- Statement by Director of Central
Intelligence
- George J. Tenet
- before the
- Senate Select Committee on Intelligence
- on the
- Worldwide Threat 2001: National Security in a
Changing World
- (as prepared for delivery)
- 7 February 2001
-
- As I reflect this year, Mr. Chairman, on the threats to
American
- security, what strikes me most forcefully is the accelerating
pace of change
- in so many arenas that affect our nation's interests.
Numerous examples
- come to mind: new communications technology that enables the
efforts of
- terrorists and narcotraffickers as surely as it aids law
enforcement and
- intelligence, rapid global population growth that will create
new strains in
- parts of the world least able to cope, the weakening internal
bonds in a
- number of states whose cohesion can no longer be taken for
granted, the
- breaking down of old barriers to change in places like the
Koreas and Iran,
- the accelerating growth in missile capabilities in so many
parts of the
- world-to name just a few.
- Never in my experience, Mr. Chairman, has American
intelligence had
- to deal with such a dynamic set of concerns affecting such a
broad range of
- US interests. Never have we had to deal with such a high
quotient of
- uncertainty. With so many things on our plate, it is
important always to
- establish priorities. For me, the highest priority must
invariably be on
- those things that threaten the lives of Americans or the
physical security
- of the United States. With that in mind, let me turn first to
the
- challenges posed by international terrorism.
-
- TRANSNATIONAL ISSUES
-
- We have made considerable progress on terrorism against US
interests and
- facilities, Mr. Chairman, but it persists. The most dramatic
and recent
- evidence, of course, is the loss of 17 of our men and women
on the USS Cole
- at the hands of terrorists.
- The threat from terrorism is real, it is immediate, and it is
evolving.
- State sponsored terrorism appears to have declined over the
past five years,
- but transnational groups-with decentralized leadership that
makes them
- harder to identify and disrupt-are emerging. We are seeing
fewer centrally
- controlled operations, and more acts initiated and executed at
lower levels.
-
- Terrorists are also becoming more operationally adept and more
technically
- sophisticated in order to defeat counterterrorism measures.
For example, as
- we have increased security around government and military
facilities,
- terrorists are seeking out "softer" targets that provide
opportunities for
- mass casualties. Employing increasingly advanced devices and
using
- strategies such as simultaneous attacks, the number of people
killed or
- injured in international terrorist attacks rose dramatically
in the 1990s,
- despite a general decline in the number of incidents.
Approximately
- one-third of these incidents involved US interests.
- Usama bin Ladin and his global network of lieutenants and
associates remain
- the most immediate and serious threat. Since 1998, Bin Ladin
has declared
- all US citizens legitimate targets of attack. As shown by the
bombing of
- our Embassies in Africa in 1998 and his Millennium plots last
year, he is
- capable of planning multiple attacks with little or no
warning.
- His organization is continuing to place emphasis on developing
surrogates to
- carry out attacks in an effort to avoid detection, blame, and
retaliation.
- As a result it is often difficult to attribute terrorist
incidents to his
- group, Al Qa'ida.
- Beyond Bin Ladin, the terrorist threat to Israel and to
participants in the
- Middle East peace negotiations has increased in the midst of
continuing
- Palestinian-Israeli violence. Palestinian
rejectionists-including HAMAS and
- the Palestine Islamic Jihad (PIJ)-have stepped up violent
attacks against
- Israeli interests since October. The terrorist threat to US
interests,
- because of our friendship with Israel has also increased.
- At the same time, Islamic militancy is expanding, and the
worldwide pool of
- potential recruits for terrorist networks is growing. In
central Asia, the
- Middle East, and South Asia, Islamic terrorist organizations
are trying to
- attract new recruits, including under the banner of
anti-Americanism.
- International terrorist networks have used the explosion in
information
- technology to advance their capabilities. The same
technologies that allow
- individual consumers in the United States to search out and
buy books in
- Australia or India also enable terrorists to raise money,
spread their
- dogma, find recruits, and plan operations far afield. Some
groups are
- acquiring rudimentary cyberattack tools. Terrorist groups are
actively
- searching the internet to acquire information and capabilities
for chemical,
- biological, radiological, and even nuclear attacks. Many of
the 29
- officially designated terrorist organizations have an interest
in
- unconventional weapons, and Usama bin Ladin in 1998 even
declared their
- acquisition a "religious duty."
- Nevertheless, we and our Allies have scored some important
successes against
- terrorist groups and their plans, which I would like to
discuss with you in
- closed session later today. Here, in an open session, let me
assure you
- that the Intelligence Community has designed a robust
counterterrorism
- program that has preempted, disrupted, and defeated
international terrorists
- and their activities. In most instances, we have kept
terrorists
- off-balance, forcing them to worry about their own security
and degrading
- their ability to plan and conduct operations.
-
- PROLIFERATION
- I would like to turn now to proliferation. A variety of
states and groups
- continue to seek to acquire weapons of mass destruction and
the means to
- deliver them.
- First, let me discuss the continuing and growing threat posed
to us by
- ICBMs.
- We continue to face ballistic missile threats from a variety
of actors
- beyond Russia and China--specifically, North Korea, probably
Iran, and
- possibly Iraq. In some cases, their programs are the result
of indigenous
- technological development, and in other cases, they are the
beneficiaries of
- direct foreign assistance. And while these emerging programs
involve far
- fewer missiles with less accuracy, yield, survivability, and
reliability
- than those we faced during the Cold War, they still pose a
threat to US
- interests.
