Latin America is Leading the Charge in Renewable Energy

While the U.S. leaves the Paris Climate Agreement, Latin America is leading the charge in renewables

By:  Tyson Guajardo, Lynx Global Intelligence


Following President Donald Trump’s withdrawal from the Paris climate agreement, many citizens of the world were left furious and in a state of uncertainty about our planet’s future.  Despite the universal outrage which surfaced from a large magnitude of individuals and organizations alike within the United States, this largely symbolic retreat does not at all indicate the end of the green future narrative.  In fact, it is possible Mr. Trump’s withdrawal has actually incentivized climate activists more than ever before to push businesses towards committing to renewables and clean energy.  The alliance of mayors from 292 cities across the United States (1), as well as the partnership of 10 states including New York, Washington and California are a beacon of hope for many who are at odds with POTUS.  Hundreds of businesses in America led by giants such as Google, Apple and Facebook (2), are also dedicated to tackling the threat of climate change, with or without the federal government’s blessing.  Opportunities for American firms to invest in renewables can be found all over the world, with most other nations willing to lend a helping a hand in some capacity.

For example, Latin America, where there is a combined population of more than 600 million, has great potential for investors looking for the current hot spot in alternative energy.  The region as a whole has one of the highest rates of renewable energy consumption in the world (3).  In 2016, both Costa Rica and Uruguay ran almost entirely on renewables for several months, while in 2014 Latin America collectively generated 53% of its electricity from renewable sources (in comparison to a world average of 22%) (4).  In Brazil and Paraguay, most electricity is hydro powered (5) and Chile has recently become a leader in solar energy.   In Latin America, mergers and acquisitions in the sector have doubled over the last 12 months (5).  There is no other area on the planet that can claim to be as successful in this regard.  Moreover, an intergovernmental organization known as the International Renewable Energy Agency has stated that close to every Latin American nation has created goals supporting a greener future (5).  These nations are willing to collaborate with private investors for the benefit of their economies, which will become more dependent on renewables in the future as most of the world shifts its focus in this direction.

Lynx Global Intelligence is currently engaged in a solar power project in Peru and can also help your organization lead the charge (pun intended) in the alternative energy revolution while simultaneously generating (oops, there’s another one) more revenues.  We partner with South American businesses to help preserve the future of our planet for our children and grandchildren.  For more information, contact us to see how we can help.






The Big Piracy Threat isn’t in Somalia, it’s in Indonesia

International focus on African piracy rather than South East Asian piracy comes from increased insurance assessments

By:  Anthony J. Riddle,  Lynx Global Intelligence


Somali piracy is back in the media after a five-year hiatus. Some may quickly assume that the Gulf of Aden along the Somali coast is once again the hotspot of piracy. This assumption is not the case. Somalian piracy is likely to remain the least prolific of all the piracy danger zones.[1] Conversely, South East Asia maintains the highest numbers of attacks, the most dollar amount of cargo seized, and nearly three times more seafarers affected as the next closest zone.[2] Despite the data, it has received the least amount of attention by the international media, shipping companies, and great navies. South East Asia should be, based on the likelihood of attacks to shipping vessels, the focus of piracy operations rather than the African continent. The United Nations’ International Maritime Bureau’s (IMB) figures demonstrate that South East Asia accountedfor 55 percent of the world’s 54 piracy and armed robbery incidents since the start of 2015.”[3]

Terrorism and piracy near the African continent lead to increased insurance premiums and create the perception that Africa is the greatest center of piracy attacks. The West Africa based terrorist group Boko Haram operates out of Nigeria and increases the insurance assessments for the Gulf of Guinea. All the while the East African terror group, Al-Shabaab, is currently in Somalia, which inflates insurance premiums for East Africa. These terrorist organizations have a history of using vessel born improvised explosive devices (VBIEDs), which justifies their inclusion in the insurance assessments for maritime shipping companies.

These increased premiums in turn motivate shipping companies to invest heavily in fixed counter measures, additional fuel expenditures to expedite transit through high premium zones, and hiring Maritime Security (MarSec) teams to safeguard their vessels. MarSec teams represent the largest cost to companies in the fight against piracy. The international focus on African piracy rather than South East Asian piracy comes from the increased insurance assessments of a combined threat instead of the sole probability of piracy attacks in Africa.

