*** These 25 Companies Are More Powerful Than Many Countries Going stateless to maximize profits, multinational companies are vying with governments for global power. Who is winning?

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BY PARAG KHANNA

At first glance, the story of Accenture reads like the archetype of the American dream. One of the world’s biggest consulting companies, which commands tens of billions of dollars in annual revenues, was born in the 1950s as a small division of accounting firm Arthur Andersen. Its first major project was advising General Electric to install a computer at a Kentucky facility in order to automate payment processing. Several decades of growth followed, and by 1989, the division was successful enough to become its own organization: Andersen Consulting.

Yet a deeper look at the business shows its ascent veering off the American track. This wasn’t because it opened foreign offices in Mexico, Japan, and other countries; international expansion is pro forma for many U.S. companies. Rather, Andersen Consulting saw benefits—fewer taxes, cheaper labor, less onerous regulations — beyond borders and restructured internally to take advantage of them. By 2001, when it went public after adopting the name Accenture, it had morphed into a network of franchises loosely coordinated out of a Swiss holding company. It incorporated in Bermuda and stayed there until 2009, when it redomiciled in Ireland, another low-tax jurisdiction. 

Today, Accenture’s roughly 373,000 employees are scattered across more than 200 cities in 55 countries. Consultants parachute into locations for commissioned work but often report to offices in regional hubs, such as Prague and Dubai, with lower tax rates. To avoid pesky residency status, the human resources department ensures that employees don’t spend too much time at their project sites.

Welcome to the age of metanationals: companies that, like Accenture, are effectively stateless. When business and strategy experts Yves Doz, José Santos, and Peter Williamson coined the term in a 2001 book, metanationals were an emerging phenomenon, a divergence from the tradition of corporations taking pride in their national roots. (In the 1950s, General Motors President Charles Wilson famously said, “What was good for our country was good for General Motors, and vice versa.”) Today, the severing of state lifelines has become business as usual.

ExxonMobil, Unilever, BlackRock, HSBC, DHL, Visa—these companies all choose locations for personnel, factories, executive suites, or bank accounts based on where regulations are friendly, resources abundant, and connectivity seamless. Clever metanationals often have legal domicile in one country, corporate management in another, financial assets in a third, and administrative staff spread over several more. Some of the largest American-born firms — GE, IBM, Microsoft, to name a few — collectively are holding trillions of dollars tax-free offshore by having revenues from overseas markets paid to holding companies incorporated in Switzerland, Luxembourg, the Cayman Islands, or Singapore. In a nice illustration of the tension this trend creates with policymakers, some observers have dubbed the money “stateless income,” while U.S. President Barack Obama has called the companies hoarding it America’s “corporate deserters.”

** Politicians cannot bring back old-fashioned factory jobs

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THE vices are what strike you. The Mercedes AMG factory in Brixworth, a town in England’s midlands, is a different world from that of the production line of yore. Engine making was once accompanied by loud noises and the smoke and smells of men and machinery wrestling lumps of metal. Here things are quiet and calm. Skilled mechanics wield high-tech tools amid operating-theatre cleanliness as they work on some of the best racing-car engines in the world. Banks of designers and engineers sit in front of computers nearby. The only vestige of the old world are the vices. There is one on every work bench. At some point, making things of metal requires holding parts still, and nothing better than the vice has come along.

Manufacturing exerts a powerful grip on politicians and policymakers in the rich world. It is central to what they want for their countries, they say; it needs to be brought home from abroad; it must be given renewed primacy at home. This is because it used to provide good jobs of a particular sort—jobs that offered decent and dependable wages for people, particularly men, with modest skills, and would do so throughout their working lives. Such jobs are much more scarce than once they were, and people suffer from the lack of them. In their suffering, they turn to politicians—and can also turn against them.

Hence Donald Trump’s promise to create “millions of manufacturing jobs”. Hence the vision articulated by George Osborne, Britain’s finance minister from 2010 to 2016, of “a Britain carried aloft by the march of the makers”, and the central role of making things in the “comprehensive industrial strategy” promised by the current prime minister, Theresa May. Hence calls from the EU for a European industrial revolution and the need for things to be “Made in France” identified by Marine le Pen, leader of the country’s National Front.

The problem with such rhetoric is that manufacturing has not really gone away. But nor has it held still. The vice has gone unreplaced, but in almost everything else there has been change aplenty. Some processes that used to be tightly held together are now strung out across the world; some processes that used to be quite separate are now as close as the workers and designers who share the shop floor in Brixworth. Assembling parts into cars, washing machines or aircraft adds less value than once it did; design, supply-chain management, aftercare, servicing and the like add much more.

India’s Naxalite Insurgency: History, Trajectory, and Implications for U.S.-India Security Cooperation on Domestic Counterinsurgency

By Thomas F. Lynch III

The pace of U.S.-India defense cooperation over the past decade—and especially the past 2 years—has been unprecedented and impressive in many areas. These areas include defense technology cooperation, the discussion of a framework for military-to-military agreements, and the expansion of joint military exercises. U.S.-India defense cooperation, however, will remain limited in critical areas where India’s historical independent interests remain firm. Among these areas of Indian reserve include strategic autonomy, the imperatives of domestic federalism, and the preference for a go-slow approach toward redressing civil unrest. Attemapts by U.S. policymakers to press harder in these areas will likely prove counterproductive.

India’s long-running class-based, economic insurgency—the Naxalite insurgency (or Community Party of India [CPI]-Maoist insurgency)—is a case study in which external security

partnerships will remain limited, if not mostly unwelcomed, in New Delhi. Known as “the greatest domestic security threat faced by India” from 2006 to 2011, the Naxalite insurgency

has receded and largely been contained—albeit still far from eliminated—as of 2016. India’s security response to the Naxalite insurgency from 2004 to 2015 demonstrates that New Delhi will prefer limited interaction with external security partners when addressing matters of domestic counterinsurgency.

