G-20 Urged to Treat Cyber-Attacks as Threat to Global Economy

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Cyber-attacks can lead to servers being manipulated from afar. Close

Cyber-attacks can lead to servers being manipulated from afar.

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Photographer: Getty Images

Cyber-attacks can lead to servers being manipulated from afar.

Cyber-attacks are eroding world economic growth, and the G-20 needs to set aside emotion-charged discussions to focus on the damage, a former White House official said.

“We have made cybersecurity one topic when it is many, and countries can’t see eye-to-eye on what is most important and what needs to be done first,” said Melissa Hathaway, who left President Barack Obama’s administration in 2009 and now heads a private consulting firm.

“We need to start to talk about this as gross domestic product loss, and the instability of the financial institutions we are all dependent on as a global economy,” she said.

Hathaway, who advised both Obama and President George W. Bush, estimated in a May report that the Group of Twenty economies have lost 2.5 million jobs to counterfeiting and piracy while governments and consumers lose $125 billion annually to cyber-attacks, including losses in tax revenue.

While governments aren’t going to give up espionage, steps can be taken to stop the disruption of services at financial institutions and the theft of intellectual property, she said.

“If you couch the conversation on the economy and not in espionage and warfare, we can all agree. The economy is common and safe ground,” she said in an interview in Tel Aviv.

Hathaway said that the G-20 projects that information and communications technology, along with increasing broadband communications, will lead to a minimum 4 percent increase in gross domestic product in developed economies, with developing countries seeing a boost of as much as 10 percent.

Full Losses

The numbers are misleading because countries aren’t measuring full losses from cyber-attacks, she said. In the May article, Hathaway said the U.K. has estimated losing 27 billion sterling ($42.4 billion) a year to online criminals. In the Netherlands, cybercrime costs at least 10 billion euros ($13.3 billion) annually, she said, citing TNO, a Dutch research organization.

U.K. officials have said the country is losing a minimum of 3 percent of its GDP to security issues, and the Netherlands is net-neutral, Hathaway said in the interview.

“Until this is on the agenda of the G-20, we aren’t going to make progress,” said Hathaway, who was in Tel Aviv to speak at a conference sponsored by Tel Aviv University’s Yuval Ne’eman Workshop for Science, Technology and Security. “It is the most effective in talking about economic stability and overall growth, health and wellbeing of the world.”

South Korea

In March, criminals launched a computer virus that penetrated financial institutions in South Korea. The malware code was distributed through targeted organizations’ servers, destroying their computers’ ability to boot.

In December 2012, Saudi Arabia blamed unidentified people based outside the kingdom for a cyber-attack on state-owned Saudi Arabian Oil Co. that was aimed at disrupting production from the world’s largest exporter of crude.

U.S. officials have accused the Chinese government of being behind a campaign to steal trade secrets and potentially disable computers that operate banks, power grids and telecommunication systems. China has rejected the charges.

“There are more and more cyber sabotage attacks, and we need to have our muscles ready to fight off the next attacks,” said Eugene Kaspersky, chief executive officer of Kaspersky Lab, a Moscow-based company that monitors cyber-attacks and develops defense against them. He said he advocates a military-free cyberspace.

Symantec’s Report

Symantec Corp. (SYMC), the largest maker of security software, reported in April a 42 percent surge in targeted attacks in 2012 compared to the year earlier. Ilias Chantzos, the firm’s senior director for Europe, the Middle East and Africa and the Asia-Pacific and Japan region, said European governments are growing increasingly aware of the risks.

“There has been an attempt to push the legislation forward that requires the disclosure of breaches and states to cooperate,” said Chantzos, who’s based in Brussels. “The move itself is a very clear political signal of the recognition of the need to go down this path.”

The G-20 is scheduled to meet next in September in St. Petersburg, Russia.

To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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