Both the United States and United Nations use a legal definition for piracy that does not include acts within state controlled waters which complicates response efforts. The United Nations Convention on the Law of the Sea (UNCLOS) defines piracy as acts conducted only “on the high seas”[4] as does the United States.[5] The boundary for the high seas begins after 200 nautical miles from shore which legally excludes piracy attacks conducted within this range. The Strait of Malacca is only 1.5 nautical miles wide at its narrowest point which means it does not meet this definition.[6] Shipping vessels are therefore alone in defending themselves against pirate attacks there unless the companies can negotiate for regional assistance. It is the responsibility of the private shipping companies to coordinate the legal ability to use deadly force from each of the various South East Asian states that control portions of this trade route.[1] The IMO, however, does not officially support the use of force by private MarSec teams responding to pirate attacks.[2]

Piracy attacks generally center on three major types: hijacking for ransom, hijacking for cargo theft, and crew robbery. Robbery is an attack of convenience and has a relatively low monetary payoff compared to the other attack types. Hijacking for kidnapping and cargo theft promise the highest returns on investment but require greater initial capital and some level of sophistication in planning to execute. For example, the long range off shore piracy attacks from Somalia require an initial investment in the operation of nearly $30,000 USD.[3]

The Strait of Malacca, on the other hand, is the both target rich and is a geographically enclosed area which creates a strategic chokepoint for piracy and therefore does not require similar up front costs.[4] The Strait of Malacca on average has 120,000 ships transit through this route a year, one third of the world’s commercial ships,[5] and “between 70% and 80% of all the oil imported by China and Japan…”[6] Approximately 15.2 million of the total 87 million barrels of oil produced in 2011 passed through the Strait of Malacca which is “nearly 19 times the amount that passed through the Panama Canal and four times more than the volume through the Suez Canal over the same period.”[7] Additionally, Singapore is the largest hub for “bunkering” stolen oil, or mixing the stolen goods with legitimate oil cargo, and is closely located to the South East Asian piracy area of operations (AOR) for swift cargo offload. China’s “go out” policy is a fundamental component of the country’s ability to secure the energy from abroad and it is projected that 51% of all oil coming from the Middle East while transit through South East Asia giving pirate teams sustained and varied targets to choose from.[8]

The South East Asia piracy presents an increasingly complex threat to transiting vessels because Indonesia’s prolific cyber crime. In 2013 Indonesia surpassed China as the leading source of malicious traffic and the Indonesian President Joko “Jokowi” Widodo stated that the number of cases of cyber attacks increased by 389 percent from 2014 to 2015.[9] It is predicated that the capabilities of Indonesian cyber criminals will become increasingly sophisticated as the country continue to become fully modernized by 2025; as stated in their current master plan MP3EI.[10]

In light of the fact that Indonesia is already a center for both cyber crime and piracy, it is likely that this combined threat will become a greater issue for international commerce as shipping vessels continue to modernize. The IMO, for example, will require all crews from large ships to integrate an electronic control system that reads electronic charts, gives piracy updates, and is remotely accessible through satellite link.[1] This electronic integration makes the vessels vulnerable to cyber attack. The electronic control systems control critical systems of the vessel such as steering and engine functions.

Rear Admiral Thomas of the United States Coast Guard speaking during an open forum in 2015 said, “Every ship built has software that manages its engines; and that software is [now] updated while the vessel is underway from the beach, and the Master doesn’t even know that the software is being updated.”[2] This critical vulnerability will allow Indonesian pirates to utilize cyber attacks to prepare a targeted vessel for a physical attack. Pirates are now not only be able to infiltrate shipboard systems to locate and track targets but also can completely shut down the vessel’s navigation and communications prior to engagement. The remotely accessible upgrades to these supervisory control and data acquisition (SCADA) navigation systems are vulnerable to Distributed Denial of Services (DDOS) or scripted malware like the recently discovered BrickBot, which renders a computer system inoperable.[3] Further compounding this issue is the public dissemination of the NSA’s cache of windows exploits and ready to use malware scripts allowing technologically modest piracy groups to use the same advanced intrusion methods of a developed country’s premiere intelligence agency.[4] In this regard, Southeast Asia is emerging as the most advanced threat to maritime trade in a way that the African continent will be unable to match for years to come.










[8] July 2011 – Piracy Briefing Powerpoint presentation Final.ppt





China’s Craft Beer Revolution is Under Way

The time is ripe to invest in China’s growing market.

By:  Conner Murphy, Lynx Global Intelligence



The craft beer market is going to get a lot bigger as small and medium sized competitors gain traction across China. The time is ripe for China’s craft beer revolution.