With this insight, U.S. policymakers should not expect that New Delhi will accept direct assistance for its domestic counterinsurgency units in the foreseeable future, and the United

Indian Financial Sector : Structure, Trends and Turns

Partha Ray ; Rakesh Mohan

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. 

Summary: 

This paper traces the story of Indian financial sector over the period 1950–2015. In identifying the trends and turns of Indian financial sector, the paper adopts a three period classification viz., (a) the 1950s and 1960s, which exhibited some elements of instability associated with laissez faire but underdeveloped banking; (b) the 1970s and 1980s that experienced the process of financial development across the country under government auspices, accompanied by a degree of financial repression; and (c) the period since the 1990s till date, that has been characterized by gradual and calibrated financial deepening and liberalization. Focusing more the third period, the paper argues that as a consequence of successive reforms over the past 25 years, there has been significant progress in making interest and exchange rates largely market determined, though the exchange rate regime remains one of managed float, and some interest rates remain administered. Considerable competition has been introduced in the banking sector through new private sector banks, but public sector banks continue have a dominant share in the market. Contractual savings systems have been improved, but pension funds in India are still in their infancy. Similarly, despite the introduction of new private sector insurance companies coverage of insurance can expand much further, which would also provide greater depth to the financial markets. The extent of development along all the segments of the financial market has not been uniform. While the equity market is quite developed, activities in the private debt market are predominantly confined to private placement form and continue to be limited to the bluechip companies. Going forward, the future areas for development in the Indian financial sector would include further reduction of public ownership in banks and insurance companies, expansion of the contractual savings system through more rapid expansion of the insurance and pension systems, greater spread of mutual funds, and development of institutional investors. It is only then that both the equity and debt markets will display greater breadth as well as depth, along with greater domestic liquidity. At the same time, while reforming the financial sector, the Indian authorities had to constantly keep the issues of equity and efficiency in mind.

Pakistani crackdown: One hand works to neutralize the other

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James M. Dorsey

This post is hosted on the Huffington Post’s Contributor platform. Contributors control their own work and post freely to our site. If you need to flag this entry as abusive, send us an email.

Pakistan has put one of the world’s most wanted men under house arrest in a half-hearted crackdown on a militant group with close ties to the military and intelligence in a bid to persuade President Donald J. Trump from adding the country to those whose citizens were last week banned from travelling to the United States.

Pakistani media reports and analysts said the move against Hafez Muhammad Saeed, a leader of the banned group Lashkar-e-Taiba (LeT) and its alleged front, Jamaat-ud-Din (JuD), came after US officials days before the inauguration of Mr. Trump gave Pakistan until January 31 to respond to complaints by the Bangkok-based Asia/Pacific Group on Money Laundering (APG) about various JuD financial transactions.

Mr. Saeed is believed to be among others responsible for the 2008 attacks on 12 targets in Mumbai, including the Taj Mahal Hotel, a train station, a café and a Jewish centre. Some 164 people were killed and more than 300 wounded. The US government has a bounty of $10 million on Mr. Saeed for information leading to his capture.

Writing in The News, Pakistani investigative reporter Azaz Syed said US officials had told Pakistan’s ambassador in a meeting on January 11 that “if the objections raised in the report were not addressed, the US may put Pakistan in the blacklist of the countries in the International Cooperative Review Group (ICRG).”

Apparently pre-warned that action may be taken against him, Mr. Saeed suggested during a press conference in Islamabad three days later that JuD may start operating under a new name, a practice frequently adopted by militant groups with government acquiescence. Mr. Saeed hinted that the new name would be Tehreek-e-Azadi-e-Kashmir (Kashmir Freedom Movement).

Mr. Syed, in a telephone interview alongside other analysts, said the move against Mr. Saeed, several other JuD leaders, and the group itself, were cosmetic. The symbolism was evident in the fact that Mr. Saeed was confined to his home in Lahore that was declared a sub-jail rather than carted off to prison.

The symbolism was also reflected in public displays such as the removal of JuD flags from streets and the hoisting of Pakistani flags at the group’s 81-hectar headquarters in Muridke, a city of two and three-storey pillboxes famous for its fruits and vegetables 22 kilometres north of Lahore. The International Crisis Group has reported that the complex which contains an ultra-conservative religious school and housing for 3,000 students and staff was built in 1998 with Saudi funding.

Trump should go after terrorism in Pakistan: Karzai

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Suhasini Haidar

Days after losing two relatives in the Kandahar Governor’s house bomb blast, former Afghan President Hamid Karzai said the incoming U.S. President must keep the promises on ending terror camps in Pakistan that President Obama failed to.

Mr. Karzai confirmed claims made by his former aide Aimal Faizi, who wrote in The Hindu this week about letters President Obama had written to then-President Karzai in 2012, where he had expressly promised to “degrade safe havens” in Pakistan, particularly for the Haqqani group and groups like the Lashkar-e-Taiba that carried out attacks in Afghanistan.

“He [Mr. Obama] gave many such promises to me, and my disappointment with him was the reason for the difficulties in our [U.S.-Afghanistan] relationship,” Mr. Karzai said in an interview on Friday.

“If they were targeting extremism, not Afghans, they knew where it was coming from. It was coming from beyond our borders, [from Pakistan]. That’s where they should have gone, that’s where President Trump should go. I don’t mean war, I mean political action there must get it right, in Pakistan,” he added.

The former Afghan President had been in India for a conference, but had also been attending to his cousin, businessman Hashim Karzai, who had been flown to India for treatment after he was grievously wounded in a bomb blast on January 10 at the Governor’s guest house in Kandahar.

