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Economic espionage and the intelligence community

Economic Espionage is the unlawful or clandestine targeting or acquisition of sensitive financial, trade, or economic policy information; proprietary economic information; or critical technologies.

US Economic Espionage Act, 1996

1) Closed societies have an intelligence advantage in their competition with open societies. We saw this in the competition between East and West Germany, and we see it today in the competition between China and the Western world.

2) All major Western countries engage in industrial espionage, and at the same time are victims of it. An overview of the threat to US national security says:

The United States continues to be threatened by the theft of proprietary economic information and information on critical technologies. The risks to sensitive business information and advanced technologies continue to increase significantly as foreign governments - both former adversaries and allies - focus their espionage resources in ever-greater numbers on the private sector. They are seeking not only technological data but also financial and commercial information that will provide their companies with a competitive edge in the global economy.

The French, Germans, and Japanese say the same.

3) A large majority of intelligence today is gathered via open sources, the most common forms of which are:

a) requests for information

b) solicitation and marketing of services

c) acquisition of technology and company takeovers

d) visits by foreign nationals

e) conferences

f) internet activity (cyber-attacks and exploitation)

g) exploitation of joint ventures

4) Cover intelligence-gathering activities include:

a) acquisition of export-controlled technologies

b) theft of trade secrets and critical technologies

c) agent recruitment

5) The intelligence community has four major tasks: collection, analysis, covert action, and counterintelligence. Counterintelligence is a problem largely created by the very existence of these organizations. Covert action (i.e. propaganda or psychological warfare, political operations, economic operations, and paramilitary operations

- coups d'etat, assassinations) is not compatible with modern democratic values, even if these activities are still permitted by our laws.125 Analysis has traditionally been the weakest link in the intelligence community.126All that is left is collection; but for how long? Open-source intelligence collection is in most cases better done by private firms.

6) The intelligence community and its supporting institutions often damage the world's business climate by creating unnecessary tension. The Echelon project was designed for non-military objectives. Economic espionage is a serious problem, but there are no reliable figures. Most companies never report it. To do so is considered bad for business, in case the story leaks to the media. It is embarrassing and shows weakness, or so managers often believe.

7) When you leave China, a government official with the customs service will go through all your belongings with a fine-tooth comb, removing anything that even smacks of competitive technology. Likewise everything of value which is imported is registered and documented. We are too naive about our competitors.

8) If you think you are being monitored in the West, this is nothing compared to the situation in Russia, where all Internet service providers are connected to FSB (the State Security Service), by fibre-optic cable, and FAPSI (the Federal Agency of Government Communications and Information) runs the entire communications infrastructure.

9) In the Soviet Union it was Gorbachev who approved the stepping-up of industrial espionage.127 In the USA it was the Clinton administration. His people used secret agents in trade negotiations, for instance with Japan. This may come as a surprise. After all, Clinton wanted nothing to do with the CIA. In two years, it is said, he received his chief intelligence adviser and head of the Agency, James Woolsey, just twice. According to insiders he thought the agency incompetent, and preferred to find his information in the New York Times.

10) The CIA has largely been a flop, a sad history mainly of mistakes.128 And the military are enjoying that situation. Do not expect them to be unduly supportive now that the CIA are having successes with their armed drones, killing top al-Qaeda and Taliban leaders.

11) The NSA (the National Security Agency, in charge of communications intelligence) is not worth the money spent on it (about $8bn annually). They have all the information in the world, but appear not to know what they have got until it is too late. The organization has also fallen hopelessly behind on technology (see e.g. Bamford 2002).

12) Intelligence services and terrorist groups have a long history as "Siamese twins" (Todd and Bloch 2003: 12-13). Few examples have had happy endings. The "War on Terror" looks like an own-goal cock-up. Bin Laden was once a CIA recruit for the Afghan War. Most terrorists have been Saudi-allied, and Saudi intelligence supports jihadist schools in Afghanistan and Pakistan, one of which was connected to the Mumbai killings in 2008.

13) At the end of the day, these services have been increasing world tension, and costing the taxpayers too much. Instead they must be made to serve society at large. Their political aspirations should be replaced with realistic concerns of security. Economic intelligence is best left to private organizations which are more on time with the world of business.

14) There are no good spies. All of them are people who have betrayed their country or their organization, having been sought out by foreign agents and most often bought by money; they are driven by greed, or sometimes by frustration or a wish for revenge. It is not a pretty business. It is an unglamorous profession.

Important economic regions of the future

1) There are six economic super-regions. These are: the European Union, the South Asian Association for Regional Cooperation (SAARC), the Association of Southeast Asian Nations (ASEAN), NAFTA in North America, MERCOSUR in South America, and the African Union (AU).

2) The zone of economic prosperity in Europe is shifting eastwards and settling in the north-east, with Berlin once again as its centre.

3) The strongest zone of prosperity and ambition will be the axis Hamburg-Stockholm-Helsinki-Berlin. Berlin will be the capital of this new cross-national region, as it was in the 1930s. It is the revenge of the Baltic region, and of the Prussians and the Hohenzollern monarchy, after their defeat by Napoleon.129 As a symbol of this regained strength the Germans are currently rebuilding the Berliner Stadtschloss, the principal Hohenzollern residence, from the ground up.

4) Another strong zone of prosperity is being established on the Frankfurt-Prague-Dresden-Budapest-Vienna axis.

5) A third strong zone will be the northern Adriatic states together with Bavaria and Baden-Württemberg. This is the Austrian-Hungarian-German Catholic world.

6) Among the more attractive metropolitan areas for business in Europe we find Frankfurt, Paris, Greater London, the Dutch "Randstad" (Amsterdam-Rotterdam-the Hague-Utrecht) for logistics, Milan, Barcelona, Madrid, Brussels, Geneva, Copenhagen-Skäne, and Stockholm-Helsinki.

7) The much-discussed Blue Banana (London-Amsterdam-Brussels-Luxembourg-Frankfurt-Stuttgart-Zürich-Milan), and the Sunbelt, stretching from Valencia along the French Mediterranean coast to the Italian border, are political constructions rather than economic realities (Gowland 2000: 32). Be aware of the difference.

The age of petroleum

1) The sooner we give up the fossil fuel economy the better. All the corrupt, despotic, narcissistic regimes in the Middle East will then falter. Few will miss them, except maybe Harrods in London and the community of luxury service establishments around the world.

2) At the end of 2005 it was estimated that 74 per cent of current proven oil reserves were to be found in seven countries:130

• 22% in Saudi Arabia

• 12% in Iran

• 10% in Iraq

• 9% in Kuwait

• 8% in the United Arab Emirates

• 7% in Venezuela

• 6% in Russia

3) Statistics from the year 2000 on provisional findings in the Caspian Basin may alter these figures (Klare 2001: 86):

• Kazakhstan would become no. 5, just above the United Arab Emirates, with 92 bbl (billion barrels)

• Turkmenistan would become no. 6, just above Venezuela and Russia, with 80 bbl

• Azerbaijan would become no. 9, just above the USA, with 32 bbl

These are only possible reserves, proven reserves are substantially lower.

4) Vulnerable geographical chokepoints for oil transport:

• Strait of Hormuz (in the Persian Gulf)

• Malacca Strait (between Malaysia and Indonesia)

• Bab el Mandeb (between Yemen and Eritrea)

• Suez Canal (northeastern Egypt)

• Bosphorus (Turkey)

• Panama Canal (Panama)

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