22 April 2019

Strategic Chabahar port is win-win for India, Iran and Afghanistan

By J K Verma 

China, the world’s second largest economy, thinks that India may soon challenge its supremacy not only in Asia but also in the world arena. Hence it encircles India through a ‘string of pearls’, a term used for a network of Chinese military and commercial installations spread from China to Port Sudan in the Horn of Africa. Besides encircling India, China also assists and instigates Pakistan to carry out hostile activities against India.

In view of the Chinese-Pakistan axis, Indian policy planners in 2015 signed an agreement with Iran to develop Chabahar port. It is a trilateral contract between India, Iran and Afghanistan. China is also developing Gwadar Port in Pakistan which is just 400 km by road and 78 km by sea. Chabahar has two ports, namely Shahid Kalantari and Shahid Beheshti. Both ports have five berths each. Chabahar port is situated on the Gulf of Oman and at the mouth of the Strait of Hormuz, giving Iran direct access to Indian Ocean.

The Notre Dame Fire – Why it strikes a chord in many Indian hearts and minds

Jay Bhattacharjee

For the last few days, the world’s attention has been riveted on a terrible tragedy that has struck one country and one city. The fire that engulfed the Notre Dame Cathedral in Paris has saddened and grieved millions of people all over the world, even those who have little in common with France and Paris.

This is because the magnificent structure in the heart of Paris (and indeed the heart of the French Republic, because this building is the point from which all physical distances in France are measured) is an inseparable part of the world’s patrimony, in the same way as the ancient temples in our own country, the Parthenon in Greece, Machu Pichu in Peru, the shrines in China and the Pyramids of Egypt, just to give a few random examples.

Emmanuel Macron, the French President who, in my opinion (and that of most of his fellow citizens), ranks as one of the least distinguished holders of this office, salvaged some esteem when he came up with a very moving response to the tragedy that had struck his nation: “Notre Dame de Paris is our history, our literature, the place where we have lived all our great moments, epidemics, wars and liberation. It is the epicentre of our lives, it is the cathedral of all the French. This is history, it is ours and it is burning. A part of us burns”.

Pakistan’s Economic Woes: The Way Forward

By Shahroo Malik

Pakistan’s economic woes – dwindling foreign exchange reserves, low exports, high inflation, growing fiscal deficit, and current account deficit – are nothing new, and once again, the country finds itself knocking on the doors of the International Monetary Fund (IMF) for what will be its 22nd loan. While the exact amount of this package has not been determined, Pakistan already owes the IMF billions from previous programs. Indeed, 30.7 percent of Pakistan’s government expenditure is earmarked for debt servicing, which cannot be supported by its decreasing revenues. Already on the Financial Action Task Force’s (FATF) grey list, and with the current Pakistan Tehreek-e-Insaaf (PTI) government enjoying internal institutional consensus on the national agenda, Pakistan must focus its attention on resolving its economic woes before it finds itself on the shores of bankruptcy.

Current State of the Economy

Delivering Prosperity in the Indo-Pacific: An Agenda for Australia and the United States


The ongoing shift in global economic weight to the Indo-Pacific1 presents tremendous opportunities for the United States and Australia, along with risks and significant challenges. Both countries share a deep strategic interest in working together to keep Asian markets open, contestable, and rules-based. In doing so, Washington and Canberra can help maximize the prosperity and security of the American and Australian people, as well as those in the region. It is an opportunity too great to miss.

A major challenge for the United States and Australia in realizing these opportunities is to reinforce and extend the practices, rules, and institutions supporting open and well-functioning markets, particularly as emerging market economies become even more important in global growth. Both countries already work together on common interests in the Asia-Pacific Economic Cooperation (APEC) forum, the Group of 20 (G20), and other forums, but much more can be achieved with deeper and more purposeful cooperation.

As the regional and world order becomes more multipolar, seizing these economic opportunities is a necessary part of a portfolio approach to meet the security challenges of more assertive military and cyber activities. Economic engagement generates prosperity and influence for the United States and Australia, and it creates a much deeper and more resilient set of interests in the peaceful resolution of conflict.

Air Force to Begin Shifting Research Funds to These Kinds of Next-Gen Weapons

BY PATRICK TUCKER

The Pentagon’s continues to shift focus toward Moscow and Beijing with a new push for tomorrow’s drone swarms and smart missiles.

