Diplomacy & Crisis News

A leading U.S. role in nurturing democracy worldwide can operate in either or both of two ways. One is by reaching out, using any of several foreign policy tools, to shape events in a foreign country in a pro-democratic direction. The American policy context for such efforts has ranged from the human rights agenda of Jimmy Carter to the more militant democracy-spreading objectives of the neoconservatives. 

The reaching out can include persuasion of governmental leaders through diplomacy, and the use of economic carrots and sticks such as aid and sanctions to reward moves toward democracy and to punish backsliding toward authoritarianism. The work of two organizations associated with U.S. political parties—the International Republican Institute and the National Democratic Institute—such as the teaching of political skills to potential candidates in free elections, also represents an active U.S. effort to promote democracy abroad.

The other fundamental way in which the United States can affect the strength or weakness of democracy in other countries is by setting an example. The concept goes back to John Winthrop’s metaphor of a shining city on a hill, which in modern times Ronald Reagan resurrected. Some analysts argue this is the more effective way in which the United States can affect the prospects for democracy in other countries. As a superpower, any example the United States sets—intentionally or unintentionally, for better or for worse—is bound to be powerful. And being an exemplar on a hilltop avoids possible backlash from those who might see more active democracy-promotion activities as meddling or interference in another country’s internal affairs.

Today, the main story about democracy worldwide is not its advance but rather its decline. Much of the analysis of the reasons for this decline focuses on conditions and developments within the individual countries where democracy is most under attack. But as with an advance of democracy, the erosion of it involves influences that cross international boundaries. Again, the United States is a major player in the process. And again, influence gets exerted both through direct action and through example. 

The attack on government offices in the capital of Brazil by supporters of former president Jair Bolsonaro earlier this month was a violent demonstration of the example effect. The attack copycatted the assault on the U.S. Capitol two years earlier by supporters of Donald Trump, even down to some of the costumes the rioters favored. Both attacks were efforts by backers of a defeated demagogue, who preached a right-wing faux-populist message, to overturn the result of a free election. Bolsonaro himself—the “Trump of the tropics”—emulated the former American president, especially with his fraudulent claims of election fraud. 

Direct transnational action also has been part of a global democratic decline, and again the MAGA portion of American politics has been involved in the action. Bolsonaro and Trump were both part of a larger surge in ethnic nationalist regimes, parties, and movements that appeal to xenophobia, present themselves as populists, and has included, for example, the National Rally party in France. Even though such movements ostensibly are anti-internationalist, the assistance across international boundaries and the cross-fertilization among the groups has been substantial. Trump’s former chief political strategist, Steve Bannon, has been a leader in organizing institutionalized cooperation—in what participants simply call “The Movement”—among hard-right ethnic nationalist parties and groups, mostly in Europe.

The most conspicuous European case of sliding from democracy into authoritarianism has been the Hungarian regime of Viktor Orban. Hungary under Orban is the only member country of the European Union that the watchdog organization Freedom House does not rate as free but instead as only “partly free.” The EU has been largely powerless to do much about the Hungarian backsliding because the Law and Justice Party in Poland—its other authoritarian-tending problem regime—has blocked most action against Orban.

Orban and his Fidesz Party are part of the transnational hard-right, ethno-nationalist phenomenon, and again the American Right has played a large role. Trump and Orban endorsed each other’s election bids, and Trump granted the Hungarian prime minister a meeting at the White House in 2019—the first time Orban had received that privilege since 1998. Fox News’ Tucker Carlson did a week of shows from Hungary, and the Conservative Political Action Conference held one of its meetings there last year. Later in 2022, Orban was the featured and much-applauded speaker at a CPAC conference in Dallas, just days after he had controversially criticized “mixed-race” societies.

Recent hand-wringing by American commentators about the erosion of democracy abroad has focused especially on the newly installed extreme right-wing Israeli government of Benjamin Netanyahu. Netanyahu is part of the same hard-right ethno-nationalist international as Orban and Bannon. The concept of a regime rooted in xenophobia and unafraid to use harsh measures to cement its rule and to keep non-favored groups subjugated is the basis of the chumminess between Netanyahu and Orban, notwithstanding the anti-Semitic vibes that emanate from the latter’s regime.

A theme of the hand-wringers is a desire to maintain the extraordinary U.S.-Israeli relationship, with their fear being that Israel’s further descent into extremism will weaken political support in the United States for that relationship. Their analysis of U.S. politics is probably at least partly correct, but they overlook how the relationship itself, given its extraordinary character, has contributed to the extreme turns in Israeli politics.

Some of the moves by Netanyahu’s new government, including an attempted emasculation of the judiciary, might indeed reduce the democratic content of political processes within the dominant ethno-religious group of Israel. But even before those moves, “democracy” was not a label that could justifiably be applied to a country that denies political rights to millions of residents of the land that the country treats for other purposes as an integral part of its territory. As successive U.S. administrations have continued unqualified support for successive Israeli governments that have solidified this system of apartheid, Israeli hardliners have been encouraged to keep moving in the same direction without paying any political price.

The government that emerged from last fall’s Israeli election is just the latest, unsurprising step in this process. There is strong awareness across the Israeli political spectrum of the importance of the relationship with the United States. If the United States had managed that relationship differently, it is very likely that the most recent Israeli election, and the government to emerge from it, would have been much different from what exists today.

The United States still is the biggest single influence on democracy worldwide, both as an exemplar and through its direct actions abroad. But in both these modes, it has often become less a promoter of democracy than a danger to it. In this respect, Winthrop and Reagan have been stood on their heads, and so have Carter and the neocons.

Paul Pillar retired in 2005 from a twenty-eight-year career in the U.S. intelligence community, in which his last position was National Intelligence Officer for the Near East and South Asia. Earlier he served in a variety of analytical and managerial positions, including as chief of analytic units at the CIA covering portions of the Near East, the Persian Gulf, and South Asia. Professor Pillar also served in the National Intelligence Council as one of the original members of its Analytic Group. He is also a Contributing Editor for this publication.

Image: Shutterstock.

America’s founders redefined the relationship between man and state with the First Amendment of the Constitution, which prohibits the government from making any law “respecting an establishment of religion.” By separating church and state, these words ushered in a new era of democratic governance, innovation, and human flourishing.

Is the next stage in the evolution of freedom to separate money from the state?

This radical idea lies at the heart of blockchain technologies like Bitcoin. By divorcing currency from the caprice of central banks, Bitcoin and competing crypto protocols aim to disrupt the global financial system by letting people opt into their own monetary policy—rather than having unelected bureaucrats decide it for them.

In the cryptographic future, an immutable public ledger (i.e., the blockchain) takes the place of traditional accounting. By removing middlemen from financial transactions—be they banks, credit card companies, or government agencies—crypto users can more freely exchange money, preserve capital, and protect themselves against inflation. Or so the theory goes.

But to what extent is this vision of the future even feasible?

Will Bitcoin and other blockchain applications write the next chapter of democracy and digital computing? Or will they collapse under the weight of their own promises?

Moreover, how can we expect governments and legacy banks to react to a technology that ultimately seeks to displace them?

The scenarios outlined in this report will attempt to grapple with these questions and many more. The goal is to sketch the broad contours of the U.S. blockchain industry in the year 2030 by building what Peter Schwartz—one of the pioneers of scenario analysis—called “myths of the future.”

Admittedly, imagining the future of an emergent industry characterized by theory, hype, and speculation is exceedingly difficult, even more so in the depths of crypto winter. But while blockchain technology may be new, human nature is not. And by looking at the past, we can catch glimpses of the future.

Indeed, historical precedents—especially as they pertain to U.S. national security, currency regulation, and the technological developments of the twentieth century—offer a firm foundation for scenario building. So, too, do existing trends. By incorporating both into our scenario analysis, we can construct plausible but imperfect visions of the future. These visions (and the drivers behind them) will help us imagine the state of blockchain in 2030, as if “see[ing] through a glass darkly.”

 Scenario 1: Crypto Cooperation

In this scenario, the United States expands its global financial hegemony through the adoption of blockchain-based stablecoins.

The founding vision of Bitcoin was to make fiat currency irrelevant. But the future may portend the exact opposite: a marriage between crypto and state. By patronizing private companies to develop stablecoins—cryptocurrencies pegged to the value of the U.S. dollar—the federal government will significantly grow global participation. The reign of the petrodollar gives way to its successor: the digital dollar. Simultaneously, the rapid expansion of U.S. dollar stablecoins challenges China’s digital yuan and cements the dollar’s status as the global reserve currency for the next decade.

This scenario would be driven by three factors:

Increasing Pressure to Adopt CBDCs. Central Bank Digital Currencies (or CBDCs) are stablecoins issued by a state’s central bank. At present, there are 105 countries conducting research to evaluate the benefits of launching their own CBDCs. Cumulatively, these countries comprise 95 percent of global GDP. Most prominent among them is the People’s Republic of China, which is slated to expand the use of its digital yuan next year.

Governments can assert much greater control over their monetary policy by launching CBDCs. CBDCs allow central banks to send stimulus money directly to citizens’ digital wallets without the use of an intermediary. They also allow governments to “program” money, turning it on and off when they see fit and allowing them to tie spending to certain sectors of the economy. Furthermore, CBDCs allow governments to surveil spending habits on an unprecedented level.

America’s Political Culture and Its Aversion to Centralized Authority. For all the above reasons, authoritarian states like China are keen to adopt CBDCs while privacy-minded states like the United States have deep reservations. Indeed, America’s unique political culture makes the prospect of the U.S. Federal Reserve (the Fed) rolling out its own CBDC much more difficult. A Morning Consult poll finds that more than 80 percent of Americans are clamoring for Congress to do more to protect their online privacy. It is unlikely that this same constituency would be willing to surrender its privacy so readily to the Fed in exchange for a digital dollar.

At the same time, U.S. reticence to adopt a CBDC puts it at a disadvantage: CBDCs are expected to be much faster and easier to transact than traditional currencies, calling into question the dollar’s status as the global reserve currency if it doesn’t move to the blockchain.

Chinese Aggression toward the Petrodollar. On top of this, current trends show that the petrodollar system is not nearly as strong as it used to be—and China is intent on exploiting its weakness over the coming decade. In the wake of Russia’s invasion of Ukraine, Saudi Arabia agreed to settle energy transactions with Russia in rubles and China in yuan. Historically, these energy trades have been transacted almost exclusively in dollars as part of Saudi Arabia’s agreement to uphold the petrodollar. But the country’s commitment to the petrodollar system has grown weaker in recent years as the Kingdom has expressed its openness to selling oil for yuan in the future.

But even in spite of China’s aggressive actions, the petrodollar faces significant headwinds over the next decade, not least of which is climate change. As global temperatures rise and extreme climate events become more frequent, international organizations will put more pressure on states to wean themselves off oil. As oil itself becomes less relevant, so too will the petrodollar, again calling into question the dollar’s strength as the global reserve currency.

In addition to weighing the drivers above, it is likewise necessary to take into account the relative certainties and uncertainties that could influence the proposed scenario. Below are a few factors to consider:

 

Relative Certainties

 

 

Relative Uncertainties

 

Climate change increases pressure on states to move to clean energy sources, hastening the transition from oil and the need to shore up the dollar if petroleum sales weaken over time.

 

The extent to which states can quickly transition to clean energy. If the transition is slow, the petrodollar faces a smaller threat.

 

Stablecoin use continues its rapid rise and unstable currencies continue to hold back developing countries.

 

The ability of blockchains like Ethereum to scale rapidly without breaking or facing severe slowdowns.

 

China will challenge U.S. hegemony in the military and financial spheres as great power competition increases.

 

Whether China’s demographic headwinds and declining reputation in the international community will stymie its bid for power.

 

In Crypto Cooperation, the state and industry share a symbiotic relationship, not unlike the close ties between Silicon Valley and Washington, DC, today. Both to varying degrees benefit from the other and see their futures as interlinked.

To be clear, Cooperation does not describe an absence of tension between the state and industry but rather a healthy management of competing interests. As an example, consider the possible path forward for a government-sanctioned digital dollar. 

The unique pressures outlined above could combine to guide the federal government to a middle-way solution on stablecoins—one that lies between the Federal Reserve avoiding the crypto space altogether and developing its own CBDC.

By sponsoring (and appropriately regulating) the development of private stablecoins like U.S. Dollar Coin (USDC), the federal government can reap the benefits of having a digital dollar while avoiding the damages to privacy and freedom that would accompany the establishment of a CBDC. USDC is already the world’s fastest-growing and most-trusted stablecoin, and it has even worked closely with US government regulators in recent years.

For example, Circle—the company that issues USDC—recently collaborated with the U.S. Treasury Department and the Fed to send stablecoin funds to Venezuelan healthcare workers being oppressed by President Nicolás Maduro. If this trend continues, the Fed could sponsor and regulate select private companies to issue their own dollar-pegged stablecoins. As a historical precedent, this would be similar to the way the U.S. government has regulated utilities and railroads in the past, giving exclusive licenses to a few companies to serve the public at large.

With a well-regulated U.S. dollar stablecoin, the United States can directly compete with China’s yuan and other CBDCs without the surveillance strings attached. It is likely that foreign stablecoin users will be more inclined to use these stablecoins than digital yuan since: a) they offer greater privacy and b) they come with the security and stability already attached to the U.S. dollar. Even more importantly, the use of these stablecoins will expand the dollar economy to developing countries.

Eswar Prasad, an economist at the International Monetary Fund, has speculated as much: “It is possible that national currencies issued by their central banks, particularly currencies seen as less convenient to use or volatile in value, could be displaced by stablecoins—private cryptocurrencies issued by multinational corporations or global banks and usually backed by US dollars to maintain stability.” With high levels of global inflation being a real possibility over the next decade, citizens in developing countries can easily convert their savings to stablecoins, putting dollarization on a flywheel. The digitalization of the U.S. dollar will strengthen its standing as a global reserve currency, offsetting the negative effects of a weakening petrodollar.

Scenario 2: Crypto Kumbaya

In this scenario, the Federal Reserve recognizes Bitcoin and Ethereum as fast-growing digital Commodities; Congress crafts legislation to establish the United States as the global capital of Web 3.0.

Characterizing the early days of Silicon Valley was an anti-government, libertarian-loving ethos. Early innovators like Bill Gates looked down on federal agencies, believing tech—not government—was best suited to solve society’s greatest problems. That is, until those three-letter agencies came knocking on Gates’ door, deposing him in a multibillion-dollar antitrust case that garnered global attention in the late 1990s.

Today, Microsoft has a much different attitude toward the state. The company counts the federal government among its largest clients and has an army of lobbyists in Washington to boot. Microsoft is emblematic of the cultural transformation that has taken place within countless Silicon Valley companies over the last two decades as the government has sought to tame tech. For example, companies like Facebook—which once flaunted its anti-establishment bravado with the motto “move fast and break things”—now moves slowly and works with the government on a daily basis. In the end, the suits in Washington brought the hoodie-clad millennials to heel.

Could the government do the same with crypto and blockchain companies? This is the question that drives the Crypto Kumbaya scenario.

In Crypto Kumbaya, regulation waters down the original libertarian vision of many crypto organizations and early investors. But in exchange, the industry gets the stamp of government approval and no longer needs to operate in legal grey zones. In short, industry and government embark on a years-long courtship.

There is give and take on both ends of this relationship. The industry, for its part, recognizes the utility of regulation in eliminating the widescale fraud that has plagued the space almost from its inception. Some blockchain companies even partner with the government to crack down on money laundering and other illicit uses of cryptocurrency. Overall, the industry’s evolving attitudes toward the state mirror the attitudes of high-growth Silicon Valley companies in the 1990s and 2000s: initial hostility followed by reflexive resistance followed by gradual acceptance.

The government, for its part, recognizes the economic benefits (and substantial tax revenue) to be gleaned from the blockchain revolution. And so, it takes a light-hand approach to regulation, looking to the legislative frameworks that boosted tech in the 1990s as a model for regulating an emerging industry. By so doing, the United States establishes itself as the global capital of Web 3.0, ensuring its dominance over global tech in the twenty-first century.

This scenario would be driven by five factors:

Investors’ Need for Regulatory Clarity. From their inception, Bitcoin and the cryptocurrencies that followed have staked their identity in an anti-establishment narrative. The purpose of protocols like Bitcoin is, after all, to displace the government’s most powerful tool: fiat currency. But some Bitcoiners have softened their stance in recent years with the realization that institutional adoption is necessary to bring Satoshi Nakamoto’s vision of widescale adoption to life. And to its credit, the U.S. federal government has opted not to ban Bitcoin outright but to weigh its potential benefits within the larger global economy.

To the surprise of both parties, industry and government appear to be meeting in the middle on blockchain regulation. In a congressional hearing in December 2021, the nation’s leading crypto CEOs even testified before lawmakers on the need for regulation to provide greater clarity to the industry. These same companies have also appealed to the SEC and CFTC to determine if Bitcoin and other cryptos are commodities or securities. Coinbase has even asked that the SEC create a new “digital asset security” classification to “allow for a more efficient and effective allocation of capital in financial markets and create new opportunities for investors.”

Imminent Classification of Bitcoin as a Commodity. While blockchain investors are still waiting for the regulatory clarity they have been clamoring for, all signs point to Bitcoin and possibly even Ethereum being regulated as commodities with greater regulatory guidance to come over the next few years. SEC Chair Gary Gensler even signaled his personal belief that Bitcoin is a commodity and should be regulated as such.

Regulatory Capture Deepens. Crypto companies have also done what some early Silicon Valley companies failed to do in their early years by mounting a strong lobbying effort to secure favorable legislation. Consider that crypto lobbying has more than quadrupled since 2018. And the results speak for themselves, having won over vocal champions of blockchain such as Senators Debbie Stabenow, Cynthia Lummis, John Thune, John Boozman, and Cory Booker. Blockchain companies have also developed close personal relationships with key officials in the SEC and CFTC, increasing the likelihood of blockchain-friendly legislation and regulation over the coming years.

Increasing Institutional and Mainstream Adoption. Once the fringe investment of internet hobbyists and cypherpunks, crypto has now found its way into the American mainstream. An NBC poll recently found that one in five Americans has invested in or used crypto. Moreover, major hedge funds, banks, and even publicly held companies have done the same: Tesla, Microstrategy, Blackrock, and Goldman Sachs are just a few examples among many. Privately wealthy individuals are also dipping their feet in the crypto markets. And Fidelity rolled out a crypto investment option last year as more investors consider allocating a small portion of their 401k to Bitcoin. With dozens of businesses and tens of millions of Americans invested in crypto, the government is much more likely to accept rather than ban it.

Need to Maintain America’s Global Economic Competitiveness. The United States today is the tech capital of the world. To secure that status in the coming decade, it has an economic incentive to establish itself as the global capital of Web 3.0. Web 3.0 describes the third generation of the World Wide Web—an internet that returns power to users through “decentralization, token-based economies and blockchain.”

China is arguably the United States’ closest tech competitor, but the United States has a natural leg up in the race for blockchain supremacy since China banned crypto in 2021. To pull further ahead of China in this sector, American regulators could craft blockchain-friendly policies to entice innovators to do business on U.S. shores. There is also already a deep well of tech talent in the United States that stands ready to transition from Web 2.0 to Web 3.0 jobs, further securing America’s status as the global hub for blockchain enterprise.

 

Relative Certainties

 

 

Relative Uncertainties

 

The SEC, CFTC, and Congress will provide regulatory clarity to the blockchain industry in the next two to three years, if not sooner.

 

Exactly how the federal government will regulate crypto. Will the power to regulate ultimately fall to the CFTC or the SEC? And if Bitcoin is classified as a commodity, what does that make other cryptocurrencies?