Mr. Hashim Karzai succumbed to his injuries on Monday, and another relative of former President Karzai: Afghan diplomat Yama Quraishi had died on the spot, along with five UAE diplomats who were present when a powerful blast believed to have been hidden in the furniture ripped through their meeting room. The governor of Kandahar and the UAE envoy to Kabul were also injured in the attack.

The Kandahar blast has set off a massive blame-game in the region, with Afghanistan blaming the Haqqani group and Pakistan for the blast, a charge India concurred with in its condemnation of the blast.

The Taliban, however, denied any involvement it the attack. Speculation has grown that the UAE diplomats were targeted as a ‘warning’ over India and UAE coming closer, with Crown Prince and deputy supreme commander Mohammed Bin Zayed Al Nahyan expected in India next week as the Republic Day Chief Guest.

The South China Sea – Some Fundamental Strategic Principles

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With the incoming administration likely to grapple early with South China Sea issues, the CSIS Southeast Asia Program, directed by Dr. Amy Searight, worked in collaboration with other Asia colleagues at CSIS—Dr. Michael Green, Senior Vice President for Asia and Japan Chair; Dr. Zack Cooper, Fellow, Japan Chair; Bonnie Glaser, Senior Adviser for Asia and Director, China Power Project; Andrew Shearer, Senior Adviser on Asia-Pacific Security; and Greg Poling, Director Asia Maritime Transparency Initiative—to provide the analytical context and some fundamental principles that should guide strategic thinking on South China Sea policy.

A critical and early Chinese test of U.S. resolve is likely to come in the South China Sea, where Washington has struggled to respond effectively to assertive Chinese behavior. 

Enduring U.S. interests—freedom of navigation and overflight, support for the rules-based international order, and the peaceful resolution of disputes—are at risk in the region. U.S. goals to uphold regional alliances and partnerships, defend international rules and norms, and maintain a productive relationship with China remain valid. China has seized the initiative in the South China Sea, however, and the United States needs to revamp its strategy to reverse current trends and escape the trap of reactive and ineffectual policymaking. To this end, the new administration should perform an early, top-down, and thorough strategic review to enable greater consistency and effectiveness in U.S. South China Sea policy.

China is undertaking a persistent, long-term effort to establish control over the South China Sea. Under President Xi Jinping, Beijing has undertaken more assertive policies that have greatly improved Beijing’s position in the South China Sea. China remains uncompromising on sovereignty, has increased its capability to enforce its de facto control in disputed areas, and has sought to advance its claims while staying below the threshold for direct military conflict with the United States. 

China has steadily built capabilities and infrastructure, most notably military facilities on artificial islands, that enable greater control of the South China Sea. The growing size and capability of the Chinese air force, navy, and coast guard allow Beijing to consistently monitor and exercise de facto control over most of the South China Sea. China’s island outposts will increase this advantage as Chinese aircraft, ships, and paramilitary vessels will be able to rest and resupply in the southern portion of the South China Sea. 

The Death of TPP: The Best Thing That Ever Happened to China

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Earl Anthony Wayne

President Trump’s decision to withdraw from the Trans-Pacific Partnership weakens America’s strategic-economic position in East Asia. Unless the Trump administration presents a strategy that can create the kind of economic opportunity and influence that the TPP would have generated, the decision may effectively leave the field of action to China. 

China is actively pursuing its own geostrategic economic agenda by creating regional institutions and programs in an effort to expand its international role. President Trump and his advisors have made very clear their intention to take on those of China’s trade practices that harm the United States, but they also need to advance a strategy for the Asia-Pacific region. That strategy must go beyond China and create opportunities for U.S. industries to expand exports. It must also create U.S. jobs.

The United States has been losing its trading position relative to China. China increased its trading partnerships in Asia-Pacific markets at America’s expense between 2000 and 2015. World Bank data show that at least seventeen countries in the Asia-Pacific increased imports from China and decreased imports from America—including every member nation of the TPP. The TPP economies comprise 40 percent of the global GDP and one-third of world trade. Countries where the trade balance shifted include Canada, Japan and Mexico, which are the United States’s largest trading partners outside of China. The U.S. trade deficit with China, one of President Trump’s campaign issues, ballooned in the same period from $84 billion to $367 billion. The TPP offered the prospect of reinvigorating American trade and economic influence with partner countries in the Asia-Pacific. It set high-standard, science-based norms, rules and procedures to help the United States regain trade momentum. By defining standards for all member countries, the TPP would also have influenced the practices of nonmembers, including China.

To be sure, the TPP was in danger long before President Trump formally withdrew from the trade agreement, but the strategic economic and geostrategic goals behind the TPP remain valid: to better integrate the United States in the quickly growing Asia-Pacific economy. Much of value was agreed during negotiations, which is why many U.S. companies, exporters and importers strongly supported the TPP. We can fairly ask: what alternative arrangements does the Trump administration have in mind to expand markets and reshape beneficial supply chains for U.S. products and services?

Hezbollah Is Winning the War in Syria

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Colin P. Clarke,Chad C. Serena

As the Syrian Civil War approaches its sixth year, the country has been destroyed beyond repair. Even if the international community can cobble together a negotiated settlement that brings an end to the violence, overwhelming damage has been done. Since the war began in 2011, an estimated four hundred thousand Syrians have been killed, almost five million have fled the country and more than six million have been internally displaced. Most of Syria’s major cities—including its former commercial hub Aleppo—have been reduced to rubble.

Many have lost so much in the ongoing conflict, yet some have benefited. None have gained more than the Shiite terrorist group Hezbollah.

Hezbollah is a Lebanese militia group loyal to the legacy of the Iranian Revolution. It boasts a sophisticated fighting force and even controls key seats in Lebanon’s parliament. It is a prominent example of a hybrid threat, which is an insurgent or terrorist group that is able to fight—often against superior adversaries—relying on a mix of conventional and unconventional military capabilities. Hezbollah also maintains a vast social-services network throughout Lebanon that would be the envy of some small nation-states.

