Annual Threat Assessment
Director of National Intelligence
Senate Select Committee on Intelligence
February 2, 2006
John D. Negroponte
Director of National Intelligence
Chairman Roberts, Vice-Chairman Rockefeller, Members of the Committee, thank you
for the invitation to offer my assessment of the threats, challenges, and opportunities
for the United States in today’s world.
I am honored to be the first Director of National Intelligence to offer you such
an assessment, and am pleased to note that following my oral testimony, I will
answer your questions with the assistance of: Mr. Porter Goss, Director of the
Central Intelligence Agency; Lieutenant General Michael D. Maples, Director of
the Defense Intelligence Agency; Mr. Robert Mueller, Director of the Federal Bureau
of Investigation; Ms. Carol Rodley, Acting Assistant Secretary of State for Intelligence
and Research; Mr. Charles E. Allen, Chief Intelligence Officer, Department of
Homeland Security; and General Michael Hayden, Principal Deputy Director of National
Let me begin with a straightforward statement of preoccupation shared by all of
us sitting here before you: terrorism is the preeminent threat to our citizens,
Homeland, interests, and friends. The War on Terror is our first priority and
driving concern as we press ahead with a major transformation of the Intelligence
Community we represent. We live in a world that is full of conflict, contradictions,
and accelerating change. Viewed from the perspective of the Director of National
Intelligence, the most dramatic change of all is the exponential increase in the
number of targets we must identify, track, and analyze. Today, in addition to
hostile nation-states, we are focusing on terrorist groups, proliferation networks,
alienated communities, charismatic individuals, narcotraffickers, and microscopic
The 21st century is less dangerous than the 20th century in certain respects,
but more dangerous in others. Globalization, particularly of technologies that
can be used to produce WMD, political instability around the world, the
rise of emerging powers like China, the spread of the jihadist movement, and of
course, the horrific events of September 11, 2001, demand heightened vigilance
from our Intelligence Community.
This morning, then, I will discuss:
Global jihadists, their fanatical ideology, and the civilized world’s efforts
to disrupt, dismantle and destroy their networks;
The struggle of the Iraqi and Afghan people to assert their sovereignty over insurgency,
terror, and extremism;
WMD-related proliferation and two states of particular concern, Iran and North
Issues of political instability and governance in all regions of the world that
affect our ability to protect and advance our interests; and
Globalization, emerging powers, and such transnational challenges as the geopolitics
of energy, narcotrafficking, and possible pandemics.
In assessing these themes, we all must be mindful of the old dictum: forewarned
is forearmed. Our policymakers, warfighters, and law enforcement officers need
the best intelligence and analytic insight humanly and technically possible to
help them peer into the onrushing shadow of the future and make the decisions
that will protect American lives and interests. This has never been more true
than now with US and Coalition forces in Iraq and Afghanistan—and the citizens
and fledgling governments they help to protect—under attack. Addressing
threats to their safety and providing the critical intelligence on a myriad of
tactical and strategic issues must be—and is—a top priority for our
But in discussing all the many dangers the 21st century poses, it should be emphasized
that they do not befall America alone. The issues we consider today confront responsible
leaders everywhere. That is the true nature of the 21st century: accelerating
change affecting and challenging us all.
THE GLOBAL JIHADIST THREAT
Collaboration with our friends and allies around the world has helped us achieve
some notable successes against the global jihadist threat. In fact, most of al-Qa’ida’s
setbacks last year were the result of our allies’ efforts, either independently
or with our assistance. And since 9/11, examples of the high level of counterterrorism
efforts around the world are many. Pakistan’s commitment has enabled some
of the most important captures to date. Saudi Arabia’s resolve to counter
the spread of terrorism has increased. Our relationship with Spain has strengthened
since the March 2004 Madrid train bombings. The British have long been our closest
counterterrorism partners—the seamless cooperation in the aftermath of the
July attacks in London reflected that commitment—while Australia, Canada,
France and many other nations remain stout allies. Nonetheless, much remains to
be done; the battle is far from over.
Jihadists seek to overthrow regimes they regard as “apostate” and
to eliminate US influence in the Muslim world. They attack Americans when they
can, but most of their targets and victims are fellow Muslims. Nonetheless, the
slow pace of economic, social, and political change in most Muslim majority nations
continues to fuel a global jihadist movement. The movement is diffuse and subsumes
three quite different types of groups and individuals:
First and foremost, al Qa’ida, a battered but resourceful organization;
Second, other Sunni jihadist groups, some affiliated with al-Qa’ida, some
Third, networks and cells that are the self-generating progeny of al-
Al-Qa’ida Remains Our Top Concern. We have eliminated much of the leadership
that presided over al-Qa’ida in 2001, and US-led counterterrorism efforts
in 2005 continue to disrupt its operations, take out its leaders and deplete its
cadre. But the organization’s core elements still plot and make preparations
for terrorist strikes against the Homeland and other targets from bases in the
Pakistan-Afghanistan border area; they also have gained added reach through their
merger with the Iraq-based network of Abu Mus’ab al- Zarqawi, which has
broadened al-Qa’ida’s appeal within the jihadist community and potentially
put new resources at its disposal.
Thanks to effective intelligence operations, we know a great deal about al Qa’ida’s
vision. Zawahiri, al Qa’ida’s number two, is candid in his July 2005
letter to Zarqawi. He portrays the jihad in Iraq as a stepping-stone in the march
toward a global caliphate, with the focus on Egypt, Syria, Jordan, Lebanon, Saudi
Arabia, the Gulf states, and Israel. Zawahiri stresses the importance of having
a secure base in Iraq from which to launch attacks elsewhere, including in the
In Bin Ladin’s recent audio tape, al-Qa’ida’s top leader reaffirms
the group’s commitment to attack our Homeland and attempts to reassure supporters
by claiming that the reason there has been no attack on the US since 2001 is that
he chose not to do so. This week’s statement by Zawahiri is another indication
that the group's leadership is not completely cutoff and can continue to get its
message out to followers. The quick turnaround time and the frequency of Zawahiri
statements in the past year underscore the high priority al-Qa'ida places on propaganda
from its most senior leaders.
