STRATCAP Internal Case StudiesActionable Events Across Regions

STRATFOR Predictions

1997 - 1999 2000 - 2002 2003 - 2005 2006 - 2008 2009 - 2011

• Asia Crisis• Suharto• Re-emergence of

Russia• U.S. economic

surge

• Wahid Ousted• Estrada Ousted• China joins WTO• US/Iran Alliance• Japan military• Argentina

agriculture• Iran intentions

during Iraq War• EU’s challenges

• EU unity• Russia influence• Iraq war• Hamas policies• US/Pakistan• China instability• US/China

relations• Syria/Lebanon

• Spain/Italy housing

• Berlin/Moscow• Ethiopia/Somalia• Russia/Georgia• Bolivia Nat Gas• Turkey

reemergence • Argentina

agriculture• Chilean unrest• Iran Instability • Fall of Musharraf• Pakistani/al

Qaeda relations• NATO/Afghan

Taliban• Zuma election• China/Peru FTA• Thai political

disruptions • Russian Ruble

• Greece/Ireland• Russia

Privatization Plan• North Korean

Nuclear Tests• Angola• Niger Delta• Ivory Coast War• Drug War• Peru election• Iran Uprisings• Bolivia/Brazil• Argentina econ

instability• Venezuela

instability• Mubarak• Lybia Civil War• Japan nuclear

plant meltdown• Zambia/China

European Union - Detailed SummaryDate / Document Incident Details

2000 Decade Forecast EU’s fundamental challenges

STRATFOR predicted that the EU would face several challenges: The first test for Europe will be whether the EU’s monetary union can survive de-synchronization, in which some regions are booming, while others are in recession. The second test will be whether the rest of Europe is prepared to join Germany in defending the eastern frontiers of Poland in the face of resurgent Russian power. STRATFOR is pessimistic about the long-term prospects of a united EU. STRATFOR is not forecasting calamity in Europe in this decade, nor even later. STRATFOR does expect fraying and disintegration of apparently solid institutions. The fraying will be both deeper and faster than most observers expect. The culmination will be to force Germany to once again defend its own interests in a world that is indifferent or hostile to its needs

2005 Decade Forecast Decline of EU’s unity STRATFOR continued to warn of EU troubles that would shake its political foundation. The crisis raised questions as to whether the euro will continue to survive and underscored Germany’s pivotal, and increasingly powerful, role within the region

August 2007 Spain and Italy housing crises

STRATFOR highlighted that Spain and Italy were facing a deeper housing crises than the U.S.

June 2009 Greece & Ireland Sovereign Debt Crisis

STRATFOR predicted that Greece would likely become the first European country to face significant economic problems beyond its control (w/ Ireland likely to follow). This would put pressure on the EU, particularly Germany, to bail out another member state.

Russia / Former Soviet Union - Detailed SummaryDate / Document Incident Details

1995 Decade Forecast

Re-emergence of Russia

STRATFOR expected Russian power to emerge, but over the next decade, it will be focused on retrieving lost portions of its empire. Because of this, STRATFOR predicted that several areas of instability will surface including he Russian borderlands where Russia will seek to reassert itself, meeting resistance at various points from Germany, the Islamic countries and China, each of whom will, for their own reasons, support breakaway elements. However, this surge will be contained by regional balances of power. For example, Russia will be constrained by forces within the former Soviet Union, as well as surrounding states such as Germany, Turkey and Japan, which will limit its ability to project power globally.

2005 Annual Forecast

Russia’s increasing influence

STRATFOR predicted that Russia would respond to the Western geopolitical penetration of its sphere of influence: born out with a reconsolidation of the majority of Russia’s former Soviet space under Moscow’s control, including (i) Kazakhstan and Belarus unions, (ii) Georgia invasion, (iii) large military deployments to Tajikistan, Kyrgyzstan, & Armenia, (iv) supporting reversal of a pro-Orange government in Ukraine, & (v) boosting the effectiveness of its security alliance

2006 Berlin and Moscow Alliance

As of 2006, STRATFOR started to predict Berlin and Moscow moving closer together as each saw a strategic partnership fitting their motives in the region. This prediction has born out politically and economically, particularly in security and energy

Russia / Former Soviet Union - Detailed Summary (cont’d)Date / Document Incident Details

2008 Russian invasion of Georgia

After the US and the West recognized Kosovo in 2008, STRATFOR predicted Russia would militarily react to prove that the US and NATO could not guarantee the security of Russia’s former Soviet states. A prediction that was born out when Russia invaded Georgia. STRATFOR knew of this invasion the night before the media picked it up

2008 Russian Ruble STRATFOR knew (internally) that Putin called a majority of the oligarchs for an emergency, required meeting to discuss the Russian Ruble. From this, STRATFOR inferred that the meeting would be a discussion about the oligarchs participating in a rescue of the Ruble. Two days later, news of both the meeting and the outcome were announced in the media.

