29 September 2018

Pakistan Trudges Along a Familiar Economic Path

Elevated energy prices and the lack of internationally competitive exports will continue to drive Pakistan's high import bill and trade deficit.

Spending cuts targeting development will narrow the budget deficit but at the cost of slowing growth and increasing unemployment.

New Prime Minister Imran Khan's great challenge will be to balance his impassioned populism with a pragmatism required to govern Pakistan.

As Prime Minister Imran Khan tries to set a new direction for Pakistani politics, his administration is urgently seeking to resolve the country's most serious macroeconomic challenge: boosting its dwindling foreign exchange reserves. As of Sept. 7, the State Bank of Pakistan's net reserves remained beneath $10 billion. That's less than the three-month import cover recommended by the International Monetary Fund (IMF), fueling speculation that Khan will turn to the U.S.-based organization for a bailout. Indeed, Finance Minister Asad Umar has unveiled a series of measures targeting the widening budget deficit ahead of an IMF delegation visit to Islamabad on Sept. 27. These measures include cutting more than $2 billion in planned development spending, doubling the tax rate on the highest income earners to 30 percent and hiking tariffs on 5,000 nonessential imports.

Pakistan-Saudi Arabia Relations in the Khan Era

By Arhama Siddiqa

“Saudi Arabia has always stood with Pakistan in difficult times and the Pakistani government and its people highly acknowledge it,” Pakistani Prime Minister Imran Khan said on September 23, Saudi National Day.

A month after he was sworn in as prime minister, on September 18, 2018 Khan embarked on his first official visit to Saudi Arabia. He was accompanied by Foreign Minister Shah Mehmood Qureshi, Finance Minister Asad Umar, Information Minister Fawad Chaudhry and Adviser on Commerce Abdul Razzak Dawood. The visit came days after the Saudi information minister visited Pakistan and met with Khan and other top civil and military officials. Khan’s choice of Saudi Arabia for his first official visit, concurrent with comments from his finance minister, led to much conjecture that the trip was actually a cover for a larger purpose — to seek a significant loan to avoid a complete IMF bailout.

AFGHANISTAN: Looming Crises

S. Binodkumar Singh

On September 15, 2018, thousands of Grand National Coalition of Afghanistan (GNCA) supporters closed the provincial offices of the Independent Election Commission (IEC) in Herat, Balkh and Kandahar Provinces after the Government and the IEC failed to positively respond to their demands. On August 10, 2018, GNCA set a 10-day deadline for a response from Government to meet their demands, including the use of a biometric system for elections, a change in the election system and a transparent poll across the country. GNCA also warned that it would close the IEC offices in Nangarhar, Kunduz, Bamiyan, Panjsher, Faryab and Jawzjan Provinces, if their demands were not met.

Further, on September 17, 2018, supporters of GNCA set up tents and closed the provincial election office in eastern Nangarhar Province, launching a sit-in protest. Later, Police arrested 16 GNCA supporters on charges of disrupting the provincial election office and removed the tents.

Jalaluddin Haqqani: Life and Times of a Jihadist Lynchpin

An Afghan by birth, the leader of the Haqqani Network was the first and foremost Pakistani jihadist proxy who took up arms against the Afghan state in 1973 – long before there was any Soviet or American presence in Afghanistan.

“Son, do you not know who I am?” said in Urdu the man with a henna-dyed beard and the Holy Quran on his lap. Reading the perplexed expression on the young man’s face, he then answered his own question, “I am Jalaluddin Haqqani – Commander Haqqani.”

The year was 1994 when a young sub-inspector of the Punjab police had stopped a convoy of double-cabin vehicles on their way out of the twin cities Islamabad-Rawalpindi, heading towards Peshawar. The young officer had spotted tens of armed men in those trucks and was debating whether he – with his tiny posse – should insist on inspecting the ominous-looking entourage or not. The officer thanked his stars when a wireless message from higher-ups came through, telling him to clear the motorcade without inspection. The officer told me that he still did not know who Haqqani was but waved him through!

China Is Winning the Race for Water Security in Asia

by Sherri W. Goodman, Zoe Dutton

Great power competition in Asia is not only about control of critical waterways in the South China Sea, but also about who controls Asia's fresh water. The future of Asia's water—upon which about four billion people depend—lies in China's hands. Through its presence in Tibet, China controls the headwaters of ten of the eleven major rivers of Asia. So far, China has taken a relatively cooperative approach to sharing water with its neighbors as part of the systematic consolidation of its "soft power" over downstream countries. But climate change and rapid growth are threatening to upset this delicate diplomatic balance. What happens when China's own thirst outpaces its resources? And how will China's choices affect U.S. interests in the strategic Asia-Pacific region? 

