President Obama's senior intelligence adviser says that the world financial crisis has surpassed terrorism as the country's "primary near-term security concern," pointing to unrest in countries around the world as commerce stumbles. It was an unusual briefing by the new Director of National Intelligence Dennis Blair, who was briefing Congress on the U.S. intelligence community's annual threat assessment, which in the past has usuall y focused heavily on issues like Iranian nuclear weapons and progress in the global effort against terrorist groups. "Time is probably our greatest threat," Blair said. "The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests."
He identified five issues in particular that concern U.S. spy agencies beyond the perpetual threat from the al Qaeda terrorist network. The list:
1. The economic crisis: The one-two punch of a prolonged financial crisis and global recession is "likely to produce a wave of economic crises in emerging-market nations over the next year," Blair said. "Roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown." Although two thirds of countries in the world, including the United States and Western European nations, have sufficient financial or other means to limit the impact for the moment, the DNI told the Senate Intelligence Committee, "Much of Latin America, former Soviet Union states, and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit, or other coping mechanism. Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one-to-two-year period."
On a more hopeful note, Blair expressed the consensus view among intelligence analysts that plummeting oil prices may give pause to governments in Tehran and Caracas, which were buoyed in the past by record revenues. Falling oil prices "may put the squeeze on the adventurism of producers like Iran and Venezuela," he said.
2. The Balkans: While the greatest threat to the United States is the global financial crisis, the greatest source of instability in Europe remains one of its largest historic power kegs. "Events in the Balkans will again pose the greatest threat of instability in Europe in 2009," Blair said. The biggest challenge comes from the "unresolved political status of the Serb minority in Kosovo, particularly in northern Kosovo, and Bosnia-Herzegovina's continuing uneasy interethnic condominium." While most member states of the European Union have recognized Kosovo, Belgrade only acknowledges the parallel Kosovar-Serb institutions. Belgrade "has used political and legal means to challenge and undermine Pristina's sovereignty and to limit the mandate of the EU's Rule of Law Mission in Kosovo," Blair said. "This has reinforced the de facto separation of Kosovo into an Albanian-majority south and a Serb-majority north and frustrated the Kosovo Albanians."
3. Afghanistan: Blair's presentation to the Senate committee included some harsh words for the government in Kabul, which is still smarting from a brazen attack by Taliban gunmen. The American-backed government of Afghan President Hamid Karzai was only one of several problems, Blair said, pointing to the widespread government corruption that has empowered both the resurgent Taliban and the country's many warlords. Moreover, "the insidious effects of drug-related criminality continue to undercut the government's ability to assert its authority outside of Kabul, to develop a strong, rule-of-law-based system, and to rebuild the economy."
Overall, it was a gloomy assessment. "The country faces a chronic shortage of resources and of qualified and motivated government officials at the national and local level," Blair said. "Kabul's inability to build effective, honest, and loyal provincial- and district-level institutions capable of providing basic services and sustainable, licit livelihoods erodes its popular legitimacy and increases the influence of local warlords and the Taliban."
4. North Korea: A perennial diplomatic bad actor, North Korea has already rattled its sabers at the opening of the Obama administration. Pyongyang elevated its hostile rhetoric toward South Korea and, U.S. officials in Washington suspect, may be preparing to launch a new missile. Kim Jong Il's 67th birthday comes in early March, and North Korean trucks have been spotted carrying two stages of a Taepodong-2 missile to a launch facility on the country's eastern shore, according to South Korean news reports. Secretary of State Hillary Clinton will travel to the region for a week of talks with China, Japan, Indonesia, and South Korea.
Blair said that the North was unlikely to use its nuclear weapons in an offensive capacity but would rely on the arsenal as a deterrent. He said that while intelligence analysts don't expect Pyongyang to export completed devices, there is concern over proliferation of nuclear and ballistic missiles technology. "Some in the intelligence community have increasing concerns that North Korea has an ongoing covert uranium enrichment program," he said.
5. Computer security: The digital realm continues to be a weak spot for technologically advanced nations. "A growing array of state and nonstate adversaries are increasingly targeting—for exploitation and potentially disruption or destruction—our information infrastructure, including the Internet, telecommunications networks, computer systems, and embedded processors and controllers in critical industries," Blair told the senators. "A successful cyber attack against a major financial service provider could severely impact the national economy, while cyberattacks against physical infrastructure computer systems such as those that control power grids or oil refineries have the potential to disrupt services for hours to weeks."
But his concerns were not solely focused on dramatic hacking attacks. "Malicious activity on the Internet also is rapidly increasing: spam—unsolicited E-mail that can contain malicious software—now accounts for 81 percent of all E-mail. . . . The total cost of spam and all of the types of fraud that take advantage of spam's impact is $42 billion in the U.S. and $140 billion worldwide last year," he said. In addition, global companies may have lost over $1 trillion worth of intellectual property to data theft in 2008.