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Cyber Warfare


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Can business trust the government to protect them?

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Cyber Warfare

  1. 1. Technology 50 | GlobeAsia April 2015 T he past several years have seen a rise in private companies being targeted by everyone from state sponsored hackers to criminals and even so called Hacktivists (hackers for a cause). Businesses have found that the attacks have reached a level of sophistication that often times is far in excess of what the company is handle themselves. Particularly in the case of state sponsored cyber-attacks, fighting back on equal footing is not an option for most businesses. The alarming number of recent high profile hacks occurring with increasing frequency have many questioning the role of government, the responsibilities of businesses and whether closer cooperation between the two could successfully combat cyber-attacks. Virtual Hacks, but very real damage Coordinated cyber-attacks can ruin a brand’s rep- utation and in many cases directly affects their bottom line. The recent Sony hack for example is considered by experts to be the most damaging attack in history, cost the entertainment company at least $15 million in the third quarter. The Cyber warfare: Can business trust the government to protect them? CLOUDFRONT.NET Entrance to the Mountain View office which is home to both the Mozilla Foundation and the Mozilla Corporation.
  2. 2. April 2015 GlobeAsia | 51 situation was because “The unique na- ture of cyberspace and its potential for damage has propelled the government and private sector to work together” Late to the party, but not to be outdone President Obama was at the Cyber Security summit at Stanford in February this year where he a signed an executive order that would allow for much closer cooperation between government and industry. The order is expected to help create a framework that will allow intelligence gathering on threats to industries such as the private defense, utility and the bank- ing sectors. The information sharing arrangement should allow the firms to both protect themselves better and better secure the United States as a whole against these cyber-attacks. In February, a slew of major U.S corpora- tions such as Walgreens and Bank of America signed on to set of cybersecu- rity standards mandated by the White House Positive steps but is “targeted liability” a red herring? An unfortunate side effect of large internet companies like Gmail and Facebook being based in the US is that its policies can become de facto stan- dards in other nations (even if only effectively, due to the popularity of these US based sites). One key aspects of President Obama’s plan calls for Jason Fernandes Tech commentator and the founder of SmartKlock. “The unique nature of cyberspace and its potential for damage has propelled the government and private sector to work together” complete tab isn’t in however and a Reuter’s article quoted a senior fellow at the Center for Strategic and Interna- tional Studies estimating the total cost could rise to as high as $100 million as the full effects of the hack are rever- berate over the next several month. These damages are absolutely unrelat- ed to a previous 2011 incident where the Sony PSN network was hacked, that cost the company $170 million. Not just Sony One might be tempted to ignore this if hackers focused their ire on the studio that brought us such cinematic gems as Paul Blart: Mall Cop and The Green Hornet starring Seth Rogan, but the financial system has been hit hard too. This summer, JPMorgan Chase was hit in a breach affecting 76 million account holders and as many as 7 mil- lion small businesses. The same sus- pected Russian criminal attackers also successfully targeted 9 other banks. The problem is serious enough that Newsweek published an end of the year cheat sheet listing cyber-attacks in 2014. Target, Home Depot, Neiman Marcus and even Jimmy Johns (a sandwich company) were all named as victims of cyber-attacks in 2014. Governments have largely ignored the threat The potential for disaster is much greater when one considers that so many critical infrastructure services are managed by private companies. Any effective defense against cyber warfare therefore will have to involve close cooperation with private compa- nies. Even attacks on private institu- tions could cause enough damage that the economy as a whole could suffer irreparable harm. As the Sony attack proved, gov- ernment and private companies are very much on different pages. Reports say the US government was largely blindsided by a cyberattack of such a magnitude on a private company and that coordination between Sony and the White House during the crisis was minimal. Sony took the difficult steps it felt were necessary to protect public safety but nonetheless had to contend with President Obama chiding their decision to capitulate. While certainly both the White House and Sony talked, apparently they did not agree on a response. Regardless of the details, the fact remains that there appeared to have been no contingency planning for this sort of occurrence and the Sony incident leaves one less than optimistic about how the government will react to similar situations in the future. Government finally reaching out to industry The lack of coordination between the private and public sector is just the sort of problems some governments are now taking steps to avoid. The UK for example just launched a £650 million 4 year National Cyber Secu- rity Program. Information about the program, available on the UK govern- ment website lists that they intend to partner with companies that own or operate key infrastructure to “ensure key data and systems continue to be safe and resilient.” Another goal of the program was to “Establish a new op- erational partnership with the private sector to share information on threats in cyberspace.” What shape this initia- tive will eventually take is anybody’s guess but it’s a positive sign. India too has made similar moves. As early as 2012, the government setup a Joint Working Group on Cyber Se- curity with representatives from both the public and private sector to help execute a plan to protect the country against cyber-attacks. Indian National Security Advisor Shivshankar Menon took pains to point out how this was the first time India would allow the private sector a seat in a national secu- rity matter. Menon explained this rare
