Monthly Archives: August 2015

Cyber Crime and the Brain Drain

Trojan-Horse-Virus

Cyber attacks and cyber espionage are on the rise in Latin America, and the source of much of it is Brazilian hackers and Peruvian recent university graduates linking up with Russian-speaking experts, according to internet security analysts.  The region has seen a massive rise in ‘trojans’ – disguised malicious software – especially in the financial sector, and other online threats, said Dmitry Bestuzhev, Latin American head of research for security firm Kaspersky Lab.  The main producers of the malware are Brazil and Peru, he said in an interview with Reuters on Thursday following a regional cyber crime conference.

“Criminals from those two countries produce the majority of malicious code and attack not only their countries but also neighboring ones,” he said, adding that their attacks spread as far as Spain and Portugal. In the last couple of years there has been a rise in Latin American hackers linking up with more experienced criminals in Russia and Eastern Europe, he said, as a kind of shadowy brain drain takes place across the Atlantic.  A significant number of Peruvian students, in particular, attended university in Russia and returned home knowing how to operate malware as well as communicate in Russian.

“They return and often they are demotivated, they have studied six or eight years, and when they return to their country the work offered is low profile and mediocre paid,” said Bestuzhev.  With Peruvian laws also inadequate to deal with the threat, that was encouraging the formation of a hacker hub in the Andean country, he said.  In return, Russian criminals are increasingly using Latin American networks to ‘test’ new malware before unleashing it elsewhere, he added.

Excerpts  ROSALBA O’BRIENLatam cyber attacks rise as Peru, Brazil hackers link up with Russians, Reuters, Aug. 28, 2015

Markets Love a War

Heckler & Koch MP7 rifles, image from wikipedia

Naval Special Warfare DEVelopment GRoUp is the official Pentagon acronym for the group more popularly known as “SEAL Team 6,” and is subordinated to the Joint Special Operations Command (JSOC and  the U.S. Special Forces Command — SOCOM). Drawn from the very best operators within the Navy’s already-superb SEAL (Sea, Air, Land) teams, DEVGRU spearheaded the fight against the Taliban’s top leadership in Afghanistan, and in 2011 launched a daring nighttime raid into Afghanistan to kill Osama bin Laden….

DEVGRU operators are outfitted with “customized” weaponry, specially tailored to their missions. German-made Heckler & Koch MP7 rifles equipped with suppressors, infrared lasers, and thermal optics are just the start of their arsenal. “The SEALs were equipped with a new generation of grenade — a thermobaric model that is particularly effective in making buildings collapse,” reports the NY Times….

Detailed information on funding for DEVGRU is not easy to come by. Media reports suggest that total “special forces” in the U.S. military may now number 72,000, with an overall budget in excess of $10 billion, but a search for contracts awarded via the U.S. Department of Defense specifically benefiting DEVGRU yields a null result. Likewise searches for SEAL Team 6.  Contracts more broadly defined as benefiting SOCOM, however, appear with some regularity in the Pentagon’s daily briefing on contract awards.
•On Feb. 6, 2008, drone specialist AeroVironment received an order for $46 million worth of SOCOM-variant Raven unmanned aerial vehicles.
•Feb. 4, 2011: General Dynamics won a $84 million contract to support “data, voice, and video communications networks” run out of SOCOM headquarters.
•On Feb. 10, 2014, privately held Oregon Iron Works won a $400 million contract to develop Combatant Craft Medium Mark One (CCM Mk1) stealth fast-attack boats for use by SOCOM.
•And to illustrate just how large these contracts can get — on June 21, 2010, Lockheed Martin was awarded a contract worth up to $5 billion “for contractor logistics support services in support of US SOCOM worldwide.”And four years after bin Laden exited the world stage, the special forces contracts just keep coming.

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How to Wipe Out Space Junk

image frrom http://jemeuso.riken.jp/en/

Half a century of rocket launches has turned the space into a junkyard. Around 3,000 tonnes of empty rocket stages, defunct satellites, astronauts’ toothbrushes and flecks of paint are thought to be in orbit.

Besides being messy, such debris can be dangerous. Anything circling Earth is moving pretty quickly, so collisions between space junk and satellites can happen at closing velocities of 10km a second or more. Large bits of junk are routinely tracked by radar. The International Space Station (ISS), for instance, regularly tweaks its orbit to avoid a particularly menacing piece of litter. But at such high speeds, even a small, hard-to-follow object can do tremendous damage.

