24 November 2018

How Indian private equity is coming of age

By Peeyush Dalmia, Vivek Pandit, Gaurav Sharma, and Dushyant Singh

As more capital becomes available, competition increases, and lessons from past excess and inexperience result in better performance, private equity firms are reevaluating their strategies and internal capabilities.

In McKinsey’s 2015 report, Indian private equity: Route to resurgence, the authors analyzed the performance of the private equity industry in India and its impact on the Indian economy. At that time, the industry was at a crossroads, and the authors highlighted the challenges it faced and identified some “green shoots” that indicated a possible revival. In the aftermath of the global financial crisis, fund managers were forced to reevaluate their playbooks and tool kits; the changes they made prepared them for the next phase of growth.

Since then, the volume of private equity activity—fund-raising, investment, and exits—has indeed grown (Exhibit 1), helped by global liquidity and the inability of other domestic sources of capital to keep pace with a growing economy. In another good sign, the industry has seen a greater range of participants and a wider spectrum of deal types and investment strategies.

India and the ‘Quad’: Forging an Innovative Approach

By Harsh V. Pant and Paras Ratna

The recent meeting of the so-called Quad countries on the sidelines of 13th East Asian Summit in Singapore, along with the Trump administration’s emphasis on the free and open Indo-Pacific (FOIP) strategy, has turned the spotlight once again on the future viability of this grouping. As a strategic concept, the Quad seems to be gradually evolving with its third round of meeting this month. The participants stressed ASEAN’s centrality and committed themselves to partnering with multiple countries and forums to promote rule-based, open, free and inclusive Indo-Pacific. The U.S. national security advisor, John Bolton, rightly suggested that “this is a strategy that is still being shaped and the level of diplomatic activity has picked up.”

In Afghanistan, a 17-Year Stalemate

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Another devastating suicide attack in Kabul on Tuesday and an independent report on the situation in Afghanistan serve to underscore what is now a growing consensus in Washington: that the United States is making no progress toward ending the 17-year-old war there.

More than 50 people were killed and at least 80 others injured when a suicide bomber blew himself up inside a wedding hall in the Afghan capital, according to reports. This comes as a blow to the Trump administration’s strategy in Afghanistan, as American military officials had made defending major urban centers such as Kabul from the Taliban a linchpin of the effort.

Just days before the bombing, America’s top general admitted the war is at an impasse. The Taliban is “not losing right now, I think that is fair to say,” Gen. Joseph Dunford, the chairman of the Joint Chiefs of Staff, said during the Halifax International Security Forum on Nov. 17.

Afghan exodus follows Taliban assaults; New Space Force cost guess; Turkeys surge to Mexican border; Expect more overlapping climate disasters; And a bit more.


An explosion has rocked a wedding in Kabul, killing at least 40 people and wounding over 80 others, Afghanistan’s Tolo News reports this morning in a developing story. 

Elsewhere, residents in multiple provinces are fleeing Taliban assaults to the more central-northern Bamiyan province — where the Taliban blew up those old Buddhist cliff statues — the Washington Post reports from Bamiyan.

Sources of exodus: Ghazni and Oruzgan province.

China Has More Nuclear Subs Than the West Believed


Western observers have likely underestimated the number of Chinese nuclear submarines in development, but overestimated how many are operational, a new analysis suggests. In particular, only half of China’s nuclear-armed SSBNs appear to be in operation.

Photos of the Bohai Shipyard and the Longpo Naval Facility produced by Planet Labs suggest that “China does not yet have a credible sea-based deterrent,” said Catherine Dill of the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies at Monterey. Two of China’s four JIN (or 094)-class subs “appear to not be in operation and are undergoing maintenance or repairs at the Bohai shipyard, suggesting to us that credibility is still in question.”

U.S. to Challenge China in Territorial Dispute Using Military, Economic Means

By Stew Magnuson

HALIFAX, Nova Scotia — Indo-Pacific Command Commander Adm. Philip Davidson said the United States will continue to challenge China over its claims in the disputed South China Sea region with both military and economic means.