According to a recently released report from Drink Sector[2], a beverage industry research organization, China’s beer market is set to become the world’s largest in value by 2018. This shouldn’t come as much of a surprise – China is, after all, a very big country, and has long been the world’s largest consumer of alcoholic beverages (China surpassed the United States in 2011).  However, tastes have been shifting across the country. Traditional liquors such as baijiu, a sorghum based liquor, have dwindled in popularity, while red wine and beer are becoming increasingly popular alternatives. Though beer has always been readily available in China, traditional options such as Tsingtao and Budweiser do not quite appeal to the young, internationally minded, growing middle-class. For a generation raised on designer brands and the newest iPhone, domestic beer just doesn’t make the cut. Drinking cultures and tastes are changing. As put by a local beer representative in a recent CCTV report[3], younger generations prefer to drink until you are satisfied, not drink until you are full (ie. drunk). Enter craft beer.

China’s Beer Market at a Glance

Beer is not new to China – domestic names such as Tsingtao (青岛啤酒), Harbin 哈尔滨啤酒, and Snow雪花啤酒) have long dominated the market, and remain favorites from restaurant goers to the bar crowd. Large international breweries also have a strong presence in the country, with Budweiser and Heineken readily available from Shanghai to Chongqing.  However, while beer production is at an all-time high, revenues have been on the decline since 2013[4]. The market is changing, and consumers are demanding something different from the watered–down lagers of the past century. Small breweries in Beijing and Shanghai that were once exclusively frequented by expats are now full of locals looking to experience the craft beer craze that has exploded across the US and Europe.

Big breweries, wary of the competition they are facing abroad, are hoping to take advantage of the changing demands as quickly as possible. Tsingtao has been rebranding itself across wealthier cities, spreading its Tsingtao 1903 brand as a premium alternative to its typical party-go happy image. Small taprooms have sprung up in Beijing and Shanghai, serving beers such as Tsingtao IPA and Tsingtao Stout.

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[5] Tap options at Beijing’s Tsingtao 1903 SoHo Taproom.  The Beijinger

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[5] Tsingtao Standard with Tsingtao Stout. The Beijinger

Meanwhile, AB-InBev has increased imports of it’s The High End line of beers into China. Beers such as Goose Island IPA and Elysian Jasmine IPA are readily available across Beijing taprooms, and continue to increase their foothold as premium beer staples. Meanwhile, AB has begun targeting local operations, and in March acquired Boxing Cat Brewery[6], one of Shanghai’s most well-known craft breweries.  These trends signal two things: First, opportunities in China’s craft beer market are readily available. Second, it is crucial to enter the craft beer market before large brewing companies gain a stronger foothold.

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At Beijing’s Home Plate BBQ, AB InBev’s Goose Island now tops the draft beer list. Photograph by Mark Leong, Fortune[7]


Partnering With a Local Craft Brewery

This is by far the most direct method of entering China’s craft beer market. Partnering with a local startup is a great way to make your brand known, develop a robust local market, distribute directly to the customer, and maintain a strong understanding of your business operations. Small craft breweries are popping up across China, and while capital is readily available, know-how is in short supply. Entrepreneurs are seeking foreign partnerships and brew masters to assist in creating strong competitors, premium internationally supported brands, and sound business strategies.

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The Next Generation of Chinese Brew masters – Graduates from the China National Research Institute of Food & Fermentation Industries. Photo provided by Jeff Li, Graduate

Collaboration Projects

Less direct than a direct partnership, opportunities exist for collaboration projects in beer production. For example, a brew master guest-training program could be arranged between US and China partners; a US brewery provides the knowhow and helps to create a collaborative collection of beers. While this option provides less control over ground operations, it does represent a chance to make strong connections on the ground, gain a better understanding of the market, and help make your brand known in specific locales. This would also open the door for future opportunities, and provide an opportunity to test the waters of a future partnership with local breweries.


Finally, exporting to China remains an option. The current trade climate appears positive, with the government steadily removing trade barriers on everything from agricultural goods to natural resources[8].This means the cost of exporting to China will go down. However, while this represents an easy inroad, it is also the least likely to bring future success. The trick is not to sell beer in China, it is to spread brand awareness and become a leading presence in the future beer market. This is both incredibly difficult and risky without a local presence.

