Quant Funds Made A Major Comeback In March

Jacob Wolinsky

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PivotalPath said that dispersion was high during March at 3.7% at the composite level compared to the long-term average of 2.9%. The Equity Sector strategy had the highest level of dispersion across all strategies at 5.2%.

The equity Sector was also the worst-performing strategy for both March and the first quarter. The strategy was down 2.2% for March and is up 0.6% year to date. Interestingly, quant funds appear to have made a comeback last month, or at least, those tracked by PivotalPath did. Most quant funds had significant difficulties last year, with some of the largest ones posting negative or weak returns, although at least one quant fund managed a triple-digit return.

Equity Quant was the best-performing strategy, climbing from the bottom of the list to the top with a March return of 5.3%. That marks a 43% increase from the strategy's previous record high of 3.7% in May 2009. U.S. Long/ Short Quant funds returned 5.6% on average, while Global Long/ Short Quant Funds were up 5.5% for the month.

Alpha generation

Event-Driven hedge funds generated the most alpha during the first quarter. Equity funds generated the most alpha in 2020 and spent 20 months toward the top of the list of alpha generation strategies. In 2019 and 2018, the strategy was in second place by alpha generation. Equity Sector funds were in first place in 2017.

Hackers can stop the trains and the lights. But could they start a war?

By Sherryn Groch

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On the morning of June 27, 2017, it seemed as if Ukraine had slipped back in time and into the wrong century – almost nothing worked. Not the ATMs, the trains, the airports, the television stations. Even the radiation monitors at the old Chernobyl nuclear plant were down.

Ukraine, in the midst of a long and undeclared war with Russia, had been hit by mysterious blackouts before but this was eating through computer networks at a terrifying pace, turning screens dark across the country. And it seemed to be spreading further than intended, out through Europe and around the globe, paralysing hospitals and companies from London to Denver, even the Cadbury chocolate factory in Tasmania, and bringing swathes of the world’s shipping to a halt. By the time the culprit – a wild variant of malicious computer code (or worm) known as NotPetya – was stopped hours later, it had looped back into Russia, where it originated, and racked up about $US10 billion ($12.9 billion) in damage worldwide, making it the most expensive cyber attack to date.

No one died but the world had been given a glimpse of a new reality, beyond cyber espionage or sabotage. This was cyberwar. With modern life more connected than ever, you could unplug a nation before you’d even fired a shot.

Today, cyber weapons feature in the opening moments of most countries’ war plans, but they are deployed in peacetime, too, and the line between espionage, vandalism and outright attack is far from clear.

DNI: Cyber Is The Common Weapon Among Top Adversaries

By John A. Tirpak

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China aims to displace the U.S. as the world’s pre-eminent superpower; Russia is “pushing back” against the U.S., sometimes with force; Iran is a “regional menace” and North Korea is a “disruptive player,” and will be for years to come, Director of National Intelligence Avril Haines said in the U.S. intelligence community’s annual assessment of top threats facing the U.S.

Released April 9 amid Chinese saber-rattling against Taiwan and as Russian troops massed on the border with Ukraine, the 31-page unclassified threat assessment calls China the “pacing threat” for the U.S.—militarily, politically, and economically—noting that the other three nations remain active, potent adversaries, particularly in cyber warfare.

President Joe Biden on April 15 announced new sanctions on Russia stemming from the Solar Winds hack and Russia’s interference in the 2020 U.S. election. The sanctions target 32 individuals and organizations, and Biden also expelled 10 Russian diplomats. Biden called the move “proportionate,” saying his intent is not to “kick off a cycle of escalation and conflict with Russia.” The Solar Winds attack gave cyber criminals access to more than 18,000 computer networks, both government and private. Biden said Russia needs to be held to account for attempting to “undermine the conduct of free and fair democratic elections” in the U.S. and other Western nations.

Moscow said it would come up with “a decisive response.”

Artificial Intelligence, Lawyers And Laws Of War

By SYDNEY J. FREEDBERG JR.

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WASHINGTON: “My entire career, I’ve stood around a mapboard and the lawyer’s always right there,” said Gen. Mike Murray, who commanded troops in Afghanistan and Iraq. But in a highly automated future war of long-range missiles, swarming robots, and sensor jamming, warned the head of Army Futures Command, “you’re not going to have 30 seconds to stand around a mapboard and make those decisions.”

“Back when I was a brigade commander, even when I was commander of the Third Infantry Division in Afghanistan,” Murray recalled, “life and death decisions were being made just about every day, and it usually was around, either [a] mapboard or some sort of digital display.” Along with the staff officers for intelligence, operations and fire support, he said, one of a handful of “key people standing around that mapboard” was the command’s lawyer, its Staff Judge Advocate.

“The lawyer always got a say,” the general went on. “Is this is just a viable course of action, given the law of armed conflict?… Is this a legal response? And usually those discussions would take some time. I think in the future the opportunities to get people around the map board and have a detailed discussion — to include discussions about the legality of the actions you’re contemplating as a commander — will be few and far between.”

