All posts in Reports

Russia’s Syrian Military Surprise

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President Vladimir Putin’s decision to begin the withdrawal of most of his forces from Syria is sensible. Having stabilized the Assad regime and reestablished Moscow’s role as a player in the Middle East, his move also reduces the danger that the Russians could suffer a politically disastrous defeat or else are dragged more deeply into the conflict.

A recent Wikistrat wargame underlines these conclusions.

Last month, 60 Wikistrat analysts wargamed a scenario of regime change in Syria and explored the likelihood and consequences of an increased Russian commitment therein. The overall conclusion of more than 150 policy options created by Wikistrat’s analysts was that while Russia could hardly sit out such a red-line event, an increased presence in Syria would represent both a political and military risk that Putin is not likely to take.

The caution exhibited by the analysts playing Russia — even in such an extreme scenario as violent regime change — was a clear indication that absent major shocks, the reverse (a decreasing presence) was the more likely path for Russia to take. Read More →

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Turkey’s Intervention in the Syrian Civil War: A Wikistrat Wargame

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Last month, 140 analysts from Wikistrat’s global community of 2,200 wargamed a scenario in which Turkey invades northern Syria to establish a buffer zone in the country’s Kurdish region.

The analysts were divided across two mirrored groups (Alpha and Bravo) which had seven teams of ten analysts each, playing Russia, Assad loyalists in Syria, Turkey, the Kurds, ISIS, anti-Damascus and Western-backed rebels, as well as Iran and its proxies.

The two groups progressed simultaneously from the same starting scenario. But the divergent courses they took revealed key insights into some of the main actors and dynamics in the Syrian Civil War:

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  • If Turkey were to cross the border and establish a buffer zone in Syria, it would be unlikely to advance much further and seek to avoid a direct confrontation with Russian forces.
  • Assad has an interest in encouraging Russian and Kurdish coordination in Kurdish-held areas in order to free resources to fight anti-Assad rebels in the north.
  • Anti-Assad rebels are likely to suffer greatly in the face of escalating tensions, as their backers (the U.S. and Turkey) will hesitate to increase the risk of hostilities with Russia by providing them with significant support.
  • If Russia manages to keep its focus on ISIS while checking Turkey, it could gain significant international public support which could be leveraged on behalf of Assad.
  • ISIS aggression was a major determinant regarding the direction and intensity of both games. However, ISIS aggression was more likely to result in sustained victory if the focus was on insurgent warfare in Syria (e.g., an attack on Russian forces within Syria) rather than terrorist attacks abroad (e.g., an attack against Russia itself). Read More →

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After Iran’s Elections

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While most analysts presented the recent parliamentary elections in Iran as a struggle between “reformers” or “moderates” on the one hand and “conservatives” or “hardliners” on the other, the actual contest was between the government’s supporters (both within the moderate and conservative factions) and its rivals among the conservative right.

In that struggle, it were President Hassan Rouhani’s supporters who won out, argues Wikistrat’s Dr. Raz Zimmt in this report.

But he also cautions against assuming sweeping change, for three reasons:

    1. Gains by moderates do not necessarily mean a failure for the regime: While election results could be considered a victory for the moderates, they also indicate the regime’s ability to gain back at least some of the legitimacy it lost following the 2009 crisis. The relatively high turnout and the reformists’ call for mass participation indicate that the majority of the Iranian public is ready to take part in politics despite the severe restrictions on participation.
    2. The President has seen a boost, but the real battle is still ahead: The new Majlis could provide the President with more power to promote his economic plans. However, the Iranian economy continues to suffer from significant structural problems — chief among them being corruption, lack of transparency, weakness of the private sector, and control exercised by powerful semi-governmental institutions like the Revolutionary Guards. The new Majlis might assist Rouhani’s efforts in carrying out certain economic reforms, but substantial economic improvement relies heavily on solving major structural defects. Such an uptick therefore remains doubtful.
    3. The public may be moderate, but the regime remains hardline: The results could indicate that given a real choice between hardliners and moderates, the Iranian public is more likely to choose moderation. Nevertheless, most power centers in Iran are not elected by the general public and are still controlled by hardliners. These include the Supreme Leader, the Revolutionary Guards, the judiciary and the Law Enforcement Force. As long as this control prevails, a strategic change in Iran’s domestic or foreign policy is unlikely. Read More →