Risks and Hurdles

As with any business practice, risks exist. Foreign and domestic competition will only continue to grow, highlighting the importance of early entry into the market. Marketing and branding strategies need to be adjusted on a locality-by-locality basis – what works in Shanghai may not work in Beijing. Open and frequent communication with local partnerships will help to ease the localization of your brand. Government regulations concerning the production and distribution of alcohol are constantly changing, and differ from city to city. Local partnerships again represent the best method for overcoming regulatory hurdles, as partners have the know-how necessary for meeting local compliance standards. Finally, intellectual property rights infringement represents a leading risk across China. Recipes and trade secrets should be kept secret unless absolutely necessary, and an on-the-ground presence is essential.  Distribution channels and retailers must also be monitored, and supply chain disruptions cannot go unnoticed. These risks, while prevalent, represent hurdles, not barriers. With an on-the-ground presence and a strong understanding of Chinese business practices, success in China’s craft beer revolution is possible.



[1] China’s taste for craft offers fizz for global brewers. Reuters. March 7, 2017.

[2] China Craft Beer Market Report 2017. Drink Sector. January 2017.

[3]央视关注精酿啤酒啦!好消息?坏消息?。 爱啤酒。September 17, 2015.–fxMy6JpdFYw

[4]Annual Report, 2016. Tsingtao Brewing CO., LTD. December 2016.

[5] Tsingtao Opens Its Own Bar in Galaxy Soho With IPA (Occasionally) on Tap and Export Quality Bottles. The Beijinger.

[6] China’s taste for craft offers fizz for global brewers. Reuters. March 7, 2017.

[7] China’s New Craft-Beer Bully. Fortune. Mar 16, 2017.

[8] Cheniere Circles China After Trade Deal Portends Gas Export Boost. The Wall Street Journal. May 12, 2017.

Accessing Cuban Medical Technology

Cuba’s medical technology could be enormously beneficial to American businesses

By Tyson Guajardo, Lynx Global Intelligence


It’s no secret that the United States would considerably benefit from open trade with Cuba.  Access to the country’s medical technology could be enormously beneficial to both American businesses and the general population alike.

Although Cuba may be struggling in many measures of development, healthcare is one area where the communist nation vastly excels.  In 2015, there were an estimated 37,000 Cuban nationals working abroad in 77 countries (1).  Remarkably, Cuba boasts more doctors per capita than any other country in the world (Vice News), features a life expectancy almost identical to the United States (2), and has a lower infant mortality rate than its northern neighbor (3).  How is this possible for a nation that has been economically crippled for the past several decades?  The isolation endured by Cuba due to the U.S. trade embargo and the collapse of its largest financial lifeline, the Soviet Union, have led to a necessity to design its own medical innovations.  Furthermore, the Cuban government treats healthcare as a basic human right and invests heavily into the development of new medicines.  In recent years, the country has achieved great success with a few major medical advancements:

  1. A lung cancer vaccine called CimaVax developed by Cuba’s Center of Molecular Immunology is already in the process of approval for use in the United States. In fact, it has already been cleared for testing by the Food & Drug Administration (4).  This vaccine was designed not as a preventative measure, but as a method to freeze growth and reduce the likelihood of recurring non-small cell lung cancer (5).  The treatment has been available in Cuba since 2011 and in its most recent trial on the island, patients who received CimaVax lived between three to five months longer than those who did not.  Moreover, individuals with high concentrations of E.G.F., or Epidermal Growth Factor in their blood survived much longer (5).  Outside of Cuba, the vaccine is also available in Peru, Paraguay, Colombia and Bosnia.
  2. Heberprot-P is a drug used to treat diabetic foot ulcers that was invented by scientists at the Center for Genetic Engineering and Biotechnology in Havana in 2006. This treatment prevents the need for amputations in individuals with the condition, in turn extending their overall life expectancy.  So far, Heberprot-P has been used to aid over 165,000 patients in 26 different countries worldwide since its launch into the global market (6).  The medication is injected near the affected area to speed up the process of skin restoration and can heal a wound in about three months.    Current treatment options for diabetic foot ulcers remain scarce in the United States where approximately 73,000 American adults with diabetes underwent amputation of their lower limbs in 2010 (7).
  3. The Center of Molecular Immunology in Havana has also developed Nimotuzumab, an anti-cancer drug used against advanced tumors in areas such as the head, neck and brain (8). Monoclonal antibodies in this medicine connect to epidermal growth factor receptors on the surface of the cancer cell and stop it from spreading.  As of 2014, the treatment is recognized under orphan drug status in the United States for the treatment of glioma.