- For example, more than two years ago North Korea tested a
space launch
- vehicle, the Taepo Dong-1, which it could theoretically
convert into an
- ICBM. This missile would be capable of delivering a small
biological or
- chemical weapon to the United States, although with
significant targeting
- inaccuracies. Moreover, North Korea has retained the ability
to test its
- follow-on Taepo Dong-2 missile, which could deliver a
nuclear-sized payload
- to the United States.
- Iran has one of the largest and most capable ballistic
missile
- programs in the Middle East. Its public statements suggest
that it plans to
- develop longer-range rockets for use in a space-launch
program, but Tehran
- could follow the North Korean pattern and test an ICBM capable
of delivering
- a light payload to the United States in the next few
years.
- And given the likelihood that Iraq continues its missile
development
- work, we think that it too could develop an ICBM capability
sometime in the
- next decade assuming it received foreign assistance.
- As worrying as the ICBM threat will be, Mr. Chairman, the
threat to US
- interests and forces from short- and medium-range ballistic
missiles is here
- and now. The proliferation of MRBMs-driven largely though not
exclusively
- by North Korean No Dong sales-is altering strategic balances
in the Middle
- East and Asia. These missiles include Iran's Shahab-3,
Pakistan's Ghauri
- and the Indian Agni II.
- Mr. Chairman, I cannot underestimate the catalytic role that
foreign
- assistance has played in advancing these missile and WMD
programs,
- shortening their development times and aiding production. The
three major
- suppliers of missile or WMD-related technologies continue to
be Russia,
- China, and North Korea. Again, many details of their
activities need to
- remain classified, but let me quickly summarize the areas of
our greatest
- concern.
- Russian state-run defense and nuclear industries are still
strapped for
- funds, and Moscow looks to them to acquire badly needed
foreign exchange
- through exports. We remain concerned about the proliferation
implications
- of such sales in several areas.
- Russian entities last year continued to supply a variety
of
- ballistic missile-related goods and technical know-how to
countries such as
- Iran, India, China, and Libya. Indeed, the transfer of
ballistic missile
- technology from Russia to Iran was substantial last year, and
in our
- judgment will continue to accelerate Iranian efforts to
develop new missiles
- and to become self-sufficient in production.
- Russia also remained a key supplier for a variety of
civilian
- Iranian nuclear programs, which could be used to advance its
weapons
- programs as well.
- Russian entities are a significant source of dual-use
biotechnology,
- chemicals, production technology, and equipment for Iran.
Russian
- biological and chemical expertise is sought by Iranians and
others seeking
- information and training on BW and CW-agent production
processes.
- Chinese missile-related technical assistance to foreign
countries
- also has been significant over the years. Chinese help has
enabled Pakistan
- to move rapidly toward serial production of solid-propellant
missiles. In
- addition to Pakistan, firms in China provided missile-related
items, raw
- materials, or other help to several countries of proliferation
concern,
- including Iran, North Korea, and Libya.
- Last November, the Chinese Foreign Ministry issued a
statement that
- committed China not to assist other countries in the
development of
- ballistic missiles that can be used to deliver nuclear
weapons. Based on
- what we know about China's past proliferation behavior, Mr.
Chairman, we are
- watching and analyzing carefully for any sign that Chinese
entities may be
- acting against that commitment. We are worried, for example,
that
- Pakistan's continued development of the two-stage Shaheen-II
MRBM will
- require additional Chinese assistance.
- On the nuclear front, Chinese entities have provided
extensive
- support in the past to Pakistan's safeguarded and
unsafeguarded nuclear
- programs. In May 1996, Beijing pledged that it would not
provide assistance
- to unsafeguarded nuclear facilities in Pakistan; we cannot yet
be certain,
- however, that contacts have ended. With regard to Iran, China
confirmed
- that work associated with two nuclear projects would continue
until the
- projects were completed. Again, as with Russian help, our
concern is that
- Iran could use the expertise and technology it gets-even if
the cooperation
- appears civilian-for its weapons program.
- With regard to North Korea, our main concern is
P'yongyang's
- continued exports of ballistic missile-related equipment and
missile
- components, materials, and technical expertise. North Korean
customers are
- countries in the Middle East, South Asia, and North Africa.
P'yongyang
- attaches a high priority to the development and sale of
ballistic missiles,
- equipment, and related technology because these sales are a
major source of
- hard currency.
- Mr. Chairman, the missile and WMD proliferation problem
continues to
- change in ways that make it harder to monitor and control,
increasing the
- risk of substantial surprise. Among these developments are
greater
- proficiency in the use of denial and deception and the growing
availability
- of dual-use technologies-not just for missiles, but for
chemical and
- biological agents as well. There is also great potential of
"secondary
- proliferation" from maturing state-sponsored programs such as
those in
- Pakistan, Iran, and India. Add to this group the private
companies,
- scientists, and engineers in Russia, China, and India who may
be increasing
- their involvement in these activities, taking advantage of
weak or
- unenforceable national export controls and the growing
availability of
- technologies. These trends have continued and, in some cases,
have
- accelerated over the past year.
-
- INFORMATION OPERATIONS AND SPACE
-
- Mr. Chairman, I want to reemphasize the concerns I raised
last year
- about our nation's vulnerability to attacks on our critical
information
- infrastructure. No country in the world rivals the US in its
reliance,
- dependence, and dominance of information systems. The great
advantage we
- derive from this also presents us with unique vulnerabilities.
