UDK: 339.9.012(497.4)355.40 1.02 pregledni znanstveni članek
Laris Gaiser
docent za mednarodno in ustavno pravo (Katoliški inštitut, Fakulteta za poslovne vede) (Ljubljana), docent za varnostne študije (Nova Univerza, Fakulteta za državne in evropske študije) (Kranj)
Economic Intelligence in the Slovenian Environment
Abstract: In a post-Cold War environment, countries live in a state of permanent confrontation. Political alliances are more and more fragile, and while countries have to compete every day on the global market in order to survive, only those with a structured system can prevail. Economic intelligence is the most advanced political and economic theory of state management, which also offers the framework for private-public cooperation. In defining economic intelligence and analyzing some examples of structured foreign systems, this article aims to show that world countries in a globalized context can be competitive and safe only by adopting an economic intelligence strategy. Within such a scenario Slovenia, despite contemplating the defense of national economic interests through the Law on Slovenian Intelligence and Security Agency, has no comprehensive strategy to defend or promote its economic interests by a structured economic intelligence system. Policy makers could take into consideration the French example of good
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practice choosing the national security authority as the body delegated to shape an appropriate strategy. Key words: economic intelligence, economic development, security, UVTP, secret services
Gospodarska obveščevalna dejavnost v slovenskem prostoru
Izvleček: Mednarodno okolje se je od konca hladne vojne močno spremenilo; globalizacija trgov sili države v stalno gospodarsko konfrontacijo, v kateri prevladujejo le tiste, ki so v zadnjih letih oblikovale primeren sistem za izmenjavo informacij med javnim in zasebnim sektorjem. Gospodarska obveščevalna dejavnost je teorija državnega upravljanja, ki predstavlja najprimernejši okvir za zasebno-javno sodelovanje v gospodarstvu. Namen članka je definirati pojem gospodarske obveščevalne dejavnosti in z analizo nekaterih tujih primerov dokazati, da so lahko države konkurenčne in varne le, če sprejmejo primerno gospodarsko obveščevalno strategijo. Znotraj takšnega scenarija - kljub predvideni zaščiti gospodarskih interesov v Zakonu o Slovenski obvešče-valno-varnostni agenciji - Slovenija nima celovite strategije za obrambo oz. razvoj lastnih gospodarski interesov preko strukturiranega sistema gospodarske obveščevalne dejavnosti. Oblikovalci politike bi lahko sledili primeru Francije in državnemu varnostnemu organu omogočili oblikovanje najprimernejše strategije.
Ključne besede: gospodarska obveščevalna dejavnost, gospodarski razvoj, varnost, UVTP, tajne službe
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Introduction
Due to the bipolar balance of power influencing international relations between 1945 and 1989, the world was characterized by a geopolitical stability and clear military alliances, with countries having rather limited margins of political and economic freedom. Today, after the end of the Cold War, we are facing a situation of a new type of anarchy based on geo-economic confrontation: global competition among states to achieve the best possible outcome in terms of profit, development and wealth. In these new economic clashes, the stability of the old political alliances has been undermined and, because of the geo-economic war, governments are required to become guarantors of social stability. This role needs to be based on a strategic vision which fosters economic growth and development. (Gaiser 2017)
Within such a framework, countries which for years have been at the center of criticism, and whose operation, under the load of liberal philosophy, has been reduced to a minimum, return to take on a role of primary importance. (2015) They return to being active co-protagonists of the economy, destined to catalyze and implement strategies of reform that allow the country-systems to remain competitive. The policymakers' goal today is to find the right means of collaboration between state and entrepreneurial systems, as well as implementing the right policies of support of national production - a necessity which develops from the fact that information today has become the most valuable resource. (Crncec 2009) The research and strategic management of information is an economically relevant and complicated art, which is why companies are forced to implement their
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own structures of business intelligence; the efficiency of this could be increased by an appropriate national cooperative system, in which, as much defensively as offensively, companies of national security must play a decisive role. The state as a service provider, instead of existing for itself, is forced to transform its bureaucracy into an efficient market support system in order to offer to private and public owned companies the most competitive services. (Treverton 2001) The international success of an enterprise is the success of the hosting country. A country that is not able to be competitive is destined to succumb to others or become non-influential on the world scene. International competition has increased remarkably. For this reason, country-systems need a more sophisticated, precise and organized means to remain credible, attractive to investments, structurally stable and able to make sound economic choices. We are living in a period that is aware of the fact that territorial conquests and direct control of parts of the globe are, in addition to being politically difficult to accept on the part of democratic public opinions, economically expensive. (Luttwak 1993)
