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Taking Stock of WikiLeaks

Posted on 15 December 2010 by Editor

By George Friedman
Stratfor.com
December 14, 2010

Julian Assange has declared that geopolitics will be separated into pre-“Cablegate” and post-“Cablegate” eras. That was a bold claim. However, given the intense interest that the leaks produced, it is a claim that ought to be carefully considered. Several weeks have passed since the first of the diplomatic cables were released, and it is time now to address the following questions: First, how significant were the leaks? Second, how could they have happened? Third, was their release a crime? Fourth, what were their consequences? Finally, and most important, is the WikiLeaks premise that releasing government secrets is a healthy and appropriate act a tenable position?

Let’s begin by recalling that the U.S. State Department documents constituted the third wave of leaks. The first two consisted of battlefield reports from Iraq and Afghanistan. Looking back on those as a benchmark, it is difficult to argue that they revealed information that ran counter to informed opinion. I use the term “informed opinion” deliberately. For someone who was watching Iraq and Afghanistan with some care over the previous years, the leaks might have provided interesting details but they would not have provided any startling distinction between the reality that was known and what was revealed. If, on the other hand, you weren’t paying close attention, and WikiLeaks provided your first and only view of the battlefields in any detail, you might have been surprised.

Let’s consider the most controversial revelation, one of the tens of thousands of reports released on Iraq and Afghanistan and one in which a video indicated that civilians were deliberately targeted by U.S. troops. The first point, of course, is that the insurgents, in violation of the 1949 Geneva Conventions, did not go into combat wearing armbands or other distinctive clothing to distinguish themselves from non-combatants. The Geneva Conventions have always been adamant on this requirement because they regarded combatants operating under the cover of civilians as being responsible for putting those civilians in harm’s way, not the uniformed troops who were forced to distinguish between combatants and non-combatants when the combatants deliberately chose to act in violation of the Geneva Conventions.

It follows from this that such actions against civilians are inevitable in the kind of war Iraqi insurgents chose to wage. Obviously, this particular event has to be carefully analyzed, but in a war in which combatants blend with non-combatants, civilian casualties will occur, and so will criminal actions by uniformed troops. Hundreds of thousands of troops have fought in Iraq, and the idea that criminal acts would be absent is absurd. What is most startling is not the presence of potentially criminal actions but their scarcity. Anyone who has been close to combat or who has read histories of World War II would be struck not by the presence of war crimes but by the fact that in all the WikiLeaks files so few potential cases are found. War is controlled violence, and when controls fail — as they inevitably do — uncontrolled and potentially criminal violence occurs. However, the case cited by WikiLeaks with much fanfare did not clearly show criminal actions on the part of American troops as much as it did the consequences of the insurgents violating the Geneva Conventions.

Only those who were not paying attention to the fact that there was a war going on, or who had no understanding of war, or who wanted to pretend to be shocked for political reasons, missed two crucial points: It was the insurgents who would be held responsible for criminal acts under the Geneva Conventions for posing as non-combatants, and there were extraordinarily few cases of potential war crimes that were contained in the leaks.

The diplomatic leaks are similar. There is precious little that was revealed that was unknown to the informed observer. For example, anyone reading STRATFOR knows we have argued that it was not only the Israelis but also the Saudis that were most concerned about Iranian power and most insistent that the United States do something about it. While the media treated this as a significant revelation, it required a profound lack of understanding of the geopolitics of the Persian Gulf to regard U.S. diplomatic cables on the subject as surprising.

U.S. Defense Secretary Robert Gates’ statement in the leaks that the Saudis were always prepared to fight to the last American was embarrassing, in the sense that Gates would have to meet with Saudi leaders in the future and would do so with them knowing what he thinks of them. Of course, the Saudis are canny politicians and diplomats and they already knew how the American leadership regarded their demands.

There were other embarrassments also known by the informed observer. Almost anyone who worries about such things is aware that Italian Prime Minister Silvio Berlusconi is close to the Russians and likes to party with young women. The latest batch of leaks revealed that the American diplomatic service was also aware of this. And now Berlusconi is aware that they know of these things, which will make it hard for diplomats to pretend that they don’t know of these things. Of course, Berlusconi was aware that everyone knew of these things and clearly didn’t care, since the charges were all over Italian media.

I am not cherry-picking the Saudi or Italian memos. The consistent reality of the leaks is that they do not reveal anything new to the informed but do provide some amusement over certain comments, such as Russian Prime Minister Vladimir Putin and President Dmitri Medvedev being called “Batman and Robin.” That’s amusing, but it isn’t significant. Amusing and interesting but almost never significant is what I come away with having read through all three waves of leaks.

Obviously, the leaks are being used by foreign politicians to their own advantage. For example, the Russians feigned shock that NATO would be reassuring the Balts about defense against a potential Russian invasion or the Poles using the leaks to claim that solid U.S.-Polish relations are an illusion. The Russians know well of NATO plans for defending the Baltic states against a hypothetical Russian invasion, and the Poles know equally well that U.S.-Polish relations are complex but far from illusory. The leaks provide an opportunity for feigning shock and anger and extracting possible minor concessions or controlling atmospherics. They do not, however, change the structure of geopolitics.

Indeed, U.S. diplomats come away looking sharp, insightful and decent. While their public statements after a conference may be vacuous, it is encouraging to see that their read of the situation and of foreign leaders is unsentimental and astute. Everything from memos on senior leaders to anonymous snippets from apparently junior diplomats not only are on target (in the sense that STRATFOR agrees with them) but are also well-written and clear. I would argue that the leaks paint a flattering picture overall of the intellect of U.S. officials without revealing, for the most part, anything particularly embarrassing.

At the same time, there were snarky and foolish remarks in some of the leaks, particularly personal comments about leaders and sometimes their families that were unnecessarily offensive. Some of these will damage diplomatic careers, most generated a good deal of personal tension and none of their authors will likely return to the countries in which they served. Much was indeed unprofessional, but the task of a diplomat is to provide a sense of place in its smallest details, and none expect their observations ever to be seen by the wrong people. Nor do nations ever shift geopolitical course over such insults, not in the long run. These personal insults were by far the most significant embarrassments to be found in the latest release. Personal tension is not, however, international tension.

This raises the question of why diplomats can’t always simply state their minds rather than publicly mouth preposterous platitudes. It could be as simple as this: My son was a terrible pianist. He completely lacked talent. After his recitals at age 10, I would pretend to be enthralled. He knew he was awful and he knew I knew he was awful, but it was appropriate that I not admit what I knew. It is called politeness and sometimes affection. There is rarely affection among nations, but politeness calls for behaving differently when a person is in the company of certain other people than when that person is with colleagues talking about those people. This is the simplest of human rules. Not admitting what you know about others is the foundation of civilization. The same is true among diplomats and nations.