How will the Army solve this problem? Gen. Murray raised this question addressing a West Point-Army Futures Command conference on the law of future war, but he didn’t provide an answer. The speakers who followed didn’t seem to have an answer, either.

To Friends in the United States: Facilitate Global Vaccine Manufacturing

ARVIND GUPTA, RUDRA CHAUDHURI, HARSH PANT, REUBEN ABRAHAM, NITIN PAI

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The current public health crisis in India is devastating. On April 22, 2021, India recorded over 330,000 COVID-19 cases and 2,000 fatalities. It is unlikely that the second wave of the pandemic will level out anytime soon. The desperate need for oxygen, medical supplies, and hospital beds has overwhelmed public and private health facilities. Clearly, the state machinery will need to be mobilized in this war against the fast-spreading disease that appears to mutate in different ways and forms at a shattering speed.

To arrest this crisis, there is an equally urgent need to accelerate India’s vaccine drive. India, as is well known, is one of the world’s largest producers of COVID-19 vaccines. “Made-in-India” vaccines have been delivered—by way of aid and under commercial contract—to ninety-five countries across the globe. From Argentina to Bangladesh and El Salvador to Sierra Leone, India has distributed 66.2 million vaccines to date.

However, India is currently facing an acute vaccine shortage at home. On April 19, the Indian government announced that Indians above the age of eighteen will be eligible to get their shots. Making sure that the tens of millions of Indians are able to access vaccines is the only way in which a country as geographically challenging as India will be able to turn the tables on this fast-moving disease.

Yet, without the support of Joe Biden’s administration in Washington, this ambition—of delivering vaccines across India—is at risk of remaining just that, an ambition.

Afghan Ambassador: ‘The Ball Is in the Taliban’s Court’

BY JACK DETSCH

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In a little over a week, the first of 3,500 U.S. troops remaining in Afghanistan will begin to fly out of the country, leaving behind 20 years of war and a flurry of questions about what the country will look like going forward. The scheduled departure, meant to be completed by Sept. 11, puts pressure on the Taliban to finally stop its violence, according to Roya Rahmani, Afghanistan’s ambassador to the United States.

“For 20 years, [the] Taliban were justifying their war on the basis of the presence of foreign troops on the ground,” Rahmani said in an interview with Foreign Policy this week. “Was it really about the presence of foreign troops? If it was, then it’s time to stop the silence [on peace talks], stop the killing, and come and become a constructive part of Afghan society.”

After the latest attempt to hold peace talks earlier this month in Turkey failed, Rahmani made clear “the ball is in the Taliban’s court.”

This interview has been edited for length and clarity.

Foreign Policy: How is the Afghan government going to be able to protect gains that have been made on women’s rights and human rights over the past 20 years?

Roya Rahmani: The Afghan government should continue to do what it has been doing over many years, but particularly over the past five years, which is continue making space for women to be incorporated in decision-making at all different levels, whether it is in government, or in legislative bodies, or facilitating the environment for them to be an active part of the private sector, as well as all other arenas and walks of life. But I have to tell you that this is directly tied to what happens, securitywise, because the deterioration of security impacts women in more ways than the rest of the system.

The Original Sin of the War in Afghanistan

BY JONAH BLANK

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The original sin of the war in Iraq was going to war in Iraq. And the original sin of the war in Afghanistan was going to war in Iraq.

In September 2001, when Joe Biden was the chair of the Senate Foreign Relations Committee, I was the policy adviser for the stretch of Asia that included Afghanistan. By 9 a.m. on 9/11, I felt certain that al-Qaeda (which was based in Afghanistan) was behind the attacks—but that we’d end up invading Iraq anyway.

I was a year and a half off. And that interim period was the only time the mission in Afghanistan ever stood a real chance. This week, President Biden announced that all United States forces will be withdrawn from Afghanistan by the 20th anniversary of 9/11. To understand his decision to get out, one has to understand the decision to get in—and how that choice was quickly undermined by the invasion of another country.

In 2001, even the most ardent war hawks didn’t want to invade Afghanistan: They wanted to invade Iraq. Neoconservatives, such as the Pentagon officials Paul Wolfowitz and Doug Feith, had a grand vision of remaking the country in America’s image. Paleoconservatives, such as Vice President Dick Cheney and Secretary of Defense Donald Rumsfeld, wanted to oust Saddam Hussein, install a pliable puppet, and thereby deter any other would-be adversaries. Both camps saw Afghanistan as an unwelcome distraction from the main event, but they applied the same rationales there.

Biden belonged to neither camp. He rejected both the unrealistic ambitions of the neocons and the unambitious realism of the paleos. His decision to support going into Afghanistan and the development of his thinking as the war dragged on provide important hints of how he’ll handle questions of military force in the future.

China's Soft Power in Europe: Falling on Hard Times

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Analysis from 17 countries and EU institutions reveals that Chinese soft power in Europe – defined as the ability to influence preferences through attraction or persuasion – has seen better days.