While most Cuban goods are still restricted from importation under the long-standing trade embargo, the US Treasury Department can grant exemptions for certain medicines and healthcare products.  Lynx Global Intelligence is leading a trade delegation to Cuba on July 23-27, presenting a great opportunity for firms in the healthcare industry to learn more about prospective medications and technologies on the island, as well as access to top Cuban business and ministry resources that can facilitate commercial activities with the United States.  Visit us at for more information.










…And This is Your Company on Socialism: A Cautionary Tale of Nationalization in Venezuela

The Venezuelan economy is in free fall and its currency is hemorrhaging value

By Jon Vreede, Lynx Global Intelligence


For those with an interest in business and Latin America, one question has dominated recent discussion: what has gone wrong in Venezuela? For years, Venezuela’s economy appeared to be booming, and that economic boom was allowing its government to combat social ills and build “socialism for the 21st century”. Yet that boom has turned to bust in dramatic fashion, and the Venezuelan economy is in free fall and its currency is hemorrhaging value. Economic hardship has in turn sparked political unrest, as opposition to President Nicholas Maduro and the ruling chavista government has taken to the streets— sometimes with bloody results. As companies doing business in Venezuela scramble to respond, they are threatened by a crisis of their own: the seizure of their increasingly-worthless assets by the government. The threat of nationalization was most recently brought home by the seizure of General Motors’ facilities by the Venezuelan government. Yet Venezuela’s renewed nationalization should not come as a bolt from the blue; there have been warning signs present for years, and the trend is likely to continue.

The nationalization trend predates the current political crisis in Venezuela, and indeed the broader economic crisis as well. The origins of this problem lie in 2003, when then President Hugo Chavez imposed strict controls on currency exchange and capped the prices on basic consumer products like food, medicine and raw materials[i]. The stated goal was to reduce inflation and combat speculation, as well as ensure that basic products were accessible to poor Venezuelans. In the same vein, Chavez began expropriating farmland which was lying idle or was of unclear ownership in 2005 and redistributing it to increase productivity and combat persistent food shortages. For the following two years, the government set its sights on the petroleum industry: the backbone of the Venezuelan economy. Historically the Venezuelan petroleum industry had been under state control, but previous governments had allowed private firms to enter the market in the 1990s, mostly in the oil-rich Orinoco Oil Belt. But a 2006 law allowed the government to unilaterally abrogate agreements signed during the previous decade, and laws the following mandated that companies must give the state-owned oil company a majority stake in their Orinoco Belt projects or else forfeit their rights. A few oil companies decided to soldier on under these new conditions, but the majority—including ExxonMobil, ConocoPhillips and Total—left the market in 2007. Other companies swept up by the state in that year included Venezuela’s largest telecommunications company, its largest privately-owned electric company, and the nation’s largest iron mines[ii].

At this point, businesses could be forgiven for not worrying about the Venezuelan market. After all, there was historic precedent for the state having a dominate role in the oil and gas sector as well as the iron business, and land redistribution has been the common plank in the platforms of left-leaning Latin-American political leaders for decades. As for telecoms and electricity? In the developed world, many of these services are provided by state-owned utilities. But business owners and investors should have been wary. The Venezuelan government had already displayed a worrying habit of solving problems by taking over businesses. Those land and utility seizures meant cheaper prices for goods, and these subsidies and other social programs were being paid for with that new state-owned oil money. And more trouble was clearly on the horizon. That same year, Chavez threatened to nationalize everything from hospital to steel mills and banks to farms if they did not play ball with his government.

True to his word, Chavez and his government went on a spree of nationalization between 2009 and 2011. This campaign touched all parts of the economy including banks, agribusiness, steel, cement and any company providing supplies and services to the nationalized oil industry[iii]. This campaign of increasing state-control occurred against a backdrop of economic uncertainty and calls for political change. During these three years, oil prices declined significantly while growth rates plummeted and inflation shot back up to around 30% per year[iv]. What is more elections for both the National Assembly and presidency were due to take place in 2011 and 2012 respectively; elections in which the opposition planned to mount a serious challenge to the ruling party. The government’s nationalization campaign can thus be seen as an attempt to right the economic ship and curry favor with the populace. Nationalization allowed the government to guarantee jobs while allowing them to lower the cost of consumer goods; both of which help secure the loyalty of the working-class Venezuelans who make up the core of chavismo support.

