Adapt or Perish

By ​​​​​​​Alice Hill and Leonardo Martinez-Diaz

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Ever since climate change became a concern for policymakers and laypeople alike, the focus of public debate has largely been on mitigation: limiting greenhouse gas emissions, capturing carbon, and transitioning to renewable energy. Those efforts must continue if we hope to keep the planet hospitable. But it is also time to acknowledge that—no matter what we do—some measure of climate change is here to stay. The phenomenon has already affected the U.S. economy, U.S. national security, and human health. Such costs will only grow over time. The United States must build resilience and overhaul key systems, including those governing infrastructure, the use of climate data, and finance. 

Otherwise, the blow to the U.S. economy will be staggering. Assuming that current trends continue, coastal damage, increased spending on electricity, and lost productivity due to climate-related illness are projected to consume an estimated $500 billion per year by the time a child born today has settled into retirement. Other estimates suggest that the U.S. economy will lose about 1.2 percent of GDP per year for every degree Celsius of warming, effectively halving the country’s annual growth.

Gas Line, Q4 2019

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Gas Line is a quarterly publication that looks at major news stories in global gas—ranging from project development to markets and geopolitics. My goal is not to cover every story but to draw connections between stories across time and space in order to shed light on the major themes that will drive global gas markets in the years ahead. My main takeaways from this quarter:

Crisis Averted—Sort of

The bottom line: These past few months have shown that European gas security, in the old sense, is now largely a Washington obsession and a transatlantic issue. Russia and Ukraine reached an agreement before December 31, thus averting another gas crisis. At the same time, the United States imposed sanctions on Nord Stream 2, and Allseas, the contractor laying the pipeline for the project, suspended its operations. Yet prices at TTF, the main European hub in the Netherlands, averaged 37 percent lower in December 2019 than in December 2018—which did not exactly signal a crisis.

Hypersonic Missiles Are a Game Changer

By Steven Simon

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Last week, President Vladimir Putin of Russia announced the deployment of the Avangard, among the first in a new class of missiles capable of reaching hypersonic velocity — something no missile can currently achieve, aside from an ICBM during re-entry.

Such weapons have long been an object of desire by Russian, Chinese and American military leaders, for obvious reasons: Launched from any of these countries, they could reach any other within minutes. No existing defenses, in the United States or elsewhere, can intercept a missile that can move so fast while maneuvering unpredictably.

Whether or not the Avangard can do what Mr. Putin says, the United States is rushing to match it. We could soon find ourselves in a new arms race as deadly as the Cold War — and at a time when the world’s arms control efforts look like relics of an inscrutable past and the effort to renew the most important of them, a new START agreement, is foundering.

Hypersonics represent an apotheosis of sorts for many warfare theorists and practitioners, who have long contended that air power alone can have a decisive effect in a conflict. They have always been wrong. The allies lost about 100,000 aircrew members in an attempt to destroy German industry and the popular will to fight during World War II, but the war in Europe was won with boots on the ground.

Don’t Hold Your Breath for Democratic Change in the Middle East

BY STEVEN A. COOK
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There were a number of major developments in the Middle East over the last 12 months: the bombing of Saudi Arabia’s Abqaiq oil facility, Turkey’s invasion of northeastern Syria, the election of a new Tunisian president, the United Arab Emirates’ decision to withdraw from Yemen, and the U.S. affirmation that Israeli settlements are not “inherently illegal.” But something more important happened in the Middle East in 2019. Just as everyone was getting used to the idea that the so-called Arab Spring was dead, street demonstrations swept through the region. The fact that protests erupted is not as interesting as whether people power will shape politics in the Arab world into 2020. That seems likely, but not necessarily in ways that some analysts expect and many Arabs hope.

With so much international media focused on the demonstrations in Hong Kong, one might be excused for forgetting that people in Sudan, Algeria, and Morocco were out in the streets months before Hong Kongers began venting their anger at Chief Executive Carrie Lam and Beijing. There were also protests in Egypt, though they were quite small, and larger demonstrations that are ongoing in Iraq and Lebanon.

Return of the Hashishin (Assassin) Cult?: Wider Implications of the Attack on Saudi Oil Facilities

Maj Gen P K Mallick,VSM (Retd)

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The attack on Saudi oil installations has large scale implications for the hydrocarbon supply to the world specially for countries like China, India and the Asian giants of Japan and South Korea. The Strait of Hormuz becomes critical for energy imports of these countries.

The Middle East has become the world’s most polarized region. Both Saudi Arabia and Iran exploit the Shiite-Sunni rift to mobilize their respective constituencies. Iran’s military strategy is to keep tensions at a low level and avoid a direct confrontation with the U.S. Even if neither side wants to fight a war it could still happen due to miscalculation and missed signals. A minor clash can lead to a regional conflagration with devastating effects for Iran, the U.S. and the Middle East. India has to remain sensitive to the happenings in the Gulf region. India spent $111.9 billion on oil imports in 2018-19. Saudi Arabia is the second-largest supplier of crude oil and cooking gas to India. Every dollar increase in the price of oil raises the import bill by around Rs10,700 crore annually.