Rocket scientists have been pondering how to deal with this problem for years. But a paper just published in Acta Astronautica by Toshikazu Ebisuzaki and his colleagues at RIKEN, a big Japanese research institute, has gone further and proposed actually building a test device.

Dr Ebisuzaki’s plan involves zapping things with lasers. He proposes to point these lasers in the right direction using a telescope intended for a different job entirely. This is the Extreme Universe Space Observatory (EUSO). It is designed to be bolted on to the ISS. From that vantage point it will monitor Earth’s atmosphere, looking for showers of radiation caused by cosmic rays hitting air molecules. Dr Ebisuzaki, however, realised that the characteristics of a telescope designed for this job—namely a wide field of view and the ability to register even fleeting flashes of light—would also be well-suited for spotting small bits of debris as they whizz past the ISS.

Having identified something, the next step is to get it out of orbit—and that is where the zapping comes in… Fire a laser head-on at a piece of space debris for long enough, then, and you can slow it down to the point where its orbit will decay and it will burn up in Earth’s atmosphere.  This idea is not new. But putting lasers into orbit is tricky. Those powerful enough to do the job need lots of electricity and this is hard to deliver with the solar panels from which satellites typically draw their power. Dr Ebisuzaki proposes instead to employ a new, more efficient laser called a coherent-amplification network device, which was developed for use in high-energy physics.

He and his colleagues suggest a three-stage test. The first, with a smaller version of the EUSO and a fairly weedy laser, would serve as a proof of concept. The second would use the actual EUSO telescope and a much more potent laser. Finally, he says, the equipment could be mounted on a purpose-built satellite, from which it would be able to shoot down tens of thousands of bits of space junk every year, thus gradually sweeping the skies clean . 

Orbiting debris: Char wars, Economist Apr. 25, 2015, at 75

Reducing Rubbish: Incinerators in China

waste to energy plant in Shenzhen China built by Keppel Seghers.  Image from http://www.keppelseghers.com/

As China urbanises, its cities are producing a lot more rubbish. They are running out of good places for landfills and are turning instead to burning rubbish, generating electricity at “waste-to-energy” plants.. About 70 such incinerators are now being built, in addition to more than 180 in operation. Cities increased their capacity to incinerate waste tenfold in the decade to 2013, allowing the country to burn more than a quarter of its formally collected urban rubbish. Techsci Research, a consultancy, expects the market for incinerators in China roughly to double in size by 2018, much faster than the pace worldwide.

Cities in Japan and several European countries burn a higher proportion of their rubbish and recycle a lot of the rest (although only Japan ranks ahead of China in tonnes burned per day). Most rubbish in China ends up either in landfills or in unregulated heaps outside cities, where it gives off methane as it decomposes. There is a lot of informal recycling: people pick through rubbish at dumps looking for items such as plastic bottles that can be sold to recycling factories. But the heaps contaminate the soil and groundwater. Plastics flow down rivers into the sea, harming ocean life. A recent study concluded that China was by far the biggest source of plastics in the oceans… Building [incinerators] will require the government to do more to earn the trust of a public that is rightly suspicious of official pledges to protect the environment. Some older incinerators have not burned as cleanly as promised, belching foul-smelling smoke from their furnaces.

The latest generation of incinerators in China may help to overcome public scepticism. Shanghai is the city producing the most household rubbish in the country: 22,000 tonnes a day. Space for new landfills is becoming scarce as existing ones reach capacity, including China’s largest, Laogang, on the coast near the city. Each day about a seventh of the city’s rubbish glides past that landfill by barge to be dumped into two large pits at an incinerator next door. In odourless rooms overlooking each pit, workers use joysticks to manipulate gigantic German-made steel claws a bit like the ones in fairground games used to retrieve sweets and toys. The claws descend and close their jaws, grabbing seven or eight tonnes at each go. The workers then move them up towards the pit’s high ceiling and drop the waste into furnaces built with technology from Germany, Japan and elsewhere.

The waste burns at temperatures of 850°C or higher, hot enough to eliminate toxic dioxin pollutants. The gases heat water to produce steam, in turn driving turbines that generate electricity. On a recent visit to the site, there was no detectable odour outside. Digital displays monitored emission levels of sulphur dioxide, carbon monoxide and other pollutants. Zhang Yi, a senior manager at SMI Environment, a local state-owned enterprise that runs the Laogang furnaces, says its facilities were built to “the strictest standard” in the world. A high proportion of imported technology and a need for careful operation make SMI’s incinerators expensive to build and operate, Mr Zhang says. State-owned companies, he insists, have a special responsibility to the public.

