ANNUAL FORECAST 2010

Jan. 4, 2009

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ANNUAL FORECAST
2010
The dominant theme of 2009 was the
global recession. A series of financial
developments in the United States
damaged the U.S. banking system and
spread from there to the rest of the global
economy. Everyone — whether purchasers
of high-tech goods or sellers of raw
commodities — was deeply affected. As the
year turns anew, that recession has ended. The recovery in place is unsteady, but appears to have put
down sufficient roots to hold.

Two major evolutions will dominate 2010. The first is a continuation of a trend STRATFOR has been
following for years: Russia’s resurgence as a major power. In the 1990s the United States became
very comfortable with the idea of Russian weakness, and in the 2000s the wars in Afghanistan and
Iraq have utterly consumed U.S. military capacity. With the recent decision to send even more forces
into Afghanistan, the U.S. preoccupation with the Islamic world will become all-consuming, allowing
Russia to do as it pleases in its near abroad.

For Russia, 2010 will be a year of consolidation — the culmination of years of careful efforts. In the
coming year, Russia will excise the bulk of what Western and Turkish influence remains from Ukraine,
Kazakhstan, Belarus, Armenia and Azerbaijan, and try to lay the groundwork for the reformulation of a
political union in much of the former Soviet space. That project will not be completed in 2010, but by
year’s end it will be obvious that the former Soviet Union is Russia’s sphere of influence and that any
effort to change that must be monumental if it is to succeed.

Contributing to the Russian consolidation is a sharpening crisis in the Middle East.

Israel believes that Iran’s nuclear program has matured sufficiently to constitute a material threat to
the survival of the Jewish state. International diplomatic efforts to contain that program are not simply
intended to forestall a future nuclear threat from Iran, but also to prevent an Israeli strike on Iran — a
strike that could quickly spiral into a general melee in the world’s premier energy artery, the Persian
Gulf.

The mix of players and motives — Israel insisting on real controls and willing to act unilaterally, Iran
evading real controls and retaining its ability to act decisively in Iraq and Afghanistan, Russia seeking
to keep the conflict brewing in order to distract all from its efforts in the former Soviet Union, and the
United States simply wanting everyone to calm down so it can focus on its wars — all but guarantees
that a crisis will erupt in 2010. The only questions are whether that crisis will be limited to “simply” the
Persian Gulf, and whether it will be military in nature.

Elsewhere in the world, there will be many developments that will not rise to the omnipresence these
issues will have in 2010, but are nonetheless critical on the regional level.

• The global recession is over and a building, albeit tentative, recovery is putting down roots in
many places. Its permanence or robustness is hardly a foregone conclusion, but the carnage of
early 2009 is certainly a thing of the past. What has taken the place of the global economic
crisis are a series of aftereffects that are regional in character: China’s struggles with its
export-led economy when export demand is tepid, and Europe’s growing banking crisis.
• The increase of U.S. forces into Afghanistan is an attempt to change the rules of the war. The
real heat from the conflict in 2010 will not be in Afghanistan, but in Pakistan, where the conflict
is expanding beyond the border region.

© 2009 STRATFOR 700 Lavaca Street, Suite 900 Austin, TX 78701 Tel: 1-512-744-4300 www.stratfor.com
 • In Europe, the Lisbon Treaty — now fully entered into force — finally will allow Germany and
France to assert meaningful leadership of the European Union.
• The effects of Mexico’s drug war are spreading rapidly, as the cartels focus their efforts along
the drug supply chain into both Central America and the United States. For Central America,
the violence and corruption that now permeates Mexico will become ever more familiar.
• With internal transitions complete and civil wars resolved, Angola and South Africa have both
matured as independent powers. Now begins their cold war.