Attacking the US Homeland, US interests overseas, and US allies—in that
order—are al-Qa’ida’s top operational priorities. The group
will attempt high-impact attacks for as long as its central command structure
is functioning and affiliated groups are capable of furthering its interests,
because even modest operational capabilities can yield a deadly and damaging attack.
Although an attack using conventional explosives continues to be the most probable
scenario, al-Qa’ida remains interested in acquiring chemical, biological,
radiological, and nuclear materials or weapons to attack the United States, US
troops, and US interests worldwide.
Indeed, today, we are more likely to see an attack from terrorists using weapons
or agents of mass destruction than states, although terrorists’ capabilities
would be much more limited. In fact, intelligence reporting indicates that nearly
40 terrorist organizations, insurgencies, or cults have used, possessed, or expressed
an interest in chemical, biological,
radiological, or nuclear agents or weapons. Many are capable of conducting simple,
small-scale attacks, such as poisonings, or using improvised chemical devices.
Al-Qa’ida Inspires Other Sunni Jihadists. The global jihadist movement also
subsumes other Sunni extremist organizations, allied with or inspired by al-Qa’ida’s
global anti-Western agenda. These groups pose less danger to the US Homeland than
does al-Qa’ida, but they increasingly threaten our allies and interests
abroad and are working to expand their reach and capabilities to conduct multiple
and/or mass-casualty attacks outside their traditional areas of operation.
Jemaah Islamiya (JI) is a well-organized group responsible for dozens of attacks
killing hundreds of people in Southeast Asia. The threat of a JI attack against
US interests is greatest in Southeast Asia, but we assess that the group is committed
to helping al-Qa’ida with attacks outside the region.
The Islamic Jihad Union (IJU), which has allied itself with al-Qa’ida, operates
in Central Asia and was responsible for the July 2004 attacks against the US and
Israeli Embassies in Uzbekistan.
The Libyan Islamic Fighting Group (LIFG) was formed to establish an Islamic state
in Libya, but since the late 1990s it has expanded its goals to include anti-Western
jihad alongside al-Qa’ida. LIFG has called on Muslims everywhere to fight
the US In Iraq.
Pakistani militant groups—primarily focused on the Kashmir conflict—
represent a persistent threat to regional stability and US interests in South
Asia and the Near East. They also pose a potential threat to our interests worldwide.
Extremists convicted in Virginia in 2003 of providing material support to terrorism
trained with a Pakistani group, Lashkar-i-Tayyiba, before 9/11.
New Jihadist Networks and Cells. An important part of al-Qa’ida’s
strategy is to encourage a grassroots uprising of Muslims against the West. Emerging
new networks and cells—the third element of the global jihadist threat—reflect
aggressive jihadist efforts to exploit feelings of frustration and powerlessness
in some Muslim communities, and to fuel the perception that the US is anti-Islamic.
Their rationale for using terrorism against the US and establishing strict Islamic
practices resonates with a small subset of Muslims. This has led to the emergence
of a decentralized and diffused movement, with minimal centralized guidance or
control and numerous individuals and small cells—like those who conducted
the May 2003 bombing in Morocco, the March 2004 bombings in Spain, and the July
2005 bombings in the UK. Members of these groups have drawn inspiration from al-Qa’ida
but appear to operate on their own.
Such unaffiliated individuals, groups and cells represent a different threat than
that of a defined organization. They are harder to spot and represent a serious
Regrettably, we are not immune from the threat of such “homegrown”
jihadist cells. A network of Islamic extremists in Lodi, California, for example,
maintained connections with Pakistani militant groups, recruited US citizens for
training at radical Karachi madrassas, sponsored Pakistani citizens for travel
to the US to work at mosques and madrassas, and according to FBI information,
allegedly raised funds for international jihadist groups. In addition, prisons
continue to be fertile recruitment ground for extremists who try to exploit converts
Impact of Iraq on Global Jihad. Should the Iraqi people prevail in establishing
a stable political and security environment, the jihadists will be perceived to
have failed and fewer jihadists will leave Iraq determined to carry on the fight
elsewhere. But, we assess that should the jihadists thwart the Iraqis’ efforts
to establish a stable political and security environment, they could secure an
operational base in Iraq and inspire sympathizers elsewhere to move beyond rhetoric
to attempt attacks against neighboring Middle Eastern nations, Europe, and even
the United States. The same dynamic pertains to al-Zarqawi. His capture would
deprive the movement of a notorious leader, whereas his continued acts of terror
could enable him to expand his following beyond his organization in Iraq much
as Bin Ladin expanded al-Qa’ida in the 1990s.
Impact of the Islamic Debate. The debate between Muslim extremists and moderates
also will influence the future terrorist environment, the domestic stability of
key US partners, and the foreign policies of governments throughout the Muslim
world. The violent actions of global jihadists are adding urgency to the debate
within Islam over how religion should shape government. Growing internal demands
for reform in many Muslim countries further stimulate this debate. In general,
Muslims are becoming more aware of their Islamic identity, leading to growing
political activism; but this does not necessarily signal a trend toward radicalization.
Most Muslims reject the extremist message and violent agendas of the global jihadists.