China releases white paper on facts and its position on trade friction with U.S.

BEIJING, Sept. 24 (Xinhua) -- China published a white paper on Monday to clarify the facts about China-U.S. economic and trade relations, demonstrate its stance on trade friction with the United States, and pursue reasonable solutions.

Excluding the foreword, the 36,000-Chinese-character white paper is comprised of six parts, which are mutually-beneficial and win-win China-U.S. cooperation in the trade and economic field, clarification of the facts about China-U.S. trade and economic relations, the trade protectionist practices of the U.S. administration, the trade bullyism practices of the U.S. administration, damage of the improper practices of the U.S. administration to global economy, and China's position.

Trump Has Put the U.S. and China on the Cusp of a New Cold War

By Mark Landler

WASHINGTON — President Trump is confident that the United States is winning its trade war with China. But on both sides of the Pacific, a bleaker recognition is taking hold: The world’s two largest economies are in the opening stages of a new economic Cold War, one that could persist well after Mr. Trump is out of office.

“This thing will last long,” Jack Ma, the billionaire chairman of Alibaba Group, warned a meeting of investors on Tuesday in Hangzhou, China. “If you want a short-term solution, there is no solution.”

Mr. Trump intensified his trade fight this week, imposing tariffs on $200 billion worth of Chinese goods and threatening to tax nearly all imports from China if it dared to retaliate. His position has bewildered, frustrated and provoked Beijing, which has responded with its own levies on American goods.

Anatomy of a Chinese Debt Trap

Trump’s Tariffs May Hurt, but Quitting China Is Hard to Do

By Alexandra Stevenson

PHNOM PENH, Cambodia — The worsening trade war between the United States and China has intensified pressure on companies to leave China and set up factories in places like Cambodia, a verdant country of 16 million people with low wages and high hopes.

But anybody who moves here may have to deal with the water buffalo.

Huffing, snorting and in no hurry to move, the big-horned bovines occasionally meander across the Khmer-American Friendship Highway, the dusty, 140-mile route linking Phnom Penh’s factories with the port in the coastal city of Sihanoukville. They are not the only potential obstacles. At quitting time, factory workers heading home on foot and motorbikes clog the road.

Iran’s Enemies Strike Back

By George Friedman 

The government in Tehran made its move. Now, it’s being boxed in. 

An interesting thing happened last week. A Russian reconnaissance plane was shot down by the Syrian army, so naturally Russia blamed Israel, claiming that Israel used the plane to shield its own fighter aircraft, en route to strike Iranian positions in Syria. Interesting though that charge may be, it’s far less fascinating than Moscow’s other quibble – that the Israelis had failed to give the Russians sufficient warning that they were entering Russia-controlled airspace in Syria. This runs counter to an arrangement whereby Israel, Russia and the U.S. pledged to inform each other about aircraft movement, so congested have the skies there become. In other words, the Russians didn’t object to the fact that Israel entered Syrian airspace – they objected to the fact they weren’t given much of a heads up.

Yes, Iran’s Economy Is Suffering—But It’s Not All About the U.S.

By Djavad Salehi-Isfahani

Iran’s currency, the rial, has lost two-thirds of its value in the last six months, much of it after the United States formally withdrew from the nuclear agreement in May. In Washington, the fall of the rial is widely seen as a consequence of U.S. sanctions and a sign of economic collapse that could bring down the Iranian regime. While the first claim is generally true, it is overstated, and the second is based on false assumptions.

Although U.S. President Donald Trump has hurt the Iranian economy, the unexpected depth of the rial’s decline owes less to U.S. policy than to poor decision-making in Tehran and structural weaknesses in Iran’s economy. A proper understanding of the factors that deepened the crisis suggests that the country’s acute hardships may ease or disappear as Iran adjusts to the new situation. Iran’s foreign exchange market needs to be understood on its own terms in order to avoid the common mistake of equating the fall of the rial in the free market with economic collapse, rising poverty, and increasing protests that can weaken the regime.

