show that food prices in Japan are nearly twice as high as international
prices) and the deterioration of Japan’s trade relations.4 First, their political power is founded
on a strong organizational basis. More than five million Japanese farm households are unified under Nokyo, or the Agricultural Cooperative Association. Although only eight percent
of those households raise beef cattle, their political activities such as anti-import campaigns
are orchestrated by Nokyo on a national scale.5 Second, farmers form a coherent voting bloc
in the electoral district system that is skewed in favor of agricultural constituencies.6 These
districts have long supported the conservative Liberal Democratic Party (LDP), which has
been in power in Japan since 1955 (except for an eleven-month period between 1993 and
1994 and for a three-year period between 2009 and 2012). In Japan’s 2012 election, the party
leader and the former nationalist Prime Minister Shinzo Abe regained control of the government. The LDP’s near-permanent hold of power in Japanese politics implies that its biggest
support group—Japanese farmers and those closely associated with the agricultural sector—
is also well-represented in the government’s policy formation process. This leads to the third
and last factor: Japanese farmers have secured the Diet politicians’ loyalties, as the predominant ruling party is electorally indebted to farm voters and their organizations. The Diet or
Kokkai refers to Japan’s bicameral legislature, which is composed of a lower house called the
3  Aurelia George Mulgan, The Politics of Agriculture in Japan (New York: Routledge, 2000), 1.
4  Kym Anderson and Yujiro Hayami ed., The Political Economy of Agricultural Protection: East Asia in International
Perspective (Sydney: Allen & Unwin, 1986), 1-3.
5  Hideo Sato and Timothy J. Curran, “Agricultural Trade: The Case of Beef and Citrus,” in Coping with U.S.-Japan Economic
Conflicts, ed. I.M. Destler and Hideo Sato (Lexington, MA: Lexington Books, 1982), 128.
6  Aurelia George Mulgan, The Politics of Agriculture in Japan, 207.

Southern California International Review - Vol. 3 No. 1

13

Daye Shim Lee

House of Representatives and an upper house called the House of Councilors. Furthermore,
Politicians from rural areas in the Diet often hold key agricultural policy positions.7
Due to these three factors, Japanese farmers and their determination to maintain the
government’s agricultural protection policies play a critical role in Japan’s political economy. Yet, globalization and the increasing volume of international trade—especially through
free-trade agreements (FTAs)—have led the Japanese government to seriously consider
implementing measures of agricultural reform. This owes to the fact that with strict agricultural protection measures, the Japanese government cannot persuade other countries to
sign FTAs with Japan. Consequently, Japanese farmers tend to oppose any sign of free trade
talks as FTAs are designed to significantly reduce or eliminate tariffs and import quotas on
most goods and services traded between countries. They fear that the dismantling of Japan’s
high protective farming tariffs will open up the country to cheap foreign agricultural goods
and ultimately threaten their livelihood. According to the Japanese Agricultural Ministry,
90 percent of Japan’s rice cultivation would disappear, and wheat, sugar, dairy and beef production would also be harmed if the country joined the free trade zone in the Asia-Pacific.
This would cost Japan about 4 trillion yen (or $49 billion) in lost production, as well as 3.4
million lost jobs.8 The Japanese government therefore, faces a dilemma over whether to open
the country’s agricultural sector to the rest of the world and join the free trade movement,
or to maintain its traditional policy that would please its domestic farmers.
In response to these recent developments in Japan’s political economy, many international scholars and policymakers in the field of U.S.-Japan trade relations have debated
about the possibility of major agricultural reform taking place in Japan. Scholar Aurelia
George Mulgan, for example, wrote extensively on how Japan’s agricultural politics are in
“transition” from an old to a new model due to broader changes in the Japanese political
economy.9 According to Mulgan, these changes include efforts to rebalance electoral power
from rural factions and to strengthen the executive power of the Prime Minister over the
Diet. At the same time, she argues that the impact of these changes on Japan’s agricultural
policy has been modest as “vestiges of the old system continue to complicate the outlook
for agricultural reform.”10 It is, therefore, difficult to currently predict the speed and extent
to which the Japanese government will open up its agricultural sector to foreign competition. However, the general consensus in both academia and the policy-making world is

7  Sato and Curran, 128.
8  Hiroko Tabuchi, “Japan’s Farmers Oppose Pacific Free-trade Talks,” The New York Times, November 11, 2010, accessed
March 27, 2013, http://www.nytimes.com/2010/11/12/business/global/12yen.html?pagewanted=all.
9  Aurelia George Mulgan, “Where Tradition Meets Change: Japan’s Agricultural Politics in Transition,” Journal of Japanese
Studies 31, No. 2 (Summer 2005): 261.
10  Ibid.

Southern California International Review - Vol. 3 No. 1

14

Daye Shim Lee

that the strong political influence of Japanese farmers over Japan’s trade policies will not be
exhausted anytime soon.
In the United States, the agriculture sector’s political power remains strong despite the
decline in the farm population. Meat producers, in particular, maintain great political clout
because they exercise influence over both the legislative and the regulatory areas.11 Unlike
large corporations on Capitol Hill that spread their funds across many different groups of
lawmakers in attempts to gain more political influence, the meat industry targets a small
number of relevant legislators who have a direct impact on the industry’s interests.12 The U.S.
meat industry, like its Japanese counterpart, is also represented by powerful trade and lobbying groups such as the American Farm Bureau Federation and the American Meat Institute;
the American Farm Bureau Federation spends between $2 million and $8 million per year
lobbying for its agenda in Washington.13 Given the substantial amount of power granted to
Congress by the U.S. Constitution and the important role that legislators play in American
politics, it is not an overstatement to say that lobbyists and interest groups representing the
U.S. meat industry indirectly exert significant influence on the formation of U.S. foreign
trade policy. Furthermore, these organizations often secure their influence by establishing
close ties with officials in the upper echelons of the U.S. Department of Agriculture (USDA).
The importance of politics in the U.S.-Japan beef trade is clearly reflected in the beef
and citrus case of the 1980s. At the time, the American agricultural sector was expressing
frustration over its failure to gain “fair” access to Japanese markets, and pressures were
building up in Washington for retaliatory measures.14 In 1982, the Reagan Administration
decided to push for new beef and citrus quotas that would allow American farmers to export
significantly more beef and citrus to Japan. Unsurprisingly, the U.S. Congressional elections
were to take place in the same year, and President Reagan needed the support of the states
that produced beef and oranges—Florida and almost all states west of the Mississippi—to
win the seats in the Senate and the House.15 Yet, the U.S. government eased its pressure to
open Japan’s agricultural market in the first six months of 1983, especially after Japanese
Prime Minister Nakasone visited Washington in January of that year. Japan’s domestic elections were coming up in April and June, and Japanese voters were criticizing Nakasone
for “giving in to American pressure and selling out Japan’s interests.”16 In consideration
11  Steve Johnson, “The Politics of Meat: A Look at the Meat Industry’s Influence on Capitol Hill,” PBS, April 18, 2002,
accessed December 7, 2012, http://www.pbs.org/wgbh/pages/frontline/shows/meat/politics.
12  Ibid.
13  Senate Office of Public Records, “Annual Lobbying by American Farm Bureau,” OpenSecrets.org, October 31, 2012,
accessed December 10, 2012, http://www.opensecrets.org/lobby/clientsum.php?id=D000021832&year=2010
14  C. Peter Timmer and Michael R. Reich, “Japan and the U.S.: Trading Shots Over Beef and Oranges,” Challenge 26, No. 4,
(1983): 20-21.
15  Ibid.
16  Timmer and Reich, “Japan and the U.S.: Trading Shots Over Beef and Oranges,” 22.

Southern California International Review - Vol. 3 No. 1

15

Daye Shim Lee

of the Japaneseleadership’s difficult position amid domestic political turmoil, U.S. Trade
Representative Bill Brock made only one public reference to agriculture during his visit
to Tokyo in February, and this comment was in response to a question brought up by the
Japanese side.
This brief history demonstrates the deeply ingrained interplay between politics and
economics in the U.S.-Japan beef trade. It also provides a real-world example of how domestic politics play a critical role in shaping a country’s foreign policy. Domestic politics matter
even more in modern liberal democracies like the United States and Japan, where authority,
legitimacy, and the power of a national leader are derived from voters. Therefore, leaders
must pay close attention to the demands of their people—especially in the areas of economics and trade because these issues are directly affect people’s livelihoods—in order to win
elections. Domestic politics and elections thus influence the timing and the intensity of demands on international trade, and often set the tone of negotiations by affecting government
positions and defining acceptable limits of adjustment. Additionally, with globalization and
the arrival of the information age, it is no longer possible for national leaders to pursue an
entirely secretive, elite-driven foreign trade policy. Each of these factors combines to create
more cohesive ties between politics and economics in today’s world.

The Outbreak of Mad Cow Disease and U.S.-Japan Beef Trade
The beef trade negotiations between Japan and the United States have become further
politicized and emotionalized since the outbreak of Mad Cow disease in North America.
Mad Cow disease, a fatal neurological disease found in cattle, first appeared in the United
Kingdom in 1986. Studies since then have suggested that the source of Mad Cow disease is
cattle feed prepared from bovine spongiform encephalopathy (BSE) agent-infected cattle
parts, and people who consume contaminated beef can be susceptible to a human version
of Mad Cow disease called variant Creutzfeldt-Jakob disease (vCJD).17
The first case of U.S. Mad Cow came from a Canadian-born dairy cow in the state of
Washington in December 2003.18 Nevertheless, the USDA announced that no highest-risk
tissues had entered the country’s food supply. The International Review Team (IRT) also
reported in March 2004 that Mad Cow disease was highly unlikely to become established
or to spread in the United States. Furthermore, the World Organization for Animal Health

17  World Health Organization, “Fact Sheet No. 113: Bovine Spongiform Encephalopathy,” November 2002, http://www.who.
int/mediacentre/factsheets/fs113/en.
18  U.S. Congressional Research Service, BSE (“Mad Cow Disease”): A Brief Overview (RS22345; December 19, 2006), by
Geoffrey S. Becker, accessed December 7, 2012.

Southern California International Review - Vol. 3 No. 1

16

Daye Shim Lee

(OIE) recognized the United States as a controlled risk country for Mad Cow disease, meaning that U.S. beef from cattle of all ages could be safely traded.19
Despite various organizations’ safety assurances on American beef, U.S.-Japan beef
trade relations rapidly deteriorated after the outbreak of Mad Cow disease in the United
States. Prior to the first American Mad Cow case, Japan was the leading importer of U.S.
beef.20 Initially, the level of meat consumption in Japan was low as the Japanese had traditionally relied on fish for protein and avoided eating red meat for cultural and religious
reasons. However, the Japanese began to consume more beef when the U.S. occupied Japan
after the Second World War and started to import U.S. beef in significant quantities in the
1970s. During the occupation, the USDA played a critical role in supporting the Japanese
school lunch program, and this partnership between the USDA and the Japanese food sector
helped the U.S. beef industry gain more access to the Japanese market.21 As a result, Japan
alone accounted for 37 percent of U.S. beef export markets in 2003.22
In response to the USDA’s announcement of the first American Mad Cow case, many
countries, including Japan, banned the import of U.S. beef. Although Canada and Mexico
resumed importing some U.S. beef in 2004, Japan and South Korea refused to reopen their
markets. Having lost more than 60 percent of its beef export markets, the United States went
from claiming 18 percent of the world’s beef market to only three percent.23 In October 2004,
Japan and the United States developed a new framework for their beef trade. Japan agreed to
admit low-risk U.S. beef if the United States could verify that it had come from cattle under
21 months old. Japan also demanded that the U.S. definition of “specified risk materials
(SRMs)” expand to include the entire head, and that these be removed before arriving in
Japan.24 However, Japan did not allow U.S. beef imports until December 2005 and abruptly
halted the imports again in January 2006, following the discovery of vertebral column bones
in several boxes of veal from New York. Despite U.S. apologies and promises of stronger
safety inspections, Japan did not reopen its market until July 2006, and even then, the U.S.
beef industry gained only limited access.
The Japanese government’s reluctance to reopen its beef market sparked anger among
U.S. officials. In addition to signaling a financial disaster, this decision became a sensitive
19  U.S. Meat Export Federation, “A Ruling by the World Organization for Animal Health,” http://www.usmef.org/newsstatistics/press-releases/a-ruling-by-the-world-organization-for-animal-health-or-oie-adds-some-14313.
20  U.S. Congressional Research Service, Japan-U.S. Beef Trade Issues (RS22115; April 13, 2005), by Geoffrey S. Becker,
accessed December 7, 2012.
21  U.S. Department of Agriculture Foreign Agricultural Service, “The History of U.S. Beef Exports to Japan,” Last Modified
April 30, 2009, http://www.thebeefsite.com/articles/1965/the-history-of-us-beef-exports-to-japan.
22  U.S. Congressional Research Service, Mad Cow Disease and U.S. Beef Trade (RS21709; December 6, 2006), by Charles
E. Hanrahan and Geoffrey S. Becker, accessed December 7, 2012.
23  Ibid.
24  Ibid.

Southern California International Review - Vol. 3 No. 1

17

Daye Shim Lee

issue evoking strong emotions from both sides.25 President George W. Bush frequently
brought up the matter in his phone calls with Japanese Prime Minister Junichiro Koizumi,
and Vice President Dick Cheney urged Japanese officials to lift the ban on U.S. beef imports during his visit to Tokyo in 2004; both the President and the Vice President had come
from the country’s biggest beef-producing states. Other American politicians also argued
that Japan should guide its decisions based on science, not politics.26 Frustration mounted
on both sides as the negotiations dragged on. In Washington, Congress passed resolutions
calling for retaliations against Japanese exports to the United States. In Tokyo, the politicians and consumer groups criticized U.S. pressure as a form of foreign intervention. In
both countries, Mad Cow disease and beef trade were no longer a mere glitch in U.S.-Japan
economic relations; the whole issue had become a symbol of national sovereignty and pride.

Analysis of the Japanese Response in 2003
Although Japan was not the only country to stop the import of U.S. beef after the 2003
Mad Cow disease outbreak in the United States, the Japanese response is unique in that it
took Japan nearly three years to reopen its market to U.S. exporters. Even after that, Japan
never fully normalized its beef trade relations with the United States. While it could be
argued that Japan had also banned European beef in response to the widespread outbreak of
Mad Cow disease across Europe in the late 1990s, the European case is significantly different
from the American case in terms of context. The European case did not have a great impact
on Japanese consumers as Japan was importing a negligible proportion of beef from Europe
to begin with.27 On the other hand, U.S. beef accounted for 30 percent of Japanese beef consumption.28 If the U.S. imports took up such a large portion of the Japanese beef market, why
did it take so long for Japan to resume its trade with the United States? If food safety was the
biggest concern for the Japanese government, why did scientific reports guaranteeing the
safety of U.S. beef fail to speed up the trade negotiations to reopen the Japanese beef market?
For the Japanese government, a goal paralleling the importance of food safety was the
protection of the Japanese beef industry in the aftermath of Japan’s own Mad Cow outbreaks. In September 2001, Japan confirmed its first Mad Cow disease discovery. As a result,
the Japanese beef industry faced sharp reactions in both its domestic and export markets.
Despite the Japanese government’s efforts to reassure domestic consumers and to persuade
other countries to drop bans imposed on Japanese beef, the Japanese beef market saw its
25  Brad Glosserman, “U.S.-Japan Relations: ‘History Starts Here’,” CSIS Comparative Connections 7, No. 1 (2005): 1-3.
26  Ibid.
27  Hyun J. Jin and Won W. Koo, “The Effect of the BSE Outbreak in Japan on Consumers’ Preferences,” European Review of
Agricultural Economics 30, No. 2 (2003): 177.
28  U.S. Congressional Research Service, BSE (Mad Cow Disease): A Brief Overview.

Southern California International Review - Vol. 3 No. 1

18

Daye Shim Lee

sales fall by as much as 50 percent due to concerns over Mad Cow disease.29 The price of
domestic beef dropped significantly, and 60 percent of Japanese consumers stopped eating
beef.30 To exacerbate the situation, a second infected cow was found in November 2001, followed by a third and fourth in the next month, further pressuring the Japanese government
to seek measures that would help the country’s beef industry recover as quickly as possible.
When the first U.S. Mad Cow case was found in 2003, Japanese beef industry was still
recovering from its own Mad Cow outbreaks. Japanese consumers’ willingness to pay higher
prices for higher quality domestic beef, which had traditionally served as the main driving force behind Japanese beef production, no longer existed to support the domestic beef
industry. Furthermore, a surge in the production of the famous Kobe beef in the United
States began to further threaten the Japanese beef industry.31 The U.S. exporters sold the
“Kobe style” beef in Japan at lower prices, which began to replace the BSE-threatened domestic Kobe beef. Until the Japanese government banned the import of U.S. beef in 2004,
many Japanese consumers preferred to buy Kobe style beef from the United States over its
authentic Japanese counterpart.32
The discovery of Mad Cow disease in the United States gave the Japanese government
both an incentive and an opportunity to pursue trade policies that would protect the crippled domestic beef industry, resulting in three big political advantages. First, it provided the
Japanese government a legitimate reason to ban imports of U.S. beef and preserve its strict
beef trade policies. With food safety at stake, no country could blame Japan for “playing
tough” against the United States, especially during the months that immediately followed
the December 2003 Mad Cow disease outbreak in the state of Washington. Rather, other
countries followed Japan when setting standards and implementing regulations on Mad
Cow disease for their own beef markets. For example, South Korea announced in 2004 that
it would not resume the import of U.S. beef until Japan did.33
Second, the 2003 U.S. Mad Cow case restored the Japanese government’s diplomatic
power in negotiating with the United States by creating a level playing field for the two
countries. The Japanese government began to raise its voice about not just regulating U.S.
beef imports in Japan but also increasing Japanese beef exports to the United States. In fact,
before Japan finalized its decision to resume U.S. beef imports in December 2005, the United
States had agreed to permit Japanese beef to enter the U.S. market.34 Prior to this revision,
29  Hyun J. Jin and Won W. Koo, “The Effect of the BSE Outbreak in Japan on Consumers’ Preferences,” European Review of
Agricultural Economics 30, No. 2 (2003): 177.
30  Ibid.
31  Meghan Staley, “Kobe Beef,” American University TED Case Studies, No. 711, December 2004, accessed December 17,
2012, http://www1.american.edu/ted/kobe.htm.
32  Ibid.
33  Brad Glosserman, “U.S.-Japan Relations: ‘History Starts Here’,” CSIS Comparative Connections 7, No. 1 (2005): 1-3.
34  U.S. Congressional Research Service, Mad Cow Disease and U.S. Beef Trade.

Southern California International Review - Vol. 3 No. 1

19

Daye Shim Lee

the U.S. government had banned Japanese beef imports due to animal disease outbreaks in
Japan, such as Mad Cow and foot-and-mouth diseases.
Third, the outbreak of Mad Cow disease in the United States bolstered some Japanese
beef producers’ claim that Mad Cow disease in Japan came from infected imported animals.
When the ninth Japanese Mad Cow case was confirmed in November 2003, a number of
Japanese meat companies started blaming imported beef as the source of Mad Cow disease. A farm ministry panel in Japan also announced that the source of the outbreak was
either cows imported from Britain in the 1980s or meat-and-bone-meal imported from Italy
before 1990.35 Although no one had directly pointed at the United States, its own outbreak
in 2003 strengthened Japan’s unproven argument that domestic beef is safe, while creating
the notion that Mad Cow is inherently a Western disease.36
These three points suggest that the primary goal of the Japanese government in restricting U.S. beef imports was to protect and revive the exhausted domestic beef industry.
It earned Japan both the justification and time to slow down the rate of beef imports into
the country. As the resumption of trade was delayed, however, the Japanese government
faced sharp criticisms from the United States for not “satisfactorily” explaining why Japanese
beef is safe to eat when U.S. beef may not be.37 Yet, the fear of Mad Cow disease in Japan
continued to be played out in favor of the Japanese government in protecting the country’s
endangered beef industry.