Indeed, as Muslims endorse democratic principles of freedom, equality, and the
rule of law and a role for their religious beliefs in building better futures
for their communities, there will be growing opportunities for countering a jihadist
movement that only promises more authoritarianism, isolation, and economic stagnation.
EXTREMISM AND CHALLENGES TO EFFECTIVE GOVERNANCE AND LEGITIMACY IN IRAQ AND AFGHANISTAN
The threat from extremism and anti-Western militancy is especially acute in Iraq
In discussing Iraq, I'd like to offer a “balance sheet” to give a
sense of where I see things today and what I see as the trends in 2006. Bold,
inclusive leadership will be the critical factor in establishing an Iraqi constitutional
democracy that is both viable as a nation-state and responsive to the diversity
of Iraq’s regions and people.
Let me begin with some of these encouraging developments before turning to the
The insurgents have not been able to establish any lasting territorial control;
were unable to disrupt either of the two national elections held this year or
the Constitutional referendum; have not developed a political strategy to attract
popular support beyond their Sunni Arab base; and have not shown the ability to
coordinate nationwide operations.
Iraqi security forces are taking on more demanding missions, making incremental
progress toward operational independence, and becoming more capable of providing
the kind of stability Iraqis deserve and the economy needs in order to grow.
Signs of open conflict between extreme Sunni jihadists and Sunni nationalist elements
of the insurgency, while so far still localized, are encouraging and exploitable.
The jihadists’ heavy-handed activities in Sunni areas in western Iraq have
caused tribal and nationalist elements in the insurgency to reach out to the Baghdad
overnment for support.
Large-scale Sunni participation in the last elections has provided a first step
toward diminishing Sunni support for the insurgency. There appears to be a strong
desire among Sunnis to explore the potential benefits of political participation.
But numerous challenges remain.
The Insurgency and Iraqi Security Forces
Iraqi Sunni Arab disaffection is the primary enabler of the insurgency and is
likely to remain high in 2006. Even if a broad, inclusive national government
emerges, there almost certainly will be a lag time before we see a dampening effect
on the insurgency. Insurgents continue to demonstrate the ability to recruit,
supply, and attack Coalition and Iraqi Security Forces, and their leaders continue
to exploit Islamic themes, nationalism, and personal grievances to fuel opposition
to the government and to recruit more fighters.
The most extreme Sunni jihadists, such as those fighting with Zarqawi, will remain
unreconciled and continue to attack Iraqis and Coalition forces. These extreme
Sunni jihadist elements, a subset of which are foreign fighters, constitute a
small minority of the overall insurgency, but their use of high-profile suicide
attacks gives them a disproportionate impact. The insurgents’ use of increasingly
lethal improvised explosive devices (IEDs), and the IED makers' adaptiveness to
Coalition countermeasures, remain the most significant day-to-day threat to Coalition
forces, and a complex challenge for the Intelligence Community.
Iraqi Security Forces require better command and control mechanisms to improve
their effectiveness and are experiencing difficulty in managing ethnic and sectarian
divides among their units and personnel.
Sunni Political Participation
A key to establishing effective governance and security over the next three to
five years is enhanced Sunni Arab political participation and a growing perception
among Sunnis that the political process is addressing their interests. Sunnis
will be focused on obtaining what they consider their demographically appropriate
share of leadership positions in the new government—especially on the Constitutional
Review Commission. Debates over federalism, central versus local control, and
division of resources are likely to be complex. Success in satisfactorily resolving
them will be key to advancing stability and prospects for a unified country. Although
the Kurds and Shia have been accommodating to the underrepresented Sunnis in 2005,
their desire to protect core interests—such as regional autonomy and de-Ba’thification—could
make further compromise more difficult.
In the aftermath of the December elections, virtually all of the Iraq parties
are seeking to create a broad-based government, but all want it to be formed on
their terms. The Shia and the Kurds will be the foundation of any governing coalition,
but it is not yet clear to us whether they will include the main Sunni factions,
particularly the Iraqi Consensus Front, or other smaller and politically weaker
secular groups, such as Ayad Allawi’s Iraqi National List. The Sunni parties
have significant expectations for concessions from the Shia and Kurds in order
to justify their participation and avoid provoking more insurgent violence directed
against Sunni political leaders.
Governance and Reconstruction
During the coming year, Iraq’s newly elected leadership will face a daunting
set of governance tasks. The creation of a new, permanent government and the review
of the Constitution by early summer will offer opportunities to find common ground
and improve the effectiveness and legitimacy of the central government. There
is a danger, however, that political negotiations and dealmaking will prove divisive.
This could obstruct efforts to improve government performance, extend Baghdad’s
reach throughout the country, and build confidence in the democratic political
Let me focus on one of those tasks—the economy. Restoration of basic services
and the creation of jobs are critical to the well-being of Iraqi citizens, the
legitimacy of the new government, and, indirectly, to eroding support for the
insurgency. At this point, prospects for economic development in 2006 are constrained
by the unstable security situation, insufficient commitment to economic reform,
and corruption. Iraq is dependent on oil revenues to fund the government, so insurgents
continue to disrupt oil infrastructure, despite the fielding of new Iraqi forces
to protect it. Insurgents also are targeting trade and transportation. Intelligence
has a key role to play in combating threats to pipelines, electric power grids,
and personal safety.
Like Iraq, Afghanistan is a fragile new democracy struggling to overcome deep-seated
social divisions, decades of repression, and acts of terrorism directed against
ordinary citizens, officials, foreign aid workers, and Coalition forces. These
and other threats to the Karzai government also threaten important American interests—ranging
from the defeat of terrorists who find haven along the Afghanistan-Pakistan border
to the suppression of opium production.
