*** The economic essentials of digital strategy

By Angus Dawson, Martin Hirt, and Jay Scanlan 

Source Link

A supply-and-demand guide to digital disruption.

In July 2015, during the championship round of the World Surf League’s J-Bay Open, in South Africa, a great white shark attacked Australian surfing star Mick Fanning. Right before the attack, Fanning said later, he had the eerie feeling that “something was behind me.”1Then he turned and saw the fin.

How to make sense of digital disruption.

Thankfully, Fanning was unharmed. But the incident reverberated in the surfing world, whose denizens face not only the danger of loss of limb or life from sharks—surfers account for nearly half of all shark victims—but also the uncomfortable, even terrifying feeling that can accompany unseen perils.

Just two years earlier, off the coast of Nazaré, Portugal, Brazilian surfer Carlos Burle rode what, unofficially, at least, ranks as the largest wave in history. He is a member of a small group of people who, backed by board shapers and other support personnel, tackle the planet’s biggest, most fearsome, and most impressive waves. Working in small teams, they are totally committed to riding them, testing the limits of human performance that extreme conditions offer. Instead of a threat of peril, they turn stormy seas into an opportunity for amazing human accomplishment.

*** Improving Decisionmaking in a Turbulent World

by Charles P. Ries

PDF file

0.7 MB 

Technical Details » 

Research Questions 

How has the evolution of the decisionmaking system diminished its effectiveness? 

What sort of challenges does the current decisionmaking system need to address? 

What sort of changes would improve the effectiveness of the decisionmaking system? 

Every president needs a decisionmaking system that harnesses the full capabilities and accumulated wisdom of the U.S. government and the nation's many stakeholders. Yet national security professionals — the officials who must advise the president on the most-difficult decisions — cite a range of structural problems that hinder effective policymaking. While a more focused and timely decisionmaking process will not necessarily improve outcomes for the United States, poor choices could be calamitous. This Perspective analyzes a range of management challenges in the national security system and presents eight recommendations for strengthening U.S. decisionmaking and oversight of policy implementation. Among the conclusions: The National Security Council staff size should be reduced to better focus on high-priority areas. Civil-military operations should be planned by a new joint office at the State Department with a military general officer as deputy. Red-team and lessons-learned efforts would help ensure that the system is adaptive and responsive. Better integration of intelligence insights and secondments of senior officials across agencies can improve the quality and coherence of decisionmaking. And the use of special envoys, or "czars," should be limited.

Key Findings

** The Old Islamic State Versus the New

By Jacob L. Shapiro

April 6, 2016

Outside of Syria and Iraq, the threat of IS is most potent in Saudi Arabia.

Summary Recent attacks in Saudi Arabia show an expansion of IS strategy in the kingdom. Saudi Arabia and the Islamic State share foundational similarities, and IS may take advantage of Riyadh’s financial troubles and overextended military to punish the royal family for its religious hypocrisy.

Much has been made of the tactical defeats the Islamic State has suffered on its periphery recently. The most serious of these was the retreat from Palmyra on March 28, but U.S.-backed Iraqi forces are also operating against IS in Hīt in the south near Ramadi and al-Nasr, a small village on the road to Mosul. While we track these developments closely, none have yet caused us to change our forecast for 2016, which predicts that IS will continue to be the single largest force in the Syrian-Iraqi theater. Further, recent events in Saudi Arabia could indicate our expectation that IS would expand its activities into the kingdom is coming to fruition.

On April 2, an improvised explosive device (IED) went off in a police station in Ad Dilam, a small town about 100 km (62 miles) south of Riyadh, according to the Saudi Interior Ministry. One person was killed and three police cars were damaged in the explosion, which was claimed by Wilayat Najd, a self-proclaimed province of the Islamic State. Then on April 5, Saudi-owned Al Arabiya reported that a Saudi security officer and colonel was assassinated in the area of al-Quwayiyah, about 171 km west of the capital. IS also claimed this assault.

** To The Future President Of The United States

05 April 2016

-- this post authored by Reva Goujon

Dear candidates of the 2016 U.S. presidential race,

Five of you remain with less than 31 weeks until Election Day. Three of you won't even make it out of the primaries. And yet, American voters and foreign observers all search for substance in your stump speeches, trying to imagine their lives and the world at large under your leaderships. Those of us who view the world through the prism of geopolitics remind ourselves that campaign rhetoric tends to diverge from post-election policy.

The constraints built into the presidency as well as those shaping the international system will inevitably blur personal distinctions and mold policy decisions, whether the winning candidate carries anti-establishment credentials to Washington or is working to create or uphold a political dynasty. We understand that perspective is hard to come by at this stage of the race, and you are obsessively watching the polls and attempting to shape your image to a media ready to pounce on every slip. But the world is watching at a time of great uncertainty. Candidates will require dispassionate analysis and a deep understanding of history to navigate the challenges that lie beyond our borders. Whoever enters the White House come January, this briefing attempts to frame the geopolitical state of the world awaiting you.

Back to Growth Fundamentals

** Pathankot: Pak Prefers Self-Destruction To Peace; We Should Help The Process

Jagannathan

April 6, 2016

Source Link

Pathankot: Pak Prefers Self-Destruction To Peace; We Should Help The ProcessR 

Chances are 99.9 percent that Narendra Modi and his National Security Advisor Ajit Doval are chasing a mirage with Pakistan.