Led by Hassan Nasrallah, Hezbollah has long maintained ties to Iran and Syria, which effectively occupied parts of Lebanon between 1976 and 2005. For years, Syria was both a conduit through which Iran transferred weapons to Hezbollah and a place where some of its most influential leaders resided.

Hezbollah has experienced mission creep in Syria, especially as circumstances have worsened for the Assad regime in the nascent stages of the conflict. From an advise-and-assist type of role, Hezbollah fighters progressed to direct training of Syrian militias and full-fledged combat—including a ground offensive in April 2013 in Qusayr in the Homs province. In late December, Hezbollah helped the Assad regime retake Aleppo.

A Shakeup in Russia’s Top Cybercrime Unit

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Sergey Mikhaylov

A chief criticism I heard from readers of my book, Spam Nation: The Inside Story of Organized Cybercrime, was that it dealt primarily with petty crooks involved in petty crimes, while ignoring more substantive security issues like government surveillance and cyber war. But now it appears that the chief antagonist of Spam Nation is at the dead center of an international scandal involving the hacking of U.S. state electoral boards in Arizona and Illinois, the sacking of Russia’s top cybercrime investigators, and the slow but steady leak of unflattering data on some of Russia’s most powerful politicians.

In a major shakeup that could have lasting implications for transnational cybercrime investigations, it’s emerged that Russian authorities last month arrested Sergey Mikhaylov — the deputy chief of the country’s top anti-cybercrime unit — as well as Ruslan Stoyanov, a senior employee at Russian security firm Kaspersky Lab. 

In a statement released to media, Kaspersky said the charges against Stoyanov predate his employment at the company beginning in 2012. Prior to Kaspersky, Stoyanov served as deputy director at a cybercrime investigation firm called Indrik, and before that as a major in the Russian Ministry of Interior’s Moscow Cyber Crime Unit.

In a move straight out of a Russian spy novel, Mikhaylov reportedly was arrested while in the middle of a meeting, escorted out of the room with a bag thrown over his head. Both men are being tried for treason. As a result, the government’s case against them is classified, and it’s unclear exactly what they are alleged to have done.

However, many Russian media outlets now report that the men are suspected of leaking information to Western investigators about investigations, and of funneling personal and often embarrassing data on Russia’s political elite to a popular blog called Humpty Dumpty (Шалтай-Болтай).

H-1B Visas: How Donald Trump Could Change America’s Skilled Worker Visa Rules

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NEWLEY PURNELL

President Donald Trump signs an executive order in the Oval Office of the White House in Washington, DC, January 23, 2017. PHOTO: SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES

During his campaign, President Donald Trump assailed a skilled-worker visa program used to send foreigners to the U.S., and in his inaugural speech Friday he said the country would “follow two simple rules; buy American and hire American.”

Indian outsourcing firms are already preparing for potential changes to visa rules, which could present a challenge because they send thousands of workers to the U.S. every year via the H-1B program.

MORE IN H1-B VISA 

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India’s Hard-Working Expat Army - The Numbers

So how much, and how quickly, could Mr. Trump change the regulations?

A significant shakeup would likely need to be approved by Congress, though there are some steps Mr. Trump could take himself immediately, analysts say.

There has been an uptick in proposed immigration bills of late. Policymakers from both sides of the aisle have likely been emboldened by Mr. Trump’s pledge to protect American workers.

“It is clear that there is growing momentum to change the H-1B and visa laws,” said Peter Bendor-Samuel, chief executive of Dallas, Texas-based technology management consulting firm Everest Group, which analyzes the outsourcing industry.

New laws would probably result in more robust restrictions targeting foreign firms like those in India’s $108 billion outsourcing industry, Mr. Bendor-Samuel said.

Last week, two prominent senators, Iowa Republican Chuck Grassley and Illinois Democrat Richard Durbin, said they planned to re-introduce a bill from 2007 that would require all employers seeking to hire workers on H-1B visas to make a “good faith effort” to hire Americans first.

Trump’s New National Security Directives

National security directives are among the most important tools the President has for managing his administration and for conducting U.S. policy on national defense, foreign relations, intelligence, nuclear weapons and other matters of consequence.

At the end of last week, President Trump publicly issued his first three national security directives, designated National Security Presidential Memoranda (NSPMs).

NSPM-1 is entitled “Rebuilding the U.S. Armed Forces.” It requires a “readiness review”, and calls for a new Nuclear Posture Review and a Ballistic Missile Defense Review. In a nod towards legal and fiscal reality, it says “This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.”

NSPM-2 is devoted to the “Organization of the National Security Council and the Homeland Security Council.” It modifies the NSC structure towards something resembling a compromise between or a hybrid of the Obama and Bush NSC structures, and borrows language from the Bush directive. Notably, however, it elevates “the Chief Strategist,” i.e. Stephen K. Bannon of Breitbart News, to membership in the NSC Principals Committee. This is a striking departure from past practice that injects an extreme political perspective into the national security policymaking process. At the same time, the Trump directive diminishes the NSC role of the Chairman of the Joint Chiefs of Staff and the Director of National Intelligence.

NSPM-3 calls for a “Plan to Defeat the Islamic State of Iraq and Syria.”

The directives include a certain amount of sloganeering and chest thumping that is familiar in electoral campaign documents, but somewhat unusual in presidential directives. So, President Trump writes, in order to achieve “peace through strength,” US Armed Forces must be “rebuilt.” And “there can be no accommodation or negotiation” with the Islamic State.

But what is even more unusual is that the Trump White House released all of these directives and ordered publication of each of them in the Federal Register. It is, one might say, an act of unprecedented transparency.

It is technically true that “any presidential determination or directive can be published in the Federal Register, regardless of how it is styled,” as a 2000 opinion from the Justice of Department Office of Legal Counsel stated.

