This research is the second in a series of strategic studies RAND conducted for the U.S. Navy’s Office of the Chief of Naval Operations, Assessment Division (N81). The initial research was conducted in the summer and fall of 2006. Entitled “Evolving Strategic Trends, Implications for the U.S. Navy,” that first study was intended for a select Navy audience. It identified likely major global strategic trends in the next decade and how they might influence Navy planning. As a result of that study, N81 asked RAND to conduct a follow-on effort that focused primarily on the domestic trends of the United...

In discussions about defense affordability, the defense budget of the United States is frequently measured as a percentage of gross domestic product (GDP).¹ This chapter argues that strategic trends in the United States will reduce the relevance of thinking about the DoD budget as a percentage of GDP. The DoD budget as a percentage of discretionary spending will, however, become more relevant. The inevitable graying of the U.S. population will increase nondiscretionary federal spending at rates that exceed economic growth. With greater pressure being exerted on discretionary spending as a whole, the DoD budget will be squeezed regardless of the...

The United States has been fortunate in that for over a century it has not had to devote considerable military resources to conflicts within the Western Hemisphere. Not since the Spanish-American War of 1898 has the United States made a considerable military effort close to its homeland. The periodic interventions in Central America and the Caribbean from early in the 20th century to the 1994 occupation of Haiti involved relatively small numbers of U.S. forces, and were conducted in the face of negligible opposition. To the north, relations with Canada have been completely nonthreatening since the 1820s. The United States...

China is living out a Faustian bargain. Its growth-at-any-cost policy has provided three decades of robust economic growth and has increasingly urbanized its once largely peasant population. The People’s Liberation Army (PLA) is transforming from a huge defensive ground force with antiquated equipment into a modern military capable of limited power projection. In exchange for wealth and might, however, China has sacrificed its environment, its natural resources, and the well-being of its elderly and rural residents. Unhealthy air and undrinkable water are common. Cropland is turning into desert. Energy and water resources are being depleted. Many elderly citizens lack retirement...

This chapter examines the status of China’s current relations with its neighbors. First we examine current and near-term relationships and their effect on China. Then we explore how these relationships might change in the medium to far term. China’s evolving relations with its neighbors will, of course, significantly influence China’s strategic situation and resource expenditures. For purposes of this discussion, we divide China’s near abroad into three regions: the east and northeast, the southern tier, and the west.

The PRC enjoys good or very good relations with its southern tier of neighbors (i.e., Vietnam, Laos, Thailand, Burma, the Philippines, and...

Iran is a complex country with profound social, political, and economic issues that will continue through 2030. Although Iran’s nuclear intentions and President Mahmoud Ahmadinejad’s (who has ruled since 2005)¹ actions dominate current policy- and defense-related discussions, the longer-term themes that will affect Iran include its economic structure, population, environmental pressures, and future political direction. Iran is unlikely to pose a significant direct strategic challenge to the United States despite current worries. Domestic pressures will continue to dominate, direct, and often dictate Iran’s defensive position. Iran will likely choose to continue its preferred soft-power and unconventional approaches to foreign policy...

This chapter examines Iran’s near abroad. We begin with a description of the current situation, then assess possible changes in the region that could significantly influence Iranian planning, decisionmaking, and resource allocation. For purposes of this analysis, Iran’s near abroad includes not only those nations on its immediate borders, but also countries as far west as Israel.

Iran is the major near-term beneficiary of the U.S. invasion of Iraq in 2003. The U.S. move to topple the Baathist regime in Iraq removed any near-term (and probably long-term) strategic threat that Iraq may have posed to Iran. Iran’s power and influence...

This chapter examines how Japan’s relations with its neighbors are evolving. Although the United States is thousands of miles to the east, it is included in Japan’s near abroad due to the great importance to Japan of its relationship with the United States.

Following its defeat in World War II, Japan became a pacifist nation. The postwar Japanese Constitution was essentially imposed on the nation by the United States. Japan’s armed forces were reestablished in the 1950s as the Self Defense Force, and strict limits on how and where that force could be employed were established. For decades after World...

This chapter discusses the status of Russia’s current domestic situation and its relations with its neighbors. First we examine the current state of the Russian economy, the role of hydrocarbons as drivers of present (and future) Russian growth, and current developments in domestic politics. Then we explore Russia’s relations with Europe, China, and Japan. Finally, we review future challenges and potential impediments—most of which are domestically rooted—to further economic development and their implications for Russia’s relations with its near abroad.

Russia has recovered from the 1998 financial crash that caused it to devaluate the ruble and to default...

This chapter highlights important insights from the preceding chapters. We begin with a summary of important domestic and near-abroad challenges for each of the three primary countries. We then describe common or related trends that are important to all of the nations. Finally, we focus on the likely implications for the U.S. defense establishment in general and the U.S. Navy in particular.

The United States has today, and will have into the far term, by far the world’s strongest economy. Unlike China, the United States will “get rich before it gets old.” That does not mean that the United States...