Pakistan desires India’s dismemberment, and to achieve its ends, self-destruction is acceptable to Pakistan’s Deep State, and India should aid in its destruction.

The most important lesson to learn from the expected Pathankot fiasco is that Pakistan will never give up its enmity towards India.

The only purpose that the Modi government can ever achieve by its Pakistan policy is to show the world our good faith and the terror sponsor Pakistan’s absolute perfidy. Beyond this, we have nothing to gain from hugging Nawaz Sharif or allowing a bogus Joint Investigation Team (JIT) to visit the Pathankot airbase that was targeted by Pakistan-based Jaish-e-Mohammed (JeM) terrorists in January.

News media leaks in Pakistan now suggest that the JIT was not convinced by the evidence provided by our National Investigative Agency (NIA), and (more preposterously) that India itself may have stage-managed the attack to embarrass Pakistan. The leak shows where this whole exercise will lead. However, we can formally conclude this, once Pakistan fails to deliver on this investigation.

** Will the PLA Reforms Succeed?

by Cristina Garafola

April 1, 2016

http://www.rand.org/blog/2016/04/will-the-pla-reforms-succeed.html

At the Third Plenum of the 18th Central Committee of the Chinese Communist Party (CCP) in November 2013, major reforms to the Chinese People's Liberation Army (PLA) were announced. Beginning in September 2015, elements of the reform programme have been made public and the process is expected to last until 2020. The changes challenge a number of established interests, including by restructuring the Military Region system as well as the four General Departments, which have been blamed for facilitating patron-client ties in the PLA.

Official sources say that these and other reforms are necessary to transform the PLA into a military force capable of conducting integrated joint operations to protect the Party's interests within and beyond China's borders. PLA analysts point out the importance of implementing the reforms, but also highlight the challenges that will come in attempting to carry them out, especially given entrenched interests within the PLA.

Overhauling the PLA

Since they began in September, the reforms have already brought about large-scale changes to the force structure, organisation, and operational command of the PLA. On 1 January 2016, the Central Military Commission (CMC) released an “Opinion on Deepening the Reform of National Defence and the Armed Forces” (hereafter, the “Opinion”), which provides the rationale, objectives, and priority areas for the reform programme.[1] The “Opinion” states that the reforms represent the only way to achieve the rejuvenation of the military as well as China's national-level goals, including the goals of becoming a “moderately prosperous society” (小 康社会, xiaokang shehui) by 2021, and becoming a “modern socialist country” by 2049.[2] The reforms are also necessary to overcome the structural and policy barriers that exist in the current national defence system.

** NOT SECURE ENOUGH: THE THREAT OF TERRORISTS ACQUIRING NUCLEAR MATERIALS IS STILL SERIOUS

GARY ACKERMAN AND JAMES HALVERSON

APRIL 6, 2016

Source Link

The recent suicide bombings in Brussels have turned the lion’s share of public discourse, perhaps only briefly, away from the torrid primary elections coverage in the United States. These attacks merely served to underline the threat to the West that the self-declared Islamic State poses. The Brussels attacks represent not just a reaffirmation of ISIL’s ability to strike outside of its typical areas of operation, but also a potential near miss with an even weightier and more transcendent threat, namely the vulnerability of nuclear power plants and other facilities that house fissile materials or materials that emit dangerous amounts of ionizing radiation.

Last month Belgian prosecutors revealed that a video recording, seized in a December 2015 raid on the home of suspected Paris attack accomplice Mohamed Bakkali, featured some 10 hours of covert surveillance footage of a senior employee at the Belgian nuclear research center (SCK CEN) traveling to and from work. Reports since the Brussels attack have stated that the videographers were none other than the El Bakraoui brothers who blew themselves up in Brussels. It is not certain why they were filming the Belgian official, but one plausible theory is that they were preparing to kidnap a family member in order to coerce the official to grant them access to the nuclear facility in the hope of acquiring nuclear or radiological material. Though worrying on its own, the nefarious activity in evidence on the tape occurred against the background of broader concerns about the security of nuclear facilities in Belgium. In 2001, al Qaeda operative Nizar Trabelsi was arrested in the midst of plotting to bomb the Keine Brogel Air Base, a facility thought to have housed U.S. Air Force tactical nuclear weapons at the time. From 2009 to 2012, Ilyass Boughalab, a Belgian national killed fighting with ISIL in Syria in November 2012, was employed and cleared to enter sensitive areas at the Doel nuclear power plant just outside of Antwerp. Then, in August 2014, an act of sabotage likely committed by a facility insider caused hundreds of millions of dollars in damage at the same plant and forced a reactor to be shut down for four months. The same facility was illegally overflown by a drone aircraft (whose operator was never caught) the day after being returned to full operation. This nexus of dangers is all the more worrying given that the facilities most threatened were a research facility believed to house significant quantities of fissile material and a nuclear power plant unusually proximate to a large population center.

