A national cybersecurity strategy will require an operational road map for offensive and defensive campaigning and significantly enhanced resilience for key critical infrastructures built upon the development and adoption of safe coding and the implementation of zero trust architectures. Establishment of such capabilities will provide the president and the national leadership with the necessary capabilities to deter and defeat nation-state and criminal activities in cyberspace.

Franklin D. Kramer is a distinguished fellow and board director at the Atlantic Council. Kramer has served as a senior political appointee in two administrations, including as assistant secretary of defense for international security affairs.

Robert J. Butler serves as the Managing Director for Cyber Strategies LLC.

Melanie J. Teplinsky is a cyber law and policy expert with over thirty years of experience spanning the private sector, government, and academia. She is an adjunct professor at American University, Washington College of Law (WCL); a senior fellow in the Technology, Law and Security Program at WCL; and a faculty fellow at American University’s Internet Governance Laboratory.

Report Jun 25, 2025

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China Cybersecurity

New Atlanticist Jun 5, 2025

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Cybersecurity Economy & Business

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Cybersecurity Digital Policy

The Atlantic Council Technology Programs comprises five existing efforts—the Digital Forensic Research Lab (DFRLab), the GeoTech Center, the Cyber Statecraft Initiative, the Democracy + Tech Initiative, and the Capacity Building Initiative. These operations work together to address the geopolitical implications of technology and provide policymakers and global stakeholders necessary research, insights, and convenings to address challenges around global technology and ensure its responsible advancement.

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The post The US needs a cybersecurity roadmap appeared first on Atlantic Council.

Introduction

Following a brief respite after a cease-fire between Israel and Hamas brokered by US President Donald Trump, and in the wake of the twelve-day war and US-backed strikes on Iran’s nuclear facilities, the Middle East appears once again to be sliding toward broader instability. Fractures among the Gulf states over Yemen’s future, growing instability inside Iran, and ongoing efforts to stabilize Syria are only some of the complex challenges confronting the region.

Despite these pressures, the Abraham Accords have endured, reinforcing their long-term significance. The United States—through both executive and congressional leadership—has continued to champion their success. Yet after Congress failed to reintroduce the Regional Integration Normalization Act (RINA) following the disgraceful exit of its former sponsor, Senator Bob Menendez, congressional engagement has largely become incremental and narrowly focused on defense relationships. This need not be the case.

In the summer of 2025, the Atlantic Council’s regional integration project—dedicated to strengthening cooperation between the United States, Israel, and Arab and Muslim countries—led its first-ever congressional delegation focused on the Abraham Accords to the Middle East amid the twelve-day war. Bipartisan engagement with Abraham Accords countries—then, as now—across areas such as interfaith dialogue, trade, and regional investment demonstrates that meaningful progress on normalization is possible, and may even accelerate, during turbulent times. This issue brief offers recommendations for Congress to reassert its leadership role in supporting the Abraham Accords and to expand the scope of US engagement on normalization and regional prosperity.

Advance regional prosperity through the Abraham Accords

Recommendation one: Expand business and commercial delegations supporting the economic integration of Abraham Accords countries. 

US trade missions are an essential bridge for US and foreign companies to connect and identify areas of mutual interest. Congress should consider requiring an annual US trade mission focused on a topic of high interest for regional integration, including travel to multiple Abraham Accords countries.

Following the signing of the Abraham Accords in 2020, then Treasury Secretary Steven Mnuchin led a trade delegation to Israel, Bahrain, and the United Arab Emirates (UAE) to support the “expanded economic cooperation” promised by the Accords and announced the Abraham Fund—a planned $3 billion fund designed to support private-sector-led development projects. However, lower-level but consistent missions are also crucial to facilitate regional economic integration and prosperity. In 2022, the US Department of Commerce’s International Trade Administration led two trade missions to the Middle East: one to Israel, Bahrain, and the UAE, engaging aerospace and defense industries, and a flagship “Trade Winds” mission to the UAE that included an optional visit to Israel or Morocco before the main event. While these missions succeeded in connecting US firms with regional industries, there have been fewer recent US-led trade missions supporting regional integration through multi-country engagement. Against this background, Congress should make regional integration a clear priority when it benefits US commercial interests and consider codifying support for the Abraham Accords.

Recommendation two: Expand Abraham Accord Caucus engagement on regional economic projects, including the India-Middle East-Europe Economic Corridor.

The India-Middle East-Europe Economic Corridor (IMEC) is a proposed transportation, energy, and digital corridor designed to provide more efficient and resilient infrastructure capable of meeting the needs of a changing global economy. It could serve as the backbone for regional integration while unlocking substantial economic incentives by leveraging the Middle East’s role as a bridge between Europe and Asia. If the United States can help shape IMEC development—setting standards for ports and digital infrastructure, identifying opportunities for US companies, and countering influence from Russia and China—it could effectively balance against China’s Belt and Road Initiative while reasserting US economic leadership in a critical region.

The Abraham Accords Caucus co-chairs and congressional committee leaders should organize regular briefings with both the administration and relevant private-sector stakeholders to explore how the United States can influence the development of IMEC and ensure opportunities for US companies. While Congress has advanced political and security integration initiatives, economic integration, which is foundational for regional peace and prosperity, has received less attention. IMEC and similar initiatives offer an opportunity for Congress to do more on this front. The Abraham Accords Caucuses should also establish staff-level working groups for frequent engagement on economic integration projects. Recent efforts by Representatives Brad Schneider (who joined the June congressional delegation) and Blake Moore to launch a House Abraham Accords Caucus trade working group offer excellent platforms for such briefings. Additionally, the Abraham Accords Caucus should coordinate with the US Department of Commerce to identify businesses and industries that could benefit from regional integration, generating district- and state-level connections that strengthen Middle East prosperity.

Recommendation three: Formally authorize and support the Abraham Fund and prioritize regional Abraham Accords projects for US International Development Finance Cooperation support.

After the signing of the Abraham Accords, the United States, Israel, and the UAE established a $3 billion fund to support private-sector investments and development initiatives advancing regional economic integration. Efforts by the US International Development Finance Cooperation (DFC) late in the first Trump administration attempted to energize the fund, including a call for proposals for projects in Morocco and a $50 million commitment from Uzbekistan. However, since a 2021 interagency review under then-US President Joe Biden, no public activity has been registered regarding the Abraham Fund.

In 2023, Congress signaled continued interest in supporting economic integration through Section 8 of the RINA, which would have authorized the creation of the “Abraham Accords, Negev Forum, and Regional Integration Opportunity Fund” with $105 million, enabling the US secretary of state to support interagency projects including the Abraham Fund. While this number was far lower than the Abraham Fund’s announced $3 billion, it demonstrated robust bipartisan support for US diplomatic leadership and the potential for a rigorous approach to leveraging development finance. Congress should build on the RINA example by authorizing and appropriating funds for regional economic integration projects while maintaining the current framework for special envoy leadership of the fund and clarifying the role of such an envoy in fund dispersal. By building on recent changes to DFC through the National Defense Authorization Act for Fiscal Year 2026 , Congress can advance the Abraham Fund in parallel with other new initiatives.

Institutionalize and expand US diplomatic leadership on the accords

Recommendation four: Allow exceptions for a dual-hatted Abraham Accords envoy.

Both the Biden and Trump administrations have demonstrated commitment to senior official engagement on expanding the Abraham Accords. Under Biden, this included the appointment of Dan Shapiro, former ambassador to Israel, as the first Abraham Accords envoy. In the National Defense Authorization Act for Fiscal Year 2024, Congress codified the role of Special Envoy for the Abraham Accords, Negev Forum, and Related Integration and Normalization Fora and Agreements. However, despite the creation of this new role, no one has been nominated to the Senate-confirmed position. Members of Congress have expressed interest in seeing the vacant slot filled, including in a widely signed letter in January 2025. One possible reason for the vacancy is that legislation codifying the role explicitly requires that the individual “. . . shall not be a dual-hatted official with other responsibilities,” which may have discouraged both the Biden and Trump administrations from making a nomination. While there is significant value in having a senior official dedicated to advancing the Abraham Accords, the reality is that the kinds of strategic economic, security, and diplomatic cooperation associated with the accords can overlap with existing portfolios within the US government. For example, Special Envoy Steve Witkoff engaged on the Abraham Accords, but this represents just one of his many priorities.

Congress should consider modifying this restriction, enabling more senior US officials with synergistic portfolios to fill the position. This would enable the administration to formally designate a “lead” for the accords, elevating their priority.

Recommendation five: Authorize the State Department to lead a new strategic multilateral forum reflecting US and regional priorities.

While the Negev Forum had a robust start in 2022, a new strategic approach is needed to operationalize the goals of the Abraham Accords. Congress should direct the State Department to develop an updated plan for a new multilateral forum that regularly brings together senior officials, advancing strategic US and regional priorities in energy, investment, and security—topics not fully covered by the Negev Forum. This forum should learn from the disruption that the Negev Forum has experienced over the past two years and adapt to evolving regional dynamics. Congress should consider constructs similar to previous regional integration legislation, such as the Deterring Enemy Forces and Enabling National Defense (DEFEND) Act and the Learning Integrated National Knowledge for the Abraham Accords Act, which authorize specific objectives and activities for the executive branch to carry out and require measurable progress—through strategies, reports, and direct action—to meet congressional intent. Priority areas for multilateral coordination among accords countries include:

• Regional security cooperation: While the present environment might not be conducive to a comprehensive security partnership, a new multilateral forum should incorporate a pathway for regional security cooperation. This could include building on existing platforms such as the Comprehensive Security Integration and Prosperity Agreement (C-SIPA) and leveraging ideas associated with past initiatives, such as the Middle East Strategic Alliance. Section 1299 of the recently passed National Defense Authorization Act for Fiscal Year 2026 provides a foundation for the further expansion of C-SIPA by requiring an assessment of the agreement’s strategic importance and its potential expansion.
• Traditional energy: Many Gulf states are seeking to diversify their economy away from fossil fuels. However, growing energy demand and the need for resilient, diverse energy systems mean that traditional energy sources will remain a critical part of the equation for the foreseeable future. Consequently, Israel, Egypt, and others have continued to develop natural gas and other traditional energy sources and have worked to integrate their projects across the region, leading to regional bodies such as the Eastern Mediterranean Gas Forum, which includes both Israeli and Palestinian representation. In line with Trump’s executive orders titled “Unleashing American Energy,” the State Department should use a revived accords multilateral framework to explore how initiatives like the Eastern Mediterranean Gas Forum can support regional economic integration.
• Investment: In addition to traditional energy, the State Department should encourage more integration in the financial space, including cooperation on regional investments and domestic barriers to intra-regional investments. This could include new forms of cooperation, such as around coordinated regulation of cryptocurrency consistent with the goals of the recent GENIUS Act. While this will take time and trust to build, integrating wealthier states with regional entrepreneurial projects would allow for an immediate and tangible demonstration of how the Abraham Accords advance participants’ prosperity. Efforts to advance investment and financial partnerships are familiar to Congress. Section 9 of the RINA, a bipartisan effort by the then-leadership of the Senate Foreign Relations Committee and all four Abraham Accords Caucus co-chairs in the Senate, outlines a directive for the special envoy for the Abraham Accords to negotiate the creation of such a financial forum.

Mobilize and deepen people-to-people and legislative exchanges

Recommendation six: Authorize and appropriate funds for interfaith religious dialogues to support tolerance and understanding across Abraham Accords countries.

The second paragraph of the Abraham Accords declaration supports promoting “interfaith and intercultural dialogue” to advance the accords’ mission of peace and prosperity. However, no State Department grants have yet been publicly made available to support interfaith dialogues across Abraham Accords countries. Such grants could support the work of organizations such as the Mimouna Association, which connects Jewish and Muslim youths through interfaith programming. The State Department’s reluctance to issue such grants contrasts with a bipartisan and bicameral effort by all eight House and Senate co-chairs of the Abraham Accords Caucus who formally requested their issuance in 2023. In addition to encouraging the use of existing funding for such efforts, the Senate included $1 million for such grants in Section 10 of the RINA. While the act remains only proposed legislation, Congress should revisit the oversight and appropriations efforts from 2023 and renew calls for interfaith and intercultural dialogue grants. The Trump administration has clarified that advancing and expanding the Abraham Accords is a priority. The Abraham Accords declaration clearly supports interfaith dialogues, and the promotion of such dialogues in the Middle East is particularly important in the current environment, as the region seeks to move past historical biases toward new bonds. Few interfaith efforts are as worthy of support.

Recommendation seven: Expand bilateral-focused congressional travel to Abraham Accords countries to support the accords.

While more than a dozen congressional delegations travel to the Middle East annually and engage with Abraham Accords partner countries, fewer delegations travel with the explicit objective of supporting regional integration. Unfortunately, even fewer congressional delegations spend sufficient time in a partner country to build the government-to-government ties essential for moving Abraham Accords countries toward further integration. The Abraham Accords Caucus, or another member-driven initiative, should organize more regular congressional delegations to Abraham Accords partner countries. These delegations should focus on specific projects or initiatives that can generate tangible improvements in bilateral cooperation, such as trade, and ultimately promote regional integration. Congress should look to the US Departments of Commerce, State, and Agriculture to help identify issues and topics that members can use to advance the bilateral relationship toward greater integration. Agencies can also assist in supporting the identification of shared commercial interests or frictions based on members’ constituencies.

Model legislation annex

The following legislative text is provided solely for educational and informational purposes as illustrative “model” language. It is not intended to advocate for or against the passage of any particular bill, nor to influence specific legislation pending before Congress. The sample provisions are offered to demonstrate how recommendations in this report could be operationalized in statutory form. Inclusion of this text should not be construed as lobbying activity but, rather, as a nonpartisan resource for policymakers, researchers, and stakeholders.

Fellow

Adam Kozloski

Nonresident Senior Fellow, N7 Initiative

Indo-Pacific Security Initiative Rafik Hariri Center & Middle East programs

Indo-Pacific Middle East

Through our Rafik Hariri Center for the Middle East and Scowcroft Middle East Security Initiative, the Atlantic Council works with allies and partners in Europe and the wider Middle East to protect US interests, build peace and security, and unlock the human potential of the region.

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When it comes to the beginning of the China-Iraq relationship, there are a number of starting points. Some are framed within the longue durée and civilizational discourse favored by the Chinese and cherished by the Iraqis. For instance, in his March 15, 2023, speech introducing the Global Civilization Initiative, Chinese President Xi Jinping invoked ancient cross-cultural exchange as the foundation of China’s modern outreach. Chinese officials talk about Iraq in similar terms. When Cui Wei, China’s ambassador in Baghdad, visited a local research center, he opened by recalling that “our ancestors—more than two thousand years ago—built the ancient Silk Road for friendly communication with the countries of the world . . . As for Iraq, it is a shining pearl on the Silk Road, which left China and Iraq with good memories.” In this narrative, Abbasid-era trade brought Chinese papermaking, gunpowder, printing, compasses, silk, porcelain, and tea to Iraq and, through Iraq, to the wider Middle East and Europe. In return, astronomy, calendars, medicine, spices, and arts moved eastward into China. This semi-mythical view of the Silk Road allows Beijing to distinguish itself from Western powers and present its presence in Iraq as rooted in deep history rather than modern geopolitics. 

Alongside this civilizational rhetoric sits an official diplomatic starting point, and these two stories are mutually enhancing. China recognized the Kingdom of Iraq in 1942, though ties remained limited. A substantive relationship emerged after the 1958 coup led by Abd al-Karim Qasim and the two countries formally established diplomatic relations on August 25, 1958. Beijing viewed Qasim’s coup as part of a broader anti-imperialist realignment and saw Iraq through the lens of Cold War polarization. The Iraqi Communist Party’s strength reinforced this perception. During this period, China’s embassy in Baghdad became a key hub for distributing Maoist literature, part of Beijing’s effort to export revolutionary ideology. 

A third foundation of the two countries’ relationship is personal and ideological, as demonstrated through figures such as former Iraqi President Jalal Talabani and, later, Adil Abdul-Mahdi. Talabani visited China in 1955 and met Premier Zhou Enlai, seeking support for the Kurdish national movement in Iraq. China declined, and Talabani later recalled realizing that Beijing’s stance on national questions was incompatible with Kurdish aspirations. Despite this refusal, he remained drawn to Maoist thought. Material links also emerged early: During the Great Leap Forward famine, Iraqi dates became an important ration for Chinese households, a memory now invoked in cultural exchanges pairing Iraqi dates with Chinese tea. These civilizational, diplomatic, personal, and material strands gave China a multilayered story about its presence in Iraq and prepared the ground for the more strategic phase that followed. 

The modern relationship: War, weapons, and debt 

The modern China-Iraq relationship took shape in post-Mao China, especially during the 1980s. By the onset of the Iran-Iraq War, China had begun prioritizing economic development and external markets—priorities later embodied in the Belt and Road Initiative (BRI). But Beijing’s approach to the two countries and their conflict was never purely economic. Deng Xiaoping saw an opportunity to counter Soviet influence as Moscow appeared to pivot toward Tehran. According to historian Pierre Razoux, China pursued three goals: containing the Soviet Union, expanding markets, and maintaining a balance between the two belligerents. 

In practice, Beijing discreetly armed Iraq while avoiding any outcome that might destabilize Iran. Chinese shipments included T-59 and T-69 tanks (copies of the Soviet T-55 and T-62), Type 59 towed field guns (copies of the 130-milimeter M-46), Type 56 assault rifles (copies of the Soviet Kalashnikov), and millions of shells and assorted munitions. Throughout the war, China became Iraq’s third-largest arms supplier, after the Soviet Union and France. This arms trade generated substantial Iraqi debt and Chinese claims became the largest portion of Saddam Hussein’s external war debt, including roughly $8.5 billion in commercial obligations. These debts later provided Beijing with leverage as Iraq reentered the international system after 2003. 

The 1990–2003 sanctions era further shaped the economic relationship. Iraq’s isolation created openings for Chinese firms willing to operate under sanctions. In 1997, the China National Petroleum Corporation (CNPC) signed a production-sharing agreement (PSA) for the al-Ahdab field in the southern Iraqi city of Kut—an uncommon contract model in Iraq, where service contracts had become the norm after the 1970s nationalization. Baghdad’s weakened negotiating position and China’s opposition to sanctions facilitated the deal. Although the PSA did not fully materialize in the 1990s, it laid the contractual groundwork for Beijing’s return in the post-Hussein era. 

Talabani turns to Beijing for debt relief

After 2003, Talabani’s long-standing ties with China became politically consequential. While serving with the US-run Coalition Provisional Authority in 2003, he traveled to Beijing. China reopened its Baghdad embassy in 2004. The decisive moment came in 2007, when Talabani, as Iraq’s president, returned to China to negotiate debt relief. Beijing agreed to cancel all Iraqi sovereign debt and 80 percent of commercial debt—roughly $6.4 billion. This forgiveness cleared the way for reviving pre-2003 energy contracts. 

When the Ahdab project was relaunched, its PSA was converted to a service contract aligned with Iraq’s post-nationalization model. Chinese officials cast the project as a flagship for renewed cooperation.  

China’s emergence as a major oil partner aligned with the preferences of Iraq’s new Shia-led political class. Reporting from 2008 indicated that Iran encouraged Iraqi authorities to steer contracts away from US oil majors. For many Shia actors, Western oil companies symbolized the risk of external interference—a view shaped partly by the legacy of the 1950s struggle over Iranian oil nationalization. Chinese firms, by contrast, were seen as politically neutral and commercially pragmatic. Their willingness to operate amid insecurity, corruption, and low margins further strengthened their position. 

As ties deepened, Iraqi leaders sought broader economic engagement with China. After Talabani’s visit, then Prime Minister Nouri al-Maliki traveled to Beijing in 2011 to solicit Chinese participation in infrastructure and power generation to “help Iraq restore its own industry.” The partial withdrawal of US forces then opened additional space for China. With much of Iraq’s oil revenue consumed by salaries and routine government spending, officials looked for alternative ways to finance major projects. Prominent Iraqi politician Ahmed Chalabi proposed borrowing from China for large-scale infrastructure—a concept that fed into the 2019 “oil-for-infrastructure” framework. 

Prime Minister Adil Abdul-Mahdi’s 2019 trip to Beijing marked the high point of this approach. He described China as a partner for rebuilding Iraq’s infrastructure and embraced an explicitly pro-China development narrative. In an op-ed for China Daily, he argued that “a new world is emerging as the old one disintegrates” and cast the BRI as an inclusive path to long-term mutual benefit. The delegation’s message—with its emphasis on speed, efficiency, and technology transfer—captured Baghdad’s hope that China could deliver what Western firms, in Iraqi eyes, had not. 

‘Everyday dependence’ leads to lasting ties

These elite choices reflect deeper social and economic shifts. Iraq’s 2024 population census revealed that the country is urbanizing rapidly: More than 70 percent of Iraqis now live in cities. Urban households demand appliances, cars, electronics, and clothing, but face limited purchasing power. Chinese products—cheaper and increasingly familiar—meet these households’ needs. Over time, this has created a form of everyday dependence on Chinese goods that reinforces the broader geopolitical relationship. Affordability has gradually translated into acceptance, and acceptance into trust. 

These economic dynamics intersect with a changing political discourse. Recent election cycles in Iraq have seen a sharp decline in the prominence of democratic norms—rule of law, human rights, institutional accountability—in party narratives. As Western states also appear less committed to these values, Iraqi elites increasingly feel less pressure and elevate other priorities. Concepts linked to China’s development model—service provision over rights, infrastructure over institutions, efficiency over process—have gained traction across the political spectrum. 

China did not originate these trends, but its model resonates with and, in some cases, strengthens them. Beijing offers investment without political conditions, engagement without democratization requirements, and diplomatic rhetoric emphasizing non-interference in domestic politics—particularly in places such as Iraq. For many Iraqi leaders, this combination is appealing. And for many Iraqi consumers, China’s presence is already embedded in daily economic life.

Together, these forces—historical narratives, wartime ties, debt diplomacy, energy cooperation, and structural shifts in Iraq’s society and political culture—have produced a relationship that is both durable and expanding. While Iraq’s future trajectory will depend on broader regional and global dynamics, China’s position in the country is now anchored in multiple layers of the Iraqi state and society, making it a long-term feature of Iraq’s economic and geopolitical landscape. 

Where China is most active in Iraq

China has established an expansive and multisectoral presence in Iraq, spanning energy, telecommunications, consumer markets, and education. Its strategy appears aimed at deepening Iraq’s economic reliance on China across vital sectors, thereby embedding Beijing’s influence within Iraq’s long-term development trajectory. Bilateral trade between the two countries amounted to $54 billion in 2024, and China is the major source of foreign direct investment in Iraq, contributing $34 billion in 2023. 

Energy dominance 

For decades, China’s interest in Iraq has centered primarily on its vast energy resources. This manifests in purchasing Iraqi oil and developing Iraq’s energy infrastructure—both of which are vital to China’s energy security and geopolitical ambitions. In 2024, China imported slightly more than 1 million barrels per day (bpd) from Iraq, or 10 percent of its total crude imports. 

Chinese state-owned firms dominate the oil sector in Iraq, which is the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia and home to the world’s fifth-largest reserves. Reports suggest Chinese companies manage about one-third of Iraq’s 145 billion barrels of proven reserves and hold direct shares in roughly 24 billion barrels. They produce two-thirds to three-quarters of Iraq’s output of slightly more than 4 million bpd, with CNPC alone accounting for half of total production. 

Initially limited to state firms, Chinese investment has recently expanded to include private energy companies attracted by Baghdad’s favorable contract terms. These firms were licensed in August 2025 to develop several new fields and plan to add 500,000 bpd to Iraq’s production by 2030, as Baghdad targets 6-million-bpd capacity. 

While Beijing’s role secures its energy interests, it also deepens Iraq’s tilt toward the East—an orientation encouraged by Shia political factions allied with Iran. These groups promote stronger ties with China (and, to a lesser degree, Russia) as a means of reducing dependence on Washington and circumventing US pressure. 

Mindful of the optics of deepening ties with China, Prime Minister Mohammed Shia al-Sudani sought to reengage US energy firms. During his April 2024 visit to the United States, he met oil executives in Houston and urged them to renew investment. The effort appeared to bear some fruit. In October 2025, Exxon Mobil signed an agreement to re-enter the Iraqi market and operate the Majnoon field in Basra, after its full exit from Iraq in January 2024 and subsequently handing over of the West Qurna 1 field to PetroChina. 

Telecommunications and digital infrastructure 

China’s involvement in Iraq’s telecom sector predates Hussein’s fall. Chinese company Zhongxing Telecom Co. first entered Iraq in 1999, when the country remained under international sanctions. Around the same time, Huawei began clandestinely building a fiber-optic network for Iraq’s military, which was later bombed during a 2001 US-UK air raid—an episode that led to Washington’s view of Huawei as a national security threat. 

In 2003, following the overthrow of the Baath regime by the United States and its allies, Huawei returned to Iraq’s emerging telecom market via Asiacell, the country’s leading carrier. In 2011, Robert C. Fonow, a US State Department adviser to Iraq’s Telecommunication Ministry, told the Washington Times that Huawei effectively “owned” Iraq’s telecom sector, alleging the firm had received more than six hundred contracts worth billions of dollars—some indirectly financed by US reconstruction funds.  

Today, Chinese technology firms remain central to Iraq’s digital expansion. In June 2025, Asiacell and China Mobile International (CMI) signed a memorandum of understanding (MoU) to expand enterprise-level digital services, billed as accelerating Iraq’s digital transformation through CMI’s global expertise. Huawei also partnered with Iraq’s Communication and Media Commission, Iraq’s top regulatory body in the field, to train personnel in cybersecurity. Iraqi officials have publicly encouraged deeper Chinese investment in telecommunications, signaling a sustained partnership in digital infrastructure. 

Consumer markets and renewable energy 

China’s commercial reach extends to Iraq’s consumer markets—from electronics to vehicles to solar energy. In the first half of 2025, Iraq imported eighteen thousand Chinese cars worth $639 million, a 30-percent increase over the same period in the previous year. The Kurdistan region accounted for the largest share, as consumers favored affordable yet feature-rich Chinese vehicles. For example, a 2025 MG GT sedan sells for about $8,850, compared with around $20,000 for comparable Asian or Western models. Similarly, a BYD hybrid sport utility vehicle (SUV) retails for $24,300, well below competitors’ SUVs. Local dealers report that “buyers who once paid more for American cars from Dubai now prefer Chinese cars with leather interiors, large screens, and panoramic roofs at a fraction of the cost.” 

Chinese solar panels have also surged. According to the Washington-based Attaqa Energy Research Group, Iraq ranked third in 2025 among Arab-majority states for Chinese solar imports. In the year’s first half, Iraq imported 0.9 gigawatts of solar panels—a nearly 600-percent increase in terms of solar generation capacity from 2024—driven by state-backed projects to install solar systems in homes, schools, and public buildings. 

Education, media, and cultural outreach 

Alongside its economic footprint, China has ramped up soft-power efforts to win Iraqi hearts and minds. Keen to counter critical media coverage of China, Chinese diplomats at times engage with Iraqi media—particularly to push back against criticism on issues such as the Uyghur crisis in Xinjiang. 

Chinese universities are offering around eighty scholarships to Iraqi students for the 2025–2026 academic year. The Chinese consulate in Erbil has backed the 2019 establishment of a Chinese language program at Salahaddin University in Erbil—one of only two such programs in the Middle East. It also helped create a China Studies Center at Sulaimaniyah University, which publishes a Kurdish-language magazine introducing China and supports translation of Chinese books.  

China’s exchange programs regularly bring Iraqi civil servants and professionals to Chinese institutions for technical training. The Chinese consulate in Erbil now plans to establish the Great Wall organization to strengthen bilateral relations by bringing together Iraqi Kurds who have visited China through various Beijing-sponsored exchange programs. Beijing has further expanded scientific cooperation by signing an agreement with Iraq in 2025 to develop a “peaceful nuclear technology program,” including construction of Iraq’s first nuclear training reactor for academic use in nuclear physics and radiological sciences. The initiative, led by Minister of Higher Education Na’im al-Abboudi—a senior member of the Iran-backed Asa’ib Ahl al-Haq movement—has drawn scrutiny in Washington for its potential geopolitical implications. 

Beijing has a distinct approach to Kurdistan 

China’s relationship with the Kurdistan Region of Iraq (KRI) differs in tone and texture from its engagement with federal Iraq, yet both align with Beijing’s broader strategy. Energy remains the core of China-Iraq relations, and China’s activities in the KRI ultimately reinforce that foundation. However, the China-Kurdistan relationship appears more diverse, shaped by the autonomous region’s social openness and China’s preference for a low-risk, apolitical presence. 

Historically, the relationship has two main strands. The first dates to Talabani’s 1955 visit to Beijing and his fascination with Maoism, which shaped aspects of his political worldview and indirectly influenced the early identity of his party, the Patriotic Union of Kurdistan (PUK). After 2003, the PUK became essential for rebuilding China-Iraq ties, and it is no coincidence that every Iraqi ambassador to China since 2003 has been from the PUK, reflecting both personal networks and political continuity. 

Another key moment in the relationship was China’s opening of its consulate in Erbil in 2014. At the ceremony, then Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani described it as “the first step toward building a new phase in bilateral relations,” signaling opportunities in politics, culture, infrastructure, and commerce. As the KRG’s former foreign relations chief, Falah Mustafa, put it, China’s permanent seat on the UN Security Council gives its presence in Erbil symbolic and practical weight. Yet Beijing has remained cautious in its political engagement with Kurdish authorities, consistent with its 1991 abstention on UN Resolution 688 condemning Hussein’s repression of the Kurds. 

Despite this reticence, China has built a wide-ranging network of relationships. The Chinese consulate in Erbil regularly invites Kurdish political parties, universities, media outlets, and government ministries to short study programs in China. This resembles earlier US public diplomacy programs but is more ideologically neutral. Beijing makes a point of engaging all political currents, including leftist, nationalist, and Islamist parties. As a former KRG adviser noted in an interview with one of the authors, “During a trip to China, I met a member of the Kurdistan Communist Party and a cadre of an Islamic party attending the same course.” Kurdish officials appear increasingly attentive to China’s rise and its willingness to support development in Iraq and Kurdistan. This was reflected in comments by Sulaimaniyah Governor Haval Abubakr, who recently described China as “the America of the East.” 

China’s expanding activity in the KRI also intersects with the US-KRG relationship. As the United States has constructed a massive new consulate complex in Erbil, intended as a physical symbol of long-term commitment, China has also signaled interest in building a new consulate of its own. However, while the KRI has deep diplomatic and security ties with the United States, its relationship with China remains overwhelmingly concentrated in trade and cultural domains. Indeed, this is a deliberate choice on Beijing’s part. By avoiding security and identity questions, China cultivates what might be described as a “decaf” relationship—active and useful, yet stripped of political commitments. 

Kurdistan’s openness to the world enables this strategy. Travel is highly valued socially, and China’s invitations arrive at times when economic hardship—such as salary delays by Baghdad—limits mobility. “I managed to have a trip in a time of salary crises,” a Sulaymaniyah lecturer interviewed for this report noted after joining a Chinese study program. This openness has provided fertile ground for Beijing’s soft-power outreach. 

China’s public diplomacy is more developed in the KRI than in the rest of Iraq. It promotes familiarity with Chinese institutions, culture, and political narratives through sustained engagement. This has shifted public perceptions and increased interest among Kurdish students and professionals. As noted earlier, Beijing has supported institutions such as China in Kurdish, the China Studies Center in Sulaimaniyah, and the Chinese Department at Salahaddin University, with plans for additional language programs. Events like Chinese Film Week and commemorations of the “80th Anniversary of the Victory of the Chinese People’s War of Resistance Against Japanese Aggression” give China cultural visibility and institutional depth. Collectively, these centers make cultural programming and exchanges smoother and more consistent. 

This network also supports China’s commercial aims. The long-standing Asiacell-Huawei partnership is illustrative. Asiacell, headquartered in Sulaymaniyah, is Iraq’s largest telecom company, and its relationship with Huawei began on the eve of the 2003 US invasion. In February 2003—anticipating conflict—Huawei scouted opportunities in Kurdistan. When Washington issued its ultimatum to Hussein in March, Huawei moved Asiacell staff to Shenzhen for emergency training. In 2023, the two firms celebrated the twentieth anniversary of their “precious partnership,” outlining plans to integrate artificial intelligence into Iraq’s telecom services. Today, Huawei is the primary equipment provider to all major Iraqi telecom operators, a position rooted partly in its early foothold in the KRI. 

China’s presence also shapes Kurdistan’s sociopolitical landscape. Chinese goods—from household items to solar panels to electric vehicles—dominate local markets. As a Sulaymaniyah trader interviewed for this paper explained, “You cannot produce anything in Kurdistan, as the Chinese make it cheaper, even if it’s a pillow cover.” This economic dependency affects local production and, over time, influences political imagination. Concepts associated with China’s governance model—especially centralized party control and the importance of family connections—mirror existing patterns and appeal of China in Kurdistan and federal Iraq. 

It is important to note that when it comes to strategic economic sectors, the KRG is not linked to China in the same way the federal government and the areas under its control are. For example, while the federal government’s energy sector is dominated by Chinese firms, there is only one Chinese-owned company—Addax Petroleum, owned by Sinopec—operating in the Kurdistan region’s oil sector.

How this growing closeness affects US policy  

As China prioritizes securing new markets abroad and ensuring energy security at home, Iraq has become integral to Beijing’s geoeconomic ambitions and economic statecraft in the Middle East region. Over the past two decades, China’s expanding presence has begun to shape Iraq’s economic future, regional role, and relations with the United States. Baghdad now faces the delicate task of balancing ties with both powers to avoid alienating either side. There is an economic and geographical logic driving Iraq’s relationship with China. China is the world’s largest energy importer, and Iraq—one of the world’s top oil producers—naturally falls within Beijing’s orbit of interest. Iraq’s infrastructure gaps and development needs also make Chinese capital and expertise attractive, if not indispensable, while Chinese consumer goods remain affordable for most Iraqis. 

However, the broader implications of this relationship cannot be understood solely through economics. China’s increasing footprint unfolds against the backdrop of intensifying US-China rivalry and the global drift toward multipolarity. Iraq is gradually emerging as a site of subtle competition between these two powers—particularly in areas such as infrastructure (especially energy), digital networks, and potential land-based transit corridors. Yet, given the deeply interconnected nature of today’s global economy and Iraq’s heavy reliance on external actors for technology, investment, consumer products, and security, it is unrealistic to expect Iraq to de-link from either China or the United States. 

Beyond economic logic, Iraq’s deepening engagement with China reflects political calculations and rationale at the domestic, regional, and global levels. Globally, China’s ascent since the mid-2010s has offered states like Iraq an alternative pole through which to diversify partnerships and reduce dependence on the West. Engagement with Beijing thus forms part of Baghdad’s broader hedging strategy—maintaining ties with multiple global actors to avoid overreliance on any single one. 

Domestically, this orientation intensified as Shia parties consolidated unprecedented control of the Iraqi state, particularly after the war against the Islamic State of Iraq and al-Sham (ISIS) and the weakening of Kurdish autonomy and political influence in Iraqi politics after the unsuccessful Kurdish independence bid in 2017. Many among Iraq’s new Iran-backed power brokers view China as a politically neutral strategic partner—one that provides investment without demanding reforms or pressing governance conditions. At the elite level, China appears to have the upper hand in the soft-power contest with Washington concerning the appeal of the two countries and their approaches to Iraq. While Washington’s retreat from democratization and aid has eroded its image, China’s cultural outreach, development model, and messaging resonate with many Iraqis.  

The Iran factor

Regionally, openness toward China has grown since the early 2010s, amid the rise of the Iran-led Shia axis. Many dominant Iraqi Shia parties maintain deep ties with Tehran, and their affinity for China aligns with Iran’s own pursuit of a closer relationship with Beijing. Aware of the risks of being perceived as leaning too heavily toward China—and also Iran, particularly in the aftermath of the October 7, 2023, conflict between Israel and Gaza and the gradual weakening of the Iranian-led axis—Baghdad has recently sought to rebalance its approach by inviting more US investment in its energy sector. 

Iraq’s recent deals with US energy companies such as ExxonMobil, Chevron, and others reflect the recognition among the dominant Shia political class that excessive dependence on China risks political backlash and economic vulnerability, particularly as Washington intensifies efforts to contain Beijing’s global influence. This dynamic highlights the limits of hedging for resource-rich countries like Iraq that lack the structural leverage to shape regional outcomes or reduce dependence on the United States. 

It remains unclear whether Iraq’s renewed outreach to US companies signals a genuine attempt at balanced relations or a tactical effort to ease US pressure determined to squeeze Iraq as part of its maximum pressure campaign against Iran. What is clear is that China’s expanding economic role in Iraq is a growing concern for Washington. Greater Chinese market share means shrinking space for US businesses and, more broadly, a potent erosion of US influence that is more than symbolic. Given that the post-2003 Iraqi order was created through US intervention—and later saved from ISIS’s existential threat through a massive US-led coalition—China’s growing role in Iraq reflects a deeper transformation in the landscape of external influence shaping the country. 

Beijing’s digital infrastructure deals, including telecommunications and cybersecurity, could create new vulnerabilities for US-Iraq security cooperation not unlike Huawei’s engagement with Iraq under Hussein. The use of Chinese companies in strategic sectors—ports, refineries, and data networks—risks limiting the space for US and Western governments and companies’ engagement with Iraq. Crucially, Iraq’s ambitious Development Road Project (DRP) connecting the Gulf to Turkey and Europe could also intersect with China’s BRI, particularly its sea route portion, and diversify Beijing’s options for trade with the Middle East and from there to Europe. Despite a cool initial reception, Beijing now appears open to supporting the Iraqi DRP, perhaps recognizing its value in shortening overland trade routes with Europe. This all fits into China’s geoeconomic strategy, expanding trade, increasing access to critical energy resources, and creating new markets for Chinese companies. 

However, this is not the entire story. Iraq appears to follow a compartmentalized approach to relations with both the United States and China, whereby Baghdad has cultivated deeper ties with China in trade, energy, and telecommunications while remaining heavily dependent on the United States in finance, security, and diplomacy. Revenue from Iraq’s oil exports flows into the Federal Reserve Bank of New York, from which the Central Bank of Iraq withdraws regularly. Iraq’s monetary and financial systems thus remain deeply tethered to the US financial system and Washington’s oversight. Any disruption in this relationship—such as sanctions or delayed clearances—could trigger liquidity crises in Iraq’s fragile economy. 

Iraq’s security dependence on Washington also remains quite firm for now. The Iraqi security forces rely on US intelligence, equipment, and training for operations against ISIS and for broader defense needs. Advanced systems such as F-16s and Abrams tanks further anchor this relationship. Iraq sits at the intersection of three core US priorities: countering Iranian influence, stabilizing global energy markets, and—after the transformations set off by October 7, 2023—rebuilding a regional order friendly to Washington. As part of this broader regional reality security links remain important for both sides, particularly as Iraq’s Shia ruling class feel threatened by the developments over the past couple of years.  

Diplomatic asymmetry is even deeper: Iraqi prime ministers routinely seek White House invitations as symbols of legitimacy and international recognition. Since 2003, Iraqi leaders at the presidential, prime-ministerial, and foreign-ministerial levels have visited Beijing on numerous occasions, yet the only senior Chinese official of comparable rank to visit Iraq during that period was Foreign Minister Wang Yi in February 2014. Iraq invests in the relationship far more than China does. 

This produces a paradox: Iraq remains reliant on US protection but is increasingly integrated into China’s commercial ecosystem. Unless the United States expands its economic engagement, its influence will continue to erode. For much of the Shia elite, China—not the United States—is the preferred long-term partner. Yet Iraq cannot function without engagement with both in some form. Historically, Iraqi attempts to shift too far toward one camp produced destabilization, including coups during the Cold War. The country’s social, economic, and security needs, along with its geopolitical position, require a diversified and compartmentalized approach to major global powers—though not one that entails equal reliance across all sectors. 

Energy is a key arena. China is a major importer of Iraqi oil while increasingly serving as Iraq’s primary supplier of solar panels and renewable technologies. At the same time, China’s domestic energy consumption is shifting. The International Energy Agency (IEA) notes that China’s use of gasoline, jet fuel, and diesel—totaling 8.1 million bpd—declined slightly in 2024 and stood 2.5 percent below 2021 levels. As global oil demand plateaus and buyers gain greater leverage, Iraq has become increasingly anxious not to lose China as a primary customer. 

Demographic and economic trends inside Iraq are particularly important as they further push the country toward China. Rapid urbanization, high birth rates, and low incomes make Iraqi households dependent on inexpensive imported goods. China is often the only viable supplier. As Iraqi society and consumption patterns evolve, so will its economic and political tilt toward Beijing. By contrast, the United States has lost most of its non-military leverage—aside from sanctions and coercive tools—partly due to years of inconsistent engagement. Moreover, the nature of Iraq’s rentier economy, and its governance model built on patron-client relations and the informal patronage networks that sustain it, requires the rapid development of oil resources as the main pillar supporting this system. For the reasons outlined above, Chinese firms represent a more reliable option for Iraq to ensure the continued expansion of its oil sector and the conversion of those revenues into political power. 

Against this backdrop, Iraq’s trajectory suggests an ongoing use of hedging as its primary policy, albeit an uneasy one. Hedging is a strategic behavior through which a state avoids clearly aligning vis-à-vis two powerful actors, maintaining instead an in-between, ambiguous, flexible position. Over the past couple of years, the Shia Coordination Framework-led government under Sudani has noticeably embraced this posture. Yet Iraq’s hedging exercise remains constrained by internal and external pressures, particularly Iran’s influence. Tehran’s networks—militias, political allies, and economic ties—limit Baghdad’s freedom of maneuver. Other constraints include anti-normalization legislation in the Iraqi Parliament targeting Israel, which prevents Iraq from joining the Abraham Accords and expanding ties with US allies. The outcome of recent Iraqi parliamentary elections will likely reinforce this dynamic. Although Sudani’s coalition performed strongly, Iran-aligned militias and parties performed far better, ensuring that hedging will continue—but in a narrow and contested space at least for the foreseeable future. 

Sardar Aziz, PhD, is a researcher, columnist, and adviser, and a nonresidential affiliate at the IRIS center at the American University of Iraq, Sulaimani. He is a former senior adviser to the Kurdistan Parliament in Iraq. He has worked extensively on China and Iraq.

Mohammed A. Salih is a nonresident senior fellow in the Foreign Policy Research Institute’s National Security Program and a researcher and journalist based in the United States. He holds a PhD from the University of Pennsylvania and has written extensively for more than two decades on Iraq, Kurdish, and regional affairs.

MENASource Nov 5, 2025

Why China is here to stay in Iraq’s energy sector

By Jared Levy and Ben Van Heuvelen

Regardless of the specific makeup of the next Iraqi government, it is likely that Chinese firms will continue to enjoy an advantage.

Elections Iraq

MENASource Oct 28, 2025

US energy firms are returning to Iraq—but politics could undo their fortunes

By Raad Alkadiri

Al-Sudani’s rush to sign deals with US firms over the past few months is fundamentally about political survival, both his own and Iraq’s.

Energy & Environment Energy Markets & Governance

MENASource Oct 6, 2025

Can Iraq and Kuwait transform the Khor Abdullah waterway dispute into a regional diplomacy model?

By Rami Alkhafaji and Safwan Al-Amin

The dispute underscores the complexities of post-conflict border demarcation— and how legal disputes may multiply into geopolitical ones.

Iraq Maritime Security

The Iraq Initiative is driving policy-oriented programs and analysis that advance Iraq’s stability and sovereignty, regional integration, and democratic and economic development. It also aims to promote a strengthened US-Iraq partnership.

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The post In Iraq, China’s long game unfolds appeared first on Atlantic Council.

Executive summary

This report’s findings are meant to guide policymakers in making important decisions about safety, security, and sustainability in the space domain, as well as to better inform the public on these issues. The report explains why current US space policy, Department of Defense (DOD) acquisition programs, and commercial integration strategies by themselves are inadequate to address the growing threats from Russia in space. The report makes the case for the development of policies, practical strategies, and more effective acquisition programs to better address a range of potential futures, considering possible space-related actions by Russia’s political leadership.

Beyond recommending changes to US declaratory policy, this report details why the United States needs a more resilient space architecture. It examines how Russia’s nuclear threat—specifically, its designs to place a nuclear weapon in orbit, in clear violation of its obligations under international law—could alter the rationale for pursuing proliferated low-Earth orbit (LEO) constellations. This report also explores the kind of space architecture the United States would need during a conflict against a major power, and how the United States can further integrate the private sector and allies in pursuit of its national security objectives. Each of these issues carries significant near-term policy and acquisition implications.

This report explains why some US policymakers might be reluctant to take the necessary coercive action to compel acquiescence by Russian political and military leaders. This reluctance is driven by a Western sense of morality and “rightness,” an inherent right of self-defense mentality, and current conceptions of international humanitarian law. US anticipatory actions seeking to deter Russian malicious actions might prove unreliable because any anticipatory action will be a political decision based upon a Western mindset and worldview. This observation underscores that deterrence by denial of benefit—including resilience and active defense—should play a substantial role in military strategies, one even more substantial than cost-imposition efforts. Additionally, assurance and reassurance efforts directed toward Chinese and Indian leadership could help dissuade potential Russian aggressive behavior and deescalate crises.

This report’s analysis illuminates important defense and force planning considerations. Its three scenarios span a catastrophic nuclear detonation (NUDET) in LEO to debris-generating anti-satellite (ASAT) weapons to less aggressive action against commercial satellites. A qualitative assessment using a detailed framework highlights the relative importance of the methods used to dissuade potential aggression while also prevailing in conflict. In priority order, the relative importance of affecting Russian leadership’s decision calculus is: deterrence by denial of benefit; assurance and reassurance; and deterrence by cost imposition.

Finally, this report provides fifteen actionable policy and defense acquisition recommendations for advancing a comprehensive and practical framework to counter potential Russian aggression and escalation in space. Should dissuasion efforts fail and conflict in space occur, it is necessary that the United States, its allies, and commercial partners fight through Russia’s irresponsible and aggressive actions in space, while working to deescalate any crisis and seek a lasting peace.

John J. Klein, PhD, is a nonresident senior fellow in the Forward Defense program of the Atlantic Council’s Scowcroft Center for Strategy and Security. Klein is a subject matter expert on space strategy and also instructs space policy and strategy courses at the undergraduate, graduate, and doctorate levels at several universities around Washington, DC. He routinely writes on space strategy, deterrence, and the law of armed conflict. He is the author of the books Space Warfare: Strategy, Principles and Policy, 2nd Edition (2024), Understanding Space Strategy: The Art of War in Space (2019), and Fight for the Final Frontier: Irregular Warfare in Space (2023), along with a score of other book chapters and articles.

Klein is also a retired United States Navy commander, receiving his commission through the Navy Reserve Officer Training Corps program at Georgia Tech. He served for twenty-two years as a naval flight officer, primarily flying in the S-3B Viking carrier based aircraft. Klein supported combat operations in Iraq and Afghanistan. His tours included service as the executive officer of Sea Control Squadron Twenty-Four and the final commanding officer of the Sea Control Weapons School.

Clementine Starling-Daniels is a vice president at Beacon Global Strategies, the former director of the Atlantic Council’s Forward Defense program, and a nonresident senior fellow at the Council’s Scowcroft Center for Strategy and Security. At Beacon, she advises at the intersection of national security and technology policy, helping clients navigate evolving defense, intelligence, and technology landscapes. As a national security expert, her research explores how emerging technologies and operational innovation enhance US and allied deterrence, defense, and joint warfighter capabilities amid strategic competition with China and Russia. Her work particularly focuses on space strategy and policy, and on the role of special operations and unconventional warfare in modern deterrence and conflict.

As founding director of Forward Defense, Starling-Daniels led a team advancing research and thought leadership on the future of warfare. She spearheaded bipartisan commissions on Defense Innovation Adoption and Software-Defined Warfare, developing approaches to leverage technologies—including AI, hypersonics, autonomy, and space systems—to solve complex defense challenges. Earlier in her career, she served as deputy director of the Atlantic Council’s Transatlantic Security Initiative, guiding task forces on NATO force posture, military mobility, contested logistics, and Arctic security. She also supported NATO’s Public Diplomacy Division during key summits and gained extensive experience in NATO and EU defense policy and industrial cooperation.

This report was produced in accord with the Atlantic Council’s policy on intellectual independence, which states that the Atlantic Council and its staff, fellows, and directors generate their own ideas and programming, consistent with the Council’s mission, their related body of work, and the independent records of the participating team members. The Council as an organization does not adopt or advocate positions on particular matters. The Council’s publications always represent the views of the author(s) rather than those of the institution.

The Atlantic Council maintains strict intellectual independence for all of its projects and publications. Council staff, fellows, and directors and those who the Council engages to work on specific projects, are responsible for generating and communicating intellectual content resulting from Council projects. The Council requires all donors to agree to the Council maintaining independent control of the content and conclusions of any products resulting from sponsored projects. The Council also discloses sources of financial support in its annual reports to ensure transparency.

This report does not necessarily reflect the views of the US Department of Defense, the US Department of the Air Force, or any other institution with which either of the co-authors or any of the contributors are now, or have in the past been, affiliated.

The co-authors acknowledge with gratitude the sponsorship of the Smith Richardson Foundation for this project.

Forward Defense leads the Atlantic Council’s US and global defense programming, developing actionable recommendations for the United States and its allies and partners to compete, innovate, and navigate the rapidly evolving character of warfare. Through its work on US defense policy and force design, the military applications of advanced technology, space security, strategic deterrence, and defense industrial revitalization, it informs the strategies, policies, and capabilities that the United States will need to deter, and, if necessary, prevail in major-power conflict.

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The post Countering Russian escalation in space appeared first on Atlantic Council.

Executive summary

Financial-sector policymakers and financial service providers are facing both a real challenge and unique opportunity to drive economic inclusion for about three billion people and spur growth toward the Sustainable Development Goals (SDGs).

The good news from the World Bank’s Global Findex Database 2025 is that 79 percent of adults globally and 75 percent in low- and middle-income economies (LMIEs) now have a financial account of some kind. Mobile phones are even more ubiquitous, with 86 percent of adults globally and 84 percent in LMIEs having one, which in most contexts can be used to access financial services. This means about four out of every five people have the potential to save safely and borrow prudently to meet their financial needs and the potential to pay and be paid digitally. This is good news for the individuals, their families, and for these economies because, as the IMF has found,
financial inclusion serves as a catalyst for both economic participation and inclusive growth.

However, the majority of adults in LMIEs that have a financial account do not yet fully engage with the formal financial sector. Only 40 percent of adults in LMIEs (on average) saved formally and only 24 percent of adults in LMIEs (on average) borrowed from a formal financial service provider in the last year and even they do not necessarily have the type of credit they need.¹ There are, therefore, about three billion people who could actively engage in the formal financial sector, and they present both a challenge for financial sector leaders and an opportunity for accelerating inclusive growth.

The main reasons adults in LMIEs do not use formal digital financial services are affordability, lack of trust in service providers, and lack of products to meet their needs. Rapid advances in digital public infrastructure (DPI) and artificial intelligence (AI) have the potential to directly tackle these challenges. Together they can reduce costs, increase trust, and tailor products for individuals, thereby improving lives and driving growth:

• DPI has been endorsed by the Group of Twenty since India’s presidency in 2023.² Ninety-seven countries now have DPI-like digital payments; sixty-four countries have digital IDs, and 103 have data exchange—together reducing costs and increasing trust.³
• AI, by cheaply analyzing massive data sets, is turbocharging cost reduction and product tailoring, which translates into greater affordability and access for people on lower incomes.⁴

Yet, there are potentially problematic aspects to these exciting innovations. DPI has the potential for loss of data privacy (if privacy by design is not embedded), for rent extraction (if not an open-source platform), and for government surveillance (if DPI safeguards are not central).⁵ AI has the potential to turbocharge fraud, scams, and identity theft and compromise trust.⁶

Therefore, government financial-sector regulators and policymakers have urgent and important decisions to make about how to enact and enforce responsible guardrails in the financial ecosystem. These guardrails are essential so new customers have affordable, appropriate products, can trust their money and data are safe, and have effective recourse mechanisms if problems occur. National coordination at the highest level is essential, regional approaches including policy harmonization can be cost-effective, and urgency is imperative. Financial-service leaders also have key decisions to make about how to design affordable and responsible financial products that build trust, enable resilience, and foster financial well-being and economic growth. There is now a unique opportunity for financial-sector leaders to unleash economic potential for three billion people and accelerate inclusive growth.

Ruth Goodwin-Groen is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center. Goodwin-Groen brings thirty years of strategic and technical leadership in financial-sector development and financial inclusion in emerging markets to her current consulting practice, Goodwin-Groen Consulting. Her focus is on responsible digital financial inclusion and equality in financial services for women.

Goodwin-Groen is best known as the founding managing director of the United Nations-hosted Better Than Cash Alliance, which created a global movement from cash to responsible digital payments to achieve the Sustainable Development Goals. Alliance members and partners include over 113 governments, 229 companies, and most of the UN—accounting for over 90 percent of global gross domestic product.

Goodwin-Groen has a PhD in financial-sector development from the University of Bath, an MBA with distinction from Harvard Business School, and a Bachelor of Science with Honors from the University of Western Australia.

The author extends special thanks to those providing expert input on this paper: Isabelle Carboni, Expert Consultant; Eric Duflos, CGAP; Nicole Goldin, United Nations University-Centre for Policy Research & Atlantic Council; Leora Klapper, World Bank; David Porteous, Integral: Governance solutions; and Camilo Tellez-Merchan, Gates Foundation. She also deeply appreciates the input of Atlantic Council colleagues Josh Lipsky, Sophia Busch, and Juliet Lancey as well as those who contributed to the findings and recommendations of this report through their participation in two roundtable discussions at the Atlantic Council in April and October of 2025. See the Appendix for a list of the participants. This report was made possible in part by a grant from Tala.

New Atlanticist Oct 15, 2024

Advancing a twenty-first century approach to remittances

By Alisha Chhangani, Ananya Kumar

Valued at nearly $900 billion each year, global remittances have become a large portion of many nations’ gross domestic product. But transaction costs remain too high—a problem that policymakers should tackle at upcoming meetings in Washington and Rio de Janeiro.

Africa Americas

Issue Brief Sep 20, 2024

Toward a financial inclusion agenda for the global majority

By Nicole Goldin

Policymakers, investors, and innovators must advance a new financial inclusion agenda designed for the global majority.

Economy & Business Fiscal and Structural Reform

Issue Brief Nov 2, 2023

Asking the right questions: Can digital currency enable financial inclusion?

By Ananya Kumar

Cryptocurrencies and CBDCs have the potential to enhance financial inclusion. However, the lack of quantitative data makes it challenging to evaluate their impact. To assess their financial inclusion capacity, this paper builds a rubric for policymakers which includes layers of consideration.

Digital Currencies Economy & Business

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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The post A three-billion-person challenge: The rising global market for financial leaders appeared first on Atlantic Council.

• Defining the terms of the debate
• Europe’s missing Silicon Valley
• Geopolitics and the rise of tech sovereignty
• Trump actions spur renewed calls for greater independence
• Key issues:
  • Snowden’s revelations and the ‘kill switch’
  • US law enforcement access to data on European servers
  • The US u-turn on data flows
  • A single European data market
  • EU content moderation and free speech
  • Cybersecurity and cloud services
• Looking ahead: Transatlantic tensions will persist
• Seven recommendations for Brussels and Washington

Introduction

Over the past several years, the concept of digital sovereignty has become ever more central to European notions of competitiveness and economic resilience. Formerly a niche idea within the digital policy community, it has now gone mainstream with major European leaders, from European Commission President Ursula von der Leyen to former head of the European Central Bank Mario Draghi, calling for the European Union to achieve digital sovereignty.¹ It has also become integral to European debates about technological sovereignty and strategic autonomy, and even to trade policy. And as digital sovereignty has become more prominent in European discussions, it has shifted from being a vague aspiration to a concept that EU policymakers increasingly seek to put into operation—raising the possibility of future EU restrictions on procurement from companies outside Europe, as well as other regulatory measures.

Yet, despite its growing centrality in European digital debates, digital sovereignty still does not have a clear definition.² At times, it seems to have been encompassed by the broader term of tech sovereignty, which reflects the EU’s desire to boost its industrial capabilities—not only in the digital space, but also in renewables and other green and future technologies. European policymakers also regularly refer to data sovereignty and cloud sovereignty, which can be seen as focused on particular aspects of digital sovereignty.

What all these definitions share, however, is the notion that Europe and its economy should be less dependent on others and more capable of protecting its own interests, including its interests in the digital sphere. That leads to the key unresolved questions at the heart of digital sovereignty. Does sovereignty require an economic approach that is exclusively European or, at minimum, favors European companies? Is ownership or effective control over key companies important, or is a risk-based system more appropriate? Is it desirable to limit sovereign requirements to certain sectors of the economy? Can Europe achieve a measure of sovereignty as part of a common enterprise among international partners? And if the partnership model is acceptable, who are the partners?

The transatlantic relationship is, in turn, entangled with Europe’s internal debate about digital sovereignty. Until recently, this has been an evenly divided contest, with some European experts calling for Europe to strategically decouple from the dominance of US companies, while others—including most member-state governments—have noted the lack of local alternatives and hesitated to discriminate against US and other non-EU companies.

But the Trump administration’s initial open hostility to the EU and continuing general unpredictability have caused even the most transatlantic of EU leaders to question the reliability of the United States. The July 2025 US-EU trade deal provided some temporary clarity and predictability in transatlantic commercial relations, although digital issues were addressed in only limited ways. President Donald Trump’s Truth Social post a few weeks later, threatening additional tariffs on countries with “Digital Taxes, Digital Services Legislation, and Digital Markets regulations [that] are all designed to harm, or discriminate against American Technology,” was immediately criticized by the European Commission, France, Germany, and others as a violation of Europe’s sovereignty.³ Nevertheless, during a November 2025 visit to Brussels, Commerce Secretary Howard Lutnick directly linked the removal of EU digital regulation with a potential US-EU agreement on steel and aluminum tariffs.⁴

Given Trump’s close connections with leading tech executives, the US administration’s combative posture toward European tech regulation is likely to continue being a point of transatlantic friction. Whether a continued focus by the Trump administration on Europe’s digital rules will create an even stronger push in Europe for an exclusive form of digital sovereignty is not yet evident. What is clear is that without some guidelines, such as those offered in the conclusions to this report, the European Union and United States might find that their differences regarding digital sovereignty and digital rules make creating and maintaining an open transatlantic digital marketplace much more challenging.

Defining the terms of the debate

One reason why digital sovereignty has become an increasingly inflammatory label across the Atlantic is that the lack of a clear definition allows everyone to define it in ways that support their own arguments. Its rise has also coincided with the European embrace of strategic autonomy in foreign and security policy—a notion that has predictably ruffled some US feathers, especially in the defense community. Further confusion has developed as similar terms (i.e., tech sovereignty, cloud sovereignty) have emerged in related areas. To introduce some clarity into this discussion, it can be useful to categorize these different notions.

• Strategic autonomy: First arising in the context of foreign and security policy, strategic autonomy refers primarily to Europe developing defense and foreign policy capabilities that would allow the EU to play a more independent geopolitical role. Aside from a few defense funding efforts, the idea has not yet inspired major legislative initiatives. To indicate that partnership and autonomy were not contradictory, the EU later adopted the related idea of open strategic autonomy in trade policy. More recently, the EU has begun to embrace the concept of regulatory autonomy—the idea that “the Union’s values, interests, and regulatory autonomy underpin EU action, including in the digital sphere.”⁵ In these notions, autonomy is a more ambiguous and flexible concept than sovereignty, which implies a legal order backed by legislative initiatives.
• Technological sovereignty: While the first European Commission headed by von der Leyen focused largely on legislation related to the online world, the importance of technologies—and Europe’s reliance on Chinese and US technologies—had come to the fore by the end of that mandate. This was not only about the digital world, but crucially about the European Green Deal. While the commission argued that carbon reduction would be key to the future EU economy, it became woefully clear that Europe remained dependent on others for many essential technologies: solar panels, wind turbines, semiconductors, electric vehicle batteries, etc.
  
  Thus, in the second von der Leyen commission, the position of executive vice president for tech sovereignty, security, and democracy was created to oversee the development of EU capabilities to support the digital agenda. Others in the commission, including Executive Vice Presidents Teresa Ribera and Stéphane Séjourné, were tasked with strengthening EU technological capabilities across the Green Deal and industrial strategy generally. In June 2025, a key European Parliament committee defined tech sovereignty as “the ability to build capacity, resilience and security by reducing strategic dependencies, preventing reliance on foreign actors and single service providers, and safeguarding critical technologies and infrastructure.”⁶ Unlike strategic autonomy, however, tech sovereignty underlies significant legislative initiatives, from the Net Zero Industry Act and the Critical Raw Materials Act to the Public Procurement Directives. It also entails a strong focus on industrial policy, including state aid, competition policy, and other means of boosting key tech-related industries.
• Digital sovereignty: While often used interchangeably with tech sovereignty, digital sovereignty focuses primarily on the online world. Legislation such as the General Data Protection Regulation (GDPR), Digital Services Act (DSA), Digital Markets Act (DMA), and Artificial Intelligence Act (AIA) have sought to establish a comprehensive system of governance for the online world, especially by regulating corporate behavior vis-à-vis individual or business users. With the exception of semiconductors and the EU Chips Act, much less attention has been paid to the technologies that enable the online world. However, recent proposals for a Eurostack—a European capacity to provide all elements of digital infrastructure, from cables to cloud—are indications of growing European concern about both governance and technologies.⁷

• Data sovereignty: This subset of digital sovereignty—one of the earliest variants—initially focused primarily on protection of personal data under the GDPR. However, with the Data Act and other initiatives, increased attention is now paid to the re-use of industrial data that are either sensitive or commercially valuable, and to safeguarding the capacity of EU businesses and governments to exploit data generated in Europe.
• Cloud sovereignty: The proliferation of data requires enhanced storage capabilities and increased focus on cloud storage and the security of data stored in the cloud. An increasingly sharp debate has centered on whether Europeans’ data should be stored exclusively within the EU, or whether they can be stored outside the EU by non-EU providers considered trustworthy and secure. This discussion has accelerated with the growth of artificial intelligence (AI) and its enormous requirements for cloud services and data centers. Cloud sovereignty also poses questions about how Europeans’ data can be accessed by foreign law enforcement and intelligence agencies.
• Sovereignty over speech: Users of online services today confront a wide array of illegal or undesirable content, from child sexual abuse material to advertisements for illegal products to political disinformation. EU efforts to regulate platforms’ responsibility for illegal content and systemic risks have recently sparked criticism from the Trump administration, which regards aspects of these efforts as violations of free speech.⁸ Who has the right to determine allowable speech available online in a jurisdiction other than where it was produced?
• Cybersecurity: Given the ever-growing number of cyberattacks, both in Europe and globally, the protection of the online world has become a growing element in digital sovereignty. In the past, cybersecurity had not been central to the debate about digital sovereignty, but since the Russian full-scale invasion of Ukraine in 2022 there has been a rapidly growing understanding that resilience against such attacks is an essential part of sovereignty. Europe in particular has faced numerous attacks from Russia and related online actors. The EU effort to establish standards for cybersecurity has already led to US-EU tensions, but there will likely be even more attention paid to cyber-proofing as the EU operationalizes its concept of sovereignty.

As part of the growing effort to operationalize digital sovereignty, both EU institutions and member states have initiated efforts to elaborate the meaning of this elusive concept. The European Council, in formal conclusions to its October 23 meeting, declared, “It is crucial to advance Europe’s digital transformation, reinforce its sovereignty, and strengthen its own open digital ecosystem,” adding that “this requires reinforced international partnerships and close collaboration with trusted partner countries.”⁹

On November 18, 2025, the French and German governments convened a Summit on European Digital Sovereignty. The summit identified several areas for building digital sovereignty, including AI, data, and public infrastructure, and launched a joint task force on European digital sovereignty to report in 2026.¹⁰ Its final declaration underscored the EU member states’ “shared ambition to strengthen Europe’s digital sovereignty in an open manner as a cornerstone of our economic resilience, social prosperity, competitiveness and security.”¹¹

The European Commission, for its part, issued a Cloud Sovereignty Framework in September 2025 that identifies eight types of sovereignty-related objectives to be considered in the government procurement context. In a stab at precision, the framework encourages contracting authorities to assign each objective a sovereignty effective assurance level (SEAL). The results of that assessment should provide a mathematically derived sovereignty score.¹² But as EU discussions on this topic progress, there are still key differences among the member states about the choice between strict autonomy or international partnerships, and whether the model should be based on exclusive EU control or on risk management.

Europe’s missing Silicon Valley

While many non-European observers would say that the EU’s regulatory power already gives it significant influence domestically and externally, the EU’s sovereignty in the European digital arena is vulnerable at best. Despite its role as a regulatory superpower, Europe finds itself reliant on non-EU companies for many essential elements of the digital world. A European Parliament report estimates that “the EU relies on non-EU countries for over 80% of digital products, services, infrastructure, and intellectual property.”¹³ This perception of dependency is at the heart of the EU push for digital sovereignty.

The EU has failed to develop a tech sector with either the vibrancy of Silicon Valley or the growing capabilities of China’s industry. In particular, Europe has not seen the emergence of world-leading new companies based on digital technologies. Indeed, while the US industry has created six companies with a market capitalization of €1 trillion or more, the EU has created none.¹⁴ In 2021, three US cloud companies supplied 65 percent of the EU cloud market, while EU-headquartered companies had less than 16 percent.¹⁵ As a consequence, European consumers and businesses must rely on non-EU companies—mostly US and some Chinese enterprises—for basic digital services. Initially, this largely applied to software, social media, search engines, and a wide array of shopping services. More recently, the importance of cloud, encryption, and AI, along with the prospective emergence of super-fast quantum computing, has made Europeans realize that this dependence on others has significant and potentially long-lasting effects on their own industries and economies, including those far beyond the tech sector. 

Of course, a few European companies are exceptions to these trends. Nokia and Ericsson were already leaders in the cables and fiber optics that are key to connectivity. They became even stronger in the market as concerns rose about the security of Chinese components. The Dutch company ASML has been a leader in the machines required to make the semiconductors that guide and manage so much of the digital world. SAP is the world’s largest vendor of enterprise resource planning software. But these European companies are not in the same league as their US equivalents in terms of market capitalization. For example, ASML has a market capitalization of $376 billion, while Nvidia is at $4.3 trillion and Microsoft is at $3.8 trillion.¹⁶

One consequence of Europe’s struggle in the digital marketplace has been the emergence of an EU-wide debate on competitiveness, as represented most prominently by the reports by former Italian Prime Minister Enrico Letta and former head of the European Central Bank Mario Draghi.¹⁷ Draghi specifically underlined the importance of Europe’s failure to develop an innovative tech sector by noting the increasing productivity gap between the EU and the United States, with European labor productivity falling to 80 percent of US productivity. He concluded that this was mainly due to “Europe’s failure to capitalise on the first digital revolution led by the internet—both in terms of generating new tech companies and diffusing digital tech into the economy.”¹⁸

The competitiveness debate has also sought to identify the causes of Europe’s lack of digital champions. Europe has a vibrant startup community, as demonstrated by the growing role of venture capital.¹⁹ But many of these innovative enterprises end up moving to the United States or elsewhere, while others fail to commercialize entirely. The most popular rationale for this failure to scale—cited by US and European analysts, including Draghi—is overregulation.²⁰ Other suggested reasons include a chronic lack of indigenous capital, overly strict bankruptcy laws, and a culture that fears failure.²¹ Whatever the reason, Europe’s inability to provide the resources and capabilities for its innovative companies to become continental champions, let alone world leaders, means it must rely on companies from elsewhere.

This was already the case in 2018, when the GDPR—the first major piece of EU digital legislation—came into force. During the next five years of von der Leyen’s first term as commission president, the EU passed several other pieces of digital legislation, most notably the DSA, DMA, and AIA. These measures made progress in harmonizing diverse member-state laws, both existing and anticipated. But while EU leaders saw this body of legislation as protecting their citizens from the excesses of data collection and illegal social media content, many outside the EU, especially in the US tech community, viewed these laws as overly burdensome at best and discriminatory at worst. Some EU policymakers, such as Member of the European Parliament (MEP) Andreas Schwab, early on were open about their desire to counter the dominance of US firms.²² Others, however, saw Europe as offering a positive alternative to the lightly regulated environment tech companies faced elsewhere. EU rules inevitably had the most impact on US companies, which provided the overwhelming majority of digital services in the EU market. Chinese companies also came to feel the impact of EU regulations as their market share grew over time, especially in shopping and social media.

Throughout this period of intense legislative activity, there were clear voices calling for greater digital sovereignty in Europe. The body of legislation passed in the first von der Leyen commission can certainly be viewed as an effort to place limits on the US companies that dominate Europe’s digital space—and as a way for Europe to regain some control, or sovereignty, over that market. But as competitiveness emerged as a top EU priority in 2023, the discussion about digital sovereignty became part of a much broader discussion about innovation and economic security.

Geopolitics and the rise of tech sovereignty

The earliest indication of a geopolitical element to EU digital sovereignty came during the first Trump administration, when the United States protested the use of Huawei components in European digital networks. Reluctantly at first, Europeans came to understand the risk of a Chinese capability to disrupt those networks and developed the EU Toolbox for 5G Security, a list of best practices released in January 2020. The toolbox identified states and state-backed actors as the most serious threats. It also set out criteria for identifying trusted versus untrusted vendors, including closeness to a foreign government, lack of democratic accountability in that government, lack of a data protection agreement with the EU, and ability of the third country to exercise pressure on the EU.²³

The toolbox was the first real effort to identify foreign companies and governments that might threaten Europe’s digital sovereignty and those that might not. There was clearly a focus on China and Chinese companies, as demonstrated by the criteria for vendors. But it should be noted that the toolbox is primarily voluntary guidance developed by the member states for themselves, with progress tracked by regular EU Commission reporting.

In 2019, the EU identified China as both an economic competitor and a “systemic rival,” but initially with little consequence, especially in terms of economic relations.²⁴ Over the next few years, the EU would increasingly focus on China and the dangers posed by its investments in the European economy, especially in critical European infrastructure. By March 2023, when von der Leyen called for de-risking Europe from China,²⁵ commission officials had identified a number of EU dependencies on China—including in critical raw materials, solar panels, and batteries—that had the power to disrupt European industry.²⁶ In June 2023, the commission reported that it considered Huawei and ZTE “materially higher risks” than other fifth-generation (5G) suppliers.²⁷

The EU also initiated a few measures to address those vulnerabilities: heightened screening of inward foreign investment, primarily at the member-state level; enactment of the European Chips Act, providing funding for advanced semiconductor manufacturing in Europe; adoption of the Critical Raw Materials Act, which established goals for EU production of key materials; and passage of the Net Zero Industry Act, which sought to build EU manufacturing capacity in clean technologies such as solar, batteries, and hydrogen. While these measures were not aimed only at China, concerns about that country’s ambitious global plans were a main motivation. Moreover, they had the effect of broadening the initially limited discussion of digital sovereignty beyond the realm of digital governance to include both digital and green technologies, resulting in a broader focus on technological sovereignty.

This European debate regarding the geopolitical dimensions of sovereignty—both digital and tech—intensified significantly following the Russian invasion of Ukraine in February 2022. Along with a focus on territorial security, as seen in the increased defense spending of most EU member states, the EU realized that it needed to address other vulnerabilities. Most urgently, the invasion led to a swift and drastic shift in Europe’s energy supply, as Russia went from providing 45 percent of Europe’s oil and gas in 2021 to 19 percent in 2024.²⁸ But the digital arena was also vulnerable: Russian cyberattacks and apparent sabotage against undersea cables demonstrated the dangers facing Europe’s digital infrastructure, while Russian-origin disinformation flooded European social media.

Perhaps the most important consequence of the Russian invasion, however, was the realization that Europe was vulnerable and that preserving its sovereignty—digital and otherwise—would require concrete actions. Many of the green technology initiatives mentioned above were still in the legislative process when the invasion began but moved to enactment by mid-2023 as the commission’s term began to close and as Europeans became even more conscious of those vulnerabilities. Competitiveness, resilience, and sovereignty became linked together in the concept of economic security as the EU sought to reduce its external dependencies, especially on Russia and China.

By the end of 2024, the tech sovereignty impulse in Europe had become a key policy priority, as demonstrated by the appointment of Henna Virkkunen to the new position of European Commission executive vice president for tech sovereignty, security, and democracy. But before the second von der Leyen commission could get its program under way—or make progress in implementing the Draghi report—Trump’s reelection as US president pushed the impulse toward European digital sovereignty into hyperdrive.

Trump actions spur renewed calls for greater independence

European suspicions about US intentions and capabilities in the digital world have existed since 2013, when Edward Snowden revealed the extent of US National Security Agency interception of Europeans’ communications. Nevertheless, the United States and EU enjoyed relatively open trade in digital services. The advent of the second Trump administration, however, has energized the transatlantic debate over digital sovereignty. While Trump’s focus during the 2024 campaign was on the EU’s trade in goods surplus with the United States, once back in office he frequently criticized the EU’s digital regulations as a whole, despite the US surplus in services trade driven by the success of US tech companies.

Only a month after Trump’s January 2025 inauguration, the White House issued a memorandum on “Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties,” calling for tariffs and other responses in cases “where a foreign government, through its tax or regulatory structure, imposes a fine, penalty, tax, or other burden that is discriminatory, disproportionate, or designed to transfer significant funds or intellectual property.”²⁹ The memo specifically highlighted “regulations imposed on United States companies by foreign governments that could inhibit the growth or intended operation of United States companies.”³⁰ It also called for the US trade representative to determine whether to renew Section 301 investigations of several digital service taxes (DSTs), including those adopted in France, Austria, Italy, and Spain. The fact sheet accompanying the memo made clear that the target was the European Union and specifically “regulations that dictate how American companies interact with consumers in the European Union, like the Digital Markets Act and the Digital Services Act, will face scrutiny from the Administration.”³¹

Such an aggressive approach brought the issue of digital sovereignty to the fore, as it seemed to disregard the EU’s right to regulate its own market. As the United States and EU pursued a trade agreement, there were conflicting reports as to whether the DSA and DMA (as well as other EU regulations) were on the negotiating table.³² In the end, the joint statement published on August 21, 2025, did not mention either regulation or the DSTs adopted by several EU member states.

But the joint statement was hardly the last word. On August 25, Trump posted on Truth Social: “As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies. Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology.”³³ Meanwhile von der Leyen, in her September 2025 State of the Union speech, defended the trade deal but also stated: “Whether on environmental or digital regulation, we set our own standards. We set our own regulations. Europe will always decide for itself.”³⁴

The Trump administration has continued criticizing EU digital regulation. For example, on December 16, US Trade Representative Jamieson Greer posted on X (formerly Twitter) that the EU had “persisted in a continuing course of discriminatory and harassing lawsuits, taxes, fines, and directives against U.S. service providers,” and suggested that the United States would retaliate.³⁵ It would be relatively easy for the administration to renew the Section 301 investigations of DSTs. The US government might also look for a mechanism to counter the impact of the DSA and DMA, especially if US companies are fined significantly under those laws. On April 23, 2025, the European Commission fined Apple and Meta €500 million and €200 million, respectively, for noncompliance with the DMA.³⁶ In September, Google was fined €2.95 billion for “distorting competition in the advertising technology industry,” although this case was pursued under the European Commission’s long-time competition authorities rather than under the DMA.³⁷

The commission is also investigating X as well as Meta’s Facebook and Instagram for alleged violations of the DSA, along with separate probes of the Chinese firms AliExpress, Temu, and Tiktok, and several European-based online pornography platforms. On December 5, 2025, the Commission fined X €120 million under the DSA for issues related to its blue checkmarks and advertising repository.³⁸ Beyond these specific cases, the growing criticism of Europe from the US executive branch and parts of Congress, which claim it is censoring “free speech,” is an indication that an influential segment of the Republican Party in the United States will continue to push for action against European efforts to moderate digital content. The EU has been a key target, as has the United Kingdom with its Online Safety Act.

At the same time, the European Commission has embarked on a process of simplifying some regulations as part of an effort to make the EU economy more competitive. A digital omnibus—a legislative package designed to amend several regulations across a sector simultaneously—was presented on November 19, 2025.³⁹ As with other commission proposals for simplifying regulations, the digital omnibus focuses on reducing requirements for small and medium-sized enterprises (SMEs), along with streamlining reporting in cases of cybersecurity incidents. It also proposes delaying implementation of AIA requirements for high-risk systems until relevant guidance has been issued and calls for “targeted amendments” to the GDPR to boost innovation, including that related to AI training.⁴⁰ While simplification is likely to reduce the regulatory burden on tech companies in Europe—including large US companies—it has not yet addressed issues related to digital sovereignty.

Apart from potential revisions to existing legislation, the commission plans to move forward on two tracks. First, the second von der Leyen commission anticipates deploying more financial resources to support research on emerging technologies such as AI and quantum. Early in 2025, von der Leyen announced InvestAI, an initiative to raise €200 billion in investment capital.⁴¹ The EU also plans, through the 2025 EU Startup and ScaleUp Strategy, to support startups in their search for the funding that will allow them to grow.⁴² While these funds should be viewed with some caution—it is unclear whether sufficient private funds will join this public-private effort—they demonstrate the EU’s commitment to building its own capabilities.

Second, the commission has made clear that it will continue to pursue new rules governing activities and companies in the digital arena. The Financial Data Access (FiDA) regulation, now in the final stage of negotiations, is intended to allow greater sharing of financial data among financial institutions in order to develop new digital financial products for consumers. European legacy banks have launched an effort to exclude those companies designated as gatekeepers under the Digital Markets Act from participation in FiDA; this effort will primarily affect US tech companies.⁴³

The EU Cloud and AI Development Act (CADA) will attempt to address the EU’s shortcomings in cloud and AI capacity by encouraging the permitting of new data centers and other infrastructure, and by providing greater computational capacity and resources to startups, especially those focused on AI. But it is also expected to establish EU-wide eligibility requirements for cloud service providers, along with harmonized procurement processes, in ways that could restrict participation by non-EU companies. It is not clear yet whether CADA will address concerns through risk-based assurance models or ownership restrictions. It has reportedly been delayed until the first quarter of 2026 as the commission considers the concept of European effective control as a way of supporting EU digital sovereignty.⁴⁴

The Digital Fairness Act, expected to be introduced in mid-2026, will be the EU’s flagship legislation for business-to-consumer relations and will address protection of minors online, transparent online pricing, the abuses of manipulative and addictive design, and marketing by influencers—all of which are likely to be of significant interest to US platforms. Other initiatives expected to be launched in the next eighteen months include the ICT Supply Chain Toolbox, the Quantum Europe Strategy, and the Digital Networks Act. Finally, the European Data Union Strategy, released on November 19 along with the digital omnibus, establishes the ambition of “safeguarding the EU’s data sovereignty through a strategic international data policy.”⁴⁵ It aims to do this by “making fair conditions for data access and cross-border transfer . . . protecting sensitive EU non-personal data . . . and deepening cooperation with trusted partners.”⁴⁶ While a strategy is not a legislative document, we can expect that it will help guide EU policy on international data flows.

The European Parliament is also active in the digital sovereignty debate. MEP Axel Voss, one of the parliament’s leaders on these issues, wrote in an October 2025 post on LinkedIn: “We need immediate decisions to regain a digitally competitive and sovereign EU. Eurostack, deregulation, venture capital, chips, energy, access to quality data and a flourishing environment for Start Ups and creators are crucial for our sovereignty.⁴⁷ He proposes a number of measures, from digital special economic zones to using only EU programs within EU institutions to integrating “buy and deploy European tech” in public procurement.⁴⁸

These initiatives will undoubtedly continue to have an impact on the transatlantic relationship, as they will affect the major actors in the market, most of them American. Even with the best of intentions—and no ambition to exclude those companies—EU adoption and implementation of such rules will likely raise questions about the openness of its future market and the participation of non-EU firms.

The next section explores how the United States and EU have wrestled with the competing pressures of sovereignty and open markets, as presented by a set of key issues relating to government access to data.

Snowden’s relevations and the ‘kill switch‘

More than a decade has passed since the Snowden revelations, but the topic continues to shadow transatlantic digital relations. Many in Europe hailed Snowden as a hero for revealing Europe’s vulnerability to US signals intelligence, and the European Parliament invited him to appear and speak at a plenary meeting. The Obama administration, which charged Snowden under the Espionage Act, objected vehemently to the invitation and, in the end, Snowden addressed the parliament only by video link.⁴⁹ Now, however, US domestic sentiment regarding Snowden’s actions has begun to shift, at least in Republican circles, as several of Trump’s advisers have called for him to be pardoned.⁵⁰

Snowden’s disclosures started a chain of legal proceedings in Europe that generated substantial uncertainty among companies about the legality of their indispensable transfers of personal data to the United States. The Court of Justice of the European Union (CJEU) twice invalidated EU-US international transfer arrangements, judging them insufficient to protect Europeans’ fundamental rights. In 2015, the court struck down the EU-US Safe Harbor Framework, and a successor arrangement, the Privacy Shield, met the same fate in 2020.⁵¹ Meta, the object of the litigation both times, took the issue seriously enough that it publicly conceded to US securities regulators that it might need to withdraw Facebook and Instagram from Europe if it could not legally transfer data to the United States.⁵²

A third arrangement, the EU-US Data Privacy Framework (DPF), concluded in 2023, put significant additional safeguards in place for Europeans’ personal data when they are transferred to the United States. It has stabilized the situation, at least for the time being. On September 3, 2025, the EU General Court rejected a challenge to the DPF brought by Philippe Latombe, a French parliamentarian.⁵³ The case tested the sufficiency of US legal reforms made to overcome the CJEU’s 2020 judgment on the Privacy Shield. The court rejected claims that a redress mechanism created by the agreement lacked independence within the US legal system. It also validated the sufficiency of US safeguards relating to the collection of bulk data for intelligence purposes. Latombe has appealed the General Court verdict to the Court of Justice, however, so a definitive verdict on the fate of DPF has yet to be issued.⁵⁴

The European privacy advocacy organization None of Your Business (NOYB)—headed by well-known Austrian privacy activist Max Schrems, who brought the 2015 and 2020 CJEU cases—reacted with disbelief to the Latombe ruling. Schrems drew attention to Trump administration actions against the independence of the US Privacy and Civil Liberties Oversight Board (PCLOB) and the Federal Trade Commission (FTC). He also said that he is mulling bringing a second challenge to the DPF in EU courts.⁵⁵

US cloud service providers, including Amazon Web Services and Microsoft, have responded to European unease over data transfers to the United States by introducing service features that allow enterprise customers to store certain types of data exclusively on servers located on the continent.⁵⁶ Offering to localize data in this fashion can reassure European customers concerned about the long arm of US government’s potential access to their data.

However, the Trump administration exacerbated European anxiety over data flows to and from the United States by briefly cutting off Ukraine from US intelligence sharing in early 2025.⁵⁷ The specter of a US government kill switch—in the form of an order to US cloud providers to stop commercial data transfers to Europe—has spurred further efforts by US cloud providers to reassure their European customers. Brad Smith, Microsoft’s vice chair and president, went so far as to issue a public statement in April that, “In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court.”⁵⁸

In response, some European companies have spied a business opportunity. For example, the German company Ecosia and its French counterpart Qwant announced their intention to build a European web index called European Search Perspective (ESP) to compete with Google’s search engine.⁵⁹ Ecosia’s chief executive officer (CEO) cited concern about the political winds blowing in the United States: “With the US election turning out as it has, I think there is an increased fear that the future US president will do things that we as Europeans don’t like very much . . . We, as a European community, just need to make sure that nobody can blackmail us.” He also emphasized Europe’s current dependence on Google’s services: “If the US turned off access to search results tomorrow, we would have to go back to phone books.”⁶⁰

The European dream of regaining data sovereignty by generating companies that can compete with the US cloud giants has a long history of failure. Our 2022 report chronicled the ambitious Franco-German effort to develop GAIA-X, a federated data and cloud ecosystem.⁶¹ In the years since, the vision of an interoperable network of trusted European cloud providers has had limited success. Its major output is a series of standards, specifications, and labels for European cloud providers, rather than a transformation of the commercial landscape.⁶²

Draghi’s 2024 report on the single market effectively conceded defeat in this area of endeavor. “It is too late for the EU to . . . develop systematic challengers to the major US cloud providers,” Draghi wrote.⁶³ Nonetheless, European anxiety over the possibility, however small, that dominant US platform services could withdraw from the continent, be blocked from serving it by the US government, or be a mechanism for channeling EU data to the US government, will continue to power a push for European sovereign alternatives.

A second continuing impetus is an awareness in Europe—thanks to Snowden—that the dominance of US digital services in Europe offers US intelligence agencies a strategic advantage. The Biden administration even boasted of this during the 2023 congressional debate to reauthorize Section 702 of the Foreign Intelligence Surveillance Act (FISA), a principal authority for collecting intelligence information on non-Americans. The pervasiveness of US digital service providers worldwide, the administration noted, allows US intelligence agencies to “leverage this national advantage to collect foreign intelligence information . . . in order to protect America from its adversaries.”⁶⁴

US law enforcement access to data on European servers

US intelligence collection in Europe is not the only challenge to data sovereignty that the EU sees emanating from the United States. Another is the Clarifying Lawful Overseas Use of Data Act (CLOUD Act), a 2018 US law. This statute confirmed that US law enforcement can unilaterally order cloud service providers with a presence in the United States to turn over personal data they host on servers in Europe and other foreign locations for criminal investigations and prosecutions. Although several EU countries, including Belgium, give their law enforcement authorities similar extraterritorial criminal evidentiary powers, this part of the CLOUD Act is seen in Europe as singularly intrusive. When EU legislators call for companies to be immune to foreign law, they are often referring to the CLOUD Act.

However, the CLOUD Act also contains a conciliatory dimension. Part II of the act authorizes the US Department of Justice to negotiate binding international agreements under which criminal investigators and prosecutors can obtain foreign-located electronic evidence directly from providers. Because CLOUD Act agreements are consensual, they do not violate a foreign state’s judicial sovereignty by commanding that a legal measure be taken on its territory. Instead, they remove legal obstacles that companies otherwise face in voluntarily assisting foreign law enforcement. This new type of international agreement can substantially reduce reliance on mutual legal assistance treaties (MLATs), which can be too slow and cumbersome for obtaining e-evidence in fast-moving investigations.

The United States has concluded CLOUD Act agreements with the United Kingdom (UK) and Australia, and negotiations are under way with Canada, all of which are members of the Five Eyes intelligence collective.⁶⁵ The UK agreement, the first to be concluded, has had a positive effect for that country’s law enforcement agencies.⁶⁶ According to the US Department of Justice, UK agencies have already made more than twenty thousand direct requests to companies holding electronic evidence in the United States, including many for real-time interception of communications.⁶⁷ The results “provided UK Law Enforcement and Intelligence Agencies with critical data to tackle the most serious crimes facing UK citizens including terrorism; child sexual exploitation; drug trafficking; and organised crime,” a UK government minister said in late 2023.⁶⁸

Prosecutors from EU member states have looked across the channel jealously as their UK counterparts have made use of this powerful new investigative tool. In 2019, the EU authorized negotiation of an e-evidence agreement with the United States.⁶⁹ Talks began in earnest after the EU finalized its controversial counterpart to the CLOUD Act, the 2023 E-Evidence Regulation.⁷⁰ Progress has been slow and painstaking. In June 2024, senior EU and US home affairs and justice officials issued an optimistic joint statement welcoming “further progress” in the negotiations and looking “forward to advancing and completing” them.⁷¹

The Trump administration has paused EU-US negotiations without explanation. It might have concluded that CLOUD Act agreements operate overwhelmingly to the advantage of foreign partners—the inevitable consequence of most relevant data being housed on servers located in the United States. As the Trump administration has demonstrated in trade negotiations with foreign countries, it is singularly focused on agreements that it can present as bringing more benefits for the United States. However, such a narrow focus overlooks other benefits of CLOUD Act agreements—sparing cloud providers conflicts of law, deterring data localization measures, and reducing the burden on the mutual legal assistance process.

In mid-2025, the UK government added an element of controversy to the use of CLOUD agreements by allegedly serving a request to Apple that it globally disable security features on its products.⁷² If the UK successfully required Apple to remove security from a product (for example, by building in a backdoor to data that would otherwise be end-to-end encrypted), it could then use the CLOUD Act agreement to request the now-vulnerable data directly from the company. Apple challenged the request in a UK administrative court proceeding and issued a public statement warning customers about the measure’s impact.⁷³ In addition, the White House and Congress sharply criticized the reported UK measure.⁷⁴ In August, the UK government withdrew its demand for access to Apple US customers’ encrypted data, effectively conceding to the US objection.⁷⁵ It recently confirmed that the order had been reissued to apply only to UK users.⁷⁶ The US government could well demand that any EU e-evidence agreement include a similar commitment safeguarding US persons’ data from surveillance by member states’ authorities.

A US-EU e-evidence agreement would be an important advance in calming Europe’s sovereign sensitivities about how US law enforcement authorities collect foreign-located evidence, just as the Data Privacy Framework has at least temporarily allayed Europe’s concerns about US national security agencies’ collection practices. Taken together, the two agreements would neutralize much of the political tension that has prevailed in these realms for more than a decade.

The US u-turn on data flows

After decades of the United States propounding unrestricted international commercial data flows—and bemoaning Europe’s privacy impediments to them—the Biden administration made a dramatic course correction in late 2023.⁷⁷ Through parallel legislation (the Protecting Americans from Foreign Adversary Controlled Applications Act) and executive action, it imposed controls on certain categories of data exports to China, Russia, and other “foreign adversaries” citing national security reasons.⁷⁸ Subsequently, the Department of Justice issued a final rule and guidance to companies on compliance and enforcement.⁷⁹ Both the legislation and regulatory actions were spurred by reports that data brokers were collecting publicly available bulk data on US persons and selling them to foreign governments, which could enable them to—among other things—track the location of US military personnel.⁸⁰

In addition to enacting domestic measures to limit certain international commercial data flows, the United States reversed course internationally. In the fall of 2023, the Office of the US Trade Representative withdrew its proposal to include in the Joint Statement Initiative on Electronic Commerce (JSI)—a World Trade Organization negotiation—a guarantee of the free flow of data across borders.⁸¹ The final text of the JSI, announced in July 2024, not only lacks such an obligation but allows parties essentially unlimited scope to restrict data flows for data protection reasons, precisely as the EU had sought.⁸² Even with these changes, the United States declined to join the JSI because it regarded the agreement’s national security exception as insufficiently flexible, a move that some European Commission officials found puzzling.⁸³

In contrast to the United States—and despite its long history of controlling data exports through the GDPR—the EU has moved slowly to evaluate the risks of data transfers to authoritarian states such as China and Russia. In 2021, the European Data Protection Board commissioned an outside report from academics that confirmed both countries’ governments have access to individuals’ personal information without commensurate rule-of-law protections, but it took no further action.⁸⁴ Even Russia’s full-scale invasion of Ukraine has not served to entirely staunch the flow of European data to Russia. The Finnish and Dutch data protection authorities investigated data transfers by Yango, a subsidiary of the Russian search engine Yandex, but have not yet imposed restrictions.⁸⁵

The past year, however, has seen a gradual shift in European regulators’ thinking regarding data transfers to China. In May 2025, the Irish Data Protection Commission (DPC) fined TikTok €530 million after discovering it was transferring data to China without requisite data protection safeguards.⁸⁶ In July, the DPC broadened its TikTok inquiry into whether the Chinese government could access such data when they are stored in China.⁸⁷ The Finnish data protection authority began a separate investigation into possible Chinese government access to health data that a Finnish university had shared with a Chinese genetic analysis company.⁸⁸

Even Schrems, who has long challenged European data transfers to the United States, has turned his attention to China. Early in 2025, he filed complaints with European data protection authorities against six major Chinese consumer companies, including Shein, Temu, and WeChat, alleging government access to Europeans’ personal data by an “authoritarian surveillance state.⁸⁹

Recent moves by European data protection authorities to question whether China’s government has impermissible access to Europeans’ personal information mirror the rise in geopolitical tensions between Brussels and Beijing. Ireland’s inquiry into TikTok data transfers, for example, can be read as asserting European data sovereignty against a geopolitical rival. The data dynamics are, in effect, a microcosm of Europe’s larger dilemma with China—deep commercial dependency, but also a recognition that a degree of sovereign control is needed.

A single European data market

Brussels has recently expanded its laws promoting the secondary use of data for commercial, research, and government purposes, in hopes that these innovative legal measures will give homegrown companies a much-needed advantage in competing with data-rich foreign tech giants. However, the transfer of such data to non-EU companies has raised concerns about potentially protectionist restrictions. The Data Governance Act, the Data Act, and the European Health Data Space regulation—all enacted during the first von der Leyen commission—seek to stimulate a market for the secondary use of European data for commercial purposes.⁹⁰ These measures are based on the recognition that data collected by—and locked within—governmental or commercial organizations can have societal and economic benefits if made available for reuse by other entities.

The 2022 Data Governance Act grew out of a post-pandemic recognition of the potential for reuse of government-held data. It facilitates reuse by the private sector, for both commercial and non-commercial purposes, of government-held data (G2B), including data originally collected by public health, environmental, and transport authorities. Then Commissioner Thierry Breton hailed it as a step toward “an open yet sovereign European Single Market for data.”⁹¹

The Data Governance Act was followed a year later by the even more ambitious Data Act, which concentrated on expanding business-to-business sharing of non-personal data, such as the industrial data generated by connected devices. The Data Act sought to ease legal issues that arise with reuse by third parties, such as intellectual property protection and trade secret rules. Both laws insisted upon additional safeguards for transferring data to companies in third countries, such as the United States, where that data could become subject to governmental access. The European Commission further envisaged a series of sector-specific European data spaces, each requiring separate legislation.⁹² They would cover sectors—from agriculture to energy to transportation—that generate large amounts of industrial data ripe for reuse. The European Health Data Space regulation is the first of this series to be enacted.

At the start of the current commission mandate, von der Leyen’s mission letter to Virkkunen instructed her to deepen focus on the reuse of data. She was asked to “present a European Data Union Strategy drawing on existing data rules to ensure a simplified, clear and coherent legal framework for businesses and administrations to share data seamlessly and at scale, while respecting high privacy and security standards.”⁹³ The commission duly launched a public consultation process, articulating as its aim “expanding the availability and use of data to support AI development.”⁹⁴ Published on November 19, 2025, the Data Union Strategy seeks to safeguard the EU’s data sovereignty by ensuring fair conditions for cross border flows of non-personal data; “linking EU data ecosystems with those of like-minded partners;” and “boosting the EU voice in global data governance.”⁹⁵ This is intended to build a comprehensive legal regime for secondary data access that will enable European industry to catch up with the US tech giants that already enjoy access to vast pools of proprietary data.

EU content moderation and free speech

One of the EU’s proudest recent legislative accomplishments is the 2023 Digital Services Act, a sprawling and complex framework regulating online platforms’ accountability for illegal content, including illegal hate speech.⁹⁶ It imposes the most onerous requirements on very large online platforms, half of which are US companies. The Trump administration and the Republican-led Congress have sharply criticized the DSA, viewing it as a tool for the suppression of right-wing populist political speech.⁹⁷ On the contrary, the EU views certain DSA provisions, such as transparency tools and safeguards against arbitrary content moderation, as intended to protect free speech.

Trump singled out the DSA for criticism in the February 2025 official memorandum on preventing the “Unfair Exploitation of American Innovation,” while the Republican chair of the Federal Communications Commission called it “incompatible with both our free speech tradition in America and the commitments that these technology companies have made to a diversity of opinions.”⁹⁸ The US State Department began a diplomatic campaign, alleging, “In Europe, thousands are being convicted for the crime of criticizing their own governments.”⁹⁹ A leaked August 2025 cable to European posts directed US diplomats to advocate for a narrowing of the DSA’s definition of illegal content, among other ambitions. The European Commission firmly pushed back, describing the censorship allegations as “completely unfounded” and insisting that its digital legislation “will not be changed.”¹⁰⁰

The Republican majority on the House of Representatives Judiciary Committee also weighed in with a strongly worded staff report describing the DSA as an “anti-speech, Big Brother law.”¹⁰¹

The report identified a handful of examples of how the act could function to restrict speech extraterritorially. For example, in an August 2024 letter, then Commissioner Breton warned Elon Musk’s X platform that the effects of a campaign interview it hosted with Trump could spill over into the EU and spur commission retaliatory measures under the DSA.¹⁰² The committee also cited a request to X by the French national police that the platform remove a post originating from a US-based account suggesting France’s immigration and citizenship policies were to blame for a 2023 terrorist attack a Syrian refugee committed in that country.¹⁰³

The chairman of the US FTC launched a further salvo in August, warning US companies that their very compliance with the EU’s DSA, or with the UK’s similar Online Services Act or its surveillance authorities, could constitute a violation of the FTC Act, which prohibits unfair or deceptive commercial acts or practices. FTC Chairman Andrew N. Ferguson suggested, “It might be an unfair practice to subject American consumers to censorship by a foreign power by applying foreign legal requirements, demands, or expected demands to consumers outside of that foreign jurisdiction.”¹⁰⁴

This transatlantic dispute over the DSA and similar content moderation laws reflects differing US and European historical traditions on speech regulation.¹⁰⁵ The US Supreme Court has identified only speech creating a “clear and present danger” of inciting violence or other illegal conduct as suitable for restriction. Many European judiciaries, informed by their countries’ twentieth century histories of hate speech, take a more cautious view. For example, Germany bans speech glorifying or denying the Holocaust, while Denmark makes it illegal to burn the Quran. The DSA is the EU’s attempt to ensure that platforms remove content deemed illegal, both offline and online, but the act’s lack of definitions leaves a door open to abuse.

On December 23, 2025, the Trump administration raised the stakes in its free speech campaign against European content moderation laws. Secretary of State Marco Rubio issued determinations under the Immigration and Nationality Act barring from entry into the United States five Europeans associated with content moderation.¹⁰⁶ The headliner was Thierry Breton, an architect of the DSA; the others hail from European non-governmental organizations that track hate speech and disinformation on the internet. The European Commission quickly issued a statement that it “strongly condemns” the US actions, reiterating its “sovereign right to regulate economic activity in line with our democratic values.”¹⁰⁷ As the Trump administration continues its ideological campaign against the DSA, the transatlantic dispute over free speech seems bound to escalate.

Cybersecurity and cloud services

In 2022, the European Union Agency for Cybersecurity (ENISA) began an effort to harmonize member-state cybersecurity requirements for government data processing contracts. The European Commission averred that cloud services were a “strategic dependency” on a handful of large providers headquartered in the United States.¹⁰⁸ Several EU member states, led by France, argued for including sovereignty requirements in the envisaged EU Cybersecurity Scheme (EUCS).

A leaked 2023 ENISA draft proposed that the EU impose sovereignty requirements similar to those in France’s domestic security certification and labeling program, SecNumCloud, for contracts involving the most sensitive government data. SecNumCloud has an announced goal that, in order to obtain a trust certificate, cloud service providers must be “immune to any extra-EU regulation.”¹⁰⁹ ENISA proposed incorporating this requirement into EU law as well, adding restrictions on foreign ownership and insisting on localization of cloud services operations and data within the EU.

EU member states divided over whether to adopt such cybersecurity requirements, which could have the effect of disqualifying large foreign cloud service providers from sensitive government data processing contracts. In addition, some European companies, especially in the financial sector, argued that the foreign providers offered greater cybersecurity as well as a superior technical product.¹¹⁰ The Office of the US Trade Representative formally questioned whether the potential EUCS restrictions were consistent with the EU’s obligations under the World Trade Organization’s Government Procurement Agreement (GPA).¹¹¹

In 2024, the Belgian EU presidency put forward a compromise proposal that discarded the foreign ownership restrictions in favor of data labeling and localization requirements.¹¹² French authorities and technology companies expressed dismay at the prospect of EU-level cybersecurity certification rules weaker than France’s own.¹¹³ ENISA has yet to issue the final implementing measure, and this debate could well reemerge in the context of the anticipated CADA.

Looking ahead: Transatlantic tension will persist

The European debate over digital sovereignty—now firmly linked to the wider debate over technological sovereignty—is likely to be a continuing point of tension in the US-EU relationship. For many years, this has been a rhetorical exercise with few real consequences for non-EU firms, especially US companies. But the shift in geopolitics and the increasing drive to support EU industries to build a more competitive economy have led many European policymakers to conclude that now is the time to act. Moreover, the geopolitics are not just about Russia’s aggression or China’s export domination. They are also about the shifts and inconsistencies in US policy that have made many in Europe believe that it must now begin to fend for itself, in terms of both defense and the economy. 

As a result, the debate over digital sovereignty has moved from a discussion of whether there should be limits on non-EU companies to a discussion of how many restrictions there will be, and of what type and in what sectors of the economy. That discussion is likely to be pursued through several key legislative initiatives planned for late 2025 and 2026. CADA is already expected to identify requirements—including sovereign requirements—for cloud services.

Perhaps most relevant, the public procurement directives are already under internal review, with a proposal for revision expected from the commission in 2026.¹¹⁴ Because much of the debate is about who can sell which products and services to whom (including to governments), procurement policy will be a key instrument in imposing sovereign requirements. EU and member-state procurement rules currently privilege price as the key selection criteria but, in the Net Zero Industry Act and other new measures, other considerations have been introduced into the procurement calculation.

As the EU pursues these initiatives, it will face a dilemma: To what degree does sovereignty require autarky? Or does the EU require partnerships, despite the risk of dependencies, because of the current lack of key capabilities? Some in Europe have argued that the right way forward is to develop end-to-end EU capabilities in the form of a Eurostack.¹¹⁵ From fiber-optic networks and computing hardware to software development and cybersecurity capabilities, all would be provided by EU companies.¹¹⁶ Others have pointed to the difficulties with this, asking whether the lack of EU-owned capabilities in cloud, AI, search, and other key functions would doom such an effort to be inferior and thus push Europe farther behind in the race to innovate essential digital technologies for the future. They also fear that European companies will not be able to compete internationally if they are cushioned by sovereign requirements.¹¹⁷ Some see no contradiction between sovereignty and being open to non-EU firms; indeed, they see access to the most innovative global companies as essential, especially given Europe’s competitiveness challenge.¹¹⁸ For others, the key element is timing. The EU tech sector currently lags in innovation but, with proper support and time, it should be fully capable of growing world-leading firms and technologies.¹¹⁹ Indeed, the EU’s International Digital Strategy emphasizes the importance of partners in boosting EU competitiveness and innovation, and the EU’s ambitions in global governance for data can hardly be accomplished without cooperative partners.¹²⁰

But in all these versions of digital sovereignty, as well as in the larger arena of tech sovereignty, there is a central question: who owns the companies involved, and does it matter if they are not EU firms as long as they abide by EU laws and regulations? The recent negotiations over an EU-wide cloud certification system stalled on exactly this point (see the above discussion of EUCS). The Toolbox for 5G Cybersecurity put forward the concept of a “high-risk supplier” to warn against non-EU companies that were insufficiently independent of their home governments. While this was aimed at Chinese companies—especially Huawei—concerns have more recently focused on the United States and its companies.

The EU’s concerns are not only about the dominant position of US platforms in the European digital market, but also the potential actions of the US government—especially the Trump administration. The administration’s inconsistency on Ukraine, highlighted by its threats in July 2025 to cease sending weapons and other military supplies to Ukraine (reversed shortly after), alarmed many in Europe.¹²¹ Reports that the Trump administration threatened to block Ukraine’s access to the vital communications network Starlink during negotiations over critical minerals also raised European concerns.¹²² While these instances were primarily about defense, not the digital arena, they have created a heightened sense of insecurity in Europe. Coupled with the experience of the trade negotiations, they put into question the reliability of the United States as a partner in any undertaking.

In this environment, the EU will need to make choices about how best to ensure it has sufficient sovereignty over its digital market. Will the answer be found in more restrictions on non-EU companies, or with a more open arrangement that also boosts European economic growth and competitiveness?

Seven recommendations for Brussels and Washington

Given the economic stakes involved for both parties, the EU should engage the United States as it moves forward, and should keep the following guidelines in mind.

Competitiveness is key to innovation and economic success.

Throughout the coming debates over sovereign requirements, the EU must balance the need for security and for its own industrial and digital capabilities with the efficiencies and productivity required for a globally competitive economy. Settling for a more expensive and less capable product or service because it is European owned is not the way to grow the economy. There are times when it is necessary, but these instances should be rare and well considered, not routine.¹²³

Heated rhetoric on either side does not help the economy.

As the EU moves forward with legislation, both Washington and Brussels should seek to lower the temperature. While some US executive orders and statements from top officials have seemed to decry any EU regulation that impedes US companies, the reality is that Europe has the right to regulate as it sees fit in its own market, as does the United States. At the same time, European threats of broad sovereign restrictions do not encourage needed investment. It should not be forgotten that the US-EU trade and investment relationship is the largest such partnership in the world, worth around $1.5 trillion in goods and services trade in 2024, and with mutual investment worth several times that.¹²⁴ As both parties establish regulatory or investment requirements intended to boost domestic capabilities and add resilience to their economies, there will inevitably be tensions and misunderstandings. Creating barriers to trade and investment is sometimes necessary in limited circumstances, but careful consultations can ameliorate their impact.

Agreed legal frameworks in key areas can ease the need for sovereign protections.

As the discussion of data policy demonstrates, the transatlantic economy is not just about products and services, but also the data generated by them. Sharing those data—and being able to use them to generate revenues—is key to success in the digital economy. Of course, those transferring and using data must comply with local laws, including the GDPR. But the US and EU regulatory regimes collide at times, offering inconsistent or even conflicting requirements. Negotiated arrangements, such as the US-EU Data Privacy Framework, can overcome those differences and provide a stable context for business. A US–EU agreement on law enforcement access to data likewise could provide the protections and access both parties need. Similarly, an agreement that facilitates transfers of non-personal data might be useful in response to the Data Act and Data Union Strategy. Now is the time to make sure the United States and EU are developing compatible regimes.

Ringfencing can be a valuable strategy, as can trusted vendors.

Not all suppliers and customers are equal. Arrangements among allies and partners can lessen risks while preserving as much of the open, prosperous economy as possible, even in sensitive sectors. It makes no sense for Europeans to focus more on the transfer of data to the United States than to Russia or China. Using criteria such as those in the EU Toolbox for 5G Cybersecurity to identify foreign companies that can partner in key sectors will provide clarity and ease transactions. Similarly, a proposal floated in the EUCS negotiations that the trusted circle of cybersecurity providers be based on NATO membership might be appropriate. The Group of Seven (G7) could also offer a starting point for developing a set of compatible, interacting regulatory regimes in the digital economy, as it has done to some degree through its discussion of data free flow with trust and the AI principles and code of conduct.¹²⁵

Certain sectors of the economy are more sensitive than others.

Digital sovereignty requirements should not be imposed on broad swaths of the economy. There are two main reasons for such requirements: national security and creating an indigenous capability in those areas where national economic resiliency is required. Policymakers should carefully identify the areas of the economy where these two reasons apply. Cybersecurity for essential government operations and protecting critical infrastructure are good examples. Management of more prosaic, but still sensitive government data—including where they are stored and who has access—might not need such stringent requirements. Because digital elements—data, cloud, software, and increasingly AI—exist across the economy, it might be more helpful to think about specific functions and make a risk-based assessment of the consequences of failure. Sovereign requirements should be limited to those areas in which a failure or breach will have consequences across society and the economy.

The type of sovereign requirement can vary with the economic sector and even particular conditions.

Among European policymakers, the sovereign requirements currently under discussion can be divided into two types: those that require a supplier to adhere to specific rules and those that involve restrictions relating to the ownership of the company supplying a particular service or product. The first might involve data localization or restricting access to data or use of a particular technology, such as AI. The second, which has been applied in the French SecNumCloud, is far more restrictive and affects the ability of any US-based company to provide the service in question. In some cases, an ownership restriction might exclude companies with the best capabilities from providing the service, and could even expose those using the service to more risk. Thus, ownership restrictions are unlikely to be worthwhile except in rare cases. In the United States, these exist in areas of defense contracting, in which companies dealing with US classified material must set up a US company with US governance and employees. But most government digital contracts, both in the United States and in Europe, are not defense related and would not require such far-reaching ownership rules.

Instead, for those functions in which a breach or disruption would cause significant harm, creating a category of trusted vendors might be appropriate. This could apply to sensitive government functions, as well as to critical infrastructure provided by private-sector enterprises. A system based on trusted vendors could balance the desire to boost local providers while also securing access to top-quality services from non-EU companies. The EU might consider whether there are lessons to be learned from the US government’s FedRAMP system, which certifies companies (including non-US companies) to provide cloud services to different government customers. Companies need to meet criteria that become more restrictive and complex through the three levels of certification (low, moderate, and high).¹²⁶ While FedRAMP applies across most of the US government, individual agencies have the ability to impose their own requirements, allowing national security and intelligence agencies to impose further restrictions on those involved in classified functions. Despite these exceptions, FedRAMP’s graduated approach—matching certification level to sensitivity of the data—is much more tailored than some European proposals in matching certification requirements to the risk level of the cloud service required.¹²⁷

Sovereign requirements should be implemented in a consistent manner, including at the member-state level.

One of the persistent challenges of EU policy is ensuring that implementation is the same throughout the union. Both the Draghi and Letta reports cited differences in member-state requirements for businesses (or implementation of those requirements) as a key factor slowing EU competitiveness. The US trade representative has cited as trade barriers numerous instances of different requirements among EU member states, meaning that companies must follow multiple sets of rules even within the single market.¹²⁸ The European Commission recognized this problem when it decided that, under the DSA, very large online platforms (VLOPs) should be regulated at the EU level, not by member-state authorities. As the EU develops sovereign requirements in the digital sphere, it should be alert to efforts by member states to toughen criteria in ways that add unwarranted restrictions.

While the EU certainly has the right to decide on its own digital sovereignty requirements, those measures will undoubtedly affect access of non-EU companies to the market as well as the capabilities that are accessible to the EU and its member states. There will be costs for the EU, especially as it tries to build a more competitive economy. For that reason, any restrictions should be focused on those circumstances in which risks are high and security is necessary. This exercise should not be about denying access to non-EU companies, but instead about building a secure digital environment and resilient European capabilities. The EU should engage with its partners—not only the United States, but also Japan, South Korea, the UK, and others—to ensure that the fewest possible frictions arise. This will be a test for the transatlantic relationship, but one that can lead to greater cooperation rather than continued angst. 

Fellow

Frances Burwell

Distinguished Fellow

Europe Center

Central Europe Digital Policy

Fellow

Kenneth Propp

Nonresident Senior Fellow

Europe Center

European Union Digital Policy

The authors would like to thank James Batchik, Emma Nix, and Jack Muldoon for their tireless support on the report’s editing, research, and data visualization.

