All posts in Reports

Crime, Terror and the Internet of Things

Wikistrat Crime, Terror and the Internet of Things Report

The Internet of Things has great potential to improve the functions of many systems in the coming decade. But as former law enforcement officer and author Marc Goodman has said, “When everything is connected, everyone is vulnerable.” The virtual world is riddled with hackers, worms, viruses and hacktivists, and it is a safe bet that the IoT — as the bridge between the virtual and the physical world — will enable these actors to move into the physical world as well.

In this report, Wikistrat analyzes the most important IoT targets, the most likely methods attackers will use and the motives behind such attacks.

Our research suggests that public infrastructure is most at risk in terms of security, as are private citizens in their homes. These two very different targets reveal some of the inherent difficulties that lawmakers and security experts must deal with regarding the IoT — as each requires a very different strategy for successful cyberdefense. Read More →

Facebook Twitter Email

China’s Choice: Responding to U.S.-Vietnam Cooperation

China's Choice: Responding to U.S.-Vietnam Cooperation

Vietnam’s relationship with China has historically been testy. Now, with the U.S. increasingly playing the role of offshore balancer, Vietnam has the distinct opportunity to move out of China’s shadow and into the global community.

However, China’s historical and contemporary positioning isn’t the only thing driving Vietnamese-U.S. relations. The relationship appears to be more than a reaction to recent Chinese behavior — and it will continue to grow.

In this report, Wikistrat’s Steve Keller amalgamates the content from our recent “Evolving U.S.-Vietnam Relations” forum — and assesses that China would be much better served if it accepted Vietnam’s drift towards the United States. Any gains that China might see from military or other open conflict with Vietnam would be more than offset by Hanoi going straight into Washington’s open arms.

China’s best case is to draw back and subtly encourage Vietnam to use the U.S.-China rivalry to its advantage in the fields of energy, arms, technology and foreign investment.

Importantly, to the extent that China is able to take part in globalization rather than fight for its own mercantile interests, it will prevent the U.S. from being the sole beneficiary of Vietnam’s movement into the global marketplace.

As long as Beijing treads lightly and wields economic incentives rather than military bluster, it should be able to keep a pro-U.S. Vietnam from being anti-China. Read More →

Facebook Twitter Email

Europe’s New Political Divide

Europe's New Political Divide cover

Europe’s traditional political order is breaking down. The public is no longer split between the traditional left and right; the divide is now liberals and internationalists against conservatives and nationalists, argues Wikistrat’s Nick Ottens in this report.

This new order is a challenge for political actors who have operated for decades in the old context. Christian and social democrats — long the mainstays of Western European democracy — find that they scarcely appeal to either of the new poles and are hemorrhaging support to greens, libertarians, nationalists and socialists. The trade unions are emptying. Courts and the institutions of the European Union are increasingly seen by one or more sides as in the cahoots of the other.

This has implications for businesses as well. The parties that are now in power have almost zero political capital for trade deals and more liberal immigration laws.

The challenge for Europe is finding a new center, including a social compact for the 21st century that generates a sense of shared prosperity. In the long term, parties probably will. In the short term, the economic interests of multinational corporations are going to have to take a backseat. Read More →

Facebook Twitter Email

The Autonomous Car That Killed

The Autonomous Car That Killed

The Autonomous Car That Killed

The tragic death of a Tesla Model S electric sedan driver on June 30 is a sharp reminder that although autonomous vehicles are ultimately expected to be safer than their non-autonomous counterparts, they will never be completely safe.

While this accident was the result of the car failing to appropriately apply the brakes before a crash, we should also consider that an autonomous vehicle may one day cause a death after making a “correct” decision for which it was intentionally programmed. In such a case, the term “accident” may not even apply.

If such a scenario does take place, what impact will it have on autonomous cars and their public image? What impact will it have on legislators?

