Prospects for the Global Economy in 2015

http://www.cfr.org/global/prospects-global-economy-2015/p35873

Authors: Robert Kahn, Steven A. Tananbaum Senior Fellow for International Economics Heidi Moore, U.S. Finance and Economics Editor, The Guardian Damien Ma, Fellow, The Paulson Institute Edward Alden, Bernard L. Schwartz Senior Fellow, Council on Foreign Relations 

Interviewer(s): James McBride, Online Writer/Editor Jeanne Park, Deputy Director December 23, 2014

As 2015 dawns, the global economy is navigating choppy seas. Instability in Russia, stagnation in Europe, and uncertainty in China are being offset by a sharp drop in oil prices that the IMF says could boost growth by as much as 0.8 percent above the expected 3.8 percent. 

The United States “faces a debt reckoning,” writes Guardianfinance and economics editor Heidi Moore. U.S.-consumer debt worth $3.2 trillion and the resurgence of subprime lending are both danger signs for an economy that otherwise appears to be on the mend. 

Europe, too, could face trouble in 2015 without major structural reform, argues CFR’sRobert Kahn. Growth and investment remain low, unemployment is “sky-high,” and early elections could once again put Greece “on a collision course with the rest of Europe.” 

China, which is in the midst of a delicate rebalancing act, will de-emphasize GDP growth in favor of structural, financial, and energy reform, writes the Paulson Institute’s Damien Ma. 

Finally, CFR’s Edward Alden foresees that 2015 could see “breakthroughs in global trade liberalization.” U.S.-led trade agreements with both Asia and Europe promise to boost growth, although they face significant obstacles at home and abroad. 

Economic instability in Russia could have global repercussions in the coming year. (Photo: Maxim Zmeyev/Courtesy Reuters) 

Robert Kahn, Steven A. Tananbaum Senior Fellow for International Economics 

The European Central Bank (ECB) has wielded a monetary policy bazooka—always on the table, but never fired—that has at times been the only thing standing between Europe and the abyss since the beginning of the financial crisis. ECB President Mario Draghi’s 2012 promise to “do whatever it takes” has restored calm and brought down spreads. 

Yet growth remains inadequate to address large output gaps and sky-high youth unemployment. The outlook for next year is an uneven recovery with growth averaging just over 1 percent. Low inflation, large amounts of debt, and persistent financial fragmentation provide additional headwinds to growth. 

RUSSIA BOLSTERING PRESENCE IN CENTRAL ASIA: THREATS AND OPPORTUNITIES FOR IRAN – ANALYSIS

By Hassan Beheshtipour*

DECEMBER 27, 2014

the increased presence of Russia in Central Asia region can entail both opportunities and special threats for the Islamic Republic of Iran.

1. Political threats to Iran resulting from Russia’s presence in Central Asia

Russia has been habitually critical of the United States’ unilateral policies in the region. On the outward, Russia has been apparently following a multilateral policy at international level and has been encouraging the United States to follow suit by adopting similar policies. However, when it comes to Central Asia and Caucasus, Russia has been itself pursuing totally unilateral policies. Russia’s political behavior in this regard has been an obstacle to multilateral cooperation with such Asian countries as India, Iran and China. Moscow is actually willing to bolster its own influence in this region. Although Russia has close ties with a country like China, its major policy and measures taken by Moscow in the strategic regions of Central Asia and Caucasus have been largely unilateral.

As a result, Russia’s policy in Central Asia has been an impediment to creation of common opportunities for countries active there. On the contrary, Iran has been cooperating with Russia in the Middle East, including in Lebanon, Syria, and Iraq. Therefore, it is quite natural for the Islamic Republic to expect Moscow to cooperate with Tehran in such important regions as Caucasus and Central Asia. Of course, due to Russia’s reluctance, this cooperation has not been realized so far.

2. Opportunities arising for national interests of the Islamic Republic of Iran as a result of Russia’s presence in Central Asia

a. Opportunities related to energy economy

Russia can have effective cooperation with Iran in the area of production and export of oil and gas. Of course, both countries are among major producers and exporters of oil and gas and are, therefore, rivals in this field, but that rivalry can take a different turn toward effective cooperation.

b. Opportunity for cultural cooperation

On the outward, there are few, if any, cultural commonalities between the two countries of Iran and Russia. However, when it comes to cultural issues, Iran has deep roots in Central Asia region. Therefore, Russia can use cultural issues as a suitable ground in order to help Tehran and Moscow forge a new sort of cultural cooperation in the aforesaid region.

Although Russians have spared no effort in the past 70 years to promote Russian language and culture in that region, this issue cannot be considered an obstacle for Iran and Russia to engage in cultural cooperation with countries located in Central Asia and Caucasus. Such a cooperation will also pave the way for a joint fight against all kinds of extremism in those regions.

There are many fertile grounds for cooperation between Iran and Russia in Central Asia. However, the absence of a model for effective cooperation has caused some of the existing opportunities to be squandered. Under these conditions, Iran has found itself more at loss and the main reason for this should be found in the pursuit of unilateral policies by Russia in Central Asia and Caucasus.

3. Iran, Russia and fields for political and geopolitical cooperation

a. Political and security cooperation

Is Burma really buying submarines?

29 January 2014 

http://www.lowyinterpreter.org/post/2014/01/29/Burmas-submarine-dream.aspx

For the past six months, there have been intermittent reports in the news media and on specialist websites stating that Burma (Myanmar) is developing a submarine capability. If this is true, it has important implications not only for Burma and the region, but also for the wider international community. 