Issue Brief Dec 4, 2025

Improving transatlantic cooperation on digital competition

By Zach Meyers

Greater dialogue between US and EU regulators would reveal similar priorities on digital competition, mergers, and antitrust issues, and could lead to greater alignment on key digital competition issues.

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By Kenneth Propp

The geopolitics of data transfers is changing. How will Washington’s new focus on data transfers affect Europe and the transatlantic relationship?

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Report Nov 2, 2022

Digital sovereignty in practice: The EU’s push to shape the new global economy

By Frances Burwell, Kenneth Propp

What does the European Union’s push for “digital sovereignty” mean in practice? Frances Burwell and Ken Propp provide an update to digital sovereignty and its transatlantic impacts.

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The Europe Center promotes leadership, strategies, and analysis to ensure a strong, ambitious, and forward-looking transatlantic relationship.

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The post Digital sovereignty: Europe’s declaration of independence? appeared first on Atlantic Council.

Executive summary

While US and European Union (EU) policies differ in their approaches to online safety and the regulation of the internet, there is agreement about the need to protect children online. That is one high-level takeaway from a recent round of US-EU dialogue hosted by the Centre on Regulation in Europe (CERRE) and the Atlantic Council.

Such dialogue helps to identify common policy approaches for the protection of minors and common approaches to enforcing rules. Ultimately, it can also help facilitate faster and more efficient rollout of technologies to protect users. Dialogue will also help global platforms develop services to comply with rules and expectations on both sides of the Atlantic.

At the recent roundtable hosted by CERRE and the Atlantic Council, the synergies and differences in regulatory approaches and philosophies on both sides of the Atlantic centred on four themes. For each theme, some common threads seemed ripe for further discussion and cooperation.

• New legislation and approaches to enforcement: In terms of the overall governance landscape, legislation has a key role to play in Europe and in the United States, where long-standing federal rules have been supported by an increasing number of state laws.The bulk of legislation in the EU—such as the Digital Services Act (DSA)—is adopted at the EU level, while some member states are adopting supplementary rules. In the United States, most legislation is now being adopted at the state level. Public enforcement by regulators plays a big role in the EU and the United Kingdom (UK). In the United States, state attorneys general are taking action to enforce rules, with powers similar to those of regulators in Europe. More alignment and cooperation on enforcement would be beneficial. Private enforcement through courts is also possible but, while this is already widespread in the United States, it is just emerging in Europe.
• The harms from which children should be protected: On both sides of the Atlantic, there is a large degree of alignment on the harms from which children need to be protected. A strong commonality is that rules in Europe and the US both require compliance by design to avoid particularly harmful conduct, such as unwanted contact by unknown adults. Other common design elements include data minimization, which is a central component of the European Commission’s guidelines on protecting minors under Article 28 of the DSA and in the UK Office of Communication’s (Ofcom) age-appropriate design code and guidance under the Online Safety Act (OSA).
• Balancing rights: To balance the protection of fundamental rights (in particular, privacy and freedom of expression) against the need to protect children, there is widespread agreement that everyone—not just children—deserves protections online. The EU, UK, and United States are all cautious about dictating which content is acceptable online and are instead converging on approaches that require platforms to use processes and systems to ensure safety by design. Ensuring the protection of fundamental rights is a common concern and, ultimately, a matter of balance, including at the enforcement level.
• Age verification: Current debates about banning access to social media and about age verification are critical in Europe and in the United States, both in general and in relation to certain types of platforms (particularly those that host pornographic content). There is no agreement on a single type of technology that should be used, but there are prototypes and guidance on the high-level principles that the technologies should reflect. There are similar discussions on both sides of the Atlantic about how to attribute responsibility for age assurance across the supply chain—i.e., where in the supply chain age verification should take place—and how the division of responsibilities between players in supply chains could work in practice.

Introduction

The EU has put in place important legal building blocks to protect children online. These include the DSA and the European Commission’s guidelines on Article 28 of the DSA, which require providers of platforms accessible to minors to “put in place appropriate and proportionate measures to ensure a high level of privacy, safety, and security of minors.”¹ They also include the Audiovisual Media Services Directive (AVMSD), which contains rules to safeguard minors’ personal data and to protect children online, and the General Data Protection Regulation (GDPR), which provides rules on collection and processing of minors’ data. Other proposals yet to be finalized include the pending Digital Fairness Act (DFA) proposal and the Regulation on Child Sexual Abuse Material (CSAM).² Member states retain certain powers to enact national laws to protect minors online.³

In the United States, the protection of minors online is an important consideration at both the federal and state levels. At the federal level, the Kids Online Safety Act (KOSA) proposal, the Children’s Online Privacy Protection Act (COPPA) and the COPPA 2.0 proposal all seek to address certain aspects of children’s safety online (in particular, privacy, advertising, and CSAM).⁴ At the state level, California’s Age-Appropriate Design Code (CAADCA) has been challenged in court on First Amendment grounds.⁵ Other states, including Nebraska and Vermont, have recently adopted similar codes that they hope will withstand First Amendment scrutiny.⁶ Utah has also recently enacted a law to protect content-creating minors from financial exploitation and privacy violations.⁷

News headlines focus on apparent differences between US and European policies, which are spiraling into growing transatlantic tension. However, there is a large degree of alignment on the need to protect children online while also safeguarding fundamental rights such as privacy and freedom of expression.

The overall governance landscape

The European and US approaches are fairly aligned on some governance aspects of regulating child protection online. Since the adoption of its rules for video sharing platforms in 2018, the EU has embraced a legislative path to protect minors online.⁸ This legislative framework was strengthened in 2022 with the adoption of the DSA. Both the video sharing platform rules and the DSA are largely principle based and rely on a form of collaboration with the industry,placing the onus on the platforms themselves to decide what constitutes an appropriate and proportionate level of protection for minors. The UK has also adopted a legislative path with the OSA and the detailed guidance produced by Ofcom.⁹ Like the DSA, the OSA adopts a risk-based approach, with the larger and riskier platforms subject to stricter measures. The UK regulator, Ofcom, has supplemented the legislation with detailed guidance.

The European Commission recently adopted guidelines to help online platforms understand and comply with their obligations under Article 28 of the DSA, including setting out a list of recommendations for platforms, but these are nonbinding. Safety by design is at the heart of the guidelines. The EU’s legislative approach focuses on ensuring platforms put in place systems and processes, while steering away from regulating the type of content that should be outlawed.

So far, the EU’s legislative framework has not led to a full harmonization of approaches to protect minors, and some member states have adopted more restrictive approaches. For example, France, Germany, Ireland, and Italy have adopted supplementary legislation to protect minors from harmful content such as online pornography.¹⁰

In the United States, the federal government has adopted legislation such as the COPPA to tackle some problematic areas such as the need to protect minors’ personal data.¹¹ Despite heightened partisanship in Congress, leaders of both the Republican and Democratic Parties have expressed interest in supporting additional bipartisan legislation to protect children online.¹² Although there is less appetite for federal legislation with binding obligations on platforms in terms of platform liability, there is appetite at the state level to embrace the legislative path, and safety by design is the cornerstone of many of these initiatives.¹³ That being said, the Kids Online Safety Act (a federal initiative) received the support of sixty co-sponsors at the federal level, which shows that this is an area with some bipartisan support. The EU and the United States are also converging on some important aspects: more obligations are placed on larger platforms; there is an emphasis on protection and safety by design; and there is no “one size fits all” solution.

There is broad consensus among experts that, irrespective of geopolitical tensions, there has never been so much space for alignment at the policy level between different jurisdictions—and between Europe and the United States in particular. This is partly because Europe (with the DSA at the EU level and the OSA in the UK) takes a systemic risk approach and does not focus on moderating individual pieces of content. That places responsibility on the platforms to have processes and systems in place to design safe spaces at the outset.

There are also similarities in public and private enforcement of norms. In the EU and the UK, regulators play an important role in making sure that industry complies with the DSA, the AVMSD, and the OSA. In the United States, even if new federal laws are adopted, the creation of a dedicated federal regulator to publicly enforce the legislation is unlikely, though existing agencies such as the US Federal Trade Commission already have a remit over some of these issues. At the state level, attorneys general are empowered to enforce COPPA via civil actions despite it being a federal law. State attorneys general have many enforcement tools at their disposal, including the power to undertake industry-wide investigations. These are broadly in line with the enforcement powers of national competent authorities and the European Commission under the DSA (and Ofcom under the OSA). On both sides of the Atlantic, private enforcement through courts is also set to play an important role, though, to date, it has been more common in the United States than in either the EU or UK.

Harms against which children should be protected

In the EU, the harms against which children should be protected are potentially very wide and are not specifically defined in the DSA, which refers only to protecting minors’ “privacy, safety and security.”¹⁴ Furthermore, member states are free to set their own rules provided they are in the line with EU legislation.

Some harms are outlawed at the EU level, such as the sharing of child sexual abuse material, dark patterns (i.e., deceptive techniques used by online platforms to manipulate users’ behavior), the processing of minors’ personal data without the consent of parents, and the sending of targeted advertising to children based on profiling.¹⁵ US policy initiatives at the state and federal levels also identify these harms as targets for regulation. The dissemination of child sexual abuse material, for example, is already a criminal offense.

A strong focus of legislation to protect minors on both sides of the Atlantic is to make sure that children cannot be contacted on platforms by unknown adults. At the state level (Vermont in particular) lawmakers frame these as safety bills to avoid framing them as content regulation, which could bring challenges on First Amendment grounds. These design architecture elements, such as default settings that prevent children being findable, are also central in the European Commission’s guidelines on Article 28 of the DSA in the UK Information Commissioner’s Office’s age-appropriate design code and in Ofcom guidance under the OSA.¹⁶

Data minimization (meaning only a minimum amount of data can be gathered and processed) is seen as critical to mitigating harms in general, because there is a strong correlation between collecting vast amounts of data about children’s behavior online and using the data to target minors with harmful content. Also, data minimization could lead to stronger protection for all users. While enforcing data minimization principles is a challenge, it can be done. In the UK, for example, Ofcom is required to work closely with the data protection authority. Operational coherence and cooperation between regulators are crucial in this area.

Balancing fundamental rights

The debate about balancing the need to protect children against the protection of certain fundamental rights (especially privacy, freedom of expression, and the rights of the child) is critical in the United States and in Europe. Initiatives in Europe and the United States tend to focus on tools and processes to protect minors, but steer away from regulating content on the platforms. Despite this, there is mounting debate regarding whether laws are creating a form of censorship or unlawfully constraining free speech, limiting users’ choices, or infringing on the rights of children. The question is wider than the need to protect children online, in the sense that some content can be inherently dangerous for some individuals whereas that same content might not be harmful for another person (minor or adult). This need to protect users from harmful (but legal) content is the most difficult to reconcile with the need to protect freedom of speech and the need for data minimization.

In the United States, the question is being argued in court. Some federal courts have ruled that laws requiring age verification are unconstitutional because they undermine the US Constitution’s First Amendment and threaten privacy rights.¹⁷ Age verification laws are being challenged by NetChoice (a coalition of tech companies) and by free speech coalitions. The Supreme Court recently ruled that the age verification law in Texas does not violate the First Amendment because it only requires proof of age to access content that is obscene to minors; it does not directly regulate adults’ speech.¹⁸ In both the EU and the United States, a considerable amount of policy work and research is being conducted on how to balance safety and privacy, especially in the context of age assurance requirements.¹⁹

At the EU level, the debate about balancing rights was not prominent while the DSA and the AVMSD were being adopted, probably because the rules were principles based and did not mention bans or age verification per se. Furthermore, the DSA contains safeguards to protect fundamental rights, such as giving users’ the right to challenge content moderation decisions (such as removals of posts, demotions of content, and account suspensions). The central article on the protection of minors in the DSA (Article 28) assumes that there cannot be safety for minors unless other rights, such as privacy, are protected as well.

Now that the DSA is being enforced, the protection of minors has become an enforcement priority for the European Commission, and some member states are calling for bans on children accessing social media platforms, some political parties are questioning the legislation and the push for age verification solutions on free speech grounds. This debate is particularly intense in the context of the regulation on the fight against CSAM, which the European Parliament and the Council of the EU are amending in an attempt to reduce the impacts of CSAM detection mechanisms on privacy, particularly in the context of end-to-end encryption.

The ultimate goal should be to protect everyone online, not just minors. This would avoid the need to put in place age assurance and age verification.

A “digital age of consent” and age verification

The debates on getting the balance right on the need to protect minors online and the need to protect some fundamental rights are crystallizing on age verification and on proposals for an outright ban on access to social media for children.

To date, there is no outright ban at the EU level on children accessing social media. Commission President Ursula von der Leyen had pledged to examine the questionwith the help of a panel of experts originally scheduled to be set up before the end of 2025.²⁰ Some member states are also discussing the option of a social media ban for children.²¹ There is a strong call in the commission’s recently adopted guidelines under the DSA for certain platforms (such as adult content platforms) to prevent children from accessing them. Also, the Danish presidency of the EU and ministers from twenty-five member states recently adopted the Jutland Declaration, which welcomed “assessments” of a digital majority age.²² This assessment could help to determine the age at which minors should be allowed access to social media and other digital services—“giving them more time to enjoy life without an invasive online presence.”²³ This question is also high on the agenda in the United States, with some states requiring social media to ban minors from accessing them (or requiring parental consent for a minor to have an account).²⁴

On age verification, there is no mandatory technology at the EU level, but the EU guidelines on the protection of minors adopted under the DSA set out principles that age verification technology used by online platforms should meet.²⁵ In particular, the systems should be based on the “double anonymity” principle. According to this principle, the platform knows the age of users without identifying them, whereas an external site—which carries out the age verification by issuing a token—does not know which site the user will visit. The EU is also about to launch an EU mini-wallet as a temporary solution, pending the adoption of national solutions.²⁶ Some member states have also set requirements on age verification that are enforced by national regulators.

In the UK, the OSA has just entered into force, and the biggest and most popular adult platforms such as Pornhub must now deploy age checks for users based in the UK. Other platforms—including Bluesky, Discord, Reddit, and X—have also announced that they will deploy age assurance in the UK as a result of the act. This has led to a surge in virtual private network (VPN) downloads, which shows the importance of global alignment where possible.

In the United States, as noted above, state legislation imposing age verification is subject to frequent court challenges.²⁷ As in Europe, there is little agreement among the states on the methods and tools to use when verifying the age of online users. Also, like in Europe, states seem to recognize that age assurance alone is not the solution.

On both sides of the Atlantic, the debates are similar in practice, including debates regarding how to attribute responsibility for age assurance across the supply chain (i.e., at what level age verification should take place, whether at the app store layer or by individual applications or websites). Questions about where verification happens raise additional questions about the extent to which other players in the chain can rely on this, or whether relying on a single point of verification could undermine safety by discouraging applications and websites from making their own assessments.

Michèle Ledger is a researcher at the Research Centre in Information, Law and Society (CRIDS) of the University of Namur where she also lectures on the regulatory aspects of online platforms at the postmaster degree course. She has been working for more than twenty years at Cullen International and leads the company’s Media regulatory intelligence service.

This issue brief benefits from the insights of discussants at an online roundtable on EU-US regulatory co-operation hosted jointly by CERRE and the Atlantic Council. However, the contents of this brief are attributable only to the author.

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This is the fourth chapter in the Freedom and Prosperity Center’s 2026 Atlas. The Atlas analyzes the state of freedom and prosperity in ten countries. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

Evolution of freedom

Singapore’s post-independence development strategy was clear and, for a long time, well suited to the country’s advantages and constraints. A free port under British colonial rule since 1819, Singapore separated from Malaysia in 1965, which made continued outward orientation an existential necessity for the city-state’s survival. Developed-country trade liberalization encouraged offshore sourcing by multinationals, enabling Singapore’s government to build an export-oriented economy anchored in foreign direct investment. It prioritized manufacturing, later adding high-end services, and used targeted industrial policy to achieve its priorities. The strategy was reinforced by disciplined macroeconomic management, public investment in world-class infrastructure, and efficient public administration.

But what made the approach distinctive was not just openness to trade and investment—it was also the degree to which the state integrated regulatory, proprietorial, and allocative power. The government planned land use, owned most of the land base, channeled compulsory savings, and exercised strategic ownership through sovereign wealth funds and government-linked companies. This tight coupling of state and market produced order and speed and made full use of a global economic environment that favored openness. At the same time, however, it embedded government discretion at the center of daily life.

The economic engine was an extensive growth model, which expanded output by adding capital and labor to a fixed land base, rather than by sustained gains in total factor productivity. Singapore incentivized multinationals to produce in the country, scaled public investment, and—critically—liberalized foreign labor inflows to keep costs predictable. That choice made sense when the priority was to build a platform economy quickly. It is less convincing as a path to future prosperity. Heavy reliance on lower-wage foreign workers depresses incentives to automate, redesign jobs, and raise productivity. At the same time, large inflows of higher-skilled foreigners add to demand for scarce urban resources and amenities, especially housing, putting pressure on prices and widening social distance. Such social distance is seen where differences in income, opportunities, and daily living conditions deepen divides between groups. In such a system, the state can point to impressive aggregate outcomes while households at the lower end experience stagnant real wages and rising costs.

Institutionally, Singapore has combined strong commercial rule of law and administrative capability with persistently narrow political competition. Elections are regular and cleanly administered, but contestation is constrained. The playing field is shaped by districting changes implemented shortly before each election; official campaign periods that last just nine days; and a long tradition of filing defamation actions against critics, including for statements made during the hustings. Mainstream media is not fully independent—there is substantive state ownership and oversight—and online speech is governed by broad statutes that give the executive sweeping, fast-acting powers. Passage of POFMA (Protection from Online Falsehoods and Manipulation Act) in 2019 and FICA (Foreign Interference [Countermeasures] Act) in 2021 was justified by the government as defenses against misinformation and foreign interference, but the measures have also generated uncertainty about what is out of bounds. In practice, the fear and reality of punishment lead risk-averse citizens and institutions to overcomply. The effect is anticipatory discipline, more than visible coercion, engendering a climate in which people self-censor and where policy debate narrows.

The legal environment reinforces this equilibrium. Singapore courts are efficient, free from corruption, and commercially reliable—central reasons investors locate there. But the same state that regulates also owns land, large companies, and the largest pools of domestic savings. Political appointments, the use of civil defamation in political contexts, and the fusion of political and administrative authority create ambiguity for anyone engaged in contentious public speech or organizing. For most commercial actors, rules are clear and enforcement swift; for citizens considering robust political contestation, the boundaries are less legible and the costs potentially high. That asymmetry lowers the expected return on civic initiative and removes information the state needs for timely course correction.

The tight state-economy nexus is particularly visible in land, housing, savings, and capital allocation. Because the government owns nearly all the land and leases public housing on 99-year terms, “market prices” are necessarily shaped by policy. The Central Provident Fund (CPF) holds employees’ mandatory savings (currently amounting to 37 percent of employee compensation) and links a very large share of it to housing purchases and other government-defined uses. The sovereign wealth funds Temasek and GIC intermediate large public assets and maintain strategic holdings in major enterprises, while government-linked companies dominate substantial portions of the corporate landscape. This architecture has delivered order, speed, and scale. It has also raised economy-wide prices, encouraged rent extraction through asset inflation, and tilted returns toward capital and land rather than labor. When the state is everywhere—as de facto landlord, employer, investor, banker, business partner, regulator, customer, supplier, and even competitor in the provision of goods and services beyond public goods—experimentation by private enterprise narrows, not by prohibition but by crowding out, and by the rational impulse to align with official priorities, especially when reliant on the state for incentives or sales.

These facts sit awkwardly with conventional measures of “economic freedom,” such as those produced by the Fraser Institute or Heritage Foundation, which reward contract enforcement, low tariffs, and investment openness, have historically placed Singapore at top positions in their indexes. The economic pillar of the Freedom Index, mainly based on these same external sources, consequently ranks Singapore as the eighth most economically free country among the 164 nations covered. Those measures capture real policy strengths, but rankings such as these cannot capture how a directed ecosystem works on the ground when the state chooses where investment is most desired, sets the volume and terms of labor inflows, prices land it largely controls, and deploys large public capital to back favored sectors. Under such conditions, entrepreneurship is not forbidden, but it is less central to the model than in economies where the state is smaller and competition wider. A rules-based marketplace can coexist with discretionary steering from above. The visible results—macro stability, fast approvals, coordination in areas the state prioritizes—are valuable. But hidden costs—muted productivity incentives, lower household consumption, and limited diffusion of capability—accrue slowly and become apparent only when the external environment turns unfriendly.

Some might argue that Singapore’s example indicates that political freedom is unnecessary for economic development. After gaining independence, the government justified expanded restrictions on labor, media, and freedom of association as necessary to ensure political stability and attract foreign direct investment (FDI). But these restrictions remain in place even as South Korea and Taiwan, formerly authoritarian regimes, showed that political liberalization and a more participatory system could reinforce and enhance, not undermine, stability as economies mature (see Figure 1). In Singapore, constraints on expression—including in academia—reduce the diversity and depth of policy discussions. When dissent is costly and information selectively released, the system hears less from those who see problems first: low-wage workers, squeezed middle-class families, independent researchers, and small firms facing rising costs. This is not an abstract normative concern but rather a practical handicap in a complex, rapidly changing economy.

Figure 1. Political liberalization did not slow economic growth in South Korea or Taiwan

Gross domestic product per capita (purchasing power parity-adjusted, in 2021 constant international dollars) was obtained from the IMF data portal. The Political Rights component has been extended back to 1980 using V-Dem data and the same methodology as in the Freedom and Prosperity Indexes.

Evolution of prosperity

Singapore’s achievements on headline income are undeniable. Gross domestic product per capita has tripled since 1990, placing the country among the richest in the world. The Prosperity Index also records the country’s high levels of life expectancy and educational attainment. Singapore joined the world’s most developed countries several decades ago. These are the peers with which it should be compared, not its lower-income regional neighbors, particularly since the Singapore model of growth is clearly distinct from that of other high-income nations. An extensive growth model powered by factor accumulation leaves characteristic fingerprints. Singapore runs large current-account surpluses (over 20 percent of GDP annually since 2005) and builds fiscal buffers (persistent large budget surpluses); public investment is high; private consumption is low by advanced-economy standards; and productivity growth has been episodic outside a few frontier activities. This is the logic by which the system operates: Singapore prioritizes external competitiveness, recycles surpluses into foreign assets, and leans on a managed exchange-rate regime to hold down imported inflation and to maintain credibility. The main questions behind the numbers are how broadly they translate to all social strata and whether the current model is sustainable in the long run.

The inequality component of the Prosperity Index gives a visual answer to the first question. Compared to the Nordic European countries, Singapore has a much higher level of income inequality (see Figure 2). Other distributional measures, such as an estimated 0.7 Gini coefficient in terms of wealth inequality, point to the same conclusion. What’s more, these numbers most likely underestimate the actual level of inequality in Singapore. Most OECD countries include all legal immigrants (permanent and temporary residents) when estimating inequality, but Singapore excludes non-permanent immigrants, though they account for 39 percent of the labor force and are concentrated at the lower end of the income distribution. The country’s official measures of inequality (a 2024 Gini coefficient of 0.435 before and 0.364 after taxes and transfers) also exclude non-labor income, more than half the total. The real inequality gap in Singapore, compared with other developed countries, is probably much wider than estimated, while Singaporeans’ share of national income has almost certainly shrunk since 2014, the last time this number was released. Socioeconomic inequality is a direct product of the Singapore model, which generates costs borne by households through higher local-currency prices, crowding out of small and medium enterprises, thin wage growth at the base, and a muted share of national income going to labor and citizens.

Figure 2. Income inequality is higher in Singapore than in Scandinavian countries

Labor-market design is central to these outcomes. Liberal foreign-worker inflows have long been used to match demand cycles, contain wage pressures, and deliver what has been referred to as “labor peace.” Over time, this has reduced the incentive for employers to automate or redesign low-productivity work. A dual structure persists. At one end, a sizeable segment of the economy depends on low-paying, physically demanding and risky jobs that do not lead to productivity ladders for residents. At the other end, inflows of professionals and executives meet genuine skills needs but also fuel demand for scarce urban resources and amenities, especially housing, raising costs and intensifying competition for positional goods and elite educational tracks. The structure widens the gap between those at the lower and upper ends of the economy without building domestic capability commensurate with the country’s income level.

Housing and savings amplify the distributional effects. Singapore links a very large share of forced savings to Housing and Development Board (HDB) purchases on 99-year leases, with 76 percent of the population (down from 85 percent) housed in these government-run properties. When home values rise, owners enjoy wealth effects; when leases age and policy signals shift, uncertainty grows for households that cannot easily diversify. Land prices—set in a market the state effectively controls—ripple through business costs and wages. The expectation of continuing asset inflation encourages rent-seeking over entrepreneurship and leads families to shoulder significant leverage. A model that relies on rising asset prices to sustain consumption in a city of high living costs is one that exposes households to policy-driven valuation risk. It also depresses fertility (the 0.97 total fertility rate is among the world’s lowest) by increasing the cost of raising children in an expensive, dense, competitive urban environment.

Singapore’s 37 percent labor share of national income has been low relative to its peers, while gross operating surplus and property-related incomes loom large, at 54 percent. Government-linked firms and multinationals dominate many input and output markets, crowding out smaller domestic enterprises. Private consumption’s share of GDP (36 percent in 2024, down from 49 percent in 2001) is strikingly low for an advanced economy. These features set Singapore apart from the most prosperous and inclusive societies, where thicker wage floors, broader diffusion of capability, and less reliance on asset inflation anchor the social contract.

Education and health present a complex picture. Attainment is high and standardized test scores in math and science rank among the world’s best. But in a relentlessly competitive school system, there are concerns that heavy reliance on private tuition (70 percent of students) contributes to unequal educational outcomes and diminished social mobility by giving an advantage to those whose families can afford the extra expenditure. Additionally, translating education into broad-based opportunity is uneven since the economic structure does not generate enough high-productivity, middle-income jobs for residents outside elite tracks. Without stronger productivity growth at the firm level—driven by job redesign, automation, and diffusion of best practice—credentials do not guarantee commensurate wages. On the health front, a technocratic system achieves strong population outcomes (in terms of average life expectancy) at relatively low public cost, but it deliberately shifts financial risk to households through compulsory savings and copayments. In a city with high living costs and thin wage growth at the base, that risk burden is felt keenly even when headline indicators look strong.

Externalities are increasingly salient. Sustaining growth through population increases and construction intensifies congestion and environmental stress in a tropical, high-density city increasingly beset by climate change (high temperatures, frequent floods, rising sea level). Industry clusters that anchor the export platform—energy-intensive manufacturing, petrochemicals, aviation-related services, data centers—carry emissions and transition risks that will be costlier to manage as climate policy tightens globally. Meanwhile, the shift to attracting family offices and private wealth poses reputational and security risks—from money-laundering and accusations of “Singapore-washing” (intermediating funds through Singapore to disguise their origin or destination) to international criminal syndicates and scammers who use Singapore as a hub for their illicit activities. The result of this shift is to concentrate purchasing power in neighborhoods and assets where residents already feel priced out, with only modest spillovers to domestic capability building and financial-market depth.

When the cost of dissent is high and data releases are selective, independent journalists, researchers, and civic groups struggle to map distributional outcomes in real time. That deprives policymakers of useful feedback, early warnings, and good ideas from outside the official complex. It also erodes trust. Citizens are more likely to accept difficult adjustments when they believe the system listens to their concerns and shares risk fairly. Today, too much downside is borne by households, which face rising prices and policy-shaped asset risks while being told that government largesse through periodic non-entitlement transfers will cushion the blow. Such discretionary transfers—conditional, temporary, inadequate, and uncertain—are inferior to market wages that rise with productivity and distort political preferences by making the citizenry beholden to the governing party. 

The path forward

Singapore will not succeed in the next decade by doing more of what worked in the last half-century. The world has changed. Globalization is retrenching, the international tolerance for mercantilist policies is narrowing, and great-power rivalry is intensifying with increased willingness to use economic pressure to exact political concessions. Regional competitors—from China to Vietnam and Indonesia—combine improving infrastructure and skills with labor costs Singapore cannot match. Subsidy races in major economies are reshaping value chains and contesting investment decisions with tools Singapore cannot or should not emulate at scale. The uncertain impact of technological disruption by artificial intelligence makes investment decisions difficult and complicates long-term planning. In this environment, doubling down on a model optimized for inflows of foreign labor and capital will yield diminishing returns and increasing vulnerabilities, while wasting scarce resources.

The first imperative is to move decisively from extensive to intensive growth. That means closely linking firm survival to productivity improvement. A credible path would temper reliance on lower-wage foreign labor in ways that raise the payoff from automation, process innovation, and job redesign—especially in service sectors where productivity lags and resident employment is concentrated. It will close some firms and raise costs for others in the short run, but without this shift, wages at the base will remain thin and inequality will worsen, no matter how many transfers the government can deploy. Complementary reforms should ensure that inflows of higher-skilled foreigners are aligned with building domestic capability rather than simply satisfying short-term demand and bidding up urban resource costs.

Second, the scale and use of surpluses and reserves should be revisited, especially as the sovereign wealth funds which invest reserves have underperformed. A stronger exchange rate and slower reserve accumulation would lower imported inflation and relieve cost-of-living pressures. A larger share of fiscal resources can be redirected from broad corporate inducements and opaque industrial bets toward social spending that reduces household risk without dulling work and investment incentives. None of this implies fiscal profligacy or acting imprudently. It reflects a recognition that the opportunity cost of very large buffers, in a rich and aging society, includes foregone domestic investment in human capital, diffusion of capability, and life-cycle security.

Third, land and housing policy must be reoriented to lower systemic costs and reduce dependence on asset inflation. More retirement savings should be decoupled from housing, the long-term treatment of aging leases clarified, and the state’s control of land used to dampen, not amplify, economy-wide price pressures. Greater transparency around land pricing and HDB cost structures would improve trust and policy effectiveness, and enable better planning of investment decisions by households and businesses. Lower land costs would cascade through wages and prices, reduce the attraction of rent-seeking, and shift capital toward productive enterprise. It would also promote family formation by lowering the cost and uncertainty associated with housing, childcare, and eldercare.

Fourth, the growth playbook should move from picking winners at scale to catalyzing broad-based experimentation by private actors. Singapore has spent heavily, over decades, on research parks and sectoral “bets” that delivered mixed results. In a world where value is increasingly created in ideas, services, and intangibles, the priority should be to lower entry barriers, democratize access to data and infrastructure, and crowd in private risk-taking outside state-linked incumbents. Public capital can be powerful when it is allocated with discipline: to back competitive markets, not sustained rents; to fund diffusion of capability, not trophy projects; and to hold itself accountable to transparent criteria and sunset clauses.

Fifth, the political-legal setting must evolve in tandem with the economy. Removing the conflation of government and ruling party interest with the public interest, strengthening checks and balances on the executive’s exercise of powers, normalizing robust debate, and making distributional data routinely available would lower the implicit tax on civic initiative and improve policy through better feedback. Complex societies govern better when they listen widely and when the rules are clear and contestable—as evidenced by other Asian countries that have shown that political liberalization can coexist with order and strengthen legitimacy. Confidence in performance should reduce, not increase, the state’s reliance on ambiguity and speed in controlling speech and association.

Geopolitics adds urgency. Singapore cannot count indefinitely on frictionless access to foreign capital, technology, and markets. Practices once tolerated may be penalized. If the country continues to rely primarily on incentive-led FDI and imported labor in a city with high costs and rising environmental constraints, it will confront sharper trade-offs: either slower growth with rising inequality and social tension, or continued growth with greater external exposure and domestic fragility. Neither is an optimal strategy for the future.

The better alternative is a new “social compact” that matches the high-income status Singapore has achieved. It would place productivity and diffusion of capability at the center of economic strategy; align immigration and industrial policy with those goals; share risk more fairly with households; and widen the channels through which citizens can speak, organize, and help solve problems. It would move society from discretionary benevolence toward institutionalized confidence that rules are predictable and fair. It would sustain high income without leaning on ever-rising asset prices, grow wages at the base faster than the cost of essentials, and ease the pressures that make everyday life feel precarious to many in one of the world’s richest cities.

Singapore possesses the administrative capacity, fiscal resources, and human talent to make this transition. The PAP government, which has ruled for 66 years, faces no short- or even medium-term threat to its overwhelming hegemony. It recognizes the external and domestic challenges the economy faces, expresses concern about social mobility and social cohesion amid a “foreign-local divide,” and is attempting to “listen more” (albeit through channels and processes it controls). The government has even acknowledged that the model that got the country to where it is today is not the model that will take it further, because the world will not arrange itself to suit the old playbook. What it has not done is change the playbook. Instead, it is ratcheting up growth acceleration by placing bigger bets on “industries of the future” while holding on to established ones as a hub for “leading global firms.” Recognizing that “not everything will succeed,” the government argues that “if just one or two do, they can transform our economy and carry Singapore to the next level.” It is not moving toward political and intellectual liberalization, insisting instead that maintaining “social harmony”—given economic openness, racial and religious diversity, divisive social media and geopolitical tensions—requires holding fast to the tight rules of the past.

If Singapore changes its playbook, its freedom profile will become less lopsided—still strong on commercial rule of law and execution but balanced by more open contestation and clearer legal protections for speech. Its prosperity will be more inclusive and sustainable. Without the change, the headline numbers may stay impressive for a while, but the trade-offs will sharpen, and the miracle will appear less as a model to emulate and more as a cautionary warning. In the long run, a city-state’s greatest asset is the capability and confidence of its people. Building institutions that allow competition in markets and ideas and that trust and empower ordinary citizens, rather than domestic and foreign elites, is the surest way to keep Singapore exceptional.

Linda Y.C. Lim, professor emerita of corporate strategy and international business at the Stephen M. Ross School of Business, University of Michigan, has studied the Singapore economy for 50 years, and published other research on international trade and investment, women in the labor force, and overseas Chinese business in Southeast Asia. She co-edits AcademiaSG, an academic blog promoting scholarship “of/for/by Singapore.” 

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• Executive summary
• Introduction
• A comprehensive approach to defense and resilience
• Key pillars of Latvian resilience
• Challenges and future imperatives for resilience
• Annex 1: Management structure
• Annex 2: Framework of concepts, plans, laws, and regulations

Executive summary

Latvia has significantly evolved its defense and security policy, focusing on national resilience as a cornerstone of its statehood, as analyzed in LVARes: The Evolution of Latvia’s Defense and Security Policy in Resilience Building, a project of the Centre for East European Policy Studies and the Atlantic Council. This transformation is anchored in Latvia’s Comprehensive National Defense (CND) framework, a whole-of-society strategy that integrates civilian, military, and private-sector efforts to deter aggression and manage crises. Key to this approach are legal underpinnings from evolving state defense concepts and amendments to foundational laws like the National Security Law.

Pillars of this resilience include ensuring the continuity of essential services and critical infrastructure, with a shift from mere asset protection to guaranteeing operational functionality through public-private partnerships and an enhanced role for municipalities. Regular exercises like Namejs and Pilskalns test these preparations.

To counter hybrid threats, Latvia formally recognizes the information space as a defense domain, implementing multilayered strategies that combine government-led strategic communications, support for independent media, civil-society engagement against disinformation, and international cooperation, notably through hosting the NATO Strategic Communications Center of Excellence. Societal resilience is further boosted by public-preparedness campaigns like “72 Hours: What to do in case of a crisis,” media literacy programs, and integrating national defense education, including psychological defense and nonviolent civil resistance, into curricula.

Significant reforms are modernizing Latvia’s crisis management, with the planned National Crisis Management Center (CMC) under the prime minister, centralizing coordination and decision-making. Civil-protection measures are strengthening as well, with new legislation for public shelters and updates to the State Civil Protection Plan.

International cooperation is indispensable, with NATO providing collective defense, the EU offering funding and policy coordination, and robust bilateral ties with the United States and regional cooperation with Baltic and Nordic partners. The LVARes project itself exemplifies Latvia’s proactive international engagement in studying national capabilities, raising awareness, and sharing best practices.

Challenges persist, including resource constraints, interagency coordination complexities, evolving threats, and the need to bolster societal cohesion. Future imperatives involve fully operationalizing the CMC, implementing the shelter program, sustained investment in capabilities, and deeper public engagement in CND. Strategic recommendations for policymakers emphasize CMC effectiveness, civil-protection investments, public-private partnerships, psychological resilience, volunteer engagement, and integrating nonviolent resistance. For international partners, continued support for Latvian capability development, amplifying LVARes findings, facilitating resilience benchmarking, and supporting cross-border exercises are crucial. Through these efforts, Latvia fortifies its security and contributes valuable lessons to the Euro-Atlantic community.

Introduction

The contemporary security environment is characterized by an array of complex and interconnected threats. These range from the potential for conventional military aggression to the more pervasive and persistent challenges of hybrid warfare, sophisticated information operations, and malicious cyber activities. Russia’s aggressive foreign policy and its full-scale war against Ukraine have significantly amplified these threats, underscoring the vulnerability of states in the region and the urgent need for robust national preparedness. Latvia’s position as a frontline state of both the North Atlantic Treaty Organization (NATO) and the European Union (EU), sharing a direct border with the Russian Federation, has inherently shaped its national security posture and necessitated a continuous adaptation of its defense strategies, pushing for an essential shift in Latvia’s defense thinking.

The traditional focus on military defense, while still fundamental, is increasingly understood as insufficient on its own. Consequently, Latvia has progressively embraced a broader concept of national resilience encompassing not only military strength but also the resilience of its society, the continuity of government and essential services during crises, the protection of critical infrastructure, and the cultivation of psychological defense among its populace. This evolution reflects a growing understanding that national security in the twenty-first century is a whole-of-society endeavor.

Latvia’s pursuit of national resilience is not confined to a single strategy but is realized through a multifaceted approach that addresses various dimensions of security. These include ensuring the operational continuity of essential services and the resilience of critical infrastructure, actively countering hybrid threats in the information and cyber domains, fostering broad societal resilience through public preparedness and education, and acknowledging the potential role of nonviolent civil resistance. The aim of this report is to systematically analyze the evolution in Latvia’s defense and security policy, particularly its implementation of a comprehensive national defense framework, and to share the insights and lessons learned with allies, partners, and the broader public to enhance collective security in the Euro-Atlantic region.

A comprehensive approach to defense and resilience

Latvia’s approach to national defense has undergone a significant evolution, moving from a primary focus on conventional military capabilities and professional military service orientation toward a more encompassing strategy known as Comprehensive National Defense (CND). Adopted in 2018, the CND system is designed to ensure security and crisis preparedness across all sectors of the state and society, thereby enhancing Latvia’s overall deterrence posture and its resilience against armed conflicts or a wide spectrum of potential crises. The overarching aims of CND are the following:

• Preparing the Latvian population to actively participate in the defense of their country. 
• Facilitating efficient and effective crisis management at the national level. 
• Ensuring the continuity and support of critical state functions, including government operations, energy supply, healthcare, and logistics, even under duress. 

A fundamental and defining characteristic of Latvia’s CND is its “whole-of-society” approach, which recognizes that national defense and resilience are not the sole responsibility of the armed forces or government ministries but require the active involvement and cooperation of every element of society. This comprehensive vision entails the systematic integration of municipalities, the owners and managers of both public and private critical infrastructure (spanning sectors such as energy, communications, finance, and healthcare), nongovernmental organizations, the broader business community, and individual citizens into national defense planning and preparedness efforts. 

A significant emphasis within this approach is placed on building and nurturing mutual trust and robust partnerships between public authorities at all levels and private-sector entities. These collaborative efforts are seen as essential for creating a networked civil and military defense system where each component is prepared and able to work in sync. The success of the CND model hinges on the ability to overcome traditional challenges and foster a shared sense of responsibility for national security.

The whole-of-society approach is further strengthened through the way the CND is managed and its legal basis, both of which are designed as a multitiered framework to ensure a whole-of-government and -societal approach to national resilience. The management structure (detailed in Annex 1) integrates political leadership, ministerial responsibilities, operational agencies, local governments, and societal actors to prepare for and respond effectively to a diverse spectrum of threats, ranging from military aggression to civil emergencies. Whereas the framework of strategic concepts, national plans, legal acts, and supporting regulations (a detailed list provided in Annex 2) ensure that CND is not merely a theoretical construct but a systematically planned and implemented national effort. Strategic concepts like the National Security Concept and the State Defense Concept, both approved by the parliament, articulate Latvia’s high-level strategic assessments, goals, and priorities in response to the evolving security environment, providing the overarching vision and direction for the development of the CND.

This approach also aligns with the direction set by NATO at its 2016 Warsaw Summit, where the Alliance adopted seven baseline requirements for national resilience. For the first time, NATO established clear conditions that member states’ civilian institutions must meet to support Article 4 and 5 military operations. These requirements include: continuity of government and critical services; resilient energy, food, and water supplies; the ability to manage uncontrolled population movements; resilient civil communication and transportation systems; and the capacity to handle mass casualties. In this regard, Latvia’s CND system goes beyond these NATO requirements by also incorporating societal resilience and the involvement of the private sector in defense operations and other aspects.

Alongside NATO’s framework, relevant EU-level initiatives provide significant complementary support for resilience. These include the EU’s crisis-management framework, particularly its Civil Protection Mechanism, and the Military Mobility initiative, which supports development of civilian infrastructure to facilitate the rapid movement of military forces across Europe. These efforts directly reinforce both NATO and national resilience objectives, providing practical tools and funding to enhance collective defense.

Beyond multilateral alliances, Latvia cultivates strong bilateral partnerships and engages actively in regional cooperation formats to enhance its security and resilience. The 2020 State Defense Concept emphasizes the strong military cooperation between Latvia and the United States, highlighting the long-standing and highly valued partnership between the Latvian National Armed Forces and the Michigan National Guard. The United States is widely regarded as a major strategic partner for Latvia’s security and independence.

The three Baltic states also work closely together to develop their collective security and defense capabilities. This cooperation includes joint efforts to strengthen their external borders, deepen collaboration in civil protection and crisis management, combat disinformation through shared intelligence and strategies, and enhance overall societal resilience. Joint military exercises are also a regular feature of this trilateral cooperation.

Nordic-Baltic cooperation provides another layer of security collaboration. Latvia’s comprehensive defense approach shares many similarities with the strategies adopted by Nordic countries, facilitating mutual learning and coordinated efforts. The Nordic and Baltic countries have also demonstrated solidarity through joint statements and coordinated actions, for example, in reaffirming their support for Ukraine.

Latvia’s multifaceted international engagement—spanning NATO, the EU, key bilateral relationships such as with the United States, and intensive regional cooperation—is not merely about receiving security assistance or aligning with external frameworks. It increasingly reflects a strategy of proactive contribution. As a frontline state that has rapidly developed its resilience concepts and capabilities in response to direct and evolving threats, Latvia is well-positioned to share valuable expertise and lessons learned.

Key pillars of Latvian resilience

Since the adoption of CND, Latvia has pursued a comprehensive approach to defense based on an understanding that every element of the government and population plays a part in creating a networked civil and military defense system—and recent lessons from Ukraine’s resistance to Russian aggression have further reinforced this understanding. This approach grew out of necessity: Latvia, a small country with limited strategic depth, neighbors Russia, a large, aggressive military power that has attacked countries in its so-called near abroad. Latvia’s approach, like those of its fellow Nordic-Baltic countries, is built on a straightforward idea that the country’s civil and military defense systems can achieve a greater deterrence and defense impact if they collaborate and if each part is prepared. Meanwhile, Latvia’s pursuit of national resilience is not confined to a single strategy but is realized through a multifaceted approach that addresses various dimensions of security. 

While the CND concept encompasses eight dimensions, ranging from military development to psychological resilience, our report examines it through four perspectives: military, civil, societal, and governmental resilience. This approach allows for a cohesive, strategic evaluation of the dimensions of readiness without sacrificing the scope of the original concept.

Military resilience

Latvia’s military resilience is a central aspect of its national defense, resting on the fundamental pillars of domestic responsibility for developing its own capabilities and a robust collective defense provided by its allies.

Lessons learned from Russia’s aggression in Ukraine since 2014 have driven initiatives to ensure that Latvian institutions and society can respond effectively to any unconventional or hybrid threat scenarios. Changes to the National Security Law have empowered the National Armed Forces (NAF), from the lowest level up, with the authority to respond to any military threat, conventional or unconventional, even without immediate orders from the political leadership. The law explicitly states that armed resistance may not be prohibited in times of war or occupation and affirms that every citizen has the right to take up arms to resist an aggressor. This legal framework solidifies the principle of total defense, ensuring that the entire nation is prepared and authorized to contribute to the defense of the country.

To maintain this posture, Latvia has steadily increased its defense budget. By 2018, Latvia had met the NATO defense spending goal of 2 percent of gross domestic product (GDP), which has significantly contributed to the development of military capabilities, including within the National Guard. Military resolve is evident in the budget’s rapid growth, which is projected to reach approximately 3.65 percent of GDP in 2025, with announcements indicating a further increase to 5 percent by 2026. This funding is crucial for keeping military modernization on track through the strategic procurement of advanced weapon systems. Since Russia’s full-scale invasion of Ukraine in 2022, Latvia has significantly increased investment in conventional war-fighting capabilities to enhance its deterrence posture. The commitment to acquiring advanced systems—such as High Mobility Artillery Rocket System (HIMARS) launchers, IRIS-T air defense systems, and coastal defense missiles—sends a vital message that the country is serious about bolstering its defense. National resilience also necessitates forging a cohesive fighting force from diverse sources of manpower. Latvia is proactively addressing manpower challenges, most notably through the reintroduction of mandatory conscription in the form of the State Defense Service (SDS). Introduced in 2023, the SDS aims to increase recruitment and build a larger, well-trained reserve force. This policy of eleven-month mandatory service has shown early signs of success. Latvia plans to enlist four thousand new recruits annually by 2028 and, notably, 40 percent of the 2024 intake opted for professional careers after their mandatory service. Current military plans envision 31,000 troops by 2029, complemented by an equally large reserve contingent thereafter. However, this rapid expansion presents significant challenges. The primary obstacles include a lack of sufficient modern training infrastructure to accommodate the larger number of recruits, a shortage of qualified instructors to lead the training, and the immense organizational task of building a functional reserve system that can effectively manage and retrain thousands of new reservists annually after their active service ends. Successfully overcoming these hurdles is critical to ensuring the SDS translates into a genuine increase in combat-ready forces.

Advanced capabilities and increased manpower are only effective if they are maintained at a high state of readiness. This is achieved through a rigorous schedule of military exercises designed to test plans and ensure interoperability. The flagship event is the annual Comprehensive Defense Exercise “Namejs,” which tests the armed forces in joint operations at every level.

These exercises are crucial for more than just military units, serving as the primary mechanism for implementing the whole-of-society defense concept in practice. During Namejs, the NAF systematically drills its cooperation with the civilian sector. This includes collaborating with municipalities and state-owned companies to support military mobility and countermobility efforts, and working with private-sector entrepreneurs on resource mobilization. Similarly, through this whole-of-society approach, Latvia has demonstrated both ingenuity and cooperation. It is exemplified by efforts to formalize the roles of civilian groups in national defense, such as the involvement of hunters in the national defense system—a patriotic and armed segment of society that can be integrated with the National Guard and tasked with support assignments. As comprehensive defense evolves into a societal reality, it demonstrates credible national will, complicates adversary planning, and builds the societal backbone needed to withstand pressure and deter aggression, including hybrid attacks from Russia.

Civil resilience

Civil resilience in Latvia focuses on the comprehensive preparedness of its civilian structures and population, encompassing robust civil-defense planning across all government levels, from national ministries to local municipalities. This emphasis recognizes the critical role of municipalities in fostering a society-wide culture of preparedness and resilience.

Russia’s aggression against Ukraine beginning in 2014 and 2022 deeply reverberated across Latvian society, creating significant momentum for action. The latter created public demand that pushed local governments beyond mere declaratory contingency plans to proactively explain preparedness strategies to their constituents. Latvia has adopted the necessary legislative basis that mandates that Latvian municipalities ensure the continuity of essential services during crises or war, therefore actively participating in developing a society-wide culture of preparedness and resilience.

Another key aspect of civil resilience involves ensuring the continuity of essential services and protecting critical infrastructure. Latvia has strategically shifted its crisis-management thinking from solely focusing on infrastructure protection to prioritizing the uninterrupted delivery of essential services and functions. While this shift presents additional planning challenges, it stems from the understanding that critical infrastructure cannot operate in isolation from broader national defense factors; it is rendered ineffective without skilled personnel, operational processes, and supporting services vital for its functioning. Businesses are consequently required to develop robust continuity plans.

The ability to ensure the flow of money for goods and services constitutes another critical service. Societal upheavals, crises, and wars often disrupt peacetime payment systems, as demonstrated by Ukraine’s experience. To address this, the Bank of Latvia (which is analogous to the US Federal Reserve) is developing crisis payment solutions, both cash and noncash, for a society with a high adoption rate for noncash transactions. For example, the Bank of Latvia is collaborating with major commercial banks to develop approved offline solutions, ensuring individuals can use their bank cards for basic necessities even if bank communications are down. Similarly, during a crisis or war, banks are required to maintain a predefined network of ATMs, with at least one ATM per municipal center, and have developed a map of critical ATMs that would operate in case of crisis.

Latvia also has proactively sought to improve the integrity of its communications systems. This involves ensuring that critical data—including sensitive healthcare, defense, security, and economic data—remains within Latvian territory and that critical information technology systems continue to function without interruption even if the connection to the global internet is disrupted. To achieve this, the government now mandates that national and municipal institutions, companies, and owners/managers of critical IT infrastructure prioritize using a single national internet exchange point, GLV-IX, a statewide and state-operated local internet ecosystem, for their data flows if the outer perimeter of electronic communications is compromised.

Finally, Latvia has actively addressed two common challenges in building preparedness: improving the communication of preparedness requirements and funding resilience efforts. Many national governments struggle with effectively communicating military crisis and war preparedness expectations to municipalities and private industries. While both disseminating information and issuing legislation are important, these efforts must be augmented by activities that encourage thoughtful planning, accurate understanding of requirements, and knowledge development. Indeed, Latvian municipalities have sometimes voiced concerns about insufficient resources for civil preparedness, arguing it should be a national responsibility. Similarly, even large, well-funded hospitals struggle to meet the three-month supply requirement for medicine and supplies, while smaller hospitals lack adequate funding altogether.

Latvia has sought to address these questions through legislative changes, clarifying responsibilities and tasks, and mandating regular exercises. Over time, continuous cooperation and the mandatory requirement of yearly exercises are expected to foster a better understanding of the overall defense system, individual roles within it, and mutual expectations among all parties involved. Regular exercise schedules significantly benefit Latvia’s preparedness across sectors by stress testing developed plans, building knowledge, and informing participants about potential organizational challenges during a military crisis or war. For example, the yearly state-wide comprehensive defense exercises Namejs involve municipalities, allied forces, and local companies playing out different scenarios alongside the National Armed Forces. On a local level, Pilskalns exercises, in use since 2020, test municipalities’ planning and practical response capabilities under wartime scenarios, involving national and local institutions, the NAF, and local companies. These exercises are crucial for stress testing plans, identifying gaps, and building practical experience among all involved parties. Ultimately, however, private enterprises are expected to fund their own preparedness planning and implementation activities.

Societal resilience

Societal resilience in Latvia is built on the principle that national security is a shared responsibility that extends to every citizen, empowering individuals with the practical knowledge and tools needed to withstand a crisis. The government has fostered a “culture of readiness” through regular information campaigns and hands-on materials that include tips to spot false information.

The most visible example of this is Latvia’s “72-hour preparedness guide,” a practical tool aimed at bolstering individual and, by extension, societal resilience. This campaign advises citizens on how to be self-sufficient for the first seventy-two hours of a crisis, a critical period before state emergency services may be able to provide widespread assistance. The booklet provides practical guidance on reliable information sources, identifying and countering disinformation, essential supplies to stock like water and food, preparing an emergency kit, and developing a family crisis action plan. This proactive approach is rooted in both general emergency-management principles and Latvia’s specific geopolitical and historical context. It not only promotes self-sufficiency that reduces the immediate burden on state resources, but also empowers citizens with concrete actions they can take, which reduces feelings of helplessness and fosters a sense of control and readiness. Public preparedness campaigns like this booklet encourage citizens to volunteer and self-organize, which are foundational elements for any form of collective resistance. The State Fire and Rescue Service (VUGD) plays a vital role in this public preparedness effort by actively informing the population on safety measures. To significantly enhance these capabilities, Latvia fully implemented a national cell broadcast system in early 2025. This modern alert system allows the VUGD to instantly send critical warnings directly to all mobile phones within a specific geographic area during an emergency, functioning without requiring users to install an application. This technology provides an immediate and widespread communication layer, complementing existing tools like sirens and the “112 Latvija” mobile application, which is also promoted by the VUGD as a key resource for emergency information.

These practical and educational efforts are underpinned by a broader national defense strategy that formally acknowledges psychological defense and nonviolent civil resistance as crucial components of CND. A noteworthy aspect of Latvia’s posture is the formal integration of nonviolent civil

resistance, where the 2020 State Defense Concept explicitly includes “nonviolent civil resistance against occupation forces” as a component of the societal dimension of “total defense.” This signifies a preparedness to resist aggression through a wide spectrum of means, not limited to armed conflict. This is, in large part, a direct response to Russia’s information manipulation and its treatment of the information space as a critical front. Securing an open media space and bolstering psychological resilience against manipulation is now a paramount security goal, involving the cultivation of critical thinking skills to withstand attempts to sow discord.  

To defend this front, Latvia employs a multilayered approach. The state has bolstered strategic communication resources, with a dedicated unit under the State Chancellery that coordinates messaging and works to disarm foreign malign information activities. Quality journalism is supported by funding and policy, and authorities have banned most of the Russian propaganda channels. In 2021, Latvia became the first Baltic state to prosecute individuals for willfully spreading dangerous falsehoods as per the criminal law, though there have been few convictions due to legal ambiguity in Article 231 around the definition of “fake news.” This state-led approach is complemented by a vibrant ecosystem of nongovernmental organizations, academics, and volunteers—such as the “Baltic elves”—who actively debunk falsehoods. Investigative journalists, fact-checkers, and initiatives like the Baltic Centre for Media Excellence also work to expose disinformation and promote high standards in journalism.

At the community level, these principles are put into practice through societal and municipality-led initiatives. Continuing work started in the previous year, the Riga municipality has organized a cycle of seven practical civil-defense seminars across various city neighborhoods. During the workshops, residents learn about specific risks in their area, such as nearby high-risk objects and evacuation routes, as identified by the Riga city municipality. They also receive practical training on how to: adapt a basement into a safe shelter; properly assemble a seventy-two-hour emergency bag; and build mental resilience with psychological self-help techniques.

To address the wider Russian threat to Western society, Latvia is sharing what it is learning with its allies and partners. It hosts NATO’s Strategic Communications Center of Excellence, and it works with allies and partners to combat malign influence. Examples of this kind of cooperation are IREX (International Research and Exchanges Board), which conducts media training in the Baltic area, and the Atlantic Council’s Digital Forensic Research Lab, which investigates disinformation and debunks narratives, educates media consumers, and has had staff based in Latvia since 2017.

Governmental resilience

Governmental resilience is the central pillar that ensures the state can continue to lead and function during a crisis, providing the necessary command, control, and coordination within the CND system. This is achieved through a robust legal framework, a clear institutional hierarchy, contingency and crisis-response planning, and a commitment to testing these plans through regular exercises to guarantee the continuity of government.

The crisis-management system of Latvia is multilayered. The State Civil Protection Plan clearly outlines the responsibilities and leading roles of all state institutions in case of state-level contingencies. The system is designed to be flexible; for example, the Ministry of Health has the leading role and responsibility for management of pandemics, as was the case with COVID-19, with all institutions (including the armed forces) supporting these efforts. Meanwhile, in the case of a military threat or war, civilian institutions have the role of supporting the armed forces and ensuring continuity of governance and essential services. At the practical level, the system envisions the establishment of the Civil Protection Operational Management Centre (abbreviated in Latvian as CAOVC), that is formed in case of state-level contingencies, including war. It would be led by the Ministry of the Interior and composed of delegated experts from across the government, tasking it with coordinating interinstitutional response, compiling a comprehensive situational picture, and providing support to the NAF.

This role is to be complemented by municipal-level responsibility through the establishment of municipal civil-protection commissions that are obliged to plan and execute response activities on a regional level, as well as coordinate with state-level efforts.

The “Kristaps” series involves the Cabinet of Ministers in simulating strategic decision-making, as well as NATO Crisis Management Exercises (CMX), while the operational comprehensive defense exercise Namejs includes tests of civil-military cooperation, the practical implementation of civil defense plans, and the coordination functions of the planned CAOVC.

Latvia’s current push to improve its crisis-management system and governmental resilience is a direct response to lessons learned from a series of major crises. The COVID-19 pandemic served as a stark, real-world test of cross-sectoral crisis management, exposing significant shortcomings in interministerial coordination, public communication, and the ability to manage state material reserves effectively. The 2021 hybrid attack and instrumentalization of migration organized by Belarus on the EU’s eastern border tested the state’s ability to coordinate a response between interior, defense, and foreign policy bodies under “gray zone” threat conditions that are, as another Atlantic Council report put it, diffuse and hard to attribute. Most significantly, Russia’s full-scale invasion of Ukraine since 2022 has provided an invaluable, albeit grim, case study in the requirements of modern national defense. It underscored the absolute necessity of a resilient government able to overcome the massive scale of civil-defense challenges and pervasive hybrid threats. These events collectively created a clear need for reevaluation and reform of the crisis-management system in Latvia, highlighting systemic challenges in achieving effective horizontal coordination across ministries.

To resolve these issues, Latvia is establishing a new centralized National Crisis Management Center (CMC). The concept for the CMC, approved by the government in early 2025, represents the keystone of the nation’s reformed resilience architecture. Its creation is a direct answer to the lessons learned from past crises, designed to provide the professional, permanent, and agile coordination that was previously lacking. Operating under the direct authority of the prime minister, the CMC is designed to provide a single, empowered hub for analysis, planning, and, crucially, to improve coordination in crisis management between key state institutions, especially in complex threat scenarios, and provide support to decision-makers and political leadership.

The core functions of the CMC will include: continuous monitoring of the situation and information gathering; identifying potential risks and threats; conducting analysis of information and data to assess these risks and threats; strategic planning and coordination of operational planning; coordinating the planning, logistics, and recovery of state-level civilian crisis-management resources, including state material reserves; and coordinating crisis-communication efforts. Meanwhile, in the specific context of a military crisis, the CMC will be responsible for coordinating the civilian sector’s response and ensuring seamless cooperation with the military sector.

In essence, this new structure, continuously validated through planning and exercises, aims to ensure the leadership and effective whole-of-government coordination deemed essential for navigating these complex security challenges.

Challenges and future imperatives for resilience

Latvia has been systematically working to integrate all societal elements into its national defense posture, particularly since 2014. This ongoing effort, while showing significant progress, presents a range of challenges and necessitates clear future developments to ensure sustained and enhanced security in a complex geopolitical landscape.

Latvia’s commendable strides in building a comprehensive national resilience model are met with several persistent and evolving challenges; therefore, for the continued evolution and strengthening of Latvian resilience it is crucial to address them in a timely manner:

1. Building and maintaining robust military defense capabilities. Maintaining momentum in military modernization programs and ensuring the capacity to sustain combat operations beyond an initial phase are crucial for credible deterrence and defense. This includes addressing the timeline for military buildup in relation to potential Russian force reconstitution. While Latvia’s defense spending is projected to reach 3.45 percent of GDP in 2025, with ambitions for 5 percent by 2026, efficient allocation across diverse needs—from military modernization to civil protection and societal programs—remains a complex undertaking. This financial strain also impacts critical infrastructure operators and municipalities tasked with new preparedness responsibilities. Therefore, continued investment in critical military capabilities, including air defense, coastal defense systems (like Naval Strike Missile systems), and long-range precision fires (HIMARS) should be pursued.
2. Expanding the National Armed Forces. Planned expansions of the NAF and the full implementation of the State Defense Service face manpower constraints, requiring substantial investment in training infrastructure, qualified instructors, and innovative recruitment policies. The current reserve system also requires significant overhaul. Latvia should continue the expansion of the NAF, overhaul the reserve system to effectively integrate SDS graduates, and implement both dedicated reservist training and early military education. Ensuring adequate infrastructure, qualified instructors, and innovative policies for recruitment and training is crucial.
3. Developing targeted strategies for critical areas. The development of industry-specific expertise for business and service continuity, particularly for critical infrastructure, can be a bottleneck. Cultivation of a deeper culture of shared responsibility with the private sector through targeted incentives, joint training programs, and secure information-sharing platforms should be continued. Additionally, mechanisms for improving intermunicipal coordination and resource sharing can alleviate the burden or strain associated with this issue. Latvia should also move beyond awareness campaigns to foster active participation, skill building, and a sense of ownership among the citizenry. Relatively low levels of public trust in certain state institutions can potentially hinder the full engagement of society in defense and resilience efforts. Actively integrating civilian agencies, businesses, and citizens into national resilience and defense planning through practical taskings and drills could help resolve this challenge. A primary challenge is also extending the intensity of preparedness from military threat scenarios to encompass nonmilitary crises across all civilian institutions. Intermunicipal coordination, particularly in resource sharing, needs strengthening. Consistent funding for new municipal responsibilities in civil defense is also a point of discussion, which the municipalities have on previous occasions cited as one of the reasons for their inability to build up civil defense capacities.
4. Interagency coordination and centralized leadership. Ensuring seamless collaboration and clear, consistent communication of preparedness requirements across all sectors and among numerous actors remains a continuous task. Latvia faces persistent interagency coordination complexities. While the spirit of comprehensive national defense promotes collaboration, the practicalities of aligning different ministries, agencies, and even different levels of government can be challenging. Each entity has its own priorities, budgets, and institutional cultures. The MoD, while a key actor, cannot guarantee or ensure the engagement and resource commitments of other ministries. Effective comprehensive national defense requires a process led by a centralized authority with the power to direct and synchronize efforts across government—ideally the prime minister’s office or a dedicated high-level body. This is especially true for distributing tasks effectively among ministries and bodies of equivalent hierarchical power. Therefore, the establishment of the new Crisis Management Center is a promising development that could further leadership in the implementation of comprehensive national defense and serve as a central actor for confronting crisis situations. However, its mandate, authority, and resourcing will be critical. It must be empowered to not just coordinate but also to direct and enforce; it also must avoid becoming yet another silo and instead act as a true hub for national crisis response and comprehensive national defense implementation. The assurance that the CMC is rapidly and effectively staffed, resourced, and empowered to coordinate across all government levels, municipalities, and the private sector is paramount. The CMC should also be tasked with leading institutionalized, regular, complex cross-sectoral crisis-management exercises. Engaging all nongovernmental organizations and local media more consistently in preparedness exercises and overcoming local political inertia are both ongoing efforts. Effective Comprehensive National Defense coordination across ministries, especially in horizontal tasking, presents difficulties. 
5. Countering evolving threats in the information landscape. Democratic countries like Latvia must counter influence within political, ethical, moral, and legal constraints, while adversaries often operate without such limits, giving them an advantage in proactive narrative projection. Latvia must continuously adapt its resilience strategies to counter new and evolving hybrid threats, sophisticated disinformation techniques, and novel cyberattack methods. Sustaining and enhancing programs to equip the population to withstand long-term information influence operations and maintain morale during crises is crucial. Further exploration and integration of nonviolent resistance concepts into national defense training and public guidance could promote the adaptability of resilience in this area. Latvia’s main approach to countering malign activities in the information space has been blocking narratives rather than proactively projecting its own strategic messages. A shift in policy is also needed from primarily blocking disinformation to more proactive narrative projection by developing and disseminating national strategic narratives that reinforce democratic values and societal cohesion. Expanding media literacy and critical thinking education is still an option; so, too, is allocating more support to independent and local media. Collaboration with allies on resilience benchmarking particularly for critical services, countering hybrid threats, and protecting critical infrastructure could bring about collective benefits in resilience building. 
6. Reviewing the conceptual framework of national defense. Latvia has made impressive progress in defining and implementing the CND concept. However, we believe that the evolution of its conceptual framework must continue to better adhere to the complexities of real-life challenges and diverse crisis situations. As time passes, a review of the initially laid out core principles is needed. A primary concern is preventing comprehensive national defense from becoming a catch-all concept. While its all-encompassing nature is a strength there is risk that its boundaries are too wide and therefore its core purpose can become diluted, leading to a diffusion of effort and resources. For instance, if every societal issue is framed as a comprehensive national defense matter, prioritization becomes difficult and the focus on core security and defense preparedness could be lost. Future work should aim to refine the operational scope of the comprehensive national defense, ensuring it remains a focused and effective framework while clearly delineating its relationship with broader societal well-being initiatives. We need to clearly define what falls within comprehensive national defense and what is supportive but distinct to maintain its strategic integrity. 
7. Deepening societal engagement and cohesion. Latvia should continue its efforts to make its comprehensive defense concept a nationwide reality not just a government policy on paper. As comprehensive defense evolves into a social reality, it demonstrates credible national will, complicates adversary planning, and builds the societal backbone needed to withstand pressure and deter aggression, including hybrid attacks from Russia. Although we have seen great examples of civil engagement from businesses in actively pursuing their role in the defense system, challenges remain with broad-based individual and community-level engagement. Latvia, for various historical and societal reasons, doesn’t always exhibit the strong deeply embedded community culture seen in some other nations. This can make reaching individuals and fostering grassroots resilience initiatives more challenging. Simply put, many individuals may not yet fully internalize their role or feel connected to a local preparedness network. Achieving genuine societal cohesion and developing the resilience of individuals within their respective communities must become a more pronounced strategic goal. This requires more than just information campaigns. It means investing in local leadership development, supporting community-based organizations, designing exercises that actively involve ordinary citizens in practical ways, and perhaps leveraging existing structures like schools, cultural centers, or even hobby groups to build networks of mutual support and preparedness. The aim should be to empower individuals and communities to self-mobilize for constructive action in crisis rather than relying solely on top-down directives.
8. Continued advocacy for enhanced support from NATO, the EU, the United States, and regional allies for Latvia’s capability development, military modernization, joint exercises, and resilience projects is crucial, as is maximizing the prepositioning of allied military equipment and stocks. The current strategic window, while Russian forces are degraded by the war in Ukraine, should be used to rapidly build up defense capacity and societal resilience, secure continued US commitment, generate a greater NATO forward presence, deepen regional integration, and refine reinforcement mechanisms. Other regional resilience priorities include transitioning the Baltic defense line from a concept to a concrete reality with fortified positions, leveraging natural terrain, and ensuring forces train to fight effectively from these prepared positions.

Editors: Armands Astukevičs, Elīna Vrobļevska.

Contributors: Mārcis Balodis, Hans Binnendijk, Marta Kepe, Beniamino Irdi.

Annex 1: Management structure

A. Strategy and policy level

President of Latvia and National Security Council (NSC): The president, as NAF supreme commander, chairs the NSC. The NSC, comprising top state officials and security heads, advises and coordinates on national security and defense, and offers recommendations to the Saeima (see below) and Cabinet.

Saeima (Parliament): Enacts national security, defense, and civil-protection laws; approves key strategic concepts (National Security Concept, State Defense Concept); and provides parliamentary oversight.

Key committees:

• National Security Committee: Prepares national security policy documents for Saeima approval.
  • Defense, Internal Affairs and Corruption Prevention Committee: Oversees relevant ministries, legislation, and budgets.
  • Comprehensive National Defense Subcommittee: Monitors government implementation of Comprehensive National Defense (CND) elements within the National Security and State Defense Concepts.
  • Other committees: May address specific CND implementation aspects as needed.

Cabinet of Ministers (CoM): The highest executive body, implementing national CND policy, approving strategic plans and regulations, allocating resources, and directing ministries.

Key bodies:

• Crisis Management Centre (CMC): Concept approval in early 2025; planned to be fully operational when legislation has been passed. Envisioned as the central, national crisis-management coordinator (monitoring, analysis, strategic planning. Its potential role in leading overall CND coordination is under active discussion.
  • Ministerial-Level Working Group for CND: Chaired by prime minister or lead minister. Ensures political alignment and high-level interministerial CND strategy coordination.

B. Planning and coordination level

State Secretary-Level Working Group for Comprehensive Defense (CND): Chaired by MoD state secretary. Coordinates CND plan development, harmonization, and monitoring across ministries at the senior-civil-servant level, translating Cabinet decisions into actionable plans.

Ministry of Defense (MoD): Lead institution for the State Defense Concept/Plan and CND concept development; responsible for military defense, NAF development, and civil-military cooperation planning.

Ministry of Interior (MoI): Lead institution for public order, internal security, and the State Civil Protection Plan; oversees the State Fire and Rescue Service (VUGD), State Police, and Border Guard; coordinates the Civil Defense Operational Management Centre.

Line ministries (e.g., health, transport, economy): Develop and implement sector-specific resilience plans and CND measures, ensuring continuity of essential services and participating in relevant working groups and exercises.

Bank of Latvia: Ensures financial-sector resilience, including payment systems and cash circulation, in cooperation with commercial banks.

C. Implementation and operations (state level):  

National Armed Forces Headquarters (NAF HQ): The NAF’s highest military headquarters and main operational command and control entity under the chief of defense; manages NAF operations, plans/executes joint operations (peacetime, crisis, war), and coordinates with civil authorities such as the Operational Control Centre of Civil Protection.

Operational Control Centre of Civil Protection: A state-level coordination body for major crises or military threats; integrates multiagency expert groups and works closely with NAF HQ to coordinate civil-military efforts.

State Fire and Rescue Service (VUGD): Primary state agency for firefighting, rescue operations, and practical civil-protection measures; implements elements of the State Civil Protection Plan.

Other key state agencies and services (e.g., Emergency Medical Service, State Police, Border Guard): Implement crisis response and resilience measures according to their mandates and plans, participating in exercises and interagency coordination.

Municipal and private-sector actors:

Civil Defense Commissions (thirty-seven at municipal level): Develop and implement local civil defense plans; coordinate local resources and crisis response (including public notification, evacuation, basic services, shelters); cooperate with regional NAF units and state services.

Private sector/critical infrastructure operators: Develop and implement business continuity plans for essential service resilience; cooperate with state and municipal authorities; may be involved in resource mobilization.  

Annex 2: Framework of concepts, plans, laws, and regulations

Armands Astukevičs is a researcher at the Center for East European Policy Studies in Riga, Latvia. Currently, he is working on his doctoral dissertation on authoritarian regime resilience. He has a master’s degree in political science from University of Latvia. Astukevičs’ previous work experience includes policy analysis and planning in the Latvian Ministry of Defense, where he focused on crisis management and comprehensive national defense issues. His current research interests relate to topics on the defense and security policy of the Baltic states, national resilience and resistance to hybrid threats, and analysis of Russia’s foreign policy processes.

Elīna Vrobļevska is a researcher and deputy director at the Center for East European Policy Studies in Riga, Latvia. She has a doctoral degree in international relations from Rīga Stradiņš University, with her thesis on “Russia’s foreign policy identity ideas and their manifestation in foreign policy (2012–2022).” Vroblevska serves as a lecturer and researcher at the Faculty of Social Sciences, Rīga Stradiņš University. Her research interests include the analysis of Russia’s foreign policy narratives and their impact on political processes, the study of Russia’s foreign policy and the security challenges it poses, as well as the examination of Russia’s activities in the information space.

Mārcis Balodis is a researcher and a member of the board of the Center for East European Policy Studies. His primary research focuses on Russia’s foreing and security policy as well as Russia’s use of hybrid warfare.

Hans Binnendijk is a distinguished fellow with the Atlantic Council’s Transatlantic Security Initiative, part of the Scowcroft Center for Strategy and Security.

Marta Kepe is a nonresident senior fellow with the Atlantic Council’s Transatlantic Security Initiative within the Scowcroft Center for Strategy and Security. She is also a senior defense analyst at RAND, a nonprofit, nonpartisan research organization.

Beniamino Irdi is a nonresident senior fellow with the Atlantic Council’s Transatlantic Security Initiative within the Scowcroft Center for Strategy and Security. He is also the head of strategic and international affairs at Deloitte Legal Italy and founder and CEO of HighGround, a political risk consulting firm.

New Atlanticist May 14, 2025

Inside Latvia’s race against time to build deterrence against Russia

By Armands Astukevičs and Hans Binnendijk

Latvia must convince its NATO allies to commit the necessary resources for its defense before Russia reconstitutes its forces.

Conflict Defense Industry

New Atlanticist May 7, 2025

Lessons from Latvia’s efforts to keep essential services running during a crisis

By Mārcis Balodis and Marta Kepe

Latvia has shifted its crisis-management thinking from a focus on infrastructure protection to an emphasis on continuity of essential services and functions.

Crisis Management Europe & Eurasia

The Transatlantic Security Initiative aims to reinforce the strong and resilient transatlantic relationship that is prepared to deter and defend, succeed in strategic competition, and harness emerging capabilities to address future threats and opportunities.

Learn more

The post The evolution of Latvia’s defense and security policy in resilience building appeared first on Atlantic Council.

The Canadian government is making a “generational investment” in its infrastructure—including pipelines, ports, and roadways. Prime Minister Mark Carney’s first federal budget, unveiled in early November 2025, establishes Canada’s long-term prosperity as a driver for this investment and enables the new government to approach linked global challenges from a place of strength. Canada’s budget process differs from the US budget process, producing a more concrete plan with less room for deviation once the budget is set. The Canadian government budget outlines actual revenue and the government’s expenditure plans. Indeed, infrastructure investments combine two priorities in the current threat landscape: economic ambition and military necessity. To achieve the stated goals of doubling Canadian exports to non-US markets over the next decade and meeting the new defense spending pledge to which NATO allies committed at the Hague summit, Canada’s new budget begins a major effort to have infrastructure catch up to ambition.

Nowhere is this more apparent than in Canada’s Arctic, where infrastructure investment has sorely lagged. Canada’s vast and remote north is a challenging environment for building infrastructure. It is costly to build and to maintain, with prohibitively high initial costs and the “tyranny of distance” often deterring investment. Amid growing international interest in the Arctic, including pressure from the United States, Canada’s north can no longer be ignored, especially as Carney’s new nation-building agenda pushes for investment in infrastructure. Investing in Canada’s northern infrastructure addresses multiple necessities: It bolsters Canada’s military footprint in the Arctic; it contributes to NATO commitments on defense spending, particularly toward the goal of 1.5 percent of gross domestic product (GDP) spent on infrastructure; it strengthens the economic opportunities available to communities in the region; and it improves access to critical minerals.  

The Canadian Arctic is facing a profound period of transformation. It is warming nearly four times faster than the rest of the globe, dramatically impacting attempts to build infrastructure in the region. Permafrost thaw, less sea ice, and rising sea levels are all challenges facing Canada’s north. Ultimately, this reality needs to be central to the development of infrastructure projects in the region. Canada seeks to become a “clean energy superpower” by supporting the development of low-emission energy projects such as nuclear reactors and low-carbon liquefied natural gas. The government is pushing for the development of carbon capture and storage technologies, as well as enhanced methane regulations. It is also affirming its commitment to the industrial carbon tax. The new federal budget’s approval by parliament was only possible with support from the Green Party. The environment must remain central to Carney’s plans for economic and infrastructure expansion in order to maintain support for his minority government.

One highlight of the new budget is the Arctic Infrastructure Fund. The government is proposing C$1 billion over four years for Transport Canada to invest in “major transportation projects in the north,” including “airports, seaports, all-season roads, and highways.” These infrastructure investments have both civilian and military uses. The Mackenzie Valley Highway is a prime example of the challenges facing major infrastructure projects in the region. The all-weather highway extension is designed to connect remote communities in the Northwest Territories. While this project’s origins date back to the 1960s, it is still several years from breaking ground. The Mackenzie Valley Highway alone is projected to cost C$1.65 billion, with the majority of the cost covered by the federal government. In this context, C$1 billion over four years—while an admirable start—is simply not enough to make a significant difference. To address infrastructure needs in Canada’s north, and to transform its portion of the Arctic so it is no longer the “soft underbelly” of the North American Arctic, this funding must be only the beginning of the Canadian government’s investments. As Carney’s large-scale projects continue to unfold, the Canadian Arctic will require more resources to meet civil and military infrastructure needs and effectively project power into the north.

In late 2025, the Atlantic Council’s Transatlantic Security Initiative hosted a workshop with government officials, academic experts, and participants from the public and private sectors of Canada, the United States, and Europe. The insights gathered from these conversations helped inform this issue brief, which assesses challenges, recommendations, and opportunities for Canada’s infrastructure in the Arctic.

Recommendations for the Department of National Defence and Canadian Armed Forces

Incorporate sustainability and climate security in Arctic infrastructure planning

Many of the Canadian government’s plans for infrastructure in the Arctic are dual use in nature, with the goal of increasing its military footprint in the region. Increased military or infrastructure presence in Canada’s north will invariably have environmental ramifications. Air- and sea-based military activities can generate excessive noise levels and air pollution, while military exercises can result in soil compaction and the destruction of vegetation. As Canada grows its infrastructure footprint in the north, it will need to include countermeasures to offset this damage—such as creating specific operational zones to protect ecosystems or paying to mitigate harm done to the environment. 

Despite these challenges, Canada has extensive resources at its disposal, such as NATO’s new Climate Change and Security Centre of Excellence (CCASCOE), headquartered in Montreal. This center can coordinate best practices, act as a standard-setting body, and provide guidance for allies and partners to operate sustainably in the region. Drawing on lessons from the European Arctic and adapting them for the North American Arctic is one area in which this center of excellence can benefit dual-use infrastructure projects.

Another reason to ensure infrastructure in the Canadian Arctic meets environmental standards is to support Canada’s new Climate Competitiveness Strategy. By linking climate sustainability to economic growth, the Canadian government is building a competitive advantage at a time when other Group of Seven (G7) countries and the European Union are walking back pledges to meet green targets.

Include local communities’ expertise and experiences in infrastructure development

As investments in Canada’s Arctic infrastructure increase, environmental considerations are being taken into account—and the experiences and expertise of those living in Canada’s northernmost regions must also be integrated into planning. Indigenous and local communities are on the forefront of the challenges facing the region, from sinking roads and runways to access to healthcare. Calls to work with Indigenous and First Nation communities are integrated throughout the budget.

Starting in 2025–2026, the government is allocating C$40 million over two years to Indigenous Services Canada through the Strategic Partnerships Initiative “to support Indigenous capacity building and consultation on nation-building projects,” some of which will be in the Canadian Arctic. The Arctic Infrastructure Fund, with its C$1 billion over four years, is specifically tasked with advancing Indigenous economic reconciliation. The budget highlights that “dual-use infrastructure investments in the north will reliably meet both military and local needs, and the government recognizes that Inuit, First Nations, and other communities are best placed to identify community needs.” Spending on infrastructure in Canada’s north has military, economic, and local resilience factors. Ensuring local and Indigenous perspectives are integrated into all stages of infrastructure development—from the planning stages to design, groundbreaking, and finalization of projects—will be key to ensuring the investments successfully meet the needs of both the military and the local community. Investing in roadways, ports, and railways in the Arctic, in close alignment with the local community, will amplify whole-of-society resilience in ways not yet realized.

Recognize critical minerals’ potential as a driver of infrastructure development in the region.

The Canadian government’s decision to increase investment in infrastructure and its northern territories can be partially understood by the global race for rare earth materials heating up. At the G7 meeting in Alberta, the prime minister introduced the Critical Minerals Production Alliance—a Canadian-led initiative that leverages trusted international partnerships to enhance critical mineral supply chains for collective defense and advanced technology.

Canada is one of the top five producers of ten critical minerals, and minerals account for 5 percent of Canada’s nominal GDP. Its northern regions are home to significant deposits of iron ore, gold, diamonds, and rare earth elements. The Mary River Mine on Baffin Island is one of the world’s northernmost reserves of high-grade iron ore, producing millions of tons annually. Similarly, the Hope Bay and Meliadine gold mines contribute substantially to Canada’s mineral output. These resources are critical for economic development and for national security.

Another major priority identified in the new budget is the Port of Churchill Plus. A series of projects will upgrade the Port of Churchill—Canada’s only Arctic-region deepwater port for more than 106,000 miles of coastline—and expand trade corridors with an all-weather road, an upgraded rail line, a new energy corridor, and marine icebreaking capacity. The goal is for the Port of Churchill to become a major four-season and dual-use gateway for the region. Expanded export capacity in the north through Hudson Bay will contribute to increased and diversified trade with Europe and other partners, while more strongly linking Churchill to the rest of Canada.

While this push for access to critical minerals makes sense from an economic perspective, it has several notable roadblocks to overcome. First is the lack of processing and refinement capabilities in Canada, and in the West more broadly. China has exerted a global chokehold over rare earth materials globally, partly due to its technical expertise in the processing stage. Western companies have struggled to compete with China over environmental and regulatory concerns, which leads to the second point: Extraction of critical minerals has an environmental tradeoff. Canada’s economic expansionism and green ambitions will eventually collide—likely in the critical minerals space. In the ever-shifting global market for critical minerals, Canada cannot prioritize short-term economic gain over long-term environmental consequences.

As always, one of the core challenges facing infrastructure projects in Canada’s north lies in sustaining this momentum in the long term. The narrow passage of this budget by parliament demonstrates the challenges of minority government rule. Improving affordability for average Canadians was the main refrain of those who voted against the new budget—a challenge that will not go away in the short term. In the long term, Carney must break the chronic habit of previous governments promising on defense spending without following through. The budget also highlights upcoming sacrifices—C$60 billion in total spending cuts in the next five years—including a 10 percent cut to the public sector (amounting to roughly forty thousand jobs). Although the C$1 billion in funding through the Arctic Infrastructure Fund is a strong step forward, it will need considerably more funding to meet Canada’s ambitions in the region and must be supported by action.

Jason C. Moyer is a nonresident fellow with the Transatlantic Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. 

Issue Brief May 30, 2025

The frontier is the front line: On climate resilience for infrastructure and supplies in Canada’s Arctic

By Jeffrey Reynolds, Kristen Taylor

The front lines of strategic competition now run through the Arctic. Ottawa must do more to enhance its military readiness and infrastructure preparedness in the region.

Climate Change & Climate Action Defense Policy

Report Aug 1, 2025

Defining Canada’s threat landscape: Resetting for a new reality

By Peter Engelke, Ginger Matchett, Samantha Wong

In a changing strategic landscape, Canada must reinforce its national security and confront the threats of geopolitics, climate change, and emerging technology.

Climate Change & Climate Action Defense Policy

Issue Brief Dec 22, 2025

How to equip Canada’s defense industrial base to meet NATO’s Hague summit commitments

By Jason C. Moyer

In 2025 Canada met NATO’s target of spending 2 percent of GDP on defense for the first time and committed to the new target of 5 percent by 2035, but its defense industrial base will struggle to deliver in its current state.

Defense Industry Defense Policy

The Transatlantic Security Initiative aims to reinforce the strong and resilient transatlantic relationship that is prepared to deter and defend, succeed in strategic competition, and harness emerging capabilities to address future threats and opportunities.

Learn more

The post Prioritizing Canada’s investment in Arctic infrastructure appeared first on Atlantic Council.

This is the third chapter in the Freedom and Prosperity Center’s 2026 Atlas, which analyzes the state of freedom and prosperity in ten countries. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

Evolution of freedom

Serbia’s freedom trajectory since 1995, according to the Freedom and Prosperity Indexes, falls into three distinct periods. The first is the dismal 1990s, defined by war, sanctions, and international isolation; institutions hollowed out, and the political sphere narrowed to the point of collapse. The second begins with the fall of Slobodan Milošević in 2000 and runs to roughly 2011, when the country reopened to the world and took the first steps toward European integration. The third starts around 2012, when the political environment tightened again and the gains of the previous decade began to erode. This pattern is visible in the Freedom Index: a sharp improvement after 2000, followed by a gradual downturn driven overwhelmingly by the political subindex after 2012.

The post-2000 rebound was immediate and dramatic in terms of politics and economics, but the rule of law took a more gradual turn. The political opening—competitive elections, wider latitude for civil society and media, and normalization of international relations—was the most visible change. Serbia signed bilateral investment treaties and free-trade agreements with neighbors and, in 2008, concluded a Stabilization and Association Agreement with the European Union. Even though domestic politics remained turbulent—Prime Minister Zoran Đinđić was assassinated in 2003, nationalism continued as a potent force, and Kosovo’s 2008 declaration of independence sparked a backlash—the trajectory differed markedly from the 1990s. European integration acted as the anchor that pulled politics and policy toward a more open equilibrium.

In 2010, the balance of incentives changed. After the global financial crisis, the EU’s enlargement energy waned; for the Western Balkans, accession increasingly looked theoretical rather than imminent. Without a credible “carrot and stick,” the reform push slowed across the region, while in Serbia, the political environment hardened against EU integration. The timing aligns with the ascent of the Serbian Progressive Party (SNS) and the rise of Aleksandar Vučić—first as prime minister in 2014 and later as president—under whom power centralized and media pluralism came under pressure. International observers like the Organization for Security and Co-operation in Europe (OSCE) became increasingly critical of the country’s internal dynamics. Civic activism—still very present—operated in a tighter space.

Over the past thirteen years, the cumulative effect has been systemic: Corruption has eroded the rule of law and turned key institutions into instruments of incumbency. Elections remain formally competitive but are marked by recurrent irregularities that leave little chance for alternation. Ruling party-aligned media dominate the information space, public advertising is allocated opaquely, and the security services have targeted civil society organizations on dubious grounds. The result is a shrinking political arena in which checks and balances are increasingly performative rather than constraining.

Media pluralism has faced sustained pressure. Journalists and associations report smear campaigns, threats, and pervasive self-censorship, while access to advertising and public funds tracks political alignment. Civil society is larger and more professional than two decades ago, but its operating space has narrowed—foreign funding is stigmatized, senior officials attack prominent NGOs, and procedural burdens sap time and resources. The situation is not one of outright closure, but the cumulative friction is real.

Within the political subindex, the steepest, most persistent deterioration is in political rights—freedom of association and expression—while the elections and legislative-constraints components also weaken. The contour is recognizable: After the 2000 break, political rights jump, remain broadly stable until the early 2010s, and then trace a clear decline that, while significant, does not return to 1990s levels. Elections remain formally competitive, but the tilt in media access and state resources has grown; the legislative constraints on the executive ebb as power concentrates in the presidency.

The legal subindex tells a different story: It starts at a low point, followed by early reforms and then stasis. The first post-Milošević years saw the establishment of baseline prosecutorial and judicial reforms, but two hard problems persisted: a lack of genuine independence from the executive and the capacity to process cases in a timely, professional way. Both remain binding constraints. Serbia’s legal profile improves off its post-conflict trough and then plateaus, reflecting institutions that function day-to-day but buckle at the most sensitive interfaces with politics. The causes are structural: Building effective, impartial courts is far harder and slower than opening political space, and where EU conditionality is weak or distant, momentum lags.

The legal upswing in the 2000s reflected real change—new courts, stronger constitutional guarantees, prosecutorial reforms, and a framework closer to European norms—and informality fell as tax bases modernized and customs enforcement improved. But judicial independence and effectiveness remained the weak links: External pressure, slow case resolution, selective enforcement in high-profile economic cases, and gaps in accountability and conflicts-of-interest rules kept trust low. Those frictions continue to drag on the economy.

Within the legal subindex, Serbia’s early-2000s bump is consistent with a shift from conflict to basic legal normalcy—laws regularized, courts reopened, and administration stabilized—with only minor oscillations later. The 2019–20 dip likely reflects the major protests triggered by the murder of opposition politician Oliver Ivanović in 2018, which led many opposition parties to boycott the 2020 elections. It also reflects setbacks in judicial reform and popular distrust in legal institutions. Constitutional amendments were eventually adopted in 2022, a move that modestly improved formal judicial independence even though implementation remains contested. 

The economic subindex improves steadily from the early 2000s until the pandemic, then levels off. Its composition helps explain why. Women’s economic freedom—largely driven by statutory changes captured in the World Bank’s Women, Business and the Law global report—rises markedly in the mid-2000s. Investment freedom and trade freedom also strengthen as Serbia deepens its commercial integration with the EU and broadens ties with Russia, China, Turkey, and others. Regulatory reform—streamlined procedures, clearer company law, and liberalized capital flows—improved the investment climate, while the accession process nudged alignment on services and market-access rules. New firms entered and integrated into regional supply chains in manufacturing and agribusiness, even as legacy incumbents persisted in some sectors. This is the one domain where policy has been consistently outward-oriented over the past quarter-century, even as rule-of-law reforms slowed. In effect, Serbia decoupled economic integration from institutional convergence: It became a more open, investor-friendly production platform without moving in tandem on media freedom or judicial independence. However, challenges remain in economic freedom. Property-rights enforcement and contract execution remain below EU norms—a deterrence for smaller investors. State-owned enterprises still play an outsized role in some sectors, obstructing competition and investment freedom. The use of incentives, particularly for some foreign investors, while bringing in new capital can also distort the level playing field.

The most recent political developments underscore both the resilience of civil society and the limits of the current equilibrium. Since late 2024, large student-led protests—sparked by a fatal building collapse in the city of Novi Sad and subsequent corruption allegations in the construction industry—have broadened into a sustained challenge to the status quo. The student-led movement remains within institutional politics: It aims to contest and win elections and then reform from within. Whether it can do so without direct confrontation depends on the state’s willingness to ensure a level playing field—and on the response of powerful external patrons. In the Freedom Index, the immediate consequences fall on the political subindex, but the stakes are larger: Progress in the legal subindex will require credible insulation of the judiciary from political interference, and professional policing—areas that have lagged for a decade.

Evolution of prosperity

Serbia’s prosperity profile reflects the same three phases, but the translation from freedom to outcomes is neither automatic nor linear. In the early 2000s, as political freedoms opened and the economy reconnected to Europe, income per capita rose and the country began to narrow the gap with the regional average. Then the 2008–09 financial crisis hit Serbia, though not as hard as in many EU member states—partly because Serbia was outside the euro area and partly because of its diversified trade and investment partners. The pandemic-era shock was similar: Growth dipped but recovered quickly relative to Western Europe, helped by early access to vaccines from China and less severe energy-price pass-through due to ties with Russia. The Prosperity Index’s income component captures this series of interruptions rather than collapse.

The country’s resilience is tied to its growth model. For roughly a decade, net foreign direct investment (FDI) inflows have run at about 6–7 percent of GDP, with sources increasingly diversified beyond the EU. China has become a leading investor, while Serbia has also plugged into German value chains in mid-tier manufacturing. The model is not high-tech sophistication; rather, it is steady insertion into European (and to a degree global) production networks. As long as political stability held, the arrangement delivered: jobs in export-oriented plants, a stronger tradables base, and sustained convergence. The current uncertainty—whether stability can continue without institutional reform—is therefore not an abstract governance concern but a direct question about the durability of the prosperity path.

Prosperity has more dimensions than income, and Serbia’s experience across them is uneven. Health is the sharpest outlier in the pandemic period: While output fell less than in Western Europe, excess mortality was higher, reflecting more permissive lockdowns, thinner safety nets, and health-system limits. Over the long run, health outcomes have improved, but there is still a persistent gap with richer European systems; out-of-pocket costs are high by regional standards, and hospital infrastructure trails the EU core.

Education follows a less pronounced trajectory. The baseline is decent legacy human capital—Serbia inherits strong math and engineering traditions from Yugoslavia—but the system struggles with funding and modernization. The Prosperity Index’s education component rises gradually with cohort attainment and expected years of schooling, but there is no step change akin to the post-2000 political jump. The bottlenecks are familiar: teacher pay and training, infrastructure in secondary and vocational streams, and alignment with the needs of an export-oriented manufacturing base.

On income inequality, Serbia’s path in the 2000s and early 2010s conforms to a modest Kuznets-style worsening—where inequality rises during the early stages of development—as growth resumed and labor markets restructured. That was followed by a period of relative stability and, by the mid-2010s, Serbia’s Gini index was among the higher readings in Europe, reflecting how early market liberalization often rewards upper deciles first while redistribution and competition policy lag. Today’s level is close to the mid-1990s baseline, underscoring how incomplete rule-of-law reform constrains broad-based gains. Here again, the structure of growth matters: FDI-led manufacturing and construction have provided employment and some formalization, but the gains are uneven across regions and skill levels. When investment cools—because confidence dips or political risk rises—the distributional strain is quickest to reappear at the margins.

The environment and the treatment of minorities complete the picture. In environmental quality, the legacy of coal-heavy energy and industrial emissions weighs on air quality, especially in urban centers, even as gradual gains in household energy and vehicle standards help. The Prosperity Index’s environment component records a slow improvement that is vulnerable to policy drift and external shocks. The politics of a green transition are visible in the Jadar lithium project near Loznica. Touted as a strategic growth opportunity and opposed over groundwater risks, land loss, and opacity, the mining project has swung from license revocation in 2022 to partial reinstatement in 2024, reigniting protests. The episode captures the broader dilemma: aligning investment with credible environmental standards and local consent.

On minority access, the record is mixed: Legal protections exist and the worst 1990s legacies have receded, but equal access to services and opportunities depends on local administration and enforcement capacity—precisely the legal-institutional levers that have lagged. Post-2000 reforms—constitutional protections, cultural councils, and local representation—moved minority rights closer to regional norms, especially for Hungarians, Bosniaks, and Roma, but progress has stalled since 2011. Formal guarantees remain, but politicization, uneven municipal implementation, and hostile media narratives in tense electoral periods have limited real access to services and opportunities.

The interaction between freedom and prosperity is clearest in three places. First, the post-2012 slide in political rights bleeds into the economy by weakening predictability: When media scrutiny and legislative checks soften, policy becomes more discretionary, which eventually shows up as softer investment freedom and a more erratic economic policy. Second, the state capacity problems in legal matters—especially judicial independence and effectiveness—translate into higher transaction costs, slower dispute resolution, and a bias toward insiders; these are prosperity-sapping frictions, even in an open-trade, FDI-friendly regime. Third, women’s economic freedom raises the ceiling on growth by widening the labor pool and entrepreneurial base; Serbia’s mid-2000s improvement on statutory gender equality has been a quiet contributor to its industrial catch-up. The Prosperity Index registers all three channels, but the pace and breadth of gains depend on whether the political and legal pillars reinforce or undercut one another.

Finally, recent domestic politics inject new uncertainty into what had become a well-understood model. The student-led protests that began in late 2024 have matured into a more organized political movement seeking early elections and a reform mandate. It is clear that this crisis will not simply fade away. Any escalation will pose serious questions for both Serbia’s democratic trajectory and the wider Western Balkans, where progress on rule of law, civic rights, and European integration remains fragile.

Investors are studying these signals closely. Already, foreign direct investment has fallen sharply: in the first five months of 2025, net FDI inflows amounted to roughly €631 million, compared with about €1.943 billion in the same period the year before—a drop of around 67.5 percent. If the political outcome is a genuine leveling of the electoral playing field and a credible push on rule-of-law reforms, Serbia’s prosperity path could re-accelerate—foreign capital is mobile and already present at scale. But if confrontation mounts, early elections are denied, and external patrons from China and Russia harden their positions, the risk is a prolonged standstill with wider regional repercussions.

The Prosperity Index is a lagging indicator here, but its income and inequality components will tell the tale in the next few readings.

The path forward

Serbia’s way forward is not mysterious, but it will be hard. The growth model that delivered catch-up—trade openness, diversified investment partners, and insertion into European value chains—remains viable. But it is probably not going to deliver the same amount of growth in an increasingly fragmented global economy facing higher tariffs and a global slowdown in FDI. And preserving it now requires political and legal reforms that were postponed when the EU accession horizon receded. The central insight of the last decade is that while economic integration can be decoupled from institutional convergence for a time, it cannot be decoupled indefinitely. The Freedom Index already shows the cost of delay in the political subindex, and the longer the legal subindex lags, the more the prosperity gains will flatten.

The immediate priority is political. Elections must be not only formally competitive but substantively fair, with balanced media access and a clean separation between state resources and party campaigning. Legislative oversight should recover ground lost to executive centralization; if the presidency remains dominant, courts and parliament cannot perform their checking functions. Serbia’s civil society has shown it can mobilize against overreach; the question is whether that energy can produce institutional change without confrontation. A credible commitment to level competition would register quickly in the political subindex—especially in elections and political rights—and, with a short lag, in investment sentiment.

The second priority is legal. Serbia needs a judiciary that is both insulated and empowered. Independence requires appointment and promotion systems that minimize political leverage; effectiveness requires resources and management that accelerate case processing and professionalize court administration. The legal subindex’s components offer a checklist: Clarify laws and reduce contradictions; strengthen judicial independence and effectiveness; improve bureaucratic quality while tightening corruption control; maintain security without eroding civil liberties; and treat informality not as a statistical curiosity but as evidence of high transaction costs that can be lowered. Even modest improvements would be catalytic: When firms expect fair, timely adjudication, they invest more and formalize faster, amplifying the earlier economic gains due to trade and investment liberalization.

Sound economic policy should aim to keep what works and fix what jeopardizes it. The external stance—openness to EU markets, continued diversification of partners, and predictable treatment of foreign investors—has served Serbia well. But stability established by way of muted scrutiny is running out of road. A rules-first approach to fiscal policy, procurement, and state-firm relations would lower the risk premium without forcing a retreat from the country’s pragmatic geoeconomic posture. In this sense, the economic subindex’s strongest components—trade, investment, and women’s economic freedoms—are the baseline to protect, while property-rights enforcement and corruption control are the levers for raising the ceiling.

Prosperity policy should target slow variables that pay off across cycles. Health outcomes require steady investment in primary care, hospital equipment, and public-health capacity; the pandemic showed how quickly gaps widen when systems are overrun. Education needs a dual track: modernized general schooling and a serious vocational stream matched to the country’s role in regional value chains. Inequality is best tackled by sustaining labor-intensive FDI while pushing more value added into local supply chains; when more of the “last mile” of production happens domestically, wage gains spread. Environmental quality will improve when energy policy tilts toward cleaner sources and when industrial standards rise; here, alignment with EU norms is both feasible and, over time, growth-enhancing. The Prosperity Index components—health, education, inequality, environment, minorities—will move together if legal quality does its part.

Geopolitics will keep testing Serbia’s pragmatism. The country’s relative nonalignment among major powers has so far produced diversified capital and insurance against shocks. The risk is that a domestic political crisis or external confrontation would force sharper choices. The safest way to preserve room for maneuvering is institutional: Fairer elections, stronger oversight, professional courts, and trustworthy administration lower the temperature at home and raise trust abroad. Investors do not require perfection; they require predictability. The Freedom Index’s political and legal pillars are proxies for that predictability, and progress there will determine whether the Prosperity Index resumes its upward slope or plateaus.

Reenergizing the EU accession track would have effects well beyond Serbia’s borders. Because Belgrade sits at the center of the region’s unresolved files—above all, relations with Kosovo and the major constitutional and territorial agenda in Bosnia and Herzegovina—building Serbian stability would lower regional tensions. A visible move from Belgrade to a more committed EU path would lower the political risk premium, unlock stalled dossiers, and revive the demonstration effect that powered reforms in earlier enlargement waves. The spillovers would be tangible—more predictable rules, faster dispute resolution, clearer procurement—and would draw in investment that binds the region more securely to European value chains. In short, if Serbia moves, the region moves; if Serbia stalls, momentum will move elsewhere in the region.

A recommitment to Serbia’s EU integration is possible. The region offers examples of rapid legal improvements when potential EU accession is real and monitored; Serbia’s own economy shows how quickly openness pays when credibility is present. What has been decoupled can be recoupled: political pluralism that is not merely formal, legal institutions that function without fear or favor, and an economy that remains as open and diversified as the past decade but under rules that are clearer and more evenly enforced. If that alignment is restored, the next readings should show the familiar pattern in reverse: first, stabilization of political rights and elections; next, a nudge up in legal quality; then, renewed momentum in investment and trade freedom—followed by broader prosperity gains that are felt not only in GDP charts but in health clinics, classrooms, and paychecks.

Richard Grieveson is deputy director at the Vienna Institute for International Economic Studies and a member of the Balkans in Europe Policy Advisory Group. He coordinates wiiw’s analysis and forecasting of Central, East and Southeast Europe. In addition he works on European policy analysis, European integration, EU enlargement, economic history, and political economy.

He holds degrees from the universities of Cambridge, Vienna, and Birkbeck. Previously he worked as director in the Emerging Europe Sovereigns team at Fitch Ratings and regional manager in the Europe team at the Economist Intelligence Unit.

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Against a global backdrop of uncertainty, fragmentation, and shifting priorities, we invited leading economists and scholars to dive deep into the state of freedom and prosperity in ten countries around the world. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

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2025 Atlas: Freedom and Prosperity Around the World

Twenty leading economists, scholars, and diplomats analyze the state of freedom and prosperity in eighteen countries around the world, looking back not only on a consequential year but across twenty-nine years of data on markets, rights, and the rule of law.

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Twenty leading economists and government officials from eighteen countries contributed to this comprehensive volume, which serves as a roadmap for navigating the complexities of contemporary governance. 

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The Freedom and Prosperity Center aims to increase the prosperity of the poor and marginalized in developing countries and to explore the nature of the relationship between freedom and prosperity in both developing and developed nations.

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At the June 2025 NATO summit in The Hague, allies committed to spend 5 percent of their GDP on defense, with 3.5 percent focused on core defense and 1.5 percent on related defense expenditures. Canadian Prime Minister Mark Carney says his country is committed to reaching NATO’s new defense spending target of 5 percent of GDP by 2035—and his government is also on track to meet the previous 2 percent target for the first time by spending an additional C$8.7 billion ($6.58 billion) this fiscal year (which ends in March 2026). Canada has struggled to meet NATO goals in the past. In 2023, it failed to meet both of NATO’s defense spending targets of 2 percent of GDP on defense and 20 percent of that spending allocated for research, development, and equipment. 

Although there is now support for increased defense expenditure at the highest levels of government, Canada has underinvested in its defense industrial base for decades and will need renewed focus, resources, and support to meet the country’s Hague commitments. How will Canada’s defense industrial base adapt to meet the current moment? Carney has put forward the bold claim that “Canada is meeting this moment with determination and resolve—modernising our defence capabilities, strengthening our industrial base, and reaffirming our role as a reliable partner in global security.” But what must its defense industrial base do to match this commitment?

In late 2025, the Atlantic Council’s Transatlantic Security Initiative hosted a workshop with government officials, academic experts, and participants from the public and private sectors of Canada, the United States, and Europe. The insights gathered from these conversations helped inform this issue brief, which assesses challenges, recommendations, and opportunities for Canada’s defense industrial base in an era defined by multiple conflicts and increased coordination by adversaries.

Canada’s defense industry at a crossroads

Canada has an extensive list of military equipment it needs to either produce domestically or purchase internationally, such as new warships, submarines, coastal defense vessels, fighter aircraft, and surveillance aircraft. This new equipment is needed for both national defense and to modernize Canada’s military to meet the current threat environment. In addition to renewing its leadership of the multinational NATO forces in Latvia, Canada has needed to strengthen its military capabilities along its three seas: in the Atlantic, Pacific, and Arctic Oceans. This comes at a time when Canada is also juggling bilateral border security cooperation and engaging in a major renewal of North American Aerospace Defense Command (NORAD) in close cooperation with the United States.

Central to Canada’s defense industry is its reliance on the US market and US companies, which supply much of Canada’s defense needs. Carney has often noted that one challenge facing Canada’s defense industry is that approximately 75 cents of every dollar in capital spending on defense winds up going to firms based in the United States. The relative size of the Canadian defense industrial base and its ability to compete internationally for contracts remain concerns as new funding flows to industry at an unprecedented rate. 

For the first time, Canada’s military is poised to receive additional funding through the new federal budget and facing “the uncomfortable position of having so much cash it will be hard to keep up.” This represents a dramatic mindset shift for the military, which has had to cope with deficits of people, equipment, training, and sustainment. Now, with more funding allocated for defense, the hard work begins as Canada tries to use that funding effectively to address gaps in equipment, personnel shortages, and better training opportunities for its military. 

With this increased available funding, the question matters of Canada’s procurement process and how to adapt it to meet the current moment. Canada’s procurement process, sometimes described as “glacial,” has received more attention lately and has a new agency focused on eliminating waste and accelerating the process. At the same time, Canada should recognize the constraints it faces regarding the size and scope of its defense industry; it should instead focus on niche areas in which it can excel, such as the maritime or Arctic domains. Many hurdles remain for Canada to meet the current moment, including personnel shortages in both the Canadian Armed Forces and industry roles. The Canadian Armed Forces (CAF), in its army modernization report, outlines the challenges facing the CAF to modernize, with at least another fourteen thousand recruits needed to meet the current security environment.

Recommendations for the Department of National Defence

1. Create consistent and predictable defense contracts for industry

A frequent refrain from industry is that the lack of consistency and predictably about defense contracts makes it challenging to scale and expand. A stable defense industrial base can foster innovation and address evolving challenges facing Euro-Atlantic security. The Canadian defense industry contributes about $10 billion annually to the economy and supports an estimated eighty-one thousand jobs. By investing in its domestic defense industry, niche capabilities, and evergreen infrastructure in the near term, the Canadian government can not only meet its NATO commitments but also expand job growth and economic performance. The long-term timeline for this investment in Canada’s defense industrial base will be key—Carney leads a minority government and this inevitably leads to a degree of uncertainty about long-term government commitment. Canada’s defense industrial base will not be able to meet the current moment with a one-off surge in available funding; it requires consistent and predictable funding over a longer-term horizon.

To get a sense of the importance of consistent and predictable defense contracts, look no further than the Canadian Patrol Submarine Project (CPSP) modernization process. Canada has been in the market for a new submarine fleet that is deployable in the Arctic with extended range and endurance. Two qualified suppliers—a German company and a South Korean company—will work with the Canadian maritime and defense sectors to deliver new submarines by 2035. So far, there is no project budget for this initiative, leading to uncertainty from an industry perspective. The Justin Trudeau government frequently made promises about defense spending that failed to materialize. The Parliamentary Budget Office recently quantified past underspending: between 2017 and 2023, efforts to buy new equipment fell short by C$18.3 billion. Ammunition producers claim they need at least C$800 million to open new production lines. Ultimately, for industry to respond to government decisions regarding its defense and security needs, a level of consistency and predictability must be provided, which has been a challenge for Canada’s defense industrial base in the past.

2. Streamline and strengthen the procurement process 

If defense spending is now a given, the question then turns to how the Canadian Armed Forces will acquire the materiel they need. On October 2, Carney announced the formation of a new agency, the Defence Investment Agency (DIA), to facilitate and accelerate the defense procurement process. The procurement process had previously been fragmented across multiple departments, resulting in significant slowdowns in obtaining critical equipment. The DIA removes some of the red tape and redundancies with a centralized review and approval process. The agency has a specific aim to bolster Canada’s domestic defense industry, to empower Canadian companies to compete globally while also investing in dual-use capabilities. This will specifically address a frequent criticism that by the time equipment is delivered it is either out of date or unfit for the current mission. Additionally, the agency hopes to bridge the divide between industry and government by bolstering awareness on both sides of the timelines, costs, and expectations for equipment deliveries.

The formation of the DIA is the first step in an overdue streamlining and strengthening exercise for procurement. As the Canadian government seeks to foster innovation and create national champions in the defense space, it needs to continue bridging the divide between industry and government. Additional work can be done to ensure a role for Canada’s many small and medium-sized enterprises (SMEs) in its industrial base, which is critical to ensure agility and flexibility. The current conflict in Ukraine has demonstrated the significance of drones, but the next conflict might look very different and, in turn, might require industry to adapt to changing battlefield conditions. SMEs are better poised to adapt and pivot as technology evolves at a rapid pace and ensure Canada’s military is ready to respond to future conflicts. 

3. Balance “Buy Canadian” with buying the right equipment for the mission

Despite the improvements to the procurement process, the Canadian Armed Forces still needs to ensure they are buying the best possible equipment for the mission. As the CAF seeks more expeditionary and proactive capabilities, this modernization effort places a premium on not just buying domestically but buying the best possible equipment. The prime minister’s new goal of focusing investment on domestic manufacturers will naturally come into conflict with the army’s modernization efforts if Canada’s defense industrial base cannot produce equipment to meet its operational needs. In turn, this decision to “Buy Canadian” will impact Canada’s ability to export its materiel and potentially raise barriers to other markets. Canada exports about half of the defense materiel it produces, with 63 percent destined for the United States and a further 12 percent to the Middle East and Africa. Striking the right balance between investing in its domestic industrial base and strengthening ties to international markets will be key to the long-term sustainability of Canada’s defense industrial base.

4. Strengthen ties with Europe

The conversation around bolstering Canada’s defense industrial base mirrors those conversations taking place in Germany, France, and elsewhere across Europe. Indeed, a deepening of Canada-Europe relations has been on display in the last year in response to the growing complexity of international conflicts and crises. This includes a landmark security and defense partnership between the European Union (EU) and Canada, which was agreed to in June 2025. This defense pact paves the way for the two to cooperate on cyber, maritime, and space security, and also opens the door to joint weapon procurement. Additionally, Canada has been proposed as a potential participant in the EU’s Security Action for Europe (SAFE) program, offering low-interest loans to accelerate procurement and investment in defense capabilities.

Diversifying and increasing the number of strategic partnerships globally, instead of over-relying on a single provider for its defense materiel, is a logical step to strengthen Canada’s defense industrial base—and also spurs innovation and supply chain resilience. Beyond the EU, Canada has sought to strengthen opportunities to collaborate with its fellow Five Eyes members, particularly the United Kingdom and Australia. The newly formed Canadian DIA aims to facilitate conversations with its counterparts in France, the United Kingdom, and Australia. Due to the similarity of their intentions to spend more on defense, Canada will have natural partners in European nations, as well as the EU more broadly. 

5. Focus on doing a few things well rather than trying to do everything all at once

A consistent theme across the various challenges facing Canada’s defense industry—its size, speed, and reliance on the US market—can all be partially solved by specializing in a few niche areas rather than doing too much all at once. Three specific areas in which Canada has both urgent needs for development and the opportunity to specialize are: unmanned autonomous systems (aerial and underwater vehicles in particular); Arctic-specific technologies, including icebreakers; and maritime capabilities leveraging Canada’s three-ocean geography. The Arctic region emerges repeatedly as a unique domain in which Canada should invest more, for both its own national security purposes and for enhancing wider Alliance capabilities. Canada has the most icebreakers of any NATO ally and is working through the trilateral ICE Pact (with Finland and the United States) to build even more of these highly specialized vessels. Capitalizing on the dearth of icebreakers within NATO would give Canada a unique opportunity to leverage its Arctic capabilities to support its shipbuilding industry while enhancing Alliance capabilities in the Arctic.

