There is no doubt- as Baumard claims- that information warfare plays a fundamental role in today’s economy and society. Furthermore, its importance has led to the emergence of a new form of conflict and therefore led to a change in reasoning. Our highly-digitalized economies and society obviously present significant windows of vulnerability linked to the fact that the modern economic system cannot but be open and fluid. At any rate, the concept of information warfare – as is widely known – emerges primarily from American publications and emerges in the moment in which the legitimacy of information has been placed under discussion in the American context. Required to deal with significant budget cuts, the leading US federal intelligence agencies have attempted to justify the preservation of their budget by emphasizing the importance of protecting the nation’s economic security; and yet as early as the 90s, it had become clear that the logics of conflict present in the geopolitical sphere have been transferred to the context of the economic sphere in which nations must be capable of implementing strategies of dominance based on the control of both the information infrastructure and the flows of technological and economic knowledge.
A strategy that takes into account modern new needs must give careful attention to the vulnerability of critical information infrastructures (on the other hand, the rapid growth in computerized piracy has encouraged nations to create ad hoc organizations for the control and surveillance of the development of this new crime). Another observation regards the increase in the strong economic rivalry between nations that has lead to the fundamental apprehension that economic intelligence has become an authentic fact of life for the world’s leading industries; deeper knowledge of information mechanisms, in fact, becomes a fundamental element of success or failure. It is now precisely this crucial importance in economic context of the leading industries and multinationals that has compelled nations to officialize their approaches in the context of information intelligence. Even if the use of denigration, discrediting and disinformation campaigns has always been a part of both the political and economic world, in today’s world the acceleration of the data digitalization has created the need for both nations and certain companies to adopt offensive and defensive systems sufficient to the situation.
A large-scale disinformation operation waged against an industry or multinational corporation can create enormous economic damage. As known to psychological warfare experts, disinformation is certainly an offensive resource with highly particular characteristics because it is a sword that cuts in one direction only, its effects are particularly insidious and can be discovered only in a second moment, but above all, the objectives of disinformation are oriented to the loss of the adversary’s reputation and legitimacy on one hand and the loss of its financial support (in the case of companies, for example), on the other. Yet whereas in traditional conflicts the economy of forces was based on a relationship of inertia, and logistic superiority represented a fundamental dimension for either victory or defeat, in cognitive warfare, similar asymmetry cannot be imposed in the knowledge system, and above all, unlike traditional conflicts, information warfare has its own autonomy regardless of who constructs or sends the message.
Eliminating the spokesman of the message therefore does not modify the dimension of the cognitive conflict but on the contrary only strengthens the adversary. Furthermore, Anglo-American practices are based primarily on the need to immediately control the electronic sources that underlay the economic, political, and military decision-making system. In this strategic view, controlling the public news infrastructure assumes fundamental importance; in any case, a closer analysis shows that the control of the world’s information infrastructure is incompatible with its ample and de-structured way of diffusion in today’s world. The exponential growth of the information infrastructure does not permit the possibility for vertical or hierarchical coordination. Furthermore, the concept of strategic dominance is based on the ability of a state to prohibit or dissuade a rival nation from emphasizing its rules of conduct and on perception of reality.
This approach starts from the assumption that the global control of news flows infrastructure would permit the achievement of global economic and political dominion. In any case, this concept is revealed ingenuous because it ignores the fact that the control of the news differs from the formation of judgments and beliefs. Faced today with the emergence of cognitive warfare and the complexity and fluidity of information, traditional security services do not possess adequate culture because the belief system on which such systems are based is built on the collection of observable facts and the processing of such information: we have agents collecting information on one hand and agents making analysis on the other. This dual organization is certainly suited to traditional conflicts but is not adequate to cognitive conflict: the logic is completely different because due to the speed with which information moves only a very short time is available to control and analyze it this therefore requires rapid decision-making processes.