This Monograph tries to provide how the attack took place, its effect on world economy and oil market, effects on various stake holding countries and their reactions, military implications and India’s concerns....

Xi’s Upcoming Visit to Myanmar Could Reshape the Indian Ocean Region

By Amara Thiha

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A decade after Xi Jinping’s first visit to Myanmar in 2009, Naypyidaw is planning a banquet for another Xi visit, expected to be on January 17, 2020. As part of the preparation, shuttle diplomacy is already underway, with China’s State Councilor and Foreign Minister Wang Yi meeting with Myanmar State Counsellor Aung San Suu Kyi on December 9, 2019. The agenda is loud and clear: to speed up the construction of the projects within the China-Myanmar Economic Corridor (CMEC) and realization of the Belt and Road Initiative (BRI). In particular, speeding up the Kyaukphyu Special Economic Zone (SEZ), Beijing’s strategic window to the India Ocean, is on the short list.

Originating as one of 16 MoUs signed during then-Vice President Xi’s 2009 visit, the Kyaukphyu SEZ is the capstone of all China’s investments in Myanmar and was Beijing’s strategic offset in the Indian Ocean prior to the launch of the BRI. However, Chinese projects in Myanmar stalled after the suspension of controversial Myitsone Dam, which created uneasy relations with Beijing for the first time in 20 years and caused BRI capital injections to fall short of the hype. Kyaukphyu was not an exception. The project was significantly trimmed down with the fear of a debt trap.

Lasting Peace in Indonesia’s Aceh Province Depends on Truth and Reconciliation

Michael Hart 

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Hailed as the model for resolving long-running separatist insurgencies in Southeast Asia, the 2005 agreement that ended a nearly 30-year civil war in Indonesia’s Aceh province, on the northwestern tip of Sumatra, is showing its cracks. Under the peace deal, Aceh was granted more political autonomy as the separatist rebels of the Free Aceh Movement, known in Indonesian as the Gerakan Aceh Merdeka, or GAM, laid down their arms. Since then, the province has held several democratic elections, while its economy has grown at an annual clip of 5 percent over the past decade.

But while the deal has provided a roadmap for ending similar conflicts in the region— from the southern Philippines to western Myanmar and southern Thailand—Aceh’s future suddenly looks less certain. Last summer, the GAM’s former military leader, Muzakir Manaf, called for a referendum on the province’s independence, warning that “Indonesia is no longer clear on the question of justice and democracy.” Manaf now heads the province’s largest political party, the Aceh Party, but not all of its members are united on the referendum. Kamaruddin Abubakar, the party’s secretary general and Manaf’s former deputy in the GAM, who is popularly known as Abu Razak, estimated public support for a referendum at about 50 percent.

Taiwan’s January 2020 elections: Prospects and implications for China and the United States

Kharis Templeman

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Taiwan will hold its presidential and legislative elections on January 11, 2020. The incumbent president, Tsai Ing-wen of the Democratic Progressive Party (DPP), appears increasingly likely to prevail over her main challenger, Han Kuo-yu of the Kuomintang (KMT). In the legislative campaign, the DPP now has better than even odds to retain its majority over the KMT and several smaller parties. As recently as six months ago, President Tsai’s path to re-election looked difficult. But the eruption of protests in Hong Kong and surprisingly robust economic growth in Taiwan, combined with the latest steps in Beijing’s ongoing pressure campaign, significant missteps by the opposition KMT and potential independent challengers, and continuing tensions between the United States and the People’s Republic of China (PRC), have together left her and the DPP in a greatly improved electoral position.

The results of the election will have significant implications for the PRC’s Taiwan policy and for the United States. Under Xi Jinping, the PRC has pursued a multifaceted pressure campaign against the Tsai administration over the last four years, constricting Taiwan’s remaining international space, restricting government-to-government cross-Strait communication, and ramping up military exercises and covert influence operations, but also selectively engaging with China-friendly elements of Taiwanese politics and society as well as expanding the array of benefits available to Taiwanese on the mainland. If Tsai and the DPP remain in power after the 2020 elections, as now appears increasingly likely, this strategy will not have delivered on its objectives, and it will present Beijing with a hard choice: double down, recalibrate, or fundamentally reassess its Taiwan policy.

What’s Next for Iran’s Cyber Actors?

BY PATRICK TUCKER
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Expect more network-enabled spying and possibly destructive cyber attacks in the wake of the killing of one of Iran’s most important military commanders, experts said.