Taking a page from Silicon Valley, the Air Force has set up a new way to fund science and technology in the areas it sees as most important to the race with China and Russia. To lead the effort the military service branch will create a new chief technology officer position to oversee the development of next-generation capabilities, the Air Force announced on Wednesday at the unveiling of the service’s new science and technology strategy for 2030.

The Air Force funds lots of research, much of it on a small scale: a bit of money here to develop a new antenna capability, a bit there to teach drones to do a new trick, or a bit more there to create a new type of space-age material. The research sometimes makes its way into a formal program of record or an actual new weapon, but at the beginning of the process there is no way to know.

232 Unmanned Ships May Be Key To Countering China, Russia

By PAUL MCLEARY

The Sea Hunter, an experimental unmanned submarine-hunter.

WASHINGTON: The Navy is scrambling to write its new acquisition and operational playbook on the fly, a decision based as much on what US rivals are doing as it is on what the service hasn’t done in recent decades.

The construction and innovation booms being undertaken by the Chinese — and to a lesser extent Russian — navies, are forcing the admirals at the Pentagon to push new, still mostly theoretical, unmanned technologies into the water as quickly as possible for urgent make-or-break tests.

The biggest gamble — with potentially the highest payoff — is the $3.7 billion worth of unmanned programs the service included in its 2020 budget submission. The spending includes $447 million to buy two large unmanned surface vehicles that can provide a variety of missions from long-range surveillance to offensive operations.

After the 2020 budget, the Navy plans to buy two LUSVs a year until 2024, for a total of about $2.7 billion. The Navy is making plans to buy 232 unmanned platforms of different sizes and configurations over the next several years.

The US-China economic relationship: A comprehensive approach

Joshua P. Meltzer and Neena Shenai

EXECUTIVE SUMMARY

The U.S.-China economic relationship has reached a critical juncture. Over the past year, the U.S. has imposed tariffs on $250 billion worth of Chinese imports and China has retaliated, raising tariffs on U.S. exports. At the G-20 leaders’ summit in November 2018, Presidents Trump and Xi agreed to resolve the trade dispute within 90 days—by March 1, 2019, though this deadline has been recently extended.

The U.S. concerns that underpin these bilateral trade tensions stem from specific practices endemic to China’s economic model that systematically tilt the playing field in favor of Chinese companies domestically and globally. Progress on specific trade issues will require China to comply with its World Trade Organization (WTO) commitments and to make certain reforms that will likely touch on areas of state control over the economy. In addition, new trade rules are needed to address China’s economic practices not covered by its WTO commitments, including in areas such as state-owned enterprises (SOEs), certain subsidies, and digital trade. These issues also come at a time of increasing U.S. concern over the national security risks China presents, particularly with respect to technology access.

A New Consensus Is Emerging On How to Handle The Risk from China’s 5G

BY PATRICK TUCKER

Much of the Western intelligence debate around Chinese high-speed 5G technology has focused on hardware and software. Once the hardware is already out in the wild — which most think is inevitable — the future of the fight is in managing risk. It’s doable, if not yet widely advertised, according to several experts speaking at a U.S. intelligence conference this week, by quarantining Chinese equipment and deploying smarter electromagnetic spectrum management tools to better handle threats.

Bottom line: Huawei leads the world in the ability to rapidly produce cheap telecom hardware (as well as the underlying software.) Recent reports, including one from NATO, state it plainly. It’s one reason why European countries, including U.S.allies like Germany and the U.K., have been reluctant to ban tech from Huawei outright, even in the face of heavy U.S. pressure.

But — quietly — many European countries like the U.K. and France actually are banning Huawei’s 5G tech in part by effectively quarantining it away from vital parts of infrastructure, or military and intelligence activities, according to James Lewis, senior vice president at the Center for Strategic and International Studies. “They don’t let Huawei near their sensitive intelligence facilities, their sensitive military facilities,” said Lewis.

Beyond Incirlik

The Turkish air base has become a point of contention in negotiations between Washington and Ankara.

U.S.-Turkish relations are strained. Turkey is frustrated over U.S. support for Kurdish groups in Syria. Turkish President Recep Tayyip Erdogan is still incensed that Fethullah Gulen, the cleric who Erdogan believes orchestrated the 2016 coup attempt, remains ensconced in the Poconos. The two countries are currently at an impasse over Turkey’s acquisition of Russian S-400 missile defense systems. None of these issues are likely to fundamentally alter the strategic alliance between Washington and Ankara, but there could be short-term ramifications if the two can’t compromise where it matters most.