The Analysis of the Japanese Response in 2012
In April 2012, the USDA announced that it had identified a case of Mad Cow disease,
the first in six years, in a California dairy cow. As the news reached the public, many U.S.
beef exporters immediately feared that the already cautious Asian countries would implement even stronger protectionist measures against the American beef and cattle products.38
South Korea proved their concerns legitimate as two major Korean retailers pulled U.S. beef
off the shelves of their stores right after the USDA confirmed the California Mad Cow case.39
Surprisingly, however, Japan voluntarily announced that it would not suspend U.S.
beef imports. Japanese Ministry of Agriculture official Minoru Yamamoto told the U.S.
35  Unknown, “Ninth Mad Cow Case Confirmed by Ministry,” The Japan Times, November 5, 2003, accessed December 17,
2012, http://www.japantimes.co.jp/text/nn20031105a2.html.
36  Michael Fitzpatrick, “Japan and BSE: Panic, Protectionism or Simply Good Science?,” Just Food, December 8, 2003,
accessed December 17, 2012, http://www.just-food.com/analysis/panic-protectionism-or-simply-good-science_id94069.aspx.
37  Alison Myers, “Japan Using Mad Cow to Boost Own Beef Industry,” CBC News, June 28, 2003, accessed December 20,
2012, http://www.cbc.ca/news/story/2003/06/28/bse_japan030628.html.
38  Stephanie Storm, “Case of Mad Cow Disease Is Found in U.S.,” The New York Times, April 24, 2012, accessed December
20, 2012, http://www.nytimes.com/2012/04/25/health/case-of-mad-cow-disease-is-found-in-us.html.
39  Paul Vercammen, “S. Korea Curbs U.S. Beef Sales After Confirmation of Mad Cow Disease,” CNN, April 26, 2012,
accessed December 20, 2012, http://edition.cnn.com/2012/04/25/health/california-mad-cow/index.html.

Southern California International Review - Vol. 3 No. 1

20

Daye Shim Lee

media—just a day after the USDA’s announcement of Mad Cow disease outbreak in
California—that Japan is importing beef from the United States “under the rules agreed
between the two nations,” and will therefore not halt imports merely because of the new
discovery in California.40 This starkly contrasts with Japan’s immediate closure of its borders
to U.S. beef after the 2003 discovery of Mad Cow disease in the state of Washington.
Japan also made another “friendly” gesture and announced its decision to further relax
the current Japanese restrictions on U.S. beef imports. The age restriction on importing
beef from cattle of 20 months old or younger had been in place since 2006 and faced widespread criticisms from U.S. exporters; the age limit meant that only 20 to 30 percent of U.S.
beef would meet the new Japanese standard.41 Yet, in September 2012, the Japanese Cabinet
Office’s Food Safety Commission began to consider lifting the age restrictions. According
to the revised plan, imports will be allowed for U.S. beef from cattle of 30 months old or
younger.42 A November op-ed piece that appeared in The Yomiuri Shimbun praised this
decision as “a realistic approach based on scientific knowledge and international trends in
connection with an important issue.”43 What is this “issue” then, and why did it prompt the
Japanese government to deviate completely from its long-held protectionist trade policy
towards U.S. beef imports?
The biggest motivation behind the Japanese government’s decision to ease the import
restrictions on U.S. beef was Japan’s potential entry into the Trans-Pacific Partnership (TPP).
Joining the TPP, a U.S.-led multilateral free trade agreement that encompasses the economies of the Asia-Pacific, has been one of the most important items on former Japanese
Prime Minister Yoshihiko Noda’s agenda. The TPP not only promotes the elimination or
review of tariffs, but also seeks to liberalize services such as banking and insurance. This
was significant to Noda because Japan’s domestic service industries have remained largely
isolated from foreign competition and, as a result, the country has struggled to create new
opportunities for entrepreneurs and workers in the service sector.44
The United States, the country that holds the key to Japan’s future participation in the
TPP talks, has demanded the Japanese government to ease restrictions on the age of U.S.
beef imports. In a meeting with Prime Minister Noda in April 2012, President Obama reiterated that the beef issue was one of the most important preconditions for Japan’s entrance
40  Takada.
41  Glosserman, 1-3.
42  Unknown, “Beef Move to Aid TPP Entry: Relaxing Controls on U.S. Imports Likely to Boost Japan’s Bid,” The Yomiuri
Shimbun, September 7, 2012, accessed December 10, 2012, http://www.yomiuri.co.jp/dy/business/T12.htm.
43  Unknown, “Easing Import Restrictions on U.S. Beef Justifiable,” The Yomiuri Shimbun, November 3, 2012, accessed
December 20, 2012, http://www.yomiuri.co.jp/dy/editorial/T121103002010.htm.
44  Unknown, “A TPP Stimulus for Japan,” The Wall Street Journal, September 6, 2012, accessed December 20, 2012, http://
online.wsj.com/article/SB10000872396390443819404577632953734008664.html#articleTabs.

Southern California International Review - Vol. 3 No. 1

Daye Shim Lee

21

into the TPP.45 Therefore, when Mad Cow disease broke out in California earlier that month,
it gave Japanese officials an additional political advantage to set the tone of negotiations regarding the country’s TPP entrance. Announcing their plan to not halt the U.S. beef imports
immediately after the Mad Cow disease outbreak in California meant that Japan was helping
the United States to convince other countries that U.S. beef was safe, and to maintain relative
stability in the Asia market. Since Japan had offered a helping hand first, it was then naturally
the United States’ turn to listen to Japanese demands. In fact, following the Japanese announcement regarding the continuation of importing U.S. beef, Senate Finance Committee
Chairman Max Baucus—whose committee has jurisdiction over trade including the TPP—
mentioned in the official statement that he is “encouraged by the steps taken by the Japanese
government,” and that the United States and Japan were “headed in the right direction.”46
Japan’s decision to lower the level of restrictions placed on U.S. beef imports was thus
a political move to reassure Washington that Japan was making an effort to improve U.S.Japan trade relations, as well as a diplomatic maneuver to gain U.S. support for Japan’s entrance to the TPP. Additionally, it was an attempt to create a more diplomatic atmosphere
before the meeting between Noda and Obama, which was scheduled to be held at the end
of April that year.47

Concluding Remarks
Understanding Japanese Motives: A Realist Perspective
The above political and economic analyses of Japanese responses to the 2003 and 2012
U.S. Mad Cow cases imply that Japan has been, and is likely to continue, using Mad Cow
disease as a powerful political tool in pursuing its national interests. According to the realist
paradigm of international relations, states always act in accordance with their national interests, with self-preservation as their primary goal.48 In the absence of an international sovereign—that is, within the anarchic structure of the international system—it is also in a state’s
best interest to search for opportunities to gain more power over other states to guarantee
its national security.49 In today’s world, economic prosperity and the capability to influence
international trade are important sources of state power. Unlike the liberal school of thought
in international relations—that the increase in international trade results in growing inter45  Unknown, “Japan to Ease Age Restrictions on U.S. Beef Imports,” The Ashahi Shimbun, October 23, 2012, accessed
December 10, 2012, http://ajw.asahi.com/article/economy/business/AJ201210230057.
46  Unknown, “Japan’s Action on U.S. Beef Encouraging – U.S. Senator,” Reuters, September 5, 2012, accessed March 27,
2013, http://www.reuters.com/article/2012/09/05/us-usa-japan-beef-idUSBRE88415P20120905.
47  Ibid.
48  John J. Mearsheimer, The Tragedy of Great Power Politics (New York: Norton, 2001).
49  Kenneth N. Waltz, Man, the State, and War: A Theoretical Analysis (New York: Columbia University Press, 2001).

Southern California International Review - Vol. 3 No. 1

22

Daye Shim Lee

dependence among states, inducing them to seek mutual rather than national interests—
inconsistent Japanese reactions to Mad Cow disease outbreaks in the United States in 2003
and 2012 confirm that states rarely operate based on trust. This is especially true considering
that Japan has been widely recognized as one of the most important U.S. allies in the world.
Based on this theoretical assumption, as well as evidence provided by the two case studies of Japanese responses to Mad Cow disease outbreaks in the United States, it is fair to conclude that the United States does not have as much control over the direction of U.S.-Japan
beef trade as it did prior to 2003. Washington may raise the issue of fairness and demand
that the U.S.-Japan trade relations operate based on trust, but Japan will make decisions that
best serve its national interest. Although Japan is currently willing to ease its age restrictions on U.S. beef imports, this is likely to be only a temporary improvement. Depending on
the intensity of Japan’s desire to join the TPP or the potential emergence of a new Japanese
political goal in the future, it remains possible that the Japanese government will develop a
very different approach to its beef import policy. Given the dramatic comeback of the rightwing LDP led by Shinzo Abe in the most recent Japanese election, as well as the increasing
share of Australian beef imports in the Japanese market that has been replacing U.S. beef,
there remain serious doubts as to how much U.S.-Japan beef trade relations can improve in
the years to come.

Implications for Overall U.S.-Japan Trade Relations
For overall U.S.-Japan trade relations, Japan’s continued use of Mad Cow disease as
diplomatic leverage could lead to strong negative emotions involved in the agricultural industry to spill over to different economic sectors. In fact, Senator Mike Johanns has already
linked the beef issue with the Toyota recall crisis in 2010. Toyota announced a recall of over
2.3 million vehicles in 2010 to correct problems associated with gas pedals, and this was a
separate case that happened in addition to the then-ongoing recall of 4.2 million Toyota and
Lexus vehicles. According to several news reports, the biggest Toyota recalls that have been
made were neither in Europe nor in China, but in the United States.50 Senator Johanns cited
this as an example of unfairness in U.S.-Japan trade relations, as he argued that Tokyo’s strict
stance on U.S. beef imports directly contrasted with Washington’s “more cautious handling”
of Toyota cars amid recalls over their acceleration problems.51 Mad cow disease thus not only
applies to beef trade, but tends to influence other areas of U.S.-Japan trade relations as well.
With the Obama administration so eager to increase American exports in keeping its
promise to rebuild the nation’s economy, reopening the Japanese market to U.S. beef and
50  Peter Valdes-Dapena, “Toyota Recall: 2.3 Million Cars,” CNN, January 22, 2010, accessed March 27, 2013, http://money.
cnn.com/2010/01/21/autos/toyota_recall.
51  Hiroko Tabuchi, “White House Presses Japan to Reopen Market to U.S. Beef,” The New York Times, April 7, 2010,
accessed December 10, 2012, http://www.nytimes.com/2010/04/08/business/global/08beef.html.

Southern California International Review - Vol. 3 No. 1

Daye Shim Lee

23

further liberalizing other Japanese economic sectors are likely to remain the top priorities
for the administration on the bilateral trade front. In that sense, Mad Cow disease will continue to be one of the biggest obstacles for the United States in pursuing its trade interests
with Japan. As demonstrated throughout this paper, Mad Cow disease is not simply an epidemic. Instead, it is an important element of political economy that greatly influences the
contemporary U.S.-Japan trade relations.

Bibliography
Anderson, Kym, and Yujiro Hayami eds. The Political Economy of Agricultural Protection:
East Asia in International Perspective. Sydney: Allen & Unwin, 1986.
Fitzpatrick, Michael. “Japan and BSE: Panic, Protectionism or Simply Good Science?” Just
Food. December 8, 2003. Accessed December 17, 2012. http://www.just-food.com/
analysis/panic-protectionism-or-simply-good-science_id94069.aspx.
Glosserman, Brad. “U.S.-Japan Relations: ‘History Starts Here’.” CSIS Comparative Connections 7, No. 1 (2005): 1-5.
“Japan’s Action on U.S. Beef Encouraging – U.S. Senator.” Reuters. September 5, 2012. Accessed March 27, 2013. http://www.reuters.com/article/2012/09/05/us-usa-japan-beefidUSBRE88415P20120905.
Jin, Hyun J., and Won W. Koo. “The Effect of the BSE Outbreak in Japan on Consumers’
Preferences.” European Review of Agricultural Economics 30, No. 2 (2003): 173-192.
Johnson, Steve. “The Politics of Meat: A Look at the Meat Industry’s Influence on Capitol Hill.” PBS. April 18, 2002, accessed December 7, 2012. http://www.pbs.org/wgbh/
pages/frontline/shows/meat/politics.
Mearsheimer, John J. The Tragedy of Great Power Politics. New York: Norton, 2001.
Mulgan, Aurelia G. The Politics of Agriculture in Japan. New York: Routledge, 2000.
Mulgan, Aurelia G. “Where Tradition Meets Change: Japan’s Agricultural Politics in Transition.” Journal of Japanese Studies 31, No. 2 (2005): 261-298.
Myers, Alison. “Japan Using Mad Cow to Boost Own Beef Industry.” CBC News. June 28,
2003. Accessed December 20, 2012. http://www.cbc.ca/news/story/2003/06/28/bse_japan030628.html.
Sato, Hideo, and Timothy J. Curran. “Agricultural Trade: The Case of Beef and Citrus.” In
Coping with U.S.-Japan Economic Conflicts, edited by I.M. Destler and Hideo Sato. Lexington, MA: Lexington Books, 1982.

Southern California International Review - Vol. 3 No. 1

24

Daye Shim Lee

Staley, Meghan. “Kobe Beef.” American University TED Case Studies No. 711. December
2004. Accessed December 17, 2012. http://www1.american.edu/ted/kobe.htm.
Strom, Stephanie. “Case of Mad Cow Disease Is Found in U.S.” The New York Times. April
24, 2012. Accessed December 20, 2012. http://www.nytimes.com/2012/04/25/health/
case-of-mad-cow-disease-is-found-in-us.html.
Strom, Stephanie, and Hiroko Tabuchi. “A Break for Embattled Ranchers.” The New
York Times. January 29, 2013. Accessed March 21, 2013. http://www.nytimes.
com/2013/01/29/business/global/japan-to-ease-restrictions-on-us-beef.html.
Tabuchi, Hiroko. “White House Presses Japan to Reopen Market to U.S. Beef.” The New
York Times. April 7, 2010. Accessed December 10, 2012. http://www.nytimes.
com/2010/04/08/business/global/08beef.html.
Takada, Aya. “Japan Has No Plan to Halt U.S. Beef Imports on Mad-Cow Case.” Bloomberg.
April 25, 2012. Accessed December 7, 2012. http://www.bloomberg.com/news/201204-25/japan-has-no-plan-to-halt-u-s-beef.
Timmer, C. Peter, and Michael R. Reich. “Japan and the U.S.: Trading Shots Over Beef and
Oranges.” Challenge 26, No. 4 (1983): 18-24.
“A TPP Stimulus for Japan.” The Wall Street Journal. September 6, 2012. Accessed December
20, 2012. http://online.wsj.com/article/SB1000087239639044381940457763295373400
8664.html
“Beef Move to Aid TPP Entry: Relaxing Controls on U.S. Imports Likely to Boost Japan’s
Bid.” The Yomiuri Shimbun. September 7, 2012, accessed December 10, 2012. http://
www.yomiuri.co.jp/dy/business/T12.htm.
“Easing Import Restrictions on U.S. Beef Justifiable.” The Yomiuri Shimbun. November 3, 2012. Accessed December 20, 2012. http://www.yomiuri.co.jp/dy/editorial/
T121103002010.htm.
“Japan to Ease Age Restrictions on U.S. Beef Imports.” The Ashahi Shimbun. October 23,
2012, accessed December 10, 2012. http://ajw.asahi.com/article/economy/business/
AJ201210230057.
“Ninth Mad Cow Case Confirmed by Ministry.” The Japan Times. November 5, 2003. Accessed December 17, 2012. http://www.japantimes.co.jp/text/nn20031105a2.html.
U.S. Congressional Research Service. BSE (“Mad Cow Disease”): A Brief Overview
(RS22345; December 19, 2006), by Geoffrey S. Becker. Accessed December 7, 2012.
U.S. Congressional Research Service. Japan-U.S. Beef Trade Issues (RS22115; April 13,
2005), by Geoffrey S. Becker. Accessed December 7, 2012.
Southern California International Review - Vol. 3 No. 1

25

Daye Shim Lee

U.S. Congressional Research Service. Mad Cow Disease and U.S. Beef Trade (RS21709; December 6, 2006), by Charles E. Hanrahan and Geoffrey S. Becker. Accessed December
7, 2012.
U.S. Department of Agriculture Foreign Agricultural Service. “The History of U.S. Beef Exports to Japan.” April 30, 2009. http://www.thebeefsite.com/articles/1965/the-historyof-us-beef-exports-to-japan.
U.S. Meat Export Federation. “A Ruling by the World Organization for Animal Health.”
http://www.usmef.org/news-statistics/press-releases/a-ruling-by-the-world-organizationfor-animal-health-or-oie-adds-some-14313.
U.S. Senate Office of Public Records. “Annual Lobbying by American Farm Bureau.”

OpenSecrets.org. http://www.opensecrets.org/lobby/clientsum.php?id=D000021832&year=2010.
Valdes-Dapena, Peter. “Toyota Recall: 2.3 Million Cars.” CNN. January 22, 2010. Accessed
March 27, 2013. http://money.cnn.com/2010/01/21/autos/toyota_recall.
Vercammen, Paul. “S. Korea Curbs U.S. Beef Sales After Confirmation of Mad Cow Disease.” CNN. April 26, 2012. Accessed December 20, 2012.
http://edition.cnn.com/2012/04/25/health/california-mad-cow/index.html.
Waltz, Kenneth N. Man, the State, and War: A Theoretical Analysis. New York: Columbia
University Press, 2001.
World Health Organization. “Fact Sheet No. 113: Bovine Spongiform Encephalopathy.”
http://www.who.int/mediacentre/factsheets/fs113/en.

Southern California International Review - Vol. 3 No. 1

Why did the United States enter the 1991 Persian Gulf
War?
A Study of Psychological Theory and Offensive Realism
Leyla Tosun

This paper will use two international relations theories to explain the U.S. entrance into the
Gulf War in 1991. Yuen Foong Khong’s psychological theory suggests that the 1938 Munich
agreement analogy weighed heavily upon President George H.W. Bush and ultimately influenced his decision to use aggressive military force rather than to appease Saddam Hussein.
John Mearsheimer’s offensive realism theory can also explain this event by evaluating the U.S.’s
desire to intervene in response to Iraq’s control of vast oil reserves, and its ambition to become
a regional hegemon. The merits of each theory in explaining this event in U.S. history will be
considered and potential weaknesses in both will be addressed. Ultimately, it is concluded that
both theories have strong explanatory value for the U.S. invasion of Iraq on January 17, 1991.
On August 2, 1990 Iraqi troops invaded neighboring Kuwait. In response, on January
17, 1991 the United States and coalition forces began an aerial bombardment of Iraq. This
paper will present two theories offering possible explanations for the United States’ invasion
of Iraq. First, psychological theory will demonstrate how the Bush administration employed
the 1938 Munich Conference analogy in justifying aggressive action against Iraq instead of
appeasement. Next, offensive realism theory will be presented as an alternative theoretical
explanation – this second theory uses the Iraqi pursuit of regional hegemony and a decrease
in U.S. security to explain this involvement. Finally, this paper will examine any potential
weaknesses in these theories and evaluate their merits in explaining the U.S. entrance into
the Gulf War.

Background
To fully analyze the U.S. entrance into the Gulf War, the regional context behind the
Iraqi invasion of Kuwait must first be examined. During the Iran-Iraq War (1980-1988), the
U.S. provided billions of dollars’ worth of aid, weaponry of non-U.S. origin, military training, and military intelligence to Iraq. While not considered allies, the U.S. also provided
substantial diplomatic support for Iraq during this conflict. Saudi Arabia and Kuwait also
provided additional monetary support, but resulted in Iraq’s heavy indebtedness to the two
Gulf nations by the conclusion of the war. Although Iraq pressured Saudi Arabia and Kuwait

Leyla Tosun is junior at the University of Virginia studying International
Relations and Economics.

Leyla Tosun

28

to forgive the debt, the two countries’ refusal resulted in mounting tensions after the war
in addition to a continuing territorial dispute with Kuwait and conflicts over OPEC quotas.
This territorial dispute had its origins in the creation of two separate countries, Iraq and
Kuwait, by Britain in 1922. Since Kuwait’s independence from Britain in 1961, Iraq has refused to recognize Kuwait as an independent state, viewing the land as legally a part of Iraq.
This dispute was compounded by a conflict over oil production, in which Iraq correctly accused Kuwait of overproducing above the OPEC approved rate. As supply increased, prices
declined, reaching prices as low as ten dollars per barrel in 1989, resulting in a loss of seven
billion dollars a year to Iraq.1 Additionally, U.S.-Iraqi relations began to spiral downwards
due to human rights abuses and Iraqi threats to use “binary chemical weapons” on Israel,
and Iraq became increasingly isolated.2 It was in this atmosphere that Iraq invaded Kuwait
on August 2, citing violations of the OPEC quotas.