Russia’s Military Intelligence Agency Isn’t Stupid

By Mark Galeotti

Six months after the attempted assassination of Sergei Skripal, a former Russian double agent in the United Kingdom, details about the suspected killers are finally coming out. According to British prosecutors, the two men named as suspects belonged to the GRU, Russia’s military intelligence service, which is the very agency Skripal worked for when he was a British spy. On the one hand, these alleged ties attest to the GRU’s aggressive agenda—something of which governments in the West should be wary. On the other hand, an excessive focus on this service, as well as an emerging narrative about its supposed clumsiness, is dangerous.

The White House has revealed massive mission creep in Syria. Here’s why.

By: Kyle Rempfer and Todd South

The Islamic State is on the brink of total military defeat ― but don’t expect U.S. troops in Iraq and Syria to be coming home anytime soon.

The Islamic State’s caliphate has collapsed. They have almost no territory remaining except for a small piece of eastern Syria and the militants appear to have very little combat power left.

At the same time, ISIS is losing its international influence as terrorist attacks in the West are declining. And the latest intelligence reports suggest the group has very little ― if any ― operational control over its affiliate groups in other countries in Africa and beyond.

Yet top U.S. officials at the Pentagon and the White House are avoiding anything that sounds like a declaration of victory.

Ukraine and Russia Take Their Conflict to the Sea

As the standoff between Ukraine and Russia intensifies in eastern Ukraine, the Sea of Azov will become a new area of contention.

Both Ukraine and Russia will increase their military presence in the sea, and Kiev has already announced plans for a new naval base there before the end of the year.

The military buildup could lead to growing economic disruption of shipping in and out of the sea.

Russia is stronger than Ukraine on the sea, but robust U.S. support for Kiev could alter the situation in the area.

Putin's Ukraine War Has Completely Backfired


LVIV, Ukraine — When they first arrived in Lviv, a university rector told me, the students who came from Donetsk walked around in packs, speaking loudly in Russian. They didn’t want to speak Ukrainian, as most inhabitants of this city do; they didn’t want to integrate. Lviv is in western Ukraine, near the Polish border. Donetsk, hundreds of miles to the east, has been occupied by Russian-backed “separatists” since the Russian invasion in 2014. The new students were “internally displaced persons” — refugees in their own country.

But that first year ended, and the second year was different. By the third year, the rector told me, the students from western Ukraine and the students from eastern Ukraine were nearly indistinguishable — and they aren’t alone. Four years have now passed since the invasion, and the 1.5 million Ukrainians displaced by the war are coping better than might be expected. Most of those who are of working age have jobs. The majority say they trust their neighbors.

What Is the Purpose of U.S. Sanctions on Russia?

By John Dale Grover

On September 20, Washington's announced new sanctions on 33 Russian individuals or entities for election interference. In addition, America’s November deadline is approaching for Russia to meet Washington’s demands for international inspections and guarantees that Moscow will never use chemical weapons again. Assistant Secretary of State Manisha Singh warned during testimony to Congress on September 13, that without compliance a “severe” “second tranche of sanctions” will be imposed. It is not clear what sanctions are meant to accomplish or whether they are working.

For instance, the September 20 sanctions were a part of the Countering America’s Adversaries Through Sanctions Act (CAATSA). They are meant “to impose costs on Russia in response to its interference in the United States election process, its unacceptable behavior in eastern Ukraine, and other malign activities.” Also, the November deadline and demands were made on August 27 after Russia used the Novichok nerve agent in an attempted assassination of former Russian spy, Sergei Skripal, and his daughter Yulia, in the United Kingdom. In that case, U.S. anti-biochemical weapons law required a response.

Gaza Is Bringing Egypt and Qatar Closer, but It Can't Keep Them Together

A comprehensive solution to the Palestinian-Israeli conflict remains extremely far off.

Concerned powers such as Israel, the United States, Egypt and the Gulf states are all carrying out policies intended to prevent a major war in Gaza.

Qatar and Egypt, two ideological foes, are seeking the same objective of a stable Gaza, but neither of them controls enough of the situation to prevent a full-on return to war.

The two states will only tolerate one another so long as an Israeli-Palestinian truce holds — and if it falls apart, each will try to pin blame on the other.

Space: The Final Frontier for War?

By Omar Lamrani

The U.S. military will continue to debate the relative merits of creating a Space Force that is separate from the other branches of the U.S. armed forces.

In the absence of international standards regulating conduct in space, the risks will grow that the United States, China and Russia will accelerate their own efforts to militarize the theater.

