Herald Sun Article, page-3

ROBERT GOTTLIEBSEN

Cyber warfare now bigger threat than nuclear attack


A photo taken on May 15, 2017 shows staff monitoring the spread of ransomware cyber-attacks at the Korea Internet and Security Agency (KISA) in Seoul. (AFP PHOTO/YONHAP)

• The Australian
• 8:05AM May 19, 2017
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• ROBERT GOTTLIEBSEN
  
  Business columnist
  Melbourne
  @BGottliebsen
  

The Wall Street gyrations this week are not just a fear that President Trump’s tax cuts and other measures are in jeopardy. Rather we are also looking at a far deeper set of events that have incredible long term ramifications.
Indeed we will look back on the last year as the beginning of an era where the increasing threat of cyber warfare will become greater than the threat of nuclear attack. In many ways the difficulties being faced by President Trump are part of that transformation.
First we saw apparently Russian interests — not necessarily those of Vladimir Putin — apparently become involved in the US election on the Trump side. That completely enraged the democrats who are now working feverishly to have Trump impeached.
It was the first time a cyber attack had been used in an attempt to alter the course of an election but in the last two weeks we have seen a more deadly form of cyber warfare as hundreds of thousands of enterprises were crippled by an attack which appears to have been orchestrated by North Korea. But those two incidents are merely the beginning.
I am attending the Australian Leadership Retreat which is normally held on Hayman Island but because of the damage inflicted by Cyclone Debbie it has been shifted to the Gold Coast. It is conducted under the Chatham House rule. Delegates were told that cyber warfare is set to expand rapidly and will emerge as a greater threat than nuclear warfare. WannaCry was a relatively crude attempt at dismantling global infrastructure. Later attacks will be much more devastating and have the potential to close down water and sewage systems, hospitals, transport systems, food production, banking and so on. Potentially it could create a large death toll.
Last week I urged companies to shore up their defences against cyber-attack but at the Leadership Retreat delegates were told that the threat of cyber warfare now required much more extensive defence mechanisms. In particular, power generation needs to be decentralised because generators are incredibly vulnerable to attack. As we know from the Australian experience decentralisation of power generation is not simply a case of plonking generation units in various country areas. Substantial investment must be made in the grid. Once the threat of cyber attack is understood Many more enterprises and households will make an investment to be independent of the grid.
There is no doubt that Russia is seeking much closer relations with the US and Trump would like to respond favourably but in both countries there are strong interests that oppose such reconciliation. In the US the cold war legacy still dominates many parts of the country including the senior levels of defence. There is also a fear that Putin has a master expansion plan. In addition, as we have seen in Syria, Russia has a completely different view on human rights to the US.
On the Russian side there is great concern about NATO’s incursion into the Baltic Sea and the Russians have drawn a line in the sand at the Ukraine. Russia desperately wants access to American technology to improve the economics of their oilfields which are high cost and that is a key motivation for their desire for better relationships.
Meanwhile Russia has shown just how useless the sanctions that Europe and US imposed on the country have become. Initially it was a disaster but Russia was forced to increase its farm production and that of other goods to replace European sources. This has greatly improved the Russian economy and Russia has still been able to trade with Iran, South Korea, major areas of South America and of course China. Russia now has a major infrastructure investment program.
It is fascinating that sanctions forced Russia into the sort of policies that Donald Trump advocated in his election campaign for the US and in both cases the share markets have responded favourably.
One of the fascinating concepts that was put to delegates at the Leadership Retreat was the possibility that President Trump would find an answer to the North Korean problem without going to war with the rogue state. If he could do that it would enhance the process of encircling China if it brought together an alliance between the Korean peninsula and Japan. It would create enormous attractions for Russia to become involved in that process. At the moment Russia is highly dependent on Chinese trade mainly in oil and gas. But a different approach in Korea would open much wider markets for Russia.
For the moment in the stock market it is all about Trump’s financial policies but down the track these wider issues are going to become more and more important