** A TALE OF TWO STRATEGIES: LIMITED WAR IN U.S. & RUSSIAN STRATEGIC CULTURE

Steven Metz 

April 6, 2016 ·

Source Link

Since assuming power in 1999, Russian President Vladimir Putin has used rising income from gas and oil exports not only to rebuild the Russian military from its post-Soviet nadir, but also to spur the evolution of new tactics and capabilities blending cyberwar, support to proxy forces, special operations and conventional operations. Like Washington, Moscow recognized that the primary security threat in the opening decades of the 21st century was not major conventional war but a complex web of state weakness, political extremism, terrorism, insurgency and transnational crime. Russia’s military interventions in Georgia, Ukraine, Syria and elsewhere demonstrate that Putin has honed Russia’s arsenal of weapons and is willing to use them.

The roots of this story go back even further, though, to the end of World War II. Despite the massive destruction and death the Soviet Union suffered in the war, Josef Stalin saw opportunity in its aftermath. The old global order that had kept the Soviet Union and before it Imperial Russia in check had been destroyed. This, Stalin and his henchmen believed, provided an opening to advance Soviet power in ways never seen before.

Stalin’s first inclination was to use the Soviet Union’s massive conventional military power to intimidate and control weaker nations. But there was a problem with this plan: the United States. While the United States had demobilized after the war, it still had massive air and sea power and, most importantly, nuclear weapons. So Stalin developed an alternative: use the Soviet Union’s connections with communist or socialist organizations around the world to exploit local grievances fueled by colonialism, inequity, corruption, repression and ethnic or racial tension, in order to empower revolutionary movements. Rather than a big and very costly Soviet offensive through Europe, the West would die the death of a thousand small cuts as it lost its friends in the Third World and access to vital resources. Thus what became known as “limited war” took on increased strategic significance, playing a major role in the post-war global security system, breaking up old empires, creating new nations, and providing a tableau for proxy conflict between the Eastern and Western blocs.

* Satellite Imagery Shows That Hezbollah Has Begun Setting Up Permanent Bases Inside Syria

April 6, 2016

Hezbollah’s Shot at Permanency in Syria

Like other foreign and domestic actors, Hezbollah has seized on the Syrian civil war to improve its position in the country and the surrounding region. Stratfor has collected information from diplomatic sources and from sources close to Hezbollah to monitor and track the establishment of Hezbollah bases in Syria. According to those reports, Hezbollah’s attempts to expand and solidify its control in Syria will only increase in the future. Now, satellite imagery adds to these predictions by enabling us to take a closer look at a Hezbollah base near the Syrian town of Qusair, where Hezbollah has built up significant defensive positions since conquering the area in June 2013.

The base near Qusair, like other anticipated defensive positions in Syria, is part of Hezbollah’s future strategy in the country. The base will play a significant role in protecting the militant group, and Lebanon as a whole, from the threats they may face if Syrian President Bashar al Assad is deposed. Alongside the base, Hezbollah has focused on securing the Lebanese border, building up a large earthen berm on the stretch of the border near Qusair. The group has also cleared the area around the base to enable it to better observe and defend the area along the Syrian side of the border. Moreover, sources report that Hezbollah has dug tunnels from the base back to Lebanon.

* Syria and Iraq: How Should These Wars End?

By Anthony H. Cordesman

APR 4, 2016 

http://csis.org/publication/syria-and-iraq-how-should-these-wars-end

Grand strategy seems to be a forgotten concept in the wars in Iraq and Syria — and in the conflicts in Libya and Yemen as well. The tactical military focus of these wars is usually on finding some way to strengthen allied ground forces from day-to-day, or on defeating ISIL in the next battle or in reaching an objective.

Strategy, in the narrow military sense, focuses on defeating each party’s primary threat regardless of overall and lasting security. The campaigns in Iraq and Syria are often treated separately, as if their common border, the fact that ISIL is a common threat, and the links between Arab Shi’ites and Kurds did not really matter.

Political and diplomatic strategic objectives are generally equally narrow and limited. For example, much of the limited official U.S. discussion of how the Syria and Iraq wars might end is confined to little more than a call for “destroying” ISIS. Such statements not only ignore all of the remaining players, tensions, and prospects for conflict, they ignore the fact that many of ISIS’s fighters will clearly survive. Violent Islamist extremism will remain a serious threat — even if these fighters take on a new name, or if the more dominant threat becomes other existing movements like Al Nusra or Al Qa’ida in the Arabian Peninsula.

The Need to Focus on Stability Operations, Lasting Outcomes, and Grand Strategy

* Modi's un-Kautilyan Foreign Policy

ZORAWAR DAULET SINGH

07 APRIL 2016

http://www.outlookindia.com/website/story/modis-un-kautilyan-foreign-policy/296800

The govt is drifting into a military alliance with US without a proper national debate or a sensible assessment of its interests

Given the cacophony of our civil society discourse on domestic issues, one might expect a similar vibrant national conversation on foreign policy. But when it comes to strategic matters, the liberal intelligentsia and media have few interventions to make. Delhi's bloated strategic community seems even less interested in strategy or India's role in the world. Fortunately, there are sober observers who are expressing concerns about the direction of India's foreign policy. The core critique of the Modi government's foreign policy is that it is drifting into a military alliance with America without a proper national debate or a sensible assessment of its national interests or even a sober assessment of global trends.