But for the past several decades, national security directives “were not required to be published in the Federal Register, were usually security classified at the highest level of protection, and were available to the public [only] after a great many years had elapsed, usually at the official library of the President who had approved them,” the Congressional Research Service said in a 2008 report.

Americans and Cybersecurity

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BY KENNETH OLMSTEAD AND AARON SMITH

Many Americans do not trust modern institutions to protect theiar personal data – even as they frequently neglect cybersecurity best practices in their own personal lives

Cyberattacks and data breaches are facts of life for government agencies, businesses and individuals alike in today’s digitized and networked world. Just a few of the most high-profile breaches in 2016 alone include the hacking and subsequent release of emails from members of the Democratic National Committee; the release of testing records of dozens of athletes conducted by the World Anti-Doping Agency; and the announcement by Yahoo that hackers had accessed the private information associated with roughly 1 billion email accounts. Finally, in late 2016 and early 2017 U.S. intelligence agencies (the FBI, CIA and Department of Homeland Security) both issued statements and testified before Congress that the Russian government was involved in the hack of the DNC with the aim of influencing the 2016 presidential election.

Previous Pew Research Center studies of the digital privacy environment have found that many Americans fear they have lost control of their personal information and many worry whether government agencies and major corporations can protect the customer data they collect. As part of this ongoing series of studies on the state of online privacy and security, the Center conducted a national survey of 1,040 adults in the spring of 2016 to examine their cybersecurity habits and attitudes. This survey finds that a majority of Americans have directly experienced some form of data theft or fraud, that a sizeable share of the public thinks that their personal data have become less secure in recent years, and that many lack confidence in various institutions to keep their personal data safe from misuse. In addition, many Americans are failing to follow digital security best practices in their own personal lives, and a substantial majority expects that major cyberattacks will be a fact of life in the future. Among the key findings:

Gen. McChrystal Is Right – In Fact, Russian Leaders Think They Already Are At War

By Oscar Jonsson

General Stanley McChrystal perhaps shocked many when he spoke out on the chance of a war in Europe – aside from the continuing conflict in Ukraine. He stated that “A European war is not unthinkable. People who want to believe a war in Europe is not possible might be in for a surprise.” He is absolutely correct, and it is with Russia.

The common idea on how this will happen is that increased activity can lead to incidents and unintentional escalation. That is, however, only focusing on the direct issues. The underlying issue is that Russia believes itself to be in a war with the West, albeit, for now, a non-military one (coincidentally the topic of my PhD).

The economic sanctions imposed on Russia following the invasion of Ukraine are not perceived as a moderate response from the West to a breach of international law. Rather, as the Russian Foreign Minister Lavrov stated, they are seen as an attempt to provoke regime change in Russia. Moreover, this perception has a longer story than economic sanctions.

The Russian regime is convinced that the West has become so good at mastering the technique of “Color Revolutions” that they can induce regime change where it suits their geopolitical interests. The technique includes an enormous informational offensive, funding NGOs, using special services, and diplomatic pressure – all in the name of democracy.

This was seen to be the case in the Color Revolutions, the Arab Spring, and in Ukraine 2014, when citizens revolted against with pro-Western and democratic ambitions (even if did not turn out that well). This was also seen to be the case in the protests over the Russian elections in 2011-2012, when Putin stated that the protesters were paid from abroad, and that the Color Revolutions were a tested scheme for destabilizing a society.

The regime is thus convinced that the West is after them, albeit with non-military means. 

This does have a logic for the regime though, Western democracy’s support has often gone to the regime’s biggest internal threats – the opposition and civil society. The fear is strengthened by recalling that the 26 years of Russian independence were full of state weakness, with financial and social crises and Russia de facto not controlling its territory between 1991-1999 (Chechnya).

A U.S. Army Formula Shows What Sarin Gas Would Do to Your Neighborhood

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Joseph Trevithick

Syria’s brutal civil war has put the horrors of chemical weapons back on many people’s minds. But it’s still difficult to imagine the actual effects and scale of attacks with these terrible weapons.

Just how much of sarin — a deadly nerve agent commonly mentioned in reports about Syria — would it take to kill everyone in your neighborhood?

Thanks to the Freedom of Information Act, War Is Boring can offer some help in answering that morbid question. We obtained a U.S. Army training manual from 1957 that has a simple formula to figure out the answer.

Thankfully, the results demonstrate how difficult it would be to launch an effective gas attack on a prepared military unit. But there’s little comfort in that. What makes sarin a relatively inefficient battlefield weapon makes it frightfully lethal to civilians.

And that’s an important lesson, as armies in the world still possess — and occasionally use — such weapons to horrendous effect.

Though a feature of earlier conflicts, chemical weapons were a particularly grim hallmark of World War I. The aftermath pushed many countries, in Europe especially, away from the idea of fighting with toxic liquids and gasses — at least against each other.

Though none of the noxious weapons saw combat on a worldwide scale during World War II, most armies involved had chemical arsenals at the ready, just in case. This remained true after the war ended.

As the Cold War took off, the United States rapidly expanded its stockpiles of both chemical and biological weapons in case of a new global conflict with the Soviet Union and its allies.

“Biological and chemical warfare have two principle objectives,” the narrator in one now declassified U.S. Navy training film explained. These are “to reduce food by destroying his crops and his food-producing farm animals and to incapacitate the enemy’s armed forces and that portion of his human population that directly supports them.”

One of the Pentagon’s primary chemical weapons was sarin, or as the U.S. military codenamed it, G.B. In 1938, the German firm I.G. Farben — which also developed Zyklon B, used in concentration camp gas chambers — first synthesized the compound as part of research into advanced pesticides.