Normally this sort of claim makes Chinese citizens scoff. Many of the factories and mills that have polluted rivers or made skies smoggy are state-owned…Environmental-impact assessments must be done, but these are paid for by the people who are building and approving the projects. Favourable assessments lead to more work and unfavourable ones to less. Neighbours of a planned project are often consulted in a desultory way, despite legal requirements for notices and hearings. The more controversial a project is, the less likely that rules about public consultation will be obeyed, and the more likely that nastier tactics, including hired thugs, will be relied upon to silence critics.

The Laogang incinerator is one of several that burn 3,000 tonnes of rubbish a day, including one in Beijing; the one in Hangzhou will be another. A planned new burner, to be completed in 2017, would make the Laogang facility the largest in the world, burning 9,000 tonnes a day. The goal by then is to increase the share of Shanghai’s household waste that is incinerated from about a third to three-quarters.

Nationally, China’s planners had wanted 35% of urban household waste to be incinerated by the end of 2015…[But]Incinerators are insatiable beasts and must keep being fed rubbish for decades to be economical. The more of them there are, the less incentive there is to recycle, and to produce less rubbish in the first place. But at present, as China’s waste problem keeps growing, the country most certainly needs to keep on burning.

Waste disposal: Keep the fires burning, Economist, Apr. 25, 2015, at 42

United States Military Strategy: 2015 and beyond

X-47B receiving fuel from a 707 tanke while operating in the Atlantic Test Ranges, Apr. 2015.  Image from wikipedia.

The United States [is developing]  a “third offset strategy”… It is the third time since the second world war that America has sought technological breakthroughs to offset the advantages of potential foes and reassure its friends. The first offset strategy occurred in the early 1950s, when the Soviet Union was fielding far larger conventional forces in Europe than America and its allies could hope to repel. The answer was to extend America’s lead in nuclear weapons to counter the Soviet numerical advantage—a strategy known as the “New Look”.

A second offset strategy was conceived in the mid-1970s. American military planners, reeling from the psychological defeat of the Vietnam war, recognised that the Soviet Union had managed to build an equally terrifying nuclear arsenal. They had to find another way to restore credible deterrence in Europe. Daringly, America responded by investing in a family of untried technologies aimed at destroying enemy forces well behind the front line. Precision-guided missiles, the networked battlefield, reconnaissance satellites, the Global Positioning System (GPS) and radar-beating “stealth” aircraft were among the fruits of that research…The second offset strategy,  the so-called “revolution in military affairs” was hammered home in 1991 during the first Gulf war. Iraqi military bunkers were reduced to rubble and Soviet-style armoured formations became sitting ducks. Watchful Chinese strategists, who were as shocked as their Soviet counterparts had been, were determined to learn from it.

The large lead that America enjoyed then has dwindled. Although the Pentagon has greatly refined and improved the technologies that were used in the first Gulf war, these technologies have also proliferated and become far cheaper. Colossal computational power, rapid data processing, sophisticated sensors and bandwidth—some of the components of the second offset—are all now widely available.

And America has been distracted. During 13 years of counter-insurgency and stabilisation missions in Afghanistan and Iraq, the Pentagon was more focused on churning out mine-resistant armoured cars and surveillance drones than on the kind of game-changing innovation needed to keep well ahead of military competitors. America’s combat aircraft are 28 years old, on average. Only now is the fleet being recapitalised with the expensive and only semi-stealthy F-35 Joint Strike Fighter.  China, in particular, has seized the opportunity to catch up. With a defence budget that tends to grow by more than 10% a year, it has invested in an arsenal of precision short- to medium-range ballistic and cruise missiles, submarines equipped with wake-homing torpedoes and long-range anti-ship missiles, electronic warfare, anti-satellite weapons, modern fighter jets, integrated air defences and sophisticated command, control and communications systems.

The Chinese call their objective “winning a local war in high-tech conditions”. In effect, China aims to make it too dangerous for American aircraft-carriers to operate within the so-called first island chain (thus pushing them out beyond the combat range of their tactical aircraft) and to threaten American bases in Okinawa and South Korea. American strategists call it “anti-access/area denial”, or A2/AD.  The concern for America’s allies in the region is that, as China’s military clout grows, the risks entailed in defending them from bullying or a sudden aggressive act—a grab of disputed islands to claim mineral rights, say, or a threat to Taiwan’s sovereignty—will become greater than an American president could bear. Some countries might then decide to throw in their lot with the regional hegemon.