It would be inaccurate and unfair to place all the blame at Modi's door. In fact, the basic continuity of foreign policy since the late 1990s has been one of the remarkable and understudied features of the post-Cold War era. And that basic path has not been without strategic logic. India's rapprochement with the US after 1998 was a sound policy and reflected both an inevitable reaction to a unipolar moment and the necessity of integrating into the global economy. China followed a similar path after Deng Xiaoping's internal transformation of Chinese socialism.

How democracy can help or hinder development

Pranab Bardhan

http://www.telegraphindia.com/1160407/jsp/opinion/story_78843.jsp 

On the general issue of democracy and development, while many liberals believe in a positive relation between the two, increasingly with the phenomenal success of China, there are some who believe in what is now sometimes called the 'Beijing Consensus': that at early stages of industrialization, authoritarianism is helpful. Even in India we hanker after 56-inch-chested strong leaders. But a moment's reflection tells you that authoritarianism is neither necessary nor sufficient for development. It is not necessary because we know there are countries which have developed reasonably well without authoritarianism. Forget about the rich Western countries or Japan. Take some developing countries that have done well with democracy for a long time. They did not need authoritarianism. If you start with small countries, Costa Rica in Latin America is a major success story of democratic development for a long period. Similarly, in Africa, the country of Botswana gives us a successful story of democracy and development. Among large countries, India is an example of democracy with sustained economic growth in recent decades. That authoritarianism is not sufficient is obvious from cases of stagnant authoritarian countries in Africa and Latin America. There are also examples of countries where democracy exists but where there has been not much progress in development. Thus democracy is also neither necessary nor sufficient for development.

Making the nuclear point The Fourth Nuclear Security Summit brought a timely focus on the link between nuclear and cyber security.

Written by Shyam Saran

April 6, 2016

Source Link

On the opening day of the Fourth Nuclear Security Summit in Washington on March 31, demonstrators outside the White House held up placards with the blunt message: “There is no nuclear security as long as nuclear weapons exist”.

The Nuclear Security Summits have been about adoption of measures to prevent terrorist groups such as the Islamic State (IS) and al-Qaeda from gaining access to nuclear weapons, fissile or radiological material, or from attacking nuclear facilities, through an array of national, bilateral or multilateral measures. However, international cooperation in promoting nuclear security is limited to the civilian sector only. Countries with nuclear weapons are expected to take national measures to secure their military facilities, fissile material and weapons.

President Barack Obama announced his initiative to convene serial Nuclear Security Summits in his much acclaimed Prague speech in 2009. But his key declaration in the speech was the re-commitment of the US to the goal of a world free of nuclear weapons. Thus, nuclear disarmament and nuclear security were integrally linked. The latter could only be an interim, though important, step in the pursuit of nuclear disarmament. Obama also pledged that the US would, in negotiations with Russia, further reduce its nuclear arsenal and would not develop any new nuclear weapons. He also hoped to persuade the US Congress to ratify the Comprehensive Test Ban Treaty (CTBT). While the limited nuclear security initiative has gone ahead, the pursuit of nuclear disarmament has been reduced to a mere proforma pledge. In fact, there has been a significant reversal, as both the US and Russia have expanded their nuclear weapon programmes over the past five years. The US has not ratified the CTBT.

SMART CITIES What Makes A 21st Century City Smart

Sanjeev Sanyal

April 6, 2016

http://swarajyamag.com/smart-cities/what-makes-a-21st-century-city-smart

The purpose of the cities today have changed from what it was in the pre-industrial or the industrialisation era. 

The diverse mix-and-match lifestyle that people follow today, makes the urban agglomeration economics work even more than previous centuries. 

So, smartness of a city should be about clustering smart people and institutions, and encouraging interaction - one key way of doing this is by encouraging walkability. 

Cities have never had it so good. More than half of the world’s population already lives in cities and indications are that over two-thirds will be urbanized by the middle of the century. Major global cities like London, New York and Singapore now dominate the world economy. But why have cities been so successful in the 21st century? In fact, why do they even exist?

In the 1990s, when the internet and mobile telephony were still in their nascent stage, many experts were of the opinion that the information technology revolution would make cities obsolete. They argued that it would soon be possible for people to work and live anywhere on the planet. Why live in an expensive, congested city when one could be operating from the beach or the ski slope? De-industrialization and sub-urbanization had led to decline of many Western cities since the late 1960s, and it was thought that information technology was the last nail in the coffin.

But the exact opposite happened - people began to move back into the cities in Europe and North America. Indeed, the densest urban cores like Manhattan saw the largest inflows and jumps in real estate prices. Similarly, there was a sharp acceleration in urbanization in developing countries with China going from being largely rural to becoming urban majority within a generation. The process is now spreading to India. What is going on?

ISIS Taking Over Former Taliban Strongholds in Eastern Afghanistan

Franz J. Marty

April 6, 2016

On the Trail of the Islamic State in Afghanistan

“From here on, everything is full of Daesh,” our driver comments as we pass what is said to be the last police checkpoint in the Chaparhar district of Afghanistan’s eastern Nangarhar province. We’re near the village of Ada, just a few minutes’ drive from Jalalabad, Nangarhar’s bustling capital. There are no signs of Daesh, the Arabic acronym for the self-declared Islamic State. All I see are quiet and peaceful surroundings: Afghan villages with ocher compounds scattered among bleak plains, green fields, and a few trees. Mighty, snow-covered mountains tower on the horizon, just visible through a slight layer of distant mist. We pass a modern gas station that doesn’t seem to fit in with what is supposedly the newest province of a revived medieval caliphate. It makes me wonder if the Islamic State is here at all.