Treaties stipulating a blanket ban on weapons in space are unlikely to succeed in the foreseeable future because of their significant limitations and concerns over the ability to verify compliance.

US spends $81 billion a year to protect global oil supplies, report estimates

Tom DiChristopher

An American flag flies near US Navy boats docked at Bahrain's Salman port in the capital Manama, on May 12, 2013

The United States military spends about $81 billion a year to protect oil supplies around the world and keep fossil fuels flowing into American gas stations, according to new analysis.

Securing America's Future Energy, a think tank that advocates for reducing U.S. dependence on oil, released the study the same day President Donald Trump claimed that some Middle Eastern countries are pushing up crude prices while benefiting from U.S. military protection.

We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!

U.S. Urged to Rapidly Prepare for Electromagnetic Pulse Attack

BY: Bill Gertz

The United States is vulnerable to a devastating electromagnetic pulse event caused by a high-altitude nuclear blast or solar superstorm, according to a recently published book.

Peter Pry, a former CIA analyst and author of the book EMP Manhattan Project, is urging the government to rapidly harden the U.S. electric power system against EMP similar to the three-year crash program to build the first atomic bomb in 1942.

"Today the United States and the world faces another existential threat—from an electromagnetic pulse (EMP) catastrophe that can be caused by nature or man, and topple the technological pillars of modern electronic civilization," said Pry, who served on a congressional EMP commission in the early 2000s.

National Will to Fight Why Some States Keep Fighting and Others Don't

Research Questions 

How can the United States assess and influence partner and adversary will to fight? 

What are the political, economic, and military variables that may strengthen or weaken national will to fight, and which are most important? 

What drives some governments to persevere in war at any price while others choose to stop fighting? It is often less-tangible political and economic variables, rather than raw military power, that ultimately determine national will to fight. In this analysis, the authors explore how these variables strengthen or weaken a government's determination to conduct sustained military operations, even when the expectation of success decreases or the need for significant political, economic, and military sacrifices increases.

UK spies go on the offensive with yet another costly intelligence agency

With all the already existing British intelligence agencies, it is puzzling why the UK needs yet another costly cyber force to counter Russia and terrorism amid national financial uncertainty.

The UK Ministry of Defence announced on 21 September the establishment of yet another British spy agency, an amalgam of military and security service professionals designed to wage cyber war against terrorists, Russia and organised crime. The new agency will have upwards of 2000 staff (the size MI5 was when I worked there in the 1990s, so not inconsiderable). I have been asked for a number of interviews about this and here are my thoughts in long form.

Perspectives and Opportunities in Intelligence for U.S. Leaders

Threats to the international order from near-peer competitors and from rogue regimes, terrorists, and the proliferation of cyber weapons and weapons of mass destruction all challenge whether the U.S. Intelligence Community (IC) will be able to fulfill its mission. It is unclear whether the IC is prepared to provide decisionmakers and warfighters with the intelligence they need and expect.

This Perspective presents five distinct discussions of changes the IC can make to meet these challenges in the areas of strategic warning; tasking, collection, processing, exploitation, and dissemination (TCPED); security, counterintelligence, and insider threats; open-source information; and surging for crises.

Each of the five discussions in this Perspective provides analysis and recommendations that may be read, acted on, and implemented alone—but the authors believe that the IC has an opportunity to make a major leap forward by acting in a coordinated manner on all five of the topics together.

Protecting the power grid from cyber attacks

by Paula Owen
As the national power grid becomes increasingly dependent on computers and data sharing—providing significant benefits for utilities, customers, and communities—it has also become more vulnerable to both physical and cyber threats. 

While evolving standards with strict enforcement help reduce risks, efforts focused on response and recovery capabilities are just as critical––as is research aimed at creating a well-defended next generation smart grid. The Daily Herd recently sat down with Michael Ahern to discuss the many challenges involved in securing the national power grid against physical and cyber attacks––both now and in the future. 

In addition to his role as director in WPI's Corporate and Professional Education and instructor for the Foisie Business School, Ahern also leads a WPI research team supporting BAE Systems as part of the Defense Advanced Research Project Agency's Rapid Attack Detection, Isolation, and Characterization Systems (DARPA RADICS) intitative. 

How Can Social Media Firms Tackle Hate Speech?

For years, social media companies have done relatively little to keep hate speech off of their platforms, often accepting racist, homophobic and anti-Semitic screeds and comments as the cost of doing business. More recently, though, social media has exploded onto the front lines in the battle over hate speech, free speech and the sociopolitical war gripping the U.S.