Although China is moving exceptionally quickly, Russia too is modernising its forces after more than a decade of neglect. Increasingly, it can deploy similar systems. Iran and North Korea are building A2/AD capabilities too, albeit on a smaller scale than China. Even non-state actors such as Hizbullah in Lebanon and Islamic State in Syria and Iraq are acquiring some of the capabilities that until recently were the preserve of military powers.

Hence the need to come up with a third offset strategy.….America needs to develop new military technologies that will impose large costs on its adversaries

The programme needs to overcome at least five critical vulnerabilities.

  • The first is that carriers and other surface vessels can now be tracked and hit by missiles at ranges from the enemy’s shore which could prevent the use of their cruise missiles or their tactical aircraft without in-flight refuelling by lumbering tankers that can be picked off by hostile fighters.
  • The second is that defending close-in regional air bases from a surprise attack in the opening stages of a conflict is increasingly hard.
  • Third, aircraft operating at the limits of their combat range would struggle to identify and target mobile missile launchers.
  • Fourth, modern air defences can shoot down non-stealthy aircraft at long distances.
  • Finally, the satellites America requires for surveillance and intelligence are no longer safe from attack.

It is an alarming list. Yet America has considerable advantages…. Those advantages include unmanned systems, stealthy aircraft, undersea warfare and the complex systems engineering that is required to make everything work together.

Over the next decade or so, America will aim to field unmanned combat aircraft that are stealthy enough to penetrate the best air defences and have the range and endurance to pursue mobile targets. Because they have no human pilots, fewer are needed for training. Since they do not need to rest, they can fly more missions back to back. And small, cheaper American drones might be used to swarm enemy air defences.

Drones are widespread these days, but America has nearly two decades of experience operating them. And the new ones will be nothing like the vulnerable Predators and Reapers that have been used to kill terrorists in Yemen and Waziristan. Evolving from prototypes like the navy’s “flying wing” X-47B and the air force’s RQ-180, they will be designed to survive in the most hostile environments. The more autonomous they are, the less they will have to rely on the control systems that enemies will try to disrupt—though autonomy also raises knotty ethical and legal issues.

Some of the same technologies could be introduced to unmanned underwater vehicles. These could be used to clear mines, hunt enemy submarines in shallow waters, for spying and for resupplying manned submarines, for example, with additional missiles. They can stay dormant for long periods before being activated for reconnaissance or strike missions. Big technical challenges will have to be overcome:.. [T]he vehicles will require high-density energy packs and deep undersea communications.

Contracts will be awarded this summer for a long-range strike bomber, the first new bomber since the exotic and expensive B-2 began service two decades ago. The B-3, of which about 100 are likely to be ordered, will also have a stealthy, flying-wing design…

If surface vessels, particularly aircraft-carriers, are to remain relevant, they will need to be able to defend themselves against sustained attack from precision-guided missiles. The navy’s Aegis anti-ballistic missile-defence system is capable but expensive: each one costs $20m or so. If several of them were fired to destroy an incoming Chinese DF-21D anti-ship ballistic missile, the cost for the defenders might be ten times as much as for the attackers.

If carriers are to stay in the game, the navy will have to reverse that ratio. Hopes are being placed in two technologies: electromagnetic rail guns, which fire projectiles using electricity instead of chemical propellants at 4,500mph to the edge of space, and so-called directed-energy weapons, most likely powerful lasers. The rail guns are being developed to counter ballistic missile warheads; the lasers could protect against hypersonic cruise missiles. In trials, shots from the lasers cost only a few cents. The navy has told defence contractors that it wants to have operational rail guns within ten years.

Defending against salvoes of incoming missiles will remain tricky and depend on other technological improvements, such as compact long-range radars that can track multiple targets. Finding ways to protect communications networks, including space-based ones, against attack is another priority. Satellites can be blinded by lasers or disabled by exploding missiles. One option would be to use more robust technologies to transmit data—such as chains of high-altitude, long-endurance drones operating in relays….

As Elbridge Colby of the Centre for a New American Security argues: “The more successful the offset strategy is in extending US conventional advantages, the more attractive US adversaries will find strategies of nuclear escalation.” The enemy always gets a vote.