- Indeed, computer-based information operations could provide
our
- adversaries with an asymmetric response to US military
superiority by giving
- them the potential to degrade or circumvent our advantage in
conventional
- military power.
- Attacks on our military, economic, or
telecommunications
- infrastructure can be launched from anywhere in the world, and
they can be
- used to transport the problems of a distant conflict directly
to America's
- heartland.
- Likewise, our adversaries well understand US strategic
dependence on
- access to space. Operations to disrupt, degrade, or defeat US
space assets
- will be attractive options for those seeking to counter US
strategic
- military superiority. Moreover, we know that foreign
countries are
- interested in or experimenting with a variety of technologies
that could be
- used to develop counterspace capabilities.
- Mr. Chairman, we are in a race with technology itself. We
are
- creating relations with the private sector and academia to
help us keep pace
- with ever-changing technology. Last year I established the
Information
- Operations Center within CIA to bring together our best and
brightest to
- ensure that we had a strategy for dealing with the cyber
threat.
- Along with partners in the Departments of Justice, Energy,
and
- Defense we will work diligently to protect critical US
information assets.
- Let me also say that we must view our space systems and
capabilities as part
- of the same critical infrastructure that needs protection.
-
- NARCOTICS
-
- Mr. Chairman, drug traffickers are also making themselves
more
- capable and efficient. The growing diversification of
trafficking
- organizations-with smaller groups interacting with one another
to transfer
- cocaine from source to market-and the diversification of
routes and methods
- pose major challenges for our counterdrug programs. Changing
production
- patterns and the development of new markets will make further
headway
- against the drug trade difficult.
- Colombia, Bolivia, and Peru continue to supply all of the
cocaine
- consumed worldwide including in the United States. Colombia
is the linchpin
- of the global cocaine industry as it is home to the largest
coca-growing,
- coca-processing, and trafficking operations in the world.
With regard to
- heroin, nearly all of the world's opium production is
concentrated in
- Afghanistan and Burma. Production in Afghanistan has been
exploding,
- accounting for 72 percent of illicit global opium production
in 2000.
- The drug threat is increasingly intertwined with other
threats. For
- example, the Taliban regime in Afghanistan, which allows Bin
Ladin and other
- terrorists to operate on its territory, encourages and profits
from the drug
- trade. Some Islamic extremists view drug trafficking as a
weapon against
- the West and a source of revenue to fund their operations.
- No country has been more vulnerable to the ramifications of
the drug
- trade than Colombia. President Pastrana is using the
additional resources
- available to him under Plan Colombia to launch a major
antidrug effort that
- features measures to curb expanding coca cultivation. He is
also
- cooperating with the US on other important bilateral
counternarcotics
- initiatives, such as extradition.
- A key impediment to President Pastrana's progress on drugs
is the
- challenge from Colombia's largest insurgent group-the
Revolutionary Armed
- Forces of Colombia or FARC-which earns millions of dollars
from taxation and
- other involvement in the drug trade. Founded more than 35
years ago as a
- ragtag movement committed to land reform, the FARC has
developed into a
- well-funded, capable fighting force known more for its brutal
tactics than
- its Marxist-Leninist-influenced political program.
- The FARC vehemently opposes Plan Colombia for obvious
reasons. It
- has gone so far as to threaten to walk away from the peace
process with
- Bogota to protest the Plan. It appears prepared to oppose
Plan activities
- with force. The FARC could, for example, push back on
Pastrana by stepping
- up attacks against spray and interdiction operations. US
involvement is
- also a key FARC worry. Indeed, in early October FARC leaders
declared that
- US soldiers located in combat areas are legitimate "military
targets."
- The country's other major insurgent group, the National
Liberation
- Army or ELN, is also contributing to mounting instability.
Together with
- the FARC, the ELN has stepped up its attacks on Colombia's
economic
- infrastructure. This has soured the country's investment
climate and
- complicated government efforts to promote economic recovery,
following a
- major recession in 1999. Moreover, the insurgent violence has
fueled the
- rapid growth of illegal paramilitary groups, which are
increasingly vying
- with the FARC and ELN for control over drug-growing zones and
other
- strategic areas of rural Colombia. Like the FARC, the
paramilitaries rely
- heavily on narcotics revenue and have intensified their
attacks against
- noncombatants in recent months. Paramilitary massacres and
insurgent
- kidnappings are likely to increase this year, as both groups
move to
- strengthen their financial positions and expand their areas of
influence.
- As for Mexico, Mr. Chairman, President Fox is also trying to
attack
- the power of Mexican drug traffickers, whose activities had
made Mexico a
- transit point for cocaine shipments into the US and a source
of heroin and
- methamphetamine for the US drug market. He faces great
challenges in doing
- so and has simultaneously launched high-profile initiatives to
strengthen
- rule of law and reduce government corruption, including among
Mexican law
- enforcement officials.
-
- REGIONAL ISSUES
-
- THE MIDDLE EAST
-
- Mr. Chairman, I would like to turn now to the Middle East.
We are
- all aware of the violence between the Israelis and the
Palestinians, and the
- uncertainty it has cast on the prospects for a near-term peace
agreement.
- So let me take this time to look at the less obvious trends in
the
- region-such as population pressures, growing public access to
information,
- and the limited prospects for economic development-that will
have a profound
- effect on the future of the Middle East.