Turkey has a key point of leverage over the United States: Incirlik Air Base. The U.S. has had a permanent military presence there since 1954 (it still has as many as 50 B61 gravity bombs, a tactical nuclear weapon, at Incirlik). The base has been critical for U.S. operations in the Middle East, though it has always been a point of contention. When Turkey invaded Cyprus in 1974, the U.S. put an arms embargo on Turkey, and Ankara retaliated by blocking U.S. access to Incirlik for five years (though it allowed NATO forces to continue using the base). Over the years, Turkey has tried to limit U.S. activity on the base in other ways. Most recently, in 2003, Turkey blocked the U.S. from using Incirlik to support its invasion of Iraq.

IT TAKES TWO TO TANGO: THE JOURNALIST’S ROLE IN A HEALTHY MILITARY-MEDIA RELATIONSHIP

Chase Spears

Media outlets have lately begun reporting on a reduction of press briefings at the Pentagon. The stories note that it has been over three hundred days since the Defense Department last held a formal press briefing. These reports acknowledge that military leaders and public affairs officials continue to work with reporters to inform the public, but take issue with the lack of formalized press conferences this year. Theories for the change in routine vary from matters of security to matters of politics. What these reports fail to consider is the culpability that some journalists share in creating legitimate concerns about going on camera in a period of increasingly divisive politics. That divisiveness has contributed to a blurring of the lines between professional journalism and punditry, putting at jeopardy the journalistic ethics to which the national-level press corps has traditionally abided.

On initial glance, I understand the reporters’ frustration. As an American, I expect accountability of our governmental institutions. As a public affairs officer, I aggressively push for it. Keeping our military leaders credible with the public makes the US military an even more formidable adversary for those who want to challenge American resolve at home and abroad. An authentic and open relationship with the press is key to that end. There is always room for criticism and recommendations on how the Defense Department can do a better job with the press. In this case, though, the Pentagon is getting a bad rap.

Anatomy of a Taiwan Invasion Part 2: Missile and Naval Domains

By Rick Joe

This is part 2 of a three-part series considering the way in which a Taiwan invasion may be conducted. Part 1 set the political basis and military parameters and timeline for such a contingency, stating a late 2019 onset of conflict. The air domain of the conflict was also discussed, arguing that Republic of China Air Force (ROCAF) fighter forces and Republic of China Armed Forces (ROCArF) air defenses and early warning systems would likely suffer significant early losses and disadvantages in terms of situational awareness, fighter sortie rates, and IADS coherency.

Part 2 now will consider the goals and prospects of other People’s Liberation Army’s (PLA) kinetic domains, including missile power, naval power, and the beach landing. As described in part 1, this series will only consider first week of active fighting (T-day to T-day+7), with the conclusion that the PLA will seek to have successfully conducted amphibious assaults to have attained at least one or more major beachheads. Part 3 next month will review methods in which the ROCArF may seek to counter existing PLA capabilities as well as to consider what the likely future trajectory of PLA development may mean for ROCArF prospects in the next decade or more.

PLA Missile Availability

Is the World Economy Headed for a Fall?


The International Monetary Fund (IMF) has once again cut its global growth forecast for 2019. In its new semi-annual World Economic Report, the organization now projects a 3.3% growth rate, down from the 3.5% it predicted in January, 3.7% in October and 4% a year ago. Key reasons for the downward revisions: the U.S.-China trade war and the potential for a disorderly Brexit.

Added to those concerns is a general tightening of monetary policy globally, particularly the spate of interest rate increases in the U.S. IMF chief economist Gita Gopinath wrote that with 70% of the global economy seeing a slowdown in growth, it is “a delicate moment right now.”

What might strike some as the relatively small size of the recent decreases in the IMF’s forecast belies the large impact such cuts in growth can bring on the ground to people and businesses, particularly in countries already struggling that could easily be tipped into a recession. At the same time, it’s worth noting that each of the IMF concerns has been partly ameliorated more recently. The immediate Brexit risk has been pushed back by a deadline extension to October, the outlook for the U.S.-China trade war – at this moment at least — looks more sanguine, and the Fed has clearly become more dovish, making further rate increases this year unlikely and raising the possibility of a rate cut.