And in the end, this is all I found in the latest WikiLeaks release: a great deal of information about people who aren’t American that others certainly knew and were aware that the Americans knew, and now they have all seen it in writing. It would take someone who truly doesn’t understand how geopolitics really works to think that this would make a difference. Some diplomats may wind up in other postings, and perhaps some careers will be ended. But the idea that this would somehow change the geopolitics of our time is really hard to fathom. I have yet to see Assange point to something so significant that it would justify his claim. It may well be that the United States is hiding secrets that would reveal it to be monstrous. If so, it is not to be found in what has been released so far.

There is, of course, the question of whether states should hold secrets, which is at the root of the WikiLeaks issue. Assange claims that by revealing these secrets WikiLeaks is doing a service. His ultimate maxim, as he has said on several occasions, is that if money and resources are being spent on keeping something secret, then the reasons must be insidious. Nations have secrets for many reasons, from protecting a military or intelligence advantage to seeking some advantage in negotiations to, at times, hiding nefarious plans. But it is difficult to imagine a state — or a business or a church — acting without confidentiality. Imagine that everything you wrote and said in an attempt to figure out a problem was made public? Every stupid idea that you discarded or clueless comment you expressed would now be pinned on you. But more than that, when you argue that nations should engage in diplomacy rather than war, taking away privacy makes diplomacy impossible. If what you really think of the guy on the other side of the table is made public, how can diplomacy work?

This is the contradiction at the heart of the WikiLeaks project. Given what I have read Assange saying, he seems to me to be an opponent of war and a supporter of peace. Yet what he did in leaking these documents, if the leaking did anything at all, is make diplomacy more difficult. It is not that it will lead to war by any means; it is simply that one cannot advocate negotiations and then demand that negotiators be denied confidentiality in which to conduct their negotiations. No business could do that, nor could any other institution. Note how vigorously WikiLeaks hides the inner workings of its own organization, from how it is funded to the people it employs.

Assange’s claims are made even more interesting in terms of his “thermonuclear” threat. Apparently there are massive files that will be revealed if any harm comes to him. Implicit is the idea that they will not be revealed if he is unharmed — otherwise the threat makes no sense. So, Assange’s position is that he has secrets and will keep them secret if he is not harmed. I regard this as a perfectly reasonable and plausible position. One of the best uses for secrets is to control what the other side does to you. So Assange is absolutely committed to revealing the truth unless it serves his interests not to, in which case the public has no need to know.

It is difficult to see what harm the leaks have done, beyond embarrassment. It is also difficult to understand why WikiLeaks thinks it has changed history or why Assange lacks a sufficient sense of irony not to see the contradiction between his position on openness and his willingness to keep secrets when they benefit him. But there is also something important here, which is how this all was leaked in the first place.

To begin that explanation, we have to go back to 9/11 and the feeling in its aftermath that the failure of various government entities to share information contributed to the disaster. The answer was to share information so that intelligence analysts could draw intelligence from all sources in order to connect the dots. Intelligence organizations hate sharing information because it makes vast amounts of information vulnerable. Compartmentalization makes it hard to connect dots, but it also makes it harder to have a WikiLeaks release. The tension between intelligence and security is eternal, and there will never be a clear solution.

The real issue is who had access to this mass of files and what controls were put on them. Did the IT department track all external drives or e-mails? One of the reasons to be casual is that this was information that was classified secret and below, with the vast majority being at the confidential, no-foreign-distribution level. This information was not considered highly sensitive by the U.S. government. Based on the latest trove, it is hard to figure out how the U.S. government decides to classify material. But it has to be remembered that given their level of classification these files did not have the highest security around them because they were not seen as highly sensitive.

Still, a crime occurred. According to the case of Daniel Ellsberg, who gave a copy of the Pentagon Papers on Vietnam to a New York Times reporter, it is a crime for someone with a security clearance to provide classified material for publication but not a crime for a publisher to publish it, or so it has become practice since the Ellsberg case. Legal experts can debate the nuances, but this has been the practice for almost 40 years. The bright line is whether the publisher in any way encouraged or participated in either the theft of the information or in having it passed on to him. In the Ellsberg case, he handed it to reporters without them even knowing what it was. Assange has been insisting that he was the passive recipient of information that he had nothing to do with securing.

Now it is interesting whether the sheer existence of WikiLeaks constituted encouragement or conspiracy with anyone willing to pass on classified information to him. But more interesting by far is the sequence of events that led a U.S. Army private first class not only to secure the material but to know where to send it and how to get it there. If Pfc. Bradley Manning conceived and executed the theft by himself, and gave the information to WikiLeaks unprompted, Assange is clear. But anyone who assisted Manning or encouraged him is probably guilty of conspiracy, and if Assange knew what was being done, he is probably guilty, too. There was talk about some people at MIT helping Manning. Unscrambling the sequence is what the Justice Department is undoubtedly doing now. Assange cannot be guilty of treason, since he isn’t a U.S. citizen. But he could be guilty of espionage. His best defense will be that he can’t be guilty of espionage because the material that was stolen was so trivial.

I have no idea whether or when he got involved in the acquisition of the material. I do know — given the material leaked so far — that there is little beyond minor embarrassments contained within it. Therefore, Assange’s claim that geopolitics has changed is as false as it is bold. Whether he committed any crime, including rape, is something I have no idea about. What he is clearly guilty of is hyperbole. But contrary to what he intended, he did do a service to the United States. New controls will be placed on the kind of low-grade material he published. Secretary of Defense Gates made the following point on this:

“Now, I’ve heard the impact of these releases on our foreign policy described as a meltdown, as a game-changer, and so on. I think those descriptions are fairly significantly overwrought. The fact is, governments deal with the United States because it’s in their interest, not because they like us, not because they trust us, and not because they believe we can keep secrets. Many governments — some governments — deal with us because they fear us, some because they respect us, most because they need us. We are still essentially, as has been said before, the indispensable nation.

“Is this embarrassing? Yes. Is it awkward? Yes. Consequences for U.S. foreign policy? I think fairly modest.”

I don’t like to give anyone else the final word, but in this case Robert Gates’ view is definitive. One can pretend that WikiLeaks has redefined geopolitics, but it hasn’t come close.

Taking Stock of WikiLeaks is republished with permission of STRATFOR.”


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Elections and Obama’s Foreign Policy Choices

Posted on 14 September 2010 by Editor

by George Friedman
Stratfor.com
September 14, 2010

We are now nine weeks away from the midterm elections in the United States. Much can happen in nine weeks, but if the current polls are to be believed, U.S. President Barack Obama is about to suffer a substantial political reversal. While we normally do not concern ourselves with domestic political affairs in the United States, when the only global power is undergoing substantial political uncertainty, that inevitably affects its behavior and therefore the dynamics of the international system. Thus, we have to address it, at least from the standpoint of U.S. foreign policy. While these things may not matter much in the long run, they certainly are significant in the short run.

