In December 2010, the Republic of South Africa was officially admitted to the BRIC club of states and the Republic’s president, Jacob Zuma, attended the April 2011 BRICS Summit in Sanya, Hainan province, China, as a full member of the now five nation club. This is not, in essence, a surprising development. As many Africa watchers will appreciate, South Africa is arguably the African continent’s most sophisticated country and its largest economy. It is Africa’s largest producer and consumer of energy, with a renowned minerals sector boasting a history of investments from the world’s largest mining companies. Recent surveys indicate that in 2011 South Africa (together with Kenya and Nigeria) is rated as one of the top three countries in Africa for investment, with the country’s Trade and Industry Minister, Rob Davies, recently stating that South Africa had already confirmed new investments in excess of US$17 billion during the next 3 years.

Investments of some US$4.3 billion were recently announced in the country’s automotive sector, creating 13,000 jobs, according to the Trade and Industry Ministry. This bodes well for a country traditionally reliant on the minerals sector (the combined market capitalisation of mining companies listed on the Johannesburg Stock Market is US$270 billion), given its need for diversification of the economy and investments into many other sectors. Last year’s Football World Cup, which was hosted by South Africa, spurred new investments into the country’s construction and infrastructure sectors. South Africa’s increasing presence on the foreign direct investment (FDI) map within the BRICS context bears some resemblance to Indonesia, on which KCS recently reported as ‘almost the BRIC nation’, with high exposure to global FDI flows.

KCS Group Staff

The two main insurgencies in which the Philippines are embroiled include the government’s conflict with the Communist Party of the Philippines (CPP) and its armed wing, the

New People’s Army

(NPA), and a second conflict between the government and armed groups seeking to establish an independent Muslim state on the southern island of Mindanao.

Although the Philippines, with its three centuries of Spanish colonial heritage, is predominantly a Catholic country, Mindanao’s originally dominant Muslim population was represented in armed struggle by the Moro National Liberation Front (MNLF), leading to the creation of the Autonomous Region of Muslim Mindanao in 1996.

However, the Moro Islamic Liberation Movement (MILM) splintered away from the mainstream MNLF since that time and refused to settle for autonomy within the context of the Philippine state, preferring the option of armed struggle. More recent years of the conflict have been characterised by ongoing violence and sporadic terrorism, cease-fires, stalled peace talks and resumption of hostilities.

Stuart Poole-Robb

Indonesia has actively pursued vigorous growth policies during the last decade, courting foreign investment and advancing economic liberalism. Taking into account that the country is itself located geographically within the rapidly developing Asian economic network of states, this has effectively been music to the ears of many of the world’s leading multinationals. News of high profile new foreign direct investments (FDI) in the Indonesian economy almost appears to be a daily occurrence at the time of writing.

 New investments appear frequently in the country

Food giant Nestle and South Korean car maker, Hyundai, have both announced investments worth hundreds of millions of dollars in Indonesia recently, while the British energy multinational, BP, has pledged to boost its investments in the country by more than US$10 billion during the next decade. Last month (June 12-13), Indonesia was host to the first World Economic Forum (WEF) East Asia, the well known conference brand hosted annually at the Swiss ski resort of Davos, which attracts leading international business leaders and political elites. Last month’s inaugural WEF East Asia attracted more than 600 participants from some of the world’s most well known international corporations (including Microsoft, Cisco Systems, Chevron, Unilever to name just a few) and resulted in the Indonesian government announcing a further US$20 billion in FDI.

Many foreign brands are highly visible in the country, which is an attractive destination for Western business both due to the export potential that cheap labour and an abundance of resources allows, as well as the prospect of catering to Indonesia’s sprawling domestic market. Indonesia has the world’s fourth largest population, much of which is under 35 (years of age) and is consumer oriented (Indonesia has one of the highest rates of BlackBerry mobile phone users in the world for example, as well as reportedly the second highest number of facebook users).

KCS Group Staff

President Felipe Calderon

By the end of 2010, four years after Mexican President Felipe Calderon declared war on the country’s drug cartels, more than 34,000 people had lost their lives in the conflict – 15,000 in 2010 alone. However, the federal government has persisted with the crackdown on the drugs groups, arguing that the spurt in violence only shows that the cartels are losing control of their networks and territories.

Friends of Mexico and allies of President Calderon argue that too much attention is accorded to Mexico’s drug violence in the international media, which would be wiser to acknowledge the strides that Mexico has taken to become an attractive destination for foreign investment. Mexico is now ranked by international agencies as the 35th most investment-friendly country in the world and has overtaken ‘investor friendly’ Columbia as a leading market for inward investment in Latin America.