Psychological Theory
In light of this historical context, this study begins with an examination of the psychological elements behind the policy decisions that lead up to the January 17 bombardment
of Iraq. Yuen Foong Khong, a scholar of psychological theory, studies the use of historical
analogies in policy decisions. In his book, Analogies at War, he explains the six diagnostic
tasks of an analogy: define the situation, stake an assessment, make an implicit policy prescription, predict the likelihood of success, assess the moral, assess the moral righteousness,
and warn of dangers associated with a decision.3 According to Khong, these analogies provide a framework for how leaders begin to understand the problems that they face, and can
significantly influence their policy decisions. The Bush administration employed a crucial
analogy in its decision to invade Iraq in January 1991. The administration found itself facing
the aggressive regime of Saddam Hussein, and it used the Munich analogy to ultimately
decide against a “weak” foreign policy of appeasement.

The Munich Analogy
The Munich analogy uses experiences from World War II policy decisions to warn
against the inherent dangers of appeasing an aggressor. At the 1938 Munich conference,
the French and Italian governments followed the lead of British Prime Minister Neville
Chamberlain in appeasing Adolf Hitler and allowing Nazi Germany to annex the Sudetenland
in Czechoslovakia. This eventually resulted in the full-scale invasion of Czechoslovakia, in
the subsequent invasions of neighboring countries, and in the magnification of Germany’s
1  Geoff Simons, Iraq: From Summer to Post-Saddam (Palgrave Macmillan, 2004): 339 - 340.
2  Simons, Iraq: From Summer to Post-Saddam, 337-338.
3  Yuen Foong Khong, “The AE Framework,” in Analogies at War: Korea, Munich, Dien Bien Phu, and the Vietnam Decisions of
1965 (Princeton: Princeton UP, 1992): 21.

Southern California International Review - Vol. 3 No. 1

29

Leyla Tosun

power. By the time that the Allied Powers finally sought to halt German expansion with
a declaration of war in 1939, the Nazis had already taken control of Czechoslovakia and
invaded Poland. Their failure to deal firmly with Hitler in 1938 suggested an unwillingness to get involved and “emboldened Hitler in his quest to conquer Europe.”4 The Munich
Agreement is generally viewed as a failure of appeasement and of the international community to defend values of freedom and sovereignty against the rising power of a dangerous
dictator.
For decades following World War II, the Munich analogy was used as a warning against
the dangers of a weak foreign policy in response to an aggressive state. In the months leading up to the 1991 Gulf war, this analogy impacted the framework that President George
H.W. Bush used to understand the situation at hand. He was influenced by his meetings
with Margaret Thatcher and with the National Security Council, and ultimately adopted this
analogy. When Iraqi forces invaded Kuwait on August 2, 1990, Bush insisted that he was
not contemplating any type of military intervention. However, in the weeks that followed, it
is evident that his thinking changed. Later in the day on August 2, Margaret Thatcher flew
to Aspen, Colorado to meet with President Bush to discuss the conflict in the Middle East.
From her memoirs, Thatcher recounts that she cited the costs of appeasement in the 1930s
and told Bush that they needed to move quickly to stop Saddam’s aggression. She urged that
the United Nations had to enact a strict economic embargo upon Iraq until they withdrew
from Kuwait.5 Thatcher had no reservations as to the seriousness of the conflict or in her
belief that appeasement was not a viable option. Shortly after their meeting, the two leaders
held a press conference where Bush altered his earlier statement about the possibility of a
military intervention, instead insisting that he had not ruled it out as a policy tool. While
Bush did not specifically mention the Munich analogy in the closed-door meetings of the
next few days, it can be surmised that Thatcher’s argument had an impact on his thinking
for the remainder of the conflict, as the administration resolutely decided that appeasement
was not an option after the Aspen conference.
In a National Security Council meeting the next day, on August 3, President Bush said,
“The status quo is intolerable” – language that proves that appeasement was not an option
for him.6 National Security Advisor General Brent Scowcroft supported this notion, stating
that, “to accommodate Iraq should not be a policy option.”7 He later announced that a military “track” was being considered in addition to diplomatic and economic ones. Secretary
of Defense Dick Cheney gave updates on possible military fronts and Chairman of the Joint
4  The Learning Network, “Sept. 30, 1938 | Hitler Granted the Sudentenland by Britain, France and Italy,” The New York Times,
September 30, 2011, Accessed March 10, 2013.
5  Margaret Thatcher Foundation, “Gulf War: Visiting Aspen [memoirs extract],” Accessed March 10, 2013.
6  Margaret Thatcher Foundation, “Gulf War: National Security Council minutes [declassified 2000],” Accessed March 10, 2013.
7  Ibid.

Southern California International Review - Vol. 3 No. 1

Leyla Tosun

30

Chiefs of Staff General Colin Powell explained two possible options for using force in the
region. From these statements, it can be concluded that military intervention was already a
strong policy choice for the Bush administration.
Two days later on August 5, in another closed meeting of the National Security Council,
when Treasury Secretary Nicholas F. Brady suggested that the administration have someone
talk to Saddam, General Scowcroft replied, “We don’t want to appear to be negotiating.”8 The
President also responded: “Our solidarity would crumble if we are seen talking to Saddam.”9
Scowcroft talked about deterring Saddam from invading Saudi Arabia, while President Bush
inquired about using “F-16s to destroy his tanks.”10 The group of men meeting that day was
clearly not moving towards a policy of appeasement, but rather one of aggressive economic
sanctions and military force. There seemed to be a sentiment in the meetings that appeasing
Saddam was never really a credible policy option.
On August 6, in a press conference after meeting again with Margaret Thatcher in
Washington, President Bush made definitive declarations such as, “These things will be
enforced, whatever it takes.”11 While the decision to use force to intervene in Kuwait was
not publicly discussed for the first month of the conflict, it is evident from these statements
that it was a valid policy option being discussed behind closed doors. The administration
appeared convinced that appeasement would not suffice and that a coalition of forces had
to show a strong front against Saddam’s aggression.

Saddam is Compared to Hitler
In addition to these examples of how the Bush administration came to value the lessons of the Munich analogy, there were also significant comparisons being made between
Saddam Hussein’s behavior in the Gulf and Adolf Hitler’s behavior in World War II. The neoconservative media promulgated most of this, but it was soon picked up by the administration and used in many speeches as additional evidence tying the two events together. These
comparisons were made in a few different ways; for example, Iraq’s invasion of its neighbor,
Kuwait, was similar to Germany’s invasion of neighboring Czechoslovakia, Poland, Austria
and France. Saddam’s pretext for invading Kuwait was also eerily Hitlerian in that he accused a fairly powerless neighbor of a “deliberate policy of aggression.”12 This kind of absurd
accusation was similar to those made by Hitler against Czechoslovakia in 1938. Saddam’s
clear desire for regional power also paralleled Hitler’s quest for European hegemony and
8  Margaret Thatcher Foundation, “Gulf War: National Security Council minutes [declassified 1999],” Accessed March 10, 2013.
9  Ibid.
10  Ibid.
11  Margaret Thatcher Foundation, “Remarks after meeting President Bush (Welcomes UNSC4665),” Accessed March 10, 2013.
12  Charles Krauthammer, “Iraq’s Thug: Nightmare From the Hitler Era,” The Seattle Times, July 31, 1990.

Southern California International Review - Vol. 3 No. 1

31

Leyla Tosun

eventually global domination. These comparisons seemed to imply that both leaders were
evil tyrants with the potential to gain much more power if left unchecked.
The use of this analogy linking Hitler and Saddam was especially prevalent among pundits who drew upon the analogy to persistently advocate for military action. For example, in
The Washington Post, Charles Krauthammer, a Pulitzer-prize winning syndicated columnist
(who was generally considered to be a conservative commentator), criticized Bush for his
seeming hesitance in adopting the Munich analogy, saying that Saddam would “get what
he wants [Kuwait and Saudi Arabia] because there is no one to stop him… George Bush is
not eager to get bogged down in a land war in a God-forsaken patch of desert.”13 On August
5, New York Times editor Abraham “A.M.” Rosenthal commented that it seemed that the
Western powers had “failed in their duty” to address “the plainest threats of aggression
since Adolf Hitler.”14 Prominent Democrats in Congress also criticized Bush for his disinclination towards military intervention. Senator Clairborne Pell, Democratic Chairman of
the Foreign Relations Committee, was one of the first American politicians to characterize
Saddam as the “Hitler of the Middle East” after the invasion of Kuwait, additionally citing
President Bush’s earlier lack of resolve to head-off an invasion.15
While the media and politicians used this language to mount pressure upon Bush to intervene militarily in Kuwait, the administration also started adopting this analogy between
the two men. By August 8, it was obvious that the inundation of editorials and speeches
on the Hitlerian nature of Saddam Hussein’s invasion had influenced the Bush administration. The central image of President Bush’s August 8, 1990 speech, “Addressing the Iraqi
Invasion of Kuwait,” was none other than the 1938 Munich conference. About four minutes
into the speech he said, “If history teaches us anything, it is that we must resist aggression
or it will destroy our freedoms. Appeasement does not work. As was the case in the 1930’s,
we see in Saddam Hussein an aggressive dictator threatening his neighbors.”16 This explicit
language indicated that the administration would no longer push for economic sanctions
alone, but that it was prepared to use force to resist aggression. Even prior to this public
speech, President Bush referred to Saddam as “a madman who has shown he will kill,” in a
National Security Council meeting on August 6.17 It is evident that the Bush administration

13  Charles Krauthammer, “A Festival of Appeasement,” The Washington Post, August 5, 1990: E19.
14  A.M. Rosenthal, “Making a Killer,” The New York Times, August 5, 1990: E19.
15  “The Iraqi Invasion; Invading Iraqis seize Kuwait and its oil; U.S. condemns attack, urges united action,” The New York
Times, August 3, 1990.
16  Miller Center at University of Virginia, “Address on Iraq’s Invasion of Kuwait (August 8, 1990), George H. W. Bush,” Accessed November 10, 2012, http://millercenter.org/president/speeches/detail/5529.
17  Margaret Thatcher Foundation, “Gulf War: National Security Council minutes [declassified 1999],” Accessed March 10,
2013.

Southern California International Review - Vol. 3 No. 1

Leyla Tosun

32

was seeing similarities between Hitler’s behavior in World War II and Saddam’s aggressive
actions.
In the weeks following President Bush’s August 8 speech, the Munich analogy emerged
many more times in his rhetoric. In a speech to Department of Defense employees one
week later, Bush again invoked the World War II analogy saying, “A half a century ago our
nation and the world paid dearly for appeasing an aggressor who should and could have
been stopped. We’re not about to make that same mistake twice.”18 Just five days later on
August 20, in a speech to Veterans of Foreign Wars in Baltimore, Bush praised Mikhail
Gorbachev for condemning the Iraqi invasion of Kuwait. He said that this showed “that
nations which joined to fight aggression in World War II can work together to stop the aggressors of today.”19

Employing the Psychological Theory
With this public engagement with the Munich analogy, the situation in the Gulf was
transformed into a battle of good versus evil. Following Khong’s framework, the Bush administration used the analogy to define its situation as one of dealing with a murderous
tyrant. The Bush Administration assessed there to be a grave risk that Saddam could threaten the sovereignty of neighboring countries, which would inevitably lead to a bloody and
destructive war with the West. The administration decided that their best policy option was
to act aggressively to deter Saddam from advancing further. The United States and its allies
were militarily strong, and so they believed that they had a high likelihood of success with
this policy.
Finally, the administration believed the Munich analogy proved that appeasement was
ineffective and the only thing that would deter Saddam was the effective use of aggressive
military power. In President Bush’s January 16 address to the nation he said, “We and our
allies concluded that sanctions alone would not force Saddam from Kuwait.”20 He continued to say, “We now believe that only force will make him leave [Kuwait].”21 His conclusion
was, “A decision not to protect Saudi Arabia would have been viewed by Saddam as a lack
of resolve on the part of the U.S. and, thus as an invitation to continue with his policy of
expansionism.”22 The Bush administration obviously determined that their only effective
18  George Bush Presidential Library and Museum, “Remarks to Department of Defense Employees,” Accessed November 18,
2012. http://bushlibrary.tamu.edu/research/public_papers.php?=2165&year=1990&month=8.
19  The American Presidency Project, “Remarks at the Annual Conference of the Veterans of Foreign Wars in Baltimore, Maryland,” http://www.presidency.ucsb.edu/ws/index.php?=18774.
20  Miller Center at University of Virginia, “Address to the Nation on the Invasion of Iraq,” (January 16, 1991), George H.W.
Bush,” Accessed November 10, 2012, http://millercenter.org/president/speeches/detail/3428.
21  Ibid.
22  Alex Roberto Hybel, Power over Rationality: The Bush Administration and the Gulf Crisis (Albany, NY: State University of
New York, 1993).

Southern California International Review - Vol. 3 No. 1

Leyla Tosun

33

choice was a military invasion. Therefore, as Khong’s psychological theory would predict,
the Munich analogy clearly had an impact on President Bush’s assessment of the situation
in the Gulf, and his decision to invade Iraq.

Weakness
While the psychological theory has great value, we must address a weakness in its explanation. It is reasonable to propose that Khong’s psychological theory is uncertain as
to whether President Bush would have employed the Munich analogy without Margaret
Thatcher’s influence and pressure from media and politicians. However, this concern can
be remedied by examining George Bush’s personal experiences. Bush had served as a fighter pilot during World War II and was shot down at one point. While in office as the Vice
President to Ronald Reagan, Bush spoke about the influence that his combat service had
on him. He is quoted as saying, “There’s no question that today it has a real impact on me
as I give advice to the President.”23 Khong theorizes that policy makers tend to latch onto
comparisons that are easily accessible in their mind, often due to personal experiences. He
quotes social psychologists Richard Nisbett and Lee Ross as saying, “Objects and events in
the phenomenal world are almost never approached as if they were sui generis configurations but rather are assimilated into preexisting structures in the mind of the perceiver.”24
Khong continues, “Individuals will be strongly attached to historical lessons in which generational and personal effects reinforce one another.”25 Applying this to George H. W. Bush,
it is evident that the generational effects of living through the destruction of World War II,
combined with his personal experience of being shot down as a naval aviator, would combine to create a strong historical lesson. This lesson leads the theory to predict that Bush
would have a proclivity towards using the Munich analogy, and so it is safe to assume that
his employment of the comparison was not wholly due to outside influences. However, another theory must additionally be considered to explain why the U.S. entered the Gulf war.

Offensive Realism Theory
Offensive realism can also be used to explain this event in U.S. history. This theory, as
detailed by John Mearsheimer, is based on five central assumptions: “That the international
system is anarchical… that great powers inherently possess some offensive military capability… that states can never be certain about other states’ intentions… that survival is the
primary goal of great powers… [and] that great powers are rational actors.”26 In his book,
23  Naval Historical Center, “Vice President Bush Calls World War II Experience ‘Sobering,’” Accessed November 10, 2012,
http://www.history.navy.mil/faqs/faq10-3.htm.
24  Khong, “The AE Framework,” 24-25.
25  Khong, “The AE Framework,”33.
26  John J. Mearsheimer, “Anarchy and the Struggle for Power,” in The Tragedy of Great Power Politics (New York: Norton, 2001):
30-31.

Southern California International Review - Vol. 3 No. 1

Leyla Tosun

34

The Tragedy of Great Power Politics, Mearsheimer discusses the effect that this system has
on state behavior. He argues that ultimately, states are trying to survive in a self-interested
world. The best way to ensure their security is to achieve regional hegemony because there
is a security dilemma in which an increase in one state’s power will decrease another state’s
security. However, Mearsheimer theorizes, “Regional hegemons… do not want peers.”27
Therefore, a state will try to check a potential hegemon’s power, since they would prefer
that there be at least two great powers in another region. Mearsheimer labels this check on
power as “offshore balancing.”28 The two powers would balance one another and prevent a
potentially threatening hegemon from emerging. Offensive realism theory also suggests that
a state will have an incentive to strike preemptively because it can never be certain of another
state’s true intentions. This leads to an aggressive international system with big payoffs for
the state that strikes first.
The theory of offensive realism can help to explain the events in the Gulf in 1990-1991.
When Saddam invaded Kuwait and positioned troops capable of invading Saudi Arabia, he
created a potentially dangerous increase in Iraq’s regional and global power. In his August 8
speech, President Bush acknowledged his concern over this possible regional power imbalance in when he said, “Iraq is already a rich and powerful country that possesses the world’s
second largest reserves of oil and over a million men under arms. It’s the fourth largest military in the world.”29 The invasion of Kuwait gave Iraq access to Kuwaiti oil and a further advance could put them in control of Saudi reserves. Bush spoke of the dangers of this move in
saying, “An Iraq permitted to swallow Kuwait would have the economic and military power,
as well as the arrogance, to intimidate and coerce its neighbors – neighbors who control the
lion’s share of the world’s remaining oil reserves. We cannot permit a resource so vital to be
dominated by one so ruthless.”30 This kind of jurisdiction over the world’s largest oil reserves
would allow Iraq to monopolize a strategically important amount of oil. This created a potential threat to the economic and political security of the United States.

Power and Security
An increase in Iraqi power would decrease American security in two different ways.
First, there was the fear that Iraqi domination of enormous quantities of oil could allow them
to become an economic, and eventually a political, hegemon in the Gulf region. As noted in
offensive realism theory, great powers pay special attention to how many resources the “rival
27  Mearsheimer, “Anarchy and the Struggle for Power,” 41.
28  Mearsheimer, “Anarchy and the Struggle for Power,” 42.
29  Miller Center at University of Virginia, “Address on Iraq’s Invasion of Kuwait (August 8, 1990), George H. W. Bush.”
30  Miller Center at University of Virginia, “Address Before a Joint Session of Congress (September 11, 1990), George H. W.
Bush,” Accessed November 10, 2012, http://millercenter.org/president/speeches/detail/3425.

Southern California International Review - Vol. 3 No. 1

35

Leyla Tosun

states control, because rich and populous states usually can and do build powerful armies.”31
This explains the U.S. concern that Iraqi oil revenue could be used to advance Iraq’s military
capabilities. The U.S. saw this increase in military power as a threat to the balance of power
in the region. Also in accordance with offensive realism theory, it was clear that the Bush
administration did not want Iraq to become a hegemon in the Gulf. In numerous speeches,
President Bush’s rhetoric emphasizing the need to keep the status quo in the region is clear.
In his August 8 speech he said that he was “committed to the security and stability of the
Persian Gulf.”32 In the same speech he continued on to say that “Iraq cannot be allowed to
benefit from its invasion of Kuwait.”33 He emphasized the importance of Saudi power in
maintaining this status quo in by saying, “The sovereign independence of Saudi Arabia is
of vital interest to the United States.”34 The U.S. did not want Iraq to become a regional hegemon because it would be a powerful foe in global relations. The U.S. much preferred that
Saudi Arabia retain its oil reserves and the accompanying influence and power in order to
preserve another strong power in the region to balance Iraq.
The fact that the U.S. was not invading Iraq to occupy them was important. In President
Bush’s January 19 speech, he stated, “Our goal is not the conquest of Iraq. It is the liberation
of Kuwait.”35 This emphasized the point that U.S. interest in the region was to prevent Iraq
from becoming a regional hegemon and therefore to restore the status quo. In his October 1
speech to the United Nations, President Bush used similar rhetoric to expand the perceived
security threat to the entire globe. He said, “The present aggression in the Gulf is a menace
not only to one region’s security but to the entire world’s vision of our future.”36 Mearsheimer
notes that the balance-of-power logic, which theorizes that security increases when military capabilities are evenly distributed so that no one state is stronger than the others, often
causes great powers to form alliances and cooperate against common enemies. This can be
seen in the coalition of 28 countries that invaded Iraq in 1991. They banded together to
prevent an aggressive state from gaining a disproportionate amount of power by invading
Kuwait and possibly Saudi Arabia.37

31  Mearsheimer, “Anarchy and the Struggle for Power,” 45.
32  Miller Center at University of Virginia, “Address on Iraq’s Invasion of Kuwait (August 8, 1990), George H. W. Bush.”
33  Ibid.
34  Ibid.
35  Ibid.
36  Miller Center at University of Virginia, “Address to the United Nations (October 1, 1990), George H. W. Bush.” Accessed
November 10, 2012. http://millercenter.org/president/speeches/detail/3426.
37  Miller Center at University of Virginia, “Address to the Nation on the Invasion of Iraq,” (January 16, 1991), George H.W.
Bush.”

