Globalization is Gone (As We Know It): It’s Now Friends and Foes
A Conversation Between Chuck Brooks, Skytop Contributing Author, and Mark Kelton, Partner with the FiveEyes Group / July 4, 2022
Mark Kelton is the Director of MEK & Associates, LLC and a retired senior Central Intelligence Agency (CIA) executive with 34 years of experience in intelligence operations. Mr. Kelton’s CIA career included more than sixteen years of overseas service, to include four assignments in key field leadership positions. He concluded his career as Chief of CIA’s Counterintelligence Center. Directing the CIA’s counterintelligence and counterespionage programs, Mr. Kelton led the team that protected the nation’s most closely guarded secrets. He has expertise in intelligence operations, international security issues, detection of insider threats, assessment of counterintelligence risk, and crisis management.
Mr. Kelton is a recipient of the CIA Distinguished Intelligence Medal, the CIA Distinguished Career Intelligence Medal, the Director of National Intelligence Distinguished Service Medal, the CIA Director’s Award, the 2015 Presidential Rank Award of Meritorious Senior Intelligence Officer, the CIA Intelligence Medal of Merit, the CIA Donovan Award and many other honors.
Mr. Kelton is a partner with the FiveEyes Group; former Senior Vice President for National Security Solutions, DynCorp International; an Outside Board Director of Blue Planet-Works, LLC; a member of the Board of Trustees of Valley Forge Military Academy and College; a member of the National Security Advisory Board of the MITRE Corporation; an Advisor to THEIA, LLC; a member of the Dell Federal Advisory Board, a member of the Heartland Consulting Advisory Board; a founding member of the FiveEyes Group, LLC; former Board Chair of, and advisor to, the Spookstock Foundation (benefitting the CIA Memorial Foundation and the Special Operations Warrior Foundation); an Advisor to the Chertoff Group; and a contributor to The Cipher Brief, writing on intelligence and national security issues.
Chuck Brooks: How would you characterize Russia’s cyber offense in context to companies inside the U.S.?
Mark Kelton: I will respond that the Russian intelligence services have a demonstrated capability to effectively target both the USG and industry. They do so to collect both classified information and industrial secrets as well conduct “active measures” influence operations. They also have the capacity to undertake denial of service and other disruptive attacks. That they have not done so in the context of the ongoing war in Ukraine is a function of a decision they have made to hold off doing so on any scale and should not be seen as indicative of a lack of capability to do so.
I will also underscore the fact that the main espionage threat, to include cyber espionage, confronting U.S. industry comes from China.
Chuck: A recent Skytop Perspectives Survey reveals that geopolitics and the new risks it presents to company boards and management is a key concern. Do publicly traded companies need to be concerned about added risk of terrorism due to the issues in Ukraine and elsewhere?
Mark: I will respond that while the U.S.has redirected its attention and resources towards peer competitors away from what we used to call “the war on terror”, the threat from Jihadi terror from AQ, ISIS and other extremist groups that have indicated a desire to strike American targets abroad and at home continues. As for other manifestations of attacks sponsored by state actors such as Russia, we have not seen such attacks to date. I would not expect any such attacks absent a shift towards direct conflict between Russia and the U.S./NATO.
Chuck: Public companies are concerned about spies from hostile nation states and their corporate competitors stealing IP or other trade secrets, on U.S. soil or remotely? Is this a growing threat that requires boards to invest in next generation defense?
Mark: In short, yes. I will explain that China is mounting a comprehensive espionage assault on the US that poses a very real risk not only to our defense, intelligence and other government agencies, but particularly to the economic power that is the basis for our national security. In explaining this I will note the expansion of that espionage threat from the “thousand grains of sand” approach Beijing emphasized in the 80’s and 90’s towards intelligence activities more akin to what we have seen from the Soviets/Russians. I will also note that the threat posed by China is a greater challenge than that from Moscow for the simple reason that China is embedded in key areas of our economy to include banking, natural resources and high tech.
Chuck: We have learned– through our experience with COVID-19– the impact of supply chain disruption on the price of goods–as well as other negative effects to our economy. Where do you see the growing risks here to companies currently uncertain how to fortify or onshore their supply chain partners?
Mark: As indicated by the war in Ukraine, we are moving into an era where autocratic regimes, encouraged by the debacle in Afghanistan, U.S. domestic turmoil and perceived American irresolution, sense weakness and feel emboldened to act more aggressively in pursuit of their goals. We can expect China to move on Taiwan any time after this summer’s party Congress. Like Putin on Ukraine, XI Jinping has made clear he intends to resolve the Taiwan issue while he is at the helm in Beijing. Further, increasing economic challenges in China will encourage him to direct internal tensions outward in order to ensure the stability of his own regime. Moreover, as we have seen with the Belt and Road initiative, China is moving to establish itself as the dominant power in key global resources and at crucial global transport nodes. They are doing so to try to increase western dependence on – and hence Chinese leverage over – other nations. Consequently, it behooves western companies to seek more dependable, reliable and secure supply chains.
Chuck: From your perspective, is globalization dead as we know it/knew it or is it standing by waiting for a signal that it’s safe to return to business as usual?
Mark: Globalization as it existed in the 90’s and early 2000’s, when we thought China could be brought into the community of nations by economic and political engagement no longer exists for the very simple reason that the Chinese have not changed and have exploited that economic engagement to enhance the PRC’s power. What we are seeing now is a gradual shift towards competing economic and political spheres forming around the U.S. and its allies on the one side and China, Russia and other autocratic states on the other. That divide will not be clean and will be gradual. China, with its 2025 plan has made clear it wants to end dependence on foreign sources and to make the PRC technologically self-sufficient. Finally, the war in Ukraine – however it ends – is likely to make Russia economically dependent on China.