“We will probably see an uptick in espionage, primarily focused on government systems, as Iranian actors seek to gather intelligence and better understand the dynamic geopolitical environment. We also anticipate disruptive and destructive cyberattacks against the private sphere,” said John Hultquist, director of Intelligence Analysis at FireEye, in a Friday statement.

Like a lot of smaller state actors, Iran has been growing its cyber capacity over the last several years. Clumsy distributed-denial-of-service attacks and website defacements in 2009 led four years later to the manipulation of search query commands in an attack on the Navy Marine Corps Intranet. In 2013, an Iranian national allegedly breached the control system of a dam in Rye, New York. Two years after that, Iran actors used wiper malware to delete files from some 35,000 computers owned by Saudi Aramco, one of the most disruptive attacks to date. 

Who’s Next? Trump Crossed a Line with Soleimani’s Assassination

BY KEVIN BARON
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The Iranian was much more than a general. Who else is the U.S. president willing to kill?

There’s a reason why the United States never just killed Nikita Khrushchev. Or Fidel Castro. Or the ayatollah. In simplest terms: if we kill them, we make it easier for others to do the same to us.

By his title, Qassem Soleimani — the recently deceased leader of the Quds Force, the special ops component of Iran’s Islamic Revolutionary Guard Corps — may not have ranked among those heads of state. But in Iran, the Middle East, and the Muslim world, he was much more than a mere general. That’s true in the Pentagon as well. “Suleimani is arguably the most powerful and unconstrained actor in the Middle East today,” retired Gen. Stan McChrystal wrote in Foreign Policy a year ago. In August 2018, U.S. Central Command’s Gen. Joe Votel said, “Wherever you see Iranian activity, you see Qasem Soleimani, whether it is in Syria, whether it is in Iraq, whether it is in Yemen, he is there and it is the Quds force, the organization which he leads.” So killing him was not like killing, say, Votel’s successor U.S. Army Gen. Richard D. Clarke, who leads U.S. Special Operations Command, or even Russia’s military chief of staff, Gen. Valery Gerasimov. In the eyes of many, Soleimani was far more.

So now that President Trump has crossed that line, who’s next?

A U.S. Invasion Of Iran Would Be Suicidal

by Zachary Keck

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Since assuming office in 2009, President Barack Obama has consistently held that the United States would carry out airstrikes to prevent Iran from acquiring a nuclear weapon. This position is supported by the vast majority of U.S. policy makers, lawmakers and the political elite, regardless of political affiliation.

Nonetheless, it is also generally agreed that airstrikes against Iran’s nuclear facilities would only have a limited impact on preventing Iran from acquiring the bomb. To be sure, a concerted airstrike effort against Iran would delay its ability to build a nuclear arsenal by several years. Nonetheless, Iran would be able to rebuild its nuclear facilities before long, especially given the windfall in economic relief it would undoubtedly receive once the sanctions regime against it unraveled in response to America’s military action.

The only military action that can truly prevent Iran from acquiring a nuclear weapon, then, is for the United States to invade and occupy the country, potentially turning it over to a U.S.-friendly regime that would uphold Iran’s non-nuclear status. Despite the widespread support in the United States for preventing Iran from building a nuclear weapon, this option is almost never proposed by any serious observer.

One of the World's Top Naval Experts Told Us All About a U.S.-Iran War

by James Holmes
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That chronic pain gnawing at officialdom’s guts is bipartisan. Presidential administrations, Republican and Democratic alike, keep trying to draw down the U.S. military presence in the Middle East, the Persian Gulf region in particular, to attend to more pressing priorities. Back in 2012 the Obama administration vowed to “pivot” or “rebalance,” from the Middle East to the Pacific theater to counterbalance China. President Donald Trump and his lieutenants proclaim that an age of great-power competition is upon us. Like their Democratic forerunners, they have signaled their desire to reapportion finite U.S. diplomatic and military resources elsewhere around the Eurasian perimeter—say, to the South China Sea or Baltic Sea.

This is sound strategy. Strategy is about setting and enforcing priorities. Lesser priorities must yield to greater lest a competitor exhaust itself trying to do everything, everywhere. Not even superpowers are exempt from this iron law of world politics.

But if U.S. presidents prefer to compete against China and Russia, the Gulf region stubbornly refuses to let America and its allies leave. Iran is the foremost mischief-maker. Whether out of strategic calculation, ideological fervor, or plain orneriness, the clerics who govern the Islamic Republic appear bound and determined not to let the Great Satan vacate their backyard. Running feuds over nuclear-weapons development and economic sanctions, freedom of maritime movement through the Strait of Hormuz and its environs, and drone shootdowns rank among the headline-grabbing issues miring the United States in the Middle East. Seldom, of late, does a day pass without some bitter exchange between Tehran and the West.