To be in possession of a good "machine of economic war", both in its active form (penetration of other markets and competitive advantages) and passive form (defense of one's own national interest), sustained by a credible state structure, is an absolute priority. Within this international environment during the last twenty years, a more sophisticated method of economic warfare has been developed: economic intelligence. It dictates the need for cooperation between the public and private sectors, a need which may have been felt in the past, but whose implementation has been only on a comparatively minor scale. This research
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demonstrates that the most important countries in the world have already shaped their own system of active collaboration and information sharing with market-based companies in order to achieve higher levels of competition on the globalized market, while Slovenia is still passive and could follow the French example of good practice appointing the national security authority as the leading institution in shaping an economic security strategy.
Economic Intelligence
Definition
During the 1990s, Edward Luttwak launched the idea that military wars would soon become a memory of the past, substituted by economic wars. In one of his main works, The Endangered American Dream (1993), he highlights the fact that, with the pacification of international exchanges, military threats and alliances have lost their importance. Economic priorities are no longer concealed, and move into the foreground. In the future it will be fear of economic consequences that will regulate commercial contestations, and certainly political interventions will be motivated by strategic purposes. (Halby 2003) According to Luttwak's geo-economic thought, the time of wars waged for conquest of territories and diplomatic influence has passed. The central objective must be to increase highly qualified work in the leading industries and in services of high added value, with the goal of conquering or preserving an envied position at the heart of the world economy. The invested capital of a country is equivalent to firepower; subsidies for the
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development of products correspond to progressions in artillery, while the penetration of markets with the help of the state substitutes the bases and military garrisons displayed abroad and even diplomatic influence.
When the state intervenes and directs, influences or promotes economic choices, we find ourselves in the field of geo-economics. All of this is not a new phenomenon unknown to past generations. Throughout the development of history, international subjects have always played an active role in the economy. The tangible difference in comparison to today's world is that of the intensity or means of determining action. Before, it was the economy which was at service to political power, where now the roles have been reversed. Nowadays, a period in which military conflicts are really becoming ultima ratio regum, the terrain of international competition is moving increasingly towards the economic sector, and the contemporary world of economics cannot be analyzed only from the point of view of classic market theories. The classic economic theories on international exchanges do not reflect all the aspects of economic international relations, where one can often find the echo of the tactics and strategies of Sun Tzu and Macchiavelli in decision-making, and such decisions often depend in an important way on factors not of the market. (Csurgai 2011, 23) In order to survive, the country sees itself as constrained to compete in a highly sophisticated environment and because of this transforms itself, according to the definition of Gyula Csurgai, into a strategic state, whose task it is to persevere or increase its own privileged position in the economic and international political world through the creation of a geo-economic framework of success. (2009)
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The strategic state is one of the keys to contemporary economics and has the vital task of adequately developing the concept of economic intelligence so as to maximize the capacities of every actor to acquire market shares. The task of economic intelligence is to strategically manage information that allows the country to control, anticipate, and manage the evolution of various markets, giving life to political choices, both offensive and defensive. The more the interests of a country are extended, the more the strategy must have a global breadth. Economic intelligence consists of gathering and processing information relevant to the economic sector with the intention of making operational choices. Its activities are aimed towards obtaining information, surveillance of competitors, protection of strategic information, and capitalizing on this knowledge in order to influence, determine and control the global economic environment. It is a power tool for countries, in which the private and public spheres are intertwined and communicating. The economic challenge decreases the spaces available to military war, but the end goal, that of accumulating power and wellbeing, remains unchanged. According to Jean and Savona (2011), economic intelligence is a discipline which, by studying the cycle of information necessary for companies and countries to carry out correct development choices, improves the cognitive and decisive abilities applied to the complexity of the competitive global context. Its structures are nothing other than the means by which the public and private sectors can collaborate efficiently for the common wellbeing, during a historical period in which, separate, they would be destined to perish. In this way, the entrepreneurial sector maintains its vitality while the state rediscovers a new legitimizing mission.