However, equally dramatic stories about Burma have emerged in the past, only to prove misleading or false. 

This is not the first time Burma has been linked to a submarine sale. In 2003, it was claimed that the military government had held discussions with North Korea on the purchase of one or two small submarines. The 110-ton Yugo and 370-ton Sang-O classes were mentioned. Despite the limitations of both designs, Burma's interest in these boats was said to reflect a wish to police its territorial waters and help deter an invasion.

According to Jane's Defence Weekly (JDW), Burma eventually opted to purchase one Sang-O class submarine, but was forced to abandon the deal in late 2002. It was suggested that the project had been scuppered by the cost of the boat, and perhaps belated recognition by the country's military leadership of the technical difficulties of keeping it fully operational.

These reports were never confirmed, but other developments gave them some credibility. For example, after the 1988 uprising, Burma's new military government launched an ambitious plan to modernise and expand the armed forces. This included a naval rearmament program. In 1999, it was reported that Burmese naval officers had undergone unspecified 'submarine training' in Pakistan.

Also relevant was the fact that in the 1990s Burma started to expand its defence ties with North Korea. If the generals were interested in acquiring other weapons from Pyongyang, possibly including ballistic missiles, so the logic went, why not a few submarines? If Korea was prepared to sell Yugo-class boats to Vietnam (which it did in 1997), why not to Burma?

Over the next decade, Burma's navy acquired several new ships, some armed with anti-submarine weapon systems, but the emphasis was clearly on surface warfare. Claims by an activist group in 2010 that India had provided training for Burma on a Foxtrot class submarine, and that Naypyidaw was considering the purchase of two Foxtrot boats from Russia, could not be verified. 

Russian Military Now Holds NATO, Ukraine, Middle East and Afghanistan As Top Threats

December 27, 2014

Russia promotes conventional forces in new doctrine

Russian soldiers deployed across Crimea during the crisis in March

President Vladimir Putin of Russia has signed a revised version of the country’s military doctrine, which identifies major threats to security.

The new document promotes the use of Russia’s conventional, non-nuclear forces as a deterrent.

Chief among new threats identified by planners are the armed conflict in neighbouring Ukraine as well as events in the Middle East and Afghanistan.

Russian forces are believed to be operating covertly in eastern Ukraine.

Their reported intervention on the rebel side, as well as the annexation of Crimea from Ukraine in March after a disputed referendum, has been met with economic sanctions by Western states.

Russia’s air force has also stepped up patrolling in international airspace close to Nato states while the Russian navy has raised its international profile to a lesser extent.

'Indirect action'

Nato expansion into eastern Europe remains the main military threat identified in the new planning document, published (in Russian) on the Kremlin website, which replaces the 2010 doctrine.

Ukraine’s parliament voted this week to drop the country’s non-aligned status and work towards Nato membership. However, its prospect of actually joining the alliance is questionable, given its territorial dispute with Russia over Crimea and the continuing conflict in its eastern regions.

After a meeting last week, the Russian Security Council announced in a statement(in Russian) that the new doctrine would take account of “the emergence of new threats for Russia, which became evident in the situation in Ukraine and around it and the events in Northern Africa, Syria, Iraq and Afghanistan”.

Russian Navy Begins Building Sixth BOREI-Class Ballistic Missile Sub

TASS News Agency

December 27, 2014

The Generalissimo Suvorov is the third modified Project 955A submarine

SEVERODVINSK /Arkhangelsk Region/, December 26. /TASS/. The sixth Borei-class nuclear-powered ballistic missile submarine was laid down on Friday at a ceremony at the Sevmash shipyard in Severodvinsk, northern Russia.

Russian Deputy Prime Minister Dmitry Rogozin attended the ceremony.

The Generalissimo Suvorov is the third modified Project 955A submarine. The boat is named after legendary Russian commander Alexander Suvorov, one of the few commanders in history who never lost a battle.

The Project 955 Yuri Dolgoruky, Alexander Nevsky and Vladimir Monomakh submarines have already entered service with the Russian Navy.

The Project 955A Knyaz (Prince) Vladimir and Knyaz Oleg submarines, which were laid down in 2012 and 2014, are currently under construction.

Russia Conducts Test Flight of RS-24 YARS ICBM From Plesetsk

December 27, 2014

Russia test fires Yars intercontinental ballistic missile — Defense Ministry

The missile’s dummy warheads were fired from the Plesetsk military cosmodrome and hit a target at the Kura range in Kamchatka in the Russian Far East

MOSCOW, December 26. /TASS/. Russia’s intercontinental ballistic missile RS-24 Yars has been test fired from the Plesetsk military cosmodrome in the country’s northwest, Russian Defense Ministry’s spokesman for the Strategic Missile Forces (RVSN) Colonel Igor Yegorov told TASS on Friday.

The missile’s dummy warheads with given accuracy hit a target at the Kura range in Kamchatka in the Russian Far East.

“On December 26, 2014 at 11:02 am, Moscow time, the solid-propellant RS-24 Yars mobile ground ICBM with a multiple warhead was test fired from the Plesetsk state test cosmodrome by a combined combat crew of the RVSN and Aerospace Defense Forces,” the official said.

According to Yegorov, the main goals of Friday’s launch were to confirm operational reliability of missiles of the RS-24 Yars system that have been made in 2013 and 2014, as well as to confirm the combat and performance characteristics of the system itself.