POLITICAL AIRPOWER, PART III: BOOTS OFF THE GROUND

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MIKE BENITEZ AND MIKE PIETRUCHA

Editor’s Note: This is the third installment of the “Political Airpower” series. The first two installments are: “Say No to the No-Fly Zone” and “The Seductive Allure of Precision Weapons.”

“Even small groups of combatants, such as a handful of enemy troops manning a mortar position, may eventually be deemed worthy of a precision-guided munition in some circumstances.”

Though the above statement sounds like some visionary revelation, it is not. It is not even from the 20th century. The above was in a late 2001 report on airpower application against terrorism. It perfectly captures the essence of how quickly the conditions surrounding airpower have changed since — and will continue to change. In addition to providing hundreds of thousands of air support sorties in Iraq and Afghanistan, airpower birthed a new way of war. Under the auspice of “drone strikes,” conventional, special operations, and remotely piloted aircraft have conducted presumably thousands of airstrikes against so-called “high-value” targets — the hammer of airpower to the special operator’s anvil. The United States has used airstrikes to conduct military operations in the absence of large numbers of ground troops, avoiding risk and preserving political capital — a tool that keeps boots off the ground.

The playbook has become well-worn, mainstream, and almost mundane in repetition: Collect intelligence, work the way up the hierarchy of leadership, then use an airstrike to decapitate some lieutenant, shadow governor, or other high value individual. On a tactical scale, we succeeded in removing some valuable and capable pieces from the board. These minor victories serve a critical nonmilitary purpose — allowing leadership and the public to view the Long War though “victory-tinted lenses” that tend to keep the politics of warfare (and the metrics of success) within the news cycle. However, from a strategic viewpoint, even an effort that we declare to be tactically successful may not have been effective at all in inching closer to victory in battle or resolution of conflict.

Today the Taliban, have more power and hold more ground than they did in 2001 and the air-centric counter-Islamic State (ISIL) operations have surpassed two years and $10 billion spent, arguably without significant progress — despite seemingly contradictive statements of continual, strong advances against a resilient adversary. It is easy to jump on the bandwagon and proclaim that airpower has once again failed us, which incites advocates of the extreme opposite view that airpower alone can win wars. The truth is somewhere in between, but airpower is not the culprit — it is the victim.

Hybrid Warfare At Sea

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 By Shawn Woodford

During his Senate confirmation hearing on January 11th, Secretary of State-designate Rex Tillerson stated that the Trump administration is “going to have to send China a clear signal that, first, the island-building [in the South China Sea] stops and, second, your access to those islands also is not going to be allowed.” Chinese state-run media outlets responded with vows to counter any attempts by the United States to block access to the artificial islands China is constructing in the South China Sea.

The possibility of a clash between the U.S. and China in the Western Pacific has been the subject of discussion and analysis for several years now. In the current issue of the U.S. Naval Institute’s journal, Proceedings, Admiral James Stavridis (ret.) takes a look at the potential challenges posed by maritime “hybrid warfare” capabilities. Noting that current assessments of hybrid war focus overwhelmingly on land warfare, he points out that both China and Iran have demonstrated the ability to apply asymmetrical approaches to sea warfare as well.

Stavridis outlines what a hybrid war at sea might look like.

Given its need to appear somewhat ambiguous to outside observers, maritime hybrid warfare generally will be conducted in the coastal waters of the littorals. Instead of using force directly from identifiable “gray hull” navy platforms, hybrid warfare will feature the use of both civilian vessels (tramp steamers, large fishing vessels, light coastal tankers, small fast craft, and even “low slow” skiffs with outboard engines). It also will be conducted and likely command-and-controlled from so-called white hulls assigned to the coast guards of given nations. Both the Chinese and the Iranians are using their coast guards (and revolutionary guards in the case of Iran) in this fashion in the South China Sea and Arabian Gulf, respectively.

Extrapolating from this, Stavridis argues that

The United States must start to consider its responses to hybrid warfare at sea, which may require developing new tactics and technologies, working closely with allies and partners, and building U.S. hybrid capability to counter its deployment by other nations and eventually transnational actors.

TRAINING “NO HUDDLE” JOINT OFFENSE

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CHRIS TELLEY AND SAMUEL MEMBRERE

Deputy Secretary of Defense Bob Work wants warfighters to kill airplanes from submarines and ships from the land. We can’t get there from here with the current knowledge level of those expected to take these advance firing or sensing actions.

Since October, the Department of Defense has attempted to nail down what the Army’s new multi-domain battle concept will entail and what technologies are needed to support it. Though Mr. Work has lauded the Army’s answer to his requirement, the ground components are not fully aligned with the Air Force, as evidenced by comments from from Army Training and Doctrine Command’s Gen. David Perkins and Air Force chief of staff Gen. David Goldfein. Language from the Air Force Chief, reinforced by other executive thoughts on air superiority, seem to suggest the air component has the monolithic solution. Aside from Pacific Command’s Adm. Harris, the Navy seems quiet on multi-domain battle, but that won’t likely last. What can field commanders do to reach outside of their lanes for joint integration while the institutional side of our organizations figure out whose doctrine writers are smarter?

It is time to go back to school by standing up multi-domain training programs across the force. Future combat leaders will need a common understanding that enables flexibility among unique joint teams and allows them to perform mission command on the fly. The diversity of possible enablers also demands that we alter our learning models to empower multifunctional leaders who can fight with whatever is on hand. This effort should be concentrated close to the front at operational headquarters in Europe and the Pacific.

The U.S. Army’s concept development office says that tomorrow’s combat will be faster and that the Army will have to fight surrounded and more dispersed. Swift actions and scattered units means cumbersome planning processes — with laptops, cables, white boards, and coffee makers — become as much a liability as it was once a strength. A future commander fighting a battle in multiple domains won’t have the luxury of thoroughly planned access to maritime, air, cyber, and space assets. Leaders will have to integrate and synchronize on the fly. They’ll have to call audibles.

