19 November 1997
The Intelligence Community
The person who is Director of Central Intelligence is simultaneously Director
of the CIA and the leader of the Intelligence Community, of which CIA is
but one component. The Intelligence Community refers in the aggregate to
those Executive Branch agencies and organizations that conduct the variety
of intelligence activities which make up the total US national intelligence
effort. The Community includes the Central Intelligence Agency; the National
Security Agency; the Defense Intelligence Agency; offices within the Department
of Defense for collection of specialized national foreign intelligence through
reconnaissance programs; the Bureau of Intelligence and Research of the
Department of State; Army, Navy, Marine Corps and Air Force intelligence;
the Federal Bureau of Investigation; the Department of the Treasury; and
the Department of Energy. Members of the Intelligence Community advise the
Director of Central Intelligence (DCI) through their representation on a
number of specialized committees that deal with intelligence matters of common
concern. Chief among these groups are the National Foreign Intelligence Board
and the Intelligence Community Executive Committee, which the DCI chairs.
Chairman, National Intelligence Council
The National Intelligence Council, managed by a Chairman, a Vice Chairman
for Evaluations, and a Vice Chairman for Estimates, is comprised of National
Intelligence Officers--senior experts drawn from all elements of the Community
and from outside the Government. The National Intelligence Officers concentrate
on the substantive problems of particular geographic regions of the world
and of particular functional areas such as economics and weapons proliferation.
They serve the DCI in his role as leader of the Intelligence Community by
producing National Intelligence Estimates. These officers work closely with
policymakers and serve as personal staff officers and senior advisers to
the DCI in their respective areas of functional or regional responsibility.
From: The CIA's
See also Chairman Gannon's
of November 13, 1997
Chairman, NIC Speech 10/31/97
Chairman of the National Intelligence Council
Washington International Corporate Circle
31 October 1997
"Global Economic Intelligence"
Thanks. As you looked over the program this morning, you might have wondered
why an intelligence officer has been invited to address this group. I'm not
a professional economist. Nor am I a soothsayer or prognosticator. (If I
could predict the future, I'd probably have gone into finance and be retired
by now, sitting on my private island, watching the surf, drinking Mai-Tais.)
I hope that I can add another dimension to the conference by talking about
the challenges to US Intelligence, including policymakers' requirements for
economic intelligence, as well as many other issues on our agenda today.
I should add, and stress, that intelligence officers do not make or recommend
policy. Rather, the function of intelligence is to help US decisionmakers
to better understand the forces at work in any situation, and the opportunities
and consequences of any course of action so that policymakers can make informed
What follows is my own thinking about some of the strategic challenges that
confront the United States government, and by extension, other key players
in the international economy.
Let me highlight for you the five general categories of national security
First, there are the great powers in transition: Russia and China. Each unique,
both nuclear armed, both undergoing major economic transformations, both
of concern to their neighbors and to us.
Second, there are those non-democratic states whose hostile policies undermine
regional stability and threaten, directly or indirectly, our interests abroad,
including Iran, Iraq, and North Korea.
Third, there are transnational issues that transcend country and region and
could strike any of us at home or abroad with little notice: terrorism, the
proliferation of weapons of mass destruction, international organized crime
and drug trafficking, economic issues, and threats to our information and
Fourth, there are regional hotspots, where tensions between nations can erupt
into conflict, cost lives, and take unpredictable turns: the Middle East,
the South Asian subcontinent, Bosnia, and the Aegean.
The fifth category we can just call humanitarian crises. From Bosnia to Burundi,
there are states and regions immersed in ethnic conflict, civil war, natural
disaster, forced migration, refugees, disease, and starvation. These crises
have resulted in heavy demands on US intelligence, diplomacy, and military
Providing American policymakers, warfighters, and other officials with good
intelligence on each of these issues is a complex and difficult undertaking.
But it is just as important to our security and well-being as ever. Failure
to collect and analyze information on these issues today only risks a heavier
diplomatic or military price to pay down the road.