  3. 3. Technology 52 | GlobeAsia April 2015 millions of dollars the present model that relies on private companies to inform governments of possible breaches just takes too long. Sometimes even further discussions may be needed before an acceptable response that both fulfills the cor- poration’s business aims and yet prevents the incident from escalating can be agreed upon. The present two or three step system before a deci- sion is made is an enormous waste of time and not quite sustainable as these attacks become more frequent. Time is a commodity one can scarce afford to waste if you happen to be a busi- ness in the midst of a sustained and coordinated attack and hence the need for urgent reform The next few years are going to set the battle lines for the future cyber warfare and the part- nerships we create today could both be our savior and our agents of destruction. In 1969 Former US Supreme Court Justice William Douglas predicted “Big Brother in the form of an increasingly pow- erful government and in an increasingly power- ful private sector will pile the records high with reasons why privacy should give way to national security, to law and order [...]” -his words seem especially chilling today. It’s a sad commentary that in a post Snowden world, consumers and businesses need to now weigh whether they have more to fear from criminal syndicates or snoops with government badges. Quis custodiet ipsos custodes? - Who watches the watchmen? a ‘targeted liability” protection for companies that share data. This means that companies that disclose data to the government are freed from the legal consequences of this sort of disclosure. While the President made an excellent argument as to why this was necessary to encourage compa- nies to share data without fear of consequences. The problem this creates could be bigger than the problem it purports to solve. The tendency would be for a company to overshare since there is no benefit to the company in being selective in the information it hands over. Soon a company might default to accepting and fulfilling any requests that the government makes. It’s not difficult to imagine how this sort of system could be abused and ultimately hurt businesses and their brand. Fox in charge of the henhouse? Probably the biggest argument against greater cooperation with governments is that they have not exactly proven themselves trustworthy when it comes to respecting their citizen’s privacy. We already know from former NSA contractor turned whistleblower Edward Snowden that the US gov- ernment has long sought backdoor access to data locked away in private companies like Facebook and Google. An informed populace might be jus- tifiably skeptical then, about letting corporations they trust with their data just let government waltz in through the front door and leave with their information A lot more will have to be worked out before this private/public sector partnership is ready for primetime and many questions remain. For example, what happens in cases of disagree- ments? Who has final say? What if in the case of the Sony hack, the US had tried to mandate Sony’s response. Is it appropriate for companies to re- spond offensively against state sponsored cyber- attacks even if it could risk an international in- cident? None of these questions have quite been answered yet and they would need to be, before companies should feel comfortable involving gov- ernment in their response to cyber-attacks. Tighter integration between the private/public sectors in necessary and inevitable While skepticism both from businesses and consumers may be warranted, a persuasive ar- gument could be made that Government needs to share information fairly efficiently and im- mediately in order to quickly respond to threats. Especially Since these threats could cost private corporations as well as the economy as a whole The next few years are going to set the battle lines for the future cyber warfare and the partnerships we create today could both be our savior and our agents of destruction. NBCNEWS.COM Edward Snowden
  4. 4. INDONESIA’S NO 1 BUSINESS MAGAZINE A A S I VOLUME 9 NUMBER 4 / APRIL 2015 Singapore Australia Malaysia Indonesia Philippines Thailand Taiwan Others S$13.00 A$9.95 RM18.00 Rp50,000 P250 B210 NT$210 US$8 MICA (P) 142/10/2007 INDONESIA AT THE FOREFRONT A new regional context is driving change in government, business and civil society W O R L D E C O N O M I C F O R U M A Tribute to Lee Kuan Yew, Singapore’s Founding Father