This report, which brings together experts from across the continent, is a collaborative effort of the 20 research institutes that make up the European Think-tank Network on China (ETNC), of which Ifri is a founding member.

Developing soft power has been a pillar of Chinese foreign policy since 2007 and remains a stated goal of China’s long-term policy orientation to 2035. The country-level analysis from the report identifies three prominent Chinese approaches to developing soft power in Europe:

- promoting Chinese language and culture;

- shaping China’s image through the media;

- and using the secondary soft-power effects of economic prowess.

Recently, and over the last year in particular, China has become more assertive in attempting to shape its image by expanding its toolkit, particularly to enhance its political messaging. This includes the systematic use of social media.

Over 500 U.S. Scientists Under Investigation for Being Compromised by China

BY MATTHEW IMPELLI 

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More than 500 U.S. scientists are under investigation for being compromised by China and other foreign countries, according to a recent hearing before the Senate Health, Education, Labor and Pensions Committee.

The hearing was focused on protecting the U.S.'s biomedical research from foreign entities such as China. While delivering opening remarks, Senator Patty Murray, chair of the committee, spoke about a recent report from the National Institutes of Health and conflicts of interests among 507 NIH grant recipients.

"It's important that researchers with foreign affiliations and potential conflicts of interest—for example, participation in foreign talent programs or commitments to file patents in, or move laboratories to, foreign nations—fully disclose those issues when applying for federal grants," Murray said.

"The latest report from the National Institutes of Health on undisclosed conflicts of interest found cause for concern with only 507 grant recipients—compared to over 30,000 total grantees in 2020," she added.

Murray also said that the NIH "has made progress in implementing policies and procedures to raise awareness of, prevent and address undue foreign influence among the biomedical research community." But she noted that "investigations from the Department of Health and Human Services' Office of the Inspector General, the department's Office of National Security and the Government Accountability Office make clear there is more NIH can be doing here."

Can Iraq play the role of a bridge in the Gulf?

Katherine Harvey and Bruce Riedel

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There has been a gradual thaw in the relationship between Saudi Arabia and Iraq since 2015, and a number of notable developments have taken place in recent months. Last November, the Arar border crossing — the principle crossing between the two countries — was opened for the first time in 30 years. In late March, during a trip to Riyadh by Iraqi Prime Minister Mustafa al-Kadhimi, the two countries signed a number of agreements covering economic and cultural relations. Most importantly, the kingdom committed to a substantial increase in investment in Iraq: up to $3 billion, from a current total of about $500 million. Then, less than 10 days after Kadhimi’s trip, according to reports, his government hosted direct talks between the Saudis and their regional rival, Iran. The talks reportedly focused on Yemen.

The Saudis broke relations with Iran allegedly after demonstrations damaged their diplomatic facilities in Iran, but in fact Saudi King Salman used this as an excuse to cut ties. In what was likely a coincidence, two days before the Saudis broke relations with Iran, they officially reopened their Baghdad embassy for the first time in 26 years, a project that had been in the works since the year before. Salman and his son, Crown Prince Mohammed bin Salman, are the most anti-Iranian leaders in the kingdom’s history, so their decision to open a dialogue now is a big step.

An Iraqi official, commenting on the talks, observed that Kadhimi is “very keen” for Iraq to play the role of “a bridge” between its two antagonistic neighbors.

The Iraq-hosted talks portend a potential new dynamic in the relationship between Iran, Iraq, and Saudi Arabia — the three major players in the Persian Gulf — that has been decades in the making.

A BRIEF HISTORY OF A SHIFTING BALANCE

Nation States, Cyberconflict and the Web of Profit

Alex Holland 

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INTRODUCTION

Today we announced the findings of a new study – Nation States, Cyberconflict and the Web of Profit – showing that nation state cyberattacks are becoming more frequent, varied and open; moving us closer to a point of ‘advanced cyberconflict’ than at any time since the inception of the internet. The research – which was conducted by Dr. Mike McGuire, Senior Lecturer in Criminology at the University of Surrey, and sponsored by HP – highlights there has been a 100% rise in ‘significant’ nation state incidents between 2017-2020. Analysis of over 200 cybersecurity incidents associated with nation state activity since 2009 also shows the enterprise is now the most common target (35%), followed by cyberdefence (25%), media and communications (14%), government bodies and regulators (12%), and critical infrastructure (10%).

In addition to the analysis of nation state cyberattacks, the research also draws upon first-hand intelligence gathering from informants across the dark web and consultations with an expert panel of 50 leading practitioners in relevant fields (such as cybersecurity, intelligence, government, academia, and law enforcement). The findings paint a clear picture of escalations in tensions, supported by increasingly complex structures that intersect with the underground cybercrime economy – referred to as the Web of Profit.