Southern California International Review - Vol. 3 No. 1

Leyla Tosun

36

Economic Impact
Aside from the security threat that Iraq as a regional hegemon posed, there were also
economic concerns regarding oil. By invading Kuwait, Iraq became very close to Hama,
Saudi Arabia’s most valuable oil fields. Iraqi control of these fields would have given it an unprecedented monopoly, which could have caused a huge spike in the price of oil. Normally,
Saudi Arabia possessed such large oil reserves that it could increase or decrease production
levels to moderate world prices. However, if Iraq gained control over Saudi reserves, Saddam
would be able to force world prices up by restricting production.38 Even though the U.S. only
gets about 16 percent of its oil imports from the six Persian Gulf members of OPEC, Saudi
Arabia owns the second biggest oil reserves in the world, and so the world price of oil would
be affected by an Iraqi monopoly of these resources.39 An increase in the world price would
ultimately cause oil to become more expensive for everyone, including the United States.
Overall, the U.S. imports about 60 percent of the crude oil that it uses, so global price increases would definitely impact U.S. commercial interests.40 Oil is the most important source
of energy for the U.S. economy, as it is needed for production, fuel, and transportation. Iraq’s
seizure of oil in Saudi Arabia could potentially cause an abrupt fall in the world supply if
they chose to restrict production, resulting in a surge in world prices, a disruption of U.S.
economic activity, and perhaps even a recession.41 These very real worries about dependence
on oil surfaced in President Bush’s August 8 speech, as he stated, “Our country now imports
nearly half the oil it consumes and could face a major threat to its economic independence.
Much of the world is even more dependent upon imported oil and is even more vulnerable
to Iraqi threats.”42 Only a month later, he again acknowledged, “Vital economic interests are
at risk.”43 This kind of rhetoric showed how worried the Bush administration was about the
impact that Iraqi monopoly over oil reserves could have on the health of the U.S. economy,
as well as on the world economy as a whole.

Oil and the U.S. Military
In addition to the importance of oil to the American economy, it is also crucial to recognize the importance of oil in the continuing power projection of the U.S. military. The
38  Middle East Research and Information Project, “Oil and the Gulf War,” Accessed March 9, 2013, http://www.merip.org/
mer/mer171/oil-gulf-war.
39  Consumer Energy Report, “Where the U.S. Gets Its Oil From,” Accessed November 18, 2012, http://www.energytrendsinsider.com/research/crude-oil/where-the-us-gets-its-oil-from/.
40  U.S. Energy Information Administration, “How Dependent Is the United States on Foreign Oil?” Last modified July 16,
2012, Accessed November 18, 2012, http://www.eia.gov/tools/faqs/faq.cfm?id=32.
41  Middle East Research and Information Project, “Oil and the Gulf War.”
42  Miller Center at University of Virginia, “Address on Iraq’s Invasion of Kuwait.”
43  Miller Center at University of Virginia, “Address Before a Joint Session of Congress.”

Southern California International Review - Vol. 3 No. 1

37

Leyla Tosun

United States Military is the biggest single purchaser of oil in the world.44 The B-52 bomber
consumes 3300 gallons per hour, the F-16 Falcon burns 800 gallons per hour, and the KC-135
Statotanker (an aerial refueling tanker aircraft) consumes 2650 gallons per hour.45As an official U.S. report states, “Out of the $20 billion the U.S. military spent on energy in 2008,
82.5% was to purchase crude oil.”46 Additionally, a fleet of 500 Humvees would consume over
1,660 gallons of gas in just one hour.47 These figures show how crucial an affordable, reliable
supply of oil is to the U.S. military in being able to work effectively. An increase in the world
price of oil or a shortage could pose a huge risk to national security if the military does not
have access to the oil it needs to function properly.

Weaknesses
While Mearsheimer’s theory of offensive realism has great value, a weakness in its application to the present case must be addressed. Offensive realism explains the economic
threat that Iraqi control of Kuwait and/or Saudi oil reserves posed. However, due to the
cooperation among other oil producing countries to increase their exports to the United
States during this period, we cannot be certain that the potential long-term economic consequences would actually have been as dire as the theory’s predictions. However, even though
the predicted devastations were only estimated, potential economic effects clearly still had
an impact upon the administration’s thinking as can be judged by their rhetoric and documentation of conversations during closed meetings. This is not a detrimental weakness
underlying the theory, because as has been detailed in this paper, both major political and
military considerations were of importance in addition to economic effects. An increase in
Iraqi power and their potential regional hegemony were very plausible security risks to the
United States.

Conclusion: Assessing the Theories
After evaluating both of these international relations theories, it is evident that they
both have strong explanatory value in describing U.S. entrance into the Gulf War. From
the Bush administration’s rhetoric leading up to the invasion of Iraq, it is clear that, as the
psychological theory would predict, the 1938 Munich analogy weighed upon their decisionmaking. This was influenced by the inundation of neoconservative criticism of President
44  “Top 5 Facts on U.S. Military Oil Consumption,” Accessed November 18, 2012, http://www.newlaunches.com/archives/
top_5_facts_on_us_military_oil_consumptio n.php.
45  Ibid.
46  Kohl, Keith. “U.S. Military Cries Peak Oil.” Energy & Capital. Last modified April 14, 2012.Accessed November 18, 2012.
http://www.energyandcapital.com/articles/peak-oil-military/1121.
47  TreeHugger, “7 Gas Guzzling Military Combat Vehicles,” Accessed March 12, 2013, http://www.treehugger.com/cars/7-gasguzzling-military-combat-vehicles.html.

Southern California International Review - Vol. 3 No. 1

Leyla Tosun

38

Bush’s lack of resolve to use military force in the Gulf. The theory also provided an applicable explanation for the President’s behavior due to his personal and generational experiences with World War II. Offensive realism can also explain the U.S. entry into the Gulf
War, although based on different considerations. John Mearsheimer’s theory evaluated the
international system as being anarchical and driven by the security dilemma, resulting in
aggressive tendencies. This theory evaluated the increase in Iraq’s regional power and what
this potential hegemony meant for the United States’ economic, political and military security. Examining the situation in the Gulf and noticing an imminent change in the status
quo led the Bush administration to see the necessity for offshore balancing. The events and
decisions leading up to the American invasion of Iraq can be told through more than one
story, so ultimately both these theories help us to explain this event in United States history.

Bibliography
The American Presidency Project. “Remarks at the Annual Conference of the Veterans
of Foreign Wars in Baltimore, Maryland.” http://www.presidency.ucsb.edu/ws/index.
php?=18774.
Consumer Energy Report. “Where the U.S. Gets Its Oil From.” Accessed November 18,
2012. http://www.energytrendsinsider.com/research/crude-oil/where-the-us-gets-itsoil-from/.
George Bush Presidential Library and Museum. “Remarks to Department of Defense Employees.” Accessed November 18, 2012. http://bushlibrary.tamu.edu/research/public_
papers.php?=2165&year=1990&month=8.
Haass, Richard. War of Necessity, War of Choice: A Memoir of Two Iraq Wars. New York:
Simon & Schuster, 2010.
Haig, Alexander M. Jr. “Gulf Analogy: Munich or Vietnam?” The New York Times. December 10, 1990. Accessed November 18, 2012. http://www.nytimes.com/1990/12/10/
opinion/gulf-analogy-munich-or-vietnam.html.
Hybel, Alex Roberto. Power over Rationality: The Bush Administration and the Gulf Crisis.
Albany, NY: State University of New York, 1993.
“The Iraqi Invasion; INVADING IRAQIS SEIZE KUWAIT AND ITS OIL; U.S. CONDEMNS ATTACK, URGES UNITED ACTION.” The New York Times, August 3,
1990. Accessed November 18, 2012. http://www.nytimes.com/1990/08/03/world/
iraqi-invasion-invading-iraqis-seize-kuwait-its-oil-us-condemns-attack-urges.
html?pagewanted=all&src=pm.

Southern California International Review - Vol. 3 No. 1

39

Leyla Tosun

Khong, Yuen Foong. “The AE Framework.” In Analogies at War: Korea, Munich, Dien Bien
Phu, and the Vietnam Decisions of 1965. Princeton, NJ: Princeton University Press,
1992.
Kohl, Keith. “U.S. Military Cries Peak Oil.” Energy & Capital. Last modified April 14, 2012.
Accessed November 18, 2012. http://www.energyandcapital.com/articles/peak-oilmilitary/1121.
Krauthammer, Charles. “A Festival of Appeasement.” The Washington Post, August 3, 1990,
A23.
-----. “Iraq’s Thug: Nightmare From the Hitler Era.” The Seattle Times, July 31, 1990. http://
community.seattletimes.nwsource.com/archive/?date=19900731&slug=1085367.
The Learning Network. “Sept. 30, 1938 | Hitler Granted the Sudentenland by Britain, France
and Italy.” New York Times, September 30, 2011. Accessed March 10, 2013. http://lear
ing.blogs.nytimes.com/2011/09/30/sept-30-1938-hitler-granted-the- sudentenlandby-britain-france-and-italy/.
Margaret Thatcher Foundation. “Gulf War: National Security Council minutes [declassified
1999].” Accessed March 10, 2013. http://www.margaretthatcher.org/archive/displaydocument.asp?=110712.
-----. “Gulf War: National Security Council minutes [declassified 1999].” Accessed March
10, 2013. http://www.margaretthatcher.org/archive/displaydocument.asp?=110716.
-----. “Gulf War: National Security Council minutes [declassified 2000].” Accessed March
10, 2013. http://www.margaretthatcher.org/archive/displaydocument.asp?=110701.
-----. “Gulf War: Visiting Aspen [memoirs extract].” Accessed March 10, 2013. http://www.
margaretthatcher.org/archive/displaydocument.asp?=110709.
-----. “Remarks after meeting President Bush (welcomes UNSC4665).” Accessed March 10,
2013. http://www.margaretthatcher.org/archive/displaydocument.asp?=110714.
Mearsheimer, John J. “Anarchy and the Struggle for Power.” In The Tragedy of Great PowerPolitics. New York: Norton, 2001.
Middle East Research and Information Project. “Oil and the Gulf War.” Accessed March 9,
2013. http://www.merip.org/mer/mer171/oil-gulf-war.
Miller Center at University of Virginia. “Address on Iraq’s Invasion of Kuwait (August 8,
1990), George H. W. Bush.” Accessed November 10, 2012. http://millercenter.org/president/speeches/detail/5529.
-----. “Address Before a Joint Session of Congress (September 11, 1990), George H. W. Bush.”
Accessed November 10, 2012. http://millercenter.org/president/speeches/detail/3425.
Southern California International Review - Vol. 3 No. 1

40

Leyla Tosun

-----. “Address to the United Nations (October 1, 1990), George H. W. Bush.” Accessed November 10, 2012. http://millercenter.org/president/speeches/detail/3426.
-----. “Address to the Nation on the Invasion of Iraq (January 16, 1991), George H.W. Bush.”
Accessed November 10, 2012. http://millercenter.org/president/speeches/detail/3428.
“The Munich Analogy - Reagan, Bush, and the Gulf War.” Encyclopedia of the New American
Nation. 2012. Accessed 18 Nov. 2012. http://www.americanforeignrelations.com/E- N/
The-Munich-Analogy-Reagan-bush-and-the-gulf-war.html.
Naval Historical Center. “Vice President Bush Calls World War II Experience ‘Sobering.’”
Accessed November 10, 2012. http://www.history.navy.mil/faqs/faq10-3.htm.
Rosenthal, A.M.. “Making a Killer.” The New York Times, August 5, 1990, E19.
Schwab, Orrin. The Gulf Wars and the United States: Shaping the Twenty-first Century. Westport, CT: Praeger Security International, 2009.
Simons, Geoff. Iraq: From Summer to Post-Saddam, 3rd ed. Palgrave Macmillan, 2004.
Smith, Jean Edward. George Bush’s War. New York: H. Holt, 1992.
“Top 5 Facts on U.S. Military Oil Consumption.” Accessed November 18, 2012. http://www.
newlaunches.com/archives/top_5_facts_on_us_military_oil_consumptio n.php.
TreeHugger. “7 Gas Guzzling Military Combat Vehicles.” Accessed March 12, 2013. http://
www.treehugger.com/cars/7-gas-guzzling-military-combat-vehicles.html.
William A. Dorman and Steven Livingston, “News and Historical Content: The Establishing Phase of the Persian Gulf Policy Debate” in Taken by Storm: The Media, Public
Opinion, and U.S. Foreign Policy in the Gulf War. Ed. by W. Lance Bennett and David L.
Paletz. Chicago: University of Chicago, 1994, 63-64.
U.S. Energy Information Administration. “How Dependent Is the United States on Foreign
Oil?” Last modified July 16, 2012. Accessed November 18, 2012. http://www.eia.gov/
tools/faqs/faq.cfm?id=32.

Southern California International Review - Vol. 3 No. 1

The Macroeconomic Trajectory of Myanmar
A Predictive Analysis

MoeMoe Chaee & Matthew Prusak
Myanmar (formerly Burma), from the Western perspective, is an economic enigma. Once
the gem in the string of British colonies stretching across Asia, the country has since fallen upon
hard times. However, in recent months, a national shift in policy has occurred with crucial
economic implications. As Myanmar breaks with its authoritarian tradition and endeavors to
simultaneously achieve both a vibrant market economy and true democracy, the financial effects of these changes remain nebulous. This paper aims to examine the economy of Myanmar
and its future as it stands on the threshold of a new era of development. After a brief introduction, the paper first addresses the history of Myanmar’s economy. The paper then delves into
the state’s status quo and how the past informs the present condition. A case study of postcolonial Botswana is included to parallel much of Myanmar’s predicament today and illustrate
a possible outcome. This transitions into an evaluation of three scenarios for Myanmar’s future
before concluding why Myanmar may become an economic powerhouse for decades to come.

Introduction: The Nature of Myanmar
“This is Burma and it is unlike any land you know about.”
–Rudyard Kipling1
While Myanmar has been in the grip of an authoritarian regime for many years, current political movements indicate a shift from this model, a transition that has significant
economic impacts for this country of sixty million.2 Thein Sein, a former general and the
President of Myanmar3 as of March 2011, sparked reforms that have set the country on a
path towards political and economic transformation. If these changes materialize, the world
will witness an integration of the Burmese economy with the global commercial system
unseen since Myanmar’s days as a British colony. Though the current climate is promising,
whether these changes are a genuine sign of things to come or merely a façade for the

1  Rudyard Kipling, Letters from the East, (London: Lovell Company, 1899).
2  Central Intelligence Agency, “The World Fact Book: Myanmar,” Accessed November 20, 2012.
3  Authors’ note: “Burma” and “Myanmar” are used interchangeably in this paper. While the name was officially changed from
“Burma” to “Myanmar” in 1989, President Obama’s administration uses both terms to refer to the nation and we have followed
suit.

MoeMoe Chaee is a junior at the University of Southern California majoring in Interna-

tional Relations and minoring in International Policy and Management.
Matthew Prusak is a sophomore at the University of Southern California double majoring
in International Relations and Philosophy, Politics, and Law.

42

MoeMoe Chaee & Matthew Prusak

Figure 14

4  International Crisis Group, “Myanmar: The Politics of Economic Reform,” Asia Report No. 231 (2012): 3.

Southern California International Review - Vol. 3 No. 1

43

MoeMoe Chaee & Matthew Prusak

military junta’s continued reign remains unclear. This lack of clarity about Myanmar’s present economic and political situation highlights the uncertainty of its future.
The notion of democracy is tantalizing, but a constantly mutating national identity has
so far translated into nationwide instability. This national identity continues to oscillate as
the trifecta of national symbolism (name, flag, and capital) have fallen to the whims of the
military junta. All three have changed under the military regime: the flag was redesigned in
1974 and again in 2010, the captial was moved from historical Yangon to the junta’s citadel of
Napyidaw in 2005, and the name of the nation has been changed from Burma to Myanmar.5
This lack of clarity about even Myanmar’s present identity highlights the uncertainty of its
future.
The question then arises as to whether the nation can overcome its challenges to achieve
democracy and economic stability. Globalization left Myanmar economically disadvantaged
and isolated, a condition further compounded by the nation’s lack of established democratic
and economic institutions. When looking for comparisons throughout history, the development of Botswana may provide some insight into Myanmar’s predicament. To achieve the
rapid and consistent growth of a developing nation like Botswana, Myanmar must overcome the challenge of simultaneously attempting to establish both a democratic process
and also economic development. If Myanmar implements effective reforms it can leverage
its rich natural resources, emerging labor force, and proximity to dynamic economies such
as China and India. Myanmar’s current course is unprecedented both in its impact on the
global economy and on the nation itself. Nevertheless, hope remains for Myanmar. In these
uncharted waters, despite the risks of economic tremors, social unrest, and political uncertainty, Asia’s latest tiger may yet rise.

History
“If it were necessary to give the briefest possible definition of imperialism, we should have
to say that imperialism is the monopoly stage of capitalism.”
–Vladimir Lenin6

Colonialism in Burma: Imperialist Beginnings
Myanmar’s current economic situation can only be understood through the context of
its colonial heritage. While pre-colonial Burma had flourishing artisan industries, British
colonialism introduced an economic model with the primary goal of resource extraction.
5  Central Intelligence Agency, “The World Fact Book: Myanmar.”
6  Vladimir Ilyich Lenin, “Imperialism, the Last Stage of Capitalism,” Lenin’s Selected Works, (Moscow: Progress Publishers,
1963): 667-766.

Southern California International Review - Vol. 3 No. 1

44

MoeMoe Chaee & Matthew Prusak

By 1886, the exportation of natural goods had dwarfed the rest of the economic output.
Burma became primarily a commodity exporter, dependent on the sale of teak, petroleum,
lead, gemstones, and rice.7 To facilitate these exports, the British allocated funding to the
resource-laden Burmese railways, a move which led to the deterioration of the country’s
road system and the development of the general infrastructure. Further consolidating imperial control, essential industries such as rice milling and the financial sector remained firmly
ensconced in British hands.8 At the end of World War I, the British imperialist system came
to an end, but the Burmese were left with little to show for over half a century of colonial rule.
Following colonial exploitation, the people of Burma were unsurprisingly xenophobic towards international trade and foreigners. This sentiment became a motivating factor
behind the post-colonial regimes, which quarantined the country and minimized the
impact of the world economy on domestic trade. Isolationist policies only compounded
the difficulties facing an independent Burma by adversely impacting its economic growth,
policy, and living standards.

Post-Colonial Burma: Free Yet Conflicted
Though the country failed to develop functional government institutions under colonialism, it maintained strong reserves of timber, rice, and minerals that provided some
financial viability. Already embroiled in political difficulties, Burma experienced turmoil
on the eve of independence as various factions sought dominance, further disrupting the
economy.9 The inexperienced activists who had successfully garnered independence for
Burma lacked the background expertise required to manage the nation’s monetary system.
Nevertheless, they attempted to implement a strong regime of central planning and a government-funded social welfare system, thus squandering the nation’s potential as Southeast
Asia’s economic powerhouse.
Though once a gem of the British colonies due to its bountiful riches, Myanmar began
its independence in 1948 with an unstable economic and political climate that still plagues
the country to this day. While independence from British mercantilism could have theoretically paved the way to economic prosperity, the distorted vision of the nascent nation reversed the potential boom into a financial depression. A litany of economic policies ensued
that would make market economists cringe. Agriculture was nationalized, land was redistributed, and free trade was replaced by high tariffs.10 The Burmese government established
a central bank with strict foreign exchange controls, and strict import licensing broke the
7  Central Intelligence Agency, “The World Fact Book: Myanmar.”
8  Khin M. Kyi, Economic Development of Burma: A Vision and a Strategy (Stockholm, Sweden: Olof Palme International
Center, 2000): 4.
9  Kyi, Economic Development of Burma: A Vision and a Strategy, 5.
10  Asia Society Task Force Report, “Current Realities and Future Possibilities in Burma: Options For U.S. Policy,” (2010): 60.