Middle East

Iran’s nuclear program has progressed

without being slowed by international
efforts. This is unacceptable to Israel, and
so the Jewish state is both becoming more
concerned about its national survival and
playing up the threat to force more
decisive action. The Israelis have said that
unless the Americans can halt Iran’s
nuclear activities (whether through the use
of “crippling sanctions” or military action),
they will have no choice but to launch a
military strike of their own to neutralize
the program.
• Russia: Trying To Maintain a
Balance in the Caucasus
Despite its desire to avoid war, the United States
• Turkey: Ankara’s Strategic
understands that should such an attack occur, it would have
Outlook on Afghanistan
to participate for two reasons. First, while Israel could
• Iraq: The Security Budget
undoubtedly throw the Iranian program back a few years,
and Parliamentary Elections
Israel lacks the reach to destroy it. Iran, cognizant of the
threat it faces, has not only done extensive work to conceal
the physical elements that make up its nuclear program, it has also distributed its various parts across
the country. Israel will need U.S. military assistance in terms of bunker-buster ordnance to
successfully penetrate facilities that are deep underground and spread across great distances. Second,
Iran would undoubtedly retaliate in a number of theaters, and one of those theaters would be in the
Strait of Hormuz, the world’s most densely trafficked energy transport route — thus threatening to
throw off the global economic recovery through rising oil prices.

U.S. participation would increase the likelihood of success in a strike against Iran’s nuclear facilities,
and only the United States has the resources to both strike at the facilities and engage Iran’s
retaliatory capabilities in the Strait of Hormuz. But none of this means that the Americans want a war
in 2010. Washington wants nothing more than to focus its efforts on the expanding war in Afghanistan
and withdrawing from Iraq. It desperately wants to put Iran off for another day. But the Israelis are
forcing the issue, and the Russians are amplifying the Iranian threat — as part of a plan to keep the
Americans occupied in the Middle East — by encouraging Tehran to remain defiant.

STRATFOR does not have sufficient evidence to forecast that war lingers at the end of this road, but
that is certainly a distinct possibility which may slide toward probability as the year wears on, and
certainly as Iran comes closer to being able to build a nuclear bomb. The year 2010 will be about
Israel attempting to force a conflict, the Americans attempting to avoid it, the Iranians preparing for it
and the Russians manipulating all sides to make sure that a resolution to the standoff does not come
too soon.

Elsewhere, Turkey continues to gain prominence, working toward a status more representative of a
country of its geographic, demographic and economic heft. But Turkey’s emergence is still a very new
phenomenon, and Ankara wishes to avoid any decisive conflicts until it is more confident of its
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position. It also remains constrained by domestic political wrangling. Turkey currently lacks the tools
to prevent a military conflagration between the Americans and Iranians — and it certainly does not
wish to become involved itself. It also lacks the stomach to face off against the Russians in the
Caucasus, and could well lose what footholds it has there in 2010. Ergo its influence will expand like a
gas into any region which other major powers have neglected. In 2010, Turkey’s efforts will be
concentrated upon two areas: the Balkans, where the geopolitical contest is a bit of a free-for-all
(especially Bosnia, where the other players have mixed feelings), and Iraq, where the Americans are
trying to leave.

That American withdrawal will severely test the ability of Iraq’s factions to work together through the
series of political arrangements that have held to date largely due to American browbeating. Iraq’s
increased factionalization in 2010 is a guarantee at this point, whether due to the U.S. departure,
Iranian meddling, as a consequence of deteriorating Iranian-U.S. relations or some combination of
these. The first taste of what is to come will be ushered in by parliamentary elections scheduled
tentatively for early March. The first recourse by any group that feels slighted will be to reactivate the
militias that turned the country into a bloodbath in the recent past. No matter which way the balance
of power shifts — and it is likely to shift away from the Kurds toward the Sunnis — Iraq is in for a very
tough year, one that will be an important test of its ability to function more sustainably.