We reach Ada, a village only a stone’s throw from the tarmac road. The dusty streets are deserted and high mud walls block the view to the houses, protecting the privacy of those inside. We enter one house and take a seat on traditional mattresses in an otherwise empty guest room. Our driver claims that Islamic State fighters came to the village with their black flag at least four times in January, grabbing local residents from streets or houses and killing them. But he can’t provide any details, so the stories might be exaggerated.

A small boy who had been crouching silently in the room speaks up. He says that some of the black-clothed warriors had stayed in Ada before they were driven out after a Jan. 29 firefight with security forces. In the neighboring village of Lalmah, the Islamic State reportedly keeps a more open presence. The village elder we were waiting for never arrives, apparently out of fear of being seen speaking to a journalist or a foreigner, or both. So we leave Ada with more questions than answers.

Why we must keep talking to Pakistan

A. S. DULAT

April 7, 2016 

Source Link

HE COURSE: “In the India-Pakistan relationship, always on a knife-edge, we should appear to take two steps whenever Pakistan takes a step forward…” Prime Minister Narendra Modi with Nawaz Sharif in Lahore.

Special Arrangement

Playing games has become a part of the Pakistani psyche, but India must stay engaged with the civilian and military establishments to help democracy strike deeper roots in the country.

Pakistan may not be, as we sometimes perceive, an army with a country but still remains a country with the army in control. As a Pakistani friend acknowledged, the army has been the final arbiter and guardian of the country since its inception. It truly believes, because of its India-centric obsession, that like the suicide bombers it has nurtured, it is doing what it is doing in Pakistan’s interest. The Pakistani military establishment is firmly entrenched and calls the shots on diplomacy which it equates with national security, a concept too dangerously contrived for our comfort. The generals are resentful of diplomacy behind closed doors and behind their back. At the same time Pakistan prides itself on its professional army, deeply conscious of its image. A possible explanation of why Pervez Musharraf had to go when he had to go is because he had become a politician and yet the army could not countenance his going to jail and bailed him out when he got into trouble with the current government.

Gulbuddin Hekmatyar Drops Major Precondition to Peace Talks in Afghanistan

By Catherine Putz

April 07, 2016

The infamous warlord has reportedly revised his demand of full foreign withdrawal before coming to the table. 

Gulbuddin Hekmatyar has been fighting in Afghanistan since the Communists were the enemy. Over the last 40 years he, and the group he founded in 1975, Hizb-i-Islami, have fought the Soviets, other Afghan mujahideen, the Taliban, the Americans, and the government in Kabul. But in recent weeks, Hizb-i-Islami spokesmen have entertained the idea of coming to the negotiating table. The biggest hurdle–a precondition that foreign troops completely withdrew before any negotiations–seems to have been dropped.

Amin Karim, described by TOLOnews as “a high-ranking member of Gulbuddin Hekmatyar’s Hizb-e-Islami party,” said in an interview with the Afghanistan-based news outlet that the party is prepared to negotiate.

In the TOLOnews interview Karim said, “When only five percent of foreign forces remain in Afghanistan, is it necessary to exile them with war? Or we can, with an Afghan agreement and a joint voice, bring a situation in order to finish the reason for foreign forces to stay in Afghanistan.”

Asia’s Growth Prospects in Beijing’s Hands

By Anthony Fensom

April 06, 2016

http://thediplomat.com/2016/04/asias-growth-prospects-in-beijings-hands/

A slowing China has prompted the ADB has cut its growth forecasts for the region. 

A slowing Chinese economy has forced the Asian Development Bank (ADB) to cut its growth projections for Asia. Worryingly for financial markets, the fortunes of Asia’s heavyweight economy are having an increasingly significant impact on global equity prices too, meaning that the next Beijing market crash could be even tougher to shrug off.

In its Asian Development Outlook 2016, the ADB cut its projections for developing Asia’s economic growth on the back of a slowing China and a continued weak recovery in major industrial economies. From 5.9 percent gross domestic product (GDP) growth in 2015, the region is expected to slip to 5.7 percent GDP growth for this year and next, weakening the prospects for the world economy.

While Japan and the eurozone have “slightly improved” prospects, softer external demand will limit the U.S. recovery. The major industrial economies are expected to stay steady at 1.8 percent GDP growth in 2016, “inching up” to 1.9 percent next year, the Manila-based lender said.

Emerging Economies Affect Global Financial Changes

April 4, 2016

http://www.imf.org/external/pubs/ft/survey/so/2016/POL040416B.htm

Changes in global asset prices increasingly reflect financial developments in emerging economies 

Financial integration main force for changes 

Policymakers must take into account emerging economies’ economic, policy developments 

Changes in emerging market asset prices explain over a third of the rise and fall in global equity prices and exchange rates, according to new research from the International Monetary Fund.

The IMF analysis, part of the Global Financial Stability Report, finds that rising financial integration, more than emerging economies’ growing share of global GDP and trade, is the key factor behind their increasing financial impact on other countries. For example, while economic news from China does affect global equity returns, spillovers from Chinese asset price shocks remain limited relative to those of financially more integrated emerging market economies including Brazil, Mexico, and South Africa. Globally, the stocks of companies with more debt are also more likely to be hit by external shocks (see charts).

