[Strategic Intelligence Summary] for 20 October 2017 – Forward Observer Shop

[Strategic Intelligence Summary] for 20 October 2017


In this Strategic INTSUM… (4100 words)

  • Russia, China, North Korea, and Middle East Situation Reports (SITREPs)
  • Defense in Brief
  • And more…

Priority Intelligence Requirements:

PIR1: What are new indicators of systems disruption or instability that could lead to civil unrest or violence?

PIR2: What is the current risk of war with the four flashpoints (China, North Korea, Russia, and Iran/Middle East)?

PIR3: Defense in Brief – What are the new pre-war developments in the U.S. military and defense industrial base?

PIR1: What are new indicators of systems disruption that could lead to instability, civil unrest, or violence?

Systems Disruption

The Russian government became the first government in the world to endorse and offer its own crypto-currency. Called the CryptoRuble, the new currency made its debut this week following months of speculation that the Kremlin would do so. The virtual money will be block-chain based, but it will be regulated and tracked by Moscow. Before the announcement, there had been speculation among financial experts as well as conflicting messages over the summer from Russian leaders regarding the new cryptocurrency. In fact, Russian President Vladimir Putin himself has criticized cryptocurrency as posing a serious risk regarding fraud and money-laundering. To overcome those concerns, the CryptoRuble cannot be mined and will only be issued and maintained by Russian authorities. The CryptoRubles can be exchanged for actual rubles at any time; if a holder cannot explain the source of their CryptoRubles, then Moscow will impose a 13 percent tax at the time of redemption for real rubles. It’s too early to tell, but someday a newly created cryptocurrency could replace the U.S. dollar as the world’s reserve currency. That would dramatically alter not only the value of U.S. money but the global geopolitical alignment, favoring whoever developed the newly adopted cryptocurrency.

Vehicles have become the terrorist weapon of choice around the world, and not just as a means to deliver explosives to a target. The modern iteration of this began on Bastille Day in France July 14, 2016, when Tunisian-born Mohamed Lahouaiej-Bouhlel drove a 19-ton truck into crowds celebrating the national holiday at Nice’s Promenade des Anglais. In the end 86 people were killed and more than 430 more were wounded — roughly the same number of people killed and injured, combined, in the Las Vegas shooting this month. Since then there has been a spate of vehicle attacks by suspected terrorists mostly in Europe and mostly in France and Great Britain. But they are happening in the U.S., as well. In November 2016, Somali-born Abdul Razak Ali Artan carried out a car-and-knife attack on the campus of Ohio State University. Vehicular attacks have continued this year, leaving at least 29 people killed and more than 170 wounded. What makes this method of attack so successful is, obviously, the proliferation of automobiles throughout Western society. “The recent uptick in vehicular attacks, however, appears to have been in large part inspired by ISIS’s explicit calls to employ cars as weapons,” said the Counter-Extremism Project in a recent study. In May 2017, the U.S. Transportation and Security Agency (TSA) issued a warning to truck and bus companies urging companies to watch out for potential vehicular terrorist assailants and listing more than a dozen car-ramming attacks since 2014 that have killed more than 170.

Just because the Islamic State is finished as a quasi-governing ‘state’ does not mean that ISIS fighters no longer pose a terrorism threat. In fact, more than a year ago ISIS leaders noted that they did not have to govern cities in order to remain a threat or inspire lone-wolf attacks around the world. In fact, they began planning for just such a day when IS would no longer exist as a traditional state; fighters would merely melt back into the countryside and revert to their previous guerrilla ways. In fact, the lone-wolf strategy has already proven effective via attacks in Manchester, England, and Orlando, Florida. “Islamic State is not finished,” said Aaron Y. Zelin, who studies jihadist movements at The Washington Institute for Near East Policy. “IS has a plan, and that is to wait out their enemies locally in order to gain time to rebuild their networks while at the same time provide inspiration to followers outside to keep fighting their enemies farther away.’” Last year, before he was killed in a U.S. drone strike, Islamic State spokesman Abu Muhammed al-Adnani urged followers to carry on the fight as a lean, agile insurgency.

PIR2: What is the current risk of war with the four flashpoints (China, North Korea, Russia, and Iran/Middle East)?

