The issues raised by the changing nature and rising volume of cyberattacks have called into question how quickly states are evolving to defend themselves. Halfpoint Images
The issues raised by the changing nature and rising volume of cyberattacks have called into question how quickly states are evolving to defend themselves. Halfpoint Images
The issues raised by the changing nature and rising volume of cyberattacks have called into question how quickly states are evolving to defend themselves. Halfpoint Images
The issues raised by the changing nature and rising volume of cyberattacks have called into question how quickly states are evolving to defend themselves. Halfpoint Images


The Ukraine war is fuelling and obscuring cyberattacks


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February 06, 2023

Cyberattacks have largely fallen out of the headlines in the year since the war in Ukraine started, but the dangerous crossover between the two threats is increasingly apparent in the scale of disruption around the world.

The former Dubai-based teacher Mark Steed found himself on the front line of these battles a little more than two years ago, and has since spoken out on the pitfalls facing an institution that finds its data locked away. At his Hong Kong international school, he decided not to devote scarce resources to paying the ransomware demands, even if that complicated the recovery operation facing his team.

“The attack encrypted our local servers, preventing access to all of our admin systems that we hosted on-site, including our finance and HR records,” he wrote in last week’s Times Educational Supplement. “Given that the school was operational and there had been no data loss, we decided not to respond to the hackers’ demands that we pay them for the ability to unencrypt our files, nor did we report the incident to the police.”

As cyberspace becomes more and more confrontational, it is not just headmasters at schools who are trying to work out appropriate responses. The war in Ukraine has seen a speeding up of the aggression against internet users there while also hogging the attention that might otherwise be devoted to these trends.

Last week, there was a major attack on the City of London that originated in Russia. The divisions between Russia and the West are such that there is slim to no co-operation in these matters. The sanctions and other policies imposed as a result of the Ukraine conflict means there is no realistic prospect of this situation improving any time soon. Indeed, the opposition might be the case.

Last week, there was a major cyberattack on the City of London that originated in Russia. Reuters
Last week, there was a major cyberattack on the City of London that originated in Russia. Reuters

The most recent attack took place against the vital infrastructure underpinning the City of London. Lockbit, a Russia-based hacker, targeted trading software provider Ion Group that provides what’s described as the plumbing systems that connect trading of shares, debt and derivatives. A total of 42 clients in financial markets lost data and one City insider said another escalation could take out “most of the derivatives trading” in London.

The same hacking group caused major disruption with a cyberattack against Royal Mail, a British multinational postal service and courier company, last month. Local government is another target, with Hackney Council telling Wired magazine that it had not fully recovered from an October 2020 attack. In the same year, the unitary authority of Redcar and Cleveland lost £11 million ($13 million), forcing staff to revert to paper to communicate for a time.

Over in the US, disruption targeting hospitals and health care has been a major issue and has been traced to the same sources.

How deep the links are between cyberattacks and current trends in war and diplomacy is under intense scrutiny

How deep the links are between these attacks and the current trends in war and diplomacy is under intense scrutiny. There is no mistaking that link in Ukraine itself, where a hacker group known as Sandworm has been directing incessant attacks. These include of variants of programmes with names such as CaddyWiper, HermeticWiper, NikoWiper and the energy sector-specific SDelete.

Viktor Zhora, the deputy head of Ukraine’s cyber body, told a meeting in London last week that the cyber offensive his country faced was linked to the military action. “The quantity of the cyberattacks on Ukraine tripled last year, and their considerable share was co-ordinated with the other directions of military activities, such as missile strikes,” he said.

The issues raised by the changing nature and rising volume of attacks have called into question how quickly states are evolving the doctrines of what is legitimate and legal cyber defence and offensive operations.

Take the UK’s efforts to cultivate a role as an advocate for responsible state behaviour in cyberspace. Within the western alliance structures, this is crucial to the development of collaborative efforts to improve global cybersecurity.

One question posed in London is if planners can develop a variation of its existing doctrines for offensive cyber operations in which it acknowledges the existence of special capabilities but does not say anything about these. One former official describes this as the Ronan Keating approach of "saying it best when saying nothing at all".

UK legal officials have opened the space for this approach by drawing a line against foreign cyber operations that makes a political definition of sovereignty the determining factor. If the UK is coerced into a situation that causes it systematic problems by another state, it should have the right to act to reverse that situation.

In other words, the scale and effect of a foreign cyber operation that disrupted its freedom to control vital matters, such as infrastructure, health or the economy, would all be factors in determining how the country responded. As a corollary, these factors would also act as restraint on the UK and shape international co-ordinated actions.

Scaling up cyber policies is an urgent challenge. The issue is also obscured from view, just as much as the damage done by ongoing attacks is overshadowed by the war playing out in Ukraine.

The dividing line between these two dangerous problems facing the world is increasingly hard to discern.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Getting there

The flights

Flydubai operates up to seven flights a week to Helsinki. Return fares to Helsinki from Dubai start from Dh1,545 in Economy and Dh7,560 in Business Class.

The stay

Golden Crown Igloos in Levi offer stays from Dh1,215 per person per night for a superior igloo; www.leviniglut.net 

Panorama Hotel in Levi is conveniently located at the top of Levi fell, a short walk from the gondola. Stays start from Dh292 per night based on two people sharing; www. golevi.fi/en/accommodation/hotel-levi-panorama

Arctic Treehouse Hotel in Rovaniemi offers stays from Dh1,379 per night based on two people sharing; www.arctictreehousehotel.com

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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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if you go

The flights

Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes. 

The hotels

Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes. 

When to visit

March-May and September-November

Visas

Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.

Updated: February 06, 2023, 7:00 AM