What the Mueller report tells us about Russian influence operations

Alina Polyakova

A social media influence and infiltration operation led by the Internet Research Agency (IRA); A cyber hacking operation carried out by the Russian military intelligence (GRU); and
An infiltration operation of the Trump campaign. The report describes in stunning detail the inner workings of the full Russian operation. To date, the report is the most comprehensive account (in addition to the previously released indictment of IRA and GRU operatives) of how the Russian operation evolved over time, how successful it was in targeting and duping Americans, and the Kremlin’s motivation.

This post focuses specifically on what the Mueller report tells us about the information operations. A second post will focus on what we have learned about Russian cyber operations and capabilities.

THE IRA’S TACTICS EVOLVED OVER TIME

The IRA’s first step was to build a network of accounts. Its social media activities started in 2014, seeking to create individual impersonation accounts meant to look like Americans, particularly on Facebook.

How the Founding Fathers helped make the US cyber-resilient

By: Jan Kallberg

The Founding Fathers have done more for U.S. strategic cyber resiliency than other modern initiatives. Their contribution is a stable society, that can absorb attacks without falling into chaos, mayhem, and entropy. Stable countries have a significant advantage in future nation-state cyber-information conflicts. If nation states seek to conduct decisive cyberwar, victory will not come from anecdotal exploits, but instead by launching systematic, destabilizing attacks on the targeted society that bring them down to the point that they are subject to foreign will. Societal stability is not created overnight, it is the product of decades and even centuries of good government, civil liberties, fairness, and trust building.

Why does it matter? Because the strategic tools to bring down and degrade a society will not provide the effects sought. That means for an adversary seeking strategic advantages by attacking U.S. critical infrastructure the risk of retribution can outweigh the benefit.

We need a reskilling revolution. Here's how to make it happe

Børge Brende

As the world faces the transformative economic, social and environmental challenges of Globalization 4.0, it has never been more important to invest in people.

Valuing human capital not only serves to equip individuals with the knowledge and skills to respond to systemic shifts, it also empowers them to take part in creating a more equal, inclusive and sustainable world.

Education is and will remain critical for promoting inclusive economic growth and providing a future of opportunity for all. But as the technologies of the Fourth Industrial Revolution create new pressures on labour markets, education reform, lifelong learning and reskilling initiatives will be key to ensuring both that individuals have access to economic opportunity by remaining competitive in the new world of work, and that businesses have access to the talent they need for the jobs of the future.

This chart shows the fall in coal-power plants being planned around the worl

Douglas Broom

Coal is widely acknowledged as one of the most polluting ways to generate electricity. The International Energy Agency (IEA) calculates that this one fuel alone has been responsible for a third of all global warming in modern times.

So, the news that the amount of planned new coal-fired generating plants reached a new low last year must be good for the planet. The amount of planned capacity fell by over a third last year and was 84% down on the figure for 2015.

But although fewer new coal-fired power stations are being planned, those already approved are still being built. Global Energy Monitor says there was a 12% increase in the amount of coal-fired capacity under construction last year. And the IEA reported this week that coal usage rose last year for the second year in a row, reversing two years of decline up to 2016 and contributing to a 1.7% increase in CO2 emissions.

Banking on the Future of Cryptocurrencies


Charlie Lee is lauded in cryptocurrency circles as the creator of Litecoin, an alternative to Bitcoin he conceived in 2011 as a Google software engineer. Today, Litecoin is the sixth-largest crypto with a market cap of $5 billion. It bears many similarities to Bitcoin, but also has important differences: Transactions are confirmed 75% faster, it has greater liquidity with four times more coins in circulation, and it is more resistant to manipulation by miners holding 51% control of the network.

In 2017, Lee sold his entire stake in Litecoin and now serves as managing director of the Litecoin Foundation, which seeks to advance Litecoin and develop blockchain technologies for the social good. At the recently held second annual Penn Blockchain Conference, Lee sat down with Knowledge@Wharton to talk about the philosophy behind Litecoin’s creation, whether cryptos will replace hard currency and what’s next for him.

An edited transcript of the conversation follows.

