Global Recovery Leaded by Developed Economies

During the last years, we have seen an emerging market growing at fast-pace rates every quarter; hence, leading the global economic growth. The main countries experiencing such growth were mainly  the BRIC’s countries, which are Brazil, Russia, India, and China. Nonetheless, this situation has changed this year, for the first time since the start of the financial crisis Japan, The U.S., and Europe together are contributing more to the global growth than the emerging markets according to an estimate by investment firm Bridgewater Associates LP.

Among the factors to this shift: a resurgent Japan, whose economy expanded 2.6% on an annualized basis last quarter reported by the government last Monday. The recovering of the U.S. economy and an expected  slightly EU’s economy expansion that new reports this week are expected to show.

On the other hand, the emerging market countries are experiencing a contraction on their growth. Beijing’s official full-year growth target is 7.5%, making it the year with the slowest growth ever seen since 1990, still surpassing the U.S. pace of 2%, though many analysts comment that China will grow even slower than the government’s target. Brazil, the biggest Latin America’s economy, is also stagnating. Brazil grew just 1% last year after growing at almost 8% in 2010. Global companies investing in the emerging markets are optimistic about these numbers.

World War, Cold War… Cyber War.

 

Homeland Security

The National Intelligence Estimate (NIE) emphasizes the U.S is facing a sustained and massive cyber-espionage campaign that is threatening the country’s economic competitiveness. The NIEs are classified documents prepared for policymakers. According to the NIE, the campaign is seeking to access businesses and institutions’ data to gather economic intelligence through cyber-attacks.  The sectors that have been the focus of hacking over the past five years include energy, finance, information technology, aerospace and automotives, according to the individuals familiar with the report.

Besides China, the NIE names three other countries — Russia, Israel and France — as having engaged in hacking for economic intelligence but makes clear that the cyber-espionage’s quality carried out by these countries are compared with those of China. Nonetheless, China repeatedly rejects such allegations.

President Obama states that foreign governments and criminals are looking into U.S. financial, energy and public safety systems “every day.” As a reaction, the U.S. military has put $3 billion into cyber security efforts. Former Deputy Defense Secretary William. Lynn states on this issue, “We need the NIE on cyber for a systematic and comprehensive understanding of what the most dangerous technologies are, who are the most threatening actors and what are our greatest vulnerabilities.”

The White House is considering imposing trade sanctions and visa restrictions on response to these cyber-attacks. Today, The Washington Post says President Barack Obama is expected to issue an executive order on cyber security soon, intended to help private companies defend themselves against hacking. So far, Washington’s response has included giving written guidance to businesses on intellectual property crimes, to setting up a toll-free number to report problems, to unsuccessful efforts to get Congress to pass legislation on the issue.

Worldwide- known U.S. dailies such as The New York Times, the Wall Street Journal, and The Washington Post recently disclosed that they believe their networks were compromised in powerful and sophisticated intrusions that originated in China.

Eric Schmidt, Google Executive Officer, says China is the world’s “most sophisticated and prolific” hacker, adding: “It’s fair to say we’re already living in an age of state-led cyber war, even if most of us aren’t aware of it.” A new war is already starting, a cyber war, and the U.S. Government needs to take actions as soon as possible to fight this problem. This issue needs to be worked out closely between the public and private sector, since both parties are being constantly affected. Several experts have said that cyber-espionage’s cost to the U.S. economy might range from 0.1 percent to 0.5 percent of gross domestic product (GDP), or $25 billion to $100 billion