Russia’s RVSN are being rearmed with the Yars systems with the RS-24 ICBM that will make the backbone of the ground group of solid-propellant missiles of Russia’s strategic nuclear forces. Yegorov said that commissioning of the RS-24 ICBM with a multiple re-entry vehicle has boosted the RVSN main strike group’s missile penetration capability.

Profile of General Kim Yong-chol, North Korea’s Spymaster and Cyberwar Chief

Bill Gertz

December 27, 2014

Four-star spymaster behind North Korean hacking; Sony’s ‘The Interview’ available online

North Korea’s chief delegate Kim Yong-chol has been identified as the man behind the Sony hack. (AP Photo/Jung Yeon-je, 

U.S. intelligence agencies have identified the military officer orchestrating North Korea’s state-sponsored hacking attacks, such as the one on Sony Pictures Entertainment. He is Gen. Kim Yong-chol, director of the espionage and clandestine operations service known as the Reconnaissance General Bureau, or RGB.

The RGB was formed in 2009 when the Korean People’s Army, the communist state’s military, combined its Reconnaissance Bureau with the ruling Workers’ Party of Korea Central Committee Operations Department.

The combined intelligence and military special operations force is under the control of North Korean supreme leader Kim Jong-un. Both military and party organizations have a long history of deadly covert operations and nefarious foreign espionage operations, such as the 1970s operations to kidnap foreign nationals for use in intelligence training in North Korea.

U.S. and South Korean intelligence agencies have been tracking Gen. Kim since he emerged as a member of the Central Military Commission in September 2010. The four-star general also was part of the funeral committee for Kim Jong-il, who died in 2011, a key indicator of his place in the hierarchy of the secretive North Korean power structure. His promotion to full general was announced in February 2012.

Gen. Kim, who is also deputy chief of the military’s general staff, has headed the RGB since 2009, but his career has not been without bumps. He was demoted to two-star rank in November 2012 following the arrest of a number of North Korean spies in South Korea. By February of 2013, however, Gen. Kim had regained the lost two stars.

His role as head of the RGB remained secret until March 29, 2013, when Pyongyang’s state-controlled media for the first time confirmed the existence of the organization blamed for the sinking of South Korea’s Cheonan warship in 2010. Earlier RGB operations included the terrorist bombing in Yangon, Myanmar, that killed three visiting South Korean government ministers and a commando raid on the South Korean Blue House presidential residence in 1968.

A report by the Center for Strategic and International Studies made public last week said North Korea employs around 5,900 cyberwarfare specialists.

The Dawn of Cyber Warfare and Cyber Spying Detailed in New Book

By Shane Harris

December 27, 2014

Book review: ‘@WAR: The Rise of the Military-Internet Complex,” by Shane Harris

Gordon Goldstein is the author of “Lessons in Disaster: McGeorge Bundy and the Path to War in Vietnam.”

The Rise of the Military-Internet Complex

North Korea’s alleged hack attack against the Sony Corporation is a spectacular escalation in the conduct of global cyberwarfare. As Shane Harris says in his timely new work of contemporary history, “@War,” the momentum for a cyber confrontation has been growing inexorably in recent years. The United States and its adversaries have been assiduously building their cyber-arsenals for the past decade and today can engage in a range of operations across the spectrum of spying, surveillance and sabotage, as well as in offensive and defensive military action. In 2013, according to Harris, U.S. Cyber Command consisted of 900 people; the Defense Department plans to grow that cyber-force to 6,000 by the end of 2016. As Harris notes, “The Internet has become a battlefield.”

‘@War: The Rise of the Military-Internet Complex’ by Shane Harris (Eamon Dolan/HMH)

The book’s title and thematic ambition come from President Dwight Eisenhower’s dramatic warning, as he left office in 1961, that the United States was threatened by a dangerous matrix of power, a “military-industrial complex” that could swallow American society. Harris writes that today a similar risk exists in the convergence of the aggressive capabilities and programs of the National Security Agency and the gigantic data warehouse controlled by America’s Internet giants. A portion of those government surveillance programs facilitated by the U.S. technology industry was exposed in 2013 by former NSA contractor Edward Snowden. “In its zeal to protect cyberspace,” Harris argues, “the government, in partnership with corporations, is making it more vulnerable.”

Was the REGIN Malware System NSA’s First Global Spyware System?

Jeff Moskowitz

December 27, 2014

Regin spying tool linked to NSA among first malware meant for espionage

JERUSALEM — The malware known as Regin – linked to the National Security Agency as a tool for tapping mobile phone networks and infiltrating foreign computer systems – now appears to have been developed as early as 15 years ago, making it among the first major pieces of invasive computer software built to enable government espionage.

The program was revealed last month in reports from security companies Kaspersky Lab and Symantec Corp. Soon thereafter, The Intercept published new leaks from NSA whistleblower Edward Snowden that shed light on how programs such as Regin (pronounced Re-gen) were used to collect sensitive, technical information on more than 70 percent of the world’s cellular networks.

Between the Snowden documents and the disclosures from computer security professionals about Regin, for the first time researchers think they’ve linked NSA wiretapping operations to the particular tool the agency used to accomplish it, caught in the act invading a foreign cellular network.

“This is the first time we’ve seen it for real with our own eyes. For us it was pretty surprising,” says Costin Raiu, director of Kaspersky Lab’s Global Research and Analysis Team.