KEY FINDINGS

John Kerry’s Biggest Mission

BY MICHAEL HIRSH

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On April 22, 1971—50 years ago to the day that U.S. President Joe Biden’s climate summit opened this week—a young Vietnam veteran named John Kerry first brought himself to national attention.

The 27-year-old former Navy lieutenant, his Silver Star ribbon pinned to his green fatigues, declared in Senate testimony that the Vietnam War was “an absolute horror.” Holding nothing back, Kerry bluntly catalogued U.S. war crimes, insisted U.S. troops be brought home immediately and questioned, in words that would be widely quoted and later inspire a Bruce Springsteen song, “How do you ask a man to be the last man to die for a mistake?”

Those words would come to define Kerry’s entire career and, ultimately, return to haunt him, costing him his fondest dream: being elected U.S. president. But Kerry’s testimony was also early evidence of a character trait his friends and admirers often point to: a hell-for-leather willingness—even eagerness—to confront the toughest issues, call them by their real name, and refuse to give up trying to solve them. Ever.

Now, at the age of 77, he is taking on the task of rolling back climate change at a time when U.S. global leadership is being questioned. And Kerry will need all those personal qualities and more. On Thursday, Biden sought to reclaim that leadership by setting a dramatic goal of cutting U.S. greenhouse emissions by about 50 percent by 2030, bringing the G-7 and European Union mostly on board and challenging China and other nations to do the same.

Global Migration Is Not Abating. Neither Is the Backlash Against It

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Around the world, far-right populist parties continue to stoke the popular backlash against global migration, driving some centrist governments to adopt a tougher line on immigration. But with short-term strategies dominating the debate, many of the persistent drivers of migration go unaddressed, even as efforts to craft a global consensus on migration are hobbled by demands for quick solutions.

The European Migrant Crisis of 2015 has long since abated, but European nativist and populist parties continue to attempt to stoke the popular backlash against immigrants to fuel their rise. Italy’s Matteo Salvini, the golden boy of Europe’s anti-immigrant populists, even rode the issue into government in 2018, before marginalizing himself with a bid to force early elections in 2019 and, more recently, misplaying the politics of the COVID-19 crisis. Nevertheless, Europe’s other far-right populists, like France’s Marine Le Pen, continue to hammer on anti-immigrant sentiment, hoping it will remain a potent issue in upcoming elections.

In the midst of a global pandemic, it is not clear it will have the same electoral impact as it did in 2015, when a wave of refugees and immigrants arrived in Europe from Syria and elsewhere in the Middle East and Africa. Still, the threat is enough to keep centrist governments toeing a tough line on immigration at home, even as they work with countries of origin and transit to restrict migration, thereby driving asylum applications back to pre-2015 levels.

Why Is Most Oil Found In Deserts And The Arctic?

By Alex Kimani 

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The short-term energy outlook has improved considerably over the past few months, thanks mainly to the ongoing Covid-19 vaccine rollout. A cross-section of analysts now expects oil demand to bounce back to near pre-pandemic levels during the second half of the year, while others are predicting a shortfall and price rally.

The same can, however, hardly be said about the long-term outlook, with WoodMac recently causing some consternation after predicting that Brent will change hands at just $10 per barrel in 2050 as renewables rapidly take over.

However, most experts agree that fossil fuels will continue to be our most dominant energy source for at least a decade—maybe even two—depending on how fast the energy transition happens.

As such, major oil and gas discoveries such as ExxonMobil's (NYSE:XOM) Guyana find will continue to dominate headlines even as the bears warn of the massive risk of these assets being stranded.

Which prompts the trillion-dollar question: Why is most of our oil found in deserts and Arctic areas? The U.S. Geological Survey estimates that the Arctic National Wildlife Refuge (ANWR), the crown jewel of the American wilderness in the northeast corner of Alaska, holds a staggering 12 billion barrels of oil, or 27% of U.S. proven oil reserves of 43.8 billion barrels.

Why the US Military Is Leading the Charge on 5G

BY JOHN BREEDEN II

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By now, many of us are already experiencing the tip of the iceberg when it comes to 5G technology. Even my personal smartphone occasionally flashes up the 5G symbol when I’m streaming something or using a web application. Unfortunately for me, I don’t see too much of a difference between 4G and 5G networking, but again, most of us only get to see the tiniest bit of what 5G can offer.

Right now, the reason for this is because most 5G networking for the general public is simply a 5G signal layered on top of a 4G infrastructure. Most of the cell towers as well as the backend networking hardware is all 4G, so we don’t get to experience anything even close to a pure 5G experience.

A pure 5G communications system would be almost fully software-based, right down to running on a software-defined network. And because it would be free of mechanical and hardware constraints, a fully 5G network would not just experience 100 times the speed of its 4G predecessors, but also have 100 times lower latency, more reliability and lower power consumption needs. That is why the military is really leading the charge on 5G adoption, ahead of even the private sector in a lot of ways.

The Military’s Big Plans for 5G

The Department of Defense sees 5G technology as a true game changer for military forces, able to one day turn the tide of battle and give our side an insurmountable edge. It’s not unlike the way that the military heavily invested in radar technology during World War II. The DOD sees 5G as being able to make that kind of difference one day.

