The Greatest National Security Challenge of the 21st Century

U.S. and allied troops spent nearly nine years, more than one trillion dollars, and hardest of all, more than 5,000 killed and 50,000 wounded in Iraq.

But what outside forces could never do — no matter how long they stayed — was give Iraqis a sense of shared destiny and nationhood, let alone the will to fight.

It’s appalling. But keep in mind the lessons of Iraq, because they foreshadow the new threat that’s emerging worldwide.

Today I’ll show you a new concept of military technology that could prevent a similar collapse in a place much closer to home.

…it’s about eight times more dangerous to grow up in a favela of Rio, than in the Gaza Strip or Israel’s West Bank.

And I predict this threat could cause a few companies, those that have an answer to the kind of global instability highlighted by events in Iraq, to move big in the years to come. But the mil-tech I’m talking about is not like any weapon you’ve ever seen.

This more hopeful story starts on the other side of the world…

A little more than two weeks ago, the 2014 FIFA World Cup “kicked-off” in Rio de Janeiro, Brazil.

It’s the 20th World Cup competition since 1930; and while soccer might not seem pertinent to military investing, it all offers a very current way of looking at things.

Indeed, soccer fans often use battlefield metaphors to describe what’s happening out on the field, with players and referees.

However, even soccer is now becoming too dangerous for comfort. That is, it’s not players and referees you should worry about, but the “urban battlefield” surrounding the football arena, particularly the one hosting this year’s World Cup.

Rio is a city of more than 6.3 million people, the second-largest urban area in Brazil, and third largest city in South America. As you may know, Rio is a hot spot for tourists — and it helps to be a rich tourist.

Rio also has many dark sides, including has some of the poorest, most violent neighborhoods in the world — I’ve seen some of them during my travels there. The local term is “favelas,” which are slums so grim that they make the London of Charles Dickens look like Beverley Hills.

The BBC recently described the situation among gangs in the favelas of Rio as “comparable to a war zone.” One study estimated that there are as many as 6,000 armed children in Rio, let alone hundreds of thousands of armed men. Experts say that, statistically, it’s about eight times more dangerous to grow up in a favela of Rio, than in the Gaza Strip or Israel’s West Bank.

In fact, some of the worst neighborhoods of Rio have been under 24/7 police occupation for months at a time; other areas have been practically abandoned to their fate. By comparison, just imagine if the U.S. Army was camping out on your block, to keep order. That’s the threat level there.

But Rio isn’t an isolated case — it’s part of a bigger picture. Rio is an archetype of the 21st century city that has far thinking military planners deeply concerned. To them, these rising third-world cities are the battlefields of tomorrow.

Okay, so you may not travel to Brazil for the World Cup. Why worry about security at a sporting event that’s thousands of miles away, in another country?

Well, begin with the point that threats touching a high-visibility event like World Cup may not remain far away forever. It’s like what Soviet revolutionary Leon Trotsky said, “You may not be interested in war, but war is interested in you!”

High-level strategists are starting to build a consensus that poor, densely-populated and fast growing cities across the world are the number one threat to overall global stability and our future national security. In other words, large, unstable cities are evolving into the world’s number one security threat.

It’s all based on an unstoppable demographic trend, but all is not dark — it’s investable!

Whether it’s Rio de Janeiro or Baghdad, or any of many other locales, I see an opportunity to get ahead of the curve on a big defense idea that’s absorbing more and more government spending in the years ahead.

It’s inevitable, too, as military, intelligence, law enforcement and other stakeholders work to keep this unstoppable trend from overwhelming borders, unleashing chaos within cities… and even defeating our armies.

This is a story you won’t get in mainstream media, either among sports fan or military planners. Yet policy people — those who make big decisions at very high levels — are watching this tale evolve, as they plan where to put their next billions of dollars in defense spending.

Let’s fast-forward to the year 2050, when about 75% of the world’s population will live in cities, according to statistics put together by the United Nations. According to the demographic math, that will mean about 7 billion people will live in large cities, which is more than twice the global urban population we have now.

Of course, that doesn’t just mean twice the New York Cities and Londons. It also means twice the Mexico City’s. Twice the Cairos. Twice the Nairobis. Twice the Mogadishus. Twice the Fallujahs. And we can’t avoid them.

As two authors recently described the phenomenon in Small Wars Journal, “With at least 200 cities of a million or more already in place or developing, urban warfare is now a strategic rather than operational or tactical question.” In other words, more and more important things — at least, things worth fighting over — are located in a sprawling city.

But even if the U.S. never launches another foreign adventure or expedition, we’ve got plenty of problems here at home. Think of Detroit, recently bankrupt. Or Baltimore — the hometown of Agora Financial, and town of only 600,000 — where there is almost a murder every night.

Think of vast areas, already teeming with millions of people, further urbanizing as people leave small towns and countryside to join their fate to that of the global economy. Now throw in severe limits to water, sewage, electric, natural gas and trash pickup.

Place the population in a position of grinding poverty, with stagnant wages (for those who hold jobs), high local unemployment, and organized crime. Meanwhile, shrink the police force thanks to the kind of budgetary problems you get with a minimal tax base. What happens? Well, it’s so new and startling, the sociologists had to make a new name for it.

Planners call it the “mega slum.”

Over the next few decades, troubled cities the world over are at risk for becoming mega slums. In fact, this phenomenon is set to take place mostly in what international relations people now call the “global south” — or what people used to call the “third world,” before that term became politically incorrect.

Here’s one map that only begins to illustrate the point. Just look at the bubbles, and ponder what it all means.

The World's 30 Largest Contiguous Slums

In essence, demographics are fueling the growth of run-of-the-mill, old-style “third world” slum into modern-day mega slums. According to the Atlantic Council, a longstanding voice in international affairs:

“Among these security challenges, none are more serious than those emanating from the slums of megacities in the global South. Slum formation has been a central characteristic of rapid urbanization in the global South and is expected to continue well into the future.”

No one knows exactly how many slums exist, nor how many people live in them… perhaps a billion human beings now live in slums worldwide, with many more yet to come…”

Now, if you already have your nice, suburban, gated retreat, you might wonder — why should this concern you?

Because according to forward-thinking military planners, these urban disaster areas will be the greatest national security challenge of the 21st century.

They’ll be ground zero for the worst kinds of organized crime, and the perfect recruiting ground for terrorist organizations… not to mention, the perfect place to hide from the law or an invading army. That and they tend to spread, sprawling and enveloping the population around them.

And as I said before, it’s not something we can afford to ignore.


Byron King
for The Daily Reckoning

Ed. Note: Byron’s research shows that massive defense spending is moving away from traditional warfare… and into more subtle, clandestine technologies. His experience as a former naval-officer and Harvard-trained scientist confirms what new military intelligence is releasing. To learn the full spectrum of Byron’s mil-tech investment ideas, sign up for the FREE Tomorrow in Review email edition, right here. Every day, readers are given a unique opportunity to discover some of the world’s most incredible investment stories, on everything from booming biotech stories to mil-tech opportunities like the one Byron details above. Don’t miss your chance to profit from the next one. Sign up for FREE right here.

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Byron King

A Harvard-trained geologist and former aide to the United States Chief of Naval Operations, Byron King is our resident gold and mining expert, and we are proud to have him on board as the editor of Rickards’ Gold Speculator and a contributor to Rickards’ Strategic Intelligence.

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