 

Mainstream adoption of crypto continues apace, especially among younger generations, which are more inclined to buy Bitcoin than gold.

 

Whether Bitcoin will achieve parity with gold’s market cap and whether its volatility will decrease as global adoption increases.

 

The continued growth of Web 3.0 businesses and technologies and the U.S. government sees an opportunity to increase its tax revenue by aiding in that growth through friendly regulation.

 

The extent to which Web 2.0 companies will adapt to a more decentralized internet or seek to stifle Web 3.0 innovation through public policy campaigns against it.

The above drivers lead to our Crypto Kumbaya scenario—a laying down of arms by entrepreneurs and regulators alike to advance the interests of both parties involved. In short, industry and government opt to make love, not war.

In 2030, Bitcoin and other well-established cryptos make up a small portion of millions of Americans’ retirement plans. Some (like Bitcoin) are seen as a form of digital gold while others (like Ethereum) are seen as a form of digital oil, powering payments and authentication on the third generation of the internet known as Web 3.0. The United States has now established itself among the most crypto-friendly nations in the world.

So how did we get here?

The crypto economy made a powerful recovery after the Bitcoin halving of 2024 precipitated a new bull cycle. And in the year 2025, regulators looked at the investment landscape and recognized that crypto (similar to certain entities during the 2008 financial crisis) was simply “too big to fail.” Tens of millions of Americans—not to mention a growing number of banks, companies, and hedge funds—were already invested in digital assets. Therefore, banning them or issuing harsh regulations against them made little financial sense. Not wanting to draw the ire of their constituents, members of Congress lined up in bipartisan fashion behind legislation that finally offered regulatory guidance to the industry, classifying Bitcoin and Ethereum as commodities and other crypto tokens as “digital securities.”

Thanks to this regulatory clarity, the number of crypto investors grew exponentially just as it had in the decade prior. With clear regulation in place, major banks and corporations became more comfortable entering the space, thereby increasing institutional adoption. Following the US’ lead, other countries increased their adoption of crypto as well. Soon, Bitcoin became globally recognized as a digital commodity, with trillions of dollars in trading volume every day. Similar to gold, nation-states began seeking to stake a claim in this newly established asset class, sparking global competition to attract Bitcoin miners. The United States was an especially attractive destination, not only for miners but for blockchain entrepreneurs of all stripes.

Why? Because in 2025, Congress enacted the Writing Enterprise Blockchain Technology and Hiring Reputable Experts and Employees (WEB THREE) Act, watershed legislation that significantly expanded America’s H-1B visa program to bring more Web 3.0 workers to America’s shores. The legislation also contained provisions to strike the right regulatory balance on emerging blockchain technology, allowing for more innovation and greater investment in the space. As a model for regulating blockchain and building the infrastructure of Web 3.0, lawmakers looked to the Telecommunications Act of 1996 and its Section 230 provision, which gave room for new digital platforms to build the infrastructure of Web 2.0.

As a result of threading the regulatory needle, America is the “place to do business” for crypto entrepreneurs from all parts of the world in 2030. The United States remains on top of the global tech hierarchy and has far outpaced China, which failed to reap many of the economic benefits of blockchain after banning all crypto assets in 2021. The U.S. economy continues to grow thanks in no small part to the contributions of Web 3.0. Meanwhile, the federal government collects significant tax revenue from this multitrillion-dollar windfall, which farsighted regulators made possible. Crypto Kumbaya ushers in the next decade of American tech hegemony.

Scenario 3: Crypto Conflict

In this scenario, a new domain in cyberwarfare emerges as major powers weaponize crypto; revisionist states leverage digital assets to undermine the liberal international order.

New assets often lead to new conflicts. Take oil. The Middle East used to be a geopolitical backwater. Then, in the early twentieth century, Western industrialists discovered it was home to the largest petroleum reserve in the world, catapulting the region to global prominence. Oil played a pivotal role in determining the outcomes of World Wars I and II, as well as proxy conflicts throughout the Cold War. To this day, it remains among the primary drivers of trade and tension between nations.

As crypto becomes its own globally recognized asset class, what will be the impact on international relations?

Crypto Conflict imagines a scenario where digital assets open a new front in cyberwarfare. Revisionist states weaponize crypto to wage war on Western economies. Bitcoin experiences rapid global adoption but in all the wrong places—countries like Russia, China, and Iran. Increasingly isolated from the liberal international order and the dollar economy, these states choose to abandon SWIFT for the digital yuan—and they put substantial pressure on developing countries to do the same. Meanwhile, militaries across the world pour billions into bulking up their cyber capabilities. Much like militaries today are preparing for the possibility of conflict in the space domain, militaries in 2030 will be prepping for battle in the crypto domain. Billions are funneled into quantum research in hopes of breaking the blockchains of CBDCs.

This scenario would be driven by three factors:

Growing State Adoption of Bitcoin. El Salvador triggered the ire of the IMF in 2021 when it purchased tens of millions of dollars in Bitcoin and announced that the digital currency would now be recognized as legal tender. The bold move by El Salvador president Nayib Bukele was a small declaration of independence from a global financial system where the United States has outsize veto power. Following El Salvador’s example, The Central African Republic also declared Bitcoin as legal tender just a few months later. Small countries typically have a stronger incentive to adopt Bitcoin because it empowers them to bypass costly remittances that are part and parcel of the traditional financial system. That’s why more countries are expected to adopt Bitcoin in the years to come, with speculation that Paraguay, Cuba, Ukraine, and Panama could be next.

First-Mover Advantage of the Digital Yuan. No country has been more ambitious in its goal of implementing a central bank digital currency than China. China launched its digital yuan—officially known as the e-CNY—in 2021, and it was already in wide circulation as a currency by the time it hosted the Winter Olympics in February 2022. The currency has been integrated into China’s largest mobile networks, Alipay and WeChat.

Meanwhile, OECD countries are still in the research and development phase of their CBDC rollout. This discrepancy gives China a significant first-mover advantage in the CBDC wars, increasing the likelihood that the e-CNY could grow faster than digital currencies from other countries. In the long term, this could pose a risk to the dominance of the petrodollar, especially as China looks to buy and sell oil using its own currency.

Disillusionment with SWIFT and the Dollar Economy. After the invasion of Ukraine in February 2022, the United States froze Russian Central Bank assets and moved to exile Russia from SWIFT. For revisionist countries like China, the unprecedented move called into question the viability of the dollar as a pristine asset free from political tampering. In the aftermath of this decision, both China and Russia put renewed effort into growing their own versions of SWIFT. The Chinese international payments program is known as the Cross-Border Interbank Payment System (CIPS), while Russia’s is known as the System for Transfer of Financial Messages (SPFS). Because of its extensive network, CIPS is the most likely alternative for states alarmed by U.S. sanctions against Russia that are looking for refuge outside the US dollar.

Relative Certainties

Relative Uncertainties

 

Cyber attacks will increase over the next decade as countries move more of their finances and commercial operations online.

 

Whether U.S. cyber defense capabilities will keep pace with the cyber offense capabilities of our adversaries.

 

Bitcoin and other cryptocurrencies will have growing appeal to revisionist and developing states that do not stand to benefit as much from the dollar-denominated global financial system.

 

How Bitcoin and other cryptocurrencies will perform over the next decade, especially if the global economy enters a period of stagflation.

 

Major powers will focus significant energy in developing quantum computing, not only for its inherent economic value but also for its national security benefits and the potential it has to disrupt blockchains and CBDCs.

 

Whether quantum computing is achievable over the next decade—if ever.

 

In Crypto Conflict, blockchain would become a hotly contested domain in cyberwarfare. As CBDCs and stablecoins across the world would rely on the integrity of blockchains to process payments and settle transactions daily, they would naturally become a target for U.S. adversaries. Enormous investment in cybersecurity and quantum computing would be necessary to secure financial networks.

The race for the latter would be akin to the race for the atomic bomb in World War II. Whichever country achieves it first will have a weapon of mass financial destruction with the ability to take down CBDCs and entire economies. Whoever possesses this kind of weapon will have the power to reorder the global balance of power.

Accounting for Black Swans

 Robust scenario analysis must also take into consideration the potential for black swan or “wild card” events. By their very nature, black swans are nearly impossible to predict. But the drivers and historical precedents outlined in this report give us at least an indication of the form a black swan might take. Consider the following outlier possibilities:

American Weimar

In 2023, the developed world is coming off a decade of unprecedented quantitative easing. Simultaneously U.S. inflation recently hit a 40-year high, and for the first time ever, the national debt surpassed $31 trillion. Naturally, fears of stagflation are setting in. But these drivers could lead to something far worse in the near future: hyperinflation.

In the American Weimar scenario, the U.S. economy enters a deep recession over the next two years, forcing the Fed to make an impossible choice: either break the economy and enter a depression by raising interest rates further or turn the money printer back on. The Fed opts for the latter, and central banks across the world follow suit. This leads to a period of runaway inflation similar to the economic disaster facing the Weimar Republic in the 1920s. Americans see the value of their savings and retirement accounts fall by half in just a few short months.

Desperately searching for a hedge against inflation, Americans begin looking to Bitcoin as a lifeboat. The appeal is simple: as a decentralized monetary network, Bitcoin cannot be tampered with by central banks. It offers Americans a form of digital gold that is easier to move, verify, and transact than precious metals. The market capitalization of Bitcoin soon achieves parity with gold and then doubles it by 2030 as younger generations coming into financial maturity adopt it in higher numbers. Desperately searching for a reset, central banks across the world consider pegging their fiat currencies to an asset of globally recognized value. Some return to the gold standard while others adopt what comes to be known as “the Bitcoin standard.”

The Dollar Dethroned by Digital Yuan

As previously outlined in this report, the digital yuan has a first-mover advantage over all other CBDCs. Moreover, it is controlled by an authoritarian government that can make rapid updates to the currency without being slowed by legislatures or any other part of the democratic process.

In this scenario, domestic politics in America makes it impossible to create a CBDC. All the while, Congress and the SEC drag their feet in providing regulatory clarity vis-à-vis stablecoins until well into the 2020s. By this time, China already has a years-long head start over the US in rolling out its digital currency. China has even expanded its currency regime through a digital Belt and Road Initiative, sending digital “stimulus checks” to Ethereum wallets in developing nations. (In crypto terms, this is known as an “airdrop,” where newly launched protocols send free tokens to digital wallets in hopes of increasing its adoption).

Meanwhile, the United States is hamstrung in competing with the digital yuan by not having its own CBDC. And to complicate matters further, the United States is experiencing deep stagflation similar to the economic headwinds it faced in the 1970s. These factors combined shake global faith in the US dollar. The dollar essentially gets “Blockbustered” by a more digitally savvy competitor—the e-CNY. The final nail in the coffin is Saudi Arabia’s abandonment of the petrodollar, a decision it makes out of pure business expedience with the yuan showing remarkable strength over other currencies.

Crypto Coup D'etat: Bitcoin and Ethereum Replaced by Newcomer

 In the 1990s, it appeared the likes of AOL and Yahoo would rule the World Wide Web for decades to come. But today, these platforms are shadows of their old selves—and used more often as punchlines than actual web services.

Could the same fate befall Bitcoin and Ethereum?

Blockchain is an industry still in its infancy, and its early protocols may not be any less prone to disruption than the tech giants of yesteryear. While Bitcoin and Ethereum have the benefit of first-mover advantage, their original code makes these blockchains exceedingly difficult to scale. For example, Bitcoin’s proof-of-work consensus system requires exorbitant amounts of energy to transact even small amounts of value on the network. In terms of environmental impact, Bitcoin could be even worse for the planet than beef as its adoption grows over the next decade. If Bitcoiners fail to find a way to make the protocol more green-friendly, they could face serious obstacles to adoption, not the least of which is environmental regulation. Ethereum, meanwhile, consumes significantly less energy than Bitcoin—but it too faces serious challenges in scalability.

These factors could lead to the Crypto Coup D’etat scenario, where a new cryptocurrency—perhaps one that hasn’t even been invented yet—overtakes Bitcoin and Ethereum in terms of market cap and global usage. This crypto would have the advantage of learning from Bitcoin and Ethereum’s mistakes in the initial design process, allowing software engineers to build a blockchain that is faster, more scalable, and more secure than both. This token gaining market dominance would be the crypto equivalent of Google overtaking Yahoo as the world’s preferred search engine of choice.

The fallout from this scenario could be immense for the millions of investors across the globe who have placed their bets on Bitcoin and Ethereum. It could even lead to digital currency competition between nation-states, depending on the levels of crypto adoption at the time. Even so, the new and improved crypto offers a faster, more secure blockchain than its competitors. And the appeal of building on this blockchain could further expedite the transition from traditional currency to CBDCs.

Conclusion: Plotting the Best Path Forward

“What a year this week has been.” This is a common refrain within the crypto industry. It captures the breakneck pace of change and development within the space as new organizations are born and old incumbents die. Predicting the state of blockchain six months out is no small feat, much less several years from now. But this report doesn’t shrink from the task. Our analysis seeks to paint a general picture of the blockchain industry in 2030 not by making wild-eyed predictions based on pure speculation but by probing historical antecedents and current trends that could lead to each potential future.

In the final count, two primary actors and the dynamic between them will determine the state of blockchain at the end of the decade—the government and the industry itself. With these two actors in a near-constant state of tension, game theory offers them two choices: cooperate in pursuit of relative gain or compete in pursuit of absolute gain. The path of cooperation appears to be the better path forward, both for the country and the world.

Admittedly, the interactions between industry and government could yield a wide variety of scenarios, even beyond Cooperation, Kumbaya, Conflict, or the black swans contemplated in this analysis. Whether any of these scenarios comes to pass is a question left to time and time alone. But no matter the outcome, engaging with these “myths of the future” in the present is a worthwhile exercise—one that could direct our attention to new opportunities in blockchain and prepare us for the challenges ahead.

Sam Lyman works at the intersection of policy and innovation. He is the policy director at the Orrin G. Hatch Foundation and an MPP candidate at Princeton University. He previously served as the chief speechwriter to Senator Orrin G. Hatch and as the speechwriter to the President and CEO of the U.S. Chamber of Commerce.

Image: Shutterstock/Parilov.

As President Joe Biden finalizes his defense budget for FY2024 and his defense program for FY2024–2028, he needs to address at least the following ten major. How he handles these issues will significantly impact U.S. national security, the federal budget deficit, and his legacy. Moreover, given the political realities of the upcoming 2024 election, the FY2024 budget, which goes into effect on October 1 and lasts until October 2024, and Biden’s FY2024–2028 defense program may be his last, best chance to significantly reshape U.S. national security policy.

First, in deciding on the top line, or the size of the FY2024 defense budget, will Biden use the $813 billion he proposed for FY2023 as a base? The $813 billion represented an increase of $73 billion, or 10 percent, over the FY2021 budget, the last complete budget of the Trump administration, and $60 billion, or 8 percent, above what he proposed for FY2022. Or, will Biden use the $860 billion approved by Congress in the National Defense Authorization Act (NDAA) for FY2023? This congressionally approved budget was $110 billion, or about 15 percent, above the Trump administration’s FY2021 budget level, and $82 billion, or 11 percent, over the enacted FY2022 level. In real terms, Biden’s initial proposal for FY2023 essentially represented a 4 percent increase, while the NDAA proposal had a real increase of about 9 percent. This total does not include military assistance to Ukraine but does include $2 billion for Taiwan.

Second, after deciding on the base, which rate of inflation will the Biden administration use to determine whether to maintain the current level in real terms, as it did last year, or provide a real increase, as Congress did previously? The yearly inflation rate in January 2022 was 6 percent, the second highest in forty years. Even with no real growth, a 6 percent increase above the amount Biden requested for FY2023 will mean an FY2024 budget request of about $870 billion. Using the NDAA level as a base will result in a budget request of approximately $900 billion. Both these amounts would be significantly more than what the Biden administration projected last year it would spend on the Department of Defense (DOD) in FY2024.

Third, in addition to deciding on which base and which rate of inflation to use in determining the top line for FY2024, Biden must decide on how to deal with those members of the Freedom Caucus in Congress who want to return the FY2024 defense topline to the FY2022 level of $775 billion. While many see this as an extreme measure, it is important to keep in mind that a defense budget topline of $775 billion for FY2024 would be $35 billion, or 5 percent, above the Trump administration’s last budget and about the same amount Biden himself had projected in his first year in office that he would propose for FY2024. While many would argue that the Russian invasion of Ukraine and China’s aggressiveness toward Taiwan have significantly changed the international environment, it is important to remember that U.S. support for Ukraine is funded separately from the regular defense budget. In addition, Taiwan is paying for most of the weapons we are providing.

Fourth, will the Biden administration finally release its budget in a timely manner? During Biden’s first two years in office, the administration released its budget, including the defense portion, more than a month later than the normal practice. This makes it much more difficult for Congress to pass the budget before the start of the fiscal year. This is particularly difficult for the DOD. Until a budget for the new fiscal year is passed, the Pentagon can only spend at the previous year’s level and cannot start any new programs.

Fifth, in addition to deciding on the base and the inflation rate, the president must decide on the rate to increase military, active duty, and retired pay. The basis for raising active-duty pay is the Employment Cost Index (ECI) as of September 30, 2022, which was 5 percent compared to 4.6 percent a year ago. This would be the highest raise in thirty years. For retired pay, the average  cost of living increased by 8.7 percent from July to September 2022. The Biden administration, or any administration for that matter, is not bound by law to implement these levels, but most administrations do. Since pay and benefits already consume one-quarter of the overall budget, how much Biden raises them will have a significant impact on how much will be left for investment in current nuclear and conventional procurement and research programs in whatever topline he chooses.

Sixth, after deciding on the base, will Biden increase the budget by just enough to keep pace with inflation, as he did last year, or will he accept a real increase of 3 to 5 percent, which some in Congress, including many in his own party, say is necessary to keep up with the growing threats from Russia and China? Increasing the budget by 3 or 5 percent in real terms, with an inflation rate of 6 percent and using the FY2023 NDAA as a base, will result in an FY2024 defense budget request of about $922 billion, $110 billion more than Biden requested just a year ago.

Seventh, will Biden make any changes in the level of funding for nuclear weapons now that he has completed his Nuclear Posture Review? In his first two budgets, Biden ignored his campaign pledges and the Democratic Party platform, which called for reducing overreliance and excessive dependence on nuclear weapons. Instead, in his first budget, Biden embraced the proposal he inherited to rebuild and modernize all three legs of the nuclear triad—at a cost of $1.7 trillion—and provided funding for four new tactical nuclear weapons, including the low-yield nuclear cruise missile. Last year, Biden did try to cancel the low-yield warhead but was overridden by the Democratic-controlled Congress and had to continue funding this program for another year. 

The Democratic platform characterized the Trump administration’s nuclear proposal, which Biden inherited, as unnecessary, wasteful, and indefensible. Moreover, while running for president, Biden pledged to dismantle America’s commitment to increasing the role of nuclear weapons. As vice president, he advocated a no-first-use policy. Many of Biden’s supporters had hoped that his pledges would lead to his cutting back or even eliminating the land-based component of the nuclear triad, which will cost $264 billion to maintain and modernize. This position has been advocated by, among others, former Democratic Secretary of Defense and nuclear expert William Perry and House Armed Services Committee Ranking Member Adam Smith (D-WA). Unfortunately, Biden’s Nuclear Posture Review did not make such a recommendation. The most likely cuts would be canceling one or more of three tactical nuclear weapons programs: a new nuclear-armed cruise missile now in the research phase, a Cold War-era thermonuclear bomb, and a new low-yield warhead that the Trump administration deployed on submarines.

