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NIC Chairman Remarks to World Affairs Council of St. Louis

Remarks by John C. Gannon
Chairman, National Intelligence Council
to the World Affairs Council of St. Louis

''Intelligence Challenges for the Next Generation''

October 8, 1998

Thank you. It is a special pleasure for Mary Ellen and me to come back to Saint Louis, where we lived six wonderful years in the 1970s as I pursued doctoral studies at Washington University and she worked in the Burn Unit at Barnes Hospital. Our two sons, Jonathan and Mark, were born at St. Mary's Hospital in Richmond Heights and St. John's Mercy in Creve Coeur, respectively. I have pushed strollers and walked toddlers endlessly on every sidewalk and through every playground in Clayton and University City. Make no mistake about it, I know precisely where I am in Clayton tonight.

I will make the point tonight that the world as this century closes is growing more complex, threats to US interests are becoming more diverse and dispersed, and the job of the CIA is getting tougher.

Intelligence officers, of course, are much harder to discourage.

  • Sure, the timing of the Indian nuclear test on May 11 got ahead of us.

     

  • Yes, North Korea's effort on August 31 to put a satellite in space surprised us.

     

  • True, some of us are still waiting for our invitations to the Helmut Kohl victory dinner.

     

  • And we, too, were caught off guard when that electrical fire on September 28 put the St. Louis Gateway Arch out of commission for a month - just when Mary Ellen and I were coming to town for the first time in 20 years.

     

  • But, I am proud to say, we did call the biggest recent shot heard round the world - the breaking on September 8 of Roger Maris' homerun record by Mark McGwire. A truly great city owes this guy, who with a little help from the information revolution, put the name of Saint Louis in Internet lights that have pulsated across the globe for the past two months. Saint Louis does well with exposure. And, God knows, you've had it big time with Mark McGwire in your midst.
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Turning to my job today, I also want to acknowledge that the Saint Louis community gave CIA its first and 14th directors, RADM Sidney W. Souers, who ably launched CIA in 1946, and Judge William H. Webster, who worked so skillfully to restore our stature and direction between 1987 and 1991. We also recall the Judge fondly for his tireless efforts to implement progressive gender and diversity policies at CIA, an investment that continues to benefit us today. Finally, you should know that our current Deputy Director of Central Intelligence, Air Force General John Gordon, is a proud Jefferson City native and a University of Missouri-Columbia alumnus. Missouri has been good to CIA, and we are grateful.

In recent days, we've been busy back at CIA Headquarters. We've been focusing on the conflict in the Serbian Province of Kosovo, where the Serbs once again seem to have the upper hand but face a possible riposte from NATO; we're analyzing evidence that North Korea has made strides in its missile programs; and we're carefully following the new turmoil in Moscow that seems to confirm the view of many that Russia has some of the same economic and political problems as a garden-variety Third World state, albeit one with nuclear arms. Meanwhile, what we only recently called ''the Asian financial crisis'' is now destabilizing markets around the world.

And I've been reading dire forecasts, as you probably have, raising the specter of a significant slowdown in global growth, if not an outright meltdown. I see reports of real and looming conflicts in Africa and of Saddam's Husayn's latest machinations as he maneuvers to get UNSCOM inspectors out of Iraq and to obtain sanctions relief on his terms. All in all, this is fairly depressing stuff, and I have not even alluded to other gloomy issues, such as weapons proliferation, terrorism, and humanitarian concerns, that cross CIA's screen. There obviously is a lot on the Intelligence Community's plate these days--everything from how foreign governments are dealing with the so-called ''Y2K'' problem to global warming.

In considering the world today, with its good news and bad, challenges and opportunities, and statesman and dictators. . .if we don't exercise vigilance, consider all options, and help our government to react quickly, the Saddams, Qadhafis, Milosevic's and Kim Chong-ils of the world are likely to surprise us.

Tonight, I want to spend most of my time exploring the world as we are likely to find it a decade or so from now—for convenience, let's say in 2010. This is more my personal view than that of the National Intelligence Council, though we have consulted experts from inside and outside of government and done some collective thinking on the subject. The world of 2010 will present new opportunities and risks both for the United States as a nation and for our intelligence services. In some cases, we will find ourselves navigating in uncharted waters.

I won't try to predict events tonight. I will, however, discuss six global trends that are at work today and that will influence the world of 2010 and the work of those in the intelligence business. Then I'll make a few observations on prospects for specific regions of the world and for a few key countries. As I provide this brief tour d'horizon, you might keep in mind this thought from Arnold H. Glasow: ''The trouble with the future is that it usually arrives before we're ready for it.''

