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The U.S. Navy faces uncertainty about the degree to which it will have to prepare for a high-end future conflict against a powerful, well-armed opponent versus the so-called Long War against rogue nations and terrorist organizations. The answer depends to a large extent on the evolution of U.S. relations with China and Iran and the future of the United States itself. To help the Navy understand how critical near-, mid-, and far-term trends in the United States, China, and Iran might influence U.S. security decisions in general and the Navy's allocation of resources in particular, RAND examined emerging nonmilitary trends in each of the three countries. The authors investigated current and projected domestic developments in the areas of demographics, economics, energy consumption, the environment, and education. They also examined each country's relations with its so-called near abroad to determine how much of a challenge each of the three nations (plus Japan and Russia) will experience in their own immediate “neighborhoods.”

The authors conclude that the Navy will have to balance its investment decisions around the following major findings:

  • There will be less tolerance for costly, “big-ticket” defense projects in the United States; the Navy's “blue-green” mix will be affected.
  • China will remain the Navy's greatest potential challenge, but Iran will continue to defy the United States in the Middle East.
  • Further cooperation with key allies in the Pacific and the Greater Middle East will be required, as will an enduring defense commitment in the Middle East.

The research described in this report was prepared for the U.S. Navy's Office of the Chief of Naval Operations, Assessment Division (N81). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Department of the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

This report is part of the RAND monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND monographs undergo rigorous peer review to ensure high standards for research quality and objectivity.

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