To begin thinking about this, we must bear three things in mind. First, while Obama won a major victory in the Electoral College, he did not come anywhere near a landslide in the popular vote. About 48 percent of the voters selected someone else. In spite of the Democrats’ strength in Congress and the inevitable bump in popularity Obama received after he was elected, his personal political strength was not overwhelming. Over the past year, poll numbers indicating support for his presidency have deteriorated to the low 40 percent range, numbers from which it is difficult, but not impossible, to govern.

Second, he entered the presidency off balance. His early focus in the campaign was to argue that the war in Iraq was the wrong war to fight but that the war in Afghanistan was the right one. This positioned him as a powerful critic of George W. Bush without positioning him as an anti-war candidate. Politically shrewd, he came into office with an improving Iraq situation, a deteriorating Afghanistan situation and a commitment to fighting the latter war. But Obama did not expect the global financial crisis. When it hit full blast in September 2008, he had no campaign strategy to deal with it and was saved by the fact that John McCain was as much at a loss as he was. The Obama presidency has therefore been that of a moderately popular president struggling between campaign promises and strategic realities as well as a massive economic crisis to which he crafted solutions that were a mixture of the New Deal and what the Bush administration had already done. It was a tough time to be president.

Third, while in office, Obama tilted his focus away from the foreign affairs plank he ran on to one of domestic politics. In doing so, he shifted from the area where the president is institutionally strong to the place where the president is institutionally weak. The Constitution and American tradition give the president tremendous power in foreign policy, generally untrammeled by other institutions. Domestic politics do not provide such leeway. A Congress divided into two houses, a Supreme Court and the states limit the president dramatically. The founders did not want it to be easy to pass domestic legislation, and tradition hasn’t changed that. Obama can propose, but he cannot impose.

Therefore, the United States has a president who won a modest victory in the popular vote but whose campaign posture and the reality under which he took office have diverged substantially. He has been drawn, whether by inclination or necessity, to the portion of his presidency where he is weakest and most likely to face resistance and defeat. And the weaker he gets politically the less likely he is to get domestic legislation passed, and the defeats will increase his weakness.

He does not, at the moment, have a great deal of public support to draw on, and the level of vituperation from the extremes has reached the level it was with George W. Bush. Where Bush was accused by the extreme left of going into Iraq to increase profits for Halliburton and the oil companies, Obama is being accused by the extreme right of trying to create a socialist state. Add to this other assorted nonsense, such as the notion that Bush engineered 9/11 or that Obama is a secret Muslim, and you get the first whiff of a failed presidency. This is not because of the prospect of midterm reversals — that has happened any number of times. It is because Obama, like Bush, was off balance from the beginning.

If Obama suffers a significant defeat in Congress in the November elections, he will not be able to move his domestic agenda. Indeed, Obama doesn’t have to lose either house to be rendered weak. The structure of Congress is such that powerful majorities are needed to get anything done. Even small majorities can paralyze a presidency.

Under these circumstances, he would have two choices. The first is to go into opposition. Presidents go into opposition when they lose support in Congress. They run campaigns against Congress for blocking their agenda and blame Congress for any failures. Essentially, this was Bill Clinton’s strategy after his reversals in 1994, and it worked in 1996. It is a risky strategy, obviously. The other option is to shift from the weak part of the presidency to the strong part, foreign policy, where a president can generally act decisively without congressional backing. If Congress does resist, it can be painted as playing politics with national security. Since Vietnam, this has been a strategy Republican presidents have used, painting Democratic Congresses as weak on national security.

There is a problem in Obama choosing the second strategy. For Republicans, this strategy plays to their core constituency, for whom national security is a significant issue. It also is an effective tool to reach into the center. The same isn’t true for the Democrats. Obama’s Afghanistan policy has already alienated the Democratic left wing, and the core of the Democratic Party is primarily interested in economic and social issues. The problem for Obama is that focusing on foreign policy at the expense of economic and social issues might gain him some strength in the center, but probably wouldn’t pick him up many Republican votes and would alienate his core constituency.

This would indicate that Obama’s best strategy is to go into opposition, government against Congress. But there are two problems with this. One of the underlying themes of the Obama presidency is that he is ineffective in getting his economic agenda implemented. That’s not really true, given the successes he has had with health-care reform and banking regulation, but it is still a theme. The other problem he has is the sense that he has surged in Afghanistan while setting a deadline for withdrawal and that his Afghan policy is merely a political gesture.

Obama can’t escape national security issues. Clinton could. In 1996, there were no burning issues in foreign policy. There are now two wars under way. Obama can’t ignore them even if his core constituency has a different agenda. Going into opposition against Congress could energize his base, but that base is in the low 40s. He needs to get others on board. He could do that if he could pass legislation he wanted, but the scenario we are looking at will leave him empty-handed when it comes time for re-election. His strongest supporters will see him as the victim, but a victimized president will have trouble putting together a winning coalition in 2012. He can play the card, but there has to be more.

We come back to foreign policy as a place where Obama will have to focus whether he likes it or not. He takes his bearings from Franklin Roosevelt, and the fact is that Roosevelt had two presidencies. One was entirely about domestic politics and the other about foreign policy, or the Depression and then World War II. This was not a political choice for Roosevelt, but it was how his presidency worked out. For very different reasons, Obama is likely to have his presidency bifurcated. With his domestic initiatives blocked, he must turn to foreign policy.

Here, too, Obama has a problem. He ran his campaign, in the Democratic tradition, with a vague anti-war theme and a heavy commitment to the American-alliance structure. He was also a strong believer in what has been called soft power, the power of image as opposed to that of direct force. This has not been particularly successful. The atmospherics of the alliance may be somewhat better under Obama than Bush, but the Europeans remain as fragmented and as suspicious of American requests under Obama as they were under Bush. Obama got the Nobel Prize but precious little else from the Europeans. His public diplomacy initiative to the Islamic world also did not significantly redefine the game. Relations with China have improved but primarily because the United States has given up on revaluation of the yuan. It cannot be argued that Obama’s strategy outside the Islamic world has achieved much. It could be claimed that any such strategy takes time, Obama’s problem is that he is running out of political maneuvering room.

That leaves the wars that are continuing, Iraq and Afghanistan. We have argued that Afghanistan is the wrong war in the wrong place. It is difficult to know how Obama views it, given his contradictory signals of increasing the number of troops but setting a deadline for beginning their withdrawal. We have argued that a complete withdrawal from Iraq without a settlement with Iran or the decimation of Iran’s conventional forces would be a mistake, but we don’t know, obviously, what Obama’s view on this is. We do not know his view of the effect of the Afghan war on U.S. strategic posture or on Pakistan, and we do not know his view of the impact of U.S. withdrawal from Iraq on Iranian influence in the Persian Gulf.