First, despite dramatic drops in fertility, by 2010 the world's population will have increased by 1.2 billion people, to around 7 billion. About 95 percent of this growth will be in developing countries, and much of this will be in already overcrowded urban areas. In many of these countries, a ''youth bulge'' — the burgeoning number of people between 15 and 24 years old — will strain educational systems, infrastructure, and job markets. In some areas, there will be real pressure on basic resources, such as water in the Middle East. Meanwhile, in the industrialized world, because of slow or negative population growth, governments will have to struggle to provide social welfare and health services to aging populations.

Second, despite the disruptions caused by the current global crisis, we anticipate a continuing integration of global capital markets and that by 2010 there will have been at least modest real growth in world GDP. We are less certain whether per capita income will grow. Many parts of the world are likely to be more prosperous a decade or two from now. But the rising tides will not lift all boats. Obviously, not every state will benefit equally, nor will all groups within each state.

Third, developments in the world will be driven as never before by technology. The continued digital data and communications revolution will shrink distances and weaken barriers to the flow of information. At the same time, rigid and authoritarian governments that resist the flow of information associated with communications advances will fall further behind technologically.

To cite a fourth trend, growing populations and increases in world output will drive demand for more energy. By 2010, the world's dependence on OPEC, and Persian Gulf oil in particular, will have grown significantly. Technological advances, as well as new sources of oil, will help meet this demand. Improvements in the efficiency of solar cells and batteries will result in greater use of these and other renewable energy resources, but they are unlikely significantly to affect global reliance on fossil fuels in the foreseeable future.

Fifth, the problem of feeding the world's population will persist. The bottlenecks will not be found in agriculture or science, however, so much as in political conditions, transport, and distribution. Indeed, global food production is likely to keep pace with overall demand. We anticipate that genetic engineering will fuel a fourth agricultural revolution. As in the past, shortages will be man-made. Serious pockets of poverty will put people in developing countries—particularly in Africa—at risk of death from disease and starvation.

Finally, we expect advances in precision-guided munitions and information technologies to give new impetus to the revolution under way in military affairs. Other countries will have technologically advanced military equipment, but no power will be able to match US battlefield capabilities, at least not in the next decade or two. And potential adversaries are not likely to repeat Iraq's mistake in challenging the United States in set-piece conventional warfare.

Adversaries' technological inferiority, however, will not mean that they will acquiesce in American policies or a global ''Pax Americana.'' Some will try to blunt US military superiority in other ways--for example, by resort to asymmetric means, such as terrorism and weapons of mass destruction. A growing number already are developing or acquiring chemical and biological weapons. A few even are incurring the high costs of supporting nuclear weapons programs. In that context, Aldous Huxley probably had it right when he proclaimed, ''Ye shall know the truth, and the truth shall make you mad.''

To view matters from a regional perspective, between now and 2010 we expect that:

The push of European governments for economic and political union will proceed, albeit by fits and starts, but with less optimism than when the Maastricht Treaty was signed in 1992. More generally, as contemporary events in the Balkans illustrate, Europe is not yet immune to the sorts of ethnic, sectarian, and other particularistic divisions that can lead to civil strife and conflict. Only enlightened leadership, occasional outside encouragement, and time will allow the protagonists and antagonists in places like the Balkans and Northern Ireland to, as we say in Washington, take a more ''corporate'' view of matters, that is, act less parochially and more responsibly.

Russia will remain in a state of profound transformation, the outcome of which is very uncertain. While a return to Soviet-style Communism is extremely unlikely, it is not at all clear that Russia will be able to develop either a liberal, Western-style democracy or a thriving market economy. The road ahead will be far from smooth. No one expects Prime Minister Primakov's government to make much headway in coping with Russia's immense problems. Russia's ultimate political survivor has taken on the biggest challenge of his life.

Even if the Russian economy begins to recover, glaring disparities in income between winners and losers will exacerbate social tensions, and corruption, if unchecked, will further undercut the legitimacy of national institutions. The post-Yel'tsin leadership likely will set the tone for the next decade or more. That government on many fronts will pursue policies at odds with our own, not because of differing ideologies or personal antipathies but because of competing interests.

As for East Asia, our once lofty expectations have been dampened by the depth and extent of the regional financial crisis we have watched unfold over the past year. The sudden and dramatic reversal of fortunes has already contributed to internal political change and instability in countries like Indonesia, and we are only beginning to appreciate the human toll the crisis is taking throughout the region and the broader implications for stability and security.

