Ian Bremmer and Nouriel Rubini, in their prescient article for the Foreign Affairs March/April 2011 issue, predicted that this new paradigm of a G-zero world would lead to “conflict, not cooperation.” Indeed, in the years since, we have seen a marked change in the world order – one that has slowly come into place over decades, becoming all the more apparent in light of new geopolitical challenges, shifting alliances, and dynamic power structures.
Brasidas Group’s May 2018 newsletter seeks to explore this theme in depth, breaking down the important actors in Bremmer and Rubini’s G-Zero world and analyzing the implications of these interplays of power, especially in the context of global security issues.
Advancements in artificial intelligence (AI) and machine learning have streamlined the compliance process utilizing algorithms designed to identify general risk categories. While these advancements have undoubtedly closed the intelligence gap to some extent, technology still cannot be completely relied upon to substitute human intelligence and nuanced analysis.
2017 saw a prevalence of political crises and unresolved disputes between countries. The war on terror continues to be fought both at home and abroad. We also saw record highs for the values of crypto-currencies. After such a year, what does 2018 hold? In Brasidas Group’s first newsletter of the year, we look at potential events or “grey swans” that could occur given the right circumstances.
Brasidas Group was pleased to host its annual cocktail in Belgrade on 8 December 2017, honoring our clients, partners, and employees. We were joined by representatives of some of the best known and most successful companies in Serbia, as well as representatives of both Serbian and international organizations.
Brasidas opened its office in Serbia over three years ago and we consider this affiliate office a success story in every respect.
Brasidas Group is pleased to announce that two of its team members, Dusan Mladenovic and Milos Radic, recently won first place in the Cloud & IoT Hackathon organized by DevTech in Belgrade. The hackathon took place in the offices of DevTech, a cloud strategy consulting company based in Novi Sad, Serbia.
Security has become a shared global concern over the past decade, as it has become evident that no single nation has all the necessary resources to protect its citizens. As such, the need for intelligence sharing is more vital now than in any other point in history. Indeed, while technological advancements have brought the world closer together in the figurative sense, they have created new types of threats that can be launched remotely and have a devastating impact on entire societies.
Themes of this event included the growing need for succession planning in family offices, wealth preservation for the next generation, with discussions centering around necessary elements for their successful implementation, including professional and high caliber staff a with clear understanding of long-term family office business strategy. During the course of two days, various experiences and strategic views of family offices were exchanged, and the participants had the opportunity to learn more about social, ecological & environmental impact investing, geopolitical risk analysis, and risk mitigation, including security and fraud investigation.
On 12 June 2017, Brasidas Group took part in a conference titled “The First National Conference on Cyber Security – Partnerships for a Secure Cyber Space” at the Hyatt Regency Hotel in Belgrade. The event was organized by the Organization for Security and Co-operation in Europe (OSCE), a security-oriented intergovernmental organization. The first public-private partnership in the cybersecurity domain in Serbia was announced at the event, with over 120 representatives of state institutions, the private sector, academia, and civil society organizations attending.
On 19 May 2017, incumbent Iranian president Hassan Rouhani won reelection by an overwhelming majority over hardliner Ebrahim Raisi, possibly indicating a significant lean towards genuine reform in the country. Although President Rouhani’s victory is encouraging with respect to Western relations, this should not be construed as a clear indication of U.S.-Iranian rapprochement. Despite the Iranian population’s apparent lean toward reform, as evidenced by recent election results, the intentions of the country’s most influential political figure, Supreme Leader Ali Khamenei, remain unknown. Khamenei is fully aware that opening Iran to the U.S. and the West can potentially call into question the future of the theocratic government and erode the authority of hardliners. Furthermore, considering that Khamenei is 78 years old, a major concern lies in who will replace him and what the implications of this replacement will be for the country’s domestic and foreign policy.
It has been 100 days since President Trump assumed office in the White House. In any presidency, these 100 days are generally characterized as a “honeymoon” period, during which the incoming president capitalizes on the momentum of his successful campaign, as well as the surge of popularity with his electorate in order to lay out his agenda. Throughout his electoral campaign, then-candidate Trump made many promises to the American people regarding his future agenda once in the White House. Indeed, within days of his inauguration, President Trump exercised his executive power, often in the form of executive orders, to institute changes and reverse policies from the previous administration, which is not uncommon for incoming presidents to do.
Following the success of its conference, Deep Web Demystified: A Journey Through the Hidden Internet, Brasidas Group sponsored its first hackathon, titled Hacking in the Dark, at Belgrade’s StartIt Center on 31 March 2017. Eight teams participated in the 48-hour event with the objective of developing innovative solutions to address the challenges of gathering information from the Deep web and Darknet and turning this into actionable intelligence.
Russia and Turkey are restoring their ties following months of crisis over the downing of a Russian aircraft by Turkey over Syria in November 2015. The relations between these two countries subsequently deteriorated, and Moscow imposed a number of sanctions on Turkey, suspending the visa-free travel regime for Turkish citizens, restricting the import of certain Turkish products, and banning charter flights. In June 2016, Turkish President Erdogan apologized and expressed regret for the downing of the Russian bomber in a letter addressed to Russian President Vladimir Putin. This has initiated a Russian-Turkish rapprochement, leading to Erdogan and Putin meeting in August 2016 in Saint Petersburg.
The Iranian science & technology field, especially as it pertains to research and development (R&D), has been thriving even in the face of sanctions. Now, with the lifting of sanctions, we can expect increased foreign interest and injections of capital that will further help support and grow this sector.