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Economic intelligence worldwide
The fluidity of international relations requires nations to be capable of facing global competition by organizing themselves in such a way as to guarantee the best results for themselves in terms of earnings, development and wellbeing. The gathering and strategic management of information is a complex art with economic relevance. Because of this, companies are forced to establish their own business intelligence units. The efficiency of such units can be improved by appropriate cooperation at the state level, where national security agencies must adopt a decisive role in terms of both protecting and gathering information. Growth strategies and an efficient exchange of information between the public and private sectors have led to a better management of the economy. Market imperfections and a hypercompetitive international environment force states to actively intervene in the economy in order to optimize the use of the human capital, technological developments and resources of a country. In this way, a state achieves three vitally important objectives: it increases the nation's growth and wealth, achieves stability by having legitimized itself, and accrues power.
Leaving aside those countries that have an economic intelligence system based on a longstanding tradition of informal information sharing between economic, political and intelligence bodies, such as, for example, Germany and Japan, and taking into account only those countries which have officially established a legal framework for private-public collaboration, we cannot avoid to refer to USA, France and United Kingdom as very well working systems. They have
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been designed since the beginning in a structured way, respecting national specificities, and, being today well-established, they present unavoidable benchmarks.
The USA is therefore an international actor which possesses a global approach to its own strategy of power and economic supremacy. After the defeat of communism, Bill Clinton was the first politician to demand that state bodies actively cooperate in offering support to the nation's economic system. In 1993, the National Economic Council (NEC) was established, which is the heart of economic politics and chaired by the President of the USA himself. This organization was proposed in order to coordinate and control the implementation of presidential directives, and represented the point of conjunction with companies' business intelligence units. Together with the NEC, the National Security Council (NSC) analyzes issues related to economic and industrial counter-espionage by also taking advantage of their collaboration with the National Counter-intelligence Centre, an organization instituted by the FBI, the CIA and the Department of Defense to cooperate with corporations in such a way as to anticipate or hinder any type of economic espionage on the part of foreign companies. On the field is the Advocacy Centre, a department within the Department of Commerce to have the task of following and supporting the expansion of US companies around the world.
Remaining in the Anglo-Saxon world, United Kingdom -where a full-scale law on the secret services, the British Intelligence Services Act, was only produced in 1994, despite the longstanding national intelligence tradition - represents a much more pragmatic approach. According to the official
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wording, the activities of the Secret Intelligence Service and GCHQ had the goal of preserving the interests of economic wellbeing in the United Kingdom (Article 1). Economic intelligence, or rather economic wellbeing, became an official priority, defined by the law. The services guarantee their support to companies' needs, and the success of the British Intelligence Community is defined every year on the basis of the results obtained in favor of the national economy. MI5 depends on the Home Office, and MI6 and GCHQ on the Foreign Office, to receive directives on the priorities and objectives of the Joint Intelligence Committee (JIC), formed by the undersecretaries of the interested departments responding to the Prime Minister. The JIC has the task of defining the goals of the activities, that is, of drafting the "shopping list", as well as forwarding information to interested companies. (Gaiser 2016) According to the most accurate estimates, at least 60 % of the funds of MI6 were already committed to that sector by the end of the 1990s. (Marcon and Moinet 1999, 7)
In 1994 a report of the Commissariat général du Plan, edited by Henri Martre, came to light, and over time became the milestone for the reform of economic intelligence in France. (Gagliano 2014) According to report outputs in 1995, a "functional subject" in contact with all the entrepreneurial sectors and state administrations was defined and named: CCSE - Comité pour la Comptétivité et la Sécurité Economique. It was given tasks comparable to those of the American National Economic Council. The General Secretariat for Defense and National Security (SGDSN), the institution coordinating the government's security policies, which incorporates the Inter-ministerial Intelligence Committee (CIR, Comité Interministériel du Renseignement), offered the CCSE logistic and
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administrative support. The SGDSN acts as a perfect information sharing platform. It allows the CCSE to be promptly supplied with important data, thanks to the CIR presence.