Davidson came to the Halifax International Security Forum in Canada Nov. 17 and delivered a message similar to one the Trump administration gave on the other side of the world the day before: The United States intends to beat back China’s influence over its smaller, less wealthy neighbors.

Davidson — as well as Vice President Mike Pence speaking Nov. 16 at the Asia-Pacific Economic Cooperation summit in Papua New Guinea — both accused China of using its economic might to “coerce” nations into doing its will and ultimately giving up part of their sovereignty.

The limits of China’s charm offensive

Minxin Pei

In terms of China’s behaviour in the region, quite a lot. In 2013, China unilaterally declared an air defence identification zone covering the East China Sea’s disputed Senkaku/Diaoyu Islands—a move that exacerbated tensions with Japan. A year later, China began to construct large artificial islands in disputed areas of the South China Sea. In 2016, China imposed sanctions on South Korea in response to the decision to allow the United States to deploy a missile-defence system there.

Now, however, such geostrategic bullying seems to be taking a backseat to diplomacy. Last month, Chinese President Xi Jinping welcomed Japanese Prime Minister Shinzo Abe to Beijing. Abe’s visit to China was the first for a Japanese leader in seven years, and Xi’s scheduled visit to Japan next year will be the first for a Chinese president in more than a decade.

China’s Risky Drive into New-Energy Vehicles

China has made developing new-energy vehicles (NEV) a top priority. The hope is that NEVs will help the country transform from a follower to a technological leader in the automobile sector, reduce China’s dependence on imported oil, and improve the country’s overall air quality. To achieve these goals, China has employed an intensive, government-led effort to generate a steady supply of NEVs, batteries, and other key components, as well as promote consumer demand.

The results of these efforts are mixed. China has by far the world’s largest NEV market and boasts an eclectic mix of NEV makers. China’s battery makers have also improved the quality of their batteries. At the same time, the sector faces some immense challenges, such as insufficient domestic demand, lack of commercial profitability, potential overcapacity, inadequate product quality, and relocation, but not overall reduction, of pollution. The future of the Chinese NEV sector also depends on how some wild cards play out: efficacy of changes in government policy, development of quality and technology, availability of more commercially viable batteries, and progress of the mobility revolution are all key.

Trump’s Utter Denial About Saudi Arabia and Its Crown Prince

So much for American justice. In a statement both stunning and coldhearted, President Trump on Tuesday gave Saudi Arabia a pass on the grisly murder and dismemberment of journalist Jamal Khashoggi in the name of U.S. national security. He blithely rejected a U.S. intelligence assessment as well as damning physical evidence provided by Turkey indicating that the kingdom’s de-facto ruler, Crown Prince Mohammed bin Salman, authorized the Saudi dissident’s execution, in Istanbul, on October 2nd. The President of the United States sounded more like a defense attorney—or lobbyist—for the oil-rich kingdom than a protector of American values.

“It could very well be that the Crown Prince had knowledge of this tragic event—maybe he did and maybe he didn’t!” Trump said in a two-page statement. He condemned the Khashoggi assassination as an “unacceptable and horrible crime,” but then said Saudi Arabia was too important a purchaser of U.S. weaponry, an exporter of oil, and an ally in “our very important fight against Iran” to take punitive action. “The United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country,” Trump said.

What Drives Israel’s Startup Success?

In October the business press reported that Israeli cybertech startup Sygnia was acquired by Singapore’s billion-dollar Temasek Holdings for an estimated $250 million. The return for the owners is over 50 times the initial investment, according to Israeli newspaper Haaretz. And last year, the Israeli company Mobileye, a pioneer in autonomous car technology, was purchased by Intel for a whopping $15.3 billion.

Tech startups may not be the first thing that comes to mind when many people think of Israel — the country’s political strife is what makes headlines. But Israel’s achievements in innovation and entrepreneurship are remarkable by any measure for a tiny, embattled nation of 8.8 million people that has only existed for 70 years.