Conclusion

Carney’s government is taking unprecedented steps to strengthen Canada’s armed forces, invest in the country’s industrial base, and reaffirm Canada’s role as a reliable partner within NATO and the wider global security context. While his government’s approach and announcements so far are laudable, Canada now must turn to the task of how to support and expand its defense industrial base to meet these goals. Without this foundation, Carney’s pledges will fail to translate into improved capabilities and will hinder attempts to modernize the CAF. Time is short, the amount of work ahead is significant, and history will remember how Canada meets the current moment and security environment. 

Fellow

Jason C. Moyer

Nonresident Fellow

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

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New president, new pressures

José Antonio Kast will head to La Moneda in March 2026. Chile’s president-elect won the second round of the election with 58.2 percent of the vote—winning by a margin of more than 16 percentage points. The day after the election, Kast met with outgoing President Gabriel Boric and emphasized afterward that he will advance a “government of national unity on priority issues: security, health, education, and housing.”

Kast will enter office with a slew of economic pressures in his inbox: slow growth, weak investment, stagnant productivity, high inequality, limited social mobility, and regional gaps. The labor market remains segmented, with low female participation and high informality. Along with these economic pressures, security and rising crime rates dominated the electoral campaign and addressing them will be central to Kast’s government plan.

In 2024, Chile’s economy showed signs of stable but uneven recovery, with moderate 2.6-percent gross domestic product (GDP) growth driven largely by mining, easing inflation, and falling poverty, while unemployment and informality remained elevated and investment growth lagged. Looking ahead to 2026, growth is expected to remain steady at 2.6 percent. Alongside a narrowing fiscal deficit and inflation stabilizing, this suggests a macroeconomic environment that is steady but still dependent on restoring investment momentum.

Chileans want to see changes and expect Kast to deliver some economic wins quickly. But the ability to do so goes hand in hand with addressing the increased rates of crime and violence. Kast’s campaign focused on the security of the country with proposals such as his Plan Implacable,  which aims to “restore state authority and curb organized crime” through tougher penalties, more federal control over prisons, and stronger security operations, while also reasserting state authority in areas where criminal networks have expanded. This plan might be among the things on which Chileans want Kast to take action first. However, Kast and his administration need to balance what they want and what they can actually get done, especially regarding migration and deportation.

A challenging congress

The first one hundred days of the Kast administration will test the executive’s ability to move legislation that supports faster growth, rebuilds investor confidence that has been weakened by security concerns and political fragmentation, and signals a clearer economic direction.

That said, Kast takes office with a congress that leans right but does not give him full control. Right and far-right parties aligned with Kast hold seventy-six of the 155 seats in the Chamber of Deputies, with his second-round opponent Jeannette Jara’s left and far-left coalition of Unidad por Chile controlling sixty-one. The swing party of Franco Parisi, Partido de la Gente, holds fourteen seats.

Kast will need a simple majority to pass most legislation. But constitutional amendments and reforms of the electoral system would require two-thirds of votes in the congress. Kast’s coalition cannot reach either threshold on its own, and must work with partners to move any major bill forward. This makes the Partido de la Gente especially important. Because no bloc controls a majority, its fourteen deputies are in position to decide whether a proposal advances or fails. Its votes can tilt negotiations, shape the final text of legislation, and determine how governable the next term becomes.

Passing legislation through the lower house will be easier, but major legislation such as Kast’s proposed mass deportations will need broader support. The evenly split senate will require him to work with the traditional right as well as swing actors to move legislation. As such, Kast will be faced with increased pressure to deliver short-term results on crime and economic growth, signaling early whether his administration can translate public demand for order and stability into a more predictable environment for investment, something US investors typically look for before committing capital in Chile.

How Chile’s investment environment has shifted

Since the mid-1980s, Chile has implemented significant reforms that opened its economy and encouraged foreign investment. These included changes in the financial and social markets, such as Law No. 20.848 of 2015 establishing the framework for foreign direct investment (FDI), as well as other tax and labor reforms. However, social unrest in 2019, the COVID-19 pandemic, two failed constitutional reform attempts, and rising crime have affected investor confidence.

The foundation for investment in Chile lies in democracy, rule of law, and a predictable regulatory environment. The Organisation for Economic Co-operation and Development (OECD) has indicated that Chile’s growth might be reaching a ceiling, making continued reforms—such as streamlining permits, encouraging innovation, digitalizing paperwork, simplifying regulations, and removing bottlenecks—essential for reigniting momentum.

What makes Chile an attractive destination for US investors

Several conditions strengthen opportunities for US investment in Chile. Together they shape a more attractive environment for long-term investment is likely to be a priority for the incoming Kast government.

• Chile is a key tech hub in Latin America. This is because of its stable economy, strong startup ecosystem, skilled workforce, advanced digital infrastructure, and government-backed innovation programs. Successful tech projects require a strong and solid workforce. According to CBRE’s Scoring Tech Talent 2025 report, Santiago has the third-highest tech talent pool in Latin America, with more than 143,000 professionals. This positions Chile as an attractive hub for companies to expand. That said, most initiatives are heavily concentrated in Santiago, emphasizing the need for additional training in both the northern and southern regions to ensure successful new project implementation.
• US companies benefit from working with reliable local partners, in part because Chile has clear rules for contracts and strong institutions and because local firms usually have long experience navigating permitting, local procurement, cultural nuances, and sector-specific regulations. These conditions create an environment where these partnerships give foreign investors a dependable base of support on the ground.  
• Investors trust Chile because its infrastructure is strong, and its politics stay steady. In 2024, Chile received $15.3 billion in FDI, one of the highest inflows in recent years. A big share of that comes from reinvesting earnings, which shows that companies already in Chile are confident enough to expand. The government agency InvestChile closed 2024 with a portfolio of $56.2 billion in foreign-backed projects, with US companies investing the largest share at $20.5 billion. Major investments target clean energy: green hydrogen, mining, and infrastructure. These numbers show that foreign investors, especially those from the United States, believe in Chile’s long-term stability and the clarity of its rules. They see a country where projects can start quickly and scale up, thanks to predictable regulations and reliable systems. That confidence in both infrastructure and political stability strengthens the case for more investment.

The U.S. International Development Finance Corporation (DFC)’s mandate prioritizes investments in markets that offer predictability, stability, and clear rules, conditions that have historically made countries like Chile attractive for engagement. The DFC, a US federal agency, was created under the 2018 Better Utilization of Investments Leading to Development (BUILD) Act, which merged the Overseas Private Investment Corporation (OPIC) with USAID’s Development Credit Authority. Its core purpose is to mobilize private capital to advance US development and foreign policy objectives by leveraging financial tools such as loans, equity investments, guarantees, and political risk insurance to support private-sector-led solutions in markets where commercial finance is limited or unavailable.

In December 2025, Congress reauthorized and modernized the DFC through the FY 2026 National Defense Authorization Act (NDAA), extending its authorization through 2031, and significantly expanding its scope and authorities. Under this reauthorization, the DFC’s investment cap (Maximum Contingent Liability) was raised to $205 billion, and the agency gained new tools, including a $5 billion equity revolving fund and increased equity investment authority. The legislation also broadened DFC’s ability to invest in more countries and sectors while placing limits on financing in the wealthiest countries, ensuring that no more than 10 percent of its portfolio may support high-income markets, with specified sector exceptions such as energy, critical minerals, and information and communications technology.

While Chile’s high-income status means that large-scale DFC engagement is still limited compared with developing markets, the agency can support selected projects in strategic areas, including clean energy, critical minerals, infrastructure, and technology, particularly where there is a clear economic or strategic rationale and consistent with the statutory constraints on participation in wealthy countries.

Addressing bottlenecks to further FDI in Chile

Following the presidential election, Chile enters a new political phase with renewed attention on how the next administration will translate campaign promises into policy. Chile continues to take steps to strengthen its investment environment, while facing persistent bottlenecks that shape foreign investor confidence and will influence the country’s economic direction in the months ahead.

• Regulatory delays are a major concern and become impediments. Permitting and environmental review processes can take several years. However, the Framework Law on Sectoral Authorizations (Law 21.770)—better known as the Ley de Permisología, which creates the Framework Law on Sectoral Authorizations (LMAS)—was enacted and posted in September 2025. The goal is to update and speed up the permit process to encourage investment. The law creates a single digital portal called SUPER to manage permits simultaneously, introduces simplified procedures for low-risk projects, and establishes administrative silence. Streamlining and updating procedures are expected to drop processing times between 30 percent and 70 percent without lowering regulatory standards. This will also be a step forward for attracting foreign investment.
• Policy uncertainty remains a concern for long-term investors. Over the past decade, shifts between governments of the right and left have created questions about the direction of future regulations. Relations between Santiago and Washington are expected to further deepen under a new administration. Kast will need to show that he can meet public expectations for stronger growth and higher investment. Here, it’s critical to balance the demands of [JF1] parties across the political spectrum as this congressional balancing act is what’s needed to advance legislation reassuring to investors. Although Chile has struggled lately to attract FDI, the United States remains its second-largest source, with a strong presence in energy, data centers, and mining.
• The economy also plays a major role in the current political moment. Chile has experienced slow growth for several years and unemployment sits at about 9 percent. Investment remains stagnant, with inflation and high living costs shaping daily choices for many Chileans. Voters widely see the current government as falling short in addressing these issues. The national budget was also a central topic of conversation during the election. The legislative commission in charge of reviewing the annual budget recently rejected the proposal for 2026; Kast will now likely express his approach to next year’s spending plan in the short term. That said, his proposal of gradual elimination of property taxes on primary residences, starting with those on homeowners over sixty-five, would reduce government revenue, meaning the 2026 budget will need to account for this shortfall. The administration will need to balance funding public services and implementing the policy in a fiscally responsible way.
• Security is another major risk. While Chile remains relatively safe in comparison to select other countries, crime has risen in recent years—including organized crime, drug trafficking, and violence in northern regions and Santiago. Researchers estimate crime costs the country nearly $8 billion annually, discouraging some foreign investment. Kast made public safety a core part of his platform through the previous mentioned Plan Implacable, which includes tougher penalties for organized crime, high-security prisons, expanded self-defense laws, protections for law enforcement and judicial actors, and targeted border security measures with his Plan Escudo Fronterizo.

Sectors in Chile with investment potential

• Information technology (IT): Chile’s IT sector is expanding rapidly, driven by high internet penetration, widespread mobile connectivity, and growing demand for digital services. Key emerging sectors include fifth-generation (5G) deployment, big-data analytics, and artificial intelligence (AI) integration, supported by initiatives such as Chile Digital 2035 and the National AI Policy. To accelerate growth, Chile can build on existing programs by expanding Chile Digital 2035 and Digital Talent for Chile, increasing investment in digital infrastructure, scaling training and education initiatives, and deepening public-private partnerships to ensure broader access to advanced IT solutions, close the skills gap, and achieve full digitalization of public services.
• Critical minerals (copper and lithium): As the world’s largest copper producer, supplying 24 percent of global output, and home to 41 percent of lithium reserves, Chile is a strategic source of materials essential for clean technologies. These include electric vehicles, energy storage, and digital infrastructure. With public policies promoting sustainability and high environmental standards, Chile is positioning itself to attract investment that advances technological innovation, supports the global energy transition, and fosters inclusive economic growth. China currently dominates global demand for Chilean copper and lithium, but Kast could attract more Western-aligned investment by promoting legal certainty, officering incentives, and fostering partnerships with companies that meet high environmental and governmental standards.
• Water management and drought mitigation: Chile is increasingly leveraging public-private partnerships to improve water management and climate resilience. Investments focus on both traditional infrastructure, such as dams, and natural solutions including reforestation and wetland restoration. There is demand for technologies that enhance water efficiency, like advanced treatment and recycling systems, data-driven water management tools, and construction waste reduction. Sustainable agricultural practices that conserve water and lower input costs also present promising opportunities. Water management could become a strategic priority for Kast, with the advancement of such projects allowing the administration to deliver visible results, balance regional needs, and contribute to Chile’s robust agriculture sector.
• Seismic-resilient infrastructure: Situated on one of the most active fault lines in the world, Chile experiences frequent earthquakes, including several above magnitudes of eight. Critical infrastructure—such as ports, airports, and energy facilities—requires modern seismic design. There is strong demand for engineering and technology services in risk modeling, resilience planning, and early warning systems. Opportunities include digital twins, smart sensors, and integrated solutions to strengthen utilities, transportation networks, and urban development.

How can the new Kast administration help unlock Chile’s economic potential and attract investment?

• Visit Washington before the March 11 inauguration. This would reinforce Chile’s shared interests in economic security and investment cooperation, present project pipelines aligned with DFC priorities and clarify Chile’s commitments in areas such as energy transition and trade. Early engagement would allow Chile to secure a proactive position in shaping US investment decisions, demonstrate commitment to close cooperation with the United States, and build political support in the US Congress and executive branch for stronger bilateral financing ties. When in Washington, use the visit to generate broader public interest in the importance of Chile as a strong US partner.
• Identify emerging skills and priority growth sectors in Chile and encourage private-sector programs that link education directly to industry needs. Kast can do this by providing tax incentives and speeding up the processing of paperwork for companies involved in workforce training. Scholarships, vocational training, apprenticeships, and partnerships with universities that teach technical skills can help equip students and current workers with the skills required for mining, technology, energy, and other strategic industries.
• Maintain continuity in key policies on permitting reforms. This applies to policies such as the Ley de Permisología, which aims to streamline and coordinate environmental and sectoral permitting across government agencies, and they should be expanded to ensure that the ministries and offices involved are actively collaborating with each other. If government entities are not coordinating—for example, in the processing of environment permits—the procedures for key sectors such as mining and technology will continue to be delayed. Demonstrating consistency will reinforce Chile’s reputation as a stable investment destination and encourage both new and reinvested capital.
• Avoid over-centralizing these initiatives in Santiago. This can be done by collaborating with regional partners or established private-sector actors to develop and train local workforces. This could include local recruitment, training programs at regional universities, and ongoing partnerships between the government and private sector.

These measures strengthen security in ways that matter for investors by creating clearer rules, steadier institutions, and stronger local trust. When the government improves workforce training and expands formal job opportunities, it reduces pressures that fuel crime in regions tied to mining and energy. Better coordination on permits lowers chances of corruption or operational disruptions because companies face fewer conflicting decisions from different agencies. Together, these steps create a safer and more predictable environment for investors. 

Conclusion

Chile remains a trusted and stable partner for the United States. Its democratic values, institutional strength, and openness to trade make it a strategic destination for US investment. But sustaining and expanding this partnership will require continued economic reforms and political engagement between both countries to ease processes for doing business, improve regulatory efficiency, enhance human capital, and foster political stability toward a robust, long-term strategic partnership. As Kast prepares to take office, he has an opportunity to set a foundation to ignite Chile’s economic growth and attract investment. And with the Western Hemisphere as a top priority for Washington, Chile has the potential to be an even more strategic partner to the United States.

The views expressed in this publication are those of the authors alone. Some of the investment opportunities discussed in this issue brief were informed by an October roundtable discussion on US-Chile investment relations, which included the participation of US and Chilean private-sector leaders, public-sector representatives, and multilateral organizations. The roundtable was organized in partnership with AmCham Chile and with the support of MetLife. Neither were involved in the production of this issue brief.

Maite Gonzalez Latorre is program assistant at the Adrienne Arsht Latin America Center of the Atlantic Council.

Jason Marczak is vice president and senior director of the Adrienne Arsht Latin America Center of the Atlantic Council

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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The post First hundred days: How Kast can accelerate US investment in Chile appeared first on Atlantic Council.

• Introduction
• The history of New START
• The nature of the two-peer nuclear strategy challenge 
• The history of Russian Federation arms control violations 
• Benefits and risks of accepting the Russian proposal 
• A path forward
• Conclusion

Introduction

The Treaty between the United States of America and the Russian Federation on Measures for the Further Reduction and Limitation of Strategic Offensive Arms (also known as the New START treaty) expires on February 5, 2026. In September, Russian President Vladimir Putin proposed that Russia and the United States agree to continue complying with the “central quantitative limits” of the treaty for one additional year.¹ He added, “We believe this measure will only be viable if the United States acts in a similar manner and does not take steps that undermine or disrupt the existing balance of deterrence potentials.”²

The United States must therefore decide whether to accept Putin’s proposal, reject it, or insist modifications be made. Given that New START is the last agreed-upon quantitative limit on the strategic nuclear forces of Russia and the United States, this is a consequential decision. Yet the choice is ultimately downstream of a more fundamental question: In order to assess the appropriate path forward, the United States must determine its strategy for managing the two-nuclear-peer threat environment that China’s rapid, unexplained nuclear buildup will create. Only then can Washington identify what nuclear forces will be required to implement that strategy with high confidence—an essential prerequisite for assessing whether an extension of New START aligns with US interests.

This issue brief will ask and answer the question of whether extending the New START limits is in the US national security interest. It will do so by analyzing the history of the New START treaty (including the circumstances under which it was negotiated); the nature of the two-peer nuclear problem and the strategic challenges it poses; the history of Russian arms control compliance; and the potential benefits and risks of accepting Putin’s proposal for a one-year extension of the New START central limits. The issue brief concludes with a recommendation for US action going forward.

The history of New START

When the Obama administration took office in January 2009, it faced an immediate nuclear arms control challenge. Two strategic nuclear arms control treaties were in effect: the Strategic Arms Reduction Treaty (START I) and the Strategic Offensive Reductions Treaty (SORT). The dilemma was that, while SORT reduced both sides’ operationally deployed strategic nuclear warheads to between 2,200 and 1,700 (far below START I’s limit of six thousand warheads), it contained no verification provisions. START I, which had significant verification provisions, was scheduled to expire in December 2009. The incoming administration rapidly sought to negotiate a follow-on agreement to SORT that would further reduce strategic nuclear forces and secure significant verification provisions before the expiration of START I. That new agreement would be dubbed New START.

At the time that the New START treaty was negotiated and signed, the United States did not view Russia as an adversary, and the prospect of large-scale war in Europe was deemed negligible. The 2010 Nuclear Posture Review (NPR) declared that “the most immediate and extreme threat today is nuclear terrorism,” a sentiment that reflected a strategic environment in which neither Russia nor China was assessed as a major or imminent strategic threat.³ Regarding the nuclear threat posed by Russia, the 2010 NPR stated, “While policy differences continue to arise between the two countries and Russia continues to modernize its still-formidable nuclear forces, Russia and the United States are no longer adversaries, and prospects for military confrontation have declined dramatically.”⁴ Similarly, at the time of New START negotiations, the nuclear threat posed by China was appropriately treated in US strategy as a “lesser included case” of the Russian nuclear threat, meaning that a force sufficient to implement US nuclear strategy vis-à-vis Russia with high confidence was sufficient to address the significantly smaller nuclear threat posed by China. That strategic assumption, however, no longer holds. 

The Obama administration’s perception of the threat environment—combined with the substantial conventional military superiority then held by the United States and its allies over any potential adversary—shaped its decision to further reduce and deemphasize the role of nuclear weapons in US national security strategy. This approach was, in part, motivated by the hope that other nuclear-armed states would follow the US lead. In this context, the United States was comfortable agreeing to the New START strategic nuclear force limits with Russia without securing parallel limits on theater nuclear forces aside from those already imposed by the Intermediate-Range Nuclear Forces Treaty (INF Treaty), which banned land-based intermediate-range ballistic and cruise missiles. After the ratification of New START, Russia rejected subsequent US efforts to negotiate further nuclear force reductions—including proposals to address Russia’s roughly ten-to-one advantage in theater nuclear forces.

A second consideration is central when assessing whether to accept Putin’s proposal: Russia’s circumvention of the New START central limits through the development of strategic nuclear weapons systems not covered by the treaty. Although developing and fielding these Russian systems are not violations of the New START treaty, they nonetheless circumvent its central limits and, more importantly, undermine its intended purpose. If the treaty’s limits were extended without addressing these new systems, they would pose an unconstrained threat to the United States.

The Russian Federation is developing two new strategic nuclear weapon systems that clearly circumvent New START: the Burevestnik intercontinental-range, nuclear-armed ground-launched cruise missile, and the Poseidon intercontinental-range, nuclear-armed torpedo (and the unique submarines from which it can be launched). The United States is within the range of both of these systems—and neither is covered by the treaty’s current provisions.

Article 5, Paragraph 2 of the treaty gives each party the right to “raise the question” of whether a “new type” of strategic offensive arm developed by the other should be subject to the treaty’s limits. The United States raised this question regarding these systems, and Russia (as is its right under the treaty) refused to discuss including them under the New START limits.

Two other Russian systems raise significant questions about the impact and advisability of agreeing to Putin’s proposal to extend the New START limits for a year.

The first is the bomber-launched Kinzhal, a nuclear-capable air-launched ballistic missile. The treaty limits “heavy bombers” capable of launching “long-range nuclear air-launched cruise missiles” with a range over 600 kilometers. When air launched, the Kinzhal has a range much greater than 600 kilometers. Russia has demonstrated this capability by employing the conventionally armed variant from the Tu-22M3 bomber in the war in Ukraine. While the Tu-22M3 does not meet the 8,000-kilometer range criterion to be a “heavy bomber” under New START, it would be limited by New START if it were capable of launching a nuclear-armed cruise missile with a range of more than 600 kilometers. Because the Kinzhal is a nuclear-capable ballistic missile, not a cruise missile, it does not make the Tu-22M3 subject to the New START central limits. This raises a salient question: Should it be? The system effectively circumvents the treaty’s constraints.

The second Russian system is the nuclear-capable RS-26 Rubezh intercontinental ballistic missile (ICBM) and the related Oreshnik intermediate-range ballistic missile (IRBM). In 2012, the RS-26 Rubezh was flight tested to a range of more than 5,500 kilometers, making it a New START treaty-limited ICBM if deployed.⁵ It was subsequently tested at least three times at ranges well below 5,500 kilometers, raising the question of whether the missile’s true military purpose was as an intermediate-range system banned by the INF Treaty.⁶ However, after the United States withdrew from the INF Treaty due to Russia’s material breach of that agreement, Russia claimed that it had developed a new IRBM, the Oreshnik. Russian subsequently used it in combat in Ukraine (meaning that it might now be deployed). Russia claims this Oreshnik is not the RS-26 ICBM. But in a November 2024 briefing, Defense Department Deputy Press Secretary Sabrina Singh confirmed “that Russia did launch an experimental intermediate-range ballistic missile.” Singh added, “This IRBM was based on Russia’s RS-26 Rubezh intercontinental ballistic missile model.”⁷ The relevant question regarding New START limits extension is whether any deployed Oreshnik missiles should be counted as deployed ICBMs under the New START central limits. The answer depends on how similar the Oreshnik is to the RS-26 Rubezh, a determination that the US intelligence community must make. At a minimum, the RS-26 and the Oreshnik should serve as a cautionary tale for US decision-makers regarding Russia’s demonstrated willingness to circumvent arms control limits. 

What does the history of the New START treaty tell us regarding the advisability of agreeing to Putin’s proposal to extend the treaty’s central limits for another year? The bottom line is that New START was negotiated in—and for—a very different threat environment than the one the United States faces today and will likely face in the near future. Given what the United States knew then about the threats it was likely to face, the New START limits made sense. They provided a US nuclear force sufficient to support the US nuclear and national defense strategies with high confidence. But the nuclear threat environment has changed dramatically since 2010.

The nature of the two-peer nuclear strategy challenge

The report of the Congressional Commission on the Strategic Posture of the United States opens its executive summary as follows.

“The United States faces a strategic challenge requiring urgent action. Given current threat trajectories, our nation will soon encounter a fundamentally different global setting than it has ever experienced: we will face a world where two nations possess nuclear arsenals on par with our own. In addition, the risk of conflict with these two nuclear peers is increasing. It is an existential challenge for which the United States is ill-prepared, unless its leaders make decisions now to adjust the U.S. strategic posture.”⁸

When New START was negotiated, there was no perceived prospect of the United States facing two peer nuclear adversaries. But that threat now is expected to become reality within a decade. The Defense Department’s 2022 China military power report to Congress concluded, “If China continues the pace of its nuclear expansion, it will likely field a stockpile of about 1,500 warheads by its 2035 timeline.”⁹ Analysts have not yet determined whether China intends to curtail its nuclear buildup once it reaches rough strategic parity or to continue it in pursuit of a usable strategic advantage, but both possibilities are realistic. 

This emerging two-nuclear-peer environment raises two fundamental questions that US national security decision-makers must address in the near term. First, what nuclear strategy will the United States adopt to manage this unprecedented challenge? Second, what nuclear forces will be required to credibly execute that strategy?

Because extending the New START limits could impede the United States’ ability to implement its strategy to address this impending threat, answering these two questions is a prerequisite for making a responsible decision on such an extension.

What nuclear strategy will the United States adopt in the future, and what forces will be necessary to implement that strategy with high confidence? The answer is still uncertain; the US government has not announced which strategic path it will choose. However, there has been a notable continuity in US nuclear strategy since the Cuban Missile Crisis. For decades, US nuclear strategy has primarily focused on three core objectives, or “ends,” including

• deter war and nuclear escalation in war;
• assure allies regarding US extended nuclear deterrence commitments; and
• achieve US objectives if nuclear deterrence fails.

As noted earlier, when New START was signed, it was possible to achieve these objectives against both Russia and China simultaneously with a force compliant with the New START central limits. Due to the increase in China’s nuclear forces, this will no longer be the case. If the US strategy for addressing two nuclear peers calls for achieving these same objectives against two peer adversaries simultaneously, US strategic nuclear forces will eventually need to grow significantly beyond the New START central limits. To avoid this required force growth, the United States would need to make a significant change in long-standing US deterrence and targeting strategies that have arguably prevented not just nuclear war, but also large-scale conventional conflict between nuclear-armed adversaries. Correlation does not necessarily indicate causation, but the least that can be said for these legacy strategies is that they have not failed in more than six decades. Is it likely that the United States will profoundly change a strategy with this track record to avoid needing to grow US nuclear forces in a relatively modest way?

If one accepts the need to increase US nuclear forces beyond the New START limits to address the two-nuclear-peer threat, the next question is when this increase must be implemented. The precise timing of the required force growth is a complex question that can be answered only with access to classified information about the threat’s growth, related targeting requirements, and US capacity to expand its forces over time. What is clear, however, is that it will take time for the United States to increase its strategic forces enough to address the two-nuclear-peer threat. Given the state of the extant US nuclear force, the nuclear modernization program, and the industrial base that supports both, the decisions needed to increase the force must be made in the near term.

The history of Russian Federation arms control violations

Russia’s track record of violating both legally binding and unilaterally declared arms control obligations is directly relevant to the advisability of accepting Putin’s proposal. Since Putin’s rise to the Russian presidency, the United States has formally found Russia in violation of nine separate arms control agreements or commitments.¹⁰ In no particular order, they are 

• the INF treaty;
• the Chemical Weapons Convention (CWC);
• the Biological Weapons Convention (BWC);
• the Conventional Forces in Europe (CFE) treaty;
• the Open Skies Treaty;
• the Vienna Document;
• Russia’s Presidential Nuclear Initiative;
• Russia’s nuclear testing moratorium (and the unratified Comprehensive Test Ban Treaty); and
• the New START treaty itself.

Russia seems to be on the verge of violating the Outer Space Treaty—if it has not already—by deploying a nuclear weapon in low-Earth orbit.

Under Putin, Russia’s track record across all these agreements and commitments is astoundingly poor. But, as the issue at hand is the proposed extension of the New START central limits, Russian violation of the New START treaty itself should be the first consideration.

Following Russia’s invasion of Ukraine, Putin suspended Russia’s compliance with the data notification and onsite inspection provisions of New START. This action is unambiguously a treaty violation. Russia’s suspension of compliance with these provisions directly undermines the United States’ ability to determine whether Russia remains in compliance with the central numerical limits that Moscow now proposes to extend. Notably, the Russian extension proposal does not include reactivation of the treaty’s data notification and onsite inspection provisions.

During Senate deliberations on ratification of New START, proponents of the treaty emphasized the importance of those provisions and the consequences for the United States if Washington lost access to them. Rose Gottemoeller, then the assistant secretary of state for arms control, verification, and compliance and Washington’s chief New START negotiator, said in remarks at the US Institute for Peace on July 26, 2010:

“The New START Treaty contains the mechanisms that will enable us to monitor and inspect Russia’s strategic nuclear forces. Our knowledge of Russian nuclear forces would substantially erode over time without ratification of the Treaty, increasing the risks of misunderstandings, mistrust, and worst-case analysis and policymaking.”¹¹

Similarly, in an online issue brief, the Arms Control Association noted regarding the New START verification provisions: “Absent the new treaty’s extensive verification provisions . . . the United States will steadily lose clarity on the current status of the most lethal potential threat it faces: Russia’s strategic nuclear arsenal.”¹²

Assuming these New START advocates were right, the United States has been suffering these consequences since 2022.

Benefits and risks of accepting the Russian proposal

An assessment of the Russian proposal to extend the New START central limits for one year must weigh both the potential benefits and the significant strategic risks.

On the benefit side, an extension could forestall a near-term Russian upload of strategic nuclear delivery vehicles above 1,550 accountable warheads, if the Russians complied with their treaty commitments. This would prevent the Russians from increasing the number of New START accountable weapons with which they could target the United States.

Additionally, some US allies might be reassured that the last remaining quantitative limit on US and Russian nuclear forces would remain in place for another year. For those allies concerned about eroding arms control structures, even a temporary extension could serve as a political signal that Washington and Moscow are not allowing the last vestige of existing arms control to collapse unchallenged.

Delaying the start of any US upload or expansion of US strategic nuclear forces for another year could save resources in the near term and might avoid incentivizing China to accelerate its already significant nuclear buildup.

Finally, both Washington and Moscow could arrive at the spring 2026 Nuclear Nonproliferation Treaty (NPT) Review Conference and claim to have preserved the New START central limits for another year. This might allow them to demonstrate a degree of commitment to the NPT’s Article VI and potentially blunt criticism from non-nuclear states.

However, there are risks to accepting Putin’s proposal—and those risks are substantial. If the United States maintains continuity in its nuclear strategy in a two-nuclear-peer environment, accepting a one-year extension of the New START central limits would delay the necessary increase in US strategic nuclear forces that the strategy will require. Such a delay will make future force-sizing adjustments more difficult to implement at scale.

Furthermore, an extension of the treaty’s central limits alone—without restoring the treaty’s verification protocol—would reward Russia for its violation of the treaty. It might also signal that the United States has diminished concerns about strict compliance, which implicitly incentivizes future Russian cheating.

Moreover, unless the central limits extension is modified to cover Russian strategic nuclear systems not currently covered by New START—such as Burevestnik, Poseidon, Kinzhal, and possibly Oreshnik—the proposal would allow Russia to continue expanding its strategic nuclear force. This possibility is especially troublesome, as the United States would remain constrained from doing so by New START limits. A one-year extension could also create a political dynamic in which recurring renewals become expected, narrowing future US options and complicating any eventual decision to cease extending the limits.

More broadly, an extension of the central limits would favor the Russian Federation, as it enables Moscow to focus its resources on the war in Ukraine and continuing its strategic programs that circumvent those limits, while the United States remains constrained. These US disadvantages would all come while China continues racing to numerical parity or beyond. Without a reinstatement of the treaty’s full complement of verification provisions, the US ability to verify continued Russian compliance will be constrained, and US insight into Russian behavior would degrade. These factors all increase the risk of further violations. The historical record under the Putin regime demonstrates that if Russia believes it can cheat without being detected (e.g., its violations of the CWC, BWC, INF, and the nuclear testing moratorium), it will.

Extending the New START central limits would send a troubling message to China regarding US capability and will to respond to Beijing’s large-scale nuclear buildup. This signal would likely undermine the prospects for bringing China to the arms control negotiating table, indicating to China that US forces will remain limited regardless of what China does. Key US allies will be profoundly unassured by the apparent US willingness to ignore Russia’s New START violation and circumvention, as well as China’s large-scale buildup. This risks strengthening the calls for nuclear proliferation in South Korea and Japan.

Finally, repeated annual extensions of the central limits will result in the number of effective prompt counterforce-capable missiles in the US strategic force dropping over the course of the planned modernization program. For example, while constrained by New START limits, the number of submarine-launched ballistic missiles (SLBMs) in the US strategic force will be reduced by four with the deployment of each new Columbia-class ballistic missile submarine (SSBN).¹³ Relief from the New START limits would allow the United States to increase the number of survivable SLBMs through 2035 despite the introduction of the Columbia class.¹⁴ Repeated extensions would also limit the expansion of the US strategic bomber force. Without those limits, the United States could unconvert thirty B-52 bombers, increasing the size of the force available to carry the new Long Range Stand Off (LRSO) cruise missile in the early 2030s. Such extensions would have the same effect on the US ability to upload the ICBM force to alleviate increasing target coverage issues in the two-peer environment. The New START central limits would prevent the United States from roughly doubling the number of warheads deployed on the ICBM force, something it could do if not constrained by the treaty. 

A path forward

After reviewing the pros and cons above, it is clearly in the US national interest to reject Putin’s proposal to extend New START limits. Instead, once New START expires, the United States should promptly begin implementing a measured expansion of its strategic nuclear forces to address the growing threat from Russia and China, while developing a new approach to US nuclear arms control policy that fully reflects the dramatic worsening of the international security environment since New START went into force.

The increase in US strategic nuclear forces should have near- and medium-term components. In the near term, the United States should unconvert SLBM launchers on Ohio-class SSBNs, increase the SLBM force, and prepare additional SLBM warheads for deployment. The United States should also begin uploading Minuteman III ICBMs. In the medium term, the United States should convert B-52 bombers and increase the planned number of next-generation air-launched cruise missiles it intends to field. It should also consider commensurate increases in future acquisitions of the SSBN force and planned number of future stealth bombers. These deployed force increases need to be accompanied by an increase in the production capacity of the US nuclear weapons complex and defense industrial base.

An appropriate new US arms control approach would require an agreement or agreements with both Russia and China. The United States should not agree to limit its nuclear forces with Russia alone in the context of China’s rapid and large-scale nuclear buildup. Rather, the US should put forward a new proposal for a trilateral agreement that enhances deterrence while managing the scope and scale of competition, placing the burden of rejecting a credible US proposal squarely on Moscow and Beijing.

The strategic force increase outlined above would not only enable the continuation of long-standing US nuclear strategy in the two-nuclear-peer environment but also generate meaningful negotiating leverage for the arms control strategy described above. The current US modernization program provides no such leverage. It is simply a rough replacement of the US New START force structure with more modern equipment. Unless the United States credibly demonstrates that it will create new dilemmas for—and additional strategic pressure on— Russian and Chinese strategy if those countries do not come to the negotiating table, neither will have an incentive to do so.

There is, of course, a less attractive alternative. It is possible that, despite the case made above, the president decides that a one-year extension is politically advantageous and does not pose insurmountable barriers to US force expansion downstream.

Should the president want to say yes, any acceptance should be conditioned—publicly and explicitly—on substantial safeguards, including two non-negotiable conditions and a publicly announced caveat.

First, Russia should agree to reinstate the full panoply of New START verification provisions as of February 6, 2026. Second, Russia should agree that the Burevestnik ground-launched cruise missile, the Poseidon intercontinental range torpedo (and its submarine launcher), and the Tu-23M3 bombers capable of launching the Kinzhal air-launched ballistic missile are, in fact, accountable under the New START central limits once deployed, and subject to data notification and onsite inspections. Moscow should also agree to discuss the applicability of New START limits to the Oreshnik IRBM.

The public caveat should be equally clear: during the one-year extension, the United States will prepare to increase its strategic nuclear forces to address the threat posed by China’s nuclear buildup. If China and Russia do not engage the United States in meaningful arms control negotiations during that period, the United States will not agree to any further extension of the New START limits.

Anything short of these conditions should be rejected.

Conclusion

The United States should not agree to extend the New START central limits for one year. Doing so rewards Russia’s violation of the treaty, constrains needed US strategic nuclear force modifications, and indicates to China that it can proceed with its large-scale nuclear buildup and its rejection of serious arms control discussions without consequence. New START extension would also, perhaps somewhat counterintuitively to some, significantly reduce the likelihood that the United States can negotiate an arms control agreement in the future that enhances US and allied security while constraining strategic competition.

It is time for the United States to make a definitive decision regarding its future nuclear strategy for the impending two-nuclear-peer threat environment and the forces required to implement that strategy with high confidence. Extending the New START limits for a year will only delay a decision that should have been made already.

Greg Weaver is the principal of Strategy to Plans LLC. Previously, he served as deputy director for strategic stability in the Joint Chiefs of Staff Directorate for Strategic Plans and Policy (J5), where he was the principal policy and strategy adviser to the chairman of the Joint Chiefs of Staff on nuclear, space, cyber, missile defense, and arms control issues. Prior to joining the Joint Staff, Weaver was principal director for nuclear and missile defense policy in the Office of the Under Secretary of Defense for Policy, and the deputy director for policy and plans at US Strategic Command. (Strategy to Plans LLC has a contractual relationship with Lawrence Livermore National Laboratory and Los Alamos National Laboratory, which design and manufacture nuclear warheads.) 

The Scowcroft Center for Strategy and Security’s work on nuclear and strategic forces has been made possible by support from its partners, including Los Alamos National Laboratory, Northrop Grumman Corporation (the prime contractor on the B-21 Raider bomber), the Norwegian Ministry of Defense, the Swedish Ministry for Foreign Affairs, the US Department of Defense, the US Department of Energy, and the US Department of State, as well as general support to the Scowcroft Center. The partners are not responsible for the content of this report, and the Scowcroft Center maintains a strict intellectual independence policy.

Forward Defense leads the Atlantic Council’s US and global defense programming, developing actionable recommendations for the United States and its allies and partners to compete, innovate, and navigate the rapidly evolving character of warfare. Through its work on US defense policy and force design, the military applications of advanced technology, space security, strategic deterrence, and defense industrial revitalization, it informs the strategies, policies, and capabilities that the United States will need to deter, and, if necessary, prevail in major-power conflict.

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The post Is extending the New START limits in the US national security interest? appeared first on Atlantic Council.

The United States faces a deteriorating global security environment, adversary governments engaged in unprecedented levels of coordination, and disruptive military and dual-use technologies shaping the future of warfare. In this context, Washington must brace for a seismic shift in the strategic landscape. This report offers recommendations to the Donald Trump administration for policy and investment decisions that will shape this new era of strategic competition in the United States’ favor.

Strategic threats facing the United States and its allies

For the first time in its history, the United States will soon need to deter two adversaries with nuclear arsenals as large as its own nuclear forces. China is undergoing the largest nuclear breakout since the height of the Cold War, Russia maintains the largest and most diverse nuclear weapons stockpile in the world, and both seek to leverage their nuclear capabilities to reshape the international order to be more suited to their interests and governing systems.¹ Beyond the great powers, North Korea’s nuclear arsenal and Iran’s nuclear ambitions continue to pose threats to US national security.

China’s rapid nuclear buildup is key to its ongoing efforts to displace the United States at the center of the international system. Through its nuclear arsenal, Beijing will aim to coerce and deter Washington from pursuing its strategic interests regionally and internationally.² According to an authoritative US Department of Defense report, China will likely reach nuclear parity with the United States in deployable nuclear warheads by the mid-2030s.³ Simultaneously, as part of its anti-area/area denial (A2/AD) architecture, China is fielding dual-capable, theater-range weapons systems able to carry either conventional or nuclear payloads.⁴ These systems, which are embedded in Chinese military plans under an “opaque” employment doctrine, complicate US escalation calculus and would introduce capability asymmetries in a regional standoff.⁵

As China surges toward parity with the United States, Russia maintains the world’s largest nuclear arsenal. Russia is armed with strategic, nonstrategic, and so-called “exotic” capabilities, all of which remain central to Russia’s strategy of coercion, intimidation, and escalation in regional conflicts and great-power competition.⁶ The Strategic Posture Commission (SPC) notes that “Russian strategy and doctrine rely on strategic nuclear forces to deter a large-scale US nuclear response against the Russian homeland while Russia can escalate to limited nuclear war in theater if it chooses.”⁷. Russia actively uses the threat of nuclear escalation to undermine US efforts to support NATO allies and Ukraine, as well as to pursue strategic objectives in Europe.⁸

Further complicating US strategic calculus are the nuclear capabilities or ambitions of rogue states. North Korea remains committed to increasing its nuclear warhead stockpile and making advancements in nuclear and missile technology to expand the lethality of its program and coerce the United States and South Korea on the Korean Peninsula and beyond.⁹ Iran also remains committed to pursuing a nuclear weapons program.¹⁰ While combined Israeli and US strikes against Iran’s nuclear infrastructure have significantly degraded the regime’s program, Iran has vowed to rebuild, meaning the threat persists.¹¹

The two-nuclear-peer-plus threat environment and growing collaboration between US adversaries present unprecedented challenges. The United States must now prepare for the possibility of concurrent or cascading conflicts in theater and across different regions with multiple nuclear-armed adversaries. Questions related to deterring multiple peer nuclear powers simultaneously and preventing opportunistic aggression must shape US nuclear strategy, employment guidance, force sizing, and conventional operations.

Strategy

As the United States faces two nuclear-armed peer adversaries, threats from emerging technologies, and limited prospects for the future of arms control, Washington must update its nuclear posture and planning to account for the realities of the next decade and beyond. Importantly, it is essential to make decisions regarding these changes now so that the United States is prepared to implement them in future years.

Even in this security environment, the traditional US nuclear strategy remains fundamentally sound. However, the United States must pursue a force posture, backed with the necessary new capabilities, that addresses the evolving challenges.

Declaratory policy

As the 2018 Nuclear Posture Review (NPR) emphasized, “given the range of potential adversaries, their capabilities and strategic objectives,” the United States requires a flexible, tailored nuclear deterrent.¹² With a full toolbox of conventional and nuclear options, US leaders will be better positioned to deter aggression, address crises, and, if necessary, manage escalation before and during conflict.

The United States should leave open a first-use option and, as the 2018 NPR states, “retain some ambiguity regarding the precise circumstances that might lead to a US nuclear response.”¹³ This would force an adversary to assume that US nuclear escalation is possible, even in response to a non-nuclear, strategic attack. Similarly, the United States should not adopt a sole purpose statement regarding the function of its nuclear weapons. Maintaining the current declaratory policy without adopting a no first-use policy or sole purpose statement supports US extended deterrence and increases allies’ assurance, as this ambiguity backstops conventional deterrence.

The United States should continue what is generally referred to as a counterforce targeting doctrine, which means not intentionally targeting population centers and deterring adversaries by holding at risk “key elements of their leadership, the security structure maintaining their leadership in power, their nuclear and conventional forces, and their war-supporting industry.”¹⁴ A counterforce targeting policy is advantageous to US objectives in several key ways. Counterforce targeting complicates adversaries’ planning and introduces doubt about their ability to achieve objectives through nuclear use. The possibility of a US strike on adversary nuclear weapons casts a shadow over an adversary’s initiation of limited nuclear use. Further, targeting adversary nuclear weapons deters by targeting what authoritarian leaders value most; these regimes prioritize regime survival and the instruments that ensure it, such as nuclear forces, over the well-being of their populations. Russian President Vladimir Putin has demonstrated in Ukraine that even massive casualty figures will not deter him from pursuing his political goals, a mindset likely shared by China and North Korea.¹⁵ By holding an adversary’s strategic forces at risk, the United States threatens the very tools on which these regimes rely for their survival, thereby reinforcing deterrence. Finally, counterforce targeting holds out the prospect of damage limitation. By holding the adversary’s leadership, strategic forces, and command and control (C2) at risk, the United States could limit the damage an adversary could inflict on the United States and its allies in a nuclear exchange.

Force sizing

With the New Strategic Arms Reduction Treaty (New START) set to expire in 2026 and China’s nuclear breakout challenging the current US deterrence posture, the United States must rethink how it sizes, structures, and postures its nuclear forces to ensure credible deterrence at both the strategic and regional levels.

Strategic forces

As the expiration of the New START treaty approaches in February, the administration must assess the future of the US nuclear force, ensuring it can maintain a credible second-strike capability against two nuclear peers, while supporting employment guidance. To do so, the administration must decide on how many strategic weapons it will need, determine the adequacy of the current triad modernization effort, evaluate upload capacity, and assess nuclear command, control, and communication (NC3) resilience.¹⁶

In addressing the two-nuclear-peer environment, the Trump administration should codify the SPC’s conclusion that the “nuclear force constructs can no longer assume that the nuclear forces necessary to deter or counter the Russian nuclear threat will be sufficient to deter or counter the Chinese nuclear threat simultaneously” and that, therefore, the program of record is “necessary but not sufficient.”¹⁷ The notion of “necessary but not sufficient” outlined by the SPC saw traction toward the end of the Joe Biden administration with Pranay Vaddi, senior director for arms control at the National Security Council (NSC), stating, “Absent a change in the trajectory of adversary arsenals, we may reach a point in the comings years where an increase from current deployed numbers is required.”¹⁸ With the growing recognition that the 1,550 treaty-accountable deployed strategic nuclear warheads will no longer be a viable force posture, senior leaders within the administration must determine how many additional deployed strategic warheads will be needed. This determination can only be calculated in a classified setting and is beyond the scope of this report.

To increase deployed strategic nuclear warheads, the administration should adopt a two-track approach. The long-term strategy should be prioritizing the full execution of the nuclear modernization program of record (POR). This effort will require continued, disciplined investment in triad modernization, including delivery systems, NC3, and supporting infrastructure. As this long-term strategy is being executed, it is vital that a balanced nuclear triad, a key underpinning of US nuclear force strength and deterrence, is maintained. Imbalance within the triad—due to program costs, modernization pressures, and emerging threats—risks overreliance on one leg or undermining another. These imbalances could create new vulnerabilities for the force, encourage adversary preemption, and weaken strategic stability.¹⁹

In the near term, to supplement the current force and address capability gaps, the United States should upload additional warheads onto extant delivery systems as soon as New START expires. The existing Minuteman III intercontinental ballistic missile force can accommodate additional warheads from the existing stockpile on multiple independently targetable reentry vehicles (MIRVs).²⁰ Additionally, the SPC recommends the Air Force and Navy “develop plans and procedures to ‘re-convert’ [submarine-launched ballistic missile] launchers and B-52 bombers that were rendered incapable of launching a nuclear weapon under New START.”²¹ This would offer a short-term remedy to an increasingly insufficient force. The ability to upload additional warheads takes weeks to years, depending on the launch vehicle.²² Measures should be taken now to overcome some of the bottlenecks in this process (e.g., the limited number of cranes certified to hoist nuclear weapons)

Nonstrategic forces

The United States faces a growing asymmetry in nonstrategic, theater nuclear forces compared to Russia and China. The insufficient arsenal of nonstrategic weapons available limits the president and military leaders’ options in addressing escalation, undermining US regional deterrence efforts. The administration must decide how it intends to address these regional asymmetries through additional capability deployment, nuclear sharing, and changes to previous policy.

The United States’ nonstrategic force principally includes dual-capable aircraft (DCA) armed with B61-12 gravity bombs stationed in Europe as part of NATO nuclear sharing, with no presence in the Indo-Pacific. The United States also fields a handful of low-yield W-76-02 warheads on its submarine-launched ballistic missiles; while a prudent stopgap measure, these weapons have limitations that make them unattractive as a sole option for addressing the risk of limited nuclear use. The current nonstrategic nuclear capabilities of the United States are lacking in several factors: survivability, penetration of adversary defenses, target coverage, and presence in theater.²³ The SPC recommended that deployed theater nuclear delivery systems have some or all of the following attributes.

• “forward-deployed or deployable in the European and Asia-Pacific theaters;
• survivable against preemptive attack without force generation day-to-day;
• a range of explosive yield options, including low yield;
• capable of penetrating advanced [integrated air and missile defenses] with high confidence;
• and operationally relevant weapon delivery timelines (promptness).”²⁴

These attributes are similarly recommended in a study conducted by the Center for Global Security Research (CGSR).²⁵

To address the capability gap in theater, the administration should continue prioritizing the nuclear-armed submarine-launched cruise missile (SLCM-N), which was discontinued by the Biden administration but funded by Congress as part of the program of record. Additionally, the administration should consider a program to deploy nuclear-armed ground-launched cruise missiles (GLCM-Ns) on road-mobile launchers and nuclear-armed ground-launched ballistic missiles (GLBM-Ns) with alternative reentry vehicles.²⁶ Both capabilities would be effective in the European and Indo-Pacific theaters.²⁷ The administration could also consider pursuing a stand-off capability by redesigning a joint air-to-surface standoff missile (JASSM) around a nuclear payload, creating an in-theater nonstrategic triad.

The full deployment of ground-based nuclear systems and nuclear-armed JASSMs is unlikely due to budget constraints, trade-offs between nuclear and conventional force investments, and the National Nuclear Security Administration’s (NNSA) backlog. As a result, at a minimum, the administration should pursue the development of the SLCM-N to ensure the United States has an in-theater capability that meets the requirements outlined in the SPC.

Arms control and nonproliferation post-New START

The security environment has greatly changed since the New START arms control treaty was signed in 2010, and, as noted above, the United States will need to expand the size of its strategic-deployed nuclear arsenal. This means that the United States cannot extend the quantitative arms limits specified in New START.

Instead, the United States should identify and pursue new trilateral arms control agreements with both China and Russia, consistent with America’s new deterrence requirements. The Atlantic Council has outlined a number of frameworks for trilateral arms control in a previous study.²⁸ It is unlikely that these efforts will succeed as China is unwilling to engage in good faith in arms control negotiations. Still, there are benefits to the United States continuing to make a good faith effort to control the strategic nuclear arms competition.

Absent a verifiable trilateral framework that includes China, the era of numerically binding arms control treaties is likely over for the foreseeable future. Still, Washington can and should pursue risk reduction measures, such as missile launch notifications, to reduce nuclear dangers.

Golden Dome for America

The administration laid out an audacious plan in the “Iron Dome for America” (later dubbed the “Golden Dome”) executive order (EO), but this policy requires significant further definition. To operationalize this initiative, the administration must define the core objective of the Golden Dome and, from there, establish an architectural concept and identify the near- and long-term research and engineering priorities necessary to achieve this vision.

Policy framework and architecture

The EO calls for “deploying and maintaining a next-generation missile defense shield.”²⁹ Of particular significance, the EO states “the architecture shall include, at a minimum, plans for:

• “Defense of the United States against ballistic, hypersonic, advanced cruise missiles, and other next-generation aerial attacks from peer, near-peer, and rogue adversaries;
• Acceleration of the deployment of the Hypersonic and Ballistic Tracking Space Sensor layer;
• Development and deployment of proliferated space-based interceptors capable of boost-phase intercept.”³⁰

In total, these objectives represent a major departure from existing US homeland missile defense (HMD) precedent. Implementing them would require not only the fielding of new capabilities but, in several cases, fundamental advances in research, development, and operational concepts.

The foundation of US missile defense policy remains the 1999 National Missile Defense Act, which directed the deployment of a system to defend the United States against limited ballistic missile attacks. Since then, successive administrations have built on this mandate, maintaining policies centered on safeguarding the homeland against nuclear-armed, long-range ballistic missiles from regional adversaries.³¹ Current HMD policy states that the United States “will defend against air- and sea-launched cruise missile threats from any country but will only pursue defenses against ballistic missiles launched by rogue states.”³² Today, the US HMD architecture relies on forty-four ground-based interceptors (GBIs), with an additional twenty next-generation interceptors (NGIs) planned beginning in 2028.³³ However, the EO’s directives indicate a significant shift in both policy and capability. Defending the homeland against the full spectrum of advanced missile threats, including hypersonic glide vehicles and long-range cruise missiles launched by peer adversaries, would represent a fundamental expansion of mission scope.

The recently passed “One, Big, Beautiful, Bill” allocates approximately $25 billion toward developing an integrated air and missile defense system.³⁴While this funding provides a solid foundation to initiate the effort, achieving the EO’s ambitious goals will require sustained, multiyear investment that extends well beyond a single administration. This raises two critical questions. First, near-term execution: what steps can be taken in the immediate future to demonstrate tangible progress toward the president’s vision? Second, long-term viability: how can the administration institutionalize this effort to ensure its continuity and eventual success across future administrations?

The administration should pursue a layered, preferential defense architecture with a space-based element. Such a system would allow the United States to rapidly enhance its HMD using existing technologies, providing credible protection against limited, coercive missile attacks by peer or near-peer adversaries, as well as reinforce extended deterrence commitments.³⁵

This near-term improvement could be achieved by augmenting the current GBIs and future NGIs with an additional defensive layer composed of the Navy’s Aegis Ashore systems, armed with SM-3 Block IIA interceptors, and the Army’s ground-mobile Terminal High Altitude Area Defense (THAAD) batteries.³⁶ Integrating these systems into a cohesive HMD network would create additional engagement zones, improve shot opportunities, and strengthen resilience against complex missile threats.

While this layered defense strategy would mitigate immediate vulnerabilities and demonstrate measurable progress toward the EO’s objectives, realizing the full vision—including the deployment of proliferated space-based interceptors and the acceleration of the Hypersonic and Ballistic Tracking Space Sensor layer—will require sustained political and financial commitment. Continued progress will hinge on securing congressional buy-in to ensure consistent funding, program stability, and long-term strategic momentum across future administrations.

Nuclear enterprise

With the proposed changes to policy and capability, significant demand will be placed on the nuclear enterprise. As then NNSA Administrator Jill Hruby stated, “NNSA is being asked to do more than at any time since the Manhattan Project.”³⁷ Meeting the Departments of Defense and Energy’s “plans to operate, sustain, and modernize current nuclear forces and purchase new forces,” would cost $946 billion over the 2025–2034 period.³⁸ To achieve the necessary increase in nuclear warheads and delivery systems, the administration must reform the broader nuclear enterprise. This means addressing not only the infrastructure and production capacity, but also the workforce.

To meet the surge in demand generated by the ongoing nuclear modernization effort, NNSA must establish a Rapid Response Office (RRO) as outlined by the FY2026 National Defense Authorization Act (NDAA).³⁹ This office, endowed with delegated authorities and flexible funding, would be empowered to rapidly design, prototype, and produce key components in response to emerging requirements. Such a capability directly supports the SPC recommendation that NNSA “meet the capability and schedule requirements of the current nuclear modernization program of record and the requirements of force posture modifications,” while maintaining the agility to “flex to respond to emerging requirements in a timely fashion.”⁴⁰

At present, excessive review layers, rigid oversight procedures, and limited incentives for innovation have created an environment that is risk averse and process driven rather than mission driven.⁴¹ An RRO would enable the enterprise to operate under delegated acquisition authority, streamlined contracting lanes, and incentive structures that reward speed, innovation, and cost control.

However, even a more agile organization cannot succeed without a modern, resilient infrastructure. Decades of underinvestment have left the NNSA complex brittle, outdated, and, in many cases, dependent on single points of failure. Nearly 60 percent of NNSA’s facilities are more than forty years old, many dating back to the Manhattan Project era.⁴² As NNSA moves to modernize critical capabilities—such as plutonium pit production, uranium processing, high-explosive manufacturing, and non-nuclear component production—these efforts have been undermined by cost and schedule overruns. As of August 2023, the agency’s eighteen major construction projects had a combined cost overrun of roughly $2.1 billion and cumulative schedule delays approaching ten years.⁴³ The Uranium Processing Facility alone faces potential additional delays of up to six years and a cost increase of approximately $3.8 billion.⁴⁴

While the SPC appropriately calls for Congress to “fund the full range of NNSA’s recapitalization efforts,” the scale and pace of these overruns make the current approach unsustainable.⁴⁵ To stabilize the modernization program and maintain capability continuity, NNSA should prioritize establishing redundant production capacity for plutonium pits and uranium components, reducing dependence on any single site and ensuring resilience in the event of technical or operational disruptions. In parallel, NNSA should establish a model similar to the Navy’s Working Capital Fund (NWCF) or Military Construction (MILCON) “no year” funds to mitigate year-to-year appropriation volatility. The NWCF “provides stabilized pricing to customers and acts as a shock-absorber to fluctuations in market prices during the year of execution.”⁴⁶ MILCON “no year” funds “represent budget authority available for obligation indefinitely until expended, regardless of fiscal year.”⁴⁷ Adopting these models for NNSA would allow for continuous and flexible funding of long-term recapitalization projects, reducing costly stop-start inefficiencies that currently plague major construction programs.⁴⁸

The final critical challenge to meeting enterprise demand is workforce retention and generational turnover. The Enhanced Mission Deliverer System Initiative (EMDI) report found that the nuclear security enterprise faces “tremendous workforce attraction and retention issues,” with roughly 40 percent of the NNSA workforce having less than five years of experience within the enterprise.⁴⁹ Compounding this challenge, “more than one-third of the nuclear security workforce will be eligible for retirement within the next five years,” risking the loss of decades of institutional knowledge and technical expertise.⁵⁰

To mitigate these workforce gaps, the administration should act on the SPC’s recommendation to “establish and increase the technical education and vocational training programs required to create the nation’s necessary skilled-trades workforce for the nuclear enterprise.”⁵¹ This should include expanding partnerships between NNSA, the Department of Education, and industry to fund specialized STEM (science, technology, engineering, and math) pipelines, apprenticeships, and advanced degrees in nuclear engineering, materials science, and manufacturing. Strengthening the talent pipeline and institutionalizing mentorship programs will be essential to maintaining design, production, and sustainment capabilities across the next generation of the nuclear security enterprise.

Strategy implementation

US nuclear strategy will only be as successful as its implementation plan. The administration must focus on two key areas of implementation: senior-leader buy-in and implementation across the combatant commands.

Sole authority for nuclear use remains with the president of the United States. While it might be impractical to involve the president personally in exercises and wargames, it is essential that senior-level defense and political leaders participate in nuclear exercises at a significantly higher cadence than they have in the past.

US Strategic Command continues to implement US nuclear strategy in operational plans but, as the salience of theater nuclear forces and the potential for limited nuclear use increase, it is more important than ever that US European Command, US Indo-Pacific Command (and its sub-unified commands), and others integrate the potential for nuclear use and the management of escalation below and across the nuclear use threshold into their operational plans and exercises. The services must also take escalation management and operations in a post-nuclear-detonation environment more seriously in their development of capabilities; tactics, techniques, and procedures; and professional military education.

Conclusion

The United States stands at a critical inflection point. For the first time in history, it must simultaneously deter two peer nuclear adversaries. The post–Cold War assumptions that guided past force planning are no longer sufficient, and senior defense leaders must reorient nuclear and missile defense policies at both the strategic and theater levels to meet today’s complex threat environment. Key decisions must be made regarding a post-New START force structure, including addressing widening capability gaps in nonstrategic forces. At the same time, policy and funding guidance is required to operationalize the Golden Dome executive order, balancing near-term implementation with long-term architectural objectives. Finally, the United States must ensure that the nuclear enterprise possesses the infrastructure, production capacity, and skilled workforce necessary to execute the nation’s nuclear strategy, which requires sustained and substantial investment in modernization, resilience, and workforce development. For eighty years, the United States has sustained the rules-based international order, helping to produce a level of stability and international collaboration without historical precedent. At the crux of this stability is a credible and extended US nuclear deterrent, which has constrained revisionist powers and upheld the integrity of global norms. A resilient nuclear posture, capable of deterring two nuclear peers simultaneously, remains the most effective safeguard against great-power war and a prerequisite for sustaining US global leadership.

Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security. Kroenig was appointed by the US Congress as a commissioner on the Congressional Commission on the Strategic Posture of the United States. He previously served in the Department of Defense and the intelligence community. Kroenig is also a tenured professor of government and foreign service at Georgetown University. He holds an MA and PhD in political science from the University of California at Berkeley.

Jonathan Rosenstein is a program assistant in the Forward Defense program of the Atlantic Council’s Scowcroft Center for Strategy and Security, where he supports work on nuclear strategy and space security. Rosenstein is a recent graduate of the George Washington University’s Elliott School of International Affairs, where he earned his master’s degree in security policy studies with a concentration in US national security, and he holds a bachelor’s degree from Tulane University.

The authors wish to acknowledge Dr. Robert Soofer for his inputs to this paper, all of which were completed before his return to the US government in 2025. They wish to acknowledge Mark Massa and Alyxandra Marine for their assistance in reviewing and editing this paper.

The Atlantic Council’s Scowcroft Center for Strategy and Security conducts work on nuclear and strategic forces, which is supported by donors including the Carnegie Corporation of New York, Lockheed Martin Corporation, Los Alamos National Laboratory, Northrop Grumman Corporation, RTX Corporation, the Smith Richardson Foundation, the United States Department of Defense, and the United States Department of State, as well as through general support to the Scowcroft Center for Strategy and Security.

Forward Defense leads the Atlantic Council’s US and global defense programming, developing actionable recommendations for the United States and its allies and partners to compete, innovate, and navigate the rapidly evolving character of warfare. Through its work on US defense policy and force design, the military applications of advanced technology, space security, strategic deterrence, and defense industrial revitalization, it informs the strategies, policies, and capabilities that the United States will need to deter, and, if necessary, prevail in major-power conflict.

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The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

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The post Nuclear priorities for the Trump administration: A time to decide appeared first on Atlantic Council.

• Foreword
• The imperative: Defining the role of military mobility in Europe
• Existing infrastructure of military mobility
• Prioritizing and streamlining infrastructure requirements
• Leveraging civilian resources
• The holy grail of a military Schengen area
• Conclusion and recommendations

Foreword

It is a great honor to write the foreword to this Atlantic Council report, Enhancing land military mobility in Europe: Advocating a pragmatic approach. This new report comes at a highly opportune moment. Against the backdrop of Russia’s war in Ukraine, the 2025 NATO summit at The Hague endorsed the Alliance goal of spending “up to 1.5% of GDP annually to inter alia protect our critical infrastructure, defend our networks, ensure our civil preparedness and resilience, unleash innovation, and strengthen our defense industrial base.” This seminal paper on military mobility opens a broader transatlantic dialogue on the efficacy of current European military mobility plans and actions, and highlights where additional fiscal resources can be wisely spent.

This is a subject of great interest to the Atlantic Council. Under the leadership of General Curtis M. Scaparrotti, a retired US Army general and former NATO supreme allied commander, and Ambassador Colleen Bell, former US ambassador to Hungary and a current member of the Atlantic Council board of directors, the Scowcroft Center for Strategy and Security established a task force on the subject six years ago to “assess the adequacy of efforts to improve military mobility in Europe.” I had the privilege to direct that study for the Scowcroft Center.

That task force’s collective efforts resulted in the 2020 report, Moving Out: A Comprehensive Assessment of European Military Mobility. The report generated important politico-military discussions on the issue across the capitals of Europe, helping to shape a broader debate over the need for Alliance improvements not only in capability and capacity, but also in logistics and sustainment, especially for northern and central Europe. The report also successfully encouraged the European Union (EU) to provide critical financial resources for mobility in its 2021–2027 multiannual financial framework. However, written as it was some five years ago, it came two years before Russia’s full-scale military aggression against Ukraine in February 2022. Consequently, a new study on the subject is timely and beneficial.

European interest has reignited on issues of military mobility, logistics, and sustainment, especially for NATO’s own southern flank. In light of NATO’s new force model and 360-degree strategy of multidomain collective defense, the 2024 NATO summit communiqué placed a heightened emphasis on the “threats, challenges and opportunities in the South,” to include “strengthening our ability to move, reinforce, supply and sustain our forces to respond to threats across the Alliance, including through effective and resilient logistics and the development of mobility corridors.” As the Atlantic Council’s task force on a security strategy for the Black Sea visited the region two years ago to help prepare its report, A Security Strategy for the Black Sea, Romanians expressed keen interest in additional study and analyses on military mobility within the broader context of the ongoing war in Ukraine, especially for its impact on NATO’s southern flank. This report places heightened emphasis on the land mobility challenges affecting that flank.

With publication of Enhancing land military mobility in Europe: Advocating a pragmatic approach, the Atlantic Council once again is playing a leadership role in advocating for military mobility modernization, this time within the context of NATO’s broader defense perimeter and rear areas. This report should be of great assistance to all NATO countries and EU member states, providing them with a foundation from which to reinvigorate their own national military mobility programs on what is increasingly acknowledged to be a vital Alliance-wide deterrence and defense planning issue. The report correctly places special attention upon Germany as a “nexus of military mobility,” and Berlin receives high priority as a critical enabler within a broader Alliance defense-planning context.

The report has much to convey to the Alliance on the technical, operational, and burden-sharing issues pertinent to strengthening collective defense across the continent. In advocating a pragmatic approach to enhancing European military mobility, the report focuses on the enhancement of existing capabilities including existing dual-use infrastructure, the mobilization of civilian assets, cyberdefense, infrastructure resilience, and looking at military mobility from the lens of a “whole-of-government, whole-of-society task.” This emphasis comports with the Atlantic Council’s 2020 report and is the right place to start. It correctly observes that land mobility capabilities have suffered from thirty years of underinvestment, making them poor cousins of European armies’ capabilities, and therefore emphasizes improving and standardizing the road and railway network in Europe including the nine trans-European transport network (TEN-T) corridors. The report also recommends making major upgrades to European rail infrastructure, electrification, and interoperable signaling systems.

The report goes further than the Council’s 2020 effort in several respects. This 2025 report focuses on European-wide improvements to both the organization of and the planning for military mobility. The report recommends that military mobility be institutionalized across the Alliance, to fully involve NATO stakeholders, from subject matter experts like the Joint Support Enabling Command for mobility on up to the International Military Staff as strategic military adviser, in the definition of priority areas of interest “to reinforce the overall coherence of the network.” The report also recommends the institutionalization of “a seminar on infrastructure linked to military mobility, jointly organized by the EUMS [EU Military Staff] and NATO, to inform participants of existing funding mechanisms and the need for nations to be involved.” These recommendations leverage and improve upon the general recommendations of the 2020 report that NATO and the EU create an institutionalized political dialogue to improve alliance information sharing.

Finally, this report’s seventeen specific technical recommendations all deserve serious consideration by national decision-makers. The report’s excellent discussion of continent-wide gaps in military mobility, and air defense mobility in particular, should be of keen interest to the Alliance given lessons learned in these areas from the Russia-Ukraine and Israel-Iran wars. Also of great interest should be the report’s comparison of routes taken by major units during World War II with the TEN-T road network of today and its analyses of the deeper penetration of West-East corridors in the North than in the South. As the geography of southern Europe is much more mountainous and complex, there is an ongoing need to address these factors and rebalance military mobility southward to seek better connectivity toward the Mediterranean.

Significantly, the report’s analysis on European-wide logistics issues of concern should be of great interest to national planners and decision-makers. The report cogently addresses the commercial ownership imbalance at several key European ports involving non-European powers—including China COSCO shipping—and the need to address this imbalance. It does so by encouraging a deeper integration of logistics requirements across northern and southern Europe to enable a more balanced combat logistics flow coming out of Europe’s twenty-nine ports, with an emphasis on the TEN-T core ports, including those on the Atlantic coast. In addition, the report encourages regular training events and educational seminars on military mobility, increased Action Plan on Military Mobility funding for large-scale projects, the development of more flexible European investment rules, transportation reserves, and national implementation of whole-of-government approaches to mitigating military mobility shortfalls. If acted upon, the report’s recommendations would offer greater burden-sharing opportunities for NATO military forces and help expedite Alliance force projection during times of crisis.

There continue to be several areas where longer-term European military mobility improvements could be made that should be the focus of future NATO and EU research efforts. These include better defining transatlantic airlift and sealift requirements within the NATO force model, expanding in-theater airlift capacity, improving planning for refugee operations, leveraging cold and dispersed basing, and evaluating the efficacy of enhanced public-private partnerships. These stand as additional opportunities for more vigorous Alliance-wide study and analyses at an even deeper level of integration.

Enhancing land military mobility in Europe: Advocating a pragmatic approach demonstrates how important it is that the Alliance stay vigilant and current on the dynamic issue of military mobility. The future is far brighter on the topic of NATO military mobility than it was five years ago. The issue has been elevated out of the defense-planning realm up to the national decision-making level. The transatlantic community should be heartened that the foreign and defense ministries of the countries within the Alliance and their militaries have the resident defense thought leadership to make major progress on the mobility issue in the years ahead.

The United States Department of Defense, NATO, and the European Union should welcome the Atlantic Council’s continuing interest, expertise, and enthusiasm shown on this highly important transatlantic security topic, as evidenced by this outstanding research report. We strongly encourage US and NATO military and political leaders to not only seriously consider these Atlantic Council military mobility recommendations, but to take positive, expeditious action upon as many of them as is practicable in the months and years ahead.

Wayne A. Schroeder, Ph.D.
Nonresident senior fellow
Scowcroft Center for Strategy and Security, Atlantic Council

The imperative: Defining the role of military mobility in Europe

Since the Russian Federation’s annexation of Crimea in 2014 and the following full-scale invasion of Ukraine in February 2022, the credibility of NATO’s deterrence and defense is at stake on Europe’s eastern flank. In response, facilitating the movement of military troops and assets across Europe will be essential to improve the implementation of NATO’s focus on territorial defense. Bringing troops from western Europe or across the Atlantic to the front lines is the first step of combat. Therefore, NATO’s ability to deter aggression and “defend every inch” of its territory relies heavily on military mobility.

Today, Europe’s military mobility capabilities are inadequate. Assessing the performance of major land, sea, and air logistical vectors is paramount to the projected fighting power of the Alliance as a whole. If the logistics chain currently in place to support Ukraine were considered a blueprint, it would not be capable of sustaining a long-lasting and massive deployment of troops to the eastern flank. If anything, transatlantic support to Ukraine over the past three years has highlighted a harsh reality: Military mobility capabilities in Europe are stretched thin. It is therefore imperative to consider the short-term operational requirements for enabling land mobility from all directions toward and along NATO’s eastern border. This report takes a holistic view of facilitating the seamless movement of troops to the East. ¹

Improving military mobility will require a whole-of-society and multilateral approach. The military cannot act alone. Most of the challenges behind land mobility such as infrastructure development and legal and diplomatic procedures fall under civilian control. Further, military mobility must consider economic and political realities as well as military ones to marry civilian priorities with NATO’s operational requirements.

NATO is the most efficient operational actor regarding military mobility, but the European Union (EU) plays a critical role in improving the continent’s military mobility. The EU could become the main operator of dual-use infrastructure, being responsible for managing and running their day-to-day operation, to allow the Alliance to operate as seamlessly as possible. The EU’s interest in military mobility is not new, but it could acquire a more strategic role in steering continent-wide priorities.

Meeting NATO’s new force generation requirements

NATO’s military efficiency relies on three key principles: a robust peacetime-activated force structure; high levels of interoperability of forces across members; and the capability, as a result, to place a significant number of forces under NATO command. The latter requires both robust integration mechanisms and adequate military mobility infrastructure. However, Western forces have struggled to adapt to the needs of current military mobility requirements.

First, Europe has much ground to recover since the end of the Cold War, when military mobility was considered a strategic issue. The post-Cold War “peace dividend” led to reductions in European armies’ forces and structures. Ground military mobility relies on five core capabilities: road transportation, road traffic management, bridge operations, railroad operations, and air defense. Those essential capabilities were gradually scaled back. Due to thirty years of underinvestment, the overall performance levels of the largest European armies in logistics have become insufficient, especially in terms of ratio of available vehicle-launched bridges for wet gap crossings,² military transport,³rail-repair capabilities for logistics, and air-defense assets per brigade.⁴

Second, for decades, Western armies have been tailored for counterinsurgency warfare beyond NATO territory, such as in sub-Saharan Africa, Iraq, or Afghanistan. The previous decades’ focus on the war on terror meant armies logically prioritized airlift for their respective expeditionary engagement instead of sea, rail, and land. This emphasis was further reinforced by the uncontested air supremacy Western forces enjoyed, which made airlift the fastest option. The result has been a structural bias toward short-term air mobility, at the expense of long-term, railway-intensive planning required for the large-scale movement of heavy forces in Central Europe. Today, this supposedly acquired air superiority is being upended—even in the rear area—by the range of land-air and air-air systems.

The requirements for military mobility have also evolved in response to Russia’s war of aggression against Ukraine, with a NATO force posture readiness model adopted at the 2022 NATO summit in Madrid. The Alliance’s defensive strategy seeks to immediately inflict losses on an aggressor and defend every inch of NATO’s territory, instead of the previous trip-wire strategy. The NATO force model expanded the readiness of forces and the requirement for how fast and where troops could be deployed. At any time, more than half a million personnel are to be made available to the supreme allied commander Europe (SACEUR) within thirty to 180 days to implement the new NATO plans.

This strategy means military planning must account for a much quicker flow of personnel and materiel to the front—meaning NATO’s new frontline, which stretches from the High North to the Baltic states and Poland, and down to the Black Sea region. In the event of a threat to NATO’s territory, rapid and massive reinforcements will be necessary from elsewhere on the continent, making mobility essential. The recent enlargement of the Alliance with the accession of Finland and Sweden has significantly extended the distance to cover for troops coming from across the ocean and multiplied the number of border crossings, adding to the existing challenge.

Allies have been slowly building up a presence along the eastern flank. Until recently, NATO did not have significant forward-deployed units along its eastern border, except for a reassurance force in the form of four NATO battlegroups: They became operational in 2017 in the three Baltic states and Poland. At the 2023 Vilnius summit, these enhanced forward presences were bolstered to improve the imbalance of conventional forces in states on the eastern flank, and particularly in the Baltic area. Now, following the decision in 2022 to quickly create four more battlegroups in Bulgaria, Hungary, Romania, and Slovakia, NATO manages eight battlegroups on the eastern flank. In 2024, Sweden announced its intention to assume the framework nation role in the enhanced forward presence in Finland, which is geared toward defending the Northern ports—with a brigade-sized unit.⁵

In Romania, France deploys 1,500 permanent personnel, which will be regularly reinforced to approximately 4,000 in order to train the ability of France to deploy a brigade—typically 3,000 to 5,000 soldiers—within ten days.⁶

Even prior to this new push, military mobility was understood to be an essential task for the Alliance. The establishment of the Joint Support and Enabling Command (JSEC) in 2018 shows that military mobility, particularly in terms of coordination, was again a strategic priority for SACEUR.

The nexus between geographical constants and technological constraints

The history of military movements across Europe provides a valuable blueprint for understanding how forces would move across the continent. The maneuvers of the major units that took part in the final victory in the European theater during World War II demonstrate the continued relevance of certain corridors. Furthermore, comparing historical and current maps underlines the role of the Carpathian Mountains as one of the most formidable physiographic divides of the European theater. The map also shows how much Germany lies at the core of the northern corridor of mobility.

While dual-use infrastructures can reduce the inequality of access between the North and South, they cannot provide complete balance. Mobility will remain more complex in the southern area than in the northern area, given its mountain chains including the Alps and Carpathians, but also rivers, notably the Danube. As a result, efforts will have to be made outside of this double corridor in the North to geographically balance activity and ensure redundant connections to the Mediterranean. In the High North, achieving secondary routes is made difficult by the fact that countries only have a few roads and even fewer rail lines. Finland’s railway gauge is different from the rest of Europe. Existing lines of transport are susceptible to winter damage. The Alliance must balance these geographical constraints with military requirements.

Figure 1: Second World War mobility corridors across Europe

Figure 2: Contemporary corridors of land mobility

Modern realities paint a more complex picture for military mobility. In a break from the past, the relative safety of the rear area of the theater of operations is fading. The increased hybrid nature of modern warfare and the proliferation of long-range weapon systems mean that the Alliance must plan for enemy actions both along the front and in the rear, meaning western Europe will also need security in the context of military mobility. Furthermore, Russia’s alliance with Belarus and the Russian enclave of Kaliningrad, in which short-range, ground-launched ballistic and cruise missiles are situated, put military mobility most at risk in the northern corridor.

For example, the Baltic Sea’s most important harbor, Klaipėda, in Lithuania, lies six kilometers from Kaliningrad. This proximity highlights the need for additional supply-line options primarily over Norway through Scandinavia in the event of a strike on the port. Securing sea routes in the High North is also a priority as a diversification strategy, facilitated by the accession of Sweden and Finland to the Alliance. The NATO countries located on its eastern flank are vulnerable to short-range cruise missiles and drone campaigns such as the those launched by Russia in Ukraine.

In the hybrid domain, Russia has shown its willingness and ability to disrupt cyber and energy networks in Europe. It also has shown its capabilities to act covertly, including with the deployment of a military ship under disguise in the English Channel.⁷ Russian activity remains persistent along NATO’s maritime borders, while incursions have increased across continental Europe⁸

—particularly on the eastern flank—testing civilian preparedness. These actions challenge not only military mobility but also aim to generate broader cognitive effects. One such effect is habituation—often described through the “boiling frog” metaphor—where organizations gradually become desensitized to hostile activity. Ultimately, the resilience of societies is closely tied to the resilience of their critical infrastructure.

European political momentum and the EU’s role as an operator

NATO allies pledged at the 2025 Hague summit to spend 1.5 percent of gross domestic product annually toward infrastructure including military mobility.⁹

Harnessing the current political momentum, this report suggests ways for Europe to address and advance its short-term gaps in air, sea, and land mobility. For example, successfully moving a massive number of troops across the entire European continent depends on reliable, resilient infrastructure with sufficient trucks and trains to execute the mission. However, it also relies on efficient coordination, smooth border crossings, and solid planning. A patchwork of players is involved in the practice of planning military mobility including:

• Sending nation: The nation whose troops are moving.
• Host nation: Transit takes place through this nation.
• NATO command structure.
• EU authorities: Those who are responsible for the administrative and legal issues of troop movements.

Much of the effort sits with member states. Many European allies have already taken initiatives to foster greater mobility. A notable example is the tripartite agreement between Poland, Germany, and the Netherlands to create more fluidity in terms of cross-border procedures in military movements along the corridor that connects all three countries. NATO also is a driving force, both in terms of procedures¹⁰ and resources, notably through the NATO Security Investment Program (NSIP). This program has seen its funds annually increase,¹¹ given growing security pressures on the continent. However, the management of this funding remains complex, and recent statements lead us to believe that military mobility is no longer one of the most important spending priorities.“In terms of the total approved program (EUR 5,651 million from 2025 to 2030), the majority of the forecasted expenditure relates to Command and Control – Communications and Information Systems, followed by Basing/Facilities and Petrol, Oil and Lubricants. ¹²

NATO adds another layer to the planning. In peacetime, JSEC prepares the theater for potential reinforcements; during crises, it coordinates the reinforcement and sustainment of forces by managing a multidomain network of contacts across NATO and the EU, facilitating logistics and cross-border coordination to ensure the rapid deployment of forces. This coordination remains complex. It relies on the voluntary efforts of individual nations, and will also be limited, as some EU states are not members of NATO (i.e., Austria, Cyprus, Ireland, and Malta¹³).

Finally, the European Union is and will be an increasingly major player in improving military mobility. First and foremost, it relies on the Trans-European Transport Network (TEN-T) program, which is an EU program dedicated to civilian and military use, to plan and develop a coherent, efficient, multimodal, and high-quality transport infrastructure across the EU. TEN-T “comprise[s] railways, inland waterways, short sea shipping routes and roads linking urban nodes, maritime and inland ports, airports and terminal,”¹⁴and more; specifically, TEN-T core ports are ideally connected to the surface network. The program has elevated military mobility as a strategic priority. It specifically delegates this issue to several of its offices: the European Defense Agency (EDA), the European Investment Bank, the European External Action Service, and several other commissions and agencies. Numerous initiatives have been taken under EU auspices, such as working meetings, reports, and audits, but a more centralized response stands out as an effort to fully target the problem: the Action Plan on Military Mobility (APMM).

The APMM seeks to eliminate bureaucratic obstacles and fund necessary infrastructure improvements. Despite complex coordination challenges—especially with neutral EU states like Austria, Ireland, Cyprus, and Malta—the collective momentum makes one thing clear: Military mobility is no longer a convenience but a cornerstone of Europe’s defense posture. The EU’s White Paper for European Defense Readiness 2030—its first—identified military mobility as one of the seven capability gaps Europe needs to collectively address urgently.¹⁵ At the same time, the newly created Defense Commission has since set up a task force to update the existing APMM. The negotiation of the EU’s multiannual financial framework (MFF) 2028–2034 also opens a window of opportunity to prioritize cross-border, dual-use military infrastructure. Military mobility was already a priority for the EU in its 2017 Strategic Compass,¹⁶ leading to the first EU APMM adopted in 2018, following by a second one in 2022. Given that the action plan draws out priorities until 2026,¹⁷ the Commission is in a process to develop a new set of priorities for the next multiannual plan.¹⁸

This Atlantic Council report looks at four areas that require more European and, most importantly, EU effort to strengthen military mobility:

• Infrastructure development: Updating existing or, if necessary, constructing new transport infrastructure such as port facilities, railroad, road, and supporting infrastructure.
• Coordination between the EU and NATO: Better coordinating, sustaining, and employing large-scale forces of the Alliance’s command structure, with the EU acting as an operator.
• Establishment of requirements for civil-military infrastructure development.
• Development of norms on legal and diplomatic procedures to ensure seamless movement: Facilitating border crossings for military forces by improving communication and coordination between civil-military actors.

EU-NATO cooperation: Efficiently streamlining activities

JSEC’s first mission in a crisis is to coordinate with the host nations to secure lines of communication, then facilitate the transit of military forces across a network of ports, railroads, airports, and roads called the reinforcement and supply network (RSN) of NATO. Since its creation, JSEC has been the main military mobility stakeholder in NATO, achieving a level of planning detail unseen since the 1990s and taking over as the head of the Allied Movement Coordination Center (AMCC), the operational level of military mobility coordination for NATO.

On the host nation side, things have been much slower, but there has been a clear trend toward taking the issue more seriously at the political level since 2022, in the wake of the Russian invasion of Ukraine. First, in western Europe, armies started to create standing Homeland Defense Commands: e.g., France and Germany regained those capabilities in 2023. Some countries, like Finland, had preserved them. Among other duties, these staff structures are tasked with planning the transit of sending-nation troops on their territory. This is important because host nations’ responsibilities include organizing troop-staging areas and making arrangements to protect, refuel, and feed the different convoys.

The protection aspect is essential because defending critical infrastructure and assets is vital against hybrid threats of sabotage and long-range fires. All these tasks require space, time, and supplies (e.g., food, fuel) that will quickly overwhelm any peacetime logistical system. Nations have also made significant improvements regarding their own movement coordination staff or, when in place and fully functional, through their own National Movement Coordination Center (NMCC). These bodies are specifically tasked with coordinating the air, sea, road, and rail movement of allied troops as a host nation or their own troops abroad as a sending nation. Several countries had not set up NMCCs up until recently, and some have not fully integrated the different movement capabilities. On the opposite end of the spectrum, Poland has recently announced its plan to create dedicated national units for the reception, staging, and onward movement (RSOM) of Alliance units on its soil.

The EU has not created an additional structure for coordinating allied movements in a major joint operation that does not involve NATO. Still, the existence of the Multinational Joint Headquarters (MNJHQ) in Ulm could fill this role, if called upon to do so, as its commanding general is also the JSEC commander. Of note is the existence of Movement Coordination Centre Europe (MCCE), an ad hoc structure that deals with multimodal strategic movement. While relevant during expeditionary warfare and peacetime, it is unlikely to be fit for high-intensity warfare in its current form. While the multiplying of actors from NATO, the EU, and other ad hoc structures is a clear indication that the subject is being taken seriously, it also carries the risk of overlapping responsibilities. On the planning side, the coordination between NATO and the EU has been fruitful, for example between Europe’s TEN-T and NATO’s RSN. However, there are initiatives that should be merged, like NATO’s Multinational Ammunition Warehouse Initiative (MAWI) and a network of logistics hubs dubbed NetLogHubs,¹⁹ through a permanent structured cooperation (PESCO) project. The missions and roles of different entities need clarification, and some will need to disappear, while others will have to be streamlined.

Planning and training

Realistically, there is no way to make sure that when the time comes, the marshaling of Alliance troops on the eastern flank will proceed smoothly. General Eisenhower famously said, “Plans are worthless; but planning is everything.”²⁰

In this case, everything depends on the quality of the planning conducted both by the Alliance’s staff and member nations.

Since 2022, the Alliance has overhauled its various war plans, and the military organizations of its member states have significantly improved their respective levels of preparation. For military mobility in times of crisis, the Alliance will activate the reinforcement and supply network, which includes ports, railways, and roads, but also convoy supply centers and hospitals. Until then, it all comes down to testing these plans. NATO training plans now require that movement training is systematically included in every training exercise in Europe. JSEC has also built its own training schedule, which notably includes Exercise Steadfast Dart, focusing on the deployment of the Alliance’s high readiness Allied Reaction Force. Using simulations or war-games, these events involving member nations’ NMCCs are of great added value. For the purposes of planning and training, NATO uses the LOGFAS (Logistics Functional Area Services) suite, whose software tools include resources, ammunition, force structure, and support infrastructure characteristics to enable accurate operational planning. To achieve the best planning results, the accuracy of the data provided by member states (a sensitive subject among certain members of the Alliance) is of the utmost importance. As managing the logistics of a coalition is challenging, the introduction of AI in a LOGFAS successor has the potential to improve its capabilities.

Member nations also have made significant improvements to the thoroughness of their military planning. However, except for countries bordering Russia, it seemed like only defense ministries were concerned about this issue. The next step is achieving a genuine whole-of-society approach to the military mobility equation. Though the current situation is encouraging, the training that has been conducted to date only involves military structures. As previously noted, military mobility in a time of crisis must be a whole-of-government, whole-of-society affair. The next step will have to include the involvement of civilian actors in transport and security, whether they are from other government departments, private-sector entities, or infrastructure stakeholders. It is encouraging to note that in March 2025, France’s Homeland Defense Command hosted HESTIA 25,“²¹

a tabletop exercise involving the armed forces, civil servants from a range of departments, and private-sector actors. The focus of the event was the role of France as a host nation within NATO and aimed at fostering mutual comprehension among the different stakeholders, while improving planning and learning valuable lessons.

Existing infrastructure of military mobility

Analyzing the efficiency and capacity of major logistical sea and rail routes is paramount to assessing the projected fighting power of the Alliance as well as its capability to take troops to the front lines. In addition, the durability of these routes must be sustained through a developed network of warehousing and stocking facilities throughout Europe.

Figure 3: Core European ports and freight rail network

The European ports: Gateways to military power

Most of the Alliance’s fighting power is provided by the United States and transported by sea, making European port facilities key to the success of European military mobility.

The series of connected ports in the Atlantic Ocean and North Sea are the most unlikely to be threatened by an opposing force, due to the projected Alliance’s naval supremacy. These “core ports” are geographically even: fourteen are located on the Atlantic (in France, Spain, and Portugal) and fifteen on the North Sea (in Norway, Sweden, Denmark, Germany, the Netherlands, and Belgium). However, the overall port activity is far less balanced. The ports of the North Sea conducted 75 percent of maritime commercial activity in 2023 (Netherlands, Belgium, France). In 2023, 58.3 percent of commercial activity was concentrated in Dutch and Belgian ports, with 28.4 percent in Rotterdam’s core port and 17.1 percent in Antwerp’s core port. This imbalance creates a vulnerability in terms of the division of logistical efforts because it makes dispersion much more difficult. In addition to physical vulnerability, this overconcentration is making NATO’s logistics planning highly predictable.

This vulnerability is accentuated by China’s investments in European ports. According to the European Parliamentary Research Service,²² China holds 24.9 percent of the Port of Hamburg’s shares and, even more significantly, COSCO Shipping²³ owns more than 85 percent of the Zeebrugge container terminal in Belgium and 67 percent of Piraeus Port in Greece, as underlined by a study from the Dutch think tank Clingendael²⁴. Beyond this financial vulnerability, China is currently providing a vast majority of the cranes used in Dutch ports, notably in Rotterdam. An investigation led by the US Congress demonstrated high threats to confidentiality due to illegally installed Chinese modems in said cranes.²⁵As these cranes unload the goods and scan them, it is likely that the cargo manifests of ships will quickly find their way into servers in China. Consequently, on February 29, 2024, the US House Committee on Homeland Security sent a letter to the chairman of Shanghai Zhenhua Heavy Industries Company, asking for clarification.

Railways: The artery of military mobility

Trains are the only ground-transportation mode capable of sustaining long-lasting and high-intensity conflict. In most European countries, the state and its armed forces maintain close ties with the major railroad companies. For instance, the three biggest European railroad operators²⁶. are still 100 percent owned by their respective countries and the armed forces remain important clients. This relative autonomy is reinforced by the recent European TEN-T policy aimed at developing cooperation and the intermodality of national rail networks. This policy focuses on nine key corridors crucial for military mobility.

Table 1: Rail corridors crucial for military mobility

Despite a strong will to establish coordinated governance over these corridors, there are still some challenges hampering the flow of military mobility. The first set of improvements are needed at the national level (and could be streamlined by standardization):

• Dealing with who or what is traveling: Some countries, like Germany and Austria, do not allow the circulation of mixed trains, meaning trains that transport both troops and equipment.
• Engine interoperability: Due to differences in railway safety systems and signaling, one country’s engine can only tow a train on its own national network, thus requiring an engine shift at each border crossing.
• Notice necessary for a foreign train to cross a border: Before February 2022, Poland required one month of notice during peacetime and five days during wartime.²⁷ Despite the dissemination of dedicated Response Measures,²⁸ this question of notice has been a thorn in NATO’s side, including when deploying its Very High-Readiness Joint Task Force between 2003 and 2024.

The second set of improvements is strictly systemic. Germany lies at the core of European military mobility. Accordingly, its railway network is the most developed on the continent. But, when it comes to freight, its network is already overloaded with brown coal convoys, which mainly move at night and are essential to fuel coal power plants. In this area, military mobility is linked to Germany’s domestic policies.

The third and last set of improvements needed are in the technical realm. Most modern military fighting vehicles have gotten heavier and bigger due to enhanced protection and firepower needs. This change makes rail transport more difficult, as most flatbed wagons were designed for smaller Cold War vehicles. Similarly, some key rail infrastructures, such as tunnels and bridges, might not be adapted to these new vehicles’ dimensions. For instance, before the launch of a modernization program named Scorpion in the 2010s, only four French military vehicles were considered oversize load. Now, most are.

On the other hand, modern civilian trains and engines are also not adapted to military needs because dual-use requirements had disappeared when they were engineered. Some cannot be efficiently adapted to war use,²⁹ while older, dual-use models are too expensive to modernize: The average cost of modernizing one railcar is around €400,000 ($466,480). Fortunately, some countries are investing again in this area: For example, the Polish Army, which has been highly dependent on railways to ensure its strategic mobility, invested in heavy platforms and ramps in 2018 and 2019.³⁰ Moreover, certain parts of the European rail network also lack sufficient electricity, with only 56 percent of this network electrified in 2021.³¹

Additionally, signaling is only slowly being standardized, preventing trains from crossing borders without having to switch the engine. The European Rail Traffic Management System initiative, launched in the 1980s, is a common effort toward a unified railroad network, but the project is making very little progress. Only 17.3 percent of the nine TEN-T key corridors are equipped with interoperable signaling systems and only 13.6 percent of the sensitive North Sea-Baltic, North Sea-Rhine-Mediterranean, and Atlantic corridors are equipped.

Given the range of improvements needed, Europe could further support the standardization of dual-use European rail cars for the transport of personnel, wounded people, and equipment. (See recommendation 1.)

Strategic air mobility: Enabling NATO’s first response

Strategic air mobility is a cornerstone of NATO’s deterrence and rapid response, offering unmatched speed and flexibility—but it also is vulnerable. In a crisis, air transport enables quick deployment of light forces and equipment, but once air superiority is contested, its role shifts to moving personnel, with heavy gear transported by sea or rail. The majority of NATO’s strategic airlift capacity comes from the US Air Force. While European allies operate Airbus A400M transporters and take part in multinational efforts like the Strategic Airlift Capability initiative, they remain reliant on US assets, especially for oversized cargo. This imbalance is worsened by limited aerial refueling and reliance on a few critical hubs such as the Ramstein and Brize Norton air bases in Germany and the United Kingdom, respectively. Many European runways cannot handle large aircraft, and civilian airports pose security risks. Strategic airlift also depends on ground infrastructure and legal access rights.

Europe’s continued reliance on chartered Antonov AN-124 aircraft through the Strategic Airlift International Solution framework exposed vulnerabilities in its strategic airlift policy. Following the withdrawal of Russian operators between 2018 and 2022, what remains of the Ukrainian fleet is facing mounting maintenance challenges after losing access to Russian-produced spare parts. Though the European Air Transport Command has improved tactical coordination, it lacks the mandate and resources to manage strategic movements. Despite being less visible than ground logistics, strategic air mobility remains important to NATO’s initial response in Europe.

Stocks and warehouses: The fuel of military mobility

During wartime, a network of fully stocked warehouses is crucial in maintaining the vitality of logistical activity, with fuel, ammunition, spare parts and even vehicles directly available. Being able to position reserve equipment in strategic locations is essential to quickly react to any contingency. While the notion of prepositioning military stocks itself triggers some sovereignty issues, this strategy is critical to absorb the first blow of the enemy. The relatively small size of the European continent does not alter the pertinence of this principle, which is why, at Belgium’s urging, NATO launched Multiannual Warehousing Initiative (MAWI) in 2021. This high-visibility warehousing project aims to organize the stocking of ammunition close to the anticipated front lines. As of June 2023, twenty-three allies had joined. However, support for this project has been mitigated by its clause regarding ammunition consumption in wartime, wherein the host nation can use nonnational ammunition stocks and refund them retroactively, a highly sensitive matter when it comes to precious and not-easily procurable ammunitions like 155 millimeter shells.

Although pertinent, this project only concerns ammunition, not battlespace management. For instance, a divisional support group requires a 400 km2 area to set up. Given the growing transparency of the battlefield of modern combat, military logistics will have to rely on a deconcentrated civilian warehousing network. In the absence of an ambitious strategic project regarding EU military stock prepositioning, identifying this network and preparing the legal aspects of requisitions could be a step toward a strategic approach to military commitment on European soil.

Without forestalling sovereignty delegation, the EU could help identify civilian warehouses that could be requisitioned in wartime. (See recommendation 2.)

Future of US force projection in Europe

The United States maintains an organization under the 21st Theater Sustainment Command (TSC) to provide theater sustainment in Europe, a practice begun in the beginning of the Cold War. It is the lead organization for the sustainment activities of the US Army Europe and Africa (USAREUR-AF). Currently the US Army’s largest forward-deployed formation, its very presence functions as a deterrent against potential adversaries.

First, the 21st TSC guarantees the smooth reception, staging, onward movement, and integration of incoming US units, leveraging its maintenance and mobility support units to accelerate force deployment. If called upon to do so, it can dramatically increase the throughput of ports, rail networks, and airports anywhere in Europe, ensuring that troops and equipment reach their respective operational area without delay.

Second, it provides sustainment for initial US forces through a vast network of depots and prepositioned stockpiles, demonstrating the ability to surge forces anywhere in Europe without relying on ad hoc logistics. Finally, the 21st TSC’s overarching mission is to sustain the USAREUR-AF at the theater level, guaranteeing that deployed forces remain effective throughout the campaign.

US deterrence and the credibility of the transatlantic security guarantee are fundamentally reliant on the 21st TSC’s ability to project, sustain, and surge American forces rapidly. In essence, US deployment is inseparable from “Team 21” and its unique logistical capabilities, which may be put under stress by the new US defense posture. As the US posture evolves, NATO must ensure the credibility of its power projection structure remains credible.

Prioritizing and streamlining infrastructure requirements

The infrastructure requirements issue stands at the crossroads of two contradictory dynamics. On one hand, NATO has the best assessment on military logistic needs and the fastest planning process. On the other hand, upgrading mobility infrastructures—used for civilian purposes in peacetime—is a long-term national and civilian prerogative. In this context, the EU’s normative power has a key role to play in organizing the meeting between the operational military requirements and harmonized, communitarian infrastructure development. In that framework, the EU APMM appears to be the best vector to enhance cooperation between NATO and the EU.

An EU strategy to achieve continent-wide effects

The EU APMM, first signed in 2018, has provided a strong incentive for member states to upgrade their infrastructure. The previous action plans have led to significant improvements, but their limited budget prevented them from achieving any broad strategic objectives. The two successive action plans, in 2018 and 2022,³² were shaped by the war in Ukraine, prompting an acceleration, which was also emphasized in the Strategic Compass published the same year.³³Approximately €1.7 billion was allocated under the 2021–2027 MFF,³⁴ but a significantly larger, more strategically directed budget could be earmarked in the coming year.

The military scope of selected APMM projects still requires refining. Decision-making is a major issue in the process. It is difficult to understand why some projects receive more money and others do not. Ultimately, 70 percent of selected projects concern land mobility by rail or road, with 81 percent of budget allocated. A major issue is that the selected projects directly support movements within the borders of the applicant countries, with only two of the ninety-five projects selected involving cross-border infrastructure.³⁵ Moreover, the locations of the selected projects show wider distribution in the eastern part of Europe, with Germany, Poland, Lithuania, and Latvia, respectively, in the top four places among the countries that received funding from the action plan. As a result, it remains challenging to assess the overall contribution of these projects to military mobility on a continental scale.

From a geographical perspective, the distribution of APMM-funded projects has favored northern and northeastern Europe. Strikingly, Romania is the only southeastern European country to have benefited from the mechanism, and even then, it ranks only eleventh overall. This imbalance is a systemic weakness in terms of military mobility. It naturally leads to a concentration of flows toward the North, which will rapidly lead to the saturation of lines of communication and greater chances of sabotage due to the geographical concentration of flows. This trend is further underscored by the fact that none of the projects put forward by Greece have been selected.

Instead of merely validating national proposals, the EU should define a genuine strategic framework for military mobility, prioritizing cross-border projects and ensuring that neglected but critical regions are not left aside. (See recommendation 3.) It also entails working more closely with NATO when setting priorities and awarding funds, to reinforce the overall coherence of the network. (See recommendation 4.)

Better cooperation between the EU and NATO would improve the project selection process and give a more strategic dimension to the actions implemented. This assessment must play a greater role in the project validation process to ensure coherent and redundant mobility, to more easily compensate for any regional shortcomings.

Process and budgetary improvements

A study of the current complex EU application process is conducive to imbalances since candidates will invest in this process with varying levels of intensity. In the wake of reviews from the 2021, 2022, and 2023 calls for applications, questions should be raised about the relevance of the process, as it exists today. The selection process involves two phases, one conducted by the European Climate, Infrastructure, and Environment Agency and the other by the Directorate-General for Mobility and Transport. The first phase consists of an independent evaluation report by three experts, followed by a consensus evaluation report from the same experts. In the second phase, the military evaluation is carried out by the European Union Military Staff (EUMS), followed by several internal assessments, and then a final meeting to arrive at a shortlist of projects.

Efforts should be made to clarify and streamline the current mechanism, as highlighted in the European Court of Auditors’ report on EU military mobility.³⁶ Currently, the strategic assessment of infrastructure renovation needs is largely reduced to a single microstep, carried out by the EUMS, in the middle of an administrative mille-feuille. The EU should renovate its application process to include a one-stop, lead decision-maker, which could help implement a better overall strategy. The applicant information should also be supplemented by details of other financing methods. Whether we are talking about direct financing from the Connecting Europe Facility (CEF) or financing purely military infrastructures through the NSIP, efforts must be made to educate all nations participating in the EU and/or NATO, to achieve continental-scale military mobility effects. (See recommendation 5.)

More generally, the EU’s budget for military mobility is insufficient. After an assessment phase from 2021, member states could submit project applications for funding to upgrade dual-use infrastructure. Precipitated by a downward revision, EU funding quickly dried up, as the last call in 2023 exhausted the allocated funds. A total of ninety-five projects were supported by this mechanism, which will ultimately refund 50 percent of the expenditure incurred by states. With an average value of €18 million, each project is expected to be delivered before the end of the EU multinational financial framework,³⁷ which should enable assessment of the mechanism’s effectiveness by 2027.

The amount of funding should not be such a rapidly limiting factor in terms of overall strategy. If we return to Greece, each of its two submitted projects obtained scores that enabled retention in the final ballot, but funds dedicated to the APMM were exhausted before these projects could be financed. This is regrettable, given that the lines of communication linking Greece to Bulgaria and Romania are already being used intensively, and it is a safe bet that in the event of mass deployment, this network would be insufficient.

More generally, the budget allocated to the APMM appears to be poorly directed and too small to provide a comprehensive response to the issue of military mobility on a continental scale. First, part of the budget should be dedicated to large-scale projects that go beyond the national framework and aim to achieve an objective strategic rebalancing on a European scale. Second, the overall budget needs to be increased to consider inflation in construction costs and to avoid holding back microprojects whose overall impact is difficult to measure. The EU should dedicate part of the APMM budget to large-scale projects, targeted by the EUMS to bridge identified capability gaps. (See recommendation 6.) At the same time, it needs to increase the budget dedicated to the APMM to guarantee funding for large-scale projects and prevent the premature drying up of funds, leading to strategic imbalances. (See recommendation 7.)

Feedback should also contribute to better targeting problematic infrastructures. Whether we are talking about flows resulting from support for Ukraine or those deliberately provoked as part of multinational exercises, lessons must be learned to pinpoint military mobility problems linked to dual-use infrastructure. Some lessons seem to have been learned already from Russian aggression, such as the financing by the CEF of standard gauge railroads in Ukraine between Chop and Uzhhorod, but more needs to be done. If Atlantic Resolve³⁸ operations were to make greater use of rail, the difference in rail gauges between Spain and the rest of Europe should encourage the EU to take up the issue of Spain’s network conversion to standard gauge. It is therefore crucial to update the APMM’s guidelines and prioritize the actions to be taken in the light of completed missions. The EU should include a list of operational shortcomings related to dual infrastructures in the joint EUMS/NATO assessment, to encompass the full spectrum of multinational missions in Europe. (See recommendation 8.)

On these two fronts, the EU could take the lead by organizing a dedicated seminar on infrastructure related to military mobility. This event should be jointly hosted by the European Union Military Staff, with active support from NATO stakeholders, to raise awareness of existing funding mechanisms and emphasize the importance of national involvement. The target audience should include representatives from transport ministries and armed forces, fostering greater synergy between civilian and military actors and encouraging more coordinated strategic planning across member states. (See recommendation 9.)

Leveraging civilian resources

The current role of the private sector in military mobility

Being able to access the massive pool of civilian transportation vehicles is a tempting way to improve military mobility in Europe. Since a quick surge in the number of military transport fleets is unlikely, it could be the quickest option available. There are two different approaches to using the private sector: through contracts or requisitioning. The latter calls to mind various legal tools enabling states to legally appropriate resources, assets, and services if no other solutions are immediately available. Although this policy exists in Europe, there are significant process variations across countries. Notably, requisitioning has fallen out of fashion since the Cold War. With the return of war on the continent, however, nations are updating their legislative arsenals to become more efficient in times of crisis. That said, tapping the private sector is not a panacea.

The private sector has had an enduring role in warfare. No matter the period, it has played a significant role in military logistics.³⁹ The success of those endeavors relied heavily on comprehensive planning: Plans were thoroughly tested and routinely revised to stay relevant. The most recent reference in Europe is the Cold War, where both sides planned to rely on requisitions to expedite mobilization, quickly transport hardware and supplies, and boost transport capabilities. Civilian and military offices were engaged in a constant inventory of not only civilian truck fleets but also buses and civil-engineering vehicles—with the tallies, locations, and statuses constantly tracked and updated. Civilian airlines and maritime transport companies made arrangements to enable use of their respective assets on short notice to directly support their country’s armed forces. Given the sheer scale of logistics in peer-to-peer warfare, there will never be enough military vehicles to support this kind of massive effort.

Since the end of the Cold War, the civilian sector dramatically shifted to occupy a contracting role, without any notion of requisition. Western armies themselves encouraged this evolution, deliberately reducing their own heavy logistical assets and increasingly outsourcing functions to civilian providers. The subsequent rise of expeditionary warfare also meant that logistics were essentially static as ammunition consumption remained low, as did human and material losses. Western armies became accustomed to this logistical comfort.

Three years after the Russian invasion of Ukraine, several important realizations have slowly surfaced. First, in the case of major conflict, military mobility alone is insufficient to enable the transport of forces across Europe in a timely manner. Armies lack the number of trucks needed to transport equipment and resources, but the same goes for heavy equipment transport (i.e., trucks able to move main battle tanks) or flatbed railcars, which are mostly owned and operated by civilian companies. This leads us to the second point: The contribution of the private sector will be essential if we want to reach the scale that is required to move and supply a significant military force in Central Europe. The final realization is that mobilization has become an increasingly rare practice, and contemporary governments are often unfamiliar with the full range of capabilities and tools it affords.

Countries are revising old laws. In France, the law mandates that construction, bus, and truck companies must establish and update inventories of their vehicles via a web portal. However, most companies are simply unaware of these legal requirements. A partial conclusion is that mobilization is not an exclusively military issue. Private companies need to be made aware of their obligations and must be involved in current discussions regarding planning and policies. Political impetus is crucial for these processes to be completed successfully, as is testing to ensure the effective functioning of requisition processes. Set up national-level, regular vehicle-mobilization training events involving private companies,⁴⁰ to check inventories and ensure the validity of the process. (See recommendation 10.)

An unequal modernization

European countries have unequal histories and development and various contexts of mobilizing civilian assets. While European countries have been highly active since 2022 to update their laws,⁴¹they are not all at the same level of progress. Most have achieved significant legislative progress, but there is a lot left to do. Also of note, apart from Sweden and Finland, military mobility is considered a purely military issue. However, the need to involve civilian stakeholders from both the public and private sectors is obvious. Most national plans state that transferring massive forces to the front lines will be a “whole-of-government, whole-of-society task.” What remains is translating this buzzword into solid facts, actual plans, and realistic training. Nationally, European countries should foster a whole-of-government approach to military mobility to develop robust relationships between ministries. The EU could fund studies of various European national approaches to civil-military relations to establish a set of lessons learned. (See recommendation 11.)

Take France, Germany, and Sweden, for example, which pursue diverse approaches to civil-military relations—adapted to the specific national context. Since 2023, the French Military Programming Law for the 2024–2030 period has allowed the prime minister to proceed with requisitions and even to delegate that power to both civilian and military authorities. More importantly, this new law expands the cases qualifying for requisitions to include the first stages of a crisis and not merely during war scenarios. It significantly enlarges the scope to become something much more adapted to hybrid warfare.⁴²The result is a significant improvement in the speed at which the French government can respond to unforeseen circumstances, improving deterrence.

As the biggest country in Central Europe, Germany is a nexus of military mobility. Its legal arsenal dates to 1968 with the passage of its Economic Security Assurance Act. Dubbed WiSiG,⁴³ the act laid out its economic mobilization processes in times of both tension and war. These laws have not been altered since then and do not cover the requisition of transport means for the direct benefit of the military, instead focusing on the security of the economy. Although not as advanced as other countries, Germany started to actively plan for its role in a major conflict in 2022. In 2024, Germany started communicating about OPLAN Deutschland, its classified plan to organize the deployment and transit of up to 800,000 NATO soldiers with their 200,000 vehicles and associated logistics across the entire country. As host nation, it is Germany’s role to provide troops with places to stop, rest, and access spare parts, equipment, and fuel. Inevitably, these plans must involve the private sector. To this day, however, there is no sign that Germany plans to resort to requisitioning to achieve its desired results, opting instead for extensive planning of a massive contribution from the private sector.

Sweden has one of the most comprehensive mobilization systems in Europe, rivaled only by Finland. In times of crisis or conflict, Sweden can mobilize civilian resources for both civilian and military needs. Local and regional authorities and the private sector are included in the mobilization planning process. There is an existing legal framework for requisitioning civilian transport assets: buses, trucks, ships, and planes. Both regional and interregional transport systems are merged in military logistics to be used most notably for evacuations and conscript transport. Essential dual-use infrastructures like ports, rail terminals, and airports can also be used and even modified to better suit military needs. The new Total Defence Bill for 2025–2030 (signed in 2024) has modernized and updated the different rules enforced in times of crisis or war, but the Swedish government has stated there is still a lot to do. Sweden is currently looking to revive its Krigsviktiga-företag concept, ⁴⁴ which designated specific companies whose mission was to maintain their strategic activities even in the case of war and the breakdown of their regular supply chain, thanks to additional stocks and higher readiness. Relying as it did on financial incentives, this system did not survive recent waves of privatization, globalization, and European rules on competition.

Priorities in the private sector-military relationship for strategic mobility

Militaries must factor in the involvement of the private sector given the gigantic size of the task required by mobility in times of war. However, relying exclusively on the private sector is not a panacea as there are areas where the needs of the military and civilians simply do not overlap. Road transportation is the private sector’s most obvious potential contribution. Trucks carry almost 80 percent of all freight transported over land in the European Union, with a truck fleet of around 6.4 million units.⁴⁵The biggest fleet is Poland’s (1.4 million), followed by Germany and Italy (900,000 each), and then France (600,000). Overall, 700,000 buses are in operation across the EU, almost half of which can be found in three countries alone: Poland (130,000), Italy (100,000), and France (95,000). On paper at least, the resources are there to allow for a quick surge in capacity if need be; but the reality is more nuanced.

There are significant differences between civilian and military logistics. Truck companies use pallets to load and handle goods (the share of container transport in road transport is only 6 percent⁴⁶), whereas the current military standard is the 20 foot container. The proportion varies greatly depending on the country in question, but on average, only about 20 percent of trucks can handle these containers. Transshipment between strategic and tactical transport would entail a loss of time and effort that would have to be addressed with proper staffing or contracts, further increasing the need for container-handling equipment. European countries, including through the EU, could identify key transport companies and encourage them to use container-compatible equipment. (See recommendation 12.)

Additionally, there is a concern about the dispersal of truck drivers in western Europe for a massive transport fleet. A significant portion of the drivers employed by transportation companies are not nationals and many third-country drivers come from Central Europe. Thus, there is a significant risk that these foreign drivers will answer the call of duty in their own country in a time of crisis. Companies will have to report honestly on these topics if any serious survey initiative is to be successful.

Furthermore, the European Union is facing a looming crisis in road transportation due to the current shortage of truck drivers. This shortage is evaluated at around 250,000 positions today and could triple in 2028 because a third of truck drivers are over the age of fifty.⁴⁷

Rail is the other area where the private sector’s role will significantly reinforce military mobility. It would be tempting to think that we could easily employ civilian rolling stock for mobilization, but as is the case with road transport, what stands out are the different civilian and military needs.

Even thirty years after the Cold War, most armed forces still possess rolling stock to transport their hardware, but the current number is nowhere near enough to transport entire divisions. On the civilian side, while flatbed railcars are available in large numbers, they are unfortunately not suitable for transporting military vehicles, as they are too high and narrow and few of them are suitable for transporting standardized, reusable containers. Power sources could also become a problem as electric engines become more prevalent across western Europe. However, the lower level of electrification in Central Europe, along with the greater vulnerability of electric lines to sabotage and damage, all make it dangerous to rely solely on electricity. European nations should identify a European budget for the development and acquisition of a standardized military flatcar. (See recommendation 13.)