In American football, an audible is a play called at the line of scrimmage to change from the play that was called in the huddle or called in lieu of a huddle. It’s a pre-planned battle drill the team can execute with minimal communication. This model relies on everyone knowing both their part and that of everyone else in every possible configuration. A football team or combat unit that practices these actions enough knows how fast each team member is moving, at what target, and why. This knowledge is so reflexive that a leader’s single phrase can initiate a complex ballet of violence.

The expectation of such teamwork should be no surprise given the requirements of the Goldwater-Nichols Act and a historic desire for low-level integration dating to before the Korean conflict. At least for the Army, deep understanding of sister services is currently only really required of senior officers. Awareness of cueing sensors, targeting radars, tactical data networks, and aerial munitions is assumed or brushed aside as the responsibility of a higher headquarters. To extend our football metaphor, Army guards and tackles at the tactical level have little idea what the Navy running back will do. This is problematic in light of the “fracturing” expected of enemies who want to deny joint overmatch that relies on operational-level control.

Blended Retirement System 9 Big Changes Coming to Military Financial Education

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By Daniel

As part of the MCRMC report back in 2015 that advocated what we now know as the Blended Retirement System (BRS), the commission also recommended creation of more military financial education opportunities. This was to not only help servicemembers understand the new BRS, but also to help combat the troubling challenge of financial illiteracy that often has a negative impact on servicemembers’ personal lives and often spills over into professional duties. Given the lack of such financial education that most Americans including servicemembers receive, this requirement has the potential to be among the most impactful if it can help create lasting change that will stay with the servicemember their entire life!

Up to this point, the military provides only general financial advice, recognizing that unscrupulous financial salesmen would attempt to pressure young and financially inexperienced servicemembers into inappropriate financial products. While this issue is not without precedent, reality dictates a more hands-on approach is desperately needed. The most recent Blue Star Family survey reveals the serious financial concerns that servicemembers and their families have.

As previously investigated in a Financial Planning article, financial stress can often tragically be a major contributing factor into servicemembers’ suicides. Improving financial literacy can hopefully have a profound effect to help reduce these stressors.

The NDAA of 2016 lists many “financial literacy skills” upon which servicemembers are to be educated and trained at intervals during their Active and Reserve Component duty. The DoD refers to the intervals at which the education and training is to occur as “touch points.” Many of these as well as new training will now also cover the elements of the BRS.

I serve as a volunteer financial counselor and educator at my base and help to teach many similar classes already. They can be an incredible free resource to help educate you about financial topics and set you on the path to financial independence. If your location doesn’t already advertise about these classes contact your respective branch’s Financial Readiness Program offered through your base. There are both paid and volunteer financial counselors whose only job is to help you!

Random Thoughts on Practical Planning

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evin Marcusk

 

For fifteen years I was a planner assigned to division, corps, army, joint task force and alliance level headquarters. In U.S. Army speak I was - therefore - a REMF. That's military slang for Rear Echelon and I'll let you imagine what 'MF' means. Still, I tried to be a good REMF; my years in tank battalions/brigades always left me with an appreciation for the impact that these senior headquarters' plans had on the tactical unit. While I didn't always produce good plans, I did learn a lot. As I look forward to a post-Army life, I'm taking the time to record some of my own random thoughts on how to better plan. While these are written from a military background, perhaps to some degree they can also apply to other spheres. 

Don't make it too hard: There are all kinds of books, pamphlets, web sites and blogs dedicated to strategy in many forms. Some will just make your head hurt. However, planning is just problem solving. Be it industry or a military combatant command, planning is about defining the problem (s), identifying required facts and assumptions, and developing ways to solve that problem. No matter the psycho-babble on 'strategic planning' that has emerged over the years (much good, some bad) the essence of planning remains this: identify the problem and practical ways to solve it. This is hard enough - don't make it too hard by getting lost in the process or its philosophical underpinnings. Be practical - focus on problem solving. 

Know why you're planning: There's a difference between planning to decide and planning to execute. Planning to decide is focused up: what must the decision maker know in order to decide? Planning for a decision relies upon identifying a range of end states and the inherent advantages/disadvantages, costs and risks towards meeting those. A plan to decide focuses on answering these questions: What should we achieve, how much will it 'cost' (e.g. time, authorities, forces, risks to other operations, money) and is it worth this cost? Planning to execute is focused down: what must the executor know in order to execute? A plan to execute focuses on answering these questions: How will we achieve our objective and how will all our units efforts work together to do so? The form of your plan depends on the purpose of your plan -- don't confuse planning to decide with planning to execute. Know why you're planning and let that shape your plan. 

Focus on a range of end states - not a range of tactics: All too often we tend to form one end state, get that approved in mission analysis, and then present the decision maker with a range of courses of action. The flexibility or options are found in the 'how' -- not the 'what'. Planners need to focus decision makers on a range of endstates: some are larger - and take more time - some are limited, but quicker and require less resources. A practical example: if the end state for OPLAN 1003V (Invasion of Iraq) had been to "Emplace an Iraqi regime, responsive to its citizenry, and capable of stabilizing the region in keeping with U.S. interests" vice "Remove the regime", the ways/means of the operation would have been significantly different. Both end states may be valid -- but both lead to fundamentally different operations. Focus plenty of energy on identifying, analysing and comparing a range of end states: focus the decision maker on deciding between them. The courses of action to achieve them -- the 'how' -- will come later. Focus on a range of end states, not a range of tactics. 

Ancient Indus Civilization’s Adaptation To Climate Change

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BY EURASIA REVIEW

With climate change in our own era becoming increasingly evident, it’s natural to wonder how our ancestors may have dealt with similar environmental circumstances. New research methods and technologies are able to shed light on climate patterns that took place thousands of years ago, giving us a new perspective on how cultures of the time coped with variable and changing environments.