South China Sea SITREP

The 19th Communist Party People’s Congress, an event that is held every five years and is the most substantial in the Chinese government, began this week with a three-plus hour speech by President Xi Jinping, who laid out his country’s geopolitical goals for the next several years. The most important of these, as it pertains to the future of America’s role in the South China Sea and the security of its allies there, is Xi’s quest to transform the Chinese military into a first-class fighting force in the near term.

First, it’s important to note that Xi’s speech was extremely nationalistic in tone because if you understand that, it’s easy to understand the military priorities he has established for China moving forward.

Xi essentially laid out three priorities. The first is to field a world-class military capable of squaring off against anyone, but in particular the United States. “A military is prepared for war. All military works must adhere to the standards of being able to fight a war and win a war,” said Xi. “Our army is the people’s army; our defense is national defense. [We must] enhance the education on national defense education, consolidate the unity between the military and civilian, in order to achieve the Chinese dream of a strong military.” (Since the early to mid-1990s, the Chinese service academies have taught young officers how to wage war against the U.S., and reports show that members of the Chinese military are eager to square off against the United States in the South China Sea.)

Next, Xi likely will put new pressure on Taiwan, which Beijing considers not independent but only a ‘renegade’ province of the mainland. “[We will] resolutely safeguard the national sovereignty and territorial integrity and will absolutely not tolerate the tragedy of the country’s split. Any activity aiming to split the motherland will be firmly opposed by all the Chinese people. We have a firm will, sufficient faith, and adequate capacity to defeat any intention of ‘Taiwan independence in any form. [We will] never allow any person, any organization, any political party, at any time, in any form, to separate any piece of Chinese territory from China,” he said.

A third priority is to improve relations with Hong Kong, but obviously, it’s the military modernization that most interests us because that will enable Beijing to more credibly challenge U.S. hegemony it a region it believes should be dominated by Chinese power.

China has already begun building the military Xi wants. The People’s Liberation Army Navy continues to modernize, while the army is making a concerted effort to enlist more technically competent soldiers who are capable of manning and operating more highly advanced weapons systems. Meantime, China is improving its missiles, including the DF-21 “carrier killer” and its asymmetrical (cyberwarfare, anti-satellite missiles) warfare capabilities as well.

Outlook: Under Xi, China looks to redouble efforts to build a first-class military that can (and will) threaten the Western-dominated order in Asia led by the United States. As Beijing’s military improves, China will become more assertive and that will necessarily brush up against U.S. national interests and alliances in the region. The United States has many historic allies in the region and isn’t simply going to abandon them because China begins fielding more sophisticated offensive and defensive weaponry.

But here’s a reality: China is coming into its own and, after remaining a second- and third-rate power for thousands of years, believes it is on the cusp of newfound greatness. That’s where Xi wants to take the country. Another reality is the United States fully recognizes China’s rise and that Beijing presents its biggest threat.

While there are few indicators this week that the U.S. and China are closer to war, there can be no doubt that the threat trend is still moving in that direction. Xi made that clear this week. Former White House chief strategic Steve Bannon predicted last year that we would be at war with China in five to ten years. We still see the real potential for war within 10 years as likely.



The Russian navy participated in drills with the Indian navy in the Pacific Ocean this week, focusing on anti-submarine warfare. Involving the Russian army, navy, and air force for the first time, the exercise was designed to bolster the legitimacy of the Russian military and deepen relationships with a regional power. The exercise has been held annually since 2003. Putin has long held plans to eventually challenge U.S. dominance in the Pacific, as we’ve observed a build-up of Russia’s Pacific fleet.

Meanwhile, on the western end of Russia, NATO continues to prepare to fight Russia in the Baltics border region. More specifically, after Russia upgraded its tank armor in the 1990s, and most recently put on display its much-touted next-generation T-14 Armata tanks, NATO is now planning to use a new weapon called the Electro-Thermal Chemical (ETC) gun, which is designed to penetrate Russian armor. A combination of high voltage electricity, plasma cartridges, and projectiles, the ETC is expected to eventually be fielded on U.S. and NATO tanks in the European theater.