In May, Wikistrat ran a simulation in which more than 50 experts were challenged to respond to a scenario in which an autonomous vehicle is involved in a fatal incident caused not by externalities or an internal malfunction, but because of the car behaving exactly as intended – i.e., making the “correct” decision in a particular situation.

The purpose of the exercise was to stress-test risks and potential issues associated with the chosen scenario, understand how they might spiral, and forecast the direction in which they might ultimately turn. This exercise identified issues as well as blind and soft spots which future autonomous vehicle manufacturers should be paying attention to today. Read More →

Facebook Twitter Email

China’s Dilemma in Venezuela

Wikistrat - China's Dilemma in Venezuela cover

In a Wikistrat simulation last month, analysts highlighted a facet of the ongoing crisis in Venezuela that is being overlooked: the implications for China, which has been the country’s greatest economic supporter and for which the current turmoil is a major test of its economic and foreign policy.

In addition to the political crisis, which is pitting President Nicolás Maduro against an opposition-controlled legislature, Venezuelans are suffering under mounting crime, triple-digit hyperinflation, a collapse of essential public services and widespread shortages of basic supplies.

China, which deepened relations with the oil-rich nation under Maduro’s predecessor, Hugo Chavez, now faces a difficult choice, argues Wikistrat’s Oren Kesler in this report: Help the regime in Caracas step back from the brink with aid and investment loans and hope that oil prices will stabilize to buy them more time — or risk a less Chinese-friendly government that would shift oil sales to whomever is willing to pay in much-needed cash. Read More →

Facebook Twitter Email

The EU Breakup

Wikistrat - The EU Breakup cover

Should Britain vote to leave the European Union in its referendum this month, the bloc’s disintegration would undoubtedly be accelerated. But even if the United Kingdom votes to stay in, there are forces at work that could conceivably break up the EU.

The two most serious forces are economic stagnation and the dramatic increase of non-European citizens seeking entry into the countries of the EU. Both are undermining the willingness of member states to pursue pan-European solutions and both contribute to the success of political parties that advocate a weakening or a breakup of the Union.

Wikistrat recently conducted a crowdsourced analysis of what would happen if the EU does fall apart. Our analysts rate the probability of such a breakup as still fairly low, but if it does happen – perhaps only partially – it would not slow the forces driving disintegration. Instead, many of the drivers of disintegration would remain – and in some cases would be exacerbated.

For instance, a British exit following the referendum or a French exit following the election of Marine Le Pen as president would economically isolate both countries. Smaller nations would suffer even more if they left the EU. A comprehensive fracture with a number of national withdrawals would likely result in high inflation in southern and peripheral member states, or cause debt defaults with subsequent severe budgetary restraint. Read More →

Facebook Twitter Email

After the Impeachment: What’s Next for Brazil?

Wikistrat - After the Impeachment Whats Next for Brazil cover

The new Brazilian government led by Michel Temer, the former deputy of the suspended president, Dilma Rousseff, has minimal room for error in the weeks and months ahead, argues Wikistrat’s Oren Kesler in this report. The public’s expectations are high and the government is expected to provide impossibly immediate solutions to deep problems.

The Temer government’s first challenge is to restore investors’ trust and confidence. Temer’s appointments of Henrique Meirelles as Minister of Finance and Ilan Goldfajn as President of the Central Bank are a step in the right direction, and have been welcomed among Brazilian and foreign investors alike.

However, a full economic recovery could prove to be an unexpectedly difficult challenge. In the first quarter of 2016, Brazil’s GDP shrank by 1.4 percent relative to the fourth quarter of 2015 — and by 6.3 percent compared to the first quarter of 2015. Overall, Brazil’s economy is set to shrink by 3.7 percent this year.