South Asia

The year 2010 will see Washington

implement its new Afghan strategy:
Increase the U.S. military presence from
70,000 to 100,000 in order to roll back the
Taliban’s momentum, break up the Taliban
factions and train the Afghan army. On the
surface, the American decision seems like
it will dominate 2010. It will not.

The Taliban is a guerrilla force, and it will

not allow itself to be engaged directly. It
will instead focus on hit-and-run attacks
and internal consolidation in order to hold
out against both the U.S. effort to crack the movement and any al Qaeda effort to hijack the Taliban
for its own purposes. These internal Taliban concerns could well make the various negotiations
involving the Taliban just as important as the military developments.

In contrast, across the border in Pakistan, Islamabad is near a breakpoint both with Washington and
the jihadists operating on Pakistani soil. Thus it is here, not Afghanistan, where the nature of the war
is shifting.

The bulk of the al Qaeda leadership is believed to be not in Afghanistan, but in Pakistan. Increased
cross-border U.S. military activity — mostly drone strikes, but also special forces operations — will
therefore be a defining characteristic of the conflict in 2010. Even a moderate increase will be very
notable to the Pakistanis, among whom the U.S. efforts in Afghanistan (to say nothing of Pakistan) are
already deeply unpopular.

The United States’ increased military presence and increased proclivity to operate in Pakistan raises
four concerns. First, Pakistan must find a means of containing the military fallout. U.S. actions will
force Pakistan’s military to expand the scope of its counterinsurgency offensive, which will turn
heretofore neutral militants against the Pakistani state. The consequence will be a sharp escalation in
militant attacks across Pakistan, including deep into the Punjabi core.

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Second, Pakistan needs to find a way to manage U.S. expectations that does not rupture bilateral
relations. Allowing or encouraging limited attacks on NATO supply lines running through Pakistan to
Afghanistan is one option, as it sends Washington a message that too much pressure on Islamabad
will lead to problems for the effort in Afghanistan. But this approach has its limits. Pakistan depends
upon U.S. sponsorship and aid to maintain the balance of power with India. Therefore a better tool is
to share intelligence on groups the Americans want to target. The trick is how to share that
information in a way that will not set Pakistan on fire and that will not lead the Americans to demand
such intelligence in ever-greater amounts.

Third, an enlarged U.S. force in Afghanistan will require more shipments and hence more traffic on the
supply lines running through the country. The Pakistani route can handle more, but the Americans
need a means of pressuring Islamabad, and generating an even greater dependency on Pakistan runs
counter to that effort. The only solution is greatly expanding the only supplemental route: the one that
transverses the former Soviet Union, a region where nothing can happen without Russia’s approval.
This means that in order to get leverage over Pakistan the United States must grant leverage to
Moscow.

Finally, there is a strong jihadist strategic intent to launch a major attack against India in order to
trigger a conflict between India and Pakistan. Such an attack would redirect Pakistani troops from
battling these jihadists in Pakistan’s west toward the Indian border in the east. Since the November
2008 Mumbai attack, India and the United States have garnered better intelligence on groups with
such goals, making success less likely, but that hardly makes such attacks impossible.

Former Soviet Union

STRATFOR has charted the strengthening

of the Russian state for several years. In
2009, with Washington’s attention focused
on Iraq, Afghanistan and domestic politics,
Moscow was able to make a series of
profound gains in many former Soviet
territories, most notably in Azerbaijan,
Georgia and Ukraine. In 2010, Russia will
consolidate those gains to insulate itself
against any future increased U.S. interest
in the region. Most of these efforts will be
focused in three specific locations.