The NSA’s vast surveillance practices – stockpiling of phone records, recording text messages, listening in on conversations of foreign heads of state, tapping into global fiber optic communications — began to be revealed a year and a half ago when the Snowden documents emerged.

Now, analysis of the Regin malware provides rare insight into how such extensive hacking and wiretapping was accomplished. 

HOW REGIN WORKS

Regin is not just a worm or a virus, but a malware platform, which can host many different types of attacks. It was built for stealth and flexibility and has been found on computers around the world, serving many different purposes.

Both Kaspersky Lab and Symantec judged Regin to not only be the work of a nation-state, but also one of the most sophisticated, if not the most sophisticated, pieces of malware in existence. Both companies also specifically noted that Regin was used against telecommunications companies and infrastructure (in addition to a variety of other targets).

The precise way that Regin enters a computer system is still unknown, but it may involve visiting spoofed versions of well-known websites or a backdoor through an application. According to Symantec, in one case log files showed that Regin got in through an unknown exploit in Yahoo! Instant Messenger.

Once inside, Regin is capable of utilizing a wide range of tools for surveillance or gaining administrative control. In one particularly telling example, Kaspersky Lab caught the malware’s operators hacking a GSM Base Station Controller in an unnamed Middle Eastern country.

The GSM network is what allows a mobile phone in Norway to call another phone in Indonesia or Mongolia or Mexico. Each local phone company follows a common set of standards determined by the GSM Association based in London and the network extends to more than 219 countries and more than 3.2 billion mobile phone users worldwide. GSM Base Station Controllers are the central hubs that pool signals from an area’s antennas and connect them with the rest of the world.

According to the log Kaspersky obtained, between April and May in 2008, the malware’s operators activated a sniffer, which is a piece of software capable of collecting the usernames and passwords of administrators of that Base Station Controller.

At the same time, the sniffer was recording commands, which Kaspersky believed to be from a mix of sources, some issued by real network administrators and some by the Regin operators. Once all the administrators’ details had been collected, the sniffer went silent.

Costin Raiu clarified that this likely wasn’t an isolated incident. “This could be one of many,” he said. “Maybe they were doing the same thing everywhere but this is the only incident we were lucky enough to observe and get a sample of.”

This marks the first time that governmental wire-tapping of the global cellular network has actually been caught out in the wild, rather than simply exposed by a leaked document.

During the course of their analysis, researchers were also surprised by how long the malware appears to have been operating.

Paraguay Activates Its First Spy Agency

December 27, 2014

Paraguay’s first intelligence service created

President Horacio Cartes signed into law the creation of Paraguay’s first National Intelligence System (Sinai) service with the purpose of “detecting, neutralizing and counterbalancing the actions of domestic and international terrorist groups, and of transnational criminal organisations.” The Sinai shall be formed by a National Intelligence Council (CNI) and a National Intelligence Secretariat (SNI) reporting directly to the President, according to the decree available on the web since Wednesday.

The Sinai shall include the Ministries of the Interior and Defence, the National Antidrugs Secretariat (Seand) and the Money Laundering Prevention Secretariat (Sprelad) to “gather and process information domestically and internationally.” It shall “file bi-monthly secret reports” to the President and to the ministers and authorities deemed relevant in each case.

In addition to that, the role of the new body will be “to guarantee peace and the security of the State, protect national sovereignty, and preserve the [existing] constitutional order and democratic form of government.” The decree also specifies that the CNI shall be of advisory nature and will assemble every two months or whenever summoned by the national Secretary of Intelligence.

The main threats to domestic security in Paraguay are drug trafficking and the Paraguayan People’s Army - Ejército del Pueblo Paraguayo (EPP) guerrilla group. Paraguay is considered to be the main producer of marijuana in the region and also a passthrough spot for cocaine on its way to Europe, Argentina and Brazil, according to Seand.

Since Cartes became president in August 2013, the Government has deployed a combined police, military and antidrug Joint Task Force (FTC) to fight EPP near the Brazilian border, specially in the districts of Concepcion and San Pedro. The guerrilla group has reportedly killed 38 people including civilians as well as military and police officers since 2008 and currently holds hostage Paraguayan police officer Edelio Morinigo, 24, since July 5.

EPP has disregarded pleas from the Paraguayan Episcopal Conference to release the hostage for Christmas. Meanwhile, Interior Minister Francisco de Vargas addressed the families of those kidnapped: “I want to tell you once more that their liberation is a priority for this Government” and added that “we can’t but offer you hope at this moment and let you know that we’re working to bring your loved ones back so that this nightmare can end right now.”

Latest on the Christmas Cyber Attack Against the Xbox and PlayStation Systems

December 27, 2014

Xbox and PlayStation tackle cyber attacks

Microsoft and Sony have been working to restore internet platforms for their Xbox and PlayStation games consoles.

Attacks disabled the online services on Christmas Day, making it difficult for users to log on.

The Xbox Live status page suggested on Saturday that Microsoft services had been restored. PlayStation said some services were being restored and thanked users for their patience.

A hacking group called Lizard Squad claimed to have caused the problems.

The name is the same used by a group of hackers that has targeted Sony in the past.

Microsoft’s Xbox Live has 48 million subscribers and Sony’s PlayStation system has more than double that number, at about 110 users.

In a tweet posted on Saturday morning, PlayStation said: “Update: PS4, PS3, and Vita network services are gradually coming back online - thanks for your patience.”

'Member Two'

A hacker claiming to be from Lizard Squad - a 22-year-old calling himself Member Two - said it had hacked the sites “because we can”.