How Will Iran's Speedboats Perform Against the U.S. Navy?

by Sebastien Roblin
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Iran has fielded a variety of unusual weapons over the years: F-14 Tomcat fighters hotwired to fire Russian missiles, homemade mini-submarines, and remanufactured Cold War jets.

In 2006, Iranian television showcased a peculiar sea-skimming flying boat, and four years later Tehran triumphantly announced it had three squadrons of them serving in the Iranian Revolutionary Guard Corps Navy. News commentators boasted it was one of the few countries to “design and produce such advanced flying boats,” which is technically true.

The blue-painted Bavar-2 flying boats seen in this video are examples of Ground Effect Vehicles, also known as ekranoplans, sea skimmers, or Wing-In-Ground vehicles. Basically, these are designed to fly at very low altitudes by capitalizing on “ground effect,” the phenomenon in which wing surfaces encounter less drag the closer they are to the surface. After generating lift through speed during takeoff, GEVs can stay airborne as long as they remain within that low-altitude envelope. This makes them more applicable to maritime operations, where inconvenient mountains are scarce.

US’ Latest Bombing Shows US Lost Iraq War – OpEd

By Ryan McMaken*
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The US government tells us that Iraq is harboring anti-US Iranian forces and must be bombed. Yesterday, the US bombed Baghdad International Airport, killing seven people, including an Iranian general and two Iraqi politicians. Meanwhile, US marines invaded Iraqi sovereign territory — in a move euphemistically called “arrest raids” — in an effort to capture an Iraqi member of parliament and a militia leader.

But how is it that Iraq is so full of anti-US politicians and militia leaders working with Iranian forces?

Wasn’t the 2003 invasion of Iraq supposed to turn Iraq into a Western-style democracy and a friendly outpost for US forces in the Islamic world?

That, at least is what we were promised at the time. But those, like the other reasons given for the war, were the usual lies we’ve come to expect from Washington, DC.

Justifications for the 2003 Invasion

When the United States regime was attempting to justify its unconstitutional and unjustified invasion of Iraq in 2003, it made a wide array of promises.

The US Strikes Iran’s Proxies – OpEd

By Neville Teller
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On the night of December 29, 2019 the United States launched its first airstrikes in nearly a decade on the forces of Iran’s proxies. 

It has long been clear that a key aspect of Iran’s geopolitical strategy is to use proxies to execute its less savory operations, thus avoiding direct responsibility for the atrocities committed at its behest. Hezbollah in Lebanon, the Houthis in Yemen, Hamas in Gaza, and a plethora of jihadist groups in Syria and Iraq are, in addition to its own Islamic Revolutionary Guard Corps (IRGC), the instruments Iran uses to reach its political goals. For the past decade these groups have been recognized by the US simply as Iran’s tools, and have not been considered central enough to warrant direct retaliation.

A rocket attack on an Iraqi military base on December 27 by an armed group known as Kataib Hezbollah (KH) was the straw that broke the camel’s back. KH is an Iranian-sponsored Shi’ite militia operating in Iraq and throughout Syria. Founded in 2003 it is linked to the Lebanon-based Hezbollah organization. The US has expressed concern in the past about pro-Iranian militias targeting coalition forces in Syria. This anti-KH operation was characterized by US Assistant Secretary of Defense Jonathan Hoffman as “defensive strikes,” in retaliation not only for the attack on December 27, but for “repeated Kataib Hezbollah attacks on Iraqi bases that host Operation Inherent Resolve coalition forces.” 

Greece, Cyprus, Israel Sign EastMed Gas Pipeline Deal To Ease Reliance On Russia

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(RFE/RL) — Greece, Cyprus, and Israel have signed an agreement to construct 1,900-kilometer undersea pipeline to carry natural gas from the eastern Mediterranean to Europe and potentially help the continent reduce its dependency on Russia for energy supplies.

Greek Prime Minister Kyriakos Mitsotakis, Israeli Prime Minister Benjamin Netanyahu, and Cypriot President Nikos Anastasiades attended the January 2 ceremony in Athens to seal the accord for the so-called EastMed project.

The deal comes as Russia prepares to start pumping gas this year through two new pipelines to Europe — TurkStream and Nord Stream 2. Russian President Vladimir Putin and Turkish leader Recep Tayyip Erdogan are scheduled to launch TurkStream on January 8.

The three MedStream governments will next put the project out for bids from private investors for financing.

The countries hope to reach a final investment decision by 2022 and aim to have the pipeline completed by 2025.

European governments and Israel agreed last year to proceed with the project, valued at up to $7 billion.

The Iranian-U.S. Confrontation in Iraq Grows Hotter

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U.S. airstrikes targeting Iran-allied militias in Iraq mark a notable escalation in the confrontation between Iran and the United States that could lead to even more attacks within Iraq. 

