As Lev Tolstoj maintained “There is nothing stronger than those two: patience and time”. These are two of the most characteristic traits of the soul and psychology of the Russian people. On the other hand, if you follow Sun Tzu’ strategic guidelines, whoever has time masters also space.
The fact of getting accustomed to suffering and sacrifice have always been typical of the Russian people who, as Vladimir Putin said by quoting Gogol, “have the sharp word which comes from the bottom of the heart.”
Today this is perhaps the most rational way of analyzing the state of the Russian economy and its new geopolitics, which started with the Russian armed forces’ engagement in Syria in favor of Bashar el Assad and against the very complex system of local and international jihad.
The slow but relentless increase in oil prices, organized by the oil and gas futures market during the current different, albeit parallel, crises in Iran and Saudi Arabia, is already an important sign of renaissance for the Russian Federation’s economy.
Furthermore, after the recent Doha summit of April 16, all oil market analysts predict that the oil barrel prices will increase rapidly throughout the second half of 2016 while investors, however, still cautiously maintain short term positions.
This is the result of a mix of factors such as the slow, but stable, global economic recovery and the planned decrease of oil extraction as a result of the decisions recently taken in Doha.
Certainly the Doha Summit failed because of the tension between Iran and Saudi Arabia, but all the latest OPEC projections point to a gradual increase in oil prices per barrel, although there are no explicit messages to that effect by the Vienna cartel.
Hence Russia’s accounts are stable and are bound to improve, despite the severity of its recent economic crisis.
Since the beginning of 2016, inflation has been falling as a result of lower consumption.
In March 2016, however, the Russian prices increased by 7.3% as against the previous year, after an 8.1% rise in February. Anyway the Russian consumer prices are below market forecasts, which pointed to 7.5%.
Moreover the current rate of Russian inflation is the lowest of the last two years.
Thus inflation has absorbed the ruble devaluation, by also allowing further monetary easing margins.
Nevertheless the decrease of disposable income was over 5% in 2015, with rapidly falling wages and an obvious massive impoverishment.
However, the share of the Russian population living below the poverty line is already limited compared to the data of previous years.
Russian poverty grew from 3.1 million needy people to 19.2 in 2015, the highest rate ever since 2006, and is now partially on the wane.
Again last year wages and salaries fell by 2.6% on average, while the Russian Stock Exchange index (MICEX) grew by 7.9% according to the 2015 data.
Nevertheless all Western analysts maintain that the worst is over for the Russian economy.
All Russian macroeconomic data and statistics point to a significant growth of exports throughout the second half of 2016, while the strategic link between the growth of the Iranian economy, after the JCPOA signature, and the increase in Russian oil and non-oil exports, makes us think that Russia used its military forces in Syria well, also at domestic geoeconomic level.
In all likelihood, the rational solution taken by the Russian government was the increase in oil and gas taxes decided in 2014.
This 15% increase in the oil and gas taxes allowed to reduce the tax burden on other Russian productive sectors, more oriented to the internal market and, in the future, to exports.
Another Russian rational decision was to make the ruble fluctuate, so as to save on currency reserves and better absorb the downward shock of oil prices.
Hence more rubles for oil and gas units exported, with a longer duration of the reserve fund.
All while the public deficit, already low by current Western standards, can be easily covered by the issue of government debt securities for the domestic capital market.
Basically the Russian economic crisis, which had been planned to “file Russian strategic nails” is now over and the Russians’ infinite patience mentioned by Tolstoj will do the rest.
After the sanctions imposed on the Russian Federation in 2014 and the drop in oil prices, which have delayed recovery, also the World Bank has predicted a slow improvement of Russia’s economy. Hence, a timid growth which, according to US analysts, will be based particularly on the fiscal and monetary policies of President Putin’s elite.
Moreover, despite persisting sanctions, the Russian Federation is using the weak ruble to expand non-oil exports, which are already rising especially after the agreements between Russia and China and between Russia and the Eurasian Customs Union.
However, which is the link between the Russian economic adjustment underway and its current and future geopolitics?
Perhaps the key factor lies in the creation of a new political and military entity, namely the Russian National Guard, recently established by President Putin.
In principle, it is the merger of various pre-existing armed structures and units.