He also suggested the motive was to demonstrate weaknesses in the two companies systems.

"It’s just such a huge company Microsoft… Do you not think they should be able to prevent such an attack?" he told BBC Radio Five Live.

"Is Christmas really about children playing with their new consoles, or playing with their new toys, or is it about them spending time with their families and celebrating Christmas?" he added. "I think everyone’s just taking it all out of the ordinary."

Analysis: Rory Cellan-Jones, BBC technology correspondent

Sony executives must be asking themselves - when will it stop?

The attack on the PlayStation network - along with Microsoft’s Xbox Live network - is nothing like as serious and sophisticated as the Sony Pictures hack.

Czech Spying in Australia During the Early Cold War Years

Andrew Greene

December 27, 2014

Czechoslovakian espionage down under during the early years of the Cold War

When the Second World War ended, Australia - like the rest of the Western World was gripped by a fear of Communism. The Cold War paranoia dominated Australia’s political and military discourse.

In 1954 the threat of Communism was brought starkly into focus when Australia was thrust into the middle of an international spy sensation… The “Petrov Affair” would have consequences around the globe, not least in Czechoslovakia. (Newsreel) "A statement made in the House of Representatives in Canberra by Prime Minister Robert Menzies gave first details of a Soviet Spy Ring in Australia. Vladimir Petrov - an official of the Russian embassy whose home is in Canberra had told the full story."

Vladimir Petrov - who was the Third Secretary of the Soviet embassy in Canberra - feared being killed if he returned to the Soviet Union, and decided to defect. He made contact with the Australian Security Intelligence Organisation - a newly established counter-espionage agency - and offered to provide evidence of Soviet spying in exchange for political asylum.

His diplomat wife wasn’t informed, and days later Moscow dispatched armed KGB agents to attempt to take her back to Russia. The dramatic scenes unfolded in full view of news cameras.

(Newsreel) "Later at Kingsford Smith Airport in Sydney crowds gather to watch Petrov’s wife leave for Russia. Australian Security officers keep careful check for disturbances are likely. Two couriers sent from Moscow both of them armed and an embassy official hustle Mrs Petrov to the plane. The crowd mainly composed of emigrated Czechs, Hungarians and Russians try to block their way. Mrs Petrov’s shoe is lost in the scuffle but the two burly couriers keep her moving. Russians in the throng claim that Mrs Petrov shouts that she does not want to go. Police are thrust aside by the angry mob."

The Cold War drama continued in Australia’s northern-most city, Darwin, where the Russian plane landed to refuel en route to Moscow.

(Newsreel) "Later at Darwin airport Mrs Petrov telephoned her husband who she had previously believed dead and decided like him to seek asylum in Australia. The Petrov case has now led to the Russians withdrawing their embassy staff from Australia and their demand that the Australians leave Moscow."

The sudden closure of the Russian embassy meant Czechoslovakia’s diplomats in Australia had a new found prominence. And they were coming under the increasing gaze of ASIO - the Australian Security and Intelligence Organisation. Professor David Horner is Australia’s leading military historian:

“After the Soviet Embassy closed the Czech consulate general got bigger. And they seemed to have far more people than was needed to do the sort of normal work that they were doing so it was suspected that they were operating on behalf of the Soviets.”

Iranians Monitoring USAF U-2 Reconnaissance Flights Near Their Borders

David Cenciotti

December 27, 2014

“Several U-2 spyplanes shooed away by our missile systems” Iran says

According to a senior Iranian commander, several reconnaissance aircraft, including some U-2 spyplanes, have been frighten away by Tehran air defenses as they flew close to Iran’s airspace.

On Dec. 22, General Shahrokh Shahram, Lieutenant Commander of Khatam ol-Anbia Air Defense Base said that Iran’s air defense units scared away several surveillance planes, including some U.S. U-2 Dragon Lady spyplanes that were flying near the borders of Tehran FIR (Flight Information Region).

“During yesterday and today [Dec. 21 and 22] warnings have been issued to several reconnaissance aircraft of the trans-regional states which were flying near the FIR (Flight Information Region) of the country’s borders[..] Some of these were U-2 spyplanes” Shahram said according to FNA (Fars News Agency).

FNA speculates the aircraft may be spying on Iran ahead of “Mohammad Rasoulallah (PBUH)” drills, scheduled between Dec. 25 and 31.

Earlier this month an Iranian top officer, Air Defense Commander Brigadier General Farzad Esmayeeli, said that a U-2 “stealth aircraft” flying close to Iran’s airspace was tracked, warned and somehow forced to make a U-turn by Iranian missile systems, “even though this type of plane can’t be picked up by any radar screen.”

Coated with RAM (Radar Absorbing Material) and designed to be hard to detect on radars, the U.S. Air Force U-2 is not considered a real stealth aircraft, even if it embeds radar-evading features.

U.S. Air Force U-2s have been operating in the region for years departing from Al Dhafra airbase in the UAE.

Hackers test, teach computer pros at Cyber Range

By Rick Barrett of the Journal Sentinel

Dec. 27, 2014

Source Link

You won't find this town on a map, but it's a very scary place.

In Alphaville, a virtual town used for cyber security training, the banks are robbed on a regular basis, the power plant and water system are under constant siege, and wireless networks at coffee shops are crawling with spyware meant to steal your personal information.

The computer system at City Hall has been hijacked and the elementary school's system is infected with malware that could have disastrous consequences.