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Turkey’s Policy Towards ISIS

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Turkey is currently dealing with two main forms of ISIS activity within its borders:

    1. Terrorist attacks against both tourists and left-wing Kurdish groups (also incurring minor Turkish military and police casualties)
    2. The organization’s tight-knit and dug-in networks, finance and recruiting operations — which are taking on a more sociological form in some provinces

While the first (more explicit) challenge requires a more traditional counterterrorism and intelligence approach, the second (less explicit, but which acts as a force multiplier on the first) brings in a wider array of social, economic and cultural policy options, argues Wikistrat’s Dr. Akin Ünver in this report.

Turkey turned a blind eye to ISIS as a part of its strategy of supporting (or at least not disrupting) cross-border transit of all groups targeting the Assad regime in Syria. Many of these cells were established and spread across Turkey when the group was still a fringe organization. Even after ISIS became a formidable player in Syria in 2014, Turkey did not stop the group’s activity within its borders, mainly out of its anti-Assad priorities and because for a long time it did not consider ISIS to be a present or future danger to Turkish interests.

Now that’s changed and Turkey needs to decide which war it wants to wage. Its fight with Kurdish separatists, both in Turkey and across the border in Syria, is sapping immense security resources and making it difficult to get Turkey’s NATO allies on its side.

The open-ended nature of security operations also serves to significantly alienate Kurdish public opinion inside Turkey, creating another long-term radicalization problem.

Even if the Kurdish problem were (temporarily) settled, though, Turkey would require all of its available resources along with international intelligence support to tackle its ISIS problem at home. The absence of solid data on the extent of ISIS entrenchment in Turkey, along with the existing mistrust between Turkish security institutions, renders this a long-term affair. Read More →

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Brazil Political Turbulence: The Silver Lining to a Perfect Storm

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If there is a silver lining to Brazil’s political turmoil, it is that the public appears to be regaining trust in two institutions which are fundamental for any democracy: the Supreme Court and the Federal Police. Both are gaining support and appreciation from the public for acting impartially throughout the crisis, and for not backing down from anti-corruption efforts despite intense pressure imposed upon them.

President Dilma Rousseff’s days in office are likely numbered while Brazil’s economy is in the tank. GDP contracted 3.8 percent last year, inflation hit a 12-year high in January at 10.7 percent.

The combination of a sinking economy and corruption scandals reaching all the way to the top of Rousseff’s Workers’ Party has made her position untenable, argues Wikistrat’s Oren Kesler in this report.

Ironically, the Workers’ Party’s successes may be partly to blame. Brazil has experienced economic crises and corruption scandals before. The difference is that now many in the middle class, which has doubled in size under Workers’ Party rule, threaten to fall back into poverty as a result. This anxiety is manifesting itself in the form of anger against Rousseff and her party, which are perceived to be failing to address the problem.

Unlike in the past, though, Brazilians do see an end in sight — either with the impeachment of Rousseff or with the Workers’ Party presidency being replaced in 2018. Such change is considered to be worth waiting for. Read More →

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Mapping Oil Market Volatility

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The global market price of oil is a closely watched benchmark of current and expected global economic and geopolitical conditions. After reaching $107 per barrel in mid-2014, world oil prices have fallen significantly — trading at $29 per barrel as of February 12, 2016. More than anything, this sharp movement downward was indicative of the high volatility of the market in the past year.

Wikistrat ran a unique voting exercise in February to assess the impact that geopolitical and economic events would have on oil price volatility, assuming a $60 per barrel stabilization point was eventually reached.

Prior to the exercise, a team of energy market experts from Wikistrat’s analytic community developed 60 events that can be expected to affect the price of oil. These were later voted on by a group of over 80 of Wikistrat’s energy and geopolitics analysts in terms of their expected impact on oil prices.

Of the 15 scenarios rated most likely to cause an increase in oil prices, all events were related to geopolitics and terrorist attacks — not to economic or regulatory changes. Thus, the most salient macroscenarios were those composed of a terror event and geopolitical event (not necessarily related to one another), with only minor influence from an economic/environmental event or technological/supply event. Read More →

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East or West: Where Will Russia Send Its Natural Gas?