Economic intelligence in Slovenia
Slovenia can be mentioned as a typical example of a country which, even though it has limited territorial dimensions, still has a good consular and diplomatic network and noteworthy intelligence - both military and civil - services, even within the limits of its dimensions, with deep historical traditions and an economic structure that could easily benefit from a coordinated and systematic action of economic intelligence. This action, however, would be difficult to achieve in a coordinated manner.
Immediately after its independence Slovenia could claim a rich web of commercial and political contacts in the world, thanks to the capillary presence of Slovenijales, a company which, even if specializing in the production of lumber derivatives and engineering, could be compared during the Yugoslavian era to the Japanese JETRO in terms of function and importance. The inevitable economic restructuring, and the departure of the state from the corporation, resulted in its downsizing to only Slovenia's internal market, and the country had to wait for the constitution of the Javna agencija za podjetnistvo in tuje investicije (Public Agency of the Republic of Slovenia for Entrepreneurship and Foreign Investments), which occurred in 2005, to regain a presence in the world that was parallel to that of the diplomatic and consular headquarters. The agency, transformed in 2013 into SPIRIT Slovenia following a very critical audit revision
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of its efficiency carried out by the Slovenian Court of Audit (Računsko sodišče 2013), had the goals of supporting the internationalization of Slovenian companies and attracting foreign investments into the country. Currently, SPIRIT Slovenia is framed within the Ministry of Economic Development and Technology. As a state-run agency it collaborates actively with all governmental departments in the promotion of the country abroad, by maintaining a special relationship with the Department of Commercial Diplomacy (part of the Ministry of Foreign Affairs), with which it prepares delegations during visits abroad. Nevertheless, the Slovenian Court of Audit has highlighted multiple times that the Ministry of Economics, the Ministry of Foreign Affairs and the Agency do not collaborate sufficiently for the internationalization of national enterprises, and that their annual work programs do not sufficiently specify the minimum set goals. According to the Court, the results that have been obtained thus far have not justified the financial investment guaranteed by the state budget. (2009)
Slovenia was in an economic identity crisis, with a public deficit that has increased by 130 % in the five year period from 2008-2013 and an unemployment rate higher than the European average. (OECD 2015) It cannot easily carry out choices of revitalization or repositioning on the international markets, despite the excellence that it possesses in niche sectors such as medicine, pharmaceuticals, energy and lumber. After having struggled with the negative legacy of the Communist intelligence heritage, Slovenia developed a small, new, modern intelligence system, coordinated by the National Security Council. (Prezelj 2016) The Security Information Service (Varnostno-informativna služba), working within the Ministry of the Interior, became an independent
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governmental agency named SOVA in 1993. This transition strengthened the Prime Minister and the government's role. According to Brejc, the intention of the political leadership of SOVA was to have a small, effective, and trained professional intelligence agency which would be able to collect intelligence information abroad. Transplanting any of the European intelligence models (e.g. the Austrian, German, British, Hungarian, etc.) to the case of Slovenia was not considered at the time due to the persuasion that Slovenia, as a small state, could not afford a large intelligence agency with global goals. (Brejc 1994, 171) The Law of 1999, amended in 2006, which delineated the competences of the national intelligence agency SOVA, foresaw in Article 2 that it must carry out its own activities, both offensive and defensive, in support of the economic interests of the country. Nevertheless, the Agency is currently required to supply its information only to the Prime Minister and possibly to competent Ministers. An effective connection between the entrepreneurial system and the use of economic interests is lacking. In fact, Slovenia possesses the structures suitable for economic intelligence of good quality, but up to now has not known how to bring them together into a single system.