Weapons Technology: Who’s Afraid of America, Economist, June 13, 2015, at 57.

The B-3 Nuclear Capable Bomber

In a 1994 live fire exercise near Point Mugu, California, a B-2 drops 47 individual 500 lb (230 kg)-class Mark 82 bombs, which is more than half of a B-2's total ordnance payload.. Image from wikipedia

The US Air Force wants to to build a new long-range strike bomber. The B-3, as it is likely to be named, will be a nuclear-capable aircraft designed to penetrate the most sophisticated air defences. The contract [that would be signed by the  US Air Force and  a weapons company] itself will be worth $50 billion-plus in revenues to the successful bidder, and there will be many billions of dollars more for work on design, support and upgrades. The plan is to build at least 80-100 of the planes at a cost of more than $550m each.

The stakes could not be higher for at least two of the three industrial heavyweights… On one side is a team of Boeing and Lockheed Martin; on the other, Northrop Grumman. The result could lead to a shake-out in the defence industry, with one of the competitors having to give up making combat aircraft for good.  After the B-3 contract is awarded, the next big deal for combat planes—for a sixth-generation “air-dominance fighter” to replace the F-22 and F-18 Super Hornet—will be more than a decade away. So Richard Aboulafia of the Teal Group, an aviation-consulting firm, believes it will be hard for the loser to stay in the combat-aircraft business. ..

Usually in a contest of this kind, particularly this close to its end, a clear favourite emerges. Industry-watchers rate this one as still too close to call. That is partly because the degree of secrecy surrounding what is still classified as a “black programme” has remained high. Only the rough outlines of the aircraft’s specification have been revealed. It will be stealthy, subsonic, have a range of around 6,000 miles (9,650km) and be able to carry a big enough payload to destroy many targets during a single sortie. …

The target for the plane to come into operation is the mid-2020s—if possible, even earlier. In part this is because of fast-emerging new threats and in part because the average age of America’s current bomber fleet, consisting of 76 geriatric B-52s, 63 B-1s and 20 B-2s, is 38 years. Keeping such ancient aircraft flying in the face of metal fatigue and corrosion is a constant struggle: just 120 are deemed mission-ready. None of these, except the B-2s, can penetrate first-rate air defences without carrying cruise missiles—and the missiles are of little use against mobile targets.

In the kind of one-sided wars that America and its allies fought in the years after the September 11th 2001 attacks, such deficiencies were not a problem. But during that period China, in particular, has invested heavily in “anti-access/area-denial” (A2/AD) capabilities. These include thousands of precision-guided missiles of increasing range that could threaten America’s bases in the Western Pacific, and any carriers sailing close enough to shore to launch their short-range tactical aircraft….A new long-range bomber that can penetrate the most advanced air defences is thus seen as vital in preserving America’s unique ability to project power anywhere in the world.

Excerpts from Military aircraft: Battle joined, Economist, May 2, 2015, at 55.

They are Nice: China in Latin America

Renminbi banknotes. image from wikipedia

A plan for a…railway across the Amazon, from Brazil’s Atlantic coast to Peru, is among a sheaf of infrastructure projects that China is offering to finance in Latin America. Li Keqiang, China’s prime minister, signed an agreement for a feasibility study for the railway during an eight-day trip through South America that began on May 18th, 2015 in Brazil and took him to Colombia, Peru and Chile…

The same goes for Chinese loans. The $22 billion lent last year outstripped credits from traditional multilateral development banks, according to China-Latin America Economic Bulletin, published by Boston University. Apart from Brazil, the money has mainly gone to Venezuela, Ecuador and Argentina, where it has helped to sustain left-wing governments. Mr Li’s trip suggests a new interest in the business-minded countries of the Pacific Alliance.

Many governments in Latin America have embraced the Chinese dragon as a welcome alternative to the United States and the conditions imposed by the IMF and the World Bank. For a region with huge shortcomings in infrastructure, China’s investment, like its trade, is potentially a boon. But both have pitfalls.  An obvious one is sweetheart deals. In 2014 Cristina Fernández de Kirchner, Argentina’s president, negotiated a currency swap with China, as an alternative to settling her dispute with foreign bondholders. The price is high: the money is tied to 15 infrastructure deals in which Chinese firms face no competition.

Excerpts, The Chinese Chequebook, Economist,  May 23, 2015, at 29