The Long Rise and Sudden Fall of American Diplomacy

BY JEREMI SURI

On the afternoon of Sept. 11, 2001, one of America’s most experienced diplomats, William Burns, sat in the deserted U.S. State Department compound, five blocks from the evacuated White House, contemplating the future of American foreign policy. The department’s computer systems were down, so he reverted to writing longhand. Burns, the assistant secretary of state for Near Eastern affairs, composed four pages that he later handed to Secretary of State Colin Powell, outlining ideas for the “imaginative and hard-nosed diplomacy” necessary to drain the Middle East of the terrorism that had now reached the United States. Burns’s advice was prescient; its rejection by the White House, Congress, and much of the American public reveals the debilitating “militarization of diplomacy”—the subject of Burns’s compelling memoir, The Back Channel.

“What was unfolding,” Burns writes, “was less a clash of civilizations than a clash within a civilization, a deeply battered Islamic world in the midst of a desperate ideological struggle. There were limits to what we could do directly to shape that debate. What we could do, however, was to help create a sense of geopolitical order that would deprive extremists of the oxygen they needed to fan the flames of chaos, and give moderate forces the sustained support they needed to demonstrate that they could deliver for their people.”

Nostalgia Is a National Security Threat

BY MICAH ZENKO 

One of the most prevalent, and pernicious, biases in U.S. foreign-policy circles was best summarized by the political scientist John Mueller. Humans have a “tendency to look backward with misty eyes, to see the past as much more benign, simple, and innocent than it really was,” Mueller wrote in 1995. “That is, no matter how much better the present gets, the past gets better faster in reflection, and we are, accordingly, always notably worse off than we used to be. Golden ages, thus, do happen, but we are never actually in them: they are always back there somewhere.”

What Mueller was describing was retrospection bias. Humans have a tendency to actively forget negative events from long ago, and thus we disproportionately judge the past in a more positive light. History is also simplified and chunked into a few key events and big impressions. With the benefit of hindsight, the past seems relatively predictable and sensible, while the present is always chaotic and uncertain. “We are standing at an unprecedented moment in human history,” say respected politicians and generals, as if that is not always the case. Inevitably, what results are mistaken—and sometimes catastrophic—foreign-policy decisions.

Is the World Economy Headed for a Fall?


The International Monetary Fund (IMF) has once again cut its global growth forecast for 2019. In its new semi-annual World Economic Report, the organization now projects a 3.3% growth rate, down from the 3.5% it predicted in January, 3.7% in October and 4% a year ago. Key reasons for the downward revisions: the U.S.-China trade war and the potential for a disorderly Brexit.

Added to those concerns is a general tightening of monetary policy globally, particularly the spate of interest rate increases in the U.S. IMF chief economist Gita Gopinath wrote that with 70% of the global economy seeing a slowdown in growth, it is “a delicate moment right now.”

What might strike some as the relatively small size of the recent decreases in the IMF’s forecast belies the large impact such cuts in growth can bring on the ground to people and businesses, particularly in countries already struggling that could easily be tipped into a recession. At the same time, it’s worth noting that each of the IMF concerns has been partly ameliorated more recently. The immediate Brexit risk has been pushed back by a deadline extension to October, the outlook for the U.S.-China trade war – at this moment at least — looks more sanguine, and the Fed has clearly become more dovish, making further rate increases this year unlikely and raising the possibility of a rate cut.

Is cyberwarfare war? Insurers balk at paying for some cyberattacks

By Matt Field

In Ukraine, a cyberattack can mean a freezing night without power. But in the United States, it often seems like just one more unavoidable hassle of modern life. People change a few passwords, maybe sign up for credit monitoring, and then go on with life. But for the organizations on the receiving end—Target, Equifax, the federal government’s Office of Personnel Management, just to name a few—a cyberattack can mean scrambling to get systems back on line, setting up response war rooms, and, of course, paying huge bills for missed orders or new equipment.

And US businesses may no longer be able to rely on insurance to cover their losses. In an era of unceasing cyberattacks, including cases of state-sponsored hacking, insurance companies are beginning to re-interpret an old line in their contracts known as the “war exclusion.” Stripping away the metaphorical connotation of the term “cyberwarfare,” big insurers like Zurich Insurance have decided that state-sponsored attacks are basically just plain warfare. This shift comes as the US government is increasingly attributingstate-sponsored cyberattacks to their alleged perpetrators, a development that some argue is a means of holding bad actors accountable.

GCHQ: a century of ciphers

By Nick Smith

This year, the UK government’s intelligence and security organisation celebrates its centenary. From its earliest days of cipher decryption to mounting today’s defences against global cyber attack, GCHQ has come a long way.

