Al Qaeda Core Down, but Terrorist Attacks Up, Says State Department

The Obama administration has spent years arguing that the killings of Osama bin Laden and numerous al Qaeda lieutenants have defeated what it describes as the "core" of the terror group. On Wednesday, though, the State Department warned in its annual terrorism report that al Qaeda had evolved from a centralized group to a set of "operationally autonomous" and financially independent affiliates, and grimly noted that the shift has resulted in a sharp spike in the total number of terror attacks and fatalities around the world.

All told, the State Department found that worldwide terrorist attacks rose by 40 percent over the past year, from 6,771 in 2012 to 9,707 in 2013. Two-thirds of the strikes occurred in Iraq, Pakistan, Afghanistan, and India, resulting in the deaths of more than 11,000 people. A total of 17,891 people died in terrorist attacks in 2013, up from 11,098 in 2012.

The report attributed much of the violence to sectarian strife in Syria, Lebanon, and Pakistan, which have been riven by brutal fighting between the countries' religious and ethnic populations. Iraq has been hit particularly hard, with Sunni militants slaughtering thousands of Shiite civilians, but Syria's brutal civil war has begun to morph from a rebellion against Syrian strongman Bashar al-Assad to ongoing communal violence between the country's Alawite and Sunni populations. Islamist militants in Syria, the report says, are increasingly "motivated by a sectarian view of the conflict and a desire to protect the Sunni Muslim community from the Alawite-dominant [Assad] regime."

While last year's report highlighted key milestones in the United States' war on terror -- including the deaths of the bin Laden and dozens of other senior al Qaeda leaders -- the latest report strikes a much less positive note, noting that al Qaeda affiliates from Yemen to Nigeria continue carrying out attacks on a regular basis.

The report noted that the threat posed by al Qaeda affiliates operating in Syria is especially worrying because the fighting there is attracting growing numbers of foreign fighters. As of April, the death toll in Syria's civil war had exceeded 150,000, and breakaway al Qaeda affiliates there appear to have few qualms about targeting civilians. Security officials across the Middle East and throughout the West worry that battle-hardened foreign militants who gained experience fighting in Syria may return to their home countries and attempt to mount attacks there as well.

"The scale of this problem has raised a concern about the creation of a new generation of  globally-committed terrorists, similar to what resulted from the influx of violent extremists to Afghanistan in the 1980s," the report notes.

The State Department also highlights the continuing threat posed by Iran, the country with which the Obama administration is trying to conclude a long-sought nuclear deal.  Iranian terror, according to the report, is a "predominant concern" to the United States given the "resurgence of activity" by Hezbollah, the Islamic Revolutionary Guard Corps' Quds Force, and the Iranian Ministry of Intelligence and Security. The report notes that authorities have intercepted several arms shipments intended for terrorist groups financed by Iran and that Hezbollah, which is thought to receive extensive support from Tehran, has helped prop up the Assad regime by sending in thousands of skilled fighters motivated by a desire to help the strongman "protect the Shia Muslim community from Sunni extremists."   

Read the full report here.

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Don't Worry America: You Aren't Poorer Than China

On Wednesday, the front page of the Financial Times declared that China stands poised to surpass the United States as the world's largest economy -- and to do so much sooner than anyone expected. Citing new data from a consortium of leading statistical agencies, the paper explains that when the Chinese and American economies are compared on the basis of purchasing power parity -- or how much a yuan or dollar can purchase in their respective countries -- China is on the threshold of overtaking the United States in terms of economic output as soon as this year.

With a graphic set against Shanghai skyline, the ubiquitous metaphor for Chinese growth, the story proclaims that a geopolitical turning point has arrived:

That pronouncement is sure to provoke a litany of hand-wringing in Washington, where analysts worried about China's increasing power have considered the moment when it becomes the world's largest economy as a signal milestone in its potentially inevitable ascension over the United States. But are these purveyors of American doom and gloom right to worry that Beijing's arrival at the top the global economic pile portends American decline?

In short, no. Indeed, the citizens of the United States are far richer than the average Chinese person, and that's unlikely to change anytime soon. U.S. per capita income in 2012 sat at around $52,000; for China, that figure was about $9,000.

If anything, Wednesday's news is but the earlier arrival of a long-expected development. Given its massive population of about 1.35 billion -- roughly four times the size of the United States -- China was widely expected to eventually become the world's largest economy. It was just a question of when. According to World Bank data cited by the Wall Street Journal, the estimated value of the U.S. economy in 2012 was $16 trillion, double the value of China's. If those figures are accurate, it will be years before the Chinese economy overtakes that of the United States.   

Those figures, however, don't account for fluctuations in the exchange rates between the dollar and China's yuan. Wednesday's data, courtesy of the International Comparison Program, a coalition of statistical bureaus housed under the auspices of the World Bank, uses an updated measure of purchasing power parity, a way of comparing economies across borders by taking into account price differences between countries, to conclude that the Chinese economy is in fact much larger than thought. The FT headline is more a question of an update in accounting accuracy than a substantive change in economic reality. Another note of caution: Some analysts question the reliability of Chinese economic data, suggesting that the Chinese economy may be in much worse shape than official numbers would indicate and may have already begun slowing.

For the moment, Chinese policymakers are desperately trying to figure out how to ensure that their country doesn't get stuck in what is known as the "middle income trap," a phrase that refers to the tendency of economies to stagnate once they escape the clutches of poverty. Escaping national poverty is by no means easy, but entering the ranks of the truly affluent can be staggeringly difficult. (The Indian economy, which has the potential to rival the size of China's, is a good example of what the Chinese government fears. After years of breakneck growth, the Indian economy has slowed, and some analysts are predicting the end of the Indian growth miracle.)

Having expanded its economy enormously, Beijing has been throwing its weight around abroad, fueling fears that Beijing will gradually overtake the United States as the world's leading superpower. China, for example, is investing heavily in Africa and has become embroiled in a nasty dispute with its neighbors over a set of disputed islands.

There's no guarantee, though, that China's economy will continue growing -- or even maintain its current strength. While China was able to escape the recent financial crisis relatively unscathed, many analysts believe that a homegrown economic implosion may not be far off. China's investment-fueled growth have sent real estate prices skyrocketing and seen China's banks issue huge amounts of credit. If growth slows, borrowers may default on the loans used to build the highways and gleaming trains that have come to symbolize China's meteoric rise, China could potentially see a cascading series of bank failures. If enough of them went under, the banking failures could spur widespread social and political unrest.

These are but some of the things to keep in mind when commentators inevitably bemoan the end of American power and the arrival of China.

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