One big recent spark was provided by Alex Jones. The conspiracy theorist has long floated patently false claims that child-sex rings run by prominent public figures (Robert Mueller, Hillary Clinton) are operating right under our noses, and that the Sandy Hook shooting was a hoax staged by gun-control activists. In early August, social media companies decided they had had enough: YouTube took down Jones’s channel — with 2.4 million subscribers — saying it violated the firm’s policy on hate speech, and Apple dropped some of Jones’s InfoWars podcasts from its app for the same reason. Facebook removed some of his pages, saying they were “glorifying violence” and using “dehumanizing language to describe people who are transgender, Muslims and immigrants.”

The real 5G ‘race’ is to serve all Americans

Tom Wheeler

September 28 will see a White House rally to promote U.S. leadership in fifth generation (5G) wireless technology. I was part of a similar event at the Clinton White House in 1993 that promoted the importance of making more spectrum available through auctions that were then being considered by Congress. This time around, it looks like the messaging will be around the “5G race” between the United States and China.

CTIA—The Wireless Industry Association warns the U.S. is in third place behind China and South Korea when it comes to 5G. The so-called “5G gap” has become the go-to rationale for all kinds of industry-sought policy changes. Judging by how the issue is framed, the U.S. is on the verge of losing the “5G race” to China.

Shanahan: cybersecurity will become new measure for industry

By: Aaron Mehta

“This is a public service announcement for those of you from industry, especially for those of you that are in the, I'll call it, higher tiers,” Shanahan told an audience at the annual Air Force Association conference Wednesday.

“Cybersecurity is, you know, probably going to be what we call the ‘fourth critical measurement.’ We’ve got quality, cost, schedule, but security is one of those measures that we need to hold people accountable for,” he said.

“We're going to work with our industrial partners to help them be as accountable for security as they are for quality. And it shouldn't be that being secure comes with a big bill. It's just like we wouldn't pay extra for quality. We shouldn't pay extra for security.”

When this country faced a suspected Russian cyberattack – it took some big steps to stop another

Elizabeth Schulze

It's been called the world's first cyberwar – and it started with the relocation of a Soviet War memorial in Tallinn, Estonia.

When Estonian authorities moved the statue of a Soviet soldier to a less prominent location in April 2007, the country's ethnic Russian population took to the streets to protest.

Then, within days, websites of Estonian parliament, government ministries, banks and newspapers went offline.

Although it hasn't ever been confirmed, it's widely believed Russia was behind the cyberattacks that left large parts of Estonian society at a standstill.

The incident served as a wake-up call for the tiny Baltic nation that was already a highly digitally-advanced society. Estonia decided to take big steps to create a cybersecurity strategy.

The Age Of Cyber War – OpEd

By Zaheema Iqbal*

The innovations in technology have brought infinite benefits to the modern life. Today, the world is interconnected as never before. But, inspite of having all technological advancements, there is a bleak side to it; the cyber age is reshaping the warfare. The age where weapons and threats were once identifiable and visible are now anonymous and invisible. Where, there were clear boundaries and rules of warfare; cyber age has borderless and anarchic warfare. This evolving threat landscape by state and non-state actors calls for a new collective security discourse.

According to the Europol 2018 report, terrorists misused more than 150 social media platforms for their propaganda dissemination. They not only used file sharing sites which were used to disseminate and store terrorist messages, and content but bot services were also misused to advertise links for streaming content to many other social media platforms. As a counter-measuring mechanism, law enforcement agencies have tried to minimize the abuse of mainstream social media platforms like Twitter, Facebook and YouTube by the terrorists. Besides being active on the online surface, there are few terrorist organizations which are active on Darknet. These activities mostly concern with fundraising campaigns, and use of illicit markets for the purchase of malwares and botnets.

Military worship hurts US democracy

Mara Karlin and Alice Hunt Friend

Toward the beginning of the 2012 novel Billy Lynn’s Long Halftime Walk, a U.S. soldier on leave from the war in Iraq reflects on his encounters with civilians. “For so many of them, this is the Moment: His ordeal becomes theirs and vice versa…They want autographs. They want cell phone snaps. They say thank you over and over.” The book explores how civilians and military personnel caricature each other and how the admiration on the part of those who have not served for those who have put on a uniform unwittingly puts an artificial distance between them.