BRIC, BRICS, BRICSI The World Financial Order’s Growing Challenge

BEIJING â€" First it was called BRIC, a group of emerging economies thought up in 2001 by a Goldman Sachs economist, Jim O’Neill, made up of Brazil, Russia, India and China. Then it acquired an “s” for South Africa and become BRICS. Now there’s talk of Indonesia, which has a strongly growing economy, maybe wanting in: BRICSI, anyone

As the leaders of the BRICS nations met in South Africa this week and announced plans to set up a development bank, five-year infrastructure investment sums, plans for a financial reserve and a string of councils to add business and intellectual heft to the group, some are wondering if Indonesia should be in.

“You can add it as a sixth BRICS, perhaps, making it BRICSI,” PK Basu, regional head of Maybank in Singapore, told the BBC.

Here’s the argument, from the Jakarta Post: Indonesia is the strongest Southeast Asian economy.

“McKinsey & Co. predicts that Indonesia will be the seventh-largest economy in the world and will add 90 million people to its middle class by 2030. There are 45 million middle-class Indonesians today, and the country ranks as the 16th largest economy in the world,” the newspaper wrote.

For now, though, it’s called BRICS, known in Chinese as “Gold Bricks” (and China is a major, perhaps the major, driving force behind it, some commentators say.) The concept of BRICS has been viewed skeptically by some who are asking what these nations actually have in common. But there is a sense it may be strengthening as a group - and growing as a challenge to the established world financial order, crafted principally by the World Bank and the International Monetary Fund.

That sense of change was on view in South Africa this week when the group held its fifth summit in Durban and agreed to some key things, even naming figures.

Infrastructure investment over the next five years: about $4.5 trillion would be needed, as Xinhua, the Chinese state-run news agency reported from Durban.

A figure for the financial reserves, called a Contingent Reserve Arrangement, would initially be $100 billion, Xinhua reported.

Also in the works are a BRICS Business Council, to provide business-to-business links within the group; a BRICS think-tanks council, to get ideas rolling; a BRICS academic forum as a way to promote specialist dialogue. (India seemed especially keen on this, with its president, Manmohan Singh, urging it at the meeting, according to Xinhua.)

How much of this is a vehicle for Chinese ambitions China has long complained that the current world financial architecture is too American and European-focused, and said it wants a bigger voice.

Apple Daily, a Hong Kong and Taiwan-based Chinese-language newspaper, reported that the currency reserve would be heavily financed by China - to the tune of 41 percent of its assets, or $410 million. That has its own logic - China is after all the world’s second-largest economy.

The report quoted a Peking University economics, Xia Yeliang, as saying that China is putting up the money to win influence.

“China is doing it to increase its say, it’s playing the part of investor in many international organizations in the hope of being able to formulate things, even rewrite the rules of the game,” Mr. Ye was quoted as saying.

In another sign of change, China and Brazil agreed in Durban to a $30 billion currency swap, a kind of an insurance policy, to be used to finance trade in case of another global financial crisis such as the one that saw dollar liquidity dry up starting in 2008.

Meanwhile, Indonesia

In January, its trade minister, Gita Wirjawan, noted that Indonesia did not want a status that it did not deserve, the Jakarta Post reported. But the country had reached the same economic standards as the BRICS countries, Mr. Wirjawan told a panel discussion at the annual gathering of the World Economic Forum in Davos, Switzerland, the newspaper wrote.

Spies and Big Business Fight Cyberattacks

LONDON - Britain’s intelligence services, working alongside security experts from private companies, are setting up a secret control center in London to combat what the head of the country’s domestic spy agency has described as “astonishing” levels of cyberattacks.

The existence of the so-called Fusion Cell was due to be confirmed on Wednesday in a statement on the government’s strategy to boost information sharing in an expanding cyberwar against online attackers.

A team of security analysts at an undisclosed location will monitor attacks on large screens and provide details in real-time of who is being targeted, according to the BBC.

The British initiative, which also includes the creation of a social network-style web portal to facilitate information exchange, is the latest in a series of international measures to combat what is seen as the growing threat of cyberattacks to both business and government networks.

President Obama last month signed an executive order to increase information sharing about cyberthreats between the government and private companies.

“We have seen a steady ramping up of cybersecurity threats,” Mr. Obama said in a recent interview. “Some are state sponsored, some are just sponsored by criminals.”

Jonathan Evans, the outgoing head of MI5, Britain’s domestic intelligence agency, made a similar point ahead of last year’s London Olympic Games.

“Vulnerabilities in the internet are being exploited aggressively not just by criminals but also by states,” he said in a rare interview. “The extent of what is going on is astonishing.”

The victims are said to include big companies. The BBC said one major London listed company had lost the equivalent of $1.2 billion as a result of a cyberattack from a hostile state.

Some 160 companies â€" from the financial, defense, energy, telecommunications and pharmaceutical sector â€" have signed up to a pilot program for the British government’s information sharing initiative since it was launched last year.