Alphaville is part of the Michigan Cyber Range, which teaches computer network professionals to detect, prevent and mitigate cyber attacks in real-world settings.

Like a test track or a firing range, the cyber range has "live fire" exercises that challenge the skills of participants in a variety of situations.

They operate against "a live, thinking and adapting adversary," said William J. Adams, a retired Army colonel and now vice president of research and cyber security for Merit Network Inc., a nonprofit that runs the Michigan Cyber Range and has ties to Wisconsin.

Inspired by mock towns used to train soldiers, Alphaville simulates cyber warfare against government, schools and businesses. Such attacks, in the real world, have become increasingly sophisticated and dangerous, which makes training like this more valuable.

State of Wisconsin officials have taken classes through the Michigan Cyber Range. This spring, they will engage in exercises where one team launches an attack on a system while another team defends it.

"It's like a war game. You have to think like the enemy to predict where the enemy is going," said Jack Heinemann, director of the Wisconsin Security Research Consortium, a nonprofit organization that seeks science and technology solutions for national Homeland Security requirements.

Nothing is safe

Michigan has cyber-range "hubs" at universities and Army National Guard bases. By plugging a laptop into a portal at one of the hubs, information technology professionals can enter Alphaville to test their skills against hackers, who are in reality Merit Network staff or volunteers from colleges.

The cyber range also can be accessed from Wisconsin through a private cloud — large groups of remote, networked computers — managed by Merit Network.

In one of the exercises, the hackers attempted to break into Alphaville Power & Electric so they could turn off power to various buildings. In another exercise, students at the U.S. Military Academy at West Point attacked the city while the Army National Guard defended it.

Nothing is safe in this town, which can be configured to suit the needs of the training for government, schools or businesses.

"Alphaville is a place that applies to just about everybody. It's not going to be an exact copy of your enterprise, but it's going to be pretty close," Adams said.

"We have all of the neat toys, and we are always looking to build others," he added.

Increasingly, hackers are going after businesses. It's a new kind of economic warfare, said Tom Still, president of the Wisconsin Technology Council, an advisory group to state government.

Wisconsin has some high-value targets, too, including large companies in the manufacturing, insurance, health care and financial sectors.

"We are probably right there with everybody else, at least, in terms of our vulnerabilities," Still said.

The Merit Network wants to establish three cyber "volunteer fire departments" in Wisconsin that would respond to major attacks and assist police in investigating the attacks.

Volunteers would be solicited from industry, academia, state and local governments.

"We are going to pick from the best people available," Adams said.

Individual vulnerability

Often it's an individual, not software, that gives hackers an entry point into a system.

The controversy surrounding the hacking of Sony highlights growing concerns over cyber-crime and cyber-warfare.

Richard Javad Heydarian

Source Link

28 Dec 2014 13:44 

Richard Javad Heydarian is a specialist in Asian geopolitical/economic affairs and author of "How Capitalism Failed the Arab World: The Economic Roots and Precarious Future of the Middle East Uprisings." 

Thanks to the evolving controversy over The Interview, cyber-warfare has increasingly become a major theme in mainstream media, writes Heydarian [Reuters] 

Recent weeks have witnessed an unprecedented tit-for-tat between Washington and Pyongyang over the release of the much-awaited satirical movie The Interview, which depicts an assassination plot against North Korea's leader, Kim Jung-un. On the surface, the whole affair reflects an ideological warfare - a Cold War holdover - between a capitalist power, on one hand, and a beleaguered post-Stalinist regime, on the other. 

Upholding the principle of freedom of expression, US President Barack Obama bluntly expressed his dismay with the initial cancellation of the movie's release, prodding the entertainment industry to stand its ground against cyber threats.

In turn, North Korea's top decision-making organ, the National Defence Commission, condemned the movie as a reactionary piece of propaganda. In its characteristically insulting bombast, Pyongyang went so far as describing Obama as "a monkey in a tropical forest", who "always goes reckless in words and deeds".

There was eventually a compromise, with Sony agreeing to a limited distribution of The Interview in late December. Earlier, the multimedia entertainment giant Sony was forced to reconsider the release of the movie out of fear of additional cyberattacks on its infrastructure.

A clash of fantasies

For years, the beleaguered company has been battling against disastrous hacking attacks, which have significantly chipped away at Sony's reputation and (already-thinning) profit margins. Unwilling to risk major liabilities, top US cinema chains also refused to host the movie, caving into ominous threats issues by an anonymous group of hackers.

Washington has accused Pyongyang of being the culprit behind recent hacking attacks and cyber threats against Sony, vowing proportionate counter-measures against the reclusive regime. Since then, North Korea has suffered two rounds of internet blackout.

Counting the Cost - Feature - Cyber safety and security 

After financial crisis to cyber warfare in 2014, next year may be no calmer

By Reuters | 27 Dec, 2014, 

NEW YORK: From financial crisis in Russia to cyber warfare with North Korea, 2014 has generated new flashpoints right into its final days, setting 2015 up to be just as turbulent. 

Almost all of the major confrontations, such as the battle with Islamic State militants, the West's stand-off with Russia over Ukraine and the fight against Ebola, will rumble on. 

Others could erupt at short notice. 

"Normally after a year like this you might expect things to calm down," said .. 

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2015: Seven Global Summits That Deserve Your Attention

Author: Stewart M. Patrick, Senior Fellow and Director of the International Institutions and Global Governance Program, Council on Foreign Relations

Dec 22, 2014

http://www.cfr.org/councilofcouncils/global_memos/p35868

A view of Mount Everest, the world's highest mountain, in the Himalayas (Tim Chong/Courtesy Reuters). 