- The recent popular demonstrations in several Arab
- countries-including Egypt, Saudi Arabia, Oman, and Jordan-in
support of the
- Palestinian intifada demonstrate the changing nature of
activism of the Arab
- street. In many places in the Arab world, Mr. Chairman,
average citizens
- are becoming increasingly restive and getting louder. Recent
events show
- that the right catalyst-such as the outbreak of
Israeli-Palestinian
- violence-can move people to act. Through access to the
Internet and other
- means of communication, a restive public is increasingly
capable of taking
- action without any identifiable leadership or organizational
structure.
- Mr. Chairman, balanced against an energized street is a
new
- generation of leaders, such as Bashar al Asad in Syria. These
new leaders
- will have their mettle tested both by populations demanding
change and by
- entrenched bureaucracies willing to fight hard to maintain the
status quo.
- Compounding the challenge for these leaders are the
persistent
- economic problems throughout the region that prevent them from
providing
- adequately for the economic welfare of many of their citizens.
The region's
- legacy of statist economic policies and an inadequate
investment climate in
- most countries present big obstacles. Over the past 25 years,
Middle
- Eastern economies have averaged only 2.8 percent GDP
growth-far less than
- Asia and only slightly more than sub-Saharan Africa. The
region has
- accounted for a steadily shrinking share of world GDP, trade,
and foreign
- direct investment since the mid-1970s, and real wages and
labor productivity
- today are about the same as 30 years ago. As the region falls
behind in
- competitive terms, governments will find it hard over the next
5 to 10 years
- to maintain levels of state sector employment and government
services that
- have been key elements of their strategy for domestic
stability.
- Adding to this is the challenge of demographics. Many of
the
- countries of the Middle East still have population growth
rates among the
- highest in the world, significantly exceeding 3
percent-compare that with
- 0.85 percent in the United States and 0.2 percent in Japan.
Job markets
- will be severely challenged to create openings for the large
mass of young
- people entering the labor force each year.
- One-fourth of Jordanians, for example, are unemployed, and
annual
- economic growth is well below the level needed to absorb some
60,000 new
- labor market entrants each year.
- In Egypt the disproportionately young population adds
600,000 new
- job applicants a year in a country where unemployment is
already near 20
- percent.
- Mr. Chairman, the inability of traditional sources of income
such as oil,
- foreign aid, and worker remittances to fund an increasingly
costly system of
- subsidies, education, health care, and housing for rapidly
growing
- populations has motivated governments to implement economic
reforms. The
- question is whether these reforms will go far enough for the
long term.
- Reform thus far has been deliberately gradual and slow, to
avoid making
- harsh economic choices that could lead to short term spikes in
high
- unemployment.
- Arab governments will soon face the dilemma of choosing
between a path of
- gradual reform that is unlikely to close the region's widening
gap with the
- rest of the world, and the path of comprehensive change that
risks fueling
- independent political activity. Choosing the former risks
building tension
- among a younger, poorer, and more politically assertive
population.
- IRAQ
-
- Mr. Chairman, in Iraq Saddam Hussein has grown more confident
in his ability
- to hold on to his power. He maintains a tight handle on
internal unrest,
- despite the erosion of his overall military capabilities.
Saddam's
- confidence has been buoyed by his success in quieting the Shia
insurgency in
- the south, which last year had reached a level unprecedented
since the
- domestic uprising in 1991. Through brutal suppression,
Saddam's
- multilayered security apparatus has continued to enforce his
authority and
- cultivate a domestic image of invincibility.
- High oil prices and Saddam's use of the oil-for-food program
have helped him
- manage domestic pressure. The program has helped meet the
basic food and
- medicine needs of the population. High oil prices buttressed
by substantial
- illicit oil revenues have helped Saddam ensure the loyalty of
the regime's
- security apparatus operating and the few thousand politically
important
- tribal and family groups loyal.
- There are still constraints on Saddam's power. His economic
infrastructure
- is in long-term decline, and his ability to project power
outside Iraq's
- borders is severely limited, largely because of the
effectiveness and
- enforcement of the No-Fly Zones. His military is roughly half
the size it
- was during the Gulf War and remains under a tight arms
embargo. He has
- trouble efficiently moving forces and supplies-a direct result
of sanctions.
- These difficulties were demonstrated most recently by his
deployment of
- troops to western Iraq last fall, which were hindered by a
shortage of spare
- parts and transport capability.
- Despite these problems, we are likely to see greater
assertiveness-largely
- on the diplomatic front-over the next year. Saddam already
senses improved
- prospects for better relations with other Arab states. One of
his key goals
- is to sidestep the 10-year-old economic sanctions regime by
making
- violations a routine occurrence for which he pays no
penalty.
- Saddam has had some success in ending Iraq's international
isolation. Since
- August, nearly 40 aircraft have flown to Baghdad without
obtaining UN
- approval, further widening fissures in the UN air embargo.
Moreover,
- several countries have begun to upgrade their diplomatic
relations with
- Iraq. The number of Iraqi diplomatic missions abroad are
approaching
- pre-Gulf War levels, and among the states of the Gulf
Cooperation Council,
- only Kuwait and Saudi Arabia have not reestablished ties.
- Our most serious concern with Saddam Hussein must be the
likelihood that he
- will seek a renewed WMD capability both for credibility and
because every
- other strong regime in the region either has it or is pursuing
it. For
- example, the Iraqis have rebuilt key portions of their
chemical production
- infrastructure for industrial and commercial use. The plants
he is
- rebuilding were used to make chemical weapons precursors
before the Gulf War
- and their capacity exceeds Iraq's needs to satisfy its
civilian
- requirements.
- We have similar concerns about other dual-use research,
development,
- and production in the biological weapons and ballistic missile
fields;
- indeed, Saddam has rebuilt several critical missile production
complexes.