Let’s assume that he has clear views, which is likely for a president, and he is playing a long and quiet game. This would not be a bad strategy if he were stronger and had more time. But if the polls hold he will be weaker and running out of time. It would therefore follow that Obama will come out of the November election having to turn over his cards on the only area where he can have traction — Iraq, Iran and Afghanistan. The question is what he might do.

One option is to solve the Iraq problem by attacking Iran’s nuclear facilities. This carries the risk, as I have said many times, of Iranian retaliation in the Strait of Hormuz and a massive hit on the Western economic revival. In that sense, a strike against Iranian nuclear targets alone would be the riskiest. Far safer is a generalized air campaign against both Iran’s nuclear and conventional capability.

But launching a new war, while two others go on, is strategically risky. From a political point of view, it would alienate Obama’s political base, many of whom supported him because he would not undertake unilateral military moves. The Republicans would be most inclined to support him, but most would not vote for him under any circumstances. Plus, brilliant military strokes have the nasty habit of bogging down just as mediocre ideas do. That would end the Obama presidency. Clinton’s war in Kosovo was not an easy option for him strategically or politically.

That leaves another option that we have suggested before, one that would appeal both to Obama’s sensibility and to his political situation: pulling a Nixon. In 1971, Richard Nixon reached out to China while Chinese weapons were being used to kill American soldiers in Vietnam. Roosevelt did the same with the Soviets in 1941. There is a tradition in the United States of a diplomatic stroke with ideological enemies to achieve strategic ends.

Diplomatic strokes appeal to Obama. They also would appeal to his political base, while any agreement with Iran that would contribute to an American withdrawal from Iraq and perhaps from Afghanistan would appeal to the center. The Republicans would be appalled, but Obama can’t win them over anyway so it doesn’t matter. Indeed, he can use their hostility to strengthen his own base.

What the settlement with Iran might look like is murky at best. Whether Iran has any interest in such a settlement is murkier still. But if Obama gets hammered in the midterms, his domestic agenda will be frozen. He doesn’t have the personal strength and credibility to run against Congress for two years and then get re-elected. He retains his power in foreign affairs but he has not gotten traction on a multilateral reconstruction of America’s global popularity. He has two wars ongoing, plus a major challenge from Iran. Attacking Iran from the air might or might not work, and it could weaken him politically. That leaves him with running against Congress or addressing the Middle East with a diplomatic masterstroke.

It is difficult to know the ways of presidents, particularly one who has tried hard to be personally enigmatic. But it is easier to measure the political pressures that are confronting him and shaping his decisions. I wouldn’t be so bold as to predict his actions, but I would argue that he faces some unappetizing choices that he could solve with a very bold move in foreign policy. His options on the domestic side will disappear if the polls are right.

Elections and Obama’s Foreign Policy Choices is republished with permission of STRATFOR.

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Germany’s Choice

Posted on 12 February 2010 by Editor

Graphic for Geopolitical Intelligence Report

By Marko Papic and Peter Zeihan
Stratfor.com
February 8, 2010  

The situation in Europe is dire.After years of profligate spending, Greece is becoming overwhelmed. Barring some sort of large-scale bailout program, a Greek debt default at this point is highly likely. At this moment, European Central Bank liquidity efforts are probably the only thing holding back such a default. But these are a stopgap measure that can hold only until more important economies manage to find their feet. And Europe’s problems extend beyond Greece. Fundamentals are so poor across the board that any number of eurozone states quickly could follow Greece down.  

Related Links:
Germany: Ratings Threats and New Challenges
Germany: The Electoral Analysis  

And so the rest of the eurozone is watching and waiting nervously while casting occasional glances in the direction of Berlin in hopes the eurozone’s leader and economy-in-chief will do something to make it all go away. To truly understand the depth of the crisis the Europeans face, one must first understand Germany, the only country that can solve it.   

Germany’s Trap

The heart of Germany’s problem is that it is insecure and indefensible given its location in the middle of the North European Plain. No natural barriers separate Germany from the neighbors to its east and west, no mountains, deserts, oceans. Germany thus lacks strategic depth. The North European Plain is the Continent’s highway for commerce and conquest. Germany’s position in the center of the plain gives it plenty of commercial opportunities but also forces it to participate vigorously in conflict as both an instigator and victim.   

Germany’s exposure and vulnerability thus make it an extremely active power. It is always under the gun, and so its policies reflect a certain desperate hyperactivity. In times of peace, Germany is competing with everyone economically, while in times of war it is fighting everyone. Its only hope for survival lies in brutal efficiencies, which it achieves in industry and warfare.   

Pre-1945, Germany’s national goals were simple: Use diplomacy and economic heft to prevent multifront wars, and when those wars seem unavoidable, initiate them at a time and place of Berlin’s choosing.   

“Success” for Germany proved hard to come by, because challenges to Germany’s security do not “simply” end with the conquest of both France and Poland. An overstretched Germany must then occupy countries with populations in excess of its own while searching for a way to deal with Russia on land and the United Kingdom on the sea. A secure position has always proved impossible, and no matter how efficient, Germany always has fallen ultimately.   

During the early Cold War years, Germany’s neighbors tried a new approach. In part, the European Union and NATO are attempts by Germany’s neighbors to grant Germany security on the theory that if everyone in the immediate neighborhood is part of the same club, Germany won’t need a Wehrmacht.   

There are catches, of course — most notably that even a demilitarized Germany still is Germany. Even after its disastrous defeats in the first half of the 20th century, Germany remains Europe’s largest state in terms of population and economic size; the frantic mindset that drove the Germans so hard before 1948 didn’t simply disappear. Instead of German energies being split between growth and defense, a demilitarized Germany could — indeed, it had to — focus all its power on economic development. The result was modern Germany — one of the richest, most technologically and industrially advanced states in human history.   

Germany and Modern Europe

That gives Germany an entirely different sort of power from the kind it enjoyed via a potent Wehrmacht, and this was not a power that went unnoticed or unused.   

France under Charles de Gaulle realized it could not play at the Great Power table with the United States and Soviet Union. Even without the damage from the war and occupation, France simply lacked the population, economy and geographic placement to compete. But a divided Germany offered France an opportunity. Much of the economic dynamism of France’s rival remained, but under postwar arrangements, Germany essentially saw itself stripped of any opinion on matters of foreign policy. So de Gaulle’s plan was a simple one: use German economic strength as sort of a booster seat to enhance France’s global stature.   

This arrangement lasted for the next 60 years. The Germans paid for EU social stability throughout the Cold War, providing the bulk of payments into the EU system and never once being a net beneficiary of EU largesse. When the Cold War ended, Germany shouldered the entire cost of German reunification while maintaining its payments to the European Union. When the time came for the monetary union to form, the deutschemark formed the euro’s bedrock. Many a deutschmark was spent defending the weaker European currencies during the early days of European exchange-rate mechanisms in the early 1990s. Berlin was repaid for its efforts by many soon-to-be eurozone states that purposely enacted policies devaluing their currencies on the eve of admission so as to lock in a competitive advantage vis-à-vis Germany.   