As many as 170,000 soldiers from the troops of the Ministry for Internal Affairs; an unreported amount of staff coming from the Ministry for Emergency Situations; 40,000 operational units of the OMON police forces, specialized in managing and suppressing riots; 5,500 officials of the SOBR rapid- reaction forces, in addition to the Operational Reaction Forces and Aviation of the Ministry for Internal Affairs, selected by its Special Designation Center, including the Zubr, Rys and Iastreb Special Forces units.
In the latter case we speak of at least 800 military men available for the new structure.
Therefore the total number of the National Guard military staff will range between 250,000 and 300,000 units.
The Guard’s tasks and functions will be managing and preventing problems of public order, combating terrorism and taking actions against “extremist” groups, namely the Chechen gangs and the future protesters in the future “orange revolutions” almost certainly planned by the West against Russia.
Then, the Guard will be responsible for homeland defense and security; the protection of State structures and special internal and foreign transport; the protection of the assets and companies of Russian citizens and organizations approved by the Government; the support to border troops, that are traditionally an integral part of the Russian Intelligence Services; the fight against arms trafficking; the command of all National Guard troops and finally the protection of men and means of the Guard itself.
Hence the whole internal security will be entrusted to the National Guard and this will obviously relieve the Russian internal and foreign Intelligence Services of a whole range of traditional and routine tasks.
President Putin wants a more geostrategic intelligence, less overburden with public order tasks, and this is a lesson we should learn also in Italy and in the West.
Some people think that President Putin wants to create a “personal army”, but the Russian President’s power is such that it is thought that he does not certainly need this new Guard only to strengthen his personal power, which is already pervasive and without any credible internal opposition.
Conversely, in all likelihood, with this new military organization, President Putin wants to avoid the coalescence of two dangers he sees looming over the Russian Federation’s near future.
These dangers are the imported jihad and the sequence of the various orange revolutions which, even combined with Islamist terrorism, could destabilize Russia permanently and make it viable for the financial and strategic interests of the West.
Probably President Putin is convinced that the United States and some US allies may make Russia pay a very high price for its ongoing engagement in Syria and the Middle East, which is the real game changer of contemporary geopolitics.
Not to mention the fact that, by opening its Syrian-Mediterranean front, the Russian Federation knocks out and bypasses the whole military network that NATO and the United States are placing along the Russian Federation’s land borders, from Estonia to Poland and the Czech Republic, up to Romania.
Certainly Putin thinks that this is a challenge which is worth a slow and relentless internal destabilization of the Russian society and politics.
This would also explain the “free hand” given by the Russian leader to the internal Services with the creation of the new Guard.
Hence the Services would now find it much easier to take actions to face external and internal threats to the Russian Federation’s political (and economic) system.
The designated Head of the new National Guard is General Viktor Zolotov, former Head of the President’s Security Service.
A man certainly trusted by Putin and a great intelligence expert.
Zolotov was born in 1964 and is a member of the Russian Security Council, an advisory body to the President, reformed in 1996, which meets at least once a month and coordinates the Russian Federation’ security, in close cooperation with the Services’ leadership.
In the past he was the bodyguard of Anatoly Sobchak, the mayor of St. Petersburg, who protected President’s Putin first steps in the very complex post-Soviet era.
Member of the KGB “active reserve”, as Putin, Zolotov was given up for dead several times but, as often happens in the great Russian intelligence game, he is obviously alive and “operational.”
In the 2000 “siloviki war” (the siloviki are the former KGB members), which was a war between some groups of agents of the old Services and the inner circle of the already powerful Putin, Zolotov stood with the losers, the men of Viktor Cherkesov against the siloviki Nikolai Patrushev and Igor Sechin.
Zolotov was later “forgiven” by Putin, as the General never made public his positions of “liberal siloviki” who supported Dimitri Medvedev as Putin’ successor in 2008.
Later Zolotov took command of the forces of the Ministry for Internal Affairs, now led by General Ragozhin, who has fewer ties with President Putin, while the President of the Judo Federation of St. Petersburg, a longtime friend of President Putin, who is a well-known judoka, has been appointed Head of the Military Police.
Zolotov’s appointment is also an action of President Putin who intends to bring peace to the vast community of the siloviki, a highly fragmented group as early as his return to the Presidency in 2012.