Many investors consider the next ninety days to be crucial. The new government needs to issue and execute economic reforms to cut the deficit — a task the Rousseff government was neither willing nor able to tackle — and privatize state-owned enterprises, such as hydroelectric dams, airports, marine ports, insurance companies and the postal services. Read More →

Facebook Twitter Email

Saudi Arabia and the Future of Oil

Wikistrat - Saudi Arabia and the Future of Oil cover

On May 17, Wikistrat held a webinar for journalists and commentators to consider Saudi Arabia’s “Vision 2030” proposals, which include leadership changes at the Saudi oil ministry and the partial privatization of Saudi Aramco in order to create a sovereign wealth fund capable of supporting diversification of the domestic economy.

Prof. Shaul Mishal, director of the Middle East Division at the Lauder School of Government at IDC Herzliya, suggested that the Saudis are trying to “adjust the country to a new era” and bring about “independence from oil revenues” through pursuit of an indigenous defense industry, the development of a tourism industry, and the adoption of a more liberal immigration policy.

He noted that Vision 2030 remains simply a vision and that it is unclear how successfully it can be turned into reality. He also commented that great efforts will be needed to mobilize support from the public due to many Saudis being employed in closed, inefficient public-sector organizations that will be resistant to economic restructuring.

Mishal suggested that success will be dependent upon more than financial and economic changes, as the plan is contingent upon psychological and cultural shifts within a Saudi society that may be unready. “It’s the first time the Saudis [the government] have been ready to think in drastic terms about their future.” Accordingly, he concluded that Riyadh is embracing uncertainty on the basis that it is better to “take a big risk without knowing where they’re heading” rather than risk a disastrous situation resulting from adherence to an outdated status quo.

Dr. Ariel Cohen, a non-resident senior fellow at the Global Energy Center at the Atlantic Council, broadly shared this analysis, concluding that the key question is whether the new plan offers a sustainable vision. Read More →

Facebook Twitter Email

March Madness: Top Factors Shaping the Energy Landscape in 2016

Wikistrat - March Madness cover

Earlier this year, Wikistrat ran a four-day “March Madness” (playoff-style) voting exercise to determine the top factors shaping the energy landscape this year. More than 70 analysts from our global community participated, including energy experts, academics, representatives from business and industry, and analysts with expertise on technology and development in Europe and North America.

The voting took place across four rounds that narrowed down key supply and demand factors. The factor determined by Wikistrat’s analysts to be most consequential was a market forecast of broad economic stagnation (a demand-side factor).

The supply-side factor determined to be most influential was Iran entering the oil market with unexpectedly high volume.

Analysts believe fundamentals to be weak influencers of prices except in negative terms (e.g., Iran producing more than expected). Our community’s emphasis was rather on external events disrupting supply, with economic/financial evaluations in futures remaining the main driver of oil prices.

By next year, fundamentals are likely to become slightly more relevant as production cuts begin to slowly impact the supply/demand differential. Read More →

Facebook Twitter Email

Turkey’s Cooperation with Europe on ISIS

Wikistrat - Turkeys Cooperation with Europe on ISIS cover

The recent terrorist attacks in Paris and Brussels revealed that intelligence sharing between European nations and Turkey is inadequate.

Salah Abdelslam, a suspect in the March bombings of Brussels Airport, was detained in Gaziantep, Turkey in July 2015 and deported to Belgium on terrorism charges. Yet, according to President Recep Tayyip Erdoğan, the Belgian authorities could not tie him to terrorist activities and Abdelslam was released.

Similarly, after the November 2015 attacks in Paris, Turkey claimed it had warned France about attacker Omar Ismail Mostefai twice, in December 2014 and in June 2015, but never heard back.

Wikistrat’s Dr. Akin Ünver argues in this report that European countries and Turkey must come to a better intelligence-sharing agreement.

“This would mean a better personal data protection law for Turkey that eventually becomes the legal basis for faster and better transfer of criminal data,” he writes.

If completed as intended, this will do wonders in leading to an EU-Turkish joint counterterrorism early-warning system.

Ünver also recommends increases in funding and personnel for European intelligence agencies. The fact that Belgian and French services were unable to heed Turkey’s warnings about their respective attackers suggest a shortcoming in capabilities that must be addressed. Read More →

Facebook Twitter Email