Here are some other significant developments this week:

  • Former NATO commander Wesley Clark says Russia is a greater threat to the U.S. than North Korea [source]
  • NATO members train to conduct nuclear strikes against “fictional enemy” [source]
  • NATO and Russia envoys to meet next week in Brussels [source]
  • NATO holds open ceremony for Poland-based counterintelligence center [source]
  • NATO anti-missile system downs four ballistic missiles in Sunday test [source]

Outlook: The outlook on a NATO-Russian war remains about the same as last week. NATO continues to struggle to match Russian power in the region, and both sides are accusing the other of building up for war. The risk remains that Putin takes advantage of an otherwise preoccupied U.S. military (i.e., with North Korea) and decides to annex parts of the Baltics with ethnically Russian populations, similar to Crimea, Donetsk, or Lugansk.


Middle East SITREP

The next round of warfare in the Middle East has begun and, wouldn’t you know it, the first skirmish involves two forces that are both backed by the United States. On Sunday night, Iraqi government forces equipped by the United States moved on and seized the city of Kirkuk, which was held by U.S.-backed Kurdish Peshmerga forces, a heavy U.S. ally in the war against the Islamic State. The assault came after Kurds voted overwhelmingly for independence, a move the U.S. did not support and which upset the Iraqi, Iranian, Turkish and Syrian governments. While neither side initially provided official casualty figures, media reports quoting an aid organization said that several Peshmerga and Iraqi forces were killed in the initial clash. While Baghdad urged armed Peshmerga security forces to cooperate with Iraqi troops and help keep the peace, the Peshmerga responded by promising that the Iraqi government would pay “a heavy price” for triggering “war on the Kurdistan people.”

Meanwhile, in Washington, the Trump administration called for calm on both sides as it sought to avoid yet another full-fledged conflict in the region. “We’ve had for many years a very good relationship with the Kurds as you know and we’ve also been on the side of Iraq, even though we should have never been there in the first place,” President Trump said last week.

Three years ago, Iraqi Army troops fled Kirkuk in the face of an onslaught by the Islamic State but have always vowed to retain the oil-rich region. The Peshmerga, on the other hand, vowed to defend Kirkuk, which they did, and have repeatedly vowed not to allow it to fall back into Iraqi hands. The region produces about $8 billion worth of oil revenue each year, so obviously Baghdad and the Kurds both have an interest in retaining it. However, prior to the ISIS onslaught, the physical ground was Iraqi territory.

Nobody in the region wants the Kurds to be independent in Iraq because that would trigger independence moves in countries with Kurdish minorities as well. One Turkish official, for instance, which has had decent relations with the KRG but does not support an independence movement, summed it up: “We are not in favor of any independence that would be detrimental to [Iraqi] unity. Nothing like that could be discussed.” Those comments were made before the Kurds opted for independence.

Outlook: Washington is in a no-win situation. It cannot abandon an Iraqi government it spent more than a decade training, arming and propping up, at no small cost in blood and treasure — and in fact, the Pentagon has warned the U.S. would withdraw its train-and-equip program with the Iraqi army if it continued action against the Kurdish minority.

But the Kurds are an important faction as well, and some are even suggesting that the U.S. support the Kurds as a way of pushing back against encroaching Iranian influence. That, they say, would provide an important doorjamb to rising Iranian influence in a region Tehran seeks even more control.

The Kurds have said they will never revert back to Iraqi government control. The Iraqi government has said it won’t allow Kurdish independence. The U.S. may be caught between a rock and a hard place, but the principal actors in this now-disputed region are clear-headed about where their interests align, and they are in opposition to one another. Iraqi forces are already pushing into Kirkuk as the Kurds remain resolute in being independent. Conflict, under these circumstances, is inevitable.


North Korea SITREP

For now, President Trump and his national security and foreign policy teams have decided to give diplomacy one last try in convincing the North Koreans to give up their nuclear weapons and ICBM programs. In a media appearance last week, Secretary of State Rex Tillerson made the clear. “He’s (Trump) not seeking to go to war,” Tillerson said. “He has made it clear to me to continue my diplomatic efforts…until the first bomb drops.”

On that note, Trump launches his first Asia tour Nov. 3-14, where he is planning to visit several Asian nations including many that are directly involved in helping to solve the North Korean crisis. Among them: China, South Korea and Japan. In addition, Trump will make visits to Vietnam and the Philippines, two countries that are being bullied by China over rival South China Sea claims.