October 2009 Russian Privatization Plan

STRATFOR outlined rivalries within the Kremlin and targets of an anticipated purge, resulting from a planned economic reform program. The program was publicly announced weeks later with more granular consequences (as predicted) in the final months of the year. STRATFOR knew about the Russian privatization program as well as the government’s plan to address corrupt budgeting processes, grant new powers to the Security Council, reshuffle officials at the Interior Ministry, and expand the powers of the Federal Security Service

Middle East - Detailed SummaryDate / Document Incident Details

October 2002 US / Iran Alliance STRATFOR predicted that the U.S. would have to work with the Iranians on the issue of Iraq. This was six months before the 2003 invasion of Iraq. This became clear in March 2007, when Iranian officials met their U.S. counterparts in Baghdad

November 2002 Iranian intentions for Iraq war

When the Iranian nuclear program became publicized in 2002, STRATFOR forecast that the Iranian government would use the nuclear threat primarily as a destraction during the US war in Iraq while remaining focused on the more critical objective of consolidating influence in Iraq and the wider region

March 2003 Iraq war Six hours before the first bombs began to fall, STRATFOR alerted readers that the U.S. war in Iraq had begun

June 2004 Switch in Hamas Policies

STRATFOR stated that Hamas would opt for mainstream politics as opposed to pure militancy. This was proven out two years later when Hamas participated in elections for the first time

2005 Syria’s position in Lebanon

Following Syria’s troop withdrawal from Lebanon in 2005, STRATFOR predicted that the Syrian regime would rapidly re-entrench its position in Lebanon, relying primarily on its intelligence, militant and banking assets

July 2007 Turkey reemergence

STRATFOR predicted that Turkey would emerge from its post-Ottoman period of introspection and move to reclaim its role as a regional power. This became evident mid-2010 with Turkey’s challenge to Israel over its blockade of Gaza

Middle East - Detailed Summary (cont’d)Date / Document Incident Details

June 2008 Iranian Power Instability

STRATFOR wrote about splits between conservatives in Iran’s power circles – more than a year before those splits became evident, with political turmoil surrounding presidential elections

June 2009 Iranian Uprisings When the Green Revolution took root in Iran following the 2009 election controversy, STRATFOR forecast the failure of the so-called revolution. STRATFOR also described the rise of the IRGC and the growing crisis of confidence faced by the corrupted clerical elite

Continuous / Ongoing

Iran and Israel threats

Each time fresh speculation over an Israeli military strike against Iran would dominate the mainstream media, STRATFOR would provide a careful analysis explaining why such a strike was unlikely and emphasized the potency of Iran’s real “nuclear weapon” – the ability to shut down the Strait of Hormuz

Continuous / Ongoing

Iran and Bahrain While the world was focused on Arab uprisings in Egypt and Libya, STRATFOR turned the market’s attention to the far more strategic issue of what was happening in Bahrain, where the Shiite-dominated island had become a play in Iran’s covert strategy against the GCC states

South Asia - Detailed SummaryDate / Document Incident Details

January 2004 U.S. Pakistan operations

STRATFOR predicted as early as January 2004 that the U.S. would conduct overt operations in northwestern Pakistan, a movement that was seen unfolding more than four years later

March 2007 Fall of Musharraf regime

STRATFOR foresaw the demise of the Musharraf regime in Pakistan 17 months before the president left office

December 2007 Pakistani / al Qaeda relations

STRATFOR repeated that Pakistan would become the new battleground against al Qaeda

May 2008 NATO / Afghan Taliban Discussions

STRATFOR publicly explored the possibility of NATO officials splitting and negotiating with Afghan Taliban members – at the time this was being discussed privately within NATO. The issue gained traction, with a consensus emerging publicly well over a year later on the eve of a January 2010 conference on the Afghanistan conflict in London

Asia / South Pacific - Detailed SummaryDate / Document Incident Details

1995 Decade Forecast

Asian Economic Crisis

In 1996, STRATFOR stated that East Asian economies were at the peak of their growth cycle, foreshadowing the Asian financial crisis that unfolded in 1997