• Ukraine: Each of the three leading • Special Series: The Kremlin

candidates in the country’s January presidential Wars
election — the first such election since the 2004 • Twenty Years After the Fall
Orange Revolution — are in the Kremlin’s pocket. • The Western View of Russia
Early in the year Russia will have successfully ejected • Ten Years of Putin
pro-Western decision-makers from the Ukrainian
senior leadership, allowing Russia to re-consolidate its hold on the Ukrainian military, security
services and economy.
• Belarus and Kazakhstan: On Jan. 1, a customs union between Russia, Belarus and Kazakhstan
entered into force. Unlike most customs unions, this one was expressly designed to grant
Russia an economic stranglehold on the other two members. Belarus reluctantly agreed, as
Russians already own a majority of that country’s economy, while Kazakhstan had to be
coerced into the deal. If there is a weak point in Russia’s armor in 2010, it will be in
Kazakhstan, where many players realize that the customs union will eventually kill any hope of
holding an economic or political position independent of Moscow. Russia aims to extend the
customs union to Ukraine, Armenia, Kyrgyzstan and Tajikistan eventually, and in time hopes to
use the union as a platform from which to launch political unification efforts.

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With Russia’s consolidation effort unlikely to meet serious resistance, other former Soviet territories
will be forced to either sue for acceptable terms or seek foreign sponsorship to maintain their
independence. Azerbaijan and Turkmenistan are almost certain to fall into the former camp, while
Georgia (unlikely to succeed) and the Baltics (unlikely to fail) will fall into the latter. Therefore it will
be in the Baltic states that Russia will slide toward confrontation with both Europe and the United
States.

Though Russia likely will have some success in its periphery in 2010, the Kremlin will face a tough
fight at home. At the end of 2009, the Russian government started multi-year economic housecleaning
to rid the government of wasteful state companies and purge the managers who were not seen as
doing their job. But this move to make Russia more financially and economically sound in the long run
has ripped through the two main power clans in the Kremlin, sparking a series of fierce purges. This
next year, the war between the Kremlin clans will intensify. Though it will be incredibly noisy and
dangerous for the majority of Russia’s most powerful men, it will be up to Russian Prime Minister
Vladimir Putin to maintain stability in the government and keep the clans from ripping the government
apart. Putin is the only one in Russia that can contain this war, though he may have to make some
tough choices on reining in or neutralizing some of the most important figures in the Kremlin. This will
ripple through every part of Russia — including the Federal Security Service, the military, strategic
economic sectors and more.

Global Economy

At some point in the middle of 2009 the recession in the United States ended. However, pockets of
economic weakness remain within the United States and larger problems continue elsewhere in the
world.

STRATFOR uses a handful of measures to

evaluate the U.S. economy, and nearly all
appear positive. The Standard and Poor’s
500 Index, a good leading indicator of
investor sentiment, is now up 50 percent
from its recessionary lows. First-time
unemployment claims, an excellent
lagging indicator of economic growth, are
down roughly a third from their
recessionary highs. Retail sales have not
only been higher than inventory builds for
months, but inventories have been
shrinking for most of that time;
businesses are running their shelves
bare, indicating that they now have no
choice but to place orders for more goods, which in turn
• The Geography of Recession
kick-starts employment growth.

STRATFOR’s largest remaining concern is that banks remain skittish about lending and consumers
about borrowing. So while the United States is well into an economic recovery, it is not a powerful one.
Until normal credit relationships are fully restored and embraced by both lender and borrower, the
U.S. recovery cannot be characterized as robust.

Yet other areas of the world have much larger, more persistent problems.

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Much of Europe returned to growth in 2009,
but several countries — most notably Greece,
Ireland, Italy, Spain, Romania, Hungary and
Latvia — remain in serious economic trouble.
Every state on this list faces increasing debt
levels that can only be resolved by painful
austerity programs, a massive bailout from
the European Union, or both — any of which
would generate massive social unrest. The
only way to avoid that result would be for the
European Central Bank to keep pumping out
emergency liquidity, allowing the weaker
economies to continue with massive deficit
spending. This “solution” would simply put off
the crashes for another day in the hopes that
a strengthening American recovery would
provide a lifeline eventually.