In other words, the capacity for interpretation and attribution of meaning in real time is the basis for cognitive warfare; furthermore, given that most non-state organizations are in fierce competition and have access to the same news from the same sources, it is highly improbable that a private or state-owned organization will acquire a decisive competitive advantage unless an improvement is made in the satellite control system over news and human information. After this clarification has been made, it must be repeated once again how crucial the control of the news flow is to victory and how mistaken it is to believe that merely destroying the adversary’s information infrastructure will suffice. On the contrary, the destruction of the latter can offer the adversary a greater degree of freedom or promote the use of alternative information tools in a context where – as is known – the distribution of information has been liberalized. Security services must realize that the current trend in worldwide information infrastructure is its Balkanization, or in other words, its dispersion and fragmentation. Efficiency in any case depends more and more on the mastery of decentralized cognitive capacity and less and less on the control of the information infrastructure. Their economy of forces in the context of modern political conflict lies on the mastery of very different cognitive systems and the imposition of a unified interpretation schema is not a strategy capable of providing fruit in the long-term.
Stating that Western Society depends- as Baud claims -on information is certainly an undeniable logical truth. An awareness of current events but also the ability to provide prompt, pertinent response has become an integral part of today’s society. Yet in regard to information warfare too much accent has been placed on the West’s growing dependency on information technology; in any case the real threats come not only from the technological sector but also the amount of influence wielded by information. Consider the fact that terrorism can be seen also as a way of communicating. At any rate, unlike traditional weapons, those of information warfare can be used whenever necessary both to serve economic interests and neutralize international competition. Furthermore, they can be placed into action very easily and adopted by both organizations and individuals. The extent of dimension of the information warfare depends on three other types of war:
information warfare or the war of numbers regarding the destruction of information infrastructure and that aims at paralyzing the adversary’s defense system;
the cognitive warfare with the objective of acquiring, circulating and integrating the information necessary to maintain greater knowledge than the adversary in order to gain an operative advantage;
the war of influence waged to manipulate both religious and public opinion in order to facilitate action against the adversary.
Even if these three aspects are autonomous they are in any case closely interlinked. It must now be forgotten that in the struggle against terrorism the West has all too often concentrated its attention only on the information dimension whereas the real vulnerability of democratic society lies in the context of the influence that represents, we repeat, the terrorism’s field of action. Yet intelligence must intervene in information warfare – as in any other form of conflict – as a useful element in making decisions and not as a weapon. There is no doubt, in this regard, that with the objective of learning all it can about the adversary, intelligence may prove useful to information warfare in revealing the enemy’s weaknesses and waging influence campaigns.
We would now like to dedicate our attention to cognitive warfare that includes all the methods and processes required to acquire, explore and distribute the information necessary in operative context. Acquiring information in all its forms, even computerized, is a part of warfare and implies not only the power of obtaining more news than the adversary but also faster access to the sources of information in order to act on the same with greater efficacy. Consequently, cognitive warfare includes measures for the camouflage and protection of information – the so-called passive measures – and also the instruments destined to deceive the adversary of one’s real operative intentions (the so-called active measures). Furthermore, cognitive warfare is an element that is also found both in the mechanisms of industrial management as a completion of the notion of economic intelligence and in knowledge management mechanisms and processes of the diffusion of knowledge through mechanisms of protection.
The war of influence is not only a fairly present threat but also lies at the base of numerous asymmetrical conflicts, and primarily regards the use of the media and the utilization of messages destined to influence or manipulate public opinion (or political decisions). Democratic society based on the free circulation of information does not accept – at least openly – an active practice of influence; despite this, our democratic societies are very vulnerable to information manipulation. Such manipulation is naturally not only made by nations but also by private pressure groups, and can play a significant role in influencing public opinion. Second of all, the influencing actions must necessarily be aimed at the achievement of strategic objectives, known jointly in both civil and military context, monitored to achieve specific psychological ends, and be founded on close cooperation between civil and military intelligence organizations; as it concerns actions of influence, they have one fundamental objective, in other words, the restoration or maintenance of the trust of the civil population in the authorities or the weakening of the adversary’s will to fight. In order to achieve these objectives efficaciously, such influencing actions must be conducted as if they were military operations and therefore on the basis of non-factious objective information.