Because it's unlikely that Iranian-allied militias will stop their harassment of U.S. targets in Iraq, U.S. forces and assets there remain at risk. 

The escalation will strain U.S.-Iraqi relations and could result in a legal petition seeking to force the withdrawal of U.S. forces from Iraq. This will leave the government in Baghdad with a dilemma over how to maintain valuable U.S. security assistance while also asserting sovereignty. 

The U.S. military response against an Iraqi paramilitary group closely affiliated with Iran has further increased the risk that an escalatory pattern of violence between Iran (and its proxies) and the United States will develop. Three U.S. airstrikes on Dec. 29 targeted positions in Iraq where the Iranian-backed militia Kataib Hezbollah has a presence; concurrent airstrikes hit two of the militia's positions in Syria near Qaim, an Iraqi border city. The airstrikes came in retaliation for a Dec. 27 rocket attack against the K-1 base near Kirkuk that killed a U.S. civilian contractor and wounded four U.S. military personnel. The United States blamed the militia group, one of Iraq's Popular Mobilization Units (PMUs), for carrying out that assault.

The Big Picture

How the US Prepares Its Embassies for Potential Attacks

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Tuesday’s attack by Iran-backed Shiite militia supporters on the US Embassy in Baghdad, followed by Friday’s US killing of top Iranian commander Qasem Soleimani, sparked fears of an intense escalation of hostilities in the region.

Analysts say US embassies and consulates are prime targets in the wake of these events, and personnel could be in jeopardy. “Iran isn’t going to let this go unanswered,” notes security analyst Brett Bruen, a former US diplomat. “They will seek to attack American senior officials and personnel in a way they never have before.” Embassies will enhance security, but “personnel will still be vulnerable when out moving around in-country.”

How to protect those people and facilities? Much will depend largely on what the State Department and its law enforcement division, the Diplomatic Security Service, learns from Tuesday’s incident. The DSS works with the US Marine Corps and local security forces in host countries to create custom security plans for each embassy and consulate. It folds its lessons into the training curriculum provided for its 2,100 armed, federally sworn special agents at its new Foreign Affairs Security Training Center, which we visited just before its opening in November in Blackstone, Virginia. It also conducts drills at each embassy—one of which I observed during a visit to the US embassy in Dakar, Senegal, in 2018. The embassy ran a simulation of a protest and attack that appeared similar to the one in Baghdad on Tuesday.

How Iran's Hackers Might Strike Back After Soleimani's Assassination

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For years, US tensions with Iran have held to a kind of brinksmanship. But the drone assassination of Iranian general Qasem Soleimani, widely understood to be the second most powerful figure in Iran, has dangerously escalated tensions. The world now awaits Iran's response, which seems likely to make new use of a tool that the country has already been deploying for years: its brigades of military hackers.

In the wake of Thursday's strike, military and cybersecurity analysts caution Iran's response could include, among other possibilities, a wave of disruptive cyberattacks. The country has spent years building the capability to execute not only the mass-destruction of computers but potentially more advanced—albeit far less likely—attacks on Western critical infrastructure like power grids and water systems.

"Cyber is certainly an option, and it’s a viable and likely one for Iran," says Ariane Tabatabai, a political scientist at the RAND think tank who focuses on Iran. Tabatabai points to the asymmetric nature of a conflict between Iran and the US: Iran's military resources are depleted, she argues, and it has no nuclear weapons or powerful state allies. That means it will most likely resort to the weapons that weak actors typically use to fight strong ones, like non-state terrorists and militias—and hacking. "If it’s going to be able to match the US, and compete with and deter it, it has to do it in a realm that’s more equal, and that's cyber."

The U.S. Assassination of a Key Iranian General Throws Fuel on the Fire

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The Big Picture

In response to the latest round of escalation between Washington and Iran, in which protesters in Iraq breached the compound perimeter of the U.S. Embassy in Baghdad earlier this week — likely at the behest of Iranian Revolutionary Guard Corps Quds Force Cmdr. Qassem Soleimani — the United States has taken the opportunity to eliminate the Iranian military leader and other key architects of Tehran's strategy in Iraq. But the question is, at what cost? Iran will retaliate in a significant fashion, increasing the risk of further escalation that could lead to a direct military confrontation between the two countries.

It's the spark to ignite a major conflagration: Late on Jan. 2, the Pentagon said it launched an overnight strike in Baghdad killing several officials linked with Iran, including Qassem Soleimani, the powerful commander of the Islamic Revolutionary Guard Corps' Quds Force. In addition to Soleimani, the head of the Iraqi Kataib Hezbollah militia, Abu Mahdi al-Muhandis, and the deputy head of Hezbollah in Lebanon, Naim Qassem were reportedly killed — although the latter's death has yet to be confirmed. The Pentagon explicitly noted that among other reasons, the United States conducted the strike in retaliation for the attempt by supporters of Kataib Hezbollah to overrun the U.S. Embassy in Baghdad's Green Zone on Dec. 31, but the decision to target one of Iran's most important military figures is sure to raise tensions between Iran and the United States in the Middle East to new heights. 

