Security

Part of the Munich Security Conference’s Transnational Security Series, this report aims to shine a light on selected examples of transnational illicit flows which, in their manifold manifestations, have implications for global, regional, and national security. Given the illicit nature of these flows, available data is often fragmented. In light of this challenge and in order to illustrate key insights, this report – which includes contents compiled in close cooperation with many institutions and experts in this field – will put the spotlight on transnational challenges across several dimensions of illicit flows. In MSC tradition, this report does not aim to be exhaustive, but rather to serve as a discussion starter for our key audience and to highlight questions that need to be asked.

Total global military spending rose for the second consecutive year in 2018, to the highest level since 1988—the first year for which consistent global data is available. World spending is now 76 per cent higher than the post-cold war low in 1998.* World military spending in 2018 represented 2.1 per cent of global gross domestic product (GDP) or $239 per person. ‘In 2018 the USA and China accounted for half of the world’s military spending,’ says Dr Nan Tian, a researcher with the SIPRI Arms and Military Expenditure (AMEX) programme. ‘The higher level of world military expenditure in 2018 is mainly the result of significant increases in spending by these two countries.’

This paper addresses the present state of play and future trends, uncertainties and possible disruptions of Artificial Intelligence (AI) and Big Data in the following areas:
Political: AI is biased, difficult to scrutinise and to estimate its power, and – more so when embodied in autonomous systems – potentially dangerous. Policy responses are accountability, transparency, safety and control, and public debate. These should be based on ethics. AI will lead to better governance, more debate, new policy actors and processes, a contest over centralisation, and the EU catching up. AI might progress in a revolutionary or evolutionary mode, lead to new political divisions, and change democracy. AI might be misused as a “superior orders” defence. What if data analysis changes or replaces democracy?
Socio-economic: Big Data is changing the role of data, is often dependent on sensitive information, is handicapped in the short term but better in the long term due to data protection, and its industry is in danger of monopolisation. AI lowers the cost of prediction, replaces human prediction and human labour and causes social problems, increased nudging and misuse of the term AI. AI will lead to more data, economic growth and more job market distortions. AI might lead to new industry giants, a request for more privacy, new state solutions, yet unknown jobs, AI taxes and increased state ownership. What if new economic ideologies emerge, singularity strikes or AI monopolies are broken up?
Geopolitical: AI is increasing the power competition between the US and China and gives both more power. Europe tries to create businesses and find its strengths. All are investing in military solutions and the west has a slight disadvantage here. AI will lead to a shakeup of the international system, hierarchies and networks becoming more powerful, and real-life deception being more difficult. AI might lead to China becoming the most powerful power overall and in AI. The future of AI R&D and the success of Europe’s broad approach is uncertain. What if there are two digital worlds, China becomes a data-privacy defender, and AI become targets?
Technological: Superintelligent AI is invested in and researched, challenged by philosophy, and possible this century. It might imitate the brain, be assembled together or be designed by other AIs. An intelligence explosion or a conscious AI could be possible, and might be the last invention of humanity. It would require long term funding, need to overcome many technical hurdles, be dangerous due to its intellect, possibly be contained with collective intelligence, and maybe have humans lose their jobs, safety or purpose.
Key questions for policy-makers: What makes European AI distinctive? What areas can and should we prioritise, if any? What should be regulated? How could and should the EU foster AI development, avoid monopolisation, provide data pools, use high data standards, link researchers and corporations, balance fundamental with applied AI research and private with state funding, boost applications, compensate for job loss, keep AIs away from dangerous actors, support EU foreign policy (neighbourhood, FPI, democracy and human rights, aid and development, economic freedom), improve our lives with AI, change the geopolitical AI race, deal with autonomous weapons and superintelligent AI and organise Foresight?

This year's report analyses the reshuffling of core pieces of the international order. Besides looking at major powers like the United States, China and Russia, the report also highlights actors of the "second row": liberal democracies such as France, Germany, the United Kingdom, Canada and Japan. In addition, the report assesses current security policy developments in selected regions such as in the Western Balkans, in the Sahel region and in the Middle East. It examines the global challenge to arms control against the background of the recently suspended INF Treaty and emerging technologies such as hypersonic weapons. Other global issues covered are the security policy implications of current developments in the areas of international trade, transnational organized crime and artificial intelligence.

Foresight is about choice, decision and action – and not, as is repeated time and again, predicting the future and getting it wrong.
This Chaillot Paper aims to alert decision-makers to potential developments with significant strategic impact while they can still prepare for, or even avoid them. This is done using two methods combined: horizon-scanning as well as single scenario-building. Taken together, they produce plausible events set in 2021 – with strategic ramifications well beyond that. All 12 scenarios in this Chaillot Paper reflect the expertise and imagination of the researchers who wrote them: some explore potential conflicts, while others look at disruptive political developments, or indeed at crises with significant ramifications.
That said, all are designed in the hope of drawing attention to foreign and security policy aspects which are potentially overlooked, and all are extrapolated from ongoing and recent developments.

The EU’s new data privacy rules, the General Data Protection Regulation (GDPR), will have a negative impact on the development and use of artificial intelligence (AI) in Europe, putting EU firms at a competitive disadvantage compared with their competitors in North America and Asia. The GDPR’s AI-limiting provisions do little to protect consumers, and may, in some cases, even harm them. The EU should reform the GDPR so that these rules do not tie down its digital economy in the coming years.

The EU has an important role to play in the management of the threat posed by North Korea. Indeed, Brussels already has a policy of ‘critical engagement’ towards Pyongyang which combines diplomatic and economic carrots with a number of sticks. This policy, however, is in need of an update to attend to two recent developments on the Korean Peninsula: North Korea’s status as a de facto nuclear power and the flurry of engagement and diplomacy involving North Korea—including top-level meetings with the US, South Korea and China.
In this context, the EU should support its partners, South Korea and the US, as they launch a process that could lead to sustainable engagement with North Korea, denuclearisation, and, as a result, a more stable Korean Peninsula. Working with its partners, Europe should creatively use its power of engagement and cooperation to change behaviour. This will enhance the position of the EU as a constructive actor in Asian affairs, support efforts by the US and South Korea to engage North Korea and, ultimately, offer a better opportunity for the EU to achieve its goals.

Consider a world where human decision-making and thought processes play less of a role in the day-to-day functioning of society. Think now of the implications this would have for the security and defence sector. Over the next few decades, it is likely that Artificial Intelligence (AI) will not only have major implications for most areas of society such as healthcare, communications and transport, but also for security and defence. AI can be broadly defined as systems that display intelligent behaviour and perform cognitive tasks by analysing their environment, taking actions and even sometimes learning from experience.
The complex attributes of the human mind are well known, but to replicate most of these abilities in machine or algorithmic form has given policymakers and scholars pause for thought. What is more, much of the concern generated by AI centres on whether such intelligence may eventually lead to post-human systems that can generate decisions and actions that were not originally pre-programmed. Accordingly, optimists argue that AI has the potential to revolutionise the global economy for the better, whereas some pessimists have gone as far as to forecast that AI will mark the end of modern society as we know it.