In 1919, with the end of the First World War still ringing in the nation’s memory, Britain was already putting in place intelligence countermeasures to ensure it would maintain the upper hand, should such conflicts ever happen again.

By the time the Armistice was signed on 11 November 1918, four years and three months of industrialised slaughter had left just over 700,000 British soldiers dead. Within a year, on the recommendation of Lord Curzon, the British Army and Royal Navy intelligence services – M11b and ‘Room 40’ ­– were merged to form the Government Code and Cypher School (GC&CS).

Located at Watergate House, London, the GC&CS was in the century that followed to become the Government Communications Headquarters, commonly known as GCHQ, arguably the most famous national government intelligence agency in the world.

Don’t Panic: The Digital Revolution Isn’t as Unusual as You Think


The digital revolution has dramatically changed life on Earth, making it easy to think we’re living in the greatest time of innovation. But a new book by Tom Wheeler, former chairman of the Federal Communications Commission, is a reminder that remarkable change has happened many times before. The invention of the printing press in the 15thcentury created upheaval and reorganized everything in society, as did the subsequent inventions of the telegraph, telephone and railroad. From Gutenberg to Google: The History of Our Future is an insightful look at the development of networks, the physical links that bind people together. Wheeler, a visiting fellow at the Brookings Institution, recently joined the Knowledge@Wharton radio show on SiriusXM to talk about why history often repeats itself. (Listen to the podcast at the top of this page).

An edited transcript of the conversation follows.

Knowledge@Wharton: This is a unique perspective on history. Where did you get the idea for this book?

Former Homeland Security Secretary Janet Napolitano: cybersecurity is national security

By Molly Wood

In a new book, Janet Napolitano, the former head of the Department of Homeland Security, says it is “impossible to overstate the urgency of improving our country's cybersecurity.” She says we're vulnerable all over the place, from critical infrastructure like utilities and 911 dispatch systems to our elections and our personal data. But there are lots of federal agencies in charge of it, and they have to work with lots of private companies to address it.

Host Molly Wood spoke with Napolitano about her new book “How Safe Are We? Homeland Security Since 9/11.” She asked her what she wishes her agency had done differently. The following is an edited transcript of their conversation.

Janet Napolitano: I think one key gap was our inability to have formulated national cybersecurity standards that were mandatory, not voluntary.

Molly Wood: Do you mean mandatory standards for companies?

Esper: Chinook & JLTV ‘Designed For a Different Conflict’

By PAUL MCLEARY

Army Secretary Mark Esper talks with soldiers during exercises in Europe

PENTAGON: The Army appears likely to cut more funding from the Joint Light Tactical Vehicle program as the service pivots from counterinsurgency to staring down China and Russia.

The service’s top civilian painted the JLTV Tuesday as a product of the wars in Iraq and Afghanistan which might not be suited for potential future high-tech fights. Mark Esper placed it alongside other programs that started life before the 2018 National Defense Strategy. 

“Now my emphasis has to be on rebuilding my armor, rebuilding my fighting vehicles, having aircraft that can penetrate Russian and Chinese air defenses,” Esper said. In those potential conflicts, the Army needs platforms “that can shoot down Russian and Chinese drones, and missiles, and helicopters and fixed-wing aircraft.”

21 April 2019

PAKISTAN’S ECONOMIC WOES: THE WAY FORWARD

by Shahroo Malik

Pakistan’s economic woes – dwindling foreign exchange reserves, low exports, high inflation, growing fiscal deficit, and current account deficit – are nothing new, and once again, the country finds itself knocking on the doors of the International Monetary Fund (IMF) for what will be its 22nd loan. While the exact amount of this package has not been determined, Pakistan already owes the IMF billions from previous programs. Indeed, 30.7% of Pakistan’s government expenditure is earmarked for debt servicing, which cannot be supported by its decreasing revenues. Already on the Financial Action Task Force’s (FATF) grey list, and with the current Pakistan Tehreek-e-Insaaf (PTI) government enjoying internal institutional consensus on the national agenda, Pakistan must focus its attention on resolving its economic woes before it finds itself on the shores of bankruptcy.