The Role of the NIC
The National Intelligence Council has a special role to play in preparing
policymakers for the challenges ahead. The Council produces intelligence
products that look beyond today's horizon--from six months to a decade or
more--and point out potential complications. National Intelligence Estimates,
or NIEs, are coordinated--and agreement does not always come easy--by the
heads of the various intelligence agencies--CIA, DIA, the State Department,
the military services, Treasury, Energy, and as appropriate the FBI--so that
policymakers get the views of the entire Intelligence Community in a single
In the last year or so, the NIC has produced NIEs and a variety of other
papers on a wide range of issues--including weapons of mass destruction,
humanitarian emergencies, narcotics trafficking, the environment and critical
regions and countries all over the globe.
The NIC also brings experts from outside the Intelligence Community to get
their perspectives--and this will be an increasingly important value added
by the NIC for an Intelligence Community that is relying on outside expertise
more than ever before.
For example, in Fall 1996 the NIC and the Institute for National Strategic
Studies held a series of conferences at National Defense University to identify
key global trends and their impact on major regions and countries. The exercise
was designed to help predict and assess major features of the world in the
year 2010. Participants in the conferences were drawn from academe, journalism,
business, the US Government, and other professions. Following the conference,
we published a document outlining likely global trends in the year 2010.
We think it is critical that policymakers think beyond the crises of the
day and consider some of the evolutionary trends that will shape our future,
both from a national security and an economic perspective. I'd like to mention
a few of these trends:
First, population will increase by 1.2 billion to over seven billion by 2010.
About 95% of this growth will be in developing countries. This growth will
be accompanied by increased urbanization: about half of the world's population
will live in cities compared with one third today. There will be many more
mega-cities with populations in excess of 8 million, mostly in developing
countries. Countries such as Mexico and Saudi Arabia that hold key geopolitical
positions will be among those heavily affected by population pressures. In
some societies a "youth bulge"-the growing number of people between 15 and
24-will strain educational systems, infrastructure, and the job market.
Population growth will also fuel migration pressures-Haiti's population,
for example, is expected to double over the next 20 years.
For the industrialized world, the population problem will not be associated
with growth but with increasing life spans and decreasing birth rates. The
"Social Security-Medicare" debate already reverberating throughout the developed
world will become even more acute. Governments will struggle to provide social
welfare and health services to an aging population, while the labor force-the
pool whose taxes help finance these services-shrinks.
In the Former Soviet Union the issue is not buttressing a safety net, but
creating one to cope with a wide range of economic and social problems, the
solutions to which will take many years of concerted effort in health,
environmental, and economic policies. The extent of Russia's demographic
ills is reflected in a sharp and unprecedented decline in male life expectancy.
Second, the NIC study points to a growth in per capita income. The study
projects real growth in per capita income of over 2% per year between now
and 2010. Growth will be uneven; not every state, nor every citizen in every
state, will benefit equally. Some will not benefit at all, or may lose out.
The pace of technological change will be rapid and the fear of being left
behind will lead to tensions between countries- and within them- as income
gaps widen. More winners will be in East Asia and the West; more losers will
be in Africa and the Middle East. Among relative losers will be those states
that, unwilling to accept the consequences of their failure will resort to
force to alter their status.
Growth will increase demands on infrastructure- such as water, energy,
communications, waste disposal, urban transportation, public health, housing,
and education. Failure to accommodate these demands will trigger disaffection
with government, emotional backlashes against modernization-and clashes against
Western policies, philosophies, and presence.
The third trend will be the problem of feeding a burgeoning population. According
to the experts who drafted the NIC study, the problem is not agriculture
or science, but rather political stability, transportation and distribution.
Indeed, food production is likely to keep pace with overall demand. The authors
anticipate genetic engineering fueling a fourth agricultural revolution by
the end of this time span. As in the past, shortages will be man-made. Serious
pockets of poverty will put people in developing countries- particularly
in Africa- at risk of death from disease and starvation.
The fourth trend is that the continued digital data and communications revolution
will shrink distances and weaken barriers to the flow of information.
Communications technology will become so inexpensive that most countries
will be able to pay the cost of connecting to the global information
infrastructure. Optical fiber will add enormous capacity for data transmission
among nodes around the globe. The United States, Europe, Asia, and Latin
America will be in the forefront of this communications revolution. To compete,
businesses will continue to move beyond regional or national perspectives
to optimize global trade. Governments will benefit from the success of these
businesses. However, communications will also thwart their efforts of government
to control the flow of information, which will undermine authority over time.