After Deby’s Death, Chad—and the Region—Brace for the Worst

Patrick Egwu

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On Tuesday, just one day after Chad’s incumbent president, Idriss Deby, was declared the winner of the country’s April 11 presidential election, a military spokesperson announced that Deby had been killed on the battlefield while overseeing fighting with rebels known as the Front for Change and Concord in Chad, or FACT, in the country’s northern region.

Deby, 68, had been poised to claim a sixth term in office, having won almost 80 percent of the vote in an election victory most observers considered to be guaranteed in advance. He had led Chad since seizing power in a 1990 rebellion, making him one of Africa’s longest-serving leaders. .

The Singular Chancellor

By Constanze Stelzenmüller

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Years ago, at the Munich Security Conference, I found myself squeezed in on the steps of the grand staircase of a hotel ballroom, trying, dutifully but vainly, to follow a more than usually humdrum speech by Germany’s first female chancellor. Tuning out, I recognized the one-star general hunkered down beside me, a senior staffer in the chancellery. I tapped his sleeve and said, “So what’s it like to work for her?” He turned to me and grinned appreciatively. “It’s like working next to a nuclear power plant. It just runs, and runs, and runs.”

And how it ran. Angela Merkel is now in the final months of her fourth term in office, her last, which is set to end with national elections on September 26. Only Helmut Kohl, the chancellor who oversaw the joining of East and West Germany in 1990, held office for longer. A Pew poll last year showed Merkel to be the world’s most trusted leader. Forbes magazine has ranked her the world’s most powerful woman for ten years in a row. In 2009, the toy company Mattel even created an Angela Merkel Barbie doll. For a while, some U.S. and British commentators, dismayed by their own leaders, even took to calling her “the leader of the free world” (a title the chancellor is said to detest).

Yet at the same time, Merkel’s opacity and technocratic prudence have frustrated and often infuriated those who wanted Germany to articulate a clearer vision of its role in a liberal world order, to take on greater responsibility for defending and shaping that order—or just to acknowledge and mitigate the impact of the country’s decisions on its neighbors and allies. And although the 66-year-old conservative remains her country’s best-liked politician, public approval of her government has dipped sharply as frustration with its haphazard pandemic management has grown.

Biden’s Everything Doctrine

By Jeremy Shapiro

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“To govern is to choose,” French Prime Minister Pierre Mendès-France reminded his fellow citizens in explaining why the once proud empire that he led should give up its colonies in Indochina in the 1950s. One suspects that Mendes-France would not have gotten very far in the modern U.S. Democratic Party. In this late stage of the American empire, the administration of President Joe Biden often seems to believe that to govern in foreign policy is to choose nearly everything.

Biden’s early foreign policy speeches, in a grand American tradition, contain a vast panoply of lofty goals. He will prioritize democracy and human rights by “meet[ing] this new moment of advancing authoritarianism” coming from China, Russia, and elsewhere. He will prioritize allies by “revitalizing America’s network of alliances and partnerships” and renewing the commitment to defend friends. And he will prioritize the U.S. middle class

It is now time to focus on multilateral order

Bruce Jones and Susana Malcorra

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The current crisis in global order stems from much more than after-effects of Trumpism and the anti-multilateral instincts of the former US administration. Rather, the problem has deep roots and has been more than a decade in the making. Of course, the world would look quite different at present if Hilary Clinton had been elected in 2016, but the truth of the matter is that even by that point, powerful changes were already underway involving the dynamics between international security, globalization, and the power structure within the United States government.

Why does multilateral order matter? The multitude of reasons include nothing less than peace and security, support for globalization, and the provision of public goods (think distribution of COVID vaccines.) There are a number of factors that have eroded confidence in and the performance of this multilateral order.

One has to do with peace and security. During the heyday of international cooperation, working together to tackle insecurity and violence was a hallmark of a dynamic international system and during the 1990s and early 2000s international cooperation brought wars to their lowest level since the end of World War II. That progress has since stalled, even reversed.

The main issue that impedes conflict management today is how transnational terrorism has fused with civil war. More than 90% of all war-related deaths in the past five years occurred in countries in which a terrorist organization was operating – the majority of which (70%) being concentrated in the Middle East. High death tolls are not the only unfortunate result, but also large-scale refugee flows and eventual region-wide tensions.

Defending democracies from disinformation and cyber-enabled foreign interference

Danielle Cave and Jake Wallis

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The Covid-19 pandemic has caused unique societal stress as governments worldwide and their citizens have struggled to work together to contain the virus and mitigate its economic impact. This has been a trying time for democracies, testing the capacity of democratic governance to mobilise state and citizenry to work together. It has also tested the integrity of open information environments and the ability of these environments to deal with the overlapping challenges of disinformation, misinformation, election interference and cyber-enabled foreign interference.