Current State of the Economy

Pentagon crafts options to counter Russian and Chinese influence in Venezuela

By CONNOR O’BRIEN 

Editor's Note: This edition of Morning Defense is published weekdays at 10 a.m. POLITICO Pro Defense subscribers hold exclusive early access to the newsletter each morning at 5:30 a.m. To learn more about POLITICO Pro's comprehensive policy intelligence coverage, policy tools and services, click here.

QUICK FIX

— The Pentagon is crafting military options to deter Russian, Chinese and Cuban influence in Venezuela, but stopping short of military action against the embattled regime of President Nicolas Maduro.

— In an interview, the new top House Defense Appropriations Republican, Rep. Ken Calvert, argues lawmakers need to provide on-time funding to help the military match advances by Russia and China and wants to see more efficiency at the Pentagon.

— Amid a long drought in on-camera briefings by senior defense officials, the top Homeland Security spokesman is headed to the Pentagon to become the next assistant to the secretary for public affairs.

Army Secretary Reveals Weapons Wishlist for War with China & Russia

BY MARCUS WEISGERBER

Army Secretary Mark Esper says he wants to shift money away from light vehicles and cargo helicopters made for “different conflicts” of the past.

U.S. Army leaders revealed Tuesday that they are briefing top military commanders about new weapons being built specifically for “high-intensity conflict” against China and Russia, in a new effort to assure that they could provide vital firepower for those potential battlefields of the future.

Army Secretary Mark Esper said he wants to shift some money away from vehicles and aircraft more suited for conflicts in Afghanistan and Iraq and into “what I need to penetrate Russian or Chinese air defenses.”

Among the new weapons and technologies he said are critical: long-range artillery, attack and reconnaissance aircraft, air and missile defenses, and command-and-control networks. Esper said the artillery — known as Long-Range Precision Fires — could be used “to hold at bay Chinese ships.”

Army Secretary Reveals Weapons Wishlist for War with China & Russia

BY MARCUS WEISGERBER

Army Secretary Mark Esper says he wants to shift money away from light vehicles and cargo helicopters made for “different conflicts” of the past.

U.S. Army leaders revealed Tuesday that they are briefing top military commanders about new weapons being built specifically for “high-intensity conflict” against China and Russia, in a new effort to assure that they could provide vital firepower for those potential battlefields of the future.

Army Secretary Mark Esper said he wants to shift some money away from vehicles and aircraft more suited for conflicts in Afghanistan and Iraq and into “what I need to penetrate Russian or Chinese air defenses.”

‘Belt and Road’ Will Help the World. China? Not So Much.

Tyler Cowen

The global economic development initiative that China calls “One Belt, One Road” is considered one of Beijing’s major instruments in its geopolitical conflict with the U.S. But it’s unlikely to do much to boost Chinese power as it helps most of the world.

China is investing in fixed assets and infrastructure from southeast Asia to the Balkans and East Africa. That poses a danger to China that host countries will eventually nationalize the assets without giving China comparable value in return. It’s a lesson the U.S. learned when it lost control of the Panama Canal and Saudi Arabian oil assets.

I was struck by a recent deal between China and Montenegro that gave China the right to access land in Montenegro as collateral, in case Montenegro does not repay certain loans. This has upset people in Montenegro, and it makes China seem like an imperialist country with territorial designs. But there’s also a more benign interpretation: China is demanding land as collateral because it knows Montenegro is not creditworthy. The loan sent Montenegro’s ratio of debt to gross domestic product to almost 80 percent, from 63 percent in 2012.

The World China Wants

BY FREDERICK KEMPE

European Union leaders sat down this week in Brussels for a summit with a China it recently branded a “systemic rival,” and the United States is nearing the end game of trade talks with a China that national security documents refer to as a “strategic adversary.”

So, it’s surprising that transatlantic leaders are neither working at common cause nor asking the most crucial geopolitical questions of our age.

What sort of world does China want to create? 

With what means would it achieve its aims? 

And, what should the United States and Europe do to influence the outcome? 

The Dangerous Dregs of ISIS

By Robin Wright

Afew days before the collapse of the Islamic State’s caliphate, I visited one of the new “pop-up prisons” that had been hastily converted to hold thousands of surrendering isis fighters in Syria. The numbers wildly exceeded all expectations, including estimates by U.S. intelligence. The most striking sight at the prison entrance was a mound of human hair lying on the raw concrete floor. Clumps of it—some brown, some graying, most of it greasy or matted—had been shaved off the heads and faces of fighters before they were taken to group cells. “Lice,” one of the guards told me.

