By Randall Mikkelsen
WASHINGTON (Reuters) - The global economic crisis has become the biggest near-term U.S. security concern, causing instability in a quarter of the world's countries and threatening destructive trade wars, U.S. intelligence agencies reported on Thursday.
The Director of National Intelligence's annual threat assessment also said al Qaeda's leadership had been weakened over the last year. But security in Afghanistan had deteriorated and Pakistan had to gain control over its border areas before the situation could improve.
"The financial crisis and global recession are likely to produce a wave of economic crises in emerging market nations over the next year," said the report. It said a wave of "destructive protectionism" was possible as countries find they cannot export their way out of the slump.
"Time is our greatest threat. The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests," it said.
The report represents the evaluations of all 16 U.S. intelligence agencies, and serves as a major security reference point for policymakers and Congress.
It noted a pressure campaign by the United States and allies in Pakistan had weakened al Qaeda. But the group remained dangerous and continued to plot against the West.
Pakistan was losing authority in parts of its North-West Frontier Province. The report said growing economic hardships and frustration with the government had radicalized people all over the country.
The report identified Iran as a key Middle East flashpoint. Persuading Tehran to give up suspected nuclear weapons development would be difficult, requiring a combination of international pressure and incentives.
(Editing by Alan Elsner)