The relationship between railway companies and the armed forces is a key factor in ensuring that military trains function smoothly. Some companies have teams dedicated to military trains, and exchanges between the highest levels of the armed forces and their CEOs are frequent. However, the liberalization of the rail sector within the EU has introduced significant weaknesses to military railway transport because the needs of the armed forces are so specific that few companies are ready to work with them. As a result, it’s usually the “historic” national operators that bid for contracts involving loading and driving trains for the military, but even this relationship is currently jeopardized by excessive regulation. For instance, Poland is currently in the process of buying new military rail stock from its historical operator, PKP Cargo, but is worried that the move could be classified as unauthorized public aid under EU competition law. European countries could take measures to make European investment rules more flexible on military mobility issues. (See recommendation 14.)

From a human resources standpoint, mobilized workers will have to be prepared. Warfare is evolving, and the relative safety of the rear area of the theater of operations is slowly fading with the proliferation of long-range assets. Proper preparation is crucial because, although civilian drivers face lower risks than combat troops, their exposure remains considerable. Being able to provide volunteer drivers with a suitable military status that will negate their right to withdraw could be a solution. Nations could assess the interest in a transportation reserve that would be used as a pool for military strategic transportation. (See recommendation 15.)

Finally, yet importantly, the world has changed since the Cold War, and global supply chains have shifted how we produce and consume resources. European citizens today rely on a delicate logistical web that makes food grown thousands of miles away available. Even after the COVID-19 pandemic, we live in a world of just-in-time deliveries and minimal stocks. Any brutal change in that web could have dire consequences for the civilian population. Proper planning must consider that a sizable portion of the civilian transportation fleet will be essential to maintain that chain.

Although the requisition process is an act of supreme authority that comes from the state, there must always be compensation provided to the owner. This means that massively resorting to it will not be cheap, especially when considering the damage and destruction to which those assets would be exposed. None of these factors are insurmountable, but it does mean that, as always, planning is essential—not only preparing minds and processes but also adapting the hardware. At the national level, armed forces will have to express their specific needs to the private sector, including initiating discussions with transport and railway companies, several years before a crisis starts to loom, to ensure that everything works as planned when the time comes.

From outsourcing to dependence: The integration of the private sector in the logistical optimization of armed forces through AI

The scarcity of resources, the complexity of equipment, and the omnipresence of intelligence, surveillance, and reconnaissance have transformed warfare into a system where data constitutes one of the most critical fuels.⁴⁸. In the field of logistics, tasks such as inventory tracking, constrained flow coordination, and data compilation represent major challenges, consuming significant human resources. To address this, NATO relies on logistics information systems such as Logistics Functional Area Services (LOGFAS), which enable real-time tracking of inventory, transportation assets, and expressed requirements.

However, artificial intelligence now emerges as an indispensable enabler to optimize not only these activities but also the use of all necessary resources. The term “resource” should be understood here in its broadest sense. Requisitioning would prove not only administratively complex to implement but also cognitively unmanageable without large-scale data processing capabilities. In the realm of military mobility, the prospects offered by AI seem almost limitless, yet they largely remain beyond the reach of armed forces in terms of data management and computational power.

Given this capability gap, armed forces are turning to specialized companies, generating long-term dependencies. Technological giants such as Google, with its data storage and sharing capabilities, ⁴⁹or Amazon Web Services (AWS), with the optimization of asset allocation⁵⁰

and resource management, ⁵¹ illustrate some of the possibilities. Some armed forces have already entrusted the management of their operational data to such private actors.

On a broader scale, NATO announced on March 25, 2025, the adoption of the Maven Smart System NATO, developed by Palantir, to equip Allied Command Operations. This AI platform aims to accelerate battlefield decision-making by fusing multisource data. In the specific field of military logistics, Palantir collaborates with Rune Technologies to integrate TyrOS, software designed to transform current logistics processes into intelligent supply networks. This system enables the prediction of future needs, the optimization of available resources, and the facilitation of decentralized operations, even from a laptop in a hostile environment.

Other solutions are under exploration, such as the European Defence Operational Collaborative Cloud at the Alliance level, or Artemis.IA, developed in France. However, this diversity of initiatives presents a challenge: Despite the undeniable contribution of AI in supporting military mobility, competition among private actors and the dispersion of efforts are slowing progress. As customers, the armed forces have little leverage to influence this dynamic. Furthermore, AI raises additional issues, ranging from data compatibility and information sovereignty to resilience against cyber threats.

While the potential of AI for military logistics and mobility has been widely discussed, few significant breakthroughs should be expected in the near term. Such a revolution cannot occur without prior harmonization of standards and methodologies, as well as convergence of perspectives on the security issues inherently linked to the use of artificial intelligence.

The holy grail of a military Schengen area

Streamlining administrative hurdles

The Schengen area permits the seamless movement of people and goods across the borders of different countries. Citizens can travel without passports from Portugal to Poland, never stopping for border control. But for armed forces to move a significant number of troops across allied territory in peacetime, there are complex steps to follow called cross-border movement procedures (CBMP). Standardization is one of the EU’s greatest powers, yet it has failed to iron out these problems. The main issue seems to be that many countries add their own layer of national regulations and paperwork, even though the EU form alone is “officially” enough. On the one hand, NATO is obviously the main client of military mobility. On the other hand, the EU is the main regulator across the continent and already provides funding and executes programs to enhance the infrastructure and border-crossing processes. Some improvements could be made in the following areas.

The first step is that the nation that allied forces want to move into must grant a movement credit that gives authorization to use its roads during a specific timeslot. Depending on the country and situation, the delays can be very long, especially if a force intends to move across several countries. This is because typically civilian authorities grant (or deny) movement credits. Some countries like Germany and France have decentralized their respective processes to regional offices, which causes further delays and complexity. Nowadays, Poland has a much more efficient process because the Army has been given the power to grant movement credits.

Next comes the preparation of the proper customs documentation for border crossing. This requirement appears simple enough: a single form for multiple border crossings. Both NATO and the EU have their own form and while close in content, only the NATO form is digitized. Each country also can (and often does) request additional paperwork. The EU could streamline the process by expediting the digitization of EU 302 Form. (See recommendation 16). Some countries add yet another layer of difficulty by requiring diplomatic clearance to cross.

The number of military organizations that deal with the different aspects of mobility can also be quite overwhelming for the sending nation. Depending on how a force is moving, the host nation might have several entities that will grant, plan, or execute the movement. Integrating these into national military command centers is key. Enforce a standard for NMCCs that integrates all modes of transportation and centralizes the granting of movement credits. These structures could also be supported by JSEC and MCCE to improve their readiness. (See recommendation 17.)

The transport of dangerous goods (e.g., ammunition and explosives) in the military domain has also become a complicated issue, due to a core series of EU regulations augmented by national restrictions. This is particularly significant for the southern strategic corridor. The European Defense Agency has made recommendations for the transport of dangerous goods in the military domain, but they are not mandatory. Streamline restrictions on dangerous goods transport across the EU for military purposes. (See recommendation 18.)

Developing specific corridors

Both at the political and military levels, cooperation between the EU and NATO exists across several points of contact. Regarding military mobility, the main one is through NATO’s Logistics Action Plan.⁵² On the administrative side, NATO and the EU are working hard to resolve the different issues. The urgency of the situation means that both parties are regularly exchanging information and requirements. Several projects are showing promise to reach NATO’s prerequisites for enabling and deploying large-scale military formations within seventy-two hours. Among them is the Secure Digital Military Mobility System (SDMMS), which will allow the direct and secure exchange of information between EU member states and dramatically accelerate approvals of CBMPs. Eventually, this software will also cover customs.

Another aspect to improving border crossing is the ability to get a train directly from a country to its destination without changing the engine at each border crossing. Standardized security systems like the European Rail Traffic Management System will greatly help with this endeavor, but it will take decades to finish developing the needed railway equipment and rolling stock. Despite the efforts of the different actors, most notably the EDA and NATO, progress on a “military Schengen” has been very slow so far; an intermediate solution is relying on bilateral and multilateral agreements to advance on this issue. In March 2025, the European Council identified four priority corridors: Northern, Central Northern, Central Southern, and Eastern Corridors,⁵³ which European member states are striving to support and streamline.

Practically, these corridors are unfolding in minilateral groupings, the first of which was formed between Netherlands, Germany, and Poland, with a letter of intent signed January 30, 2024. The three countries are all major stakeholders in military mobility, due to the size of their ports and their geographical location.⁵⁴During the NATO Washington summit in 2024, Albania, Bulgaria, Italy, and North Macedonia signed a corridor agreement.⁵⁵

Turkey, Romania, and Bulgaria signed a letter of intent in October 2024, while Romanian and Bulgarian defense ministers signed a memorandum to establish a regional special operations command center which will plan and manage the Alliance’s special operations forces in the Black Sea region. In November 2024, the Nordic countries (Denmark, Finland, Sweden, Norway, and Iceland) signed a letter of intent stating their willingness to create such a corridor. ⁵⁶.Also that month, Bulgaria, Greece, and Romania signed a letter of intent for a corridor that would permit direct access to southern Europe via the maritime port of Alexandroupolis.⁵⁷

These various planned corridors could provide a blueprint for the future look of European military mobility.

These military mobility areas could theoretically allow for significant improvements and facilitate the movement of military forces between the different nations involved, as well as offer helpful options to transfer forces between northern and southern Europe. The additional corridor between Italy, Slovenia, Hungary, and Romania would potentially keep the road to Romania open in case of a blockade of the Eastern Mediterranean. Unfortunately, stringent regulation regarding the transport of hazardous material in Italy, in total disregard of EU regulations, could dramatically downsize the impact of this initiative.

Notably, these “corridors” are only an administrative development and have not improved infrastructure, as is often incorrectly portrayed. Nevertheless, the Netherlands-Germany-Poland initiative has the potential to become the model for streamlining cross-border procedures, if and only if its successors adopt the exact same requirements. Otherwise, we will end up with a dozen corridors, each with its own specific procedure.

Conclusion and recommendations

Given current geopolitical circumstances—despite the time required to update legislation in Europe, revise the Military Mobility Action Plan or design the EU’s multiannual financial framework 2028–2034—the EU should focus on enacting prompt, rapid solutions, many of which are outlined in this report.

The delays in developing military mobility should encourage every actor to keep prioritizing the issue. An economic reality as well as a military one, mobility is a perfect subject to become one of the first building blocks in the development of European strategic autonomy.

Recommendations

1. Support the standardization of dual-use European rail cars (transport of personnel, wounded people, and equipment).
2. Identify civilian warehouses that could be requisitioned in wartime.
3. Define a genuine strategic framework for military mobility, fostering cross-border projects and ensuring that neglected but critical regions are not left aside.
4. Work more closely with NATO when setting priorities and awarding grants to reinforce the overall coherence of the network.
5. Renovate the EU application process to include a one-stop, lead decision-maker, to help implement an overall strategy; and strive to educate all nations participating in the EU and/or NATO, to achieve continental-scale military mobility effects.
6. Dedicate part of the APMM budget to large-scale projects, targeted by the EUMS and NATO to bridge identified capability gaps.
7. Increase the budget dedicated to the APMM to guarantee funding for large-scale projects and prevent the premature drying up of funds, leading to strategic imbalances.
8. Include a list of operational shortcomings related to dual infrastructures in the joint EUMS/NATO assessment, to encompass the full spectrum of multinational missions in Europe.
9. Organize a seminar on infrastructure linked to military mobility, jointly organized by the EUMS and NATO, to inform participants of existing funding mechanisms and the need for nations to be involved. To encourage synergy, the audience should include representatives of transport ministries and armed forces.
10. Set up regular mobilization training events involving private companies.
11. Nationally, foster a whole-of-government approach to military mobility in order to develop robust relationships between ministries.
12. Identify key transport companies and encourage them to use container-compatible equipment.
13. Identify a European budget for the development and acquisition of a standardized military flatcar to facilitate mobility by rail.
14. Make European investment rules more flexible on military issues.
15. Nationally, assess the interest in a transportation reserve that would be used as a pool for military strategic transportation.
16. Expedite the digitization of EU 302 Form.
17. Enforce a standard for NMCC that integrates all modes of transportation and centralizes the granting of movement credits. Those structures could also be audited by JSEC and MCCE to assess their readiness.
18. Streamline the restriction on dangerous goods transport across the EU for military purposes.

This publication was funded by the European Union. Its contents are the sole responsibility of the authors, and do not necessarily reflect the views of the European Union. An earlier draft of this study was submitted as part of the European Commission’s targeted consultation on the military mobility package.

The Europe Center promotes leadership, strategies, and analysis to ensure a strong, ambitious, and forward-looking transatlantic relationship.

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This is the second chapter in the Freedom and Prosperity Center’s 2026 Atlas, which analyzes the state of freedom and prosperity in ten countries. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

Evolution of freedom

Between 1995 and 2025, Colombia has gone through five institutional phases. Each phase could be characterized by progress and tension, where advances in democracy, improvements in the rule of law, and economic openness were frequently challenged by fiscal limits, political crises, and persistent inequality and informality.

The rooting period (1991–2002)

A fresh chapter of institutional development arrived in Colombia during the early 1990s. The 1991 constitution emerged from a collective determination to eliminate centralism and violence through establishing a participatory and decentralized state which protected rights for all. Social and cultural rights were integrated into the legal framework along with expanded civic freedoms. In addition, the government in the 1990s initiated structural market reforms which included trade liberalization, financial system modernization, and the establishment of an autonomous central bank to manage inflation and create responsible and prudent macroeconomic policies.

Colombia earned economic policy credibility from these reforms which established fiscal and monetary stability for three decades. Nevertheless, these reforms produced a paradox within the country: The economic liberalization process outpaced the transformation of the country’s productive base. As many authors, such as Juan Carlos Echeverry, have noticed, Colombia opened international trade doors without having first constructed its economic base. The nation developed openness, but industries remained defenseless, and infrastructure remained behind. On the other side, the constitution guaranteed a wide range of rights (related to health, education, justice, and more) which had to be funded and created ongoing fiscal burdens exceeding the state’s financial resources. In the 1990s, Colombia emerged as a nation with promising reforms, but its ambitions outpaced its capabilities. This is the tension in which Colombia has operated for many years.

Security and stabilization (2003–2015)

Between 2003 and 2015, Colombia experienced a phase of security along with stabilization. The country managed to regain territorial authority from insurgent forces while attaining public trust in its institutional structures. The government’s “democratic security” strategy was combined with macroeconomic discipline to create a virtuous cycle of investor return, economic growth, and advancement in the rule of law.

During this time, institutional development advanced significantly in response to various policies. A fiscal rule was established while the central bank kept its independence and debt remained controlled. Changes among political ruling parties in Colombia continued without violence while international observers recognized the country’s democratic progress. However, structural problems remained hidden. The security improvements brought undeniable benefits to Colombia, but fighting insurgent forces led to human rights violations that damaged the country’s legitimacy and ability to govern. Colombia made progress on security but failed to improve equality and strengthen its institutions.

Polarization and the post-peace era (2016–2020)

The third stage in modern Colombian history began with the 2016 Peace Agreement, which put an end to fighting with FARC, the Revolutionary Armed Forces of Colombia, the country’s largest guerrilla force. The peace agreement meant to unite society but instead divided it more deeply. The national plebiscite opposition to the agreement, together with its congressional approval, created an impression that the government had disregarded public opinion.

The government could not maintain the ambitious goals of the peace agreement because it lacked sustainable implementation capacity. The implementation of programs for rural reform and reintegration and financial support for these programs remained insufficient. Progress on truth, justice, and reparation was also uneven. At the same time, non-repetition mechanisms—designed to prevent former combatant or affiliated groups from committing the same crimes and to reduce the likelihood of renewed violence—were only partially carried out. Meanwhile regional territorial conflicts increased as coca production grew (due to the dismantling of aerial coca fumigation), and new criminal organizations appeared. The anticipated “post-conflict” situation was instead a reshuffling of existing threats. By 2020, people in Colombia had grown exhausted and increasingly disappointed that the global celebrations of peace appeared so distant from their actual experiences.

Pandemic and social unrest (2020–2022)

The fourth phase revolves mostly around the COVID-19 pandemic. Although Colombia managed to avoid major economic and social setbacks through its proactive countercyclical economic approach, the pandemic nonetheless revealed structural weaknesses of inequality and informality, which led to multiple indicators falling before they partially recovered in 2021 and 2022. The impact of COVID-19 pushed more people into informal work while increasing poverty and inequality and reducing the number of available jobs. The result was diminished economic freedom. The public protests, in part triggered by illegal support and tax increases announced in the wake of the pandemic, revealed deep societal inequalities and perceptions of corruption and political manipulation. These combined to damage institutional trust, hindering investor confidence and consequently the economy.

Uncertainty and political confrontation (2022–2025)

The fifth phase covers the developments since 2022. The current political environment is marked by a confrontational atmosphere, which disrupted consensus-building efforts and created conditions that decreased investment potential and caused institutional uncertainty that destroyed trust in all government institutions. Since 2022, Colombia has faced fresh difficulties caused by inadequate and debatable policies on energy, public services, education, pensions, health, taxes, and land that drive political polarization and create economic instability. The decline of institutional dialogue has diminished investor trust and created uncertainty about Colombia’s future course while democracy persists. The current state of ideological conflict has displaced the practical economic management approach that used to guide the country’s economic affairs. Colombia now confronts the dual challenge of building trust between government and markets and connecting its citizens with their representative institutions.

The 1991 constitution established institutional structures which form one of Colombia’s most valuable assets. The Acción de Tutela gave citizens legal tools to protect their rights, and decentralization increased local government accountability, capacities, and options. The central bank’s autonomy enabled uninterrupted monetary and exchange rate policy and protected the nation from the populist cycles that ravaged most regions on the continent.

But legal systems cannot ensure freedom by themselves. Governance remains weak due to corruption, excessive regulations, and persistent informalities and social inequalities. Over 55 percent of workers remain outside the formal economy, and millions of firms are microbusinesses with low levels of formality, undermining tax collection and labor protections. Colombia needs to protect its democratic institutions while extending institutional benefits to formalize the excluded population.

The security situation represents the second vital point in Colombia’s recent timeline. During the 1990s, the Colombian state faced three concurrent threats from drug cartels, guerrilla insurgents, and armed groups that fought for territory; used kidnapping, extortion, and narcotrafficking to fund their operations; and exported large-scale violence to cities. The homicide rate ticked up, and many people were forced to abandon their homes. Business owners lost their local enterprises and had to defend themselves because municipal authority disappeared from vast sections of the country. By 2005, Colombia regained its administrative control and normalized daily activities, which permitted people to travel more freely, reduced transportation expenses, and extended investor horizons. Companies prospered under fiscal discipline and macroeconomic stability, which directed workers toward new regions for economic enterprise.

Over the course of three decades of social and economic development, women gained visibility and access to opportunities in both the public and private sector. Women’s participation in the workforce increased as did leadership diversity and social policies aimed at gender balance. The boost in household earnings together with more stable societies proved that inclusive growth strengthens both economic prosperity and social freedom.

The business environment in Colombia developed according to its political dynamics. Institutional predictability and consistent rules produced the best investment conditions from mid-2010-2020s. The trust in Colombia has been diminished by inconsistent policies and growing polarization since 2022. The business community shows apprehension toward taxation due to its inconsistent design and enforcement.

The country’s most effective reforms happened when governmental authorities joined forces with business leaders and academic experts to craft public policy that integrated regulatory, infrastructure, and labor initiatives to achieve common goals. Economic strategy has lost cohesion because the dialogue that used to inform it has diminished. Because freedom and prosperity depend on a foundation of predictability, the loss of predictability stands as the most critical institutional threat facing Colombia in the short term.

Colombia’s democracy has shown more stability compared to other regional nations, but 2016–18 marked a fundamental change. The nation experienced a rapid deterioration of political rights and a decline in civil liberties during this time frame. The rejection of the peace agreement in the plebiscite triggered political polarization, which worsened after congressional ratification of the plan. This resulted in widespread public concern about the institutional bypassing of political processes. During this period, both cocaine cultivation and illegal mining activities expanded while violence shifted its operational patterns and power dynamics among different actors. The political rights indicator shows further deterioration during the 2020 emergency period, which also witnessed social uprisings, but there was some improvement in 2021–22 once restrictions were lifted.

At present, legal operations are restricted in Colombia because of two fundamental elements. Most labor markets and business activities operate predominantly beyond the formal sector. The rule of law, measured by the legal subindex, experienced a rapid increase in 2014–15, followed by a dramatic decline. Formalization efforts expanded when security conditions improved, and economic activity rose only to retreat once economic performance declined and labor costs increased. Research shows that greater informality reduces enforcement capacity as well as social insurance coverage and tax revenue. Corruption and bureaucratic scandals from 2010 to 2018 reduced judicial public trust, and illegal activities in unregulated territories eroded local government authority.

Governance quality worsened during these processes even though other sectors showed signs of improvement. While problems existed before the pandemic, COVID-19 made them more apparent. Social unrest spiked sharply in 2019, subsided during COVID-19 lockdowns, and intensified again in 2021. Data reveal that political freedom declined both before and after COVID-19. Yet the underlying causes—rising inequality, widespread informality, and growing insecurity—had been eroding democratic rights well before the pandemic triggered massive job losses and overwhelmed public services. The political situation since 2022 has been more confrontational, hindering consensus-building between government, business, and academic partners and stirring tensions between autonomous institutions and regulatory bodies. The key goal of economic recovery requires the establishment of stable economic directions along with trustworthy dialogue mechanisms that will rebuild private-sector confidence and restore normal market expectations.

Evolution of prosperity

Freedom and prosperity in Colombia have developed concurrently, although their progression has never been perfectly aligned. The 1990s and 2000s market liberalization, alongside expanded rights in the new constitution of 1991 and fiscal and monetary discipline, created the foundation for Colombia’s largest social change in contemporary history. The nation’s average per capita income tripled while poverty dropped by 20 percentage points and life expectancy increased by around ten years. This growth, however, contained a key warning since its uneven distribution meant delayed economic benefits for many Colombians. The clear lesson was that growth without fairness damages society just as severely as economic stagnation.

The inequality trap

Between 2005 and 2016, many observers believed Colombia had entered a positive feedback loop.¹ Economic growth remained healthy while job creation improved, and social programs reduced extreme poverty levels. Market freedom finally found a way to work harmoniously with social policy to benefit society.

After 2016, the positive cycle started to break down. Economic growth decreased, and productivity reforms came to a halt while the wealth gap between rural and urban Colombia remained the same. Informal employment increased yet again while people lost hope for their future because inequality returned to its former levels. Then the pandemic struck, revealing structural defects the country had delayed addressing. Education interruptions, female job losses, and strained public finances pushed the country to its limits.

The 2021 protests were triggered by discontent over taxes, but they served to express people’s deeper sense of exclusion. Many Colombians felt that prosperity had become an exclusive privilege rather than a universal promise. The widespread perception damaged people’s trust in democracy and transformed economic inequality into a political moral crisis. People will tolerate slow economic growth, but they will refuse to support a system that fails to reward hard work or equitable treatment.

Colombia achieved indisputable progress through its recognition of Indigenous and Afro-descendant community rights. However, many of these advancements failed to deliver real benefits in practice. From 2010 to 2020, minority inclusion freedom indicators experienced a decline. The absence of governmental security in peripheral regions, combined with ongoing displacement and illegal expansions of mining and drug production, continue to drive social marginalization.

The disconnect between greater formal rights and stagnant living conditions is clearly visible. For many Colombians, equality before the law failed to translate to real equality of opportunities. The main takeaway is that inclusion demands more than official recognition; it requires continuous financing for education, infrastructure, and peacekeeping that creates national investment incentives for all territories.

Since 2018, Colombia has received over two million Venezuelan migrants. Managing this massive influx tested national institutions but also brought new energy, talent, and entrepreneurship to Colombian society. Border communities became overburdened because social services reached their limits. The “Temporary Protection Statute” along with other pragmatic policies transformed what could have been a humanitarian crisis into a demographic boon over time. Formal labor market workers contributed to the economy through tax payments while bringing new and energetic workforce potential. Amid regional tendencies to respond with populist fervor, Colombia demonstrated a distinct approach that blended openness with strategic foresight. Institutional flexibility combined with inclusiveness demonstrated that migration could be a driver of renewal instead of instability.

Colombia has achieved one of its most remarkable successes through environmental policy initiatives. From 2010 through the early 2020s, Colombia transitioned from setting green targets to producing tangible achievements. The economic policy established through CONPES 3934 (2018) and CONPES 4075 (2022) proved that green growth had become an integral economic plan instead of merely aspirational.

The addition of electric vehicle incentives, together with renewable energy auctions in La Guajira and enhanced prosecution of illegal mining, transformed environmental defense into a core competitiveness element. Mercury emissions decreased while wind and solar power capacity expanded, and the nation began perceiving sustainability as an advantage rather than a limitation. Although environmental issues such as deforestation remain, Colombia has advanced to where economic and environmental goals are more in sync.

Human development presents the clearest demonstration of how freedom relates to prosperity. People in Colombia have experienced longer lifespans and enhanced health outcomes over the past three decades. Infant mortality rates dropped dramatically while literacy rates increased, and healthcare access became almost universal. As a result of the 1993 and 2011 reforms, Colombia’s health care systems transformed to become one of Latin America’s most comprehensive.

Education in Colombia remains divided: Urban schools have developed quickly but rural areas continue to lag behind. Digital access and trained teachers remain scarce in many classrooms while educational results show significant differences across regions. The pandemic intensified educational inequalities, emphasizing to policymakers that offering coverage without proper quality or relevance is insufficient. Future development requires better integration between educational systems and productive sectors to create job opportunities which could also lead to social stability.

The path forward

Colombia is approaching a critical point which will define its future direction. Thirty years of institutional advancement delivered stability alongside credibility, yet the country continues to struggle with social inequality, economic informality, and declining public trust. Challenges arose after 2016, when investment diminished, economic growth declined, and political polarization intensified. But the real issue is greater than Colombia’s ability to grow: The crucial challenge is to achieve inclusive growth that transforms freedom into equal prosperity.

The foundation of prosperity rests on establishing stable public finances. After the necessary spending during the pandemic period and the increase in public debt, Colombia started to make a fiscal adjustment which was successfully implemented between 2020 and 2023. However, since then, public debt and the fiscal deficit have risen high enough to make investors nervous. As a result, Colombia needs an effective reform that expands the taxpayer base while making compliance easier; it should also eliminate tax benefits that favor a select few while preserving support for small regional businesses.

The restoration of fiscal rules (which were suspended in 2025) would demonstrate Colombia’s commitment to disciplined governance while enhancing market and public confidence in the country’s fiscal management. Decentralized fiscal authority with proper accountability mechanisms would enable state institutions to connect with citizens more effectively while distributing growth benefits more fairly.

Peacebuilding requires more than negotiation-based approaches while demanding consistent territorial governance. Large rural areas of Colombia still live under alternative and illegal power systems that impose fear instead of upholding legal authority. Road construction alongside internet connectivity and new schools serve as development tools which could also be useful in strengthening citizenship.

Government investments in infrastructure yielded clear advancements across Antioquia, the coffee region, and parts of the Caribbean region in the form of decreased violence, increased job opportunities, and population retention. Security improves only when people have access to opportunities to replace coercive systems. The practical and moral lesson that emerges is that prosperity requires peace, and peace demands governance from a state whose presence is felt where people reside.

Informality blocks the path that unites freedom with a prosperous future. More than 50 percent of Colombian workers lack contracts and protections since they work outside the formal system. The workplace formalization process would be achievable by easing procedures and reducing labor expenses and modernizing ways to connect workers with employers.

Simultaneously, Colombia needs to transition from an extraction-based economy to an innovation-driven economic model. Productivity functions as the link between immediate economic recovery efforts and enduring prosperity. This requires industry-university coordination along with technological implementation support and local business development investment. Subsidies will not reduce inequality nor sustain freedom because productivity growth serves as the fundamental solution.

Colombia’s greatest challenge, however, springs not from fiscal concerns but from the political domain. The current political division has turned policy discussions into entrenched conflicts, making compromise look like weakness. Future development in Colombia depends on institutional pragmatism, which requires leaders to prioritize results over political statements.

Non-negotiables must be to protect the independence of the central bank and to maintain the autonomy of courts and oversight agencies. Dialogue between government, business, and civil society needs to be reestablished through structured channels. Economic freedom depends not only on predictable rules for investors but also on the social contract that allows it to endure. Transparent institutional operations promote both economic and public trust.

The transition toward clean energy creates difficulties while promising new possibilities. Even though oil and gas continue to generate substantial government revenue, Colombia possesses vast renewable energy potential. The appropriate approach involves slow and responsible market transition combined with building new industries based on sustainable agriculture, clean energy, and ecotourism while preserving fiscal stability.

Environmental stewardship could become a competitive advantage when established through consistent regulations and patient investment. Colombia is endowed with geographical diversity, biodiversity, and abundant water resources that would enable green industries to thrive—as long as institutions remain constant, regulations are simplified, and public-private partnerships are strengthened.

Throughout the thirty-year period from 1995 to 2025, Colombia has been trying to balance its aspirations against its limitations. It strengthened its democracy and opened the economy, but it continues to battle persistent problems of inequality, informality, and insecurity. Freedom in the country has never been fixed since each generation must labor to preserve and renew it.

The next chapter depends on Colombia’s ability to tether freedom to present-day opportunities. Achieving fiscal stability together with security systems, educational advancement, and institutional trust is a moral obligation essential for democratic success. Once trust returns to citizens and government bodies, between investors and institutions, and among regions with their central authorities, Colombia will convert its practical liberty to enduring economic prosperity.

The future direction of the nation depends on making decisions between opposing forces, including confrontation versus consensus, populism versus pragmatism, and empty rhetoric versus courageous social and economic reforms. With the right decisions, Colombia can become an example of democratic stability and inclusive development throughout the Americas.

José Manuel Restrepo is an economist, academic leader, and former public servant with experience in education management and economic policy. He has served as president (rector) in Universidad EIA, Universidad del Rosario, and CESA Business School in Bogotá. He held cabinet roles as Colombia’s minister of commerce, industry and tourism and later as minister of finance and public credit. He holds a master’s degree in economics from the London School of Economics and a Ph.D. in management from the University of Bath.

A strong advocate for innovation, sustainability, and institutional ethics, Restrepo has championed policies such as the Entrepreneurship Law, Green Sovereign Bonds, and the modernization of Free Trade Zones 4.0. His leadership experience extends to academia, government, and business, where he seeks to foster collaboration as a means to turn policy into progress. As a frequent speaker and columnist, he reflects on productivity, education, and governance, emphasizing that economic progress must always serve people.

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• Introduction
• Russia’s relationship with Ukraine
• Russia’s global standing
• About the author

Russia’s invasion of Ukraine has been, by any metric, a strategic nightmare for Moscow. Not only has Russia lost more soldiers in Ukraine than in any war since World War II—and might well end up losing more troops than the United States lost during the entirety of WWII—but the Russian economy has lurched between overheating and stagflation. All the while, the Kremlin’s decision to expand its invasion of Ukraine has resulted in a NATO both enlarged and enhanced; in Russia’s transition from regional hegemon to a “junior partner” (and even potential vassal) of China; in waning influence in places such as the South Caucasus, the Middle East, Africa, and Europe; and the creation of a heavily armed, deeply resentful neighbor in Ukraine, which will see Kyiv nurse both an animus toward Russia and a desire to reclaim much of the occupied territories for years to come.

The entire war has been an exercise in Russian myopia, accelerating Russian decline and leading to a broad range of self-inflicted wounds. Mirroring other neo-colonial wars—France in Algeria, the Netherlands in Indonesia, Portugal in southern Africa—the war has exposed Russia as a pretender to great-power status and a shell of a once-swaggering empire. While Moscow might yet gain more towns scattered throughout Ukraine’s eastern Donbas region, any remaining victories will remain pyrrhic, with Russia continuing to sacrifice its future prospects for any present gains.

Much of Russia’s failure rests on Ukrainians’ ongoing sacrifices, as well as on the broader West’s willingness to back Ukraine’s troops. But a great deal of this disaster also stems from a series of muddled narratives that Russia has peddled about precisely why it launched the expanded invasion in the first place. Pushing a sprawling, occasionally contradictory series of goals and rationales, and without a clear narrative push to consolidate either support or success, Moscow has flailed for years, lurching from one rationale to another—all while its troops continue dying en masse and its domestic population continues to feel escalating pain and stress as the war drags on.

Given all of the competing claims Moscow has put forth to defend its invasion of Ukraine, it is worth analyzing how the Kremlin has justified its expanded war and how Moscow has tried to sell the deadliest war Europe has seen since the days of Adolf Hitler and Benito Mussolini. Such analysis can not only help Western allies of Ukraine figure out how best to back Kyiv’s efforts but can provide a roadmap for sounder Russia policy in the West overall. In sifting and sorting these narratives, we can identify precisely what is motivating the Kremlin—and, better yet, how to stop it.

Selling the war

The Kremlin’s public rationales for its war in Ukraine fall into two broad buckets.

The first rests directly on Russia’s relationship with Ukraine, focusing specifically on the links, both historic and contemporary, between Moscow and Kyiv. The narratives focused specifically on Ukraine, and on Russians’ relationships with Ukrainians, can be broken down further into three primary prongs.

1. The Ukraine war is primarily about “rescuing” Russians and Russian speakers, especially (but not exclusively) in eastern and southern Ukraine. This is primarily predicated on the idea that Ukraine is overseen by “fascists” and “Nazis,” who have been in power since the 2014 Euromaidan “coup.”
2. Russia and Ukraine are actually “brotherly” nations, and Ukrainians are simply “confused” about their relationship as subalterns to Russia. This is primarily predicated on the idea that Ukraine is simply “Little Russia,” part of the “triune state” of Russia, Belarus, and Ukraine—and, naturally, not part of the West. The war is simply about restoring that Ukrainian status. It is also about restoring Russia’s colonial control of Ukraine and keeping Ukraine as an entity subservient to Russia.
3. “Ukraine” does not actually exist but is a Leninist fabrication. This is predicated on the idea that Vladimir Lenin and other Soviet leadership were mistaken to draw any internal, republican borders within the Soviet Union—and that the entire “near abroad” is rightfully Russian. The war is about rectifying this Leninist mistake.

However, the Kremlin’s rhetoric explaining its war in Ukraine has often expanded far beyond Ukraine itself. Indeed, while the fighting might take place largely on Ukrainian (and occasionally Russian) territory, the Kremlin has often claimed that the war is both global and epochal, linked directly to the second broad bucket of narratives and focused on the status of Russia’s global standing. Those narratives centering on Russia’s role in the broader international context, as well as the creation of a new geopolitical order, can also be broken down into three primary threads.

4. This war is primarily about beating back NATO and Western expansion. NATO “pledged” in 1990 that it would not expand its borders, and this war is simply about forcing NATO to uphold that pledge. This war is a “defensive” war, aimed at preventing Russian “encirclement.”
5. This war is about the non-Western world standing up to Western bullying, hypocrisy, and decadence. Russia is at the vanguard of the non-Western world’s fight against Western “colonialism,” trying to restore “traditional values” that the West is attempting to destroy around the world.
6. This war is about restoring Russia’s status as a “great power,” both in Europe and globally. It is primarily about ushering in a “multipolar” world, with other “civilization-states” such as China and India rising to parity with the United States.

None of the narratives above are mutually exclusive. Indeed, one of the difficulties in assessing these narrative components is the multiple instances of reinforcing themes and topics. For example, the idea that Russia and Ukraine are brotherly nations—or even the notion that Ukraine does not exist—can be directly tethered to the idea that NATO must never extend to Ukraine and that the war is necessarily defensive. The false claim that Ukraine’s 2014 revolution was in reality a coup is also often paired with the idea that the war is about rolling back Western influence and meddling in non-Western nations. These narratives can often work in conjunction—and are often included in the same speeches and writings from Russian President Vladimir Putin and his allies.

Adding to the difficulty, many of these narratives are also in tension with one another. For example, Putin wrote at length about the supposed brotherly relationship between Ukraine and Russia, yet he has simultaneously claimed that Ukraine is a mere fabrication set to be annulled. Likewise, the idea that this is somehow an anti-colonial war grates against the claim that some countries are civilization-states destined to rule over smaller nations.

Still, each of these narratives is worth analyzing on its own. The remainder of this paper will be dedicated to just that: detailing the primary contours of each of these narratives, as well as offering analysis (and often corrections) therein. The paper will also offer a brief conclusion about what these competing and contradictory narratives reveal about Russia’s aims—and how best to combat Russian expansionism in Ukraine and elsewhere.

Russia’s relationship with Ukraine

1. The Ukraine war is primarily about “rescuing” Russians and Russian speakers, especially (but not exclusively) in eastern and southern Ukraine. This is primarily predicated on the idea that Ukraine is overseen by “fascists” and “Nazis,” who have been in power since the 2014 Euromaidan “coup.”

Details

One of the primary narratives that Russia has relied on since its expanded invasion did not originate in February 2022, or even in the months beforehand. It instead traces back to at least early 2014, when Ukrainian protesters successfully ousted former President Viktor Yanukovych in the democratic Euromaidan Revolution—and when Putin launched Russia’s initial invasion of Ukraine in Crimea and parts of the Donbas.

At its simplest, Russia’s post-Euromaidan narrative boiled down to the idea that the Ukrainian protesters were illegitimate usurpers, ousting a democratically elected leader and instituting a new regime dedicated not only to wresting Ukraine out of Moscow’s orbit but focused especially on the immiseration of Russians and Russian speakers. The “junta” responsible for this “coup” was secretly in hock to its “real masters in the West,” who were simply using Ukraine and its post-2014 government as a means of targeting Russia and Russian interests. In this view, these new Ukrainian leaders—including Volodymyr Zelenskyy—should be considered fascists and Nazis, simply because they were opposed to Russia writ large, whether that meant not recognizing Russia’s claims to Crimea or encouraging the use of the Ukrainian language throughout the country.

According to Russia, this supposed junta continued its persecution for years until things reached a breaking point in early 2022. That February, Moscow was supposedly forced to invade Ukraine for the express protection of Russians in regions like eastern Ukraine. As Putin claimed, Russia did not need to annex any further parts of Ukraine, but authorities in Kyiv needed to recognize the nominal independence of both the Donetsk People’s Republic and Luhansk People’s Republic—building upon previous demands that these entities must also have a veto over Kyiv’s foreign policy decisions. According to Moscow, Ukraine also needed to renounce any fascist or Nazi leaders and sympathies forevermore.

As Putin said during his address announcing the expanded invasion, “The purpose of this operation is to protect people who, for eight years now, have been facing humiliation and genocide perpetrated by the Kiev regime.” As he added in 2025, the crisis did not begin with Russia’s invasion but was the “result of the coup d’etat in Ukraine, which was supported and provoked by the West.” More specifically, Putin said in 2022 that Russia’s expanded invasion was a direct response to the “tragedy” in the Donbas. As Tass reported, Putin told a twelve-year-old girl that Ukraine’s “bombardments, artillery strikes and combat operations” in Donetsk and Luhansk “compelled Russia to start this military operation.”

Putin’s rhetoric also built on this narrative to call for the notion of “denazifying” Ukraine. As he memorably claimed during his February 2022 address, Russia would “seek to demilitarize and denazify Ukraine, as well as bring to trial those who perpetrated numerous bloody crimes against civilians, including against citizens of the Russian Federation.” The Russian Foreign Ministry and the Russian ambassador to the United Nations echoed this language.

Analysis

The idea that Russia needed to invade Ukraine in order to rescue compatriots and remove Nazi elements from Ukraine’s leadership is, to outside observers, perhaps the most farcical of the narratives detailed here. The notion that Ukraine—whose president is Jewish—requires denazification was immediately met with ridicule and mockery. However, this argument also provided a sense of flexibility for Putin. After all, it remains unclear what denazification would actually entail—whether regime change, full lustration, the ending of any pro-Western trajectory policies, a mix of these options, or something else entirely. Likewise, the call has a clear domestic component, with Putin able to sell the war as a battle against a new generation of supposed fascists and a reprise of Moscow’s victory in World War II.

The calls that Moscow must rescue ethnic Russians suffering in Ukraine, especially in the Donbas, also have significant salience for domestic audiences in Russia. For many Russians, the Donbas remains a traditionally Russian land and Moscow maintains a unique role in protecting Russians in neighboring nations—including beyond Ukraine. Given its salience, this line of argument would likely be employed again should Russia launch another invasion of a neighboring nation in the future, with potential usage from Estonia to Kazakhstan.

2. Russia and Ukraine are actually “brotherly” nations, and Ukrainians are simply “confused” about their relationship as subalterns to Russia. This is primarily predicated on the idea that Ukraine is simply “Little Russia,” part of the “triune state” of Russia, Belarus, and Ukraine—and, naturally, not part of the West. The war is simply about restoring that Ukrainian status. It is also about restoring Russia’s colonial control of Ukraine and keeping Ukraine as an entity subservient to Russia.

Details

As with the narrative on Ukraine suffering a coup via fascists in 2014, the idea that Russia and Ukraine are brotherly nations—and that they are destined for embrace, with Russia lording as the “elder brother” over Little Russia—long predated Russia’s 2022 expanded invasion. Indeed, such a narrative stretches back to at least the middle of the nineteenth century, when young Russian aristocrats “discovered” Ukraine and began “to work intensely to uncover the region’s supposed original Russianness,” wrote Johns Hopkins University’s Eugene Finkel, whose 2024 book traced the origins of such efforts. No longer was Ukraine a separate polity with a distinct history; by the 1830s and 1840s, as Russian Slavophile writer Aleksei Khomiakov noted, Ukraine was “an organic and inseparable part of a single Russian nation.” Russia and Ukraine, alongside Belarus, formed a supposed triune state, in which all three nations were part of one greater Slavic nation headed by Russia.

It is an idea that, nearly two centuries later, remains largely unchanged—and which helped provide the outline for one of Moscow’s prime narratives about why it needed to launch its expanded invasion in 2022. This narrative formed much of the basis for Putin’s lengthy 2021 treatise on the topic, in which he detailed the supposed “historical unity of Russians and Ukrainians.” As Putin wrote:

I am confident that true sovereignty of Ukraine is possible only in partnership with Russia. Our spiritual, human and civilizational ties formed for centuries and have their origins in the same sources, they have been hardened by common trials, achievements and victories. Our kinship has been transmitted from generation to generation. It is in the hearts and the memory of people living in modern Russia and Ukraine, in the blood ties that unite millions of our families. Together we have always been and will be many times stronger and more successful. For we are one people.

If anything, Putin’s beliefs in the historical unity binding Russia and Ukraine have only grown despite the military setbacks and massive casualty rates continuing to climb. In late 2022, Putin announced the supposed “annexation” of further Ukrainian territory, including territory Moscow had not yet even conquered. As a means of getting around this awkward fact, Putin pointed to the supposed unity already extant between Ukraine and Russia—found, naturally, in the land he was now claiming as Russia’s. As Putin said, those in Ukraine were “our compatriots, our brothers and sisters . . . the native part of our united people.”

Nor is it just Putin who has peddled such tropes. In a malicious, revelatory article originally posted on (and later removed from) RIA Novosti, one Russian writer laid out what Russian victory in Ukraine would look like. “Ukraine has returned to Russia,” the article begins. “It will be reorganized, re-established and returned to its natural state as part of the Russian world . . . [Russia, Belarus, and Ukraine] will now act in geopolitical terms as a single whole.” Thanks to the invasion, “Russia is restoring its unity” via a “de facto civil war” waged by “brothers.” And thanks to Moscow’s victory, “Russia is restoring its historical completeness, gathering the Russian world, the Russian people together—in all its totality of Great Russians, Belarusians and Little Russians [i.e., Ukrainians].”

Analysis

In this narrative, Ukraine and Ukrainians still exist in concept, but only as a nation and people subordinated to Russia and Russian sovereignty. It is, if anything, a vision that posits Ukraine as simply another Belarus: a state that retains nominal independence but is nonetheless tightly embraced by Moscow and subservient to the Kremlin’s demands. This, as Moscow sees it, is the natural state of things—and anything else would simply be a historical anomaly.

This narrative, of course, is chock-full of historic revisionism, outright fabrications, and warmed-over excuses for empire. As Finkel noted, Kyiv’s origins predate Moscow’s founding by centuries, and few if any Russian intellectuals ever considered Ukraine part of their history and identity until the middle of the nineteenth century. Moreover, this narrative grossly ignores what Ukrainians actually think—and blinded Moscow to just how fiercely Ukrainians would fight to preserve both their state and their nation moving forward.

3. “Ukraine” does not actually exist but is a Leninist fabrication. This is predicated on the idea that Vladimir Lenin and other Soviet leadership were mistaken to draw any internal, republican borders within the Soviet Union—and that the entire “near abroad” is rightfully Russian. The war is about rectifying this Leninist mistake.

Details

This narrative flips the notion of a supposed triune state on its head. Instead of Ukraine being a constituent part of a greater Russia, there is no Ukraine whatsoever—and any claims of a separate Ukrainian nation, language, or identity are simply slander against the one, true, and indivisible Russia. It is a narrative that tips into the genocidal, giving Russia cover to try eliminating Ukrainian identity entirely.

As with other narratives mentioned above, the idea that Ukraine is not a separate polity but is simply a “project” meant to target and undercut Russia has a lengthy lineage. In the 1860s, Russian officials shunted the idea of Ukraine entirely to the side, claiming that the Ukrainian language “never existed, does not exist and cannot exist,” culminating in a tsarist edict banning the teaching of Ukrainian and marking the first instance of Russian authorities trying to stamp out the idea of Ukraine entirely.

The key inflection point in this narrative—that Ukraine is a mere fabrication, rather than a fraternal nation that has lost its way—came in the early 1920s, when Lenin and other Soviet higher-ups began outlining the borders of the new Soviet republics. Given the levels of support in Ukraine for Ukrainian nationhood, Soviet leadership granted Ukraine (and a number of other polities) republican status, effectively placing it on par with the Russian Soviet Federated Socialist Republic. For Putin and others, this decision was a “time bomb” that ultimately detonated in the Soviet Union’s dissolution and is a historic wrong that must be corrected.

We see elements of this narrative throughout Putin’s speeches and writings. In the same essay mentioned above about the supposed historical unity of Russia and Ukraine, Putin claims that “modern Ukraine is entirely the product of the Soviet era,” created “on the lands of historical Russia.” As he added when announcing the expanded invasion, “modern Ukraine was entirely created by Russia or, to be more precise, by Bolshevik, Communist Russia. This process started practically right after the 1917 revolution, and Lenin and his associates did it in a way that was extremely harsh on Russia—by separating, severing what is historically Russian land . . . When it comes to the historical destiny of Russia and its peoples, Lenin’s principles of state development were not just a mistake; they were worse than a mistake.”

As such, the time had come to rectify that “mistake”—even to the point of destroying and subsuming Ukraine entirely.

Analysis

Putin might play-act as a historian, but his reading of history is saturated in grievance and mythmaking, cherry-picking facts and concocting details of his own. The idea that Ukraine is a fabrication or some facile project is, of course, belied by the fact that Ukraine and Ukrainians continue to exist and continue to fight back against Russian forces.

Moreover, Putin’s shoddy history is easily dismissed by those who have actually studied the region. As acclaimed historian Serhii Plokhy noted, the idea that Ukraine exists on historical Russian lands is nonsensical. “Even a cursory acquaintance with the history of the Russian Revolution and fall of the Russian Empire that accompanied it indicates that the modern Ukrainian state came into existence not thanks to Lenin but against his wishes and in direct reaction to the Bolshevik putsch in Petrograd in October . . . of 1917,” Plokhy wrote. “The Bolsheviks tried to take control of Kyiv as well but were defeated, jumpstarting the process of the modern Ukrainian state-building.”

Putin is hardly the only Russian nationalist who has learned the hard way the peril of dismissing Ukrainian identity. During the Russian Civil War, the pro-tsarist White forces refused to grant Ukraine (among other nations) any political freedoms or sovereignty. They instead claimed they were fighting for “Russia, one and indivisible”—a cry that rallied few non-Russians and eventually doomed the White forces to defeat.

Russia’s global standing

4. This war is primarily about beating back NATO and Western expansion. NATO “pledged” in 1990 that it would not expand its borders, and this war is simply about forcing NATO to uphold that pledge. This war is a “defensive” war, aimed at preventing Russian “encirclement.”

Details

Not all of the Russian narratives backing the expanded invasion center on Ukraine. In fact, a number claim that Ukraine is simply the latest flashpoint in a far broader struggle Russia is waging against a perfidious West, and the United States in particular. A case in point is the claim that the war in Ukraine is not just about toppling Kyiv’s “regime,” or even preventing Ukraine from joining NATO, but that it is about unwinding NATO’s post-1991 gains and preventing the wholesale encirclement of Russia by Western forces.

Such a narrative came to the fore in the weeks leading up to the expanded invasion in early 2022. In December 2021, the Kremlin moved from demanding that Ukraine simply acquiesce to Russian demands (especially foregoing NATO membership) to demanding that NATO deployments leave much of Eastern and Central Europe entirely. Moscow specifically called for the removal of NATO forces and weapons from countries such as Romania and Bulgaria, and formally called for NATO to pull back to its 1997 borders, effectively abandoning Poland, Czechia, the Baltics, and others—and effectively restoring military parity between the United States and Russia in Europe.

The Kremlin has justified these demands by claiming that the United States pledged in the early 1990s not to expand NATO eastward. Putin has regurgitated these claims multiple times, including after Russia first launched its invasion in 2014, when the Russian leader stated that Western leaders “have lied to us many times . . . This happened with NATO’s expansion to the east, as well as the deployment of military infrastructure at our borders.” According to Putin, all NATO enlargement following the Soviet dissolution is invalid and must be rolled back. Preventing Ukraine from NATO membership is simply the first domino in a far broader effort to push NATO out of all of its newest member states.

Analysis

Putin’s claims that the United States pledged not to expand NATO are ahistorical and fabricated. The United States never pledged any such veto. Even Mikhail Gorbachev, then ruling as Soviet premier, attested to this, saying that the “topic of ‘NATO expansion’ was not . . . brought up in those years.” Moreover, the key comment in question, in which Secretary of State James Baker floated the idea of NATO moving “not one inch east,” referred solely to NATO troops from West Germany moving into East Germany. The George H. W. Bush administration, however, never adopted this or any prohibition on NATO expansion as formal policy.

However, such a lie is a handy means of cultivating support among gullible audiences, both domestically and internationally, and helps present Russian aggression as being defensive in nature. Of course, this kind of framing—that invading a neighbor is not imperialism but is actually a defensive move—long predates Putin. It can be found in everything from the US decision to invade Mexico in the 1840s to Japan’s decision to invade much of Asia in the 1940s. This “defensiveness” was also the basis for much of the Soviet Union’s rationale for invading numerous neighbors, from Hungary in 1956 to Czechoslovakia in 1968 and beyond. Putin will almost certainly not be the last imperial leader to claim his country’s expansion is defensive in nature.

Thankfully, the Kremlin’s demands have been roundly dismissed by NATO and Western governments alike, and Ukraine remains dedicated to joining NATO. Yet the demands highlight how Russia has spun the war in Ukraine as a means not simply of thwarting NATO’s enlargement but of restoring a military parity between the United States and Russia on the European continent. It implies, in other words, an effective return to the Cold War military status quo within Europe and an unwinding of all the post-Cold War gains that have helped beat back malign Russian influence and military dominance in Europe, far beyond just Ukraine.

5. This war is about the non-Western world standing up to Western bullying, hypocrisy, and decadence. Russia is at the vanguard of the non-Western world’s fight against Western “colonialism,” trying to restore “traditional values” that the West is attempting to destroy around the world.

Details

While the war is taking place in Ukraine, this narrative posits that the war is about far more than simple NATO expansion or Ukrainian nationhood. Instead, it is about finally standing up to Western predation and perfidy, and to the West’s attempts to spread supposedly liberal values around the world—including all those elements opposing so-called traditional values.

Russia’s efforts to transform itself into a bastion of these supposed traditional values dates back at least a decade, when the Kremlin first began positioning itself as the primary bulwark for those opposed to liberal democracy. These include those opposed to LGBTQ rights, those opposed to so-called “gender ideology,” and even those opposed to democracy writ large. This effort has been largely successful, with Russia and Putin widely viewed as the lodestar for these anti-democratic forces.

The war in Ukraine, then, is simply a continuation on this theme. Announcing the expanded invasion in 2022, Putin claimed that the West “sought to destroy our traditional values and force on us their false values that would erode us, our people from within.” Patriarch Kirill, one of the key spokesmen for Putin’s regime and the titular head of the Russian Orthodox Church’s Moscow Patriarchate, echoed Putin’s claims that the war was predicated on those in eastern Ukraine “refus[ing] to accept the so-called values that are being offered by” the West, including “the gay parade.” RT editor-in-chief Margarita Simonyan, one of the war’s biggest boosters, warned that Ukraine risked becoming “an LGBTQ capital or a venue for the Transgender Olympics.”

More broadly, the Kremlin has attempted to position the war as an effort to stand up to Western “neo-colonialism.” Ignoring centuries of Russian colonialism in Ukraine (and elsewhere), Putin has attempted to sell the war as a means of beating back Western colonial efforts. As he said when announcing the supposed annexations of multiple Ukrainian provinces in late 2022, “The West is ready to step over everything in order to preserve the neo-colonial system that allows it to parasitize, in fact, to plunder . . . Hence their aggression towards independent states, towards traditional values and original cultures[.]”

Analysis

It’s difficult to take seriously Russia’s claims that it is waging a war in Ukraine for traditional values, or that it has some kind of spiritual mission to beat back the encroachment of LGBTQ rights. After all, Russia is a country in which the rate of regular church attendance is in the single digits, while the country’s abortion rate remains higher than that of many other European nations. Moreover, the country routinely persecutes Christian denominations, even in Russia itself. The country is hardly a bastion of traditional values, despite Putin’s claims otherwise.

However, the claim that Russia is supposedly leading an anti-colonial war is perhaps the most farcical. Russia was a constituent part of the broader, ghastly story of European colonization, stealing lands and brutalizing populations from Eastern Europe and the Caucasus to North Asia and Central Asia—and even joining Great Britain, France, and Spain in colonizing North America. Claiming it was spreading “civilization” and “Christianity” to “heathen” groups of “savages,” Russia’s colonialist claims were indistinguishable from those in European empires elsewhere. In other words, Moscow was as much a European colonizer as London, Lisbon, Brussels, or Paris.

This was true not just in Chechnya, Kazakhstan, Sakha, or Finland, but also in Ukraine, where Moscow—during tsarist, Soviet, and now Putin eras—routinely engaged in colonial behavior, from ethnic cleansing to cultural genocide to mass murder, all while claiming non-Russian lands as its own. The war in Ukraine is indeed colonial, but with Russia once more in the role of colonizer.

6. This war is about restoring Russia’s status as a “great power,” both in Europe and globally. It is primarily about ushering in a “multipolar” world, with other “civilization-states” such as China and India rising to parity with the United States.

Details

Arguably the broadest narrative propounded by Russian authorities is that the war in Ukraine is not about the status of certain Ukrainian provinces, or Ukrainian security arrangements, or even the size and status of NATO in Europe. It is instead about restoring Russia’s role as a supposed great power on par with a small number of other states that make up an exclusive club of nations dominating geopolitics. These nations include the United States, China, and potentially India, with Russia also seen as a natural member.

The Kremlin claims Russia’s rightful status as a great power has been dismissed by the West—and especially by the United States, which has preferred to oversee a unipolar world—but no more. In invading Ukraine, Russia has announced its permanent status as one of the supposed civilization-states in a new multipolar world. This is not to say that Russia is aspiring to global dominance, per se. Rather, Russia is aspiring to—and has already achieved—a role as one of the key geopolitical players internationally, regionally dominant and globally relevant. Ukraine remains firmly within Russia’s supposed sphere of influence and, as such, Russia should have the right to do whatever it wants within Ukraine with no outside interference.

This obsession with great-power status has long pervaded Putin’s rhetoric, infusing and inflaming Russia’s revanchism. In October 2022, when he announced Russia’s supposed annexation of four Ukrainian provinces, Putin claimed that Russia is “a great millennial power” and a “country-civilization” that will follow its own path. In March 2023, Putin signed a strategic blueprint outlining Russia’s “historically unique mission” as a “unique state-civilization.” As Uppsala University’s Igor Torbakov wrote, it was the first time that Russian leadership had “officially stated that Russia is a sui generis civilization.”

Much of this narrative has manifested in specific calls for a “new Yalta,” in which leaders in Moscow, Beijing, and Washington effectively carve up the world, Ukraine included. In such a scenario, Russia would be the modern equivalent of the United Kingdom: an empire that might not be quite as powerful or wealthy as the other two nations, but that nonetheless deserves a place at such a summit. “Putin has never hidden that his dream is a new Yalta . . . [to] establish a new world order,” writes journalist Mikhail Zygar. Russia’s Ukraine war—and its supposedly imminent victory—is merely the opening salvo in a far broader global reordering. As the much-maligned RIA Novosti article mentioned above claimed, the invasion of Ukraine meant that a “new world is being born before our eyes”—a world that Russia will help steer.

Analysis

This pretension to greatness hardly began with Putin. Years before Russia’s expanded invasion, the Kremlin and Russian intellectuals were long obsessed with “the pursuit of derzhavnost,” which scholar Seva Gunitsky translates as “both being a great power and being recognized as such by others.” Not only does this mean acting as a regional hegemon, but it also means being entitled to “an unquestioned sphere of influence.” This rhetoric—of Moscow’s “special mission” and its “historic destiny” as a “great power”—stretches back centuries and was evident in the Kremlin’s tsarist, Soviet, and post-Soviet history.

It is perhaps ironic, then, that little has done more to expose the hollowness of Putin’s claims than his invasion of Ukraine. Rather than restore Russia’s great-power status, the war has led not just to the degradation of the Russian economy and outright military disaster in Ukraine but to Russia’s weakening influence in the South Caucasus, the Middle East, Africa, and, of course, Europe more broadly. It has likewise forced Russia to rely on North Korea to shore up national security, and to lean on China to shore up Russia’s teetering economy.

The war has only accelerated Russian decline and undone, perhaps for good, the potential restoration of Russian greatness. Moscow might still maintain its status on things like the United Nations’ Security Council and might still be the only post-Soviet state with nuclear weapons. But the idea that Russia is, or will soon become, a great power is increasingly laughable—and a testament to what a disaster Putin’s rule has been for Russia.

Conclusion

Wars can often contain multiple narratives. The US invasion of Iraq, for example, was originally pegged to removing Iraq’s supposed weapons of mass destruction program before it shifted to fostering “democracy” for Iraqis. The US Civil War was originally launched to restore the sovereignty of the federal government before it shifted to eliminating slavery within the United States entirely. A war with multiple narratives does not necessarily portend either success or failure.

Rare are those wars, however, that push as many competing narratives as Russia has peddled in Ukraine. Indeed, it’s difficult to think of another war that has seen so many different justifications from the invading party. And it’s difficult to identify another war that has seen such a massive difference in scale of what those narratives are proposing, from simple territorial shifts to the entire reordering of the state of global affairs.

But as we’ve seen above, this is precisely what Russia has attempted with its invasion of Ukraine. From protecting pockets of Russians in the Donbas to ushering in an entirely new geopolitical era, from restoring a supposed Slavic unity to eliminating liberal values, the Kremlin’s justifications for its war have been breathtaking in their breadth.

They have also been a confused, muddled mess and a testament to just what a fiasco Russia’s entire war has been for Moscow. Instead of a clear-cut series of goals and aims, Russia’s leadership has flailed for excuses for its invasion, tossing idea after idea into the ether to see what might succeed. Such narrative confusion has stemmed, in large part, from Russia’s overall failures in Ukraine, forcing the Kremlin to reach for more and more justifications as the war drags on. At the same time, the confusion has played a significant role in Russia’s overall strategic failures in Ukraine and elsewhere; without a clear set of strategic goals, there’s little reason to think that tactical or battlefield successes would follow. Of course, much of this is also predicated on the Kremlin’s historical myopia as it pertains to Ukrainian history and Ukrainian nationhood; rather than a constituent part of some kind of Greater Russia, Ukraine is a distinct polity with a unique, separate history—a reality that hundreds of thousands of Russians have now died to learn. While Russia might continue to occupy sections of Ukrainian territory, the Kremlin has all but assured that a heavily armed Kyiv remains Russia’s greatest geopolitical foe for decades to come, if not longer.

For those looking forward, all this narrative confusion highlights one thing: there’s little reason to think Putin will be satisfied with simple recognition of Russian sovereignty over places such as Donetsk or Kherson. As Russian authorities have claimed, this war is about far more than the status of certain sections of eastern Ukraine, or even about Ukrainian membership in NATO. The Kremlin has far broader, and far more destabilizing, goals than simply dominating Luhansk and Zaporizhzhia, or even necessarily toppling Kyiv. Ukraine is but a stepping stone to Putin’s far more sweeping goals of rolling back US and allied interests, reaffirming Russian dominance over all of its neighbors (China and North Korea excepted), and creating a world in which the rights of smaller nations are subject to the whims of a handful of great powers. Given Putin’s ongoing obstinacy about winding down the war and finding a so-called “off-ramp,” it is clear that, for him, this war is about far more than simply the territorial status of parts of eastern or southern Ukraine.

It is, indeed, a reflection of the Kremlin’s obsession with derzhavnost—an obsession of which Ukrainians have done everything they can to disabuse Russia. And it reflects the fact that what can end this war is not the status of places like Crimea or Donetsk oblasts, but a full and outright defeat of Russia. Anything less would simply tempt the Kremlin to try again—with another effort to upend the global order and another war to try making Russia great again.

Casey Michel is an author and journalist who writes extensively on international corruption, kleptocracy, national security, and Russia policy. His writing has appeared in the New York Times, Foreign Affairs, Financial Times, Wall Street Journal, and many other outlets. His 2021 book, American Kleptocracy, was named by the Economist as one of the “best books to read to understand financial crime,” and his 2024 book Foreign Agents was named by Foreign Policy Magazine as one of the “biggest foreign-policy book releases of 2024.” His next book, United States of Oligarchy, will be released in summer 2026.

He is based in New York, and is currently sanctioned by the Russian regime for his work.

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The post Narrating the war: Analyzing Russia’s narratives for its invasion of Ukraine appeared first on Atlantic Council.

This issue brief is part of the Freedom and Prosperity Center’s “The future of democracy assistance” series, which analyzes the many complex challenges to democracy around the world and highlights actionable policies that promote democratic governance.

Introduction

The political landscape in Africa defies generalization. Despite setbacks and challenges, democratic progress continues in Ghana, Malawi, and Senegal, among other countries. Next to these bright spots, military juntas have deepened their grip on multiple West African and Sahelian governments, long-standing authoritarian regimes remain in Rwanda, Uganda, and other countries, and conflict and war continues to upend lives and threaten the territorial integrity of the Democratic Republic of Congo (DRC) and Sudan. Numerous other countries are best described as hybrid regimes, combining democratic and authoritarian forms of governance and producing inconsistent outcomes for their citizens in terms of delivering public goods, securing basic rights, and promoting economic growth.

Against this backdrop, the United States is recasting its relationship with African governments and their constituencies. Department of State officials describe “trade, not aid” as the foundation of US policy in Africa. In doing so, they have named expanded access to critical minerals and energy resources, alongside the development of new markets for US exports, as signature priorities for the Trump administration on the continent. This shift has brought cascading effects on African nations. As the region with the largest historic inflow of US foreign assistance, deep and sudden cuts to the aid budgets of the US Department of State and the closure of the US Agency for International Development have disproportionately affected African countries.[2]

Previous US administrations—including the first Trump administration—promoted democratic governance and stability in Africa using a combination of diplomatic and development tools. In fiscal year 2023, for example, the US government spent more than $338 million on democracy, human rights, and governance (DRG) programming in Africa. Even more was spent in the final year of the first Trump administration, when DRG spending in Africa stood at more than $415 million.

Today, the outlook is very different. In addition to eliminating most democracy assistance to the continent in the early round of aid cuts, the administration has sought to defund the National Endowment for Democracy and proposed the elimination of nearly all DRG funds in its 2026 budget. Meanwhile, it has shifted away from criticizing foreign governments on democratic and human rights grounds.

Regardless of the direction of US government policy, recent history shows that both African societies and US national interests are best served by stable, democratic, and accountable systems of governance, which have proved more effective at delivering peace, expanding socioeconomic opportunity, and fostering market economies that attract domestic and international investment. Given this reality, the “dealmaking” intended to drive the administration’s foreign policy will find its greatest long-term success in countries with stronger and more democratic institutions.

This brief makes recommendations for how and why US stakeholders should work with democratic partners in Africa to seek democracy and stability-related outcomes. It includes specific recommendations directed at the US government for using democracy assistance as a tool to advance key African and American priorities. Recognizing that the near-term reality of reduced funding for US government democracy assistance will generate new shortfalls and challenges, this brief also identifies opportunities for other American institutions, namely private philanthropy and the private sector, to partner with key democratic actors and advance DRG practice in Africa.

Why prioritize democracy, good governance, and stability?

There are numerous practical reasons for the US government and constituencies to prefer and encourage democracy, good governance, and stability in Africa. Most importantly, it is what African publics want. Survey respondents on the continent consistently report a preference for democratic systems of government over all other options. The 2021–23 Afrobarometer survey found that, across thirty-nine surveyed countries, 66 percent of respondents prefer democracy over any other kind of government, while 78 percent oppose one-party rule and 66 percent oppose military rule. Despite some erosion in overall support for democracy over the past decade, popular support for democratic governance remains resilient in the face of social and economic headwinds and global momentum for authoritarian governments.

Despite challenges, democratic and institutionally stable regimes have yielded economic, political, and social benefits. The Atlantic Council’s Freedom and Prosperity Indexes show that globally, while gains often take time to accrue, democratizing countries see an average bump of 8.8 percent in gross national product per capita over a twenty-year period compared to their autocratic peers. Meanwhile, institutional instability and fragility remain especially damaging to socioeconomic well-being. Countries with the highest levels of fragility as defined by the Fragile States Index have seen slow or significantly negative economic growth, conflict, and recurrent humanitarian crises. Insecurity and crisis, in turn, create unstable markets, disrupt supply chains, and erode long-term investment for US industries.

From an American perspective, African countries with stable and democratic institutions have been reliable economic, political, and security partners. They are more inclined to establish and strengthen rules-based economic and political systems that protect US and other investors. In regions like the Sahel, as elaborated on below, democratic governments serve as key political and security allies, while undemocratic and especially unstable countries have invited foreign interference by geopolitical rivals and create risks related to radicalization.

Institutional stability will only become more important as the US government and corporations push to expand trade relations and close deals in capital-intensive sectors like mining. Moving forward, the limiting factor on investments that generate returns for African and American economies alike is not the ability of the US government to sign deals today, but its ability to encourage stable economic and political conditions that protect those investments in the years to come.

Priorities for democracy assistance

A sensible US foreign policy interested in achieving meaningful social, political, and economic gains for African partner societies and US stakeholders alike would make diverse investments in stable, democratic, and accountable governance on the continent. We identify three broad priorities that could power an effective democracy assistance strategy:

1. Invest in countries on a democratic pathway.
2. Ally with citizens, including in backsliding democracies and autocracies.
3. Prioritize stabilization and local institutions that enable peace and security.

These priorities and the specific investments listed below are not meant to be comprehensive, but rather indicative of what a balanced and sufficiently ambitious US democracy assistance strategy could entail. The priorities could be applied across a wide set of countries and regions, or focus on specific geographies where the US government has direct economic and security interests, such as large population centers and economies like Nigeria and Kenya, or strategic regions like the Great Lakes, Horn of Africa, and Sahel. Recognizing that the US government is poised to reduce its investments in critical areas of intervention, we identify specific opportunities for private philanthropy and the private sector to play a leadership role in delivering and reenvisioning elements of a democracy assistance package moving forward.

Priority 1: Invest in countries on a democratic pathway

Reinforcing the economic, political, and security gains to democratic stability in Africa, the United States should continue to invest in the success of aspiring and longer-standing democracies on the continent. Democratic governments are better at protecting the rights and well-being of their citizens while creating hospitable conditions for secure, long-term investments and trade relations. Key democratic governments on the continent have set reform agendas with the potential to benefit their citizens and serve near- and long-term American economic and political interests. Furthermore, multiple democratic countries represent anchor security partners for the United States and critical bulwarks against instability, radicalization, and foreign interference in volatile regions such as the Sahel.

Take Senegal, for example. Senegal provides a case study for how a country that has made long-term democratic progress—and that overcame threats to its 2024 presidential election—is prioritizing economic and governance reforms that are responsive to the stated interests of its citizens. Like other recently elected governments on the continent, Senegal’s administration has prioritized anti-corruption, structural economic reforms, and poverty reduction, among other signature initiatives. Senegal’s President Bassirou Diomaye Faye led this effort by declaring his assets during the election and, once in office, announcing audits of the oil, gas, and mining sectors. The administration similarly proposed multiple transparency laws and released previously unpublished reports from anti-corruption institutions.

The extent and success of reform efforts in Senegal remains to be seen, but they have the potential to strengthen its citizens’ socioeconomic security and overall market economy. Alongside Ghana, Senegal remains a long-standing democratic partner in a region where the proliferation of military-led governments has put US security interests and assets at risk, as evidenced by the recent closure of US military bases in Niger. The U.S., therefore, has a direct stake in the success of governance-strengthening efforts in countries like Senegal.

The US government and other entities should make strategic investments in countries on a democratic pathway, like Senegal, to achieve results in high-priority areas of reform and strengthen key institutions, including in sectors of mutual interest to the US stakeholders and partner governments.

• Prioritize support for reforms that are championed by government partners. External technical and financial assistance is most effective when supporting reform and governance-strengthening initiatives that are owned and led by government partners. Indeed, political commitment alongside bureaucratic capacity are among the interrelated factors contributing to the success or failure of reform. In countries seeking to entrench democratic and economic reforms, the US government can work with partner governments that see their political futures as tied to the success of reforms across a range of economic and social sectors, such as public health, transportation, and financial services where key benefits accrue to US constituencies. The US government can aid these reform efforts by providing technical assistance, technology transfers, and direct financial support, concentrating on sectors where the US has a strategic interest.
• Continue social and capital investments in democratizing countries. The US government has used vehicles such as the Millennium Challenge Corporation (MCC) to invest in economic and social sectors in countries meeting basic governance benchmarks. This has included, for example, using cofinancing models to support upgrades of the energy sector in Senegal and the transport sector in Malawi. The MCC’s investment-led, government-to-government approach is suited to countries on a stable and democratic trajectory, where US and partner country investments are more likely to be secure. While its future remains uncertain, the MCC and institutions like the Development Finance Corporation can help democratizing countries generate capital for high-priority, high-impact sectors that can contribute to economic growth and social welfare. Looking forward, the US government can maintain investments in strategically important countries like Cote d’Ivoire and Zambia. It can also use its investments to crowd in funding to sectors of mutual interest for African and American businesses and other stakeholders.

The role of other actors: Private philanthropy must maintain support for free and fair electoral systems

The integrity of electoral institutions and, ultimately, the conduct of elections has an outsize influence on the trajectory on democratic consolidation. The US government has decades of experience supporting political parties, strengthening the infrastructure for independent election monitoring, and strengthening electoral management bodies (EMBs), which research shows is critically important to democratic trajectories, including re-democratization. Meanwhile, the current Department of State has backed away from electoral assistance programs and issued directives restricting embassies from criticizing foreign elections.

Given trends in US government policy, private philanthropy can help preserve US leadership in international electoral support. While the philanthropic sector cannot replace US government election funding—which included $48.9 million in support for unanticipated events like snap elections across twenty-eight African countries between 2022 and 2024—it can make high-impact investments that help preserve and build on democratic gains. These investments could include, for example, prioritizing targeted support for EMBs and the electoral monitoring capacities in countries working to consolidate their democratic progress.

Priority 2: Ally with citizens, including in backsliding democracies and autocracies

In pursuing a dealmaking-focused foreign policy, it will be tempting for the US government and private sector to “deal” primarily or exclusively with power-wielding political and economic elites. Doing so risks putting the United States at odds with African publics who express a preference for democracy and accountable governance, while potentially promoting corruption and distorting markets key to fair competition for US and other businesses.

Many African societies have tended to hold positive views of the United States and find resonance with its economic and political values. Recent research from Pew found that the some of the highest US approval ratings from foreign publics come from surveyed African countries. These findings mirror older Afrobarometer data showing that preference for the US development model outcompetes China’s by 11 percentage points across surveyed countries. This research suggests that views of the United States are influenced by its perceived commitments to democratic and free-market development approaches.

An effective foreign policy focused on long-term US interests must grapple with the reality that the political and socioeconomic interests of African citizens are not always served by their leaders. Many regimes tilt the electoral system in their favor, effectively silencing their electorates. Across a range of countries, civil society and human rights leaders face political repression for exercising their fundamental political rights. And too many large-scale investments in extractives and other sectors—including investments led by transactional Chinese state and corporate entities—have undermined the human rights and failed to serve the interests of local communities.

Allying with African citizenries does not mean forgoing economic and political dealmaking. Across regime types, citizens want to see expanded economic opportunity, social welfare gains, and security. Failure to prioritize the economic and political needs and interests of African societies, however, would put the United States on the wrong side of many of the youngest populations in the world, jeopardizing hard-won admiration on the continent. Democracy assistance offers practical tools for supporting and protecting key constituencies.

• Invest in strengthened economic governance and business climates. African publics and the US government and corporations have a shared interest in strengthening business sectors that enable fair, rules-based market competition. The US government should invest in strengthened economic governance through targeted support to government and nongovernment actors, potentially focusing on sectors with heightened exposure for the United States. This could, for example, include supporting efforts to reduce child labor and forced labor from supply chains, thereby addressing significant human rights violations and leveling the economic playing field for US corporations that must adhere to international labor standards. Where there is state commitment to reform, the US government can support technical assistance to lawmakers and regulatory bodies to put in place and implement legal, policy, and regulatory frameworks that meet international standards. It can also support chambers of commerce, industry associations, and civil society organizations to promote transparent and accountable business practices and advance market-oriented reforms.
• Prioritize anti-corruption and accountability. Support for anti-corruption efforts by committed government and citizen actors offers a clear opportunity for the US government to stand with African publics. In countries as varied as Gabon, Gambia, Liberia, and South Africa, more than 70 percent of Afrobarometer respondents report that corruption increased “somewhat/a lot” in the past year.” Corruption concerns have helped fueled democratic transitions in countries such as Ghana and Senegal, as well as large-scale protests in Kenya, Madagascar, and South Africa, among others. The US government could assist governments committed to anti-corruption efforts to advance e-governance that has been shown effective at reducing opportunities for corruption. The United States should also support civil society and independent media to conduct investigations, analyze public data, and advocate for public transparency and accountability, including to address regional challenges like cross-border illicit financial flows that harm US economic interests.

The role of other actors: Private philanthropy should prioritize emergency assistance to civil society and human rights institutions

With the near-term decline of the US government’s support to civil society in Africa and globally, private philanthropy is best placed to shore up critical gaps while shifting the terms of assistance for civic institutions. In particular, private foundations can prioritize funding for emergency assistance aimed at protecting individuals and organizations facing acute risks of political repression. The annual value of US government human rights programming in Africa was $21.6 million in fiscal year 2022, of which emergency assistance activities was only a part. The sums involved for sustaining core emergency assistance categories are within the capabilities of individual or coalitions of leading US philanthropies.

Private foundations can also adopt regional or global approaches to directly funding and supporting local civic institutions. This could include developing programs that facilitate horizontal relationships, learning, and mutual assistance among civic actors from Africa, the United States, and other regions grappling with common struggles related to conflict, democracy, and accountable governance in their societies.

Priority 3: Prioritize stabilization and local institutions that enable peace and security

Instability and conflict remain critical challenges across key regions and countries in Africa. The Fragile States Index shows that four out of the five most fragile countries (and sixteen out of the most fragile twenty-five countries) globally are in sub-Saharan Africa. Recent years have seen a rapid expansion in the scope and intensity of conflict in the region. This includes conflicts fueled or amplified by extremist groups in the Sahel, West Africa, and coastal East Africa. It also includes civil conflicts in Ethiopia, Sudan, and South Sudan, among other countries. The human and economic costs of conflict are vast. In 2023, the number of displaced persons in Africa approached 35 million, representing nearly half of the total number of displaced persons globally.

In the DRC and broader Great Lakes region of Africa, the Trump administration has shown a willingness to use its political capital to seek an end to a long-standing and worsening conflict that threatens its trade and investment interests. In late June 2025, the US government announced a peace deal between the DRC and Rwanda governments aimed at halting the conflict between state authorities and the March 23 Movement (M23) rebels. Questions remain about the ultimate effectiveness of the settlement given that M23 and other rebel groups are not direct parties to the agreement. The US government, however, has expressed commitment to its implementation, which it sees as necessary for enhanced American access to critical minerals, including cobalt, copper, and tantalum. As in other countries with active conflicts, the US government has cut important aid programs to the DRC that invest in the social infrastructure and critical institutions necessary for supporting and sustaining peace deals. The long-term durability of any peace, however, depends on empowered individual and institutional structures that can deliver foundational levels of governance, and social and economic benefits that can reinforce stability.

• Maintain support to networks of peacebuilders at the local, regional, and national levels. Integrated networks of formal and informal peacebuilding institutions and individual activists are critical to monitoring, responding to, mitigating, and managing conflict, especially at the local level. Local peacebuilding committees and related structures have a track record of enabling community-level peace outcomes and social cohesion in countries like Burundi, Ethiopia, Ghana, and Kenya. Similarly, mutual aid groups are playing a key role in responding to the impacts of conflict in contemporary Sudan. The US government should prioritize cost-effective investments in the peace institutions and structures that monitor and strengthen peace settlements, especially in countries and regions where it invests in negotiation.
• Prioritize stabilization and repairing local institutions. Where it pursues diplomatic solutions to conflict, the US government can help secure gains by investing in interventions that produce stability. The DRC shows how daunting the challenge of stabilization can be, with more than 2 million Congolese having faced displacement from the M23-driven conflict between January and June 2024 alone. Effective stabilization efforts require prioritizing humanitarian responses to meet the basic needs of families and communities experiencing displacement, return, and other traumas. It also must include supporting the reestablishment of local civil society and state institutions that can help deliver services, manage public goods, and resolve disputes.

The role of other actors: The private sector should foster multisector investments in peace and security

The long-term ability of private sector companies to operate and recoup investments in conflict-affected communities depends on durable peace and security. Direct investments in peace dividends (i.e., socioeconomic returns to peace) can help reinforce reductions in conflict. US and other private sector companies are optimally positioned to strengthen their local business environments by making social and economic investments that help communities and regions benefit from periods of relative calm while strengthening overall socioeconomic well-being. This can include making investments in local infrastructure, public goods, and service delivery capacities. Private sector actors, especially within the extractives sector, can also build on frameworks like the Voluntary Principles on Security and Human Rights and commit to business and human rights practices that reinforce good governance and security.

Committing to and growing who leads democracy assistance

During its first ten months in office, the Trump administration has removed long-standing infrastructure and funding for delivering democracy assistance globally, including in Africa. The near- and long-term interests of African societies and key US stakeholders, however, are bolstered by the advancement of democratic, accountable, and stable governance on the continent. Not only is a robust democracy assistance strategy in Africa in line with long-standing US values that underpin America’s reputation and image on the continent, but it is also instrumental to stated objectives of the current administration, such as expanding fair access to strong foreign markets and securing priority peace agreements.

Regardless of its ultimate policy, the US government is, at least for the time being, stepping back from traditional aspects of DRG programming. In this context, other institutional actors can do more. Private philanthropy and the private sector cannot replace US government democracy assistance, but they can make targeted, evidence-based, and cost-effective investments that protect important areas of intervention, such as emergency assistance for human rights defenders, institutional support for EMBs, and pro-peace investments in conflict-affected communities. These and other types of investments are affordable, and when well executed, they can positively influence the trajectories of individual democratic actors, institutions, and partner countries.

Private foundations are especially well positioned to pursue DRG investments while prioritizing direct support to African-based institutions. This can include forging mutual relationships among democratic actors grappling with common 21st-century democratic challenges in Africa, the United States, and beyond, to seed the sector with stronger horizontal ties and novel partnership approaches and new strategies for the future.

Mason Ingram is vice president for governance at Pact, a nongovernmental organization that carries out development work around in the world in partnership with private sector organizations government agencies, including with USAID until the agency’s closure in 2025. Pact continues to receive funding from the US Department of State. Ingram has more than 15 years of experience designing, advising, and managing international development programs, with a focus on civil society and governance programming.

Alysson Oakley is vice president for learning, evaluation, and impact at Pact. Oakley also teaches courses on program design and evaluation of democracy assistance and conflict resolution interventions at Georgetown University. Oakley holds a PhD from Johns Hopkins University’s School of Advanced International Studies, and a bachelor of arts degree from Brown University.

Jack Higgins is a research assistant and MA candidate at Georgetown University’s College of Arts and Sciences.

The authors are grateful for consultations provided by experts on democratic governance in Africa, including Dr. Babra Ontibile Bhebe (executive director, Election Resource Centre), Bafana Khumalo (co-executive director, Sonke Gender Justice), Omolara Balogun (head, policy influencing and advocacy, West African Civil Society Centre), Jean-Michel Dufils (retired senior governance research expert and program manager), and Jon Temin (visiting fellow, SNF Agora Institute). 

The future of democracy assistance

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Freedom and Prosperity Indexes

The indexes rank 164 countries around the world according to their levels of freedom and prosperity. Use our site to explore twenty-eight years of data, compare countries and regions, and examine the sub-indexes and indicators that comprise our indexes.

The Freedom and Prosperity Center aims to increase the prosperity of the poor and marginalized in developing countries and to explore the nature of the relationship between freedom and prosperity in both developing and developed nations.

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The post Democracy and stability in Africa: Why US leadership still matters appeared first on Atlantic Council.

Executive summary

From classrooms to farming communities, generative artificial intelligence (gen AI) holds great potential for Africa. The key question is whether its promise of abundance will reach everyone—or only those already well-connected.

The technology should be regulated with both its strengths and weaknesses in mind, and approached with a healthy dose of skepticism toward corporate advocates; but ignoring the obvious value and use of gen AI makes little sense. Those concerned with development in Africa must engage with the technology and consider its potential for reducing poverty and strengthening education, alongside other priorities such as digitizing and preserving languages.

Gen AI poses real risks and requires guardrails, especially for young people. Yet disengagement carries risks of its own: if gen AI is not actively shaped and governed, the very youths and communities it could benefit—or harm without proper controls—risk being left behind. Not engaging with gen AI would be not only harmful but also patronizing. More conversation is needed between those inventing and implementing gen AI models and those who work in development assistance, including actors involved in shaping and advancing the UN Sustainable Development Goals (SDGs). Two of these SDGs—ending poverty and providing quality education—closely mirror gen AI’s promise, or boast, of future “abundance” and human or even superhuman intelligence. The SDG and gen AI camps must explore what each can realistically offer the other.

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By Aubrey Hruby

As the Trump administration aligns foreign aid with core strategic interests, the MCC represents an underutilized asset.

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Atlantic piracy, current threats, and maritime governance in the Gulf of Guinea

By Maisie Pigeon

A drop in attacks in the Gulf of Guinea does not necessarily mean piracy has been resolved. Pirates have adapted their tactics, and the potential for resurgence remains high; this issue remains a critical security and development concern. It is not just a regional priority—it is an international imperative.

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Marine energy: Harnessing the power of the Atlantic

By William Yancey Brown

In partnership with the Policy Center for the New South, the Atlantic Council’s Africa Center is launching a new series of publications and events dedicated to the power of the Atlantic ocean with an inaugural policy brief on energy and mineral potential.

Africa Critical Minerals

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The post Engaging generative artificial intelligence in African development appeared first on Atlantic Council.

Introduction

Taiwan occupies a fraught diplomatic position. Beijing claims sovereignty over the island, maintains a threatening presence around it, and seeks to push Taipei out of diplomatic circles to support its claims that only Beijing—and not the government in Taipei—can effectively represent the island. Taiwan, in contrast, seeks to maintain space for its democratically elected government to speak on its own citizens’ behalf and advocate for their interests in the international arena. From a deterrence perspective, the more Taiwan can advocate for its own interests with global stakeholders, the higher the international cost Beijing would pay for taking the island by force and, thus, the stronger the deterrence against doing so. Based on China’s own war plans,¹ Beijing’s first step in a coercive move against Taiwan would be to establish global information control: cutting Taipei off from the global community and claiming that Beijing speaks for the island. Beijing is laying that groundwork now, working across multiple fronts to isolate Taiwan and create maneuvering room for coercion. Chinese diplomats are pushing Taiwan out of United Nations (UN) bodies, keeping it from joining multilateral meetings, and bullying Taiwan’s smaller partners to push them to distance themselves from the government in Taipei. Taiwan’s diplomatic partners are a particularly important battleground. At present, Taiwan only has twelve official diplomatic partners that maintain a formal diplomatic relationship with Taipei. Those relationships—and Taiwan’s other partnerships—play a critical role in maintaining deterrence.

Washington’s role in Taiwan’s diplomatic positioning is unique and complicated. The United States aims to thread a delicate needle: acknowledging that there is “one China” and the Chinese Communist Party (CCP) is the government in charge while also deterring any attempts to take the island by force, which includes assistance to bolster Taiwan’s self-defense capabilities. The United States has always sought to tread lightly on the issue of Taiwan’s diplomatic partners. Washington “flipped” its own formal diplomatic recognition from Taipei to Beijing in 1979. Encouraging other nations to do what Washington did not—maintain a formal diplomatic relationship with Taipei—is diplomatically awkward. But changing times might call for new approaches. Most of Taiwan’s remaining diplomatic partners lie in the Western Hemisphere and the Indo-Pacific, two priority regions for deterring Chinese initiatives that directly threaten US security interests. This is especially true for the Western Hemisphere, which is a top priority for Donald Trump’s second administration. In both regions, there are nations that play an outsized role in Taiwan’s global diplomatic presence and allied efforts to deter Chinese coercion toward the island. The United States should consider developing a more targeted strategy for supporting these nations and the role they play in cross-strait stability.

This report will assess how Taiwan’s diplomatic partners contribute to peace and stability in and around the island, and what the United States and its allies can do to maintain, and potentially even bolster, this critical aspect of deterrence. It draws on extensive case studies from the Pacific Islands and Latin America and the Caribbean, obtained through in-depth interviews with representatives from Taiwan and its partners in those regions.

Taiwan’s democratic awakening and its diplomatic space

Taiwan’s complicated diplomatic status is rooted in its history. In 1945, the Republic of China (ROC), which had served as the ruling government on the Chinese mainland since the end of the Qing Dynasty in 1911 and fought on the allied side in World War II, accepted Japan’s surrender in Taiwan and took over the island’s administration pursuant to Allied General Order No. 1. In 1949, the CCP defeated the ROC in mainland China and the ROC fled to Taiwan, but the civil war continued. At that time, most nations still maintained formal diplomatic relationships with the ROC, which occupied the “China” seat at the United Nations (claiming to represent all of China at the time, including Taiwan and Mongolia) from its island perch.

In the 1970s, as the CCP’s power grew, many countries began to support its claim as the sole legitimate government of China, shifting their diplomatic recognition from Taipei to Beijing.² In 1971, recognizing that the ROC no longer enjoyed majority UN support to occupy the “China” seat, the ROC government in Taiwan preemptively left the United Nations as a formal nation-state member. In 1979, the United States switched its own diplomatic recognition from the ROC in Taipei to the People’s Republic of China (PRC) in Beijing. Since then, Washington has maintained an official diplomatic relationship with Beijing and an “unofficial” relationship with Taipei. However, this is based on an assumption that Beijing will not seek to take Taiwan by force. The 1979 Taiwan Relations Act (TRA) states that the US “decision to establish diplomatic relations with the People’s Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means.”³ The United States also pledged in the TRA to “provide Taiwan with arms of a defensive character” and “maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”⁴

In 1996, Taiwan held its first direct presidential election, marking the island’s official transition to democracy. Throughout the 1980s and 1990s, Taiwan’s growing democratization brought identity issues to the fore. Those who came to Taiwan in 1949⁵ with the Kuomintang (KMT) brought ties from the mainland and largely supported the idea of a Chinese nation including both the mainland and Taiwan. By the 2000s, the KMT had begun to prioritize a close and peaceful relationship with Beijing. In contrast, Hoklo Taiwanese who immigrated to the island prior to 1949 were generally more suspicious of Beijing. They tended to support an independent Taiwan—separate from mainland China—and to identify with the Democratic Progressive Party (DPP).

As the island developed its own identity at home, Beijing steadily pushed Taiwan out of international spaces abroad. In 1969, Taiwan had seventy official diplomatic partners. By 1996, that number was down to thirty. Taiwan lost its membership in international organizations such as the World Bank and the International Monetary Fund. Successive democratically elected leaders in Taipei tried to find ways to thread a tricky diplomatic needle: maintaining Taiwan’s international presence without claiming to also represent mainland China or directly refute the need to declare a de jure independent nation of Taiwan, which would trigger conflict with the CCP. ⁶ From 1988 to 2000, then President Lee Tung-Hui (a KMT politician) positioned the island as the “Republic of China on Taiwan” in a bid to carve out space for Taiwan at the United Nations, separate from Beijing’s China but without declaring independence from Beijing. This became a compromise term within Taiwan, one that Taiwan’s pro-independence crowd and those who still believed in a single China under the ROC (including both the island and the mainland) could both accept politically. All of Taiwan’s presidential administrations (including the present one) have maintained this official position.⁷

From 2000 to 2008, then President Chen Shui-Bian’s DPP administration tried to use Taiwan’s then superior economic resources to cultivate new diplomatic partners. That effort was largely unsuccessful. From 2008 to 2016, under then President Ma Ying-Jeou’s KMT administration, Beijing agreed to a “diplomatic truce” in which it would not seek to poach Taiwan’s diplomatic partners and the Ma administration would refrain from asserting Taiwan’s sovereignty on the international stage. Beijing was willing to offer this olive branch because it correctly viewed the KMT as more accommodationist toward Beijing than the DPP. This approach preserved Taiwan’s partners but confused them regarding Taiwan’s status vis-à-vis Beijing.

Everything changed in 2016. The people of Taiwan elected DPP candidate Tsai Ing-Wen as president (2016–2024). Beijing despised Tsai because her electoral success represented a step back in China’s ambitions to “reunify” the island with the mainland and bring it under CCP control. The Chinese government responded with a scorched-earth approach that ratcheted up the pressure on Taiwan across all domains. Militarily, Beijing increased its military exercises around Taiwan and incursions into Taiwan’s air defense identification zone (ADIZ). On the diplomatic front, Beijing stepped up the old “three none policy,” which aims to leave none of Taiwan’s diplomatic partners standing, none of Taiwan’s international space intact, and Taiwan with none of the bargaining chips it needs to negotiate on equal grounds.⁸ In the multilateral space, Beijing began driving Taiwan out of arenas such as the World Health Organization that do not require nation-state status and that Taiwan had participated in up to 2016. The Chinese government also ramped up its campaign to pressure Taiwan’s remaining diplomatic partners to flip their recognition from Taipei to Beijing. From 2016 to 2023, the island’s diplomatic partners decreased from thirty to twelve. Even those nations that had already recognized Beijing as their official diplomatic partner (while maintaining unofficial relationships with Taiwan) faced intense Chinese government pressure to reduce or curtail their engagements with Taiwan.

Today, ten of Taiwan’s twelve remaining official diplomatic partners are located in two regions: the Pacific Islands and Latin America and the Caribbean.

Beijing is waging a campaign in these regions to further isolate Taiwan. In order to counter this campaign, it is critical to first understand how it has unfolded thus far. The campaign includes a mix of carrots and sticks. On the inducement side, China seeks to entice countries to switch their allegiance by offering an array of economic benefits: access to China’s market, infrastructure investments, loans, and more.⁹ China is very public about its inducements but tends to wield the sticks behind closed doors. This report draws on interviews with government officials and journalists from Taiwan and six of Taiwan’s remaining diplomatic partners, as well as two of its former diplomatic partners, to map the range of tools Beijing deploys in its campaign to isolate Taiwan.

The following sections utilize four case studies—Palau, St. Lucia, the Dominican Republic, and Honduras—to illuminate Beijing’s tactics.

Palau: Coercion and promises

Palau is one of Taiwan’s most important partners in the South Pacific, maintaining reciprocal embassies and direct engagement with Taipei. Taiwan has provided technical assistance to Palau since 1984, including agricultural and engineering assistance. Starting in 2017 (after the people of Taiwan elected a DPP presidential administration), the Chinese government launched a coercive campaign to push Palau to derecognize Taiwan. This has particular significance for the United States because Palau is a Compact of Free Association (COFA) member, granting basing access to the US military in exchange for US assistance. China’s success in flipping Palau would thus rob Taiwan of a diplomatic partner and also potentially undermine the US military’s ability to operate in the Indo-Pacific.

Prior to COVID-19, tourism contributed more than 40 percent of Palau’s gross domestic product (GDP), with 60 percent of tourists coming from the PRC.¹⁰ Beijing leveraged these ties for economic coercion against Palau. In November 2017, Beijing banned Chinese tour group travel to Palau as part of a broader coercion campaign against multiple Taiwan partner nations.¹¹ To restrict tourism from all nations, Chinese-owned and operated hotels on Palau blocked bookings for months at a time, keeping rooms empty to prevent tourists from visiting the island and hiking up prices for airlines seeking accommodation for overbooked passengers. In 2024, the Chinese government declared Palau unsafe to travel.¹² Beijing also banned Palau’s presence at the Pacific Asia Travel Association in Macau, despite Palau being a member.¹³

Palau—along with other Pacific Island countries—also faces Chinese government bullying in regional settings such the Pacific Islands Forum (PIF). In 2022, despite being barred from attendance, China attempted to attend the PIF Summit for the Suva Agreement, an agreement on how future PIF leadership will be elected and rotated between all members. The representative was removed but later demanded bilateral meetings with individual members and lobbied for China’s own draft version of the agreement on how to determine future PIF leadership. The attempt failed but a source in Palau was alarmed and saw Beijing’s attempted interference as an example of how Beijing could target Palau and other regional Taiwan partners on Taiwan-related issues during multilateral meetings.¹⁴

China has also increased maritime harassment near Palau’s territorial waters and submarine cables, with Chinese research vessels entering Palau’s exclusive economic zone (EEZ) without notification and getting within range of sensitive facilities on the island.¹⁵ Beijing times these incursions to coincide with storms, when the waves are too high for Palauan patrol boats to intercept them.

Due to these ongoing activities, there is substantial anti-China sentiment in Palau. Yet Beijing promises benefits if Palau switches recognition, including promises to “flood Palau with visitors” and satisfy “whatever Palau needs.”¹⁶

Thus far, local support remains lukewarm, driven by an inability to articulate the benefits of siding with China and the exact vision of such a future, as well as concerns around regional experiences such as China’s takeover of Sri Lanka’s Hambantota Port and the way unsustainable Chinese lending contributed to Tonga’s astronomical debt.¹⁷ There are also regional examples that do not instill confidence, including an instance in which Chinese firms bought a lease for land development in Palau but never followed through, China’s unfulfilled promise to Kiribati for an airstrip, and the opacity of Kiribati’s dealing with Beijing.¹⁸ One source indicated that, while loan-based projects offered by Taiwan have negotiated fixed interest rates, China tends to manipulate interest rates and is reluctant to provide grants, share expertise, or address local concerns.¹⁹ In addition, China tends to extend the grace period of repayment without extending the maturity, resulting in a spike in repayment amounts for the last few years and placing enormous pressure on island governments.²⁰

A diplomat from one of Palau’s Pacific neighbors also complained that while they regularly tried to talk to China about their own development needs, Beijing rarely listened. Instead, China came back with its own economic development concepts, designs, engineers, and contractors, and was not open to consultation.

While local experts estimate that about one-third of Palauans might consider switching recognition to China in the future, Palau President Surangel Whipps, Jr., is strongly anti-China, declaring “Palau is already at war with China.” This moment, in which China has adopted a “biding its time” approach to neutralizing Palau, presents a good opportunity to reassess Taiwan and the United States’ strategy for empowering Palau and blocking further PRC encroachment into the Pacific.

St. Lucia: Coercion and unfulfilled promises

The island nation of St. Lucia is a unique case in that it initially flipped diplomatic recognition from Taipei to Beijing in 1997 but flipped back to Taipei in 2007. Those flips followed electoral shifts: the St. Lucia Labor Party (SLP) came to power in 1997 (triggering the first flip) and the United Workers’ Party (UWP) in 2007 (triggering the second). Along the way, China’s unfulfilled economic promises grew stale. When the SLP regained power in 2011, coinciding with China and Taiwan’s diplomatic truce under Ma and the KMT, the SLP decided that sticking with Taiwan was in St. Lucia’s best interest.

St. Lucia’s initial switch to Beijing was partially motivated by then Foreign Minister George Odlum’s desire to jumpstart major infrastructure projects. Beijing promised St. Lucia a fifteen-thousand-seat football stadium and a national mental health hospital. However, Beijing lost interest in these projects after it achieved St. Lucia’s diplomatic switch. Both projects became emblematic of unmet promises. After signing a memorandum of understanding (MoU) to develop the stadium, China determined—without consulting St. Lucia—that the island did not require such a large stadium. Beijing unilaterally downgraded the plan to a smaller, 7,000–8000-seat stadium. Sources interviewed for this report expressed great displeasure with the downgrade and the fact that St. Lucia was not consulted. The electronic scoreboard for the smaller stadium stopped working a week after installation and the steel railing around the audience seating area began to crumble from rust soon after. The St. Lucian government considered demolishing the stadium, but ultimately decided to turn its clubhouse into an outpatient area for a local hospital. Chinese contractors never finished the national mental hospital; the project dragged on in a ten-year design and construction process.

By 2007, St. Lucia decided it had made a mistake in switching to Beijing and that Taiwan’s previous assistance was more valuable than Beijing’s unfulfilled promises. Once the UWP regained power, the pro-Taiwan John Compton cabinet orchestrated a switch back to recognizing Taiwan. Beijing responded by dismantling the partially constructed national mental hospital. Chinese firms took everything that was remotely useful from the site—including parts from unfinished elevators, cables, and other materiel—for transport back to China. They then salted the earth around the hospital so nothing could grow there. The hospital, however, was later completed with Taiwan’s assistance after the 2007 switch.

The 2008–2016 diplomatic truce between China and Taiwan (during the time when Taiwan elected KMT presidential administrations and Beijing sought better relations with the island) limited China’s overt retaliatory actions against St. Lucia. However, covert efforts continue. Of particular concern, Beijing appears to be leveraging regional settings such as Caribbean Community (CARICOM) meetings to pressure its own partners in the Caribbean to induce or coerce Taiwan’s regional partners to switch recognition.²¹ These forums are intended to focus on economic issues, but the nations that recognize Beijing periodically bring up Taiwan’s recognition in ministerial meetings. When pressed, representatives from those nations have admitted that they are doing so due to Chinese pressure.

From St. Lucia’s perspective, Taiwan has proven to be a steady partner. Following its disastrous infrastructure deals with the PRC, St. Lucia pivoted to focus on developing existing agricultural industries such as bananas and watermelons, two products that Taiwan’s agricultural experts have a strong technical background in. As a small island developing country, St. Lucia prioritizes education and healthcare, and Taiwan’s more flexible and responsive aid and scholarship programs were well received by the local population. Taiwan’s International Cooperation and Development Fund (ICDF) and its Ministry of Foreign Affairs join forces to offer roughly forty scholarships exclusively for St. Lucian students to study in Taiwan every year, predominantly for undergraduate degrees. Taiwan’s first post-2007 ambassador also pioneered and paid for local irrigation cannels that subcontract local labor for construction. While relations between St. Lucia and Taiwan remain strong, this moment calls for Taiwan and the United States to organize a “best fit” plan to integrate St. Lucia into the United States’ and Taiwan’s industrial and agricultural supply chains.

The Dominican Republic: Flip leads to frustration

The Dominican Republic established diplomatic relations with the PRC in 2018 and cut relations with Taiwan. The sources consulted for this case study—who include high-ranking public officials, former cabinet members, and industry association leaders—said hopes were high about the advantages of strengthening relations with China. They also agreed that these hopes have not been realized, and that the Dominican Republic is generally frustrated with the results.

China began engaging the Dominican Republic (DR) in the 1990s, when the latter was still a Taiwan diplomatic partner, signing an economic and diplomatic cooperation agreement with Santo Domingo in 1993 and opening commercial offices in the Dominican Republic. Diplomatic collaboration between Santo Domingo and Beijing widened in the 2000s, including mutual support when either nation applied for seats in UN offices and councils.

In 2005, Beijing decided to launch a pressure campaign to push the Dominican Republic to flip its official diplomatic partnership from Taipei to Beijing. Then Foreign Minister Carlos Morales Troncoso met then PRC Vice President Zeng Qinghong to discuss plans for President Leonel Fernández’s to visit China. At that meeting, Zeng claimed that the Dominican Republic had committed to establishing diplomatic relations with the PRC when signing the 1993 economic agreement, and that the PRC was increasingly upset that the commitment hadn’t been honored. Zeng also said that a friend of Taiwan was an enemy of China. He reminded the foreign minister that, without formal diplomatic relations between the PRC and the Dominican Republic, the PRC could not receive the DR president as a head of state and thus the president’s planned visit to China could not proceed as planned.

Taiwan tried to keep the Dominican Republic onside with new investments and commitments. In 2018, then President Danilo Medina announced the Dominican Republic would cut relations with Taiwan and pivot to the PRC. Administration officials publicly denied it would take place until they suddenly announced it. The private sector generally welcomed the change. A national business association publicly praised it, noting that major Dominican importers of machinery and other goods had created sustained pressure for flipping to China. Meanwhile, the PRC helped the Dominican Republic’s effort to attain a UN Security Council nonpermanent seat. This was something the Dominican Republic failed to secure several times between October 2001 and 2018 but—only thirty-eight days after switching diplomatic recognition—it succeeded, backed by Beijing’s lobbying, winning the General Assembly vote with 184 out of 190 ballots.

However, expectations soon soured. Business leaders have been especially disappointed with the PRC’s commercial penetration via stores that sell all kinds of cheap goods—sometimes in direct competition with Dominican products—and use Chinese clerks and Haitian laborers instead of employing Dominican nationals. This dislocated Dominican commercial institutions and disrupted all levels of commerce. Chinese companies also evade local regulatory guidelines. When tax and customs authorities attempt to audit PRC businesses for tax evasion, these businesses have been known to evade enforcement by relocating or opening another operation with a different name and commercial registration.

There are also concerns about illegal mining. PRC mining companies have exported bauxite at suspiciously high volumes and prices because their exports actually contain higher-value titanium dioxide and rare earths. PRC companies have acquired copper mine rights from the Dominican Mining Corporation (CORMIDOM) and there are rumors of Chinese operations in the Falcondo ferronickel project. At present, DR officials do not seem to be seriously considering flipping back to Taiwan as St. Lucia did. However, there is growing DR interest in welcoming Taiwan to establish a commercial representative office in the Dominican Republic, which would be consistent with how most nations balance official relations with China and unofficial relations with Taiwan. Dominican officials state that, when the Medina government negotiated the pivot, it did not accept Beijing’s demands for an exclusivity clause preventing relations with Taiwan. They point out that all of China’s BRICS (Brazil, Russia, India, China, and South Africa) partners—as well as Japan, South Korea, and the United States—maintain unofficial relations with Taiwan.

Case study: Honduras

Honduras established diplomatic relations with what was then the government of China in 1941, when the ROC government still resided on the mainland. Tegucigalpa continued diplomatic relations with Taiwan until March 2023, when the new government under Xiomara Castro severed ties, established formal relations with the PRC, and announced that Honduras recognized “only one China in the World” with Beijing its sole and legitimate government.²² Castro made switching diplomatic relations part of her campaign for office, in contrast with her predecessor Juan Orlando Hernández (2014–2022). The shift reflected growing economic pressure, including Honduras’s high external debt, Taiwan’s refusal to forgive a $2.45-billion loan, and enticements such as the lure of a free trade agreement with China and promised Chinese investment in a hydroelectric dam that Taiwan was unable to match.²³ Conversations with a Honduran journalist confirmed this account: the Honduran government issued “a kind of diplomatic ultimatum to Taiwan” to renegotiate Honduras’s debt with Taiwan and support public infrastructure construction.²⁴

While Honduras tried to negotiate better concessions from Taiwan, China’s tactics included a combination of threats and enticements that influenced the Honduran government’s decision.²⁵ Two years after the switch, a closer look at the actual fallout illuminates some of the short- to medium-term impacts.

In July 2023, following the flip, China and Honduras began negotiating a free trade agreement (FTA) that promised to reduce or eliminate tariffs and improve access to the Chinese market for Honduran exports. Early negotiations also laid out a framework around “comprehensive and in-depth” consultations on trade in services as well as investment protections and rules.²⁶ While still ongoing, the FTA negotiations reached an “early harvest” agreement that both countries signed in early 2024.²⁷ Honduras hasn’t joined the Belt and Road Initiative (BRI) but signed two MoUs—one in June 2023 and a second in December 2024—as part of the process to join.

To many Hondurans in the business sector, the results of the FTA have been meager so far and private-sector sources interviewed for this report have complained about not being sufficiently represented in the FTA negotiation committee.²⁸ Shrimp producers and exporters were the main losers from the diplomatic pivot. Cutting ties with Taiwan—the industry’s principal buyer—devastated the sector, and exports fell by 67 percent after Honduras switched recognition and Taiwan terminated the Honduras-Taiwan FTA.²⁹ Interviewed sources framed this loss within a broader concern about replacing a trade partner with which Honduras maintained a positive balance (Taiwan) with one with which it holds a large deficit (the PRC).

Since the pivot to the PRC, local businesses in Honduras’s main cities have grown increasingly uneasy about the growing number of Chinese-owned establishments competing with them. One source cited rising Sinophobia among local shop owners as a concern. Labor law compliance has also drawn attention, and recent reporting revealed that Chinese construction companies employ a higher percentage of Chinese workers than Honduran regulations allow.³⁰

While the Castro government will leave office at the end of January 2026, and both candidates vying for the presidency vowed to reengage Taiwan, the way the Castro government engaged with China is illustrative for other countries in the region. Both local sources cited above warned that information about negotiations between the Castro government and the PRC is worryingly opaque. There is little public knowledge about the content of the ongoing FTA talks, and business leaders report feeling inadequately represented.³¹ They also noted that only one of the seventeen diplomatic agreements signed between the PRC and Honduras in 2023 has been even partially implemented. One local journalist interviewed for this report said analysts have cautioned that China is a demanding creditor—unlike development partners that offer flexible debt renegotiation—and warned that access to public resources and strategic infrastructure could be jeopardized if Honduras misses payments. He added that the lack of transparency and anti-corruption oversight in Chinese credit lines is also troubling.

Another local journalist observed that while PRC-funded projects to improve education and build agricultural schools have progressed, they remain incomplete. Meanwhile, Taiwan’s scholarship program has been suspended. Honduran students still studying in Taiwan receive inadequate support, and the PRC has yet to meaningfully replace this program as promised.

Finally, local journalists expressed concern about Chinese censorship and surveillance. The Chinese embassy issued a press release condemning critical coverage of the shrimp export collapse by Honduran outlet El Heraldo. The embassy demanded that the newspaper refrain from referring to Taiwan as separate from mainland China, claiming such phrasing violated the “one China” policy. Although the press release was later removed from the embassy website following public backlash, local journalists interpreted it as an attempt at censorship. These concerns compound existing fears about surveillance, especially after the national telecommunications company signed an agreement with Huawei to provide police monitoring technology and security camera systems—an arrangement that could enable Chinese government espionage and raises national security concerns.

Lessons and recommendations for Taiwan, its partners, and the United States

A closer look at China’s engagement with Taiwan’s current and former partners reveals a concerning pattern. China consistently targets Taiwan’s partners with diplomatic and economic pressure urging them to switch their official recognition to Beijing. Once that happens, China’s interest in and support for the target nation appears to diminish, as reflected by the lack of follow-through on promises made to countries in the years following a switch. As a result, these countries face economic loss on two fronts. They forgo the benefits they previously gained working with Taiwan, and the engagement with Beijing either fails to meet their expectations or, as in the Dominican Republic’s (and potentially Honduras’s) experience, brings new models of commerce that undercut local production and the local tax base. As a journalist in one of these countries put it, there was “no golden pot at the end of the rainbow.”³²

This pattern presents an opportunity for Taiwan to proactively engage its remaining diplomatic partners to prevent economic and diplomatic disengagement. It also serves as a warning to countries considering switching recognition. Lastly, given that most of Taiwan’s partners are in Latin America and the Caribbean and the Indo-Pacific—two regions of utmost strategic importance to the United States—these case studies also present opportunities for the US to reengage with Taiwan on jointly maintaining those partnerships.

Taiwan

The interviews and case studies conducted for this report suggest five key recommendations for Taiwan.

Clarify exactly what Taipei gains from diplomatic partnerships. If certain relationships are a high priority, invest to maintain them.

Taiwan lacks a clear strategy for leveraging diplomatic partners as deterrence against China. It needs one. If certain nations are critical for Taiwan’s international presence and voice, Taipei should prioritize and invest in them. Many diplomatic partners expressed confusion over Taiwan’s stance on sovereignty and cross-strait issues. More communication is needed if these partners are to support Taiwan’s diplomatic standing. Alternatively, if commercial engagement suffices for deterrence and diplomatic recognition is less important, Taiwan should shift its resources accordingly and focus on those nations that are a priority for other reasons, regardless of their diplomatic stance.

Highlight China’s broken promises.

Based on the case studies above, when China uses inducements to bring about a flip in recognition, these promises often fall short. Taiwan should share these examples widely with current partners.

Offer what Taiwan can, and coordinate with the United States and likeminded countries.

Countries’ needs differ depending on their unique circumstances and levels of development. Aid should match Taiwan’s strategic goals of preserving diplomatic space and imposing costs on China, and should include some of Taiwan’s competitive advantages—bespoke aid and technological assistance that addresses specific needs of small island countries. Taiwan should also leverage US and allied efforts to counter Chinese influence, collaborating on solutions such as integrating Taiwan’s current and prospective diplomatic partners into trusted supply chains where doing so makes economic sense for all parties.