The prison at Dashisha, in eastern Deir Ezzor province, had been an oil-storage facility. In just four days, the compound of modest brick and stucco buildings had been filled with fifteen hundred fighters from countries on four continents, including France, Libya, Russia, Turkey, Saudi Arabia, Morocco, Iraq, and the United States, the warden told me. Average-sized rooms had been fitted with metal doors; each cell had a small barred window that I had to stand on my tiptoes to peer through. Each one was crammed, wall to wall, with dozens of men squatting on the floor. The isis fighters wore new T-shirts, in army green, and whatever trousers they had on when they were captured.

Hard Truths in Syria: America Can’t Do More With Less, and It Shouldn’t Try

by Brett McGurk

Over the last four years, I helped lead the global response to the rise of the Islamic State (ISIS)—an effort that succeeded in destroying an ISIS “caliphate” in the heart of the Middle East that had served as a magnet for foreign jihadists and a base for launching terrorist attacks around the world. Working as a special envoy for U.S. Presidents Barack Obama and Donald Trump, I helped establish a coalition that was the largest of its kind in history: 75 countries and four international organizations, their cooperation built on a foundation of U.S. leadership and consistency across U.S. administrations. Indeed, the strategy to destroy the ISIS caliphate was developed under Obama and then carried forward, with minor modifications, under Trump; throughout, it focused on enabling local fighters to reclaim their cities from ISIS and then establish the conditions for displaced people to return.

Doing the Haka

By George Friedman

Despite the furor that rages, the world appears to be quietly moving along.

In New Zealand, the Maoris have a ceremonial dance called the haka. Today it’s performed at rugby matches and consists of the New Zealanders making stylized threatening gestures, including sticking out their tongues at their competitors, crouching, jumping and chanting. It is deeply rooted in Maori history, but for all its energy and passion, it does not do what it is intended to do, which is frighten their opponents, and the rugby match goes on.

The political history of humankind is filled with the haka and the violence that was meant to come next. Yet even at the great turning points, the deepest agonies of humanity, life went on. This was no comfort to those caught in the moment. They died but, in the end, so did everyone. That is of course too Olympian a perspective for most of us, and certainly for those of us with children and grandchildren, but there is a terrible truth to it.

On a lesser level, there are moments when the haka goes on, when all sides are determined to frighten each other and frighten the world, yet it means no more than at a rugby match. Coming back down to earth, we seem to be at a moment like that. The furor rages, but the world appears to be quietly moving along.

How global value chains open opportunities for developing countries

David Dollar

Traditional trade statistics measure the gross value of trade. When a smart phone goes from China to the United States, what is recorded as an export is the full value of the phone. It would be more accurate to say that the United States is importing different types of value added from different partners: labor-intensive assembly from China, more sophisticated manufacturing inputs from South Korea, and services from the United States, since even foreign-brand phones have a lot of U.S. technology.

In recent years, major economies have produced annual input-output tables that deconstruct production into its many constituent parts. There is a growing amount of research into the value added in trade, as well as into the stages of the value chain. These studies provide new perspectives on trade. The Global Value Chain Development Report 2019, produced by the World Trade Organization and other partners, has a wealth of findings, some of which are especially relevant to developing countries.

THE CASES OF CHINA AND VIETNAM

Advanced gene editing may mutate into WMDs

Shambhavi Naik

Last June, German police arrested a man planning a terror attack by releasing large quantities of the biological toxin ricin, said to be 6,000 times more poisonous than cyanide. The raids on a block of flats in Cologne blew the lid off our worst fears: non-state actors laying their hands on bioweapons.

Technology has always changed war and its arsenal. Scientists, security experts and diplomats are increasingly talking about biological weapons when they discuss strategies to prevent proliferation of conventional and nuclear weapons. While biological attacks have been rare since the end of World War II, isolated incidents have been reported. The ‘anthrax letters’, which killed five people in the US following 9/11, is one such incident.

The renewed attention to biological warfare also stems from advances in gene editing technologies. CRISPR-based technologies have allowed humans to edit genomes and manipulate organisms with precision at a low cost. The use of these technologies in humans, plants, animals and micro-organisms has spread rapidly. CRISPR has broken out of labs into garages and DIY kits. This ‘democratisation’ of science has triggered concerns about the misuse of technology to create pathogens that can be weaponised.