Eighth, will Biden continue his “divest to invest” strategy for our naval forces, and what will be his goal for the ultimate size and composition of the fleet? In his FY2022 request, Biden proposed decommissioning fifteen ships, including seven cruisers and four littoral combat ships, and building only eight in replacement—far fewer than were funded in FY2021. Congress not only authorized an additional four ships but limited the ability of the Navy to decommission ships. In his FY2023 budget request, Biden proposed $27.9 billion to purchase eight new ships and retire fifteen. But Congress again added $5 billion for six new ships and prohibited the decommissioning of twelve of the fifteen. In light of these changes, the Biden administration will have to decide whether to increase its goal of expanding the Navy from its present level of 296 ships to 321 by 2030. And if it does, will the administration take the money from the other services or increase the budget topline?

Ninth, will Biden continue to try to slow down the production of the tri-service F-35 aircraft until it fixes its myriad problems? For FY2023, Biden requested sixty-one of these aircraft, down from eighty-five the previous year, but Congress added eight more to bring the total to sixty-nine.

Tenth, the administration must decide on the number of active duty personnel it wishes to recruit and maintain. Because of the difficult recruiting environment, the Army reduced its force level for FY2023 by 33,000, or 6 percent, to 452,000. The Air Force fell from 329,200 to 325,000, and the Marines from 178,500 to 177,000. On the other hand, the U.S. Navy has requested an increase of 7,000, from 347,000 to 354,000.

How Biden handles these issues will not only have a significant impact on our security and economy but will also tell us a great deal about his values. As Biden said before becoming president: “Don't tell me about what you value. Show me your budget, and I will tell you what your values are.”

Lawrence Korb is a Senior Fellow at the Center for American Progress and former Assistant Secretary of Defense.

Image: DVIDS.

U.S.-Pakistan relations are on the mend. It isn’t clear how far they will go or where they are headed, but both sides are keen to move forward after a decade of contentious engagement that brought the relationship to one of its lowest points in history.

Troubled Engagement

For the past two decades, the U.S.-Pakistan relationship derived its strengths and weaknesses primarily from the war in Afghanistan. Pakistan provided the U.S. military with critical logistics support and valuable intelligence, for which it received significant American aid and security assistance. But Washington’s failure in Afghanistan rendered Pakistan’s help futile. And as Pakistan suffered major blowback from the war, it made American aid to Islamabad inconsequential.

Pakistan’s successful efforts to bring the Taliban to the negotiating table also became immaterial, as the Trump administration’s deeply flawed, one-sided deal helped the Taliban win the political battle without a military victory. Then, former Pakistani prime minister Imran Khan’s jubilation over the Taliban’s victory and criticism of U.S. policies in the American media added insult to injury, provoking backlash in Washington. Senate Republicans vented their anger by once again blaming alleged Taliban sanctuaries in Pakistan for the failure in Afghanistan and threatening to sanction Islamabad.

Yet, cooler heads prevailed, and the damage was contained. At a Congressional hearing in September 2021, Secretary of State Antony Blinken said that going forward, Washington will look not just at “the role that Pakistan has played over the last 20 years but also the role we would want to see it play in the coming years and what it will take for it to do that”.

Reimagining the Relationship

With the Afghanistan War in the rearview mirror and Khan no longer in power, the United States and Pakistan have been walking back from the brink and searching for a new meaning to their relationship. The reality is that in the nearly seven decades of U.S.-Pakistan relations, despite their lack of continuity and strategic consensus, the two countries have kept coming back to each other. Even their troubled post-9/11 engagement was not without major accomplishments, as Pakistan provided critical military and intelligence support for America’s efforts to weaken Al Qaeda and advance U.S. and global security. The security challenges remain, as does Washington’s need for Pakistan’s cooperation, for which there is no alternative following the American withdrawal from Afghanistan.

But gone are the days when the United States could just come back and reignite the relationship as if nothing had happened while it was away. Pakistan has long been in the grip of anti-Americanism, incited by America’s image as an unreliable ally that has manipulated Pakistan’s political system to its advantage, an image further inflamed by Khan’s allegations that Washington conspired to have his government removed, which are baseless but compelling to his base.

The United States and Pakistan now realize that if their ties are to be revived, they must be sustainable, mutually beneficial, and have public support. The stimulus for revival has come from both sides, though the initiative may have come from Washington, which is finally focusing on Pakistan, having been freed from the Afghanistan War and possibly provided a strategic pause by India’s ambivalence over the Russian invasion of Ukraine. It is evident that India’s interests in Russia are many and will endure. Indeed, India prefers “multi-alignment.”

American Multi-Alignment?

Could this re-engagement with Pakistan be Washington’s own multi-alignment? For a start, last September, Washington announced a potential $450 million sale of F-16 aircraft sustainment to Pakistan over the objections of India. While India will remain a critical part of the American Indo-Pacific strategy, the centrality of India to U.S. policy in South Asia may not be in Washington’s interests.

Washington has important stakes in Pakistan, where it needs an independent policy that stands on its own. Pakistan is at the confluence of multiple U.S. concerns and interests that cannot be dictated by the Indo-Pacific strategy alone, such as China, Russia, the Taliban, counterterrorism, nonproliferation, nuclear security, and climate change. In any case, as Raja Mohan notes, “Pakistan occupies a vital piece of real estate that sits between the subcontinent, Iran, Arabia, Central Asia, Russia and China and is too important to be isolated.”

Rethinking in Pakistan

Pakistan has also been rethinking the relationship. There is a growing sentiment, especially among the ruling establishment, that the country’s mounting economic difficulties, rising challenges to internal stability, and continuing external security threats require good relations with Washington, particularly as China may not be the answer to all of Islamabad’s problems (nor should it be). However, the U.S.-Pakistan relationship can no longer be based on the rentier model that has largely defined it since the two sides’ initial engagement from 1954 to 1965, when the United States, to its credit, strengthened Pakistan’s defense capabilities and potential for economic development, offering critical help in stabilizing the emergent state.

But since then, it is not Pakistan but its services that have been important for Washington. And Islamabad allowed Washington to play into the power imbalances and structural weakness of its elite-based system and become an external pillar to sustain the system. Thus developed a co-dependency between the two countries that serviced faulty policies on both sides, setting each other up to deflect blame for their own failures and increasing contention in the relationship.

This bargain, as well as Islamabad’s traditional role as an adjunct to America’s wars, which proved costly to Pakistani interests, has been discredited in the eyes of the Pakistani public. Given the country’s economic vulnerabilities and political instability, there is now increasing talk in Islamabad of a foreign policy of “geo-economics,” for which regional stability and a reoriented relationship with the United States would be important. Knowing that a high-profile aid relationship with the United States is neither possible nor desirable at the moment, Pakistan is interested in investment, trade, and support in international financial institutions, particularly the International Monetary Fund. The United States happens to be Pakistan’s largest trading partner and export destination.

The Broader Context

Pakistan desires to broaden the scope and scale of the relationship, but America’s priorities remain limited—focused on China and Afghanistan/terrorism—though Washington may pursue these priorities in a broader context. The United States does not have critical economic interests in Pakistan, but its economic ties with Islamabad may be important to the realization of its objectives there. Many areas of potential cooperation, including energy technology, agriculture, and IT, are being discussed. Washington also wants to help in healthcare and education. Overall, a Pakistan that is secure and economically and politically stable may be key to achieving U.S. security and strategic objectives in the region.

Pakistan’s policy shifts, including its aspirations for geo-economics and better relations with the United States, and its professed desire to seek peaceful relations with India, are aligned with America’s broader goals in South Asia. Of course, Washington has always been in favor of peace between India and Pakistan—though it has never done much to promote it outside of occasional crisis management—but it is more interested in stability now because of its Indo-Pacific strategy. Washington may also hope that an American alternative can contain Pakistan-China relations, further advancing its regional strategy.

Washington’s PR Effort

But Washington realizes that if it wants to re-engage with Pakistan, it will have to contend with the country’s pervasive anti-Americanism. As a result, America’s immediate focus is on actions that are of high public interest in Pakistan, like its much-publicized flood relief and reconstruction aid. And in its statements and actions, the United States is giving the impression that it is not returning to Pakistan to further its own agenda by buying friendships that benefit the elite but hurt the people. Instead, it has come to pursue “shared interests.” That is why the focus is on counterterrorism. Pakistan has once again become a victim of terror and a partner in the fight against terrorist groups, which have been emboldened by the Taliban’s return.

Pakistan suffered 1,007 terrorist attacks in 2022, principally conducted by Tehrik-i-Taliban Pakistan and Islamic State Khorasan. At a news briefing in December, State Department spokes­person Ned Price noted, “We have partnered with our Pakistani friends to help them take on this challenge. We stand ready to assist, whether with this unfolding situation or more broadly.” Pakistan, he said, remains an important security partner: “We seek a strong partnership with Pakistan on counterterrorism and expect sustained action against all militant and terrorist groups. We look forward to cooperative efforts to eliminate all regional and global terrorist threats.”

Ahead of the State Department’s comments, the head of U.S. Central Command, Gen. Michael “Erik” Kurilla, visited the Torkham-Afghanistan border and commended Pakistan’s successes in the fight against terrorism. During his meeting with Pakistan’s military leadership, Kurilla also discussed strengthening their military-to-military relationship.

Washington is also taking other steps that have popular appeal. The recently passed $1.7 trillion omnibus spending package includes $200 million for promoting gender equality in Pakistan, a twenty-fold increase from 2020.

Additionally, the United States is taking steps to assuage Pakistani concerns that its extraordinary relationship with India has dictated U.S. policies toward Pakistan. Commenting on relations with India and Pakistan, Price said, “Each of them is indispensable to us and to the promotion and the pursuit of the shared goals that we have with India, the shared goals that we have with Pakistan, the shared goals that all three of us share”

The Missing Piece of the Indo-Pacific Strategy?

The U.S.-Pakistan relationship will serve many U.S. interests, but its centerpiece may be an unspoken one. Could the relationship be the missing piece of America’s Indo-Pacific strategy and China policy? Could it allow Washington to exert influence to ensure Pakistan’s regional posture—its strategic partnership with China and conflicted relationship with India—does not undermine this strategy? And could it also be a test case of peaceful competition between the United States and China, an alternative to forcing countries to pick sides?

Touqir Hussain, a former Pakistani Ambassador and Diplomatic Adviser to the Prime Minister, is an Adjunct professor at Georgetown University and a Visiting Senior Research Fellow at the Institute of South Asian Studies, National University of Singapore.

Image: Flickr/U.S. State Department.

As the women-led protests sparked by the killing of Mahsa Amini by Iran's infamous morality police begin to quiet down, it is not clear what the protests can actually achieve from here on out. What is clear is that the protests have worked in significant ways, even if they did not trigger the collapse of the Islamic Republic, which some protesters desired. Past lessons on successful revolutions offer valuable insights into both the protests’ partial success and the regime’s response to its most serious crisis of legitimacy since 1979.

Undoubtedly, political developments in real-time diverge from political theory. But two ideas have garnered a hard-won consensus. First, social movements require buy-in from the security apparatus of the state to be successful. However, the Iranian protests were too small to truly threaten the regime’s survival. Protests numbered in the tens of thousands in a country of 80 million. Military forces were, therefore, unlikely to defect and support the protesters.

Second, successful social movements require support from a vast range of the population, ideally from both sides of the aisle, through sustained waves of protests. According to Mehdi Noorbaksh, a professor of International Affairs at Harrisburg University, one of the problems with the protests was the failure to translate them into a broad social movement that included all segments of the population.

In response to the uprising, the Islamic Republic has utilized a calibrated set of tools and tactics to diminish the potency of the protests and re-establish control over the streets and squares of the country. Social media’s ability to influence the massive protests that rocked Tehran in 2009 led some pundits to extol the moment as the “Twitter revolution.” However, as it turned out, these claims were exaggerated. Now, as then, the primary drivers of social change are those who put their lives at risk. Arash Azizi, a researcher at NYU, argues that authoritarian regimes have leveraged social media and the internet to monitor protesters with surveillance technology acquired directly or copied from China and, to a lesser degree, Russia and North Korea. Tehran has also expressed interest in facial recognition technology that can register Hijab-related violations, akin to how plate-reading cameras capture driving violations.

According to an Iranian scholar based in Europe, the regime deliberately abstained from using harsher forms of repression early on, instead allowing the protests to take place under its watch. All along, the regime believed it had the power to control, contain, and eventually disperse the crowds. A seemingly counterintuitive claim, the idea is that the authoritarian impulse to use deadly violence against the protesters was balanced by a more strategic and sinister objective. Recently, Iran has developed a sophisticated surveillance system using CCTV cameras and drones. According to the expert, who spoke on the condition of anonymity, protesters are not immediately arrested and may instead face prosecution later based on police analysis of visual recordings. According to this view, the protests were permitted to continue because the regime wanted to collect and store incriminating data about disgruntled Iranian citizens. This means that in the coming years, dissenters will be trapped in a state of protracted uncertainty about their safety and will remain vulnerable to surprise detention.

However, there are signs that the government may shift to a de facto softening in the implementation of certain laws, mainly concerning the religious dress code, without officially announcing any de jure changes. In practice, many in Iran are reporting that the policing of the mandatory hijab has effectively stopped. In this way, the protests have worked in so far as the regime is changing its behavior in an area that matters to its core identity—the policing of female bodies. This is consistent with the regime’s historical approach of making no public concessions but managing dissent with a mix of pragmatism and lethal force.

In December 2022 and January 2023, Iran executed four people linked to the protests, and up to 100 more currently face charges for capital crimes. The visual power of a lifeless body hanging motionless from the top of a crane seems to have worked, at least for now, as the executions have coincided with a slowing down of public protests. The UN high commissioner for human rights, Volker Turk, has stated that the executions amount to “state-sanctioned killing.”

The West must send a strong message to Iranian authorities that the executions violate international human rights law and will come with consequences. In 2019, Washington designated the Iranian Revolutionary Guard Corps (IRGC) as a terrorist organization. It is time that other Western countries follow suit. On January 14, the Islamic Republic executed Alireza Akbari, a British-Iranian dual national, on trumped-up charges of being a spy for British intelligence. The United Kingdom may be edging closer to designating the IRGC as a terrorist organization, even as critics of such a move warn that it could shut the door to future negotiations with Iran, risk nuclear proliferation in the Middle East, and push the regime even closer to China and Russia. But continuing with the status quo, which constitutes appeasement of a deadly regime, is neither sufficient nor effective.

A few months ago, there was a real possibility that the Joint Comprehensive Plan of Action (JCPOA) would be revived in some form. This is no longer the case. The Iranian regime must make some concessions to revive it. Iranian oil exports have rallied—possibly to their highest since 2019—despite U.S. sanctions, thanks to shipments to China and Venezuela. However, the economic forecast remains bleak. The United States is clearly not eager to return to negotiations and cannot amid the current political and social turmoil in Iran. The Iranian diaspora has united and created a powerful lobbying force across capitals in the West. External pressure on Iran, especially as the regime continues to support the Russian war in Ukraine, is mounting and will impact Iran.

The regime’s brutal repression delivered a highly effective deterrent to protesters. However, the protests have worked in the sense that Iran’s internal politics will remain unstable for the foreseeable future, with the regime’s legitimacy in decline. The “Mahsa moment” has left an indelible mark on the country’s political landscape, delegitimizing the regime and the core pillars it claims to stand upon, even if it will take more time to fully grasp the long-term ripple effects of the protests.

Dr. Burcu Ozcelik is a research fellow at the Henry Jackson Society and holds a Ph.D. in Politics from the University of Cambridge.

Image: Shutterstock/Mircea Moira

Whether described as transformations or revolutions in military affairs, from time-to-time armed forces must engage in periods of self-inspection. Spurred by changes in threats, advancements in technology, the realignment of national goals, fluctuations in resources, and guidance from their civilian masters, the services must reexamine their doctrines, organizations, and cultures to ensure they comport with the nation’s security needs and expectations. Having repaired the internal and external ravages of the Vietnam War, the U.S. Marine Corps came face-to-face with the need to transform itself in the latter part of the 1980s.

Dictionary definitions are cumbersome, but the clearest and most succinct definition of “transformation” is just three words: “this changes everything.” An important, relatively recent transformation of the Marine Corps has its roots in two events that occurred over the space of nine months. In October 1986, the Goldwater-Nichols Department of Defense Reorganization Act was signed into law, changing the way the Department of Defense was structured and permanently altering how the U.S. military would fight future wars. Among its provisions, the chairman of the Joint Chiefs of Staff was designated as the senior military advisor to the president, the role of the service chiefs was compressed to manning, training, and equipping the force, and a constellation of regionally and functionally oriented commanders was tasked to fight the force. This diffusion of power and authority was willingly accepted by some senior officers and resisted by a few.

Nine months later, in July 1987, Gen. Alfred Mason Gray was installed as the twenty-ninth commandant of the Marine Corps. Gray was among the senior leaders who embraced the tenets of Goldwater-Nichols. This tough-talking, tobacco-chewing New Jersey native’s gruff demeanor failed to disguise a razor-sharp intellect. He immediately set about the task of refocusing the Marine Corps on its traditional core competencies. Measures of merit for leaders changed dramatically, and while the Corps’ emphasis on physical fitness and a sharp personal appearance was undiminished, highly shined shoes and shaved heads took a back seat to the study of military history and critical thinking about the nature of war and the qualities needed by the men and women who would fight them.

The twenty-ninth commandant’s mantra was encapsulated in a pamphlet-sized publication, simply titled “Warfighting.” Sure, there were quips, but for the most part, they were good-natured. Warfighting? Isn’t that like “food eating” and “water drinking”? The response was direct and uncompromising. Eating and drinking are physical acts that sustain life, while warfighting is, first and foremost, an intellectual activity that often ends it. While Warfighting redefined the character of war, a companion concept, “Maneuver Warfare,” emerged as an offshoot of that epistle. Drawing on lessons learned from Genghis Khan, the German Blitzkrieg, and Israeli operations in the Middle East, maneuver warfare redefined how the Marine Corps would fight on future battlefields. Dismissing the last man standing tenants of the attrition models prevalent in the two world wars and previous conflicts, maneuver warfare was and is a philosophy that seeks to shatter the enemy’s cohesion through a variety of rapid, focused, and unexpected actions that create a turbulent, quickly deteriorating situation with which the enemy cannot cope. Reduced to its simplest terms, Marines would both outfight and outthink their adversaries. Under this concept, massed forces gave way to massed capabilities, an operational approach best executed by versatile combined arms teams. Accordingly, Gray retained and enhanced the Marine Air Ground Task Force (MAGTF) organizational model that had served the Corps well in multiple “climes and places.”

Emphasizing the virtues of maneuver warfare and the aggregate utility of MAGTFs, Gray vigorously supported the activities of the geographic combatant commanders carrying out their responsibilities defined under the Goldwater-Nichols act. His direction to MAGTF commanders was forceful and direct. They were enjoined to be the combatant commanders' “force of choice” for initial responses to unexpected, fast-breaking combat and non-combat contingencies. Active players rather than passive spectators, they were counseled not to wait to be asked to undertake these tasks. Rather they were directed to step up to the plate and offer their forces and capabilities along with rapidly conceived plans for their employment.