A bigger foreign policy mess than anyone predicted

Thomas Wright

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Every four years, after the U.S. presidential election, the National Intelligence Council publishes a report looking ahead to the next two decades in global affairs. We do not have a report to mark the beginning of the 2010s, but the council’s 2012 report, “Alternative Worlds,” described two scenarios—the best plausible case and the worst plausible case. In the best-case scenario, “China and the United States cooperate on a range of issues, leading to broader global cooperation.” In the worst-case scenario, “the risks of interstate conflict increase. The US draws inward and globalization stalls.”

Reports like these encourage the reader to land somewhere in the middle, but that would be an egregious analytical error. The 2010s were far more disruptive than the National Intelligence Council’s worst-case scenario envisioned. It was a horrid decade for those who aspire to a more cooperative and freer world. Today, every region, with the possible exception of Africa, and almost all major countries are in a worse state than 10 years ago.

The scale of repression in China and the rise of Xi Jinping’s dictatorship; Donald Trump’s election as president and the return of “America first” rhetoric; the weakening of the European Union; the erosion of democracy in Poland, Brazil, India, the Philippines, and Hungary; the failure of the Arab Spring and the rise of a new generation of dictators in the Middle East; the devastation of the Syrian civil war; Vladimir Putin’s official return to Russia’s presidency and subsequent aggression against other countries; the collapse of diplomatic achievements such as the Iran nuclear deal and the Paris climate accord; the weaponization of social media; and the beginning of deglobalization—all of these trends would have seemed alarmist to even the most pessimistic of observers at the end of 2009.

Global Energy Perspective 2019

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Energy systems around the world are going through rapid transitions that affect many aspects of our lives. The continuation and acceleration of these shifts will bring important changes to the way we fuel our cars, heat our homes, and power our industries in the coming decades. Our Reference Case provides our consensus view on how energy demand will evolve.

Corruption Is Corroding Democracies Around the World

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Corruption knows no geographic boundaries, and its impact is devastating, particularly for developing countries. While recent revelations of massive corruption have made the issue a high priority for voters, the obstacles to effectively tackling corruption can prove to be persistent. That, in turn, can lead to popular disenchantment with leaders and democratic processes. Learn more when you subscribe to World Politics Review (WPR).

The world is constantly reminded that corruption knows no geographic boundaries. In South Africa, former President Jacob Zuma is embroiled in an inquiry into whether he ran a patronage system that drained money from the country’s treasury. A money laundering investigation launched in Brazil in 2008 expanded to take down a vast network of politicians and business leaders across Central and South America. And U.S. President Donald Trump’s administration has been plagued by officials who have used their offices for private gain and been forced to resign.

The impact of actual corruption is devastating, whether it siphons money from public use or drives policy that is not in the public interest. The effects can be particularly pernicious in developing countries, where budgets are tight and needs are vast. The United Nations estimates that corruption costs $2.6 trillion in losses every year.

Dirty Money How Corruption Shapes the World

By Oliver Bullough 

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There is an old joke about a drunkard searching for his keys under a streetlight. A passerby stops to help. After a few minutes of failing to find them, he asks the drunkard if he is sure that this is where he lost them. “No,” the drunkard replies, “but it’s dark everywhere else.”

That is how humans approach many daunting tasks, not least of them writing about corruption. We know that it’s a problem, we know that it’s serious, but we are reduced to hunting for evidence in the light cast by the few countries willing and able to prosecute the crime. Darkness stretches all around: we are missing out on a whole world of evidence that remains completely obscure.

In a speech he delivered in 1996, James Wolfensohn, then president of the World Bank, likened corruption to cancer. “Corruption diverts resources from the poor to the rich, increases the cost of running businesses, distorts public expenditures, and deters foreign investors,” Wolfensohn explained. It was a new, post–Cold War world, and he wanted to spearhead a push for cleanliness and corporate accountability now that it was no longer acceptable to ignore kleptocracy for reasons of geopolitical expediency. Two years later, Wolfensohn’s counterpart at the International Monetary Fund, the economist Michel Camdessus, put a figure on the phenomenon: he estimated that between two and five percent of global money flows had criminal origins. 

The Department of Defense Posture for Artificial Intelligence

by Danielle C. Tarraf,

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What is the state of AI relevant to the DoD?

What is the DoD’s current posture in AI?

What internal actions, external engagements, and potential legislative or regulatory actions might enhance the DoD’s posture in AI?