Atypically, the economic sanctions imposed on Iran by the West have been a major factor in the growth of Iran’s R&D sector. The UNESCO report “Towards 2030,” published in 2015, states that “[t]he sanctions…have accelerated the shift from a resource-based economy to a knowledge economy by challenging policymakers to look beyond extractive industries to the country’s human capital for wealth creation… between 2006 and 2011 the number of firms declaring R&D activities more than doubled.”
From Viber, through ReWalk (a robotic exoskeleton that threatens to make wheelchairs obsolete), to Zuta Labs (a pocket-sized printer), Israeli start-ups are changing the world as we know it. With a population of only 8.5 million people, it is astonishing that 4 percent of all venture capital (VC) deals made outside the US since 2012 have taken place in Israel, which rightfully wears its “Start-up Nation” title. Similarities between Silicon Valley and its Israeli tech-centric coastal counterpart have led to the latter being labeled “Silicon Wadi” (with “wadi” being the Arabic for “valley”). There are multiple reasons behind the surprising success of Israel’s start-ups, including government incentives and cultural factors. These factors have led to an influx of creative ideas and products coming out of Israel, helping establish it as VC-friendly and worthy of attention from foreign investors.
The portmanteau “Brexit” has been one of the most overused terms in the last few months, referring to the exit of the United Kingdom from the European Union. As 23 June, the date of the referendum to determine this issue, draws closer, it has become even more difficult to ignore the implications of this event. It will affect not only the UK, but all of Europe, both economically and politically. While public opinion regarding this topic vacillates, the short- and long-term consequences of an affirmative vote can be discerned with certainty.
The former East African Federation (EAF) was founded as a means of promoting inter-territorial cooperation between countries in this region, including Kenya, Tanzania, and Uganda. This first incarnation collapsed during the 1970s. However, the idea has not died. The premise for the future of a considerably enlarged version of the EAF is in the same spirit of much larger supranational organizations, such as the European Union (EU) and the Association of Southeast Asian Nations (ASEAN). Over the next few decades, this quasi-federation has the goal of becoming a more important player in world politics and the global economy. It seeks to rid the region of its stigmatic colonial history by creating a regional trading bloc that will be competitive in the global economy.
“The show must go on” could very well be the maxim of the 2016 U.S. presidential election. Just last week, Donald Trump announced his “America First” foreign policy program and managed to further worry Americans about the future of American foreign policy. Yet traditionally, when it comes to U.S. presidential elections, neither the candidates nor their electorate have paid much notice to foreign policy issues. Indeed, foreign policy issues have historically had only a minor effect on polls, which further discourages candidates from delving into such topics. Notwithstanding, we should remember that, while foreign policy cannot decide a winner, it can certainly decide a loser.
China, a once thriving manufacturing powerhouse, is struggling to keep this title. China entered 2016 encumbered with a weakening economic outlook that has cast a shadow on its struggling industrial sector, with growth numbers at 7%, the lowest since 1990. The challenges faced by the Chinese industrial sector have been, in part, attributed to a culmination of decelerating technological progress and inadequately equipped factories. Conversely, China’s decline as a manufacturing frontrunner has been further exacerbated by foreign market entrance barriers created by China’s strict data surveillance regulations and data theft concerns that have hindered foreign investments, which are limiting the potential of China's industrial rate of growth. China has continually implemented strict regulations for foreign companies, as these entities have been frequently subjected to invasive audits that have made them vulnerable to economic cyber espionage. Yet, it is becoming evident that China’s protectionist policies are not only creating barriers for foreign companies but are increasingly showing to be self-destructive to its own economy.
The European migrant crisis is the most severe crisis of its kind in Europe since World War II. When discussing this crisis, the blame is often placed on the civil war in Syria, with the culprit being Assad or ISIS—or both. However, such claims are shortsighted and neglect the fact that the entire Middle East is in a state of geopolitical turmoil. The instability in Iraq and Syria are just more visible examples of this instability. Contrary to popular sentiment, we have not yet reached the pinnacle of refugee flows from the Middle East to Europe. On the contrary, given the confluence of geopolitical, socioeconomic, religious, and environmental factors, the exodus of refugees will become unimaginably worse in the long-term.
The significant potential for Foreign Direct Investment (“FDI”) in Serbia’s Free Zones, coupled with Serbia existing free trade agreements with Russia, offer an unmatched opportunity for companies targeting the sanctioned Russian market and vice versa. However, these opportunities are tempered by the context of the current political climate, making it essential for investors to identify and maintain relationships with key decision makers in the country in order to ensure a smooth investment process. It is necessary to understand the cultural nuances to further help investors navigate the bureaucratic maze successfully, ensuring that risks of any potential red flags are minimized.
Love him or hate him, but for better or worse Russian President Vladimir Putin has a talent for surprising the world. After six months of Russian air campaigns in Syria, Putin announced unexpectedly on 14 March 2016 that Russia would be withdrawing most of its armed forces from Syria. This decision goes contra to two ideas: first, that Putin would back his client in Damascus, Bashar al-Assad, to the very end; and two, that intervention would entrap Russia and Putin in a quagmire conflict. However, these two views do not take into account that the logic behind Putin’s actions in Syria is multifaceted and influenced by numerous factors.
While there are intrinsic risks associated with doing business in Iran, the Computer Crimes Law (“CCL”) of 2009 put up another obstacle that foreign companies already working in Iran or looking to enter this market must overcome. Instead of being assured by Iran’s passing a law that was ostensibly created to address intellectual property thefts and rights, companies are advised to closely inspect the exact nature and implementation of this law as it served to establish an elaborate surveillance system used primarily as a means of dealing with political opponents.