The European Union, meanwhile, is studying proposals for greater information sharing among the 27-member alliance following a series of high-profile cyberattacks directed at eBay, PayPal and Diginotar, a Dutch Internet certificate company.

Despite increased international attention to a growing cyberwar, some skeptics believe the threat is being hyped by governments and by companies involved in an increasingly lucrative and pervasive security industry.

“Anything that uses ‘cyber’ in its title is a con and should be laughed out of the room,” according to Glynn Moody, blogging at ComputerWorld UK this week.

“Yes, attacks take place, but the fact that they take place across the Internet is no different from those using any other technology,” wrote Mr. Moody, an “open source” expert.

“Trying to claim that the ‘cyberthreat’ is somehow qualitatively different is merely a demonstration of the abiding ignorance and fear that afflicts our rulers when it comes to the digital realm.”

In the United States and elsewhere, plans to combat the threat have raised privacy concerns and accusations that governments are overreacting.

“A reminder is in order,” Thomas Rid wrote at Foreign Policy this month. “The world has yet to witness a single casualty, let alone fatality, as a result of a computer attack.”

Mr. Rid, a London University war studies expert, said private computer security companies were keen to pocket government money earmarked for cybersecurity. “And hype is the means to that end.”

The cybertrend has already been spotted by investors. The U.S.-based Investment U Web site said this week it had spotted “a great investment opportunity” back in 2011.

“Fast forward to the present,” Investment U’s Jason Jenkins wrote. “Cyber stocks are finally starting to move. And the cybercrime issue has exploded - not just in terms of domestic fraud, but it has now been elevated to national security problem No. 1.”

The potential opportunities were spotted by the British government as it prepared to announce its new Fusion Cell.

“Businesses that take cybersecurity seriously can gain commercial advantages from doing so,” James Brokenshire, the British minister for security, said earlier this month, adding, “The UK can export expertise through the growth of a vibrant UK security industry.”

A Museum With a View: Exploring Hong Kong’s World of Water

HONG KONGâ€"If you arrive at Hong Kong’s international airport on Lantau island and take a cab or bus into the central district on Hong Kong island, you can’t help but notice the sheer number of ships and boats in the water. The seas around Hong Kong draw vessels from all over the world and thousands arrive every year.

The newly reopened Hong Kong Maritime Museum explores East Asia’s inextricable link to the water, putting Hong Kong’s maritime story into context regionally and internationally, as the museum puts it.

The museum officially reopened last month on Central Ferry Pier 8 in the heart of Victoria Harbor.

It first opened in 2004 in Murray House, a 19th-century building that was moved to Stanley, an area along the southern coast of Hong Kong island somewhat removed from other cultural attractions found in the Central and Kowloon districts.

Now, the government of the Hong Kong Special Administrative Region has provided the space on the central pier and some funding for staff salaries for the first several years. The rest of the museum’s costs are covered mainly by donations, including those of prominent shipping companies. Each of the galleries in the museum is supported by a shipping company or a person connected to shipping, according to Robert Trio, one of the principal consultants who worked on the reopening.

The galleries are divided onto three well-organized levels. Starting on the lower floor, visitors receive an introduction to ancient Chinese culture with the oldest item on display, a ceramic model boat that dates from the Han Dynasty. Other galleries include everything from depictions of maritime culture in fine art across the centuries (including loans from other museums) to 19th- and 20th-century technology used in diving and sailing to hands-on displays that allow visitors to sound bells and horns from ships. (A tip to visitors: avoid standing directly in front of them while sounding!).

The museum’s collection has over 5,000 items, an array that can be overwhelming but also leave a visitor wanting to know more. Who, for example, was Philo McGiffin, a few of whose belongings are on display He was an American naval captain, Philo McGiffin, who lived in China in the late 19th century, but his significance remains unexplained.

But as a general overview of maritime culture, it’s hard to imagine a more engaging and appealing space. Its staff is knowledgeable and its resource center is open to both scholars and the public, according to Kitty But, a librarian at the center.

On the main floor large windows, directly over the harbor, are framed by a beautiful figurehead above and a reproduction of a map on the carpet below. It’s a spectacular view and a good reminder of just how close to the sea you are in Hong Kong.

A highlight of the collection is a painted scroll known as “Pacifying the South China Sea” (its original name has been lost, along with that of the artist). Painted in the 19th century, its colorful images tell the story of piracy and its decline in southern China after the arrival of a governor general, Bailing. An interactive wall display allows visitors to zoom in digitally on particular areas of the scroll and read sections of a related Chinese text. In another room of the museum, a 360-degree screen animates parts of the scroll, to an audio accompaniment.

There are more than 50 interactive touch screens, in both English and Chinese, in the museum that allow visitors to learn more about specific items in the collection. The building includes a gift shop and eventually will also have a cafe.