At the recent Wharton Israel Conference, speakers and participants highlighted Israel’s contributions to technology, science, medicine and agriculture, as well as its entrepreneurial spirit which they said helps transform discoveries into real-world solutions.

The Czech tech to overcome Russian jammers

By: Grant Turnbull  

In a small city, just a few hours drive from the Czech Republic capital of Prague, a quiet revolution is brewing in the field of passive surveillance. The technology developed here in Pardubice gives NATO an edge when it comes to detecting aerial and naval threats and could help international forces overcome Russia’s powerful electronic warfare capabilities.

Czech company Era is relatively unknown outside of the electronic surveillance community and civil aerospace sector, but along with its home city of Pardubice, it has a rich history in passive sensor technology. While Era was established in the 1990s, its lineage can be traced back to the Soviet era when it was part of the massive Czech conglomerate Tesla (unrelated to Elon Musk’s company of the same name).

European Security Post-Merkel

By Fabrizio Tassinari

EU defence cooperation suffers from a lack of strategic purpose. This challenge offers an opportunity for smaller members such as Denmark to stress that PESCO supported by Germany and the French EI2 initiative are not and should not be competitive models.

Modern German defence policy is mired in a paradox. While international partners expect more activism from Germany, a majority of its citizens believes that international organizations are more competent than the government in the field of defence and armament policy. To address this dilemma, the notion of a European Army has repeatedly been stated to be a central long-term goal of German defence policy.

Is This Bitcoin Armageddon? Popular Cryptocurrency Is Worth 75 Percent Less Than It Was A Year Ago

My, how the worm has turned. The surge of Bitcoin over the past several years has been nothing short of meteoric — until now. After rising to $20K per bitcoin in 2017, Bitcoin is trading this morning (Monday/Nov. 19, 2018) — down $300, to $5,262, less than what it costs to produce a single coin at around $6K per coin. Last week, bitcoin “took an abrupt turn, down 14 percent in just one four-hour period, with other digital coins experiencing similar losses,” Victoria Bell wrote on the November 14, 2018 edition of the DailyMail. McAfee’s Ethereum, fell $182.41, with other smaller firms like Litecoin, and XRP dropping more than 17 percent. “The slump has caused a wave of selling in the digital currency and other crypto assets in what has been a prolonged market slump that began earlier this year,” Ms. Bell wrote.

The Kremlin Cannot Continue to Ignore the Chaos in Chechnya

by Neil Hauer

Ramzan Kadyrov has long been a headline staple beyond the bounds of the republic he rules, Chechnya. His penchant for tracksuit meetings at the Kremlin and workout videos have made him a regular media phenomenon throughout Russia and the North Caucasus, while less savory proclamations about letting the families of gay men “ deal with them ” have made rounds in the West.

For others in the North Caucasus, Kadyrov was largely seen as an unappealing curiosity—someone who repressed his people to a degree they could hardly imagine in their own republics, but largely “Chechnya’s problem.” Moscow’s view was similar: as long as he kept the lid on Chechnya and maintained “stability,” the oh-so-familiar sacrosanct principle of Vladimir Putin’s tenure, then whatever horrors he inflicted on his captive populace were of little concern.

The Geoeconomic World Order

By Anthea Roberts, Henrique Choer Moraes, Victor Ferguson

We appear to be entering into a new geoeconomic world order, characterized by great power rivalry between the United States and China and the clear use of economic tools to achieve strategic goals. This increased convergence of economic and security thinking and strategies is likely to lead to a significant restructuring of the laws and institutions that govern international trade and investment.

In the post-Cold War period, the old international economic world order flourished. It was characterized by a relative separation of the realms of security and economics; a primary focus on maximizing absolute economic gains; and a tendency to treat interdependence as a good that would facilitate the goal of increased economic efficiency. In the new geoeconomic world order, the balance and relationship between economics and security have changed. The new order is characterized by a higher degree of convergence between security and economics; a greater focus on relative economic gains given their implications for security; and increased concern over the security risks posed by interdependence in terms of undermining state control, self-sufficiency and resilience.