But Germany is no longer a passive observer with an open checkbook.   

In 2003, the 10-year process of post-Cold War German reunification was completed, and in 2005 Angela Merkel became the first postwar German leader to run a Germany free from the burden of its past sins. Another election in 2009 ended an awkward left-right coalition, and now Germany has a foreign policy neither shackled by internal compromise nor imposed by Germany’s European “partners.”   

The Current Crisis

Simply put, Europe faces a financial meltdown.   

The crisis is rooted in Europe’s greatest success: the Maastricht Treaty and the monetary union the treaty spawned epitomized by the euro. Everyone participating in the euro won by merging their currencies. Germany received full, direct and currency-risk-free access to the markets of all its euro partners. In the years since, Germany’s brutal efficiency has permitted its exports to increase steadily both as a share of total European consumption and as a share of European exports to the wider world. Conversely, the eurozone’s smaller and/or poorer members gained access to Germany’s low interest rates and high credit rating.   

And the last bit is what spawned the current problem.   

Most investors assumed that all eurozone economies had the blessing — and if need be, the pocketbook — of the Bundesrepublik. It isn’t difficult to see why. Germany had written large checks for Europe repeatedly in recent memory, including directly intervening in currency markets to prop up its neighbors’ currencies before the euro’s adoption ended the need to coordinate exchange rates. Moreover, an economic union without Germany at its core would have been a pointless exercise.   

Investors took a look at the government bonds of Club Med states (a colloquialism for the four European states with a history of relatively spendthrift policies, namely, Portugal, Spain, Italy and Greece), and decided that they liked what they saw so long as those bonds enjoyed the implicit guarantees of the euro. The term in vogue with investors to discuss European states under stress is PIIGS, short for Portugal, Italy, Ireland, Greece and Spain. While Ireland does have a high budget deficit this year, STRATFOR prefers the term Club Med, as we do not see Ireland as part of the problem group. Unlike the other four states, Ireland repeatedly has demonstrated an ability to tame spending, rationalize its budget and grow its economy without financial skullduggery. In fact, the spread between Irish and German bonds narrowed in the early 1980s before Maastricht was even a gleam in the collective European eye, unlike Club Med, whose spreads did not narrow until Maastricht’s negotiation and ratification.   

Even though Europe’s troubled economies never actually obeyed Maastricht’s fiscal rules — Athens was even found out to have falsified statistics to qualify for euro membership — the price to these states of borrowing kept dropping. In fact, one could well argue that the reason Club Med never got its fiscal politics in order was precisely because issuing debt under the euro became cheaper. By 2002 the borrowing costs for Club Med had dropped to within a whisker of those of rock-solid Germany. Years of unmitigated credit binging followed.   

The 2008-2009 global recession tightened credit and made investors much more sensitive to national macroeconomic indicators, first in emerging markets of Europe and then in the eurozone. Some investors decided actually to read the EU treaty, where they learned that there is in fact no German bailout at the end of the rainbow, and that Article 104 of the Maastricht Treaty (and Article 21 of the Statute establishing the European Central Bank) actually forbids one explicitly. They further discovered that Greece now boasts a budget deficit and national debt that compares unfavorably with other defaulted states of the past such as Argentina.   

Investors now are (belatedly) applying due diligence to investment decisions, and the spread on European bonds — the difference between what German borrowers have to pay versus other borrowers — is widening for the first time since Maastricht’s ratification and doing so with a lethal rapidity. Meanwhile, the European Commission is working to reassure investors that panic is unwarranted, but Athens’ efforts to rein in spending do not inspire confidence. Strikes and other forms of political instability already are providing ample evidence that what weak austerity plans are in place may not be implemented, making additional credit downgrades a foregone conclusion.

Chart showing Govt bond yield minus German Bund yield

 

Germany’s Choice

As the EU’s largest economy and main architect of the European Central Bank, Germany is where the proverbial buck stops. Germany has a choice to make. 

The first option, letting the chips fall where they may, must be tempting to Berlin. After being treated as Europe’s slush fund for 60 years, the Germans must be itching simply to let Greece and others fail. Should the markets truly believe that Germany is not going to ride to the rescue, the spread on Greek debt would expand massively. Remember that despite all the problems in recent weeks, Greek debt currently trades at a spread that is only one-eighth the gap of what it was pre-Maastricht — meaning there is a lot of room for things to get worse. With Greece now facing a budget deficit of at least 9.1 percent in 2010 — and given Greek proclivity to fudge statistics the real figure is probably much worse — any sharp increase in debt servicing costs could push Athens over the brink. 

From the perspective of German finances, letting Greece fail would be the financially prudent thing to do. The shock of a Greek default undoubtedly would motivate other European states to get their acts together, budget for steeper borrowing costs and ultimately take their futures into their own hands. But Greece would not be the only default. The rest of Club Med is not all that far behind Greece, and budget deficits have exploded across the European Union. Macroeconomic indicators for France and especially Belgium are in only marginally better shape than those of Spain and Italy. 

At this point, one could very well say that by some measures the United States is not far behind the eurozone. The difference is the insatiable global appetite for the U.S. dollar, which despite all the conspiracy theories and conventional wisdom of recent years actually increased during the 2008-2009 global recession. Taken with the dollar’s status as the world’s reserve currency and the fact that the United States controls its own monetary policy, Washington has much more room to maneuver than Europe. 

Berlin could at this point very well ask why it should care if Greece and Portugal go under. Greece accounts for just 2.6 percent of eurozone gross domestic product. Furthermore, the crisis is not of Berlin’s making. These states all have been coasting on German largesse for years, if not decades, and isn’t it high time that they were forced to sink or swim? 

The problem with that logic is that this crisis also is about the future of Europe and Germany’s place in it. Germany knows that the geopolitical writing is on the wall: As powerful as it is, as an individual country (or even partnered with France), Germany does not approach the power of the United States or China and even that of Brazil or Russia further down the line. Berlin feels its relevance on the world stage slipping, something encapsulated by U.S. President Barack Obama’s recent refusal to meet for the traditional EU-U.S. summit. And it feels its economic weight burdened by the incoherence of the eurozone’s political unity and deepening demographic problems. 

The only way for Germany to matter is if Europe as a whole matters. If Germany does the economically prudent (and emotionally satisfying) thing and lets Greece fail, it could force some of the rest of the eurozone to shape up and maybe even make the eurozone better off economically in the long run. But this would come at a cost: It would scuttle the euro as a global currency and the European Union as a global player. 