How China Fights: The PLA’s Strategic Doctrine

By Ben Lowsen

April 06, 2016

http://thediplomat.com/2016/04/how-china-fights-the-plas-strategic-doctrine/

The PLA is (quite likely) coming to your neighborhood. Read on to find out what they’ll be doing there. 

As a wave of reform sweeps through China’s People’s Liberation Army (PLA), you might expect the PLA’s fighting doctrine to change as well. But you might be wrong. It appears that doctrine has predicted important reforms, namely the division of labor between the services and theater commands. But what else is the PLA working on? Its most authoritative doctrinal work isThe Science of Military Strategy, last published in 2013 by the Academy of Military Science. The key elements of doctrine according to Strategy are described below.

China’s national goal is to build a moderately prosperous society and achieve the great rejuvenation of the Chinese people by 2050. The PLA must ensure that neither internal nor external forces sabotage China’s economic engine or embarrass its national honor.

China's Capacity to Project Power Is Going Global

Gordon G. Chang

Source Link

Tuesday, Chinese Foreign Minister Wang Yi said that China is looking to build “some infrastructure facilities and support abilities,” Beijing’s code for military bases, outside China. “I believe that this is not only fair and reasonable but also accords with international practice,” he said.

If Wang sounded defensive, it is because for decades China adamantly insisted it would never maintain such bases outside its borders.

At the moment, however, the Chinese navy is building “support facilities” in Obock in Djibouti, on the Horn of Africa, which guards the southern entrance to the strategically important Red Sea. The location is generally considered, inside China and elsewhere, as the first of the country’s foreign military bases.

More are on the way as China develops port projects around the Indian Ocean. Take the Chinese-funded Colombo International Container Terminal, for instance. In both September and October 2014, the Sri Lankan government allowed a Chinese submarine and its tender to dock there, which shocked and angered New Delhi.

Mullah Omar’s Brother and Son Appointed to Top Taliban Leadership Positions

Bill Roggio

April 6, 2016

Taliban appoints Mullah Omar’s brother, son to key leadership positions

The Islamic Emirate of Afghanistan, the official name of the Taliban, appointed Mullah Omar’s brother and eldest son to key leadership positions in the jihadist group’s executive council. Mullah Omar’s kin had previously opposed the appointment of Mullah Akhtar Mohammad Mansour as emir of the Taliban after Omar’s death was disclosed in the summer of 2015, but quickly changed their mind and swore allegiance to Mansour.

The Taliban announced yesterday that Mullah Abdul Manan Akhund, a brother of Mullah Omar, was named “the head of Dawat wal Irshad,” or the Preaching and Guidance Commission. Mullah Mohammad Yaqoub, Omar’s eldest son, was given a seat on the executive council, which is better known as the Quetta Shura, “as well as the military chief of 15 provinces” within the structure of the Taliban’s Military Commission.

The Taliban made the announcement in an English-language statement on Voice of Jihad, its official website.

“Both of the new officials of Islamic Emirate were given advise [sic] by the Amir ul Mumineen [the Commander of the Faithful, the title for Mullah Mansour] who later prayed to Allah Almighty for their success in their current duties,” the statement concluded.

According to the Taliban, Manan and Yacoub received their new positions at “a special meeting” that “was convened by the Islamic Emirate in which the leader, council members, high ranking officials and military heads participated.”

Panama Papers Reveals Lots of Chinese Communist Elite Are Hiding Money in Offshore Bank

David Werteim

April 7, 2016

New ‘Panama Papers’ Report Hits China’s Red Elite

he global image of Capitalism with Chinese characteristics took yet another hit on April 6, when the International Consortium of Investigative Journalists (ICIJ), in conjunction with German outlet Süddeutsche Zeitung, published a China-focused report that peels back further the curtain that usually shields the financial machinations of China’s elite and well-connected from public view. The report, authored by former Foreign Policy reporter Alexa Olesen, reflects the author’s access to the trove of 11.5 million underlying documents leaked from Panama-based law firm Mossack Fonseca, which has specialized in the formation of offshore entities in jurisdictions like the Cayman Islands and the British Virgin Islands (BVI), a leak first exposed on April 3 and dubbed the “Panama Papers.”

While the latest findings are unlikely to surprise Chinese palace-watchers, they cement the country’s reputation as a place whose leadership, despite its Communist provenance, is both willing and able to use the levers of international finance to obfuscate asset ownership and to utilize positions of power to benefit friends and family. The results include a dizzying array of shell companies with meaningless monikers like Glory Top, Ultra Time, Keen Best, Dragon Stream, and Purple Mystery.

For the first time, the April 6 report names each of the eight current and former members of China’s elite, Politburo Standing Committee (PSC) with a family member implicated in the leaked papers. The list reaches surprisingly far back into China’s history, touching even Mao Zedong, the founder of the People’s Republic of China. It includes:

Mao Zedong (deceased), who led the country with an iron fist from 1949 to his death in 1976: Mao’s grandson-in-law incorporated a BVI company in 2011.

Friends, Foes, and Future Directions: U.S. Partnerships in a Turbulent World

by Hans Binnendijk

PDF file

Research Questions 

How should the United States manage its relationships with partners and adversaries in a world of shrinking defense budgets and reduced political will for international engagement? 