The fight between the former KGB agents regards power, the relationship with the economy and, above all, the struggle for the succession to Vladimir Putin.
And this will be the new scenario for which the National Guard seems to be already prepared, although Vladimir Putin has recently indicated that he is likely to run again in the next presidential election.
Should Turkey and Azerbaijan Be Worried About Killed Syrian Mercenaries?
Just a few weeks ago many analysts and observers were sceptical about reports of Turkey’s transferring units of its Syrian National Army (SNA) proxies to Nagorno Karabakh, even more so because Turkish officials denied any such claims. However, as evidence of massive casualties among the Syrian mercenaries continues to mount, there is little space left for doubt: SNA fighters have become cannon fodder in the Turkish operation in support of Azerbaijan.
The first batch of bodies of those Syrians who perished in Nagorno Karabakh counted over 50 people, according to messages and videos that went viral on opposition WhatsApp and Telegram channels. Among the dead who were delivered to Syria over Hiwar Kilis border crossing and were given a hasted burial were men from Aleppo, Idlib, Homs and other regions of Syria. Many of their relatives, like families of Muhammad Shaalan from Atareb and Kinan Ferzat from Maarat al-Nuuman, were shocked to learn about their death.
Just like the majority of the Syrians who travelled to Nagorno Karabakh, Muhammad and Firzat were primarily motivated by lucrative rewards of up to 2,000 dollars promised by Turkey. “I came here to make money and have a better life back in Syria where the living conditions are miserable. I consider this a job, nothing else,” a member of Liwa Sultan Murad, one of the first SNA factions to deploy its fighters to the contested region, told Guardian.
The reason behind heavy casualties of the Syrian mercenaries is that they are thrown into action where the clashes are the most violent, including Jabrayil, Terter, Fizulin and Talysh. This move allows Azerbaijan to keep its military, who mainly provide air support including operating Turkey-made Bayraktar TB2 UAVs and coordinate artillery and missile strikes of the Armenian positions, out of direct contact with the enemy.
The estimates of the numbers of the Syrian mercenaries present in Nagorno Karabakh are wildly different. While initial reports put their number at 500 men, it is currently believed that the actual number may be in thousands. This data indicates that at least 10 percent of the fighters were killed during the very first days of the escalation – a serious alarm for the mercenaries as well as their Turkish backers.
These developments must ring a bell for Azerbaijan as well. The longer the conflict protracts, the higher the risk of casualties among the Azeri servicemen becomes, who have already suffered losses in Armenian retaliation strikes. Baku has managed to avoid discontent among the military as well as the civilian populace – not least thanks to the Syrian mercenaries crushed as cannon fodder – but this can not continue for long.
Emerging Multipolarity and its consequences
“Make America great again” a slogan that formed the nucleus of trump’s electoral campaign vividly suggests that America is no more a great country. It is, in fact, an implicit admission that U.S is gradually losing its clout in international politics and hence, its image as a sole superpower of the world has virtually tarnished. Let me rephrase this connotation; it means that the era of unipolar world is over and the world has now transitioned to a multipolarirty.
Currently, new power centers are emerging in transnational political landscape. China, Russia, India and Turkey are excessively engaged to carve a niche for them in evolving international order. Most importantly, with China and Russia’s mushrooming proximity, balance of power is now shifting from west to east. Former United States (US) Secretary of State, Hillary Clinton at her state visit to New Zealand was one of the first to observe “a shifting balance of power to a more multi-polar world as opposed to the Cold War model of a bipolar world”. This conspicuous change in multi-national political setup was also realized by Ban ki Moon, the then secretary- General of United Nations who stated at Stanford University in 2013 that we have begun to “move increasingly and irreversibly to a multi-polar world”. Russian Foreign Minister, Sergei Lavrov, also declared at the Russia-China Conference 2016 that “international relations have entered into a conceptually new historical stage that consists in the emergence of a multi-polar world order and reflects the strengthening of new centers of economic development and power”.
These manifestations of political spin doctors have since then revealed a general acceptance of the idea of multi-polar world as a concept that is inescapable political reality in the contemporary international dynamics. However, when it comes to the transitions and inevitability of power structures, there is a little agreement among the international states.
