Financial Crisis Called Top Security Threat to U.S.

By Walter Pincus and Joby Warrick
Washington Post Staff Writers
Friday, February 13, 2009

Director of National Intelligence Dennis C. Blair told Congress yesterday that instability in countries around the world caused by the current global economic crisis, rather than terrorism, is the primary near-term security threat to the United States.

"Roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown," Blair told the Senate Select Committee on Intelligence, delivering the first annual threat assessment in six years in which terrorism was not presented as the primary danger to this country.

Making his first appearance before the panel as President Obama's top intelligence adviser, Blair said the most immediate fallout from the worldwide economic decline for the United States will be "allies and friends not being able to fully meet their defense and humanitarian obligations." He also saw the prospect of possible refugee flows from the Caribbean to the United States and a questioning of American economic and financial leadership in the world.

But Blair also raised the specter of the "high levels of violent extremism" in the turmoil of the 1920s and 1930s along with "regime-threatening instability" if the economic crisis persists over a one-to-two-year period.

In answer to a question about whether he was shifting assets to cover the financial downturn, Blair said that by leading off with the economic situation he "was trying to act as your intelligence officer today, telling you what I thought the Senate ought to be caring about." He said he was not refocusing the intelligence community's basic collection and analytic work from traditional concerns such as terrorism, Afghanistan, Pakistan, Iran, North Korea, Russia and China.

In fact, during the nearly two-hour hearing, Blair took lawmakers on a virtual tour of every other major and minor security threat, from terrorism and cyber-attacks to the country's evolving relations with Russia and China.

Discussing terrorism, Blair emphasized the progress being made against al-Qaeda. "We have seen notable progress in Muslim opinion turning against terrorist groups such as al-Qaeda" as more religious leaders question terrorists' use of brutal tactics against fellow Muslims. He said that "al-Qaeda today is less capable and effective than it was a year ago" based on the pressure the U.S., Pakistan and others put on Osama bin Laden and his core leadership in Pakistan's tribal areas and the decline of al-Qaeda in Iraq. He also reported that while no major country faces the risk of collapse at the hands of any terrorist groups, "Pakistan and Afghanistan have to work hard to repulse a still serious threat" to their governments.

Despite these successes, Blair said al-Qaeda and its affiliates and allies "remain dangerous and adaptive enemies," and the threat continues that they could inspire or orchestrate an attack on the United States or Europe. He told the committee there is still concern that al-Qaeda could inspire some homegrown terrorists inside the United States. He added that if al-Qaeda is forced out of the Pakistan tribal areas, it will have difficulty supporting the Taliban in Afghanistan. He said bin Laden could relocate. For example, he said, al-Qaeda elements in Yemen now pose a new threat to Saudi Arabia, whose own efforts have been successful in killing or capturing most al-Qaeda senior leaders in that country.

Blair delivered a blunt assessment of Iran and its weapons programs, saying that it is possible that Tehran could develop a nuclear weapon as early as next year, if the country's leaders choose to do so. But he also suggested that Iran could be kept off the nuclear path with the right combination of diplomacy and economic pressure.

"Iran is clearly developing all the components of a deliverable nuclear weapons program," he said, but "whether they take it all the way to nuclear weapons depends a great deal on their internal decisions."

Blair described Iraq as increasingly stable, with terrorist attacks on the wane and al-Qaeda losing followers and influence. But he warned that recent progress could be undermined by tribal disputes, corruption and foreign support for militia groups.

Echoing recent statements by U.S. military commanders, he gave a grim portrayal of security in Afghanistan, where Taliban insurgents have shown new aggressiveness while the government continues to struggle with rampant corruption and an extensive drug trade. In neighboring Pakistan, an intensified campaign against terrorists has failed to subdue multiple insurgencies or quell growing radicalism in many parts of the country.

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