Can business trust the government to protect them?

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. 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. 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. INDONESIA’S NO 1 BUSINESS MAGAZINE
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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. 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-
Mall.com 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 | 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
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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
shoeb@globeasia.com
GEORGEGASCON/AFPPHOTO