May 1998 Indonesian Elections

Suharto resigned as President due to strong opposition over his rule. STRATFOR knew Megawati Sukarnoputri would not take his place despite widespread belief that Sukarnoputri would be the next President. Sukarnoputri would be too big of a break from prior, established rule. Habibie, Suharto’s VP, ultimately became President and undertook some liberal political reforms

November 2001 China’s WTO banking requirements

STRATFOR understood the requirements for joining the WTO and estimated how China would manipulate its existing system to meet these requirements. STRATFOR focused on how China would handle its banks with increasingly poor balance sheets. China ultimately created asset management companies that took on the banks’ bad assets, “cleaning” up the banks’ balance sheets and making them more attractive investments to outside capital. With attractive balance sheets, it did not make sense for foreign capital to set-up their own banks to compete against China. In summary, China ostensibly allowed foreign investors into the country (which the WTO required), but did so in a manner that didn’t hurt their control over the banking sector.

2001 Indonesian & Philippine government disruption

STRATFOR accurately predicted the downfall of the governments of Abdurrahman Wahid in Indonesia and Joseph Estrada in the Philippines, as well as naming their replacements (Megawati Sukarnoputri and Gloria Macapagal Arroyo)

Asia / South Pacific - Detailed Summary (cont’d)Date / Document Incident Details

2001 Japanese militarization

STRATFOR foresaw Japan’s drive toward remilitarization.

2004 / ongoing Chinese economic instability

STRATFOR foresaw an economic overheating in China, accompanied by growing pressures and disruptions of the Chinese “miracle.” At the time, most financial institutions did not agree with STRATFOR, but over time they came to adopt STRATFORs analysis

December 2004 Souring relations between China & U.S.

STRATFOR foresaw that China’s fixed exchange rate policy and growing trade deficits would lead to an economic confrontation between China and its Western trading partners

December 2008 Thai political disruptions

STRATFOR accurately predicted many events in Thailand’s political crisis, including (i) that upon the dissolution of the People’s Power Party (forerunner of the subsequent Puea Thai Party), the seeds of a new phase of upheaval had already been planted and specifically noted the possibility that protests would disrupt plans for an ASEAN summit and (ii) in April 2009 and March 2010 that the Democrat Party-led government would outlast periods of severe civil strife and violence also were borne out

May 2009 North Korean Nuclear Tests

STRATFOR knew (internally) that North Korea was planning a nuclear weapon test five days prior to the actual (and highly publicized) test .

March 2011 Japanese Nuclear Plant Meltdown

STRATFOR released a Red Alert the weekend of March 12 alerting readers to the increasing risk of a nuclear threat posed by the tsunami

Africa - Detailed SummaryDate / Document Incident Details

July 2006 Ethiopia’s Somalia intervention

STRATFOR predicted that Ethiopia would intervene in the conflict in Somalia and send military forces as a counterterrorism effort

December 2007 South African Zuma election

Despite popular belief that President-elect Zuma was a radical and would implement anti-business policies, STRATFOR predicted that Zuma would execute a centrist policy, a prediction that has proved correct thus far

January 2009 Angola’s increasing importance

STRATFOR accurately predicted that Angola would gain greater recognition as a regional power in southern Africa. During the year, Washington launched a series of high-level diplomatic meetings with Angola and the country made its first appearance at the G-8 summit in London. Moreover, throughout 2010 political recognition continued to give rise to business recognition. With Angola’s fast growing, oil-driven economy unencumbered by the constraints of civil war, visits by representatives of many corporations and states in the region and further abroad continued throughout the year, underscoring efforts to develop economic relations and profits from the southern African state

2010 Niger Delta Peace STRATFOR predicted that pipeline bombings and attacks from militant groups would subside when the new government came to power

December 2010 Ivory Coast Civil War

STRATFOR accurately predicted that instability in the Ivory Coast would escalate to a civil war

Africa - Detailed Summary (cont’d)Date / Document Incident Details

2011 Egypt - Mubarak Ousted

Before demonstrations began in Egypt at the start of 2011, STRATFOR used the Alexandria church bombings to forecast that a major geopolitical shift was approaching that would return Egypt to its status as a pivot in Arab world. In addition, STRATFOR predicted that overthrow of Mubarak regime was a way for the military to maintain control and prevent Mubarak’s son Gamal from coming into power. Protests were a way to oust Mubarak and ensure his son would not come to power.

March 2011 Libya Civil War STRATFOR predicted that there would be a civil war due to the significant increase in arms and weapons crossing into the country combined with a deep understanding of the power players involved in the political structure of the country

September 2011 Zambia / China relations

STRATFOR is currently predicting that Michael Sata (recently elected President ) will work with China despite his campaign rhetoric based on anti-business and trade with China.