Every state to date that has defaulted on its debt and eventually recovered has done so because it controlled its own monetary policy. These states could engage in various (often unorthodox) methods of stimulating their own recovery. Popular methods include, but are hardly limited to, currency devaluations in an attempt to boost exports and printing currency either to pay off debt or fund spending directly. But Greece and the others in the eurozone surrendered their monetary policy to the European Central Bank when they adopted the euro. Unless these states somehow can change decades of bad behavior in a day, the only way out of economic destitution would be for them to leave the eurozone. In essence, letting Greece fail risks hiving off EU states from the euro. Even if the euro — not to mention the EU — survived the shock and humiliation of monetary partition, the concept of a powerful Europe with a political center would vanish. This is especially so given that the strength of the European Union thus far has been measured by the successes of its rehabilitations — most notably of Portugal, Italy, Greece and Spain in the 1980s — where economic-basket case dictatorships and pseudo-democracies transitioned into modern economies. 

And this leaves option two: Berlin bails out Athens. 

There is no doubt Germany could afford such a bailout, as the Greek economy is only one-tenth of the size of the Germany’s. But the days of no-strings-attached financial assistance from Germany are over. If Germany is going to do this, there will no longer be anything “implied” or “assumed” about German control of the European Central Bank and the eurozone. The control will become reality, and that control will have consequences. For all intents and purposes, Germany will run the fiscal policies of peripheral member states that have proved they are not up to the task of doing so on their own. To accept anything less intrusive would end with Germany becoming responsible for bailing out everyone. After all, who wouldn’t want a condition-free bailout paid for by Germany? And since a euro-wide bailout is beyond Germany’s means, this scenario would end with Germany leading the EU hat-in-hand to the International Monetary Fund for an American/Chinese-funded assistance package. It is possible that the Germans could be gentle and risk such abject humiliation, but it is not likely. 

Taking a firmer tack would allow Germany to achieve via the pocketbook what it couldn’t achieve by the sword. But this policy has its own costs. The eurozone as a whole needs to borrow around 2.2 trillion euros in 2010, with Greece needing 53 billion euros simply to make it through the year. Not far behind Greece is Italy, which needs 393 billion euros, Belgium with needs of 89 billion euros and France with needs of yet another 454 billion euros. As such, the premium on Germany is to act — if it is going to act — fast. It needs to get Greece and most likely Portugal wrapped up before crisis of confidence spreads to the really serious countries, where even mighty German’s resources would be overwhelmed. 

That is the cost of making Europe “work.” It is also the cost to Germany of leadership that doesn’t come at the end of a gun. So if Germany wants its leadership to mean something outside of Western Europe, it will be forced to pay for that leadership — deeply, repeatedly and very, very soon. But unlike in years past, this time Berlin will want to hold the reins. 

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This report is republished with permission of STRATFOR 

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Ukraine’s Election and the Russian Resurgence

Posted on 30 January 2010 by Editor

Graphic for Geopolitical Intelligence Report

By Peter Zeihan
Stratfor.com
January 26, 2010

Ukrainians go to the polls Feb. 7 to choose their next president. The last time they did this, in November 2004, the result was the prolonged international incident that became known as the Orange Revolution. That event saw Ukraine cleaved off from the Russian sphere of influence, triggering a chain of events that rekindled the Russian-Western Cold War. Next week’s runoff election seals the Orange Revolution’s reversal. Russia owns the first candidate, Viktor Yanukovich, outright and has a workable agreement with the other, Yulia Timoshenko. The next few months will therefore see the de facto folding of Ukraine back into the Russian sphere of influence; discussion in Ukraine now consists of debate over the speed and depth of that reintegration.

The Centrality of Ukraine

Russia has been working to arrest its slide for several years. Next week’s election in Ukraine marks not so much the end of the post-Cold War period of Russian retreat as the beginning of a new era of Russian aggressiveness. To understand why, one must first absorb the Russian view of Ukraine.

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The Russian Resurgence

Since the break-up of the Soviet Union, most of the former Soviet republics and satellites found themselves cast adrift, not part of the Russian orbit and not really part of any other grouping. Moscow still held links to all of them, but it exercised few of its levers of control over them during Russia’s internal meltdown during the 1990s. During that period, a number of these states — Estonia, Latvia, Lithuania, Poland, Hungary, Romania, Bulgaria and the former Czechoslovakia to be exact — managed to spin themselves out of the Russian orbit and attach themselves to the European Union and NATO. Others — Azerbaijan, Georgia, Moldova, Uzbekistan, Kyrgyzstan and Ukraine — attempted to follow the path Westward, but have not succeeded at this point. Of these six, Ukraine is by far the most critical. It is not simply the most populous of Russia’s former possessions or the birthplace of the Russian ethnicity, it is the most important province of the former Russian Empire and holds the key to the future of Eurasia.

First, the incidental reasons. Ukraine is the Russian Empire’s breadbasket. It is also the location of nearly all of Russia’s infrastructure links not only to Europe, but also to the Caucasus, making it critical for both trade and internal coherence; it is central to the existence of a state as multiethnic and chronically poor as Russia. The Ukrainian port of Sevastopol is home to Russia’s Black Sea fleet, and Ukrainian ports are the only well-developed warm-water ports Russia has ever had. Belarus’ only waterborne exports traverse the Dnieper River, which empties into the Black Sea via Ukraine. Therefore, as goes Ukraine, so goes Belarus. Not only is Ukraine home to some 15 million ethnic Russians — the largest concentration of Russians outside Russia proper — they reside in a zone geographically identical and contiguous to Russia itself. That zone is also the Ukrainian agricultural and industrial heartland, which again is integrated tightly into the Russian core.

These are all important factors for Moscow, but ultimately they pale before the only rationale that really matters: Ukraine is the only former Russian imperial territory that is both useful and has a natural barrier protecting it. Belarus is on the Northern European Plain, aka the invasion highway of Europe. The Baltics are all easily accessible by sea. The Caucasian states of Armenia, Azerbaijan and Georgia are on the wrong side of the Caucasus Mountains (and Russia’s northern Caucasus republics — remember Chechnya? — aren’t exactly the cream of the crop of Russian possessions). It is true that Central Asia is anchored in mountains to the south, but the region is so large and boasts so few Slavs that it cannot be controlled reliably or cheaply. And Siberia is too huge to be useful.

Without Ukraine, Russia is a desperately defensive power, lacking any natural defenses aside from sheer distance. Moscow and Volgograd, two of Russia’s critically strategic cities, are within 300 miles of Ukraine’s eastern border. Russia lacks any natural internal transport options — its rivers neither interconnect nor flow anywhere useful, and are frozen much of the year — so it must preposition defensive forces everywhere, a burden that has been beyond Russia’s capacity to sustain even in the best of times. The (quite realistic) Russian fear is that without Ukraine, the Europeans will pressure Russia along its entire western periphery, the Islamic world will pressure Russia along its entire southern periphery, the Chinese will pressure Russia along its southeastern periphery, and the Americans will pressure Russia wherever opportunity presents itself.