Afghan leaders face four critical challenges: containing the insurgency, building
central government capacity and extending its authority, further containing warlordism,
and confronting pervasive drug criminality.
Intelligence is needed to assist, monitor, and protect Afghan, Coalition, and
NATO efforts in all four endeavors.
The volume and geographic scope of attacks increased last year, but the Taliban
and other militants have not been able to stop the democratic process or expand
their support base beyond Pashtun areas of the south and east. Nevertheless, the
insurgent threat will impede the expansion of Kabul’s writ, slow economic
development, and limit progress in counternarcotics efforts.
Ultimately, defeating the insurgency will depend heavily on continued international
aid; effective Coalition, NATO, and Afghan government security operations to prevent
the insurgency from gaining a stronger foothold in some Pashtun areas; and the
success of the government’s reconciliation initiatives.
WEAPONS OF MASS DESTRUCTION AND STATES OF KEY CONCERN: IRAN AND NORTH KOREA
The ongoing development of dangerous weapons and delivery systems constitutes
the second major threat to the safety of our nation, our deployed troops, and
our allies. We are most concerned about the threat and destabilizing effect of
nuclear proliferation. We are also concerned about the threat from biological
agents—or even chemical agents, which would have psychological and possibly
political effects far greater than their actual magnitude. Use by nation-states
can still be constrained by the logic of deterrence and international control
regimes, but these constraints may be of little utility in preventing the use
of mass effect weapons by rogue regimes or terrorist groups.
The time when a few states had monopolies over the most dangerous technologies
has been over for many years. Moreover, our adversaries have more access to acquire
and more opportunities to deliver such weapons than in the past. Technologies,
often dual-use, move freely in our globalized economy, as do the scientific personnel
who design them. So it is more difficult for us to track efforts to acquire those
components and production technologies that are so widely available. The potential
dangers of proliferation are so grave that we must do everything possible to discover
and disrupt attempts by those who seek to acquire materials and weapons.
We assess that some of the countries that are still pursuing WMD programs will
continue to try to improve their capabilities and level of self-sufficiency over
the next decade. We also are focused on the potential acquisition of such nuclear,
chemical, and/or biological weapons—or the production technologies and materials
necessary to produce them—by states that do not now have such programs,
terrorist organizations like al-Qa’ida and by criminal organizations, alone
or via middlemen.
We are working with other elements of the US Government regarding the safety and
security of nuclear weapons and fissile material, pathogens, and chemical weapons
in select countries.
Iran and North Korea: States of Highest Concern
Our concerns about Iran are shared by many nations, by the IAEA, and of course,
Iran conducted a clandestine uranium enrichment program for nearly two decades
in violation of its IAEA safeguards agreement, and despite its claims to the contrary,
we assess that Iran seeks nuclear weapons. We judge that Tehran probably does
not yet have a nuclear weapon and probably has not yet produced or acquired the
necessary fissile material. Nevertheless, the danger that it will acquire a nuclear
weapon and the ability to integrate it with the ballistic missiles Iran already
possesses is a reason for immediate concern. Iran already has the largest inventory
of ballistic missiles in the Middle East, and Tehran views its ballistic missiles
as an integral part of its strategy to deter—and if necessary retaliate
against—forces in the region, including US forces.
As you are aware, Iran is located at the center of a vital—and volatile—
region, has strained relations with its neighbors, and is hostile to the United
States, our friends, and our values. President Ahmadi-Nejad has made numerous
unacceptable statements since his election, hard-liners have control of all the
major branches and institutions of government, and the government has become more
effective and efficient at repressing the nascent shoots of personal freedom that
had emerged in the late 1990s and earlier in the decade.
Indeed, the regime today is more confident and assertive than it has been since
the early days of the Islamic Republic. Several factors work in favor of the clerical
regime’s continued hold on power. Record oil and other revenue is permitting
generous public spending, fueling strong economic growth, and swelling financial
reserves. At the same time, Iran is diversifying its foreign trading partners.
Asia’s share of Iran’s trade has jumped to nearly match Europe’s
40-percent share. Tehran sees diversification as a buffer against external efforts
to isolate it.
Although regime-threatening instability is unlikely, ingredients for political
volatility remain, and Iran is wary of the political progress occurring in neighboring
Iraq and Afghanistan. Ahmadi-Nejad’s rhetorical recklessness and his inexperience
on the national and international stage also increase the risk of a misstep that
could spur popular opposition, especially if more experienced conservatives cannot
rein in his excesses. Over time, Ahmadi-Nejad’s populist economic policies
could—if enacted—deplete the government’s financial resources
and weaken a structurally flawed economy. For now, however, Supreme Leader Khamenei
is keeping conservative fissures in check by balancing the various factions in
Iranian policy toward Iraq and its activities there represent a particular concern.
Iran seeks a Shia-dominated and unified Iraq but also wants the US to experience
continued setbacks in our efforts to promote democracy and stability. Accordingly,
Iran provides guidance and training to select Iraqi Shia political groups and
weapons and training to Shia militant groups to enable anti-Coalition attacks.
Tehran has been responsible for at least some of the increasing lethality of anti-Coalition
attacks by providing Shia militants with the capability to build IEDs with explosively
formed projectiles similar to those developed by Iran and Lebanese Hizballah.
Tehran’s intentions to inflict pain on the United States in Iraq has been
constrained by its caution to avoid giving Washington an excuse to attack it,
the clerical leadership’s general satisfaction with trends in Iraq, and
Iran’s desire to avoid chaos on its borders.