KCS Group Staff

Street violence in Rio

While drug gangs are active within Brazil’s borders and appear to enjoy covert support from some police officers and government officials who take bribes in exchange for intelligence information, the Brazilian authorities have already launched preventative operations to counter gang infiltration of the security forces before the malaise has a chance to spread.  There has been a heavy crackdown on corrupt officials in Rio de Janeiro in recent months, which led to the arrest of more than 30 police officers. Along with with the clean up operation, which has been taking place within the government forces, an equally severe law enforcement strategy directly targeting drug gangs was put in place. The government has also been seeking to re-establish state control over urban slums (where crime has been evident) by sending in special operations forces into such areas in Brazil’s larger cities. Furthermore, a military presence is being maintained in the sensitive area of Complexo do Alemão (in northern Rio de Janeiro) in order to prevent the return of the expelled gangs. Brasilia is also seeking to launch an inter-governmental framework to counter the expansion of drug networks at the regional level in Latin America. Brazil has signed an agreement with Bolivia and the two countries are now seeking to persuade more Latin American states to join their initiative. Overall, Brazil seems to be keeping a tight leash on drug cartel violence.

KCS Group Staff

Despite some concerns over recent anti-government protests in Saudi Arabia, Saudis revere their King, Abdullah II. Reverence of the ruler, however, is no less felt in Dubai among Emirati nationals than it is by Saudis in the Saudi Kingdom. Governance experts in the UAE currently observing the trend of social and political disturbances in neighbouring Gulf monarchies and elsewhere in the region, tend to dismiss the prospect of any major anti-regime demonstrations taking place in Dubai, citing the depth of appreciation that Emiratis feel towards their government.

With a substantially smaller population than Saudi Arabia and some 10% of the world’s oil reserves, the UAE rulers have developed an even tighter social contract by which to manage state/society relations than in Saudi Arabia – the Gulf’s grand bargain of doling out high volumes of state budgetary patronage in return for acquiescence from potentially restless segments of the population.

Ever since the UAE’s late-ruler, Sheikh Zayed, unified the UAE’s seven emirates into one federal state, Emiratis in Dubai and elsewhere in the country have largely associated their government with the provision of numerous free public goods such as healthcare and education, but also housing and even interest free loans at state banking institutions.

KCS Group Staff

A moment of hope appeared on the horizon for the country in late 2010, when Cote d’Ivoire’s long anticipated presidential elections were finally held. While many had hoped that the elections would lead to the long-awaited unification of this war-torn West African nation, a security crisis emerged instead as Cote d’Ivoire’s incumbent president, Laurent Gbagbo, refused to accept the apparent electoral victory of his main rival, Alassane Ouattara.

Laurent Gbagbo

The disputed election result sparked clashes between supporters of the two men, both of whom claimed victory in the poll. Furthermore, Gbagno’s defiance of widespread international recognition of Ouattara’s apparent victory in the presidential poll is particularly worrying, given that Gbagno’s brinkmanship has been supported by the threat of force and intimidation directed against UN peacekeepers and other international groups present in the country.

While having commented in previous writings that Cote d’Ivoire’s post-conflict domestic stability remains highly shaky, all of KCS’ previous concerns relating to the country are emerging rather explicitly in early 2011. Multiple deaths sparked by political clashes are presently gripping the country. Hints of ethnic cleansing are likewise starting to reveal themselves through Cote d’Ivoire’s new landscape of political violence, while the presence of a 12,000 strong UN peacekeeping contingent does not seem to bear any weight on dissuading the combatant parties from applying the use of force.

KCS Group Staff

The government is happy to support criminal groups acting in the US (And the UK and AU) from Ve. Basically, as long as nothing is done against the citizens of Ve, not criminal sanctions come against the cartels.

Caracas

One major aspect is rape videos from abduced foreign nationals and the other is child porn videos.

These cartels manage many and many US, UK and AU “clients”. Once they get bank or credit card details, they move to an extortion model. One that lasts many years. Those who buy the videos and other child porn/rape videos are extorted. The cartels use the information they obtain to collect evidence of the crime.

These groups are current and moving to more former drug cartels. Interestingly, cybercrime is earning more than cocaine. The US market for coke is depressed and cybercrime has been turning more money for some of the groups.