-
- IRAN
- Turning now to Iraq's neighbor: events of the past year
have been
- discouraging for positive change in Iran. Several years of
reformist gains
- in national elections and a strong populist current for
political change all
- threaten the political and economic privileges that
authoritarian interests
- have enjoyed for years under the Islamic Republic-and they
have begun to
- push back hard against the reformers.
- Prospects for near-term political reform are now fading.
Opponents
- of reform have not only muzzled the open press, they have also
arrested
- prominent activists and blunted the legislature's powers.
Over the Summer,
- Supreme Leader Khamenei ordered the new legislature not to
ease press
- restrictions, a key reformist pursuit. This signaled the
narrow borders
- within which he would allow the legislature to operate.
- The reformist movement is still young, however, and it
reflects on
- the deep sentiments of the Iranian people. Although
frustrated and in part
- muzzled, the reformers have persisted in their demands for
change. And the
- Iranian people will have another opportunity to demonstrate
their support
- for reform in the presidential election scheduled for June.
Although
- Khatami has not announced his candidacy, and has voiced
frustration with the
- limitations placed on his office, opinion polls published in
Iran show him
- to remain by far the most popular potential candidate for
president.
- The short -term gains made by shutting down the proreform
press and
- prosecuting some of its most outspoken members is not a
formula for
- long-term success. A strategy of suppressing the demands of
the new
- generation coming of age risks a political explosion down the
road. Some
- advocates of the status quo are beginning to recognize this
danger as more
- conservatives-to include Khamenei-have endorsed the principle,
if not the
- substance, of reform.
- Despite Iran's uncertain domestic prospects, Mr. Chairman,
it is
- clear that Khatami's appeal and promise of reform thus far, as
well as the
- changing world economy, have contributed to a run of successes
for Iran in
- the foreign arena over the past year. Some Western
ambassadors have
- returned to Tehran, and Iranian relations with EU countries
and Saudi Arabia
- are at their highest point since the revolution in 1979.
Higher oil prices,
- meanwhile, have temporarily eased the government's need to
address difficult
- and politically controversial economic problems. They have
also taken more
- of the sting out of US sanctions. Iran's desire to end its
isolation has
- not resulted in a decline in its willingness to use terrorism
to pursue
- strategic foreign policy agendas-Tehran, in fact, has
increased its support
- to terrorist groups opposed to the peace process over the past
two years.
-
- NORTH KOREA
-
- I would like to shift gears to North Korea. P'yongyang's
bold
- diplomatic outreach to the international community and
engagement with South
- Korea reflect a significant change in strategy. This strategy
is designed
- to assure the continued survival of Kim Chong-il's regime by
ending
- P'yongyang's political isolation and fixing the North's
failing economy by
- attracting more aid. We do not know how far Kim will go in
opening the
- North, but I can report to you that we have not yet seen a
significant
- diminution of the threat from the North to American and South
Korean
- interests.
- P'yongyang still believes that a strong military, capable
of
- projecting power in the region, is an essential element of
national power.
- P'yongyang's declared "military first" policy requires massive
investment in
- the armed forces, even at the expense of other national
objectives. North
- Korea maintains the world's fifth largest armed forces
consisting of over
- one million active-duty personnel, with another five million
reserves.
- While Allied forces still have the qualitative edge, the North
Korean
- military appears for now to have halted its near-decade-long
slide in
- military capabilities. In addition to the North's
longer-range missile
- threat to us, P'yongyang is also expanding its short and
medium range
- missile inventory, putting our Allies at greater risk.
- On the economic front, there are few signs of real systemic
domestic
- reform. Kim has recently shown interest in practical measures
to redress
- economic problems, most notably with his trip to Shanghai. To
date,
- however, Kim has only tinkered with the economic system.
- External assistance is essential to the recovery of North
Korea's
- domestic economy. Only massive food aid deliveries since 1997
have enabled
- the country to escape a recurrence of the famine from the
middle of the last
- decade. Industrial operations remain low. The economy is
hampered by an
- industrial base that is falling to pieces, as well as
shortages of materials
- and a lack of new investment. Chronic energy shortages pose
the most
- significant challenge.
- Aid and investment from the South bring with them increased
foreign
- influences and outside information that will contradict
propaganda from the
- regime. Economic engagement also can spawn expectations for
improvement
- that will outrace the rebuilding process. The risk for Kim is
that if he
- overestimates his control of the security services and loses
elite support,
- or if societal stresses reach a critical point, his regime and
personal grip
- on power could be weakened. As with other authoritarian
regimes, sudden,
- radical change remains a real possibility in North Korea.
-
- CHINA
- Mr. Chairman, let me now turn to China, whose drive for
recognition
- as a Great Power is one of the toughest challenges we face.
Beijing's goal
- of becoming a key world player and especially more powerful in
East Asia has
- come sharply into focus. It is pursuing these goals through
an ambitious
- economic reform agenda, military modernization, and a complex
web of
- initiatives aimed at expanding China's international
influence-especially
- relative to the United States.
- Chinese leaders view solid relations with Washington as
vital to
- achieving their ambitions. It is a two-edged sword for them,
Mr. Chairman.
- China's development remains heavily reliant on access to
Western markets and
- technology. But they also view Washington as their primary
obstacle because
- they perceive the US as bent on keeping China from becoming a
great power.