This report is the third in RAND's ongoing Strategic Rethink series, in which RAND experts explore the elements of a national strategy for the conduct of U.S. foreign and security policy in this administration and the next. The report evaluates three broad strategies for dealing with U.S. partners and adversaries in Europe, Asia, and the Middle East in a time of diminishing defense budgets and an American public preference for a domestic focus. The three strategies are to be more assertive, to be more collaborative, or to retrench from international commitments. All three of these alternative approaches are constrained and a balance will need to be struck among them — that balance may differ from region to region. In general, however, the United States may need to follow a more collaborative approach in which it seeks greater collaboration and burden sharing from strong partners who have until now not been pulling their weight. To further reduce risk, the United States should seek to prevent deeper security ties from developing between China and Russia. It should work closely with its most vulnerable partners not only to reassure them, but to coordinate crisis management with them to limit the risk of unwanted escalation of incidents. And it should sponsor new trilateral efforts to draw together partners in both Europe and Asia that face similar security, political, economic, societal, and environmental problems. Only by working together across regions can many of these challenges be effectively managed. Trilateralism might serve as a useful follow-on strategy to the pivot to Asia.

Key Findings

U.S. for stronger ties with India

VARGHESE K GEORGE

April 7, 2016

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Defence Secretary Ash Carter, a strong proponent of deeper cooperation between India and the U.S., said he spent "a lot of time on it".

The U.S. is looking for stronger and closer relations with India but not for “anything exclusive,” Defence Secretary Ash Carter said, days ahead of his three-day visit to India that starts on April 10.

Mr. Carter, a strong proponent of deeper cooperation between India and the U.S., said he spent “a lot of time on it,” and reiterated that the U.S. Pivot to Asia and India’s Act East policy implied convergence of concerns and interests.

He will also be visiting the Philippines, where he will witness a joint military exercise and visit a U.S. navy ship in the South China Sea.

“What we are looking for is a closer relationship and a stronger relationship as we can, because it is geo-politically grounded,” Mr. Carter said, speaking at the Centre of Strategic and International Studies (CSIS). “They [India] want to do things their own way. They don’t want to do things just with us. They want to do things themselves. So all that’s fine. So we’re not looking for anything exclusive,” he said. Both countries, he said, would be announcing a “whole bunch of things” during his visit.

Mr. Carter’s emphasis on allowing space for India’s autonomy even as strategic ties deepen between the two countries comes against the backdrop of renewed efforts to conclude three defence agreements –the Logistics Supply Agreement (LSA), the Communication and Information Security Memorandum of Agreement (CISMOA) and the Basic Exchange and Cooperation Agreement (BECA).

Barriers to Bankable Infrastructure

By Helen Moser

APR 4, 2016 

Incentivizing Private Investment to Fill the Global Infrastructure Gap 

This report discusses the estimated $1 trillion annual global infrastructure gap and provides recommendations on how U.S. agencies and multilateral development banks can better incentivize private-sector investment in global infrastructure. While many private companies are looking to support infrastructure projects with readily available capital, they have not found a viable project pipeline. The study first provides background on the global infrastructure gap and explores the current state of play of the various public, private, and multilateral actors who work on infrastructure projects in the United States and globally. It then discusses three important areas of needed reform: project preparation, product innovation, and foreign government capacity building. It concludes with targeted recommendations for the multilateral development banks and U.S. agencies that work on infrastructure, with a focus on creating an expanded pipeline of projects that are bankable for the private sector. The study also presents two case studies of World Bank-funded infrastructure projects in Mali and Cape Verde to illuminate the challenges related to financing and implementing infrastructure that are discussed in the broader report.

Download PDF file of "Barriers to Bankable Infrastructure"

Download PDF file of "Barriers to Bankable Infrastructure"

Japan's Nuclear Weapons Conundrum

By Mina Pollman

April 06, 2016

http://thediplomat.com/2016/04/japans-nuclear-weapons-conundrum/

Even while Japan pushes for a world free of nuclear weapons, it recognizes the importance of a nuclear deterrence. 

Since 1967, when then-Japanese Prime Minister Eisaku Sato introduced the “three non-nuclear principles,” Japan has existed in a state of contradiction when it comes to the question of nuclear weapons’ place in the world: while Japanese leaders call for the global abolition of nuclear weapons, they simultaneously acknowledge the importance of nuclear deterrence and Japan’s reliance on the U.S. nuclear umbrella.

Consider this strikingly vivid example: In 1974, when Sato was preparing to accept the Nobel Peace Prize for his non-nuclear principles, which is Japan’s policy to not manufacture, possess, or introduce nuclear weapons, he asked then-U.S. secretary of state Henry Kissinger whether the five nuclear powers would consider renouncing the pre-emptive use of nuclear weapons.

Kissinger rejected the proposal, saying, “If we were to renounce the first use of nuclear weapons, there would be a great danger for Japan,” specifically vis-à-vis the Soviet Union and China. Sato apparently acquiesced to this view, as he did not float the idea in his acceptance speech. The next year, in 1975, the United States officially announced it would extend the “nuclear umbrella” to Japan.