Attuned to and supportive of joint force concepts and doctrine, Marines were expected to study the capabilities and operational techniques of the other services and joint commands, with particular emphasis on those of the Special Operations Command created by the 1987 Nunn-Cohen Amendment. Under Joint Force Doctrine, forces from the respective services were expected to be complementary, not duplicative. In the case of the Marine Corps, this led some critics to assert that the nation did not require two land armies—a valid position, as the United States already had the best army in the world, a fact fully appreciated by Marines. Still, when the occasion demanded, it proved useful for the nation to have at its disposal a force capable of rapidly reconfiguring itself, with minimal augmentation, to perform many of the functions of a second army. The Gulf War, the last conflict in which the United States achieved all of its strategic objectives, serves as a case in point. President George H.W. Bush and Generals Colin Powell and Norman Schwarzkopf found it beneficial to have a force adept at operating with coalition partners and capable of breaching an extensive barrier system while mounting a frontal attack on Iraqi forces. The Marines played a key role in supporting the brilliant Army-led flanking main attack through Saudi Arabia that unhinged the Iraqi Republican Guards. Simultaneously, the presence of a Marine Expeditionary Brigade offshore on amphibious ships posed an additional threat to Iraq, requiring the diversion of four combat divisions.

Gray’s successor, Gen. Carl Mundy, inherited a vigorously debated and rigorously tested philosophy buttressed by an impressive array of operational concepts. Still, the Marines needed to codify the philosophy, harmonize with joint force concepts, processes, and procedures, and fully integrate expanded Marine Corps capabilities into the war and contingency plans of the geographic combatant commanders. Under Mundy’s precise and articulate leadership, this was accomplished. Possessing boundless energy and imagination and a keen appreciation for organizational design and management, it fell to the thirty-first commandant, Gen. Chuck Krulak, to develop and implement a systemic approach for the integration of concepts and doctrine, as well as requirements and programs that were flexible, affordable, and responsive to constantly shifting threats and national security priorities. Krulak’s answer to these challenges was the “Combat Development Process,” which, when conscientiously employed, still enables the Corps to remain abreast of these threats and challenges.

Simultaneously, Krulak foresaw the need to augment the training of new Marines to instill in them the self-confidence, appreciation for teamwork, and total commitment to mission demands required by maneuver warfare. He conceived a single event, the “Crucible,” to test Marines’ endurance, resolve, and ability to subordinate individual desires to unit goals. Only in this way could they complete the transition from civilian society to the lifestyle of Marines. With these tools at their disposal, five succeeding commandants continually rethought, refined, retrained, and re-equipped the Marine Corps to provide the nation with a versatile “middleweight” military organization, on the scene or deployable by multiple means, rapidly reconfigurable, and possessing the range of capabilities needed to carry out differing missions in varying environments, either independently or as part of a larger joint or international force.

Now, the Marine Corps has embarked on another transformation, one that is, in many ways, the antithesis of the former. While the previous transformation was largely intellectually based, the current one is primarily structurally oriented.

Based on guidance and direction issued through a transformational roadmap titled “Force Design 2030,” the range and depth of the Marine Corps’ capabilities are being significantly reduced. Deep cuts have been imposed on the infantry, cannon artillery, and tactical aviation components of MAGTF combined arms teams, while armor, bridging, and military police capabilities have been or will be eliminated outright. As a consequence, Marine Corps formations that have previously served as a “one-stop shop” for combatant commander responses to fast-breaking contingencies at the lower end of the conflict spectrum will now require external augmentation, resulting in extended timelines for planning and force deployment and employment. Moreover, the elimination and/or reduction of key capabilities will negate one of the cardinal virtues of the MAGTFs. As a functionally self-contained force, Marines arrived on scene fully integrated. Troops and equipment constituting the ground, aviation, logistics, and command and control elements had prepared for likely missions as a single entity, thus eliminating time-consuming requirements for arrival, assembly, and integration. In short, the “flash to bang time” between force movement and mission execution was essentially eliminated. Finally, the Corps’ unrelenting insistence on immediately responsive support of the combatant commanders has been tempered by the internal focus on the implementation of Force Design 2030.

In a strategic context, the tenets of warfighting and maneuver warfare recognize no geographic restrictions, nor do they establish priorities among potential adversaries. They provide substance to the phrase “any clime and place.” Under Force Design 2030, “Stand in Forces” and “Marine Littoral Regiments” that are clearly optimized for a future conflict with China will be or have been created. The wisdom of this approach is questionable. To paraphrase an insightful observation by former Secretary of Defense Robert Gates, “we have a perfect record when it comes to predicting future conflicts—we always get them wrong.” History supports Gates’ assertion. Former Marines and others with extensive operational experience have urged those involved in developing the forces of the future to optimize them not for a single possible adversary, but for the uncertainty that characterizes the twenty-first-century international security environment. That counsel has gone unheeded.

Informally organized under the banner of “Chowder II,” critics of Force Design 2030 have exhaustively and convincingly made the case that the end product of this second transformation will yield a Marine Corps that is less operationally and tactically capable and less strategically relevant than the one that has emerged from the first. Honoring the institutional precept that one who poses a problem or contests an idea is obligated to proffer a solution or alternative, the members of Chowder II have published a four-chapter alternative to Force Design 2030, titled Vision 2035. Among other things, Vision 2035 addresses dominant issues associated with the ability of the Corps to sustain its role as a global response force now and in the future. Specifically, it identifies requirements for the Marine Corps to remain a mobile, multi-mission, offense-oriented force able to engage fully in the single battle—deep, close, and rear—in the age of precision weapons, and shows that the Corps must capitalize on new technology to deal with emerging threats in ways that are both combat- and cost-effective.

Few will challenge the assertion that, while the nature of war is immutable, its character and content are subject to fluctuation. Again, calling into question the wisdom of a China-centric approach to force design, we must accept the reality that Chinese fingerprints cover the globe and competition with China may be one for influence rather than conquest. It’s entirely possible that the dominant stratagems for dealing with China may lie not in the military but in the diplomatic, informational, and economic realms. Sun Tzu’s axiom that “the supreme art of war is to subdue the enemy without fighting” merits our attention.

With the midterm elections decided and the 218th Congress seated, scores of new members are receiving their committee appointments and are turning to their responsibilities to govern the nation. These new members and committee heads are undoubtedly eager to assume their legislative roles and make their presence felt on matters of urgency to the United States. Now, as in the past, the security of the nation will be at or near the top of the list. The future role of the Marine Corps in meeting existing and looming security threats is a matter of the highest urgency. The Corps is at a crossroads. It’s imperative that this crucial element of the national security apparatus is prepared for the challenges of the future, which may not be possible if Force Design 2030 is allowed to run its course. Our elected officials have the power and duty to intercede. They should do so.

Gen. Charles Wilhelm is a career infantry officer. His last assignment was Commander, United States Southern Command.

Image: Flickr/U.S. Navy.

The United States developed—or further developed—a strategy called “by, with, and through” for its successful military campaign from 2014 to 2019 against the Islamic State, or ISIS. Under this strategy, the United States worked with local forces by providing advice, supplies, and intelligence, and carrying out airstrikes. But the locals were expected to take almost all of the casualties. And, indeed, they did: tens of thousands of people were killed in the war, but only twenty of them were American service personnel.

Key to the success of the strategy was the willingness of the locals to fight and die for the cause. This quality is difficult to inspire or fabricate, but it helps greatly if the enemy, as in the case of ISIS, is taken to present a threat that is genocidal or existential to the locals.

For all the success, however, it seems possible that civilian deaths would have been far lower if ISIS fighters, many of them disillusioned and fundamentally muddled, had been allowed to flee the fray.

The Rise of “By, With, and Through”

Degrade and Destroy: The Inside Story of the War Against the Islamic State from Barack Obama to Donald Trump, an impressive book by Michael Gordon, a top military reporter for the Wall Street Journal, can help to guide the discussion. The book focuses primarily and in considerable depth on the American contribution to the campaign, but it does not deal very much with the fighting qualities of ISIS—an omission that has come with analytical consequences, as will be seen. Nonetheless, it is highly useful in assessing the development of the strategy that defeated ISIS.

Although Gordon concludes that the “by, with, and through” strategy constitutes a “new way of war,” it is not clear that the strategy is all that new. Gordon himself espies “elements” of it in earlier interventions, but in many respects, it was fully in view in the American (and European) approach to civil wars in Bosnia and Croatia in the early 1990s. The outside interveners were willing to supply and advise one side in those conflicts and even to apply some focused bombing. But U.S. troops were sent to police the situation only in 1995 after the wars had been substantially settled—when the military environment had become “permissive,” as it was put at the time by President Bill Clinton and others. Helpful to the success of the mission was the fact that the opposing Serb forces were substantially incompetent and criminalized.

Something similar could be seen in U.S. strategy in the last years of the Vietnam War two decades earlier. Sapped by declining popular support for the war at home, the U.S. contribution had been reduced to a supporting role by 1971, while the South Vietnamese forces America had trained were expected to bear the brunt of any ground fighting. In 1972, North Vietnam launched a major offensive, and for a while, it looked like South Vietnam’s military would fold. However, some elements did hang on, blunting the offensive. When that was obvious, the United States re-entered combat, but mainly with airpower, and the combined effort defeated the offensive. But three years later, when the North launched another offensive, the ill-led South Vietnamese military collapsed, and the United States mainly stood back and withdrew its personnel, watching as the North took over and handed the United States the greatest debacle in its foreign policy history—something it accepted with remarkable equanimity as it turned out.

Foreign policy analyst David Ignatius argues that the United States military may well have found a “winning combination” in its war against ISIS. However, as the Vietnam experience suggests, it needs local forces that are prepared to do the fighting and dying. Indeed, in a broader comparative study, Stephen Biddle and his colleagues conclude that security force assistance works best, and perhaps only, if the locals are convinced they face a mind-concentratingly existential challenge. Otherwise, their interests are likely to depart considerably from those assisting them.

“By, With, and Through” in Iraq and Syria

A problem is that a willingness by the locals cannot readily be created by U.S. efforts. Because of its focus on the Americans, Gordon’s book tends to underplay the dynamic.

To begin with, the United States spent $20 billion over a decade to create defense forces in Iraq. However, confused and corruption-ridden, these forces simply fell apart when challenged by ISIS fighters in 2014, abandoning territory and weaponry to ISIS even though the defending forces often greatly outnumbered the challengers.

But there was soon a remarkable transformation: effective forces in opposition to ISIS emerged among the locals. They came not only from the Iraqi army but also from various militia and paramilitary groups, especially Kurdish ones. They often squabbled and, as Gordon extensively documents, a central U.S. mission was to get them to coordinate their efforts. But all were in agreement on the need to extinguish ISIS and to risk death in the process.

However, although this change was likely bolstered by the American commitment, it was caused not so much by that as by local revulsion at the vicious and genocidal tactics and goals of ISIS, which, as Daniel Byman puts it, had a “genius at making enemies.” A poll conducted in Iraq in January 2016 found that fully 99 percent of Shiites and 95 percent of Sunnis expressed opposition to ISIS. Spines had become steeled by its staged beheadings of hostages, summary executions of prisoners, and rape and enslavement of female captives. For example, in 2014, ISIS massacred some 1,700 unarmed captured Shia military cadets by shooting, beheading, and choking them, triumphantly web-casting videos of the event. This mind-concentrating episode is mentioned only in passing by Gordon. But, as one ISIS opponent puts it bluntly in the film City of Ghosts, the conclusion for many was “either we will win, or they will kill us all.”

In addition, the U.S. strategy against ISIS was aided by the fact that Americans came to believe that the enemy presented a direct threat to the United States—another element that is substantially missing from Gordon’s narrative. This stemmed from the vicious group’s ultimate idiocy: staging and webcasting beheadings of defenseless American and Western hostages in the late summer and early fall of 2014. Only 17 percent of the American public had advocated sending ground troops to fight ISIS after its successful routs earlier in the year—it seemed to be yet another incomprehensible civil conflict among Iraqi factions. However, the beheadings—tragic and disgusting, but hardly of the order of the magnitude of destruction wreaked on 9/11—boosted support to over 40 percent, and that went even higher later. A poll conducted in 2016 asked the 83 percent of its respondents who closely followed news about ISIS whether the group presented “a serious threat to the existence or survival of the U.S.” Fully 77 percent agreed, more than two-thirds of them strongly.

Reducing Civilian Casualties

Because of its focus on American policy and strategy, Gordon’s book says little about the inner workings and machinations of ISIS, and this is sometimes unfortunate. The issue is especially relevant to some brief suggestions at the end of the book that efforts should be made to improve the strategy to reduce civilian casualties. As he points out, U.S. strategy, particularly as put forward by Secretary of Defense General Jim Mattis, was focused on “annihilating” ISIS. As a result, sieges of ISIS forces often made the fighters cornered rats and did not allow them an escape route. This led to situations such as the one in which an American bomb blew up a building housing two ISIS snipers, killing 105 civilians in the process. But sometimes, local commanders did allow for escape routes, and evidence in the book suggests that this may have saved many civilian lives.

As Gordon points out, the concern was that if ISIS fighters were allowed to escape, they would be free to rejoin the battle elsewhere. But this concern seems to have been based on an overestimate of their capacities and dedication.

In fact, after its startlingly easy advances of 2014, in which Iraqi defenders mainly fled, ISIS did not show much dedicated military tenacity. Some of this was evident even at the time when the group announced in 2014 that it was “ready to burn 10,000 fighters” in one fight but abandoned the field after the loss of a few hundred. In late 2015, it launched three badly-coordinated offensives in northern Iraq that included “armored bulldozers,” but all were readily beaten back.

Frontline commanders observed of ISIS that “they don’t fight. They just send car bombs and then run away. Their leaders are begging them to fight, but they answer that it is a lost cause. They refuse to obey and run away.” Increasingly, ISIS sought to ferret out informants within the ranks, some of them alienated by sharp cuts in salaries, executing them by such methods as dropping them into vats of acid. In defense, ISIS seems primarily to have relied not on well-organized military operations, but on planting booby traps, using snipers, and cowering among civilians. For example, to maintain its human shield, ISIS murdered hundreds of civilians who tried to escape, sometimes hanging the corpses from electrical pylons as a warning.

Rather than treating ISIS fighters as cornered rats behind human shields as U.S. policy dictated, it might have been better overall to let them escape. Some escapees might have fought again, but many seem to have been thoroughly disillusioned and were anxious to flee the fractious, murderous, and pathological ISIS society. Fears at the time that foreign fighters would return home to commit terrorist attacks were understandable, and that did happen in Paris in 2015 and Brussels in 2016. But there were few, if any, such events later; fears about returnees proved to be substantially unjustified.

The Future of “By, With, and Through”

Gordon’s contention that this “new way of war” has a future seems to be on solid ground. Although the book was in press when the war in Ukraine erupted, he suggested in later interviews that a version of the strategy is currently being applied by the United States and its allies in that conflict.

Although the United States and NATO had done some training and had sent military aid to Ukraine in recent years, they were wary and expected that, if a Russian invasion took place, the Ukrainians might well fold the way U.S.-trained forces had in Iraq in 2014, in Afghanistan in 2021, and in South Vietnam in 1975. They were especially concerned about supplying intelligence because Ukraine’s intelligence apparatus was shot through with Russian moles.

However, once the Ukrainians proved to be dedicated and effective at defending against a threat that seemed to threaten the existence of their state, the essential element in the “by, with, and through” strategy was established. This was bolstered by outrage at the Russian invasion, which inspired broad popular support in North America and Europe for a costly assistance effort.

Moreover, it seems likely that outside support for dedicated forces like those in Ukraine can be sustained because the “by, with, and through” strategy does not require that casualties be suffered by the supporters. Mounting U.S. casualties were the essential cause of the decline in popular support for wars like Vietnam, Iraq, and Afghanistan, not events in the war (which generally proved to have only a short-term effect) or the antics of anti-war demonstrators.

But if the conflict in Ukraine suggests that this “way of war” has a future, it is a limited one. As experiences in Vietnam, Iraq, and Afghanistan attest, dedicated local forces cannot readily be fabricated by well-meaning outsiders, even after decades of effort and expense.

A test may come if China decides at some point to take over Taiwan by military force. If local forces resist effectively, as happened in Ukraine, it seems rather likely that the “by, with, and through” approach will be applied by the United States in much the same manner as in Ukraine. If Taiwan’s forces fold, however, outsiders are unlikely to try to rescue them on their own.

John Mueller is Professor Emeritus of Political Science at Ohio State University and a Senior Fellow at the Cato Institute. His most recent book is The Stupidity of War: American Foreign Policy and the Case for Complacency (Cambridge University Press, 2021).

Image: DVIDS.

Pakistan is once again in trouble. Since the Afghan Taliban (hereafter the Taliban) returned to power in August 2021, Pakistan has witnessed an uptick in violence perpetrated by the Tehreek-i-Taliban Pakistan (TTP), which uses Afghanistan as a safe haven. The Taliban’s reluctance to rein in the TTP or to hand it over to Islamabad has disappointed Pakistan, where many celebrated the Taliban victory over Ashraf Ghani. In 2021-2022, the Taliban brokered a ceasefire between the Pakistan Army and TTP. The TTP, however, brought an end to the ceasefire in November 2022, ordering its fighters to resume their attacks.

Pakistani opinion and decisionmakers are now suggesting hitting the TTP hard, initially in Pakistan and, if need be, even in Afghanistan. But Pakistani decisionmakers should remember that they have tried to both negotiate and fight with the TTP since the latter’s inception in 2007—Neither approach seems to have worked in Pakistan’s favor. Therefore, given Pakistan’s past experiences with the TTP, any future military campaign by the Pakistan Army is likely to fall short of achieving long-term strategic success. Afghanistan is in no position to help Pakistan with its TTP problem either. At this point, Pakistanis should accept living with the TTP. While such a proposal might sound offensive, Pakistan’s choices are limited given historical and ground realities.

Afghanistan and TTP Challenge

First, it should be recalled that Afghans do not take away the protection they offer to others. The Taliban preferred to lose their government in 2001 rather than hand over Osama bin Laden to the United States. The only major exception to this practice is the Afghan government’s decision, during World War II in 1941, to ask German and Italian nationals to leave Afghanistan on the condition that the Allies would guarantee their safe return to their home countries. Even at the height of World War II, while being sandwiched between the British and Russians, Afghanistan did not hand over the Germans and Italians to the British or Russians.

Additionally, Afghanistan has offered protection to any Pashtuns fleeing Pashtun majority areas of the subcontinent (India under British rule, and Pakistan since 1947). From Amir Abdur Rahman Khan (1880-1901) to President Mohammad Najibullah (1987-1992), it was an unwritten policy of successive Afghan governments. Afghanistan also hosted dissident Pakistani Baloch and Sindhi elements—including former Pakistani prime minister Zulfikar Ali Bhutto’s sons and followers. The practice helped Afghanistan maintain influence among Pakistanis and put pressure on Pakistan when necessary.

Since Afghans have not lost interest in the Pashtun majority areas of Pakistan, the TTP’s demand to reinstate the tribal status of the former tribal areas (hereafter the tribal areas), where the TTP would have more autonomy, is too tempting a prospect for Afghans to ignore. Afghans have historically held a self-appointed role to advocate for greater rights for Pashtun tribes in the subcontinent. More importantly, the restoration of the tribal areas will also have a practical utility for Afghanistan: to relocate the TTP and other terror groups from Afghanistan to the tribal areas.

In addition to historical baggage, there are also ideological links between the Taliban and TTP. Like the Taliban themselves, the TTP regards the Taliban leader, Hibat Ullah Akhundzada, as its leader. No Taliban leader would ever hand over their followers and supporters, who fought shoulder to shoulder with their fighters, to another country. The TTP’s claim that it wants to enforce Sharia in the tribal areas also resonates with the Taliban leaders, who claim to have also fought to enforce Sharia.