Southern California International Review - Vol. 3 No. 1

45

MoeMoe Chaee & Matthew Prusak

correlation between international and domestic prices.11 Moreover, all of this regulated only
the import side of the economy.
In terms of free enterprise, the new policies were even more crippling for those hoping
to engage in export. The rice and teak industries became state monopolies, immediately
impacting the productivity of the agricultural sector. Rice cultivators lost their incentive to
produce marketable surpluses as the SAMB (State Agricultural Marketing Board) bought
output at a fixed price that was significantly lower than global market prices. Coupled with
the import-licensing regime, domestic prices of consumer goods soared well above world
prices, triggering rampant inflation.12 Myanmar had effectively hamstrung its own trade
policy.
Though misguided and counterproductive, Myanmar’s early economic policies were
typical of a newly independent Asian country.13 The economic model of primarily stateowned enterprises with limited private sector ownership rarely proved successful, and
Myanmar’s case was no different. Public sector management was a fiasco and state industries
fared terribly when pitted against their international competitors.14 The prospect of a liberalized market was thwarted by the nation’s bitter colonial experience. Consequently, commercial privileges were granted to Burmese firms on the basis of political and familial ties rather
than a reputation for economic competence. This further entrenched the stagnant economy.
As rice production fell, the economy continued to falter; by the 1960s, the government
began to recognize the major limitations of monopolizing industrial development. In search
of alternatives, the Pyidawtha Plan – a blueprint for economic development and perhaps the
Burmese economy’s only hope of a free market without massive political change – emerged.
However, it stalled due to a lack of funds. The measure proved too little, too late; profits from
the already crippled agricultural sector would have been required to subsidize any reforms.
The situation reached a point where economic change was inevitable.
Demographic issues also erupted concurrently. Ethnic groups demanded more power
in return for entering the Burmese Union under the post-colonial framework. Furthermore,
as large, sector-specific companies failed, different economic classes also began clamoring for greater societal equality.15 The growing power of labor unions, religious organizations, volunteer groups, and professional guilds alarmed the Burmese military, which had
assumed the dominant role among government factions amid the struggle for economic
dominance. Together, the twin forces of financial struggle and ethnic tensions triggered a
11  Kōichi Fujita, Fumiharu Mieno, and Ikuko Okamoto, The Economic Transition in Myanmar after 1988: Market Economy
versus State Control (Singapore: NUS in Association with Kyoto UP, 2009): 1-4.
12  International Monetary Fund, “Myanmar 2011 Article IV Consultation,” No. 12/104 (2012): 3.
13  Peter John Perry, Myanmar (Burma) since 1962: The Failure of Development (Aldershot, England: Ashgate, 2007): 3.
14  International Crisis Group, “Myanmar: The Politics of Economic Reform,” 3.
15  Kyi, Economic Development of Burma: A Vision and a Strategy, 9-10.

Southern California International Review - Vol. 3 No. 1

46

MoeMoe Chaee & Matthew Prusak

military coup that installed the modern-day junta. In 1962, to ostensibly engineer national
stability, the Burmese Army wrested power from the hands of the business community and
the civilian population through a military coup d’état.16

Junta-Controlled Myanmar: The Burmese Way to Socialism
Under direct military control, Myanmar slid further down its reclusive, authoritarian slope. The Burmese Army replaced the previous economic model with its own form of
socialism, ending the symbiotic existence of the public and private sectors. The “Burmese
Way to Socialism,” as the Army dubbed it, nationalized the retail and trade sectors, further
impoverishing Myanmar.17 Moreover, the “Revolutionary Council”18 under General Ne Win
repealed the constitution and transferred all legislative, executive, and judicial power to
himself and his partisans.19 Obsessed with extending its power and influence, the military
regime restricted contact with the outside world in order to cement its authority. Already
reclusive, Myanmar’s self-imposed exile completely isolated it from the international community and transformed it into a pariah state.
Adherence to this policy of isolationism created an economic horror story.
Nationalization and mismanagement tarnished any glimmer of a successful private manufacturing industry that existed during the previous democratic period. Lack of foreign exchange
earnings and losses by state enterprises meant government revenue constantly fell short of
necessary funding for public expenditures. Repeated “de-monetization” of Myanmar’s currency resulted in hyperinflation and dragged millions of citizens into abject poverty. By 1987
the United Nations considered Myanmar a Least Developed Country (LDC). The misguided
socialist experiment had left the economy on the brink of total collapse.

SLORC Reformation: Stepping Forward But Sliding Backwards
The resulting insurgency of Myanmar’s citizens was met with violent repression, producing an internal power struggle among the generals that resulted in the formation of
the State Law and Order Restoration Council (SLORC) in 1988. Under Chairman Thein
Shwe, leader of the SLORC, Myanmar abandoned socialism and tried an open-door policy
towards foreign investment and trade. This produced mixed results for the nation and its
economy. Much like Deng Xiaoping’s approach to the modernization of the Chinese economy, Chairman Thein Shwe believed the only way to bring successful reform to Myanmar
was to suppress political dissent and gather resources needed to revive a collapsing economy
16 
17 
18 
19 

Kyi, Economic Development of Burma: A Vision and a Strategy, 10.
IKyi, Economic Development of Burma: A Vision and a Strategy, 12.
A socialist council made up of 24 members, which functioned to increase the military’s role in state affairs.
Lex Rieffel, “The Myanmar Economy: Tough Choices,” Global Economy and Development at Brookings (2012): 51.

Southern California International Review - Vol. 3 No. 1

MoeMoe Chaee & Matthew Prusak

47

through foreign trade and investment.20 However, the regime’s attempt to cultivate an economically liberal yet politically authoritarian state backfired. To cultivate a democratic
image and assuage the concerns of world powers, the regime hosted an election expecting to
win in 1990; the junta was shocked and enraged when the National League for Democracy
(NLD) led by Daw Aung San Suu Kyi won a decisive victory. In response to the election results, the junta placed her under house arrest and imposed severe restrictions on political
activities.
In protest over the draconian policies of the military regime, Western powers began
dissolving bilateral developmental programs and imposing economic sanctions in order
to pressure Myanmar to adopt formative political and human rights policies. As these actions began damaging an already fragile economy, General Thein Shwe attempted to install
“discipline-flourishing democracy” by restoring a market-based economy. Continued economic uncertainty and a lack of faith in the government’s policies have thus far hindered the
development of the nation’s economy.

The Status Quo
“We are not giving up, we are just yielding to the aspirations of the people.”
–Aung San Suu Kyi21

Myanmar Today, Myanmar Tomorrow
Myanmar is a tragedy of lost opportunity, a land recovering from over a century of
punitive rule from both foreign and domestic regimes. Today, Myanmar suffers from entrenched economic corruption, low industrial productivity, high unemployment, a fickle
financial sector, and severe market inefficiencies. It is characterized by a centralized command economy that has stressed self-sufficiency – anathema to today’s globalized merchant
class. Crippled by sanctions and fear of foreign institutions, it has been isolated from the
international community. Information gaps, infrastructural issues, and poorly constructed
policies hinder the ability of Burmese enterprises to enter the global market. However, the
economic situation appears to be evolving.
To fully grasp the nature of current Burmese economic reform it is crucial to view it
through the lens of political action. Policy began shifting gears with the administration
change in November 2010, when President Thein Sein announced during his inaugural address his intent to guide Myanmar in a reformist direction. Standing before the legislature,
he proclaimed, “Myanmar must to be able to stand as a democratic nation … with justice,
20  David I. Steinberg and Hongwei Fan, Modern China-Myanmar Relations: Dilemmas of Mutual Dependence (Copenhagen:
NIAS, 2012): 131-132.
21  Thomas Fuller, “Myanmar Opposition Yields in Oath Dispute,” The New York Times, Last modified 2012, Accessed December 1, 2012.

Southern California International Review - Vol. 3 No. 1

48

MoeMoe Chaee & Matthew Prusak

freedom, and equality while steadfastly shouldering the State[’s] duties. At the same time
I would like to urge and invite all the people to work together with the government in the
interests of the nation.”22 Myanmar has felt political and economic winds shift, and the pressure for transformation is imminent. The government yielded to this pressure by ending
many repressive policies and began to target economic growth.
Myanmar has begun to give positive indications of political reform following this
speech. Shortly after Thein Sein assumed the presidency, he signaled the transformation
of Myanmar by ushering in a host of political reforms, ranging from the release of political
prisoners to renewed ceasefires with separatist groups.23 In fact, Sein’s first reform decision was the release of opposition leader Aung San Suu Kyi. She was subsequently granted
a seat in the lower chamber of the national legislature. This represents a marked shift from
the regime’s prior treatment of the opposition. Moreover, a law to reduce print and online
censorship was passed in late 2012.24 While no single change would provide a complete solution, the speed with which all these changes are occurring may indicate an authentic era
of reform for Myanmar.
Increased freedom of the press has fueled hopes of improving relations with ethnic minorities who seek a voice in shaping national discourse. The current government has taken
significant steps in dealing with minority, environmental, and foreign interests. Though the
peace is fragile, leaders have arranged a ceasefire with ethnic minorities in the Kachin state,
and steps are being taken to address the factions’ grievances. The government has also halted
construction of the Myitsone Dam in the Kachin State due to unfavorable environmental
and social impacts—a remarkable shift in policy from the harshly utilitarian focus of previous administrations.25
Political progress was further encouraged by President Obama’s visit on November 18,
2012. During his stay, Obama assured American support for Myanmar’s transition towards
a more democratic process. While speaking at the University of Yangon, he remarked, “I’m
not somebody who thinks that the United States should stand on the sidelines and not want
to get its hands dirty when there’s an opportunity for us to encourage the better impulses
inside a country.”26 U.S. support of a free state that empowers the Burmese citizenry reinforces the strength and permanency of the political transformation, which appears to have
taken root at all levels of society.
22  Unknown, “The New Light of Myanmar: President U Thein Sein Delivers Inaugural Address to Pyidaungsu Hluttaw,” Burmanet News, Last modified 2011, Accessed November 10, 2012.
23  Rieffel, “The Myanmar Economy: Tough Choices.”
24  Lewis Macleod, “More Press Freedom for Myanmar’s Media,” BBC News (2012).
25  Rieffel, “The Myanmar Economy: Tough Choices,” 2.
26  U.S. Government, The White House, “President Obama Speaks at the University of Yangon,” Last modified 2012, Accessed
November 20, 2012.

Southern California International Review - Vol. 3 No. 1

49

MoeMoe Chaee & Matthew Prusak

As for its economic development, Myanmar continues to capitalize on a bounty of national resources. With a GDP of 51.9 billion USD, the state is already a major exporter of gas
and other natural materials including teak wood, oil, and precious and non-ferrous metals.27
At roughly 55 percent of Myanmar’s total export, energy and mining account for the majority of the country’s foreign revenue and 86 percent of its foreign direct investment.28 In addition to mineral and gas deposits, the renewable fisheries and agriculture sectors have the
potential for further trade development. Moreover, food production already exceeds selfsustaining levels and can be further cultivated to increase international sales of rice, palm
oil, and grains. Mechanization of an underdeveloped agriculture sector should expand job
opportunities in the labor-intensive manufacturing sector.
Despite these successes, the government is fostering economic reform through fiscal
policy changes. In early 2012 the government abandoned fixed exchange rates to the SDR
in favor of a floating market rate set at 818 K to 1 USD in order to reduce monetary arbitrage.29 The new floating rate will provide investor security and help solve the national deficit by eliminating deficit monetization. Other fiscal matters on the administration’s reform
agenda include establishing clear regional and state budgets while streamlining income
taxes and taxing civil officers.3031 To reduce inflation, the government issued bonds to pay
down the fiscal deficit, eliminating expensive, endless refinancing. According to the World
Bank, sanctions lifted from the EU, the U.S., Australia, Canada, and Japan further simulated
business confidence and generated interest from multinational corporations contemplating
expansion into Myanmar.
The time has never been more opportune for foreign investors. The recent passage of
the Foreign Investment Law by the Thein Sein administration in November 2012 marks a
new era for international commerce. It clarified the nature of Burmese land leases, a notoriously byzantine process, and promised to restore nationalized businesses to their former
owners at current market value. Low caps on investment had previously stunted foreign
equity participation, but the new bill authorizes the Burma Investment Commission, a new
body independent of the older, corrupt system, to sanction foreign investments of up to
one hundred percent equity on approved projects. This rapid awakening has spurred the
foreign business community to invest in this untapped market. Announcing high hopes for
a profitable venture, Coca Cola returned to Myanmar following the suspension of Western
27  Central Intelligence Agency, “The World Fact Book: Myanmar.”
28  International Monetary Fund, “Myanmar 2011 Article IV Consultation,” No. 12/104 (2012): 4.
29  The World Bank, “International Development Association and International Finance Corporation Interim Strategy Note for
The Republic of the Union of Myanmar FY13-14,” Last modified 2012, Accessed October 30, 2012.
30  Jesse Oeni, “Myanmar: Opportunities in Asia’s Last Frontier Economy,” International Enterprise Insights 2 (2012): 10.
31  Rieffel, “The Myanmar Economy: Tough Choices,” 4.

Southern California International Review - Vol. 3 No. 1

50

MoeMoe Chaee & Matthew Prusak

sanctions in July, 2012.32 Clearly, the new rules not only encouraged foreign companies to
invest in Myanmar but also renewed interest in joint ventures with local businesses – a good
omen for future international commercial success.
Myanmar is poised to benefit from the experience of its developing neighbors whose
comprehensive reforms and global engagement serve as models for development and partners for new economic opportunities. The Association of Southeast Asian Nations (ASEAN)
framework is the best example; it unites Southeast Asian countries through common goals.
Motivated by its need to modernize and industrialize, Myanmar can easily relate to nearby
regional economies, which provide blueprints for its own economic and political objectives.
Myanmar’s need to play catch-up has its advantages. Given the effects of the recent global
financial downturn, Myanmar has learned cautious restraint from the experiences of other
nations, where economic growth fluctuates quickly and market responses are beyond objective parameters. Because political and economic restructuring are intertwined, change
requires careful and balanced planning. With its political mandate still precarious, the state
faces challenges and runs the risk of failing to successfully juggle the many changes, but the
current of sweeping change portends well for a liberated Myanmar.

Botswana
“Botswana’s progression of economic growthmanship has become the envy of its neighbors…which they should consider emulating.”
–Dr. Nake M. Kamrany33

Botswana: A Model for Myanmar
In the annals of nation-states that have successfully negotiated developmental challenges similar to those Myanmar faces today, Botswana emerges as a shining example. Although
its prospects were dimmer than those of Myanmar, the resource-rich Botswana not only
won its independence in the 1960s, but also retained it, establishing itself as a stable and
prosperous sovereign state. Surpassing all expectations for its development, this landlocked
democracy has maintained an average growth in GDP of about 9.2 percent per year since
its transition to a free state in 1966 – higher than any other nation on earth.34 The past fifty
years of Botswana’s development provide a blueprint for Myanmar’s evolving plan to achieve
fiscal success in managing its natural resources over the coming decades.
32  Patrick Boehler, “Coca Cola Goes Back to Burma for First Time in 60 Years,” Time News Feed, Last modified 2012, Accessed
November 20, 2012.
33  Nake M Kamrany,”Botswana: An African Model for Progress and Prosperity,” The Huffington Post, Last modified 2012,
Accessed November 22, 2012.
34  Maria Fibæk, Botswana’s Modern Economic History Since 1966 (Copenhagen: Department of Economics, University of
Copenhagen, 2010): 1.

Southern California International Review - Vol. 3 No. 1

MoeMoe Chaee & Matthew Prusak

51

 

Figure 235
At first glance, the Republic of Botswana appears to be a distant stretch from Myanmar’s
political and geographical reality, but upon closer examination remarkable similarities
emerge. Botswana was ranked among the poorest countries in Africa when it gained independence from the UK.36 Saddled with an unskilled work force and only 12 kilometers
of paved roads, Botswana appeared hindered with little to offset its limitations aside from
diamond exports.37 Botswana’s greenhorn government, like Myanmar’s, took a hands-on
35  Image Source: http://www.mapsharing.org/MS-maps/map-pages-state-map/27-botswana-map.html
36  Ibid.
37  Daron Acemoglu, An African Success Story: Botswana (Department of Economics, Massachusetts Institute of Technology,
2001): 3.

Southern California International Review - Vol. 3 No. 1

52

MoeMoe Chaee & Matthew Prusak

approach in coordinating a national development plan. In 1970, an official Batswana38 government report explained its rationale as follows: “the country’s available resources were
few and the problems facing the country were so great that it was only by careful planning
that these resources could be put to their most effective use.”39 In many ways this mirrors
the rhetoric the current Burmese administration uses to justify its centralized methods of
liberalizing the economy.
Botswana’s incredible economic growth indicates that despite inexperience it is feasible
to devise a winning strategy for steering a resource-rich nation towards success. Numerous
economic scholars have concluded that Botswana achieved spectacular growth because it
adopted sound policies; this indicates Myanmar’s crucial need to develop coherent policy
action.40 Although fueled by the state’s mineral wealth, the driving force in Botswana’s economic evolution was the government’s bold decision to channel the resulting riches back
into the domestic economy. If Burmese policymakers want to chart a path to economic
success, they may wish to look to Botswana’s policy formulations in order to manage more
effectively their abundant natural resources.

The Botswana Method: A Path to Progress
Just as the current administration in Naypyidaw discovered, Botswana recognized early
on that primarily exporting raw natural resources does not encourage sufficient secondary
employment in other sectors. To generate future employment, Botswana applied two tactics.
First, the government created parastatals that could compete effectively abroad and initiated
programs to aid private sector development. Second, the government recognized the crucial necessity of developing its human capital by dramatically increasing its expenditure on
education and health. Over forty percent of the annual national budget has been dedicated
to the social sector; education alone has received more than twenty-five percent in most of
the last forty-six years since independence. This approach paid dividends in increasing the
physical, financial, social and political wellness of Botswana.
In addition, the implementation of a Revenue Stabilization Fund kept the dangers of
the resource windfall at bay by sterilizing the revenue gained from the mineral wealth rather
than allowing it to adversely impact the rate of government spending or the foreign exchange
rate.41 The government in Myanmar faces similar challenges in dealing with the enormous
supply of natural gas and other resources in high demand. Botswana’s strategy was to manage
the resource boom as if it were temporary, investing the resulting wealth in areas like health
and education, encouraging the nation’s citizens to diversify the resource-driven economy.
38  Batswana is the proper adjective form of Botswana and also refers to the citizenry.
39  Fibæk, Botswana’s Modern Economic History Since 1966, 12.
40  Acemoglu, An African Success Story: Botswana, 3.
41  Acemoglu, An African Success Story: Botswana, 7.

Southern California International Review - Vol. 3 No. 1

53

MoeMoe Chaee & Matthew Prusak

In striving towards these goals, Botswana successfully avoided two traps that Myanmar
must now avoid: Dutch disease and white elephant projects. The economic phenomenon
labeled “Dutch disease” infects an economy when the “appreciation of the real exchange rate
caused by one booming (usually a natural resource) sector makes the goods of other sectors
uncompetitive in international markets.”42 If the government had chosen to spend the windfall immediately rather than to implement fiscal discipline via the Revenue Stabilization
Fund, Botswana’s domestic costs would have outstripped the rise of its neighbors; this would
have skewed the real exchange rate, harmed the manufacturing sector, and crippled export
diversification. Similarly, because the resource boom was well managed, Botswana deftly
sidestepped “white elephant projects,” structures constructed in prosperous conditions that
cannot be sustained after completion. If Myanmar is to succeed, it must be cognizant of
these two potential issues.
With regard to central planning, Botswana’s methodology for creating its national plans
could serve as a roadmap for Burmese legislators. As a democracy,43 Botswana’s policymaking environment has the advantage of being informed by a consensus-based process. This
constant collaboration between stakeholders allows for a multifaceted approach amenable
to the many involved parties. This consultative process is the fundamental technique used
to assess potential policy reforms, whereby the government chooses to undertake comprehensive studies to evaluate issues before taking a course of action.44 Though Myanmar does
not possess the same rich democratic heritage as Botswana, the approach demonstrates the
“best practices” undertaken by a state that dealt with similar problems. Cohesive policies
that take note of the various stakeholders would reduce the risk of involved parties working
at cross-purposes and splintering the economy by driving it in conflicting directions.
Although there are yawning gaps between Myanmar’s and Botswana’s political history, this requirement of policy coherency addresses the challenges Myanmar faces. Though
countries were originally British colonies, Botswana’s economy had the advantage of a democratic system already in place, while Myanmar’s history of political reform is only now
approaching the threshold of a democracy.45 The speed with which political and economic
reform is occurring, combined with the limitations, in experience and expertise, of current policymakers, has resulted in ad-hoc decisions instead of the meticulously planned
approach employed by the Batswana. Myanmar has chosen alacrity over clarity. While key
reformers such as President Thein Sein are keen on moving away from the old, counterproductive ways, it is unclear what exactly the new economic policy will be.46 This degree
42 
43 
44 
45 
46 

Fibæk, Botswana’s Modern Economic History Since 1966, 18.
With elections considered fair despite there never having been a change of elected political party.
Fibæk, Botswana’s Modern Economic History Since 1966, 26.
There is poetry to the dichotomy of the countries’ current state despite their similar origins.
International Crisis Group, “Myanmar: The Politics of Economic Reform,” Asia Report No. 231 (2012): 5.