For businesses operating in Venezuela, this nationalization campaign should have been the signal to exit this market. The problem was not just that the government was expropriating industry; unsettling though that seemed. Instead, the dangerous development was the it appeared to be working. Slowly, inflation began to creep back down, and GDP began to grow again. From the government’s perspective then, the nationalization program would appear to be recipe for economic recovery. That oil prices rebounded during that same period, thus allowing the government to continue funding its programs was left unsaid. For those who realized the dangerous precedent this set, it was clear that Venezuela was no longer a welcoming market. But many others ignored the trends and decided that things were getting better. Initially at least, that seemed to be true.

That is until 2014, when the price of oil fell dramatically, and with it the Venezuelan economy. To continue providing jobs and services, the Venezuelan government kept printing money, resulting in out-of-control inflation. By 2016, inflation was estimated to be over 700%  (the exact figure is unknown since the government stopped reporting the number) and consumer prices rose by an astounding 2200%[v]. The result has been mass shortages of everything from food to medicine and the shuttering of factories for lack of raw materials. President Nicholas Maduro (who succeeded Hugo Chavez after the latter’s death in 2013) has responded with thundering denunciations of wealthy Venezuelans and shadowy foreign forces; and of course, nationalization, with Maduro pledging to seize any shuttered factory and restarting production[vi]. This process has already begun with the seizure of a Kimberly Clark plant in 2006 and most recently of GM’s Venezuelan plant. The fact that this response will likely not solve the underlying problems will be of cold comfort to those businesses still operating in Venezuela.


Facing twin economic and political crisis, the government has returned to its favorite response, although they maintain that these “asset freeze” and not expropriations[vii]. For those still doing business in Venezuela, this is a no-win situation. With the aid of experts like Lynx Global Intelligence, their losses might have been avoided. Our analytical tools and techniques could have helped identify the warning signs, and allowed our clients to close down their Venezuelan operations before the economy imploded. Instead, they are left with factories they cannot operate, funds that— thanks to currency controls— are worth less and less every day, and a government willing and able to confiscate whatever maybe left.


[i] “Venezuela Announces Currency, Price Controls”. Sydney Morning Herald. February 7, 2003.

[ii] Mrquez, Humberto. “Venezuela: Chavez Announces Broad Nationalization Drive”. GIN/IPS. May 14, 2007.

[iii] “Venezuela’s Nationalizations Under Chavez”. Reuters. October 7, 2012.

[iv] International Monetary Fund.

[v] “Let Them Eat Chavismo: As Venezuela Crumbles, the Regime Digs in”. The Economist. January 28, 2017.

[vi] “Venezuela Seizes Kimberly Clark as New Plan to Tackle Shortages Launched” TeleSUR. July 12, 2016.

[vii] “Venezuela Freezes GM Assets After Managers Ask Government to Kick Workers Out of Factory”. TeleSUR. April 21, 2017.

photo: Oil workers hang a Venezuelan flag at the Jose Complex during celebrations in Barcelona, Venezuela, May 1, 2007. (Photo: Reuters/Jorge Silva)

The Iranian Presidential Election: Significance and Potential Outcomes

Lynx Global Intelligence


With less than a few days before Iran holds its presidential election, a victory for incumbent president Hassan Rouhani is likely. This comes despite blowback from his failure to deliver on political reforms, as well as the underperformance of the economy after Rouhani sold the nuclear accord and removal of sanctions to Iranians as a path to prosperity. Polls have shown that Rouhani may have 54% of the decided vote, sparking the possibility that he may win the election outright on Friday and avoid a runoff.  Polls are scheduled for May 19, with the possible run-off on May 26th.

A couple issues are working in favor of Rouhani and in disfavor of the conservatives. First, every incumbent Iranian president has gone on to serve a second term. With the 2009 election debacle and Green Movement protests still fresh in the minds of the ruling elites, stability and continuity are important factors in the race. Second, Rouhani’s base of reformist/moderate voters has remained solid. When turnout for an election is high, this tends to favor reformists like Rouhani. The conservative base, while mostly consolidated around former prosecutor and current custodian of the Imam Reza shrine, Ebrahim Raisi, is still partially fractured. Tehran mayor Mohammad Bagher Qalibaf, a former chief of the Iranian police force, enjoys significant support.