In the case of St. Lucia, while a US-Taiwan joint assistance effort has been discussed since 2018, little concrete cooperation has materialized. Taking inspiration from Taiwan’s recent efforts to integrate Guatemala into the US-Taiwan semiconductor supply chain, and from the second Trump administration’s focus on the Western Hemisphere, the United States and Taiwan should leverage their respective technical expertise and available resources to elevate St. Lucia’s economic position by integrating it into global supply chains or channeling transnational tourism such as cruise ships to St. Lucia, among other strategic partners in the region.

The Dominican Republic needs support with both agriculture and housing, two areas where targeted assistance from Taiwan would be very welcome. Taiwan could contribute significantly through academic and scientific collaboration and commercial partnerships around advanced mechanization, modernization, and automation of the Dominican Republic’s agriculture sector. With regard to housing, Taiwan could bring its expertise in construction of large housing complexes to the Dominican Republic. With a historical housing deficit exceeding 1 million units, the Dominican Republic desperately needs capabilities to assist in this area (and Beijing is not delivering on this front, creating an opportunity to build other partnerships).

Increase capacity building and law-enforcement cooperation.

In Palau, the Global Cooperation Training Framework (GCTF) interventions have received high praise for their contribution to capacity building in cybersecurity and investigating artificial intelligence (AI)-related criminal activities. However, additional efforts in training and equipment are needed to ensure the Palau government has what it needs to ensure transparency and independence from Chinese maritime coercion.

Similarly, in the Caribbean, St. Lucia relies heavily on foreign assistance for both its current stability and future development. Capacity building programs such as those provided by the GCTF received universal praise from sources interviewed for this report. These workshops covered topics from empowering local women to start businesses to maritime disaster prevention to counter-narcotics. Drug trafficking through the region, specifically the gun violence associated with narcotic activities, poses a significant threat to St. Lucia’s major industry of tourism. Additional joint efforts by the United States and Taiwan in this area should prove beneficial to trilateral interests. The United States is St. Lucia’s main source of tourism, so these efforts would also directly benefit the United States by keeping Americans safe and reducing trafficking into the United States.

Maintain a principled approach to diplomatic outreach.

While the PRC pressures its regional partners to exclude Taiwan and counter US influence, the United States and Taiwan should leverage regional settings to highlight their principled approach. Two cases highlight these contrasting approaches. In 2017, Hurricane Maria devastated the Commonwealth of Dominica. Dominica requested aid from Taiwan through the Organization of Eastern Caribbean States (OECS) and Taipei agreed, even though Taiwan does not have an official diplomatic relationship with Dominica. In contrast, when Taiwan’s diplomatic partner St. Vincent and the Grenadines experienced a volcano eruption in 2019 and requested assistance from China through the OECS, Beijing refused to provide aid on account of the country’s diplomatic ties with Taiwan. Beijing’s actions affirmed its political priorities over humanitarian ones and provided an opportunity for the United States and Taiwan to demonstrate their more principled stance.

For Taiwan’s partners

Lessons from countries that switched to China include the following:

View China’s promises with caution.

Honduras swapped a positive trade balance with Taiwan for a trade deficit with China, while Chinese-owned establishments undercut local Honduran businesses. Similar patterns emerged in the Dominican Republic, where Chinese stores sell cheap consumer products that compete with domestic production rather than transform the Dominican productive structure or integrate PRC firms into export-oriented or domestic manufacturing.

Honduran shrimp farmers suffered greatly, with exports declining by 67 percent after Honduras switched its recognition to China and Taiwan terminated its FTA. St. Lucia saw China fail to address World Trade Organization (WTO)-related losses stemming from the “banana wars,” a long-running trade dispute (1993–2009) between the European Union (EU), the United States, US-based banana companies (e.g., Chiquita, Dole), Latin American banana-producing countries (Ecuador, Guatemala, Honduras), and Caribbean small-island exporters, including St. Lucia.

Two years after the switch, China had only implemented one of the seventeen agreements it signed with Honduras. In the Dominican Republic, the expected and hoped for influx of Chinese investment and construction never materialized. Instead of producing aluminum at a plant in the Dominican Republic, Chinese investors imported aluminum from China and labeled it as locally made. In St. Lucia, construction of the national mental health hospital dragged on for ten years and was finished only after Taiwan stepped in.

For the United States

Partner with Taiwan to support local needs including disaster relief.

The United States should consider helping to sustain Taiwan’s official diplomatic relations as a means to uphold the international status quo and deterrence. To that end, it could deepen cooperation between the US Development Finance Corporation (DFC) and Taiwan’s International Cooperation and Development Fund (ICDF), providing infrastructure and economic growth programming to Taiwan’s partners. Expanding the MoU between the American Institute in Taiwan (AIT), the Taipei Economic and Cultural Representative Office in the United States (TECRO), and the DFC would leverage the DFC’s financial tools and the ICDF’s trusted presence.³³ Additionally, the increased US military presence and base access in the Western Hemisphere can also provide, in conjunction with Taiwan’s ICDF and NGOs such as Tzu Chi, increased capacity for disaster relief for Taiwan’s diplomatic partners in the region.

Moreover, future friendshoring and nearshoring efforts targeting Taiwan’s partners should ideally be done in coordination with the United States and its allies. Current joint US and Taiwanese efforts to include Guatemala in the semiconductor supply chain could be a template for these future endeavors.³⁴ Future joint initiatives could focus on resilient infrastructure, renewable energy, and digital transformation—areas in which both Washington and Taipei seek to counterbalance Beijing’s state-led investments under the BRI.

Increase technical support and leadership for strategic local communities.

Technical support and aid from the United States and Taiwan are both visible and popular in Palau but are seen as underwhelming. The US military recognizes Palau’s strategic significance for future conflicts with China and conducts air defense exercises there, firing PATRIOT missiles from Palau into the surrounding ocean. Local residents know a single training round costs around $1.5 million. They see a disparity between what the United States spends firing missiles from the island versus its meager investments in the infrastructure assistance Palau urgently needs. Working with local communities to identify and fill targeted local infrastructure needs would go a long way toward winning local hearts and minds.

Similarly, a coalition of Pacific countries that includes the United States could help to counter China’s playbook in the Pacific. China often bullies individual smaller countries in bilateral meetings on issues concerning the United States and Taiwan, while playing them against their neighbors. And with enough countries in its pocket, China can then manufacture regional consensus in regional multilaterals against US and Taiwanese interests. To that end, the United States and Taiwan should leverage the close-knit nature of Pacific communities, counter China’s attempts to monopolize regional meetings, and strengthen US-Pacific ties through subnational diplomacy (such as close ties between American Samoa, Guam, Hawaii, and Pacific countries). Holding future regional forums on US territories that discuss regional affairs and collaboration would counter China’s influence playbook by leveraging the US presence and stake in the Pacific, something China sorely lacks.

Conclusion

Maintaining Taiwan’s diplomatic relationships is not a sentimental task; it is a matter of strategic deterrence for both Taipei and Washington. Beijing does not execute a global diplomatic campaign without a purpose. It is systematically targeting Taiwan’s partners in a bid to isolate the island and provide more maneuvering room for potential future Chinese coercion against Taiwan. Slowing that progression could provide a countervailing force, causing China to question how big of an international outcry it could face if it violates Taiwan’s security. And there are weaknesses at the center of Beijing’s approach. From Honduras and St. Lucia to the Dominican Republic and Palau, these case studies reveal a consistent pattern: China couples high-visibility promises with diplomatic and economic coercion but often underdelivers once it achieves its goal of flipping recognition. Moreover, countries often find themselves more economically vulnerable and more exposed to opaque governance and policies after the switch, since China rarely discloses financial details of its loan or investment, nor does it require their partner countries to do so for their populace. By contrast, Taiwan’s engagement—while often under-resourced and strategically under-articulated—tends to be steadier, better at addressing actual needs, more reliable, and better aligned with partner countries’ long-term development goals.

For Taipei, there is an urgent need to clarify Taiwan’s diplomatic and strategic objectives with partner countries. If there are material benefits to having more diplomatic partners or keeping certain nations onside, then Taiwan should invest in these nations accordingly, share “buyer beware” lessons learned from recent switchers, and coordinate with the United States and likeminded partners and democracies to address the needs that Taiwan cannot meet alone.

For Taipei’s partners, the pattern of China’s behavior suggests the need to carefully weigh Beijing’s short-term inducements (and any political wins they might produce for local officials) against long-term structural economic imbalances and overreliance on the PRC, as well as recognizing the strategic value of ties with Taiwan, especially vis-á-vis the United States.

For Washington, there is an urgent need to make its own assessments about exactly what Taiwan’s diplomatic partners mean for the island’s peace and stability. If these relationships bolster deterrence, then the United States has an interest in maintaining the status quo. Given China’s campaign to further undermine it, that requires countering China’s actions to peel Taiwan’s partners away one by one. That will require the United States to think seriously about the benefits it offers these partners and how it can team up with Taiwan to offer a stronger economic deal. The United States already has a joint partnership agreement with Taiwan on development activities in third-party countries, via the DFC-ICDF Memorandum of Understanding on Advancing Private Sector Investment Opportunities signed in 2024. The State Department should consider putting current Taiwan diplomatic partners on the list for targeted projects next year, when the United States and Taiwan will likely convene their next Economic Prosperity Partnership Dialogue.

For decades, the United States has coasted on the issue of Taiwan’s formal diplomatic partners, standing back and watching China execute flips, but largely staying on the sidelines due to discomfort around the fact that the United States itself flipped recognition in 1979. Washington must recognize that coasting will result in the number of Taiwan’s official partners diminishing further. If Washington and Taipei decide that is not a concern, then coasting can continue. If, however, both sides agree this is a key element in deterrence, then both sides will need a much more targeted diplomatic approach. China stopped coasting in 2016 and hasn’t slowed down since.

Correction: A previous version of this report misstated the nature of Taiwan’s diplomatic positioning under former President Lee Tung-Hui. The Lee administration avoided declaring de jure independence, which would trigger a conflict with the CCP, but it did refute Beijing’s claim to represent the island.

Staff

Kitsch Liao

Associate Director

Global China Hub

China Security & Defense

Fellow

Nik Foster

Nonresident Fellow

Global China Hub

China Energy & Environment

Fellow

Santiago Villa

Nonresident Fellow

Global China Hub

Africa China

This report is the culmination of a year-long research project made possible through the generous support of the Taipei Economic and Cultural Representative Office in the United States (TECRO).

The Global China Hub tracks Beijing’s actions and their global impacts, assessing China’s rise from multiple angles and identifying emerging China policy challenges. The Hub leverages its network of China experts around the world to generate actionable recommendations for policymakers in Washington and beyond.

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But what results have Trump’s peace efforts yielded so far—and where do the agreements that the US administration has facilitated over the past months stand today? This series takes stock of Trump’s peace deals across the world, highlights the patterns, tools, and strategic choices that characterize them, and assesses whether they can deliver stability over the long run.

From negotiations with the Democratic Republic of the Congo and Rwanda to talks with Cambodia and Thailand, several cross-cutting themes emerge. Trump uses economic tools such as trade deals, tariff pressure, and targeted incentives to bring parties to the table and further US interests, while highly visible announcements and signing ceremonies serve to reduce tensions and lock parties into deals.

With this unorthodox style, Trump aims to position the US economy as a driver of cooperation abroad while simultaneously securing domestic wins, such as beneficial agreements on critical minerals. His style produces rapid outcomes and creates political openings that might otherwise be unattainable. However, it also runs the risk of substituting short-term gains for long-term peace.

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies.

—Bailey Galicia is a program assistant with the Atlantic Council’s Scowcroft Center for Strategy and Security.

The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

Learn more

The post Inside Trump’s peace plans   appeared first on Atlantic Council.

US President Donald Trump’s successful negotiation of a cease-fire that ended the fighting in Gaza and secured the release of Israeli hostages was a significant diplomatic success.

Driven by exhaustion on both sides and the effective application of US leverage following Israel’s strike against Hamas leaders in Doha, the deal featured Israel and Hamas agreeing to terms that both had long resisted: Israel ending fighting without a guarantee of Hamas’s removal from power, and Hamas releasing all hostages without securing Israel’s full withdrawal from Gaza.

Although Hamas has not yet released all of the bodies of deceased hostages and occasional exchanges of fire continue, the cease-fire is likely to hold in the near term. Hamas needs time to recover from the blows it has endured, and Israel is unlikely to defy Trump as he seeks to claim this win and bolster his campaign for a Nobel Peace Prize.

But phase two of Trump’s twenty-point plan will be far more difficult, with multiple obstacles to implementation.

Gaza’s future hinges on who governs

The core elements of phase two are Hamas’s disarmament, the reconstruction of Gaza, the establishment of an interim Palestinian technocratic government under an international “Board of Peace” chaired by Trump, the deployment of an international stabilization force, and the gradual return of a reformed Palestinian Authority (PA) to governance in Gaza.

All of these objectives hinge on Hamas’s disarmament. That fact has been made irrefutable by videos circulating on social media showing Hamas using its weapons to engage in retribution killings against Palestinians who have resisted the group’s authority—a gruesome method of tightening its grip on the roughly 47 percent of Gaza it still controls.

Following the October 7, 2023, Hamas attacks, I led a State Department task force on “day-after” planning for Gaza. We immediately established as one of our core planning assumptions that unless Hamas was defeated, disarmed, and removed from power, there would be no “day-after.” Following the worst attack on the Jewish people since the Holocaust, neither Israel’s leaders nor its citizens would accept Hamas emerging from another war battered but intact—still armed, still clinging to power, and still preparing for the next round of fighting.

There were also pragmatic reasons for our assessment. The postwar gains we envisioned—Gulf-funded reconstruction, an international security force, and PA involvement in governance—would all be impossible if Hamas remained armed and in control.

No stabilization without disarmament

Since these objectives also form the foundation of phase two of Trump’s plan, it is no surprise that his administration is already confronting those very challenges. Gulf states are reluctant to fund reconstruction in Gaza without a long-term solution to the conflict. Meanwhile, the countries expressing some willingness to deploy stabilization forces—including Indonesia, Azerbaijan, Egypt, the United Arab Emirates, Jordan, and Morocco—have made clear that they will not engage Hamas directly and would prefer to deploy only after the group has been fully dismantled. The PA’s track record does not inspire confidence in this regard either; after all, it was routed from Gaza by Hamas in a brief civil war in 2007.

Disarming Hamas must therefore be the overriding priority. Without it, the conflict will likely remain in suspended animation, recovery will stall, and Gaza will drift toward renewed war.

Leaving disarmament solely to the Israel Defense Forces (IDF) is, at best, a flawed strategy. While the risk of further hostage killings has been removed, other concerns persist: rising civilian and IDF casualties, deepening international isolation of Israel, and the risk of a full-scale Israeli occupation of Gaza—all of which would severely damage US and Israeli national interests and undermine prospects for expanding regional integration.

Qatar and Turkey could play a crucial role

The most viable alternative is the same tool Trump used to persuade Hamas to release all hostages after the Doha strike: leverage over Qatar and Turkey. While Trump pressed Israel to agree to a cease-fire, he used Qatar’s fear of regional escalation—and its long-standing financial ties to Hamas—to pressure the group’s leadership.

Trump also brought in Turkey, which had been largely absent from the Biden administration cease-fire efforts. Trump’s relationship with Turkish President Recep Tayyip Erdoğan—who shares Hamas’s Muslim Brotherhood ideology and has allowed its leaders to live and even operate on Turkish soil—proved pivotal in persuading the group to accept the deal.

Trump leaned heavily on his transactional instincts, declaring a security guarantee for Qatar, signaling openness to an F-35 fighter jet program for Turkey, and, according to reports, easing US legal action against the country’s state-owned Halkbank, which faces charges related to helping Iran evade sanctions.

Qatar and Turkey have proven that, when properly motivated, they can exert decisive influence over Hamas. Trump should once again leverage both, using fresh incentives to press Hamas to surrender its arms to an agreed third party. A critical mass of Hamas fighters and remaining leaders could then accept safe passage into exile, allowing an international stabilization force and technical experts to safely decommission Hamas’s remaining tunnel networks. The United States and Israel have already struck a tentative agreement to allow safe passage for approximately two hundred Hamas terrorists currently in tunnels under Rafah, which, if implemented, could serve as a test case for a much larger effort across Gaza.

The road to recovery

There is precedent for this. In 1982, US diplomats helped arrange the peaceful departure of some fourteen thousand Palestine Liberation Organization personnel from Beirut while the Israeli military besieged the city. A similar effort, coordinated with and financed by key Arab states, could open the door to genuine recovery and a peaceful future for Gaza.

More than Gaza’s future is at stake. Significant opportunities to expand Middle East integration remain as well. With Iran and its proxy network profoundly weakened by Israeli and US strikes, a strengthened coalition of Israel, the United States, and Arab partners would advance the interests of all parties. A Hamas refusal to disarm, however, would freeze Gaza’s recovery and undermine progress toward Israeli-Saudi normalization, or even more modest steps such as renewing and expanding the Negev Forum—a regional cooperation framework comprising Israel, the United States, the United Arab Emirates, Bahrain, Morocco, and Egypt—improving Israeli-Indonesian ties, or completing a non-aggression pact between Israel and Syria.

Hamas leader Yahya Sinwar’s motivation to launch the October 7 attacks included a desire to derail Israel-Saudi normalization. Hamas must not be allowed to continue obstructing this brighter regional future. The United States must marshal all its partners in the region to ensure that the group’s disarmament becomes a shared, non-negotiable priority.

Daniel B. Shapiro is a distinguished fellow with the Scowcroft Middle East Security Initiative. He served as US ambassador to Israel from 2011 to 2017, and most recently as deputy assistant secretary of defense for the Middle East. 

Issue Brief Dec 12, 2025

From the DRC to Sudan, Trump’s disruptive moves could revive stalled negotiations

By Maureen Farrell

Across Africa, US President Donald Trump’s unorthodox diplomacy is unsettling old patterns—reviving talks between the Democratic Republic of the Congo and Rwanda and injecting new momentum into Sudan mediation. The gains may be fragile, but the openings are real.

Africa East Africa

Issue Brief Dec 12, 2025

In Southeast Asia, the promise and pitfalls of tariff diplomacy are on full display 

By Amy Searight

US President Donald Trump’s high-profile intervention in the Thai-Cambodian border dispute delivered a cease-fire, but its violation exposes the fragility of tariff diplomacy and raises questions about the durability of coercive US diplomacy in the region.

Indo-Pacific Peacekeeping and Peacebuilding

The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

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The post It’s all about Hamas’s disarmament appeared first on Atlantic Council.

Back in July, US President Donald Trump played a key role in brokering a cease-fire between Thailand and Cambodia—a diplomatic effort that earned him a Nobel Peace Prize nomination from Cambodia and a starring role at an elaborate cease-fire signing ceremony during the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur in October. The timing of Trump’s intervention, combined with his use of tariffs as economic leverage, was instrumental in securing the initial cease-fire agreement. Although the truce was fragile and unraveled within a few months, it nonetheless prevented a dangerous escalation and created space for ASEAN-led mediation to briefly take hold.

Trump’s “victory lap” in Kuala Lumpur served both as a boost to his self-proclaimed campaign for the Nobel Peace Prize—earning him a nomination from Phnom Penh—and as a reminder to Southeast Asian nations that the United States remains a key player in shaping regional dynamics and promoting regional stability. Yet his visit also underscored the region’s growing unease over the United States’ retreat from its traditional role as a reliable economic partner and champion of free trade. Trump’s role in the Thailand-Cambodia conflict highlights a new US embrace of economic coercion, transactional bargaining, and exclusionary dealmaking. His abrupt departure from Kuala Lumpur—skipping the East Asia summit—followed by his early exit from South Korea just before the Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting, left China in the spotlight to promote its role as the region’s most dependable partner for free trade, infrastructure investment, and development assistance.

Recent events have more starkly called into question the effectiveness of Trump’s tariff-driven diplomacy. The Thai-Cambodia peace process quickly unraveled in November after Thai soldiers were injured by a landmine, sparking renewed fighting and causing Cambodian casualties along the border. Trump again sought to mediate with phone calls to both leaders, but this time Thailand’s Prime Minister Anutin Charnvirakul publicly dismissed the threat of economic coercion, saying “I no longer care” about trade and tariff negotiations: “If we can’t sell to this country, we’ll find others. How can we put our lives in the hands of one country?”

On December 8, the situation worsened dramatically when Thailand carried out air strikes on Cambodian military sites it claimed were stockpiling long-range Chinese-made rockets. Hundreds of thousands of civilians fled the ensuing violence, and the cease-fire crumbled—underscoring how fragile the truce always was. The latest turn of events came on December 12, when in a Truth Social post, Trump announced that he had again spoken with both Anutin and Manet and secured their agreement to halt all shooting. It remains far from certain, however, whether this new pledge will hold amid ongoing tensions. In all, the crisis lays bare the limits of tariff-based diplomacy in resolving conflicts rooted in nationalism, territorial rivalry, and domestic political pressures.

Bitter conflict over an ancient temple and colonial map

The Thai-Cambodia border dispute centers on Preah Vihear, an ancient Khmer temple perched atop a sheer escarpment along a poorly demarcated stretch of the frontier. The roots of the conflict stretch back centuries to the rivalry between the Khmer Empire and the Kingdom of Siam. In the modern era, the dispute rests on a colonial-era treaty and a French-drawn map whose ambiguities have fueled competing territorial claims.

Cambodia brought the case to the International Court of Justice, which ruled in 1962 that Preah Vihear lay on Cambodian territory. But the court did not decide who owned the surrounding plateau—an area far larger and strategically more significant than the temple. That unresolved question, combined with Thailand’s persistent rejection of the French map that informed the ruling, has left the Preah Vihear region a recurring flashpoint.

The last major clashes erupted from 2008 to 2011 after the United Nations Educational, Scientific and Cultural Organization listed Preah Vihear as a Cambodian world heritage site, a move that inflamed nationalist sentiment on both sides. For Cambodians, the temple is a potent symbol of Khmer identity, and political leaders have often invoked heritage and historical grievances to boost their popularity. Thai leaders who have sought compromise have faced backlash from nationalist groups, and the Thai military has at times exploited the issue to bolster its domestic standing and assert leverage over civilian authority. As a result, the dispute over Preah Vihear remains not only a legal matter but also a deeply emotional and politically combustible issue in both countries.

Escalating border clashes and the search for a cease-fire

The latest crisis erupted in late May 2025, when a Cambodian soldier was killed in a border skirmish, triggering a full-blown diplomatic confrontation and rapid troop buildups on both sides. Fighting escalated dramatically in late July, with heavy artillery exchanges, cross-border incursions, and sporadic air strikes. The human and economic toll mounted quickly: at least thirty-eight people were killed, more than 300,000 displaced, and cross-border trade ground to a halt.

ASEAN was initially caught off guard by the rapidly escalating conflict. As the fighting intensified, Malaysia—serving as ASEAN chair—stepped in to try to broker a cease-fire. Malaysian Prime Minister Anwar Ibrahim worked diligently behind the scenes, coordinating closely with the United States and China to open channels for talks. But these efforts were rebuffed by Thailand, which has long resisted third-party involvement in the dispute.

It was at this critical juncture that Trump’s personal intervention helped break the impasse. On July 26, he called Cambodian Prime Minister Hun Manet and Thailand’s acting Prime Minister Phumtham Wechayachai. His message was blunt: sign a cease-fire or face consequences in ongoing trade negotiations. The threat carried weight because US tariffs were set to rise sharply for Cambodia, Thailand, and most other Southeast Asian countries unless they reached trade agreements before the “Liberation Day” tariff deadline on August 1.

Within twenty-four hours, both governments agreed to meet in Kuala Lumpur, and on July 28 they signed an unconditional cease-fire. Trump announced on social media that he had “saved thousands of lives” and declared himself the “President of PEACE.” Manet seized the moment to curry favor with Trump by nominating him for the Nobel Peace Prize, citing his “extraordinary statesmanship” and “visionary and innovative diplomacy.”

Eager to secure Trump’s attendance at the ASEAN summit in October, host country Malaysia invited him to preside over a formal cease-fire signing ceremony. The event was carefully choreographed to spotlight the US president’s role in brokering the deal and the commitments made by Thailand and Cambodia to continue pursuing peace. China was pointedly excluded from the ceremony as a result of US demands for Trump’s participation. Cambodia’s Manet used the moment to remind Trump of his Nobel Peace Prize nomination, Thailand’s Anutin publicly thanked the president for his “personal dedication” to peace, and Malaysia’s Anwar praised Trump for his “tenacity and courage.”

A fragile peace—and its collapse

Despite the July cease-fire, the situation on the ground remained volatile. Violations persisted through August and September. The fragile truce was vulnerable to ultranationalist provocations, inflammatory disinformation circulating on social media, and the absence of any credible monitoring mechanism. Still, the cease-fire had prevented a return to all-out fighting and created space for negotiators to craft a more durable framework to resolve the underlying border dispute.

The agreement signed at the ASEAN summit added several new commitments: withdrawal of heavy weapons from the front line, monitoring by ASEAN observers, and repatriation of Cambodian prisoners of war. The hope was that once these steps were taken, the two countries would tackle the far more difficult process of technical border demarcation, which has remained stalled for years. Yet the most critical ingredient for any lasting settlement is sustained political will at a time when both governments face potentially volatile political situations at home. As Thai analyst Thitinan Pongsudhirak cautioned in October, leaders in both countries “appear intent and incentivized to stoke the flames of nationalism for domestic political gains.”

The rapid unraveling of the peace process in November and December proved these warnings prescient. Just two weeks after the Kuala Lumpur signing, Thailand announced that it would suspend participation in the peace process after four Thai soldiers were wounded, one critically, by a landmine that Thailand claimed was planted by Cambodia after the October peace accord had been signed—an allegation Cambodia denied. The crisis escalated dramatically on December 8, when Thailand launched airstrikes on Cambodian military targets, asserting that Cambodia had mobilized heavy weaponry and repositioned combat units. Fighting spread quickly into civilian areas, causing dozens of casualties and forcing hundreds of thousands to flee, with both sides accusing the other of breaking the truce. Anutin has taken a firm public stance, rejecting ASEAN-led mediation and US tariff pressure in favor of handling the dispute bilaterally with Cambodia. Then came Trump’s December 12 announcement that Anutin and Manet agreed to halt “all shooting” once again.

The confrontation has also offered Anutin a platform to project strength and nationalism at home at a time of economic anxiety and political turbulence in Thailand. This week, Anutin dissolved parliament, setting up a general election in early 2026.

Strategic takeaways for Southeast Asia

Southeast Asia broadly welcomed US involvement in the Thailand-Cambodia crisis and Trump’s visit to the region. After years of sporadic presidential attendance at ASEAN-centered summits under both Trump and former US President Joe Biden, Trump’s presence at the Kuala Lumpur meeting was well received and gave a diplomatic boost to Malaysia and ASEAN.

Yet the downsides were equally clear. The fact that Trump skipped both the East Asia summit and the APEC Leaders’ Meeting reinforced the perception that US engagement remains intermittent and unpredictable. In contrast, Chinese President Xi Jinping seized the opportunity to present China as a stable and reliable partner—championing multilateralism, expanding trade, and financing infrastructure from Laos to Indonesia.

Trump’s use of economic leverage—conditioning tariff relief on cease-fire cooperation—was undeniably effective in bringing Thailand and Cambodia to the negotiating table. But the collapse of the peace process just two weeks after the comprehensive cease-fire was signed also showcases the limits—and potential counterproductive effects—of coercive tariff diplomacy when issues of sovereignty and nationalism are at stake. Tariff pressure may even have backfired, giving the Thai prime minister an opportunity to demonstrate resolve and bolster his nationalist image at a politically opportune moment at home.

More broadly, Trump’s tariff-centric approach sends a highly visible and deeply troubling signal to the region. The United States, once seen as an engine of growth and leader of the liberal trade system, increasingly appears transactional and willing to weaponize trade for political ends. Ironically, that has long been the critique of Chinese engagement in Southeast Asia. Now, with Beijing positioning itself as a defender of free trade and regional multilateralism, the United States risks flipping the script—mirroring the coercive tactics it once condemned.

Meanwhile, China—though still resorting to economic coercion—has deepened its economic engagement, signing free trade agreements, financing ports, railways, and power plants through the Belt and Road Initiative, and expanding development assistance. The United States, by contrast, has dismantled the US Agency for International Development, retreated from ambitious trade deals, and remained a modest player in infrastructure development.

If the United States hopes to re-establish itself as Southeast Asia’s preferred strategic partner, it will need to pair high-level diplomacy and security cooperation with long-term economic engagement—demonstrating that US leadership is durable, reliable, and aligned with Southeast Asia’s long-term development priorities.

Amy Searight is a nonresident senior fellow in the Indo-Pacific Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security and senior adviser at Vriens & Partners. She previously served as US deputy assistant secretary of defense for South and Southeast Asia.

Issue Brief Dec 12, 2025

It’s all about Hamas’s disarmament

By Daniel B. Shapiro

A US-brokered cease-fire ended the Israel-Hamas war, but the next phase depends on the group’s disarmament. Until that happens, Gaza’s reconstruction, regional diplomacy, and political future hang in the balance.

Israel Middle East

Issue Brief Dec 12, 2025

From the DRC to Sudan, Trump’s disruptive moves could revive stalled negotiations

By Maureen Farrell

Across Africa, US President Donald Trump’s unorthodox diplomacy is unsettling old patterns—reviving talks between the Democratic Republic of the Congo and Rwanda and injecting new momentum into Sudan mediation. The gains may be fragile, but the openings are real.

Africa East Africa

The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

Learn more

The post In Southeast Asia, the promise and pitfalls of tariff diplomacy are on full display  appeared first on Atlantic Council.

The Trump administration’s global push for peace is aimed both at ending wars and at improving the president’s chances of winning a Nobel Peace Prize. Regardless of the motivations, the diplomatic energy the administration is expending to resolve conflicts in Africa is creating movement and shaking up systems in a way that could break stalemates or at least disrupt patterns of violence for short-term gains.  

US President Donald Trump’s proclivity for dealmaking and leveraging influence may not generate long-term solutions, but the administration’s disruption of the conflict between the Democratic Republic of the Congo (DRC) and Rwanda represents an unorthodox approach to creating negotiation space. Stepping into this space created by Trump’s style could offer an opportunity to forge new short-term paths to peace.

Unconventional moves, unforeseen results? 

Building on the diligent efforts of the Joe Biden administration, the Trump team gave significant political weight to the DRC-Rwanda negotiations early in the term by tapping Massad Boulos, the US senior advisor for Africa—and father-in-law of the president’s daughter Tiffany Trump—to lead the talks. This resulted in a “declaration of principles” in April, followed by the “Washington Accord” in June, both signed by the countries’ foreign ministers. Then, on December 4, the presidents of the DRC and Rwanda signed the “Joint Declaration” in Washington, with Trump and leaders from Qatar, Kenya, Angola, Togo, Burundi, Uganda, and Nigeria witnessing.  

This peace agreement was violated just four days later, and the Rwandan-backed M23 militia continues to gain ground in eastern DRC. Burundi’s involvement in the conflict is also increasingly concerning. However, the US administration’s diplomatic investment has created international momentum for peace, providing the parties and regional actors more room to maneuver in their respective domestic politics. For the DRC, the political push from the White House has generated a buzz of activity in the critical-minerals sector, as exemplified by myriad recent forums in Washington policy circles and the interest of several companies in capitalizing on the “peace.” Similarly, Rwanda, which has long faced criticism for greenwashing and sportswashing its reputation for human rights abuses and autocracy, has had the opportunity to burnish its image as a promoter of peace on the global stage by signing this series of high-profile agreements. In that sense, both countries are already benefiting from Trump’s political signaling, though the stickiest details of a long-term solution remain unaddressed.   

In Sudan, US foreign policy faces its toughest test 

The same may be true in Sudan, where Trump recently announced that he intends to focus on resolving the crisis after meeting with Saudi Crown Prince Mohammed bin Salman. While there might be a short-term gain, the US approach is unlikely to deliver a sustainable political path toward an enduring peace. Still, Boulos’s engagement on Sudan could inject some much-needed energy into a stalled mediation process led by the United States, Saudi Arabia, Egypt, and the United Arab Emirates (UAE). A lasting resolution to the conflict in Sudan, where the world’s largest humanitarian disaster is unfolding, would be a real feather in Trump’s cap.  

Most Sudan watchers have argued that any solution must start with the United States exerting political pressure on the UAE to terminate its support for the Rapid Support Forces (RSF), a Darfur-based paramilitary group. In January, the outgoing Biden administration determined that the RSF has committed genocide, and continued Emirati support has allowed the group to perpetrate more atrocities, such as those widely reported during its late October siege of the Sudanese city of El Fasher. However, the UAE is an important US ally and a key strategic partner in other global conflicts—from the war in Gaza to countering the Houthi threat in Yemen. Using US leverage to squeeze Abu Dhabi on Sudan has therefore proven politically impractical.  

If Trump were to pull it off, an Emirati pivot on Sudan would indeed result in a power shift on the battlefield. Still, spearheading an effort for lasting peace would require another seismic political shift. The US administration would also need to elevate legitimate Sudanese political actors who could lead this fractious and war-ravaged country—and that is no easy feat. After all, neither of the two main belligerents, the Sudanese Armed Forces or the RSF, maintains any political legitimacy, as Michelle Gavin of the Council on Foreign Relations argues. If Trump or Boulos could pick up those two giant rocks—Emirati support for the RSF and legitimate Sudanese political leadership—and move them even inches forward, that would represent real progress that evaded the Biden administration. 

Small wins can produce big diplomatic yields 

As Trump continues his pursuit of a Nobel Peace Prize, there are myriad other conflicts across the African continent that may receive a burst of diplomatic attention as his administration seeks to unlock sustainable paths to peace. The Ethiopia-Egypt-Sudan dispute around Nile River water access and the Grand Ethiopian Renaissance Dam (GERD) may be one of those cases. Although it should be acknowledged that Trump has previously overstated his claim of resolving the conflict, he could still theoretically pull off an agreement, as argued by Allison Lombardo and Peter Quaranto. While Ethiopian Prime Minister Abiy Ahmed has little motivation to strike a deal on the GERD, Egypt might be more amenable to negotiations.  

During his July 2025 travel to North Africa, Boulos continued discussions with Egyptian President Abdel Fattah el-Sisi on both the GERD and on emerging space to possibly broker a deal on Libya. There may yet be developments in this arena as the US administration seeks to create opportunities for energy-sector deals for US companies.   

The administration is also pursuing solutions to several other security challenges in Africa, including the metastasizing terrorist threats in Mali and across West Africa. Here, the United States has been increasingly sidelined, with regimes from Burkina Faso to Niger pivoting to Moscow. However, there is an opportunity to redirect Sahelian states’ attention away from Russian patrons if the United States steps up with its own counterterrorism support. 

In northern Somalia, a new collaboration between Somaliland and Puntland may provide a vehicle for the United States to advance locally driven counterterrorism solutions aimed at containing or degrading threats posed by the Somali affiliate of the Islamic State of Iraq and al-Sham, al-Shabaab, and even the Houthis operating in the Red Sea region. Likely with a lighter touch than was needed to advance DRC-Rwanda negotiations, the Trump administration could make near-term counterterrorism gains that may open space for partner governments—including Western allies, Turkey, the UAE, and Qatar—to share burdens and claim political and diplomatic wins. 

It is easy to criticize the administration’s nontraditional approach to peace promotion, particularly when paired with sizable tariffs, visa bans, and misleading narratives about marginalized groups in South Africa and Nigeria. However, the reality is that the political disruption that Trump’s style can generate, combined with his unpredictable decision-making and pursuit of the Nobel Peace Prize, has shifted political thinking about what is possible in the DRC and Rwanda. With sustained and credible engagement, similar diplomatic openings could emerge in Sudan, Libya, and other terrorism hot spots in Africa. In many of these cases, small victories may prove more valuable than prolonged stalemates. 

Maureen Farrell is a nonresident senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security and vice president for global partnerships at Valar, a Nairobi-based strategic advisory and risk firm. She previously served as the deputy assistant secretary of defense for African affairs and director for African affairs at the US National Security Council. 

Issue Brief Dec 12, 2025

It’s all about Hamas’s disarmament

By Daniel B. Shapiro

A US-brokered cease-fire ended the Israel-Hamas war, but the next phase depends on the group’s disarmament. Until that happens, Gaza’s reconstruction, regional diplomacy, and political future hang in the balance.

Israel Middle East

Issue Brief Dec 12, 2025

In Southeast Asia, the promise and pitfalls of tariff diplomacy are on full display 

By Amy Searight

US President Donald Trump’s high-profile intervention in the Thai-Cambodian border dispute delivered a cease-fire, but its violation exposes the fragility of tariff diplomacy and raises questions about the durability of coercive US diplomacy in the region.

Indo-Pacific Peacekeeping and Peacebuilding

The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

Learn more

The post From the DRC to Sudan, Trump’s disruptive moves could revive stalled negotiations appeared first on Atlantic Council.

• Introduction
• Pivot to the East: How China has come to Russia’s rescue
• Guns over butter
• Regions
• Conclusions and recommendations
• About the authors

In the three and a half years since Russia launched its full-scale invasion of Ukraine, its economy has continued to grow, supported by increased militarization. This resilience is a far cry from Western governments’ prognosis in the early days of the war that sanctions would crash the Russian economy. Sky-high energy prices and hesitation on the part of Western leaders to push for stronger enforcement of sanctions kept the Russian economy afloat in 2022. Meanwhile, deepening economic integration with China has helped supplant the void left by the loss of the European Union (EU) as a market. Overall growth, however, is slowing markedly in 2025 as Russia is increasingly feeling the pressure of “guns versus butter,” the inherent tension between military and social spending. 

Fortunately for Ukraine and its Western partners, topline gross domestic product (GDP) figures tell only part of the story. The Russian economy has been overheating—demand is outpacing supply and economic activity is growing at an unsustainable rate—since late 2023. Stubbornly high inflation has forced the Central Bank of Russia (CBR) to raise interest rates to a peak of 21 percent.¹ In part, higher inflation (and growth) figures have been driven by Moscow’s wartime spending spree, often described as military Keynesianism. This has been exacerbated by an exceptionally tight labor market by Russia’s standards. The unemployment rate sits at just above 2 percent, less than half of its pre-pandemic levels—which, in addition to boosting inflation even higher, betrays the economy’s limited room left to grow. Demand has been pushed up by government spending beyond the point at which supply can keep up, whether through investment, labor, or productivity gains.

The sanctions landscape has, rather unsurprisingly, become more fractured since President Donald Trump’s return to the White House in 2025. While Ukraine’s partners in Brussels and London have applied additional economic pressure on Moscow, Washington had entirely refrained from doing so until October, when Trump announced sanctions on Russia’s two largest oil producers, Rosneft and Lukoil. On one side of the Atlantic, sanctions—which require constant monitoring and updating to remain relevant—have seemingly been reduced from a tool of economic statecraft designed to inflict costs for and deter bad behavior to a bargaining chip. On the other, the European Union and United Kingdom have continued to expand their sanctions regimes, including by lowering the price cap they impose on Russian oil, but are unable to replicate the reach that the United States Treasury Department has thanks to the dominance of the US dollar and the US ability to enforce secondary sanctions.

The Russian economy is, therefore, in a precarious but manageable position. Its growth has slowed, its oil and gas revenues have slid, and the latest US sanctions on Rosneft and Lukoil directly challenge the prevailing assumption that geopolitical risks and sanctions threats had subsided. Nevertheless, the economy might yet be saved by fickle White House policy. Unless the new sanctions escalation is genuinely sustained, or global oil markets see a further downturn, the current slow downward trends are likely to hold as Russia appears to have hit supply-side constraints in the labor market and investment. This makes a better understanding of where the Russian economy currently stands all the more important. The following sections explore three key wartime developments: the growing role of China, the prioritization of the defense sector, and the positive effects of the war on poorer regions.

Pivot to the East: How China has come to Russia’s rescue

When Russian President Vladimir Putin launched a full-scale invasion of Ukraine, he gambled his country’s future on a quick victory. When that goal proved elusive, he doubled down. Two developments helped make this economically feasible. The first was the spike in energy prices, particularly for natural gas, which was precipitated by the uncertainty that Putin had wrought upon global markets. The second was Russia’s burgeoning trade relationship with China and its role in helping Russia circumvent sanctions.

Economically and politically, Russia’s relationship with China is simultaneously deeply asymmetrical and mutually beneficial. While Moscow has not become Beijing’s vassal—at least not to the extent that it would attack NATO purely to distract the Alliance from a war for Taiwan—Russia is certainly the junior partner in the “no limits” partnership. China has served as a lifeline for Russia, while Russia has supplied China with cheap energy and raw materials.

On one hand, China has easily overtaken the EU to become Russia’s largest trading partner. On the other hand, Russia accounts for just 3 percent of China’s exports and 5 percent of China’s imports as of 2024.² Russia’s economic importance to China, to be sure, is not fully reflected in these figures; it became China’s top supplier of crude oil in 2023. But even in the case of oil, China buys from an intentionally diversified set of suppliers, in which Russia accounts for less than one-fifth of imports. With an economy nine times the size of Russia’s, China has the same leverage in market power over Russia as the EU, without the structural dependencies on Russian energy.³ Many EU members (including Germany, the bloc’s largest economy) grew structurally dependent on cheap Russian oil and gas for their economic growth in the twenty-first century.⁴ The Nord Stream 1 and 2 natural gas pipelines from Russia to Germany via the Baltic Sea, which together cost €18 billion to build, best symbolized the relationship.

Even Russia’s energy exports to China are comparatively far more important to Russia. Oil and gas revenues account for nearly one-third of Russia’s budget inflows. Until 2023, Europe was the most lucrative export market for Russian energy and, thus, for Russian state coffers. Nonetheless, by invading Ukraine, Russia slayed its irreplaceable golden goose, leaving it reliant on new partners. And China, well aware of Russia’s lack of alternatives, purchases both oil and gas at a steep discount.

Russia’s trade to and from China could hardly be more different. It sells oil, gas, coal, and raw materials to China, while it buys machinery, vehicles, and electronics (see below).⁵ In other words, Russia exports what it can extract from the ground and imports what it lacks the technology and industrial capacity to build itself—highlighting the deep asymmetry in the relationship. This is a complete and embarrassing reversal in the relationship compared to the 2000s, when Russia exported higher value-added goods to China. 

Automobiles have become a bellwether of China’s presence in the Russian consumer market and a rare case of the Russian market’s importance to Chinese industry. Before the full-scale invasion in 2022, Russia imported cars from a range of countries—including Japan, South Korea, Germany, China, and the United States—and a number of countries established production facilities in Russia, creating productivity spillovers. The West’s sanctions regime upended the market so thoroughly that Russia, although wary of provoking its more powerful neighbor, even increased duties on car imports in an attempt to slow the Chinese takeover.⁶ Chinese brands’ market share surged from below 10 percent in 2021 to above 60 percent in 2023, and they allegedly accounted for the vast majority (about 90 percent) of revenues in 2024. 

Russia had become the largest export destination for Chinese cars, which filled the void left by Western brands exiting the country—and though Russia’s protectionist measures might have chipped away at this, the Chinese automotive industry is among the largest beneficiaries of the expanded Sino-Russian trade relationship. The industry produces far more than the Chinese consumer market can absorb, so markets like Russia—which is both large and absent of Western competition—are highly beneficial. In contrast, China’s smartphone industry, which has taken over the Russian market in a rather visible manner (86 percent of sales in 2024), is hardly dependent on Russia.

China’s manufacturing industries—which are purposefully designed for overcapacity—need international markets, and Russia has become an increasingly important destination for them to sell their products. But automotive exports are the exception that proves the rule; even mutually beneficial exchanges are far more important to Russia than to China. This conclusion is not as trivial as it might sound—the European Union, with a combined GDP that surpasses China’s, was so reliant on Russian energy that the bloc is still working on phasing it out. In other words, structural dependencies on Russia were ingrained in European economies, making it more painful to cut off the trading relationship than key economic figures would have suggested; Russia does not have this leverage with China.

But from an economic point of view, China is not a better trading partner for Russia than the European Union was. It buys oil and gas at lower prices, it invests far less in Russia, and its products are often technologically inferior. Nor is China’s relationship with Russia equivalent to the West’s relationship with Ukraine; whereas Ukraine has received billions of dollars in grants and in-kind contributions from the West, Russia pays in full for its imports from China. But with no alternatives to speak of, China has served as an economic lifeline for the Russian economy.

China has also been central to Russia’s efforts to evade Western sanctions. Following the exodus of Western countries and the imposition of a strict export control regime in 2022, Russian importers turned to increasingly complex sanctions-evasion supply chains to continue buying prohibited products and components. This was particularly urgent for the military-industrial complex, as Russia sourced more Common High Priority Items List (CHPL) items—a set of fifty export-controlled products that the sanctioning coalition jointly determined to be key to Russia’s military industry—from the EU than from anywhere else. A look at Russia’s 2023 imports of these goods reveals China’s new centrality: In value terms, 90 percent of CHPL imports were facilitated by a Chinese firm in some way. Over time, China’s role in providing sensitive goods to Russia has also tilted from facilitator to manufacturer—by 2023, 49 percent of all CHPL imports were made by Chinese companies in China. Goods as complex as computer numerical control (CNC) machines and as simple as ball bearings are now sourced from China instead of the West, making export controls less effective or, at the very least, more difficult to enforce.⁷

Chinese machinery and components are predominantly supplied to the military-industrial complex, while domestically produced alternatives usually go to civilian firms. Moreover, shipments of domestically produced machinery and components have declined during the full-scale war, indicating that Chinese imports have supplanted Russian competition. In other words, despite all of the resources that have gone into import substitution programs—and the restrictions that sanctions have imposed—Russia’s machinery and components supply chains are more import dependent now than they were in 2021. With the Russian economy on a war footing, manufacturers have merely swapped out their European dependencies for Chinese ones.

Russia’s turn from Europe to China raises the question: Did the sanctions regime backfire? After all, Russia has continued its war against Ukraine and is now closer to China than it was at any other time in the post-Soviet period. 

Economically, sanctions have neither backfired nor achieved maximalist goals. The sanctions regime has ensured that every drone, artillery shell, and missile aimed at Ukraine is more expensive or more difficult to produce. Supply chains have needed to be reoriented, introducing friction costs and quality concerns—the lengths to which Russian firms have gone to acquire export-controlled technologies and machinery effectively reveal the inferiority of alternatives. Disappointment with the fact that sanctions have not brought about the collapse of the Russian economy has more to do with overzealous expectations combined with lax enforcement than it does with the failure of sanctions themselves.

However, the tightening Sino-Russian relationship carries weightier consequences for the practice of economic statecraft. Financial sanctions against Russia—including the disconnection of some major banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT)—have driven the country out of the dollar-dominated global financial system and toward its (much smaller) Chinese alternative. China and Russia now settle the vast majority of their trade in renminbi, which could theoretically pave the way for a Chinese-led, anti-Western global financial system. Combined with the Trump administration’s trade policies, risks of de-dollarization have grown, particularly in Asia. This remains hypothetical, however, and it is unclear whether Beijing is willing to bear the costs associated⁸ with taking up such a role. In reality, the Russian economy’s resilience is more of a wake-up call than a cautionary tale for Western governments. A sanctions regime that allows energy export revenues to continue to flow and leaves an economy the size of China’s as a safe haven is destined to disappoint.

Guns over butter

In the push and pull between civilian and military priorities, never has post-Soviet Russia so clearly veered toward the latter. In part, this is reflected in Moscow’s larger ambitions to revive its status as a regional hegemon in Eurasia, and in all the costs it is already bearing in pursuit of this goal—it sacrificed its most lucrative oil and gas customers in the name of dominating Ukraine. But Moscow’s priorities are more straightforwardly revealed by its wartime federal budgets.

The Russian federal budget is both convoluted and secretive, with almost one-third of all allocated funds classified, including more than 80 percent of the defense budget. Even classified expenditures are attributed to broad budget chapters (e.g., national defense), and some categories are easier to ascertain than others—the Ministry of Defense’s classified social support, for example, is likely made up of payments to families of soldiers killed or wounded in the war. Spending on the war has been immense (pegged at or above 8 percent of GDP) but not entirely straightforward to measure. Not all defense expenditures go to the war, while some large civil expenditures, such as investments in occupied territories, are directly related to it. Nevertheless, a few observations can be made about how the budget reflects today’s Russian economy. 

First, direct military spending is likely to plateau, if not decrease, in real terms this year. As spending grew well above inflation since the full-scale invasion, further increasing spending would need to come at the cost of noticeable cuts to social spending, as liquid reserves in the country’s National Welfare Fund (NWF) have been depleted substantially (down 59 percent), and military spending accounted for almost half of budget revenues in the first half of 2025.⁹ As is the case with much of the Russian economy, 2025 has shown that growth cannot continue forever.

Second, while budget deficits are well above expectations, Russia has not had difficulties financing its deficits. Russia’s federal budget nearly exceeded the planned target for 2025 in just the first six months of the year. The shortfall, which was driven by a drop in oil and gas revenues and a 20-percent rise in expenditures, is far bigger than previous wartime deficits. Nonetheless, Moscow has managed to finance the deficit thanks to strong demand for bonds from Russian banks. This is particularly important to maintain, as domestic banks are effectively the only remaining buyers of the government’s bonds.¹⁰

Third, much depends on the price of oil. A bit less than one-third of the federal budget is funded by oil and gas income, and the Ministry of Finance based its budget projections on a forecasted $69.7 per barrel average export price in 2025. The extent of the budget shortfall that falling oil revenues create will depend on two factors: global oil prices, which have been weighed down by sluggish global growth, and how steep a discount on Russian oil prices the Group of Seven’s (G7) oil price cap sanctions can create. With its eighteenth sanctions package in July 2025, the European Union both lowered the price cap for crude oil (from $60 per barrel to $47.6 per barrel) and introduced an automatic mechanism to adjust the cap to market conditions. While this is a welcome change, its effect will still depend on enforcement, which has been subverted by Russia’s shadow fleet of old and uninsured oil tankers.

Besides defense expenditures as a share of GDP, one of Russia’s most-watched financial statistics has been the bonuses that the government pays those who sign up to join the “special military operation.” To entice men to join the war effort despite the risks, regional and local governments have offered sign-on bonuses that far exceed annual salaries. By early 2025, more than 60 percent of Russia’s regions offered bonuses that exceeded 1 million rubles (about $12,000). In Sverdlovsk Oblast in the Urals region, prospective soldiers are offered about 3 million rubles—2.5 million rubles from the regional government, 400,000 from the federal budget, and more from individual municipalities—which is nearly three times the median annual wage. In Mari El, a poor ethnic republic 400 miles east of Moscow, a stunning 10 percent of the region’s total budget is spent on sign-on bonuses.

In Russia’s poorer regions, the combination of sign-on bonuses and killed in action (KIA) payouts has created a system of “deathonomics” in which dying on the battlefield in Ukraine can be more profitable than living to retirement age. The system is particularly appealing to men who are not economically productive—whether due to a lack of training and education or a poor local economy—and effectively acts as local stimulus. From a macroeconomic perspective, these payouts must be viewed in the context of a tight labor market and an overheated economy, in which employers in the civilian sector compete for workers with the army, a military-industrial complex that receives favorable treatment from the government, and each other. Moreover, they are indicative of a larger trend: Russia’s resources are being directed away from the civilian economy and toward the war. Every working-aged man who joins the army is one fewer factory worker or local business employee, and every government ruble spent on incentivizing his choice is one fewer ruble for social spending.

It is no coincidence, then, that war-related industries have substantially outperformed the rest of the economy. While war-related industries have boomed—their combined output has increased by around 50 percent—the rest of the economy has been largely stagnant. Much of Russia’s investment, which is already low, is directed to supporting the war. Because Russia has long struggled to translate its military-industrial complex spending to durable civilian-sector growth, this leaves few opportunities for medium- to long-term spillovers. And as Russian workers move to the military-industrial complex or leave for the front, they are not being replaced by migrant labor, which is at its lowest level in a decade.

There are some areas that allow for direct, “apples to apples” comparisons between the fates of the civilian and military sectors. Though both sides are impacted by sanctions, restrictions on military-industrial complex entities are more stringent. Nonetheless, it is the military-industrial complex that comes out ahead.

Russia’s aviation industry, historically reliant on Western planes and technology, has been hit hard by sanctions. Even before the full-scale invasion, Russia’s commercial aviation industry was so reliant on Western supply chains that it resorted to smuggling parts and components from the United States to get around sanctions, as nominally Russian-made airplanes still rely on foreign components. Sanctions forced Russian airlines to quickly seize jets that had been leased from the West and cannibalize older aircraft for spare parts. But measures have clearly been insufficient, as civil aviation incidents hit a record high in 2024 and plans to build more than one thousand commercial aircraft by 2030 are merely a fantasy. In talks with the Trump administration, Russia specifically brought up the aviation industry as a pain point and proposed a scheme to purchase Boeing planes with frozen state assets. 

Military aviation—which is a top-heavy sector led by companies Yakovlev, United Aircraft Corporation, and United Engine Corporation—has not suffered the same fate. Military aviation manufacturers have rapidly expanded their production capacity since the full-scale invasion, with Chinese imports playing an ever-increasing role in their supply chains. While the commercial aviation fleet steadily degrades, military aviation is continuing to produce both fighter jets and helicopters for the war effort. The diverging performance of the civil and military aviation industries, despite the substantial overlap in companies active in them, is further evidence of how Russia has prioritized military production at the expense of the civilian economy.

An indefinite expansion of the military-industrial complex, however, is not feasible. Moscow does not appear willing to make the sacrifices necessary to truly militarize society—for example, to direct the resources to defense that the Soviet Union did during the Cold War—which would be unavoidable during a broader economic slowdown. The more it spends on military-industrial manufacturing and infrastructure, the less the civilian economy can compete for labor and financing (i.e., the military-industrial complex is crowding out the rest of the private sector). Russia has now pushed the limits of how much the civilian economy can be neglected before it is forced into stagnation.

In the first two years of the full-scale war, the Kremlin was not forced to face the trade-offs it is facing today. Military-led economic expansion was not at odds with broader economic growth for a number of reasons that no longer hold true. 

First, high inflation has forced the CBR to raise interest rates substantially as it attempts to pump the brakes on the overheated economy. With a key policy rate of 16.5 percent (down from a high of 21 percent), fewer businesses can afford debt-fueled growth. Furthermore, a significant share of economic actors receive subsidized interest rate loans; one-sixth of all new loans issued in 2023 were subsidized at below-market rates. Russia’s subsidized mortgage program made up a majority of these funds and was more distortionary than preferential loans to the corporate sector, but it ended in July 2024. The remaining portfolio of subsidized loans, held primarily by large banks, ranges from innocuous recipients—the agricultural sector, small and medium-size enterprises, and strategic industries—to defense contractors and the military-industrial complex writ large, which the Kremlin funds with “hidden war debt.”

The bottom line is that these preferential loan programs force the CBR to hike rates more than it would need to otherwise, hurting the broader economy’s growth prospects in the process. This has led to open infighting among regime elites, with defense executives like Rostec’s Chief Executive Officer Sergey Chemezov repeatedly lashing out at CBR Governor Elvira Nabiullina for her stewardship of the Russian economy.¹¹ Nabiullina and the CBR have been critical of these programs, noting that the subsidized loans are paid for by all the individuals and corporations that must pay market rate. Thus far, the Kremlin seems to have sided with the bank. But the longer rates remain high, the more difficult the balancing act becomes.

Second, the external environment has deteriorated significantly. In Russia’s case, this is first and foremost a question of oil and gas exports. Soaring energy prices—and the delayed application of key measures such as the G7’s oil price cap—supported the Russian economy, the ruble, and the government budget in 2022. Natural gas prices were particularly crucial in 2022 because Russian oil has been sold with a risk premium (i.e., with a discount) ever since the full-scale invasion. Russia’s gas revenues more than doubled between 2021 and 2022—from $64 billion to $130 billion—but fell precipitously below pre-war levels thereafter. Now, three and a half years into what was envisioned as a three-day war, energy revenues have structurally changed (see the analysis above). Depressed oil prices amid a global oil glut, China’s unwillingness to import more Russian natural gas via stalled projects like the Power of Siberia 2 pipeline, the EU’s measures targeting India’s refining of Russian crude oil, and Washington’s sanctions against Rosneft and Lukoil all represent real challenges for Russia’s economic prospects.¹² Regular Ukrainian strikes on hydrocarbon processing facilities have also hit Russia’s bottom line and show no sign of letting up. None of these challenges are insurmountable or even permanent, but they compound on each other in the absence of other key buffers—most notably, liquid reserves and a large and stable current account balance.

Third, Russia has burned through the reserves that it built prior to its full-scale invasion. Russia’s most important buffer has been the NWF, its sovereign wealth fund. Moscow has heavily relied on the NWF for budget financing—withdrawing more than 7.5 trillion rubles ($93 billion) for fiscal financing, while more than $300 billion of CBR reserves were immobilized in sanctions coalition countries. The NWF’s liquid funds, holdings of foreign currency and gold, have dropped by nearly 60 percent and now consist of just renminbi and gold, as Russia sold all hard currency assets in 2022. Once again, this is not an existential threat to the Russian economy, as the government’s ability to fund its deficit with debt issuance has been consistent. However, the depleted NWF is a lost buffer that creates new trade-offs for the Kremlin. If Moscow continues its war-related spending spree, it must fund its deficit by selling even more debt to domestic banks; if it does not continue its fiscal expansion, it no longer has the NWF to cushion the fall for the general population.

The reality is that the Kremlin spent the first two years of the full-scale war kicking the can down the road, avoiding the trade-offs inherent to its policies. Fiscal expansion, a supportive external environment, and large buffers had the economy growing but running on fumes. At least in the economic sphere, the war was all carrots and no sticks. In 2024–2025, when the situation deteriorated significantly on all three fronts, the Russian economy did not collapse, to be sure, but the Kremlin began to face the trade-offs that it had long put off. Interest rates climbed, real wages fell, and subsidized mortgage programs were scrapped. Fears of looming stagflation—the combination of high inflation, low growth, and high unemployment—have been (perhaps prematurely) in the ether for quite some time. 

What does this mean for the most fundamental trade-off of all: guns versus butter? It is difficult to imagine a scenario in which the Russian government can sustain its current defense expenditures without social spending cuts that are pervasive and visible to the general population. Moreover, the broader economy can no longer support growth (in output and real wages) in both the military-industrial complex and the civilian sector simultaneously. This does not spell disaster, but it will likely chip away at the gains that the country’s poorer regions and citizens have seen during the war.

Regions

Parts of the civilian sector have benefited immensely from the wartime spending bonanza, and it has helped reshape the economy in surprising ways. In some cases, the war has served as an equalizer, injecting cash into poorer regions through army recruitment and casualty payments. Self-reported well-being and financial security measures have generally increased. In other ways, wartime spending has reinforced existing structural inequalities that favor privileged groups and areas, such as ethnic Russians, large cities, and regions with a strong military-industrial base.

The benefits that poorer regions have enjoyed during the full-scale war come at a cost, and they are unlikely to be permanent. Household incomes rise in exchange for killed and wounded men and high inflation; investment into the military-industrial complex crowds out more efficient investment into the civilian economy. Moreover, casualty payouts and defense spending are hardly sustainable drivers of economic growth. Regardless of their permanence, it is worth understanding the regional dynamics associated with Russia’s war.

Both before and during the war, Russia’s economy has been centered around a few economic centers: Moscow, St. Petersburg, Ekaterinburg, and regions with oil and gas extraction industries such as the Nenets, Yamalo-Nenets, and Khanty-Mansi autonomous okrugs.

But the war has brought unprecedented investment and income to Russia’s poorer regions. Two indicators—fixed investment and retail turnover—exemplify the geographic nature of wartime growth. Fixed investment, which includes assets that range from machinery to factories, has shown explosive growth in Russia’s poorer and far-flung regions. The Republic of Tyva, a small ethnic republic on the Mongolian border, has seen 190-percent growth in fixed investment and 74-percent growth in retail turnover—some of the highest in the nation. However, income is not evenly distributed within the region, with military-related incomes not trickling down to the rest of the population. In other words, the fiscal stimulus (from recruitment and KIA payouts) and demand in the military-industrial complex have not dispersed across the entire economy.

Tyva also tops the charts in a less desirable metric; it has the highest number of confirmed war deaths per capita of any region in the country. While Tyva’s sign-up bonuses are some of the lowest in the country—the region merely matches the federal government’s 400,000-ruble payout—it is worth remembering that these bonuses are generally dwarfed by the payments to soldiers’ families when they are killed in action. Consequently, the growth of household bank deposits in Tyva has massively outpaced national averages.

Households are generally faring better in regions that have contributed more soldiers to the war. The growth in household bank deposits is so visible, in fact, that it has even been used as a proxy to measure regions’ mobilization results. Notably, trends in household incomes and household expenditures somewhat diverge. While regions like Tyva show only relatively middling growth in household income despite strong employment growth, their household expenditures have risen just like their bank deposits. In other words, deposits and expenditures have risen precipitously—but not necessarily from standard income sources.

Of course, these poorer regions have had help. In late 2024, the federal government implemented a program to allow lower-income regional governments to write off up to two-thirds of their debt, provided that they spend the freed-up funds on social and communal expenditures or, in some cases, national projects. This effectively means that some regions’ exorbitant spending on the war in Ukraine, including sign-up bonuses and benefits for families of soldiers wounded or killed in action, has been subsidized by Moscow. The program exemplifies the difficulty of assessing how much the Russian government has spent on the war; the Kremlin uses arcane budget maneuvers to funnel money to the war through programs that are ostensibly designed for economic development in poor regions.

Another key development during the war is the renewed convergence between regions’ average wages.¹³ Between 2000 and 2014, as commodity prices and the market economy helped Russia grow substantially, the differences in wages across regions declined. This trend stagnated between 2014 and 2021 but then reemerged with the full-scale war. More important than the convergence itself, however, is what has driven it.

The dispersion of wages across Russia’s regions is visible in two distinctions—between the rich and middle-income regions, and between the middle-income and poor regions. Between 2000 and 2014, the convergence of average wages was primarily driven by the poorest regions catching up to middle-income regions. Since the full-scale invasion in 2022, the driver of convergence has been on the other end of the wealth distribution, with middle-income regions catching up to rich ones. Geographically, this means that the strongest wage growth does not extend much further east than the Urals.

Trends in investment betray a more complex and less optimistic picture. At face value, fixed investment has increased dramatically in some poorer parts of the country, including in the archetypal region of the Republic of Tyva. But while growth figures are useful metrics, they can obscure differences in scale. In reality, Russia’s poorer regions entered the war so far behind on fixed investment that these large increases (above 100 percent since 2021, in many cases) are dwarfed in scale by those in major metropolitan areas and export-driven (i.e., resource-rich) areas. In fact, dispersion of fixed investment per capita between regions has increased considerably since the full-scale invasion. This suggests that the wage gains in poorer regions relative to the rest of the country are unlikely to become a permanent feature of the economy.

Much of this post-2022 divergence can be attributed to regions with a heavy military-industrial presence; most of these regions fall into the Central, Ural, and Volga federal districts. Regional manufacturing growth is, of course, strongest there, and weakest where production relied on Western export markets. 

Sverdlovsk oblast, which hosts key heavy industry manufacturing hubs, saw fixed investment rise by more than 100 percent since 2021. Russia’s premier tank-producing facility, Uralvagonzavod, is based in Sverdlovsk oblast’s Nizhny Tagil. The Nizhny Tagil industrial cluster has doubled down on military-industrial production, including by ramping up hiring (and wages) for skilled and unskilled workers. It faces macroeconomic headwinds, including a shrinking workforce, but has been buoyed by defense procurement orders (gosoboronzakaz) and debt-fueled investment. Thanks to the expansion of production and the tight labor market, manufacturing wages in Sverdlovsk oblast increased by 78 percent between February 2022 and February 2025 (compared to 70-percent growth in all sectors). 

While the convergence of economic prospects across Russia’s regions might not be permanent, the inefficient allocation of resources—particularly to the military-industrial complex at the expense of the civilian sector—is likely here to stay for the foreseeable future. After the sign-up and war casualty payments stop flowing to the country’s poorest regions, the investments in the war machine will remain, fed by Moscow’s aggressive posture toward NATO.

Conclusions and recommendations

Unfortunately for those (the present authors included) who wish for Russia’s aggression to end as soon as possible, the bill is not yet coming due for the Kremlin’s war economy. Rather, we have argued in favor of a different lens through which to view the Russian economy—one of increasing trade-offs—as costs have mounted but remain manageable.

Slowing growth, depressed oil prices, harsher sanctions, and high inflation are the key macroeconomic challenges that the Kremlin and CBR face in late 2025. However, they are not the only trends worth considering. We have examined three structural shifts that Russia’s full-scale war against Ukraine has wrought upon the country’s economy: an external sector pivot from West to East, a clear prioritization of guns over butter, and a convergence of regional economic trends. Among these, regional convergence is the least likely to persist beyond the war.

Prescriptions for hindering the Russian economy vary depending on the specific goals and risk tolerances of sanctioning states. The United States and EU, for example, have long held the contradictory goal of reducing Russia’s oil and gas revenues without pushing up global market prices—hence the price cap—so as to avoid domestic and international backlash. With the current oil market glut, however, it is feasible to impose sanctions on Russian oil majors without spiking global prices. The true test of this theory will come only in time, as we wait to see what waivers the Treasury Department’s Office of Foreign Assets Control (OFAC) issues to potential customers of Rosneft and Lukoil (particularly India and China) and whether these sanctions remain in place for the foreseeable future.

The Trump administration’s punitive measures against China and India for their support of Russia, be they secondary sanctions or secondary tariffs, have thus far largely been half-hearted and inconsistently applied. This leaves policymakers, particularly in Europe, in a tricky situation. When Washington strikes a more conciliatory tone toward Moscow, sanctions enforcement is tougher. EU and United Kingdom efforts to sanction shadow fleet tankers have continued without the United States, and a growing willingness to interdict law-breaking vessels also put downward pressure on Russia’s oil export revenues, but they are less effective without the Treasury Department’s help. And in the only case in which Washington has imposed new restrictions—on Rosneft and Lukoil—it did so without coordination.

Economically, the two fundamental goals of the post-2022 sanctions regime have been to make it harder for Russia to produce materiel for its war and make it harder for Russia to pay for its war. Both come with their own costs and challenges—the former is hard to enforce, while the latter threatens to boomerang costs back to the sender—that reduce the coalition’s resolve.¹⁴ Nonetheless, we see no reason to deviate from these two guiding principles. 

Reducing Russia’s industrial production for its war can and should be accomplished in various ways. 

First, the sanctions coalition’s existing export controls regime must be better enforced and expanded. This would require more resources for investigations and a willingness to target third-country intermediaries that help Russian firms access export-controlled goods.¹⁵ As we have detailed, this will inevitably focus on China. 

Second, Chinese and North Korean supply chains to the Russian military-industrial complex must be disrupted. Chinese manufacturers sell dual-use goods and machinery to a wide range of firms in the military-industrial complex, while North Korea has been supplying Russia with more than half of its artillery shells. Targeting Chinese supply chains could entail sanctioning the logistics providers that facilitate the transactions on the Russian side or imposing secondary sanctions on the manufacturers and banks that do so on the Chinese side. Targeting North Korean supply chains, while more difficult due to the country’s international isolation, could entail sanctioning Russian or Chinese banks that facilitate trade with North Korea. 

Third, many entities in the Russian military-industrial complex remain unsanctioned, particularly those that maintain civilian pretenses. Rosatom and Roscosmos, two state-owned enterprises that have heavy ties to the military-industrial complex, are prime examples.

Reducing Russia’s ability to finance its war effort is, for all intents and purposes, a question of reducing its energy export revenues. Despite the fact that the United States has little direct role in the generation of these revenues, it might indeed have more leverage than Europe in the situation by virtue of its more powerful sanctions (and secondary sanctions) toolbox. In either case, the sanctions coalition can target the price of Russian energy exports or the volume of the exports; thus far, sanctions have almost exclusively targeted the former. Rosneft and Lukoil sanctions do appear to be the first major attempt to remove some Russian oil from the market entirely.

Once again, there are multiple paths that the sanctions coalition can take. The simplest step would be to align and expand sanctions against shadow fleet oil tankers, which circumvent the oil price cap. While US sanctions against shadow fleet tankers have generally been the most effective, Brussels and London should continue their efforts to force Russian oil off the shadow fleet and back to the mainstream fleet, where the price cap applies. Washington adopting the EU’s new, lower oil price cap would also hurt Russia’s oil revenues. More severe options could target Russian export volumes by embargoing a specific port, deciding not to grant waivers for Rosneft and Lukoil sanctions, or even applying secondary sanctions on buyers of Russian oil.

Whether by hitting Russia’s military-industrial capacity or its energy revenues, the United States and its European allies can surely hinder Russia’s ability to continue prosecuting its war against Ukraine economically. What is less clear, particularly in Washington, is whether the political will exists to do so.

Elina Ribakova has been a nonresident senior fellow at the Peterson Institute for International Economics since April 2023. She is also a nonresident fellow at Bruegel and a director of the International Affairs Program and vice president for foreign policy at the Kyiv School of Economics. Her research focuses on global markets, economic statecraft, and economic sovereignty. She has been a senior adjunct fellow at the Center for a New American Security (2020–23) and a research fellow at the London School of Economics (2015–17).

Ribakova has over twenty-five years of experience with financial markets and research. She has held several senior level roles, including deputy chief economist at the Institute of International Finance in Washington, managing director and head of Europe, Middle East and Africa (EMEA) Research at Deutsche Bank in London, leadership positions at Amundi (Pioneer) Asset Management, and director and chief economist for Russia and the Commonwealth for Independent States (CIS) at Citigroup.

Prior to that, Ribakova was an economist at the International Monetary Fund in Washington (1999–2008) working on financial stability, macroeconomic policy design for commodity-exporting countries, and fiscal policy. Ribakova is a seasoned public speaker. She has participated in and led multiple panels with leading academics, policymakers, and C-level executives. She frequently collaborates with CNN, BBC, Bloomberg, CNBC, and NPR.

She is often quoted by and contributes op-eds to the New York Times, Wall Street Journal, Financial Times, Washington Post, Guardian, Le Monde, El País, and several other media outlets.

Ribakova holds a master of science degree in economics from the University of Warwick (1999), where she was awarded the Shiv Nath prize for outstanding academic performance, and a master of science degree in data science from the University of Virginia (May 2023).

Lucas Risinger is an economic analyst and nonresident research fellow at the Kyiv School of Economics (KSE) Institute. His research focuses on the macroeconomics and military industrial complexes of Russia and Ukraine, as well as the Western sanctions regime against Russia.

Prior to joining KSE Institute, Risinger received his master’s degree from Harvard University’s Davis Center for Russian and Eurasian Studies, where his research centered around Ukraine’s modern economic development. He has studied and worked in Kyrgyzstan, Kazakhstan, Poland, Georgia, and Russia, and is fluent in Ukrainian and Russian.

Russia Tomorrow May 23, 2024

Oil, gas, and war: The effect of sanctions on the Russian energy industry

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Europe & Eurasia Financial Sanctions and Economic Coercion

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The CRINK: Inside the new bloc supporting Russia’s war against Ukraine

By Angela Stent

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A new Atlantic Council report explores the effect of Putin’s politics on domestic Russian demographic change. Is Putin heading towards a Russia without Russians?

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The post The Russian economy in 2025: Between stagnation and militarization  appeared first on Atlantic Council.

Their recent footsteps on the continent are becoming more and more attention-grabbing. These include Saudi companies buying 2.2 million tons of carbon credits at a 2023 Kenya auction and, in 2024, the UAE becoming the biggest investor in new business projects in Africa—including an investment of $4.5 billion in clean energy on the continent. At the same time, global attention has focused on Khartoum’s suit at the International Court of Justice alleging UAE involvement in the civil war in Sudan, which broke out in early 2023. The UAE has denied supporting the Rapid Support Forces paramilitary group.

In 2024, the third Qatar Africa Business Forum took place, following the Chinese, Russian, Japanese, US, and European Union summits with African nations. Doha has also been hosting the peace talks between the DRC and Rwanda through the M23 since March 2025, with the meeting between Congolese President Felix Tshisekedi and Rwandan President Paul Kagame under the aegis of the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani. Before the October 7 Hamas attacks, Israel hoped to join this geopolitical trend with the goal of amplifying its ties with African partners beyond traditional security issues. In 2023, Japan celebrated the thirtieth anniversary of the Tokyo International Conference on African Development. Meanwhile, Indonesia sealed $3.5 billion in business deals from the Indonesia-Africa Forum in 2024, nearly six times the amount generated at the first forum six years ago.

As middle-power nations position themselves on the international scene, they are entering into direct competition with global powers such as the United States, China, and Russia. Moreover, new tensions are emerging among middle powers. For example, in April 2025, India held its first-ever Africa-India Key Maritime Engagement (AIKEYME) exercise, co-hosted with Tanzania and involving nine other African nations such as Kenya, Madagascar, South Africa, Djibouti, and others. Part of India’s motivation for this exercise is to offer a non-coercive security alternative in the Indian Ocean—countering China’s increasingly dominant maritime presence in Africa. Observers see India’s large-scale naval outreach as part of a broader geopolitical push: by strengthening maritime ties, India is increasing its influence in Africa at the expense of China’s traditional footprint there.

Even for closer allies such as China and Russia, a competition can exist: Russia providing security, weapons, and political backing in insecure regions risks undermining China’s investments focused on long-term economic stability (infrastructure, trade).

These moves have been triggered by three major internal changes that occurred on the African continent in the past few years: population growth, pro-sovereignty sentiment, and industrial transformation.

The African century

First, Africa is poised to become the next “demographic champion,” behind India and China. It is already on track to double its population by 2050, and may be the most populous continent by the end of the century. On the youngest continent in the world, this shift will have a strong economic impact on business markets with a rising group of African workers, consumers, and clients. The continent had already launched the largest free trade area in the world with the 2018 signing of an agreement to create the African Continental Free Trade Area. The numbers confirm these structural shifts. In February 2024, the African Development Bank noted that Africa featured prominently in a list of the world’s fastest-growing economies in 2024 and had better-than-average growth prospects in 2025, subject to global shocks. Sub-Saharan economic growth averaged 4.0 percent in 2024, exceeding expectations by 0.4 percentage points—but global shocks created a “sudden shift in the economic landscape,” including higher tariffs and greater uncertainty, according to the IMF’s April 2025 sub-Saharan report. When the IMF lowered the global growth outlook for 2025 by 0.5 percent, it trimmed sub-Saharan Africa’s outlook by 0.4 percentage points to 3.8 percent, noting that “regional growth is now expected to slow this year.”

Second, internal sentiment has led to significant external changes. A feature of African public opinion is a strong eagerness to protect African nations’ sovereignty against former colonial powers like France, with collateral impact on those powers’ allies: After France withdrew its military forces from Niger, the United States was asked to close its military bases there in July 2024 and in Chad in May 2024.

Nations without a colonial past in Africa have also faced criticism and pushback, including a growing call for transparency and value creation when it comes to Chinese lending practices and mining exploitation. Meanwhile, Russia’s Africa Corps (the successor to the Wagner Group) has regularly been exposed for its contribution to deadly attacks in the Sahelian countries they are supposed to be supporting with security assistance. The strong aspiration for greater African sovereignty is not limited to authoritarian regimes in the Sahelian countries—Mali, Niger, Burkina-Faso, and Chad—that recently experienced coups d’états. Democratic regimes such as Senegal are pivoting toward a more independent path as evidenced by the presidential campaign of April 2024 and the victory of a “patriotic” candidate.

This powerful trend is visible in various sectors, from defense policy (with the end of military cooperation agreements) to currency (with the growing rejection of the France-linked CFA franc), energy (with new norms of mining exploration), and even arts (with the restitution of African cultural heritage).

Third, industrial transformation has become a priority for many African countries. Observing that humanitarian aid and assistance have not always been productive and cannot meet their huge development needs, most African countries prioritize a transformation-driven vision. In the energy sector, where Africa is home to 30 percent of the world’s critical mineral reserves (cobalt, lithium, rare earth elements, copper, chromium, graphite, manganese, and platinum), expectations for what the sector can deliver are higher than ever. And in Africa’s underdeveloped manufacturing sector, there is “a significant opportunity to leapfrog more developed nations and build a thriving low-carbon manufacturing sector from the ground up,” according to a McKinsey & Company report; to do so would likely require investments of roughly $2 trillion to spur “decarbonization-fueled growth.” Therefore, the question is simple: How can Africa move from the extractive, even predatory, model of which it has often been victim to one that guarantees economic diversification, infrastructure development, increased revenue, fiscal stability, improved environmental management, and workforce training?

Within this transformative context, rising middle powers are playing an opportunistic card to capture the new African demands and take advantage of the diversification of African partnerships. Indonesia, for example, which needs more critical minerals (such as lithium) to feed its electric-vehicle (EV) battery industry, is actively positioning itself in Africa’s mining space, in partnerships and not necessarily at the expense with African states.

This is quite significant because it shows Indonesians are not only investing in resource-rich African countries, but also partnering with local state mining firms. For example, PT Timah (an Indonesian tin mining company) has a signed memorandum of understanding with Stamico, a Tanzanian state-mining corporation, to explore tin, nickel, gold, and even rare earth elements.

Returning to Africa for the twenty-first time on the occasion of the thirty-seventh Ordinary Session of the Assembly of the Heads of State and Government of the African Union, Brazil’s President Luiz Inácio Lula da Silva noted that “more than half of the 200 million Brazilian citizens recognize themselves as Afro-descendants.” During Lula’s first presidency, Brazil opened nineteen African embassies. Meanwhile, India showcased its support for the African Union’s Group of Twenty (G20) permanent seat in September 2023.

Regional routes

Very often, investment expansion starts with a bold airline strategy. Consider Turkish Airlines, which connects more than sixty African destinations and has long been a key tool for Turkey’s influence in Africa. Thanks to its “Action Plan for Africa” in 1998 and its “Opening to Africa” program launched in 2005, Turkey’s international outreach to sub-Saharan Africa has flourished, while the European Union’s doors remain closed to Ankara. Turkey has expanded trade ties with African partners, with bilateral trade growing from $5.4 billion in 2003 to $40.7 billion in 2022. The number of Turkish embassies has also increased from twelve to forty-three between 2009 and 2021.

Qatar is taking similar steps, with Qatar Airways investing $1.3 billion to acquire 49 percent of RwandAir in 2020 and, more recently, a 25 percent equity stake in one of Africa’s largest regional airlines, Airlink, which serves fifteen African countries and flies to forty-five destinations.

Building on this experience and taking advantage of their geographical proximity, many Muslim countries in the Middle East have been developing ties with African countries. Water, forests, land, critical minerals: Africa has strategic resources Gulf countries lack. From 2016 to 2023, the commercial volume generated between the Gulf Cooperation Council (GCC) countries—the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman—and Africa doubled to $121 billion, according to Afreximbank. The pan-African organization notes that those investments come primarily from the UAE (54.9 percent), Saudi Arabia (25.6 percent), Qatar (7.2 percent), Kuwait (5 percent), and Bahrain (4.2 percent); they have been directed to Egypt (69.8 percent), Morocco (4.6 percent), Algeria (3 percent), Nigeria (2.6 percent), and South Africa (2.3 percent).The level of direct investments in Africa between 2012 and 2022 has outpaced $100 billion, while the Gulf countries spent $9.2 billion in aid in 2022 (equal to 14 percent of global aid received by African countries). The key sectors of investment are construction, environmental technology, energy, transportation, and agribusiness.

What is a middle power?

Despite their geographical diversity, the middle powers that have emerged on the African scene in a significant way share common features.

For sure, we know they are neither superpowers like the Cold War’s United States and USSR nor hyperpowers as the United States was named following the collapse of the Soviet Union in 1991. They don’t belong to the P5, the group of permanent members of the United Nations Security Council (China, France, Russia, the United Kingdom, and the United States). Economically speaking, they are not yet among the richest countries in the world (based on gross domestic product): the United States, China, Germany, Japan, India, the United Kingdom, France, Italy, and Canada. (The case of India is discussed below.) But many are close: Brazil (tenth place), South Korea (twelfth), Indonesia (sixteenth), Turkey (seventeenth), Saudi Arabia (nineteenth), and the UAE (twenty-seventh). Even if some have not reached the top thirty, their ambitions are large enough to place them among Africa’s rising partners, such as Qatar (in fifty-fifth place), which pledged to invest $103 billion across six African countries in 2025.

Beyond belonging to the group of high-GDP countries, middle-power nations have four other common characteristics:

• They make demonstrations of power: e.g., South Africa referred a case to the International Court of Justice in May 2024 accusing Israel of “genocide” in Gaza.
• Middle powers can belong to the neighborhood, like the Gulf countries, or be located far away like South Korea, which organized a June 2024 African summit attracting forty-eight African delegations.
• Their influence is contained because a regional power is not autonomous: It belongs to a more global system of influence like Turkey, which may be expanding its diplomacy in Africa but is limited by its NATO membership.
• Middle powers must be creative by deploying indirect persuasion techniques on the ground: In 2017, Turkey persuaded Senegal to close schools linked to Fethullah Gülen, a cleric Ankara alleges was behind a 2016 coup attempt.

The cases of Russia and India

While some of the countries mentioned above clearly belong to the category of middle powers, two cases remain difficult to classify.

After losing the Cold War and its empire in 1991, Russia, now the world’s eleventh largest power in terms of GDP, has since sought to move from a Eurasian middle power, integrated into the Commonwealth of Independent States, to a global power that spans from its position within the Shanghai Cooperation Organization as far as Africa with the newly renamed Africa Corps, which deploys propaganda operations there.

As for India, the most populous country and the fifthlargest economic power in the world, it has been able to expand its influence in Africa thanks to the longstanding presence of its diaspora in the east of the continent as well as its involvement in the Non-Aligned Movement, which emerged from a summit in Bandung, Indonesia, in 1953.

The uncertainty about the position of Russia and India is not due to their economic power—they are both among the richest countries in the world—but stems from the fact that these two countries have more impact than the middle powers but less than the global powers. They have features of both groups. Time will tell where they will fall. Thus, while Russia was the leading supplier of arms to Africa ($14.6 billion) in 2021—far ahead of the United States ($5.4 billion)—the level of its trade with Africa has remained very low. According to European data, in 2022, Africa’s imports from Russia were less than 2 percent of its total imports; and African exports to Russia were less than 1 percent of Africa’s total exports. This supports the idea that even as trade has grown in absolute terms, Russia is still not a major economic partner for Africa compared to the European Union or China.

Three weight classes

The middle-power nations can be divided into three groups, depending on their economic weight and the depth of their engagement in Africa:

• Level 1: UAE, Brazil, and Turkey
• Level 2: Iran, Indonesia, Saudi Arabia, and Qatar
• Level 3: South Korea and Malaysia

They are all benefiting from the retreat of the former colonial powers, which are essentially European, the most striking expression of which is France in the Sahel. Also of note is the relative weakening of superpowers in Africa: According to a recent Gallup report, China surpassed the United States in popularity on the continent in 2023. At the same time, China’s dominant position is no longer so hegemonic: While the value of China-Africa trade has increased nearly thirty-fold since 2000 to reach $282 billion in 2023—making China Africa’s largest trading partner—China’s official loans totaled less than $1 billion in 2022 for the first time in eighteen years, according to Boston University’s Global Initiative for China. When the world powers are less involved, there is a vacuum that the middle powers have been quick to fill. And African nations are among those interested in interacting with them in regional groups such as the BRICS: South Africa, Ethiopia, and Egypt have all joined the intergovernmental organization.

Creativity and boldness

In any case, the tools of influence that the middle-power nations deploy in Africa are different from those of the traditional powers. Thus, the UAE has established itself, with its maritime giant Dubai Ports World, as one of the world’s largest port operators in the strategic areas of the Red Sea and the Indian Ocean, with the aim of being less dependent on hydrocarbons and ensuring its food security. The cultural influence of regional powers, which is less well-known, has also been crucial in recent years. For example, Saudi Arabia’s investments in West African education systems have increased the use of the Arabic language. The Indian diasporas have served as an effective support for India’s strategy, whose successful Bollywood films participate in the information war. The Qatari channel Al Jazeera and the Turkish news agency Anadolu cover the continent widely. Many middle powers broadcast their messages in local African languages; Turkey’s TRT and Natural TV offer programs in Hausa and Swahili and television series popular in many countries.

As a result, these middle powers have acquired considerable political influence. India took advantage of its presidency of the G20 in September 2023 to take credit for the African Union’s permanent seat in the G20. In 2015, many African countries, including Niger, Chad, and Mauritania, joined the founding members of the Islamic Military Counterterrorism Coalition, created by Saudi Arabia.

While none of these middle powers has been able to replace the traditional global powers or former colonial powers such as France or the United Kingdom in terms of engagement volume, their growing influence on the continent puts them in a position of strength. The competition will not, however, benefit everyone in the long run. No doubt the future belongs to the powers that can navigate the shifts already underway by forming complementary and winning alliances in a more complex geopolitical scene—dominated by interests, not ideology. This is undoubtedly the reason why, in the African theater, Russia and Iran are seeking closer cooperation, as, separately, China and Russia are as well. On these complex alliances, the Western powers are behind. Meanwhile, regional powers may need to clarify their intentions in Africa, such as the case of the UAE in the bloody civil war in Sudan, in order to preserve their comparative advantage vis-à-vis the informed African public, aware of what is happening on their soil.

Fellow

Rama Yade

Senior Director, Africa Center

Africa Center Europe Center

Civil Society Human Rights

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Foreign diplomats, US officials, and figures from the world of soccer gathered at our studios to talk about the power of sports diplomacy.

Politics & Diplomacy United States and Canada

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Conflict Crisis Management

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US-backed gas and mining projects could transform Mozambique’s economy, yet persistent terrorist violence threatens progress. Targeted security partnerships offer a path to protect communities and safeguard investments.

Africa Energy & Environment

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The post Middle powers’ game-changing rivalries in Africa appeared first on Atlantic Council.

This is the first chapter in the Freedom and Prosperity Center’s 2026 Atlas, which analyzes the state of freedom and prosperity in ten countries. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

Evolution of freedom

Ghana’s signature achievement since the mid-1990s is the consolidation of civic and political freedoms and a competitive political order in which citizens, journalists, and civic organizations routinely hold leaders to account. The durability of this achievement is not a result of elite benevolence or political will but the product of a dense, independent civil society and a remarkably resilient independent media ecosystem. When governments test the boundaries of civic space, the response is often swift and organized; this social infrastructure is the primary reason Ghana’s civic and political freedoms have remained consistently strong for more than two decades. This context is reflected in the Atlantic Council’s Freedom and Prosperity Indexes’ political subindex for Ghana, which sits well above the economic and legal subindices. In recent years, it sits in the low-to-mid 70s out of a maximum score of 100, a pattern that aligns with lived realities. In the most recent Afrobarometer survey, conducted in 2024, an overwhelming majority of Ghanaians (85 percent) reported that they did not fear political violence or intimidation during the last national elections, a strong testament to the electoral freedoms that Ghanaians enjoy. Moreover, a majority (52 percent) expressed trust in civil society organizations, ahead of religious leaders (who are trusted by 49 percent). Only the military (trusted by 65 percent) ranks ahead of civil society organizations in Ghana.¹

The historical roots of this civic vigilance matter. From the anti-colonial mobilization led by Kwame Nkrumah, Ghana’s first post-independence president, and mass professional and student associations to later generations of advocacy groups and think tanks, Ghanaians have long treated resistance to state overreach as a civic obligation.

As formal unions of lawyers, teachers, students, and medical professionals gave way to contemporary civil society and independent media organizations and research networks—among them, the Media Foundation for West Africa, the Ghana Anti-Corruption Coalition, the Ghana Integrity Initiative, the Ghana Center for Democratic Development, and many others, including subnational advocacy groups—the core impulse has remained the same: to protect and defend civic space, demand procedural fairness, and insist that those in power remain answerable to the public. This explains why the social reaction to efforts to undermine political freedoms is often met with resistance and why Ghana’s political openings have not been easily reversed.

Electoral integrity is a useful illustration of how these social checks operate. While the courts can usually be swayed by partisan crosscurrents when individual political actors are charged with corruption or other acts of impropriety, the dynamic is often different with election disputes. The vigilance of civil society and independent media organizations in monitoring and independently collating election results at the polling-station level often helps to provide credible evidence when electoral disputes arise. The volume and quality of that evidence strengthen adjudication, making it harder for judicial bias to gain traction and increasing the credibility of outcomes, even in contentious contests.² This distinction is important: While the administration of justice in ordinary (nonpolitical) cases is broadly reliable, the politicization of corruption cases can distort judicial behavior; election cases, by contrast, have benefitted from robust, external scrutiny that fortifies the work of the courts.

This juxtaposition points to the core challenge in Ghana’s performance on legal freedom: The judiciary’s structural vulnerability to executive influence, particularly through appointments to the High Court and Supreme Court. Observers can—and do—sort judges into partisan “buckets,” a perception that inevitably erodes confidence in the system’s neutrality. Survey data clearly show a deterioration of citizens’ trust in the judicial system in the last fifteen years, falling by 20 percentage points since 2011.³ Yet outside of high-stakes political cases, the courts tend to function competently and deliver justice with regularity.

Recent movement in the legal subindex has been mildly positive, driven in part by improvements in informality and, to a lesser degree, by steadier security conditions after the turbulence of the early 2000s. On informality, the government’s digitalization initiatives, including the introduction of national (and tax) identification (the Ghana Card) and a digital address system, have helped to identify and increasingly formalize informal businesses. Other initiatives, such as the institution of fee-free secondary education, opened opportunities for young Ghanaians to further their education instead of entering the informal economy. The National Youth Employment Program, although relatively less successful, helped to draw young entrepreneurs into more formalized activities. Finally, a surge of capital investments into construction, alongside an expansion in mining activities, has created demand for artisans, contractors, and allied tradespeople who transact in more formal ways than the street-level microenterprise typical in developing economies. The result is a measurable reduction in the prevalence of informality, a trend visible within the relevant component of the legal subindex.

The gradual strengthening of security owes more to internal stability than to a benign regional environment. Ghana’s northern border with Burkina Faso and proximity to Nigeria’s insurgency-affected areas create constant risks, and yet Ghana has avoided the cascade of instability that has afflicted parts of the Sahel. That relative steadiness, together with the normal functioning of everyday justice for nonpolitical cases, helps explain why legal freedom is trending slightly upward despite persistent concerns about executive sway over judicial appointments and decisions.

Corruption control within the justice sector is another area to watch. Across administrations, chief justices have consistently placed anti-corruption at the center of their institutional reform agendas, and recent executive appeals to rebuild public trust in the courts suggest continued political salience. However, these public commitments have not always translated into tangible reforms or outcomes. Public perception of judicial corruption remains high: According to the 2024 Afrobarometer survey, more than 40 percent of Ghanaians believe that “most or all judges and magistrates” are corrupt.⁴ The growing trend of presidents appointing loyalists to the Supreme Court has only reinforced these perceptions, contributing to Ghana’s relatively weak performance on the legal subindex. The ongoing constitutional review presents an opportunity to reform judicial appointments and promotions, tighten avenues for corruption, and strengthen judicial independence.

Ghana’s strong performance on elections, civil liberties, and political rights within the political subindex is tempered by weaker scores on legislative constraints on the executive, highlighting concerns about the effectiveness of institutional checks in practice. However, civil society remains uncompromising in defending democratic norms, including contesting attempts to erode these checks. The resulting equilibrium is not perfect—nor is it immutable—but it has proven remarkably resilient over the past generation.

Economic freedoms have followed their own trajectory, with a notable increase from the mid-2000s into the first half of the 2010s, a period that coincided with the broader “Africa Rising” narrative. This period was characterized by strong improvements in governance and economic growth, rising incomes, and a growing middle class. Consolidation of Ghana’s return to constitutional democracy commenced in the year 2000 with the transfer of power from the ruling party to an opposition party, which further boosted optimism in the country’s political and economic outlook. The new political leadership signaled a clear focus on improving the economy, and market openness and property-rights enforcement seemed to find firmer footing. Former President John Kufuor is remembered in this context for emphasizing macroeconomic health and business-climate improvements that many citizens experienced in their daily lives. The results of committed political leadership and effective economic management are reflected in the economic subindex and the other components such as investment freedom and property rights, starting in the mid-2000s.

The subsequent downturn around 2015 is worth noting. Rising debt-service pressures, coupled with a large budget deficit and high inflation culminated in Ghana going in for an IMF program; a similar pattern occurred around 2023-24 as reflected in the downward trend of the economic subindex. These patterns signal the fragility of gains when fiscal anchors are not backed by disciplined fiscal decisions—such as politically motivated increases in public spending during election years and subsidies on utilities and petroleum products, among others—and when investment freedom and property-rights expectations face credibility questions. These observations underscore that Ghana’s enviable political freedoms do not automatically translate into disciplined fiscal management or sustained economic openness. The freedom metrics capture this: The political subindex remains high, while the economic and legal dimensions fluctuate with policy choices that either reinforce or erode market institutions and democratic norms.

Trade freedom tells a more erratic story. Ghana’s trade policy framework has generally been open by regional standards, but the component’s volatility reflects the broader health of the economy and investors’ read on the policy environment. In periods of economic stress, policy consistency suffers, and openness on paper does not translate into confidence in practice. The trends in the data thus track not only tariff schedules and non-tariff measures but also the credibility of macroeconomic management, which is often punctuated in election years.

The trajectory of women’s economic freedom stands out as a major structural improvement. Around 2004, there was a steep rise in the economic subindex driven in part by a cluster of women’s empowerment policies of the Kufuor administration: free maternal health services, including postnatal care services that reduced a key barrier to women’s labor-market participation, and explicit efforts to expand women’s access to finance and enterprise support. Those initiatives may have helped to boost women’s economic autonomy and anchor a higher plateau that persisted in the years that followed. The component’s level has stagnated since about 2008 and hence leaves some room for improvement—but the rapid change around 2004 is unmistakable. Recent Afrobarometer survey data for Ghana show strong popular support for women to have equal rights to work as men. However, more than a quarter of Ghanaians (26 percent) identify employers’ preference for hiring men as the top barrier to women’s advancement, ahead of childcare (17 percent) and skills gaps (16 percent).⁵

Where do remaining constraints lie? First, land ownership: In Ghana,  community and family lands are predominantly controlled by male heads; women’s ownership and collateralization of land remain very limited. Given the economic value of land, women remain at a significant disadvantage that dampens entrepreneurship, constrains access to credit, and restricts intergenerational wealth transfer for women. Second, intrahousehold decision-making: In many households, women’s ability to take paid work outside the home remains mediated by male authority. These social and legal frictions are the kinds of de facto constraints that keep the Women’s Economic Freedom component below its potential despite the formal policy gains that started in the mid-2000s.

Evolution of prosperity

Ghana’s prosperity trajectory since the mid-2000s mirrors, in broad outline, the “Africa Rising” era: a period of macroeconomic optimism, improved governance, favorable terms of trade, and political stability across much of the continent. Between 2005 and the mid-2010s, the Prosperity Index registered a strong and upward trend, reflecting the robust growth in incomes and steady improvements in social indicators, even as inequality widened in the classic early-development pattern. Ghana rode this wave and, for several years, significantly outpaced the sub-Saharan Africa average.

The story of the income component is familiar but still striking in its local particulars. A large discovery of offshore oil in the late 2000s added a new driver to a commodity basket already weighted toward gold and cocoa. In the mid-2000s, when global commodity prices were favorable, Ghana’s growth accelerated sharply; in 2011, Ghana recorded a double-digit real GDP growth rate (about 11 percent), up from about 8 percent the year prior. Oil windfalls amplified these gains, though they also heightened exposure to volatility and raised questions about how resource-linked revenues were managed.⁶ The income component of the Prosperity Index captures this rise and the subsequent plateau, which has persisted over the last decade. Reversals are visible too, mainly coinciding with the two IMF interventions mentioned earlier, driven in large part by fiscal indiscipline during election years.

The inequality component of the Prosperity Index shows a rapid deterioration, especially from the year 2000. But the composition of Ghana’s inequality is complex. It is not simply a rural-urban story; it is also generational. Large cohorts of better-educated youth, especially those under thirty-five, struggle to find formal employment at scale, while older cohorts, who are relatively less educated, hold on to existing jobs.⁷ The consequence is an age-skewed labor market that expands inequality even as education levels rise. On the rural side, extensive reliance on small-holder agriculture—more than 40 percent of the population is engaged in subsistence farming—keeps cash incomes low. Climate variability has compounded these pressures, with shifts in rainfall and temperature patterns outpacing the seed and crop research needed to adapt. The Index’s inequality line captures the macro pattern, and the underlying micro-mechanisms are the youth (un)employment crunch and the persistent productivity trap of smallholder agriculture.

Environment and health are relative bright spots. The national push to switch households from charcoal and wood to liquefied petroleum gas (LPG) for cooking—especially the 2013 rural LGP promotion program—may have helped to reduce indoor air pollution and, with it, the number of respiratory and related illnesses. Additionally, the government’s 2021 Green Ghana initiative to plant five million trees nationwide to combat desertification signaled a strong commitment to environmental issues in the country.⁸ The behavioral transition and practical action on desertification probably account for the Prosperity Index’s environment component alongside CO₂ and other measures. On the health side, Ghana’s COVID-19 response benefitted from institutional memory and capacity developed during earlier West African epidemics. Ebola never crossed into Ghana, thanks in part to the region’s experience dealing with health epidemics. When COVID-19 broke out, pandemic protocols were quickly activated and enforced, which resulted in comparatively low infection rates and deaths and a health system that proved more resilient than many expected.

Education presents a more mixed picture. Policy volatility in the secondary cycle—oscillating between three- and four-year models—created confusion and capacity mismatches just as youth cohorts ballooned. Free, compulsory basic education expanded access, but in many districts infrastructure and staffing could not keep pace, producing “shift systems” and, in some cases, causing students to drop out before completing upper-secondary education. Because the Prosperity Index’s education component bundles mean years of schooling with expected attainment, the friction from policy oscillation and demographic pressure is visible at a level that remains middling despite long-run improvements.

Finally, informality also intersects with prosperity through the labor market. The government’s digitalization programs—the introduction of the Ghana Card, which links to individual tax identification numbers, as well as the digital address system—have expanded formalization of the national economy. Moreover, governments’ special initiatives to increase youth employment and a boon in the construction and mining sectors have pulled workers into the formal sector. These interventions should, in principle, raise tax revenues and improve public service availability and access over time. The hard question is durability: Formalization built on cyclical or enclave sectors may not last if investment slows or governance costs mount. The Prosperity Index cannot answer that question by itself, but its pattern—modest gains in prosperity with uneven distributional effects and vulnerability to macro slippage—point to areas where reforms might matter most.

The path forward

The economic, social, and political outlook of Ghana’s next decade will depend largely on the steadiness with which it improves core institutions and transforms its civic strength into predictable, broad-based gains. Moreover, aligning reforms to citizens’ stated priorities—jobs, public services, and integrity—can increase traction.⁹ The political foundations are relatively strong; the next important step is ensuring that the transparency and accountability mechanisms that guard the conduct of elections also insulate the justice system from partisan distortion in high-stakes cases. Judicial appointments will remain politically salient, but the deeper imperative is to tighten the system’s incentives so that corruption cases are decided on evidence rather than allegiance. Civil society and media can help—by maintaining the evidentiary standard that has worked in election disputes—but ultimately the judiciary must build a reputation for political impartiality that is strong enough to withstand executive pressure. The ongoing constitutional review offers a chance to implement a judicial reform agenda that delivers on this objective.

Economic management is the second pillar. The political business cycles are familiar by now: A new government comes to power and starts out with prudent fiscal management that boosts confidence and attracts investment, often resulting in an increase in the economic subindex. Then comes election time and fiscal indiscipline—such as excessive borrowing and indiscriminate public spending with weak fiscal oversight—erode confidence and investment freedom, triggering adjustment and decline. Breaking this cycle requires more than fiscal rules on paper; it requires political commitment to enforce them consistently and minimize politically motivated borrowing and spending. The 2015 and 2024 IMF programs are markers of what happens when that discipline falters. In the coming years, the goal should be to make investment freedom boring—i.e., stable, predictable, and insulated from the electoral business cycle.

On economic freedom, two structural agendas stand out. The first is women’s economic freedom. The 2004 leap tied to women-centered policies shows how targeted policy can permanently raise the ceiling of economic progress. The unfinished business is in property rights, especially land ownership. In areas where family land remains the norm and titles are controlled by male heads, women’s ability to own, mortgage, and leverage land is curtailed. Reform here is politically delicate, embedded in social norms and local authority structures, but the economic payoff could be enormous: more women-owned firms, better access to credit, and fairer intergenerational asset accumulation. The women’s freedom component of the Index offers a clear benchmark; moving from the mid-seventies to the high eighties would require not just programs but enforceable property rights.

The second is youth (un)employment. Inequality in Ghana increasingly wears a generational face;a cohort of better-educated young people cannot find formal, stable jobs in sufficient numbers. Policy tools here must focus on easing business entry, expansion in labor-absorbing sectors, and modernizing agricultural value chains so that rural youth are not confined to subsistence farming. Climate-smart research and extension services, reliable input markets, and storage and transport infrastructure can help farmers move up the value ladder—and should be paired with vocational pathways aligned to construction, light manufacturing, and services. Such an agenda could help to address the twin problems of rural low productivity and urban underemployment.

Strengthened legal freedom and rule of law can support both agendas if reforms focus on clarity of the law and the quality of bureaucracy. Where statutes are clear, predictable, and enforced uniformly, the transaction costs that push firms into informality will fall; where frontline administration is competent and corruption risks are contained, formalization becomes a benefit rather than a burden. Ghana’s recent sector-led formalization has demonstrated that workers and firms will choose formal channels when the opportunity set changes. The task now is to make those choices systemic: digital one-stop services for business registration and tax collection; credible and quick adjudication for commercial disputes; and incentives for small firms to formalize without fear of retroactive penalties.

Regional (in)security will remain a concerning external variable. Instability in parts of the Sahel and the enduring threat of violent extremism in neighboring regions create risks that Ghana has to grapple with. The country’s success to date reflects internal discipline and professional security services, but the calculus can change quickly as alliances and external funding priorities shift. Ghana’s democratic resilience—anchored in a vigilant civil society and robust private media—makes it better placed than many to navigate these shocks without sacrificing core freedoms. The imperative is to ensure that security responses remain proportionate and bounded by law, so that security gains are not purchased at the cost of civil and political liberties that have been the bedrock of Ghana’s democratic success story.

Geoeconomic partnerships will also shape the opportunity set for Ghana. Specifically, infrastructure that lowers freight costs—an inland port located up north with rail connectivity, for instance—has immediate appeal, and Ghana would do well by investing in this area. Engagements with Chinese state and private investors are often judged domestically on whether they deliver such tangible benefits; they are not, by themselves, read as threats to democratic credentials. The test for the next decade is to structure these partnerships transparently, align them with national priorities, and avoid governance concessions that have complicated infrastructure deals elsewhere. If done well, they can help stabilize economic policy by supporting trade freedom in practice, not just on paper, and by attracting private investment that widens formal employment.

The prosperity side of the ledger will hinge on two slow-moving but decisive social investments. The first is education system reliability. When secondary school terms oscillate, cohort planning collapses; when seating capacity lags enrollment, “shift systems” lead to lost learning and early exits. The policy objective must prioritize stability: a curriculum and cycle length that survives political alternation, infrastructure that grows with cohorts, and targeted support to keep marginal students—especially rural girls—through upper secondary. If achieved, educational attainment will move steadily upward, with compounding effects on income and inequality.

The second is health and environment. Ghana’s clean cooking fuel and afforestation initiatives demonstrate how coordinated public messaging and practical access can drive large-scale shifts in household behavior—which often yield immediate and tangible benefits. Extending this logic—through cleaner fuels, safer urban air, adaptive health systems, and expanded green coverage—can enhance environmental quality, improve health outcomes, and free up resources otherwise consumed by preventable disease burdens.

Finally, the country’s political economy will continue to be shaped by how it manages its natural resource wealth. When mineral and oil revenues supplant tax collection, citizens have fewer reasons to monitor spending, governments face fewer incentives to be transparent, public resource leakages rise, and the discipline that keeps debt manageable erodes. A forward-looking reform would therefore tackle the credible fiscal rules that bind during booms, transparent revenue management that makes it costly to divert funds, and a tax system that is simple enough to comply with and fair enough to legitimize. The expanded government digitalization programs offer sound foundations to make this possible. If Ghana can lock in these basics while preserving the civic and media freedoms that have distinguished it for three decades, legal and economic institutions will catch up and converge with political freedom, and prosperity gains will follow.

Ghana’s comparative advantage is … the lived practice of accountability that precedes and outlasts any single administration.

Civil society and media have proven that they can guard the franchise; the task before us is to extend that guardianship to the legal system’s most politically sensitive corners and to the fiscal choices that unlock prosperity and avoid the familiar cycle of fiscal indiscipline, crisis, and repair. If managed well, the evidence should be visible where it matters most: a steadier investment freedom line, a women’s economic freedom score that rises again rather than plateaus, an inequality curve that bends as youth employment expands, and a legal freedom profile that reflects not just order in the streets but fairness in the courtroom. That is the trajectory Ghana can reasonably aim for in the decade ahead, and it is within reach.

about the author

Joseph Asunka is the CEO of Afrobarometer, a pan-African survey research organization that conducts public attitude surveys on governance and social issues across the continent. His research interests are in governance, democracy, and political economy of development. He holds a PhD in political science from the University of California at Los Angeles.

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1    Center for Democratic Development, Afrobarometer Round 10 Survey in Ghana, 2024, https://www.afrobarometer.org/wp-content/uploads/2025/04/Ghana-summary-of-results-Afrobarometer-R10-22april25.pdf (see pages 30, 32, and 33 of the summary of results tables).

2    For causal evidence that domestic observers in Ghana’s 2012 elections reduced fraud and violence at monitored stations and altered parties’ manipulation strategies, see Joseph Asunka et al.,  “Electoral Fraud or Violence: The Effect of Observers on Party Manipulation Strategies,” British Journal of Political Science 49, no. 1 (2019): 129–51.

3    See the Afrobarometer report on public trust in institutions here: https://www.afrobarometer.org/wp-content/uploads/2024/10/AD891-PAP20-Africans-trust-in-key-institutions-and-leaders-is-weakening-Afrobarometer-31oct24.pdf?utm_source=chatgpt.com.

4    Center for Democratic Development, “Ghanaians Decry Widespread Corruption, Afrobarometer Survey Shows,” news release, February 14, 2025, https://www.afrobarometer.org/wp-content/uploads/2025/02/R10-News-release-Ghanaians-decry-widespread-corruption-Afrobarometer-14feb25.pdf.

5    Ghana Round 10 Summary of Results, April 22, 2025, https://www.afrobarometer.org/wp-content/uploads/2025/04/Ghana-summary-of-results-Afrobarometer-R10-22april25.pdf?utm_source=chatgpt.com.

6    According to an Afrobarometer survey in 2022, 85 percent of Ghanaians support tighter regulations of natural resource extraction. See Center for Democratic Development, “Ghanaians Call for Tighter Regulation of Natural Resource Extraction,” news release, November 8, 2022, https://www.afrobarometer.org/wp-content/uploads/2022/11/R9-News-release-Ghanaians-call-for-tighter-regulation-of-natural-resource-extraction-Afrobarometer-bh-7november22.pdf?utm_source=chatgpt.com.

7    Josephine Appiah-Nyamekye Sanny, Shannon van Wyk-Khosa, and Joseph Asunka, “Africa’s Youth: More Educated, Less Employed, Still Unheard in Policy and Development,” Afrobarometer, November 15, 2023, https://www.afrobarometer.org/wp-content/uploads/2023/11/AD734-PAP3-Africas-youth-More-educated-less-employed-still-unheard-Afrobarometer-13nov23.pdf.

8    Elorm Ntumy, “Green Ghana Day: A Chance to Turn the Tide on Deforestation,” UN Capital Development Fund, 2021, https://www.uncdf.org/article/6857/green-ghana-day.

9    See Joseph Asunka and E. Gyimah-Boadi, “People-Centered Development: Why the Policy Priorities and Lived Experiences of African Citizens Should Matter for National Development Policy,” Foresight Africa 2025–2030, May 13, 2025, https://www.brookings.edu/articles/people-centered-development-why-the-policy-priorities-and-lived-experiences-of-african-citizens-should-matter-for-national-development-policy/.

The post Delivering justice and jobs is the real test of Ghana’s storied democracy appeared first on Atlantic Council.

]]> https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/improving-transatlantic-cooperation-on-digital-competition/ Thu, 04 Dec 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=888039 Greater dialogue between US and EU regulators would reveal similar priorities on digital competition, mergers, and antitrust issues, and could lead to greater alignment on key digital competition issues.

The post Improving transatlantic cooperation on digital competition appeared first on Atlantic Council.

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Bottom lines up front

• Despite US officials’ stated opposition to the EU’s Digital Markets Act, the United States and the European Union have similar priorities on digital competition.
• Dialogue between US and EU regulators could identify consistent approaches to mergers and antitrust issues, making it easier for companies to adopt similar business models on both sides of the Atlantic.
• Public communications linking antitrust actions to consumer welfare, competitiveness, and economic growth can help competition enforcers withstand political pressure.

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Executive summary

President Donald Trump’s policies are substantially reshaping prospects for transatlantic cooperation across a range of policy areas. In digital competition, the picture is complex. The Trump administration opposes Europe’s competition regulation, but both the European Commission and US federal and state competition enforcers have similar priorities when it comes to competition in digital markets.

US-European Union (EU) dialogue could help make interventions to promote digital competition more effective. It could boost consistency (helping firms adopt the same remedies across both sides of the Atlantic) and help regulators share knowledge and best practices. Beyond technical alignment, EU and US authorities can coordinate on narratives and messaging, ensuring that regulatory measures are perceived as fair and mitigating the risk of digital competition policy fueling foreign policy disputes.

At a recent roundtable hosted by the Centre on Regulation in Europe (CERRE) and the Atlantic Council, we identified the following recommendations for competition enforcers on digital antitrust.

• The European Commission and national competition authorities should continue to cooperate with US federal agencies and strengthen their cooperation with US state attorneys general, given their important role in US digital antitrust cases.
• To effectively learn from each other’s experience with remedies, and to enhance mutual learning and correct remedies when needed, competition agencies in both the EU and the United States should have a robust, evidence-based assessment about how their remedies have performed.
• The European Commission needs to improve its communication strategy when pursuing antitrust cases. Antitrust enforcement must be closely linked to consumer welfare, competitiveness, and economic growth. Enhancing its legitimacy can help ensure European competition enforcers withstand any political pressure.
• Europe needs to better highlight how open and competitive markets foster innovation. Tools to open competition are therefore important ways to support US and European global technological leadership.