We cannot predict when the crisis will end or whether there will be an even more serious economic downturn and contagion, but we believe that the crisis is likely to generate a variety of new challenges that could strain the peace and stability the region has generally enjoyed in the past decade or two. We cannot rule out the possibility of geostrategic shifts in East Asia as governments recalculate their security interests in a fundamentally changed economic environment.

One of the lessons to be learned from the financial crisis, which will hold with even greater force in the more economically integrated world of the future, is that economic developments in one country or region can have profound implications for another. Another lesson is that economic globalization is a two-edged sword. It can foster prosperity as well as decline, instability as well as stability, depending, of course, on the circumstances.

China, by dint of its population, regional sweep, economic potential, territorial claims, and aspirations to be a major foreign policy player, will challenge US policymakers over the next decade and beyond. As intelligence officers, we can neither assume that China will be an entirely benign actor on the world scene, nor should we view prospects for confrontation as inevitable. There are issues over which China probably is willing to resort to force — to head off Taiwan's drive for independence being one — but how this issue evolves will depend as much on Taipei's actions as Beijing's.

Looking out a decade in North Korea, our analysts debate the end game for the Kim Chong-il regime, but most--perhaps prematurely--assess that it will not be long in coming. Whether the North expires with a whimper or a bang, one thing is sure: the South will have to pay a heavy price for the North's recovery.

In the meantime, as was driven home to us by North Korea's test launch of a Taepo-Dong 1 missile on August 30, we cannot relax our guard about the North's capabilities and intentions. As the testing makes clear, P'yongyang intends to pursue high-priority military projects—probably including an ICBM capability—with little regard for the price. Such efforts in coming years will threaten security in the region and perhaps well beyond it.

Turning to the Middle East, we expect Iraq's Saddam to be gone by 2010, though this judgment is based as much on pure speculation on our part as informed analysis. In the meantime, he will be a thorn in our side, a threat to regional well being, and a menace to many of his own people.

As for Iran, we anticipate that political change, driven largely by societal forces, will proceed, particularly as power passes to another generation of leaders. Tehran's recent test of a medium-range ballistic missile and its military show of force on the Afghan border suggest that Iran intends to remain a regional power.

Notwithstanding the results of recent discussions between Prime Minister Netanyahu and Chairman Arafat, progress between Israelis and Palestinians will be uneven and punctuated by occasional violence. We do not expect the Middle East to contribute to underemployment in the Intelligence Community for many years to come.

In the Middle East today, let me add, low oil prices resulting from the collapse of international demand, are threatening the economic and political stability of some of America's closest allies. A protracted weakness in oil prices would force these governments into tough choices between military and social spending, increasing the appeal of Islamic extremism and the risk of political unrest.

Turning to South Asia, the region is likely to remain a source of concern, even if a balance of terror restrains India and Pakistan, which earlier this year tested nuclear weapons, from a nuclear exchange. The potential for miscalculation, particularly in the highly charged domestic political environments of the two countries, is real. More generally, over the next decade or two, India will emerge as an economic powerhouse relative to Pakistan and its South Asian neighbors. And Pakistan's serious economic difficulties could lead to greater political turbulence there.

As some of you know, we in the Intelligence Community knew that India was in a position to test a nuclear device last May, though we did not predict the day it was to take place. As intelligence officers would put it, we provided adequate strategic warning but for various reasons were unable to provide timely tactical warning. In the intelligence business, our challenge is to do better than this. We try to think ''out of the box''—to consider alternative hypotheses, consciously eschew mindsets, and to question preconceived notions about the way things are likely to be.

In South Asia and elsewhere, we must not let our preconceived notions—in this case that New Delhi would not test at this time—impede our efforts to weigh all the options.

Sub-Saharan Africa, while in the aggregate the poorest and least globally integrated region, is becoming more differentiated. Southern Africa is the region of the continent where conditions are most auspicious, and some individual African countries—notably Ghana, Mali, Botswana, Mozambique, and Uganda--are likely to make significant progress. But Africa is still wracked by ethnic conflict and will remain so. Whether an African state ''succeeds'' by most conventional definitions will depend more on the quality of its leadership and the ability of its peoples to work together than on its natural endowments.

In Latin America, prospects appear good in many respects. Democratic institutions are likely to take firmer root, and key economies are being reformed in ways conducive to growth. If present trends continue, by 2010 the region will represent one of the largest markets for US trade and investment. Nonetheless, financial difficulties, which increasingly are manifesting themselves in Brazil and elsewhere, could lead countries there to experiment once again with less orthodox political and economic prescriptions.