Future Tense - Our World in Ten

This year’s Halifax International Security Forum paid respect to the 100th anniversary of the end of World War One, but in its final plenary session, Present Tense: Our World in Ten, the attention shifted to the future. How will the issues discussed throughout this year’s Forum play out over the next decade? Will democratic states be able to defend their values and institutions from growing threats like great power politics and cyber-warfare? This diverse set of panelists spoke confidently and optimistically about the resilience of democracies to withstand this challenge.

Former Ambassador to NATO, R. Nicholas Burns, Professor of the Practice of Diplomacy and International Relations at the Harvard Kennedy School spoke about the need for democratic states to preserve their collective self-confidence, and their values and institutions, in the face of rising authoritarianism from China and Russia.

The U.S. Could Regulate AI in the Name of National Security

By Dave Gershgorn and Max de Haldevang,

Artificial intelligence technology has the capability to be the most impactful software advance in history and the U.S. government has no idea how to properly regulate it.

The U.S. does know that it doesn’t want other countries using its own AI against it. A new proposal published Monday by the Commerce Department lists wide areas of AI software that could potentially require a license to sell to certain countries. These categories are as broad as “computer vision” and “natural language processing.” It also lists military-specific products like adaptive camouflage and surveillance technology.

The small number of countries these regulations would target includes a big name in AI: China. Donald Trump, who has placed tariffs on hundreds of billions of dollars of Chinese goods as part of a simmering trade war, has long railed against China’s alleged theft of intellectual property. This proposal looks like a warning from U.S. officials, just as Chinese president Xi Jinping aims to boost AI in his own country.

Zero Botnets Building a Global Effort to Clean Up the Internet

Zero Botnets 

Botnets are the bane of the internet. Criminals use these groups of computers infected with malicious software to propagate spam, send phishing emails, guess passwords, impersonate users, and break encryption. Their most pernicious use, however, is to carry out distributed denial of service (DDoS) attacks. DDoS attacks harness the power of the individual computers that make up the botnet to send internet traffic to a target, thereby blocking legitimate traffic. As much as 30 percent of all internet traffic may be attributable to botnets, and most of that traffic is from DDoS attacks.

Most DDoS attacks are criminal in nature, often used by companies to take down their competitors’ websites or servers; however, China, Russia, and Iran have all harnessed botnets for geopolitical purposes. A motivated nation-state actor could easily harness millions of systems to shut down countries’ domestic networks or target core internet infrastructure and shut the internet down globally. Foreign governments certainly might judge such actions to be to their advantage in some scenarios.

Trusting Technology: Smart Protection for Smart Cities

By Marie Baezner, Linda Maduz and Tim Prior 

What do technological advances in Artificial Intelligence (AI) and the Internet of Things (IoT) mean for the protection of critical infrastructure (CI) of today’s increasingly complex and connected smart cities? According to Marie Baezner, Linda Maduz and Tim Prior, it means trusting technology to play a more substantial role in security infrastructure for the resilient provision of critical services. In addition, a crucial challenge will be to strike a balance between the preservation of security and the openness to exploit opportunities that come with technological advancement.

This CSS Analyses in Security Policy was originally published in September 2018 by the Center for Security Studies (CSS). It is also available in German and French.

Connectedness within and between modern societies generally strengthens social systems. But connectedness can also increase the exposure and sensitivity of technical systems to disturbances (natural, technical, and social). When those technical systems provide critical services for social systems, connectivity can become a problem.

Can Army Afford The Electronic Warfare Force It Wants?


WASHINGTON: Army planners are thrashing out how many electronic warfare specialists the service needs, not just to rebuild radio-jamming and spoofing capability in combat units, but to create a training cadre that can sustain the EW corps for the long-term. Whether this plan for robust growth — certainly hundreds of soldiers, possibly over a thousand — will survive the coming budget crunch is another question, but there are positive signals from Pentagon leaders.