Naturally enough, these objectives can be pursued through secretive operations that include propaganda and disinformation. On the other hand, increasing one’s own power advantage – also by denigrating or compromising that of the adversary through disinformation – has always played a part in the art of war. In an open and democratic society, the manipulation of public opinion is certainly possible, of course, but it must be implemented through new forms. In the context of the struggle against terrorism, information remains a determinant element, and must be developed through these three objectives during information warfare:
- a) there must be an information matrix upstream from the operative decision-maker, and this requires the ability to generate an awareness of the battlefield and to integrate this knowledge with the information necessary to wage war (which is substantially the ability to anticipate the enemy’s moves);
- b) the information matrix downstream from the operative decision that serves to acquire and maintain the technical means and the processes of command and conduct that permit any determined mission to be followed;
- c) the communication matrix between the state and public opinion regarding the management and perception of the conflict.
Transitioning from least developed country status: Are countries better off?
The Least Developed Countries (LDCs) are an internationally defined group of highly vulnerable and structurally constrained economies with extreme levels of poverty. Since the category was created in 1971, on the basis of selected vulnerability indicators, only five countries have graduated and the number of LDCs has doubled. One would intuitively have thought that graduation from LDC status would be something that all LDCs would want to achieve since it seems to suggest that transitioning countries are likely to benefit from increased economic growth, improved human development and reduced susceptibility to natural disasters and trade shocks.
However, when countries graduate they lose international support measures (ISMs) provided by the international community. There is no established institutional mechanism for the phasing out of LDC country-specific benefits. As a result, entities such as the World Bank and the International Monetary Fund may not always be able to support a country’s smooth transition process.
Currently, 14 out of 53 members of the Commonwealth are classified as LDCs and the number is likely to reduce as Bangladesh, Solomon Islands and Vanuatu transition from LDC status by 2021. The three criteria used to assess LDC transition are: Economic Vulnerability Index (EVI), Human Assets Index (HAI) and Gross National Income per capita (GNI). Many of the forthcoming LDC graduates will transition based only on their GNI. This GNI level is normally set at US $ 1,230 but if the GNI reaches twice this level at US $ 2,460 a country can graduate.
So what’s the issue? A recent Commonwealth – Trade Hot Topic publication confirms that most countries graduate only on the basis of their GNI, some of which have not attained significant improvements in human development (HAI) and even more of which fall below the graduation threshold for economic development due to persistent vulnerabilities (EVI). This latter aspect raises the question as to whether transitioning countries will, actually, be better off after they graduate.
Given the loss of ISMs and the persistent economic vulnerabilities of many LDCs, it is no surprise that some countries are actually seeking to delay graduation, Kiribati and Tuvalu being two such Commonwealth countries despite easily surpassing twice the GNI threshold for graduation.
How is it possible that a country can achieve economic growth but not have appreciable improvements in resilience to economic vulnerability? Based on a statistical analysis discussed in the Trade Hot Topic paper, a regression model, based on all forty-seven LDCs, was produced. The model revealed that there was no statistically significant relationship between economic vulnerability and gross national income per capita. The analysis was repeated just for Commonwealth countries and similar results were obtained.
Most importantly, analysis revealed that there was a positive relationship between GNI and EVI. In other words, increases in wealth (using GNI as a proxy) is likely to result in an increase in economic vulnerability. This latter result is counterintuitive since one would expect more wealth to result in less economic vulnerability.
So what’s the take away?
The statistical results do not necessarily imply that improving the factors affecting economic vulnerability cannot result in improvements to economic prosperity. It does suggest, however, that either insufficient efforts have gone into effecting such improvements or that there are natural limits to the extent to which such improvements can be effected.
One thing is clear, the multilateral lending agencies should revisit the removal of measures supporting climate change or other vulnerabilities for LDCs on graduation, since the empirical evidence suggests that countries could fall back into LDC status or stagnate and be unable to achieve sustainable development. Whilst transitioning from LDC status should be desirable, it should not be an end in itself. Rather than to transition and remain extremely vulnerable, countries should be resistant to such change or continue to receive more targeted support until vulnerabilities are reduced to more acceptable levels.
What are your thoughts?