Additionally, as most European governments

blamed the Americans for the recession, few
took a serious look into their own banking
systems (U.S. banking problems are what
spread the crisis in the financial sector to the
broader economy). The European Union has
only now begun to diagnose the health of its
own banks — which are far worse off than
their U.S. counterparts — much less address
the banks’ failings. At the time of this writing,
only half of the probably 1 trillion euros ($1.4 trillion) in damaged assets has even been
acknowledged, and less than half of that has
been realized as losses. Consequently, Europe
will face two economic crises in 2010: a
generational banking crisis, and a series of
debt mitigation efforts that could well damage
the health of the euro itself.

Japan too has returned to growth, but only by

reverting to the massive deficit spending of the
1990s. Critics point out that the United States
has also engaged at such spending, but a
sense of perspective is needed: The U.S.
national debt is now 87 percent of gross
domestic product, while Japan’s stands at 217
percent — the largest in absolute and relative
terms in human history.

China registered the strongest growth in the

world in 2009, but this growth occurred
despite a collapse in exports — traditionally the
source of China’s economic dynamism. Fully 95
percent of China’s growth for 2009 originated
from investment spending, most of which was
rooted in a massive lending expansion
characterized by almost no concern for loan
quality. In essence China maintained growth —

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and with it mass employment and social stability — by generating a large chunk of questionable loans,
or by transferring the new debt to local governments. Both solutions will haunt China in the future.
And with the U.S. recovery less than entrenched and the European recovery questionable at best,
China will need to find another way to avoid in 2010 the downturn it evaded in 2009.

The key global economic issue of 2010 is simple: export demand. There are no states experiencing
growth strong enough to serve as unabashed consumers — while recovering, the once-insatiable U.S.
consumer’s demand levels remain below those in 2008, a circumstance unlikely to improve much in
2010 — and there are too many states whose economies are export-oriented. That mismatch will limit
growth throughout Asia and to a lesser degree Europe, but the overproduction of goods that this
mismatch generates will ensure that overall inflation remains extremely tame.

East Asia

Unlike the rest of the world, for China the

2009 global recession did not translate into
a credit crunch. China has a very high level
of household and corporate savings and a
deep pool of foreign exchange reserves to
draw upon, and it used these to encourage
a massive surge in cheap loans. This,
coupled with government stimulus
measures aimed at infrastructure
development, generated the high levels of
economic growth the world has come to
expect from China. But this growth is not
without its cost, and even the Chinese
government has realized that economic reforms necessary to stabilize the economy and shift it away
from the Asian “growth for the sake of growth” model have been seriously set back as the government
focused on weathering the financial storm. Like Japan and the East Asian Tigers, China’s economic
model is fraught with risks, and the inefficient use of capital built into the system is sure to come back
to haunt Beijing at a later date.

China’s problem in 2009 was a plunge in global demand for Chinese exports. Much of China’s industry
was already operating on thin profit margins, and the drop in exports left parts of the economy
twisting in the wind. Rather than firing workers to balance the books — something that could quickly
translate into mass unrest — China rapidly increased loans to those companies on one hand, and
launched major (debt-financed) infrastructure projects on the other. Combined, the two efforts
(conservatively) cost more than $1 trillion, but they had the desired effect.

China’s current problem is that, with the exception of having more infrastructure than it did a year
ago, Beijing enters 2010 in almost the same situation as it entered 2009. Exports have rebounded by
about one-third but have not returned to pre-crisis levels. Chinese corporations remain burdened with
the same export-dependency and capital-inefficiency problems that made 2009 so nerve-wracking,
and structural shifts in the Chinese economy to reduce this dependency cannot be made in a decade,
much less a year. The Chinese, then, have little choice but to continue the debt-driven loan and
infrastructure programs that allowed them to evade a crash in 2009 until such time that external
demand revives sufficiently.