- Perhaps the toughest issue between Beijing and Washington
remains
- Taiwan. While Beijing has stopped its saber rattling-reducing
the immediate
- tensions-the unprecedented developments on Taiwan have
complicated
- cross-strait relations. The election last March of President
Chen ushered
- in a divided government with highly polarized views on
relations with
- Beijing. Profound mutual distrust makes it difficult to
restart the
- on-again off-again bilateral political dialogue. In the
longer term, Mr.
- Chairman, cross-strait relations can be even more volatile
because of
- Beijing's military modernization program. China's military
buildup is also
- aimed at deterring US intervention in support of Taiwan.
- Russian arms are a key component of this buildup. Arms
sales are
- only one element of a burgeoning Sino-Russian relationship.
Moscow and
- Beijing plan to sign a "friendship treaty" later this year,
highlighting
- common interests and willingness to cooperate diplomatically
against US
- policies that they see as unfriendly to their
interests-especially NMD.
- On China's domestic scene, the Chinese Communist leadership
wants to
- protect its legitimacy and authority against any and all
domestic
- challenges. Over the next few years, however, Chinese leaders
will have to
- manage a difficult balancing act between the requirements of
reform and the
- requirements of staying in power.
- China's leaders regard their ability to sustain economic
prosperity
- as the key to remaining in power; for that reason, they are
eager to join
- the WTO. Beijing views WTO accession as a lever to accelerate
domestic
- economic reform, a catalyst for greater foreign investment,
and a way to
- force Chinese state-owned enterprises to compete more
effectively with
- foreign companies.
- But Beijing may slow the pace of WTO-related reforms if
the
- leadership perceives a rise in social unrest that could
threaten regime
- stability. Chinese leaders already see disturbing trends in
this regard.
- Their crackdown on Falungong, underground Christians, and
other spiritual
- and religious groups reflects growing alarm about challenges
to the Party's
- legitimacy.
- All of these challenges will test the unity of the
leadership in
- Beijing during a critical period in the succession process.
The 16th
- Communist Party Congress next year will be an extremely
important event, as
- it will portend a large-scale transfer of authority to the
next generation
- of Communist Chinese leaders. The political jockeying has
already begun,
- and Chinese leaders will view every domestic and foreign
policy decision
- they face through the prism of the succession contest.
-
- RUSSIA
- Mr. Chairman, yet another state driving for recognition as a
Great
- Power is Russia. Let me be perfectly candid. There can be
little doubt
- that President Putin wants to restore some aspects of the
Soviet past-status
- as a great power, strong central authority, and a stable and
predictable
- society-sometimes at the expense of neighboring states or the
civil rights
- of individual Russians. For example,
- Putin has begun to reconstitute the upper house of the
parliament,
- with an eye to depriving regional governors of their ex
officio membership
- by 2002. He also created a system of seven "super districts"
where
- Presidential "plenipotentiaries" now oversee the governors
within their
- districts.
- He has moved forcefully against Russian independent media
including
- one of Russia's most prominent oligarchs, Vladimir Gusinskiy,
pressing him
- to give up his independent television station and thereby
minimize critical
- media.
- Moscow also may be resurrecting the Soviet-era zero-sum
approach to foreign
- policy. As I noted earlier, Moscow continues to value arms
and technology
- sales as a major source of funds. It increasingly is using
them as a tool
- to improve ties to its regional partners China, India, and
Iran. Moscow
- also sees these relationships as a way to limit US influence
globally. At
- the same time Putin is making efforts to check US influence in
the other
- former Soviet states and reestablish Russia as the premier
power in the
- region. He has increased pressure on his neighbors to pay
their energy
- debts, is dragging his feet on treaty-mandated withdrawals of
forces from
- Moldova, and is using a range of pressure tactics against
Georgia.
- Putin has also increased funding for the military, although
years of
- increases would be needed to deal with the backlog of problems
that built up
- in the armed forces under Yeltsin. The war in Chechnya is
eroding morale
- and thus the effectiveness of the military. Despite its
overwhelming force,
- Moscow is in a military stalemate with the rebels, facing
constant guerrilla
- attacks. An end does not appear close. There are thousands
of Russian
- casualties in Chechnya, and Russian forces have been cited for
their
- brutality to the civilian population. Increasingly, the
Russian public
- disapproves of the war. Because Putin rode into office on a
wave of popular
- support, resolution of the conflict is an issue of personal
prestige for
- him. Recently, Putin transferred command in Chechnya to the
Federal
- Security Service, demonstrating his affinity for the
intelligence services
- from which he came.
- Despite Putin's Soviet nostalgia, he knows Russia must embrace
markets and
- integrate into the global economy and that he needs foreigners
to invest.
- Plus, public expectations are rising. Putin is avoiding hard
policy
- decisions because Russia enjoyed an economic upturn last year,
buoyed by
- high oil prices and a cheap ruble. But Putin cannot count on
these trends
- to last permanently. He must take on several key challenges
if Russia is to
- sustain economic growth and political stability over the
longer term.
- Without debt restructuring, for example, he will face harsh
choices
- through 2003. Russia will owe nearly $48 billion spread over
the next three
- years.
- Domestic and foreign investment is crucial to sustained
growth.
- Moscow recently announced that capital flight last year
increased to $25
- billion. Putin will need to demonstrate his seriousness about
reducing
- corruption and pushing ahead with corporate tax reform and
measures to
- protect investor's rights.