U.S. policy and the Turkish Economic Crisis: Lessons for Pakistan
Over the last week, the Turkish Lira has been dominating headlines the world over as the currency continues to plunge against the US dollar. Currently at the dead center of a series of verbal ripostes between Presidents Donald Trump and Recep Tayyip Erdogan, the rapidly depreciating Lira has taken center stage amidst deteriorating US-Turkey relations that are wreaking havoc across international financial markets. Considering Pakistan’s current economic predicament, the events unfolding in Turkey offer important lessons to the dangers of unsustainable and unrealistic economic policies, within a dramatically changing international scenario. This holds particular importance for Pak-US relations within the context of the impending IMF bailout.
In his most recent statements, Mr. Erdogan has attributed his economy’s dire state of affairs as an ‘Economic War’ being waged against it by the United States. President Trump too has made it evident that the latest rounds of US sanctions that have been placed on Turkey are directly linked to its dissatisfaction with Ankara for detaining American Pastor Andrew Brunson. Mr Bruson along with dozens of others has been charged with terrorism and espionage for his purported links to the 2016 attempted coup against President Erdogan and his government. There is thus a modicum of truth to Mr. Erdogan’s claims that the US sanctions are in fact, being used as leverage against the weakening Lira and the Turkish economy as part of a broader US policy.
However, to say that the latest US sanctions alone are the sole cause of Turkey’s economic woes is a gross understatement. The Lira has for some time remained the worst performing currency in the world; losing half of its value in a year, and dropping by another 20% in just the last week. Just to put the scale of this loss in to perspective, the embattled currency was trading at about 2 Liras to the dollar in mid-2014. The day before yesterday, it was trading at about 7 Liras to the dollar.
While the Pakistani Rupee has also depreciated quite considerably over the last few months, its recent drop (-17% against the dollar over the past 12 months) pales in comparison to the sustained and exponential downfall of the Lira. Yet, both the Turkish and Pakistani economies are at a point where they are experiencing an alarming dearth of foreign exchange reserves that have in turn dramatically increased their international debt obligations.
The ongoing financial crises in both Turkey and Pakistan are similar to the extent that both countries have pursued unsustainable economic policies for the last few years. These have been centered on increased borrowing on the back of overvalued currencies. While this approach had allowed both governments to finance a series of government investments in various projects, the long term implications of this accumulating debt has now caught up with them dramatically. As a result, both countries may soon desperately require IMF assistance; assistance, that in recent times, has become even more overtly conditional on meeting certain US foreign policy requirements.
In the case of Pakistan, these objectives may coincide with recent US pressures to ‘do more’ regarding the Haqqani network; or a deeper examination of the scale and viability of the China- Pakistan Economic Corridor. With regards to the latter, US Secretary of State Mike Pompeo has clearly stated that American Dollars, in the form of IMF funds, to Pakistan should not be used to bailout Chinese investors. The rationale being that a cash-strapped Pakistan is more likely to adversely affect Chinese interests as opposed to US interests in the region at the present. The politics behind the ongoing US-China trade war add even further relevance to this argument.
In the case of Turkey however, which is a major NATO ally, an important emerging market, and a deeply integrated part of the European financial system, there is a lot more at stake in terms of US interests. Turkey’s main lenders comprise largely of Spanish, French and Italian banks whose exposure to the Lira has caused a drastic knock on effect on the Euro. The ensuing uncertainty and volatility that has arisen is likely to prove detrimental to the US’s allies in the EU as well as in key emerging markets across South America, Africa and Asia. This marks the latest example of the US’s departure from maintaining and ensuring the health of the global financial system, as a leading economic power.
Yet, what’s even more unsettling is the fact that while the US is wholly cognizant of these wide-ranging impacts, it remains unfazed in pursuing its unilateral objectives. This is perhaps most evident in the diminishing sanctity of the NATO alliance as a direct outcome of these actions. After the US, Turkey is the second biggest contributor of troops within the NATO framework. As relations between both members continue to deteriorate, Turkey has been more inclined to gravitate towards expanding Russian influence. In effect, contributing to the very anti-thesis of the NATO alliance. The recent dialogues between Presidents Erdogan and Putin, in the wake of US sanctions point markedly towards this dramatic shift.
