‘Grim’ is Duncan Lewis’s terse assessment of the geopolitical outlook and potential for major conflict in the region. But not hopeless, he hastens to add, even though Australia will have to work much harder—diplomatically, economically and strategically—to emerge safely from this period of turbulence.

In conversation with journalist Stan Grant as part of ASPI’s ‘Strategic Vision 2020 ^[1]’ conference series, Sir John Scarlett, a former head of MI6, and Lewis, former head of ASIO, ran through the critical issues facing allied intelligence agencies.

Scarlett agrees with Lewis’s bleak assessment of the likelihood of major conflict, as well as with an observation by Grant that this is not the whole sum of futures challenges for intelligence. As well as the deteriorating geopolitical outlook, agencies are having to grapple with the implications of global economic uncertainty, the ongoing threat of terrorism, the rise of authoritarianism and the impact of climate change.

While the Covid-19 pandemic has often been described as an accelerant of these trends, it could also transform them in ways which are completely opaque to us now, says Lewis.

For example, both former intel chiefs worry about the coronavirus-generated economic crisis stymieing the ability of governments to fund critical climate change measures. Similarly, if governments handle the pandemic poorly, winning public trust for other big and necessary reforms becomes more difficult. ‘My overwhelming worry is the degree to which confidence in government may be undermined when we look back on this’, says Scarlett.

Terrorism, long a preoccupation of intelligence agencies, has been pushed off the front page by Covid and climate change. But it will come roaring back, warns Scarlett. Even though the Islamic State group has been defeated territorially, roughly 18,000 foreign fighters are still active, and the power of IS ideology remains, spreading across Africa and beyond. ‘The idea is infectious’, adds Lewis. ‘It’s a bit like Covid.’

Terror groups of all kinds, including those on the far right, have been quick to take advantage of the fact that more people are online and socially isolated due to the pandemic. Combined with economic uncertainty, these conditions create a perfect climate for online recruitment and radicalisation. ‘The seeds for those things to prosper are in the ground now in our communities and we need to be very, very careful of it’, says Lewis.

This is but one example of the way in which digital technologies create new headaches for intelligence agencies. Another is the surge of foreign interference in liberal democracies, which, for Lewis, is driven by what social media and fake news can do.

On the plus side, the public use of digital technologies and advances in machine learning have vastly increased the datasets intelligence agencies can exploit. Even so, ‘old fashioned human intelligence sources are not going away’, says Scarlett.

Foreign interference looms large for both Australia and the UK, but in different ways. Scarlett says that he’s been impressed with the scope of the Australian response, but, for the UK, the issue of Chinese influence in politics is less well understood. Decisions like banning Huawei from its 5G network were difficult to make because the UK system had been slow to adapt to the new reality of China under Xi Jinping. ‘Just a few years ago we had leaders talking about a golden era in relations [with China].’

The main focus of ‘heated political debate’ is Moscow, says Scarlett, referencing the recent report to the House of Commons on Russian interference in the UK. He notes that the report is ‘very critical of the readiness and capability, and just general awareness, of the government and the intelligence and security community to Russian interference in our economy, decision-making and politics’.

On the issue of the ever-increasing powers of intelligence agencies, Grant asked whether greater surveillance of everyday life and increasing encroachment on human rights and civil liberties is the new normal, citing police raids on Australian journalists last year.

Lewis says he hopes ‘desperately, personally, that it’s not the new normal’ but suspects that technology is in the driver’s seat here. He notes that citizens are more willing to share their data with private corporations than with governments, but concedes it’s an issue of trust as well as a huge legislative challenge.

‘How do you legislate in such a way that intelligence agencies have got the necessary oversight to protect citizens? Because you don’t want to be preying on your citizens. The citizenry has to be protected from its government.’

In the UK, ‘a clear majority across public opinion is supportive of trusting the security and intelligence community’, says Scarlett. He cites legislation like the 2016 Investigatory Powers Act which introduced judicial oversight to the intelligence system as being important in instilling trust, as well an ‘instinct within society—and I may be a bit optimistic here—to be trusting and that we don’t, as a country, have a history of state abuse and dictatorship’.

But it can be a mistake for governments and citizens to overstate links between surveillance and coercive powers, according to Scarlett. Pointing to the limitations placed on people’s movement in response to Covid-19, he says ‘the national response and the people’s response was a voluntary one. There was no capability on the part of the authorities to really enforce it.’

On the future of the Five Eyes intelligence relationship, both men are confident that it can withstand current stresses. ‘After three-plus years of the “America first” administration, there is a degree of disorientation amongst America’s allies, within alliances and more generally around the world’, says Scarlett. But at the same time, he adds, ‘I’ve worked very closely with a whole range of US colleagues and senior people in the administration, politics and the security intelligence community, and they’re absolutely rock solid in their commitment to the alliances, to NATO and to the Five Eyes, and to liberal democracy and American leadership internationally’.

All intelligence agencies, stresses Scarlett, ‘have to be, first of all, absolutely clear about what it is that we’re defending. We’re defending our countries as liberal democracies, based on the rule of law. It’s not often explained exactly what a liberal democracy is and what it stands for. But making sure that you’re doing that is essential.’