Consequently, trade spats with the United States — a country also nervous about its employment
situation — are sure to increase, even as China attempts to step up new trade deals in Asia and the
developing world to reduce its dependence on the United States and tap into new areas of growth.
Furthermore, China is facing increasing resistance to its 2009 push to buy overseas resource assets
and will be shifting its approach in 2010 to more joint ventures and smaller shares as it seeks to
deflect criticism and opposition.
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As China continues to deal with its internal economic and social difficulties, it is also looking at
Southeast Asia with concern. Recent U.S. initiatives to revive relations with the Association of
Southeast Asian Nations, including a diplomatic visit to the oft-shunned Myanmar, have left Beijing
feeling that Washington is meddling in China’s expanding sphere of influence and seeking to encircle
China. For their own economic and strategic reasons, Japan and India are also stepping up economic
and political activity in Southeast Asia, contributing to China’s feelings of insecurity. In 2010,
Southeast Asian countries could find themselves at the center of attention — something they will seek
to carefully navigate and exploit.

Europe

With the United States preoccupied in the

Middle East, Europe will have to deal with a
resurgent Russia on its own. However, as
the European Union deals with the realities
of the Lisbon Treaty, new — and opposing
— coalitions are solidifying within the
union. The most important of these
coalitions by far is the Franco-German
relationship. Paris and Berlin have come to
an understanding — perhaps transitory —
that together they are much better able to
project power within the European Union
than when they oppose each other. Under
Lisbon, there are very few laws and regulations that these two states cannot — with a little
bureaucratic and diplomatic arm twisting — force upon the other members. Gone are the days that a
single state could paralyze most EU policies.

But many EU states have problems with a union led by France and Germany, and Lisbon leaves the
details on many forthcoming institutional changes to be sorted out. This will create plenty of
opportunity for further disagreements on how the European Union is to be run. Furthermore, France
and Germany have already resigned themselves to Russian preeminence in Ukraine and Russia’s
preeminent role in Europe’s energy supply. These two policies are not palatable to Central Europe,
particularly the Baltic States, Poland and Romania. In 2010, the Central Europeans will finally be
convinced that they are facing the Russians alone. They will try to draw a distracted United States into
the region in some way.

The United Kingdom is almost certain to elect a euroskeptic government by mid-year which will hope
to precipitate a crisis with the European Union in second half of 2010. London will find ample allies for
its cause in Central Europe. Finally, increasingly divergent economic interests among EU members (see
the Global Economy section) will further swell the ranks of states disenchanted with Franco-German
leadership.

Latin America

Latin America has seen many changes in

the past decade as a generational shift in
leadership reset regional trends: Venezuela
and Bolivia’s shift to staunch anti-
Americanism, Argentina’s financial
deterioration, Colombia and Mexico’s
critical decisions to use force against their
drug cartels, and Brazil’s long-delayed rise
to prominence.

© 2009 STRATFOR 700 Lavaca Street, Suite 900 Austin, TX 78701 Tel: 1-512-744-4300 www.stratfor.com
For Latin America, 2010 will be noted not for any great • The Geopolitics of Mexico: A
shifts, but rather for continuity, despite substantial internal Mountain Fortress Besieged
evolutions in key countries. It is an election year in the • Mexican Drug Cartels: Two
region’s two most dynamic states, Brazil and Colombia, Wars and a Look Southward
where the ultimate outcome — as far as who will succeed • When the Mexican Drug Trade
the enormously popular incumbents — is not at all clear. Hits the Border
But the policies pursued by both countries — relatively • Central America: An Emerging
liberal, consensus-based and market-friendly investment Role in the Drug Trade
and tax laws (and in Colombia’s case, a focus on security)
— have proven so successful and popular that whoever is the leader at year’s end will have very little
room to negotiate changes. Brazil and Colombia are finally on the road to meaningful economic
development, and for the first time in a century, no mere election has a serious chance of disrupting
that path.