KCS Group Staff

A few years ago, the fact that people were able to ‘hack’ into computer systems from afar was the stuff that science fiction movies were made of. Unfortunately fiction has become reality and it’s not the general consumer who suffers – banks, huge corporations and governments are falling foul of the ever-ruthless hackers. Cyber crime has reached huge proportions and we’re all in the hackers’ grip.

Massimo Cotrozzi who heads up the IT security division of KCS Group, a Knightsbridge, London security intelligence and risk management company goes a step further: “We’re not so much in their grip, we are effectively being controlled by cyber fraudsters and everyone has to exercise extreme caution when working on computers, sending text messages or even speaking on mobile phones.”

Cotrozzi has worked in IT security since graduating with a BSc in computer science from Milan University. Cyber security became his chosen avenue and at one stage in his career he was seconded to the Milan Police Force where he was involved in several of the first hacking/phreaking/carding/e-mail fraud investigations. His investigations have encompassed industrial espionage as well as electronic surveillance and covert operations.

Keeping ahead of the hackers is one of the greatest headaches that specialists like Cotrozzi face all the time.  It would be true to say that literally every day there is another threat hitting the market which can effectively close down computer systems or send them into disarray. The world reeled in the autumn of 2010 when media headlines went into overdrive reporting on a virus called Zeus.

Zeus, a ‘botnet’ – slang for robot network – was first discovered in 2007 when it was used to steal information from the US department of transportation. Since then it has grown, affecting and infecting organisations and banks, but knowledge of its existence was not as widespread as it has become since October 2010.

In a nutshell, a botnet is a network of computers which are controlled through a command and control centre (C&C) usually resident on a hacked server which infiltrators access through anonymous network connections or virtual private networks (VPNs).

Botnet attacks are increasingly becoming the common way that fraudsters use to gather credentials for stealing money from bank accounts and lately also by cyber criminals to attack and damage specifically targeted infrastructures.

When Zeus began its alarming journey through millions of computers in October, it spread through the systems of individuals, businesses and municipalities around the world. The virus was disseminated in an email and when those targeted opened up their emails, the Zeus software installed itself, secretly capturing passwords, account numbers and other data used to log in to online banking accounts.

The devastating effect was that unauthorised transfers of thousands of dollars were extracted from bank accounts at a time. It even had the ability to route the funds to other accounts controlled by a network of ‘money mules’.

These mules – many recruited from outside the UK and especially from Eastern Europe – created bank accounts using fake documents and false names. The money didn’t rest in these false accounts: it was either wired on to mules’ bosses in Eastern Europe or smuggled in cash out of the US. An estimated $70 million is believed to have been extracted in this way. The FBI reacted and arrested over 90 people in the US and a number of others in the UK and Ukraine.

One would imagine that once discovered by the authorities and computer systems cleansed of the botnet that all would get back to normal again. Wrong. Zeus continues to perpetrate computer systems while cyber security specialists like Cotrozzi continue their attempts to keep one step ahead of its spread: it is incidentally now in its third version while version one has, through experts’ efforts, been made obsolete.

But Zeus has generated what is known in the business as ‘forks’ or variants which use the same infection method of the browser in order to steal credentials. Some more malware has recently been produced – and they’re now spreading.

Massimo Cotrozzi - KCS Group

Prime Minister Naoto Kan

Japan’s ratio of public borrowings to gross domestic product is currently unsustainable and tittering precariously toward a financial crisis. The Kan government is well aware of this and has attempted to instigate a number of measures to free up the stagnating economy. One such plan was to put laws in place which would make it far more attractive for the elder Japanese to give their inheritance to their children early, as the younger generation are considered far more likely to spend the Japanese economy out of recession (the massive surge in sales in Sony’s PS3 consoles since the release of the new GT5 game being a case in point).

Unfortunately the Japanese public does not consider any of the proposed plans palatable, despite the fact that most analysts believe the country will end up with a current account crisis in around two years. Indeed, there are strong signs that the crisis is beginning to happen already. The composite index of indicators such as industrial output, large-lot electricity use and retail sales are showing a steady decline, according to the Cabinet Office, and the Yen is only getting stronger.

In May this year, Prime minister Naoto Kan offered up the possibility of increasing sales tax by 5% – the net result was a rapid 9% drop in popularity for him and his party. Two months later the Japanese voters rejected the plan outright, leaving Kan with few tools left to repair the country’s damaged finances, and Kan himself has said that unpleasant action may have to be taken in order to avoid a Greek-style crisis. It should be remembered that Japan has had six prime ministers in the last four years and there are still leadership challenges simmering in background.

KCS Group Staff