-
- CENTRAL ASIA
-
- Mr. Chairman, the Caucasus and Central Asia are parts of the
world that have
- the potential to become more volatile as they become more
important to the
- United States. The strategic location of the Caucasus and
Central
- Asia-squeezed between Russia, Turkey, Iran, Afghanistan, and
China-make the
- stability of these countries critical to the future of
Eurasia. Here
- corruption, poverty, and other social ills are providing
fertile ground for
- Islamic extremism, terrorist networking, and drug and weapons
trafficking
- that will have impact in Russia, Europe, and beyond. Central
Asian leaders,
- seeking to fend off threats to their security from terrorists
and drug
- traffickers, are looking increasingly to the West for support.
- We are becoming increasingly concerned about the activities
of the
- Islamic Movement of Uzbekistan, an extremist insurgent and
terrorist group
- whose annual incursions into Uzbekistan have become bloodier
and more
- significant every year.
- In addition, US companies have a significant stake in
Caspian energy
- development. As you know, the United States supports the
construction of
- pipelines that will bring the Caspian's energy resources to
Western markets.
- One oil pipeline is expected to pass through both Georgia and
Azerbaijan.
- Western companies are pursuing the construction of a gas
pipeline under the
- Caspian Sea from Turkmenistan through Azerbaijan and Georgia
en route to
- Turkey. Although many of the leaders in the region through
which the
- pipelines will flow view the United States as a friend, regime
stability
- there remains fragile.
-
- The Balkans
-
- Mr. Chairman, let me now turn to another important region:
the
- Balkans. It is an open question when Balkan states will be
able to stand on
- their own. The Balkans continue to be fraught with turmoil,
and the coming
- year promises more challenges.
- Milosevic's departure was a victory for the Serbian people
and the
- United States. America was a strong force in helping to
depose this
- indicted war criminal who was a major obstacle to progress.
Milosevic's
- fall through election and popular rebellion gives Serbia and
what is left of
- Yugoslavia a chance to remake its politics and to begin to
recover. It also
- means that Serbia can be reintegrated into Europe.
- Milosevic's successors will have a hard time cleaning up the
mess he
- left. Milosevic, his family, and cronies stole much of what
had value, ran
- down industries, and wasted whatever resources were left.
From the ashes,
- newly elected President Vojislav Kostunica is trying to create
a legal,
- transparent, and effective government. Meanwhile, the Serbian
economy has
- contracted 50 percent since 1990.
- Mr. Chairman, Kostunica will also face problems holding his
country
- together. Montenegro's drive for independence presents a
simmering crisis.
- Montenegrin President Djukanovic remains committed to
negotiating a new,
- decentralized relationship with Belgrade. Events in the rest
of Yugoslavia
- will have impact on Kosovo as well. Ethnic Albanians from
across the
- political spectrum in Kosovo still insist on independence.
- There are signs that Kosovo's troubles are spilling over
into
- southern Serbia where both ethnic Albanians and Serbs live in
close
- proximity. Most ethnic Albanians in this region seek only
greater civil
- rights within Serbia, but militants are fighting to join the
region to an
- independent Kosovo. This is a dangerous flashpoint, Mr.
Chairman, with the
- potential for escalation. In short, Mr. Chairman, we are
still not at the
- point where we look confidently ahead to a Balkans without
violence.
- With regard to Bosnia, none of the three formerly
warring
- factions-Muslims, Serbs, or Croats-wants to begin fighting
again. Refugee
- returns continued at a brisk pace last year as in 1999, the
most encouraging
- development since the end of the war. Disarmament of the
warring factions
- has been generally successful, and positive developments in
Croatia and
- Serbia have removed some sources of earlier nationalist
sentiment. But
- there has been little progress in achieving a common vision of
a unified,
- multiethnic Bosnia capable of standing on its own.
-
- SOUTH ASIA
-
- At this point, Mr. Chairman, let me draw your attention to
the
- potentially destabilizing competition in South Asia. I must
report that
- relations between India and Pakistan remain volatile, making
the risk of war
- between the two nuclear-armed adversaries unacceptably high.
The military
- balance in which India enjoys advantages over Pakistan in most
areas of
- conventional defense preparedness remains the same. This
includes a
- decisive advantage in fighter aircraft, almost twice as many
men under arms,
- and a much larger economy to support defense expenditures. As
a result,
- Pakistan relies heavily on its nuclear weapons for deterrence.
Their
- deep-seated rivalry, frequent artillery exchanges in Kashmir,
and short
- flight times for nuclear-capable ballistic missiles and
aircraft all
- contribute to an unstable nuclear deterrence.
- If any issue has the potential to bring both sides to
full-scale
- war, it is Kashmir. Kashmir is at the center of the dispute
between the two
- countries. Nuclear deterrence and the likelihood that a
conventional war
- would bog down both sides argue against a decision to go to
war. But both
- sides seem quite willing to take risks over Kashmir in
particular, and
- this-along with their deep animosity and distrust-could lead
to decisions
- that escalate tensions.
- The two states narrowly averted a full-scale war in Kashmir
in 1999.
- The conflict that did occur undermined a fledgling peace
process begun by
- the two prime ministers. Now, for the first time since then,
the two sides
- are finally taking tentative steps to reduce tension. Recent
statements by
- Indian and Pakistani leaders have left the door open for
high-level talks.
- And just last week [2 Feb 2001], Vajpayee and
Musharraf conversed by phone
- perhaps for the first time ever, to discuss the earthquake
disaster.
- The process is fragile, however. Neither side has yet
agreed to
- direct, unconditional talks. Tension can easily flare once
winter ends or
- by New Delhi or Islamabad maneuvering for an edge in the
negotiations.
- Leadership changes in either country also could add to
tensions.