There are several concerns regarding the election and its outcome. No matter who wins the election, the nuclear accord is certain to remain in place. The Supreme Leader, Ayatollah Khamenei, has ultimate authority over foreign policy issues and the success of the nuclear accord is evidence of his tacit approval. Qalibaf has also indicated support for the agreement. However, a conservative victory would likely still come with risks. Both Raisi and Qalibaf have attacked Rouhani’s tepid economic record, pledging to increase subsidies to poor families and address youth unemployment. Their economic populism reminds the ruling class very much of Ahmadinejad’s destructive economic policies, a situation they do not want repeated.

There is a potential for social unrest. Ayatollah Khamenei warned recently that “disruptors” would be dealt with harshly. Should Raisi or Qalibaf pull off an upset that Iranian voters see as illegitimate, the possibility of protests increases. The regime would likely crack down immediately and decisively. Human rights abuses continue in Iran, but a very public repeat of anything resembling 2009 could give the international community a reason to reassess sanctions.

A victory by either Qalibaf or Raisi may embolden those who wish to see a more assertive Iranian foreign policy. A confrontation in the Persian Gulf or a missile test may invite the Trump administration to junk the nuclear deal. Earlier this year, the administration put Iran “on notice” after Tehran launched a test missile. A US pullout from the nuclear deal would, of course, be harmful to US investors interested in exploring the emerging market in Iran. While current restrictions on business with Iranian banks and the complexity of the sanctions themselves have deterred investors, it would be wise to continue to navigate these issues and prepare for an Iran that is ready to do business with US investors. Lynx Global Intelligence is prepared to provide on-the-ground knowledge of emerging markets in Iran, as well as clarify what the current risks are and explore ways of entering Iranian markets.

Some have suggested that Raisi’s candidacy is really a dry run for fielding a replacement for Supreme Leader Ayatollah Khamenei, who is suffering from prostate cancer. Raisi, a conservative cleric with considerable experience as a prosecutor, is also the custodian of the Astan Quds Razavi, the powerful foundation that manages the shrine of Imam Reza in Mashhad. Raisi is also a member of the Experts Assembly, which has authority to choose the Supreme Leader. Raisi is an untried candidate who has been criticized for his lack of charisma, but the regime may be testing the appeal of Raisi as a potential leader, as well as the resonance of his conservative message.

At the same time, it is too simplistic to see establishment groups in Iran such as the Experts Assembly through a binary reformist vs. conservative lense. Saeid Golkar, a visiting fellow for Iran policy at the Chicago Council on Global Affairs, has instead suggested viewing such groups as divided between “three pillars”: the state bureaucracy, the clerical establishment, and the military. Golar positions Rouhani close to the state bureaucracy, and Raisi with the military. Khamenei navigates these groups, and despite the fact that he has expanded the powers of his office, the Revolutionary Guard still exert significant influence in Iranian politics. Despite this complexity, the regime seeks continuity and an avoidance of any shock to the system—in this case, an unprecedented loss for an incumbent president. The replacement of Rouhani with an administration that may be inclined to pursue an aggressive foreign policy, economic populism, and further antagonize a nation that is ready for change is widely seen as a potentiality best avoided.

Hybrid Warfare: Irregular Soldiers, Political Subversion, “Lawfare”, Cyberwarfare, and Violent Nationalism

With the current European elections, many speculate social influence and interference by Russia

By:  Matthew C. Bebb, Lynx Global Intelligence


Violent nationalism as a force of legitimacy

Putin has exercised a unique type of hard power in the past decade with the use of hybrid warfare. This has been evidenced in the 2008 Georgia conflict, the present-day Ukraine conflict, and confrontations with NATO and EU countries. Putin has rejuvenated Russian nationalism by incorporating the Orthodox Church into policy making. The Orthodox Church serves as Putin’s “right hand man” that gives him legitimacy and moral superiority. Furthermore, Putin’s nationalism emphasizes “Russianness” by stating that people who speak the Slavic language are all part of Russia. This gives Putin self-appointed validity when intervening in other sovereign countries such as Georgia and Ukraine. In both conflicts, Putin states that he was coming to the aid of “Russians”. These “Russians” were not Russians, but Ossetians, Abkhazians, and East Ukrainians. However, Putin marries history with language by alleging that these people existed under the Russian sphere throughout history and belong to Russia. Putin’s strong nationalism calls upon “patriots” to enforce nationalism at home (e.g. The Nightwolves motorcycle club, Slav Mobs that beat up foreigners and homosexuals, and xenophobic organizations).