Americas - Detailed SummaryDate / Document Incident Details

1995 Decade Forecast

U.S. economic surge

STRATFOR estimated that the U.S. is by far in the best financial and demographic position to capitalize on substantial funds available on a global basis for investment in capital plants and the increased consumption of aging investors that retained sufficient cash for this purpose. Interestingly, the national deficit, which is declining as a proportion of GDP, has not had the effect feared. The primary problem of the deficit—that it crowds out private borrowers and raises interest rates—has simply not happened and it will not happen. What it has done is cripple the Federal government’s ability to finance new social initiatives. The key structural issue — the U.S. deficit with East Asia — is primarily a political rather than economic problem, and will be dealt with as such

2006 Bolivian Natural Gas Nationalization and Implications

When Bolivia attempted to nationalize its natural gas extraction and transportation infrastructure, STRATFOR correctly predicted that the impact of this effort would be to drive its neighbors (particularly Chile, Uruguay, Brazil and Argentina) to seek global sources of natural gas. This prediction was borne out when all four countries began to invest significantly in liquefied natural gas regasification facilities. Brazil also began to increase its domestic production of natural gas

April 2008 Argentina’s agriculture induced strife

STRATFOR predicted that problems in Argentina’s agricultural and energy sectors would lead to economic decline and social strife. This forecast was borne out over the ensuing months with clashes between the agricultural sector and the government. The practical result of this deterioration can be seen in Argentina's switch from being a natural gas exporter to a natural gas importer and in the fall in beef, wheat, and corn production

Americas - Detailed Summary (cont’d)Date / Document Incident Details

2008 Chilean social unrest

STRATFOR correctly predicted as early as 2008 that rising incidences of protests by Chilean youths were not isolated incidents, but signaled a shift in demographics and politics in that country. This prediction has been validated in subsequent years as Chilean student protests have grown in size and influence alongside growing labor unrest and pressure against the post-dictatorship Chilean governments

2009 Drug War instability STRATFOR correctly predicted in 2009 the rising importance of Central America in the Mexican drug war. This trend rose to a breakpoint in 2011 when elements of the Los Zetas cartel mass murdered peasants in Guatemala, bringing unprecedented political attention to the issue

2009 Annual Forecast

Mexican Drug Cartels

STRATFOR highlighted that the influence of Mexican drug cartels would become more evident within the U.S., but without a massive influx of cartel-related crime from Mexico. During the year, La Familia Michoacana expanded its networks throughout the U.S., but most violence continued to be concentrated on Mexico’s side of the border

July 2011 Peruvian election implications

STRATFOR predicted that, despite enormous worries in the financial and political spheres that incoming Peruvian President Ollanta Humala would use his leftist ideology to destabilize foreign investors, Humala would prove to be a cooperative partner for direct investors. So far, this has proven true as Humala has indeed begun to renegotiate many aspects of Peru's mineral policies, but has made compromises to take into account the needs of investors. As a result, he has been received positively by the finance community

Americas - Detailed Summary (cont’d)Date / Document Incident Details

September 2011 Bolivian / Brazilian confrontation

STRATFOR correctly predicted that indigenous protests in the remote Bolivian TIPNIS nature reserve would become a key point of bilateral tension between Brazil and Bolivia. This prediction was born out in late October and early November when a cascading set of circumstances pushed the two into confrontation over the Bolivian government's capitulation to indigenous demands in direct violation of its agreements with Brazil

2011 Argentinian economic instability

In the lead up to the 2011 presidential elections, STRATFOR correctly identified the economic growth trends as temporary. STRATFOR also predicted (internally) that Cristina Fernandez de Kirchner was likely to win, and that in the wake of the October election her administration would begin to lift prices on limited key goods and seek to reduce Central Bank expenditures that were keeping the peso overvalued

Ongoing Venezuelan instability

STRATFOR has correctly predicted the gradual decline and destabilization of the Venezuelan economy under the administration of Venezuelan President Hugo Chavez as well as the government's increasing reliance on oil revenues

Ongoing Calls & Looking Forward

Ongoing Calls China – trade agreements Zimbabwe – mining legislation

Looking Forward South China Sea – tension in the region China – trade agreements with Tanzania and Kenya Russia – Customs Union; privatizations Turkey – re-emerging as a regional power resulting in increased

Mediterranean tension Argentina – potential run on the banks Venezuela – food and resource scarcity finally driving Chavez out