A much stronger resistance to forego unipolarity remains embedded in the Trump administration vision to “make America great again”. Political pundits such as Robert Kaplan continue to question, whether there is an overlap of unipolar and multi-polar world realities; where US continues to retain the supremacy in military realm of affairs and is anticipated to remain so for a considerable future time, whereby China leads in the economic realm. Additionally nations in the former Third World are acquiring status as rising powers, notably India who have over the years with smart diplomacy have acquired global outreach to shape international agenda.
Chronologically, After World War II, the U.S. became the undisputed and unchallenged global superpower. It was the only country, equipped with nuclear warheads and was one of the few countries involved in the war that came away from it relatively unscathed at home. The U.S. underwent a meager loss of approximately 400,000 soldiers and a fractional amount of civilians in the war. The Soviet Union, meanwhile, incurred a gigantic loss of around 11 million soldiers and some 7 million to 10 million civilians. While Soviet and European cities were undergoing the process of rehabilitation, American cities flourished. It seemed clear to all that the future belonged to the United States.
But it didn’t take long for the luster of unrivaled power to tarnish. The U.S. military machine relaxed as quickly as it had mobilized, and wartime unity gave way to peacetime political debates over government spending and entitlement programs. Within five years, a bipolar world emerged: The Soviets attained an atomic bomb, and the U.S. was caught flat-footed in a war on the Korean Peninsula that ended in a stalemate. Soon thereafter, the U.S. was withdrawing from Vietnam and rioting at home. In 1971, then-President Richard Nixon predicted a world that he said would soon emerge in which the U.S. was “no longer in the position of complete pre-eminence.” Within 26 years of the end of World War II, Nixon’s prediction saw the light of the day and the U.S. had to resign to its fate.
Theoretically, multipolarity refers to a distribution of power in which more than two states have nearly equal amounts of military, cultural, financial and economic influence.
If we look at the contemporary world, we find that with the rise of like China, India, Russia, Indonesia, Turkey and Brazil, global power will spread across a wider range of countries, hence, a new world order with multipolar outlook is likely to emerge .
Realistically speaking, several revisionist powers are and will shaking up their regions. For instance, Russia invaded Georgia in 2008 and Ukraine in 2014 – annexing Crimea, over which it has fought several wars throughout history (mainly with Turkey). In turn, Turkey is asserting its sovereignty over the eastern Mediterranean to the frustration of countries like Greece, Egypt, Cyprus and Israel. Meanwhile, India has upped its aggression in its border dispute with Pakistan as Modi began a process to revoke the autonomous status of the disputed territories of Jammu and Kashmir.
Notably, after the age of city-states and nation-states, we are now entering the age of continental politics. The most powerful countries of the 21st century (the U.S., China, Russia India, Indonesia, and Brazil) are the size of continents. They have broad economic bases and their digital economies potentially have hundreds of millions of users. Internationally, their scale requires them to seek broad spheres of influence in order to protect their security.
Here the question arises what will be the impact of growing multipolarity in the world? First of all, revisionist powers will increasingly ignite tensions. The growing assertiveness of countries like Russia, Turkey and India is the new normal. As they grow more powerful, these countries will seek to revise arrangements in order to reflect the new realities of power. Because these (continental) states seek broad spheres of influence, many places are at risk of destabilization.
Second, one of the biggest risks is the growing paranoia of the hegemon (the U.S.). The current trade war has shown how destabilizing the policy of the (financial) hegemon becomes as it feels threatened by the rise of a rival. Historically, this has been the most important source of violent conflicts. Indeed, the biggest source of uncertainty in the coming years is how the U.S. will react to the rise of China.
Third, the world order will become more ambiguous. Two developments deserve our attention. First, the growing use of shadow power will make conflict more unpredictable. With digital tools, states (and non-state actors) are manipulating each other in subtle ways. For example, Russian hackers posed as Iranians to hit dozens of countries and Americans blamed Russia for tampering with American elections. Second, alliances will also become more ambiguous. With ever changing dynamics of world economy, new alliances, motivated by the concept of triangulation (to keep balance in relation with the US and China, the trade warriors) will form and such alliances, as predicted by spin doctors; will be less stable than the blocs, formed in 20th century.