Continuity will also hold for those states whose economic future is not so bright, the most visible cases
being Argentina and Venezuela. Argentina will concentrate on gaining access to global capital markets
despite the lingering effects of its 2001 debt default. This is not part of any economic restitution or
rehabilitation program; Argentina is seeking capital so it can spend itself into a deeper hole. When it
comes, Argentina’s reckoning will be a painful one. However, regardless of what happens — or does
not happen — with international capital markets, that reckoning is not likely to come in 2010.

In Venezuela, the question remains one of political control. There will be legislative elections in 2010
that could give the opposition a new rallying point, but that opposition remains disunited and
disorganized, allowing the government to maintain the upper hand fairly easily. Barring an external
shock — and one that triggers a massive and sudden economic decline — the central government’s
control will likely hold.

The only country in which STRATFOR expects a change of circumstance will be Mexico, where cartel
activity will expand. Mexico has experienced significant successes in its fight against drug cartels
during 2009. With pressure picking up on their home territories as the military presses every
advantage, the Mexican cartels will increasingly seek to diversify their involvement in the drug trade
by strengthening their control of various parts of drug supply chains — and the corresponding profit
pools.

Cartel activity will spread increasingly across the Mexican borders to the United States and Central and
South America. While there will likely be a concurrent rise in violence in the countries to the south of
Mexico, the cartels will attempt to maintain a low profile in the United States in hopes of avoiding the
attention of U.S. law enforcement. Nevertheless, the potential for violence remains, as the cartels will
have to compete with established gangs, and potentially even with each other.

Sub-Saharan Africa

The leadership transition in South Africa

has taken years to occur and crystallize,
while Angola has required years to stabilize
and consolidate after nearly three decades
of civil war. Both processes are now
complete, and the competition between the
two southern African countries to become
the dominant regional power has finally
begun.

The players have different strengths and

vulnerabilities, though each has its own
power base and means of leverage. South
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Africa is wealthier and boasts a stronger military and industrial base. Angola boasts a brutally effective
security service and abundant revenue from its now-robust oil industry.

In 2010, the competition will start off rather sedately, with Angola offering bits of its diamond industry
and sales of crude oil as a means of keeping relations with South Africa friendly. But it will not be long
before something like a cold war — that is, a conflict using proxy dissident factions — erupts between
the two. The factions’ operations in 2010 will be limited to the political realm, however, rather than an
all-out war like the one between Angola and South Africa in the 1970s and 1980s.

Both states plan to shape Zimbabwe to their liking, and competition there will heat up as Zimbabwean
President Robert Mugabe’s health (or general disagreeability) takes him out of the picture. Already
both are maneuvering their allies into position.

There will also be no shortage of action within the two countries as each attempts to sow chaos within
the other.

South Africa has plenty of contacts among Angola’s various ethnicities that date back to the civil war
— the governing Mbundu are actually a minority (albeit a sizeable one) of Angola’s population — that it
will reactivate. The group likely to attract the most South African patronage will be the Ovimbundu,
the group that fought the Mbundu most fiercely during much of the civil war.

Angola will return the favor by establishing links with the upper echelons of South Africa’s much more
powerful — but also much more fractious — military, and with factions within South Africa’s governing
alliance. In particular, Angola will attempt to ingratiate itself with the South African Communist Party
and the Congress of South African Trade Unions, two groups that are already chafing at the leadership
of South African President Jacob Zuma.

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the STRATFOR service, we publish an ongoing series of geopolitical monographs and assessments
which offer rigorous forecasts of future world developments.

The STRATFOR Difference

STRATFOR members quickly come to realize the difference between intelligence and journalism. We
are not the purveyors of gossip or trivia. We never forget the need to explain why any event or issue
has significance and we use global intelligence not quotes.

STRATFOR also provides corporate and institutional memberships for multi-users. Our intelligence
professionals provide Executive Briefings for corporate events and board of directors meetings and
routinely appear as speakers at conferences. For more information on corporate or institutional
services please contact sales@stratfor.com

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