Iranian conventional military power constitutes the greatest potential threat
to Persian Gulf states and a challenge to US interests. Iran is enhancing its
ability to project its military power in order to threaten to disrupt the operations
and reinforcement of US forces based in the region—potentially intimidating
regional allies into withholding support for US policy toward Iran—and raising
the costs of our regional presence for us and our allies.
Tehran also continues to support a number of terrorist groups, viewing this capability
as a critical regime safeguard by deterring US and Israeli attacks, distracting
and weakening Israel, and enhancing Iran’s regional influence through intimidation.
Lebanese Hizballah is Iran’s main terrorist ally, which—although focused
on its agenda in Lebanon and supporting anti- Israeli Palestinian terrorists—has
a worldwide support network and is capable of attacks against US interests if
it feels its Iranian patron is threatened. Tehran also supports Palestinian Islamic
Jihad and other groups in the Persian Gulf, Central and South Asia, and elsewhere.
North Korea claims to have nuclear weapons—a claim that we assess is probably
true—and has threatened to proliferate these weapons abroad. Thus, like
Iran, North Korea threatens international security and is located in a historically
volatile region. Its aggressive deployment posture threatens our allies in South
Korea and US troops on the peninsula. Pyongyang sells conventional weapons to
Africa, Asia, and the Middle East, and has sold ballistic missiles to several
Middle Eastern countries, further destabilizing regions already embroiled in conflict.
And it produces and smuggles abroad counterfeit US currency, as well as narcotics,
and other contraband.
Pyongyang sees nuclear weapons as the best way to deter superior US and South
Korean forces, to ensure regime security, as a lever for economic gain, and as
a source of prestige. Accordingly, the North remains a major challenge to the
global nuclear nonproliferation regimes. We do not know the conditions under which
the North would be willing to fully relinquish its nuclear weapons and its weapons
program. Nor do we see signs of organized opposition to the regime among North
Korea’s political or military elite.
GOVERNANCE, POLITICAL INSTABILITY, AND DEMOCRATIZATION
Good governance and, over the long term, progress toward democratization are crucial
factors in navigating through the period of international turmoil and transition
that commenced with the end of the Cold War and that will continue well into the
future. In the absence of effective governance and reform, political instability
often compromises our security interests while threatening new democracies and
pushing flailing states into failure.
I will now review those states of greatest concern to the United States, framing
my discussion within the context of trends and developments in their respective
MIDDLE EAST and SOUTH ASIA
Middle East. The tensions between autocratic regimes, extremism, and democratic
forces extend well beyond our earlier discussion about Iran, Iraq and Afghanistan
to other countries in the Middle East. Emerging political competition and the
energizing of public debate on the role of democracy and Islam in the region could
lead to the opening of political systems and development of civic institutions,
providing a possible bulwark against extremism. But the path to change is far
from assured. Forces for change are vulnerable to fragmentation and longstanding
regimes are increasingly adept at using both repression and limited reforms to
moderate political pressures to assure their survival.
We continue to watch closely events in Syria, a pivotal—but generally unhelpful—player
in a troubled region. Despite the Syrian military withdrawal from Lebanon last
year, Damascus still meddles in its internal affairs, seeks to undercut prospects
for an Arab-Israeli peace, and has failed to crackdown consistently on militant
infiltration into Iraq. By aligning itself with Iran, the Bashar al-Asad regime
is signaling its rejection of the Western world. Over the coming year, the Syrian
regime could face internal challenges as various pressures—especially the
fallout of the UN investigation into the assassination of the former Lebanese
Prime Minister— raise questions about President Bashar al-Asad's judgment
and leadership capacity.
Syria’s exit from Lebanon has created political opportunities in Beirut,
but sectarian tensions—especially the sense among Shia that they are underrepresented
in the government—and Damascus’s meddling persist. Bombings since
March targeting anti-Syria politicians and journalists have fueled sectarian animosities.
Egypt held presidential and legislative elections for the first time with multiple
presidential candidates in response to internal and external pressures for democratization.
The Egyptian public, however, remains discontented by economic conditions, the
Arab-Israeli problem, the US presence in Iraq, and insufficient political freedoms.
Saudi Arabia’s crackdown on al-Qa’ida has prevented major terrorist
attacks in the Kingdom for more than a year and degraded the remnants of the terror
network’s Saudi-based leadership, manpower, access to weapons, and operational
capability. These developments, the Kingdom’s smooth leadership transition
and high oil prices have eased, but not eliminated, concerns about stability.
HAMAS’s performance in last week’s election ushered in a period of
great uncertainty as President Abbas, the Israelis, and the rest of the world
determine how to deal with a majority party in the Palestinian Legislative Council
that conducts and supports terrorism and refuses to recognize or negotiate with
Israel. The election, however, does not necessarily mean that the search for peace
between Israel and the Palestinians is halted irrevocably. The vote garnered by
HAMAS may have been cast more against the Fatah government than for the HAMAS
program of rejecting Israel. In any case, HAMAS now must contend with Palestinian
public opinion that has over the years has supported the two-state solution.
Many of our most important interests intersect in Pakistan. The nation is a frontline
partner in the war on terror, having captured several al-Qa’ida leaders,
but also remains a major source of extremism that poses a threat to Musharraf,
to the US, and to neighboring India and Afghanistan. Musharraf faces few political
challenges in his dual role as President and Chief of Army Staff, but has made
only limited progress moving his country toward democracy. Pakistan retains a
nuclear force outside the Treaty on the Non- Proliferation of Nuclear Weapons
and not subject to full-scope IAEA safeguards and has been both recipient and
source—via A.Q. Khan’s proliferation activities—of nuclear weapons-related
technologies. Pakistan’s national elections scheduled for 2007 will be a
key benchmark to determine whether the country is continuing to make progress
in its democratic transition.