After four years focused on cyber warfare, “we have really focused on the build of the next phase of development, and that’s in our electronic warfare force, bringing cyber, electronic warfare, and information operations capabilities across all echelons of the Army,” said Brig. Gen. Jennifer Buckner.

Show Me The Battle: Cyber Command Needs Data Fusion, Training Sims & C2


WASHINGTON: What does Cyber Command need industry to invent ASAP? Simulators that capture the full complexity of cyber warfare and command systems that show the virtual battle raging in real time, Lt. Gen. Vincent Stewart said this morning at CyCon US, a US ArmyNATO cyber conference.

It’s an irony of the information age. The US military has plenty of simulators to train pilots, sailors, tank crews, and even foot troops in physical combat. It has plenty of command-and-control systems to feed commanders data on what planes, ships, tanks, and troops are doing in physical operations. But it doesn’t have comparable computer systems to either train for or to control operations in cyberspace — the very kind of conflict where computers are both the weapons and the battlefield.

Understanding the Drone Threat

By Steve Tomaselli 

Last summer, fans at a San Diego Padres baseball game caught a glimpse of the future when a drone crashed into the stands. Thankfully, the operator was a hobbyist who had lost control of his drone and nobody was hurt. But the incident highlighted the drone threat, both in terms of a potential physical attack as well the capability to gather video surveillance and livestream it online, where malicious actors can exploit that footage in a number of ways.

In a recent report, Goldman Sachs estimated that the total drone market could reach $100 billion by 2020. And while we tend to think of drones as tools for the military, commercial aviation and hobbyists, the reality is that drones play significant roles in every sector of the economy, from agriculture to entertainment and everything in between. For security professionals, the scope of the threat is huge and evolving.

The Confusion of Clausewitz in Modern Warfare

By Daniel Covany

It is not uncommon in today’s world to see some quote of the infamous general Carl Von Clausewitz manuscript “on war” in an article or presentation advocating for current counterinsurgency strategies. Designed to win the hearts and minds of the people by combining politics and war into a single operation. Which can defeat the enemy in the ideological sphere rendering him impotent, but strangely enough you will find no such advice within Von Clausewitz’s manuscript. Instead, you find a constant and complete opposite:

Now philanthropists may easily imagine there is a skillful method of disarming and overcoming an enemy without causing great bloodshed, and that this is the proper tendency of the art of war. However plausible this may appear, it is an error which must be stamped out; for in such dangerous things as war; the errors which proceed from a spirit of compassion are the worst.

Command Has Not Been Eroded

Admittedly, the stakes are increasing in the Surface Force, but the CO is more rather than less important in this challenging environment in the wake of high-profile accidents and the revival of great power competition.

For starters, Commander, Naval Surface Forces, Vice Admiral Rich Brown, clearly believes in the primacy of COs and in our judgement. From his first communication via “Personal For” message to his commanders through this fall’s Commanders’ Training Symposium, his consistent message is one of empowerment and reducing administrative burdens while setting thresholds for minimum requirements in the force. [1]

The new Surface Force Training and Readiness Manual (SFTRM) streamlines the qualification process, and, for ships with strong leaders and capable crews, dramatically decreases training redundancies while giving valuable time back to the Captain. A day at sea is great, but a day at sea without inspectors on board is better. The SFTRM allows ships to forgo the previous block training and incorporates our most qualified watchstanders into mission area certification—changes that incentivize COs and give training time back to the crews of prepared ships. [2]

Army & Air Force Craft New Joint Combat Attack Plan - Information as Weapon

by Warrior Maven

The Army and the Air Force are crafting a new combined air-ground combat attack strategy to improve warfare networks, perform long-range sensing of targets, strike enemies more effectively and strengthen defenses across multiple domains in real-time.

The Army-Air Force collaboration, called "Multi-Domain Operations," has included in-depth joint-service wargames; it is ultimately aimed at developing new doctrine, service leaders explained.