On North Korean leader Kim Jong-un, Tillerson said Trump wants “to be clear” regarding his diplomatic outreach efforts in that the Oval Office has never taken its military options off the table. Tillerson said Trump “has military preparations ready to go and he has those military options on the table. And we have spent substantial time actually perfecting those.”

Speaking of that preparation, the U.S. Army has been shifting is mission set and requirements for North Korea. Army war-planners and weapons developers are working overtime to fast-track networking technologies that would give troops on the ground a better ability to counter or smash a ground invasion by North Korea. The plan is ensure soldiers can operate better in underground tunnel complexes and dense urban environments. “We have been looking at Korean peninsula ops,” said Col. John Lanier Ward, director of a concept called the Rapid Equipping Force.

The fast-tracking of technology makes sense against this backdrop: One China analyst — Gordon Chang, author of, “The Coming Collapse of China,” — says that Chinese President Xi Jinping has been “weaponizing North Korea,” and by that he means transferring advanced weaponry and military technologies to Pyongyang, which certainly helps explain the country’s rapid advances in its nuclear and missile programs. “Xi Jinping has been kind of fueling North Korea, transferring very important weapons and equipment and technology to the North Koreans, especially their ballistic missile program… They are weaponizing the North,” he said.

That could include nuclear missile technology for submarines as well. In August there was a report noting that Pyongyang has been “steadily assembling” the various technologies it needs to place a nuclear warhead atop a sub-launched ballistic missile. While North Korea does not possess what you’d call a “modern” submarine force among its estimated 70-odd subs, U.S. intelligence has detected the construction of what analysts are calling the Sinpo-C class, a diesel-electric boat being built at the Sinpo Shipyard on the country’s east coast. It is believed it will be capable of sub-launched ballistic missiles which, of course, will eventually include nuclear-tipped missiles aboard an ultra-quiet diesel-electric platform. In addition, U.S. intelligence has detected ejection tests on May 30, July 18, July 25, and July 30, an accelerated schedule to be sure. These tests allow North Korean shipbuilders and engineers to assess the missile’s cold-launch system, designed to push the missile through the ocean to the water’s surface before its engines ignite. “The construction of a second ballistic missile submarine at Sinpo suggests that North Korea is planning on potentially operationalizing a sea-based deterrent capability around multiple submarines in the coming years,” said one assessment.

Outlook: As we go to press, the U.S. Navy is assembling a large, powerful force in waters off the Korean peninsula. Another war indicator: The Air Force munitions stockpile in Guam got bigger — by 10 percent — this month, as more than 816,000 munitions (bombs and such) were delivered between August and the end of September. “The inbound munitions ensure required assets are available in theater to support national objectives,” explained Maj. Erik Schmid, 36th Munitions Squadron commander. “The munitions will increase the overall availability of day-to-day training assets and War Reserve Material stocks to support warfighting capabilities.”

Coupled with the latest events diplomatic events, it is becoming clearer that the Trump administration is at least preparing for the possibility that Kim Jong-un will force Washington into a corner over its policy of never allowing Pyongyang to obtain a nuclear capability it can eventually use to threaten the American homeland.


Defense in Brief

Senior Army leaders plan to spend the next fiscal year (’18) developing the groundwork for new weapons programs, despite the fact that will require them to devote fewer resources to improving existing weapons systems. In an interview, Lt. Gen Mike Murray, the Army’s deputy chief of staff, said that the planning is “all about ends, ways and means this year.” While acknowledging that the service can’t simply stop spending money on all existing weapons platforms, it could nevertheless dramatically reduce spending on legacy systems in order to fund newer ones. Using the M1A2 Abrams tank as an example, he said “the only way you buy the next-generation tank is by stopping, or significantly reducing, the number of [engineering change proposals] you’re doing on the current generation.” Most of the savings will have to come from big-money programs, Murray said. Acting Army Secretary Ryan McCarthy and Army Chief of Staff Mark Miller reiterated Murray’s position, saying the service is “very focused on this.” Readiness remains the service’s top priority, said Milley, but he added he’s “ready to spend some more effort and time” on modernizing Army weapons. First, Army leaders must figure out where they want to go, what is feasible, and what is actually affordable.