The 2019 National Defense Authorization Act mandated a study on artificial intelligence (AI) topics. In this report, RAND Corporation researchers assess the state of AI relevant to the U.S. Department of Defense (DoD), and address misconceptions about AI; they carry out an independent and introspective assessment of the Department of Defense's posture for AI; and they share a set of recommendations for internal actions, external engagements, and potential legislative or regulatory actions to enhance the Department of Defense's posture in AI.

Key Findings

Infographic Of The Day: What The Experts See Coming In 2020

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While there was no firm consensus on where 2020 will take us, there were a few themes that appeared in multiple publications. Today's infographic highlights these reappearing predictions, and below, we examine seven of them in more detail.

3 Big Ways That The US Will Change Over The Next Decade

by Dudley L. Poston, Jr

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The U.S. has just entered the new decade of the 2020s.

What does our country look like today, and what will it look like 10 years from now, on Jan. 1, 2030? Which demographic groups in the U.S. will grow the most, and which groups will not grow as much, or maybe even decline in the next 10 years?

I am a demographer and I have examined population data from the U.S. Census Bureau and from the Population Division of the United Nations.

Projections show that whites will decline; the number of old people will increase; and racial minorities, mainly Hispanics, will grow the most, making them the main engine of demographic change in the U.S. for the next 10 years and beyond.

What executives are reading in 2019

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Time to restock your shelves? We asked leaders of some of the world’s biggest organizations to share the books they look forward to reading or revisiting.

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Article (PDF-173KB)

We have books on the brain, with the recent release of the Financial Times–McKinsey Business Book of the Year long list.1 (See coverage of last year’s winner, Bad Blood, on our blog, and check back December 3, when the 2019 award is given.) There’s inspiration aplenty in the selections, which offer compelling insights on topics crucial to business today. But we also wanted to see what CEOs and other business leaders are keeping on their shelves or tucking into their suitcases—consider it food for thought in picking your next read. Read on for selections from leaders at Novartis, PayPal, Walmart, and more.

Doug McMillon

Blockchain’s Occam problem

By Matt Higginson, Marie-Claude Nadeau, and Kausik Rajgopal

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Blockchain has yet to become the game-changer some expected. A key to finding the value is to apply the technology only when it is the simplest solution available.

Blockchain over recent years has been extolled as a revolution in business technology. In the nine years since its launch, companies, regulators, and financial technologists have spent countless hours exploring its potential. The resulting innovations have started to reshape business processes, particularly in accounting and transactions.

Amid intense experimentation, industries from financial services to healthcare and the arts have identified more than 100 blockchain use cases. These range from new land registries, to KYC applications and smart contracts that enable actions from product processing to share trading. The most impressive results have seen blockchains used to store information, cut out intermediaries, and enable greater coordination between companies, for example in relation to data standards.

One sign of blockchain’s perceived potential is the large investments being made. Venture-capital funding for blockchain startups reached $1 billion in 2017. IBM has invested more than $200 million in a blockchain-powered data-sharing solution for the Internet of Things, and Google has reportedly been working with blockchains since 2016. The financial industry spends around $1.7 billion annually on experimentation.

Remembering Michael Howard Soldier, Scholar, Sage of Military History

By Lawrence Freedman 

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Sir Michael Howard, who died on November 30, 2019, a day after his 97th birthday, was a giant in the worlds of military history and strategic studies. A decorated veteran who redefined the study of war, he was also a voice of reason and conscience in some of the most important policy debates of his time, offering sage commentary on subjects as wide-ranging as nuclear policy and counterterrorism. Some of his most important writings appeared in these pages, where he contributed 12 articles between 1960 and 2002.

Howard is perhaps best known for his invaluable translation of Carl von Clausewitz’s On War, undertaken with his former student Peter Paret. But it was Howard’s prize-winning book The Franco-Prussian War that established military history as a serious area of scholarship and him as a leading practitioner. Prior to the book’s publication in 1961, military histories had mainly sought to describe specific campaigns or battles. What Howard demonstrated was the need to consider the conduct of war against the backdrop of broader social and economic changes. His later works—including War in European History, War and the Liberal Conscience, and The Invention of Peace—are masterpieces of concision, capturing big themes with economy of language and elegance of style. His lectures at King’s College London, and later at Oxford and Yale Universities, were delivered with wit, timing, and an eye for telling detail.

Return of the Hashishin (Assassin) Cult?: Wider Implications of the Attack on Saudi Oil Facilities

Maj Gen P K Mallick,VSM (Retd)

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The attack on Saudi oil installations has large scale implications for the hydrocarbon supply to the world specially for countries like China, India and the Asian giants of Japan and South Korea. The Strait of Hormuz becomes critical for energy imports of these countries.