Slovenia's potential in creating a new approach to national economic security
The role of the French SGDN that represent the National Security Authority is managed to a lesser extent in Slovenia by the Office of the Government of the Republic of Slovenia for the Protection of Classified Information (UVTP, Urad Republike Slovenije za varovanje tajnih podatkov). The Office was established in 2002 with a decision of the Government
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in order to meet the requested EU and NATO standards. Thanks to the acquired knowledge and experiences, UVTP could actively become in the near future the body entrusted with the shaping of a new, much more appropriate and transparent intelligence system. The Slovenian government could extend the current competences of UVTP and enable it to actively participate in finding the possibility to formulate an overall economic security strategy as well as the way to implement it successfully coordinating the cooperation between the public and private sector. At a time when foreign countries with stable economic systems and geo-economic visions ground their own stability and development on pursuing an efficient economic intelligence strategy, Slovenia needs the cooperation between public and private in order to strengthen the efficiency of its economic environment. The establishment of the most appropriate information exchange system among the key economic actors is indispensable for: the further development of the economy and the protection of its interests, the strengthening of the presence of Slovenian entrepreneurship worldwide and the reduction of threats to its interests on foreign markets, the increase of attractiveness of the country's investment environment, the strengthening of the geo-economic projection of the Slovenian national interest around the world, increasing the employment rate, improving the collection of information from foreign environments, better planning of state's tax and legal efficiency, and increasing general welfare. Risks to which is exposed an unprotected economic environment by foreign economic intelligence systems operating on institutionalized data exchange procedures between the public and private sectors can lead to a reduction of general welfare, a significant fall in revenues to the state budget and, consequently, to social tensions or even to the destabiliza-
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tion of the international political security of the Republic of Slovenia.
The final report, Report Martre, and the activities carried out with the support of the French government by the Commissariat du Plan in the period 1991-1994 could represent for UVTP a reference example of good practice. Within the contemporary international geopolitical scenario, only a real commitment on formulating and disseminating a national concept of a participatory security or security system can contribute to greater solidarity and stability of the Slovenian society. Given the current, legally assigned, scope of work UVTP is the most appropriate body for pointing out to a generally accepted and coordinated contemporary participation of civil society, security authorities and the government of the Republic of Slovenia. As a national security authority, the Office works interconnected with several different systems and, consequently, it could better than any other institution explore or propose updated solutions for an overall country's socio-economic security and stability.
Conclusion
Economic intelligence is a collective and offensive measure, formed by the coordinated actions of research, treatment, diffusion and protection of information, obtained legally or through legalized systems of state activities, in as much as access to secret information becomes lawful at the moment in which it is authorized. All of this presupposes an organization of networks and specific instruments to preserve or increase the geo-economic power of a state and its sphere of influence. The national systems must guarantee an environ-
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ment suitable for the success of their own enterprises, both public and private, and the goal of the state's economic intelligence is also to change the rules of the game of world competition, adapting the markets to their own needs and creating the conditions for their success even in inferior circumstances.
Slovenia is a market-based economy with still a strong state presence, especially in banking and the industrial system. It is by Constitution (Article 2) a social state. This means that public sector activities will be always oriented towards maximizing general wellbeing. Within this scenario it is the decision-makers' duty to restructure the country's economic framework and to propose a new development strategy in the near future. Following the examples of the most qualified countries, the Slovenian government should find a workable solution for coordinating the intelligence services with the needs of the economic system. Its economic interests are geographically limited. Economic politics could find greater opportunities if it was decided to establish a full-scale strategy of economic intelligence. The government should give life to a specific institutional framework in which it could conflate, in an official way, information obtained by the Slovenian Intelligence and Security Agency (SOVA) with that obtained by the economic and banking system and by the SID Bank, responsible for the financing and insuring exports. Within this framework, we consider that the Office of the Government of the Republic of Slovenia for the Protection of Classified Information could be the most appropriate organ for shaping and proposing new solutions. According to the current situation, the above mentioned office has access to all levels of Slovenian society and can provide a comprehensive answer for coordinated protection of the
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national economy in the context of a wider participatory security approach.
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