Covid-19 has spurred the world into a new era of disinformation where we can see the daily erosion of credible information. Individuals, organisations and governments are increasingly fighting for the value of facts. But the global information environment was home to bad-faith actors long before the pandemic hit, from states interfering overseas or misleading their own populations with targeted disinformation to conspiracy groups like QAnon and alt-right extremist groups. Some of these groups have leveraged legitimate public concerns related to the pandemic, vaccine rollouts and issues like data privacy to build new conspiracy theories, and Covid-19 has provided them with a bigger platform to do so.

Relationships between governments and social media platforms are increasingly strained. Divisions are deepening about how to best balance free expression while dealing with the public harms caused by mis- and disinformation and speech that incites violence or hatred, and how to best tackle rapidly emerging issues such as the proliferation of manipulated content and the risks caused by increasingly sophisticated deep-fake technologies that could mislead and erode trust in institutions.

Transformative Technology, Transformative Governance: A New Blog Series on the Future

Stewart M. Patrick 

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Coauthored with Kyle L. Evanoff, research associate for International Institutions and Global Governance at the Council on Foreign Relations.

World Economic Forum founder and executive chairman Klaus Schwab calls it the “Fourth Industrial Revolution.” Ethicist Wendell Wallach prefers the term “techstorm.” And former U.S. Secretary of the Navy Richard Danzig offers the alarming sobriquet “technology tsunami.”

A wave of rapid innovation has left these and other thinkers concerned about the transformative effects of today’s emerging technologies on society and world affairs. The promised benefits of breakthroughs in artificial intelligence, quantum computing, biotechnology, additive manufacturing, and other technologies are dazzling, almost beyond belief. But these advances carry immense risks too, and the twin penumbra of myopia and hype cloud our foresight, limiting the vision we need to take informed actions and ensure positive outcomes.

Despite these uncertainties, we cannot afford to remain passive observers. New technologies portend pressing policy dilemmas, and the decisions we take—or fail to take—today may lock us into trajectories that we cannot correct tomorrow. To mitigate risks, national governments and non-state actors must adopt a global perspective and pursue international cooperation. After all, innovation is too transnational an enterprise, information too indifferent to borders, and civilization too interconnected for purely national solutions.

HP Study: Nation-State Cyber Attacks Double Between 2017 and 2020 as World Edges Toward Open Cyber Warfar

SCOTT IKEDA

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A new study from HP has reviewed over 200 nation-state cyber incidents going back more than a decade, finding new connections between state-backed hacking groups and the criminal underworld. Cyber attacks of this nature have not only doubled since 2017, but are also increasingly incorporating attacks on physical assets (such as infrastructure).

The researchers believe that nation-states will only increase their use of “espionage, disruption and theft” in the coming years, escalating tensions and pushing the world closer to the brink of advanced cyber warfare.

Nation-state groups step up intelligence campaigns

Called “Into the Web of Profit,” the study incorporates research from HP’s Security for Personal Systems department and the University of Surrey. The actions of nation-state hackers are naturally difficult to research, but the report draws on a wealth of materials leaked by whistleblowers as well as the expertise of some 50 leading researchers in a variety of related fields.

The research finds a consistent escalation in nation-state tensions due to exchanges of cyber attacks over the past two decades, with a particularly sharp increase in recent years. To date, this world of cyber warfare has operated under a veneer of “plausible deniability”; nations generally have a good idea of who did what to whom, but concrete evidence that can be presented to the public is rare.

Privacy Tip #281 – Preparing for Cyber Warfare: A Survival List

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The United States government, states, municipalities, and private companies all have been trying to defend themselves from cyber warfare from foreign adversarial governments, including Russia, China, and North Korea, for years—actually, for decades. Even when I started practicing full time in this area of law in the early 2000s, we were talking about not traveling to those countries with work laptops for fear that data on the laptop would be stolen or misappropriated.

Every time a foreign adversarial government attacks a U.S. government agency or business with a cyberattack, it should be viewed like what it is: a bomb. Although it does not blow up bricks and mortar, it blows up the ability for the target to do business and forces it to rebuild its network and system in order to function. Every time a ransomware or malware code, or other bug, virus, or malicious tool is downloaded into a system, it should be viewed as what it is as well: an act of war by an adversary.

Last week, President Biden called out Russia for its part in wreaking havoc on tens of thousands of businesses when it launched the SolarWinds attack, and put sanctions in place. This will not be the last word in cyber warfare.

Russia and other foreign adversaries have sophisticated capabilities in cyber warfare. We don’t want to talk about it, but cyber warfare could cripple the economy, critical infrastructure, monetary transactions, health care, food supply, access to accurate information, communication, and our livelihoods. Everything is connected to the internet. Everything. And everything is vulnerable to cyber warfare.