The Taliban cannot afford to expel the TTP by force. The Taliban do not want to create pro-TTP and anti-TTP factional divisions amongst themselves. It is also unclear if the Taliban have the ability to take military action against the TTP. More importantly, even if the Taliban were able to, they would not take military action against the TTP to avoid pushing the TTP toward an alliance with the so-called Islamic State. It seems unnecessary for the Taliban to pick a fight, at Pakistan’s request, with fellow Pashtun Taliban, who have the same ideology and leader as them.

Furthermore, tribal Pashtuns, who today form the bulk of the TTP and live along the Afghan-Pakistani border, have a long history of resisting outsiders such as the Mughals, British, Soviets, and NATO. The border areas’ Pashtuns’ struggle against the British, whom they fought for a century, is of particular importance. Despite tens of military operations and spending tens of millions of pounds and losing countless soldiers, Britain could not subdue the Pashtun tribes like the Masuds (aka Mehsuds), Wazirs, Orakzais, Mohmands, and Afridis.

Tribal raids—which the TTP has replaced with ambushes and suicide attacks—on cities and towns, including Peshawar, were common under the British, who could barely venture out of their cantonments after dark. As such, history advises that military operations against Pashtun tribes will only add to the Pakistan Army’s problems. The tribes will defend their honor and land at any price. If they need to, they will retreat to Afghanistan to live to fight another day. But the tribesmen do not forget or forgive anything. The TTP, in addition to being a terror outfit, is a channel to express frustration at the Pakistan Army and its continued presence on tribal lands.

The idea that the Pakistan Army can handle the Pashtuns better than the British Indian Army because of presence of a large number of ethnic Pashtuns in the former needs to be re-evaluated. There was a large number of ethnic Pashtuns in the British Indian Army as well. The British also, multiple times, raised and disbanded tribal militias, composed entirely of Pashtuns, to counter fellow Pashtun tribesmen. The presence of Pashtuns on both sides did not help curb the violence then; it will not be helpful now.

Moreover, the notion that the TTP has no popular support in the tribal areas needs to be revisited. For decades, the Afghan government lied to us that the Taliban had no popular support in Afghanistan. A similar rhetoric has emerged in Pakistan. The Pakistani government will find it embarrassing and costly to admit that the TTP has popular support amongst Pashtuns in Pakistan. Ironically, the TTP’s main objective to enforce Sharia is widely shared, especially by religious circles, across Pakistan.

Finally, the TTP also enjoys some degree of popular support amongst Afghans, just like the Taliban enjoyed popular support amongst Pakistanis. In addition to ethnic and linguistic ties, Afghans believe if the Taliban received popular support from Pakistan to enforce Sharia in Afghanistan, why should the TTP not receive popular from Afghanistan to enforce Sharia in Pakistan? If enforcing Sharia is a noble calling, it should be equally noble in both countries.

The Way Forwar

First, despite the seriousness of the situation, there is no easy way out of this crisis for Pakistan. Pakistan may wish to take military action against the TTP. The TTP will cross into Afghanistan, wait for an opportunity to recross into Pakistan, and stage violent attacks—a practice similar to what the Taliban used to do during the Karzai and Ghani governments, but in the opposite direction. The fencing on the Afghanistan-Pakistan border has proved unreliable, and can be easily removed or blown, or tunnels can be dug underneath it.

Second, the Pakistan Army—with its Iman (faith), Taqwa (piety), and Jihad motto—is India-centric. Fighting fellow Muslims in Pakistan is the last thing the Pakistan Army would want to do. But more than the army, it is the people of the tribal areas who do not seem to be supportive of any further military operations in their area. Their flocking in droves to Pashtun Tahafuz Movement (PTM) rallies against war in the tribal areas is an indication of how much the tribes have become fed up with continued military operations by the Pakistan Army.

Third, taking the war against the TTP inside Afghanistan can entail serious long-term security consequences for Pakistan. The Taliban, in retaliation, will stop cooperating with Pakistan. The Taliban will also likely switch from tacit tolerance to active support of both the TTP and Baloch militants, who have kept their insurgency on and off since Pakistan’s inception. Pakistan should take seriously the risk of the TTP joining hands with Baloch insurgents. Such an alliance would spell disaster for Pakistan, especially if it receives active support from India.

Repeated incursions by Pakistan into Afghanistan also run the risk of pushing the Taliban toward India. Pakistan refrained from sincere cooperation with the Karzai and Ghani governments because they were considered pro-India. Now by alienating the Taliban, Pakistan will achieve the exact opposite of what it intended.

Fourth, Pakistan may feel tempted to seek support from the United States against the Taliban and TTP, especially with respect to carrying out drone attacks in Afghanistan. Drones have taken countless innocent lives and contributed to resentment against those who have conducted and facilitated them. One reason why the Taliban are bitter towards Pakistan is because of the latter’s complicity in drone attacks against the former.

Domestically, if Pakistan’s cooperation with the United States against Afghanistan gets exposed, Pakistani authorities will most likely face a popular backlash, especially within religious circles, and lose support for taking strong measures against the TTP. It is also very likely that the United States will abandon Pakistan to deal with any fallout from drones and other issues related to Afghanistan—something Pakistan is not prepared for.

Finally, the Taliban do not fear border closures with Pakistan, should Pakistan close its borders with Afghanistan to punish the Taliban. The Taliban can rely on Iran and Central Asia for trade. In retaliation, the Taliban will not allow Pakistan to trade with Central Asia through Afghanistan, which will cost Pakistan tens of millions of dollars annually. The illicit drugs, which the Taliban have been trading and trafficking for decades, will still make its way to the international market regardless of the status of the Afghan-Pakistani border.

Pakistanis should prepare for difficult times ahead. There are no easy solutions. The TTP is not going to disappear. For the TTP to deny Pakistan a victory, it only needs to survive. Thus, Pakistanis are advised to accept to live with the TTP for now. In the long run, Pakistan may want to do two things: first, try to steer its society away from extremism so that a lasting and genuine peace may be achieved; second, genuinely engage the Pashtun tribes through their elders and listen to them, without trying to impose anything on them from Rawalpindi.

Arwin Rahi a former adviser to the Parwan governor in Afghanistan. He can be reached at rahiarwin@gmail.com.

Image: Trent Inness / Shutterstock.com

The United States is officially sending Ukraine its long-serve Patriot air defense system to help defend the embattled nation’s civilian infrastructure against the ongoing Russian assault. This decision represents what could be a significant leap in Ukraine’s defensive capabilities, while also serving as a powerful political message about America’s deepening support for the wartorn nation.

However, America’s Patriot air defense system, like the air defense enterprise itself, is a widely misunderstood topic online. So we set out to offer a better understanding of the system itself, its capabilities, and perhaps most importantly, its limitations.

It’s a near certainty that Russia will leverage misconceptions about both the system and its role to advanced narratives meant to undermine faith in American equipment and in Ukraine’s chances at emerging from this conflict victorious.

So, in order to innoculate yourself against the flood of disinfomation that’s sure to ensue, here’s a crash course in America’s MIM-104 Patriot Air Defense system.

What is the Patriot air defense system?

The MIM-104 Patriot system is comprised of multiple assets but serves a singular purpose: identifying and intercepting inbound threats ranging from aircraft to both cruise and ballistic missiles.

Developed by Raytheon, the MIM-104 Patriot Air Defense System first entered service in the early 1980s as a replacement for both Nike Hercules high-to-medium air defense and MIM023 Hawk medium tactical air defense systems.

Despite being developed with a focus on defending against high-performance aircraft, there was a clear need for countering tactical missiles by the mid-80s. In this context, tactical missiles refer to short-range ballistic missiles, cruise missiles, and air-to-surface missiles deployed by air and rotorcraft.

Ballistic and cruise missiles offer different challenges for air defenses due to their inherent differences in their operation. Ballistic missiles like Russia’s air-launched Kh47M2 Kinzhal or even its nuclear-armed RS-28 Sarmat ICBM could be thought of as similar to rockets. They’re commonly launched using a conventional rocket booster along a high, arcing ballistic flight path before separating from the booster and careening back toward their target at extremely high rates of speed. Nearly all ballistic missiles achieve hypersonic velocities as they approach their targets, but unlike modern hypersonic missiles, they rarely maneuver during their descent, making their trajectories fairly predictable.

Cruise missiles, on the other hand, can be thought of as more akin to suicide drones. They’re often powered by air-breathing jet engines, not unlike tactical aircraft, which allow them to fly under power along a more horizontal and unpredictable trajectory. These weapons fly at much lower speeds than ballistic missiles but can be more dangerous due to their maneuverability and the ability to use to curvature of the earth to mask their approach.

To this end, the U.S. soon fielded two modifications to the Patriot system before it ever even saw combat. The first, Patriot Advanced Capability 1 (or PAC-1), was a software upgrade while the second, PAC-2, included changes to the hardware itself, including a new fuse and larger fragments within the warhead. By the time the first Patriot systems were deployed in the Middle East for the Gulf War in 1991, both of these modifications had been fielded, which made the Patriot system more adept at engaging missiles than it had been at its onset.

However, the Patriot system failed to live up to expectations during its first combat deployment, and as a result, it is often dismissed by those who only recall those early controversies. However, mistaking today’s MIM-104 Patriot system for the same one America fielded over three decades ago would be a mistake.

“In the first Gulf War Patriot was right around 25%. It was doing something it wasn’t necessarily designed for. It was actually built for planes but they decided to throw it at missiles and it sometimes hit. Since then, we have vastly improved the system — like hundreds of upgrades,” explained U.S. Army Patriot Fire Control Enhanced Operator-Maintainer, Sergeant First Class Long. “Now days, Patriot has right around a 95% hit ratio.”

We’ll dive much further into the controversy surrounding the Patriot’s early performance in an another piece.

The Patriot system is usually deployed in batteries that are made up of six primary components as well as some others depending on circumstance:

• An electrical power plant
• A radar set
• An engagement control station
• Launching stations
• An antenna mast group
• The Patriot interceptor missiles themselves

Today, the Patriot is operated by 18 nations, with the United States operating the largest fleet of systems, with 16 Patriot battalions operating upwards of 50 Patriot batteries with more than 1,200 interceptors in the field.

However, it’s important to understand that the Patriot system does not operate as an island unto itself under normal circumstances. In America’s missile defense apparatus, the Patriot serves as one portion of a layered defense strategy, something Long and the Army refer to as “defense in depth.”

“Defense in depth is defined as having increasing levels of firepower as the threat gets closer to you,” Long explains, “which means the enemy runs into an increasing number of fires as they approach friendly forces.”

What can Patriot missiles (PAC-2 and PAC-3 Interceptors) really do?

Today’s American Patriot systems operate interceptors from two primary families: PAC-2 and PAC-3, though even the PAC-2 missiles are a far cry from their siblings employed in the 1990s.

Incredibly, both PAC-2 and PAC-3 interceptors are actually launched by the Patriot system before it has even secured what’s known as a “weapons-grade lock,” or a targeting solution for the inbound aircraft or missile. Instead, the weapon is deployed in what’s called the “initial fly out” stage of its guidance approach where it is then fed active guidance information from the Patriot’s radar array until it gets close enough to the target to transition from the Patriot’s radar system to its own onboard guidance systems.

This results in an extremely short window of time between an aircraft, for instance, being notified of a radar lock and the weapon itself actually reaching its target.

“The Patriot is by far the most lethal SAM system in the world, and there is no aeroplane in existence that is going to get away from it. The missile itself is also designed to bias its impact on the nose of the aircraft so as to kill the pilot. If a Patriot is fired at your aircraft, you might as well eject, as there is nothing you can do to get away from it,” explained Navy Lt. Cdr. Rod Candiloro, an F/A-18 Hornet pilot who flew during Operation Iraqi Freedom.

His concerns about the system were warranted. At the time, the system was proving very effective at intercepting enemy missiles with its processes automated, but that automation ultimately led to two friendly-fire incidents against a Royal Air Force Tornado and a U.S. Navy Hornet. All three crewmembers involved in those intercepts were killed.

PAC-2 GEM-T

PAC-2 missiles are interceptors that benefit from the PAC-1 and 2 updates discussed above, however, the modern PAC-2 GEM-T, or Guidance Enhanced Missile – Tactical (as opposed to GEM-C with the “C” denoting cruise missile), is a modernized iteration with a number of further enhancements to improve its performance against tactical ballistic missiles.

These interceptors come equipped with a new proximity fuse for their explosive fragmentation warheads, which represents one of the significant operational differences between these weapons and the kinetic-based PAC-3 interceptors.

“As the interceptor missile approaches the target, its active seeker will steer the missile to the target. A PAC-2 Patriot missile will detonate in the vicinity of the threat missile whereas a PAC-3 will seek to impact the warhead of the threat ballistic missile,” says NATO’s “Patriot Deployment Fact Sheet.

The PAC-2 GEM-T is also equipped with a new low-noise oscillator in the nose that allows for improved targeting of aircraft or missiles with a low radar cross-section. These interceptors entered service in 2002 and saw significant success in Iraq the following year.

“In contrast with the experience of Desert Storm, Patriot interceptors defeated every ballistic missile they engaged during the 2003 Operation Iraqi Freedom. Since 2015, Patriot has successfully engaged scores of missiles and drones in the Yemen Missile War. Israel has likewise used it on a number of occasions to defeat drones, aircraft, and other threats,” write Mark Cancian and Tom Karako for the Center for Strategic & International Studies.

PAC-3 MSE and CRI

While the PAC-2 missiles used blast fragmentation warheads to take out incoming missiles or aircraft, the smaller and more modern PAC-3 missiles leverage “hit to kill” technology to destroy targets with sheer kinetic force. Another important difference is manufacturer — while PAC-2 missiles come from Raytheon, PAC-3 interceptors come from Lockheed Martin. As such, the PAC-3 missiles are completely new “clean sheet” designs meant to maximize the Patriot air defense system’s capability set.

PAC-3 missiles use an active Ka-band radar seeker for terminal guidance into the target, with 180 solid-fueled attitude control motors (ACM) in its forward section to allow for heightened maneuverability.

Despite the leap in performance, PAC-3 missiles are much smaller than PAC-2 interceptors, reducing their overall range despite the interceptor’s improved aerobatics allowing them to defend a larger overall area. The PAC-3 MSE, or Missile Segment Enhanced, is slightly larger and offers different capabilities than the PAC-3 CRI, which stands for Cost Reduction Initiative.

How much heat can each Patriot battery carry?

A single Patriot battery can include up to eight separate M901 launch stations. A launch station carries up to four launch canisters on a two-axle trailer. These canisters can each hold one PAC-2 GEM-T interceptor, three PAC-3 enhanced missiles, or as many as four PAC-3 CRI (cost reduction initiative) missiles. America’s Patriot systems tend to deploy with an assortment of these interceptors to offer the best option for whatever the incoming threat may be.

What about the Patriot’s radar system?

Patriot batteries have operated a number of different radar systems over the years, known as the AN/MPQ-53, AN/MPQ-65, and AN/MPQ-65A radars. Unlike the Nebo-M system leveraged by Russia’s S-300 and S-400 systems, the Patriot radar actually combines surveillance, tracking, and engagement functions into one assembly mounted on a single trailer — dramatically reducing deployment time and increasing mobility while offering the same function and performance of multiple arrays.

The AN/MPQ-53 system operates at the C-band frequency range for long-range detection (low-frequency) and at the G/H bands for precision targeting at distances claimed to be as great as 100 kilometers (62 miles), while the more modern AN/MPQ-65 systems offer a disclosed range of better than 150 kilometers (or about 93 miles).

However, the older MPQ-53 system has been reported to actually offer a range of up to 170 kilometers (105 miles), suggesting the newer MPQ-65 can actually reach significantly further than had been acknowledged.

The more advanced MPQ-65 system is said to be capable of tracking up to 100 airborne targets simultaneously while guiding nine separate missiles toward their targets.

Despite their high degree of capability, these arrays do have limitations, however. One notable limitation is its inability to offer full 360-degree scanned coverage.

Today, the Army is working on rolling out another, even newer, radar array for the Patriot, dubbed the Lower Tier Air and Missile Defense System (LTAMDS), part of Raytheon’s GhostEye family of radars. It promises offer full 360-degree coverage. Despite being about the same size as previous Patriot radar systems, Raytheon claims it offers twice the power.

Which radar system the Patriot battery provided to Ukraine will operate has not been disclosed thus far.

How effective is the Patriot air defense system?

As is so often the case when discussing advanced military systems, trying to assess the Patriot’s real efficacy is a simple question with a complicated answer. Historically speaking, the Patriot system has seen a dramatic improvement since its rocky start in the Gulf War, achieving what SFC Long says is around a 95% intercept success rate.

But Long himself will tell you that there’s much more to the story when it comes to air defenses than simply comparing intercept ratios between very different systems like America’s Terminal High Altitude Area Defense (THAAD), Israel’s Iron Dome, or Russia’s S-400. Each of these systems was designed for specific (and often different) portions of the air defense enterprise. But further than that, they also see very different rates of use.

“Right now, on paper, THAAD has a 100% engagement efficiency. It has had one engagement and hit one missile,” he explains.

And while the Patriot system currently has around a 95% success rate, it still only engages a few times a year. The more frequently the system is called on to defend against incoming threats, the more chances it has to fail and the lower its overall success rate may be. Iron Dom, Long points out, may have a success rate of just 80-85%, but it sometimes sees use multiple times per week, giving it that many more opportunities to fail.

On paper, the MIM-104 Patriot air defense system is among the most advanced and capable missile defense assets on the face of the planet, and there’s a sound argument to be made that it’s even more advanced and capable than Russia’s much-touted S-400… but the complicated reality of the air defense enterprise is that it’s extremely complex, and nothing is invincible.

This article was first published by Sandboxx News.

Alex Hollings is a writer, dad, and Marine veteran who specializes in foreign policy and defense technology analysis. He holds a master’s degree in Communications from Southern New Hampshire University, as well as a bachelor’s degree in Corporate and Organizational Communications from Framingham State University.

Image: DVIDS.

Vice Admiral William Joseph Houston is a thoughtful and experienced United States naval officer, entrusted with command of perhaps the most potent US capability: its submarine fleet.

Houston is also steeped in the history of the US submarine service, and the outsized role it played in defeating Japan in World War II. Following the attack on Pearl Harbor, the only viable weapon immediately available was the US submarine force. In fact, USS Gudgeon commenced the US fleet’s first offensive patrol just four days after the attack of 7 December 1941.

By the time the war had ended, US submarines had sunk more than 30% of Japan’s navy (including eight aircraft carriers) and more than 60% of Japan’s merchant marine fleet.

Not surprising, then, that Houston is fond of describing his submarines as ‘apex predators’ that fear ‘nothing above the sea, nothing on the sea, and nothing under the sea’.

Which is why Australia wants the best possible submarines, too. Nuclear-propelled boats would give Australia the same ‘stealthy, full-spectrum expeditionary platform’ that the US Navy has—minus the nuclear weapons, of course.

But Houston has a problem on his hands: while the number and size of submarines planned for the US Navy continues to grow, the size of the workforce needed to build those submarines has shrunk in real terms.

Events of the past week have highlighted the risk that, regardless of the strongly stated political and military support for AUKUS, members of Congress could begin to take a more ambivalent view if it comes at the expense of US operational readiness.

The leak of a letter that the chairman of the Senate armed services committee, Jack Reed, and then-ranking Republican member James Inhofe wrote to President Joe Biden showed that the senators held concerns that the AUKUS plan to sell or transfer Virginia-class submarines to Australia would undermine the US Navy’s own requirements.

The letter highlights the risk of key US policymakers concluding that nuclear-powered submarines for Australia are a great idea, just not right now. Not while the US is simultaneously planning for war with China.