In relation to merger policy, competition authorities on both sides of the Atlantic are evolving to better tackle the role of innovation in digital markets. Recommendations include the following.

• EU and US authorities should develop consistent guidelines setting out how they will assess a merger’s impacts on innovation capabilities (such as chips and computing power, skills, data, and risky and patient capital) and incentives to innovate. Pro-innovation merger control should promote the new innovators and not protect the old ones.
• The Directorate-General for Competition (DG-Comp) should aim to learn from the US merger guidelines and US authorities’ recent practices to inform the EU’s current exercise of revising its own guidelines.
• As with antitrust remedies, competition authorities in both the EU and the United States must be honest and clear about how their merger remedies have performed, so that different authorities can become better by learning from each other’s successes and mistakes.

Introduction

Trump’s policies have challenged the transatlantic relationship and are reshaping prospects for transatlantic cooperation. On digital competition, the picture is particularly complex. The president and some of his appointees to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division oppose Europe’s competition regulation, the Digital Markets Act (DMA)—and the president recently threatened to investigate the EU’s nearly €3 billion fine imposed on Google as an unfair trade barrier under Section 301 of the Trade Act of 1974. Despite this, when it comes to ex post digital antitrust cases, US federal and state competition enforcers and the European Commission have similar priorities. More broadly, competition authorities on both sides of the Atlantic are grappling with how to adopt consistent, principled, and predictable approaches in digital markets. This can better take innovation, investment, and firms’ capabilities into consideration during competitive analysis, and a consistent approach is key for global corporations.

US-EU dialogue could help improve the efficiency and effectiveness of interventions to promote digital competition. It could do the following.

• Facilitate mutually consistent approaches to common regulatory challenges, reducing burdens on regulators and making it easier for global firms to adopt the same business models across both sides of the Atlantic.
• Even where consistency is not possible, help regulators by sharing knowledge and best practices, or even help authorities to divide and conquer in areas such as ex post antitrust cases in which authorities on both sides of the Atlantic are pursuing similar goals.
• Mitigate the risks of foreign policy disputes as digital competition interventions increasingly have cross-border impacts, and as the Trump administration bristles at foreign governments enforcing competition law and pro-competitive regulation against US champions.

But how can this mutually beneficial cooperation be maintained? In 2021, the EU and United States established a Joint Technology Competition Policy Dialogue, supplementing established agreements between the European and US competition agencies, and there is still dialogue between antitrust enforcers. However, given the growing perception of a difference in values between the EU and the United States, and tensions on a range of topics from trade to defense, prospects for cooperation risk becoming narrower in the future.

Cooperation on digital antitrust

European and US authorities have a significant degree of alignment on ex post antitrust enforcement in the digital sector. In digital markets, large firms have often argued that highly innovative digital markets had natural “winner take all” characteristics, but there is nevertheless competition for the market. These firms argue they are subjected to significant competitive pressure from those who might displace them with disruptive innovation and, therefore, have strong incentives to keep innovating. This implies a marginal role for competition agencies. In practice, however, many digital markets have seen little displacement of incumbents in recent years. Effective antitrust remedies not only enforce competition law but also create space for innovation, enabling new entrants and disruptive technologies to challenge incumbents and thrive. While, until recently, innovation in some markets appeared to have slowed, there is an open question about how much artificial intelligence (AI) could disrupt the architecture of digital ecosystems—and whether that implies antitrust authorities should step back or play a role in keeping this possibility open.

In the meantime, competition authorities in the EU and United States have become more assertive. On the US side, the FTC and DOJ are pursuing cases against tech firms brought under previous administrations, despite the Republican Party’s traditional light-touch approach to antitrust. The FTC and DOJ’s approach is fueled by a view that conservative antitrust must not allow “private tyranny,” just as it is opposed to government tyranny.¹ In particular, FTC Chairman Andrew Ferguson has applauded that “this administration . . . is rediscovering the wisdom of taking competition enforcement seriously.”²

In Europe, although there have been few new antitrust cases under the new European Commission, a number of ongoing cases are being pursued against the same firms, on similar timeframes and in relation to similar conduct. These cases have been supplemented by enforcement action under the DMA. Some of these cases might have different underlying motivations—with US authorities more concerned with the potential role of large technology firms in stifling plurality of voices online, and the EU more concerned with ensuring market contestability. But they nevertheless illustrate authorities’ common challenges, particularly how to design remedies for highly complex and fast-moving digital markets.

EU and US competition policies increasingly interact. For example, in a case brought by the US DOJ and some states against Google regarding its conduct in the search market, the DOJ sought an extensive list of potential remedies, including data-sharing rules that looked similar to obligations in the EU’s DMA. In September 2025, the district court decided to apply a narrower data-sharing remedy. A similar question about alignment of remedies will arise in the EU and US cases concerning Google’s digital advertising technologies.

However, challenges remain in coordinating antitrust actions on both sides of the Atlantic.

A first challenge is ensuring that the tenets of antitrust analysis remain synchronized. Protecting disruptive innovation in digital markets, for example, might require identifying robust theories of harm closer to market realities and moving away from reliance on static market definitions. However, the US legal system—in which the FTC and DOJ must convince a judge of their case—makes EU-US alignment difficult. Even if EU and US competition authorities agree on a common approach to a particular case, judges might take a different approach. In particular, competition cases in the United States go before generalist US judges, some of whom might be relatively conservative about government intervention. For example, European competition agencies are exploring how large firms can stymie disruptors by preventing their access to inputs to innovate or impacting their access to customers. They have used these concerns to rework the essential facilities doctrine and the tests for when discrimination is anticompetitive (with EU courts often sympathetic to their approaches, as in the Google Shopping and Android Auto cases).³ However, there is limited evidence that US courts are as willing to see principles evolve.

A second challenge is remedy design. Ex post antitrust remedies can have global impacts—for example, by raising costs of operating different business models in different countries, or by requiring structural changes to large firms or technical changes that cannot be implemented at a regional level. Conversely, for firms that can benefit from remedies, a consistent approach to remedy design in the EU and United States could lower costs and allow innovative firms to scale faster. Securing consistent approaches to remedies between the EU, the United States, and third countries such as the United Kingdom could therefore have widespread benefits. There is acceptance that past remedies in tech antitrust cases have sometimes not been very effective, and that innovation seems to have played more of a role than antitrust remedies in promoting competition in digital markets. Both sides seem to be learning from these past experiences, but they have adopted different lessons. The EU has sought to front-end tougher remedies in the DMA while, in the US Google Search case, the judge adopted a narrower set of remedies and instead put more faith in possibilities for AI to disrupt online search markets. Both European and US authorities can benefit from robust and transparent evaluations of past remedies, learning from successes and failures to design more effective interventions in the future.

Thirdly, the EU and United States also take different approaches to the merits of ex ante digital competition regulation. Europe’s DMA has few influential friends among the current US administration. Trump has implied he sees the law as an attack on “the growth or intended operation of United States companies,” and FTC Chair Andrew Ferguson has described the DMA as a “tax on American companies” and one which is “overly rigid,” despite most of the beneficiaries of the DMA being US firms.⁴ The EU’s objectives with the DMA were to foster a competitive and fair digital market, creating opportunities for challenger firms from both Europe and the United States, and supporting the West’s global technological leadership. From a European perspective, there is no appetite to rescind or water down the DMA; Commissioner Teresa Ribera has signaled the European Commission would take a “brave” approach to enforcement and has fined Apple and Meta for noncompliance.⁵ However, there is a widespread perception that the commission is tailoring its enforcement approach to reflect the current environment. For example, the Apple and Meta fines came only after the commission missed its own self-imposed deadlines, seemingly to avoid torpedoing EU-US trade talks.⁶

There is also a question of how European and US regulatory authorities can best cooperate and coordinate in practice, given the different timeframes and processes of their respective cases and concerns in the United States about Europe taking the lead on antitrust matters. Ferguson, for example, has argued, “If we think that Americans are suffering from anticompetitive conduct at home, we should address it here at home . . . I don’t want the Europeans doing it for us.”⁷ The EU and United States have a positive comity agreement, which allows one party affected by anticompetitive behavior originating in the other party to request that said party address the conduct. But this agreement has never been used in practice. Under the Trump presidency, the European Commission has shown a desire to allow the United States to take the lead. For example, in the Google AdTech case, the European Commission has found that Google breached competition law. However, the US federal court also considered remedies in its case regarding the same conduct. The commission has therefore delayed a final decision on remedies, stating that it wanted to “ensure that Google puts in place an effective remedy on both sides of the Atlantic . . . It is in everyone’s interest to achieve a joint outcome, including for Google itself, and for citizens worldwide.”⁸ While in principle such an approach might lead to harmonization, and would provide the EU with political cover, it poses the risk of delaying the imposition of remedies or encouraging the EU to accept remedies that might prove ineffective in the European context.

The broader political backdrop remains challenging. Trump has challenged the independence of numerous public authorities, including the FTC—and there is a risk of the president seeking to change the direction of US digital antitrust policy in the future. On the European side, while the EU secured a trade deal with the United States without needing to change its digital antitrust or digital regulation, the European Commission’s enforcement of the DMA and competition law—both procedurally and substantively—already appears to have been influenced by fears of triggering retaliation by the United States. It is difficult to see how the EU can adopt a rigorous and independent approach while remaining dependent on the United States for its security.

These challenges suggest several lessons for competition enforcers.

• The European Commission and national competition authorities should continue cooperating with the US federal agencies and strengthen their cooperation with US state attorneys general, given their important role in US digital antitrust cases.
• To effectively learn from each other’s experience with remedies, and to enhance mutual learning and correct remedies when needed, competition agencies in both the EU and the United States should have a robust evidence-based assessment of how their remedies have performed.
• The European Commission needs to improve its communication strategy when pursuing antitrust cases. Antitrust enforcement must be closely linked to consumer welfare, competitiveness, and economic growth. Enhancing its legitimacy can help ensure European competition enforcers withstand any political pressure.
• Europe needs to better highlight how open and competitive markets foster innovation instead of protection of national champions. Tools to open competition are therefore important ways to support US and European global technological leadership.

Merger policy and innovation

The discussion on antitrust enforcement naturally leads to questions about how merger policy can also protect innovation and competition in digital markets. Both EU and US approaches to competition policy are evolving to better tackle the role of innovation in digital markets. In particular, there is growing unease that competition authorities need to improve how they approach the impacts of a merger on innovation.

Reflecting these concerns, the United States updated its merger guidelines in 2023 after a two-year process. Merger guidelines are traditionally intended to describe the FTC and DOJ practices to the public, businesses, and courts—such as setting out important questions to which the agencies seek answers during the review process, including what type of evidence they are looking for and how that evidence is typically analyzed. However, the updated guidelines have been perceived by some as a more political document and a statement of the agencies’ intent to toughen merger policy, with more mergers likely to be presumed anticompetitive and the introduction of novel theories of harm. These guidelines remain in place for now, despite changes of leadership at the DOJ and FTC.⁹

The European Commission is still in the process of updating its merger guidelines, a process that it aims to finalize in 2027. Recently, both Mario Draghi and Commission President Ursula von den Leyen have pushed for the process to speed up. Much of the debate has centered on the importance of scale. Draghi’s report on European competitiveness—often interpreted as reigniting discussion about the merits of allowing EU firms to merge to create more innovative “European champions”—also proposed an innovation defense to allow mergers that would otherwise be prohibited. While some consider the report to be misunderstood, Draghi’s subsequent speeches have contributed to the perception that he is arguing for a loosening of merger policy. However, the extent to which new guidelines will (or can) represent a significant evolution in approach is unclear.

• First, in Europe, different stakeholders have vastly different objectives when they argue that innovation (and other factors such as resilience) should play a bigger role in merger review. For enforcers, taking innovation into account might imply being able to intervene in more mergers; it is difficult to argue that EU merger policy has been too lax given that only a tiny proportion of mergers have ever been prohibited. For other stakeholders, the objective of giving innovation a stronger role in merger policy is to allow more deals. It is unclear how the guidelines can promote European champions while preventing foreign competitors from engaging in similar large-scale mergers.
• Second, the recommendations in Draghi’s report are modest. His report has been understood to propose relaxing EU competition law constraints on mergers of major industrial companies. In fact, he acknowledges that a dominant firm would still be precluded from making use of the innovation defense, which would make it inapplicable in almost all cases in which a merger is blocked today. It would also be accompanied by strict safeguards and investment commitments by the merging parties. If Draghi’s proposal is adopted, there might not be much difference from today’s efficiency defense, which has never changed the outcome of a merger review process in Europe (though that might be, in part, because so few mergers are challenged in the first place or because the efficiency defenses have not been clearly articulated or sufficiently convincing). Therefore, there is a significant gap between some of the political rhetoric surrounding the review and the technical reality.
• Third, the EU’s existing merger guidelines have already been superseded by changes in the commission’s practices, so the urgency of a new set of guidelines can be overstated. In reality, the guidelines should not be a statement of intent but, rather, a description of current practices and approaches. This means they might not fundamentally change case-specific analysis.
• Fourth, it is difficult to see how changes in merger review alone will significantly alter the EU’s innovation trajectory. In the absence of further development of the single market, and greater availability of venture capital, highly innovative European firms will remain more likely to move to the United States or be acquired by foreign companies rather than remain European.

This might mean that—despite the call for a fundamental change in approach in Europe—the EU and the United States will stay relatively aligned.

One area in which divergence remains a risk is adopting predictable approaches to assessing the impact of a merger on capabilities and incentives to innovate, particularly in relation to disruptive innovation. Competition authorities have pursued theories of harm based on how a merger might impact innovation, even in the absence of immediate impacts on price or quality in particular markets. For example, innovation and innovative capabilities (or access to assets considered essential for innovations) featured heavily in cases such as Dow-DuPont, Amazon-iRobot, Facebook-Giphy (in the UK), and Google-FitBit. However, these cases have often (but not exclusively) focused on sustaining innovation rather than disruptive innovation. Where competition authorities have taken disruptive innovation into account (such as the UK authority in Facebook-Giphy) or examined markets for research and development (as the US and EU authorities did in the Illumina/Grail merger) they were highly criticized for making the results of merger reviews unpredictable.

Authorities will need to make decisions when the evolution of markets is not fully certain. An insistence on only acting when the anticompetitive outcome is undeniable will, on the whole, lead to less competition. On one hand, this suggests authorities should be humble. Sources of disruptive innovation are hard to identify beforehand, which suggests some firms might have more vulnerable positions than static markers of market power might imply. On the other hand, if authorities take the need to protect possibilities for disruptive innovation seriously, this might help illuminate previously under-identified types of anticompetitive effects, such as mergers that stymie potentially disruptive firms even if they appear to be in an unconnected market. This might require defining markets for innovation or focusing more on firms’ capabilities, their management practices, and their strategies in merger review.¹⁰ While the outcomes might not always be predictable, EU and US authorities could work together to try to ensure more transatlantic consistency when identifying the impact of a merger on innovation and incentives to innovate. This could increase certainty about the process and framework that competition authorities will adopt.

A second area of potential conflict is whether competition authorities should seek to promote certain types of innovation over others. In line with the Trump administration’s broader deregulatory approach, US competition authorities appear to be taking an agnostic and free-market approach to this question. In contrast, European authorities have emphasized how merger control can contribute to innovation in the area of sustainability and protect incentives for green innovation.¹¹ This includes reflecting customer and government preferences for sustainable products when defining markets. For example, when the European Commission prohibited the Hyundai-Daewoo merger in 2022, it took into account the parties’ incentives to invest in lower-emission liquefied natural gas (LNG) vessels.

A third area of divergence risk relates to politicization of the merger process in both the EU and United States. More than ever, there is a perceived risk of US merger policy and practice being influenced by industry lobbying and top-down political influence. The lack of an institutionally independent competition regulator at the EU means this also remains a risk in Europe. Industry capture could happen at the level of guidelines—where there is a risk of helping today’s largest European companies rather than promoting the growth of disruptive and innovative firms—or on a case-by-case basis. There have been previous merger cases in which the formal technical analysis did not align well with the final decision reached. In this respect, updating the EU’s merger guidelines—by reducing the European Commission’s room for maneuver in response to political pressure—could provide significant cover for taking difficult decisions.

Lessons for merger review authorities include the following.

• EU and US authorities should develop consistent guidelines setting out how they will assess the impacts of a merger on innovation capabilities (such as chips and computing power, skills, data, and risky and patient capital) and incentives to innovate. A pro-innovation merger control should promote the new innovators and not protect the old ones.
• DG-Comp should aim to identify and adopt positive aspects of the revised US merger guidelines and US authorities’ recent practices to inform the EU’s current exercise of revising its own guidelines. For example, adopting the US approach by combining horizontal guidelines (which signal how a competition authority examines mergers between direct competitors) and vertical guidelines (which signal the approach to mergers between players at different points in the supply chain) would prove useful to ensure the European Commission thinks holistically about the impact of mergers on innovation, including in digital ecosystems in which horizontal and vertical concerns can be closely related. On the other hand, the EU guidelines still need to follow and reflect DG-COMP’s practices and should avoid becoming politically charged or signaling major changes to the EU approach.

As with antitrust remedies, competition authorities in both the EU and the United States must be honest and clear about how their merger remedies have performed, so different authorities can become better by learning from each other’s successes and mistakes. This will be especially important if there is increasing use of long-term investment commitments as a merger remedy (as in the UK with the Vodafone-O2 merger, and as recommended by Draghi). Such an approach can help ensure authorities across the Atlantic can work with each other. DG-COMP’s previous retrospective studies on remedies are an excellent starting point.

About the author

Zach Meyers is the director of research at the Centre on Regulation in Europe (CERRE). Previously the assistant director of the Centre on European Reform, Meyers has a recognized expertise in economic regulation and network industries such as telecoms, energy, payments, financial services and airports. In addition to advising in the private sector, with more than ten years’ experience as a competition and regulatory lawyer, he has consulted to governments, regulators, and multilateral institutions on competition reforms in regulated sectors.

This issue brief benefits from the insights of discussants at an online roundtable on EU-US regulatory co-operation hosted jointly by CERRE and the Atlantic Council. However, the contents of this brief are attributable only to the author.

About CERRE

Providing high-quality studies and dissemination activities, the Centre on Regulation in Europe (CERRE) is a not-for-profit think tank. It promotes robust and consistent regulation in Europe’s network, digital industry, and service sectors. CERRE’s members are regulatory authorities and companies operating in these sectors, as well as universities.

CERRE’s added value is based on

• its original, multidisciplinary, and cross-sector approach covering a variety of markets (e.g., energy, mobility, sustainability, technology, media, and telecommunications);
• the widely acknowledged academic credentials and policy experience of its research team and associated staff members;
• its scientific independence and impartiality; and
• the direct relevance and timeliness of its contributions to the policy and regulatory development process impacting network industry players and the markets for their goods and services.

CERRE’s activities include contributions to the development of norms, standards, and policy recommendations related to the regulation of service providers, to the specification of market rules, and to improvements in the management of infrastructure in a changing political, economic, technological, and social environment. CERRE’s work also aims to clarify the respective roles of market operators, governments, and regulatory authorities, as well as contribute to the enhancement of those organizations’ expertise in addressing regulatory issues of relevance to their activities.

About the Atlantic Council

The Atlantic Council promotes constructive leadership and engagement in international affairs based on the Atlantic community’s central role in meeting global challenges. The council provides an essential forum for navigating the dramatic economic and political changes defining the twenty-first century by informing and galvanizing its uniquely influential network of global leaders. The Atlantic Council—through the papers it publishes, the ideas it generates, the future leaders it develops, and the communities it builds—shapes policy choices and strategies to create a more free, secure, and prosperous world.

The Atlantic Council’s Europe Center conducts research and uses real-time analysis to inform the actions and strategies of key transatlantic decision-makers in the face of great-power competition and a geopolitical rewiring of Europe. The center convenes US and European leaders to promote dialogue and make the case for the US-EU partnership as a key asset for the United States and Europe alike. The center’s Transatlantic Digital Marketplace Initiative seeks to foster greater US-EU understanding and collaboration on digital policy matters and makes recommendations for building cooperation and ameliorating differences in this fast-growing area of the transatlantic economy.

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1    “Assistant Attorney General Gail Slater Delivers First Antitrust Address at University of Notre Dame Law School,” US Department of Justice, April 28, 2025, https://www.justice.gov/opa/speech/assistant-attorney-general-gail-slater-delivers-first-antitrust-address-university-notre.

2    Andrew N Ferguson, “Competition in the 21st Century: Heeding the Rallying Cry for Deregulation,” US Federal Trade Commission, May 7, 2025, https://www.ftc.gov/system/files/ftc_gov/pdf/chairman-ferguson-2025-icn-remarks.pdf.

3    “Judgment of the Court (Grand Chamber ) of 25 February 2025: Alphabet Inc. and Others v Autorità Garante della Concorrenza e del Mercato,” European Union, February 25, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:62023CJ0233.

4    “Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties,” White House, February 21, 2025, https://www.whitehouse.gov/presidential-actions/2025/02/defending-american-companies-and-innovators-from-overseas-extortion-and-unfair-fines-and-penalties/.

5    Francesca Micheletti, “Trump’s Antitrust Agency Chief Blasts EU Digital Rules as ‘Taxes on American Firms,’” Politico, April 2, 2025, https://www.politico.eu/article/trumps-antitrust-agency-chief-blasts-eu-digital-rules-as-taxes-on-american-firms/.

6    Francesca Micheletti and Jacob Parry, “Big Tech Fines Just Got Political, Whether the Commission Likes It or Not,” Politico, April 14, 2025, https://www.politico.eu/article/big-tech-fines-digital-markets-act-political-european-commission-meta-apple-donald-trump-tariffs/.

7    Micheletti, “Trump’s Antitrust Agency Chief Blasts EU Digital Rules as ‘Taxes on American Firms.’”

8    “Statement by Executive Vice-President Ribera on the Adoption of the Google Adtech Decision,” European Commission, September 4, 2025, https://ec.europa.eu/commission/presscorner/detail/en/statement_25_2034.

9    “Chairman Ferguson Memo re Merger Guidelines,” US Federal Trade Commission, February 18, 2025, https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/chairman-ferguson-memo-re-merger-guidelines.

10    Giulio Federico, Fiona Scott Morton, and Carl Shapiro, “Antitrust and Innovation: Welcoming and Protecting Disruption,” Innovation Policy and the Economy (2019), https://www.journals.uchicago.edu/doi/full/10.1086/705642?af=R; David J. Teece, Dynamic Capabilities and Strategic Management: Organizing for Innovation and Growth (Oxford, UK: Oxford University Press, 2009).

11    Catherine Ellwanger, et al., “EU Green Mergers & Acquisitions Deals—How Merger Control Contributes to a Sustainable Future,” Competition Merger Brief, September 2023, https://competition-policy.ec.europa.eu/system/files/2023-09/kdal23002enn_mergers_brief_2023_2.pdf.

The post Improving transatlantic cooperation on digital competition appeared first on Atlantic Council.

]]> https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/a-stronger-safer-and-more-prosperous-hemisphere-the-case-for-investing-in-democracy-in-the-americas/ Thu, 04 Dec 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=891352 This issue brief is the fourth in the Freedom and Prosperity Center's "Future of democracy assistance" series, which analyzes the many complex challenges to democracy around the world—and highlights actionable policies that promote democratic governance.

The post A stronger, safer, and more prosperous hemisphere: The case for investing in democracy in the Americas appeared first on Atlantic Council.

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Bottom lines up front

• Democratic backsliding, transnational organized crime, and authoritarian influence are driving insecurity and migration across Latin America and the Caribbean.
• At the same time, weak rule of law and entrenched kleptocratic networks are stifling economic growth and enabling criminal organizations.
• To push back, the US must shift to a broader investment-driven foreign policy that mobilizes public-private partnerships and supports democratic actors.

Download pdf

This issue brief is part of the Freedom and Prosperity Center’s “The future of democracy assistance” series, which analyzes the many complex challenges to democracy around the world and highlights actionable policies that promote democratic governance.

Introduction

After decades of democratic and economic progress, Latin America and the Caribbean (LAC) is now losing ground. Between 1995 and 2016, the Atlantic Council’s Freedom and Prosperity Indexes recorded steady gains—a more than eight-point rise in prosperity and a more than three-point rise in freedom—that lifted millions out of poverty, deepened the region’s integration into the global economy, and strengthened democratic institutions. Over the past decade, however, this momentum has stalled, and in many countries reversed. Across the region, insecurity has surged, authoritarianism has deepened, and corruption has stifled development, with consequences that reach far beyond its borders.

This reversal is fueling two interconnected crises reshaping the Western Hemisphere: migration and insecurity. Over the past decade, migration—both within the region and toward the United States—has surged. Authoritarian rule in Venezuela, Cuba, and Nicaragua, along with the collapse of Haiti, has driven mass exoduses, while gang violence spurs migration from Central America and hundreds of thousands more have left other countries in search of safety and economic opportunity. Transit states such as Colombia, the Dominican Republic, and Panama face mounting strain on public services, while the United States confronts unprecedented pressure at its southern border.

Regional security is also deteriorating as gangs and transnational criminal networks expand their operations. Mexican cartels dominate the production and trafficking of fentanyl, methamphetamine, cocaine, and other illicit drugs across Latin America and into the United States. The effects of their trade have been devastating, with tens of thousands of overdose deaths annually, particularly in the United States and Canada. Other groups, such as Venezuela’s Tren de Aragua, extend beyond narcotics, driving homicides, corruption, and violent competition over trafficking routes across the region.

Beneath these crises lies a deeper erosion of governance and democracy—one that the United States should support its allies in confronting. Weak rule of law and systemic corruption stifle economic growth and enable criminal networks to thrive. Authoritarian regimes in the region fuel migration, crime, and cross-border instability, while external powers—most notably China—exploit governance gaps through opaque infrastructure projects and debt diplomacy, deepening authoritarian influence. Together, these forces erode state capacity, destabilize the region, and pose a direct challenge to US security and economic prosperity.

Stable, transparent governance in LAC reduces migration pressures, disrupts criminal networks, and creates economic opportunities that benefit both US and Latin American citizens. As the United States reassesses its foreign assistance strategy, democracy assistance can be enacted as a strategic investment to make the hemisphere—including the United States—stronger, safer, and more prosperous. We identify three core issues that pose the greatest challenges but promise the greatest rewards if addressed, and provide recommendations to streamline assistance, expand its scope, and engage business and local actors as funders and partners.

Ultimately, democracy assistance in the region remains one of the most cost-effective investments to advance shared security and prosperity.

Regional challenges to democracy and governance

LAC is confronting a convergence of three interlinked challenges that erode governance, destabilize societies, and undermine US security and economic interests. Each reinforces the others and fuels the migration and crime that strain the region. The United States should therefore prioritize addressing these challenges through targeted foreign assistance and investment.

Transnational organized crime and insecurity

Transnational organized crime (TOC) has evolved into one of the most destabilizing forces in LAC. Once localized, criminal groups have grown into sophisticated, multinational networks that traffic drugs, weapons, and people across borders while infiltrating political systems. These networks now operate across nearly every corner of the region, both benefiting from and contributing to weak rule of law and institutional resilience.

Gangs and TOC actors are among the main drivers of insecurity in the region. Although the region comprises less than 10 percent of the world’s population, it accounts for roughly one-third of global homicides. Central America maintains high levels of insecurity, while countries such as Mexico, Ecuador, Colombia, and Peru have experienced sharp increases in violent crime as cartels and gangs battle for control of trafficking routes, urban neighborhoods, and illicit economies. The costs are profound: Latin American Public Opinion Project data show that intentions to emigrate are significantly higher among individuals exposed to crime, while nearly one-third of private sector firms in Latin America cite crime as a major obstacle to doing business, with direct losses averaging 7 percent of sales. Insecurity is not only displacing communities but also undermining prosperity and eroding trust in governments.

The drug trade remains one of the most profitable and damaging arms of TOC. Mexican cartels—particularly the Sinaloa Cartel and Jalisco New Generation Cartel—are the hemisphere’s principal suppliers of fentanyl, methamphetamine, cocaine, and heroin. Their operations extend beyond Mexico and the United States, reaching deep into Colombia, Ecuador, Central America, and increasingly Canada. In 2024, US Customs and Border Protection seized over 27,000 pounds of fentanyl at the southern border—up from 14,700 pounds in 2022. The human toll is staggering: Fentanyl overdoses now kill more than seventy thousand people annually in the United States.

TOC represents not only a law enforcement problem but also a profound institutional and governance challenge. These groups thrive in contexts marked by weak institutions, porous borders, and entrenched impunity. Venezuela’s institutional collapse, for example, directly enabled the rapid growth of the Tren de Aragua gang from one prison to over ten countries. Once established, criminal networks act as corrosive forces—penetrating police forces, judicial systems, militaries, local governments, and even segments of the private sector. Their influence extends into the electoral arena as well: In Mexico’s recent elections, criminal actors not only financed campaigns for local candidates but also threatened and assassinated others, further distorting political competition and undermining democratic accountability. Left unchecked, TOC erodes public trust, distorts markets, and makes effective governance nearly impossible, fueling a self-reinforcing cycle of violence, displacement, and state fragility.

Case study: Ecuador’s fight against insecurity

The once relatively stable country of Ecuador has become a battleground among Mexican drug trafficking organizations (DTOs) in recent years, with authorities estimating that 70 percent of the world’s cocaine passes through its ports. As Ecuador has emerged as a vital transit country, Mexican DTOs have partnered with local crime syndicates to deepen their control in the country, buying the influence of politicians, judges, and security officials. The main actors vying for control of drug shipment routes include the Sinaloa Cartel, its rival the Jalisco New Generation Cartel, and their affiliated local crime syndicates. These structures tax and protect cocaine flows moving from border regions toward export terminals, targeting trucking firms, port and warehouse staff, and local authorities.

Ecuador’s security crisis, however, is not simply a matter of state versus gangs, but of deep institutional infiltration. The landmark Metástasis investigation (2023-25) exposed how judges, prosecutors, police officers, politicians, a former head of the prison authority, and other high-ranking officials systematically protected or advanced the interests of organized crime for years. In exchange for cash, gold, luxury cars, and other benefits, officials allegedly released gang leaders, altered prison conditions, and sabotaged investigations.

Despite these challenges, Ecuador’s government—reelected in 2025 with a mandate to confront organized crime—has pledged to continue the fight. Yet its experience highlights a critical lesson: Defeating gangs and cartels cannot be achieved solely through crackdowns or arrests; it also requires rebuilding institutions.

In many countries, governments have proven unable or unwilling to meaningfully confront TOC. Others have stepped up efforts to target these groups through mano dura policies or intensified security operations that, while capable of disrupting trafficking routes, cannot by themselves dismantle transnational criminal networks. Addressing the governance gaps that allow these organizations to thrive is therefore crucial. In this context, US leadership remains essential. Given the cross-border nature of these networks, lasting, viable solutions demand a coordinated regional response. By leveraging its diplomatic influence, security partnerships, military capabilities, and development tools—including technical assistance, institutional support, and investment incentives—the United States can help foster cross-border cooperation, strengthen judicial and prosecutorial capacity, and reinforce institutions to shield them from criminal infiltration. Paired with diplomatic and intelligence support, democracy assistance can play a critical role in disrupting organized crime, safeguarding US security interests, and creating the conditions for more prosperous and resilient communities across the hemisphere.

Rule of law and economic development

Declining rule of law has become an increasingly urgent concern in LAC, as regional indicators have steadily worsened in recent years and several countries have registered some of the steepest declines worldwide. This deterioration both enables transnational organized crime and authoritarianism and imposes enormous costs on national economies. Research by the Atlantic Council’s Freedom and Prosperity Center shows that the rule of law is the single most influential factor for long-term economic growth and societal well-being. Liberalizing markets is not enough: Legal clarity, judicial independence, and accountability are the foundations of effective governance and thriving economies. This is particularly relevant in Latin America, where corruption remains the region’s Achilles’ heel—undermining public spending, fueling fiscal deficits, and weakening financial oversight. Across the region, higher corruption levels are consistently associated with lower gross domestic product per capita and reduced foreign direct investment, costing countries and investors billions in lost growth and opportunity

A particularly distorting force in the region’s economy is the prevalence of kleptocratic networks. These are not isolated acts of graft, but coordinated, systematic efforts to capture state resources and extract rents for political and economic gain. Such networks often comprise coalitions of corrupt political elites, complicit business actors, and criminal organizations. They co-opt the judiciary and prosecutors, while silencing investigations and oversight bodies. Their actions stifle competition, discourage entrepreneurship, and produce unfair monopolies that sideline foreign investors, while draining public coffers of resources needed for development.

The scale of these operations can be staggering. In Venezuela, over the past two decades, ruling party figures and business allies have been suspected of siphoning off as much as $30 billion in public funds through transnational schemes involving front companies, illicit contracts, and offshore accounts. This systemic kleptocracy has not only enriched elites but also accelerated Venezuela’s economic collapse, fueling one of the worst migration crises in the region, including to the United States. In Peru, the Club de la Construcción scandal revealed how an informal cartel of major construction companies colluded to divide up public works contracts in exchange for bribes to officials in the Ministry of Transport and Communications. The scheme operated for more than a decade, was worth billions in inflated contracts, and sidelined honest competitors while draining infrastructure budgets.

Case study: The Dominican Republic’s success story

The Dominican Republic illustrates how strengthening the rule of law can improve governance and unlock economic opportunity. Since President Luis Abinader took office in 2020, the government has carried out anti-corruption reforms. The administration appointed an independent attorney general and empowered the public ministry to investigate and prosecute high-level corruption cases. The government has also advanced transparency and digitalization reforms to make interactions with public agencies—especially in procurement—more open, efficient, and resistant to abuse. In addition, the country has aligned with key recommendations from the Financial Action Task Force, including by passing a revamped Anti-money Laundering and Illicit Finance Law, which has constrained kleptocratic networks and organized crime.

These measures have begun to restore trust in public institutions. Procurement processes are now more transparent and competitive––with twenty thousand new suppliers registered—while new safeguards better protect against corruption. Since 2020, the Dominican Republic’s score on Transparency International’s Corruption Perceptions Index has improved by eight points. Investor confidence has followed: Foreign direct investment reached record highs in 2024, while trade with the United States expanded sharply. US goods exports to the Dominican Republic grew to $13 billion that year, producing a $5.5 billion trade surplus for the United States.

Some of the region’s largest corruption scandals have been uncovered by investigative journalists and independent prosecutors. Yet in many cases, impunity prevails, and little progress is made toward prevention or sustained accountability. Strong judicial institutions, effective anti-corruption reforms, and governance are essential for stability and growth. Predictable, rules-based environments make countries far better partners for both domestic and US businesses—creating jobs, expanding markets, and strengthening local economies. Such efforts can also reduce migration pressures, as corruption has been shown to drive both legal and irregular migration. As with TOC, for the United States, supporting rule-of-law reforms is therefore a strategic investment in building a more prosperous, democratic, and secure hemisphere.

Countering authoritarian influence

LAC is home to several resilient democracies that remain close US allies and important trading partners. Yet the region also contains some of the world’s most entrenched dictatorships—Cuba, Venezuela, and Nicaragua—which pose direct threats to stability. Between these extremes lie eight nations that Freedom House classifies as “partly free,” many of which experienced additional democratic declines in 2025. Countering democratic backsliding and protecting the global order is not a values-based mission; it is essential to safeguarding US security, economic interests, and the long-term prosperity of the Western Hemisphere.

The region’s authoritarian regimes illustrate the stakes. Economic collapse and repression have forced 7.7 million Venezuelans, 500,000 Cubans, and tens of thousands of Nicaraguans to flee over the past decade. These governments also generate acute security risks. Nicaragua has positioned itself as a conduit for extra-regional migration, inviting travelers from Africa, Asia, and the Caribbean to enter visa free and transit toward the US border. The Daniel Ortega regime has further been linked to targeted harassment and even assassinations of dissidents abroad, including the 2025 killing in Costa Rica of Roberto Samcam Ruiz, a retired Army major and government critic.

Similarly, the consolidation of Venezuela’s dictatorship has transformed the country into a hub for criminal organizations, including Colombian paramilitary groups and Tren de Aragua. The Nicolás Maduro regime has hosted the Wagner Group while continuing to rely on Russian military advisors, Iranian oil technicians, and Chinese surveillance systems to tighten internal control and repress dissent. Members of the regime have been linked to drug trafficking––most notably through the illicit military network Cartel de los Soles––and, in late 2024, Maduro threatened to invade neighboring Guyana.

At the same time, external authoritarian powers—especially China—are expanding their footprints, particularly in “partly free” states where institutional checks are weak. China exploits governance gaps through surveillance technology, opaque infrastructure deals, and strategic investments in critical sectors—often at the expense of US influence and market access. Over the past decade, China invested $73 billion in Latin America’s raw materials sector, including refineries and processing plants for coal, lithium, copper, natural gas, oil, and uranium. In Peru, Chinese firms paid $3 billion to acquire two major electricity suppliers, giving them what experts describe as near-monopoly control over the country’s power distribution and edging out competitors. Beijing also provides critical technology to regional authoritarian governments and at-risk democracies. In Bolivia, the government deployed Huawei’s “Safe Cities” surveillance systems, raising concerns about mass data collection, particularly during elections.

Case study: The cost of partnering with authoritarian regimes

Under President Rafael Correa, Ecuador—alongside Bolivia’s Evo Morales and Venezuela’s Hugo Chávez—pursued closer ties with foreign authoritarian powers, betting heavily on Chinese financing and infrastructure. A centerpiece of this strategy was the $2.7 billion Coca Codo Sinclair hydroelectric project, awarded under opaque terms to Chinese firms, primarily Sinohydro, as part of an $11 billion package of oil-backed loans and infrastructure deals.

The project soon became a symbol of the risks of such arrangements. The dam has been plagued by structural flaws, including more than seventeen thousand cracks, severe environmental damage, and corruption allegations implicating senior officials. State agencies attempted to downplay or conceal the problems, but by 2024 the facility had ceased functioning altogether. Experts estimated that repairing the damage could cost tens of millions of dollars, erasing much of the project’s intended economic benefit. Beyond its technical failures, Coca Codo Sinclair left Ecuador financially vulnerable. In 2022, the government was forced into arbitration and subsequently renegotiated more than $4 billion in debt with Beijing, further compromising its fiscal position and weakening investor confidence. The episode illustrates how opaque partnerships with authoritarian powers can undermine democratic accountability and damage economic stability.

These developments underscore the importance of countering authoritarianism in LAC as both a security and economic priority for the United States and the region. Betting on democratic renewal in Cuba, Nicaragua, and Venezuela is critical to restoring stability in the hemisphere. At the same time, it is equally important to strengthen “at-risk” democracies to prevent further backsliding. Targeted investments in political party development, anti-corruption reforms, and transparency measures can bolster resilience in these states and reduce the appeal of authoritarian alternatives. Pushing back against China’s growing economic and geopolitical influence in the hemisphere is also essential. By leveraging diplomatic and trade tools, the United States can position itself as a credible alternative to China—particularly by mobilizing investment, fostering public-private partnerships, and advancing governance reforms that strengthen transparency and accountability. Doing so is vital for freedom and security in the region and creates opportunities for business and investment.

Recommendations

Insecurity, weak rule of law, and authoritarianism represent growing threats to freedom and prosperity in the Western Hemisphere. As outlined above, TOC, entrenched corruption, and authoritarian regimes impose heavy economic costs on LAC and undermine democratic governance. At the same time, these forces drive mass migration, placing immense strain on transit and destination countries. Tackling these challenges is a strategic win-win: It can enhance US security and economic interests while advancing stability and prosperity in the region.

As the United States reassesses its foreign policy and democracy assistance strategy in LAC, it should make use of its full range of diplomatic, security, trade, and investment mechanisms—including targeted democracy assistance—to address these challenges.

Move beyond grants to expand the toolkit

The proposed shift toward an investment- and trade-driven foreign policy can go hand-in-hand with democracy assistance and reform. The United States can mobilize financial and diplomatic tools to expand investment as an alternative to Chinese influence, while incentivizing governance, transparency, and accountability reforms that strengthen the region’s resilience against the challenges outlined above.

• Leverage the US International Development Finance Corporation (DFC) to provide an alternative to Chinese financing and invest in projects that strengthen democratic resilience through economic modernization, digitalization, and high-quality infrastructure—particularly in areas vulnerable to authoritarian influence. As Congress prepares to revisit the DFC’s authorizing legislation, it should ensure the agency has long-term funding to deploy its range of tools—including debt financing, equity investments, and political risk insurance—across the region.
• Work with Congress to pass the Americas Act to establish regional trade, investment, and people-to-people partnerships with like-minded nations, fostering long-term private sector development. Use this framework to advance transparency and institutional autonomy reforms—particularly through the proposed Americas Institute for Digital Governance and Transnational Criminal Investigative Units—to ensure partner countries strengthen anti-corruption prevention, detection, and prosecution.
• Use regional forums—such as the Summit of the Americas—to advocate for governance, security, transparency, and accountability reforms to strengthen the resilience of democratic allies and counter authoritarian regimes. The United States should link political reform benchmarks to investment incentives, offering “carrots” for change through regional development commitments.

Ensure democracy assistance makes business sense

A safer and more democratic Western Hemisphere directly benefits economic development and business. The United States should position its domestic and the Latin American private sectors as active partners in strengthening democratic resilience, not just as passive beneficiaries of stability.

• Revive and operationalize America Creceto incentivize and promote reform-linked investments, infrastructure projects, and job creation across the region to counter Chinese influence and advance US interests while bolstering political will through the DFC. Participation should be tied to clear benchmarks on transparency, labor rights, and legal predictability.
• Forge public-private partnerships that co-finance civic education, anti-corruption initiatives, and local development projects, particularly in high-risk areas vulnerable to TOC recruitment and migration.
• Mobilize Latin America’s business elites—among the greatest beneficiaries of economic and democratic collaboration with the United States—to push for and co-fund democracy and governance programs in their home countries. Leading companies, philanthropic foundations, and chambers of commerce should be engaged as active partners in advancing reforms.
• Strengthen and engage with regional initiatives like the Alliance for Development in Democracy—championed by Costa Rica, Panama, the Dominican Republic, and Ecuador—that integrate the private sector into democratic reform and good governance agendas.

Deploy whole-of-government tools

While the State Department plays a central role in US democracy assistance, the scale and interconnected nature of the region’s challenges—spanning security, rule of law, and authoritarian influence—demand a coordinated, whole-of-government approach.

• Leverage the Pentagon’s Defense Institution Building program to strengthen law enforcement reform, bolster rule-of-law resilience, and build institutional capacity to counter transnational crime and human trafficking.
• Provide technical assistance and legal expertise through the Department of Justice, Drug Enforcement Administration, and Bureau of International Narcotics and Law Enforcement Affairs to help countries develop national frameworks that protect transparency, law enforcement, and sovereignty in investment decisions.
• Double down on rule-of-law reforms and projects, particularly those targeting organized crime and corruption. Support vetted law enforcement units, independent anti-corruption actors, and judicial reform initiatives through US, private sector, and multilateral funding channels, including the Organization of American States, the Inter-American Development Bank, and the Open Government Partnership.
• Protect the key pillars of democratic institutions from co-optation by TOC, kleptocratic, or authoritarian actors. This must include courts, election management bodies, political parties, and critical government agencies such as those overseeing infrastructure, development, procurement, and public prosecution. Emphasis should be placed on institutional independence, combating and preventing corruption, and ensuring sustainable financing to strengthen resilience.
• Apply targeted sanctions, Global Magnitsky measures, and trade conditionality to dismantle kleptocratic networks, prosecute corrupt actors, and reward credible reformers.
• Advocate for and support the implementation of global security and anti-corruption standards—including recommendations from the Financial Action Task Force and its LAC branch, GAFILAT (Grupo de Acción Financiera de Latinoamérica), on money laundering, organized crime, and illicit finance—to disrupt TOC and kleptocratic funding networks while fostering safer and more competitive business environments.

Scale the power of local networks

Regional local actors—both within and outside of government—are often the most credible and resilient defenders of democratic governance. The United States should deepen its engagement with these networks while identifying and empowering new partners.

• Partner with trusted community institutions—including religious organizations, civic leaders, businesses, and grassroots groups—on programs that prevent gang recruitment, reduce crime, and promote integrity in high-risk areas.
• Strengthen governance mechanisms to build sustainable local capacity to counter corruption and transnational organized crime.
• Expand the partner ecosystem to include diaspora networks and local community groups, leveraging their resources, expertise, and transnational connections to reinforce democratic resilience.

Push back on regional and external authoritarian influence

Bipartisan US support for organized opposition in Cuba, Nicaragua, and Venezuela has been a cornerstone of regional democracy policy and should be sustained and expanded. At the same time, Washington should back democratic movements and reformers across the hemisphere where authoritarian influence is taking hold.

• Sustain support for dissidents and democratic movements in Cuba, Nicaragua, and Venezuela to prepare the ground for eventual political transitions.
• Invest in independent media.
• Support the next generation of democratic leaders through fellowships, trainings, and political party development, prioritizing authoritarian and high-risk states.
• Collaborate with electoral commissions, legislatures, and political parties with an emphasis on internal democracy, campaign transparency, and long-term institutionalization.
• Assist governments in auditing and renegotiating opaque infrastructure or digital agreements—particularly those with authoritarian powers—that undermine sovereignty, transparency, and public accountability.

The recommendations offered here provide a roadmap to confront the region’s most pressing security and prosperity threats by pairing diplomacy, trade, and investment tools with targeted democracy support. By leveraging the United States’ entrepreneurial capacity and its ability to mobilize multinational and public-private partnerships, reforms can be made more attractive, sustainable, and impactful. This is not charity—it is a strategic investment that advances both US and LAC interests.

At relatively low cost, democracy assistance strengthens governance and open markets in ways that directly serve US security and economic priorities. It helps dismantle transnational criminal organizations, kleptocratic networks, and corruption, while countering the growing influence of authoritarian regimes inside and outside the region. These efforts reduce the flow of illicit drugs and irregular migration, create more reliable markets for businesses, and build stronger partnerships with governments that share democratic values. The outcome is clear: a stronger, safer, and more prosperous hemisphere.

about the authors

Antonio Garrastazu serves as the senior director for Latin America and the Caribbean at the International Republican Institute (IRI). Prior to this role, he led IRI’s Center for Global Impact and from 2011 to 2018 was resident country director for Central America, Haiti, and Mexico. Garrastazu has worked in academe, the private sector, and government, serving in the Florida Office of Tourism, Trade and Economic Development under Governor Jeb Bush. He holds a bachelor’s degree in political science from the University of Florida, and a master’s and PhD in international studies from the University of Miami. 

Henrique Arevalo Poincot is a visiting fellow with the Atlantic Council’s Freedom and Prosperity Center. A strategy and communications specialist with expertise spanning Europe and Latin America, Arevalo Poincot is pursuing his master’s degree in democracy and governance at Georgetown University.

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Table of contents

• Executive summary
• Introduction
• A shared cloud computing vocabulary
• Cloud computing and artificial intelligence
• Building trust
• Digital sovereignty and data localization
• Implications for cybersecurity and AI
• Conclusion
• Author and acknowledgements

Executive summary

Placing trust in cloud computing is no longer optional. Cloud computing is essential to critical infrastructure, commercial, and government operations.¹ Outages over the past few months emphasize the vitality of cloud services to modern economies and essential government services.² As cloud adoption and transformation continue, policy attention should shift from the question of whether to simply trust cloud computing to the methods for establishing and verifying that trust.  

The stakes will only continue to increase as artificial intelligence systems, which have been identified by the US, China, and the European Union as essential national priorities, continue to utilize cloud infrastructure for development and deployment.³ Sophisticated and unsophisticated threat actors continue to target cloud computing systems, striking rapidly, globally, and opportunistically. ⁴ These cloud incidents can result in data theft, financial losses, and operational disruptions. Even accidents require rapid coordination and information sharing to ensure systems can get back up and running as quickly as possible.⁵

Ensuring trust in cloud computing systems between nations and cloud providers is an essential task for modern economies, national security, and ways of life. This report argues that cloud trust will require collaboration between providers, nation states, and customers, but should not start with location requirements and geographic restrictions on access to cloud computing. Instead, national cloud policies should prioritize criteria of trust that verifiably and meaningfully improve the security of customer cloud operations. 

Introduction

As a component of artificial intelligence deployment, development, and use, as well as an enabling technology for business, government, and critical infrastructure functions, cloud computing is a fixture of cyber policy discussions. Within the emerging AI supply chain, cloud services are the means of deploying ‘compute’, a critical resource powering models in both training and inference throughout the global economy.⁶ This paper aims to offer a nuanced discussion of cloud computing through the consolidation of a shared policy vocabulary and common technical principles to describe and understand trust in cloud computing. By adding detail to how cloud computing is portrayed, policymakers can more effectively understand the systems they’re expected to trust. By adding granularity to existing discussions of cloud computing, policymakers can more effectively understand the systems they are expected to trust and better appreciate how policy shapes both those systems and that trust.  

Attackers continuously scan public-facing devices and infrastructure for misconfigurations and weaknesses.⁷ Countries with advanced cyber capabilities, including Russia, China, North Korea, and Iran, show no signs of ceasing cyber threat activity.⁸ The pace of vulnerability exploitation continues to accelerate, and within days of their public disclosure, attackers weaponize vulnerabilities to gain access to and exploit cloud environments.⁹ Meanwhile, policy debates often focus on limiting access from cloud providers to customer information, instead of ensuring the security of such resources and information from adversary access. 

Developing a more compelling model and framework for trust in cloud computing requires bridging debates around localization, digital sovereignty, and technical security, as well as emerging trends in artificial intelligence development and deployment. The risks posed to the cloud ecosystem by the unintended consequences of policy intervention are significant, but so too are the consequences of untrusted and insecure cloud deployments. 

A shared cloud computing vocabulary 

This section will establish essential vocabulary and terms for cloud computing. The terms and characteristics defined here are non-exhaustive but are a useful starting point for cloud policy discussions. Cloud computing describes a model where service providers offer metered, on-demand access to computing resources.¹⁰ Instead of operating their own servers and facilities, customers specify workloads—sets of defined computing tasks, utilizing computing resources—for which cloud providers handle implementation and execution.¹¹ Sometimes the resources used by these workloads are virtual versions of physical resources (“virtual machines” or VMs), but often they are abstract resources or functions, such as data storage or analysis services, and are not rooted in or wedded to specific hardware or software implementations. Cloud providers must manage and architect both individual hardware and software components and the protocols, pathways, and constraints of their communications and interactions. To ensure visibility and reliability, cloud providers must build systems that carefully manage changes, catch and alert on outages, and gracefully handle errors or failures. This model of access to computing resources includes general access to applications and data storage, but also specialized services for specific customers or sectors. 

Cloud providers aggregate and distribute workloads across computing resources. Centralized control over the design, development, testing, and maintenance of both hardware and software enables cloud providers to reduce costs while optimizing their services for the performance and reliability needs of customers.¹² End-to-end control over cloud systems also allows costly experimentation with specially-tailored or developed software and hardware, including custom advanced semiconductors (chips, silicon).¹³ Prominent cloud providers, including Microsoft, Google, and Amazon, derive advantages from both the scale of their cloud infrastructure and their expertise in adjacent fields and product offerings (earning them the name hyperscalers”).¹⁴ For example, Google’s development of its distributed data storage and processing platform BigTable was driven by the computing demands of its search product.¹⁵ Embedded within the configurations and offerings available to customers are a cascading sequence of impactful decisions made by cloud service providers. Balancing incentives, imperatives, and resource constraints creates an ever-evolving system of systems that is more than the sum of its parts. 

Customers of cloud providers can adjust their use of computing resources elastically. Instead of purchasing physical hardware, launching software, and monitoring it directly for power outages or reliability issues, customers can outsource those responsibilities to cloud providers. This allows companies to focus on their unique products and services instead of monitoring and maintaining networking, energy, and processing equipment. Decomposing workloads into discrete tasks, scheduling tasks for individual hardware components, and monitoring the execution of those tasks for errors, delays, or hardware failures requires carefully optimized software, specific hardware, and dedicated research capabilities.¹⁶ Within nano- or milliseconds, cloud computing systems communicate and synchronize across oceans and continents, ensuring availability and reliability despite frequent outages, hardware failures, and natural disasters. Using metered, elastic cloud services also allows companies to “scale” their computing resource footprint in response to demand.¹⁷ Seasonal surges, such as a boom in visits to e-commerce sites around the holiday season, or daily and weekly patterns, such as workplace software peaking in use during business hours Monday-Friday, no longer require projections months ahead of time, and the build-up of infrastructure to handle maximum demand, which then sits idle outside of specific moments. Instead, enterprises can dynamically and automatically adjust their use of computing resources and services through their cloud providers.¹⁸ At the global scale of modern cloud systems, cloud providers triage and respond to issues that would be completely unfamiliar to self-hosted cloud operators accustomed to handling only hundreds or thousands of servers.  

Cloud customers and providers optimize the architecture of services to support different computational demands, using distinct technology configurations to execute workloads. Cloud computing architectures dictate “how various cloud technology components, such as hardware, virtual resources, software capabilities, and virtual network systems interact and connect to create cloud computing environments.”¹⁹ Workloads such as high-definition video streaming, training AI models, and analyzing and extracting information from data have different requirements for synchronicity, availability, reliability, and error tolerance, which demand different choices of software and hardware to balance tradeoffs. By optimizing cloud infrastructure and systems for different tasks, cloud providers can utilize heterogeneous components to their full relative advantages.  

As an example, to ensure rapid access to cloud resources, providers maintain and offer content delivery networks (CDNs)—networks of servers and computing resources distributed worldwide to minimize the distance and latency (time delay) between cloud infrastructure and end-users.²⁰ Cloud providers also maintain points of presence, or edge locations, where their infrastructure connects with internet service providers, on-premise customers, or other cloud providers.²¹ These points of connection include Internet Exchange Points (IXPs) and other co-location services, a subset of which are sometimes referred to as peering locations.²² Network infrastructure, including edge servers, is a critical vantage point for information useful for security monitoring and incident response. Security practices involving network infrastructure range from mitigating attacks that attempt to overwhelm servers with large amounts of requests to limiting unauthorized access to data and cloud resources.²³

Cloud computing and artificial intelligence 

Cloud computing is involved in AI development and deployment at every stage, from providing data storage and structures to enabling interactions between models and users, all while serving as a central hub of monitoring and evaluation for AI systems. Artificial intelligence companies have close financial and technical relationships with hyperscale cloud providers, and cloud providers themselves develop their own AI models and integrate them with other products. This section will give a brief overview of the importance of cloud computing to artificial intelligence development and deployment as a component of the broader compute infrastructure used in the development and deployment of AI systems. 

Emerging players, sometimes referred to as neo-clouds, also offer cloud computing services specific to artificial intelligence workloads. CoreWeave, Lambda, Crusoe, and Nebius all operate under this model.²⁴ These companies are financially intertwined with both existing hyperscale cloud providers and key chipmaker NVIDIA. NVIDIA has invested in both Lambda and CoreWeave, in addition to its own quasi-cloud offering, which is built on the infrastructure of other cloud service providers.²⁵ Oracle has contracted Crusoe to build out compute offerings for OpenAI as part of the Stargate project.²⁶ Microsoft was responsible for 62 percent of CoreWeave’s 2024 revenue, while Google recently inked a deal to use CoreWeave to deliver computing resources to OpenAI.²⁷ These interactions and overlaps all complicate the cloud ecosystem, creating new, interdependent players and novel connections among long-established entities. These new relationships could complicate existing patterns of information sharing and incident response practices, while emerging players have yet to establish long-term track records of security and reliability.  

Hyperscale cloud providers have also invested extensive resources in creating and expanding cloud offerings to support AI workloads and to provide access to AI models for their customers within cloud offerings. Examples include AWS’s managed container offerings, which Anthropic uses to execute training and inference workloads at “ultra” scale, as well as tailoring of existing services, plugins, monitoring agents, credentials, and caching features.²⁸ AWS’s Bedrock offering provides access to several models, including Anthropic’s.²⁹ Microsoft’s Azure managed cloud offerings monitor, orchestrate, and execute AI workloads, including inference for OpenAI’s models.³⁰ Google Cloud’s Cloud TPU platform includes a compiler, managed software frameworks, and custom chips designed to accelerate AI workloads and is used both internally at Google and by companies like Cohere, Stability AI, and Character AI.³¹

Scarcity or lack of access to key computing resources specific to artificial intelligence could also drive customers to overlook security requirements, focusing instead on rapid access to essential computing power. The increasing compute demands of AI firms and the growth of niche cloud computing service companies, both intertwined with hyperscale cloud providers, will continue to strain existing compute resources such that cloud computing policy interventions run a growing risk of compromising a fragile ecosystem.  

Policymaking in this sector has largely focused on advanced semiconductors, particularly NVIDIA GPUs, as the principal component of AI compute, from the Biden administration’s AI diffusion rule to the Trump administration’s AI Action Plan.³²  Proposals have also examined the challenges of securing model weights, managing the flow of advanced semiconductors used in AI training development, and acquiring energy and land needed to construct datacenters.³³  

However, limited attention has focused on the risks and opportunities of cloud computing’s role in AI development and deployment, and as an essential component of the AI supply chain itself. Efforts to secure the cloud computing ecosystem can protect sensitive intellectual property involved in AI development in deployment, including model weights and proprietary details of both AI use and research methods and practices used to develop frontier AI models. Conversely, policies and security practices that hamper efforts to secure cloud computing infrastructure could jeopardize the security of AI development and deployment.  

Building trust

Trust, in this paper, refers to both the ability of cloud customers to ensure that their cloud configurations are secure from external threats and from excessive interference or access from cloud providers themselves. Quickly verifying trustworthiness after a violation is paramount for customers wanting to keep up with attackers. This section will discuss the challenge of establishing trust in cloud computing systems. Miscommunication and misalignment regarding trust have immediate consequences for cloud customers, who often bear the costs of security incidents. 

Threat intelligence from cloud security firms suggests that the pace of incidents is increasing, with a 2024 Google Cloud report finding only five days of average observed time between the disclosure and exploitation of vulnerabilities, down from 32 days in 2023.³⁴ Another 2023 report from Orca Security found that it took only two minutes for AWS encryption keys that were publicly exposed on GitHub to be used by threat actors.³⁵ Sophisticated attackers have targeted companies, such as Cloudflare, that specialize in cloud network infrastructure, stealing credentials to access documentation and source code.³⁶ Advisories from cybersecurity companies and intelligence agencies indicate that organizations persistently experience breaches from sophisticated, nation-state-sponsored threat actors who utilize publicly known vulnerabilities as part of a global espionage strategy.³⁷ Meanwhile, trust deficits that result from customers’ lack of trust in cloud providers, or an inability by cloud providers to verifiably demonstrate trustworthiness, hamper both the adoption of cloud capabilities and the ability of organizations to prevent and respond to security incidents. When trust criteria are insufficient or incomplete, preventable incidents can occur at breathtaking speed.  

In policy contexts, trust frequently centers on an entity-based definition. The National Institute of Standards and Technology (NIST) notes that trust is “a belief that an entity meets certain expectations and therefore, can be relied upon.”³⁸ A focus on entities can lead to technology policies focused on static, easily verifiable attributes, such as the national origin or corporate headquarters of cloud providers, from which policymakers derive restrictions on specific firms or sweeping prohibitions against foreign entities. This dynamic is not exclusive to cloud computing policy and has occurred throughout national security debates over trusted technology, from Kaspersky to Huawei.³⁹ While organizational attributes can provide useful information, requirements exclusively based on entity-based definitions of trust can overlook technical security measures and implementation details that directly affect system trustworthiness, while incentivizing the use of proxy companies and circuitous legal setups.  

Technical communities have developed alternative approaches to trust that emphasize continuous verification instead of static, binary decisions to trust or not trust a technology provider. The zero-trust security model operates on “the premise that trust is never granted implicitly but must be continually evaluated,” according to NIST.⁴⁰ This model is a shift from a perimeter-based security strategy toward contextually securing and restricting access to dynamic computing resources and assets.⁴¹ As an illustrative example, a zero-trust approach would reflect a company’s decision to shift from a sign-in system to enter a building, after which each person would have complete access to move around a building, to an approach where each room or floor requires a special key that only certain people can access, regardless of whether or not the person requesting access is already within the building. However, zero-trust is more of a broad set of principles than a set of specific operational requirements and might not align with existing organizational structures and regulatory frameworks that mandate perimeter-based security approaches. 

Cryptographic and hardware-based verification mechanisms offer another path through technical, not organizational, assurances. Trusted Execution Environments (TEEs) and confidential computing could enable remote attestation of the integrity and confidentiality of data and code.⁴² Remote attestation and technical assurances can establish trust outside of organizational attributes but require specialized hardware and software implementations that are not currently widely available or cost-effective.⁴³ 

These divergent approaches to trust create challenges for cloud providers and customers. A coherent, cohesive approach to cloud trust must bridge different methods while accounting for the scale and complexity of cloud computing. This requires moving beyond simple analogies and one-size-fits-all policies towards frameworks that thoughtfully weigh technical and organizational attributes. The alternative is a fragmented system in which policies undermine the economic and technical benefits of cloud computing without improving security. The costs of insecurity will only grow as the cloud becomes more entwined with AI applications, making the question of ensuring trust in cloud computing increasingly critical. 

Digital sovereignty and data localization

This paper’s focus is on digital sovereignty policies that target cloud infrastructure, such as the promotion of national or local alternatives to cloud providers, the exclusion of foreign cloud providers from specific certifications or sectors, or restrictions on the structure and configuration of cloud deployments within national borders.⁴⁴ This section will ground this paper’s discussion of trust and security in cloud computing and infrastructure within a contemporary policy debate: the application of digital sovereignty and data localization restrictions to cloud computing.⁴⁵

In many cases, companies that qualify as hyperscalers also offer search engines, operating systems, social media sites, and ad platforms, which could also be relevant to digital sovereignty debates. Those offerings remain outside of the scope of this paper but could very well have implications for cloud computing if remedies or policies aimed at achieving digital sovereignty goals impacted hyperscale providers and their cloud offerings. 

There are at least three essential characteristics of digital sovereignty and data localization policies with direct implications for cloud computing: the affected country or region, the scope of customers affected, and the criteria for cloud trust. In addition to descriptions, each characteristic will include illustrative examples.  

Table 1: Key characteristics for digital sovereignty policies affecting cloud computing systems

Geography

The first essential characteristic is the geographic region affected by a policy. Typical examples of cloud sovereignty or digital sovereignty policies apply at a national level and are set by a federal policymaking body. 

For example, the French SecNumCloud certification scheme, which includes localization requirements and restrictions on foreign ownership of cloud providers, is in effect within France.⁴⁶ Attempts to extend sovereignty policies in certification requirements across the EU within the European Union Cybersecurity Certification Scheme for Cloud Services have been unsuccessful so far, facing opposition from Denmark, Estonia, Greece, Ireland, Lithuania, Poland, Sweden, and the Netherlands.⁴⁷ Outside the EU, digital sovereignty policies appear to remain national in scope, which aligns with the focus of supporters of some digital sovereignty policies in ensuring government control over and visibility into cloud services.  

Scope

Another essential characteristic is the scope of customers or procurers of cloud services affected by digital sovereignty policies. Direct government use of cloud services or use by critical infrastructure sectors like finance and defense have been a focus of digital sovereignty policies. These policies can take the form of explicit bans or prohibitions on critical sector or government use of foreign cloud providers, procurement incentives for local companies, or technical requirements that in effect mandate country or sector-specific cloud configurations. 

Several countries and geographies have experimented with sovereignty and localization requirements specific to critical infrastructure sectors or government use. The Cross Border Data Forum’s 2021 data localization report highlighted requirements for exclusive localization of financial sector information and operations, such as transactions and banking information, in several countries, including South Africa, Turkey, and India.⁴⁸ The aforementioned French SecNumCloud scheme applies to government agencies and “operators of national importance.”⁴⁹ South Korea’s Cloud Security Assurance Program (CSAP) applies to public sector cloud use, but debates over its provisions have suggested it could be extended to additional sectors such as healthcare and education.⁵⁰ 

The sensitivity of government and critical infrastructure sector data and operations raises heightened concerns regarding the risks of unauthorized access to information or disruption of services. The sheer size of the government and critical infrastructure sectors’ cloud budgets also creates an appealing policy target, as including requirements or incentives within procurement regimes serves as an intermediary between economy-wide regulations and no regulation at all. Government and critical infrastructure criteria for cloud computing are often thought to induce effects outside of their direct targets, as other companies and organizations incorporate or reference criteria used by those entities in their own cloud procurement decisions.⁵¹

Criteria for trust

The final essential characteristic of digital sovereignty policies applying to cloud infrastructure is the criteria for trust that policies reference or create. Criteria of trust can include restrictions on nationality or operational jurisdictions of cloud providers, geographic locations of cloud infrastructure, or specific technical and operational measures, such as the use of encryption or external key management. These criteria can be directly put into force through legislation or through references to external certifications or standards bodies. 

Digital sovereignty policies often seek to ensure that cloud service providers have local physical footprints. Ensuring the physical footprint of a technology provider can create a toehold for further enforcement and oversight, clarifying the obligations of cloud providers to the citizens and laws of different countries. Without a clear presence in the form of personnel or physical infrastructure in a country, it is difficult for governments to enforce regulations or to substantively hold companies accountable for abuses or violations of policy. Russia and Vietnam both adopted policies requiring local offices and representatives for technology companies, which have been described as creating opportunities for government control and coercion.⁵² Incentives for local data center construction, such as Brazil’s proposed package of incentives and tax breaks for developers, can alternatively focus on the potential economic benefits of localized infrastructure, from collected taxes to construction and maintenance jobs.⁵³

Other localization requirements seek to restrict the physical location of cloud infrastructure. Proponents of data localization argue that restricting the physical location of data, including prohibiting cross-border data transfers, provides security and privacy advantages. Countries around the world have adopted localization measures applicable to various sectors, types of data, or processing requirements. Localization measures mandate restricting operations to cloud infrastructure located within certain geographic boundaries. Often, this manifests as restricting the set of cloud “regions” that companies have access to, while cloud providers recommend structuring applications to span multiple regions and availability zones.“⁵⁴  Availability zones are logically isolated segments of cloud infrastructure that attempt to ensure that if one zone suffers an outage, it does not take down other zones within the same region.⁵⁵ However, region-wide disruptions such as October’s AWS DynamoDB incident in the us-east-1 region, while rare, have significant impacts on both customers relying on resources within a region and cloud service providers that operate within a specific region.⁵⁶

Figure 1: Region and launch year

Restricting the flow of data and information can limit access to computing and processing resources, limiting the ability of cloud providers to surge capacity and geographically distribute workloads. The ability to migrate workloads and computing assets, such as data, to other countries is essential for effective disaster recovery, which could motivate carving out backups as exempt from data localization. In preparing for Russia’s invasion, for instance, Ukraine paused localization requirements and shifted essential government data to cloud infrastructure outside of its borders to ensure availability and access in the event of the physical destruction of domestic data centers.⁵⁷ Estonia has also established a data embassy, which consists of an external private cloud region in Luxembourg to ensure continuity of government operations in the event of a crisis.⁵⁸

Beyond infrastructure locations, countries and customers might seek to restrict the geographic location of technical support staff and engineers, especially individuals who might access or view sensitive data. Requirements can restrict physical location, citizenship, or clearance of support personnel, which can impact the staffing strategies, create challenges for around-the-clock availability, and require duplication of expertise across nations. According to ProPublica, Microsoft worked around such restrictions from the United States Defense Department by using support structures such as “digital escorts,” where individuals in possession of security clearances but lacking technical expertise supervised engineers, including engineers physically located in China, as they interacted with cloud systems used for national security purposes.⁵⁹ The impulse towards workarounds for location-based restrictions, such as the digital escort system, which Microsoft has reportedly stopped using for the Department of Defense, demonstrates the operational difficulties restrictions on the location of support staff can create and the security risks that can result from the uneven implementation of location restrictions.⁶⁰

Infrastructure localization approaches can also be designed to ensure that companies or governments have local oversight and control over security measures, including the use of encryption. Keeping encryption keys off cloud provider infrastructure, and instead on local or on-premise infrastructure, can be referred to as “key escrow” or “external key management.”⁶¹ Apple has historically complied with key localization requirements in China, while Google has implemented an offering designed for compliance with a requirement in Saudi Arabia.⁶²  These offerings may be developed in partnership with local providers, who can oversee cloud provider access to encryption keys.⁶³ However, this approach introduces distinct risks to cloud computing systems, as customers must trust the additional provider to secure encryption keys, which, if compromised, would provide access to sensitive data. Countries can also impose other requirements relating to encryption, such as country-specific standards. South Korea’s government cloud certification requires national standard encryption algorithms that are not widely used outside of Korea.⁶⁴

In the US, debates on state-sponsored, proprietary encryption standards have resulted in concerns about the intelligence community creating “backdoors,” or exploitable flaws within encryption algorithms, which could be used by intelligence agencies and malicious actors to monitor communications and access content.⁶⁵ Governments could also directly restrict the ability of cloud service providers to offer products with certain encryption standards or features. The UK’s secret law enforcement request to Apple to access certain encrypted communications led Apple to withdraw its Advanced Data Protection feature from the UK market rather than create a backdoor for authorities.⁶⁶  Restrictions or constraints on encryption standards and encryption system architectures can give local authorities control over access to encrypted data, but can also create vulnerabilities if they result in compromising key local management systems or mandates for insecure encryption standards. 

The jurisdictions cloud providers originate from or operate within can be a source of concern for governments, especially when other governments mandate, incentivize, or promote practices that undermine the security of underlying technology systems. Digital sovereignty policies can aim to exclude specific cloud providers or providers from certain countries, either with outright bans or structural requirements mandating local partnerships. The approach of excluding specific countries, or restricting the access of companies from certain countries, is referred to as a blacklist, while a policy that only allows transfers to specified countries is referred to as a whitelist.⁶⁷

The United States has typically taken a blacklist approach to national security reviews of foreign companies, imposing a smaller, ad-hoc set of limitations on companies’ jurisdictions and origins. For example, the US government has expressed skepticism over Chinese cloud providers’ access to American information, resulting in investigations of Alibaba’s cloud business.⁶⁸ These concerns include Chinese policies requiring technology companies to notify the government when they discover technical vulnerabilities and extensive cooperate with defense and intelligence services.⁶⁹  In reviews of other technical systems, such as telecommunications infrastructure, the US has weighed the national security risks of the involvement of both Chinese and Russian companies.⁷⁰

Meanwhile, European data protection regimes, such as the General Data Protection Regulation (GDPR), utilize a whitelist approach, requiring “adequacy decisions” to approve data transfers to certain countries.⁷¹  European leaders have raised concerns about US surveillance practices and the lack of federal privacy legislation, which has prompted regulators to revoke previous data transfer agreements.⁷² The dominance of US hyperscale cloud providers, domestically and abroad, has led to a close focus in policy discussions on US legislation applicable to cloud providers, including those that affect the operations of cloud providers in other jurisdictions. Concerns regarding US government access to information have led to repeated references in policy debates to one piece of legislation: the 2018 Clarifying Lawful Overseas Use of Data (CLOUD) Act.  

The CLOUD Act restated requirements of the US Stored Communications Act (SCA) as they apply to information under the control of cloud providers, including if that information is shared, sharded (splitting data into multiple, more manageable pieces), or distributed across geographic locations, but did not change the requirements for warrants under US law to access the content of electronic communications.⁷³  The CLOUD Act’s clarification of the SCA’s scope brought the United States into compliance with the Budapest Convention on Cybercrime, while also authorizing bilateral agreements for countries to request information from cloud providers for law enforcement investigations outside of the Mutual Legal Assistance Treaty (MLAT) process.⁷⁴  The EU-US Data Privacy Framework currently holds an adequacy decision, allowing individual US companies to transfer data under GDPR. However, the Trump administration’s disruption of the Privacy and Civil Liberties Oversight Board (PCLOB) and US intelligence community data collection have raised questions in Europe about the merits of the adequacy decision and could result in further legal challenges, which could remove the United States and American companies from the GDPR whitelist.⁷⁵   

Concerns about the market dominance of US hyperscalers, as well as US government access to content stored on cloud computing systems, have also led to various European initiatives to foster domestic alternatives, such as the GAIA-X initiative.⁷⁶  Foreign ownership restrictions contained within cloud certifications, such as the SecNumCloud regime, have led cloud providers to set up operations and joint ventures with domestic companies that manage local configurations of cloud computing. In France, for instance, Google has partnered with Thales, while Microsoft has partnered with Orange and Capgemini.⁷⁷ Hyperscale cloud providers have also announced commitments to expand “sovereign” cloud regions, such as Microsoft’s partnership with a German SAP subsidiary, which will consist of “a sovereign cloud platform for the German public sector, hosted in German datacenters and operated by German personnel.”⁷⁸  AWS’s sovereign cloud commitment language also highlights the physical and logical isolation of a forthcoming sovereign European cloud region, which will have “no operational control outside of EU borders.”⁷⁹ These commitments and infrastructure developments require significant investments as well as a shift in operational and management strategies from the existing global distributed models.  

Table 2: Illustrative policies mapped to characteristics for digital sovereignty policies affecting cloud computing systems

Implications for cybersecurity and AI 

This multifarious tug of war over sovereignty and trust has significant implications for cloud computing infrastructure, security, and the services, including for AI. Focusing on location as a proxy for control and trust can lead to policies that ultimately undermine security goals by decreasing the reliability and integrity of essential systems. The critical nature of cloud computing means it deserves intensive evaluation to ensure the trustworthiness of foundational systems, but evaluation and assurances of trust in cloud computing should be rooted in effective guarantees. The efficiency and performance benefits of cloud computing are fractured and disrupted by location-based requirements. The replication of infrastructure, support systems, and other operational overhead creates meaningful costs for cloud providers, limiting their ability to invest in other measures that could improve performance or security. Filings by industry organizations, including the US Chamber of Commerce, prove this point by repeatedly highlighting the costs of staff and infrastructure location requirements impose on the operations of cloud providers.⁸⁰

This location requirements race fragments security monitoring and threat response, limiting the ability of organizations with global footprints and technical systems to mitigate and respond to cross-border risks. National or regional silos of cloud deployments with the same underlying software and hardware deployments—all relying on core features, patterns, and architectures developed by the same handful of companies—insulate cloud deployments from legal concerns while creating technical and financial burdens.

Constraints on provider locations and jurisdictions can also limit organizations from taking full advantage of advanced global capabilities, including networking infrastructure. In 2021, for example, Portugal’s Supervisory Authority fined its public census body €4.3 million for using Cloudflare’s services, citing concerns regarding Cloudflare’s global, distributed network of servers and position as a US company.⁸¹  Despite Cloudflare’s reputation as a cost-effective and highly reliable network security provider, the ruling occurred in the wake of broader discussions on the ability of European organizations to transfer data to the United States as part of GDPR compliance.⁸²

Moreover, the impacts of limiting access to network infrastructure are not mitigated by local datacenters and computing capacity, as organizations will still be unable to use state-of-the-art platforms that enable global communications and stronger security protections. Policies that only consider datacenter capacity and access ignore these impacts and can inadvertently create security issues while degrading service quality.

Governments should avoid imposing restrictions on access to cloud computing based exclusively on the location of cloud infrastructure. Location is at best a proxy for the security practices and guarantees of cloud providers and imposes cost and security consequences on providers. Localization requirements should, at a minimum, involve an advanced notification and blacklist approach, minimizing disruptions and operational concerns for cloud providers who build infrastructure configurations years in advance. Ad-hoc revocation should be reserved for well-documented offenders, observed compromises, and emergencies, as cloud providers, their customers, and the security ecosystem broadly benefit from stability and predictability.

Cloud security fundamentally depends upon the ability of organizations to respond to incidents rapidly at scale. Container escape vulnerabilities, which are errors in the implementation of encryption standards, or misconfigurations in the software connecting different services that expose can data and enable lateral movement, are just a few examples of cybersecurity flaws that are agnostic to the physical location of servers and support staff. If location-based requirements restrict companies’ ability to monitor, observe, and remediate incidents, or even prohibit or discourage them from retaining non-domestic cybersecurity incident response companies, organizations and governments will be cut off from the global flow of cutting-edge threat intelligence, vulnerability reports, and mitigation guidance.⁸³

Conflicting trust frameworks can also undermine the ability of organizations to collaborate across the cloud ecosystem. Instead of working with cutting-edge providers and cybersecurity companies focused on addressing security challenges, organizations are encouraged to turn inward, reinventing the wheel by managing their own technology configurations and security postures. While these organizations have useful context for their own security risks, rapid coordination and information-sharing bolsters collective defenses in ways that are difficult to replicate. Ad-hoc grants and revocations of trust in cloud computing systems or cloud providers exacerbate these challenges, and governments should adopt frameworks for trust that allow for continuous verification and evaluation instead.

The management of cloud encryption keys and credentials is also essential to cloud security. Externalizing key management systems poses enhanced risks for the same reasons that advocates seek to localize control of encryption keys: they unlock access to otherwise secure data.⁸⁴ However, removing key management from cloud provider infrastructure and placing it under the control of another provider creates additional risks, as cloud users must now trust each provider and the infrastructure or platform through which keys or identities are managed.⁸⁵ Threat actors have targeted key and identity management platforms, recognizing their importance to the overall security posture of cloud customers. Okta, an identity and management company, has been the subject of repeated attacks, including a breach of its customer support portal, which initially became public because of a threat actor’s boasts on Telegram.⁸⁶ Removing keys from cloud provider infrastructure does not reduce the importance of securing cryptographic information and credentials, and externalizing key management only places additional responsibility on individual customers to manage and ensure key security.

Cloud security errors and flaws cross organizational boundaries and are not prevented by distinctions between cloud providers and other companies in operating or managing infrastructure. Attackers have leveraged connections between on-premise and public cloud systems (known as hybrid cloud deployments), such as shared credentials or identity systems, to compromise and wreak havoc in cloud environments.⁸⁷. In a 2023 example, a suspected Iranian threat actor used stolen credentials to move from an on-premise environment into a customer’s Azure configuration.⁸⁸

Security flaws can also be similar across cloud providers, even when cloud providers separately develop features and products. The cloud security firm Wiz conducted research on the incorporation of a popular open-source database service, PostgreSQL, into cloud platforms and found similar vulnerabilities in Azure and Google Cloud, despite their independent development.⁸⁹

Policymakers should not operate under the assumption that segmenting cloud infrastructure —or the oversight of cloud infrastructure —across organizations will automatically improve the cybersecurity posture of cloud configurations. By limiting the ability of companies to share information about vulnerabilities or observe threat activity across active cloud configurations, policymakers can inadvertently exacerbate the challenge of common security failures across cloud providers. The trajectory of AI development and its intense reliance on cloud resources will only exacerbate the challenges of navigating these tradeoffs. Policies that require jurisdictional independence, exclusive local legal or operational control, and partnerships with local companies incentivize configurations that are not based upon a solid foundation of technical boundaries and isolation. Artificially constraining cloud providers, mandating technology transfer, and rewarding regulatory arbitrage do nothing to advance national sovereignty objectives and incentivize lax security practices instead of proactive, systemic monitoring.

If specific government or critical infrastructure sector criteria for cloud procurement are too onerous or burdensome, they also risk artificially segmenting the cloud market, leaving public sector customers out of step with industry norms and delayed in accessing new offerings. For example, AWS’s US GovCloud region contains detailed documentation on services available in other regions that are unavailable or require distinct configurations within GovCloud.⁹⁰ A US Government Accountability Office report on federal agency use of generative AI also references delays of cloud certification processes as an obstacle to access and use of new services, particularly when the companies offering them are not interested in gaining authorization through procurement processes or are unaware of federal procurement requirements.⁹¹

Critical infrastructure sectors and government agencies already shoulder cybersecurity burdens as the targets of persistent cyberattacks, with consistent ransomware attacks on hospitals as one example.⁹² In budget-constrained organizations, interpreting and implementing cybersecurity regulatory requirements can create cost burdens that lead to difficult tradeoffs with essential functionality.⁹³ Policies designed to shape the cloud market broadly should carefully evaluate which sectors are impacted and to what degree. If the goal of a procurement or incentive structure is cross-sector security requirements, public entities with limited cybersecurity expertise or leverage to negotiate with hyperscale cloud providers, such as critical infrastructure operators, may not be a logical starting point.

Governments around the world have a crucial role to play in allowing cloud providers to demonstrate trustworthiness, as they can remove barriers to information sharing, harmonize international trust regimes, and demand information from providers that customers would otherwise be unable to access. Accepting and embracing this role requires a strategic focus outside of the role of governments as merely cloud procurers. While governments are essential users of the cloud, consumer protection mandates and broader security goals merit a focus on ecosystem-wide security, which should be disentangled from direct procurement capabilities. Cloud providers should be required to share cloud security indicators with governments not just as a step to securing public sector contracts, but also to verify the trustworthiness of cloud infrastructure critical to modern society.

The US can play an important role in shepherding confidential computing technology—which runs computations on isolated systems—but must also manage coordination to ensure that by the time this technology is available and trustworthy, that allies and partners have not fully pivoted to regulatory regimes that mandate fragmented cloud infrastructure. One way to assure allies and partners is to demonstrate commitments to the security of the cloud ecosystem. Where legislation like the CLOUD Act has been mis- or over-interpreted by outside entities to provide expansive authorities, law enforcement agencies should continue to clarify the scope and details of warranted access to the content or information stored by cloud providers. Through its oversight functions, the US Congress can also publicize further aggregated, anonymized, and declassified information about the nature of interactions between the intelligence community, law enforcement agencies, and cloud providers, including allowing further information sharing about national security requests.

Conclusion

As artificial intelligence demands force the evolution of cloud computing systems, policies aiming to ensure the security of cloud computing must balance the goals of visibility and control with essential capabilities. Specialized providers and the relative opacity of the AI ecosystem both make cloud computing’s role in AI more critical and fragile. As artificial intelligence workloads continue to require careful coordination across specialized providers and infrastructure, establishing clear criteria of trust in cloud computing gains urgency. The consequences of failing to establish and maintain this trust will not just be felt by organizations using the cloud to develop and deploy artificial intelligence, but by governments and companies broadly, as the cloud infrastructure they depend upon and utilize becomes fragmented and limited. 

Countries around the world have implemented and proposed policies that impose geographic or location restrictions on cloud systems, instituting organizational and operational changes for cloud providers without fully evaluating the security tradeoffs. Requirements that change the criteria for trust in cloud computing to prioritize location can silo and fragment cloud infrastructure, reducing geographic distribution that provides resilience and elasticity. Focusing the evaluation of trust instead on technical assurances, rather than geographic and organizational proxies, should be the priority of governments. The location and nationality of cloud providers, while important, are insufficient proxies for security guarantees and outcomes and ultimately serve to incentivize regulatory arbitrage and compliance over state-of-the-art security practices. 

The complexity of cloud computing—driven by scale, specialization, and demand—enables the reliable systems and technical innovations that define modern economies and ways of life—and that is why that policies and regulations in this sector need to be finely-tuned and informed by technical realities. Interventions that aim to manage this complexity by tearing apart infrastructure and segmenting it within geographic borders will only end up undermining these systems and their security without fulfilling national security goals.  

There is no doubt this is a tall task. But only strategies as nuanced as the technology itself can safeguard its advantages while establishing the foundational trust that will underpin the future of artificial intelligence and technological innovation.  

About the author

Sara Ann Brackett is an assistant director with the Cyber Statecraft Initiative, part of the Atlantic Council Tech Programs. She focuses her work on open-source software security, software bills of materials, software liability, and software supply-chain risk management within the Cyber Statecraft Initiative’s cybersecurity and policy portfolio.

Brackett graduated from Duke University, where she majored in computer science and public policy and wrote a thesis on the effects of market concentration on cybersecurity. She participated in the Duke Tech Policy Lab’s Platform Accountability Project and worked with the Duke Cybersecurity Leadership Program as part of Professor David Hoffman’s research team.

Acknowledgements

The author would like to thank Trey Herr, Stewart Scott, Nitansha Bansal, Kemba Walden, Devin Lynch, Justin Sherman, Dominika Kunertova, and Joe Jarnecki for their comments on earlier drafts of this report, as well as all the individuals who participated in background and Chatham House Rule discussions about issues related to data, AI applications, and the concept of an AI supply chain. 

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The Atlantic Council’s Cyber Statecraft Initiative, part of the Atlantic Council Technology Programs, works at the nexus of geopolitics and cybersecurity to craft strategies to help shape the conduct of statecraft and to better inform and secure users of technology.

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60    Renee Dudley, “Microsoft Says It Has Stopped Using China-Based Engineers to Support Defense Department Computer Systems,” Pro Publica, July 18, 2025, https://www.propublica.org/article/defense-department-pentagon-microsoft-digital-escort-china.

61    Anton Chuvakin and Il-Sung Lee, “The cloud trust paradox: 3 scenarios where keeping encryption keys off the cloud may be necessary,” Google Cloud, February 2, 2021, https://cloud.google.com/blog/products/identity-security/3-scenarios-where-keeping-encryption-keys-off-the-cloud-may-be-necessary.

62    Tom McKay, “Apple Moves Chinese iCloud Encryption Keys to China, Worrying Privacy Advocates,” Gizmodo, February 25, 2018, https://gizmodo.com/apple-moves-chinese-icloud-encryption-keys-to-china-wo-1823312628; Archana Ramamoorthy and Bader Almadi, “Google Cloud expands services in Saudi Arabia, delivering enhanced data sovereignty and AI capabilities,” Google Cloud, August 19, 2024, https://cloud.google.com/blog/products/identity-security/google-cloud-expands-services-in-saudi-arabia-delivering-enhanced-data-sovereignty-and-ai-capabilities.

63    Il-Sung Lee, “Use third-party keys in the cloud with Cloud External Key Manager, now beta,” Google Cloud, December 17, 2019, https://cloud.google.com/blog/products/identity-security/cloud-external-key-manager-now-in-beta.

64    Esperanza Jelalian, “Subject: Public Consultation on Amendments to Korea’s Cloud Security Assurance Program (CSAP),” US-Korea Business Council, US Chamber of Commerce, February 9, 2023, https://www.uschamber.com/assets/documents/U.S.-Chamber_USKBC_CSAP-Letter-to-MSIT-02-09-2023.pdf.

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68    Alexandra Alper, “Exclusive: U.S. examining Alibaba’s cloud unit for national security risks – sources,” Reuters, January 19, 2022, https://www.reuters.com/technology/exclusive-us-examining-alibabas-cloud-unit-national-security-risks-sources-2022-01-18/.

69    Peter Harrell, “Managing the Risks of China’s Access to U.S. Data and Control of Software and Connected Technology,” Carnegie Endowment for International Peace, January 30, 2025, https://carnegieendowment.org/research/2025/01/managing-the-risks-of-chinas-access-to-us-data-and-control-of-software-and-connected-technology?lang=en.

70    Communications Networks Safety and Security, US Senate Committee on Commerce, Science, and Transportiation, Subcommittee on Communications, Media, and Broadband, 117^th Cong. (2024) (written statement of Justin Sherman, Nonresident Senior Fellow, Atlantic Council Cyber Statecraft Initiative), https://www.commerce.senate.gov/services/files/9D566360-52C7-4FB9-B30B-1A5A86B9A69E.

71    Propp, Who’s a national security risk?

72    Caitlin Fennessy, “The ‘Schrems II’ decision: EU-US data transfers in question,” IAPP, July 16, 2020, https://iapp.org/news/a/the-schrems-ii-decision-eu-us-data-transfers-in-question.

73    “Promoting Public Safety, Privacy, and the Rule of Law Around the World: The Purpose and Impact of the CLOUD Act,” US Department of Justice, April 2019, https://www.justice.gov/criminal/media/999601/dl?inline.

74    “Deputy Assistant Attorney General Richard W. Downing Delivers Remarks at the 5th German-American Data Protection Day on ‘What the U.S. Cloud Act Does and Does Not Do,’” US Department of Justice, May 16, 2019, https://www.justice.gov/archives/opa/speech/deputy-assistant-attorney-general-richard-w-downing-delivers-remarks-5th-german-american.

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76    Mark Scott and Francesco Bonfiglio, “Why Europe’s Cloud Ambitions Have Failed,” AI Now Institute, October 15, 2024, https://ainowinstitute.org/publications/xi-why-europes-cloud-ambitions-have-failed.

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78    Brad Smith, “Microsoft announces new European digital commitments,” Microsoft, April 30, 2025, https://blogs.microsoft.com/on-the-issues/2025/04/30/european-digital-commitments/.

79    Colm MacCarthaign, “Establishing a European trust service provider for the AWS European Sovereign Cloud,” Amazon Web Services, July 10, 2025, https://aws.amazon.com/blogs/security/establishing-a-european-trust-service-provider-for-the-aws-european-sovereign-cloud/.

80    Jelalian, “Subject: Public Consultation on Amendments to Korea’s Cloud Security Assurance Program (CSAP).”

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82    Hendrik Mildebrath, “The CJEU judgment in the Schrems II case,” European Parliament, September 2020, https://www.europarl.europa.eu/RegData/etudes/ATAG/2020/652073/EPRS_ATA(2020)652073_EN.pdf. 

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/how-the-baltic-sea-nations-have-tackled-suspicious-cable-cuts/ Wed, 26 Nov 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=889855 Two places in the world's oceans see a lot of suspicious maritime behavior: the Baltic Sea, and the waters around Taiwan. Elisabeth Braw reports from the NATO task force charged with protecting the undersea cables and pipelines essential to daily life in Europe, with lessons for Baltic states and Taiwan, too.

The post How the Baltic Sea nations have tackled suspicious cable cuts appeared first on Atlantic Council.

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Bottom lines up front

• In 2023 and 2024, many undersea cables and a pipeline in the Baltic Sea were cut or damaged in a string of suspicious incidents. Caught by surprise, the Baltic states’ initial response was improvised and uncoordinated. 
• The AI boom and the energy transition are likely to increase the number of undersea cables, and governments can no longer assume they would only be damaged by accident. 
• A NATO task force now leads multinational patrols and the EU has reached out to nations whose flag is used by vessels flouting maritime law to get dangerous ships de-flagged. 

On September 26, 2022, the Nord Stream 1 and 2 pipelines began leaking gas in the exclusive economic zones (EEZs) of Sweden and Denmark. It quickly became clear that the leak was not a technical fault but the result of explosions. In the months and weeks before the leak, Germany, the main importer of the Russian gas carried by Nord Stream, had completely cut its Russian gas imports.¹ It had also declined to certify Nord Stream 2, the second pipeline, which was full of gas and ready to commence operations.² Nord Stream AG—Nord Stream 1’s owner—had, in turn, scheduled maintenance suspensions, some of which were not part of standard maintenance. The two pipelines, conceived of during the peak of globalization but long opposed by the Baltic states and Poland, had become so geopolitically fraught that the explosions were quickly interpreted as an act of state-linked sabotage. Most analysts reasoned that Russia must have orchestrated the explosions as an act of revenge against Western countries slashing their imports of Russian gas.

Almost precisely one year later, on October 8, 2023, the Balticconnector pipeline connecting Finland and Estonia began leaking gas in the Gulf of Finland, the easternmost part of the Baltic Sea.³ Investigators soon established that the pipeline had been hit by the Hong Kong-flagged, Chinese-owned boxship Newnew Polar Bear.⁴ So had an undersea data cable. Even though different countries and outfits launched individual responses, the Newnew Polar Bear managed to sail through the Baltic Sea and along Norway’s coast before reaching Russian waters, where it was completely out of investigators’ reach.

After the Eagle S had struck the fifth cable and was approaching yet another, the Finnish police and coast guard dramatically boarded and detained it.

Just over a year later, the Baltic Sea region was struck by another suspicious undersea incident. On November 17, 2024, a data cable connecting Sweden and Lithuania was damaged. So was a data cable connecting Finland and Germany, the only cable connecting Finland with the European continent. Authorities quickly identified a suspect, the Chinese-owned and Chinese-flagged bulk carrier Yi Peng 3.⁵ Vessels from different Baltic Sea states shadowed the bulker, but they could not detain it because it was sailing in EEZs, not territorial waters. After sailing through the Danish Straits—which count as international waters, not territorial ones—the ship stopped in Denmark’s EEZ.⁶ It remained there with China, the flag state, blocking Danish and other local investigators from boarding the ship. On December 20, the Chinese authorities allowed investigators from Denmark, Sweden, Finland, and Germany to board, but only under Chinese supervision and only for a truncated visit.⁷ The following day, the bulker left.

A few weeks later, on Christmas Day, the Cook Islands-flagged tanker Eagle S struck one interconnector (power cable) and four data cables in the Gulf of Finland.⁸ Because the tanker was a shadow vessel known to the Finnish and Estonian authorities, both had been monitoring it.

A shadow vessel:

• generally has owners who deliberately obfuscate their identity;
• flies flags from nations with minimal or no maritime expertise (“flags of extreme convenience”);
• has questionable protection and indemnity (P&I) insurance; and
• turns off its automatic identification system (AIS) to hide its movements.

There is no standard intergovernmental definition of “shadow vessel,” but the Atlantic Council’s Threats to the global maritime order project has developed this set of criteria.

After the Eagle S had struck the fifth cable and was approaching yet another cable, the Finnish police and coast guard dramatically boarded and detained it.⁹ They did so in Finland’s EEZ—a highly controversial move because coastal states only have jurisdiction in their territorial waters, with limited rights in the EEZ.¹⁰ However, the Finnish authorities reasoned that they had no choice but to detain the ship in the EEZ, because not doing so would have resulted in even more cables being struck.¹¹

The following month, the Maltese-flagged bulk carrier Vezhen struck a data cable connecting Sweden and Latvia. When the bulker approached Sweden, authorities escorted it into Swedish territorial waters, then seized it.¹² However, because the prosecutor couldn’t prove that the bulker’s crew had intentionally released the anchor, the investigation was shelved and the ship and crew were released.¹³

Between and after these high-profile incidents, ships were spotted behaving suspiciously near undersea cables and pipelines. The sightings, and especially the incidents, have highlighted a troubling reality: governments and undersea-infrastructure operators can no longer assume that ships will only hit undersea installations by accident. On the contrary, they must now assume that the waters above the cables and pipelines are frequented by state and non-state actors wishing to damage these installations.

This matters because existing cables and pipelines are indispensable to the functioning of the countries they connect. What is more, the continuing digital transformation and the advance of artificial intelligence (AI) will require even more undersea data cables, and the green transition will require even more undersea power cables. These undersea power cables transport electricity between different countries, between countries and islands, and between offshore wind farms and the mainland. For Europe, the need to replace Russian gas imports makes undersea pipelines providing gas from Norway essential.

A coordination cell takes on saboteurs and the shadow fleet

Even though it has long been known that saboteurs could target undersea cables and pipelines, countries and organizations affiliated with them have historically refrained from doing so, if only because the United Nations Convention on the Law of the Sea (UNCLOS) bans deliberate damage of undersea installations. Terrorist organizations, for their part, have had little interest in conducting attacks that would not result in dramatic footage. Although some damage to undersea cables and pipelines over the decades has been attributed to criminals, nation-state involvement has been exceedingly rare.

That explains why, in September 2022, the Nord Stream explosions caught Baltic Sea nations and the rest of the world by surprise.¹⁴ Because the explosions occurred in the EEZs of Sweden and Denmark, the two countries launched investigations. As one of two countries connected by the pipelines, Germany also launched an investigation. Russia, the other country connected by the pipelines, repeatedly accused the three other countries of not sharing information about their investigations with Russian authorities.¹⁵ These protestations were widely condemned and ridiculed by Western commentators, who assumed that Russia was behind the explosions.

The real test for the Baltic Sea nations, and NATO, will arrive if—or when—a vessel ignores instructions to change course.

Even after the incident, Nord Stream’s extremely high profile led the three countries to believe the attack had been a one-off incident. NATO and the Baltic Sea nations did not see a need to establish protocols in case further attacks occurred, though NATO tasked Hans-Werner Wiermann, a retired German general, with mapping out what role the Alliance could play in coordinating the response to future incidents. Wiermann responded by establishing a coordination cell, based at NATO headquarters, which would function as a clearinghouse of information between different agencies in different member states. The coordination cell began operations in early 2023.¹⁶

The coordination cell was, however, dependent on receiving all necessary information from authorities in NATO member states, and that stream of information was not yet fully functional when the Balticconnector began leaking gas. The lack of a NATO-wide protocol for such incidents meant that Finland and Estonia activated their national protocols, but that information was not systematically shared across NATO and national authorities. As a result, a few allies and NATO institutions independently discovered that an incident had taken place and began investigating. However, there was no regular coordination between the different entities. That meant that it took hours before the Newnew Polar Bear was identified as a suspect and, by that point, the boxship had left the EEZs of Finland and Estonia and struck a nearby data cable.¹⁷ The authorities later realized that the Chinese-owned ship appeared to have cut a data cable in Sweden’s EEZ before hitting the Balticconnector.

Precisely because there were no NATO-wide protocols for such situations, and also because Sweden was not yet a member of NATO, the information did not reach the right authorities and officials quickly enough. That enabled the Newnew Polar Bear to make its way through the Baltic Sea, through the Danish Straits, along the Norwegian coast, and into Russian waters before the respective countries’ authorities—and NATO—could decide what actions to take. (The Newnew Polar Bear had, in coordination with Russian authorities, recently undertaken a pioneering journey through Russia’s Northern Sea Route.¹⁸) “Where we were in 2023 was that damage to undersea cables and pipelines was in the risk scenarios, there was acknowledgement that these kinds of incidents could happen,” said Erkki Tori, Estonia’ national security advisor. “But I don’t think that we truly acknowledged the multinational nature of these incidents. What we learned in Estonia after the Newnew Polar Bear incident was that you need to have a very operational relationship with different nations that you share the undersea infrastructure with. And not only on one level, but on multiple levels: the government level, the agency level, but also on the level of the companies that use or co-own the infrastructure.”¹⁹

Since then, communication protocols and coordination have improved. Tori added: “On a bilateral basis [with Finland], we have tried to maintain and enhance the relationships that we built as a response to the Newnew Polar Bear incident. If you move further from there onto a regional perspective, you need such relationships across the region as well, because even just one moving ship might be a problem for various critical undersea infrastructure objects. You need to have the same kind of awareness, the same kind of response protocol throughout the region as well.”²⁰

A new NATO task force patrols the Baltic Sea

In March 2024, Sweden was finally admitted to NATO after Turkey dropped its opposition. A few months later, in October, Germany stood up Commander Task Force (CTF) Baltic.²¹ While NATO has other CTFs, CTF Baltic took on special significance the moment it was created, as it was seen as another response to the undersea incidents, with a role completely different from that of NATO’s coordination cell.

CTF Baltic, based in the German port city of Rostock, has some ninety naval officers, most of them from the Bundeswehr, with others on loan from Baltic Sea nations and even southern European countries like Italy. It also commands a fleet of naval vessels and some aircraft, most of which belong to the Bundeswehr while others are on loan from allies.

While CTF Baltic’s official task is “to coordinate naval activities in the region with Germany’s allies and provide them with a current joint maritime situational picture around the clock,” its focus since its inception has been on the shadow fleet and threats to undersea installations. “The Baltic Sea may seem like a small ocean, but it’s a significant body of water to patrol,” said Brian Svendsen of the Danish Navy, CTF Baltic’s assistant chief of staff for current and future operations. “We focus on the shipping lanes, on ships that have previously been identified as a potential source of concern, and naturally monitoring the undersea installations.”²²

Although CTF Baltic is a German entity, it undertakes its activities on behalf of NATO’s Maritime Command (MARCOM). It does so not only by patrolling selected parts of the Baltic Sea, but also by monitoring ship movements from land, including through radar. When the leaders of NATO’s Baltic littoral states announced the creation of Baltic Sentry in January 2025, it was not a matter of a new organization but rather a new component for CTF Baltic.²³ Baltic Sentry essentially added more vessels, patrol aircraft, and staff to the setup already in place in Rostock.²⁴ “We had found that in order to show that we take the threat to undersea installations seriously, we need allied presence on top of our national presence,” Tori said. “And by we, I don’t mean just Estonia and Finland. On a national basis, we already have ships patrolling. Baltic Sentry is there to show solidarity and as a very practical measure, a way of demonstrating vigilance.”²⁵

Around the same time that NATO allies launched Baltic Sentry, the Joint Expeditionary Force (JEF) activated Nordic Warden, a monitoring system that “harnesses AI to assess data from a range of sources, including the Automatic Identification System (AIS) ships use to broadcast their position, to calculate the risk posed by each vessel entering areas of interest.”²⁶ Nordic Warden was also integrated into CTF Baltic’s operations. (The United Kingdom-led JEF also comprises Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, the Netherlands, Norway, and Sweden.)

Only a few weeks after CTF Baltic was launched, the Yi Peng 3 incident occurred, and the Eagle S and Vezhen incidents occurred after that, but the Baltic Sea has not experienced any suspicious undersea incidents since January 2025. “That is a sign that the deterrence we provide is working,” Svendsen said. As with all deterrence, it is impossible to ascertain whether the deterrent has worked or whether no further incidents were being planned, but mounting deterrence is better than testing one’s luck without it.

Either way, the Baltic Sea countries today have in place collaboration, monitoring, and response options that are a far cry from where they were when the Newnew Polar Bear struck the Balticconnector in October 2023. When shadow vessels approach undersea cables and pipelines, CTF Baltic monitors them. Should another vessel start behaving suspiciously around undersea installations, the task force will detect that too. Also, coastal states’ coast guards and navies conduct regular patrols, and the countries’ authorities systematically share updates in a manner that simply was not in place in mid-2023 and earlier. Their efforts also show how NATO member states can succeed in addressing regional threats without the entire Alliance needing to become involved.

In addition, Tori noted, the European Union (EU) is also part of the efforts to restore order in the Baltic Sea, not just through its sanctions on specific shadow vessels. EU officials also engage with counterparts in the countries that flag the shadow vessels. Today such countries—flags of extreme convenience, to use the phrase coined by this author—include the Gambia, Sierra Leone, and Comoros. In a noteworthy development that reflects European outreach, Barbados, Gabon, and the Cook Islands—which had been popular flag states for shadow vessels—have announced they will de-flag ships sanctioned by Western governments.²⁷ While incidents involving undersea infrastructure are not limited to shadow vessels, the fact that shadow vessels skirt rules and have opaque ownership structures makes them more likely candidates for suspicious incidents than conventional ships.

In addition, the EU is implementing its Action Plan on Cable Security, which it passed in February 2025. Among other measures, the plan involves steps to further develop information exchange and strengthen joint repair capabilities.²⁸

If, or when, another suspicious incident involving undersea cables or pipelines occurs, it is less clear how NATO, the EU, or the nations and entities now involved in the efforts to protect this infrastructure would respond. “We’d deploy there straight away, and it’s important to remember that the Baltic Sea is bigger than it seems,” Svendsen explained. “We can’t be everywhere all the time. In case of an incident, we’d deploy to the site and monitor it, but the response is up to the coastal state because it decides what can be done depends on that country’s legal system. And it’s important to remember that the owners of cables and pipelines have primary responsibility for their security. CTF Baltic and NATO are there to assist, but not to provide all-round security.”²⁹

As a military alliance, NATO is also not in charge of responding to suspected underwater sabotage; coastal states are. In the Baltic Sea, vessels seconded to CTF Baltic can return to national command if needed in incident response. But the question remains how the coastal states and NATO would respond. For now, they seem to bet that patrolling and monitoring the Baltic Sea will deter sabotage of undersea installations—but like all deterrence efforts, these activities are at best an educated guess. The real test for the Baltic Sea nations, and NATO, will arrive if—or when—a vessel ignores CTF Baltic’s patrols and coastal states’ instructions to change course.

From the Baltics to the South China Sea

The Baltic Sea is the region most affected by Russia’s shadow vessels and—together with Taiwan—the region most affected by suspicious incidents involving undersea cables and pipelines. At the time of the Newnew Polar Bear incident in October 2023, individual countries had impressive response protocols, but there were no real protocols involving information sharing and response with other countries. That situation has dramatically improved. Today, the Baltic Sea countries systematically share information, aided by NATO’s coordination cell, and consistently exchange updates and information with cable and pipeline operators, while national authorities and CTF Baltic monitor traffic around the clock and are able to deploy in case of an incident.

What is less clear is how CTF Baltic and national authorities would respond in case of an incident in which a vessel refuses to obey orders to move or has already struck a cable or pipeline and refuses orders to halt. Such rules of engagement cannot be established by CTF Baltic or national authorities. Instead, they depend on what NATO decides constitutes an aggressive act that could trigger Article 5.

CTF Baltic and Baltic Sea countries can bring further attention to suspicious incidents by adopting the Philippines’ strategy of total transparency. In contested parts of the South China Sea, where the Chinese Coast Guard and Maritime Militia harass Philippine and other vessels, the Philippine Coast Guard patrols the waters and films each dangerous Chinese activity. At times, the Philippine Coast Guard also invites reporters on board its vessels. This gives the public at home and abroad a better understanding of the dangerous activities transpiring in the South China Sea. A similar strategy could help educate the public about the situation in the Baltic Sea. As in the South China Sea, those involved in dangerous activities in the Baltic Sea are likely to be immune to naming and shaming, but public attention would increase the pressure on them and, at the same time, educate the public about actions their governments might need to take.

About the author

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Elisabeth Braw

Senior Fellow

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

NATO Resilience & Society

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1    “Bundesnetzagentur Veröffentlicht Zahlen zur Gasversorgung 2022,” Bundesnetzagentur, January 6, 2023, https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/DE/2023/20230106_RueckblickGasversorgung.html

2    “Certification Procedure for Nord Stream 2 Suspended,” Bundesnetzagentur, November 16, 2021, https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/EN/2021/20211116_NOS2.html

3    Anne Kauranen and Terje Solsvik, “Finland Says ‘Outside Activity’ Likely Damaged Gas Pipeline, Telecoms Cable,” Reuters, October 10, 2023, https://www.reuters.com/markets/commodities/finnish-government-hold-news-conference-suspected-pipeline-leak-media-2023-10-10/

4    “National Bureau of Investigation Has Clarified Technically the Cause of Gas Pipeline Damage,” Police of Finland, October 24, 2023, https://poliisi.fi/en/-/national-bureau-of-investigation-has-clarified-technically-the-cause-of-gas-pipeline-damage

5    Elisabeth Braw, “Suspected Sabotage by a Chinese Vessel in the Baltic Sea Speaks to a Wider Threat,” Atlantic Council, November 21, 2024, https://www.atlanticcouncil.org/blogs/new-atlanticist/suspected-sabotage-by-a-chinese-vessel-in-the-baltic-sea-speaks-to-a-wider-threat/

6    Ibid.

7    Louise Rasmussen, “China Lets Sweden, Finland, Germany and Denmark Board Ship in Cable Breach Case,” Reuters, December 20, 2024, https://www.reuters.com/world/europe/swedish-police-go-board-yi-peng-3-vessel-invitation-china-2024-12-19/

8    Michelle Wiese Bockmann, “Russia-Linked Cable-Cutting Tanker Seized by Finland ‘Was Loaded with Spying Equipment,’” Lloyd’s List, December 27, 2024, https://www.lloydslist.com/LL1151955/Russia-linked-cable-cutting-tanker-seized-by-Finland-was-loaded-with-spying-equipment

9    “Boarding of Eagle S ‘Serious Violation of Maritime Safety,’ Says Master,” Lloyd’s List, August 22, 2025, https://www.lloydslist.com/LL1154601/Boarding-of-Eagle-S-serious-violation-of-maritime-safety-says-master

10    Ibid.

11    Joshua Minchin, “Eagle S Could Have Cut More Cables, Says Finnish Police,” Lloyd’s List, January 14, 2025, https://www.lloydslist.com/LL1152219/Eagle-S-could-have-cut-more-cables-says-Finnish-police

12    Alexander Martin, “Sweden’s Elite Armed Police Used Helicopter to Board Suspected Sabotage Ship,” Record, January 29, 2025, https://therecord.media/sweden-vezhen-ship-armed-police-boarded-helicopter

13    “Misstankar om Sabotage Efter Kabelbrottet Avskrivna—Beslagtagna Fartyget Vezhen Släpps,” SVT Hyheter, February 3, 2025, https://www.svt.se/nyheter/lokalt/blekinge/beslagtagna-fartyget-slapps

14    The countries with Baltic coasts are: Germany, Poland, Sweden, Denmark. Finland, Estonia, Latvia, and Lithuania. In addition, Russia’s Kaliningrad exclave has a Baltic coastline.

15    “The Nord Stream Incident: Open Briefing,” Security Council Report, October 3, 2024, https://www.securitycouncilreport.org/whatsinblue/2024/10/the-nord-stream-incident-open-briefing.php

16    “NATO Stands Up Undersea Infrastructure Coordination Cell,” NATO, February 15, 2023, https://www.nato.int/cps/en/natohq/news_211919.htm

17    Roula Khalaf and Oliver Telling, “Chinese Vessel Spotted Where Baltic Sea Cables Were Severed,” Financial Times, November 19, 2024, https://www.ft.com/content/383516a5-02db-46cf-8caa-a7b26a0a1bb2

18    Elisabeth Braw, “Finland Identifies Pipeline Sabotage Ship,” American Enterprise Institute, October 25, 2023, https://www.aei.org/foreign-and-defense-policy/defense/finland-identifies-pipeline-sabotage-ship/

19    Interview with the author, October 17, 2025.

20    Ibid.

21    “Commander Task Force Baltic Established,” Bundeswehr, October 21, 2024, https://www.bundeswehr.de/en/organization/navy/news/commander-task-force-baltic-established-5850832

22    Interview with the author, October 15, 2025.

23    “NATO Launches ‘Baltic Sentry’ to Increase Critical Infrastructure Security,” NATO, January 14, 2025, https://www.nato.int/cps/en/natohq/news_232122.htm

24    Ibid.

25    Interview with the author, October 17, 2025.

26    “Joint Expeditionary Force Activates UK-Led Reaction System to Track Threats to Undersea Infrastructure and Monitor Russian Shadow Fleet,” Government of the United Kingdom, press release, January 6, 2025, https://www.gov.uk/government/news/joint-expeditionary-force-activates-uk-led-reaction-system-to-track-threats-to-undersea-infrastructure-and-monitor-russian-shadow-fleet

27    Braw, “The Threats Posed by the Global Shadow Fleet—and How to Stop It”; “Top 7 Geopolitical Disruptions in Q3 2025,” Windward, last visited October 28, 2025, https://windward.ai/knowledge-base/top-7-geopolitical-disruptions-q3-2025/

28    “Joint Communication to the European Parliament and the Council: EU Action Plan on Cable Security,” European Commission, February 21, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52025JC0009

29    Interview with the author, October 15, 2025.

The post How the Baltic Sea nations have tackled suspicious cable cuts appeared first on Atlantic Council.