The fifth trend is that growing populations and per capita income will drive
the demand for more energy, particularly as the Chinese and Indian economies
expand. By 2010 the world will require added production of petroleum on the
order of what OPEC produces now. Technological advances, however, can meet
this demand. Problems will arise not out of overall shortages but out of
short term disruptions in the flow of oil stemming from political-military
instabilities. Improvements in the efficiency of solar cells and batteries
will result in greater use of these and other renewable energy resources,
but they are unlikely to significantly affect global reliance on fossil fuels
during this time period.
The sixth and final trend outlined in the study pertains to military technology
& deterrence. Precision-guided munitions and information technologies
will be the hallmarks of the revolution in military affairs. Other countries
will have technologically advanced military equipment at their disposal,
obtained from arms merchants and other governments. However, no power will
be able to match US battlefield technological capabilities at lest up to
2010, and potential adversaries are unlikely to repeat Iraq's mistake in
challenging the United States via set-piece conventional warfare.
Policymakers' Interest in Economic Intelligence
Intelligence officers have to think hard about all of these longer term trends.
Economic issues are inextricably linked to all other national security
issues--political, military and transnational--and economic analysis has
always been a big part of what we do.
Today, senior US officials are more interested than ever in the contribution
of economic intelligence to international policymaking. Policy officials
increasingly view developments and trends in the international economy as
a vital element of US national security-affecting the performance of the
US economy, altering political relations both within and between nations,
and causing shifts in regional and global power balances. They look to economic
intelligence to help them better understand the threats to political stability,
economic welfare, and US national security worldwide.
Before I describe more specifically the mission of economic intelligence,
let me define the parameters:
First, economic intelligence is helping US policymakers understand the general
economic forces faced by foreign officials in key countries that will directly
or indirectly affect their policy options, particularly toward the US.
Second, it is helping US policymakers understand foreign positions and practices
towards international agreements, especially those involving the United States.
Last, it is helping US policymakers understand how foreign governments are
violating laws, breaking international agreements, or behaving outside the
As for the other side of the line, US Intelligence does not engage in "industrial
espionage"--spying on foreign companies for the purpose of providing information
to US firms.
The Mission of Economic Intelligence
There are two broad missions for economic intelligence.
The first is to provide strategic warning of international economic trends
that could have a significant impact on US interests.
The second is tactical-providing information and analysis on important
international economic issues to US policy and enforcement officials in support
of their day-to-day decisionmaking and interactions with foreign counterparts.
The Intelligence Community monitors the pace, scope, and direction of economic
reform in the former Soviet Union, Eastern Europe, and China, and it tracks
economic policies and performance in other key emerging markets of concern
to US interests.
Specifically, Intelligence Community economic analyses includes:
Warning. Anticipating economic crises by providing timely assessments of
financial vulnerabilities, national economic performance, and threats to
world energy supplies. More integrated international markets increase the
risk that an economic crisis in one country will spill over to other trading
or financial partners.
Understanding foreign economic policy making. Identifying and assessing the
complex interaction between economic, political, and social factors that
drive policymaking and economic performance in emerging economic powers and
in countries of strategic interest. This includes the analysis of obstacles
to these countries instituting market-based economic reform.
Rogue states and illicit activities. Monitoring the domestic performance
and external economic relations of rogue states--North Korea, Iran, Iraq,
and Cuba--monitoring the economic impact of sanctions, and developing approaches
that track the complex financial networks that support drug traffickers,
terrorists, and proliferators of weapons of mass destruction.
Helping to ensure that all countries are playing by the same economic rules
so we have a "level playing field." The Intelligence Community is not involved
in enforcement, but we do report our findings to appropriate officials.
Economic intelligence has been critical to addressing some of the issues
US policymakers have faced over the past year:
Economic analysis helped policymakers better understand the economic conditions
in North Korea.
Analysis of the economic changes taking place Russia have enhanced policymakers'
understanding of Russian military reforms as well as political developments.
Knowledge of Iraqi economic pressures has helped policymakers evaluate the
conditions for Iraq's political leadership and the likelihood of adherence
to the UN agreements.
I hope I've given you a sense of our view of the global scene, the role of
economic intelligence, and some of the forces that we think will shape our
Collecting information on economic trends and assessing their implications
for US national security will continue to be key facets of the Intelligence
Community's effort to help policymakers understand and address the key foreign
policy and security challenges facing the United States in the 21st century.
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