At the heart of the problem is this simple fact: according to current projections, the US needs to turn out two submarines a year, but only around 1.3 per year are coming out of its shipyards.

The deficit in shipyard capacity is a problem that affects maintenance and refits as well as new boat construction. Last year, Rear Admiral Doug Perry, director of undersea warfare requirements in the US Navy, admitted that of America’s 50 attack submarines, ‘18 were either in maintenance or waiting to go in maintenance’. That figure should be closer to 10.

In the words of senators Reed and Inhofe, ‘what was initially touted as a ‘do no harm’ opportunity to support Australia and the United Kingdom and build long-term competitive advantages for the US and its Pacific allies, may be turning into a zero-sum game for scarce, highly advanced US SSNs’.

Reed and Inhofe will have been briefed in detail by US officials, and presumably those classified briefings led them to conclude that the projected additional demand from the AUKUS program would come at the expense of America’s own military preparedness.

The senators added that they ‘recognise the strategic value of having one of our closest allies operating a world-class navy’. Indeed, Reed subsequently tweeted that he is ‘proud to support AUKUS’, noting that America’s advantage over China is ‘our network of partners and allies’.

Or as one senior US government official privately stated: ‘China hates AUKUS, which means we should love AUKUS—and I love AUKUS!’

Further support arrived in the form of an open bipartisan letter to Biden from nine members of Congress calling for expanding the industrial base, and noting that ‘far from a zero-sum game’, AUKUS could be a ‘rising tide that lifts all boats’.

However, the back-and-forth shows that wider congressional commitment could be put under strain if the program comes to be seen as improving Australian capability while stretching the US to breaking point.

Ultimately, the success of the AUKUS submarines program will be determined not by expressions of political support, but by the ability of an integrated defence industrial base in the US and Australia.

It will take some difficult, even unpalatable decisions: more money, certainly, in the form of government support. But likely also a larger, deeper, better-skilled workforce that will need to start being trained almost immediately, and possibly a workforce that poaches talent overseas from countries that themselves face capacity constraints.

All that plus a fundamental rethink of the way governments and the private sector integrate on long-term advanced technology projects. Add to that the need for a concerted effort to overcome institutional and policy barriers such as the labyrinthine US export controls regime, and the way forward will be anything but easy.

The alternative for Washington, however, is a less capable ally in its primary area of strategic competition. At a time when it is widely accepted by governments in Washington, London and Canberra that the US cannot be expected to carry the burdens of strategic deterrence alone, AUKUS is worth the investment.

Mark Watson is director of ASPI Washington, DC. A version of this article was published in the Australian Financial Review.

This article was published by the Australian Strategic Policy Institute.

Image: Shuttstock.

Shortly before the December holidays, Senators Bob Menendez (D-NJ) and Jim Risch (R-NJ), chair and ranking member of the Senate Foreign Relations Committee, delivered a straightforward message to Lebanon’s leaders: make progress or face sanctions.

After making multiple trips to the country last year, including one with congressional staff, it is clear that the United States continues to have a vital leadership role to play in not only helping Lebanon recover from this historic crisis, but also rebuilding its foundation to become a country with transparent and reform-oriented political and financial leadership. There is an overwhelming consensus in the policymaking community, reflected in the senators’ letter and a policy brief authored by twenty leading U.S.-Lebanon policy experts, that there needs to be a new international framework to incentivize better governance in Lebanon. The United States needs to lead such an effort now because Lebanon is on the precipice of failure.

The priority for Lebanon’s elected leaders and political parties is the election of a reform-oriented and corruption-free president committed to addressing the needs of the people. This needs to be followed with the timely formation of an effective government. Lebanon has been without a president since Halloween. The United States needs to use all tools at its disposal, as the Senate letter calls for, to pressure Lebanon’s leaders to elect a president and form a government that can usher in the reforms the country so desperately needs. There is no time to waste.

The suffering of the Lebanese people is a tragic consequence of the corruption of Lebanon’s financial and political elite who benefitted from a Ponzi Scheme that has rendered the country’s currency valueless and triggered a crisis in the banking sector. Meanwhile, Lebanon’s elected leaders have delayed implementing reforms outlined in the International Monetary Fund (IMF) staff-level agreement, which are necessary for unlocking IMF support to rehabilitate the country’s economy. The United States has made it clear that the IMF package is essential for both Lebanon’s socioeconomic recovery and future support from the United States and international community. As a result of this crisis, 80 percent of Lebanon’s population of 6.5 million residents and refugees live below the poverty level. The country’s education and healthcare sectors are being neglected at all levels. The largest university in Lebanon, Lebanese University, doesn’t even have paper to administer exams. As Lebanon drifts into failed state status there is a strong chance the United States will be dragged further into a protracted and increasingly difficult task to protect U.S. interests in the region and counter increasing encroachment from Russia and Iran.

Electricity reform is an area where the United States can show leadership that concretely affects millions of Lebanese. Right now, the Lebanese people are only receiving about one to two hours of electricity per day due to corruption and incompetence in the electricity sector. Without this vital source of power, economic stability will be impossible, and the lives of the Lebanese will deteriorate.

The Levantine Energy Deal, which would see Egyptian gas and Jordanian electricity imported to Lebanon, is a major solution promoted by the United States. Lebanon has an equally important role to play as the Ministry of Energy needs to recruit a politically-neutral Electricity Regulatory Authority (ERA) and propose a sustainable cost recovery program as necessary conditions for World Bank support for the project. This is all the more important because Iran has approached Lebanon with an offer of a “gift” of fuel for Lebanese power plants to avoid the complication of sanctions.

Support for the Lebanese Armed Forces (LAF) continues to be one of the strongest bipartisan pillars of support for the United States in the Middle East. Given the depleting salaries of the soldiers due to the country’s economic crisis, the one-time livelihood support the United States is providing to military families in the LAF and Internal Security Forces (ISF) in Lebanon is crucial and comes hand in hand with encouraging U.S. allies to continue their support. Consistent support for the LAF is essential if Lebanon is to control its own security and protect its territorial integrity against both its own enemies and those of the United States.

The United States has recently shown its indispensable leadership in facilitating the maritime boundary agreement between Lebanon and Israel, thus avoiding the threat of another war. The United States will need to show the same determination in leading the international community, especially its partners in Europe and the Gulf, in pressuring Lebanon’s elected leaders to elect a president who is clean, capable, and willing to institute needed reforms that address Lebanon’s needs. If the United States can prioritize the Lebanon response now, it can avoid further deterioration which will only result in a more-costly price to be paid later.

Edward M. Gabriel is president of the American Task Force on Lebanon, a leadership organization of Americans of Lebanese descent, and former U.S. Ambassador to Morocco.

Image: Shutterstock.

Turkey’s President Recep Tayyip Erdogan has hinted at holding what the Washington Post has described as the “world’s most important election in 2023,” on May 14. This would put the date of the election just over one month earlier than the mandated June 18 deadline. It is also a symbolic date, representative of Turkey’s first free and fair elections in 1950 when the nascent Democrat Party of Adnan Menderes defeated the Republican People’s Party (CHP, the party of Ataturk) in a landslide. Seventy-three years later, the irony could not be louder: Sevket Sureyya Aydemir, a veteran chronicler of the early republic and author of biographies of both Ataturk and his successor, Ismet Inonu, wrote that the Turkish Armed Forces in May 1950 stood ready to uphold the leadership of the CHP, regardless of the electoral outcome. According to Aydemir, it was Inonu who insisted that the CHP’s greatest defeat (at the ballot box) would also be its greatest victory—facilitating, for the first time, the peaceful transfer of power from the founding party of the republic to the popularly elected party chosen by the people.

Erdogan does not appear to be interested in repeating history. The 2023 presidential and parliamentary elections are an occasion where Erdogan and his governing Justice and Development Party (AKP) are seeking to retain power and are not interested in achieving this goal by democratic means. Instead, the elections are under the shadow of a rapidly maturing authoritarian landscape. One of the most likely presidential candidates that stands a decent chance of defeating Erdogan is Istanbul’s mayor, Ekrem Imamoglu. To prevent him from challenging Erdogan, the pro-Erdogan courts have slapped down a political ban on Imamoglu that could very well prevent him from assuming the presidency if he were to run and win. Moreover, the country’s top court—the Constitutional Court—is poised to shut down the second most popular party in the opposition ranks: the pro-Kurdish Peoples’ Democracy Party (HDP). As it stands, the HDP polls between 12-15 percent. Closing it down would mean that its share of votes would be redistributed to the remaining parties and candidates in the race. There are other factors that will likely prevent a free and fair election from taking place: a largely pro-Erdogan mainstream media that actively shuns and delegitimizes all shades of the political opposition landscape.

Added to this punch bowl is a rapidly expanding economic strategy that Erdogan is unleashing day by day to increase his chances of electoral victory. This is Erdogan and the AKP’s soft underbelly: a disastrous economy plagued by unbridled consumer inflation, officially running at 65 percent. The unofficial rate is far higher—and likely closer to reality—at 170 percent. Beginning in 2023, the government has offered up a barrage of spoils intended to please a diverse body of voters: increases to the minimum wage, increases to pensions, lowering of interest rates for borrowers, and widespread availability of credit opportunities for businesses. These are haphazard economic measures that will no doubt saddle the country with further debt, but everything is intended for the short term and to one end: woo enough voters to vote for Erdogan and worry about the consequences later.

However, to achieve the threshold of victory—50 percent of the vote, plus one—Erdogan is hoping for the continuity of one factor that is not directly under his control: the continued incompetence of the opposition parties that joined together as the Nation Alliance.

Spearheaded by the CHP and the Good Party (IP), the opposition alliance of six parties appears intent on handing over victory to Erdogan on a silver platter. Since its inception, the alliance, which was designed to remove Erdogan from power and reinstate the country’s parliamentary governance structure, has held many summits to discuss strategy and select a presidential candidate to challenge Erdogan. This has yet to happen, but circulating rumors suggest that the alliance is under tremendous pressure from the CHP to nominate its chairman, Kemal Kilicdaroglu, as its presidential candidate. This is the worst possible choice. Polls consistently demonstrate that Kilicdaroglu is the least favored individual to defeat Erdogan. A wiser choice would either be Imamoglu or the mayor of Ankara, Mansur Yavas. While Imamoglu faces the prospect of a political ban that could bar him from taking office, Yavas is bedeviled by his lack of appeal to Kurdish voters owing to his political roots as a Turkish nationalist. (In contrast, it is likely that Imamoglu can deliver the Kurdish vote, judging by the Kurdish support he received for his Istanbul campaign in 2019.) Kurdish voters are a vital part of the rod to victory, as they account for 12-15 percent of the total vote share. Added to this is the most important point which the opposition is decidedly overlooking: Imamoglu is the only person who has defied Erdogan at the ballot box; he won the Istanbul mayoral race twice in 2019, despite Erdogan’s efforts to nullify his victory.

So why does the alliance not nominate Imamoglu? There are two possible explanations. Frustratingly, the Nation Alliance is second-guessing itself. The opposition fears that if it nominates Imamoglu, and he runs to claim victory, he will ultimately be barred from taking office due to legal bans. A political ban is exactly the same problem Erdogan faced when the AKP won the general election in November 2002. Erdogan had to wait until March 2003 before he could assume the office of prime minister. The second and perhaps more worrying reason is ego. Kilicdaroglu, either by himself or the political groupies he is coddled by within the CHP, thinks he deserves to be the nominee. This is despite the fact that he has not scored one electoral victory against Erdogan since becoming chairman of the CHP in 2010. Meral Aksener, who leads the IP, is opposed to Kilicdaroglu’s candidacy, but it remains to be seen whether she can sway his mind.

This election, as far as the opposition alliance is concerned, is supposed to be about doing what it takes to vote Erdogan out of power, restore the rule of law, re-anchor Turkey as a parliamentary democracy, and distance it from the shadow of one-man rule that Erdogan has imposed. If the opposition is interested in seeing this become a reality, it would do well to nominate Imamoglu as the alliance’s candidate. Let Erdogan do his very worst! If Imamoglu is nominated, Erdogan will likely pull out all the stops to prevent his victory. In the likely event that Imamoglu wins the presidency, Erdogan will be tempted to rely on illegitimate bans to prevent him from taking office. But Erdogan knows he cannot count on that. Public pressure from an Imamoglu victory would likely be so great that that insistence on upholding his political ban in the courts is likely to falter. It is way past time for Turkey’s opposition to make the right choice. Imamoglu represents the best chance for a democratic Turkey.

Sinan Ciddi is a non-resident senior fellow at the Foundation for Defense of Democracies (FDD), where he contributes to FDD’s Turkey Program and Center on Military and Political Power (CMPP). He is also an Associate Professor of Security Studies at the Command and Staff College-Marine Corps University and Georgetown University’s School of Foreign Service. He tweets @sinanciddi.

Image: Lumiereist / Shutterstock.com

Victory for Ukraine, democracy for Russia.

How to fix the country’s broken system.

Secretary of State Antony Blinken will visit China in early February for a trip that was agreed upon during President Joe Biden’s meeting with Chinese president Xi Jinping in Bali, Indonesia, on November 14. Blinken’s visit ostensibly aims to follow up on the understandings reportedly reached in Bali, especially the agreement—as characterized by the official White House readout of the summit—to “maintain communication and deepen constructive efforts” on a range of bilateral and global issues. The two leaders pledged to pursue such efforts through a “joint working group” and also “discussed the importance of developing principles that would advance these goals” and allow Washington and Beijing to “manage the [US-China] competition responsibly.” According to the Chinese readout of the Bali meeting, the two sides would “take concrete actions to put U.S.-China relations back on the track of steady development.”

In the two months since Bali, however, there has been little evidence of “concrete actions” or “constructive efforts” in that direction, involving either a joint working group or progress in the development of principles to guide the bilateral relationship. Yes, there have been additional high-level bilateral meetings: Secretary of Defense Lloyd Austin met with his Chinese counterpart in Cambodia shortly after the Bali summit; Assistant Secretary of State Dan Kritenbrink and White House Senior China Director Laura Rosenberger traveled to Beijing in December to discuss Blinken’s upcoming visit; and Secretary of the Treasury Janet Yellen met Chinese vice premier Liu He in Zurich on January 18. But it remains unclear what if any substantive progress was made in those meetings: the U.S. readouts suggest that they largely consisted of exchanges of predictable talking points, and that American officials largely reiterated the need to “responsibly manage competition” and “maintain open lines of communication”—a minimalist phrase that has become Washington’s standard characterization of the current purpose of U.S.-China engagement.

In the meantime, Beijing and Washington appear to have essentially returned to the pre-Bali trajectory of mutual distrust and recrimination. Both sides continue to pursue policies that appear aimed more at competition and confrontation than at pursuing avenues for cooperation. This appears to have been clear even at Bali, when Biden (again, according to the White House summary of the meeting) emphasized that “the US will continue to compete vigorously with the PRC, including by investing in sources of strength at home and aligning efforts with allies and partners around the world.” Kritenbrink and Rosenberger reiterated this core message in Beijing before moving to “explore potential avenues for cooperation where [US and Chinese] interests do intersect.” More recently, White House Indo-Pacific Policy Coordinator Kurt Campbell reiterated publicly on January 12 that “the dominant feature of US-China relations will continue to be competition.”

Beijing has its own reasons for adopting a confrontational posture, including its growing belief—reinforced by recent evidence—that the United States is essentially undertaking an economic and science and technology (S&T) containment strategy toward China, while diluting its “one China” commitment regarding Taiwan. In response, Beijing is clearly pursuing a broad strategy of maximizing its global wealth, power, and influence relative to the United States, while affirming its will to fight over Taiwan. Chinese leaders are probably also hunkering down because they face domestic uncertainty and vulnerability in the wake of Beijing’s recent reversal of its “zero-Covid” strategy.

There are also multiple reasons for Washington’s own foot-dragging on substantive and constructive engagement with Beijing. The Biden administration certainly has been reluctant to assume the domestic political risks of appearing accommodative to an assertive authoritarian China, given the delicate balance of power in Washington. In the prevailing environment, anything that looks like (or is called) “engagement” is easily characterized and denounced as appeasement.

One recurring assertion in Washington is that the United States has on several occasions sought substantive dialogue with Beijing on key issues but has been stymied because Chinese officials have been unwilling or unprepared to meaningfully engage. It is more likely, however, that Beijing has not been willing to engage on Washington’s terms. Indeed, this was apparent during the Biden administration’s first high-level exchange with Chinese officials in Anchorage, Alaska, in March 2021, when Beijing’s then top diplomat told his American counterpart that “the United States does not have the qualification to say that it wants to speak to China from a position of strength.” Another senior Chinese diplomat, later addressing Washington’s call for “guardrails” for the U.S.-China relationship, said any such guardrails “should not be unilaterally set by the United States as a behavior boundary for China.”

There is an obvious symmetry here in Washington’s unwillingness to engage with Beijing on China’s terms. This was one of the reasons the Obama administration a decade ago ultimately dismissed a Chinese proposal for a “new model of great power relations”—because it was perceived as an attempt by Beijing to dictate the framework and terms for the relationship. In effect, both sides appear to believe that they have sufficient—if not decisive—leverage with which to resist making concessions to the other side or deferring to its preferences and priorities for the bilateral agenda. This is why Washington’s claim that Beijing is not seriously interested in negotiating on key bilateral issues is almost certainly mirrored by a Chinese perception that Washington itself is not genuinely interested in substantive talks. It appears that both sides would rather blame the other for obstructing—or trying to dictate—the agenda than acknowledge the limits on their leverage and the need to make some accommodations.

In the runup to Blinken’s visit next month, this equation has been reinforced by the apparent perception in Washington that the U.S. side may now have enhanced leverage over Beijing because Chinese leaders are simultaneously grappling with domestic problems (after the Covid policy reversal) and undertaking a diplomatic “charm offensive” to improve China’s global image in the wake of its earlier “overreach.” It is convenient for the Biden administration to calculate that this gives Washington the upper hand. But it invites the risk of mistaking a genuine Chinese desire to engage substantively on key issues—which, as noted above, U.S. officials are already inclined to dismiss as disingenuous—for a Chinese sense of vulnerability that allows Washington to respond minimally and/or try to extract unilateral concessions from Beijing. This is not hard to imagine, given that Washington itself probably assumes that any genuine U.S. eagerness to substantively engage with Beijing would be interpreted by Chinese leaders as a sign of American weakness and an opportunity to exploit.

Indeed, Beijing has expressed what almost certainly is a genuine—and greater—interest in constructive engagement. The Chinese readout of the Xi-Biden meeting in Bali was more extensive and detailed than the U.S. version on the need for sustained dialogue and on the range of bilateral and global issues that should be addressed through “strategic communication” and “regular consultations.” Moreover, Beijing has repeatedly criticized Washington’s characterization of the relationship as primarily competitive, emphasizing instead that bilateral cooperation should be elevated and maximized.

These themes have been echoed by Chinese foreign minister Qin Gang, who will be Blinken’s primary host in Beijing and who was just appointed on December 30 after eighteen months as the Chinese ambassador to the United States. On the occasion of his departure from Washington, Qin published two articles for the American audience, one in The National Interest and one in the Washington Post. In addition to invoking Xi’s messages in Bali, Qin wrote that the United States and China “should and can listen to each other, narrow our gap in perceptions of the world, and explore a way to get along based on mutual respect, peaceful coexistence, and win-win cooperation.” He reminisced about his frequent travels across the United States during his tenure as ambassador, and highlighted his extensive interactions with officials, scholars, businesspeople, and journalists: “Though we did not always see eye to eye, I appreciated their readiness to listen to the Chinese perspective.”