Southern California International Review - Vol. 3 No. 1

MoeMoe Chaee & Matthew Prusak

54

of uncertainty simultaneously discourages foreign investments and hampers the ability of
domestic businesses to adapt. This has been demonstrated already; in one instance, car dealers were recently blindsided by a pronouncement easing restrictions on car imports that
caused second-hand prices to drop over fifty percent.47 If Myanmar is to follow Botswana’s
path, its government must outline a clear, public strategic vision and commit to it.
Another obstacle lies between Myanmar and the development level of its neighbors:
education. Botswana immediately applied considerable resources to rectify the deficiency
as soon as its lack of skilled workers became apparent. However, even if a significant investment were to be made in the Burmese education system, it would take over a decade
for the investment to bear fruit, as students advance through a reformed system. Although
education is a critical investment, it fails to keep step with the current speed of the reforms.
It will be some time before a skilled Burmese workforce can compete with its neighbors.
Nevertheless, Myanmar needs to invest in an educated workforce.
Finally, in contrast to Botswana, Myanmar remains subject to economic sanctions and
other punitive measures implemented by various Western countries. However, the demise
of these sanctions may be near, a positive indicator for Myanmar. In response to the swift
speed of Burmese reform, Australia, Norway, and Switzerland removed all sanctions except
for those on arms embargoes.48 The European Union and the United States have also begun
the process of easing or suspending sanctions; President Obama has used his executive
powers to export financial services to Myanmar, thus bringing the power of Wall Street to
bear on Burmese capital needs and providing Myanmar with access to the international, U.S.
dollar-based clearing system.49 Though the economic antagonism faced by Myanmar may
largely abate, those evaluating the future of the nation would do well to remain cognizant of
these obstacles when comparing Myanmar to other developing nations.
By examining the similarities between Myanmar and Botswana while acknowledging the differences between the two states, it is possible to envision a successful economic
path for Myanmar. Botswana may be a positive indicator of a brighter future for Myanmar.
Bearing in mind Myanmar’s rich potential, Botswana’s success indicates that an abundance
of natural resources can transform a curse into a blessing—as long as a country’s limitations
can be recognized and overcome.

Forecast
“Our country has all sound foundations. So, if we try our best, without doubt,
we will achieve our goal.”
47  International Crisis Group, “Myanmar: The Politics of Economic Reform,”6.
48  Ibid.
49  International Crisis Group, “Myanmar: The Politics of Economic Reform,” Asia Report No. 231 (2012): 8.

Southern California International Review - Vol. 3 No. 1

55

MoeMoe Chaee & Matthew Prusak
–President Thein Sein50

Myanmar’s Future: A Land Rife With Possibilities
With the Burmese status quo in mind, and Botswana’s emergence from a comparable
fiscal trough, it is possible to predict scenarios for the direction of the Burmese economy in
the year 2030. Though observers must be wary of using trends to extrapolate the future of a
state too extensively, three main scenarios arise as potential outcomes.
Going forward, macroeconomic and political stability, two intimately entwined factors, govern the economic prospects of Myanmar. If market volatility or sluggish growth
destabilizes the economy, this will have political repercussions for the prospect of continued
reform. If the political reformers wish to realize their goals, Myanmar needs to understand
the foundations of a successful economy. Likewise, if political transition is not conducted
efficiently, declining market confidence will result as consumers, investors, and businesses
foresee dim financial prospects. Because of this, factors in both areas are given consideration
in order to best gauge overall trends. By examining the predicted outcome in these two areas,
the following scenarios seem potential courses for Myanmar’s future.

Scenario One: The Middle Path
The first and most likely scenario is contingent on the continuation of reforms at a moderate pace. Balancing the inexorable drive towards economic maturation with the wariness
of a still-intact junta, this assessment takes the most temperate moderate approach. As seen
in the status quo, Myanmar has much to do to attain its neighbors’s level of prosperity, and
even with reforms proceeding at a reasonable speed it has much to overcome. Vice President
for East and Southeast Asia at the Asian Development Bank, Stephen Groff, warns: “It will
take a generation for us to see significant improvement…it will take 30 years for Myanmar
to catch up to where Thailand is today.” He further argues that this will occur if and only if
there are no setbacks or departures in the Burmese reform program.51 With all the issues
stemming from Myanmar’s past, ranging from infrastructure shortages to questions of good
governance, there are bound to be a few mishaps.
The circumstances of this median path account for the recent improvement of relations
between Myanmar and the Western powers, in accordance with President Obama’s recent
visit to Myanmar – a first for a sitting president. President Obama encouraged the shift away
from an authoritarian state as he spoke at the University of Rangoon:

50  “The New Light of Myanmar: President U Thein Sein Delivers Inaugural Address to Pyidaungsu Hluttaw.”
51  Banyan, “Crawling Up Through the Wreckage,” The Economist, Accessed November 10, 2012.

Southern California International Review - Vol. 3 No. 1

56

MoeMoe Chaee & Matthew Prusak
Today I’ve come to keep my promise and extend the hand of friendship. America now
has an ambassador in Rangoon, sanctions have been eased, and we will help rebuild an
economy than can offer opportunities for its people and serve as an engine of growth
for the world.52

In addition, the IMF and World Bank are providing consultative support and economic encouragement that could lead to an expansion of private consumption.53 Such signals could
indicate the beginning of genuine change for the better.
Progress is not perfect, as changes take time and must be structural. Some government
officials had unrealistic expectations and were subsequently disillusioned by false hopes. As
the Economist described it, “these officers have been persuaded to go along with it anyway,
consoled with the belief that with the lifting of sanctions a sudden rush of foreign investment will quickly boost the economy out of the doldrums, and with it millions people out of
poverty – maybe even enough to save some of the army’s contested seats in the 2015 general
election.”54 According to The New York Times, the civilian population continues to believe
that the government’s apparent changes are merely money-making schemes.55 This forecast
hopes current reformers continue to appease all involved parties in order to push their
agenda, somewhat emulating what Deng Xiaoping was able to accomplish in China during
the 1970s. Moreover, the entire outcome hinges on the administrations ability to implement sound policy and create strong institutions necessary to run a stable market economy.
Whether or not this is possible remains to be seen.

Scenario Two: The Golden Age
The second scenario, predicting a Myanmar that quickly emerges as a vibrant economy
in Southeast Asia, hinges on its ability to progress forward in a genuine and productive
manner. By doing so, it is possible that a Burmese Golden Age may signal the rise of a new
Asian Tiger. An indication of Myanmar’s willingness to change is readily apparent in the
swiftness with which reform has been made. Furthermore, Western countries have already
acted accordingly by removing sanctions on Myanmar.56 If this trend continues, the playing
field will be speedily leveled for Myanmar’s growth. Continued support from other countries
and multinational enterprises will spur the nation’s growth through capital inflows.

52  U.S. Government, The White House, “President Obama Speaks at the University of Yangon.”
53  The World Bank, “International Development Association and International Finance Corporation Interim Strategy Note for
The Republic of the Union of Myanmar FY13-14.”
54  Banyan, “Crawling Up Through the Wreckage.”
55  “Myanmar,” The New York Times, Last modified 2012, Accessed November 10, 2012.
56  Banyan, “Crawling Up Through the Wreckage.”

Southern California International Review - Vol. 3 No. 1

57

MoeMoe Chaee & Matthew Prusak

In the short term, prospects seem positive. The recent passage of a landmark investment reform bill may have drastic implications for FDI confidence. President Thein Sein and
other key reformers appear confident in the strength of their political positions, and strong
pushback from the junta and hardliners is unlikely.57 In a speech to the National Parliament
on March 1, 2012, President Sein mentions, “The national development strategy of our government is not aimed at developing a class or a community but aimed at developing every
aspect of all walks of life, all classes or all the people of the Myanmar polity.”58
Under this model, by 2015, Myanmar’s upward trajectory will be readily apparent.
Myanmar has already committed to regional economic integration with the rest of the
ASEAN Economic Community, a system that will “transform ASEAN into a region with free
movement of goods, services, investment, skilled labor, and freer flow of capital.”59 ASEAN
engenders to become a union much like the European Unions, allowing it to hedge against
growing Chinese power and have economic and political clout in diplomacy with the US
and EU. The degree to which Myanmar is able to handle this shift will dictate its economic
progress for decades to come. In a Golden Age outcome, the Burmese economy may climb
to greater heights and trigger an era of economic prosperity as it assumes a prominent role
in regional trade and gains the strength to negotiate with the world market.
It is vital to keep in mind that this paints an incredibly optimistic picture of a complex
and unstable transition. Aung San Suu Kyi warns, “The most difficult time in any transition
is when we think that success is in sight. We have to be very careful that we’re not lured by
the mirage of success.”60 Therefore, it is not unreasonable to have doubt in this forecast. As
mentioned in scenario one, there is a recurrent fear among citizens about the rhetoric of
change being only empty promises. Moreover, to expect a country that has spent the past
half-century mired in economic doldrums to suddenly spring forward in its development
without any internal experience with the free market may smack of a Panglossian worldview
to skeptics.

Scenario Three: Regression Into Darkness
Assuming the worst outcomes in Myanmar, the third, and final scenario would be
known as the “dark ages.” Under this model, the civilian population’s fears are correct in
that the administration is either unwilling or unable to give Myanmar the impetus necessary
for Batswana-style reform. The reformers also run the risk of failure when it comes to implementation. If they fail to satisfy both the military hardliners and the common people, they
57  International Crisis Group, “Myanmar: The Politics of Economic Reform,” 17.
58  Thein Sein’s speech
59  International Crisis Group, “Myanmar: The Politics of Economic Reform,” 20.
60  Jim Kuhnhenn, “Obama to People of Myanmar: America ‘is with You,’” Yahoo! News, Last modified 2012, Accessed November 12, 2012.

Southern California International Review - Vol. 3 No. 1

58

MoeMoe Chaee & Matthew Prusak

will lose their mandate and forfeit all the political capital needed to effect real change. Some
academics have wondered whether Myanmar will fail to capitalize on its reform potential.
Political scientist Francis Fukuyama wrote to this effect when he stated:
They [the Government] are aligned with the crony capitalists who got rich working
with the military government over the past decade, and they are now, among other
things, holding up a new foreign investment law that the country desperately needs
in order to kick-start economic growth once sanctions are lifted. Many of the current
economic elite fear foreign competition and have been using economic nationalist arguments to limit future foreign ownership.61
The egalitarianism in Myanmar has moved forward leaps and bounds from once where
the country used to be, but this could easily be reversed given the country’s fragile political state. The country may regress and fall back into the dark abyss of corruption and illicit
drug trade along the boarder as erratic insurgencies with ethnic minorities spur conflict. The
Secretary General of the United Nations, Ban Ki-Moon, said in a statement in October 2012
that the country’s “fabric of social order could be irreparably damaged” if the violence was
not curtailed. The statement also argues that transition to democracy would be in jeopardy
if “vigilante attacks, targeted threats and extremist rhetoric” were not stopped.62
Penurious regions where the Burmese government has little control remain the biggest
base of drug production in Southeast Asia. The underlying drug trade increases the challenges President Thein Sein faces as he tries to push foreword with reform.63 The President
treads a fine line where alienating ethnic groups could destabilize political and national
reconciliation.
Recent trends suggest the likelihood of this scenario prevailing is very small. Hoping to
shore up the progress that has been made already, the US recently indicated a willingness to
reestablish a USAID mission to the tune of 167 million USD a year in aid.64 Moreover, much
of the international community wants Myanmar to succeed—a victory for democracy, capitalism, and development. Myanmar will chair ASEAN in 2014, so the international spotlight
will be on it to demonstrate the capacity to spearhead regional governance. The US wants
Myanmar to succeed, a foreign policy victory where North Korean and Iranian diplomatic
issues have both proved trying under Obama’s administration. Even neighboring China, an
authoritarian regime itself, Myanmar would benefit from a country eager to trade natural
61  Francis Fukuyama, “What Myanmar Needs,” The American Interest, Accessed November 12, 2012.
62  “Myanmar,” The New York Times.
63  Thomas Fuller, “Drug Surge Clouds Myanmar Reform Effort,” The New York Times, Last modified 2012, Accessed November 12, 2012.
64  U.S. Government, The White House, “President Obama Speaks at the University of Yangon.”

Southern California International Review - Vol. 3 No. 1

MoeMoe Chaee & Matthew Prusak

59

resources for the fruits of the Middle Kingdom’s industrial base, not to mention serve as a
potential client-state, able to provide deep-sea ports for China’s naval vessels.

Conclusion: Eye Of The Tiger
“All courses of action are full of risk, but I think this is the right step forward.”
–Prime Minister David Cameron65
No matter what scenario prevails, one thing holds true: Myanmar remains a seesaw of
implications and possibilities. Historically a missed opportunity, the Asian Tiger failed to
develop and complete the Pacific Rim. No matter what scenario prevails, Myanmar must
make choices that will have enduring consequences. Evolving from authoritarianism and
crippled infrastructure is not easy, but the roadmap is there and Myanmar’s people are willing to create change. The Botswana model can provide a useful template for Myanmar when
creating a system of government and economics that maximizes transparency and accountability. The international community has also demonstrated its willingness to provide support if Myanmar will commit to attaining global economic parity. Myanmar can transform
ruin into riches with careful analysis, oversight, planning, and commitment; all that remains
to be seen is what Myanmar will do with the opportunities laid before it.

Bibliography
Acemoglu, Daron. An African Success Story: Botswana. Department of Economics, Massachusetts Institute of Technology, 2001.
Asia Society Task Force Report, “Current Realities and Future Possibilities in Burma: Options For U.S. Policy.” (2010).
Banyan. “Crawling Up Through the Wreckage.” The Economist. Accessed November 10,
2012.
Boehler, Patrick. “Coca Cola Goes Back to Burma for First Time in 60 Years.” Time News
Feed, Last modified 2012. Accessed November 20, 2012.
Burmanet News, “The New Light of Myanmar: President U Thein Sein Delivers Inaugural
Address to Pyidaungsu Hluttaw.” Last modified 2011. Accessed November 10, 2012.
Central Intelligence Agency. “World Factbook: Myanmar.” Accessed November 20, 2012.
Kamrany, Nake M. “Botswana: An African Model for Progress and Prosperity.” The Huffington Post. Last modified 2012. Accessed November 22, 2012.
65  Thomas Fuller, “David Cameron calls for Burma sanctions to be suspended,” BBC, Last modified 2012, Accessed November
26, 2012.

Southern California International Review - Vol. 3 No. 1

60

MoeMoe Chaee & Matthew Prusak

Kuhnhenn, Jim. “Obama to People of Myanmar: America ‘is with You’.” Yahoo! News. Last
modified 2012. Accessed November 12, 2012.
Kyi, Khin M. Economic Development of Burma: A Vision and a Strategy. Stockholm, Sweden: Olof Palme International Center, 2000.
Fibæk, Maria. Botswana’s Modern Economic History Since 1966. Copenhagen: Department
of Economics, University of Copenhagen, 2010.
Fujita, Kōichi, Fumiharu Mieno, and Ikuko Okamoto, The Economic Transition in Myanmar
after 1988: Market Economy versus State Control. Singapore: NUS in Association with
Kyoto UP, 2009.
Fukuyama, Francis. “What Myanmar Needs.” The American Interest. Last modified 2012.
Accessed November 12, 2012.
Fuller, Thomas. “Drug Surge Clouds Myanmar Reform Effort.” The New York Times. Last
modified 2012. Accessed November 12,2012.
-----. “Myanmar Opposition Yields in Oath Dispute.” The New York Times. Last modified
2012. Accessed December 1, 2012.
-----. “David Cameron calls for Burma sanctions to be suspended.” BBC. Last modified
2012. Accessed November 26, 2012.
International Crisis Group. “Myanmar: The Politics of Economic Reform.” Asia Report No.
231 (2012): 3.
International Monetary Fund. “Myanmar 2011 Article IV Consultation.” IMF Country Report No. 12/104 (2012).
Macleod, Lewis. “More Press Freedom for Myanmar’s Media.” BBC News (2012).
“Myanmar.” The New York Times. Last modified 2012. Accessed November 10, 2012.
Oeni, Jesse. “Myanmar: Opportunities in Asia’s Last Frontier Economy,” International Enterprise Insights 2 (2012).
Perry, Peter John. Myanmar (Burma) since 1962: The Failure of Development. (Aldershot,
England: Ashgate, 2007).
Rieffel, Lex. “The Myanmar Economy: Tough Choices,” Global Economy and Development
at Brookings (2012).
Steinberg, David I., and Hongwei Fan. Modern China-Myanmar Relations: Dilemmas of
Mutual Dependence. (Copenhagen: NIAS, 2012).
The World Bank, “International Development Association and International Finance Corporation Interim Strategy Note for The Republic of the Union of Myanmar FY13-14.”
Last modified 2012. Accessed October 30, 2012.
Southern California International Review - Vol. 3 No. 1

61

MoeMoe Chaee & Matthew Prusak

U.S. Government. The White House, “President Obama Speaks at the University of Yangon.” Last modified 2012. Accessed November 10, 2012.

Southern California International Review - Vol. 3 No. 1

Regionalism and European Integration
A Complementary Relationship
M. Beau Feibus

The 1980s brought about a variety of key developments for regionalism in Europe, namely the conceptual boost of the Jacques Delors Commission’s vision to create a stronger, more
federal European Community. This became especially important with the enlargement of the
Community to include states in Greece, Spain and Portugal in which regional disparities were
severe. These developments increased the importance of European regional policy. As regions
have become an important part of the discourse surrounding European integration, they have
worked within the given structural constraints to secure the most effective means through
which they can attain their interests. Although much of the post-1980s optimism regarding regionalism has subsided, this paper argues that an increased focus on European integration has
strengthened regionalism within Europe. Using studies of specific regions in Scotland, Belgium,
and Spain, this paper sets out to demonstrate the growing power and influence of regions,
especially in terms of nationalist-separatist movements. Taking this analysis one step further,
this paper also seeks to argue that regionalism has likewise strengthened the European project
through the principles of both multilevel governance and subsidiarity.

Introduction
The mid-1980s marked the beginning of increasingly meaningful interplay between
European regions and the European Union (EU), specifically with regard to European integration. The importance of regional policy increased with the entrance of Greece in 1981
and Spain and Portugal in 1986, which created a European Community that was characterized by “economic and social disparities.”1 As a result, the already existing European Social
Fund (ESF) and European Agricultural Guarantee and Guidance Fund (EAGGF) became
critical regional policy tools in shaping a cohesive response to this transformation known as
the Structural Action Policy. These funds worked to combat unemployment and regularize
agricultural markets, respectively. With these key facets of the new cohesion policy, underdeveloped regions became the focus through joint mechanisms such as rural development
funding.
The focus of these policies brought regions into the forefront of European integration
discourse. This was coupled with the significant support European Commission President
Jacques Delors, a staunch supporter of European unity and supranational governance who
1 

John Loughlin, “Europe of the Regions and the Federalization of Europe,” Publius 26 No. 4 (1996): 152-153.

M. Beau Feibus is a senior at the University of Southern California double
majoring in International Relations and Spanish.

M. Beau Feibus

64

strove for federalism and decentralization of member states.2 In response to the new policies, regional lines were drawn and regions began to lobby at the supranational level for the
newly available structural funds.3 During this period there was an enormous amount of optimism regarding the perceived ascending role of the regions. However, over the course of
history, the path of regionalism has been one of ups, downs, and confusing implications. On
the one hand, many interpreted the Maastricht Treaty as heralding the death of the regions,
while others saw the establishment of the Committee of the Regions as proof of regions’ resurgence in power and influence. This paper contends that continued European integration
has strengthened regionalism in Europe, specifically in the context of nationalist-separatist
movements. Moreover this new regionalism does not threaten the goals of European integration; on the contrary, it is argued that regionalism, based on the principles of multilevel
governance and subsidiarity, and its goals actually enhance the legitimacy of the European
project.
This paper will explore the experiences of three regions or groups of regions in Europe
(the Belgian regions, Scotland and the Spanish autonomous communities) in order to determine the impact of European integration on regionalism. Although regions have experienced varying degrees of success using very different mechanisms, this overview concludes
that they have adapted their strategies to reach newly possible levels of autonomy. This
argument will show that integration has in fact strengthened regionalism. This will be followed by a brief discussion of recently heightened separatist calls from some of the regions
explored in this paper. Finally, the argument will be made that improvements in regional
advocacy and capability have likewise strengthened the idea of integration.

