Impact on Confidence of War with Iraq - Asymmetric Risks

news release

London, UK - 20 February 2003, 13:00 GMT - At a closed discussion event hosted by VISA this evening, 25 senior executives from the insurance, reinsurance and banking industry will get together to discuss the impact on business confidence of the pending US/UK military action against Iraq and asymmetric threats from Chemical, Biological, Radiological, Nuclear, Digital and Suicide (CBRN-DS) means.

The event is being held under Chatham House rule and the speakers will include Professor Lord Desai, Director of the Centre for Global Governance at the London School of Economics, Bill Emmott, Editor of The Economist and DK Matai, Chairman and CEO of mi2g.

There will also be senior representatives from the House of Lords, Royal United Services Institute, American Institute of Foreign Study, Centre for Environmental Risk, Foreign and Commonwealth Office, Worshipful Company of Information Technologists, the Association of Insurance and Risk Managers (AIRMIC) and specialist law firms.

DK Matai's speech will focus on the unintended global consequences of the war with Iraq. Key points made will include:

"Disaffected groups are beginning to acquire the means to execute asymmetric attacks on the West through CBRN-DS means blended with conventional physical attacks. Whilst we may think in the local context, it is becoming apparent that radicals are thinking in global terms and range from one-man operations, like the Shoe Bomber, to larger and more diffuse terrorist groups that are trans-national."

"There is growing concern about 'Command and Control' digital attacks, which would impact the critical national infrastructure such as: financial services, telecommunications, electricity production and distribution, water storage and distribution, nuclear power plants and gas facilities. This would require extensive insider help and there is evidence to suggest that insiders have already been discovered in some cases who were planted on a long-term basis."

"In recent months, information about critical infrastructure has been ferreted via the Internet and scanning of critical infrastructure components has become more frequent; this has been traced back to IP addresses in Saudi Arabia, Kuwait, Pakistan and Indonesia."

"Sophisticated computer programs used by engineers to find stress points and weaknesses in buildings, bridges and dams had also been found at the tail end of 2001 and early 2002 in computers belonging to suspected Al-Qaeda members in Kabul, Afghanistan. So even if the ability of a terrorist organisation to conduct direct attacks against critical infrastructure is limited, digital attacks can be used as a highly effective reconnaissance tool to enable more effective physical attacks."

"Especially when considering digital attacks, it is unlikely that governments will choose to remain oblivious to such assaults on their citizens and their livelihoods given the economic damage being caused. Successful overt digital attacks - as opposed to scans, attempts or covert attacks - are predicted to follow the trend, albeit more slowly, established over the last seven years and could number between 120,000 and 140,000 worldwide in 2003. Blended attacks - physical attacks synchronised with digital attacks - could materialize in the coming two years. Although new viruses and worms released in 2003 may reduce, the damage caused by a few killer viruses or worms - some politically motivated - will remain in Billions of Dollars."

"If the war with Iraq in early 2003 materialises, USA will remain one of the most attacked countries digitally followed by other NATO member countries and allies. Successful and verifiable attacks against the US are likely to be between 80,000 and 100,000 in 2003."

"There will be increasing consolidation and unity in 2003 between fundamentalist and anti-capitalist hacker groups with a united agenda against Western interests. The Israel-Palestine conflict, the Allies' War on Terrorism as well as the India-Pakistan issue on Kashmir will continue to bring fundamentalist hackers closer to each other. The war with Iraq will accelerate this process."

"As digital crime proliferates in 2003, unsuspecting individuals and small to medium size businesses with broadband access could also become surrogates for increasingly targeted Distributed Denial of Service (DDoS) attacks as well as providing cover for terrorists."

"The vacuum left behind post the removal of Saddam Hussein's power base in Iraq could trigger political power fluctuations around Gulf countries such as Saudi Arabia, Kuwait and Bahrain as well as Iran and Central Asia. This would affect energy prices, business and consumer confidence. It may well spur a wave of asymmetric CBRN-DS type attacks against the West."

"Post war Iraq is a huge challenge for the leadership of Western democracies. Images of millions of dislocated Iraqis or their lack of appropriate protection post the bombings from death or disease would not help the perspective of a just war."

"It would be critical for any participating leader to have dealt with the Iraq situation successfully without causing severe economic disruption - from terrorism or loss of business confidence - at home."

"Equating hacker groups with terrorist organisations that kill people with powerful explosives may not be justified. Having said that, the biggest threat could still be a blended threat: digital attacks that cripple emergency response, transport or telecommunications with some insider help, could be employed by terrorists in conjunction with conventional or CBRN-DS attacks to magnify the effects of their intended disruption and damage."

On the issue of timing, DK Matai will state, "It is only a matter of time. Blended global threats of CBRN-DS type terrorism coupled with conventional attacks from fundamentalist groups will materialize in the West and it will be difficult to predict the full impact of such attacks on health care, financial services, government services, transport and distribution."

"Asymmetric warfare relies on global mobility and access to local specialist knowledge. We need to be extremely alert in order to thwart globally organised attacks targeting the West."

[ENDS]