Ukraine by contrast has the Carpathians to its west, a handy little barrier that has deflected invaders of all stripes for millennia. These mountains defend Ukraine against tanks coming from the west as effectively as they protected the Balkans against Mongols attacking from the east. Having the Carpathians as a western border reduces Russia’s massive defensive burden. Most important, if Russia can redirect the resources it would have used for defensive purposes on the Ukrainian frontier — whether those resources be economic, intelligence, industrial, diplomatic or military — then Russia retains at least a modicum of offensive capability. And that modicum of offensive ability is more than enough to overmatch any of Russia’s neighbors (with the exception of China).

When Retreat Ends, the Neighbors Get Nervous

This view of Ukraine is not alien to countries in Russia’s neighborhood. They fully understand the difference between a Russia with Ukraine and a Russia without Ukraine, and understand that so long as Ukraine remains independent they have a great deal of maneuvering room. Now that all that remains is the result of an election with no strategic choice at stake, the former Soviet states and satellites realize that their world has just changed.

Georgia traditionally has been the most resistant to Russian influence regardless of its leadership, so defiant that Moscow felt it necessary to trounce Georgia in a brief war in August 2008. Georgia’s poor strategic position is nothing new, but a Russia that can redirect efforts from Ukraine is one that can crush Georgia as an afterthought. That is turning the normally rambunctious Georgians pensive, and nudging them toward pragmatism. An opposition group, the Conservative Party, is launching a movement to moderate policy toward Russia, which among other things would mean abandoning Georgia’s bid for NATO membership and re-establishing formal political ties with Moscow.

A recent Lithuanian power struggle has resulted in the forced resignation of Foreign Minister Minister Vygaudas Usackas. The main public point of contention was the foreign minister’s previous participation in facilitating U.S. renditions. Vygaudas, like most in the Lithuanian leadership, saw such participation as critical to maintaining the tiny country’s alliance with the United States. President Dalia Grybauskaite, however, saw the writing on the wall in Ukraine, and feels the need to foster a more conciliatory view of Russia. Part of that meant offering up a sacrificial lamb in the form of the foreign minister.

Poland is in a unique position. It knows that should the Russians turn seriously aggressive, its position on the Northern European Plain makes it the focal point of Russian attention. Its location and vulnerability makes Warsaw very sensitive to Russian moves, so it has been watching Ukraine with alarm for several months.

As a result, the Poles have come up with some (admittedly small) olive branches, including an offer for Putin to visit Gdansk last September in an attempt to foster warmer (read: slightly less overtly hostile) relations. Putin not only seized upon the offer, but issued a public letter denouncing the World War II-era Molotov-Ribbentrop Treaty, long considered by Poles as the most outrageous Russian offense to Poland. Warsaw has since replied with invitations for future visits. As with Georgia, Poland will never be pro-Russian — Poland is not only a NATO member but also hopes to host an American Patriot battery and participate in Washington’s developing ballistic missile defense program. But if Warsaw cannot hold Washington’s attention — and it has pulled out all the stops in trying to — it fears the writing might already be on the wall, and it must plan accordingly.

Azerbaijan has always attempted to walk a fine line between Russia and the West, knowing that any serious bid for membership in something like the European Union or NATO was contingent upon Georgia’s first succeeding in joining up. Baku would prefer a more independent arrangement, but it knows that it is too far from Russia’s western frontier to achieve such unless the stars are somewhat aligned. As Georgia’s plans have met with what can best be described as abject failure, and with Ukraine now appearing headed toward Russian suzerainty, Azerbaijan has in essence resigned itself to the inevitable. Baku is well into negotiations that would redirect much of its natural gas output north to Russia rather than west to Turkey and Europe. And Azerbaijan simply has little else to bargain with.

Other states that have long been closer to Russia, but have attempted to balance Russia against other powers in hopes of preserving some measure of sovereignty, are giving up. Of the remaining former Soviet republics Belarus has the most educated workforce and even a functioning information technology industry, while Kazakhstan has a booming energy industry; both are reasonable candidates for integration into Western systems. But both have this month agreed instead to throw their lots in with Russia. The specific method is an economic agreement that is more akin to shackles than a customs union. The deal effectively will gut both countries’ industries in favor of Russian producers. Moscow hopes the union in time will form the foundation of a true successor to the Soviet Union.

Other places continue to show resistance. The new Moldovan prime minister, Vlad Filat, is speaking with the Americans about energy security and is even flirting with the Romanians about reunification. The Latvians are as defiant as ever. The Estonians, too, are holding fast, although they are quietly polling regional powers to at least assess where the next Russian hammer might fall. But for every state that decides it had best accede to Russia’s wishes, Russia has that much more bandwidth to dedicate to the poorly positioned holdouts.

Russia also has the opportunity. The United States is bogged down in its economic and health care debates, two wars and the Iran question — all of which mean Washington’s attention is occupied well away from the former Soviet sphere. With the United States distracted, Russia has a freer hand in re-establishing control over states that would like to be under the American security umbrella.

There is one final factor that is pushing Russia to resurge: It feels the pressure of time. The post-Cold War collapse may well have mortally wounded the Russian nation. The collapse in Russian births has halved the size of the 0-20 age group in comparison to their predecessors born in the 1970s and 1980s. Consequently, Russian demographics are among the worst in the world.

Even if Russia manages an economic renaissance, in a decade its population will have aged and shrunk to the point that the Russians will find holding together Russia proper a huge challenge. Moscow’s plan, therefore, is simple: entrench its influence while it is in a position of relative strength in preparation for when it must trade that influence for additional time. Ultimately, Russia is indeed going into that good night. But not gently. And not today.

This report is republished with permission of STRATFOR

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Airline Security: Gentle Solutions to a Vexing Problem

Posted on 13 January 2010 by Editor

WASHINGTON, D.C. - JANUARY 20:  Crowds look at...

 

By Fred Burton and Ben West
Stratfor.com
January 13, 2009

U.S. President Barack Obama outlined a set of new policies Jan. 7 in response to the Dec. 25, 2009 Northwest Airlines bombing attempt, which came the closest to a successful attack on a U.S. flight since Richard Reid’s failed shoe-bombing in December 2001. As in the aftermath of that attempt, a flurry of accusations, excuses and policy prescriptions have emanated from Washington since Christmas Day concerning U.S. airline security. Whatever changes actually result from the most recent bombing attempt, they will likely be more successful at pacifying the public and politicians than preventing future attacks.

At the heart of President Obama’s policy outline were the following key tactics: pursue enhanced screening technology in the transportation sector, review the visa issuance and revocation process, enhance coordination among agencies for counterterrorism (CT) investigations and establish a process to prioritize such investigations. While such measures are certainly important, they will not go far enough, by themselves, to meaningfully address the aviation security challenges the United States still faces almost nine years after 9/11.