  5. 5. A Media Holdings Publication4 | GlobeAsia April 2015 Columnists 14 Oxford Infrastructure spending boost 16 Steve Hanke The monetary approach reigns supreme 46 Jamil Maidan Flores Operation Big Bird: The hunt for the hidden Marcos wealth 50 Jason Fernandes Cyber warfare: Can business trust the government to protect them? 54 Wuddy Warsono Still believe in superheroes 90 Scott Younger Time to get to work 92 Keith Loveard Limits to freedom contentsVOLUME 9 NUMBER 4 / APRIL 2015 INTERVIEW 78 Safeguarding Indonesia’s maritime sovereignty Indroyono Soesilo is by no means a new name in Indonesia’s maritime affairs, with a strong background in the government agency tasked with marine and fisheries research. 80 Out of the east HIPMI chairman Bahlil Lahadalia proves that a humble upbringing does not hinder success. 84 Indonesia seeks to strengthen ties with India India and Indonesia must take relations to the next level says Indonesian ambassador to India Rizali W. Indrakesuma. 88 Last chance to save the planet Jeffrey Sachs is on a worldwide mission to save the planet while also ensuring sustainable economic growth. EVENT 98 Mochtar Riady donates Nanotech Center to UI Lippo Group founder Mochtar Riady donated a cutting-edge research center to the University of Indonesia (UI). Living the Good Life 108 Lost at sea Paul Whelan of Simpson Marine yacht brokers and dealers explains the ins and outs of yachting in Asia and Indonesia. Back Page 112 A famous Medan landmark 114 78 COMPANY 62 Dealing with the details in the finance industry Ratih D Item wanted to be a judge but a tragedy pushed her in the direction of the finance industry. 64 The future of retail With $500 million to play with, Matahari- intends to reshape online retail in the country. 66 Tony Wenas to steer RAPP into eco-friendly future Tony Wenas is using his vast corporate experience to remake RAPP. SPECIAL REPORT 68 From Aceh to Papua: Building a nation Infrastructure has been a hot topic for more than a decade but the question remains whether there is really much progress. 74 Regional manpower movement One of the biggest issues surrounding the coming ASEAN Economic Community (AEC) concerns manpower movement within the region. 76 Focus on the economy first If the economy is running well, President Joko Widodo’s concept of a maritime axis can happen, says an expert on maritime defense. 108
  6. 6. 6 | GlobeAsia April 2015 A gainst significant odds, Lee Kuan Yew transformed Singapore from a backwater port to a global economic powerhouse. His leadership style was direct and even confrontational but he had the nation’s interest at heart. Lee was both visionary and pragmatic – a rare combination. He was not afraid to take tough decisions and would stare down his critics and opponents because of his convictions. Singapore is today a modern, developed first-world country but it did not happen by chance. Lee Kuan Yew was the chief architect but he had a lot of help from his cabinet and the people of Singapore. His passing at the age of 91 will leave a gaping hole in the hearts of Singaporeans but also in the leadership of the region. He was the last of the founding fathers of the Association of Southeast Asian Nations (ASEAN) and with his departure the baton of leadership has fully passed to the next generation. Lee was a true leader in every sense. He harnessed the only two resources Singapore had, its people and its geographical location, to build one of the most dynamic economies in the world. He blended capitalism and free markets with state-led control of the economy. It is no surprise that many Singapore government-owned enterprises are today regional and even global companies. They are run and managed by professionals who adhere to global best practices. That such large companies arose from a tiny, resource-poor country is testament to Lee’s leadership. He also opened up Singapore to foreign direct investment to create jobs and bring in technology. As a result, Singapore’s gross national product (GNP) increased 15-fold Editor’s Note Editorial Editor in Chief Shoeb Kagda Managing Editor Yanto Soegiarto Deputy Editors Muhamad Al Azhari Editor at Large John Riady Senior Editor Albert W. Nonto Denverino Dante Contributing Editors Farid Harianto Steve Hanke Scott Younger Contributors Suryo Bambang Sulisto Wijayanto Samirin Frans Winarta Jason Fernandes John Denton Special Columnist Jamil Maidan Flores Reporters Vanesha Manuturi Dion Bisara Copy Editor Geraldine Tan Art, Design and Layout Gimbar Maulana Elsid Arendra Agustinus W. Triwibowo Nela Realino Wulan Tagu Dedo Rudi Pandjaitan Senior Photographers M. Defrizal Suhadi Production Assistant Danang Kurniadi GlobeAsia Magazine BeritaSatu Plaza 9th Floor Jl. Jendral Gatot Subroto Kav. 35-36 Jakarta 12950 Indonesia Tel +62 21 29957500 Fax +62 21 5200072 For sales inquiries salesglobeasia@ To subscribe Tribute to a leader between 1960 and 1980 and Singaporeans today enjoy one of the highest living standards in the world. To be sure these successes were not achieved without sacrifice and stepping on toes. Lee was unrepentant about going after his critics and silencing his political opponents. He did not brook dissent and his record on human rights was patchy. There is no denying, however, that Lee Kuan Yew was, as US President Barrack Obama noted, “a true giant of history who will be remembered for generations to come as the father of modern Singapore and as one of the great strategists of Asian affairs.” WEF East Asia Lee Kuan Yew’s passing comes at a sensitive time for Singapore and the region. Leaders from around the world will gather in Jakarta from April 19-21 for the World Economic Forum East Asia meeting to deliberate the pressing problems facing the region and to find solutions. Asia is at a crossroad as the region grapples with regionalism and slowing economic growth while having to fulfill the aspirations of its young population. At the core of the challenge is rebuilding public trust in the state and other institutions. The region could do with Lee Kuan Yew’s wisdom and insight at this crucial juncture. Shoeb Kagda Editor in Chief GEORGEGASCON/AFPPHOTO