There are a lot of perks to being a world leader. Attending far-flung conferences, it’s safe to say, is not one of them. But however much Barack Obama and his counterparts grouse about jet lag, global summits will continue to play an indispensable part in governing an unruly world. Even when overly choreographed and scripted, these events give presidents and prime ministers a rare opportunity to establish a personal rapport, speak candidly on tough items, and break logjams to international cooperation. Herewith, a calendar of the seven summits to watch in 2015.

1. Summit of the Americas

For the seventh time since 1994, leaders of the Western Hemisphere will meet in April for their triannual confab, on this occasion in Panama. Established to promote democracy, growth, and security in the region, the forum has increasingly become a symbol of Latin America’s willingness to stand up to the United States. At the last Americas summit—in Cartagena, Colombia, in 2012—the United States was in the hot seat for its perceived failure to consider more creative approaches to the long-running war on drugs, which many Latin Americans blamed for high levels of crime and violence in their countries. The 2015 summit seemed destined to experience similar tensions, particularly after Latin American leaders disregarded longstanding U.S. policy toward Cuba, by insisting that Raúl Castro be invited to the Panama summit.

All that changed on December 17, when President Obama announced a softening U.S. stance toward Cuba. The prospect of gradual normalization between Washington and Havana should improve U.S.-Latin American relations. Neighbors of the United States will also be cheered by recent Obama administration shifts on drug policy, including a greater focus on public health approaches at home and more tolerance for decriminalization experiments abroad.

2. Nuclear Nonproliferation Treaty (NPT) Review Conference (RevCon)

Winners and losers of oil price plunge

Chris Giles

December 15, 2014

http://www.ft.com/cms/s/2/3f5e4914-8490-11e4-ba4f-00144feabdc0.html#ixzz3NBOk1SBy

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Inflation and strong dollar could curb global economic impact

Suddenly the world is awash with oil. A surprise surge in production and weaker than expected global demand for crude have sent oil reserves soaring and prices tumbling. The 40 per cent drop in the oil price to around $60 a barrel since June is by far the biggest shock for the global economy this year. Similar episodes in the past tell us the consequences are likely to be both profound and long lasting. Normally, economists would add “positive” to this list, but doubts are surfacing as never before.

The scale of the current oil shock is difficult to exaggerate. While financial markets and commentators were obsessed by rising geopolitical tensions and the latest twists in central banks’ policies in the US, Europe and Japan, even larger forces in oil markets went largely unnoticed. As late as October, a “key concern” of the International Monetary Fund was the risk of an oil price spike caused by geopolitical tensions. Instead, rising production and weaker demand growth have left suppliers competing to find willing customers.

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Rich country stocks of crude oil have defied the onset of the northern hemisphere winter and risen to their highest level in two years, according to the International Energy Agency. West Texas Intermediate crude oil prices dropped from more than $100 a barrel in June to less than $60, with the European Brent oil prices following the same downward path. Even a slight uptick yesterday cannot disguise the downward trajectory of the price.

Rather than geopolitical tensions in Ukraine and Iraq causing an oil shortage and price spike, as foreseen in the IMF scenario, the causality is flowing from economics to politics. The plunge in oil prices now threatens Russia’s living standards and public finances to the point where it will start 2015 as a devalued and belligerent nation with nuclear weapons. In the Middle East, the funds to finance vicious conflicts in Iraq and Syria face greater pressures, which promise to stretch all sides. And the US is less likely to want to play global policeman now that it can satisfy almost 90 per cent of its energy needs from domestic sources, up from 70 per cent as recently as 2005.

In normal times, the broad effects of the oil price drop on the global economy are well known. It should act as an international stimulus that will nevertheless redistribute heavily from oil producing countries to consumers and the longer the new prices endure, the more profound will be the effects on the structure of industries across the world.

But this time, economists are actively debating whether the world has changed and other moving parts — such as falling inflation levels and the strong dollar — will throw sand into the works of the usual economic relationships.

But when oil prices fall, there is no iron law that enhances global economic growth. The main effect is a huge redistribution from oil producers, who receive less for the effort of extracting the black gold, to consumers who benefit from cheaper transportation and energy, enabling them to spend more money on other goods and services or to save their windfall.

Most economists still agree with Christine Lagarde, IMF managing director, who this month said that “it is good news for the global economy”. The positive effect on growth should arise because oil consumers tend to spend more of their gains than oil producers cut their consumption.

Government Contracting Should be a Core Competence for U.S. Military Personnel

Authored by Professor Katherine E. White.

Added December 12, 2014 

Type: Student (Carlisle) Papers 

35 Pages 

Download Format: PDF

Cost: Free 

During Operations Iraqi Freedom (OIF) and Enduring Freedom (OEF), more than half of the U.S. personnel on the ground were civilian contractors. Unfortunately, lack of contractor oversight led to significant levels of waste, fraud, and abuse. To address these concerns, Congress created the Commission on Wartime Contracting to develop recommendations to study the acquisition process during OIF/OEF. Concomitantly, the Office of Federal Procurement Policy issued a policy letter to provide strategic-level guidance to federal agencies to assess risk and accountability when outsourcing critical functions. This Paper looks at these recommendations and guidance and identifies the gap between what has been adopted versus what was recommended—ultimately focusing on the steps needed for the U.S. military to change its culture and make government contracting a core competency for civilian and military personnel.