]]> https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/carbon-markets-and-climate-finance-for-ukraines-recovery/ Wed, 19 Nov 2025 21:45:00 +0000 https://www.atlanticcouncil.org/?p=889238 As COP30 unfolds, learn how Ukraine's experience will influence climate finance mechanisms and drive sustainable recovery efforts.

The post Carbon markets and climate finance for Ukraine’s recovery appeared first on Atlantic Council.

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Bottom lines up front

• Amid full-scale war, Ukraine is emerging as a laboratory for innovative finance, testing climate finance solutions—such as Article 6 of the Paris Agreement—as a way to channel finance directly into reconstruction projects.
• A proposed “solidarity credits” framework, using the funding pool of a Green Recovery Fund and supported by a first-loss guarantee facility, could de-risk private investment and unlock concessional finance for Ukraine’s recovery.
• By linking carbon integrity with human security, Ukraine can show how carbon markets can drive resilient development in fragile or transitioning economies, from solar roofs on hospitals to reforestation, setting a model for countries aligning climate action with security and inclusive growth.

As COP30 convenes in Belém, the first UN Climate Conference hosted in the Amazon and a symbolic turning point for global climate solidarity, the question before negotiators is not only how to scale climate ambition, but how to ensure it delivers on Nationally Determined Contributions (NDCs) finance for countries’ sustainable economic development. Ukraine’s recovery stands as one of the clearest tests of whether climate finance can function under conditions of war. Article 6, finalized last year in Baku, now enters its implementation phase; Ukraine’s experience could define how these mechanisms evolve.

The challenge of financing reconstruction in Ukraine is massive. Russia’s full-scale invasion has inflicted more than $176 billion in direct damage and over $589 billion in economic losses across Ukraine, which is nearly three times the country’s pre-war gross domestic product (GDP). The destruction is systemic, with the metals sector reducing steel production by almost 71 percent after several leading plants were destroyed or occupied. Millions of acres of farmland are unusable due to occupation or contamination from over two million landmines, making it the most heavily mined country in the world. Natural reserves such as Sviati Hory have lost thousands of hectares of forest and wetland ecosystems to fires and contamination. The energy sector ranks among the most heavily affected, with up to 93 percent of damaged or destroyed assets across power generation, transmission, and distribution infrastructure since the start of Russia’s full-scale invasion. As of December 2024, the sector’s recovery and modernization needs are estimated at $67.78 billion, including $53.7 billion to rebuild power generation on green transition principles aligned with EU climate and energy goals. The Ukrainian regions facing the highest reconstruction needs—Zaporizhzhia, Kharkiv, Dnipropetrovsk, Donetsk, Odesa, and Sumy oblasts—are industrial hubs and front-line territories.

Despite the scale of destruction, Ukraine’s recovery offers an opportunity for transformation. The country can not only rebuild what was lost, but also redesign its economy and infrastructure on resilient, sustainable, and future-ready foundations. Guided by the Build Back Better principle, endorsed by President Volodymyr Zelenskyy and supported by international partners, Ukraine aims to reconstruct using higher-quality, advanced, and sustainable technologies, aligning recovery with the EU’s Green Transition and Digital Transformation agendas. 

If realized, this vision could radically reshape Ukraine’s economic landscape by mid-century. The economic dividends would be substantial: lower import bills, improved trade balance, and thousands of skilled jobs in engineering, manufacturing, and local services. Breaking its historic dependence on imported fossil fuels, once 70 percent of Ukraine’s energy mix, Ukraine could become nearly self-sufficient in primary energy. New value chains in clean technologies, sustainable construction materials, and bio-based industries would drive regional growth and anchor long-term industrial modernization.

As Ukraine aligns its recovery strategy with the EU Green Deal, one of the most pressing challenges will be balancing industrial revival with the obligations stemming from the EU’s Carbon Border Adjustment Mechanism (CBAM). Exemption from CBAM may be politically feasible in the short term, but in the long run, Ukraine’s competitiveness will depend on achieving genuine emissions reductions across energy-intensive sectors. Carbon finance under Article 6 could be instrumental in this process—directing investment toward low-carbon steel, cement, and fertilizer production, speeding the transition away from coal and gas, and helping Ukraine move toward alignment with the EU’s carbon pricing and reporting systems.

Yet the challenge is immense. Achieving this transformation will require annual investment around $35 billion across energy, industry, transport, and buildings, including $11 billion each year in renewable generation and grid infrastructure. Ukraine’s $524 billion reconstruction need is therefore more than rebuilding physical assets; it is a test of financial credibility, investor confidence, and political will. In defending Ukraine against Russia’s unlawful aggression—a threat not only to Ukrainian sovereignty but to the shared interests and security of its allies—Western countries have already demonstrated significant political will, mobilizing over $454 billion in military, financial, and humanitarian aid since 2022. The same resolve now needs to power a new framework for climate-aligned reconstruction, where solidarity is measured not just in aid, but in investment, innovation, and shared security. 

The scale of Ukraine’s reconstruction is daunting, yet existing international frameworks currently being discussed at COP30 could potentially help mobilize the necessary capital. Can COP leaders leverage the framework of Article 6 of the Paris Agreement to bring reconstruction finance to Ukraine?

Article 6 as a bridge to climate, development, and green recovery finance

Article 6 of the Paris Agreement enables the trade of emission reductions and removals units as “internationally transferred mitigation outcomes” (ITMOs)—equal to 1 ton of CO₂ counted toward the country’s climate targets. In practice, a government or company can fund verified climate action abroad, and count the resulting emissions reduction toward its own NDC, or use them for corporate or investment needs. 

If implemented at scale, Article 6 can become a channel for financing Ukraine’s reconstruction and green transition. Reimagined as a mechanism for countries to further demonstrate their unwavering support for Ukraine, Article 6 ITMOs could be redefined as “solidarity credits,” verified units of climate finance directed to Ukraine’s reconstruction. These credits would support grid restoration, renewable-energy deployment, and institutional capacity building, while following Article 6’s framework and maintaining its integrity and transparency requirements.The governments of the United Kingdom, the EU, and Ukraine could take the lead in testing this approach through bilateral agreements under Article 6. The initiative would pilot a new class of “solidarity credits” that uphold Article 6’s integrity rules while extending its application to post-conflict reconstruction. These credits would enable partner countries to channel verifiable climate finance (or results-based finance) into Ukraine’s recovery, supporting projects such as clean energy. Then, the supporting government could either claim these credits or let the private sector buy or invest in them, thus providing climate finance and advancing global decarbonization goals. Because these are authorized under the Paris Agreement, there is no risk of double-counting. Companies can retire these ITMO units to support high-integrity corporate climate claims, bolstering their climate accountability and transition plans while channeling capital into Ukraine’s recovery.

Current endeavors

Last year’s package agreed at COP29 in Baku effectively finalized the core rulebook for Article 6. In practice, this means that the Paris Agreement architecture for issuing and trading ITMOS under Article 6.2 and under Article 6.4 is now sufficiently clear for countries to move from design to delivery. Early movers, including Switzerland, Honduras, Suriname and Japan, have begun translating these rules into real national programs and project transactions, showing what the Article 6 implementation actually looks like.

That shift, however, has also underscored how complex and demanding Article 6 is to implement effectively. The framework builds on the Kyoto Protocol’s clean development and joint implementation mechanisms, retaining their focus on transparent governance, environmental integrity, and contributions to sustainable development while introducing stricter safeguards and transparency, and stronger alignment with national climate targets. Implementing this framework requires robust national systems, including clear authorization procedures, reliable monitoring, reporting and verification, and registries capable of tracking units from issuance to final use. Many countries are now developing and implementing these systems, and while progress is evident, it remains uneven across jurisdictions.

For the moment, international transfers of ITMOs remain modest in volume, but some countries, such as Honduras and Suriname have signed MoUs to trade large volumes with large banks and companies. Limited adoption is not a failure of the concept so much as a reflection of both the infancy of this new market and the work needed to align domestic institutions, data systems, and project pipelines with these new Article 6 rules and regulations. As more countries complete those building blocks and capital liquidity enters this market, a steady scale-up is inevitable.

Designing a new financial architecture

Implementing Article 6 to enable Ukraine’s reconstruction will be a test of financial ingenuity, with clear policy signals, proving that climate finance can operate even under extreme conditions of risk and instability, such as war.

The framework suggested by the Oxford Roadmap to Net-Zero Aligned Carbon Market Regulation, which is widely referenced as setting a gold-standard approach in carbon finance investment-grade, defines six pillars: efficient financing, net-zero alignment, ecosystem integrity, equitable outcomes, enforcement, and usability. These principles can support a de-risked Article 6 architecture, one that embeds high-integrity standards within Ukraine’s reconstruction finance. Applied to Ukraine, they suggest a model where carbon revenues complement grants and concessional lending. Even a modest stream of credits could channel between $2 billion and $3 billion annually into verified renewable and grid-resilience projects, roughly 5 percent of Ukraine’s annual recovery needs.

Translating these principles into practice requires a concrete governance model. Integrity and traceability are the bridge between abstract standards and operational finance. Each Article 6 credit should therefore carry verifiable metadata—satellite monitoring, reporting, and verification; third-party audits; and tangible co-benefits such as megawatts restored, hospitals powered, jobs created, or tons of diesel displaced.

Why now?

The UK and EU are uniquely positioned to partner with Ukraine on carbon finance. London retains diplomatic credibility on climate policy and has been among Ukraine’s staunchest allies since 2022. Its management of the International Climate Finance (ICF) portfolio and commitment to high-integrity carbon markets form a solid foundation, reinforced by the 2025 UK–Ukraine 100-Year Partnership Memorandum.

The EU, on November 5, 2025, approved a 90 percent emissions reduction target for 2040, allowing member states to use Article 6 international carbon credits for up to 5 percent of their emissions. This would allow and incentivize any EU member countries, companies, and investors to invest in Ukraine and use those Article 6 carbon credits for their emissions reduction purposes.

On October 29, 2025, the second NDC of Ukraine to the Paris Agreement was approved by resolution of the Cabinet of Ministers of Ukraine and published on the UNFCCC website during COP30. This sends a strong political signal and shows a clear determination by Ukraine to grow its economy sustainably. Ukraine aims to reduce its greenhouse gas emissions in 2035 by more than 65 percent from 1990 levels. Furthermore, Ukraine intends to continue participating in market mechanisms under Article 6 of the Paris Agreement as a party on whose territory projects under Article 6 of the Paris Agreement are implemented. 

By participating in cooperative approaches, under Article 6, Ukraine will comply with the rules and guidelines in accordance with the decisions of the Paris Agreement to ensure proper accounting, environmental integrity, transparency, and avoidance of double counting. 

A proposed bilateral Article 6 framework could consist of three pillars:

1. Solidarity credits: The UK and the EU would contribute approximately £200 million ($263.4 million) to a Ukraine Green Recovery Fund. This fund would finance projects such as grid reconstruction, solar energy initiatives, and energy efficiency upgrades. The resulting ITMOs would be transferred to the UK but explicitly not used to meet its NDCs. Instead, they would function as either “solidarity credits,” or sold to businesses and the capital markets, thus strengthening business cooperation and bringing symbolic political value.
   
2. Guarantee facility for risk mitigation: Utilizing UK-backed concessional finance, a first-loss guarantee facility would reduce investment risk for private developers. This guarantee would cover partial losses if a project is destroyed or interrupted by conflict, thereby lowering Ukraine’s perceived country risk.
   
3. Pilot “green corridors” with transparent monitoring, reporting, and verification. Two to three green corridors, for example, around Kyiv, Vinnytsia, and Dnipro, could serve as regional reconstruction zones integrating distributed renewable energy and upgraded transmission infrastructure within international carbon-market frameworks, including the Paris Agreement Crediting Mechanisms.

For quick and lasting impact, Ukraine should prioritize projects where carbon finance meets human security:

• Distributed renewables on schools, hospitals, and administrative buildings—Ukraine’s rooftop photovoltaic potential exceeds 238.8 gigawatts, alongside distributed storage. Ukrainian firms such as KNESS have already deployed over 100 megawatt-hour of battery capacity. For example, retrofitting municipal hospitals in Chernihiv oblast with rooftop solar systems could unlock concessional financing backed by a UK guarantee covering 20 percent of potential losses, thereby reducing the cost of capital from 12 percent to 7 percent.
  
• Energy-efficiency retrofits could cut heating demand by 50 percent and 60 percent since almost 80 percent of the housing stock in Ukraine is considered energy inefficient, with the bulk constructed between the 1960s and 1980s.
  
• Circular-economy and low-carbon materials for reconstruction can cut emissions and reduce import dependency. Ukraine’s biomethane potential, estimated at 9.7 billion cubic meters annually, offers a strategic opportunity to replace fossil natural gas in heating, industry, and transport.
  
• Nature-based solutions should be a priority in both ecological and urban recovery. With more than ten million hectares of degraded land, Ukraine could pilot high-integrity restoration projects under Article 5—from reforestation to green urban renewal in heavily affected cities such as Chernihiv and Mykolaiv.

These activities would diversify Ukraine’s mitigation portfolio and embed climate resilience in its recovery model.

Restoring trust through carbon finance cooperation

By linking emission reductions and removals to real reconstruction outcomes, Ukraine can turn climate cooperation into a driver of national renewal, and the COP process can become the beginning of this road for Ukraine. A transparent, high-integrity carbon market would show that climate action can restore energy generation capacities, reforest bombed landscapes, and reconnect communities. 

In this sense, Ukraine’s carbon market could become a prototype for conflict-affected economies worldwide, where climate policy and recovery policy converge, and where the currency of carbon is measured not only in tons of CO₂ but in megawatts restored, hectares rehabilitated, and lives rebuilt. 

about the authors

Ievgeniia Kopytsia is a legal scholar and policy expert with more than ten years of experience advancing climate and environmental governance across Ukraine, the EU, and international institutions. She specializes in climate and energy law, post-conflict reconstruction, and the legal alignment of Ukraine with European and global standards for a green transition.  As a national legal expert, Kopytsia has provided legislative assessments, policy advice, and project leadership on the implementation of environmental and climate laws, including supporting Ukraine’s climate policy reforms and green recovery initiatives. She is a frequent contributor to international conferences and working groups, focusing on the intersection of environmental law, conflict resilience, and sustainable development within the Euro-Atlantic community.

Darka Harnyk is the director of the Energy Security Marshall Plan for Ukraine at EOPA, where she works with Ukraine’s Ministry of Economy, Ministry of Environment, and international partners to develop financing mechanisms for post-war green reconstruction. Her work focuses on Article 6 climate cooperation, war-risk de-risking, and critical raw materials. Before transitioning into reconstruction and climate finance, Harnyk worked in the tech sector at Unity Technologies and later earned a degree in environmental science and policy from Columbia University.

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/report/biometrics-and-digital-identity-in-africa/ Wed, 19 Nov 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=888771 Biometrics have become deeply embedded in Africa’s political, social, and economic landscape. 

The post Biometrics and digital identity in Africa appeared first on Atlantic Council.

]]>

Bottom lines up front

• Forty-nine African countries now operate biometric systems, with foreign vendors dominating a market that controls the continent’s most sensitive identity infrastructure.
• An estimated half a billion Africans lack identity documents, driving governments to deploy biometric systems rapidly. Still, weak governance frameworks often mean these technologies exclude the very populations they’re intended to serve.
• From Uganda’s Ndaga Muntu to Kenya’s Huduma Namba, biometric deployments across Africa face common challenges: data breaches, corruption in enrollment processes, exclusion of elderly citizens, and the use of facial recognition to monitor political dissent.

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Executive summary

The rapid adoption of biometric and digital identification systems is transforming governance and public administration across Africa. Promoted as tools to modernize service delivery, enhance electoral integrity, and strengthen state capacity, these systems are becoming central to how identity and citizenship are managed. From national identification schemes and voter registration to border management and SIM card registration, biometrics have become deeply embedded in Africa’s political, social, and economic landscape. 

However, this technological expansion comes with profound risks. Weak legal frameworks, limited oversight, and a growing reliance on foreign vendors have created an ecosystem vulnerable to privacy breaches, state surveillance, and systemic exclusion. Biometric systems increasingly integrate electoral and civil identity data, giving governments vast surveillance capabilities while disenfranchising marginalized groups such as rural communities, migrants, and individuals without foundational IDs. 

The report explores the main use cases driving biometrics and digital identification systems in Africa, focusing on their governance, vendor dynamics, and human rights impacts. Key areas include national identification and civil registration, which provide the foundation for legal identity and access to services; immigration management; elections, where they strengthen voter registration and authentication; and smart city initiatives, which leverage digital IDs for efficient service delivery and urban governance. 

The research reveals that foreign technology firms dominate Africa’s biometric ecosystem; that forty-nine African countries have at least one form of biometric system; and thirty-five out of the fifty-four countries on the continent use biometrics in their election processes. Companies such as Idemia (France), Semlex (Belgium), Veridos (Germany), Thales (France), and Huawei (China) provide the core technology, hardware, and algorithms that underpin these systems. African governments often finance these projects through loans from international institutions like the World Bank, creating dependencies that shape procurement and governance practices. 

While biometric systems are often introduced to improve electoral processes and service delivery, their fragmented rollout forces citizens to repeatedly submit sensitive data across multiple platforms, increasing costs and risk of fraud. Many projects lack transparency, with procurement processes shielded under the guise of national security. Public knowledge of these systems remains low: a sample study in three countries by ICT Works found that only 38 percent of surveyed citizens were aware of their governments’ purchases of biometric, facial recognition, or AI systems, highlighting a significant transparency gap. 

To mitigate these risks, the report offers seven key policy recommendations: 

1. Strengthening independent oversight bodies free from political interference; 
2. Enacting comprehensive data protection laws covering the full life cycle of biometric data; 
3. Ensuring transparent, participatory deployment processes; Integrating human rights due diligence into all projects; 
4. Establishing continuous oversight and remedies for rights violations; 
5. Protecting electoral integrity and preventing the over-integration of ID systems; 
6. Embedding a rights-based governance model rooted in privacy, equality, and non-discrimination. 

The findings underscore that biometric and digital identity systems must not be viewed merely as technical tools for modernization. They are inherently political, with the potential to either strengthen democratic governance or entrench authoritarian control. Without robust reforms, these systems risk becoming instruments of exclusion and surveillance rather than empowerment. 

read the full report

About the authors

Sani Suleiman Sani is a policy and research strategist shaping continental dialogue on digital rights, technology governance, and inclusive innovation in Africa. He leads the research portfolio at Paradigm Initiative, where he oversees multi-country studies that inform legislative processes, corporate accountability, and global debates on digital policy.

Thobekile Matimbe is a human rights lawyer and Senior Manager Partnerships and Engagements at Paradigm Initiative (PIN) where she dedicates her skills to the advancement of digital rights and inclusion in Africa and beyond.

Kenton Thibaut is a senior resident China fellow at the Atlantic Council’s Digital Forensic Research Lab (DFRLab), where she leads China programming for the Democracy + Tech Initiative, and a resident senior fellow at the Atlantic Council’s Indo-Pacific Security Initiative (IPSI) at the Scowcroft Center for Strategy and Security.

 Iria Puyosa is a senior research fellow at the Atlantic Council’s Democracy+Tech Initiative. She specializes in the complex interplay between technology and political dynamics. 

Acknowledgements

This report was made possible with support from the Embassy of Denmark in the United States. The Digital Forensic Research Lab (DFRLab) would also like to thank the Paradigm Initiative for contributing writing and research.

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A paper to better inform the conversation around technology’s impact on democracy by evaluating technosolutionism and its application to the management of human mobility.

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The Atlantic Council’s Digital Forensic Research Lab (DFRLab) has operationalized the study of disinformation by exposing falsehoods and fake news, documenting human rights abuses, and building digital resilience worldwide.

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/why-ankaras-rising-power-in-the-sahel-could-benefit-the-west/ Wed, 19 Nov 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=888402 Turkey offers a rare channel in the Sahel that the West could use to recalibrate its approach to the region.

The post Why Ankara’s rising power in the Sahel could benefit the West appeared first on Atlantic Council.

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Bottom lines up front

• Arms and infrastructure deals have steadily bolstered Turkey’s standing as a reliable partner in the Sahel, where coups disrupted French and US roles.
• Turkey’s “solution-based” diplomacy contrasts sharply with Russia’s security-first playbook in Africa, yet they operate in parallel rather than competing in the countries with military juntas.
• Ankara must decide whether to align more openly with Russia in the Sahel or mediate and potentially counter Russian influence, potentially coordinating with the West on security strategy.

As the US role in the Sahel is weakening, Turkey’s role is rising. With new defense agreements, increasing diplomatic engagements, and joint economic development projects with new, junta governments that espouse anti-colonial rhetoric in Burkina Faso, Mali, and Niger, Turkey finds itself working in the same theater as the Kremlin to fill the void left after Western forces departed. Turkey’s new trusted status among Sahelian governments and its state-led approach make it one of the nations positioned to influence regional security dynamics during a time when other Western powers are constrained. Although Turkish efforts in the Sahel have been primarily based on its own strategic ambitions and national interests, Ankara’s growing influence offers a rare channel through which the United States and its allies could recalibrate their approaches to the region. 

The Sahel’s break with the West 

Since these coups and the establishment of military juntas in Mali, Niger, and Burkina Faso, France and the United States have faced the annulment of defense agreements in the region, French and US troops have withdrawn from the region, the European Union’s Takuba Force ceased anti-Jihadist operations in Mali, and, in January, Niger revoked a counterterrorism accord with the United States, demanding the withdrawal of 1,000 US troops from the country. The United States has laws that prohibit it from assisting governments that have overthrown democratic governments, including clear guidance from the US State Department against foreign assistance to Niger, and now Washington finds itself without a clear role in the Sahel.

The region’s Western-backed security architecture has collapsed: Three withdrawals (i.e., Mali, Burkina Faso, and Niger) prompted the dissolution of the Group of Five (G5) for the Sahel. The same three departures from the Economic Community of West African States (ECOWAS) has left the Sahel searching for new patrons and new strategic frameworks. Mali, Burkina Faso, and Niger, for example, have formed the Alliance of Sahel States (AES), a political and defense bloc that rejects old alignments. To fill the new defense void, alternative partners without the baggage of colonial legacy—most notably Russia and Turkey—have stepped in, offering defense cooperation without the governance conditions demanded by the West. 

The United States, which provided humanitarian aid, economic investment, and security forces to the region for roughly a decade prior to the coups, lost much of its ability to advance regional security interests when it was pushed out of the region. Its ability to monitor threats in the region and in neighboring countries like Libya, coordinate strategies with local forces, and access crucial intelligence was significantly degraded. Although US security operations in the region have been constrained by new partnerships, it still has options. Opportunities remain through indirect engagement—particularly with actors that retain both credibility on the ground and diplomatic standing in the West. Turkey is one of the only powers operating in the Sahel that meets both criteria.

​Turkey’s role amid a shrinking Western presence, rising Russian influence

Turkey’s military cooperation in the Sahel draws on nearly two decades of experience positioning itself as a rising power in Africa, rooted in its 2003 ​​​​Strategic Depth​ doctrine and early initiatives like the “Strategy for the Development of Economic Relations with Africa” and the “year of Africa” in 2005—the same year it secured observer status in the African Union. Initially, Turkey relied on soft power, leveraging shared Ottoman heritage, cultural diplomacy, and economic partnerships to expand its influence. However, what began as a soft-power push—through development aid, cultural ties, and embassy openings—has evolved into a defense and infrastructure strategy, especially under President Recep Tayyip Erdoğan’s aim to position Turkey as a leader among emerging powers. Turkish delegations have conducted regular visits to AES capitals, striking arms and infrastructure deals while pursuing bilateral military agreements.  

At the same time, Russia, too, has made swift inroads. It is capitalizing on anti-colonial sentiment and offering support through its largest private military company, the Wagner Group, to provide “training, close protection, and counter-terrorism operations.” Through proxy forces, Russia has gained access to political influence and resource extraction in exchange for security-force training, arms deals, and protection of junta leaders. Russia’s use of proxy forces has allowed it to distance itself from Russian casualties and military failures. 

However, Russia’s war in Ukraine has slowed its operations in the Sahel. Across AES, Russian forces are stretched thin. Despite Russia’s success in stabilizing the Touadéra regime in the Central African Republic in 2021—a conflict that gave Russia defense legitimacy despite the fact that Sahel—Russian forces have largely been unsuccessful. In 2024, fifty-one percent of global terrorism-related deaths took place in the Sahel. This was the deadliest year in the Sahel’s history as the region remains mired in conflict and plagued by violent insurgencies, fragile state institutions, and waning international engagement. 

​​​​In the Sahel, Turkey can play the same role as Russia. Turkey can offer Sahelian militaries affordable, “rapidly deployable” equipment. And Russia, which has been struggling to keep up with military-industrial demands, is an increasingly unreliable partner. Sahelian clients grew more discontented with the Russian proxy forces’ unsuccessful operations and inability to fulfill weapons contracts, and the Wagner Group officially left Mali, announcing on Telegram that its mission was accomplished. In its place, Russia plans to consolidate its troops under the Russian Ministry of Defens​​​​e-backed Africa Corps. Reestablishing connections, building trust, and establishing higher capacity supply lines will take time; meanwhile, alternative partners like Turkey are in place in the Sahel and can take advantage of the Kremlin’s declining foreign-operations capacity. 

In contrast to Russia’s focus on mercenary deployments and ​​​​direct-combat missions, Turkey offers a more varied tool​ ​kit: combining diplomacy, state-to-state defense deals, economic engagement, intelligence sharing, and technology transfers. Turkey’s defense industry, particularly its drone sector, made early moves into the African market, supplying low-cost, high-capability platforms like Baykar’s Bayraktar TB2 and Akinci drones. These have become cornerstones of AES air power, and are ​​​​​often more cost-effective​ than systems from Iran, Israel, or even Russia. 

Turkey is now the main producer of combat drones for Africa, according to the Africa Center for Strategic Studies (part of the US Department of Defense). In December 2024 Mali received Turkish Akinci drones in addition to its eight TB2 drones; Niger has purchased six TB2 drones, five Karayel-SU drones, and Aksungur drones; and Burkina Faso has purchased at least six TB2s and two Turkish Akinci drones. These drones are managed and operated out of local airbases, like the Niamey air base in Niger or the Bamako Air Base 101 in Mali, and are managed by a “hyper-closed circle” of high-ranking officials. In early April 2025, Mali was also found to be using MAM-T bombs 20 kilometers from its border with Algeria when a Turkish-made Akinci drone was shot down. This was the first time the Malian armed forces were found to be using MAM-T bombs, which are guided, high-explosive fragmentation munitions that can be strapped to Bayrak drones, and are manufactured by Turkish company Roketsan. 

On the ground, Turkey’s engagement increasingly makes up for declining Russian power. Turkish drones and, ​​​​​​reportedly, Turkish-hired Syrian mercenaries disrupt insurgent operations in areas where state forces are absent, helping to alleviate local manpower shortages. ​​​​​Although unconfirmed, Sadat, a private Turkish military contractor often referred to as Erdogan’s “parallel army,” was alleged to have sent more than one thousand Turkish-trained Syrian mercenaries to Niger and Burkina Faso in 2024, ​​​​tasked with protecting mines, petroleum infrastructure, and military installations​. This is not the ​​first time​​ Sadat has been accused of using Syrian ​​mercenaries​​ in foreign conflicts.

Already, Turkey has increased intelligence-sharing capabilities in the region through its intelligence agency, Milli İstihbarat Teşkilatı, which recently opened a hub in Niger. Its growing network​ of embassies, companies, and security personnel across the Sahel gives Ankara access to critical information, which can influence security operations.

Turkey’s economic expansion in the Sahel

Turkey has slowly expanded its influence in the Sahel by expanding its security operations simultaneously with its commercial agreements. 

While the AES has implicitly distanced itself from former colonial powers through new security partnerships and arms contracts, the three states are also turning to alternative partners for economic support. They had perceived prior Western economic conditions as unfair and are seeking more beneficial economic relationships. After revoking mining licenses and pulling out of economic partnerships with the West, the Sahel now needs new partners to help develop its potentially lucrative energy and raw materials sectors.  

Since the 2010s, Turkey has increasingly engaged with Africa’s energy sector, leveraging its 2017 National Energy and Mining Policy to enhance its energy independence. It has signed agreements with at least seventeen African countries across North, West, and East Africa, as well as the Horn of Africa, focusing on renewables and critical minerals. Trade volumes between Turkey and Africa increased from ​​​​$5.4 billion in 2003 to $40.7 billion in 2022, and a ​​​​growing number of Turkish companies are expanding their operations in Africa. 

Turkey now has greater reason to diversify its imports away from Russia and Iran— given the disruption of trade patterns by conflicts in Ukraine, the Mediterranean, and the Middle East—and toward Africa. The Sahel’s underdeveloped energy sector offers Turkey a foothold in new supply routes and economic opportunities.  

A Turkish energy company has taken a leading role in Mali, supplying 60 megawatts of power and building a heavy fuel oil power plant. Turkish exports to Mali rose from $87 million in 2021 to $111 million in 2023. Similarly, Turkey has boosted trade with Burkina Faso, despite regulatory hurdles in the mining sector. Exports rose from less than $100 million prior to 2020 to $166 million in 2024, reflecting Ankara’s deeper economic engagement with the new military government. 

In the Sahel region, Niger has traditionally been Turkey’s strongest energy partner in the region. Turkey and Niger have signed bilateral mining agreements and oil and natural gas agreements, established a working committee​ to expand economic cooperation, and held leadership-level discussions about infrastructure development projects​ in northern Niger. Turkish firms have been uniquely willing to engage in high-volatility regions, implementing critical infrastructure, energy, and mining projects simultaneously with increased defense cooperation. 

The Sahel’s mineral wealth is critical to Turkey’s industrial ambitions and plans to become a processing hub for critical minerals. Turkey’s defense industry depends heavily on critical minerals used in advanced weaponry, aerospace systems, and batteries and, at the same time, Turkey’s rising clean technology industry has accelerated the need for lithium, nickel, copper, and other raw minerals. While Turkey is beginning to build up its raw mineral processing capabilities in an attempt to limit foreign control over critical supply chains, Ankara is in search of suppliers for these materials.  

With limited domestic reserves and rising industrial needs, Ankara is targeting the region’s large supplies of raw materials. Mali is Africa’s second-largest lithium producer; Niger is a leading exporter of uranium; and Burkina Faso is a major gold supplier. Though Turkey has domestic reserves of tungsten, graphite, and cobalt, access to the Sahel’s minerals enables Turkey to compete in global markets and develop its own processing base. 

Through diplomatic and corporate efforts, Turkey has tried to secure access to gold and uranium in Niger, the world’s seventh-largest producer of uranium; Turkish and Azerbaijani companies have discussed joint mining projects in the Sahel; and, until recently, a Turkish company held the industrial exploitation rights of the largest gold mine and the largest manganese mine in Burkina Faso. Russian companies have likewise expanded their economic presence in the Sahel; Russian companies ​​​​have signed lithium mining deals with Mali, lithium and uranium mining deals with Niger, and deals on nuclear cooperation with Burkina Faso. While Western companies have been sidelined, governments in the Sahel remain open to cooperation with both Ankara and Moscow. Turkey, as a NATO ally that retains the political space to operate in these markets, is a potential counterbalance to Russia’s growing influence while advancing its own strategic and industrial objectives.

Solution-based diplomacy in a security-first landscape

What sets Turkey apart from other external actors—especially Russia—is the diversity of its engagement. Unlike Moscow’s arms-for-access model, which is often viewed as exploitative and destabilizing, Ankara has prioritized a ​​​​multifaceted approach that includes trade, infrastructure, defense, diplomacy, and development. Turkish-African trade spans sectors from textiles to healthcare and energy, and Turkey’s public and private sectors have actively invested in education and capacity building across the continent. This “solution-based” diplomacy contrasts sharply with Russia’s security-first playbook. 

Yet Turkey’s growing presence in contested regions comes with risks. Infrastructure investments in unstable political environments require security guarantees—and that often means greater military involvement. As Ankara deepens its footprint, it must decide whether to align more openly with Russia, or to use its position to mediate and potentially counter Russian influence. 

Turkey is viewed by many African leaders as a reliable, noncolonial partner. This gives Ankara access that Western powers now lack. While Turkey has not publicly aligned with US or European policy in the Sahel, its access and credibility in the region offer an opportunity to bridge the growing gap between Western interests and Sahelian realities. 

If Ankara chooses to leverage this position, it could quietly support Western objectives—sharing intelligence, coordinating security policies, or shaping development strategies that undercut Russian influence. Turkey would not be acting as a Western proxy, but as a sovereign actor leveraging its credibility and access to serve both its own interests and those of the broader international order. In a region where Western engagement is rapidly shrinking, Turkey’s role may become indispensable—not as a rival, but as a crucial partner.

Not a proxy but a pathway: The West’s reentry point in the Sahel

The power balance between Russia and Turkey is markedly different from conflict zones where they stood or stand on opposite sides—such as Syria, Libya, Ukraine, and the Azerbaijan-Armenia conflict. In the Sahel, both powers are engaging the same postcoup regimes—Russia through mercenary-led counterinsurgency and Turkey through state-led arms deals, drone operations, and economic development. They are not in direct confrontation in the Sahel, nor are they locked in zero-sum competition. Instead, they operate in parallel, often in the same theaters and with the same governments, but with divergent methods, capabilities, and long-term goals. 

Parallel engagement between Russia and Turkey raises security concerns for Western powers who have lost their influence in the region, but it also creates a unique opening. While Russian security forces have been largely unsuccessful in their efforts to mitigate threats in the Sahel, Turkey has an opportunity to increase its engagement with local forces. And as the only Western partner force that is directly engaging with the region, Ankara can potentially disrupt Russian influence and coordinate with the West on security strategy. Its access to critical mineral assets, defense infrastructure, and high-level political relationships across the AES bloc can offer the West indirect access to a region from which it has been largely expelled. 

Since President Donald Trump returned to office at the beginning of 2025, both Washington and Ankara have shown renewed willingness to deepen their bilateral partnership on regional matters and cooperate in third countries, most notably Syria. In addition to diplomacy, including Foreign Minister Hakan Fidan and Secretary of State Marco Rubio meeting in Washington and Brussels, both capitals have continued demonstrating top-level cooperation on Syria with the trilateral gathering in Riyadh, where Trump and Erdoğan met with Syrian President Ahmed al-Sharaa, together with the creation of the joint Syria Working Group to further enhance closer cooperation on Syria’s reconstruction and stability efforts. This dynamism and strategic alignment can be a strong foundation for extending the US-Turkey partnership into Africa, where shared interests in stability and security could help reshape the dynamics of great​-​power competition in the region. 

Turkey’s pragmatic foreign policy is not without complications. But in the Sahel, that very pragmatism can work to the West’s advantage. If Washington moves beyond its reflexive skepticism and recognizes Turkey’s intermediary potential, the Sahel could shift from a symbol of Western retreat to a frontier of renewed influence—anchored by a partner that understands and navigates both the streets of Niamey and the corridors of NATO.

About the authors

Alp Burak Ozen is a program assistant at the Atlantic Council Turkey Program.

Haley Nelson is a Boren Scholar and a Georgetown University alumna. She is an independent geopolitical consultant with a focus on energy and infrastructure security in Eastern Europe, Central Asia, and Turkey.

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/why-modernizing-cafta-dr-matters-for-the-united-states-and-options-for-updating-the-trade-pact/ Wed, 19 Nov 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=888568 Central America and the Dominican Republic are emerging as key partners for US economic security. The United States has a unique opportunity to reform its free trade agreement with the region—CAFTA-DR—to strengthen these ties.

The post Why modernizing CAFTA-DR matters for the United States, and options for updating the trade pact appeared first on Atlantic Council.

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Bottom lines up front

• The United States’ free trade agreement with Central America and the Dominican Republic needs updating to address digital trade, labor standards, and supply-chain rules that have evolved since it took effect in 2005.
• Modernizing CAFTA-DR will strengthen US economic security by countering China’s influence and reducing migration pressures.
• Three paths forward exist: full USMCA accession for CAFTA-DR members; replacing the group agreement with bespoke bilateral deals; or targeted updates to specific chapters of the original agreement.

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As the US government reconsiders its trade architecture, as well as its trade network in the Western Hemisphere, updating the Central America–Dominican Republic Free Trade Agreement (CAFTA-DR) should be viewed not as a simple economic exercise, but as a strategic investment in US economic security and competitiveness. An upgraded CAFTA-DR could reinforce regional stability at a time when economic fragility, migration pressures, and external influence are converging in the United States’ near abroad.

Aligning CAFTA-DR’s standards with the more modern United States–Mexico–Canada Agreement (USMCA) framework—for example, on digital trade, labor, and supply-chain governance—would create a more coherent North American–Central American production corridor serving US industries, reducing dependence on distant suppliers, and supporting a more orderly regional economy.

China’s expanding presence in Central America and the Caribbean, via critical infrastructure investments, technology partnerships, and growing trade links, has altered regional dynamics and tried to dilute US influence. Modernizing CAFTA-DR is therefore not just an economic update; it is a geopolitical must-have to both secure supply chains and keep key trade partners aligned with the United States.

An updated CAFTA-DR could strengthen supply chain resilience by encouraging the strategic relocation of certain US light and more-labor-intensive manufacturing and by diversifying away from China-dependent networks. It would also enhance digital trade rules, environmental standards, and labor protections, all central issues on today’s economic security agenda. By refreshing these commitments, the United States could help its partners attract high-value investment, foster inclusive growth, and reduce migration pressures fueled by economic fragility.

Moreover, modernization would reaffirm Washington’s long-term commitment to shared prosperity and democratic governance. A proactive US agenda, anchored in fair trade, sustainable investment, and transparent governance, could offer a compelling alternative to China’s transactional and opaque financial approach. In short, an updated CAFTA-DR represents a strategic tool for deepening US partnerships, defending economic values, and reinforcing the hemisphere’s autonomy at a time when geopolitical competition is intensifying.

About the authors

Enrique Millán-Mejía is a senior fellow in economic development at the Adrienne Arsht Latin America Center of the Atlantic Council. He served as senior trade and investment diplomat for the government of Colombia to the United States between 2014 and 2021.

Antonio Ortiz-Mena, PhD, is a nonresident senior fellow at the Adrienne Arsht Latin America Center of the Atlantic Council. He served as head of the Trade & Economics office of the Embassy of Mexico to the United States between 2007 and 2015. He is the CEO and founder of AOM Advisors.

Rocío Rivera Barradas, PhD, is a senior advisor with AOM Advisors. She served as trade and investment diplomat of the government of Mexico to the United States, based at the Mexican Consulate in Chicago, between 2019 and 2024.

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/report/chinas-economic-slowdown-and-spillovers-to-africa/ Tue, 18 Nov 2025 16:00:00 +0000 https://www.atlanticcouncil.org/?p=887330 China has catalyzed new infrastructure and industries in Africa, but the continent is also exposed to negative ripple effects from changes in China’s domestic economy. This report investigates how different projections of China’s economic growth and structure over the next five years will affect trade and financial engagement with the African continent.

The post China’s economic slowdown and spillovers to Africa appeared first on Atlantic Council.

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Bottom lines up front

• On balance, the best long-term outcome for Africa is likely one in which China accepts the cost of reform.
• Demand for minerals will grow about 5 percent per year under all scenarios but only a reform scenario sees Chinese demand for African manufactures grow.
• Chinese exports of commodities and manufactures to Africa are set to grow only 4 to 6 percent per annum in all scenarios, a marked decline from annual growth rates above 10 percent between 2020 and 2024.

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Executive summary

China’s economic rise and its integration with Africa have catalyzed new infrastructure and industries across the continent. But this also now exposes African countries to negative ripple effects from changes in China’s domestic economy. As China’s investment- and manufacturing-centric economic model loses steam, African officials and policymakers will need to plan for growth and economic transformation, with an understanding that their largest trade and investment partner might look very different than it has over the past decade.  

This report investigates how different projections of China’s economic growth and structure over the next five years (through 2030) will affect trade and financial engagement with the African continent, and what these outcomes will mean for decision-makers. It deploys a novel framework to estimate how economic flows between China and Africa shift under different growth scenarios. To account for Africa’s diverse economies—spanning some of the world’s least developed countries as well as high-income financial centers—this analysis extends to country groups.

No growth scenario in China will benefit all of Africa’s nations equally. But on balance, the best long-term outcome for Africa is likely one in which China accepts the cost of reform to implement slower, but more stable, growth. While countries could previously envision the net benefits of close trading relationships with China in 2030, trade now presents both opportunity and threat: opportunity in the form of cheap imports, but complication in the form of persistent trade imbalances and overcapacity in manufacturing. Under any growth scenario, finance from China’s banks and investors will continue to decline—whether sharply or gradually—as China’s domestic financial system evolves.

Chapter 1 surveys economic conditions in Africa as of 2025, as well as how commodity markets and external imbalances make many African countries vulnerable to shifts in the global growth environment and in their economic relationships with China. Even countries with limited direct exposure to China are likely to feel the impact of a slowdown via regional economic linkages and the effect of China’s exports and imports on global prices.

Chapter 2 provides an overview of trade and financial flows between China and Africa. While the importance of individual flows varies, a few channels account for the majority of economic value: goods trade, commercial and development finance, and foreign direct investment (FDI). Baseline growth rates of these flows are used to inform projections in the later analysis.

Of these, the goods trade represents the largest scope of bilateral engagement between China and the African continent, approaching $300 billion annually as of 2024, or about 10 percent of Africa’s gross domestic product (GDP). However, imbalances driven by structural characteristics of the two economies have intensified in recent years. Despite recent attempts to diversify trade, African countries still have large trade deficits, mostly exporting commodities to China and importing manufactured goods. China’s mode of finance mixes concessional and commercial motives, and new financial flows are slowing as lenders look to control risk. The result has been that China is collecting more in debt service payments than it is disbursing in new loan finance.

China’s outbound financial activity, which recovered after COVID-19 downturns, is now more diverse in both its form and its targets. New annual FDI flows from China now exceed new lending from China to African countries ($6 billion in annual deals as of 2023, according to Rhodium Group data). Portfolio flows are still small. Estimated total Chinese portfolio investment amounted to only $1.6 billion as of June 2024, which remains concentrated in economies with more developed financial markets, such as South Africa and Egypt. The differences in scale between these flows influence the channels through which China’s growth effects will be most keenly felt.

To evaluate the impact on African economies of spillovers from China’s growth slowdown, Chapter 3 establishes a baseline of economic conditions in China. The real question to determine China’s future growth is whether it manages to reform its investment-driven system or stagnate on its current path. To evaluate both of these possibilities, we evaluate the economic assumptions of China’s growth scenarios—and from there, the impacts on African countries— through 2030, using three different perspectives.

• The International Monetary Fund (IMF) scenario: In its official World Economic Outlook (WEO) projections, the IMF forecasts growth of 3.4 percent by 2030.
• The reform scenario: China begins to successfully rebalance toward a consumer-oriented economy and the country’s economic growth slows in the short term before rising to a more sustainable rate of around 4 percent by 2030.
• The stagnation scenario: Beijing’s reform efforts flounder and China’s economy grinds slower and slower. Growth slows to 2.5 percent by 2030.

Chapter 4 assesses outcomes for African economies, based on the growth scenarios laid out in Chapter 3 for China through 2030. The impacts of growth projections are evaluated for goods trade across four product groups of Chinese imports from Africa (oil, minerals, agricultural products, and manufactured goods) and two product groups of Chinese exports to Africa (manufactured goods and commodities). Impacts on key outbound financial flows from China to Africa are also evaluated, including lending, portfolio flows, and FDI. Several key takeaways arise from this analysis.

• Across different scenarios, China’s oil imports from Africa are likely to decline due to growing electric vehicle adoption and clean power generation capacity, but they hold up best in scenarios in which China’s structural reforms are limited.
• China’s non-oil mineral imports will likely grow quickly under all scenarios, but demand might shift among mineral products, with different implications for different African countries. Commodities such as iron ore and those used in clean tech sectors are core inputs for a variety of China’s manufacturing industries. As a result, the projected growth of China’s mineral demand is strong across all scenarios.
• African manufactured and agricultural goods do best in a reforming China, where an empowered consumer base spends more on foodstuffs and African-made manufactured goods such as clothing. In the stagnation scenario, and to a lesser extent, the IMF scenario, weak Chinese demand and expanding manufacturing output and trade surplus suppress demand for African manufactured goods. Growth of China’s agricultural imports is projected to be strong under all three scenarios. In the reform scenario, growth projections are highest for both agriculture and manufacturing imports. As Chinese household consumption grows, industrial upgrading in China will move out of lower value-added industries, letting African manufacturers capture more market share.
• All three scenarios project that lending to Africa will be stronger than other forms of finance. Chinese lenders will still need to refinance and support their existing obligations despite tightening constraints on their balance sheets.
• Under all three scenarios, the growth of FDI to Africa is projected to continue at modest levels over the next five years. Chinese FDI in Africa is heavily concentrated in capital-intensive sectors that are stickier and more often linked to policy goals, such as control of critical minerals and other essential inputs used by Chinese manufacturers.

Chapter 5 concludes by assessing the potential impacts of each scenario by country group. While oil exporters and “traditional” mineral and commodity metal exporters would paradoxically benefit from a “stagnating” China that maximized oil consumption, this would not be a net benefit to the rest of the continent. Instead, a reforming China—better positioned to resolve trade and financial imbalances, and to drive consumption of Africa’s exports—offers the best prospects overall for a larger group of African countries.

• For transition mineral exporters, demand for Africa’s critical minerals is likely to persist regardless of scenario, as these sectors will remain a core focus of China’s (and other countries’) national economic strategies. It is more difficult to predict outcomes for low-income countries even if they are less exposed to commodity markets, where much depends on regional transmission of spillovers. Though China’s aid and development finance are far from the only considerations for policymakers in this group, they are not guaranteed to rise even in a high-growth scenario. For the middle-income group as well, much depends on the balance between surging Chinese exports and opportunities to capture investment from China. A reform scenario is their best bet.

Read the full report

About the authors

Matthew Mingey is an Associate Director with Rhodium Group, focusing on China’s economic diplomacy and outward investment, including development finance. Matthew is based in Washington, DC. Previously, he worked on global governance issues at the World Bank. Matthew received a Master’s degree in Global Business and Finance from Georgetown University’s Walsh School of Foreign Service and a Bachelor’s degree from the University of Pennsylvania.

Jeremy Smith is a Research Analyst with Rhodium Group’s China practice, focusing on China’s evolving growth dynamics and economic engagement with the world. Jeremy previously worked at S&P Global, where he performed macroeconomic forecasting and sovereign risk analysis for countries in Latin America and the Caribbean. Prior to that, he was a James C. Gaither Junior Fellow at the Carnegie Endowment for International Peace. Jeremy received a master’s degree from the Johns Hopkins School of Advanced International Studies, concentrating in international economics and China studies. He also earned a graduate certificate from the Hopkins-Nanjing Center and a bachelor’s degree from Williams College.

Laura Gormley is a Senior Research Analyst with Rhodium Group’s China Projects Team, focusing on China’s innovation ecosystem and external economic engagement. Prior to joining Rhodium Group, she was a research assistant with the Global Development Policy Center – Global China Initiative at Boston University, where she contributed to the Center’s work on China’s development finance and decarbonizing the Belt and Road Initiative. Laura holds a Master’s degree in Global Policy from Boston University’s Pardee School of Global Studies and a Bachelor’s degree from McGill University.

Acknowledgements

This report was written by Matthew Mingey, Laura Gormley, and Jeremy Smith, with support from the Atlantic Council GeoEconomics Center’s Charles Lichfield and Jessie Yin.

Rhodium Group and the GeoEconomics Center wish to thank the colleagues, fellow analysts, and reviewers who shared their ideas and perspectives with us during the writing process and helped us strengthen the study in review sessions and individual consultations. Our gratitude goes out to Daniel Rosen and Josh Lipsky.

This project was made possible thanks to the philanthropic support of Carnegie Corporation of New York.

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/report/building-the-digital-front-line/ Mon, 17 Nov 2025 15:35:11 +0000 https://www.atlanticcouncil.org/?p=886781 In this report, author Emma Schroeder examines which factors most shaped tech companies’ decisions as to whether and how to lend their support to Ukraine throughout the war.

The post Building the digital front line: Understanding big tech decision-making in Ukraine appeared first on Atlantic Council.

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Table of contents

• Executive summary
• Introduction
• Pull factors
  • Clarity of conflict
  • Business alignment
• Push factors
  • Difficulty of coordination
  • Risk of retaliation
• Key takeaways and conclusion
• Author and acknowledgements

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Executive summary

The war in Ukraine has seen Russia launch and sustain a full-scale invasion across the information and physical domains against a country that has embraced technological development and increased technological and geopolitical connections to the United States, Canada, and Europe. Private technology companies have provided essential and often irreplaceable support to Ukraine following Russia’s invasion in 2022 and—especially in the early months of the conflict—did so largely without a request from an allied state or payment from Ukraine.

However, more than three years on, although the private sector’s assistance in Ukraine has been well-documented, the policymaking community at large is still largely unaware of how companies decided whether and how to provide technological support to and in Ukraine. Through open research as well as interviews and roundtable discussions with various private sector and government representatives, this report posits that companies were primarily motivated by a complex combination of factors in tandem, which pulled them toward or pushed them away from support. The factors pulling companies toward cooperation were the moral clarity of the conflict, and alignment with existing business opportunities. At the same time however, among factors pushing companies away from involvement in Ukraine was the difficulty of coordinating assistance in-country, as well as the risk of Russian retaliation. Meanwhile, both sets of factors were either enhanced—or mitigated—due to various actions taken by Ukraine, allied states, and international bodies. This includes Ukrainian tech diplomacy; the development of Ukraine’s technical capabilities; aid facilitations and coordination efforts by both various groups and entities; and risk mitigation efforts undertaken by both states and private companies.

Dependency on the private sector in the cyber domain has become a somewhat frequent refrain in domestic cybersecurity conversations. However, prior to the February 2022 Russian invasion of Ukraine, no one—not supranational bodies, states, or even companies themselves—was prepared for the role they would assume once the tanks rolled and the missiles fired.  The Russia-Ukraine conflict’s cyber dimension has revealed an underlying dependency on products, services, and infrastructure owned and operated by private companies. This has proved to be both a source of opportunity to enhance Ukraine’s defenses, while at the same time revealing fundamental risks and vulnerabilities. Given the heft and impact of technology companies in today’s digital infrastructure, let alone in conflict, it is essential that policymakers grasp this complex interplay of factors that influenced companies‘ decision-making as they headed in Ukraine, to inform planning or preparedness for future conflicts where the private sector will inevitably play a key role.

Introduction

Amid the Russia-Ukraine conflict, the private sector was and is a crucial line of defense and source of cyber resilience to a greater extent than any conflict previously observed. As the first case study of this phenomenon in an overt, conventional war, the past three years in Ukraine have clearly demonstrated how crucial the cyber and informational domain, and the private companies at its forefront, will be in competition, conflict, and war to come.

More than three years following the full-scale Russian invasion of Ukraine in the early morning of February 24, 2022, the war—and the crucial role of the international community in it—continues, but not unchanged. The war that Putin expected to end in Russian victory within a handful of days is now well into the third year of the largest and deadliest war in Europe since World War II.

This study examines the characteristics of this conflict that influenced companies’ decision-making regarding the type and degree of their involvement in Ukraine. Which factors and actions taken by states shaped tech companies’ decisions throughout the conflict as to whether and how to lend their support to Ukraine? These include both pull factors, those that increased the likeliness and degree of technology company involvement in Ukraine, and push factors, those that decreased the likeliness or degree of the same. Additionally, a key element influencing this space was the response by the Ukrainian government, allied governments, and international bodies to either build on the effects of the pull factors or mitigate the effects of the push factors throughout the conflict.

These factors and reactions are explored through open research, individual interviews with executives from tech companies active in Ukraine,¹ and workshop discussions including private sector, civil society, and representatives from various governments. It puts forward the private sector’s perspective on its own involvement in Ukraine since the 2022 invasion, reflecting on opinions and actions as they stood at the time of initial decision but also on the lessons learned since. The intention is to contribute to a baseline of understanding of public-private cooperation in Ukraine so that future policy decisions, whether in the Ukraine context or beyond, are built upon a full evaluation of experience.

Pull factors

Clarity of conflict

Clarity of conflict refers to the perception of the “right” and “wrong” or “victim” and “perpetrator” in a conflict, among one or more set audiences, whose support has the potential to provide materiel aid. In examining the role of this factor in the provision of tech aid to Ukraine, these audiences are primarily state policymakers, general populations, and technology leaders in Europe and North America. Overwhelmingly, in both public reporting and private interviews, the central reason given by companies themselves for why private companies provide aid and services supporting Ukraine is the moral clarity that these companies, their employees, and a large portion of their customers saw in the conflict and its conduct. Many interviewed commented on how the Russo-Ukrainian War, distinct from most other conflicts, has a clear and binary “right” and “wrong” side in the perspective of at least most of the Western world, from governments to individuals. 

Russia engaged in continuous overt and covert aggressive action through a wide variety of coercive, though largely nonescalatory, tools in an attempt to exert control on Ukraine and its population. On February 24, 2022, however, Russia unleashed coordinated missile strikes on Ukrainian cities, airborne deployments of soldiers to key locations beyond the border region, conventional advancement across the border, and coordinated cyber aggression.

In March 2022, Amnesty International released a statement saying, in part, that “In less than a week, Russia’s invasion of Ukraine has triggered a massive human rights, humanitarian, and displacement crisis that has the makings of the worst such catastrophe in recent European history.”² Photos and videos poured out of Ukraine, documenting Russian violence and war crimes against the people of that country. Reports on Russian atrocities and Ukrainian resistance dominated the headlines and news discussions in the West for months.  A Monmouth University survey conducted in March 2022 found that 89 percent of Americans believed that Russia’s actions in Ukraine were not justified.³ Similarly, a poll of public perceptions of responsibility for war, taken across ten European countries showed that a clear majority in all countries attribute the primary responsibility to Russia.⁴

During these early months of 2022 the private sector quickly became an essential pillar of support for the Ukrainian war effort. As one expert put it, “If you had ordered a generic villain, you would have gotten Putin. From a moral standpoint, it was really easy for companies to take a stand, you have a moral highpoint.”⁵ Russia’s long decade of slowly escalating violence toward Ukraine, culminating in a brutal conventional assault and now, yearslong war, created an unusually stark geopolitical environment in which both Western states and the majority of their populations not only supported the defense of Ukraine but did so enthusiastically.

Across interviews and roundtable discussions, industry experts demonstrated an appreciation of the clarity of the “right” and “wrong” in the case of Ukraine. Nearly every private sector individual interviewed highlighted the importance of this factor in determining whether and how their company decided to begin or deepen its involvement in Ukraine following the invasion. One expert from a leading tech company said that “This was the easiest of all scenarios I could imagine for the private sector to seek to help an entity like Ukraine. The clarity on the conflict made the decision to assist Ukraine clear.”⁶ As several experts attested, much of the cyber aid provided to Ukraine required technical expertise that was not only limited to a few companies but also limited to a relatively small population of skilled individuals. At this level of analysis, the degree of available assistance had to take into account the bandwidth and possible burnout risk for these individuals as well as a strong, prevalent reluctance to work with a government or, especially, a military. The perceived clarity of the war in Ukraine, however, was critical to overcoming these concerns—at least for a while.⁷

Reaction – Ukrainian tech diplomacy

Tech diplomacy is the engagement between state authorities and tech companies, civil society organizations, other states, and multilateral fora to influence the development of both technology itself and the policy that surrounds it.⁸ Within the early days of the conflict, members of the Ukrainian government and especially the Minister for Digital Transformation Mykhailo Fedorov, rallied for aid across the technology sector. These calls, and the generally positive reception to them, built on arguments regarding the clarity of the conflict. Although this tech diplomacy has been the project of various Ukrainian officials and offices, both before the 2022 invasion and in the years since, a focus in on Fedorov is illustrative of the Ukrainian approach to cultivating and extracting mutual benefit from relationships with international technology companies.

In 2019, Fedorov was tapped as deputy prime minister and minister of digital transformation and was subsequently named deputy prime minister for innovation, education, science and technology and minister for digital transformation and most recently first deputy prime minister of Ukraine—minister of digital transformation of Ukraine.⁹ Fedorov and his team have been adept, according to government affairs executive from a US-based multinational technology corporation, at creating and using “carrots and sticks” to influence company leadership and employees to more favorably view Ukraine and to augment their willingness to contribute to its defense.¹⁰

Fedorov cultivated a strong social media presence with an audience both within Ukraine and across Europe and North America. He emphasized the importance of social media platforms—using primarily English to connect with an international audience—to bring awareness to the dire situation in Ukraine. He pointed to the social media platform X (formerly Twitter), saying it “has become an efficient tool that we are using to counter Russian military aggression.”¹¹ In efforts like United24, the Ukrainian government’s official fundraising platform, which began with Fedorov tweeting the government’s crypto wallet addresses with an ask for donations,¹² he saw it not just as a fundraising tool, but as a tool that is “keeping people around the world aware of what is going on in Ukraine.”¹³ Crowdfunding efforts, even if donations are small, make people feel that their contributions are making a difference and fosters a closer relationship between that person and the Ukraine regardless of the distance.

Fedorov leveraged this engaged global audience to incentivize company action, effectively mobilizing his audience’s attention. A look at Fedorov’s social media presence shows a clear pattern of this strategy in action. Between March 2022 and July 2024, Fedorov posted fifty-two requests for aid from specific companies, celebrated companies and individuals taking positive action, and called out companies engaging in business practices that he deemed detrimental to Ukrainian defense efforts. These posts served as additional public acknowledgement of the contributions of specific companies to Ukraine in a global public forum that other states were watching, as were individuals, aid organizations, and companies. One tech executive explained that not only did these callouts serve as thanks, they also leveraged the competitive nature of these companies that “one up” each other with aid as an additional driver.¹⁴

The Starlink case provides an interesting example of this strategy in action. Fedorov tagged Elon Musk in an X post and asked him directly to instruct SpaceX to provide Ukraine with Starlink stations, calling him out for trying to “colonize Mars” instead of helping civilians on Earth.¹⁵ Musk responded publicly on X less than twelve hours later that, “Starlink Service is now active in Ukraine. More terminals en route.” Two days later these stations, which would come to serve critical functions for civilians, government entities, and even military personnel, arrived. Fedorov again publicly responded on X with a photo of a truck full of terminals saying, “Starlink – here. Thanks, @elonmusk.”¹⁶

According to Fedorov’s deputy minister, Alex Bornyakov, in the months leading up to the Russian invasion, Fedorov’s office was unable to secure a meeting with Elon Musk. However, SpaceX President and COO Gwynne Shotwell indicated in March of 2022 that the company had been coordinating with Ukraine as part of its European expansion effort for several weeks before the invasion and were awaiting final approval from the Ukrainian government.  According to Shotwell, “they tweeted at Elon and so we turned it on … that was our permission. That was the letter from the minister. It was a tweet.¹⁷ These early interactions show that at the very least, Fedorov’s social media engagement functioned as a nontraditional method to accelerate the provision and delivery of essential technical equipment that would enable connectivity for civilians, government entities, and even military units.¹⁸

Six months before the February 2022 invasion, Fedorov went on a tech diplomacy tour to Silicon Valley, intent on building stronger relationships with key technology companies with Ukraine’s digital transformation on the agenda. Fedorov‘s tech diplomacy work laid a solid foundation for coordination between the Ukrainian government and these technology companies by the time the war began. These relationships and Fedorov and his ministry’s direct approach with private companies meant that his office could seek solutions in the private sector directly and more swiftly than in traditional government acquisition. For example, in less than a month, a new and improved air raid alert system was implemented across the country as a result of a direct and informal conversation between Ajax Systems Chief Marketing Officer Valentine Hrytsenko, Deputy Minister of Digital Transformation Valeriya Ionan, and a team of digital transformation officers.¹⁹ 

Therefore, Ukraine’s approach to tech diplomacy represents a significant shift in how states, especially small or mid-power states, should conceptualize and shape their relationships with technology companies. Given that global technology companies’ (“big tech”) yearly revenue continually overshadows the gross domestic product (GDP) of many states,²⁰ this evolution in states’ relationships with big corporations suggests that corporate ties are sometimes more important than a state’s relationship with another state. This was echoed in a statement from the Danish government, recognizing the extent to which technological disruption affects societal and geopolitical change, nothing that the companies driving that innovation “have become extremely influential; to the extent that their economic and political power match—or even surpass—that of our traditional partners, the nation states.”²¹ Fedorov’s actions therefore proved the importance of tech diplomacy as a key government priority to secure the cooperation of the tech sector in a crisis, aided by the moral clarity that many companies saw in assisting Ukraine in a time of war.

Business alignment

For companies examining whether and how to provide tech-based support to Ukraine in its defense, business alignment can take a variety of forms, but typically refers to some combination of benefits that the company receives from these activities. Although the primary driver cited publicly for tech companies’ involvement has been the desire to aid Ukraine, their customers, and employees in Ukraine against blatant Russian aggression, another factor in companies’ decision-making was in fact how the provision of assistance to Ukraine fit into and supported the overall health and security of their organizations. This included the character of preexisting relationships with both Ukraine and Russia, direct financial profit, and indirect benefits such as instructive experience, field-testing products, and reputational benefits.​

Preexisting relationships

The Russian invasion of Ukraine in February 2022 was not the start of the conflict between the two nations, nor was it the beginning of technology companies’ relationships with Ukraine and Russia. The nature and tone of these relationships provided a key foundation for these companies’ decisions throughout the post-2022 conflict. Ukraine and Russia, both as partners and as markets, had different starting points and were also on different active trajectories that informed the types and depth of engagement that tech companies wished to have with each country, both individually and comparatively.

One of the primary motivations cited for company involvement in Ukraine after the Russian invasion was the simple fact that many of these companies were already active in Ukraine to some extent and their leadership felt a responsibility to protect its employees and continue to serve its customers within Ukraine. For example, threat intelligence companies like Mandiant and CrowdStrike had been engaged in Ukraine since at least 2014, actively tracking cyber espionage, influence, and attack operations, while companies like Microsoft and Google were actively building capacity in the country despite Ukraine’s prohibitions on cloud services. In 2020, Google opened its second research and development center in Ukraine and Microsoft signed a memorandum of understanding with Ukraine’s Ministry of Digital Transformation to include a $500 million investment to build two data centers.²²

Several private sector and government representatives conveyed in private interviews that one of companies’ greatest concerns in the first few weeks of the conflict was the safety of their employees in Ukraine.²³ Many companies set up or contributed to programs intended to help employees leave the country, if they wished, or to provide protection measures for those who remained.²⁴ Additionally, companies with existing customers in Ukraine saw their mission as largely unchanged, seeking to serve their customers regardless of their location.²⁵ Companies with these preexisting relationships had more reason to continue or expand their work in the country due to these long-term connections.

By contrast, many of these companies also had preexisting, albeit weaker, ties with and in Russia. According to a 2024 report from the Center for Security and Emerging Technology, however, of the eighteen US tech companies that provided “direct assistance on the battlefield and/or services to maintain critical infrastructure or government functions,” none had “significant economic or financial linkages to Russia.”²⁶ While Ukraine had undertaken concerted steps to foster mutually beneficial relationships, Russia had been largely coercive. The Kremlin in the years before the 2022 reinvasion sought to tighten control over the Russian information space and exert influence over international tech companies’ activities in Russia. For example, in 2021 Russia passed a law requiring large technology companies with a presence in the Russian market to establish Russian offices registered with the Federal Service for Supervision of Communications, Information Technology, and Mass Media, commonly known as Roskomnadzor, or risk severe punitive measures.²⁷ Some in the industry viewed the move as an attempt to blackmail tech companies into complying with Russian censorship.²⁸ Google was one such target of these coercive measures—in a push to force Google to censor the content available on its platforms within Russia, Russian authorities seized the company’s bank accounts. In response, Google’s Russian subsidiary declared bankruptcy and ceased all but its free services within Russia.²⁹

Amplified by the clarity of conflict discussed above, and Ukrainian tech diplomacy efforts for companies to sever financial ties with Russia and the Russian market, the decision calculus for these companies was less complex than it may have been otherwise.

Not all companies chose to leave the Russian market completely. Despite the coercion that Google faced, the company chose to keep YouTube available in Russia; however, without ads for users in Russia and without the ability to monetize content that would “exploit, dismiss, or condone Russia’s war in Ukraine.”^“30 As discussed previously, many companies decided to continue services in Ukraine out of an obligation to existing customers. Depending on the company and the type of product sold or service provided, this same motivation was seen with respect to Russia as well. One tech executive explained that some of these products and services remained active because they provided a benefit to the Russian public, as opposed to the Russian government. For example, YouTube remained partially active, with restrictions, so that the platform could continue to serve as an alternate source of information for Russians.³¹

Direct profit

For companies, both those with an existing presence in Ukraine and those without, providing technical services in and to Ukraine could also serve more clear-cut business interests. Some were at least partially motivated by direct financial gain like new paid contracts and revenue potential such as additional value generated through the delivery of services and the possibility of positive publicity for the company or their products.

Although much of private companies’ work in Ukraine was (or started as) free of charge, many others were acquired in a more traditional contractual manner, with either Ukraine or an allied government footing the bill. Company representatives said in several interviews and roundtables that while they wish to continue their work in the country, as the war continues, they will require financial support to do so.³²

Indirect benefit

Some of the tech companies active in Ukraine derived value from the very act of providing a service itself, with indirect gains that included instructive experience with Russian cyber operations, the ability to field-test products, and reputational benefits.

For more than a decade, many multinational threat intelligence companies have been tracking Russian cyber aggression in Ukraine as part of their core function. These services helped to drive the development of Ukrainian cyber infrastructure, but it was not solely a charitable effort. It was in these companies own interests to gain the closest possible insights into areas like Ukraine that experience a high degree and sophistication of cyberattacks. As a result, these companies sowed valuable intelligence from their experience, and improved their business offerings across the board. As one executive in threat intelligence at a US cybersecurity nonprofit put it: “for threat intelligence companies, having this depth of access is a gold mine, the details delivered out of Ukraine on Russian tactics, techniques, and procedures (TTPs) are quite amazing.”³³

These benefits are not only limited to threat intelligence companies. Companies that run active platforms used by and in Ukraine, such as cloud platforms, also gained greater direct experience against Russian cyber operations. As one executive put it, “while acting as a shield, [these] companies are collecting vast intelligence that can be used to improve their products and protect all their customers.”³⁴ The experience of defending against Russian activity at that scale and volume served as training of sorts for companies’ cybersecurity teams.

Both representatives from private companies and the Ukrainian government cited an additional benefit to working in Ukraine during the current war: it served as a testing ground for technology. As Fedorov stated, Ukraine “is the best test ground for all the newest tech … because here you can test them in real-life conditions.”³⁵ Several company executives privately seconded this notion, saying that alongside their company’s desire to do the right thing, their work in Ukraine provided proof of concept for their capabilities.³⁶ Ukraine also offered a means to demonstrate to potential customers the effectiveness of their offerings. Founding partner of Green Flag Ventures Deborah Fairlamb said at a European defense conference that “no one would even look at a product unless it had ‘Tested in Ukraine’ stamped on it.”³⁷ During a roundtable conversation, a company executive said that governments were more likely, having seen a company’s work in Ukraine, to purchase their products and trust that they are secure.³⁸

Finally, companies working actively in Ukraine were also motivated by the benefits to public perception and reputation. Popular support of Ukraine meant that companies’ support may have improved their reputation by association. In a TIME article from early 2024, author Vera Bergengruen argued that this reputational concern was part of Palantir’s decision calculus for its work in Ukraine, by helping to dispel characterization of the company’s work as a tool to support intrusive government surveillance. This would situate Palantir’s work in Ukraine among its similar efforts to “shed its reputation as a shadowy data-mining spy contractor.”³⁹ Clearview AI’s reputational concerns also likely motivated its assistance to Ukraine. The company was sanctioned multiple times throughout Europe for privacy violations and was lambasted in a 2020 New York Times article for its controversial use by law enforcement and private companies to track people through AI-enabled facial recognition.⁴⁰ Nevertheless, the company received an outpouring of positive press following public announcements that Ukraine  was using this same AI-enabled facial recognition software to identify Russian soldiers, including deceased soldiers and those suspected of committing war crimes in Ukraine.⁴¹ Whether trying to capitalize on a positive reputation or counter negative perceptions, companies benefit from their association with a cause popular across their customer base.

Reaction – Ukrainian technical capability and posture

In both the buildup to war and the conduct of it, some companies with interest in setting up operations in or with Ukraine were reluctant      to do so out of concern regarding Ukraine’s ability to act as a capable and trustworthy recipient of goods and services. Executives working in threat intelligence and information security at US-based multinational technology companies have pointed to corruption in Ukraine as a barrier to engagement prior to the invasion and a factor that was carefully considered when deciding how to provide aid in Ukraine.⁴² This challenge is openly acknowledged in Ukraine’s Anti-Corruption Strategy for 2021-25, which states that “corruption prevalence and distrust in the judiciary are the key obstacles to attracting foreign investment to Ukraine.”⁴³

To mitigate these factors, Ukraine and its partners have invested heavily over the past decade to take on corruption and build out legal, economic, and technical frameworks to transform Ukraine so as to make it a more appealing target for assistance and cooperation from the public and private sectors. According to Alex Bornyakov, Ukraine’s deputy minister of digital transformation, Ukraine’s sought to develop “the largest IT hub in Eastern Europe with the fastest growing GDP, industrial parks, and its own security-focused ‘Silicon Valley.’”⁴⁴

Anti-corruption efforts

The Ukrainian government’s commitment to anti-corruption efforts has been an important factor for the success of the process, which began well before the buildup of Russian tanks on its border. According to the 2025 Organization for Economic Cooperation and Development (OECD) Integrity and Anti-Corruption Review of Ukraine, since 2013 Ukraine “significantly reformed its anti-corruption framework to fight what were then historically high corruption levels in the country.”⁴⁵

Ukraine’s public and private IT sectors have long been a breeding ground for software acquisition-related fraud, a scheme in which an individual reports the purchase of a legitimate software license but actually buys a pirated or outdated version of that software and pockets the difference. Before 2014, approximately 80 percent of Ukrainian government and private entities were using network software that had either never been or was no longer supported by the associated software vendor,⁴⁶ making Ukraine a difficult and unappealing market for software vendors.

In 2014, anti-corruption activists started the ProZorro project, which over the past decade moved public sector procurement, including that of IT infrastructure, to a central platform built around the tenets of transparency, efficiency, and cross-sector collaboration and competition.⁴⁷ According to a report by Dr. Robert Peacock, through the use of ProZorro and other anti-corruption efforts, senior officials at Ukraine’s State Special Communications Service estimated that “the share of pirated and unsupported software on the country’s networks had dropped from more than 80 percent in 2014 to only 20 percent in 2020.”⁴⁸

As the conflict in Ukraine escalated into a full-scale war, Ukraine’s anti-corruption efforts became even more urgent and essential. For example, UNITED24, the country’s official fundraising platform to fund the Ukrainian war effort that has raised approximately $350 million since the beginning of the war, sends money directly into transparent national accounting systems depending on the choice of the donor, with the leading global accounting firm Deloitte auditing platform.⁴⁹ In addition, in the first year of the war Ukrainian President Volodymyr Zelenskyy and his government dismissed several high-ranking government officials based on allegations of corruption. This included two of the top Ukrainian cyber officials after they were accused of participated in corrupt procurement practices. According to the country’s National Anti-Corruption Bureau, the accused allegedly embezzled $1.7 million between 2020 and 2022 through fraudulent software acquisition.⁵⁰ The Ukrainian government’s efforts  largely mitigated companies’ concerns regarding corruption, and those companies that cited corruption as a barrier to working with Ukraine have since commenced programming previously denied to Ukraine on those grounds.⁵¹

For a private company to make the decision to invest more heavily in Ukraine, the benefits—financial or otherwise—must outweigh the risks. By addressing corruption within the government, and especially tech-related corruption, the Ukrainian government effectively diminished the weight of this factor in companies’ overall decision calculus. Crucially, such efforts take time to implement and yet more time to create meaningful change. Had these anti-corruption programs not been well underway before 2022, the question of corruption may have significantly deterred companies from deeper involvement in Ukraine.

Ukraine turns toward tech

Instead of sowing distrust in the idea of cyberspace as a safe space for economic and even government services, the past decade of Russian aggression against Ukraine in cyberspace motivated Ukraine to invest heavily in that space and turn its former weakness into a newfound strength. It could even be said that the continuous Russian aggression against Ukraine, through cyberspace and otherwise, helped Ukraine to better defend itself against Russia. Before the 2022 Russian invasion and even more so since, the Ukrainian government sees a flourishing technology sector within Ukraine as a key component to the economic strength of the country.⁵² However, to foster such a flourishing tech environment, Ukraine needed to first invest in its legal and economic foundations.

As a response to escalating Russian aggression in 2014, Ukraine began what would be an intensive decade of government reform and policy advancement on cyber issues. The figure below highlights various investment and development programs aimed at enhancing Ukrainian technological capacity, including efforts of the Ukrainian government itself and in partnership with various international entities such as the North Atlantic Treaty Organization (NATO) and the US Agency for International Development (USAID).

These, among other efforts, were essential steps to creating and expanding a technologically capable and developed Ukraine. Especially important was the increased relative cybersecurity of the Ukrainian digital environment, the development of Ukraine’s cyber workforce and general cyber literacy, and an influx of capital enabling increased investment in private sector tools and services.

On the economic front, the Ukrainian government made strides to create an attractive environment for investment. The government’s mission has been to shift the conversation from purely one of donations and aid to a direct appeal to the companies’ more pecuniary concerns. According to Bornyakov, “The best way to help Ukraine is to invest in Ukraine.”⁵³ This call is both international and domestic. The Ukrainian government has implemented a number of projects and programs dedicated to fostering the local tech ecosystem. As of December 2024, the IT sector accounted for 4.4 percent of Ukraine’s GDP and 38 percent of the country’s total service exports. Much of this technological energy is being dedicated back to the war effort—according to a report compiled in cooperation with the Ministry of Digital Transformation of Ukraine, 97 percent of Ukrainian IT companies are “actively supporting projects that contribute” to Ukrainian defense.⁵⁴

Diia City in particular, launched just two weeks before the invasion, is a tool intentionally designed to make it easier and more appealing for foreign companies to set up and run operations within Ukraine. Diia City is a “virtual free economic zone for tech companies in Ukraine” that offers a variety of legal and tax benefits.⁵⁵ The connected Brave1 initiative launched in early 2023 to “create a fast track for innovation in the defense and security sectors,” especially those projects of high importance to Ukrainian military leadership, such as “drones, robotic systems, electronic warfare, artificial intelligence tools, cybersecurity, communications, and information security management systems.”⁵⁶

These efforts, both domestic and international, bolstered the defense of Ukraine by building and demonstrating trustworthiness, capability, and economic value for the private sector. In other words, the political and economic engine driving technological development in Ukraine was composed of more than a decade of concentrated action from Ukraine and its international partners, and was in place well before tanks began rolling across the borders. This vital work ultimately helped to bring about conducive conditions for private sector investment or provision of services, as long-term structural factors indirectly shaping company decision-making to aid Ukraine.

Push factors

Difficulty of coordination

Difficulty of coordination refers to the friction that private companies experienced along the lifecycle of technical assistance to Ukraine—from understanding which products or services would be impactful, knowing who to coordinate with and how, or the logistics of providing that assistance. Friction, as in all domains of warfare, is the imposition of the constraints of reality upon one’s plans and impulses, and therefore each additional complexity that stands between a certain technology and its use in Ukraine increases the likelihood that that desired provision will not occur, will take longer, or will be provided in a less helpful form.

One of the most persistent hindrances to the provision of tech-related assistance from private companies in Ukraine was the difficulties that all parties involved faced, which was to effectively coordinate the assistance available with the assistance that Ukraine needed most in a fast-moving and high-pressure environment, particular as more Ukrainian organizations expressed a need for more threat intelligence, licenses, or training for tools. In almost every conversation with industry representatives about their experience in this space raised this coordination problem. The factors that most significantly impacted coordination effectiveness included whether a company had a preexisting presence in or relationship with Ukraine, the clarity with which Ukraine communicated its technical needs, and the ability to assess the effectiveness and impact of products or services provided.⁵⁷ 

Especially in the early months of the full-scale Russian war, much of the assistance that private tech companies provided was coordinated by companies themselves and in a largely ad hoc manner. In addition, Ukraine experienced communications challenges such as a lack of secure channels or limited visibility into networks and infrastructure on the ground.⁵⁸ Companies that did not have a strong relationship with the Ukrainian public sector prior to the conflict found that direct coordination was difficult to establish once the conflict had begun.⁵⁹ For some, not having a direct relationship with or in Ukraine had been an intentional choice, due to regulation complexity or corruption concerns.⁶⁰ Initially, companies without a preexisting presence often struggled to pinpoint the correct office or person with which to speak. They bridged this gap most often with some combination of brand recognition driving direct outreach from the Ukrainian government and facilitation by Ukrainian private companies that had established relationships with international tech companies and could act as middlemen.⁶¹

Even in cases of existing relationships within Ukraine, complexities abound for companies. A threat intel executive indicated that, for many, there is a tension between what companies thought they could provide and what the Ukrainian government knew about its own needs. While Ukraine was effective in communicating its technical needs at the tactical level, according to various company representatives, effective coordination was somewhat hampered by their ability to effectively communicate and coordinate technical assistance needs across government at a strategic level lagged behind.⁶²

An additional point of friction was the high degree of difficulty in deconflicting the assistance provided to Ukraine from different companies. Understandably, the Ukrainian government—and various individuals and agencies working within it—were responding to imminent threats and thus would send out the same or similar requests to various companies in the hope that one would respond.⁶³ This meant that at times various companies were devoting time and resources to developing an assistance measure that was not actually needed and would not be implemented, or if it was in part, had a lesser relative impact on Ukrainian defense because of duplicative measures. This inability to understand and plan around the impact of assistance was broader than just the duplication issue; dozens of company representatives reported difficulties in getting a clear view as to whether their assistance was actually effective once provided.⁶⁴

Without this data, future requests for and fulfillments of technical aid will continue to be based on theory rather than evidence from their growing experiences together. A 2024 paper from the Cyber Defense Assistance Collaborative (CDAC) and Columbia School of International and Public Affairs, made strides in its effort to collate and assess the effectiveness of those companies and organizations that provided cyber defense assistance to Ukraine through their program. The report identified both direct indicators, where effectiveness can be assessed via concrete measures, and proxy indicators, where possible contributing factors are assessed on a scale of perceived impact.⁶⁵

Reaction – Ukrainian coordination and adaptation

On top of domestic development efforts, Ukrainian government officials spent concerted time and effort to build relationships that would serve as the foundation for future cooperation. Fedorov‘s tech diplomacy work forged new connections with these companies, as well as their leadership and employee bases, that in many ways enabled the speed of company response following Russia’s February 2022 invasion. “When the invasion began, we had personal connections to these companies,” Fedorov said. “They knew who we are, what we look like, what our values are and our mission is.”⁶⁶

According to Fedorov, in the first month of the war he sent “more than4,000 requests to companies, governments, and other organizations, each one personally signed.”⁶⁷ Some of these connections built on existing relationships, but companies without preestablished links either initiated conversations directly with or received direct requests from the Ukrainian Government. Beyond the Ministry of Digital Transformation, various Ukrainian offices like the State Special Communications Service of Ukraine, Security Service of Ukraine, National Security and Defense Council of Ukraine, and Ukrainian National Cybersecurity Coordination Center were engaging in relationship building and outreach efforts in order to coordinate the provision of tech assistance.⁶⁸ According to Bornyakov, the early days of coordination with the international private sector were chaos.⁶⁹ Various offices and employees sent out messages and requests without internal coordination, and products or services were provided without sufficient due diligence to ensure that they were truly useful to the Ukrainian war effort.

The Ukrainian government quickly updated its practices to facilitate more efficient cooperation. Among the first of these moves was a Ukrainian policy change to directly enable increased private sector participation. In February 2022, prior to the invasion, the Ukrainian parliament Verkhovna Rada amended the laws that had barred government use of Cloud services. This change meant that just days before the Russian invasion, companies including Amazon, Microsoft, Google, and Cloudflare were able the aid the Ukrainian government and several critical sector entities in migrating their critical data to their cloud servers—a critical move, as Russia’s attacks during the first few weeks of the war specifically targeted physical data centers.⁷⁰ In addition, due to the imposition of martial law, Ukraine adopted two resolutions to streamline public procurement. Resolution 169, adopted on February 28, 2022, enabled government contracting authorities to ignore, when necessary, the procurement procedures required by the laws on public and defense procurement.⁷¹ Resolution 723, passed four months later, added new, more efficient requirements to the procurement process, amending both resolution 169 and resolution 822, most important of which was the introduction of the ProZorro platform as the mandatory electronic procurement system.⁷² As previously discussed, this platform was both a tool to facilitate procurement and to counter corruption in the procurement process at large.

Despite improvements to coordinate more effectively with private tech companies, and even as international coordination mechanisms emerged, a significant contingent of companies has maintained a preference for direct coordination. One government affairs executive noted that their company, like many others, preferred direct coordination with the Ukrainian government since it enabled more immediate and relevant support, and they were skeptical that third-party mechanisms would be as effective.⁷³

Reaction – International aid facilitation

Since the February 2022 Russian invasion of Ukraine, and even before that, international entities—states, supranational bodies, and non-state groups— played an important role in coordinating technical-focused aid in support of Ukraine.

However, states’ coordination efforts were notably inconsistent. In the first year and a half after the Russian reinvasion, the United States allocated $113 billion in response to the war in Ukraine—largely allocated to the Department of Defense at 54.7 percent, USAID at 32.3 percent, and the Department of State at 8.8 percent.⁷⁴ This money should not be viewed like a check signed over to the Ukrainian government, but rather as money allocated to respond to the Russian invasion through a combination of forms and recipients, primarily the defense industrial base in the United States.⁷⁵ By contrast, private companies publicly announced and celebrated their digital and tech aid to Ukraine. In an interview, one leading tech executive observed a clear dearth of focus from the US government toward digital and tech aid, instead opting for significant humanitarian and more traditional military assistance.⁷⁶ This prioritization was likely an intentional choice—the US government’s perspective seems to have been that it was leading conventional aid by a significant margin and wanted others, like European governments and the private sector, to take the lead on digital and tech matters.⁷⁷Though not speaking specifically on cyber and tech elements, Secretary of Defense Pete Hegseth in February 2025 called publicly for European states to provide the “overwhelming” majority of defense funding for Ukraine, bemoaning what he saw as an “imbalanced relationship.”⁷⁸ Hegseth specifically pushed for the expansion of existing Europe-led coalitions—discussed below—dedicated to coordinating technological aid.⁷⁹

By contrast, industry experts agreed that the UK Foreign, Commonwealth and Development Office (FCDO) was a very effective facilitator of private sector aid.⁸⁰ The UK’s efficiency on this issue was due in part to fewer restrictions on aid money between distinct civilian- and military-designated buckets.⁸¹ According to an assessment from the Independent Commission for Aid Impact, which scrutinizes UK aid spending, this flexibility enabled the FCDO to respond and adapt to the constant evolutions of the war and geopolitical environment—thereby acting as an effective channel for private sector assistance into Ukraine.⁸²

The ad hoc nature of many of the early digital assistance programs provided by private companies was in some ways a double-edged sword. In many cases they were present and able to move more quickly than government programs, and in some places they stepped into de facto political roles—shaping the conflict and public understanding of it. However, this efficiency and effectiveness became difficult to sustain in the long run as governments and government-sponsored mechanisms were slow or insufficient to step in to support these efforts.⁸³ US government entities were instrumental in facilitating support from private companies to Ukraine through purchase agreements, such as that of hundreds of Starlink devices and subscriptions in coordination with other governments⁸⁴ and partnerships. US government entities also participated in intelligence sharing and collaboration efforts regarding Russian cyber capabilities and activities⁸⁵ and even conducted hunt forward operations to assist in Ukrainian defense against Russian cyber aggression both before and after the February 2022 Russian invasion.⁸⁶

In various conversations, both industry and government representatives confirmed the lack of effective governmental and supranational coordination and its impact on the private sector, and on Ukrainian defense.⁸⁷ Company representatives across the United States and Europe shared the same refrain: “we can’t keep supporting Ukraine ourselves forever without government assistance.⁸⁸

In addition to bilateral assistance efforts, various entities emerged across the conflict focused on cooperation organization and facilitation of digital and tech aid. The first of these was the CDAC, not a government entity, but a nonprofit organization that brought together a number of cybersecurity and technology organizations to better coordinate assistance efforts. The organization was founded by Gregory Rattray and a coalition of cyber executives to address the impediments and complications that accompanied the early days of digital and tech assistance provision from the private sector. A CDAC representative said in May 2024 that the group had facilitated $20-30 million in tech-related assistance for Ukraine since its inception.⁸⁹ As Ukrainian and CDAC representatives noted, CDAC’s facilitation efforts have since slowed for a variety of reasons: decreased ability to act as an intermediary as requests have become more specific, a stabilization among companies that no longer require a coordinator after their relationships in Ukraine were established, and a lack of sufficient financial support for both CDAC and the companies willing to provide assistance.⁹⁰

The vacuum noted by industry representatives and CDAC founders in the shape of a true digital and tech aid coordination body with the resources and remit to execute that mission is the planned role of the IT Coalition and the Tallinn mechanism. The IT Coalition, part of the Ukraine Defense Contact Group (UDCG; also known as the Ramstein Group), was established in September 2023 as “a dedicated group of donor nations led by Estonia and Luxembourg within the UDCG framework, focused on delivering support to Ukraine’s Defense Forces in the area of IT, communications, and cyber security.”⁹¹ The group consists of eighteen member countries, with the European Union, NATO, the United States, and France acting as observers.⁹² In 2024 and 2025, the coalition had raised “€1,1 billion in both financial and material assistance.”⁹³ The coalition aims to support Ukraine cyber defense capability and command and control integration while also delivering on more long-term goals such as fostering innovation and cloud adoption. The United States is currently an observing member of the IT Coalition and have thus far has declined taking a more active role. Those familiar with the inner workings of the mechanism have emphasized the clear benefit of a more active US role in the mechanism, as most of the tech companies with whom the organization would like to coordinate are headquartered out of the United States.⁹⁴

The Tallinn Mechanism was established in December 2023 with 11 states to “coordinate and facilitate civilian cyber capacity building” within Ukraine, and is intended to be complementary to military-focused cyber aid facilitation bodies like the IT Coalition.⁹⁵ The Tallinn Mechanism is focused on “amplifying the cyber support of donors to Ukraine in the civilian domain.”⁹⁶ The mechanism raised approximately $210 million by the end of 2024 and has focused on bolstering cyber defense capabilities, especially that of critical national infrastructure, through the public and private provision of hardware and software, incident response, satellite communication provision, and cybersecurity training for government officials.⁹⁷

The international community has certainly made strides to better facilitate technology aid to Ukraine, to counteract the pushing effect that complicates such coordination for technology companies. However, it is yet unclear whether these programs and practices will meet the demands of this conflict, or those of conflicts to come. The most effective element of the tech sector at large’s efforts in Ukraine has been its speed, both in its response to the invasion itself and to individual challenges that have arisen over the course of this war. Meanwhile, government and supranational coordination—aside from those programs already in place—were much slower to implement.

Risk of retaliation

A significant factor shaping the behavior of companies’ work in and with Ukraine is the heightened threat state created by active warfare. Various technology company officials cited their concern about potential backlash—whether financial, cyber, or physical violence—from Russia against their infrastructure, products, and people.⁹⁸ The real risk that these companies took on was informed by a number of factors, such as the application of their products or services by and for military ends, the required physical presence of personnel, products, or infrastructure, and also the degree to which increased Russian aggression against these companies might be a meaningful increase from prewar conditions.

Defense application

An undeniable yet complex risk that companies face as a result of providing support to Ukraine is the threat of Russian retaliatory action. Private sector behavior in Ukraine is shaped by the degree to which the goods and services provided are connected to the conduct of the conflict itself. Products and services provided to civilian groups for purely humanitarian purposes come with a different risk profile than goods that underpin government functions. Though not discrete or exhaustive, cyber and technical aid to Ukraine can be understood in four categories: humanitarian aid, critical infrastructure protection, government support, and military application. In practice, this division exists on a continuum, from purely humanitarian support to products or services that the state itself has come to rely on for the continued provision of government services, with particular importance placed on whether the good is for military use and whether that use is in direct support of combat operations. 

By and large, companies have made their own determinations as to how to amend their work in Ukraine, looking not only at the direct military application of their product or service but also examining existing and potential products or services to determine potential applicability for offensive operations—and where to avoid their abuse. A clear example of this is Google’s cessation of the live traffic display functionality within Google Maps. A team of open source researchers at the Middlebury Institute of International Studies, under the leadership of Professor Jeffrey Lewis, were allegedly able to infer the early movements of the February 2022 Russian invasion before official reporting by analyzing Google Maps traffic data in combination with radar imagery.⁹⁹ Following these reports, Google announced that it would temporarily disable live traffic data so that it would not be used to plan military operations.¹⁰⁰ An internal task force at Google largely coordinated these and similar decisions to coordinate aid to Ukraine and, most importantly, to examine their actions and decisions in order to identify and address programs that had a potential to cause harm.¹⁰¹ However, even after these amendments were made, Google Maps was again the subject of controversy. In November 2024, Ukrainian defense chiefs accused Google of revealing the location of key military positions following an earlier Google Maps update. According to Russian military bloggers, among these revelations was the position of new air defense systems, including US-made Patriot anti-aircraft missiles, surrounding an airport near Kyiv. According to the head of Ukraine’s counter-disinformation unit Andriy Kovalenko, Google representatives reached out to Ukrainian government officials to address the issue shortly thereafter.¹⁰²

Similar in many ways was the SpaceX effort to restrict use of the Starlink satellite network close to the active front of the war. Though controversial in the public eye, and significant for military operators and planners, the SpaceX decision to restrict the use of Starlink devices near the front was an intentional one—to limit escalation directly supported by their devices. SpaceX President Gwynne Shotwell explained “our intent was never to have them use it for offensive purposes.”¹⁰³ The Starlink network, despite these imposed limitations, has undeniably been an extremely useful tool for the Ukrainian military,¹⁰⁴ but its network also supports a much wider geography of users, from individuals to government entities. The inherent dual-use nature of the Starlink network poses a much greater risk should its network be considered a military object. This risk framework is likely a significant part of the drive behind Space X’s creation of Starshield, announced in early December 2022. A partner project to Starlink, Starshield operates on a separate network and is specifically and exclusively for government—rather than consumer and commercial—use.¹⁰⁵ With this application in mind, reports still vary as to whether such a contract, like the $1.8 billion deal with the National Reconnaissance Office, would be operated by the contractee, in this case the NRO, or whether, like Starlink, the service would remain operated by SpaceX.¹⁰⁶ It is possible that this case will follow, in practice, the principle that the closer that the operation of a technology sits to strategic and sensitive national priorities, the higher the risk for both state and company of that technology being operated by said company, and the more likely that technology will come to be operated from within a government body.

Physicality

Products and services that require the physical presence of personnel, products, or infrastructure within Ukraine are the riskiest to undertake. Providing support in this way carries a level of risk that most companies did not have either the willingness or the infrastructure to take on.¹⁰⁷ While some companies, for certain products, chose to partner with government entities to deliver products or services where physical presence was necessary, as in the preceding example, others chose instead to eschew options with such a requirement. In an interview, one expert said, “there were some products that you wanted to go forward with, but you couldn’t. Your informational security can only be as good as your physical security, so projects requiring new physical infrastructure development, or new infrastructure dependencies, was a major stumbling block.”¹⁰⁸

Russia’s cyber-offensive impact

To some degree, most of the technology companies in question—especially those with a preexisting presence in Ukraine—were already a target of a significant volume of Russian cyber intrusion attempts as well as other coercive actions. As one industry executive put it when asked about the role of risk assessment in decisions to deepen their work in Ukraine following the invasion, “we knew the risk, we were already targeted on a daily basis.”¹⁰⁹ The risk of Russian aggression and retaliation remains, but for many large tech companies, their work already took them into spaces where they were in direct or indirect conflict with Russian or Russian-affiliated groups. However, the risk of Russian cyber intrusions against their networks was already a built-in calculation for their existing cybersecurity plans.

In addition to the experience and expectations of many of these private companies, Russian cyber operations accompanying and following its February 2022 invasion were less disruptive than previously anticipated. The most prominent case of coordinated disruption in the information space remains the ViaSat satellite communications system hack during the invasion. As cyber scholar Jon Bateman writes, this intrusion demonstrated clear “timing (one hour before Russian troops crossed the border), clear military purpose (to degrade Ukrainian communications), and international spillover (disrupting connectivity in several European countries).”¹¹⁰ However, the incident appeared to be limited in duration and unclear in impact—senior Ukrainian official Victor Zhora acknowledged the loss to communications during the early hours of the invasion, but later stated that the incident was less disruptive than it could have been because of redundancies in Ukrainian communication methods.¹¹¹

As nonresident senior fellow Justin Sherman explored in May 2025 Atlantic Council report, Unpacking Russia’s cyber nesting doll,¹¹² the comparably muted effectiveness of Russian cyber operations during the war is the result of a multitude of factors including:

• Cross-domain coordination difficulties
• Resource constraints
• Interagency competition
• Intentional strategic prioritization
• Ukrainian defensive strength

Sherman goes on to explain that while cyber operations against Ukraine did not have that catastrophic impact expected by some—the promised cyber Pearl Harbor—Russian cyber capabilities should not be underestimated.¹¹³

In just the first year of the war, Russia and—importantly—non-state actors in Russia’s orbit, launched a multitude of cyberattacks and intrusions against the public and private sector in Ukraine—including those entities relying on products, platforms, or infrastructure owned and operated by Western tech companies.¹¹⁴ In May 2025, the US Cybersecurity and Infrastructure Security Agency released a joint cybersecurity advisory highlighting this threat, and explicitly calling out Russian targeting of “those involved in the coordination, transport, and delivery of foreign assistance to Ukraine.”¹¹⁵ The question at hand, then, is not what level of risk is associated with these actions but how prepared the company is to encounter such risks.

Reaction – Risk definition and mitigation

In response to the risk of Russian retaliatory action, either through cyber or kinetic means, states and intranational bodies had a role to play in helping companies to navigate and mitigate these risks. The first method by which this was attempted was in an increased clarity on the types of actions that may be considered military or escalatory in nature. Additionally, in many cases states were necessary partners in securing any element of product delivery or operation required new physical presence in or movement into and across Ukraine.

Definition

Throughout the conflict, industry executives and civil society displayed a great deal of concern about where the line falls between civilian actors and military objectives, and how to ensure that their activities fall squarely on the civilian side of this line. Individuals and companies reiterated a desire for increased clarity on this question from Western governments and international legal bodies.¹¹⁶ Current humanitarian law requires the country at war to target only military objects, defined as objects “whose total or partial destruction, capture or neutralization, in the circumstances ruling at the time, offers a definite military advantage” in a manner proportional to the military gain foreseen by the operation.¹¹⁷

In a 2023 report, the International Red Cross posited that, “tech companies that operate in situations of armed conflict should understand and monitor whether the services they provide may amount to a direct participation in hostilities by their employees and whether the company might qualify as a military objective.”¹¹⁸ Essentially, the line between civilian and military object is determined by Russia in its assessment of the battlespace, as well as the broader question of whether the Kremlin is concerned about staying within the bounds of international humanitarian law. The subjectivity of this divide allows for some range in interpretation.¹¹⁹ Indeed some, like Lindsay Freeman at UC Berkeley School of Law, argue that “civilian objects have been intentional, direct targets and not simply collateral damage.”¹²⁰ Ukraine and its allies cannot simply dictate where such a line exists. However, greater clarity from national and supranational entities would provide some measure of cover to these companies and help solidify their ability to make more accurate risk calculations.¹²¹

Mitigation

For products and services that require physical presence, either of people or products, many companies view some kind of partnership with government, local or otherwise, as a virtual necessity to bridge the risk imposed.¹²²

Cisco’s Project PowerUp, led by Senior Security Strategist Joe Marshall of Cisco Talos Intelligence Group,¹²³ is a clear demonstration of this. The project innovated and delivered a new industrial ethernet switch that could ensure continued effective power grid management even when Russian GPS jamming blocked Ukrenergo substation synchronization, and avoid the resulting forced outages across the Ukrainian power grid.¹²⁴ The delivery of these devices into Ukraine was coordinated via a phone call to a US government official who coordinated the first shipment on an upcoming cargo shipment to Poland and then onto a train into Ukraine to be installed by Ukrenergo engineers.¹²⁵ While this project was conceived of and executed by Cisco employees, those involved in the project emphasized the importance of Cisco’s partnership with the US government on this, as well as other private assistance programs.¹²⁶

Several governments and international organizations have established insurance programs, particularly political risk insurance to help shield companies from the financial risk of investment into Ukraine. In 2023, the Multilateral Investment Guarantee Agency of the World Bank issued guarantees of $9.1 million to support the construction and operation in the M10 Industrial Park in Lviv.¹²⁷ Additionally, the US International Development Finance Corporation has established several financial packages guaranteeing millions in political risk insurance for a variety of projects.¹²⁸ Within Ukraine, war and political risk insurance is offered by the Export Credit Agency, which insure loans for qualifying Ukrainian businesses against such risks, as well as for direct investment from or into Ukraine.¹²⁹ The Ukrainian Ministry of Economy also drafted a law, in cooperation with the National Bank of Ukraine, which would create a unified framework for political or war risk insurance, with a focus on mitigating risks that may deter foreign investments.¹³⁰

The physical element of presence in Ukraine and especially near the battlefield remains a clear demarcation between activities that are the realm of the public sector and those that are the realm of the private sector. In this area, cooperation and coordination between companies and governments could largely follow established practices and procedures. But, for technology whose infrastructure does not touch the territory of Ukraine, the question of where the line is between civilian product and military object, and where bodies like NATO, the European Union, and the United Nations would define that line to be, resembles a gradual gradient rather than a stark line.

Key takeaways and conclusion

Behind much of the discussions and debates among various groups on the role of the private sector in in the war in Ukraine is a deeper anxiety about the evolving character of warfare as we reach the quarter marker of the twenty-first century. The integration and implementation of new technologies and its effect on the practice of war is familiar territory for theoreticians and practitioners alike, from Douhet’s theories on the supremacy of air power to the revolution of military affairs (RMA) school of thought, to those today that focus on the effect of evolving drone tactics on the operation and strategy of war. Less comfortable, however, is the analysis of what changes in technology may mean in practice not just for the conduct of war itself, but more fundamentally for the very nature of actors whose abilities and choices shape the conduct of war.

Over the past few years, private companies, especially technology companies based in North America and Western Europe have made decisions as to whether and how to contribute to the Ukrainian war effort in ways that have greatly impacted the ability of the Ukrainian government to direct and effectuate its own defense. In other words, they have moved beyond the status of resource providers in this conflict toward something more resembling actors in and of themselves, at times approaching the importance of states in their contributions.

Clarity of conflict

The war in Ukraine—especially in the first months and years of the war— was notably less divisive in the court of public opinion in the West than many other contemporary conflicts. The historical context of the Russia-Ukraine relationship, along with the sustained aggression launched against Ukraine for more than a decade prior to this invasion and the nature of the invasion itself, combined with myriad factors including those discussed throughout this report, created conditions conducive to widespread sympathy and support across much of Western Europe and North America. The efforts of the Ukrainian government proactively built on these conditions both before and after the invasion. Ukrainian leaders, Zelenskyy in particular, both publicly and in private conversations with government and private sector representatives, clearly communicated the effects of Russian aggression against Ukraine and the actions undertaken by the Ukrainian government and its people.

Clarity of conflict, as a motivating factor for tech companies’ decision-making over the course of this conflict, was important in creating favorable conditions for such choices, but is not determinative. Most important as a lesson applicable in potential future conflicts, is that the seeds that grew these conditions into place were planted well before Russian forces rolled across the Ukrainian borders in February 2022.

Business alignment

Many firms had preexisting operations, employees, or customers in Ukraine—generating both a sense of duty and a pragmatic incentive to safeguard assets and personnel. Firms that were already active in Ukraine, or whose services directly contributed to protecting their employees and customers, were the most proactive and consistent contributors. Additionally, companies could derive direct or indirect benefits from their engagement. Several firms leveraged their involvement as an opportunity for product testing, cybersecurity innovation, and real-world validation of technologies under extreme conditions. In doing so, companies not only supported Ukraine’s defense but also advanced their own technical capabilities and reputational standing.

Ukraine’s long-term digital transformation further enhanced this alignment. Over the past decade, the government has implemented legal and technical reforms aimed at combating corruption and promoting digital industry growth, positioning the country as a prospective regional tech hub and a credible, innovation-friendly partner. This proactive transformation reassured corporate partners that their investments and assistance could be practicable and impactful.

For future conflicts, states will need to account for business alignment factors as an important driving factor in private sector’s decision-making. This includes the uncomfortable, yet important finding that this includes companies’ ability to profit, or at a minimum, sustain their operations in a conflict in a way that maintains their organizational health, noting that companies’ motivations will not always align with that of the states in which they are headquartered. While moral conviction catalyzed early engagement, sustained corporate involvement in Ukraine depended on alignment between ethical action and business strategy.

Difficulty of coordination

Even amid broad goodwill, the initial months of the war revealed the challenge of coordination. Companies often struggled to identify appropriate Ukrainian counterparts, assess needs accurately, or ensure that their offerings were deployed effectively. Early efforts were marked by confusion—with multiple government offices issuing overlapping requests and little centralized control. As Bornyakov later acknowledged, the early days of outreach “were chaos.”

Many of the most significant factors that shaped company involvement were already in place and being acted upon before the February 2022 Russian invasion. Preexisting relationships were key, both as a motivating factor and a facilitating factor, effectively minimizing coordination friction. Additionally, the technological and policy developments well underway before the February 2022 invasion created the appealing Ukrainian tech landscape and improved coordination necessary once the conflict was underway.

While private companies excelled in speed and agility, governments brought scale, reliability, and regulatory legitimacy. The war illustrated how preparedness for potential future conflicts will depend on preestablished coordination frameworks that merge these strengths—enabling rapid mobilization of technological capabilities, matching private capabilities with public needs in real time.

Risk of retaliation

Providing assistance to Ukraine exposed technology companies to new security risks from cyberattacks, sanctions, or kinetic threats against personnel or infrastructure. The degree of perceived risk—and retaliation—varied depending on each company’s exposure, particularly for firms whose technologies had direct military applications or some kind of physical presence.

Ambiguity around international law, cyber norms, and export controls can delay or discourage private assistance. Companies must understand whether providing certain technologies or services could be construed as escalatory, illegal, or sanctionable. Private firms are increasingly targeted in state-level cyber operations. The possibility of retaliation, in any of a myriad of forms, was a serious risk for companies aiding Ukraine; managing and sharing that risk is essential to sustaining long-term cooperation.

To mitigate these risks, Ukraine and allied governments played an essential supportive role, clarifying the boundaries between civilian and military assistance, helping companies avoid escalatory missteps and, in some cases, underwrote contracts or insurance to shield firms from loss. Such measures demonstrate the emerging need for risk-sharing frameworks between states and corporations. In cases where physical operations within Ukraine were necessary, governments provided logistical and security coordination to protect personnel and assets. Such collaboration underscores an emerging model of public-private security cooperation, wherein states and corporations jointly navigate the blurred boundaries between national defense and digital resilience.

If private technology companies’ decisions and actions are so impactful to the conduct of war, as they have shown themselves to be, then the character of warfare has evolved in such a way as to require states to likewise evolve in the ways that they provide military assistance and plan for potential future conflicts. The foundation for this evolution needs to be a greater understanding of the factors in the case of Ukraine that most greatly impacted company decision-making regarding their participation, or not, in the conflict space, starting with the four factors identified in this report: those that pulled companies toward cooperation, and those that pushed companies away. By assessing the factors that drove companies’ decision-making in Ukraine, states can better plan and prepare for future crises and conflicts—and not leave such critical capabilities, once again, to chance.

About the author

Emma Schroeder is an associate director with the Cyber Statecraft Initiative, part of the Atlantic Council Tech Programs. Her focus in this role is on developing statecraft and strategy for cyberspace useful for both policymakers and practitioners. Her work focuses on the role of cyber and cyber-enabled technology in conflict and crime.  

Originally from Massachusetts, Schroeder holds an MA in History of War from King’s College London’s War Studies Department. She also attained her BA in International Relations & History, with a concentration in Security Studies, from the George Washington University’s Elliott School of International Affairs. 

Acknowledgements

This report was made possible by the participation of dozens of scholars and practitioners who shared their expertise and experiences with the author.

Thank you to the Cyber Statecraft Initiative team for their support, particularly Nikita Shah and Trey Herr for their guidance. Particular thanks to Emerson Johnston, Grace Menna, and Zhenwei Gao for their research assistance, as well as to Nancy Messieh, Samia Yakub, and Donald Partyka for the creation and review of language and digital assets. All errors are the author’s own.

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1    All unattributed interviews were conducted in confidentiality with the author, and the names of interviewees are withheld by mutual agreement.

2    “Russia/Ukraine: Invasion of Ukraine Is an Act of Aggression and Human Rights Catastrophe,” Amnesty International, March 1, 2022, https://www.amnesty.org/en/latest/news/2022/03/russia-ukraine-invasion-of-ukraine-is-an-act-of-aggression-and-human-rights-catastrophe/.

3    “Majority back U.S. troop presence in Europe, but not in Ukraine itself,” Monmouth University Polling Institute, March 16, 2022, https://www.monmouth.edu/polling-institute/reports/monmouthpoll_us_031622/.

4    Catarina Thomson et al., “European public opinion: united in supporting Ukraine, divided on the future of NATO,” International Affairs 99, no. 6 (2023): 2485–2500, https://doi.org/10.1093/ia/iiad241.    

5    Interview with threat intelligence executive at US cybersecurity nonprofit, April 2, 2024.

6    Interview with government affairs executive at US multinational technology corporation, March 26, 2024.

7    Industry executive, IT coalition roundtable, Atlantic Council, February 21, 2024.

8    “The TechPlomacy Approach,” Ministry of Foreign Affairs of Denmark, accessed October 20, 2025, https://techamb.um.dk/the-techplomacy-approach.

9    “Mykhailo Fedorov,” Government Portal (Ukraine), accessed Oct 15, 2025, https://www.kmu.gov.ua/en/profile/mikhaylo-fedorov.

10    Interview with government affairs executive at US multinational technology company, March 26, 2024.

11    Joe Tidy, “Ukraine Crisis: Tech Firms Curb Services in Russia,” BBC News, March 4, 2022, https://www.bbc.com/news/technology-60608222.

12    Peter Guest, “Mykhailo Fedorov Is Running Ukraine’s War Like a Startup,” WIRED, July 25, 2023, https://www.wired.com/story/ukraine-runs-war-startup/?_sp=f5dd85ca-06aa-46ec-b716-b7cda17ce4f4.1721243250176. Tom Wilson, “Ukraine raises $13 million in crypto after crowdfunding appeal,” Reuters, February 28, 2022, https://www.reuters.com/world/china/ukraines-government-raises-crypto-worth-8-million-crowdfunding-appeal-2022-02-27/.

13    Guest, “Mykhailo Fedorov is Running.”

14    Interview with government affairs executive at US multinational technology corporation, August 28, 2024.

15    Mykhailo Fedorov (@FedorovMykhailo), “@elonmusk, while you try to colonize Mars — Russia try to occupy Ukraine! While your rockets successfully land from space — Russian rockets attack Ukrainian civil people! We ask you to provide Ukraine with Starlink stations and to address sane Russians to stand,” X, February 26, 2022, 7:06 a.m., https://twitter.com/FedorovMykhailo/status/1497543633293266944.

16    Elon Musk (@elonmusk), “Starlink service is now active in Ukraine. More terminals en route,” X, February 26, 2022, 5:33 p.m., https://twitter.com/elonmusk/status/1497701484003213317; Mykhailo Fedorov (@FedorovMykhailo), “Starlink — here. Thanks, @elonmusk,” X, February 28, 2022, 3:19 p.m., https://twitter.com/FedorovMykhailo/status/1498392515262746630?s=20&t=vtCM9UqgWRkfxfrEHzYTGg.

17    Jeff Foust, “SpaceX Worked for Weeks to Begin Starlink Service in Ukraine,” SpaceNews, March 3, 2022, https://spacenews.com/spacex-worked-for-weeks-to-begin-starlink-service-in-ukraine/.

18    Emma Schroeder with Sean Dack, A Parallel Terrain: Public-Private Defense of the Ukrainian Information Environment, Atlantic Council, February 27, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/a-parallel-terrain-public-private-defense-of-the-ukrainian-information-environment/.

19    Guest, “Mykhailo Fedorov is Running.”

20    Alphabet Inc., “Exhibit 99.1 (Q1 2023),” SEC EDGAR, April 25, 2023, https://www.sec.gov/Archives/edgar/data/1652044/000165204423000041/googexhibit991q12023.htm; Alphabet Inc., “Exhibit 99.1 (Q2 2023),” SEC EDGAR, July 25, 2023, https://www.sec.gov/Archives/edgar/data/1652044/000165204423000067/googexhibit991q22023.htm; Alphabet Inc., “Exhibit 99.1 (Q3 2023),” SEC EDGAR, October 24, 2023, https://www.sec.gov/Archives/edgar/data/1652044/000165204423000088/googexhibit991q32023.htm; Alphabet Inc., “Exhibit 99.1 (Q4 2023),” SEC EDGAR, January 30, 2024, https://www.sec.gov/Archives/edgar/data/1652044/000165204424000014/googexhibit991q42023.htm; The “GDP (current US$),” World Bank, accessed October 20, 2025, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD.

21    “The TechPlomacy Approach.”

22    Alexander Query, “Google opens research and development center in Ukraine,” Kyiv Post, January 15, 2020 https://www.kyivpost.com/post/7682; “Ministry of Digital Transformation of Ukraine and Microsoft to Collaborate in Digital Transformation,” Microsoft, October 2, 2020, https://news.microsoft.com/en-cee/2020/10/02/ministry-of-digital-transformation-of-ukraine-and-microsoft-to-collaborate-in-digital-transformation/.

23    Interview with government affairs executive at US multinational technology corporation, March 1, 2024; Interview with government affairs executive at US multinational technology corporation, March 26, 2024;  Interview with threat intelligence executive at US multinational technology corporation, April 22, 2024, Interview with government affairs executive at US multinational technology corporation; Interview with information security executives at US intelligence and data analysis software technology corporation, May 8, 2024; Interview with subject matter expert on government cyber aid coordination, June, 17, 2024; Interview with threat intelligence executive at US multinational digital communications technology corporation, July 26, 2024; Interview with information security executive at US multinational technology corporation, August 28, 2024; Industry executive, IT coalition roundtable, Atlantic Council, February 21, 2024.