Predictably, Qin’s farewell articles were largely dismissed in Washington as typically lame and/or disingenuous Chinese efforts at public diplomacy. Indeed, they featured standard Chinese talking points on issues like Taiwan and Ukraine; well-worn propaganda about such things as Beijing’s pursuit of a global “community with a shared future for mankind”; and the recurring claim that responsibility for improving the U.S.-China relationship rests primarily with the U.S. side: “The Chinese people are looking to the American people to make the right choice.”

Qin reportedly received little high-level attention from the Biden administration during his tenure in Washington, partly because he was perceived as little more than a mouthpiece for such Chinese rhetoric, or as one of Beijing’s arrogant and obnoxious “wolf warrior” diplomats. The announcement of his appointment as foreign minister thus generated much commentary about whether this had been a miscalculation on Washington’s part. Some observers have dismissed the idea of a lost opportunity with Qin on the grounds that Beijing’s ambassadors and even its foreign minister are not really key players in the formulation of Chinese foreign policy. But this retroactive excuse appears only to reinforce the perception—in China and elsewhere—that Washington is unwilling to engage substantively with Beijing.

For his part, Qin never complained—at least publicly—about his treatment in Washington, and upon his departure even expressed appreciation for “several candid, in-depth and constructive meetings with [Blinken] during my tenure” as ambassador. Moreover, the Chinese Foreign Ministry spokesman has publicly welcomed Blinken’s upcoming trip, expressing the hope “that the United States can work with China to fully deliver on the important common understandings reached between the two heads of state, and bring China-US relations back to the track of sound and steady growth.”

But the obstacles to crossing that threshold are still evident in the way the two sides are framing their expectations. The Foreign Ministry spokesman added that Beijing “hopes that the United States will adopt a correct perception about China, stick to dialogue rather than confrontation, and pursue win-win results rather than a zero-sum game.” Blinken, for his part, reverted in his farewell conversation with Qin to invoking the modest goal of “maintaining open lines of communication.” And Campbell, in his public remarks on January 12, reiterated Washington’s focus on “building a floor” under the U.S.-China relationship and “guardrails” to prevent it from going off track.

This language from both sides suggests low expectations and limited potential for substantive forward progress in U.S.-China relations, at least in the near term. For now, it appears that meaningful reciprocal engagement, mutual development of “principles” to frame the relationship, and the possibility of setting sights higher than the floor will be slow in coming. With this backdrop, Blinken’s visit to Beijing will provide some indicators of how much the Bali meeting actually accomplished.

Paul Heer is a Non-Resident Senior Fellow at the Chicago Council on Global Affairs. He served as National Intelligence Officer for East Asia from 2007 to 2015. He is the author of Mr. X and the Pacific: George F. Kennan and American Policy in East Asia (Cornell University Press, 2018).

Image: 360b / Shutterstock.com

On December 21, China officially opened its first consulate general in Bandar Abbas, Iran’s most important southern sea transportation hub. The Chinese Communist Party (CCP) and Iran both praised the move as a step towards further cementing bilateral ties. The Chinese ambassador to Iran hailed the move as a landmark moment in China-Iran relations, while Iran’s former ambassador to China said that he anticipated Beijing to play a leading role in developing Iran’s southern coastal regions.

Why Does the Consulate Matter?

To better understand the importance of this development, one must grasp the bigger picture, starting with the signing of a semi-secretive twenty-five-year strategic cooperation document.

This consulate opening comes after the signing of an agreement known as the “Comprehensive Strategic Partnership between Iran and China” in March 2021, following an initial agreement during Chinese president Xi Jinping’s visit to Tehran in January 2016.

Though the details of this document have not been made public, according to some reports, the agreement includes special concessions given to China by Iran, including selling Iranian oil, gas, and petrochemical products at a guaranteed discounted price; the leasing of certain Iranian islands to China; and approving the establishment of a Chinese military base to secure Beijing’s facilities in Iran’s restive southern provinces.

To some Iran experts, with the signing of the twenty-five-year deal, Tehran has become a de facto Chinese colony and is even vulnerable to a demographic change and a massive influx of Chinese nationals. Other pundits contend that China’s endgame is to build an espionage hub in Iran under the agreement.

Could China’s Military Suppress the Uprising in Iran?

While both counties are determined to expand bilateral ties, the Iranian government faces an unprecedented domestic challenge as the nationwide protests enter their fourth month. The clerical regime has failed to subdue its youth, who seek structural transformation—i.e., regime change—and Tehran may need to ask for external support to quell opposition.

There is a precedent for seeking help from foreign fighters and non-Iranian militia groups. Indeed, Shia citizens from Iraq, Afghanistan, Pakistan, and Yemen have been turned into groupings formed by Iran's Islamic Revolutionary Guard Corps.

Consider the following examples. In early November 2022, it was reported that Iraqi Hashd al-Shaabi and Kata’ib Hezbollah forces arrived in Iran, probably to help suppress protesters. In March 2019, a senior Iranian official stated that Tehran could use Shia militias from other parts of the Middle East to crack down on popular uprisings in Iran. Amid the protests during the 2009 presidential Iranian election, also known as the Green Movement, Tehran reportedly brought foreign agents to persecute Iranian protesters.

Nevertheless, the People’s Liberation Army (PLA) of China is a much harder sell. Iran is aware that deploying the non-Muslim, officially atheist PLA in the streets of Iran could backfire spectacularly. China, too, is quite reluctant to deploy its security forces abroad, let alone in the never-ending conflicts in the Middle East. Yet, as the world’s leading executioners and human rights violators, Iran and China can share their expertise, and the CCP may assist the clerical establishment in Iran by providing it with anti-riot equipment and know-how on detecting and tracking Iranian protesters. 

What Brings Communist China and Islamist Iran Together?

Despite initial appearances, both the clerical regime in Iran and the Chinese Communist Party have values that bind them together.

The regimes in Iran and China loathe human rights and see Western democracy as a non-indigenous, invading, and harmful foreign concept. The Chinese development model promises countries like Iran and Arab Gulf states prosperity and economic progress, devoid of headaches such as political opening and human rights. This is why the CCP’s friends and foes alike are inclined to imitate the Chinese governance model in the Middle East and some other parts of the developing world. If anything, Iran’s “Look to the East” foreign policy orientation and Saudi Arabia’s recent “Pivot to Asia” approach show that China’s rise to prominence has made its alternative, authoritarian development model more fashionable among other developing countries, especially as democracy is in decline globally.

Both the Iranian regime and the CCP despise Uncle Sam. Iran and China, along with Russia, seek to weaken what is known as the “U.S.-led rules-based world order” under the disguise of advocating for a multipolar world. The China-led multipolar world promises such revisionist countries like Iran an opportunity to play a larger role by diminishing America’s sole superpower status.

Both Tehran and Beijing have pursued a policy of demographic reengineering. By replacing Turkic Uighur Muslims with Han Chinese settlers, the CCP plans to gain further political control over the whole Xinjiang region and create a population that is sympathetic to Beijing. Using the same playbook, the clerical regime in Iran seeks to subdue non-Persian ethnic groups by turning them into minorities in their own ethnic heartland via demographic reengineering. In a leaked letter, former Iranian vice president Sayed Mohammad-Ali Abtahi suggests the forced migration of indigenous Ahwazi Arabs out of Ahwaz (Khuzestan) province and their replacement with non-indigenous but loyal settlers, particularly ethnic Persians.

Is the Consulate a Security Threat to America?

Since 2012, when Xi consolidated control over the party, the CCP has become increasingly assertive in its global military and geopolitical dominance. Not surprisingly, Xi has changed the CCP’s traditional foreign policy approach, ending “peaceful ascendance” and seeking superpower status and the eventual replacement of America. “Wolf warrior” diplomacy and the recent reassignment of the combative Zhao Lijian as China’s chief diplomat, the Belt and Road Initiative (BRI), debt trap diplomacy, and accelerating plans to take over Taiwan are some of the changes in China’s foreign policy approach that either began or gained momentum under Xi’s reign.

In tandem with its efforts to rapidly achieve global primacy, the CCP established its first overseas military base in Djibouti in 2017, deployed its first flotilla to the Gulf, and reached strategic partnerships with Algeria, Egypt, the United Arab Emirates, and Iran. Xi’s China has, for the first time, also staged multiple naval drills with Russia and Iran. Now, China is reportedly planning to open a military base on the northern shores of the Gulf. While the southern coast of the Arabian Gulf is a U.S.-friendly neighborhood, the northern part (Iran) is a hotbed of anti-Americanism and geopolitical revisionism.

A strong Chinese diplomatic, economic, security, and military presence in the northern part of this crucial waterway is not a welcome development for the United States for a variety of reasons:

The fight for global primacy is intensifying

China’s traditional foreign policy—known as the “peaceful rise” to great power status—was replaced by a more assertive one under Xi Jinping. Despite its COVID-19 hiccup, Xi’s China continues to not-so-peacefully rise to become a global economic and military powerhouse, and its ascent to global prominence poses a security challenge to America’s supremacy amid the intensified New Cold War between the two superpowers. Skeptics don’t rule out a scenario where China’s security goals change, prompting it to engage in systemic conflict with the United States across the world. In that case, the energy-rich Gulf region is going to be a key U.S.-CCP battlefield in the war for global supremacy. The opening of a Chinese consulate in the northern part of the Arabian Gulf can be interpreted as a step in that direction.

Great power competition and dominating two strategic straits

If China decides to engage in systemic conflict with the United States, dominating transportation hubs, strategic canals, waterways, and straits would be key. Strangulating America in the strategic straits of Hormuz and Bab al-Mandab would become essential and is one of China’s long-term objectives in its competition with the United States. America may have a sizable military presence in the Arabian Gulf region that secures the Strait of Hormuz for now, but as a counterbalancing act, Iran can help China establish its security, intelligence, and military foothold in the Gulf.

As for the Bab al-Mandab Strait, home to one of the world’s busiest shipping lanes, China already has a military base near the southern part of the strait in Djibouti, and its expansion to the northern part of this strategic waterway would bolster Beijing’s geopolitical posture. Iran’s proxy force, the Houthi militias, who are the de facto rulers of Yemen, can help China expand its influence on the northern part of the strait. The new consulate in southern Iran will facilitate China’s efforts to achieve this goal.

The China-Iran-Russia Triangle

Iran, Russia, and China are increasingly united on the cause of anti-Americanism. They have formed an unofficial “Triangle Alliance” in Asia that, according to the Iranian parliament’s National Security and Foreign Policy Committee spokesman, heralds the “end of the inequitable hegemony of the United States and the West.”

The military aspect of this triangle alliance stands out. Iran, China, and Russia have held at least three joint naval exercises in recent years. Since Russia’s invasion of Ukraine, military cooperation between Tehran and Moscow has been growing on such a scale that, according to U.S. national security council spokesman John Kirby, Iran has become Russia's top military backer.

In addition, China’s AI and other military technology capabilities are rapidly developing. Beijing provides Iran with UAVs, whereas Iran sells its Shahed-136 kamikaze drones to Russia. These game-changing weapons are radically altering the military landscape in Ukraine. Conversely, Russia is set to supply Iran with dozens of its Sukhoi Su-35 fighter jets, giving Iran much-needed air superiority capabilities.

China’s Bandar Abbas consulate would undoubtedly serve as a conduit to consolidate this new triangle alliance.

Coordinating the Belt and Road Initiative

The success of the BRI gives the Xi administration a strategic tool in great power competition. China intends to improve Iran’s transportation infrastructure by building roads, bridges, ports, factories, and industrial towns, in accordance with the twenty-five-year strategic agreement. When completed, these infrastructural projects in Iran’s southern free trade zones in Jask and Chabahar would be integrated into China’s trillion-dollar BRI to export its goods to the Middle Eastern, Central Asian, and European markets. Needless to say, opening a consulate at Iran’s transportation hub would expedite this integration.

The Reconquista of Taiwan.

If the forceful unification of Ukraine is inevitable for Russian president Vladimir Putin’s realization of his imperial Novorossiya (New Russia) project, for Xi, the reunification with Taiwan is necessary to fulfill the “One China” objective.

As the world’s largest energy importer, China seeks to ensure an uninterrupted flow of hydrocarbon resources from Iran, Saudi Arabia, and other Gulf states. By signing comprehensive economic and security agreements with Iran and Saudi Arabia, the Gulf’s major players, the CCP has taken steps to ensure a smooth flow of oil in the event that the West punishes it for attacking Taiwan.

The opening of a CCP consulate in Iran can serve, among other things, as a platform to ease the energy and economic consequences of this strategic decision.

Ahmad Hashemi is an independent foreign policy analyst with a focus on Iran, and Middle East affairs. Follow him on Twitter @MrAhmadHashemi.

Image: Shutterstock.

Semiconductors are at the center of the new cold war. President Joe Biden’s signing of the CHIPS and Science Act in August 2022, followed by the U.S. Department of Commerce’s announcement in October of complementary export controls, made clear U.S. concerns about China.

More broadly, high-tech competition is a driver of foreign policy for the United States, and its national security is dependent on maintaining a technological advantage over its adversaries. The Biden administration has assessed the risk China poses to that technological advantage and drawn a line in the sand. This high-stakes reality has informed Washington’s preparedness to not only deny China access to advanced chips but also limit access to the machinery and expertise required to make them.

This is not the first time America’s leadership in high tech and the semiconductor industry has come under threat. Throughout the 1980s, Japan’s rise in efficient and low-cost production of dynamic random-access memory (DRAM) chips forced Silicon Valley companies, such as Intel, to pivot to the production of microprocessors for PCs in order to stay competitive. At the time, research and development (R&D) grants for leading manufacturers and universities from the Defense Advanced Research Projects Agency (DARPA), and deft trade diplomacy by Washington in the form of coordination with new partners such as South Korea, helped the United States maintain leadership in semiconductor design and prevent Japan’s low-cost chips from undercutting the U.S. market. Collaboration across supply chains with partners sharing mutual interests enabled U.S. market dominance and national security. Preserving these wins remains vital in today’s strategic competition with China.

Australia—like South Korea in the past—can help fill the gap in the U.S. semiconductor supply chain. Looking outward to collaborative opportunities with partners, particularly trusted allies such as Australia, will be key in ensuring the United States maintains its tech advantage and, in turn, its national security. For Washington, Australia represents an opportunity to develop a secure semiconductor supply chain that supports U.S. sovereign industry and export policies. Australia is not yet entrenched in the global semiconductor ecosystem and therefore can support alliance interests without having to weigh “trade” against “geopolitics,” which is a major concern for existing semiconductor manufacturers such as South Korea’s Samsung and Taiwan’s TSMC. Both companies rely on semiconductor supply relationships with China.

In the context of China developing technology capabilities in artificial intelligence (AI) and Quantum powered by advanced semiconductors, Australia and the United States should be seeking to collaborate on how the alliance network can be leveraged to both slow China's access to these advanced chips and ensure mutual semiconductor security.

Australia along with the rest of the world is closely watching how the United States engages with its global partners. U.S. commerce secretary Gina Raimondo recently stated that the United States is “working very closely” with like-minded countries and is confident that countries such as the Netherlands and South Korea will “work in concert” with the United States due to mutual national security interests. Some linchpins in the global semiconductor supply chain, such as Dutch company ASML Holding—a global leader in lithography—already appear poised to align with U.S. policies.

The Japan-U.S. R&D collaboration announced in early January is indicative that other major semiconductor players are recognizing mutual security that is gained through friend-shoring semiconductor supply chains. Significantly, it is occurring through public-private partnership, with U.S. company IBM and Rapidus, a new Japanese government-backed company, partnering to develop next-generation chips.

This development signals that Washington is prepared to engage and back cross-sector collaboration with aligned partners and is a trend on which Canberra should seek to capitalize. The advanced capability sharing under pillar two of the AUKUS agreement is further indicative of the existing recognition of the benefits of streamlining technology sharing between trusted partners. AUKUS pillar two is dependent on public-private sector collaboration, which has also been identified as necessary for Australia to grow its semiconductor industry, as outlined in the 2022 Australian Strategic Policy Institute’s (ASPI) “Australia’s semiconductor national moonshot” report. Semiconductor production should therefore be integrated into AUKUS discussions as partners work to address the challenges of developing a shared defense industrial base and adjusting barriers, such as International Traffic in Arms Regulations, to achieve the agreement's goals. The advanced technologies identified as critical under AUKUS are all dependent on semiconductors and therefore should explicitly consider how this enabling technology can be secured to begin with.

For Australia, the urgency driving U.S. export polices and diplomatic coordination with allies incentivizes complementary development of a sovereign industry capability. Australian governments have recognized the security benefits of developing a sovereign semiconductor capability in recent years. The publication of a 2020 report commissioned by the office of the New South Wales government chief scientist and engineer on the capabilities, opportunities, and challenges in Australia’s semiconductor industry, provided a signal as to what the development of the industry could look like.

Australia’s nascent semiconductor industry offers an alternative capacity to secure “trailing edge” technologies and compound chips, as opposed to advanced silicon chips that the United States specializes in. “Trailing edge” technologies refer to less advanced chips that are larger and slower, but crucial in legacy systems such as household appliances to existing weapons systems. This differs from the advanced semiconductors used in cloud computing and AI systems that the U.S. export controls primarily concern.

Compound semiconductor production is also a ripe opportunity for Australia given the limited U.S. production of these chips. Compound chips are a strategic investment due to their utility in supporting wireless communication technology, and renewable technology such as solar panels. The existing expertise and base-level production capacity within Australia by companies such as Morse Micro enhance the practical focus on this aspect of semiconductor production.

The start-up investment required is significant. ASPI’s moonshot report estimated that $1.5 billion is needed to stimulate $5 billion in compound semiconductor foundry manufacturing activity. In the long term, such an investment would help ensure Australian security in a critical industry and assuage any concerns about Australia’s technical capability to support the U.S.-Australia alliance in this critically important field.

Harnessing diplomatic and trade relationships built on existing security alliances and decades of trust offers an attractive and comparatively reliable policy avenue for addressing the unknown risks associated with the global scramble for semiconductor security.

Bronte Munro is an Analyst at the Australian Strategic Policy Institute in Washington, DC, with a focus on critical technology and cyber. 

Image: Shutterstock.

The United States can help Taiwan defeat a Chinese invasion, but doing so will rely heavily on American airpower and come at a significant cost.

While largely classified Pentagon war games have previously suggested China would succeed in such an attack, a recent series of war games carried out by the Center for Strategic and International Studies (CSIS) think-tank indicates that previous Defense Department war games were likely aimed at identifying weaknesses within Taiwan’s and America’s defensive postures, rather than providing a clear and realistic view of how such a conflict would play out.

But despite the seemingly optimistic outcomes of CSIS’s war games, one thing remained clear throughout every iteration: American intervention on behalf of Taiwan would lead to staggering losses of life and military hardware unlike anything seen by American forces since the Second World War.

And as is so often the case when it comes to Uncle Sam’s combat operations, victory for Taiwan is heavily dependent on the effective use of the full breadth of American airpower — though surprisingly, it’s not the F-22 or F-35 that could make the biggest difference. Instead, it’s America’s bomber force that could win the day.

Related: Are we too quick to draw parallels between Ukraine and Taiwan?

CSIS played out China’s invasion of Taiwan 24 times, and heavy losses were a constant through all of them

  (U.S. Army photo by Thomas Mort)

In a 165-page report released by CSIS, entitled The First Battle of the Next War: Wargaming a Chinese Invasion of Taiwan the think-tank outlined the outcomes of 24 wargame scenarios in which China launches a full-scale invasion in 2026. Leveraging the full breadth of unclassified information about each country’s respective military capabilities, stockpiles, and doctrine, the project team played each scenario through the end of the heaviest fighting, and the results were largely positive for those in the West… though positive is a subjective term.