- Kashmiri separatist groups opposed to peace could also
stoke
- problems. India has been trying to engage selected militants
and
- separatists, but militant groups have kept up their attacks
through India's
- most recent cease-fire. In addition, the Kashmir state
government's
- decision to conduct local elections-the first in more than 20
years-will
- provoke violence from militants who see the move as designed
to cement the
- status quo.
- Pakistan's internal problems-especially the
economy-complicate the
- situation and further threaten what maneuvering room Musharraf
may have.
- Musharraf's domestic popularity has been threatened by a
series of unpopular
- policies that he promulgated last year. At the same time, he
is being
- forced to contend with increasingly active Islamic
extremists.
- Mr. Chairman, a word on proliferation. Last year I told you
I
- worried about the proliferation and development of missiles
and weapons of
- mass destruction in South Asia. The competition, predictably,
extends here
- as well and there is no sign that the situation has improved.
We still
- believe there is a good prospect of another round of nuclear
tests. On the
- missile front, India decided to test another Agni MRBM last
month,
- reflecting its determination to improve its nuclear weapons
delivery
- capability. Pakistan may respond in kind.
-
- FRAGMENTATION AND FAILURE
-
- The final point that I would like to discuss today is the
growing in
- potential for state fragmentation and failure that we have
observed this
- past year.
- Mr. Chairman, Afghanistan obviously falls into this
category. The
- Afghan civil war will continue into the foreseeable future,
leaving the
- country fragmented and unstable. The Taliban remains
determined to impose
- its radical form of Islam on all of Afghanistan, even in the
face of
- resistance from other ethnic groups and the Shia minority.
- Mr. Chairman, what we have in Afghanistan is a stark example
of the
- potential dangers of allowing states-even those far from the
US-to fail. The
- chaos here is providing an incubator for narcotics traffickers
and militant
- Islamic groups operating in such places as Kashmir, Chechnya,
and Central
- Asia. Meanwhile the Taliban shows no sign of relinquishing
terrorist Usama
- Bin Ladin, despite strengthened UN sanctions and prospects
that Bin Ladin's
- terrorist operations could lead to retaliatory strikes against
Afghanistan.
- The Taliban and Bin Ladin have a symbiotic relationship-Bin
Ladin gets safe
- haven and in return, he gives the Taliban help in fighting its
civil war.
- Mr. Chairman, events of the last few years in Indonesia
paint a
- vivid picture of a state struggling to regain stability. Last
year I
- described the difficult political transition that Indonesian
President Wahid
- was trying to manage. He has managed to stay one step ahead of
his
- opponents, mostly because they are unable to work together.
He has survived
- several confrontations with the legislature, but efforts to
impeach him on
- corruption charges will continue.
- Separatist violence is rampant in Aceh and rising in two
other key
- provinces. Muslim-Christian violence continues, and resulted
in several
- thousand deaths last year. The country's security forces are
poorly
- equipped, and either back away from challenges or respond too
forcefully.
- Mr. Chairman, Indonesia's problems are worrying
neighboring
- countries that have long considered it as the pillar of
regional stability.
- Some Southeast Asian leaders fear a power vacuum in Indonesia
would create
- fertile ground for international terrorist groups and Islamic
activists,
- drug trafficking, and organized crime.
- My final case study, Mr. Chairman, is Africa, a land of
chronic
- turbulence and crises that are among the most brutal and
intractable in the
- world. Left behind by globalization and plagued by ethnic
conflicts,
- several African states appear to be the first of the wave of
failed nations
- predicted by the Global Trends 2015 Report.
- We are especially concerned because hotspots often set off
chain
- reactions across the region. The brutal civil war in Sierra
Leone, for
- example, started as an offshoot of fighting in Liberia and has
now spread
- into Guinea. These waves of violent instability bring even
worse woes in
- their wake, including the ethnically-based killings that are
now routine in
- the wars in Sudan, Congo (Kinshasa), and Burundi. Coping with
this unrest
- depletes the scant resources available to the region's
governments for
- fighting HIV/AIDS and other epidemics.
- One immediate challenge in Africa, Mr. Chairman, is the
protection
- of US diplomats, military personnel, citizens, and other
interests in the
- region. Violent unrest has necessitated a half-dozen
evacuations of Embassy
- employees, other citizens, and Allied nationals in recent
years.
-
- CONCLUSION
-
- Mr. Chairman, I have spoken at some length about the
threats
- we face to our national security. It is inevitable given our
position as
- the world's sole superpower that we would attract the
opposition of those
- who do not share our vision or our goals, and those who feel
intimidated by
- our strength. Many of the threats I've outlined are familiar
to you. Many
- of the trends I've described are not new. The complexity,
intricacy, and
- confluence of these threats, however, is necessitating a
fundamental change
- in the way we, in the Intelligence Community, do our business.
To keep pace
- with these challenges:
- We must aggressively challenge our analytic assumptions,
avoid
- old-think, and embrace alternate analysis and viewpoints.
- We must constantly push the envelope on collection beyond
the
- traditional to exploit new systems and operational
opportunities to gain the
- intelligence needed by our senior policymakers.
- And we must continue to stay ahead on the technology and
information
- fronts by seeking new partnerships with private industry as
demonstrated by
- our IN-Q-TEL initiative.
- Our goal is simple. It is to ensure that our nation has the
intelligence it
- needs to anticipate and counter threats I have discussed here
today.
- Thank you Mr. Chairman, I would welcome any questions you and
your fellow
- Senators may have for me.