Since India and Pakistan approached the brink of war in 2002, their peace process
has lessened tensions and both appear committed to improving the bilateral relationship.
A number of confidence-building measures, including new transportation links,
have helped sustain the momentum. Still, the fact that both have nuclear weapons
and missiles to deliver them entails obvious and dangerous risks of escalation.
In Russia, President Putin’s drive to centralize power and assert control
over civil society, growing state control over strategic sectors of the economy,
and the persistence of widespread corruption raise questions about the country’s
direction. Russia could become a more inward-looking and difficult interlocutor
for the United States over the next several years. High profits from exports of
oil and gas and perceived policy successes at home and abroad have bolstered Moscow’s
Russia probably will work with the United States on shared interests such as counterterrorism,
counternarcotics, and counterproliferation. However, growing suspicions about
Western intentions and Moscow’s desire to demonstrate its independence and
defend its own interests may make it harder to cooperate with Russia on areas
of concern to the United States.
Now, let me briefly examine the rest of post-Soviet Eurasia where the results
in the past year have been mixed.
Many of the former Soviet republics are led by autocratic, corrupt, clanbased
regimes whose political stability is based on different levels of repression;
yet, at the same time, we have seen in Georgia, Ukraine, and Kyrgyzstan the emergence
of grassroots forces for change.
Central Asia remains plagued by political stagnation and repression, rampant corruption,
widespread poverty and widening socio-economic inequalities, and other problems
that nurture nascent radical sentiment and terrorism. In the worst, but not implausible
case, central authority in one or more of these states could evaporate as rival
clans or regions vie for power—opening the door to an expansion of terrorist
and criminal activity on the model of failed states like Somalia and, when it
was under Taliban rule, Afghanistan.
A gradual consolidation and improvement of democratic institutions is the dominant
trend in much of Latin America. By the year’s end, ten countries will have
held presidential elections and none is more important to US interests than the
contest in Mexico in July. Mexico has taken advantage of NAFTA and its economy
has become increasingly integrated with the US and Canada. Committed democrats
in countries like Brazil and Chile are promoting economic growth and poverty alleviation.
And despite battling persistent insurgent and paramilitary forces with considerable
success, Colombia remains committed to keeping on a democratic path. Nonetheless,
radical populist figures in some countries advocate statist economic policies
and show little respect for democratic institutions.
In Venezuela, President Chavez, if he wins reelection later this year, appears
ready to use his control of the legislature and other institutions to continue
to stifle the opposition, reduce press freedom, and entrench himself through measures
that are technically legal, but which nonetheless constrict democracy. We expect
Chavez to deepen his relationship with Castro (Venezuela provides roughly two-thirds
of that island’s oil needs on preferential credit terms). He also is seeking
closer economic, military, and diplomatic ties with Iran and North Korea. Chavez
has scaled back counternarcotics cooperation with the US.
Increased oil revenues have allowed Chavez to embark on an activist foreign policy
in Latin America that includes providing oil at favorable repayment rates to gain
allies, using newly created media outlets to generate support for his Bolivarian
goals, and meddling in the internal affairs of his neighbors by backing particular
candidates for elective office.
In Bolivia, South America’s poorest country with the hemisphere’s
highest proportion of indigenous people, the victory of Evo Morales reflects the
public’s lack of faith in traditional political parties and institutions.
Since his election he appears to have moderated his earlier promises to nationalize
the hydrocarbons industry and cease coca eradication. But his administration continues
to send mixed signals regarding its intentions.
Haiti’s interim government is the weakest in the hemisphere and the security
climate could continue to deteriorate due to slum gang violence. A failure to
renew the UN mandate would greatly increase the risk of a complete nationwide
breakdown of public order, intensifying migration pressures. The perception among
would-be migrants that the US migration policy is tough is the most important
factor in deterring Haitians from fleeing their country.
Southeast Asia includes vibrant, diverse, and emerging democracies looking to
the United States as a source of stability, wealth, and leadership. But it is
also home to terrorism, separatist aspirations, crushing poverty, ethnic violence,
and religious divisions. Burma remains a dictatorship, and Cambodia is retreating
from progress on democracy and human rights made in the 1990s. The region is particularly
at risk from avian flu, which I will discuss at greater length in a moment. Al-Qa’ida-affiliated
and other extremist groups are present in many countries, although effective government
policies have limited their growth and impact.
The prospects for democratic consolidation are relatively bright in Indonesia,
the country with the world’s largest Muslim population. President Yudhoyono
is moving forward to crack down on corruption, professionalize the military, bring
peace to the long-troubled province of Aceh, and implement economic reforms. On
the counterterrorism side, Indonesian authorities have detained or killed significant
elements of Jemaah Islamiya (JI), the al Qa’ida-linked terrorist group,
but JI remains a tough foe.
The Philippines remains committed to democracy despite political turbulence over
alleged cheating in the 2004 election and repeated rumors of coup plots. Meanwhile,
Manila continues to struggle with the thirty-five year old Islamic and Communist
rebellions, and faces growing concerns over the presence of JI terrorists in the
Thailand is searching for a formula to contain violence instigated by ethnic-
Malay Muslim separatist groups in the far southern provinces. In 2005, the separatists
showed signs of stronger organization and more lethal and brutal tactics targeting
the government and Buddhist population in the south.
Some good news is coming out of Africa. The continent is enjoying real economic
growth after a decade of declining per capita income. The past decade has also
witnessed a definite, albeit gradual, trend toward greater democracy, openness,
and multiparty elections. In Liberia, the inauguration of Ellen Johnson Sirleaf
as President, following a hotly contested multi-party election, was a positive
harbinger of a return to democratic rule in a battered nation.