Terminology and Concepts
There is a certain amount of ambiguity that surrounds even such basic terms as “region,”
which thus requires elaboration. In this context, regions are any reasonably defined “subnational levels of government or territory.”4 These regions can exist within or across a state’s
borders, such as Catalonia or the Basque region and can be confined in a larger national
framework, such as the Flemish community in Belgium, or exist as a clearly defined entity,
like Scotland. Regions can be economic in nature or constructed solely for the purposes
of administration or planning. They may also have historical or ethnic origins. This paper
specifically deals with the latter group of regions, largely in the context of regional separatism. Historical/ethnic regions are defined as “territories marked by the presence of human
societies sharing histories and cultural features that are different from that of the dominant
2  Ian Bache, Europeanization and Multilevel Governance, (Lanham, MD: Rowman and Littlefield Publishers, Inc., 2008): 41-42.
3  Noreen Burrows, “Scotland’s European Strategy,” in Europe, Regions and European Regionalism, ed. Rogey Scully et al. (London: Palgrave Macmillan, 2010): 121.
4  Loughlin, “Europe of the Regions and the Federalization of Europe,” 146.

Southern California International Review - Vol. 3 No. 1

65

M. Beau Feibus

culture of the nation-state in which they find themselves.”5 For the purposes of this paper,
there is overlap between these historical/ethnic regions and political regions, which have a
degree of autonomy and administration. Further, regionalism in this framework is an “ideology and a political movement advocating for greater control by the regions over the political,
economic, and social affairs of their regions.”6
To argue for the positive impact that regionalism has on European integration, it is
important to comment on two of its key principles: subsidiarity and multilevel governance.
Subsidiarity, codified by the Maastricht Treaty, signifies the EU’s agreement to only act “in
areas which do not fall within its exclusive competence” if “the objectives of the intended
action cannot sufficiently be achieved by the Member States, either at the central level or
at regional and local level.”7 In other words, the principle implies that actions should be
taken at the lowest possible level of governance to be effective. Multilevel governance here
indicates an approach to European integration in which the state is no longer the only actor
that has the ability to influence EU policy.8 The state can be seen as experiencing an attack
from above (from supranational EU institutions) and from below (from regional and subnational actors).
The Maastricht Treaty of 1992 is often viewed as the turning point for the regions’ relationship with European integration. It created the pillar system consisting of the European
Community, the Common Foreign and Security Policy, and Justice and Home Affairs (JHA).
Moreover, the EU was given greater responsibilities in more policy areas and the European
Parliament was strengthened.9 Generally, it is seen as a momentous step in European integration because it laid the foundations for an Economic and Monetary Union and advanced
political unity. Maastricht also created the Committee of the Regions (CoR). The CoR is
significant in that it established an official European body through which the regions could
interface in an advisory capacity with the Commission and Council. Although its establishment was seen as the beginning of increasing regional importance in the EU, in hindsight
this new institution has been the high-water mark of progress for regionalists. This could be
a result of the lack of headway made by the CoR in gaining more capacities or a side effect
of the fact that enlargement has taken precedent both in EU discourse and on the agenda
(perhaps “cementing the dominant position of states” in the Union).10
5  Loughlin, “Europe of the Regions and the Federalization of Europe,” 148.
6  Ibid.
7  Umberto Rivolin, “Cohesion and Subsidiarity: Towards Good Territorial Governance in Europe,” The Town Planning Review
76.1 (2005): 97.
8  Janet Laible, Separatism and Sovereignty in the New Europe (New York: Palgrave Macmillan, 2008): 25.
9  John McCormick, Understanding the European Union: a concise introduction 5th ed. (New York: Palgrave Macmillan, 2011):
63-64.
10  Richard Wyn Jones and Roger Scully, Europe, Regions and European Regionalism (London: Palgrave Macmillan, 2010): 2,
124.

Southern California International Review - Vol. 3 No. 1

66

M. Beau Feibus

Case Studies of Regionalism in the Context of European Integration
In order to draw general conclusions about the impact of European integration on
regionalism, an exploration of several historical ethnic regions offers insight. It is useful to
look at how Belgium, Scotland, and Spain have evolved in the context of European integration both to maintain their commitment to sovereignty and independence and also to
increase calls for separatism. These three case studies exemplify the activity, ideals, and evolution of historical/ethnic regions throughout European integration, using the Maastricht
Treaty’s inception in 1991 as a rough starting point. With the ultimate principles of sovereignty, self-government and separatism destined to govern the policies of these regions, the
regions each began to work within the context of the new EU framework to increase their
regional profiles. At some point post-Maastricht, Vlaams Blok/Vlaams Belang (of Flanders),
the Scottish National Party (SNP), and the Catalan and Basque nationalist parties each decided that it was in their best interests to use European integration to their advantage.

Belgium
The fact that Belgium is divided sharply along cultural and linguistic lines shapes how
various subgroups within the country have approached European integration. It also means
that regions have disparate interests and viewpoints from those of the state. Brussels, for
example, displays a higher trust in the European Parliament than it does in the Belgian
federal government. In contrast, the two most identifiable historical/ethnic regions within
Belgium, Wallonia and Flanders, have displayed a lower favorability for the European Union
institutions. In this environment, regional policy becomes very important.
The Flemish, for whom the right-wing party Vlaams Belang acts as the primary voice
of criticism, have historically worried that European integration would eliminate their gains
in autonomy. Since ratifying the Maastricht Treaty, the Belgian regions have had their autonomy undermined in certain sectors by growing European capacities. Moreover, new,
unfamiliar frameworks have been imposed on the Belgian regions, such as the supremacy
of EU law and the regions’ responsibility to implement it. In Belgium, legislation like this
is “kept to a minimum.” However, as neither federal nor regional law is seen as carrying
more weight, dislike has been created for overarching supreme law. Furthermore, votes in
the Council cannot be split along regional lines, eliminating any diversity of opinion in the
Belgian position. Unsurprisingly, the Flemish region has been the most vocal in its concerns
about European integration meddling in its affairs.11
Conceptually, Flemish nationalists have worried about the negative impacts European
integration could have on their goals of sovereignty and separatism. Vlaams Blok, predecessor
11  Wilfried Swenden, “The Belgian Regions and the European Union: Unintended Partners in Unravelling the Belgian State,”
in Europe, Regions and European Regionalism, ed. Rogey Scully et al. (London: Palgrave Macmillan, 2010): 16-21.

Southern California International Review - Vol. 3 No. 1

67

M. Beau Feibus

to Vlaams Belang, had a hostile perspective on European integration as Maastricht was seen
to create obstacles to sovereignty and national identity. They saw the “unelected bureaucracy” of European institutions as preventing European citizens from being able to participate
in the policy decisions that impacted their daily lives. Vlaams Blok has specifically referred
to the permanent representatives in Brussels as being “anational.” By definition, this means
they do not belong to any nation and do not understand the demands of groups that take
pride in their unique ethno-cultural characteristics.12
The nature of the relationship between the Belgian regions and European integration
has evolved and changed over time. The regions saw positive gains in the 1980s when areas
of regional economic policy such as public investment, economic development, and land
use were delegated to the regions. Although the Belgian regions did not have the official
right to engage in matters regarding relevant policies in the foreign and European sphere,
they eventually negotiated with the European Commission in these areas as they claimed
the “implied right” to do so.13 This example serves as a microcosm for the overall Flemish
experience with European integration: initial hostility towards perceived negative impacts
evolving into utilizing it to their advantage.
Vlaams Blok envisioned a road to independence within Europe relatively early on. The
way in which this stance seemingly conflicts with the hostility discussed above reflects both
the challenges and opportunities offered by European integration. By 1995, the primary
aim of the party was indeed to seek independence within Europe. One reason Vlaams Blok
strove to work within European integration was that it drew parallels between the struggle
for a Flemish state and the European effort to protect its own culture (especially from Islam,
in the eyes of the Vlaams Blok). Moreover, common security policies were seen as the best
way to ensure the safety of Europeans.14 Rooted in its Flemish ethnic identity, Vlaams Blok’s
vision for Europe conflicted with the overall theme of the EU, however. Vlaams Blok saw
integration as ideally consisting of a community of sovereign entities organized around historical/ethnic regions. In addition to the high importance placed on ethnicities, this vision
of the EU also would have allowed a Flemish state to exist as a state among equals.15
As the Belgian regions have been unable to establish their own independent states, they
have sought to increase their role in external relations in order to extend their influence in
an era of European integration. In attempting this, the Belgian regions were hampered by
the fact that international organizations traditionally only accept agreements between states,
and that Belgium must speak with one voice in EU institutions. To overcome these obstacles,
12  Laible, Separatism and Sovereignty, 134-136.
13  Swenden, “The Belgian Regions and the European Union: Unintended Partners in Unravelling the Belgian State,” 16-21.
14  Laible, Separatism and Sovereignty, 136-143.
15  Laible, Separatism and Sovereignty, 130-134.

Southern California International Review - Vol. 3 No. 1

M. Beau Feibus

68

the regions have sought unity with other regions in Europe in order to promote subsidiarity
and a stronger Committee of the Regions. They have also managed to reach an agreement
with the state to make their voice heard in this framework. In council sessions pertaining to
regional issues, a negotiator from one region takes the lead with an assistant federal negotiator with the converse occurring when meetings pertain to federal issues. When meetings
exclusively apply to European regions instead of states, attendance is determined by issue
area. For example, the Flemish region represents the Belgian viewpoint on fisheries as they
are the only community with a coast. As is evident, the regions have worked within the
system to continue to espouse their ideals of sovereignty and autonomy. Compared with
regions within other member states, the Belgian regions have, in fact, secured the most tools
for European-level policy influence.
Despite these successes, the regions are not satisfied with the status quo. The Flemish,
for their part, seek greater regional autonomy and domestic policy influence and support the
further decentralization of the federal government. These desires, shared to a lesser extent
by the Walloons, manifest in calls for greater regional competences and for the federal government to represent their interests in the EU institutions. If they get their wish, the federal
government could end up being hollowed out, becoming little more than a regional “power
broker” in the EU and acting as a simple conduit for regional interests.16
Furthermore, Vlaams Belang successfully evolved its approach towards European integration in order to further its own nationalist-separatist ends by using the framework of
the EU to delegitimize Belgium. Vlaams Belang has taken the issue of the inherent flaws in
the Belgian state (its inability to represent constituent regions adequately), and has blown
them up to be visible at the supranational scale. This has worked to delegitimize the state in
areas pertaining to regions. Overall, Flemish nationalist-separatists have adopted a vision
of the EU as “the protector of the values [they] cherish” and have asserted themselves as the
only legitimate actor with which the EU can negotiate on Flemish issues.17 They have been
able to do this, and secure the other gains mentioned above, through the various modes of
cooperation and influence made available to regions by European integration.

Scotland
Scotland, another historical/ethnic region, has similar goals and has developed strategies in recent years to use European integration to its advantage. As a result of Scotland’s
continued desire for more autonomy, along with its interest in exploiting the new opportunities afforded by the EU, the Scottish Executive laid out a new plan in 2004. This plan would
“position Scotland as one of the leading legislative regions, with a thriving and dynamic
16 
17 

Swenden, “The Belgian Regions,” 21-32.
Laible, Separatism and Sovereignty, 143-148.

Southern California International Review - Vol. 3 No. 1

69

M. Beau Feibus

economy” and would increase the region’s influence at the UK and EU levels in issues concerning Scotland. The plan had three main goals, the first of which was to promote Scottish
interests in the EU both indirectly through the UK and directly by establishing bilateral relations with EU institutions. Scotland also plans to join with other regions in organizations
such as Regions with Legislative Powers (REGLEG) to lobby for greater regional representation at the EU level. The plan also aimed to increase Scottish influence within the UK, as well
as to increase its profile in Europe to become more attractive to businesses and tourists.18,19
However, transnational obstacles have impeded the attainment of greater European
visibility for these regions. Under devolution (the Scotland Act which gave the Scottish
Parliament the right to legislate in areas outside the purview of Westminster), both Scottish
and UK ministers were granted powers for the implementation of EU law in Scotland. EU
policy is technically a UK responsibility as member states must speak with one voice, but
some areas of implementation within the UK have been ceded to Scotland. In other words,
the UK has general responsibility for EU diplomacy, while Scotland must comply with and
implement agreements reached on that level.20 Since devolution, it has been the responsibility of the UK governments to consult Scotland on certain policies, but this has been a mixed
bag as far as execution has been concerned. For example, the UK has consulted regularly
with Scotland in policy areas such as agriculture and rural affairs, while structural funds
have sometimes been determined without consultation. Moreover, as the UK minister must
present a unified “UK” position to the Council, the Scottish minister, when present, only has
a supplementary role.21 Put simply, the system forces the Scottish to exert their influence at
the state level. They must lobby for the state to represent them at the EU level to ensure that
Scottish interests are taken into account.
Therefore, in order to take advantage of the new opportunities offered by post-Maastricht European integration, Scotland would have to adapt and create new mechanisms to
secure its interests. Previously, Scotland had exercised most of its power through the UK, so
with powers being transferred to the EU, Scotland lost a degree of political autonomy. It was
therefore necessary that Scotland have a presence at the European level in order to lobby for
structural funds and to influence policies that would impact Scotland. With this in mind,
Scotland established the Scottish Executive EU Office (SEEUO) to work in Brussels. The
SEEUO works closely with the UK representative, improving EU-level representation for
Scotland. The SEEUO is an example of the region changing its strategies to fit the political

18 
19 
20 
21 

Wyn Jones and Scully, Europe, Regions and European Regionalism, 9.
Burrows, “Scotland’s European Strategy,” 115-116.
Burrows, “Scotland’s European Strategy,” 116-121.
Burrows, “Scotland’s European Strategy,” 127-129.

Southern California International Review - Vol. 3 No. 1

70

M. Beau Feibus

climate: it maintains a subordinate position to that of the UK in Brussels to ensure that it
only “augments [the UK representative] in the framework of a ‘single UK voice in Europe.’”22
In working within the avenues that have been established for regions to exert EU-level
influence, Scotland has also taken a proactive position by participating in inter-regional
institutions. Scotland has participated heavily in REGLEG and has also lobbied through the
CoR to increase the role of regions in the Council and for the right to bring actions before the
European Court of Justice where regional interests are at stake. Scotland has also engaged in
other European arenas of inter-regional cooperation, such as the Conference of Peripheral
Maritime Regions. Additionally, Scotland has worked to increase its profile within the EU by
boosting regional ties and expanding business connections. It has forged close ties with other
regions that it perceives to have similar interests, such as Flanders, and has even entered into
bilateral cooperation agreements with several regions, such as Catalonia. Agreements such
as these are very symbolic and encompass areas such as research, education, and commitments to collaborate on EU issues of mutual import.23 Overall, Scotland appears to have
recognized the constraints that the EU has placed on regions and has not only strived to
increase influence within the UK, but has also sought to exploit new opportunities created
by the EU framework to raise the Scottish profile on the EU scale. Whether the final result
is independence or simply greater political autonomy, the Scottish see European integration
as the forum in which their voice can be heard.
The impetus behind Scotland’s re-framing of its autonomous desires to work within
the European context can be found in the potential benefits from the perspective of the
Scottish National Party (SNP). It can be argued that, although visions of sovereignty and
self-government had to be adapted after Maastricht (monetary independence, for example,
had been a tenant of the SNP platform), the prospect of independence within Europe offers
a more attractive alternative for the SNP. European integration has actually provided both
positive and negative incentives for the SNP to advocate for independence. These include
the perceived way in which the EU protects and empowers small states, granting advantageous economic and social conditions, as well as the de facto lack of real regional power
under a single UK voice.
As a result of these incentives and others, the SNP shifted its platform from advocating
pure sovereignty to supporting the “sovereignty” to represent Scottish interests within the
EU. This view developed gradually, even before Maastricht, as party leadership increasingly
saw that European integration was impacting Scottish interests and that they were unable
to influence these processes. After Maastricht, many in the party began to support independence simply to gain the right to veto policies that went against Scottish national interests.
22 
23 

Burrows, “Scotland’s European Strategy,” 122-124.
Burrows, “Scotland’s European Strategy,” 125-132.

Southern California International Review - Vol. 3 No. 1

71

M. Beau Feibus

Regardless of the nature of the incentives that European integration has provided the SNP
to call for independence in Europe, the SNP has taken an aggressive stance in increasing the
Scottish profile among Europeans. The party has even implied that the Scottish are much
more outward looking than the “xenophobic…little Englander.”24 In this way, the party dissociated their separatism from separatism. In other words, European integration has provided the unique opportunity for the SNP and Scottish nationalists to assert their separatist
agenda without the negative consequences expected in that Scotland would break away from
the UK but find safety in the EU. This illustrates how the Scottish view of European integration has evolved from suspicion of the centralist project that took away the Scottish voice,
to the acceptance of the EU as the perfect framework in which to exist independently.25
Nonetheless, Scotland has been disillusioned by its seeming disenfranchisement in
Europe. The way in which the CoR has amounted to little more than a “talking shop,” along
with the Common Agriculture and Fisheries Policy’s apparent ignorance of Scottish interests, has played heavily into anti-EU sentiments in Scotland.26 It might, therefore, be difficult
to sell the idea to the average Scot that entering the framework of an increasingly supranational EU would increase Scottish political autonomy. However, the fact remains that the
political elites see this as the best option and that autonomous desires are stronger than ever
throughout the region.

Spain
As in Belgium and Scotland, there has been significant concern among the Spanish
autonomous communities regarding the centralization of policy making throughout the
process of European integration. For example, some of the large competences nominally
given to autonomous communities within Spain actually fall under the jurisdiction of the
Spanish central government in EU policy decisions. Both Catalonia and the Basque Country
have been vocal in advocating for greater involvement at the EU level as a result. As in the
other regions explored in this paper, the Spanish autonomous communities have recognized
the obstacles and opportunities created by Spain’s accession to the EU and further European
integration in order to evolve their regional policies and mobilizations.27
The perceived threats and opportunities of European integration were clear early on to
the Spanish historical/ethnic regions, and, as in the other cases outlined above, the primary
response of these autonomous communities was to directly involve themselves at the systemic level of the European Union. As the Spanish government prepared to be welcomed
24  Laible, Separatism and Sovereignty, 109-120.
25  Eve Hepburn, Using Europe: Territorial Party Strategies in a Multi-level System, (Manchester: Manchester University Press,
2010): 75-78.
26  Hepburn, Using Europe, 80-96.
27  Burrows, “Scotland’s European Strategy,” 134-135.

Southern California International Review - Vol. 3 No. 1

M. Beau Feibus

72

into the EU in 1986, it began to take steps to increase domestic policy coordination so as
to better present a single voice to the EU as a whole. The Catalan government, at this time,
proposed that the autonomous communities be able to issue binding recommendations to
the central government in policy areas in which they had domestic purview. The Catalans
also proposed that a Delegation of the Autonomous Communities for European Affairs be
created in Belgium that included 6 members (3 from Catalonia, the Basque Country, and
Galicia) that would be full participants in the Spanish Permanent Representation. Both the
central government and the majority of regional governments rejected the proposal, however, because of the direct participation and the historical/ethnic region-favoring elements,
respectively.28 This pre-Maastricht effort by the historical/ethnic regions in Spain demonstrates how quickly these regions understood the challenges and opportunities of European
integration.
However, some mechanisms for regional influence were indeed adopted. In 1994, an
agreement established a manner of cooperation between the central government and the autonomous communities in which the autonomous communities would reach a consensus to
adopt a position on a given European Commission proposal. This position was non-binding
but it would be “considered in a determinant way” by the central government. The Sectoral
Conference for issues related to the European Communities (CARCE), created earlier, was
one of the main ways in which the two levels of government exchanged ideas. As a result
of regional lobbying, especially from Catalonia, the autonomous communities eventually
gained a greater role in influencing Spanish positions through the CARCE as well as the
creation of the Autonomous Advisor in Brussels.29
Although obstacles remain, one way in which the autonomous communities have had
success in increasing their political role has been through exploiting the need for presidents of the central government to form parliamentary majorities/minorities with regional
parties. The political activities of 2004 serve as an example of this amplified political clout
as regional ministers were added to the state delegation in four out of nine Council meetings. These Council configurations were in areas in which the autonomous communities
exercise competencies, like Agriculture and Fisheries or like Education. Excluded from
this arrangement, however, were configurations that dealt with competences that only pertained to Catalonia or to the Basque Country. Also in 2004, the autonomous communities secured the permanent presence of two advisors (with the possibility of a third if the
Catalans and Basques agreed to share their own) in COREPER I and the Special Committee
of the Common Agricultural Policy. Perhaps most significant here is the “breaking of the

28  Laible, Separatism and Sovereignty, 135-138.
29  Laible, Separatism and Sovereignty, 138-141.

Southern California International Review - Vol. 3 No. 1

M. Beau Feibus

73

governmental monopoly in the representation of the state interests.”30 The manner in which
these breakthroughs have occurred, however, illustrates some of the difficulties of working as regions within the EU. The autonomous communities cannot appeal to any court of
law; furthermore, some autonomous communities possess little motivation to act in areas
outside the bounds of Structural Policy. This makes policy convergence difficult among regions.31 These obstacles illustrate difficulties of regional participation in the EU framework,
even when those regions have made significant gains in establishing a profile at the EU level.
Catalonia has independently worked hard to secure EU-level representation. The
Catalan Statute of Autonomy of 2006 represents the manifestation of the principles of sovereignty and self-government in the era of European integration. It asserted that Catalonia
must participate in Spanish delegations to the EU in issue areas under its purview, be able
to implement EU law in its own jurisdiction, have the capability to demand the central government bring an issue to the European Court of Justice, and have the ability to establish an
official delegation to EU institutions. In addition to these areas, Catalans have been active
in other areas of regional mobilization within the EU. They have established regional offices and engaged in inter-regional cooperation, such as REGLEG, to push for regionalism
with a united front. Through these mechanisms, Catalonia has sought to reduce the central
government to a role of “negotiator” in the EU as the regions advise in the implementation
of policy.32
The Basque Country has similarly aimed to mobilize within the EU. Like Catalonia,
the Basques established a regional office in Brussels. The Basque Country also participated
heavily in the CARCE, but, again like Catalonia, continued to insist that “bilateral” mechanisms be added to the framework for region-state cooperation. The Basques argued that the
voices of the historical/ethnic regions (the Basque Country, Catalonia and Galicia) could
not be represented adequately through consensus decisions with the other autonomous
communities. Such a Bilateral Commission was established to meet on EU issues concerning the Basque Country in 1996, but the body did not meet again after 1999. This suggests that the agreement only worked when good relations existed between the Spanish and
Basque ruling parties. In more recent years, Spanish presidents have formed minority governments through agreements with Basque (along with Catalan) parties. The regions have
used these arrangements to secure greater financial autonomy.
Furthermore, the Basques parties have also been active at the EU level. They have worked
within the CoR and have called for the enhancement of its powers in REGLEG. The Basques
have also used their regional office in Brussels to increase their EU profile. In fact, the Basque
Country won a case in the Constitutional Court against the central government in which its
30  Laible, Separatism and Sovereignty, 141-143.
31  Ibid.
32  Laible, Separatism and Sovereignty, 143-152.