Meanwhile, Murray also says that the Army faces a “triple whammy” type “disturbance in the force:” Specifically, reductions in procurement, modernization, research & development, testing and evaluation funding, which has been occurring since 2009, President Obama’s first year in office. These reductions in funding and capability have come at a time when the global security situation “has only gotten more complicated,” he noted. Worse, the military can’t seem to convince Congress to actually pass a budget — which permits long-term planning and funding — or getting rid of funding shortfalls via sequestration, which has dramatically cut into weapons development. The way forward must include six pillars: Continued investment in incremental upgrades to existing combat platforms, “greater clarity and prioritization” in the service’s science and technology budget, “increased investment in prototyping of select next-generation combat systems” with soldier feedback and experimentation prior to requirements, greater desire for non-developmental solutions, “an effort to sustain our support fleets and combat service support fleets” for the maximum possible duration, and continued divestment of “obsolete and excess equipment.” Both House and Senate versions of defense authorization bills contain language instructing the Army to devise “a comprehensive modernization strategy.”

The U.S. Navy may indeed be able to meet President Trump’s goal of a 355-ship fleet from 270 now, but it will have to rely on its “ghost fleet” in order to get there. What’s that? It’s primarily the National Defense Reserve Fleet, which consists of “mothballed” vessels that can be reactivated to active service within 20 to 120 days in times of emergency. While none exists at the moment, it’s not possible to build our way to that figure, according to industry experts who say the shipbuilding infrastructure in the U.S. just doesn’t exist. What should the expanded fleet look like? According to Capt. Jerry Hendrix (Ret) Ph.D., who served as director of the Naval History and Heritage Command, and Curator of the Navy, it should consist of 12 carriers, 35 cruisers, 72 destroyers, 64 frigates, 65 fast attack submarines, and 12 ballistic missile submarines. The additional 95 ships should include amphibious assault vessels, expeditionary fast transports and various auxiliary ships. And while creating a 355-ship navy would not be cheap — requiring an estimated $25 billion more a year in shipbuilding funding — a large-scale war would cost trillions per year. Having a muscular, well-funded and capable navy is the best way to prevent a hugely costly, ultimately deadly war.

As many as 108 F-35s may not be combat-capable according to the program’s executive officer, Vice Adm. Mat Winter, who said his office is currently exploring the option. The reason: Funding to upgrade them to fully combat-capable configurations will put a damper on the Air Force’s plans to bolster production of the planes in the coming years. Most likely these 108 planes are those the Air Force reportedly needed to upgrade earlier this year. If they are not retrofitted, they will become “Concurrency Orphans,” or planes that were left behind in the acquisition cycle after they were bought in haste by the services before the development process was finished. In short, we’d end up with about $21 billion worth of “fighter” planes that are incapable of fighting — not a smart use of limited military funds in the age of sequestration. Worse, what’s not yet clear is what the fate of 81 F-35s bought by the Marine Corps and Navy during that same period will ultimately be. If left in their current condition, nearly 200 vitally needed F-35s may wind up as multi-ton paperweights unready for combat because the Pentagon would rather buy new F-35s than upgrade planes taxpayers have already purchased. Even worse: Because these planes were among the first built, they were also the most expensive.

Defense Secretary James Mattis has issued a memo to all Defense Department personnel reminding them “we are a department of war” tasked with defending the nation and the American people who are dependent upon them. Further, Mattis noted that at all times the military’s role was to provide the president and his diplomatic corps a force capable and strong enough to allow them to always negotiation “from a position of strength.” He also went on to list specific threats: “We must be prepared to deal with an increasingly complex global security situation, characterized by an accelerating decline of the rules-based international order. North Korea’s provocative actions and reckless rhetoric continue despite United Nations censure and sanction. Russia has violated the borders of nearby nations and seeks veto power over the economic, diplomatic and security decisions of its neighbors. China is a long-term strategic competitor that seeks to intimidate its neighbors while escalating tensions in the South China Sea. Iran continues to sow violence and remains the largest long-term challenge to Middle East stability. Despite recent gains against ISIS, terrorist groups continue to murder the innocent and threaten peace.” His objectives for the Pentagon are to restore military readiness while building a more lethal force; strengthen existing alliances while attracting new partners; and bring needed business reforms to the Pentagon (particularly the acquisition and logistics systems). “I expect you to pursue actively these three lines of effort,” Mattis said, handwriting the word “Charge!” atop his signature.


Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

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