Irregular soldiers, low intensity warfare, and NATO confrontation

Putin, along with many Russians, views the collapse of the Soviet Union as the greatest geopolitical catastrophe of the 20th century. This “catastrophe” was compounded during the Balkan Wars when NATO bombed Serbia. Furthermore, Slavic speaking countries such as Croatia, Slovenia, Albania, Poland and Macedonia pivoted away from Russia after the war and embraced EU relations. Consequently, this further weakened Russia’s sphere of influence in the Slavic world while also bringing his enemies (EU and NATO) into his backyard (Ukraine and Georgia). Thus, Putin has sought to engage in realpolitik strategy in Russia’s near abroad by staging military exercises in sovereign spaces in order to project strength, demonstrate its posture, and deter further encroachment into the Russian sphere. This has taken place in the form of dangerously close flybys of NATO ships, naval drills in the Arctic, flyovers in EU airspace, showing off new military hardware at parades, and threatening the use of its nuclear weapons if provoked.

For all this muscle flexing, Putin is smart enough to know that engaging in formal mil-mil warfare against the West would end in disaster. Instead, Putin has clandestinely sent unmarked Russian troops such as those seen in the Crimea land grab. Or he sends in regular Russian soldiers who pose as civilian rebel fighters such as those seen in East Ukraine. These irregular forces give him plausible deniability while exercising his hard power secretly. On the other hand, if NATO or other Western militaries were to intervene against these regular troops, Putin could react with full force stating that Russians were being attacked and he had no choice but to use military force. Fortunately, these conflicts have been low in intensity and have not yielded international intervention.

Political subversion 

Putin has also supported and/or sponsored movements that cause political volatility such as Euroskeptics parties, the Brexit movement, European ultra-right wing parties, European anti-immigration parties, and secessionist movements with pro-Russian goals. These parties represent a disconnect between the beliefs and values of the European Union and its institutions. Putin thrives on these dissidents because they undermine the legitimacy of the European Union and look to Russia as a model for governance.

Putin’s image of strongman authoritarianism and Russian exceptionalism are propagandized by government-sponsored media outlets such as Russia Today, Sputnik, and Pravda. Each of these sites are hosted in various languages in order to reach a broader audience. The disinformation campaign used by the Kremlin seeks to undercut EU goals and thwart the idea of American exceptionalism. Coupled with his media campaign are Russian cyberwarfare efforts that continually attack American economic and political secrets. This is another type of hybrid warfare that gives Putin plausible deniability by stating that these could be rogue hackers who don’t work for the government. However, it is widely acknowledged that along with Putin’s cyberwarriors are a horde of internet “trolls” who write disparaging comments on social media sites about the West.

Lastly, Russia’s role in the UN is a flagrant hypocrisy. Putin manipulates domestic and international laws in order to achieve his goals (i.e. lawfare). Putin advocates states’ sovereignties. In other words, no foreign power should have a say in another country’s business. That is unless, of course, you are Vladimir Putin. Russia has a habitual veto voter in the UN and undermines the international community’s progress toward addressing many issues. Putin also claims that Russia must maintain its sovereignty by eliminating potential fifth column agents within the Russian state (e.g. NGOs, foreign companies, and tourists).

Recent News Confirming Information Warfare Feb. 21, 2017

Defense Minister Shoigu, backed by his top brass army generals, addressed the State Duma on February 21st. The usual protocol for addressing the Duma on security matters adhered by Shoigu along with his predecessors was a private affair. These plenary sessions were always declared state secrets, and members of the Duma were not allowed to share any information with journalists. However, during last week’s address by Shoigu, there were press present and live stream media provided by the Defense Ministry. Replying to questions from Duma members, Shoigu shared that four years ago Russia secretly created an “information warfare directorate” within the defense ministry. This is a new branch of the military that will be engaged in cyber warfare “counterpropaganda.” Apparently, this will involve hacking into databases and Internet trolling. Duma officials were caught off guard when Shoigu publicly disclosed what was once secret information, now being put on blast for state media.

Colonel General Vladimir Shamanov, a former chief of the Airborne Troops and the current Duma defense committee chair, told journalists these new troops will “protect [Russia’s] national defense interests and engage in information warfare,” including cyber warfare. Retired Colonel General Leonid Ivashov, the former head of the defense ministry’s international cooperation department, insists Russia should be more aggressive in information warfare “to open up concealed Western data in the US and in Germany to expose their lies”. The hacking of e-mail accounts to dump their contents into the public domain could seem to fit the Russian understanding of “information warfare.”