Southern California International Review - Vol. 3 No. 1

74

M. Beau Feibus

right to establish relations with EU institutions was upheld. The Basque Country, however,
has faced staunch resistance to its calls for direct historical/ethnic region Council participation. In the end, it seems regional Council participation directly correlates with central government reliance on regional parties to form coalitions. For example, the Spanish political
system was not as reliant on these regions to form a government from 2000 to 2004, but as
discussed above, the regions succeeded in securing stronger participation of autonomous
community ministers in 2004.33
It is therefore evident that the Spanish autonomous communities, particularly those
of the Basque Country and Catalonia, have worked to overcome challenges while taking
advantage of opportunities in European integration. Lower political autonomy as a result
of integration has been met with myriad efforts, many successful, to increase their regional
profile on the EU level, especially in influencing areas in which the autonomous communities have competences.

European Integration and Growing Regionalism
As can be seen through the extensive case studies of Scotland, the Belgian regions and
the Spanish historical/ethnic autonomous communities, there is a certain pattern that has
developed among this selection of regions in response to European integration. In each case,
there has been enormous initial skepticism and even hostility towards European integration.
Especially after the Maastricht Treaty, the regions saw European integration as the process
that would take away their power and would centralized them as subordinates under their
respective states. These fears were grounded in reality as greater integration at the supranational level necessitated that member states centralize decision-making and speak with one
voice at the EU level. Each of these three groups of historical/ethnic regions had enjoyed
greater political autonomy within their member state prior to greater European integration.
As a result, all three lobbied against the EU, for the most part, in the pre-Maastricht and
immediate post-Maastricht periods.
Working within the new EU framework post-Maastricht, each of these regions has
sought to secure their interests in terms of the principles of sovereignty, self-government,
and separatism. The result has been that Vlaams Blok/Vlaams Belang, the SNP, and the
Catalan and Basque nationalist parties all have used European integration to increase their
regional profile on the EU level. All made a concerted push to increase cooperation with
their central governments, as the state was now the conduit between the regions and the
increasingly powerful supranational institutions of the EU. The Flemish, Scottish and the
Catalans/Basques were all able to secure some sort of participation in the Council and
33  Angela K. Bourne, The European Union and the Accommodation of Basque Difference in Spain, (Manchester: Manchester
University Press, 2008): 27-70.

Southern California International Review - Vol. 3 No. 1

75

M. Beau Feibus

permanent representative delegation to exert regional influences. Moreover, each has fought
to retain regional competences domestically and for the right to implement and advise on
EU law in those areas. The other main way in which regions sought to increase their profile
on the EU level was through the use of new mechanisms that emerged as Europe further integrated in order to influence policy. The historical/ethnic regions have established regional
offices in Brussels, engaged in the CoR and REGLEG to advocate for regionalism, and have
even entered into bilateral agreements with each other and with EU institutions. Having
demonstrated the way in which the regions have met the challenges of European integration
and have adapted to exploit the opportunities of the new framework, the argument can be
put forth that European integration has, in fact, strengthened regionalism.
This would be a surprising revelation for those who have heralded European integration
as the death of regionalism (or at least its stagnation). Some conclude that it is now counterproductive to advocate for independence as the nation-state loses ground to supranational
institutions.34 Others have concluded that the CoR is nothing more than a “talking shop” and
that its establishment was not the beginning of the age of the regions, but, in fact, as good as
it would get for regionalism.35, 36 One could also simply point to the decay of regions’ powers
after Maastricht to arrive at the obvious conclusion that European integration is detrimental
to regionalism.37 From reading these and many other analyses of the bleak state of regionalism in the EU, it would seem as if the hopes of the mid-90s for a “Europe of the Regions”
have sputtered, collapsing upon themselves like the impotence of the CoR.38 Taking all of
this negativity into account, the above findings are shocking.
The regions have done more than simply continue to seek political autonomy. They
have fundamentally evolved and adapted in ways that those prognosticators of the decline
of regionalism could not have predicted. They have collectively shifted their ideological base
from being grounded in the pursuit of sovereignty to the pursuit of the most sovereignty
possible.39 The SNP, as discussed above, changed its tune, for example, from the pursuit of
self-government, to the pursuit of the right to represent its own interests in at the EU level.
More than just the myriad options available in the EU framework, through which regions
can establish an extra-state profile, have convinced historical/ethnic regions of the advantages inherent to working within the context of European integration. These regions learned
to transform and adapt, essentially using these new forms of political activism to create legitimate political capital. This becomes especially important as regions have evolved, out of
34  Laible, Separatism and Sovereignty, 5.
35  Hepburn, Using Europe, 96.
36  Wyn Jones and Scully, Europe, Regions and European Regionalism, 2.
37  Álvaro Laiz, Contentious Regions in the European Union: Nationalist Parties and the Coordination of European Policies in
Federal Member States, (Baden-Baden: Nomos, 2009): 26.
38  Loughlin, “Europe of the Regions,” 158.
39  Laible, Separatism and Sovereignty, 2.

Southern California International Review - Vol. 3 No. 1

M. Beau Feibus

76

necessity, to conceive of statehood (the goal of separatism) not only in terms of achieving
politically isolationist nationalism, but also in terms of achieving legitimacy and authority
over their regions.40 This political capital, which has been referred to as an EU level profile
in much of the discussion above, gives these regions more legitimacy than they could have
ever hoped for sans-European integration. The abilities to engage in agreements with EU
institutions, to lobby for regional interests at the EU level, and to bilaterally deal with other
regions all would have been impossible outside of European integration, and all greatly
increase the visibility, political autonomy, and legitimacy of the participant region. In this
way, separatism, once an extreme manifestation of regionalism, has come to signify regions’
ownership of the issues important to them at the EU level.
Furthermore, this discussion does not yet include some of the most basic attractive features of independence in Europe. Scotland, Flanders, the Basque Country, and Catalonia all
perceive themselves as the rightful interlocutor between their populations and the EU and,
possibly incorrectly, assume that they would be able to immediately belong to the European
community if their separatist goals were to reach fruition. This has the obvious psychological impact of reducing the extremism of separatism. Moreover, the EU is also seen as being
ideal for small states in terms of financial gain for the historical/ethnic regions, as mentioned
above.
This paper cannot ignore, however, the failure of the inter-regional bodies within the
EU, namely the CoR, to make any real progress or impact on policy. The failure of any of the
three regional groups discussed, along with of dozens of others with similar trajectories, to
actually realize their goals of independence, also must be noted here. While the mechanisms
of regional power have yet to attain significant political clout, the argument can instead be
made that the regions have been bolstered by their increased extra-state profiles and have
been made aware of the possibilities that exist for greater political autonomy within the EU
framework. Although far from a Europe of the Regions, what is seen today is certainly a
regionalism strengthened by European integration.

Economic Factors and Regionalism: Current Separatist Sentiments
There have been significant reports of separatist regional sentiments, notably from
Catalonia and, to a lesser extent, Flanders and Scotland, reported in the past several months
by the media. The question that arises due to the political machinery is “why now?” If
one considers the above arguments on strengthened regionalism through European integration to be true, one also would expect definitive calls for independence in the regions.
More specifically, this might occur when the political climate is conducive to separatism
and when the region has amassed domestic and extra-state political autonomy to the extent
40 

Laible, Separatism and Sovereignty, 3.

Southern California International Review - Vol. 3 No. 1

77

M. Beau Feibus

that the next logical step is separation. However, this is not the case as the trajectory for
independence through these means has certainly not been followed to its end. For its part,
Catalonia likely does not have the political solidarity to enact an independence referendum
at this point (even though nationalist/separatist parties claimed most of seats, the CiU—
party of Catalan President Artur Mas—complicated the political process by failing to secure
a majority). Furthermore, Commission President Barroso specifically dispelled beliefs that
Scotland would be grandfathered into the EU, saying that they would have to wait in line
like anybody else.41,42
The question of “why now?” may have an answer in the eurozone crisis. It may be no
accident that Catalonia and Flanders are the richest regions in their respective countries.
Catalonia and Flanders make the argument that they give more than they receive in terms
of national funds, and these regions may simply be dissatisfied with subsidizing the poorer
sections of their countries. It may truly be that, in these cases, “relative prosperity” is further
empowering “an already divergent people who wish to garner greater control of their economic destiny.”43, 44 As noted above, the historical/ethnic regions see the EU as having enormous financial advantages for small states, giving further credence to this theory. Bolstered
by the regionalism-strengthening factors already set forth, it is possible that this economic
situation has driven some of these regions to advance their calls for separatism.

Regional Sentiment and the Legitimacy of European Integration
After the preceding analysis of the impacts of European integration on regionalism, it is
natural to theorize about the possible effects that strengthening regional advocacy in Europe
could have on the future of European integration.
The decentralization of the state when combined with the increasing political profile of
the regions, creates an environment in which different actors share decision-making competences. This is exactly what a framework of multilevel governance would suggest. The
multilevel governance model claims that, as just noted, decision-making competences are
“shared by actors at different levels,” that collective and supranational decision making involves a “significant loss of control for individual state executives” (which is seen through
examples such as qualified majority voting in the Council and the supremacy of EU law),”
and that “subnational actors operate in both national and supranational arenas.”45 The focus
41  “Catalonia election: Separatists win majority,” BBC News, http://www.bbc.co.uk/news/world-europe-20482719.
42  Gwynne Dyer, “Separatist movements play on hurt,” Elliot Lake Standard, http://www.elliotlakestandard.ca/2012/11/29/
separatist-movements-play-on-hurt.
43  Ryan Barnes, “Catalonia and the Rise of Economic Separatism in Europe,” EA November 2012, http://www.europeaninstitute.org/EA-November-2012/catalonia-and-the-rise-of-economic-separatism-in-europe.html.
44  Steven Erlanger, “Europe’s Richer Regions Want Out,” The New York Times, http://www.nytimes.com/2012/10/07/sundayreview/a-european-union-of-more-321-nations.html.
45  Bache, Europeanization and Multilevel Governance, 25.

Southern California International Review - Vol. 3 No. 1

78

M. Beau Feibus

on political actors, as opposed to political institutions, is important as it implies that actors
“operate in the context of those institutions, but they may also try to change them,” while
institutions, on the other hand, “specify the structure and allocation of authority in a given
territory.”46 It therefore appears that the processes outlined above easily fit into the multilevel governance model; regions seek participation in institutions and seek to change them,
while influencing the shared competences of the state and supranational levels. The notion
espoused by multilevel governance that power is a “positive-sum game” is crucial to each
actor’s ability to influence and create policy. In this context, power is not “control over persons,” which would necessitate one actor losing and another gaining, but, in fact, “the ability
to achieve desired outcomes.”47 In line with this thinking is the demonstrated idea that identities (whether state, regional or EU) in Europe are not competing, but complementary.48
Considered together, these theories indicate that power could be shared among actors in an
effective and peaceful way.
It is in this framework that the argument can be made that strengthened regionalism
in Europe is beneficial to European integration. As regions acquire larger political profiles
and continue to advocate for influence on both the domestic and EU level, one can expect
power and competences to be shared among the three levels of government. This is where
the principal of subsidiarity becomes important. The European Union has, since Maastricht,
subscribed to the belief that the form of government best suited for a specific policy area
should handle that policy area. Given that the regions also heavily tout this idea, and have
lobbied for the increase of its application since the establishment of the CoR, one can assume
that, as these two actors (the subnational and supranational actors) gain more competences,
the application of the subsidiarity principle in Europe will increase.
Some of the main proponents of the argument that there is a democratic deficit in
Europe have cited the handing over of policy areas once sacrosanct to nation-states to “large
bureaucracies” beholden to no particular group of citizens as evidence of the decline of
democratic values in Europe. This, in turn, delegitimizes European integration.49 Not only
is this perspective an exaggeration as the EU abides by the same democratic principles as
do nation-states (although this extends beyond the scope of this paper), but the European
project is actually becoming more democratic in the purest sense. This is because as regionalism strengthens, an actor closer to its constituents than a state is the recipient of some of
the competences ceded by the traditional state. Therefore, because of the increase in the
46  Bache, Europeanization and Multilevel Governance, 25.
47  Bache, Europeanization and Multilevel Governance, 37.
48  Andrea Schlenker-Fischer, “Multiple Identities and Attitudes Towards Cultural Diversity in Europe: A Conceptual and
Empirical Analysis,” In Cultural Diversity, European Identity and the Legitimacy of the EU, ed. Dieter Fuchs and Hans-Dieter
Klingemann, (Cheltenham: Edward Elgar Publishing Limited, 2011): 110.
49  Yves Meny and Andrew Moravcsik, “A Transatlantic Dialogue about Democracy and its Future,” Princeton University,
www.princeton.edu/~amoravcs/library/dialogue.pdf.

Southern California International Review - Vol. 3 No. 1

79

M. Beau Feibus

application of subsidiarity, one can expect the result to be a Europe in which a system of
multilevel governance takes shape and where actors at each of the three levels deal with the
policy areas with which they are best suited to legislate. As a result, regionalism has the effect
of adding legitimacy to European integration.

Conclusion
Through the analyses of the evolution in regionalist principles in Scotland, the Belgian
regions (specifically Flanders), and the Spanish autonomous communities (specifically
Catalonia and the Basque Country) a varied sample is provided from which general arguments can be constructed regarding regionalism and European integration. Historical/
ethnic regions were deliberately examined as they best demonstrate significant gains and
losses in political autonomy and where the political will to progress regionalism exists. From
the analysis of these regions, this paper has been able to assess the impact of European integration on regionalism in Europe. It has been evident that, although regional responsibilities
were ceded to central governments as a matter of necessity in the immediate post-Maastricht period, the regions have worked within their states and within the European Union to
increase their influence, political autonomy, and profile. Developments such as these, along
with common positive regional perceptions of independence within Europe, indicate that
European integration has strengthened regionalism in Europe. Moreover, it has also been
posited that economic regionalism has recently been growing in wealthier regions, raising
an already bolstered foundation of separatism to new heights.
Finally, this paper has also put forth the argument that these two processes (regionalism
and European integration) have a reflexive relationship. In other words, regionalism also has
a significant impact on European integration. Working within the theoretical framework of
multilevel governance and the principle of subsidiarity, it seems likely that the strengthened
regional “sovereignty” and advocacy in Europe has a positive impact on the legitimacy (both
internal and external) of European integration.
The relationships established in this paper have significant impacts on larger debates
surrounding the EU, including the question regarding the presence of a democratic deficit.
The evidence explored here indicates that the increasing regionalism in Europe provides
a counterweight to some of the processes of supranationalism that many tout as being responsible for said deficit. Therefore, it may actually be beneficial for those concerned about
the loss of state sovereignty, to, albeit paradoxically, support the processes of growing competences and growing profiles for the regions. Although the discussion of what truly is the
most representative form of governance needs further research, the relationships and trends
established above suggest a convergence of supranationalism and regionalism that will result
in the efficient power sharing between the state, the EU, and the regions, either as states of
Southern California International Review - Vol. 3 No. 1

M. Beau Feibus

80

their own or with a high levels of autonomy within the state and EU levels that have yet to
be reached.

Bibliography
Bache, Ian. Europeanization and Multilevel Governance. Lanham, MD: Rowman and Littlefield Publishers, Inc., 2008.
Barnes, Ryan. “Catalonia and the Rise of Economic Separatism in Europe.” EA, November
2012. http://www.europeaninstitute.org/EA-November-2012/catalonia-and-the-riseof-economic-separatism-in-europe.html (accessed December 2, 2012).
Bourne, Angela K.. The European Union and the Accommodation of Basque Difference in
Spain. Manchester: Manchester University Press, 2008.
Burrows, Noreen. “Scotland’s European Strategy.” in Europe, Regions and European Regionalism, edited by Rogey Scully et al., 115-134. London: Palgrave Macmillan, 2010.
BBC News. “Catalonia election: Separatists win majority.” http://www.bbc.co.uk/news/
world-europe-20482719 (accessed December 2, 2012).
Dyer, Gwynne. “Separatist movements play on hurt.” Elliot Lake Standard. http://www.
elliotlakestandard.ca/2012/11/29/separatist-movements-play-on-hurt (accessed December 3, 2012).
Erlanger, Steven. “Europe’s Richer Regions Want Out.” The New York Times. http://www.
nytimes.com/2012/10/07/sunday-review/a-european-union-of-more-nations.html
(accessed December 2, 2012).
Hepburn, Eve. Using Europe: Territorial Party Strategies in a Multi-level System. Manchester:
Manchester University Press, 2010.
Laible, Janet. Separatism and Sovereignty in the New Europe. New York: Palgrave Macmillan, 2008.
Laiz, Álvaro. Contentious Regions in the European Union: Nationalist Parties and the Coordination of European Policies in Federal Member States. Baden-Baden: Nomos, 2009.
Loughlin, John. “”Europe of the Regions” and the Federalization of Europe.” Publius 26,
no. 4 (1996): 141-162. http://www.jstor.org.libproxy.usc.edu/stable/3330775 (accessed
December 2, 2012).
McCormick, John. Understanding the European Union: A Concise Introduction. 5th ed. New
York: Palgrave Macmillan, 2011.

Southern California International Review - Vol. 3 No. 1

81

M. Beau Feibus

Meny, Yves, and Andrew Moravcsik. “A Transatlantic Dialogue about Democracy and its
Future.” Princeton University. www.princeton.edu/~amoravcs/library/dialogue.pdf
(accessed December 2, 2012).
Rivolin, Umberto. “Cohesion and Subsidiarity: Towards Good Territorial Governance in
Europe.” The Town Planning Review 76, no. 1 (2005): 93-106. http://www.jstor.org.libproxy.usc.edu/stable/40112633 (accessed December 2, 2012).
Schlenker-Fischer, Andrea. “Multiple Identities and Attitudes Towards Cultural Diversity
in Europe: A Conceptual and Empirical Analysis.” in Cultural Diversity, European Identity and the Legitimacy of the EU, edited by Dieter Fuchs and Hans-Dieter Klingemann,
Cheltenham: Edward Elgar Publishing Limited, 2011: 86-123.
Swenden, Wilfried. “The Belgian Regions and the European Union: Unintended Partners in
Unravelling the Belgian State.” in Europe, Regions and European Regionalism, edited by
Rogey Scully et al., London: Palgrave Macmillan, 2010: 16-35.
Wyn Jones, Richard, and Roger Scully. Europe, Regions and European Regionalism. London:
Palgrave Macmillan, 2010.

Southern California International Review - Vol. 3 No. 1