Holes in the System

For one thing, technology must not be seen as a panacea. It can be a very useful tool for finding explosive devices and weapons concealed on a person or in luggage, but it is predictable and reactive. In terms of aviation security, the federal government has consistently been fighting the last war and continues to do so. Certain practical and effective steps have been taken. Hardening the cockpit door, deploying air marshals and increasing crew and passenger awareness countered the airline hijacking threat after 9/11; requiring passengers to remove their shoes and scanning them prior to boarding followed Reid’s 2001 shoe-bombing attempt; and restrictions on liquids and gels followed the 2006 trans-Atlantic plot. Not enacting these measures would have meant not learning from past mistakes, and they do ensure that unsophisticated “copycat” attackers are not successful. But such measures — even those that are less technological — fail to take into account innovative militants, who are eager and able to exploit inevitable weaknesses in the process.

Even advanced body-imaging systems like the newer backscatter and millimeter-wave systems now being used to screen travelers cannot pick up explosives hidden inside a person’s body using condoms or tampons — a tactic that was initially thought to have been used in the Aug. 28 assassination attempt against Saudi Deputy Interior Minister Prince Mohammed bin Nayef. (It is now believed that the attacker in that case used an underwear bomb like the one used in the Christmas Day attempt.) Moreover, X-ray systems cannot detect explosives cleverly disguised in carry-on baggage or smuggled past security checkpoints — something that drug smugglers routinely do.

Preventing attacks against U.S. airliners would require unrealistically invasive and inconvenient measures that the airline industry and American society are simply not prepared to implement. El Al, Israel’s national airline, is one international carrier that conducts thorough searches of every passenger and every handbag, runs checked luggage through a decompression chamber and has two air marshals on each flight. The airline also refuses to let some people (including many Muslims) on board. While these practices have been successful in preventing terrorist attacks against the airline, they are not in line with American and European culture and President Obama’s insistence that measures remain consistent with privacy rights and civil liberties. It is also economically and politically unfeasible for major U.S. airlines operating hundreds of flights per day from hundreds of different cities to impose measures such as those followed by El Al, an airline with fewer planes and a smaller area of operation.

And as long as U.S. airport security relies on screening techniques that are only moderately invasive, there will be holes that innovative attackers will be able to exploit. While screening technology is advancing, there is nothing in the foreseeable future that would be able to do more screening with less invasiveness. The U.S. prison system grapples with the same problem, and even there, where inmates are searched far more invasively than air travelers, contraband is still able to flow into facilities.

Focusing on the visa issuance and revocation process also leaves holes in the system. The Christmas Day bomber, Umar Farouk Abdulmutallab, had been given a multiple-entry U.S. visa, which allowed him to travel to the United States. When Abdulmutallab’s father expressed concerns to officials at the U.S. Embassy in Abuja, Nigeria, on Nov. 19, 2009, that his son might have been involved with Yemen-based Islamist militants, Abdulmutallab’s name and passport number were sent from the U.S. Embassy in Abuja to Washington and placed in the “Visa Viper” system, which specifically pertains to visas and terrorist suspects. His name and passport number were also logged into the Terrorist Identities Datamart Environment, but not the “no-fly” list.

This standard operating procedure (which does not automatically result in a visa revocation) passed the responsibility from the CIA agents who spoke to Abdulmuttalab’s father on to the U.S. State Department, where agents unfamiliar with the specifics of the case did not, apparently, decide to act on it. In hindsight, the decision not to take the father’s warning more seriously appears to be a glaring mistake, but in context it seems less obvious. The father’s tip was vague, with little indication of what his son was up to or, more important to U.S. CT agents, that he was planning even to travel to the United States, much less attack a U.S. airliner.

Intelligence Limitations

The possibility of yet another jihadist suspect emerging in the Middle East does not pose an existential threat to the United States, so this raises the third challenge: prioritizing CT investigations. Vague warnings such as the tip from Abdulmuttalab’s father spring up constantly throughout the world and CT investigators have to prioritize them. Only the most serious cases get assigned to an investigator to follow up on while the rest are filed away for future reference. If the same name pops up again with more information on the threat, then more action is taken. U.S. CT agents are most concerned about specific threats to the United States, and with no actionable intelligence that Abdulmutallab was plotting an attack against the United States, his case was given a lower priority.

Nevertheless, not acting immediately on the father’s vague threat proved to be a near-fatal move. This highlights the danger of the unsophisticated, ill-trained militant, referred to in U.S. CT circles as a “Kramer jihadist” (after the bumbling character in the sitcom “Seinfeld”). By himself, a Kramer jihadist poses a minimal threat, but when combined with a trained operative or group, he can become a formidable weapon. Abdulmutallab had been radicalized, but there is nothing to suggest that he had extensive jihadist training or any tactical expertise. He was simply a willing agent with a visa to the United States. When put in the hands of a competent, well-trained operator (such as those involved with al Qaeda in the Arabian Peninsula), a Kramer jihadist can be outfitted with a device and given a support network that could supply him with transportation and direction to carry out an effective attack. There are simply too many radical Islamists in the world to investigate each one, but immediately revoking visas to keep suspects off U.S. airliners until they can be investigated further is a fairly simple process and would be an effective deterrent.

Finally, the lack of coordination among agencies in CT investigations is an old problem that dates back well before 9/11. This challenge lies in the fact that the U.S. intelligence community is broken up into specific agencies — each with its own specific jurisdiction and incentive to leverage its power in Washington by controlling the flow of information. This system ensures that no single agency becomes too powerful and self-interested, but it also fractures the intelligence community and bureaucratizes intelligence sharing.

National Counterterrorism Center

In order to investigate a case like Abdulmutallab’s, agents from the CIA must work with agents from the FBI, and the State Department is tasked with coordinating the requests for information from various foreign governments (whose information is not always reliable). For foreign threats specifically aimed at airlines, agents from the Transportation Security Administration, Federal Aviation Administration, Office of Director of National Intelligence, and Immigration and Customs Enforcement must be notified. Rallying and coordinating all the appropriate actors and agencies to respond to a threat requires careful bureaucratic maneuvering and presents numerous opportunities to be bogged down at every step. Certainly, the more overt the threat, the easier it is to move the bureaucracy, but a case as opaque as Abdulmutallab’s would not likely inspire a quick and decisive follow-up.

The U.S. National Counterterrorism Center (NCTC) was created to aggregate threats from various local, state and federal agencies all over the world in order to streamline the threat-identification and investigation process. However, the additional bureaucracy that was generated with the formation of the NCTC has essentially canceled out any benefit that the center might have contributed.

When it comes down to it, modern airliners — full of people and fuel — are extremely vulnerable targets that can produce highly dramatic carnage, characteristics that attract militants and militant groups seeking global notoriety. And Abdulmutallab’s efforts on Christmas Day certainly will not be the last militant attempt to bring an airliner down. As security measures are changed in response to this most recent attempt, terrorist planners will be watching closely and are sure to adapt their tactics accordingly.

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“This report is republished with permission of STRATFOR

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