Based on the above, it has become increasingly evident that US actions have come to stand in direct contrast to the Post-Cold War status quo, which it had itself help set up and maintain over the last three decades. It is rather, the US’s unilateral interests that have now taken increasing precedence over its commitments and leadership of major multilateral frameworks such as the NATO, and the Bretton Woods institutions. This approach while allowing greater flexibility to the US has however come at the cost of ceding space to a fast rising China and an increasingly assertive Russia. The acceleration of both Pak-China and Russo-Turkish cooperation present poignant examples of these developments.
However, while it remains unclear as to how much international influence US policy-makers are willing to cede to the likes of China and Russia over the long-term, their actions have made it clear that US policy and the pursuit of its unilateral objectives would no longer be made hostage to the Geo-Politics of key regions. These include key states at the cross-roads of the world’s potential flash-points such as Turkey and Pakistan.
Therefore, both Turkey and Pakistan would be well advised to factor in these reasons behind the US’s disinterest in their economic and financial predicaments. Especially since both Russia and China are still quite a way from being able to completely supplant the US’s financial and military influence across the world; perhaps a greater modicum of self-sufficiency and sustainability is in order to weather through these shifting dynamics.
Social Mobility and Stronger Private Sector Role are Keys to Growth in the Arab World
In spite of unprecedented improvements in technological readiness, the Arab World continues to struggle to innovate and create broad-based opportunities for its youth. Government-led investment alone will not suffice to channel the energies of society toward more private sector initiative, better education and ultimately more productive jobs and increased social mobility. The Arab World Competitiveness Report 2018 published by the World Economic Forum and the World Bank Group outlines recommendations for the Arab countries to prepare for a new economic context.
The gap between the competitiveness of the Gulf Cooperation Council (GCC) and of the other economies of the region, especially the ones affected by conflict and violence, has further increased over the last decade. However, similarities exist as the drop in oil prices of the past few years has forced even the most affluent countries in the region to question their existing social and economic models. Across the entire region, education is currently not rewarded with better opportunities to the point where the more educated the Arab youth is, the more likely they are to remain unemployed. Financial resources, while available through banks, are rarely distributed out of a small circle of large and established companies; and a complex legal system limits access to resources locked in place and distorts private initiative.
At the same time, a number of countries in the region are trying out new solutions to previously existing barriers to competitiveness.
- In ten years, Morocco has nearly halved its average import tariff from 18.9 to 10.5 percent, facilitated trade and investment and benefited from sustained growth.
- The United Arab Emirates has increased equity investment in technology firms from 100 million to 1.7 billion USD in just two years.
- Bahrain is piloting a new flexi-permit for foreign workers to go beyond the usual sponsorship system that has segmented and created inefficiencies in the labour market of most GCC countries.
- Saudi Arabia has committed to significant changes to its economy and society as part of its Vision 2030 reform plan, and Algeria has tripled internet access among its population in just five years.
“We hope that the 2018 Arab World Competitiveness Report will stimulate discussions resulting in government reforms that could unlock the entrepreneurial potential of the region and its youth,” said Philippe Le Houérou, IFC’s CEO. “We must accelerate progress toward an innovation-driven economic model that creates productive jobs and widespread opportunities.”
“The world is adapting to unprecedented technological changes, shifts in income distribution and the need for more sustainable pathways to economic growth, “added Mirek Dusek, Deputy Head of Geopolitical and Regional Affairs at the World Economic Forum. “Diversification and entrepreneurship are important in generating opportunities for the Arab youth and preparing their countries for the Fourth Industrial Revolution.”
With a few exceptions, such as Jordan, Tunisia and Lebanon, most Arab countries have much less diversified economies than countries in other regions with a similar level of income. For all of them, the way toward less oil-dependent economies is through robust macroeconomic policies that facilitate investment and trade, promotion of exports, improvements in education and initiatives to increase innovation and technological adoption among firms.
Entrepreneurship and broad-based private sector initiative must be a key ingredient to any diversification recipe.
The Arab Competitiveness Report 2018 also features country profiles, available here: Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates.
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