The Middle East has become the world’s most polarized region. Both Saudi Arabia and Iran exploit the Shiite-Sunni rift to mobilize their respective constituencies. Iran’s military strategy is to keep tensions at a low level and avoid a direct confrontation with the U.S. Even if neither side wants to fight a war it could still happen due to miscalculation and missed signals. A minor clash can lead to a regional conflagration with devastating effects for Iran, the U.S. and the Middle East. India has to remain sensitive to the happenings in the Gulf region. India spent $111.9 billion on oil imports in 2018-19. Saudi Arabia is the second-largest supplier of crude oil and cooking gas to India. Every dollar increase in the price of oil raises the import bill by around Rs10,700 crore annually.

This Monograph tries to provide how the attack took place, its effect on world economy and oil market, effects on various stake holding countries and their reactions, military implications and India’s concerns..

Trends In Terrorism: What’s On The Horizon In 2020 – Analysis

By Colin P. Clarke*

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(FPRI) — As we usher in a new year, what trends in terrorism are likely to dominate the global security landscape in 2020? Geopolitical realignments, emerging technologies, and demographic shifts will all contribute to different manifestations of ideologically and politically motivated violence. Much of this will continue to have a transnational dimension, with once seemingly parochial challenges made even more complex as a result of the globalization of violence. The threat posed by transnational terrorism in 2020 thus presents a complex mosaic.

The Islamic State enters 2020 as a different group than it has been since its rise to power six years ago. The physical caliphate has been demolished, and the organization seems to be at a nadir, especially when compared to its peak, when it controlled massive swaths of territory and maintained a proto-state in the heart of the Levant. The Islamic State will continue to atomize, making the group weaker in some regards, but also making its network more difficult to target since it will be more decentralized. In Iraq and Syria, there are already reports that the group is attempting to rebuild itself, relying on guerrilla tactics and hit-and-run attacks against Iraqi security forces and the Assad regime in Syria. Sleeper cells are reportedly lying in wait to launch attacks, including bombings and assassinations.

Soleimani's Killing Sets the Stage for a Long-Term Oil Price Rise

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The oil market is poised to contain the price fallout from the assassination of a key Iranian commander, but perhaps only for the immediate future....

The Big Picture

Crude oil rose nearly 4 percent on news of the U.S. strike that killed senior Iranian military official Qassem Soleimani in Iraq. In the short term, however, it will be difficult for the market to price in much more risk regarding possible Iranian retaliation without suffering actual losses in volume. In the next few weeks, Iran has reason to avoid strikes against tankers or its neighbors' oil infrastructure, but that could change in the longer term.

The killing of Maj. Gen. Qassem Soleimani, head of the Quds Force unit of the Islamic Revolutionary Guards Corps (IRGC), is reverberating around the world, not least of all in oil markets. The price of crude oil has surged nearly 4 percent since the United States killed the senior Iranian military leader in Baghdad early on Jan. 3 — although the rise is only about a third of the rise that occurred in the first trading session after Iran attacked Saudi oil facilities at Abqaiq and Khurais in September.

Iran has the capability to launch cyber attacks on very short notice, expert says

Akiko Fujita

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Iran’s Supreme Leader Ayatollah Ali Khemanei vowed “harsh retaliation” against Washington, in response to the assassination of top General Qassem Soleimani. Intelligence experts say cyber warfare could be a primary focus, given Tehran’s vastly improved capabilities.

The country has invested heavily in its development of cyber warfare, since the destructive “Stuxnet” malware crippled Iran’s nuclear capabilities back in 2010. That has drastically reduced its response times to attacks, putting it on the same level as the U.S., according to Tom Warrick, a Non-Resident Fellow at The Atlantic Council and former Deputy Assistant Secretary for Counterterrorism Policy at the Department of Homeland Security.

“It's quite possible, as we sit here right now that Iranian cyber attacks may be launched against American targets, whether they be banks oil companies, academic institutions,” said Warrick, speaking to Yahoo Finance’s On The Move. “It's certainly clear that Iran has the capability to launch attacks on very short notice from cyber.”

Soleimani ‘Revenge’—This Is Why Iran’s Most Dangerous Cyber Weapons Will Stay Hidden

Zak Doffman

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The fact the U.S. has taken the decision to kill Iran’s most powerful general, Qassem Suleimani, is less surprising than the fact it took them this long. The commander of the country’s Quds Force was viewed as an extreme threat to U.S. interests, the second most influential person in Iran behind Ali Khamenei, the most dangerous person in the region. American and European nationals have now been warned to leave a Middle East bracing for a short-term physical response that might include attacks on security and commercial facilities, on tourism and shipping, on the Strait of Hormuz.

We can expect something “immediate and spectacular,” says Philip Ingram, formerly a senior officer within British Military Intelligence, now a defence analyst—he expects “a longer term sustained escalation of proxy wars in the region, deniable terror attacks.” The significance of Soleimani’s killing “cannot be underestimated,” he tells me, but the organisation survives, with a protege in charge.