To sum it up, before we reach a multipolar world order, we will see a period of growing uncertainty based on the rise of revisionist powers, the paranoia of the U.S. and growing ambiguity of conflict and cooperation. Moreover, the political pundits are divided in opinion that whether multi-polarity is unstable than unipolarity or bipolarity. Kenneth Waltz strongly was in favor of “bipolar order as stable”. On the other side, Karl Deutsch and David Singer saw multi-polarity as guaranteeing a greater degree of stability in an article published in 1964, “Multipolar Systems and International Stability”. Simon Reich and Richard Ned Lebow in “Goodbye Hegemony” (2014), question the belief whether a global system without a hegemon would be unstable and more war prone. However, whatever the system the world is likely to witness in the days to come, let’s hope that this should be in the best interest of humanity and it should make the lives of the inhabitants of this planet peaceful and prosperous.
The future of strategic intelligence
There are currently three types of intelligence transformations, namely conceptual, technological and operational.
In the first case, we are dealing with a new and original intelligence paradigm.
From a mechanism based on the identification of the need for information-research-processing and analysis-dissemination-feedback, we are shifting to what some people already call “position intelligence”.
In other words, we are coming to an information mechanism that continuously perceives data and processes it, and then spreads it permanently and continuously to those who have to use it.
While the old intelligence model was “positivist”, i.e it concerned single objective and empirical data to be included in a decision-making process that is not determined by intelligence, currently it is instead a matter of building acontinuous follow-up not of data, but of political behaviours, perceptions of reality by the enemy-opponent, as well as complex phenomena that constantly reach the intelligence matrix from different parts and areas.
While in the past intelligence was rhapsodic and temporary, à la carte of politicians, and sometimes even unsolicited and not requested, it currently becomes the stable core of political, strategic, economic and industrial decisions.
This obviously results in a new relationship between politicians and Intelligence Services.
While, in an era we have already defined as “positivist”, facts, news and the unknown novelties of the enemy-opponent counted, what currently matters is the ever more evident integration between the intelligence system and politicians.
There is obviously a danger not to be overlooked, i.e. the danger that – without even realizing it – the Intelligence Services take on responsibilities which must be typical of elective bodies only.
But certainly intelligence currently plays a much greater role than in the past.
Another key element of the conceptual transformation of intelligence is the use not only of highly advanced and powerful information technologies, but also of scientific paradigms which were unknown to us only a few years ago.
Just think about Artificial Intelligence, but also cloud computing, algorithm theory and Markov chains – and here we confine ourselves to the mathematics that sustains current IT and computing.
But there is also human ethology, an extraordinary evolution of Konrad Lorenz’s animal ethology, as well as social psychology, sociological analysis and scientific depth psychology.
A whole universe of theories that, in Kant’s words, have recently shifted from metaphysics to science.
It must certainly be used to analyse, for example, mass behaviours that seem unpredictable, as well as the psychological reactions of both the ruling classes and the crowds, and the interactions between the various group behaviours of a country.
Nothing to do with the old Habsburg Evidenzbureau, which informed the General Staff of enemy troops’ movements or of the various generals’ lovers.
We here witness a substantial union between intelligence and political decision-making or, rather, between the thought produced by intelligence and the foundations of political decision-making.
CIA has often tried to poison Fidel Castro’s beard.
Today, apart from the doubtful rationality of that operation, it would be a matter of using – for example – advertising, TV series, Hollywood movies, the sugar, tourist or tobacco market cycles, not to poison late Fidel’s beard, but to put the Cuban economy and decision-making system into structural crisis.
The typical idea of Anglo-Saxon political culture –whereby, once the “tyrant” is eliminated, everything can be fine and back in place – has been largely denied by facts.
All this obviously without being noticed, as far as the operations for disrupting a country are concerned.
Another factor of the conceptual transformation of intelligence is speed: currently the IT networks are such as to allow data collection in real time with respect to facts and hence favour wide-ranging decisions.
As far as technology is concerned, it is well known that both the AI networks, the new calculation structures, and the networks for listening and manipulating the enemy-opponent data are such as to allow operations which were previously not even imaginable.
At this juncture, however, there are two problems: everybody has all the same tools available and hence the danger of not “successfully completing” the operation is great, unlike when the Intelligence Services’ operations were based on the skills, role and dissimulation abilities of some operatives – or on confidential and restricted technologies.