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Russia’s natural gas policy is at a watershed moment. It still sells most of its gas to Europe, but a slump in demand and accelerated European Union diversification efforts in the wake of Russia’s annexation of Crimea have pushed Moscow to accelerate its quest for market access in the East. Demand there is strong, but Russia does not have the infrastructure to expand rapidly.

In this report, Wikistrat explores Russia’s energy policy, its trajectory and the factors shaping it.

One of our key findings is that Russia isn’t going to make a clear-cut choice between East and West, because it can’t. Moscow must hold onto its European market share and is ultimately willing to comply with legislation — but it won’t do so without putting up a fight.

The Asian market and LNG projects give Gazprom breathing space in the event that Europe’s demand is not strong enough or it sets too many obstacles; however, competition in terms of LNG is fierce, and prices may fall substantially if supply increases or demand softens. Read More →

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The Chinese Navy: A Look Ahead

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Naval modernization is a key component of China’s military program and seen as crucial to realizing President Xi Jinping’s “Chinese Dream” of a strong and prosperous China. A white paper released last year announces ambitious goals: By 2020, the People’s Liberation Army Navy (PLAN) is supposed to the second-best in the world.

In this report, Wikistrat’s David K. Schneider analyzes China’s capabilities and intentions for projecting power into its near and far seas. He argues that China is unlikely to emerge as a new global maritime hegemon or peer competitor of the United States anytime soon. But it could emerge as a peer challenger in East Asia or in other theaters in cooperation with another regional peer competitor such as Russia — or even on its own, should the U.S. be occupied in more than one theater at the same time.

Beijing is looking to a future in which China takes its place as a major world military power commensurate with its economic power and global interests.

Key factors that could derail China’s grand maritime strategy, according to Schneider, include an end to its entente with Russia, conflict between the Communist Party and the army, and a more comprehensive American effort to block Chinese expansion. Read More →

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China’s Economy: From Exports to Domestic Consumption

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While the thought of selling 1.3 billion wristwatches or shoeing 2.6 billion feet is a tempting proposition for exporters, the promised bonanza of the Chinese consumer market has proven elusive for many.

This is also true for producers of domestic goods and services in China who have had to struggle against what some would say is a deserved bias against Chinese products, given the rampant quality control problems that have occurred in many areas.

Now, argues Wikistrat’s Hugh Stephens in this new report, the Chinese economy is reaching a turning point

Exports are flattening and the economy is no longer expected to grow at the double-digit rates of the past. China can no longer afford to continue to be the world’s leading exporter of low-tech industrial products; it is reaching the limits of growth as its citizens choke in smog-ridden cities, clean water is in ever-decreasing supply and its population transitions into an inverse pyramid age structure.

The year 2016 will see the beginning of a transition. Read More →

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China’s Strategic Calculus in North Korea

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Earlier this month, North Korea conducted its fourth-ever nuclear weapons test — the second since Kim Jong-Un took power. The underground detonation of what is estimated to have been a 10 kiloton nuclear weapon — smaller than the atomic bombs dropped on Hiroshima and Nagasaki — was met with widespread international criticism, including from China.

Echoing language used in response to previous tests, the Foreign Ministry issued a written statement expressing “resolute opposition” and calling on Pyongyang to “honor its denuclearization pledges.” Moreover, China looks set to join the other permanent members of the U.N. Security Council to back an additional resolution against North Korea.

Still, there is widespread disappointment in the international community that Beijing does not do more to persuade Pyongyang to abandon its nuclear weapons program.

In this report, Wikistrat’s Dr. Benjamin Herscovitch argues that China has conflicting imperatives.

On the one hand, China worries that North Korea’s behavior will drive Japan and South Korea to call for a greater U.S. military presence in North Asia — and that the two will bolster their own defenses as well.

On the other, China’s worst-case scenario is not a nuclearized Korean Peninsula but rather the collapse or removal of the North Korean regime. In such an event, China would have on its border a politically and socially unstable and highly militarized nation of roughly 25 million.

Even worse, in the event of the absorption of North Korean territory into a reunified Korea, China would face the prospect of bordering a U.S.-aligned nation in which tens of thousands of U.S. troops are stationed. Both of these scenarios would be seen by Beijing as strategic disasters.

Thus, the rest of the world should not count on China to rein in North Korea’s nuclear program. Read More →

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