The Five C’s of Biden’s Foreign Policy

Judah Grunstein 

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If we’re honest with ourselves, it’s hard to deny that Donald Trump is a tough act to follow. As much as the return to calm since he left office—and more importantly, since his Twitter account was suspended—has been welcome, the drama and unpredictability he brought to the American presidency was as transfixing as it was unprecedented. This was perhaps truer in the realm of foreign policy than elsewhere due to the outsized autonomy U.S. presidents enjoy in the conduct of diplomacy, but also because of the impact Trump’s disregard for conventional wisdoms and established protocols had on America’s national interests and security.

It was no surprise, then, that for months before the U.S. presidential election, and in the months between the election and Joe Biden’s inauguration, more attention was given to how he would conduct U.S. foreign policy than any other issue, with the possible exception of his plans for handling the coronavirus pandemic. The challenges Biden faced were well-known: to repair the damage Trump had done to America’s alliances and partnerships; to reestablish America’s credentials as a “responsible stakeholder” in multilateral institutions and diplomacy; to reassert American leadership on issues that transcend borders, like climate change; and to do all of that while rehabilitating America’s reputation as a champion, but also an upholder, of human rights.

Artificial Intelligence, Lawyers And Laws Of War

By SYDNEY J. FREEDBERG JR.

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WASHINGTON: “My entire career, I’ve stood around a mapboard and the lawyer’s always right there,” said Gen. Mike Murray, who commanded troops in Afghanistan and Iraq. But in a highly automated future war of long-range missiles, swarming robots, and sensor jamming, warned the head of Army Futures Command, “you’re not going to have 30 seconds to stand around a mapboard and make those decisions.”

“Back when I was a brigade commander, even when I was commander of the Third Infantry Division in Afghanistan,” Murray recalled, “life and death decisions were being made just about every day, and it usually was around, either [a] mapboard or some sort of digital display.” Along with the staff officers for intelligence, operations and fire support, he said, one of a handful of “key people standing around that mapboard” was the command’s lawyer, its Staff Judge Advocate.

“The lawyer always got a say,” the general went on. “Is this is just a viable course of action, given the law of armed conflict?… Is this a legal response? And usually those discussions would take some time. I think in the future the opportunities to get people around the map board and have a detailed discussion — to include discussions about the legality of the actions you’re contemplating as a commander — will be few and far between.”

How will the Army solve this problem? Gen. Murray raised this question addressing a West Point-Army Futures Command conference on the law of future war, but he didn’t provide an answer. The speakers who followed didn’t seem to have an answer, either.

The Problem With India’s Economic Diplomacy in South Asia

By Granth Vanaik

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Even though Indian Prime Minister Narendra Modi touts the vision of “Sabka Saath, Sabka Vikas, Sabka Vishwas” (“everyone together, everyone’s development, everyone’s trust”), India has failed to deliver on its promises. Trade totals with South Asian neighbors remain low, many Indian infrastructure projects in the region are still incomplete, and its neighbors are disappointed with discrimination in aid. China, on the other hand, has extensively made inroads into the region. What are the significant issues hampering India’s economic diplomacy? Furthermore, why has India not been able to resolve its challenges?

Protectionism

One major problem is that India has increased its protectionist approach since Modi’s election in 2014, which has a significant impact on economic diplomacy. The Asian Development Bank, in a December 2020 report looking at 25 countries in the Asia-Pacific region, ranked India 24th on trade openness – only Pakistan scored lower. Despite having implemented economic reforms with liberalization, privatization and globalization (LPG) policies starting in 1991 and signing the South Asian Free Trade Area (SAFTA) agreement for greater economic integration and free trade in 2006, India’s overall trade with South Asia has been low accounting for between 1.7 percent and 3.8 percent of its global trade. India exports in bulk; however, imports are minimal, due to trade barriers.

A Preview of Post-Withdrawal Problems in Afghanistan

By Bryce Klehm 

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On Tuesday, the House Armed Services Committee held a hearing to address “national security challenges and U.S. force posture” in the Middle East and Africa. Gen. Kenneth “Frank” McKenzie, head of U.S. Central Command, appeared alongside Gen. Stephen Townsend, head of U.S. Africa Command, and Amanda Dory, the acting under secretary of defense for defense policy. The hearing touched on a variety of issues, from China and Russia’s influence in Africa to the U.S.’s potential return to the Iran nuclear deal. But it was also the first time that Gen. McKenzie, the head of all U.S. forces in the Middle East, has publicly appeared before Congress since President Biden announced the withdrawal of all U.S. military personnel in Afghanistan by Sept. 11, 2021. (Gen. Austin Miller, the head of U.S. forces in Afghanistan, did not appear before the committee.) The hearing delivered a preview of the issues that U.S. lawmakers and military personnel anticipate as the U.S. leaves the country.

Gen. McKenzie and Dory provided early, if incomplete, answers to key questions about the Afghanistan withdrawal: How will the U.S. military ensure that there will not be another terrorist attack emanating from Afghanistan? Could other extremist groups gain a foothold in Afghanistan? How will the military ensure that the same mistakes of the Iraq withdrawal are not repeated? What will the drawdown mean for the Afghan Security Forces that currently depend on U.S. contractors?