24    Interview with threat intelligence executive at US multinational digital communications technology corporation, July 26, 2024; Iain Martin, “US and Israeli Tech Companies Evacuate Ukrainian Staff From Possible Frontline,” Forbes, February 17, 2022, https://www.forbes.com/sites/iainmartin/2022/02/17/usand-israeli-tech-companies-evacuate-ukrainian-staff-from-possible-frontline/; Supantha Mukherjee and Paul Sandle, “Cisco CEO Says Quarter of Staff in Ukraine Have Left,” Reuters, March 1, 2022, https://www.reuters.com/business/cisco-ceo-says-quarter-staff-ukraine-have-left-2022-03-01/; “A Message to Team Members on the Conflict in Ukraine,” FedEx, March 4, 2022, https://newsroom.fedex.com/newsroom/global-english/a-message-to-team-members-on-the-conflict-in-ukraine.

25    Interview with threat intelligence executive at US cybersecurity nonprofit, April 2, 2024.

26    Sam Bresnick, Ngor Luong, and Kathleen Curlee, Which Ties Will Bind: Big Tech, Lessons from Ukraine, and Implications for Taiwan, Center for Security and Emerging Technology (Georgetown University), February 2024, https://cset.georgetown.edu/publication/which-ties-will-bind/.

27    “Putin signs law forcing foreign social media giants to open Russian offices,” Reuters, July 1, 2021, https://www.reuters.com/technology/putin-signs-law-forcing-foreign-it-firms-open-offices-russia-2021-07-01/; Human Rights Watch, Russia: Growing Internet Isolation, Control, Censorship, June 18, 2020, https://www.hrw.org/news/2020/06/18/russia-growing-internet-isolation-control-censorship.

28    Interview with government affairs executive at US multinational technology corporation, August 28, 2024.

29    “Google’s Russian Subsidiary Files Bankruptcy Document,” Reuters, May 18, 2022, https://www.reuters.com/markets/europe/googles-russian-subsidiary-files-bankruptcy-document-2022-05-18/; “Google’s Russian Subsidiary Recognised Bankrupt by Court—RIA,” Reuters, October 18, 2023, https://www.reuters.com/markets/deals/googles-russian-subsidiary-recognised-bankrupt-by-court-ria-2023-10-18/.

30    Google Wins UK Injunction over YouTube Block on Russian Broadcasters,” Reuters, January 22, 2025, https://www.reuters.com/technology/google-wins-uk-injunction-over-youtube-block-russian-broadcasters-2025-01-22/. 

31    Interview with executive at US multinational technology corporation, date withheld.

32    Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2025. 

33    Interview with threat intelligence executive at US cybersecurity nonprofit, May 2, 2024.

34    Interview with business development executive at US information and communications technology corporation, July 18, 2024. 

35    Vera Bergengruen, “How Tech Giants Turned Ukraine into an AI War Lab,” TIME, February 8, 2024, https://time.com/6691662/ai-ukraine-war-palantir/.

36    Interview with information security executive at US intelligence and data analysis software technology corporation, May 8, 2024.

37    Bergengruen, “How Tech Giants Turned.”

38    Industry Executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

39    Bergengruen, “How Tech Giants Turned.”

40    Robert Hart, “Clearview AI: Controversial Facial-Recognition Firm Fined $33 Million for Illegal Database,” Forbes, September 3, 2024, https://www.forbes.com/sites/roberthart/2024/09/03/clearview-ai-controversial-facial-recognition-firm-fined-33-million-for-illegal-database/; Kashmir Hill, “The Secretive Company That Might End Privacy as We Know It,” New York Times, January 18, 2020, https://www.nytimes.com/2020/01/18/technology/clearview-privacy-facial-recognition.html.

41    Paresh Dave and Jeffrey Dastin, “Exclusive: Ukraine Has Started Using Clearview AI’s Facial Recognition during War,” Reuters, March 13, 2022, https://www.reuters.com/technology/exclusive-ukraine-has-started-using-clearview-ais-facial-recognition-during-war-2022-03-13/; Kashmir Hill, “Facial Recognition Goes to War,” New York Times, April 7, 2022, https://www.nytimes.com/2022/04/07/technology/facial-recognition-ukraine-clearview.html; Vera Bergengruen, “Ukraine’s ‘Secret Weapon’ Against Russia Is a Controversial U.S. Tech Company,” TIME, November 14, 2023, https://time.com/6334176/ukraine-clearview-ai-russia/; Drew Harwell, “Ukraine is scanning faces of dead Russians, then contacting the mothers,” Washington Post, April 15, 2022, https://www.washingtonpost.com/technology/2022/04/15/ukraine-facial-recognition-warfare/.

42    Interview with government affairs executive at US multinational digital communications technology corporation, May 2, 2024; Interview with information security executives at US intelligence and data analysis software technology corporation, May 8, 2024.

43    “Anti-Corruption Strategy for 2021–2025,” National Agency on Corruption Prevention (Ukraine), 2021, https://nazk.gov.ua/en/anti-corruption-strategy/.

44    Oleksandr Bornyakov, “Why Ukraine is Going All In on Tech to Rebuild Economy,” Fortune, August 24, 2022, https://fortune.com/2022/08/24/ukraine-going-all-in-tech-rebuild-economy-international-oleksandr-bornyakov/.

45    Integrity and Anti-Corruption Review of Ukraine, OECD Public Governance Reviews, OECD Publishing, May 2025, https://doi.org/10.1787/7dbe965b-en. 

46    Robert Peacock, The Impact of Corruption on Cybersecurity: Rethinking National Strategies Across the Global South, Atlantic Council, July 1, 2024, https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/the-impact-of-corruption-on-cybersecurity-rethinking-national-strategies-across-the-global-south/; Software Management: Security Imperative, Business Opportunity, Business Software Alliance, June 2018, https://www.bsa.org/files/2019-02/2018_BSA_GSS_Report_en_.pdf.

47    Alona Savishchenko, “How Open Source E-procurement System Prozorro Helps to Sustain Ukrainian Economy,” Open Source Observatory, European Commission, November 19, 2024, https://interoperable-europe.ec.europa.eu/collection/open-source-observatory-osor/news/e-procurement-prozorro-support-ukrainian-economy; “EProcurement System ProZorro,” Observatory of Public Sector Innovation, https://oecd-opsi.org/innovations/eprocurement-system-prozorro/.

48    Robert Peacock, The Impact of corruption; Software Management, Business Software Alliance.

49    “About UNITED24,” UNITED24 – The Initiative of the President of Ukraine, accessed October 20, 2025, https://u24.gov.ua/about; Guest, “Mykhailo Fedorov is Running.”

50    Daryna Antoniuk, “Two Ukraine Cyber Officials Dismissed amid Embezzlement Probe,” The Record, November 20, 2023, https://therecord.media/two-ukraine-cyber-officials-dismissed-amid-embezzlement-probe; “Misappropriation of UAH 62 million during the purchase of software: the leadership of the State Special Communications Service is suspected,” National Anti-Corruption Bureau of Ukraine, news release (in Ukrainian), November 20, 2023, https://nabu.gov.ua/news/zavolod-nnia-62-mln-grn-pri-zakup-vl-programnogo-zabezpechennia-p-dozriu-t-sia-ker-vnitctvo-derzhspetczviazku/.

51    Interview with government affairs executive at US multinational digital communications technology corporation, May 2, 2024; Interview with information security executives at US intelligence and data analysis software technology corporation, May 8, 2024; Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024.

52    Bergengruen, “How Tech Giants Turned.” 

53    Bergengruen, “How Tech Giants Turned.”

54    “Ukrainian Tech Industry Shows Resilience in the Face of War — IT Research Ukraine 2024,” techukraine.org, December 5, 2024, https://techukraine.org/2024/12/05/ukrainian-tech-industry-shows-resilience-in-the-face-of-war-it-research-ukraine-2024/.

55    “Diia City,” Diia, accessed October 20, 2025, https://city.diia.gov.ua/en.

56    Mykhailo Fedorov, “Ukraine’s Vibrant Tech Ecosystem Is a Secret Weapon in the War with Russia,” UkraineAlert (Atlantic Council), August 17, 2023, https://www.atlanticcouncil.org/blogs/ukrainealert/ukraines-vibrant-tech-ecosystem-is-a-secret-weapon-in-the-war-with-russia/.

57    Greg Rattray, Geoff Brown, and Robert Taj Moore, The Cyber Defense Assistance Imperative: Lessons from Ukraine, Aspen Digital, May 2025, https://www.aspeninstitute.org/wp-content/uploads/2025/05/Aspen-Digital_The-Cyber-Defense-Assistance-Imperative-Lessons-from-Ukraine.pdf.

58    “CDAC: “The Scale of What We Can Do is Severely Hampered by not Having Funding for Dedicated Staff or to Fulfill Requirements Directly,” Common Good Cyber, May 29, 2025, https://commongoodcyber.org/news/interview-cdac-funding/.

59    Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024.

60    Interview with business development executive at US information and communications technology corporation, July 18, 2024; Interview with government affairs executive at US multinational digital communications technology corporation, May 2, 2024; Interview with information security executives at US intelligence and data analysis software technology corporation, May 8, 2024.

61    Interview with business development executive at US information and communications technology corporation, July 18, 2024.

62    Interview with threat intelligence executive at US cybersecurity nonprofit, April 2, 2024; Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

63    Industry executive, “IT Coalition” Roundtable, Atlantic Council, February 21, 2024.

64    Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024; Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.  

65    “Cyber Defense Assistance Evaluation Framework,” Cyber Defense Assistance Collaborative, June 18, 2024, https://crdfglobal-cdac.org/cda-evaluation-framework/.

66    Peter Guest, “Mykhailo Fedorov is Running,” WIRED, July 25, 2023, https://www.wired.com/story/ukraine-runs-war-startup/.

67    Cat Zakrzewski, “4,000 letters and four hours of sleep: Ukrainian leader wages digital war,” Washington Post, March 30, 2022, https://www.washingtonpost.com/technology/2022/03/30/mykhailo-fedorov-ukraine-digital-front/.

68    Interview with tech assistance coordination executive, US nonprofit organization, July 17, 2025.

69    Bergengruen, “How Tech Giants Turned.”

70    Colin Demarest, “Data Centers Are Physical and Digital Targets, Says Pentagon’s Eoyang,” C4ISRNET, November 17, 2022, https://www.c4isrnet.com/cyber/2022/11/17/data-centers-are-physical-and-digital-targets-says-pentagons-eoyang/.

71    Oleh Ivanov, “Procurement During the Full-Scale War,” Vox Ukraine, October 14, 2022, https://voxukraine.org/en/procurement-during-the-full-scale-war.

72    “On Amendments to the Resolutions of the Cabinet of Ministers of Ukraine No. 822 of September 14, 2020 and No.169 of February 28, 2022,” Verkhovna Rada of Ukraine, June 24, 2022, https://zakon.rada.gov.ua/laws/show/723-2022-%D0%BF#n2.

73    Interview with government affairs executive at US multinational technology corporation, August 28, 2024.

74    Elizabeth Hoffman, Jaehyun Han, and Shivani Vakharia, Past, Present, and Future of US Assistance to Ukraine: A Deep Dive into the Data, Center for Strategic and International Studies (CSIS), September 26, 2023, https://www.csis.org/analysis/past-present-and-future-us-assistance-ukraine-deep-dive-data.

75    The difficulty, for the purposes of this paper, is understanding the breakdown of this assistance as it applies to digital and tech-focused aid to Ukraine. The author found examples breaking down US government assistance by general category (i.e., humanitarian, military, financial) and breakdowns of weapons systems aid (e.g., tanks and air defense systems) but little enumeration of the kind and amount of digital and tech aid provided by the US government. See “Ukraine Support Tracker,” Kiel Institute for the World Economy, updated October 14, 2025, https://www.ifw-kiel.de/topics/war-against-ukraine/ukraine-support-tracker.

76    Interview with government affairs executive at US multinational technology corporation, August 28, 2024.

77    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024; Interview with information security executive at US multinational technology corporation, August 28, 2024; Interview with threat intelligence executive and government affairs executive at US multinational digital communications technology corporation, October 2, 2024.

78    Alex Therrien and Frank Gardner, “Hegseth Sets Out Hard Line on European Defense and NATO,” BBC News, February 12, 2025, https://www.bbc.com/news/articles/cy0pz3er37jo.

79    Jon Harper,“Hegseth Puts Onus on Allies to Provide ‘Overwhelming Share’ of Weapons to Ukraine,” DefenseScoop, February 12, 2025, https://defensescoop.com/2025/02/12/hegseth-ukraine-defense-contact-group-allies-military-aid-trump/.

80    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024; Interview with threat intelligence executive and government affairs executive at US multinational digital communications technology corporation, October 2, 2024.

81    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

82    “UK aid to Ukraine,” Independent Commission for Aid Impact (ICAI), April 30, 2024, https://icai.independent.gov.uk/html-version/uk-aid-to-ukraine-2/.

83    Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024.

84    “SpaceX, USAID Deliver 5,000 Satellite Internet Terminals to Ukraine,” Reuters, April 6, 2022, https://www.reuters.com/technology/spacex-usaid-deliver-5000-satellite-internet-terminals-ukraine-2022-04-06/; Alex Marquardt, “Exclusive: Musk’s SpaceX Says it Can No Longer Pay for Critical Satellite Services in Ukraine, Asks Pentagon to Pick Up the Tab,” CNN, October 13, 2022, https://www.cnn.com/2022/10/13/politics/elon-musk-spacex-starlink-ukraine; Michael Sheetz, “Pentagon Awards SpaceX with Ukraine Contract for Starlink Satellite Internet,” CNBC, June 1, 2023, https://www.cnbc.com/2023/06/01/pentagon-awards-spacex-with-ukraine-contract-for-starlink-satellite-internet.html.

85    “United States and Ukraine Expand Cooperation on Cybersecurity,” Cybersecurity and Infrastructure Security Agency, July 27, 2022, https://www.cisa.gov/news-events/news/united-states-and-ukraine-expand-cooperation-cybersecurity; David Jones, “White House Warns of US of Possible Russian Cyberattack Linked to Ukraine Invasion,” Cybersecurity Dive, March 22, 2022, https://www.cybersecuritydive.com/news/white-house-warns-russian-cyberattack-ukraine/620755/; Egle Murauskaite, “U.S. Assistance to Ukraine in the Information Space: Intelligence, Cyber, and Signaling,” Asymmetric Threats Analysis Center (University of Maryland), February 2023, https://www.start.umd.edu/publication/us-assistance-ukraine-information-space-intelligence-cyber-and-signaling.

86    Maj. Sharon Rollins, “Defensive Cyber Warfare: Lessons from Inside Ukraine,” US Naval Institute Proceedings, June 2023, https://www.usni.org/magazines/proceedings/2023/june/defensive-cyber-warfare-lessons-inside-ukraine; “Before the Invasion: Hunt Forward Operations in Ukraine,” US Cyber Command (declassified briefing), November 28, 2022, https://nsarchive.gwu.edu/sites/default/files/documents/rmsj3h-751×3/2022-11-28-CNMF-Before-the-Invasion-Hunt-Forward-Operations-in-Ukraine.pdf; Dina Temple-Raston, Sean Powers, and Daryna Antoniuk, “Ukraine Hunt Forward Teams,” The Record, October 18, 2023, https://therecord.media/ukraine-hunt-forward-teams-us-cyber-command. 

87    Interview with tech assistance coordination executive at US nonprofit organization, July 17, 2025; Interview with government affairs executive at US multinational technology corporation, August 28, 2024.

88    “Interview with threat intelligence executive at US multinational technology corporation, April 22, 2024; Industry executive, “IT Coalition” Roundtable, Atlantic Council, February 21, 2024; Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024; Interview with threat intelligence executive and government affairs executive at US multinational digital communications technology corporation, October 2, 2024.

89    Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024.

90    Industry executive, “Public-Private Cyber Support” Workshop, Royal United Services Institute, May 29, 2024.

91    “Luxembourg, Estonia, and Ukraine Have Launched the IT Coalition,” Government of Luxembourg, September 19, 2023, https://gouvernement.lu/en/actualites/toutes_actualites/communiques/2023/09-septembre/19-bausch-itcoalition.html.

92    “Ukraine Defence Contact Group: Estonia and Luxembourg Announce New Contributions to IT Coalition,” European Pravda, April 8, 2024, https://www.eurointegration.com.ua/eng/news/2024/04/8/7183316/; “IT Coalition Established by Estonia and Luxembourg … Has Raised about 500 Million Euros in Its First Year,” Republic of Estonia Ministry of Defense, December 12, 2024, https://www.kaitseministeerium.ee/en/news/it-coalition-established-estonia-and-luxembourg-help-ukraine-has-raised-about-500-million-euros.

93    “IT Coalition Led by Estonia and Luxembourg Has Raised over One Billion Euros to Support Ukraine,” Republic of Estonia Ministry of Defense, May 28, 2025, https://kaitseministeerium.ee/en/news/it-coalition-led-estonia-and-luxembourg-has-raised-over-one-billion-euros-support-ukraine.

94    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

95    “Formalization of the Tallinn Mechanism to Coordinate Civilian Cyber Assistance to Ukraine,” US Department of State (Office of the Spokesperson), December 20, 2023, https://2021-2025.state.gov/formalization-of-the-tallinn-mechanism-to-coordinate-civilian-cyber-assistance-to-ukraine/.

96    “Tallinn Mechanism Raises €200 Million to Support Ukraine’s Resilience in Cyberspace,” Republic of Estonia Ministry of Foreign Affairs, December 20, 2024, https://www.vm.ee/en/news/tallinn-mechanism-raises-eu200-million-support-ukraines-resilience-cyberspace.

97    “Joint Statement Marking the First Anniversary of the Tallinn Mechanism,” US Department of State (Office of the Spokesperson), December 20, 2024, https://2021-2025.state.gov/joint-statement-marking-the-first-anniversary-of-the-tallinn-mechanism/.

98    Interview with government affairs executive at US multinational technology corporation, August 28, 2024; Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

99    Rachel Lerman, “On Google Maps, Tracking the Invasion of Ukraine,” The Washington Post, February 25, 2022, https://www.washingtonpost.com/technology/2022/02/25/google-maps-ukraine-invasion/.

100    Marc Cieslak and Tom Gerken, “Ukraine Crisis: Google Maps Live Traffic Data Turned Off in Country,” BBC News, February 28, 2022, https://www.bbc.com/news/technology-60561089.

101    Interview with government affairs executive at US multinational technology corporation, date withheld.

102    Seb Starcevic, “Ukraine Slams Google for Revealing Location of Military Sites,” Politico, November 4, 2024, https://www.politico.eu/article/ukraine-google-reveal-location-military-site/; James Kilner, “Google Maps ‘reveals location’ of Ukrainian military positions,” The Telegraph, November 4, 2024, https://www.telegraph.co.uk/world-news/2024/11/04/ukraine-angry-google-maps-reveal-location-military-position/.

103    Alex Marquardt and Kristin Fisher, “SpaceX Admits Blocking Ukrainian Troops from Using Satellite Technology,” CNN, February 9, https://www.cnn.com/2023/02/09/politics/spacex-ukrainian-troops-satellite-technology/index.html.

104    “Russia Using Thousands of SpaceX Starlink Terminals in Ukraine, WSJ says,” Reuters, February 15, 2024, https://www.reuters.com/world/europe/russia-using-thousands-spacex-starlink-terminals-ukraine-wsj-says-2024-02-15/.

105    “Starshield,” SpaceX, accessed October 20, 2025, https://www.spacex.com/starshield/; Joey Roulette and Marisa Taylor, “Exclusive: Musk’s SpaceX Is Building Spy Satellite Network for US Intelligence Agency, Sources Say,” Reuters, March 16, 2024, https://www.reuters.com/technology/space/musks-spacex-is-building-spy-satellite-network-us-intelligence-agency-sources-2024-03-16/.

106    Tim Fernholz, “The Big Questions About Starshield: SpaceX’s Classified EO Project,” Payload, March 22, 2024, https://payloadspace.com/the-big-questions-about-starshield-spacexs-classified-eo-project/; Brian Everstine, “SpaceX: DoD Has Requested Taking Over Starship Individual Missions,” Aviation Week Network, January 30, 2024, https://aviationweek.com/space/spacex-dod-has-requested-taking-over-starship-individual-missions; Sandra Erwin, “Pentagon Embracing SpaceX’s Starshield for Future Military SATCOM,” SpaceNews, June 11, 2024, https://spacenews.com/pentagon-embracing-spacexs-starshield-for-future-military-satcom/.

107    Interview with information security executive at US intelligence and data analysis software technology corporation, May 8, 2024; Interview with government affairs executive at US multinational technology corporation, March 1, 2024; Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

108    Interview with information security executive at US intelligence and data analysis software technology corporation, May 8, 2024.

109    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

110    Jon Bateman, Russia’s Wartime Cyber Operations in Ukraine: Military Impacts, Influences, and Implications, Carnegie Endowment for International Peace, December 16, 2022, https://carnegieendowment.org/research/2022/12/russias-wartime-cyber-operations-in-ukraine-military-impacts-influences-and-implications?lang=en.

111    Rafael Satter, “Satellite Outage Caused ‘Huge Loss in Communications’ at War’s Outset—Ukrainian Official,” Reuters, March 15, 2022, https://www.reuters.com/world/satellite-outage-caused-huge-loss-communications-wars-outset-ukrainian-official-2022-03-15/; Kim Zetter, “ViaSat Hack ‘Did Not’ Have Huge Impact on Ukrainian Military Communications, Official Says,” Zero Day (Substack), September 26, 2022, https://www.zetter-zeroday.com/viasat-hack-did-not-have-huge-impact/; Emma Schroeder with Sean Dack, A Parallel Terrain: Public‑Private Defense of the Ukrainian Information Environment, Atlantic Council, February 27, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/a-parallel-terrain-public-private-defense-of-the-ukrainian-information-environment/.

112    Justin Sherman, Unpacking Russia’s Cyber Nesting Doll, Atlantic Council, May 20, 2025, https://www.atlanticcouncil.org/content-series/russia-tomorrow/unpacking-russias-cyber-nesting-doll/.

113    Justin Sherman, Unpacking Russia’s Cyber.”

114    Shane Huntley, “Fog of War: How the Ukraine Conflict Transformed the Cyber Threat Landscape,” Threat Analysis Group blog (Google), February 16, 2023, https://blog.google/threat-analysis-group/fog-of-war-how-the-ukraine-conflict-transformed-the-cyber-threat-landscape/.

115    “Russian GRU Targeting Western Logistics Entities and Technology Companies,” Cybersecurity and Infrastructure Security Agency, May 21, 2025, https://www.cisa.gov/news-events/cybersecurity-advisories/aa25-141a.

116    Industry executive, “IT Coalition” Roundtable, Atlantic Council, February 21, 2024; Interview with government affairs executive at US multinational technology corporation, March 1, 2024; Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024; Interview with information security executive at US intelligence and data analysis software technology corporation; Interview with threat intelligence executive at US multinational digital communications technology corporation, July 26, 2024.

117    International Committee of the Red Cross, Protocol Additional to the Geneva Conventions of 12 August 1949, and Relating to the Protection of Victims of International Armed Conflicts (Protocol I), (June 8, 1977), United Nations High Commissioner for Refugees, https://www.refworld.org/docid/3ae6b36b4.html.

118    Protecting Civilians Against Digital Threats During Armed Conflict: Recommendations to States, Belligerents, Tech Companies, and Humanitarian Organizations, ICRC Global Advisory Board on Digital Threats during Armed Conflict, October 19, 2023, https://www.icrc.org/en/document/protecting-civilians-against-digital-threats-during-armed-conflict, 15.

119    Zhanna L. Malekos Smith, “No ‘Bright‑Line Rule’ Shines on Targeting Commercial Satellites,” The Hill, November 28, 2022, https://thehill.com/opinion/cybersecurity/3747182-no-bright-line-rule-shines-on-targeting-commercial-satellites/; Emma Schroeder and Sean Dack, A Parallel Terrain: Public‑Private Defense of the Ukrainian Information Environment, Atlantic Council, February 27, 2023, https://www.atlanticcouncil.org/in-depth-research-reports/report/a-parallel-terrain-public-private-defense-of-the-ukrainian-information-environment/.

120    Lindsay Freeman, “Evidence of Russian Cyber Operations Could Bolster New ICC Arrest Warrants,” Lawfare, March 13, 2024, https://www.lawfaremedia.org/article/evidence-of-russian-cyber-operations-could-bolster-new-icc-arrest-warrants.

121    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

122    Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

123    Joe Marshall, “Project PowerUp – Helping to Keep the Lights on in Ukraine in the Face of Electronic Warfare,” Cisco Talos Intelligence blog, December 4, 2023, https://blog.talosintelligence.com/project-powerup-ukraine-grid/. 

124    Joe Marshall, “Project PowerUp;” Interview with threat intelligence executive at US multinational digital communications technology corporation, July 26, 2024.

125    Sean Lyngass, “Exclusive: This Pizza Box-sized Equipment Could Be Key to Ukraine Keeping the Lights on This Winter,” CNN, November 21, 2023, https://www.cnn.com/2023/11/21/politics/ukraine-power-grid-equipment-cisco/index.html; Industry executive, “Tales from Ukraine” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, November 20, 2024; Industry executive, “Supporting Ukraine’s Warfighting Efforts with Digital Capabilities” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, September 13, 2024.

126    Industry executive, “Tales from Ukraine” Roundtable, Embassy of Estonia and the Estonian Ministry of Defense, November 20, 2024

127    World Bank Group, “MIGA Backs Industrial Park in Ukraine,” news release, September 28, 2023, https://www.miga.org/press-release/miga-backs-industrial-park-ukraine.

128    US International Development Finance Corporation, “DFC Announces $357 Million in New Political Risk Insurance for Ukraine,” news release, June 12, 2024, https://www.dfc.gov/media/press-releases/dfc-announces-357-million-new-political-risk-insurance-ukraine-russias.

129    “Your Business in Ukraine 2025,” KPMG Ukraine, March 2025, https://kpmg.com/ua/en/home/insights/2025/03/your-business-in-ukraine.html.

130    “Developments in War‑Risk Insurance Products for Investments in Ukraine,” Dentons, December 5, 2024, https://www.dentons.com/en/insights/articles/2024/december/5/developments-in-war-risk-insurance-products-for-investments-in-ukraine.

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]]> https://www.atlanticcouncil.org/content-series/russia-tomorrow/minsk-in-moscows-grip-how-russia-subjugated-belarus-without-annexation/ Thu, 13 Nov 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=887034 The latest report in the Atlantic Council's Russia Tomorrow series examines how Belarus moved from close relations with Russia to full-scale integration under the Kremlin.

The post Minsk in Moscow’s grip: How Russia subjugated Belarus without annexation appeared first on Atlantic Council.

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Russia’s full-scale invasion of Ukraine in February 2022 challenged much of the common Western understanding of Russia. How can the world better understand Russia? What are the steps forward for Western policy? The Eurasia Center’s new “Russia Tomorrow” series seeks to reevaluate conceptions of Russia today and better prepare for its future tomorrow.

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Table of contents

• Introduction
• Sovereignty eroded: How Belarus became a Russian satellite
• Military merger: From troublesome ally to armed outpost
• From fence-sitter to foot soldier: How Belarus lost its foreign policy
• Hostile takeover: Russia’s control of Belarus’s economy
• Cultural hegemony: The appropriation of media and education
• What Belarusians really want
• Conclusion
• About the author

For about five years, from 2015 to 2020, Belarus created an illusion that it was changing: a deceptive glimmer that suggested its leader, Alyaksandr Lukashenka, might steer his country away from Russia’s orbit and toward greater independence. In hindsight, this false dawn only masked the tightening grip of Moscow.

Two myths fueled misplaced optimism. First, there was a belief that Belarus could balance between the East and West through a multivector foreign policy. Second, there was a hope that Minsk’s limited reforms, release of some political prisoners, and especially its refusal to unconditionally back Moscow in the 2014 annexation of Crimea and intervention in the Donbas signaled a liberalizing turn. Both illusions ultimately frayed during this period.

At first, Lukashenka positioned Belarus as a neutral host for peace talks on the Ukraine conflict—not a participant. The Minsk agreements of 2014 and 2015 fed Western hopes: Belarus as mediator, not accomplice. Lukashenka even rejected Russian demands for a new Russian airbase in Belarusian territory, wary of appearing too dependent.

A partial thaw followed. Some Belarusian political prisoners were released. The European Union (EU) lifted sanctions. Western officials applauded Lukashenka’s apparent pragmatism. Engagement resumed.

But beneath the surface, nothing fundamentally changed. The regime remained authoritarian and Soviet in ethos. The security apparatus stayed intact. Dissent was managed, not tolerated. And Moscow remained the indispensable lifeline—providing cheap energy, market access, and strategic cover.

By the end of the decade, the signs were unmistakable. Crackdowns against dissent intensified. Economic dependence on Moscow deepened. Russia’s regional aggression hardened. The scaffolding of sovereignty remained, but the core was hollow.

When mass protests erupted in 2020 and the West recoiled at the regime’s violent crackdown on peaceful demonstrators in 2020, Lukashenka had only one direction to turn. The illusion of neutrality collapsed. So did the myth of a buffer state. What had once looked like strategic balance was instead a drift toward absorption into Russia.

A rapid unraveling ensued. After the extreme crackdown on protesters came the forced landing of a Ryanair flight to detain a dissident journalist and the weaponization of migration at EU borders, both in 2021. Clearly, Lukashenka was no longer playing both sides. He had chosen one—and it was Moscow’s.

This report examines how Belarus moved close relations with Russia to full-scale integration under the Kremlin. From political alignment to economic subjugation. From linguistic erasure to cultural annexation. What looked like independence was dependency in disguise.

Yet beneath this transformation lies a deeper truth: Belarusians themselves have not chosen this path. Public opinion surveys consistently show opposition to war and to nuclear weapons on Belarusian soil. They reject the loss of sovereignty and the transformation of Belarus into a Russian-controlled satellite. The regime has chosen absorption. The people have not.

The following chapters trace Belarus’s evolution into a de facto Russian outpost: militarily, politically, diplomatically, economically, and culturally. They also outline strategic options for ensuring that Belarus’s future is not decided solely in Moscow.

Sovereignty eroded: How Belarus became a Russian satellite

Lukashenka’s proclaimed neutrality during Russia’s 2014 invasion of Ukraine was always a fiction. Belarus remained a loyal authoritarian ally, making no meaningful reforms. Still, until 2020, Minsk maintained a degree of strategic flexibility, balancing deep ties with Moscow against limited outreach to the West and to China. Now, however, the question is no longer whether Belarus is drifting into Russia’s orbit but how much autonomy Lukashenka still retains.

From the start of his presidency in 1994, Lukashenka aligned himself with Moscow, consolidating domestic power by dismantling democratic institutions and suppressing dissent. He courted Russian elites and even positioned himself in the 1990s as a possible successor to President Boris Yeltsin, garnering the support of some nationalists in Russia. His ambition culminated in the 1999 Union State Treaty, a blueprint for deep integration: shared currency, joint institutions, and equal rights for citizens. But when Russian Federation President Vladimir Putin came to power in 2000, Lukashenka’s dreams of entering the Kremlin were dashed. Putin used that treaty to attempt to end Belarusian sovereignty. 

As a result, for over two decades, Lukashenka stalled implementation of the Union State Treaty, using the illusion of progress to extract economic concessions from the Kremlin—especially cheap energy—while avoiding genuine integration.

That strategy started to unravel in the late 2010s. Frustrated by Minsk’s endless demands for cheaper energy prices, Moscow began tying economic support to political concessions. In 2019, the two sides drafted thirty-one road maps for integration. Lukashenka sought better economic terms; Moscow wanted alignment. When Belarusians protested, he let the demonstrations proceed: a signal to Putin that public backlash might limit his flexibility.

Everything changed after the fraudulent 2020 presidential election, in which Lukashenka claimed victory over popular opposition forces led by Sviatlana Tsikhanouskaya. Mass protests left Lukashenka isolated and unrecognized by the West. Desperate, he turned fully to Moscow, and Putin seized the opportunity. In November 2021, Belarus and Russia formally endorsed twenty-eight Union State programs, reviving integration plans that aimed to harmonize legal systems, unify markets, and align policies in energy, finance, customs, and taxation. Though framed as cooperation, these measures eroded Belarusian sovereignty.

Implementation continues today with minimal transparency. Lukashenka maintains vague, noncommittal rhetoric, but the direction is clear: Moscow is embedding itself deeper into the Belarusian state. If enacted in full, these reforms would strip Belarus of real independence in key areas of governance.

The most sensitive areas—oil, gas, taxation, and customs—expose the imbalance. While the creation of a joint energy market remains stalled and more controversial steps like a single currency or union parliament have been deferred, integration is advancing quietly. A unified tax system is particularly telling. It includes a common policy, a supranational committee, and a Russian-designed digital platform with access to centralized taxpayer data. Lukashenka insists Belarus still makes its own decisions, but Moscow now has unprecedented access to its economic infrastructure.

The same dynamic plays out in customs. Lukashenka’s proposed joint customs group, framed as merely advisory, opens the door to deeper dependency. The more Russia shapes Belarus’s regulatory and administrative frameworks, the less independent Minsk becomes as bureaucracies are built to serve Moscow’s interests.

Technically, Belarus retains sovereignty—just as other members of Russia-led blocs do, including the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organization (CSTO). These alliances offer the illusion of multilateralism, but are structured to preserve Russian dominance. 

Russia’s intentions are not subtle. In a 2021 essay, Putin asserted that Russians, Ukrainians, and Belarusians form a “triune Russian nation,” denying Belarus a distinct identity. Lukashenka has echoed this logic, repeatedly affirming Belarus’s eternal closeness to Russia. Yet he continues to resist full annexation. Maintaining the appearance of sovereignty helps him contain domestic resistance and preserve what limited international engagement remains. For now, Russia seems content with this arrangement: decisive control without the complications of formal annexation.

Most Belarusians support independence. But every concession, every road map, chips away at the country’s ability to determine its future. Lukashenka has traded that future to retain power. Belarus remains a state in name—but, increasingly, a satellite in function.

Military merger: From troublesome ally to armed outpost

When Russia launched its full-scale invasion of Ukraine in February 2022, NATO’s eastern flank faced a new reality. Belarus opened its skies, railways, and military infrastructure to support Moscow’s assault.

What began as logistical support has since evolved into something far more permanent: the transformation of Belarus into a de facto military outpost of the Russian state. Behind the facade of sovereignty, Lukashenka’s regime has traded independence for protection, welcoming Russian troops, hardware, and even nuclear weapons onto Belarusian soil.

Before 2022, Russia’s permanent military presence in Belarus was limited to two Soviet-era facilities: the Hantsavichy missile warning station and the Vileyka naval communication center. Moscow sought to expand its footprint as early as 2013, aiming for permanent bases and deploying fighter jets. But Lukashenka resisted. Particularly after Russia’s annexation of Crimea and armed intervention in the Donbas in early 2014, he avoided the optics of occupation, maintaining the appearance of a balancing act between the East and West. He hosted the Minsk peace talks, freed some political prisoners, courted Western engagement, and even refrained from recognizing Crimea’s annexation, while publicly mocking the Kremlin’s “Russian World” ideology.

That balancing act ended after the August 2020 fraudulent election and the mass protests that followed, when Lukashenka relied heavily on Moscow’s political and security support to stay in power. In early February 2022 Belarus held a constitutional referendum—under conditions of repression and with no genuine debate—that ended the country’s nuclear-free status. The timing was no coincidence: Within days, Russia launched its invasion of Ukraine. And Belarus was complicit from day one.

Since then, Belarus has allowed its territory and infrastructure to be used by Russian forces. Military and civilian airfields—including Homiel airport—have served as operational hubs for launching missile and drone attacks, conducting maintenance, and supporting logistics for Russian military operations against Ukraine.

But Belarus provided more than runways. Its integrated air defense systems, navigation networks, and flight control infrastructure supported Russian operations. The Mazyr Oil Refinery fueled the war machine. Belarusian railways became arteries of invasion, shuttling tanks, troops, and ammunition across the Ukrainian border. Belarusian roads, depots, and logistics hubs sustained the assault on Kyiv.

​​By December 2022, the depth of this integration became unmistakable. Putin announced that Belarusian SU-25 aircraft would be modified to carry nuclear weapons and that Russia’s Iskander-M missile systems—capable of carrying nuclear payloads—had been delivered to Belarus. Because the operational control remained with Russia, the symbolic shift was profound.

Meanwhile, Belarus’s defense industry quietly joined the war effort: repairing Russian tanks, modernizing aircraft, and supplying optical systems for missiles. Trains loaded with weapons and parts began moving in both directions, solidifying a more profound military-industrial interdependence.

Between February 2022 and March 2023, more than seven hundred missiles were launched from Belarus into Ukraine. However, as the front lines stabilized, Belarus’s role shifted from an active launchpad to a strategic rear base.

In October 2022, as Ukrainian counteroffensives gained ground, Minsk and Moscow activated the Regional Grouping of Forces (RGF), a bilateral military formation that provided legal cover for new Russian deployments. Around nine thousand Russian troops, along with hundreds of tanks and artillery systems, arrived in Belarus under a joint command. The RGF marked a turning point: ad hoc cooperation became institutionalized military integration.

By mid-2023, most Russian troops deployed under the RGF had withdrawn, likely due to manpower constraints elsewhere. But the infrastructure remained—ready for rapid reactivation.

In March 2023, Putin announced that Russia had reached an agreement with Belarus to station tactical nuclear weapons on Belarusian territory, with the construction of a special storage facility to be completed by July. The establishment of a Russian military base complete with nuclear weapons would significantly increase Moscow’s leverage over Belarus and cement Putin’s grip on the country.

By early 2023, Belarusian crews had completed training on using the Iskander tactical missile system for potential nuclear strikes. However, independent monitors have found no visual evidence of actual nuclear weapon deployments in Belarus, casting doubt on whether Moscow’s nuclear rhetoric reflects the reality on the ground.

Throughout 2024, Belarus adopted a new military doctrine that codified deeper integration with Russia’s armed forces. For the first time, it explicitly allowed the deployment and potential use of Russian tactical nuclear weapons on Belarusian territory—framed as a deterrent against external threats. In practice, the doctrine handed Moscow strategic leverage near NATO’s borders, while letting Lukashenka claim a protective nuclear umbrella at home. The price was a further erosion of Belarusian autonomy.

Even as Russian MiG-31K fighters armed with hypersonic Kinzhal missiles maintained their presence on Belarusian territory, keeping Ukraine’s air defenses on constant alert, the relationship was becoming institutionalized rather than episodic.

In December 2024, Russia and Belarus signed the Treaty on Security Guarantees under the Union State framework. The agreement enabled permanent Russian bases and deployments in Belarus and committed both sides to mutual defense—including in response to threats against “sovereignty” or “constitutional order.” It further folded Belarus into Russia’s nuclear deterrence strategy.

As of mid-2025, roughly two thousand Russian military personnel remain in Belarus, including air defense units and aerospace forces. Russian operations continue from key locations, such as the Mazyr (Bokau) and Ziabrauka airfields.

New satellite imagery from May 2025 revealed expanded infrastructure at the Asipovichy base: new fencing, loading platforms, and air defenses—all consistent with preparations for storing and potentially deploying tactical nuclear weapons.

While Belarus has gestured toward de-escalation, suggesting it might scale back the Zapad-2025 joint exercises with Russia, these moves are largely symbolic and likely reflect Russia’s shifting priorities on the battlefield rather than a genuine reduction in military activity. In September, separate large-scale drills took place—both the Zapad-2025 exercises and joint CSTO operations—keeping the region on edge. 

Meanwhile, Minsk confirmed plans to host the Oreshnik missile system; Russia has already used this system in strikes against Ukraine. For Lukashenka, this is both a pledge of loyalty to Putin and a way to remain strategically indispensable.

In less than three years, Belarus has transitioned from a reluctant ally to a satellite state. Lukashenka has surrendered control over the country’s military and security policy in exchange for Kremlin backing. The result: Belarus is now a forward base for Russian aggression—potentially with nuclear weapons.

This development reshapes NATO’s eastern frontier, attempts to legitimize the forward deployment of Russian nuclear assets, and dismantles the boundaries between sovereign ally and subjugated proxy. The implications are stark. A former buffer state has become a Russian military outpost. Belarus is on the front line of Russia’s war against Ukraine and the West. 

From fence-sitter to foot soldier: How Belarus lost its foreign policy

After Lukashenka spent decades creating the illusion of maneuvering between the East and West to preserve regime autonomy, poof—it’s gone. Since Russia’s full-scale invasion of Ukraine in 2022, Belarus’s foreign policy has collapsed into a one-way street leading straight to Moscow.

Facing sweeping Western sanctions and mounting isolation, the Belarusian regime claims to be pivoting toward Asia, Africa, and Latin America. Officials describe this reorientation as a strategic reset, aimed at offsetting annual losses estimated at $16 billion to $18 billion due to sanctions. But the pivot is largely rhetorical. Minsk’s global engagement has narrowed to improvised alliances, symbolic gestures, and tactical outreach.

Lukashenka’s facade of neutrality—avoiding recognition of Russia’s annexation of Crimea and refraining from endorsement of Kremlin claims over Abkhazia and South Ossetia—crumbled in 2021 when he acknowledged Crimea as Russian territory. By 2024, he was hosting bilateral meetings with Denis Pushilin, the Moscow-backed head of the self-proclaimed Donetsk People’s Republic.

At the United Nations, Belarus has become one of Moscow’s most reliable allies. On March 2, 2022, it was one of just five countries to vote against a resolution condemning Russia’s invasion of Ukraine—alongside North Korea, Eritrea, Syria, and Russia itself. Diplomatic independence has all but evaporated.

Western sanctions have gutted Belarus’s traditional export markets. In 2019, Belarus exported goods valued at $8.5 billion to the EU. By 2024, that figure had dropped to just over $1 billion. Potash, oil products, and timber—key sources of revenue—have been hard-hit.

In response, Lukashenka launched an outreach campaign focused on the Global South. He visited Equatorial Guinea, Kenya, and Zimbabwe, promising closer ties and “anti-colonial solidarity.” Yet these trips have produced little beyond vague memoranda and photo ops. The case of Zimbabwe is telling: Lukashenka offered tractors and equipment, and trade reached $25 million in 2021. More significant, however, are Belarusian elite links to Zimbabwe’s gold and lithium sectors, and growing military ties between the two regimes. These are not signs of diversification, but transactions rooted in authoritarian clientelism.

Nowhere is the asymmetry of Belarus’s foreign policy more visible than in its relationship with China. While Minsk promotes Beijing as a key partner, the reality is marked by caution, imbalance, and diminishing returns. Lukashenka’s fifteenth visit to Beijing, delayed until June 2025, was described in state media as “family style,” which sounds like a cozy familiarity but produced no major agreements. 

Belarus remains a logistical node in China’s Belt and Road Initiative, but its value has declined amid the war in Ukraine and Western sanctions. In 2024, Lukashenka announced fifteen new “strategic” Chinese investment projects totaling three billion dollars, but much of this support is conditional and geared toward Chinese interests. The China-Belarus Industrial Park Great Stone lacks fresh momentum. With Western investors gone, it increasingly targets Russian and domestic firms.

Belarus’s 2024 accession to the Shanghai Cooperation Organization was meant to signal a turn from the West. In practice, trade with China is lopsided. Belarus exports potash and foodstuffs, while importing higher-value Chinese machinery and electronics. Belarusian defense firms are incorporating Chinese components into optics used by Russian tanks. In July 2024, Chinese and Belarusian troops held joint drills near NATO’s borders. The two countries have also codeveloped the Polonez multiple-launch rocket system.

Even as formal economic cooperation stalls, Lukashenka remains politically useful to Beijing. His public support for China on the status of Taiwan and Hong Kong reinforces shared authoritarian alignment. As China expands its global reach, Belarus’s transit infrastructure may retain some relevance. But the broader partnership remains shallow. China is watching carefully, but is not investing heavily. Not yet.

With traditional diplomacy in ruins, Minsk has embraced a model of “shadow diplomacy,” a murky blend of military deals, sanctions evasion, and autocratic alignment. The United Arab Emirates (UAE) has emerged as a key enabler. A UAE-based company acquired the Belarusian arm of Austria’s Raiffeisen Bank after it came under pressure to exit. Investigative journalists from the Belarusian Investigative Center and the Organized Crime and Corruption Reporting Project network have alleged Dubai’s involvement in laundering Belarusian assets through shell companies.

Ties with Iran have deepened. Since 2023, Minsk and Tehran have signed a string of defense agreements. A 2023 Kyiv Post article, citing unconfirmed reports and Western analysts, suggested Belarus may begin producing Iranian Shahed drones. During the 2024 military parade in Minsk, Belarus showcased its domestically produced “Geran” strike drones—closely resembling the Iranian Shahed-136 model widely used by Russia in Ukraine—marking their first public appearance. Defense ministers have met repeatedly, underscoring the growing military dimension of the partnership.

Meanwhile, Belarus is bypassing Western restrictions via new trade corridors. In 2024, the port of Makhachkala in Dagestan began handling Belarusian potash as part of the North-South Transport Corridor linking Russia and Iran.

Despite occasional overtures, such as Lukashenka’s claimed willingness to mediate peace or restore dialogue with Washington, the regime shows no signs of meaningful reform. Recent prisoner releases have been tokenistic, used as bargaining chips rather than a shift in policy.

Belarus’s foreign messaging now mirrors the Kremlin’s almost entirely. From Ukraine to NATO to US policy, Minsk speaks with Moscow’s voice. The country that once sought to straddle the East-West divide has become, decisively, a satellite of its eastern neighbor.

Hostile takeover: Russia’s control of Belarus’s economy

Since 2020, Belarus has undergone a profound economic shift: not toward growth or innovation, but into near-total dependence on Russia. What may look to some like recovery is, in fact, economic subjugation. Following a 4.7 percent decline in gross domestic product (GDP) in 2022 due to Western sanctions, the Belarusian economy rebounded by 4 percent in 2024, according to the World Bank. But this growth was driven to a large extent by Russian demand. Today, nearly every major Belarusian export, investment, and banking channel runs through Moscow. Belarusian factories feed Putin’s war machine, the Russian ruble dominates the Belarusian ruble, and tens of thousands of skilled workers have fled to EU countries. This is not a partnership—it’s an economic takeover. Russia no longer needs troops in Belarus to control it; it already controls the country through trade, credit, and industry.

State-owned enterprises have been systematically repurposed to support the Kremlin’s war in Ukraine. Electronics firms like Integral and JSC Planar, once producers of civilian components, now supply Russian weapons manufacturers. Backed by nearly $120 million in Russian investment, Integral produces microchips found in Russian cruise missiles. Legmash in Orsha, which once manufactured textile machinery, now produces components for the Grad multiple rocket launchers. StankoGomel builds machine tools for the Russian arms industry. Textile giant Mogotex signed a contract with Chechnya’s Erzu to produce military uniforms.

Even before the full-scale invasion, Belarus played a significant role in Russia’s military supply chains, but recent disclosures reveal a dramatic escalation. By early 2025, according to BelPol, a group of anti-regime former security officers, at least 287 Belarusian state enterprises have become involved in producing weapons, components, or munitions for Russia, with the real figure potentially approaching 500 when private firms are included. Belarusian factories now manufacture or supply everything from artillery shells and rocket parts to drones and electronics components, making the country a crucial node in the Russian military-industrial complex.

Belarus’s economy has long mirrored its authoritarian politics: centralized, state-controlled, and resistant to market reforms. Under Lukashenka, state-owned enterprises still account for more than half of GDP. This Soviet-style model prioritizes loyalty over innovation—a vulnerability Putin has exploited. 

Today, up to 70 percent of Belarus’s exports flow to Russia. When including transit through Russian-controlled ports and railways, Moscow effectively controls more than 90 percent of Belarus’s outbound trade.

This near-total dependence extends beyond simple trade flows. With traditional European export routes blocked, Belarus has become locked into Russian transit corridors. In 2023, Belarusian exporters utilized twenty Russian ports, double the number from the previous year. Even goods destined for third countries must pass through Russia, inflating costs and shrinking profit margins. Key exports, such as potash and oil products, are especially vulnerable, with state-owned producer Belaruskali facing costly delays at Russian-controlled ports.

Moreover, Belarus’s fiscal survival depends almost entirely on Russian support. The country owes roughly eight billion dollars in intergovernmental loans to Russia, making it Moscow’s largest debtor. Last year, Russia granted a seven-year deferral on debt repayments—effectively writing a blank check to preserve Lukashenka’s loyalty.

The Belarusian ruble is informally pegged to a currency basket, half of which is the Russian ruble, meaning it rises and falls with Moscow’s economic fortunes, limiting Minsk’s ability to pursue an independent monetary policy.

Russian banks now handle an increasing share of Belarusian exports, while local financial institutions have been integrated into Russia’s payment and messaging systems. Western sanctions have forced Belarus to adopt Russian digital infrastructure—from tax administration tools to consumer payment platforms—further eroding what remains of its economic sovereignty.

In 2024, more than half of foreign direct investment in Belarus came from Russia. Under the banner of “import substitution” and joint ventures, Russian firms aren’t merely filling gaps left by departing Western companies, they’re systematically displacing Belarusian competitors in a quiet economic conquest.

For Belarusian manufacturers, access to the Russian market represents both a lifeline and a trap. The more dependent they become on Russian demand, the more vulnerable they are to Moscow’s political whims. In critical sectors, Russia has evolved from the largest customer to the sole customer, giving Putin effective veto power over Belarus’s industrial base.

This process is hollowing out Belarus’s economy from within. Domestic policies—such as price freezes and retaliatory sanctions—have only added strain. Prices are rising, and consumer choice is shrinking. When Lukashenka occasionally pushes back, such as blocking McDonald’s rebranding to Russia’s “Vkusno i Tochka” (which means “Tasty, Period”) and instead insisting on a Belarusian brand, these gestures prove meaningless against the broader trajectory of economic surrender.

Nowhere is Belarus’s decline more visible than in its once-thriving information technology (IT) sector, formerly a symbol of innovation and Western integration. The transformation has been devastating: IT exports plummeted 45 percent from $3.2 billion in 2021 to $1.8 billion in 2023, while the sector shed over 19,000 workers.

Russian investors, who previously comprised just 10 percent of foreign IT involvement, now account for nearly a third of the market. While these contracts offer short-term stability, they represent a strategic dead end: constraining growth potential, limiting global market access, and tying Belarus’s technological future to Russia’s isolated digital ecosystem.

The brain drain extends beyond IT. As Belarus’s most talented professionals flee westward, the country loses not just individual expertise but entire innovation networks that took decades to build. This hemorrhaging of human capital ensures Belarus’s long-term economic stagnation regardless of short-term Russian subsidies.

Cultural hegemony: The appropriation of media and education 

Moscow is attempting to methodically redefine what it means to be Belarusian. Since the mass protests following the flawed election of August 2020, the Kremlin has fused its propaganda machine with Minsk’s state media, rewritten school curricula, and flooded the cultural sphere with programming promoting “brotherly unity.” The objective is unmistakable: erase the idea that Belarus can stand apart from Russia.

Russian cash and consultants now dictate prime-time narratives across Belarusian television. A joint history textbook portrays Belarus as a junior branch of Russian civilization, while concert stages and museums celebrate Kremlin-approved myths, silencing dissenting voices. This soft-power offensive, reinforced by Lukashenka’s brutal repression, amounts to a slow-motion annexation of memory and identity.

The transformation began in August 2020, when Belarusian state media workers walked off the job to protest the regime’s violent crackdown on peaceful demonstrators. Almost immediately, rumors spread that Russian journalists—particularly from Kremlin-backed outlets like RT—had replaced them. Lukashenka fueled the speculation by publicly thanking Russian media, while RT admitted only to “advising” local teams.

Soon after, state channels began parroting Moscow’s talking points. Anti-Western and anti-Ukrainian rhetoric surged. When Russia launched its 2022 invasion of Ukraine, Lukashenka was framed as a bystander, even as Belarusian territory was used as a launchpad for missile strikes and military operations. 

Russia isn’t just influencing Belarusian media—it’s bankrolling it. In 2025, a new Union State joint media holding is set to launch with a budget of one billion Russian rubles (approximately eleven million dollars), headquartered in Moscow with a representative office in Minsk. The venture will encompass television, radio, and print outlets, marking a significant step toward media integration under Kremlin direction. In February, RT hosted a two-day “media school” at the Russian House in Minsk, an unmistakable effort to cultivate a new generation of regime-aligned Belarusian journalists.

Independent outlets, by contrast, are suffocating. Since 2020, the Information Ministry has blocked about eighteen thousand websites, branding nearly seven thousand as “extremist.” Dozens of newsrooms have fled abroad; those that remain work under constant threat. For most Belarusians, uncensored news is becoming increasingly scarce.

After the 2020 protests, the regime also sharply curtailed academic freedom. Student activism is met with expulsions, imprisonment, forced “repentance” videos, and mobile court trials held at universities. The government has intensified its ideological campaign, blaming “internet technologies” and foreign influence for corrupting students and responding with stricter controls on campus life.

This campaign extends into all areas of student life. In 2023, Belarus’s largest university banned Valentine’s Day, citing it as “too Western,” following a previous ban on Halloween for similar reasons. Since 2024, military training has been introduced into curricula, and even kindergartens now host military-themed events.

The state is also strangling educational choice. Licensing rules adopted in 2022 shut dozens of private schools and those that have survived face intrusive oversight. Belarusian-language teaching is in decline: Fewer than one in ten pupils study it, and no university offers a full Belarusian curriculum. In 1999, 86 percent of citizens identified Belarusian as their native language; by 2019, that figure had dropped to 61 percent and continued to fall.

At the same time, Belarusians are being steered toward Russian universities. State‑funded places for Belarusians at Russian universities jumped from 72 in 2019 to 1,300 in 2023—plus an unprecedented 30,000‑seat quota through the Rossotrudnichestvo exchange program. The Kremlin is grooming a generation whose professional networks and intellectual loyalties lie in the East, not the West.

Russia’s cultural dominance in Belarus has grown in parallel with its political and media influence. Joint exhibitions, concerts, and museum partnerships—especially those highlighting shared military history—further embed Belarus within Russia’s ideological orbit.

Events like the Slavianski Bazaar celebrate “Slavic unity,” but the content increasingly serves pro-Kremlin narratives. Russian artists who openly support Moscow’s foreign policy are welcomed, while Belarusian and Western performers and authors critical of the war in Ukraine or Lukashenka’s regime are banned.

Since 2020, independent Belarusian culture has been gutted. State funding has shifted toward Russian-backed projects, leaving little room for local voices. The result is a cultural landscape where Belarus’s distinct identity is increasingly blurred and, in many cases, erased.

What Belarusians really want

Most Belarusians aren’t choosing Russia’s path—they’re being dragged down it.

While the Kremlin tightens its grip on Belarus’s military, economy, and foreign policy, public opinion tells a very different story. Independent polling consistently shows that the Belarusian people reject war, oppose Russian nuclear deployments, and are uneasy about their country’s deepening dependence on Moscow.

Over 85 percent of Belarusians oppose sending troops to fight in Russia’s war against Ukraine, and more than half disapprove of missile attacks launched from Belarusian soil. These numbers have remained remarkably stable over time, signaling deep and consistent anti-war sentiment that transcends political divisions. Belarusians want stability, but not if it means becoming a launchpad for Russian aggression.

Russian nuclear weapons represent another red line. Two-thirds of Belarusians oppose their deployment on Belarusian territory, though support has ticked up slightly since Moscow reportedly moved tactical nuclear weapons into the country in 2023. This resistance to militarization extends to broader security arrangements. Support for remaining in the Russia-led Collective Security Treaty Organization dropped from 63 percent in 2020 to 54 percent in 2023. When Russia invaded Ukraine, more Belarusians briefly preferred remaining outside any military bloc than staying in the CSTO—showing growing distrust of Russian-led alliances. These trends suggest Belarusians are not deeply attached to such alliances and may be open to neutrality or alternative security options.

Geopolitical preferences reveal a more complex picture. While half of Belarusians still back an alliance with Russia, 16 percent favor alignment with the EU, and 30 percent support neutrality. More telling, 57 percent believe Belarus should improve ties with the EU, with 37 percent specifically wanting stronger trade relationships.

Support for NATO remains low, between 6 percent and 11 percent, typically, but this reflects mistrust on all sides, limited access to open debate, and years of regime-driven anti-Western messaging rather than wholehearted embrace of Russia. Importantly, even among those who back integration with Russia, few envision a single state. Belarusians may accept cooperation, but not annexation.

Media access explains much of this complexity. Among those who rely on state-controlled media, 63 percent support closer ties with Russia and only 2 percent support EU integration. However, among consumers of independent media, the numbers flip: 44 percent support moving toward Europe, while just 11 percent back greater integration with Russia.

This data point carries profound implications for Western strategy. Propaganda works, but only when it monopolizes the conversation. Where independent journalism survives, even underground or in exile, it shapes opinions and maintains space for alternative futures. Belarusians who access independent information are more likely to oppose war, support Ukraine, and envision a sovereign development path.

The regime may have crushed street protests, but resistance persists through underground sabotage, cyber leaks, and digital dissent. These aren’t isolated acts of defiance; they signal a society that refuses to surrender its agency.

Belarusians are not ideologues. They are pragmatic. While geopolitical views are fragmented, public support for economic reforms is strong. Nearly 80 percent support fair competition between the public and private sectors. Most also want stock market development, tax cuts for small businesses, and less state interference.

That said, there are anxieties. Inflation, shrinking social safety nets, and the risk of economic shock are real concerns. Attitudes are nuanced: people support market mechanisms but fear short-term pain. Trust in the business elite is limited, but support for entrepreneurship is high.

The regime’s choices do not reflect the will of the Belarusian people. Most Belarusians oppose the war, reject nuclear deployments, and favor neutrality over dependence on Moscow. Despite repression and propaganda, quiet resistance persists: in attitudes, media habits, and daily acts of dissent. This gap between state and society is strategic. The regime is brittle; the people are not. Western policy must begin here: Belarus is not lost, and its future is still in play.

Conclusion

Belarus has not been formally annexed, but it has been absorbed. Militarily, politically, economically, and culturally, it has become a Russian outpost: a launchpad for aggression and repression alike. Yet this transformation is not complete, and it is not irreversible. The Belarusian regime survives through coercion and dependence, not legitimacy. Beneath the surface lies a society that still aspires to sovereignty, stability, and connection to the democratic world.

This report has shown how absorption happened, sector by sector—but also why it matters. A captive Belarus threatens NATO’s flank, enables Kremlin aggression, and offers a template for authoritarian consolidation elsewhere. For the United States and its allies, the time to act is now. Containing Russia, defending Europe, and supporting democracy all run through Minsk. The path to long-term regional security runs not only through Kyiv but also through a free and sovereign Belarus.

Belarus in the balance: Strategic recommendations for US and allied policy

The West can no longer afford to treat Belarus as a sideshow. Since Russia’s full-scale invasion of Ukraine, Belarus has become a critical platform for Kremlin aggression: militarily, economically, and ideologically. Restoring Belarusian sovereignty is now a strategic imperative for NATO’s eastern security and the broader defense of democratic values.

To counter Belarus’s deepening alignment with Russia, Western policymakers must adopt a four-part strategy: reframe Belarus as a frontline issue, enforce synchronized pressure, build democratic resilience, and prepare for regime rupture.

First, the United States must elevate Belarus as a national security priority. It should be fully integrated into NATO and EU threat assessments, treated alongside Ukraine and the Baltic states in strategic planning. Russian bases, nuclear deployments, and hybrid threats from Belarus are not theoretical: They are already altering Europe’s security landscape.

Second, sanctions must be expanded, enforced, and fully aligned with allies. Belarus is a central hub for sanctions evasion and war logistics, leveraging smuggling networks, trade rerouting, and Russian support. The United States, the EU, and the Group of Seven should synchronize measures against Belarus’s military-industrial complex, financial institutions, and dual-use sectors, extend secondary sanctions to enablers in China, Iran, and elsewhere, and close loopholes to raise the cost of Minsk’s subjugation to Moscow and deter further aggression.

Third, pressure must be matched by investment in Belarusian democratic infrastructure. This includes independent media, secure digital tools, exile education, and cultural preservation. These aren’t symbolic; they sustain the capacity for democratic self-rule and offer a credible alternative to Kremlin domination.

American leadership is vital. Appointing a US special envoy for the Belarusian democratic forces would centralize policy coordination and ensure Belarus stays on the transatlantic agenda. Belarusian democratic leaders must also be present in any future diplomatic process on postwar regional security. No high-level engagement with Lukashenka should resume until more than one thousand political prisoners are freed. 

Thanks to US mediation, a number of Belarusian political prisoners and foreign nationals have been freed this year. This humanitarian track should continue. However, it is crucial not to legitimize Lukashenka or ease pressure prematurely. The United States must adopt long-term strategic thinking on Belarus. Ultimately, Western policy should be guided by the understanding that only a democratic Belarus can ensure lasting stability for the entire region.

Finally, contingency planning is essential. Lukashenka’s regime is fragile. The West must be prepared for scenarios ranging from internal collapse to Russian destabilization. Planning should cover political transition, humanitarian assistance, and infrastructure security. Clear public guarantees of post-Lukashenka support—from economic aid to security cooperation—could hasten regime erosion and incentivize elite defections.

Belarus’s future must be embedded in the broader strategy to end the war in Ukraine and roll back authoritarian influence. A free Belarus would deny Moscow a key launchpad, reduce NATO’s exposure, and weaken Russian and Chinese leverage in the region.

The window for action is narrowing. A coherent Western strategy that combines pressure with preparation can still tip the balance.

Read the full issue brief

About the author

Hanna Liubakova is a Belarusian journalist and political analyst. She is a nonresident senior fellow at the Atlantic Council and has reported on developments in Belarus for international outlets including the Washington Post, the Economist, and others.

Liubakova began her career at Belsat TV, the only independent Belarusian television channel, which has been banned by the regime in Minsk. She later worked for Radio Free Europe/Radio Liberty (RFE/RL) in Prague, Czechia, and is currently writing a book about Belarus.

Her reporting has earned multiple honors, including the Freedom of the Media Award from the Transatlantic Leadership Network and the One Young World Journalist of the Year Award. She was also a finalist for the European Press Prize. In retaliation for her work, the Lukashenka regime sentenced her in absentia to ten years in prison. She is wanted by authorities in Russia and across all Commonwealth of Independent States countries.

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]]> https://www.atlanticcouncil.org/in-depth-research-reports/report/the-future-of-food-in-the-americas/ Tue, 11 Nov 2025 14:00:00 +0000 https://www.atlanticcouncil.org/?p=883923 Though the Americas have traditionally been a food-secure region, even moderate shocks can have profound consequences for agriculture. But there are concrete steps policymakers can take to protect the Western Hemisphere's breadbaskets from climate disruption, rising protectionism, and other risks. 

The post The future of food in the Americas appeared first on Atlantic Council.

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Bottom lines up front

• The Americas have traditionally been a food-secure region, but interlocking ecological, technological, and political trends could change that.
• Ecological risks pose the greatest threat to hemispheric food production, though rising protectionism and the resultant market uncertainty also have a destabilizing effect.
• There is little margin for error, as even moderate shocks can have profound consequences, and food insecurity raises the risk of political and social instability.

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Table of contents

• Introduction
• Food, society, and politics
• Food security in the Americas
• Drivers of change in the Americas and beyond
• Toward a food-secure future
• Conclusion
• About the authors

Introduction

Food security is at the core of national, regional, and global security. When societies are food secure, they stand a much greater chance of social and political stability; when they are food insecure, the opposite is true. Fortunately, the Western Hemisphere—the Americas—is a food-secure region. Although access to food is an ongoing challenge deserving greater attention in every country (as there are hungry people across the hemisphere), food abundance generally characterizes the Americas. Historically, the hemisphere has owed its unique position to several factors: a favorable natural resource base; equally benign geopolitical conditions; and extensive public and private cooperation to improve production methods and support innovation.

However, the future is not guaranteed to look like the past. Several key drivers of change are afoot that could alter the trajectory of hemispheric food security. These drivers bring with them uncertain outcomes, alternatively threatening the stability and productivity of current agrifood systems or offering hope that they could become even stronger and more resilient in the years to come.

This report assesses the future of food in the Western Hemisphere. It focuses on the major uncertainties that are driving change in the agrifood systems within the hemisphere and the world. These drivers represent risks or opportunities, and sometimes both. They include the decline of healthy and stable ecosystems, rapidly changing geopolitics, the erosion of multilateral institutions, increasingly inflationary and volatile food prices, the promise of innovation and emerging technologies, and generational shifts in farming and agricultural production.

These forces are not siloed. Rather, they intersect. There might be an awareness that these individual drivers of change represent obstacles to (or opportunities for) achieving durable food-security solutions in the future, yet many leaders see them as isolated challenges rather than as intersecting ones, obscuring the bigger picture.

The drivers discussed in this report therefore are not just accumulating layers of risks and opportunities. Rather, their interaction multiplies the system’s dynamism. This emerging dynamism will require policymakers, business leaders, investors, and farmers to find innovative solutions in the face of a rapidly changing, and not entirely predictable, agrifood landscape. Yet such outlooks may not arise. Complacency is a big risk, if leaders believe that the status quo will continue to improve, requiring changes only at the margins. In such a situation, the hemisphere would become far more vulnerable to unexpected shocks because there would not be enough appreciation for how ecological, technological, geopolitical, and institutional changes are reshaping the future.

This concern is not hyperbolic. A very recent external shock—the COVID-19 pandemic—erased major progress that the hemisphere had made on reducing hunger, which should remind us that the foundations of food security remain shaky. Looking ahead, there is little margin for error, as even moderate shocks can have profound consequences.

Food, society, and politics

Food security is at the core of national, regional, hemispheric, and global security. When societies are food secure, they stand a much greater chance of social and political stability; when they are food insecure, the opposite is true.

This axiom, although a simple one, has been demonstrated time and again throughout history. High food prices occasioned by war, poor harvests, or high taxation of the peasantry (or all three) preceded the onset of the French Revolution in 1789 and the Russian revolutions of 1905 and 1917, to name just a couple of famous examples from history.

Today, despite far greater agricultural production at national and global levels, such disturbances still recur with alarming frequency: The 2007–2008 food riots across Africa followed commodity price spikes for agricultural inputs (oil, principally) that inflated the price of food; the 2010–2011 Arab Spring was preceded by food-price spikes owing to multiple breadbasket harvest failures across several world regions; and Russia’s war in Ukraine, which disrupted wheat, fertilizer, and natural gas exports, blocked the flow of agricultural inputs and outputs and dramatically raised food prices globally. Millions of additional people became food insecure around the world.

No other good has such an impact on society and politics as food because people need to eat every day. “Food riots are as old as civilization itself,” as one food security analyst summarized the impact of food on social and political stability. Often, it will only take a single big food-price shock to change social and political dynamics within a country or even an entire region. Although high food prices have a disproportionately negative impact on vulnerable, poor, and fragile countries, they also can have an outsized impact on otherwise wealthy and stable ones. Japan offers a recent example. In July 2025, soaring rice prices in Japan directly contributed to the defeat of Prime Minister Shigeru Ishiba’s Liberal Democratic Party in parliamentary elections.

The Food and Agriculture Organization (FAO) adopted a definition of food security at the 1996 World Food Summit (see box 1 for the history of the concept), which has persisted with only slight revision:

• Food security exists when all people, at all times, have physical, social, and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.

This definition contains four main dimensions, or pillars:

1. The physical, supply-side availability of food, typically assessed at the national level and consisting of domestic agricultural production plus food imports.
2. Household access to food, which is dependent on household incomes and food prices (set by a combination of market and nonmarket forces).
3. Nutritional intake by individuals, which is not the same thing as caloric intake; nutrition depends in part on dietary diversity.
4. Stability of the first three pillars over time.

A couple important pieces of the food security puzzle are missing from this formulation. One is ecological stability. Food security depends on the sustainability of the underlying Earth systems that are essential to food production. Maintaining the integrity of these Earth systems, including the integrity of the world’s soils, water, biodiversity, nutrients, and atmospheric conditions (precipitation and temperature, primarily), is critical. A second missing piece is the stability of the international systems, specifically stability of a rules-based trading order that ensures that food moves easily from food-surplus to food-deficit countries. Such a trading order improves food security through enhancing agriculture productivity and (under emergency conditions) enables swift distribution of humanitarian aid in the form of food. Such a system helps to avoid trade conflicts and establishes international norms for the notion that food security is in the collective interest and responsibility of all parties.

The capacity of the current international system to encourage global production and trade in food has increased over time, dramatically so over the past several decades: The FAO reported that in 2021, the world traded some 5,000 trillion kilocalories of food, more than double the amount that it did in 2000. A central piece of this equation has been the existence of key multilateral institutions that have had the credibility and authority to provide a forum for states to negotiate trade agreements, resolve trade disputes, and monitor and enforce commitments.

None of these conditions should be treated as a given. Looking ahead, the odds are high that the world will become more dynamic rather than less so, with no guarantee that dynamism will have more upside than downside. To adapt and thrive within changing conditions (with both positive and negative impacts), the world’s agrifood systems will need to become more resilient and adaptable. The good news is that humankind has the tools—or can develop the necessary tools—to ensure such outcomes.

Box 1: Food security: History of a concept
Although concerns surrounding hunger and famine are ancient, dating to human prehistory, the formal concept of food security is only about a half century old. Its institutional origins are often traced to a 1974 World Food Conference that defined the concept in terms of the global supply of food. The thinking at the time linked hunger with global supply (chiefly of staple crops, especially cereals), the idea being that hunger would be solved through adequate supply. Over the following decades, the concept of food security evolved in multiple key respects including: moving away from a sole focus on food supply and toward food distribution and access, especially by households and individuals; an acknowledgment that food security is not just a function of quantitative intake of calories but also of nutrition; the acceptance that importing food is a legitimate national means of achieving food security (as opposed to defining a food-secure country as one that domestically produces the entirety of its needs); an incorporation of social considerations (for example, inequalities in food access owing to ethnicity or gender). The definition adopted at the 1996 World Food Summit has become the default definition of food security: “Food security exists when all people, at all times, have physical, social, and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.” (The word “social” in this definition postdates the 1996 summit.)

Food security in the Americas

The Western Hemisphere is in a fortunate position regarding agriculture and food. Its natural endowment is significant, consisting of arable soils and plentiful rainfall distributed across numerous regions suitable for agriculture (temperate, subtropical, and tropical). The hemisphere’s highly productive agriculture benefits from relatively stable political and economic environments, medium-to-high income levels, and reasonably well-functioning domestic and international markets, all stimulated by public, private, and academic sector investments in agricultural research and development (R&D).

As a result, the hemisphere’s aggregate production capacity in both staple and specialized crops gives it an indispensable role in providing domestic food security but also meeting the world’s food needs.

There are several caveats to this picture, which this report endeavors to make clear. First, several driving forces are changing baseline conditions that will alter the hemisphere’s future, for better or worse. Second, the Americas might be fortunate in many respects, but it is not a single bloc of countries acting in unison. Trade disputes, unfortunately, are becoming a sharper and more common part of the hemisphere’s diplomatic landscape, for example. Finally, as this report also makes clear, food security is not just about supply-side agricultural production. Food insecurity remains a problem in the Americas as it does everywhere in the world.

Supply side: Agricultural production
in the Americas

The five largest primary crop producing countries (by tonnage) in the world are all in the Americas: Brazil, the United States, Argentina, Mexico, and Canada. As shown in table 1 and figure 1, the hemisphere also contains top exporters of all four primary crops: soybeans, corn, wheat, and rice. The largest producers of food in the Americas are, therefore, critical for ensuring global food security. What happens in the region matters greatly, because developments in the Americas have an outsized effect on global trade in food.

In addition to the largest primary crop producers, the Americas also lead in the production of a wide range of specialty crops, including coffee, avocados, lemons, limes, oranges, blueberries, cranberries, quinoa, almonds, and more. Numerous countries in the hemisphere are leading producers of these crops. For example, Peru is in the top three global producers of avocados, blueberries, and quinoa, while Colombia is a leading global producer of coffee, sugar cane, avocados, and agave fibers.

For many countries in the Americas, agriculture continues to be a critical piece of their national economies. As shown in figure 2, agriculture’s share of gross domestic product (GDP) is above five percent in most countries and is above ten percent in a handful of countries in Central America, the Caribbean, and South America. Over the 2023–2024 period, agriculture’s share of Brazil’s GDP was 6.24 percent while its agricultural exports represented nearly half (49 percent, at $164 billion) of Brazil’s total exports by value. Both figures demonstrate the spectacular growth in Brazil’s intensive farming, especially of soybeans (see also box 2).

Box 2. Case study: Brazil
Brazil might be the single most interesting agrifood production story in the entire hemisphere, and perhaps the most important as well. Brazil today is one of the world’s great breadbaskets, being among the largest producers and exporters of primary crops and many specialized ones as well. Yet Brazil was a net food importer for much of its history, becoming a net exporter only over the past several decades. Starting in the 1960s, an agrifood production revolution occurred in Brazil, based on both extensification (expansion of agricultural land) and, just as critically if not even more so, an intensive modernization program based around research, capital investment, and technological development. Brazil’s modernization program included cutting-edge research conducted by universities and its now world-famous agricultural research agency, Embrapa, into tropical soybean and corn cultivation. These efforts led to new seed varieties and technologies that in turn enabled primary crop production to occur at scale in vast regions of Brazil including the Cerrado. Over roughly the same period, the liberalization of agricultural trade allowed Brazil to grow into a global agricultural exporter. On the demand side of the food security equation, a combination of rising wealth plus innovative social safety programs, including the Bolsa Familia and Fome Zero (zero hunger) programs, helped to reduce hunger among the poor in Brazil. Yet Brazil’s story has not been without its downsides, which in the past have included high deforestation rates in the Cerrado and Amazon regions, and related ecological damage.

Demand side: calories and nutrition

The FAO’s definition of food security, which is broadly accepted among experts, emphasizes that food security is as much about access and affordability, especially by vulnerable populations, as it is about the aggregate production of food. If people cannot access a nutritious diet at affordable and stable prices, they will not be food secure.

In recent decades, the Western Hemisphere has gradually decreased its level of food insecurity. In comparative terms, it has done well. Between 1990 and 2015, for example, Latin America and the Caribbean (LAC) was the only region in the world to reduce hunger by half.

As shown in table 2, the FAO’s latest data indicates that the Western Hemisphere continues to be relatively food secure. Over 2022–2024, the two major subregions in the Americas, North America on the one hand and LAC on the other, performed better than the world average. This is reflected in several key metrics related to the reduction of caloric intake of food, in particular undernourishment (calorie deprivation over time), severe food insecurity (a measurement of households going without food for periods of time), and the prevalence of wasting in small children (an indicator of undernourishment). On metrics related to poor diets such as overweight and obesity (both of which are indicators of too many calories rather than too few), the Americas performed less well.

These outcomes are consistent with levels of wealth. Although an oversimplification, as national wealth increases, per capita consumption of food rises. Most countries in the Americas are classified by the World Bank as either high- or upper middle-income countries. (Note, however, that lower-income populations, including those within both lower- and higher income economies, are at increasing risk of obesity, in part due to easy availability of inexpensive processed foods with low nutritional value.)

There are several countries in the Americas that underperform. According to the FAO, over half (54.2 percent) of Haitians are undernourished, while just 10.7 percent of adults are obese (compared with over 40 percent of US citizens); Haiti is the most fragile state in the Americas. Although undernourishment is much lower across the hemisphere now than in previous decades, it nonetheless remains high in several countries including Bolivia (21.8 percent), Honduras (14.8 percent), Ecuador (12.1 percent), and Guatemala (11.8 percent).

There is a gendered dimension to deprivation, with women being more likely to be food insecure than men. This difference worsened during the COVID-19 pandemic, increasing to a 3.3 percent gap between the genders in Latin America in 2021, before reducing again by 2024. In North America, the gap has worsened every year since 2020, from 0.1 percent in 2020 to 0.5 percent in 2024.

Drivers of change in the Americas and beyond

Strategic foresight asserts that the future likely will not conform to our expectations. It is risky to assume that the future will consist of a simple linear extrapolation of one or two current trends. Hence, the discipline focuses as much on the intersections of the drivers that together will drive multiple possible futures. Food security in the Americas is no different, as there are several significant intersecting drivers of change that will
shape the hemisphere’s future.

Changing ecology

Ecological risks are among the greatest threats to food security in the Americas. A rapidly changing climate creates the primary set of risks, from rising heat and worsening drought and flooding. Other ecological risks exist as well in specific subregions, for example deforestation, biodiversity loss, and soil erosion and degradation.

Of these changing ecological conditions, perhaps the worst for agricultural production is the combination of drought and heat, or “dry-hot” conditions. Trend data show that such conditions are becoming more frequent and intense. An Organisation for Economic Co-operation and Development (OECD) study of drought patterns, released in July 2025, found that the share of land globally exposed to drought has doubled since 1900.

Dry-hot conditions threaten to become more frequent across the Americas. In North America, for example, scientists estimate that the now decades-long megadrought that has impacted northern Mexico and the southwestern United States might be the worst in 1,200 years. In South America, the frequency of dry, hot, and flammable weather has increased across much of the continent since the early 1970s. Such changes are highly consequential for agriculture. A 2021 study, for instance, showed that increases in Brazil’s dry-hot conditions, combined with the impacts of deforestation on temperature and rainfall, have already pushed 28 percent of the country’s agricultural land beyond its optimum productive range, with further projections of 51 percent by 2030 and 74 percent by 2060.

One of the more discouraging climate-driven outcomes is the possibility, even probability, of future multiple breadbasket failures (i.e., “simultaneous harvest failures across major crop-producing regions” around the world). Climate change likely will make such failures more common in the future. A 2021 study projected that the probability of multiple harvest failures globally was “as much as 4.5 times higher by 2030 and up to 25 times higher by 2050.”21 Another, focusing on the impacts that oscillations such as the El Niño-Southern Oscillation (ENSO) and North Atlantic Oscillation (NAO) might have under future warming, concluded that shifting ENSO and NAO patterns might “expose an additional 5.1–12% of global croplands” to such oscillations, with strong ENSO/NAO negative phases “likely to cause simultaneous yield losses across multiple key food-producing regions.”

The Americas, home to several of the world’s major producers of staple crops including soybeans, corn, and wheat, faces the possibility of multiple breadbasket failures. It is entirely possible that in the years to come, severe dry-hot conditions could strike simultaneously in the United States, Mexico, Brazil, and Argentina. The consequences for agricultural production and global food security would be enormous.

A changing climate also will negatively impact most—perhaps all—of the other crops grown across the Americas. Coffee and banana production, to name just two examples, likely will be severely affected by increased heat and altered precipitation patterns. A recent scientific study conducted by the University of Exeter forecasts that 60 percent of the regions currently producing bananas—including regions in Central America—will be unable to do so before the end of this century, owing principally to increased temperature. The world will not have to wait nearly that long to see such effects because climate-driven impacts are already occurring. In 2024, the FAO reported a 38.8 percent annual increase in global coffee prices “primarily driven by supply-side disruptions, stemming from adverse weather conditions” including drought, heat, and flooding in major coffee-producing countries including Brazil, Vietnam, and Indonesia.

Because farmers are on the receiving end of changing ecological conditions, it is critical to understand how they are impacted by such change and how they process those changes.

Doing so will assist in defining the policy and investment options with the greatest likelihood of mass adoption on farms and in farming communities. Farmers will be impacted differently depending on where in the hemisphere they farm, their farm sizes and resources (financial and otherwise), whether they are subsistence farmers or integrated into national, regional, and global markets, and the types of crops they grow. Taken together, farmers do not experience changing ecological conditions in the same way at the same time. Smallholder farmers in poorer settings, for example, will be at greatest risk from climate-driven impacts given the small size of their landholdings and a lack of access to insurance and other sources of resilience. It follows that farmers’ perceptions of ecological impacts on their farming operations will not follow a straight line. Farmers will parse the impacts of environmental hazards such as drought, heat, or flooding differently.

In sum, ecological change dramatically increases the risk of declining crop yields while shifting the locations where crops can be grown. Potentially, ecological change with impacts at scale could generate significant shortfalls in global food supply, causing market panics, high prices, hoarding, and a breakdown of trade. Food insecurity would spike.

Geopolitical and geoeconomic turbulence

A second set of risks stems from rising geopolitical and geoeconomic competition and uncertainty. An open, rules-based trading system has been essential to improving hemispheric and global food security. Trade in that system has precipitated more economic integration of the region—more bilateral trade and investment agreements, greater investment flows, and exchange of technical know-how—which benefits food security via higher economic growth, greater employment opportunities and rising incomes, poverty reduction, and general economic dynamism. It also has allowed governments to see that a set of policies, including more focus on innovation and competitiveness and less on trade distortions and protectionism, is the best path forward.

Yet this trajectory is now subject to geopolitical risk. Over the past two decades, the global food trading system has been disrupted by several significant events including wars and related phenomena (e.g., civil strife, terrorism). Such events generate (largely) unanticipated shocks to agricultural inputs, supply chains, and agrifood exports, resulting in higher production prices and, therefore, consumer prices. The most well-known and significant of these events is the full-scale war in Ukraine, which upon its onset in 2022 immediately resulted in higher global prices for key commodities including natural gas and nitrogen fertilizers (because Russia is the world’s third ranking natural gas exporter and natural gas is a critical input for nitrogen fertilizers); potash fertilizers (primarily from Russia and Belarus) and wheat (before the war, Ukraine was the world’s seventh-largest wheat exporter).

Although global input markets, for example for fertilizers, are broadly resilient, at the same time they also clearly are affected by geopolitical turbulence arising from trade policies, sanctions, shocks such as wars, and other phenomena. While the war in Ukraine is an important case, it hardly exhausts the list of current examples. In July 2025, the World Bank said that sanctions and restrictive trade policies “are playing an increasingly significant role in reshaping global fertilizer markets,” citing China’s discretionary export restrictions on nitrogen and phosphate fertilizers to protect its domestic agriculture, and the European Union’s (EU) June 2025 tariffs against Belarusian and Russian fertilizers to reduce EU dependence on these countries.

An even more difficult problem is the risk that the hemispheric and global agrifood trading system is returning to a protectionist order, which risks the benefits that have accrued since the emergence of a rules-based trading model in the 1990s for agriculture established under the World Trade Organization (WTO) 1994 Agreement on Agriculture. Under that model, countries tended to place high tariffs only on a few politically sensitive crops (such as sugar or cotton). Yet today’s rising protectionism is much broader, affecting a larger number of crops, including staple crops, and implemented by an ever-longer list of countries. The result is likely to undermine food security by increasing food prices—with impacts falling most harshly on poor households—and reducing profitability by raising both producers’ and exporters’ costs, lowering investment and decreasing productivity.

Over the past several decades, the largest agricultural producers in the Americas, including the United States and Brazil, have become the world’s largest agrifood exporting nations. Southern Cone states have pushed agricultural exports as key pieces of their export-led growth strategies, especially to China given its rapidly growing demand for commodities. With such a high dependence on global agricultural exports, the biggest agricultural producers in the Western Hemisphere ought to be the most heavily invested in a global agrifood free-trading regime. Tariff and nontariff barrier uncertainty negatively impacts agrifood producers, processors, distributors, and consumers.

These disruptions have other distorting effects. Trade patterns within the Americas, and between the Americas and the rest of the world, are shifting because of trade tensions. China’s behavior in international agricultural markets is a significant example, with direct relevance to the Western Hemisphere. A decade ago, China imported more agricultural goods from the United States than from Brazil; today, China imports almost twice as much from Brazil as from the United States, including in soybeans and corn. China’s shift toward non-US sources (including but not limited to Brazil) began even before the 2018 trade dispute with the United States. In addition to supply diversification, China also has dramatically increased its stockpiling of food (grains, soybeans, and frozen meat), which it defines as a strategic good.

Further, China’s decoupling from the US agricultural market has had major consequences for trade patterns in that it has helped Brazil become the world’s largest exporter of soybeans. Since the 2018 Sino-American trade dispute, Brazil’s global soybean exports have increased by 40 percent, while those from the US have remained flat.

Geopolitical and geoeconomic turbulence has distorting effects on global trade in food. The biggest concern for global food security is the impact on food prices, both in terms of inflation but also price variability. Such turbulence also can generate trade disputes and, therefore, contribute to fractured relations among states. After the United States levied tariffs in August 2025 of up to 50 percent against certain Brazilian agricultural goods including coffee, beef, and sugar, Brazil immediately asked the WTO for consultation, arguing that the tariffs violate international trade rules. A likely immediate effect of the tariffs is to hasten Brazil’s interest in developing alternative markets for its agricultural products, including with China. A second and (often) underappreciated concern is that unstable trade rules and fluctuating market access make it more difficult for farmers to plan and make production and investment decisions, increasing their economic uncertainty.

Geopolitical tensions and rising trade protectionism are also likely to lead to slower economic growth. This is important because in the Americas, as everywhere, economic growth coupled with rising incomes are keys to increased food security. If slower economic growth combines with higher food prices owing to increasing trade friction, then there is a greater risk of more food insecurity in the future. International food trade is being shaped increasingly by geopolitical considerations rather than market signals, thereby realigning trade patterns in unpredictable ways.

Institutional uncertainty

Multilateral institutions are a hallmark of the current international order. Most of the world’s biggest and most important institutions that exist today were created after 1945. Although not without criticism, much of it deserved, these institutions have been central to building a global order which has delivered unprecedented—if also uneven—prosperity. When it comes to trade, the data say as much: Today’s global trade is 45 times by volume and 382 times by value greater than it was in 1950. Moreover, since the mid-1990s, global trade growth has accelerated, averaging 4 percent growth by volume annually and 5 percent by value.

However, the multilateral institutions that have facilitated this growth in trade now are under enormous pressure from all sides. One reason is that the world’s largest trading powers as well as many smaller ones have been willing to bend or even break established norms and international trade law. China, for example, has taken advantage of its status as a developing country under the WTO to engage in unfair practices, including massive subsidies, heavy use of state-owned enterprises, forced technology transfer, and protection of its domestic market (for example, limiting foreign companies’ and investors’ access to its technology and financial markets).36 Further, the United States is preventing the WTO’s Appellate Body from functioning as designed, preventing the organization from enforcing its own rules.

Such developments are important because they create uncertainty surrounding trading rules and thereby increase friction among countries when it comes to trade. Even worse, these developments create space wherein the breaking of rules by some countries prompts others to believe they can as well. Both India and Indonesia, for example, recently have taken advantage of the lack of a functioning Appellate Body to
implement policies that likely are in violation; Indonesia instituted a ban on nickel exports (to induce nickel processors to relocate to Indonesia) while India heavily subsidized steel and pharmaceuticals. By some estimates, two-thirds of initial WTO rulings made about trade disputes have been appealed, but the Appellate Body cannot convene itself.

The decline of multilateral institutions is significant because the Americas benefit more than other regions from an open global trading system in agricultural goods, per table 1 above. Agriculture always has been a controversial topic in trade negotiations, extending back to the origins of the Global Agreement on Tariffs and Trade (GATT) in the 1940s. Despite this fact, functional multilateral institutions are valuable because
they create a stable, rules-based global marketplace that in turn enables trade in food at scale.

In sum, a breakdown of multilateral institutions and rising protectionism portend headwinds for agriculture in the years to come, increasing risks and possibly disincentivizing investments by farmers. Such developments erode the open agrifood trading system that globalization made possible. The Americas have utilized open trade to expand agriculture production and exports and, therefore, is most at risk from the unraveling of that system

Price inflation and variability

The price of food is a core metric for food security: For the world’s consumers, the most desirable food prices are both low and stable over time. Food insecurity is made worse when the opposite applies: rapid price inflation combined with high price variability. Unfortunately, as shown in figure 3, the latter situation has characterized global food prices for much of the past quarter century.

Since the 2000s, shocks have occurred with such frequency that prices settle on a new higher baseline rather than returning to previous levels. The FAO noted this trend as early as 2009: Prior to the 2006–2008 global food-price shock, “real prices [in food had] shown a steady long-run downward trend punctuated by typically short-lived price spikes.” But by the mid-2000s, the FAO observed, this trend no longer held. As of 2008, its own food-price index “still averaged 24 percent above 2007 and 57 percent above 2006.” Indeed, as shown in figure 3, since the mid-2000s, global food prices have risen to a new and higher level after each exogenous shock. The most recent global shocks—the COVID-19 pandemic followed by the full-scale invasion of Ukraine—has had the greatest impact on sustained high food prices.

The upward trend in the price of food has important implications for food security around the world. Food is less affordable; households have more difficulty consuming a healthy diet, and they are forced to switch to less nutritious foods and/or reduce their total consumption of food. This cost-of-living crisis erodes food security gains and threatens to make societies less stable.

Food-price inflation and volatility is as problematic in the Americas as elsewhere in the world, increasing food insecurity and becoming a key social and political issue. In Latin America, rising food prices have been a major driver of inflation across the region. In some cases, such as Argentina, food prices have contributed to extreme inflation rates. In North America, food prices also continue to rise and are a major cause of the cost-of-living crisis experienced by many households.

Investment: Innovation, technology, and infrastructure

Public- and private-sector investments in on- and off-farm innovation and productivity have been critical enablers of modern agrifood systems. A question to be answered in the years to come is whether such investments will increase agricultural productivity and sustainability enough to match or exceed demand-side pressures for more food (from population and income growth), even as baseline conditions from other drivers—ecological, institutional, geopolitical—become more challenging.

Historically, on- and off-farm innovation and productivity increases, which stem from process and technological developments plus infrastructural improvements, have been fundamental to increasing the supply of food to meet rising demand. Since the 1990s, global efficiency gains have been the largest contributors to global growth in agricultural output. Efficiency gains have far outstripped the other contributors, including the use of more inputs per hectare of land, greater extension of irrigation to cropland, and expansion of new agricultural land (e.g., expansion of agriculture into previously forested lands).

In agriculture, efficiency is gauged using total factor productivity (TFP), a metric of inputs relative to outputs. If total on-farm output (e.g., volume of crops produced) is growing faster than inputs (defined as labor, capital, and material resources), then TFP is increasing.

That is the good news. The bad news is that global TFP growth is now slowing. After steadily increasing from a 0.55 percent annual growth rate during the 1970s to a peak of 1.97 percent annual growth rate in the 2000s, TFP has since fallen back to 1.1 percent annually (figure 4). Within the Americas, the picture is even more dire. Between 2011 and 2020, TFP increased by only 0.9 percent annually in Latin America and the Caribbean. In North America, typically at the global forefront in productivity and efficiency gains, TFP grew over the same period by just 0.2 percent annually. The Americas significantly lagged the global average (figure 5).

The decline in TFP over the past fifteen years is a worrisome development, as it threatens to undermine progress toward an elusive goal, which is to produce enough food to meet growing global demand while simultaneously retaining on-farm profitability and reducing environmental impact. Analysts at the US Department of Agriculture recently made this argument. “At the global level,” they wrote, “improvements in agricultural productivity have not been rapid or universal enough to make a significant dent in the effect of agriculture on the environment.” If TFP were to continue to slow down in the future, the impact “could [negatively] affect food prices, [lead to] the expansion of agriculture into more natural lands, and [threaten] global food security.”

Nor is underinvestment in innovation the only form of investment risk. Despite the hemisphere’s reliance on trade in agriculture and food, infrastructure across much of the Americas remains underdeveloped. The so-called infrastructure gap in the Americas refers to how the hemisphere’s ports, railways, bridges and roads, telecommunications, and other forms of infrastructure are insufficiently robust in kind, quality, and/or maintenance. In 2021, for example, the Inter-American Development Bank (IDB) estimated that countries in Latin America and the Caribbean alone would need to invest $2.2 trillion in “water and sanitation, energy, transportation, and telecommunications infrastructure” to meet the UN’s Sustainable Development Goals. The IDB’s estimate included not just funds for new infrastructural investment but for maintenance and replacement as well (at some 41 percent of the total).

North America is not exempt from this problem, as both Canada and the United States face large infrastructure deficits. As is well-known, for decades the United States has largely underinvested in infrastructure. Despite passage of the 2021 Infrastructure Investment and Jobs Act, which directed the federal government to spend some $1.2 trillion over five years on infrastructure, investment levels in the United States will remain insufficient absent systematic changes in how funds are raised by local, state, and federal governments.

Likewise, in Canada, the infrastructure deficit, which is estimated at $196 billion, is of particular importance to that country’s globally important agricultural exports, which include foodstuffs such as grains (wheat, principally) and key agricultural inputs such as fertilizers, largely produced in the country’s vast interior. Getting bulky grains and inputs to external markets more cheaply and efficiently will require Canada to upgrade its transport infrastructure, including railway lines, bridges, and ports, which are key in all circumstances but especially so during periods when unexpected disruptive factors, such as recent port labor strikes or extreme weather events, create choke points that necessitate rerouting. The recent announcements by the government of Canada to expand the Port of Montreal is a step in the right direction. However, significantly greater ambition will be required to push Canada’s infrastructure investments to levels comparable to other leading OECD countries.

Policymakers, the private sector, farmers, investors, and the scientific and technological communities will need to find solutions to these challenges. Doing so will require some combination of enhanced public and private investment in on- and off-farm infrastructure, R&D, improved piloting and scaling of new technologies, and implementation of policies to encourage farmers to become more innovative, productive, and efficient.

Demographic shifts

Agricultural employment as a share of global GDP has been trending downward for decades, owing to the ongoing mechanization of farmwork, increasing urbanization and industrialization, and other factors. According to the World Bank, in 1991, 43 percent of the world’s population was employed in agriculture. By 2023, that figure had fallen by almost half, to 26 percent.

The Western Hemisphere has followed this trendline. In Latin America and the Caribbean, agricultural employment fell over the same 1991–2023 period from 21 percent to 13 percent and in North America from 2.8 percent to 1.6 percent. As can be expected, given differences in income levels, structure of national economies, and crop specialization, there are widespread differences in agricultural employment across the hemisphere. In 2023, several countries still had employment levels in agriculture above 20 percent: Haiti (by far the most, at 45 percent), Ecuador, Guatemala, Bolivia, Nicaragua, Peru, and Honduras. In contrast, the hemisphere’s biggest producers of staple crops—the United States, Canada, Mexico, Brazil, and Argentina—are all well below the global average of 26 percent, in most cases in low single digits.

This demographic transition underscores how agriculture is becoming more capital-intensive and productive: more food is being produced per person employed in the sector. The largest food producers also typically have the lowest share of farmers and agricultural workers employed in the national economy, as the United States, Canada, and Argentina all show (each is at less than 2 percent of their populations employed
in agriculture).

However, there is a generational downside to this demographic trend: farmers worldwide are aging in part because on-farm employment opportunities are declining. The trend appears to be worse in the wealthiest regions having the smallest share of employment in agriculture. In the EU, for example, only 11.9 percent of farmers were under forty years old in 2020.52 In the United States, only 9 percent were under thirty-five years of age in 2022.

Toward a food-secure future

The world needs a bold new way of thinking about food security, one that incorporates a comprehensive understanding of how divergent forces, including those identified in this report, are creating a dynamic and unsettled agrifood landscape that will shape the future in unpredictable ways. To avoid negative future scenarios and increase the odds of positive ones, what is needed is a shift in the prevailing debate about food security that incorporates all these driving forces. That debate should stress that these forces combine in important and not entirely predictable ways to disrupt agrifood systems.

Such an outlook recognizes, for example, that geopolitical tensions add risk to other phenomena such as climate change to make an already perilous situation more difficult.

Policymakers and other leaders across the Americas should recognize that these drivers intersect and combine, in turn reshaping the hemisphere’s agrifood outlook. The challenge is clear: They will need to develop strategies and design policies that will lead to resilient and sustainable food systems that minimize the impact of shocks—both natural and human-made—on the production, distribution, and access to food.

Ecology

As stated above in the introduction, a central challenge will be to ensure that food production can remain profitable and resilient in the face of disruptive change. Ecological changes and the environmental resources that the world relies upon for productive and healthy agriculture systems are critical pieces of this equation.

A key task concerns how best to frame this problem for policymakers, business leaders, and farmers, to relay that ecological changes threaten to undermine progress toward a food-secure future. How these stakeholders act through policies, investments, and practices to mitigate and adapt to ecological changes will go a long way to determining whether the hemisphere’s future is food secure or insecure.

Farming is inherently uncertain because of the vagaries of weather and disease, so efforts to minimize the instability caused by ecological changes, including climate change, extreme weather, disasters, and other phenomena, will help farmers to manage this complex set of risks. Integration across risks is an important way to frame the problem, not only because the problem itself is multifaceted but so too are the solutions. Synergies among healthy ecosystem services, robust agricultural production, and profitability can be found with the right application of imagination, creativity, policymaking, investment, and on-the-ground application by utilizing input and knowledge from farmers and farming communities.

Agriculture is a major driver of ecological change, including land-use patterns and carbon emissions. Yet at the same time, agriculture also holds enormous potential, under the right domestic and international conditions, to provide robust and lasting solutions. Doing so would require that policymakers, investors, farmers, scientists, and technologists and society writ large coordinate efforts toward effecting scalable change.

Synergistic approaches include a range of alternative farming techniques and practices as well as novel technologies that collectively hold great potential not only to perform at a high level of output but at the same time go some way toward repairing the natural world. These strategies, which overlap in practice, include regenerative agriculture, no-till farming, agroforestry, climate-smart agriculture, and 4R nutrient stewardship practices (referring to nutrient-management practices focusing on the right sources, right rates, right times, and right places for nutrients). Such approaches aim to improve resource efficiency, reduce waste, protect ecosystems and ecosystem services including freshwater sources, soils, and biodiversity, while retaining profitability. Through the more efficient use of resources, carbon sequestration in soils, land and forest conservation, and improved management (for example, of water and waste processes), these strategies also can mitigate the agricultural sector’s significant greenhouse gas emissions.

Although many of these approaches once were considered experimental, novel, and unproven, that is far less the case today. Regenerative farming, for example, now has more adherents (including farmers) who believe that the diverse methods falling under it deliver tangible environmental benefits without sacrificing on-farm yields—a claim that is also drawing greater financial-sector interest and investment. A global survey of farmers, conducted in 2024 by McKinsey and Company found that over three-quarters of farmers in Argentina, Brazil, Canada, and the United States were adopting no-till or reduced tillage practices. Farmers’ willingness to adopt these and other regenerative practices were “underpinned by economics,” according to McKinsey, with respondents in the Americas ranking increased yields as their primary motive for adoption, followed by lower production costs and additional revenue streams.

There is an enormous amount of land worldwide and in the Americas that could be revitalized through such approaches. Land degradation, which by extension means the degradation of the world’s soils, is a massive problem. The world is losing at least one hundred million hectares of productive land each year, with some forecasts suggesting up to 95 percent of the world’s arable land could be in some kind of degraded state
by 2050.

In the Americas, degradation is a serious problem but also a big opportunity for soil and land regeneration. Brazil alone has enormous swathes of degraded pastureland. Embrapa, Brazil’s agricultural research agency, estimated in 2024 that the country has approximately twenty-eight million hectares of degraded pastureland (classified as intermediately or severely degraded). Bringing this land back into production using regenerative methods would help alleviate forest conversion pressures in Brazil’s Cerrado and Amazon regions.

One important consideration for policymakers is that if trade in agriculture and food becomes more costly, there is a risk that the fiscal capacity to invest in policies to make agrifood systems more productive and resilient in the face of ecological change will be reduced. Hence, this report focuses on understanding how these issues are linked and addressing them through greater international cooperation to promote more sustainable and resilient agrifood systems.

Trade, geopolitics, and institutions

Rising protectionism and geopolitical competition undermine the incentives for states to cooperate. Trade tensions risk spilling over into diplomatic tension, eroding international trust. In such conditions, states will be less likely to collaborate, which can sour international relations. If the world’s biggest economies are becoming more protectionist and eschewing a rules-based trading system, a zero-sum world returns, with many states, concerned by protectionist measures placed on them from elsewhere, believing they must adopt such policies. More dialogue among states, not less, is an antidote.

An increasing number of governments around the world appear to no longer see the equation in these terms. China, for example, is seeking greater self-reliance in food through stockpiling and other measures. It also has weaponized tariffs for its own purposes, imposing large tariffs on grain imports from Australia and more recently on Canada. These are not isolated incidents but part of how China exercises its power, given its outsized impact on world markets.

As articulated in this report, global trade in food depends on the strength of multilateral institutions and international agreements. These institutions are often underappreciated contributors to global food security. Today these institutions are being eroded by rising geopolitical and diplomatic conflict and other forces. The rapid rate of their erosion is worrisome.

Despite the WTO’s flaws—of which there are many—it remains valuable because it has the reach and standing to create and enforce global trading rules. Yet the organization is failing at doing so, in large part because of its own rules (decisions are made by consensus) and even more so because the largest trading countries no longer want to abide by a rules-based system. The risk is a collapse of the entire multilateral trading system. “The reversal of global economic integration [if the multilateral trading system were to fail] would bring with it growing lawlessness, conflict, and disorder in the global economy,” one scholar writes, and with it “the international system at large.”

One aim should be to build alternative institutions within the hemisphere consisting of states having the critical mass to achieve desired outcomes. One such solution would be to mimic the Group of Seven and Group of Twenty, two examples of institutions that bring leaders from the world’s largest economies together to attempt to coordinate solutions to various global challenges. One possibility would be to start with just the largest agricultural producers in the hemisphere—an “A5” consisting of the United States, Brazil, Mexico, Canada, and Argentina—to bring agriculture ministers together for systematized dialogue about hemispheric trade. Dialogue outcomes might include regional food-security compacts that generate commitments to invest in agricultural research leading to breakthrough technologies (“agtech”), to avoid the most trade distorting policies (export bans, for example), and more.

A related idea is to construct a standing (as opposed to episodic) hemispheric food security council to bring willing governments together for discussing responses to future shocks, identifying pathways for greater scientific and technological cooperation, and buttressing the norm regarding the hemisphere’s responsibility to the rest of the world as a major food supplier. Hemispheric institutions such as the Organization of American States (OAS) and Inter-American Development Bank can be leveraged to convene this council, given their credibility in addressing hemispheric affairs, including in trade. Using the inter-American system to convene a hemispheric food security council consisting of foreign, environment, and agriculture ministers—alongside representatives from industry and producer groups—should appeal to a wide set of stakeholders.

Investment in innovation, technology, and infrastructure

The constant improvement of on- and off-farm activities, including innovative use of new technologies and processes, and capital investment in the phenomena that enable them (including infrastructure), are central to ensuring that the hemisphere and the world are food secure. Innovation and investment also are critical components of agrifood systems that not only are productive but also sustainable and resilient, given
the need to prepare for climate-driven shocks in the future. Innovative technologies and processes, and the infrastructure that undergirds them, can build redundancy and efficiency into the agrifood system in anticipation of such shocks.

Regenerative agriculture and other agrifood systems focused on sustainability can be enhanced through the application of advanced technologies. Examples include:

• Alternative energy sources can enhance on- and offfarm systems while reducing carbon footprints.
• Geospatial remote sensing tools for precision farming can identify and help safeguard ecological assets.
• Robotics and mobile digital technologies (including deeper integration of handheld devices into farming practices) can improve agricultural efficiencies while reducing environmental impact.
• AI-driven analytics can integrate and utilize data streams from numerous applications.

Such technologies will become more critical in the future, as ecological changes make farming more difficult. Rising heat, for example, will create harsher working conditions for farm labor, in turn requiring machines and other technologies to alleviate workers’ outdoor exposure during periods of extreme heat.

Biotechnologies should be added to this list, given their promise to improve on-farm productivity and nutrient use efficiency while protecting ecological assets such as soils and water. Biofertilizers, for example, aim to improve soil fertility and nutrient use efficiency through application of living organisms including bacteria, fungi, and algae, with crop yields increasing by an estimated 10 percent to 40 percent. They also help
plants withstand abiotic stressors, some brought on by climate change, including drought, salinity, and extreme temperatures.

How can governments, the private sector, and other actors together ensure that the right mix and scale of investments are being made that will lead to innovative technologies and processes across the hemisphere’s agrifood systems? Additionally, how can they ensure that innovative technologies and processes are transformative at all scales, including for the hemisphere’s millions of smallholder farmers in addition to its largest producers? Some technologies and processes are more suitable for large-scale applications because of high cost or other considerations, for example. Improving access to the benefits of such technologies will require improved pathways for dissemination of knowledge, practical know-how, access to capital, and other services (e.g., training).

Every year, researchers at Virginia Tech produce the Global Agricultural Productivity Report, which tracks and analyzes TFP trends. The 2025 version asserts that reversing the decline in TFP growth—including low growth in the Americas—will require five “policy, investment and research priorities,” which are:

• Invest more in strengthening and expanding multistakeholder dialogues, agriculture extension services, and incentive structures for technology transfer to smallholder farmers.
• Expand access to markets for all participants in the agrifood value chain, including smallholder farmers.
• Strengthen trade as it “enhances competitive prices” which incentivizes investment in improved inputs and technologies” while facilitating “the exchange of knowledge, innovations, and best practices across borders, driving productivity gains.”
• Reduce food loss and waste.
• Invest in public-private partnerships, joint ventures, knowledge sharing agreements and platforms, and interdisciplinary research.

These types of innovative practices have real impact on agrifood systems at every level, down to the farm itself. Innovation delivers new seeds and crop varieties, creates more efficient production methods, solves practical problems faced by farmers (pests and disease), and creates new markets for goods and services provided by farmers (such as using sugarcane to produce ethanol to reduce carbon emissions of transport
fuels).

Farmers are both users and creators of innovative technologies and processes, so their knowledge and experience should be included in robust feedback loops. Moreover, farmers must be able to adopt and utilize innovative technologies and processes to realize their full positive contributions. This is not an automatic process, as on-farm adoption is not the same thing as laboratory invention. When making investment decisions, farmers are businesspersons, concerned about the upfront costs and return on investment (ROI). Global surveys of farmers indicate they are hesitant to adopt new technologies and processes if the technologies and processes are unfamiliar or they face high initial investment costs or uncertain ROI.

Publicly funded agricultural extension programs, which connect researchers at universities and other institutions to farmers—in the process, enabling mutual learning and successful technology transfer—are critical to improving agtech adoption. Maintaining and strengthening extension services (including public funding) should be central to any country’s aspiration to build world-class agrifood systems based on widespread technology and process adoption by farmers.

Improving infrastructure to strengthen agrifood supply chains is also critical, especially as higher temperatures, changing precipitation patterns, more frequent and powerful disasters, and other problems will put more infrastructure—e.g., ports, bridges, roads, railroads, canals— at risk. Ports are especially at risk, with most food trade moving by cargo ships. The Panama Canal, which in recent years has had low water levels due to Central American drought, is a good example. (Chinese ownership of port facilities also has proven controversial in the United States.) Beyond adaptation measures designed to improve individual pieces of infrastructure, there is much need for strategies that will frame the challenge in terms of societal and even transboundary (international) resilience. Canada, for example, in 2023 released a whole-of-society National Adaptation Strategy that emphasizes the need to make physical infrastructure (and communities) more resilient to climate-driven impacts.

Farmers for the future

Ensuring a food-secure future in the Americas must place human beings at its center. This formula long has been the focus on the demand side of the food-security equation: The goal always is to ensure that all humans always have access to affordable and nutritious food.

Yet the same logic also holds on the supply side of the equation. To avoid the demographic decline of farming amid the chronic aging of the world’s farmers, it is imperative that farming be made financially, socially, and culturally attractive to younger generations. Unfortunately, such conditions are not prevalent in many countries (perhaps most) around the world. The reasons for this are many. To young people, particularly those without a family heritage in agriculture, farming can be perceived as backward, unprofitable, difficult, alien, or uncool—or all the above.

There is no single set of recognized solutions to assist in turning the demographic trendlines around. However, evidence from around the world suggests that a combination of interventions, some obvious and others not so much, might suffice. The obvious ones are to make it easier to gain access to farming in the first place by reducing barriers to entry (access to affordable financing or access to farmland through ownership or long-term contract), and closing knowledge and skills gaps through on-farm training programs, scholarships, and apprenticeships. There are less obvious interventions, too. One such intervention is to incentivize nontraditional candidates to enter farming, for example, young women, in addition to traditional candidates (typically men). Another is to stress the increasingly important role played by digital technologies, robotics, big data and remote sensing, artificial intelligence, and other technical applications that appeal to tech-savvy and ambitious young people.

Although none of these solutions will guarantee a demographic rebound in farming, there are examples of where the curve has been bent toward youth. Brazil’s farmers are getting younger rather than older. They appear to be attracted by the prospect of getting rich in Brazil’s booming, forward-facing, and tech-savvy industry.

Conclusion

The issues outlined in this report should be seen as a starting point for discussion. The challenges and the opportunities facing agrifood systems in the Americas in the coming decades will be profound. A central question is whether the hemisphere’s key actors—governments, farmers, the private sector, researchers, foundations, civil society groups, and the public—will be willing to invest in the transformative processes and approaches that will reduce risk while increasing prosperity, sustainability, and resilience.

This report has put great emphasis upon generating productive dialogues among key stakeholders. Promoting the diffusion of critical innovations for food security will be an important piece of this process. It is imperative that governments and multilateral institutions in the hemisphere find financing and pool technological know-how to support programs tailored to meet the needs of the region.

Beyond that, however, it is critical that nongovernmental stakeholders, including investors, the private sector, researchers, scientists, analysts, farmers, and farming communities, act in concert with one another. They must themselves build the transnational dialogues to assist in envisioning, creating, and strengthening the tools that will be needed to ensure a food-secure future.

Acknowledgments

This report was produced by the Atlantic Council with support from The Mosaic Company as part of the Food security: Strategic alignment in the Americas project.

About the authors

Peter Engelke is a senior fellow with the Atlantic Council’s Scowcroft Center for Strategy and Security as well as a senior fellow with its Global Energy Center. His diverse work portfolio spans strategic foresight; geopolitics, diplomacy, and international relations; climate change and Earth systems; food, water, and energy security; emerging and disruptive technologies and tech-based innovation ecosystems; and demographics and urbanization, among other subjects, and he is the creator of the Council’s most widely read long-form publication series, Global Foresight. Engelke’s previous affiliations have included the Geneva Centre for Security Policy, the Robert Bosch Foundation, the World Economic Forum, and the Stimson Center.

Matias Margulis is associate professor of the School of Public Policy and Global Affairs and a faculty member of Land and Food Systems at the University of British Columbia. His research and teaching interests are in global governance, development, human rights, international law, and food policy. In addition to his academic research, Margulis has extensive professional experience in the field of international policymaking and is a former Canadian representative to the World Trade Organization, Organisation for Economic Co-operation and Development, and the UN Food and Agriculture Organization.

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