Yet, in much of the continent, humanitarian crises, instability, and conflict
persist. Overlaying these enduring threats are the potential spread of jihadist
ideology among disaffected Muslim populations and the region's growing importance
as a source of energy. We are most concerned about Sudan and Nigeria.
The signing of a Comprehensive Peace Agreement in Sudan last year was a major
achievement, but the new Government of National Unity is being tested by the continuing
conflict in Darfur, and instability in Chad is spilling over into western Sudan,
further endangering humanitarian aid workers and assistance supply lines. Gains
in stabilizing and improving the conditions in Darfur could be reversed if the
new instability goes unchecked.
The most important election on the African horizon will be held in spring 2007
in Nigeria, the continent's most populous country and largest oil producer. The
vote has the potential to reinforce a democratic trend away from military rule—or
it could lead to major disruption in a nation suffering frequent ethno-religious
violence, criminal activity, and rampant corruption. Speculation that President
Obasanjo will try to change the constitution so he can seek a third term in office
is raising political tensions and, if proven true, threatens to unleash major
turmoil and conflict. Such chaos in Nigeria could lead to disruption of oil supply,
secessionist moves by regional governments, major refugee flows, and instability
elsewhere in West Africa.
GLOBALIZATION AND RISING ACTORS
To one degree or another, all nations are affected by the phenomenon known as
globalization. Many see the United States as globalization’s primary beneficiary,
but the developments subsumed under its rubric operate largely beyond the control
of all countries. Small, medium, and large states are both gaining and losing
through technological and economic developments at a rate of speed unheard of
in human history.
Such recalibrations in regional and global standing usually emerge in the wake
of war. But globalization isn’t a war, even though its underside—
fierce competition for global energy reserves, discrepancies between rich and
poor, criminal networks that create and feed black markets in drugs and even human
beings, and the rapid transmission of disease—has the look of a silent but
titanic global struggle.
One major recalibration of the global order enabled by globalization is the shift
of world economic momentum and energy to greater Asia—led principally by
explosive economic growth in China and the growing concentration of world manufacturing
activity in and around it. India, too, is emerging as a new pole of greater Asia’s
surging economic and political power. These two Asian giants comprise fully a
third of the world’s population—a huge labor force eager for modern
work, supported by significant scientific and technological capabilities, and
an army of new claimants on the world’s natural resources and capital.
China is a rapidly rising power with steadily expanding global reach that may
become a peer competitor to the United States at some point. Consistent high rates
of economic growth, driven by exploding foreign trade, have increased Beijing’s
political influence abroad and fueled a military modernization program that has
steadily increased Beijing’s force projection capabilities.
Chinese foreign policy is currently focused on the country’s immediate periphery,
including Southeast and Central Asia, where Beijing hopes to make economic inroads,
increase political influence, and prevent a backlash against its rise. Its rhetoric
toward Taiwan has been less inflammatory since Beijing passed its “anti-secession”
law last spring. China has been reaching out to the opposition parties on Taiwan
and making economic overtures designed to win favor with the Taiwan public—although
Beijing still refuses to deal with the elected leader in Taipei.
Beijing also has expanded diplomatic and economic interaction with other major
powers—especially Russia and the EU—and begun to increase its presence
in Africa and Latin America.
China’s military is vigorously pursuing a modernization program: a full
suite of modern weapons and hardware for a large proportion of its overall force
structure; designs for a more effective operational doctrine at the tactical and
theater level; training reforms; and wide-ranging improvements in logistics, administration,
financial management, mobilization, and other critical support functions.
Beijing’s biggest challenge is to sustain growth sufficient to keep unemployment
and rural discontent from rising to destabilizing levels and to maintain increases
in living standards. To do this, China must solve a number of difficult economic
and legal problems, improve the education system, reduce environmental degradation,
and improve governance by combating corruption.
Indeed, China’s rise may be hobbled by systemic problems and the Communist
Party’s resistance to the demands for political participation that economic
growth generates. Beijing’s determination to repress real or perceived challenges—from
dispossessed peasants to religious organizations—could lead to serious instability
at home and less effective policies abroad.
Rapid economic growth and increasing technological competence are securing India’s
leading role in South Asia, while helping India to realize its longstanding ambition
to become a global power. India’s growing confidence on the world stage
as a result of its increasingly globalized business activity will make New Delhi
a more effective partner for the United States, but also a more formidable player
on issues such as those before the WTO.
New Delhi seeks to play a key role in fostering democracy in the region, especially
in Nepal and Bangladesh, and will continue to be a reliable ally against global
terrorism, in part because India has been a frequent target for Islamic terrorists,
mainly in Kashmir. India seeks better relations with its two main rivals—Pakistan
and China—recognizing that its regional disputes with them are hampering
its larger goals on the world stage. Nevertheless, like China, India is using
its newfound wealth and technical capabilities to
extend its military reach.
On the economic front, as Indian multinationals become more prevalent, they will
offer competition and cooperation with the United States in fields such as energy,
steel, and pharmaceuticals. New Delhi’s pursuit of energy to fuel its rapidly
growing economy adds to pressure on world prices and increases the likelihood
that it will seek to augment its programs in nuclear power, coal technologies,
and petroleum exploration. Like Pakistan, India is outside the Nonproliferation
THREATS TO GLOBAL ENERGY SECURITY
World energy markets seem certain to remain tight for the foreseeable future.
Robust global economic expansion is pushing strong energy demand growth and—combined
with instability in several oil producing regions—is increasing the geopolitical
leverage of key energy producer states such as Iran, Saudi Arabia, Russia, and
Venezuela. At the same time, the pursuit of secure energy supplies has become
a much more significant driver of foreign policy in countries where energy demand
growth is surging—particularly China and India.