TED Talk: How Megacities Change the Map of the World

by Parag Khanna

April 5, 2016 

TED Talk: How Megacities Change the Map of the World

"I want you to reimagine how life is organized on earth," says global strategist Parag Khanna. As our expanding cities grow ever more connected through transportation, energy and communications networks, we evolve from geography to what he calls "connectography." This emerging global network civilization holds the promise of reducing pollution and inequality — and even overcoming geopolitical rivalries. In this talk, Khanna asks us to embrace a new maxim for the future: "Connectivity is destiny."

JLENS Future Bleak, But Need for Capability Remains

By Thomas Karako, Ian Williams 

APR 5, 2016 

Missile defense is not just about ballistic missiles. The wider problem of integrated air and missile defense, to include cruise missiles, has received growing attention in recent years. The attempt to design and field an architecture to detect and track cruise missiles, however, has proven challenging, as seen with the recent history of the cruise-missile detecting Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS). There are alternatives for the mission, such as with a fleet of AWACS E-3 aircraft, but manned systems lack the same range and have higher operating cost than a persistent and tethered radar. The JLENS program’s recent history exemplifies both the political and strategic demand for the capability, but also technical and political challenges. Whatever the ultimate fate of JLENS, the cruise missile threat and the need to address it remains an ongoing concern. 

Download PDF file of "JLENS Future Bleak, But Need for Capability Remains"

‘Close the Internet’: Why the Israel National Police is Recommending Avoiding the Internet for the Next Few Days (OR NOT!)

by Elad Popovich

April 6, 2016

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‘Close the Internet’: Why the Israel National Police is Recommending Avoiding the Internet for the Next Few Days (OR NOT!)

Elad Popovich

On April 6th 2016, Israel Defense Forces (IDF) radio station’s ‘communication, science and technology’ reporter tweeted that Israel’s National Police had recommended to its employees to avoid, as much as possible, using the internet over the next few days. The recommendation was supposedly one of the solutions to the upcoming annual cyber-attack against Israel known as “OpIsrael.” The first OpIsrael campaign was initiated on the eve of Israel’s Holocaust Remembrance Day in 2013 (which was April 7th).

The slogan and goal of the campaign is “erasing Israel from the internet” due to its alleged crimes against the Palestinian people. Since 2013, OpIsrael attacks, have been led by several cyber collectives such as ‘Anonymous,’ ‘AnonGhost,’, ‘Fallaga Team,’ and ‘RedCult.’ In the past the attacks mainly targeted Israeli government websites as well as Israeli telecommunications and financial services. Most of the attacks used techniques consisting of denial-of-service (DOS), web intrusion, website defacement, database hijacking, and admin panel takeover. In general, these campaigns were moderate and mostly failed to cause substantial damage to Israel.

So what, if anything changed this year?

Russia's Social Media vs. the Kremlin's Domestic Information War

Andreas Umland

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The West has only recently started to understand how deeply public opinion in the Russian Federation has become infected with rabidly anti-Western conspiratorial and Manichean worldviews. During the last fifteen years, Russia’s citizens have been exposed to relentless demonization of the Western world, purposeful instigation of hatred towards the United States, and heavily manipulated foreign affairs reporting in Kremlin-controlled mass media. Thousands of cynical politicians, corrupt journalists, irresponsible showmen, and bizarre pseudo-experts are telling the Russian people, day after day, how immoral, degraded and dangerous Western civilization and, above all, the United States are.

As a result, the majority of Russians now believe that the West is after them. Russia’s territory, natural resources, civilization and very existence are, according to a widespread belief, under deadly threat from Washington as well as its underlings in Europe and elsewhere. Given Russia’s large (and modernizing) nuclear arsenal, this phenomenon is perhaps the most dangerous development in world affairs in the post-Soviet era.

U.S. Special Operations Forces in the Philippines, 2001–2014 by RAND Corporation

April 6, 2016 

U.S. Special Operations Forces in the Philippines, 2001–2014 by Linda Robinson, Patrick B. Johnston, and Gillian S. Oak, RAND Corporation

This report examines the 14-year experience of U.S. special operations forces in the Philippines from 2001 through 2014. The objective of this case history is to document and evaluate the activities and effects of special operations capabilities employed to address terrorist threats in Operation Enduring Freedom — Philippines through (1) training and equipping Philippine security forces, (2) providing operational advice and assistance, and (3) conducting civil–military and information operations. The report evaluates the development, execution, and adaptation of the U.S. effort to enable the Philippine government to counter transnational terrorist groups.

An average of 500 to 600 U.S. Army, Navy, Air Force, and Marine Corps special operations units were employed continuously under the command of a joint special operations task force. They provided training, advice, and assistance during combat operations to both Philippine special operations units and selected air, ground, and naval conventional units; conducted civil–military and information operations on Basilan, in the Sulu archipelago, and elsewhere in Mindanao; provided intelligence, surveillance, reconnaissance, medical evacuation, and emergency care; aided planning and intelligence fusion at joint operational commands and force development at institutional headquarters; and coordinated their programs closely with the U.S. embassy country team. The authors conclude that Operation Enduring Freedom — Philippines contributed to the successful degradation of transnational terrorist threats in the Philippines and the improvement of its security forces, particularly special operations units. It identifies contributing and limiting factors, which could be relevant to the planning and implementation of future such efforts.

Key Findings