GLOBAL THREAT FORECAST 2015 – ANALYSIS

By Rohan Gunaratna*

DECEMBER 27, 2014 

The al Qaeda-centric threat landscape has been eclipsed by an Islamic State (IS) insurgency. Today, an al Qaeda-IS hybrid influences and shapes the global threat landscape of political violence. IS will expand its international footprint in 2015.

The galaxy of threat groups inspired and instigated by al Qaeda present a growing challenge to global harmony. Despite the presence of the world’s finest standing armies in Afghanistan and Iraq, the insurgent, terrorist and extremist groups in the two most violent conflict zones survived. The unwillingness of Western and their Middle Eastern partners to deploy ground troops in Iraq, the pressure to pull out from Afghanistan, and the reluctance of more countries to join the fight perpetuate conflict. In a trajectory of growth, the ruthlessness and resilience of the violent actors threaten international security.

The international neglect of Iraq led to the rise of the Islamic State of Iraq and Syria (ISIS), an episode likely to repeat itself in Afghanistan in 2015-6. Although the international coalition formed in September 2004 in Iraq and Syria offer hope, a greater commitment of its constituents to fight on the ground is needed. Unless there is greater will on the part of the community of nations to fight violent actors and commitment of capabilities to counter their vicious ideologies, the global threat of violence and extremism will spread in 2015.

The context

Today, the most violent theatres of conflict are in the Middle East (Syria-Iraq, Yemen); Asia (Pakistan-Afghanistan), and Africa (Nigeria and Somalia). With less than 200 members, al Qaeda itself has become exceptionally weak but its associates and affiliates have become strong. The most violent threat groups are Islamic State (IS), Taliban, al Qaeda in the Arabian Peninsula, Boko Haram and al Shabab. While these high profile groups will continue to pose a threat in 2015, several existing groups in the Middle East, Africa, and Asia are likely to grow stronger.

They include al Nusra also known as al Qaeda in Syria, Turkistan Islamic Party in Western China, al Qaeda in the Indian Subcontinent. Although non-Muslim groups from the Philippines to India and Peru to Colombia present a security threat, the ethno-nationalist and left/right wing groups present a localised threat.

The epicentres of global terrorism today are in the Levant, where IS is the lead actor, and South Asia, where Taliban is. In Africa, a new epicentre is likely to develop unless stability is restored in Libya, Egypt, especially in the Sinai, northern Mali/Southern Algeria, Somalia and Nigeria. At present, the threat in Africa’s north is moving from Maghreb to the Sahel; in Africa’s east, al Shabab in Somalia is disintegrating; and in Africa’s west, Boko Haram in Nigeria is developing into a regional movement with cells in Niger, Chad and Cameroon.

The Year of Living Dangerously The Education of an Operational Planner

https://medium.com/@Doctrine_Man/the-year-of-living-dangerously-3e37c085bdc7

After a year in purgatory as a division plans chief, I added a cynical comment to my Officer Evaluation Report Support Form: “Planned the invasion of 42 countries on three separate continents.” The comment was only half in jest. It was a long year.

The year began with a series of planning conferences for the Korean theater exercise Ulchi Focus Lens, rolled into the terrorist attacks of 9/11 and the deployment of the first conventional forces into Afghanistan, mounted a false summit with a division warfighter exercise, reached a crescendo with the initial planning for the invasion of Iraq, and finished with another summer of conferences for Ulchi Focus Lens. Between the peaks and valleys, there were any number of “what if” drills that involved detailed plans for everything from anti-piracy efforts along the coast of Somalia to operations deep into the heart of regions unfriendly and inhospitable.

Yeah, it was a long year. A very, very long year.

Looking back, I can see now that it was an unparalleled learning experience. Everything we discussed in the School of Advanced Military Studies proved true. The hours spent with Clausewitz, Corbett, and Douhet were reflected again and again in our work. We became masters of our craft, journeymen in the operational art of war. We earned the title “Jedi Knights,” first bestowed upon our predecessors during the Gulf War.

Along the way, I found the dry sarcasm and gallows humor common to planners. A year locked in the basement of a secure facility will do that to you. That, and not seeing the sun. PX pizza, leftover bags of Cheetos, stale coffee, Girl Scout cookies sold during the Reagan Administration. The glamorous life of a war planner is anything but. Those long days – and longer nights – also produced planning “truisms.” Not exactly the type you would find in On War, but something more reminiscent of “Murphy’s Law.”

1. Friends may come and go, but enemies accumulate: Everything comes down to how you seal the deal. Inside the beltway, the people in $5,000 suits call it “conflict termination.” We call it “imposing your will on the enemy.” If you don’t break the will of other guy, you’re going to have to fight him again. And again. And again.

2. Nothing spurs adaptability like a genuine lack of planning: “The enemy of a good plan is the dream of a perfect plan.” – Carl von Clausewitz

Your plan won’t survive first contact. No plan does. The more time you spend building excessive detail into a plan, the less time you have to think through the problem, and the more crap you put your subordinate headquarters through. Sometimes, commander’s intent, planning guidance, and a clear mission statement is all you need.

3. The facts, while interesting, are irrelevant: It’s not what you know that matters, it’s what you don’t know. And it’s what you don’t know that tends to get people killed. Let the battle staff sweat the detailed lists of facts and assumptions. Spend that time playing “Battlefield Clue” with the enemy’s possible courses of action. What does he know that you don’t? What does he see that you can’t? What do you have that he wants?