The changing global oil and gas market has encouraged Russia’s assertiveness
with Ukraine and Georgia, Iran’s nuclear brinksmanship, and the populist
“petro-diplomacy” of Venezuela’s Hugo Chavez. Russia’s
recent but short-lived curtailment of natural gas deliveries to Ukraine temporarily
reduced gas supplies to much of Europe and is an example of how energy can be
used as both a political and economic tool. The gas disruption alarmed Europeans—reminding
them of their dependence on Russian gas—and refocused debate on alternative
Foreign policy frictions, driven by energy security concerns, are likely to be
fed by continued global efforts of Chinese and Indian firms to ink new oilfield
development deals and to purchase stakes in foreign oil and gas properties. Although
some of these moves may incrementally increase oil sector investment and global
supplies, others may bolster countries such as Iran, Syria, and Sudan that pose
significant US national security risks or foreign policy challenges. For example,
in Venezuela, Chavez is attempting
to diversify oil exports away from the US.
THE SECURITY THREAT FROM NARCOTICS TRAFFICKING
In addition to the central US national security interest in stemming the flow
of drugs to this country, there are two international threats related to narcotics:
first, the potential threat from an intersection of narcotics and extremism; and
second, the threat from the impact of drugs on those ineffective and unreliable
nation states about which we are so concerned.
Although the worldwide trafficking-terrorist relationship is limited, the scope
of these ties has grown modestly in recent years. A small number of terrorist
groups engage the services of or accept donations from criminals, including narcotics
traffickers, to help raise operational funds. While the revenue realized by extremists
appears small when compared to that of the dedicated trafficking organizations,
even small amounts of income can finance destructive acts of terror.
The tie between drug trafficking and extremism is strongest in Colombia and Afghanistan.
Both of Colombia’s insurgencies and most of its paramilitary groups reap
substantial benefits from cocaine transactions. In Afghanistan, the Taliban and
Hizb-i Islami Gulbudin gain at least some of their financial support from their
ties to local opiates traffickers. Ties between trafficking and extremists elsewhere
are less robust and profitable. North African extremists involved in the 2004
Madrid train bombings reportedly used drug income to buy their explosives.
Most major international organized crime groups have kept terrorists at arm’s
length, although some regional criminal gangs have supplied fraudulent or altered
travel documents, moved illicit earnings, or provided other criminal services
to members of insurgent or terrorist groups for a fee.
Narcotics traffickers—and other organized criminals—typically do not
want to see governments toppled but thrive in states where governments are weak,
vulnerable to or seeking out corruption, and unable—or unwilling—to
consistently enforce the rule of law. Nonetheless, a vicious cycle can develop
in which a weakened government enables criminals to dangerously undercut the state’s
credibility and authority with the consequence that the investment climate suffers,
economic growth withers, black market activity
rises, and fewer resources are available for civil infrastructure and governance.
We are particularly concerned about this cycle in countries on the other side
of the world, such as Afghanistan, Kyrgyzstan, and Burma, and those close to home,
such as in Haiti, Jamaica, and Mexico. About 90 percent of detected cocaine destined
for the US was smuggled through the Mexico– Central America corridor; nearly
all Mexican heroin is for the US market; and Mexico is the primary foreign supplier
of marijuana and methamphetamine to the US.
THE THREAT FROM PANDEMICS AND EPIDEMICS
In the 21st century, our Intelligence Community has expanded the definition of
bio-threats to the US beyond weapons to naturally occurring pandemics. The most
pressing infectious disease challenge facing the US is the potential emergence
of a new and deadly avian influenza strain, which could cause a worldwide outbreak,
or pandemic. International health experts worry that avian influenza could become
transmissible among humans, threatening the health and lives of millions of people
around the globe. There are many unknowns about avian flu, but even the specter
of an outbreak could have significant effects on the international economy, whole
societies, military operations, critical infrastructure, and diplomatic relations.
Avian flu is not something we can fight alone. An effective response to it is
highly dependent on the openness of affected nations in reporting outbreaks where
and when they occur. But for internal political reasons, a lack of response capability,
or disinclination to regard avian influenza as a significant threat, some countries
are not forthcoming. In close coordination with the Department of Health and Human
Services, the Intelligence Community therefore is tracking a number of key countries
that are—or could be—especially prone to avian influenza outbreaks
and where we cannot be confident that adequate information will be available through
open sources. The IC also coordinates closely with the Department of Homeland
Security (DHS) and provides input to the national Bio Surveillance Integration
System at DHS.
Each of the major intelligence challenges I have discussed today is affected by
the accelerating change and transnational interplay that are the hallmarks of
21st century globalization. As a direct result, collecting, analyzing, and acting
on solid intelligence have become increasingly difficult. To meet these new and
reconfigured challenges, we need to work hand-in-hand with other responsible nations.
Fortunately, the vast majority of governments in the world are responsible and
responsive, but those that are not are neither few in numbers nor lacking in material
resources and geopolitical influence.
The powerful critiques of this Committee, the 9/11 Commission, and the WMD Commission,
framed by statute in the Intelligence Reform and Terrorism Prevention Act of 2004
and taken to heart by the dedicated professionals of our Intelligence Community,
have helped make us better prepared and more vigilant than we were on that terrible
day in September 2001. But from an intelligence perspective, we cannot rest. We
must transform our intelligence capabilities and cultures by fully integrating
them from local law enforcement through national authorities in Washington to
combatant commanders overseas. The more thoroughly we do that, the more clearly
we will be able to see the threats lurking in the shadow of the future and ward
Thank you very much.