In the one interval played out without any American or allied intervention, Taiwan fell to Chinese forces somewhat rapidly, offering a baseline for the value of Western intervention in maintaining the country’s sovereignty.

In the handful of scenarios played through with the most optimistic of circumstances, the U.S. and Taiwan secured rapid victories, but with an average of 200 American combat aircraft and eight warships lost, in addition to similar Japanese losses.

In the most realistic “base” scenarios, China was rapidly defeated or fought to a stalemate that would likely ultimately result in Taiwan’s victory, but the average losses for American forces in these iterations included some 270 combat aircraft and 17 warships of varying sorts.

The vast majority of iterations played through were considered “pessimistic scenarios,” in that they included variables meant to hinder American capabilities in ways that potentially could play out in a real conflict.

 

Even in the pessimistic scenarios, Chinese forces failed to secure a single dominant victory. In three iterations, Taiwan and the U.S. emerged victorious. In seven more, the forces fought to a stalemate that favored Taiwan’s eventual victory. In two others, they fought to a stalemate that favored neither side, and finally, in just three of these pessimistic scenarios, China was able to secure a stalemate that appeared to favor its eventual success.

However, despite that promising list of outcomes, losses for the United States were severe, with a combined average of 484 American combat aircraft lost and 14 U.S. warships destroyed. Once again, Japan also suffered similar losses.

These losses, of course, were relatively small compared to China’s, but because America’s losses usually included two aircraft carriers and many 5th-generation fighters, the personnel and material losses for the United States would be immense and would require years, if not decades, to recover from.

Related: Taiwan Strait Crises: How history is repeating itself in the Pacific

RAGNAROK: For China to take Taiwan, it must negate US AirPower

 

(U.S. Navy photo by Mass Communication Specialist 3rd Class Keenan Daniels/Released)

After Chinese forces failed to secure a single outright victory in any of the optimistic, baseline, or pessimistic scenarios that included American intervention, the project team established one more set of circumstances meant specifically to identify what it would take for China to succeed. This iteration was dubbed, “Ragnarok” — which is the final battle of the gods and the forces of evil in Norse mythology. Based on their findings, the success of the Chinese invasion is predicated specifically on beating America at what America does best.

“To be victorious, China must negate U.S. airpower, both fighter attack and bombers.”

“The First Battle of the Next War: Wargaming a Chinese Invasion of Taiwan,” Center for Strategic and International Studies (CSIS), January, 2023

Doing so would require a few specific events to play out as needed to benefit the Chinese invasion force, but they’re not entirely unrealistic. First, Japan would need to bar the United States from flying combat operations from their soil, limiting American airfields to Guam where China could concentrate air and missile strikes, wiping out hundreds of aircraft while still on the ground.

This could leave American bombers without viable fighter escorts, opening the door for Chinese fighters to engage them with long-range air-to-air missiles, and limiting their ability to deploy long-range anti-ship cruise missiles toward China’s invasion fleet.

Related: What does the invasion of Ukraine mean for China and Taiwan?

Why are these outcomes so different from previously discussed DoD wargames?

(U.S. Army Military Review)

In 2020, anonymous sources within the Defense Department leaked the results of a series of Pentagon war games in which China repeatedly defeated American forces in the Pacific by 2030. These results were widely publicized and discussed, but like many discussions about military exercises and war games, they often lacked essential context about the nature of such efforts.

It is true that Pentagon war games are conducted behind closed doors to leverage the full breadth of classified intelligence available, which might seem to suggest that these games should be taken more seriously than efforts like this more recent CSIS series, which was based on open-source data. But it’s important to understand the nature and intent of Pentagon war games, and where they differ from objective analysis.

As we’ve discussed in previous coverage around debates surrounding notional training dogfights with high profile platforms like the F-22 Raptor, the goal of these sorts of efforts is not to secure victories and pad a score card, but rather, to specifically place units, leaders, and individual service members in difficult circumstances to assess the very real limitations of current training, equipment, and doctrine. While the goal of each participant is to win, winning isn’t the goal of the enterprise. Learning is.

(DoD photo by Javier Chagoya)

These war games are incredibly important for the leaders, strategists, and planners involved in them, but when it comes to divining what they may mean for real-life conflict from the outside looking in, with only bits and pieces of leaked information to work with, they offer little real value.

This conclusion has now been substantiated by two different war-game revolutions from separate independent think tanks: the aforementioned series from CSIS, and a June 2022 series conducted by the Center for a New American Security (CNAS) that indicated neither side could secure a swift victory without incurring massive losses.

However, this does not mean victory over China would be assured, and it certainly doesn’t mean that the United States could rapidly defeat China in a large-scale conventional war in the Pacific of another sort. Instead, these war games offer an insight into the size of the challenge all parties face in such a conflict, and by better understanding those challenges, we can better predict what different parties may do to overcome them.

These types of exercises aren’t meant to soothe or stoke fears. They’re tools that can be used to understand how a fight might play out, with the ultimate goal of using what’s learned to prevent one from starting in the first place.

Because, at the end of the day, warfare is about far more than comparing numbers on paper. But if we’re lucky, we’ll be able to leave it that.

Alex Hollings is a writer, dad, and Marine veteran who specializes in foreign policy and defense technology analysis. He holds a master’s degree in Communications from Southern New Hampshire University, as well as a bachelor’s degree in Corporate and Organizational Communications from Framingham State University.

This article was first published by Sandboxx News.

Image: Shutterstock.

Much has been written and discussed about the problem of “free riding,” in general, and in foreign policy, in particular. During the Cold War and its aftermath, America’s allies across the Atlantic and the Pacific were being criticized in Washington for relying on the United States to spend its national treasure in terms of higher military expenditures to provide them with global security.

With prime examples being Germany and Japan, it was argued that the allies were provided with little incentive to contribute to the production of an international public good that takes the form of the protection of global interests of the Western alliance as long as the United States seems to be ready to provide that cost-free.

Most of this discussion focused on geostrategic issues. But in the aftermath of the Cold War, it also spilled into geo-economic issues. Why should America continue bankrolling the defense budgets of countries like Japan, surplus economies whose companies compete with American businesses in the global arena?

Paying less for defense, thanks to U.S. subsidies, allows these free riders to spend more on social-economic programs while fiscal tightening forces Americans to cut expenditures on education and health.

Moreover, the United States’ hegemonic position in the Middle East, which has been maintained through huge military and financial costs, allowed America’s allies in Europe and Asia that are dependent on energy imports to have freedom of access to the oil resources in the Persian Gulf.

And then there is the international reality under which the United States is committed to use its nuclear weapons to defend its North Atlantic Treaty Organization (NATO) allies as well as Japan and South Korea if those countries face threat from a rival nuclear power. Hence, the Americans are supposedly ready to see New York and San Francisco being nuked in order to save Berlin and Tokyo from annihilation.

Thus, pressing NATO members to increase their defense budgets and their military and economic contributions to the alliance has become a ritual of sorts in Washington, practiced by Republican and Democratic officials and lawmakers, until President Donald Trump’s behavior made it look faux pas.

At the same time, the growing anti-globalization sentiments in the United States reflected an unwillingness on the part of the Americans to continue to open their markets and to continue supporting the liberal economic order while the allies were breaking free-trade principles. But then that was the way the industrial miracles of Germany and Japan had happened, very much at the expense of American economic interests.

And there is no doubt that the costs of the wars the United States has fought in the Greater Middle East have started challenging the Washington consensus about the U.S. role in the world. America is supposedly ready to come to the aid of its allies as the global balancer of last resort, and thus, for example, ensure their access to the energy resources in the Persian Gulf, while the allies pay very little in exchange, and even try to force the United States into costlier military interventions in the Middle East, as France did in the case of Libya.

But then came events—Russia’s invasion of Ukraine and growing Chinese threats to Taiwan—that according to the conventional wisdom may have finally convinced the U.S. allies that free riding isn’t an option anymore and that they need to start playing a more activist role in the protection of Western interests against the threat of powerful global disruptors. They now have to contribute to the production of that international public good, since alone the United States will not continue to provide it cost-free.

On some level, the conventional wisdom is correct if one considers the German responses to the Russian attack on Ukraine and the Japanese reaction to the perceived threat from China. These developments seemed to have changed the balance of power in Europe and Asia, where America can supposedly now count on its allies to play their roles as its deputies while the United States remains primus inter pares (first among equals), call it American Hegemony Lite.

Indeed, Germany’s post-Ukraine policy changes were dramatic. “We are living through a watershed era. And that means that the world afterwards will no longer be the same as the world before,” Chancellor Olaf Scholz told a special session of the Bundestag in April, proclaiming a Zeitenwende (”historic turning point”), that involved witnessing a total collapse of strategic principles embodied in Ostpolitik (“Eastern Policy”) and its notion of Wandel durch Handel (“change through trade”).

Announcing the most far-reaching policy reversals in postwar German history, Scholz pledged to invest significantly more in the armed forces, to provide military support for the Ukrainian army, to revamp Germany’s energy policy, and lead the efforts for joint European Union (EU) sanctions against Russia’s regime.

Japan, the other nation that was defeated by the United States and its allies in World War II, responded like Germany to the changes in the global balance of power by embracing a more militarist posture.

Under Prime Minister Fumio Kishida, who has asked his parliament to double his government’s defense budget, Japan seems to be trying to move beyond its post-WWII pacifist tradition.

During a visit to Washington, Kishida reaffirmed his country’s commitment to acquire hundreds of American Tomahawk cruise missiles, while the United States announced plans to expand its military assistance to Tokyo, suggesting that both sides will benefit from the relationship. Or so it seems.

In a way, dealing with Trump for four years provided a lesson of sorts for the Japanese, Germans, and other U.S. allies: in the long run, the American public isn’t going to tolerate the kind of relationship under which America does more for its allies than it gets in return. In short, Americans don’t want to be played for suckers anymore in both the geostrategic and geo-economic arenas.

Liberalizing American trade policies while dealing with nations that practiced protectionism made some sense at the beginning of the Cold War. The economies of Japan and Germany were recovering from the WWII devastation and were shielding their domestic industries from foreign competition by taxing imports when Washington wanted to ensure the economic growth of its allies in Europe and Asia.

But those who assumed that Trump’s economic nationalist policies would change under the more internationalist President Joe Biden are discovering now that that approach enjoys bipartisan support.

Biden’s decision not to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which would have required the Americans to reduce tariffs on some Asian imports, and his administration’s enactment of electric-vehicle subsidies that U.S. allies regard as unfair protection of U.S.-made goods are signs that Washington has turned upside-down the Cold-War-era deal with the allies. It was based on the expectations that the United States needed to win the geostrategic commitment of its allies through concessions in the geo-economic area.

If anything, the message coming from Washington these days is that if the allies want to be able to continue to rely on U.S. military leadership, they are the ones who would have to accept the economic conditions set by the Americans: Ending their energy deals with Russia, sanctioning it, and joining the United States in a long and costly economic-technological war with the Chinese.

This approach runs contrary to free-trade principles and reflects the basic tenets of power politics that might make right, despite the attempt by Biden to market these policies as part of a campaign to fight dictators and promote democracy worldwide. In the same way, unlike the Soviet Union, neither Russia nor China is interested in seeing its respective political-economic model win the hearts and minds of the people of this world. Like the United States, they seek access to economic and military power.

Given that perspective, and in consideration of the backdrop of threats that are being posed by Russia and China, the decisions by Germany, Japan, and other countries to increase their defense contributions stem from the recognition that this is the minimum they need to do to have America continue pledging to see Washington destroyed in order to protect Berlin and Tokyo.

That means that even if Germany and Japan do increase their military spending to the stratosphere, they would still remain free riders on American power unless they decide to go nuclear in order to defend themselves because they cannot count on U.S. support anymore.

It can be argued that it’s in America’s interest to prevent Japan, Germany, South Korea, Taiwan, and Saudi Arabia—or for that matter, Ukraine—from developing independent nuclear military power since that would supposedly make the world a more dangerous place. However, this is ironic. We should remember that it has been the United States and Russia that have launched a series of wars in recent decades that have made the world more dangerous. In retrospect, if Saddam Hussein’s Iraq and Ukraine had nuclear weapons, the world would have probably been less dangerous today.

Dr. Leon Hadar, a contributing editor at The National Interest, has taught international relations at American University and was a research fellow with the Cato Institute. A former UN correspondent for the Jerusalem Post, he currently covers Washington for the Business Times of Singapore and is a columnist/blogger with Israel’s Haaretz (Hebrew).

Image: Shutterstock.

2023 could be a watershed year for public policy regarding Big Tech. Since 2020, the Federal Trade Commission (FTC), the Department of Justice (DOJ), and the European Union (EU) have filed lawsuits against major U.S. tech companies, alleging they have relied on anti-competitive methods to maintain monopolies over social media platforms, search engines, advertising, and app stores. “The agencies have started laying the foundations for a more interventionist stance over the last two years, and this year is when we’ll start to see some of those efforts come to fruition—or be stopped in their tracks by the courts,” said Colin Kass, a partner in Proskauer Rose LLP’s antitrust group.

On November 10, the FTC voted to replace its 2015 “Statement of Enforcement Principles Regarding ‘Unfair Methods of Competition’ under Section 5 of the FTC Act” with a new “Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act.” This new policy statement is reflective of FTC chair Lina Khan’s antitrust philosophy and President Joe Biden’s “Executive Order on Promoting Competition in the American Economy.” However, Logan Breed, a partner at Hogan Lovells, has noted that “this policy statement exists in a vacuum. There is no real clarity on what [Section 5] means, and we’re just going to have to wait and see what the FTC decides to do. … And that’s likely going to happen in 2023.”

The new policy statement defines a method of competition as “a conduct undertaken by an actor in the marketplace”—as opposed to merely a condition of the marketplace not of the respondent’s making, such as high concentration or barriers to entry. This conduct must implicate competition directly or indirectly. In addition, the term “unfair” is defined as conduct that “goes beyond competition on the merits,” e.g., a firm having “superior products or services, superior business acumen, truthful marketing and advertising practices, investment in research and development that leads to innovative outputs, or attracting employees through better employment terms.” The new FTC policy statement is explicit that an FTC “inquiry will not focus on the ‘rule of reason’ inquiries more common in cases under the Sherman Act, but instead focus on stopping unfair methods of competition in their incipiency based on their tendency to harm competitive conditions.” Actual harms may not always be necessary to warrant enforcement, and such “incipient threats” now become challengeable.

Furthermore, the recent passage by Congress of the $1.7 trillion omnibus spending bill includes the “State Enforcement Venue Act,” which extends a federal exemption to consolidate antitrust cases pending in different districts before a single court when they concern common questions of fact to state governments involved with multidistrict litigation. The act was prompted partly by Google’s successful move to change the venue of a case brought by Texas and other states that was eventually consolidated with related cases in the Southern District of New York. The bill was originally proposed by, among others, Sen. Mike Lee (R-UT) and had been publicly supported by the National Association of Attorneys General and FTC chair Lina Khan.

Both Khan and Jonathan Kanter, who leads the DOJ’s antitrust division, are willing advocates of novel antitrust legal theories—even if that means sometimes losing a case. Both the FTC and the DOJ are pursuing major Big Tech investigations and have federal judicial rulings expected in 2023. They include:

FTC v. Facebook

The FTC alleges that Meta (formerly Facebook) is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers—to eliminate threats to its monopoly. The FTC originally sued Meta in December 2020. However, the lawsuit was dismissed in 2021 due to a lack of evidence. The FTC refiled its lawsuit following the dismissal and was allowed to proceed in January 2022.

FTC v. Meta/Within

The FTC is attempting to block Meta’s acquisition of virtual reality (VR) company Within. In a lawsuit filed in July 2022, the FTC alleges that unlike building a VR app on its own—an action that would increase competition—Meta’s attempt to purchase another VR developer would dampen “future innovation and competitive rivalry.” The FTC accused Meta of attempting to purchase its way to the top of the VR market rather than competing or building its own product. The FTC anticipates a ruling by the end of January.

FTC v. Microsoft

The FTC sued Microsoft in December 2022 to block its acquisition of video game developer Activision Blizzard, which owns the popular Call of Duty franchise. The FTC alleges that the $69 billion deal, which would be Microsoft’s largest acquisition in the video game industry, “would enable Microsoft to suppress competitors (such as Sony and Nintendo) to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.” In response, Microsoft has stated that its goal is to create a cloud gaming service that allows consumers to stream various games on multiple devices for one reasonable fee. The FTC filed its case in administrative court and has not yet requested a federal court to grant an injunction blocking the acquisition.

U.S. v. Google (Alphabet, Inc.)

The Trump administration’s DOJ sued Google in 2020, alleging that it maintained its “gatekeeper” role as a monopoly for online search services and search advertising through anti-competitive practices, i.e., developing an unlawful web of exclusionary and interlocking business agreements that shut out competitors. The case will go to trial in September 2023. If successful, the DOJ could seek structural changes to Google, including a spinoff of the company’s Chrome browser.

A private antitrust case worth watching is Epic Games v. Apple. In 2020, Epic Games, Inc. alleged that Apple violated antitrust laws through its Apple App Store policies by charging exorbitant commission fees and instituting a requirement to use Apple’s in-app payment method rather than alternative payments on iOS devices. Apple countered that Epic Games had breached its developer agreements and App Store guidelines by introducing a direct pay option on iOS devices in Epic Games’ popular video game Fortnite. While Judge Yvonne Gonzalez Rogers initially ruled that Apple’s conduct was not anti-competitive, Epic Games has since appealed the decision.

Also, on January 5, the FTC unveiled proposed rules prohibiting companies from asking workers to sign non-compete clauses, which may limit or delay workers from starting competing businesses or moving to rival companies. The proposed ban could most impact the tech industry, as such agreements are widely used by tech companies, which cite the need to protect trade secrets and intellectual property.

In the executive branch, Tim Wu, a major critic of Big Tech, stepped down as a White House special assistant for competition and technology policy in early January to return as a law school professor at Columbia University. Wu was one of three antitrust policy advocates in the Biden administration pushing for more assertive antitrust measures designed to rein in Big Tech giants such as Amazon and Google. Wu was also a key architect of the more than seventy initiatives to improve competition in the technology, healthcare, and agricultural industries within the Biden administration’s “Executive Order on Promoting Competition in the American Economy.” Elizabeth Kelly of the White House’s National Economic Council will now oversee Wu’s work on technology policy, while Hannah Garden-Monheit will take over competition policy.

In Congress, several proposed privacy and antitrust bills did not make it into the end-of-year $1.7 trillion omnibus spending bill, including the American Innovation and Choice Act and the Open App Markets Act, both of which deal with the tech industry. Senate Majority Leader Chuck Schumer (D-NY) “killed” both bills. However, as a consolation, Schumer allocated an extra $85 million to the nation’s two antitrust enforcement agencies: $50 million to the FTC and $35 million to the DOJ. The majority leader also included an amendment authorizing these agencies to collect higher fees from companies that require a proposed merger review. As a result, the FTC and DOJ are projected to collect approximately $1.4 billion over the next ten years.

What tech industry legislation can be expected in the 118th Congress? Ultimately, there will be few opportunities for antitrust legislation to be enacted in the House or the Senate. Nevertheless, there is bipartisan support in both chambers for addressing privacy issues—including Section 230 of the Communications Decency Act—and cybersecurity issues with broadband.

Thomas A. Hemphill is David M. French Distinguished professor of strategy, innovation and public policy in the School of Management, University of Michigan-Flint.

Image: Shutterstock.