A new article in the February issue of Current Anthropology explores the dynamics of adaptation and resilience in the face of a diverse and varied environmental context, using the case study of South Asia’s Indus Civilization (c.3000-1300 BC).

Integrating research carried out as part of the Land, Water and Settlement project — part of an ongoing collaboration between the University of Cambridge and Banaras Hindu University — that worked in northwest India between 2007 and 2014, the article looks at how Indus populations in north-west India interacted with their environment, and considers how that environment changed during periods of climate change.

FBI Says It Will Keep Secret How It Broke Encryption on iPhones

WASHINGTON (AP) — The FBI on Monday defended its decision to withhold documents on how it unlocked an iPhone used by one of the San Bernardino, California, shooters, saying the information could be exploited by “hostile entities” if released to the public.

The Justice Department earlier this month released heavily censored records in response to a Freedom of Information Act lawsuit from The Associated Press, Vice Media and Gannett, the parent company of USA Today. Among the information withheld were details about how much the FBI paid last year to a third party to unlock the work phone of Syed Rizwan Farook, who along with his wife killed 14 people at a holiday party in December 2015, as well as the identity of that vendor.

In a court filing Monday that sought to justify those redactions, the Justice Department argued that the information it withheld, if released, could be seized upon by “hostile entities” who could develop their own “countermeasures” and interfere with the FBI’s intelligence gathering. The government also argued that disclosure “would result in severe damage to the FBI’s efforts to detect and apprehend violators of the United States’ national security and criminal laws through these very activities and methods.”

“The withheld information is also very specific in nature, provided during a specific time period, and is known to very few individuals,” Justice Department lawyers said.

The FBI in its most recent filing broadened the legal arguments it had used earlier this month, when it released about 100 pages of largely redacted documents, saying for the first time that national security was at risk and that the records were entirely exempt from disclosure under the law. It has moved to keep 23 additional pages fully secret.

The Obama administration had imposed a “foreseeable harm” standard for withholding records under the Freedom of Information Act, saying that “openness prevails” in the face of doubt and that “speculative or abstract fears” are not sufficient for withholding documents.

Assessing the Draft Cyber Executive Order

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By Charley Snyder, Michael Sulmeyer

Amidst the whirlwind of executive orders and presidential memoranda that have been in the news, it was easy to miss a purported draft of President Trump’s first executive order (EO) covering cybersecurity issues, leaked to the Washington Post and released on Friday, January 27. The order, titled “Strengthening U.S. Cyber Security and Capabilities,” calls for several 60- and 100-day assessments of the state of U.S. cybersecurity and the identification of areas of improvement. This mirrors the approach taken by President Obama, who ordered his own 60-day cyberspace review shortly after assuming office.

Our bottom line up front, assuming the text of this draft does not change, is that while the intent of the executive order represents a reasonable start to getting a handle on the cybersecurity challenges that await this administration, this appears to be another case where an executive order has not been coordinated with federal departments and agencies. Compared to other recent orders, this one is fairly tame—for example, we see no attempt to scale back U.S. compliance with international law. But that is a very low bar, albeit one that has been difficult for the new Administration to meet at times. Here, our concern is that the document’s authors are either unaware or dismissive of the substantial equities and capabilities of a broad swath of the government.

The biggest surprise is the absence of any mention of the FBI. We are not sure how to explain this, as the FBI and law enforcement secured an important role in cybersecurity early in the Obama Administration. Perhaps this is an omission that will be corrected in a later draft. However, if the FBI remains absent from this EO, they will be the agency with the most to lose out of this process. FBI zealously guards its role in investigating malicious cyber activities, and had been given a leading role in Obama-era policies, most recently in Presidential Policy Directive 41. Depriving them of a role in these reviews will be a significant reversal from past years.

At its core, this order loosely follows a traditional formula to estimate risk: assess the threat from adversaries, your vulnerability to that threat, and the consequences if the vulnerability is exploited. In essence, the Administration wants to get a better idea of our nation’s vulnerabilities and the threats it faces and to determine what tools we might have at our disposal to protect critical infrastructure from those adversaries. Here is our rundown of the draft, which we caution may very well change before it is finalized, along with some concluding thoughts on what the order leaves out.

Speed, agility seen as Israel’s edge in cyber-war

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BY SHOSHANNA SOLOMON 

Israel’s proven agility to come up with solutions quickly is one the key factors that puts the nation in a leading position in the battle against cyberattacks, said Erez Kreiner, a former director of information security at Israel’s Shin Bet security service.

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“We act as a speedboat as opposed to a naval carrier, and that is our advantage,” he said in an interview with The Times of Israel. “In the war against cybercrime you need immediate reactions.” Some countries are good at coming up with robust and thorough solutions over a period of time — the naval carriers. Israel’s advantage is its quick ingenuity in the face of new challenges, he said.

Cyber-challenges are moving very fast and becoming more and more intense, he said, and they are sponsored both by individual hacker groups and by nation states.

Kreiner, who was also a director at Israel’s National Cyber Security Authority, today heads his own cybersecurity consulting company.

As the world moves toward greater digitalization, it becomes more vulnerable to cyberattacks. At the end of 2015 hackers shut down power in Ukraine. In February 2016 more than $80 million was stolen from Bangladesh’s account at the Federal Reserve Bank of New York, and US intelligence services have blamed Russia for hacking attacks during the 2016 presidential election campaign.

“Definitions about what is considered a cyberattack and how many there are a day or a month vary,” he said. “What is important to note, however, is the intensity and sophistication of the attacks,” which have been growing over the years.

State-sponsored attacks are more intense than those perpetuated by individual hackers, he said: nations have more resources and less fear of being discovered. In addition, as opposed to conventional weapons, for cyberwarfare requires less investment and development times are faster.