The other problem is intelligence manipulation: a country that thinks to be a target can spread – in ad hoc networks – manipulated news, malware, data and information which are completely false, but plausible, and can modify the whole information system of the country under attack.
Another problem of current intelligence technologies is their distance from the “traditional” political decision-making centres.
A politician, a Minister, a Premier must know what comes out of the intelligence system. Nevertheless, it is so specialised and sectorial that the distance between technical data processing and the “natural language” of politics is likely to make data ambiguous or unclear and of little use.
Moreover, there is a purely conceptual factor to be noted: if we put together the analysis of financial cycles, of technology change, of public finance and of political and military systems, we must connect systems that operate relatively autonomously from each other.
In other words, there is no “science of the whole” that can significantly connect such different sectors.
Therefore, there is the danger of projecting the effects of one sector onto another that is only slightly influenced by it, or of believing that, possibly, if the economy goes well, also the public debt – for example -will go well.
The room for political decision-making is therefore much wider than modern intelligence analysts believe.
Political decision-making is still made up of history, political-cultural traditions and of perceptions of reality which are shaped by many years of psychological and conceptual training.
With specific reference to operativity, once again we are dealing with radical changes.
Years ago, there was the single “operative” who had to decide alone – or with very little support from the “Centre” – what to do on the spot and with whom to deal.
Today, obviously, there is still the individual operative, but he/she is connected to the “Centre” in a different way and, in any case, imagines his/her role differently.
On the level of political decision-making, intelligence is always operative, because reality is so complex and technically subtle that it no longer enables even the most experienced statesman to “follow their nose”.
The primary paradox of the issue, however, is that intelligence cannot take on political roles that imply a choice between equivalent options.
This is inevitably the sphere of politics.
Another factor of the operational transformation is the inevitable presence of intelligence operatives in finance, in the scientific world, in high-level business consulting, in advertising, communication and media.
Intelligence has therefore progressively demilitarised itself and is increasingly operating in sectors that we would have previously thought to be completely alien to Intelligence Services. Instead, they are currently the central ones.
Moreover, we are currently witnessing a particular mix of strategic intelligence, geopolitics and financial analysis.
Why finance? Because it is the most mobile and widespread economic function.
We are witnessing the birth of a new profession, namely currency geopolitics.
Hence we are also witnessing the evolution of two new types of intelligence, namely market intelligence (MARKINT) and financial intelligence (FININT).
An old and new problem is secrecy. The greater the extent to which old and new intelligence is used, the less it can keep secrecy, which is essential now as it was in the past.
What has always been the aim of strategic intelligence? To predict phenomena starting from a given context.
Contexts, however, change quickly and the interaction between sectors is such as to change the effect of forecasts.
The formalised techniques for analysis-decision making are manifold: intelligence data mining, “grid technologies”, knowledge creation and sharing, semantic analysis, key intelligence needs (KINS) and many others.
All operations which are often necessary, but currently we need to highlight two factors typical of the North American intelligence culture which, unfortunately, also negatively affects the models used by U.S. allies.
The first aspect is that, strangely enough, the same formal models are proposed for both companies and States.
A State does not have to maximize profits, while a corporation does, at least on a level playing field with its competitors.
A State is not a “competitor” of the others and ultimately a State has no specific “comparative advantage” but, on the contrary, some of its companies have, if this happens.
Therefore, the overlap between business intelligence, which is currently necessary, and States’ intelligence is a conceptual bias, typical of those who believe that a State is, as Von Mises said, “the joint stock company of those who pay taxes to it”.
For companies, it is obvious that all specific and original intelligence operations must be known to the State apparata, which may coordinate them or not, considering that they inevitably have additional data.
On the other hand, some business operations can become very useful for intelligence.
Hence a structure would be needed to put the two “lines” of operations together, and above all, a new intelligence concept is needed.
In the past, the Intelligence Services’ operations were largely defensive: to know something just before it happened, to avoid the adverse operations of a State hitting its own resources, but all with often minimal time limits.
Now we need expressly offensive intelligence which can hit the opponents’ (commercial, economic and strategic) networks before they move and in good time.
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