Japan says Chinese military likely behind cyberattacks

By MARI YAMAGUCHI

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TOKYO -- Tokyo police are investigating cyberattacks on about 200 Japanese companies and research organizations, including the country’s space agency, by a hacking group believed to be linked to the Chinese military, the government said Tuesday.

Police have forwarded the case involving attacks on the Japan Aerospace Exploration Agency to prosecutors for further investigation, Chief Cabinet Secretary Katsunobu Kato told reporters.

Police believe a series of hacks of JAXA were conducted in 2016-2017 by “Tick,” a Chinese cyberattack group under the direction of a unit of the People’s Liberation Army, Kato said.

A suspect in the JAXA case, a Chinese systems engineer based in Japan, allegedly gained access to a rental server by registering himself under a false identity to launch the cyberattacks, Kato said, citing the police investigation.

NHK public television said another Chinese national with suspected links to the PLA unit who was in Japan as an exchange student was also investigated in the case. Both men have since left the country, it said.

China’s Creative Challenge—and the Threat to America

by Hal Brands

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CHINA HAS the look of a self-confident superpower. Beijing is testing geopolitical limits and asserting its influence almost everywhere; it is no laonger content to accept second-tier status among the great powers. This much was clear from a stormy meeting between high-ranking U.S. and Chinese officials in Alaska in March 2021. After Secretary of State Antony Blinken and National Security Adviser Jake Sullivan began by briefly enumerating American grievances with Chinese behavior, their counterparts—Foreign Minister Wang Yi and foreign-affairs potentate Yang Jiechi—responded with a blistering critique of U.S. diplomatic and domestic practices. Their tirade was reminiscent of Soviet propaganda attacks during the Cold War. “Many people within the United States actually have little confidence in the democracy of the United States,” Yang taunted. “The leaders of China have the wide support of the Chinese people.”

Over the past half-decade, it has become ever more difficult for foreign observers to deny what Beijing itself admits—that China is pursuing a dramatic revision of the U.S.-led international order in Asia and globally. Yet that hegemonic challenge is not simply bringing China into competition with the established superpower. It is also bringing Premier Xi Jinping’s regime up against the most deeply entrenched patterns of modern geopolitics.

The impression Chinese officials seek to create is that history is now firmly on the side of a rising Communist regime rather than a decadent American democracy. History, however, might beg to differ. It shows that autocracies like China have consistently been outmatched by more liberal states over the past 400 years. History also suggests that China confronts a daunting strategic geography—including a beleaguered but intact international order—that is more likely to obstruct than enable its efforts. China’s path to primacy is harder than it might once have seemed since one traditional lane of advance—military aggression—is riskier than it was in previous eras. Finally, China is going up against a country that has destroyed, physically or geopolitically, every one of its great-power rivals over the last century. China may be the most formidable competitor America has ever faced—but America is perhaps the most dangerous enemy the world has ever produced.

The fact that China has risen so fast, so far, and with—until recently—so little global resistance is a tribute to the creativity of Beijing’s strategies for addressing these challenges. Yet many of those strategies worked best in a world that had been complacent about China’s trajectory. Today, America and other nations are beginning to focus in earnest on thwarting Beijing’s ascent. One wonders whether Xi and his subordinates are really as confident as they seem.

Open-source analysis of Iran’s missile and UAV capabilities and proliferation

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Iran’s ballistic missile systems, supplemented by cruise missiles and UAVs, are intended not only for deterrence, but for battle, including by Iran’s regional partners. In a new report, the IISS provides a detailed assessment of Iran’s missiles, and the manner and purposes for which it has been proliferating them.

Nuclear issues are the exclusive focus of the negotiations on the restoration of the 2015 Joint Comprehensive Plan of Action, which have taken place in Vienna. The Western powers are keen, however, to engage in follow-on talks to address Iran’s missiles and activities in the region. To inform the public policy debate on the latter matters, the IISS has produced a fact-rich technical assessment of Iran’s current missile and uninhabited aerial vehicle (UAV) capabilities and its proliferation of these technologies to Iran’s regional partners.

Robust arsenal

Drawing exclusively from open sources, including Persian-language material, the IISS report details Iran’s roughly 20 different ballistic missiles (the exact number depends on how variants are counted), as well as cruise missiles and UAVs. For now, all of Iran’s ballistic missiles apparently adhere to a self-imposed range limit of 2,000 kilometres. Iran’s priority is to improve precision, notable in several missile systems: ­

The Qiam-1, which is an 800 km-range variant of the Shahab-2 short-range ballistic missile with a 500kg separable warhead and ground-based guidance augmentation. Qiams have been smuggled to Houthi rebels, who have named it the Burkan-2H and have used it against Saudi sites. A modified version of the Qiam, which appears to have a manoeuvrable re-entry vehicle (MaRV) to further improve its accuracy, was used in the January 2020 attack against Ayn al Asad airbase in Iraq. ­