We are watching Brazil, where President Cardoso last weekend won a renewed mandate, with particular concern. If the economy of Brazil--the ninth largest in the world and a country in which US investors have large exposure—falters, numerous other Latin American countries will feel what some call the ''samba'' effect. That will include Mexico, which is in the midst of a political transition at present to a more pluralistic system that is positive direction but also carries risks to that country's political stability. Cuba obviously faces an uncertain future as it prepares for the post-Castro era. More generally, Latin America, more than any other region, will have to contend with narcotrafficking and its consequences for corruption and political instability.

Viewing the world of 2010 as a whole, no country, no ideology, and no movement will emerge on a global scale to threaten US interests. Nonetheless, the regional agendas of some countries will collide with those of the United States, and the threat of terrorism directed against US interests--both at home and abroad--will remain and, quite possibly, grow. And dangers posed by the proliferation of weapons of mass destruction will only intensify in the future.

Let me make a few points about the threat we face from weapons of mass destruction, which today is one of our major preoccupations:

  • Many countries now have the technological capability to move short-term missiles closer to targets. Adapting missiles for launch from a commercial ship could be accomplished covertly, and probably with little warning.

     

  • The medium-range missiles of countries such as Iran and North Korea pose an immediate threat, as do existing and emerging ICBM systems.

     

  • The dangers that arise from the proliferation of such weapons systems and technologies are increasing. Foreign assistance can enable recipient countries to save decades of time that otherwise would have to be devoted to development and testing.

     

  • Within the past few months, for example, Pakistan and Iran tested their versions of the 1,300-km range North Korean No Dong missile.

     

  • An ICBM threat from North Korea is looming. The multi-stage missile P'yongyang used in its failed attempt on August 31 to launch a satellite could be reconfigured to deliver small payloads to ICBM ranges, that is, in excess of 5,500 km, if the North overcame certain technical problems.

     

  • As the North proceeds with development of its Taepo Dong 1 and 2 missiles, we assume that it will follow past practice and try to market them or, at a minimum, that aspiring recipients will try to purchase them.

     

  • Meanwhile, nonmissile delivery of weapons of mass destruction—chemical, biological, and nuclear and radiological weapons—already represent a serious and immediate threat to US interests at home and abroad.
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Returning to the scenarios of the future world I have posited, they by and large are the most probable ones as we see matters today. We are realistic enough to understand, however, that in our business the only certainty is that there are no certainties. The world may well be a far more benign place than I have portrayed it. Economic growth may be more rapid, for example, or terrorism could wane if--despite the odds--peace breaks out in the Mideast. Alternatively, however, we could be in for a rockier ride than I have projected. What if:

  • The international financial crisis deepens and spreads, engulfing virtually all regions and countries? This sounded sensationalist when I introduced it in a speech four months ago. Not so today.

     

  • Russia takes a turn toward authoritarianism domestically and acts like a regional bully or, alternatively, drifts into anarchy and fragments?

     

  • China cannot peacefully resolve its differences with Taiwan?

     

  • North Korea in an act of desperation marches south? Or deploys or sells ICBMs?

     

  • A nuclear exchange occurs in South Asia?

     

  • Strife in Kosovo or elsewhere in the Balkans leads to a humanitarian crisis of major dimensions and destabilizes the neighborhood?

     

  • Greece and Turkey come to blows over Cyprus?

     

  • An information warfare attack on the US grinds major sectors of the economy to a halt?

     

  • Iran or an Arab state, perhaps with the assistance of others, gets the ''bomb?''

     

  • A failure of the Middle East peace process leads to another Palestinian intifada, and Jordan and Egypt are drawn into a conflict with Israel.

     

  • Foreign terrorists foul our water supplies in a major metropolitan area or contaminate the air our military forces abroad breathe with toxic chemicals.

     

  • A government unfriendly to the United States, perhaps operating in a hidden underground facility, makes a major technological breakthrough that has at least the potential to do major damage to US security interests.

     

  • An epidemic breaks out in the Third World for which there is no ready cure.
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The list of such ''wildcards'' could go on and on. Fortunately, most of these tragic scenarios will not unfold in the next decade or two. A safe bet, however, is that one or more of them will.

To sum up, US intelligence has its work cut out for itself!

Let me stop here. I look forward to your questions and comments.


Historical Document
Posted: Apr 03, 2007 08:56 PM
Last Updated: Jun 20, 2008 08:02 AM