The Banking Executive Magazine - April 2022 Issue

Who Owns World Resources? dollars in damages. In February 2022, Ukrainian government web- sites, including the defence and inte- rior ministries, banking sites, and other affiliated organizations were targeted by distributed-denial-of-ser- vice attacks alongside the Russian in- vasion. United States President Joe Biden has called on private companies and or- ganisations in the United States to "lock their digital doors", claiming that intelligence suggests Russia is planning a cyber-attack on the United States. The United Kingdom's cyber-author- ities are also supporting the White House's calls for increased cyber-se- curity precautions. Russia is a cyber-superpower with a serious arsenal of cyber-tools, and hackers capable of disruptive and potentially destructive cyber-attacks. Experts fear that Russia may go on a cyber-offensive against Ukraine's al- lies. The hacks that experts most fear are: • BlackEnergy - targeting critical in- frastructure attack: In 2015 Ukraine's electricity grid was dis- rupted by a cyber-attack called BlackEnergy, which caused a short- term blackout for 80,000 cus- tomers of a utility company in western Ukraine. • NotPetya - uncontrollable destruc- tion: NotPetya is thought to be the most costly cyber-attack in history and has been blamed on a group of Russian military hackers by the United States, United Kingdom and European Union authorities. The destructive software was hid- den in an update of popular ac- counting software used in Ukraine, but spread worldwide destroying the computer systems of thousands of companies and causing approx- imately $10bn (£7.5bn) of damage. • Colonial Pipeline - cyber-criminal attacks: In May 2021, a state of emergency was declared in a num- ber of United States states after hackers caused a vital oil pipeline to shut down. Social Media Misinformation Facebook has reported a rise in hack- ing and misinformation amid the Russian invasion of Ukraine. Face- book-owner removed a hacking campaign in which Russian-linked hackers attempted to break into the accounts of Ukrainian military offi- cers to upload videos of surrendering Ukrainian soldiers. This is example of a rise in hacking and misinformation amid the Russian invasion of Ukraine. The company also reported an increase in domestic disinformation and propaganda in countries around the world, suggest- ing that tactics pioneered by foreign intelligence agencies are now being used more widely. Rising COVID-19 The World Health Organization WHO warned that war in Ukraine will increase Covid-19 transmission, putting large numbers of people at risk of severe disease. Some experts say that the war in Ukraine and the ensuing flood of refugees to other countries could spur another surge of COVID-19. Adding to the brutal, immediate ef- fects of Russia’s invasion, the Ukrain- ian people are facing an onslaught of infectious diseases. Some threats such as the spread of COVID-19 are immediate, as people huddle in basements, subway stations and tem- porary shelters to protect themselves from bombardments. Without ade- quate water and sanitation, cases of diarrhoeal diseases are certain to rise. IMPACT ON GLOBAL RESOURCES This section presents an analysis of the impact of global war on world re- sources and global economy. Views and perspectives from International Monetary Fund IMF, Organisation for Economic Co-operation and Devel- opment (OECD), United Nations Conference on Trade and Develop- ment UNCTAD, and world experts are overviewed IMF Impact Analysis IMF foresees that Russia’s invasion of Ukraine may ‘fundamentally alter’ the global economic order. The war in Ukraine is hurting the economies of Russia and its neighbour, with both countries expected to experi- ence sharp recessions. But the eco- nomic consequences of the fighting will not only be felt by the parties to the conflict. Sanctions imposed on Russia and the soaring price of en- ergy supplies could also inflict pain on other nations. The International Monetary Fund (IMF) says the war could have a severe effect on the global economy. It expects to cut its growth forecast globally. Beyond the suffering and humanitar- ian crisis from Russia’s invasion of Ukraine, the entire global economy will feel the effects of slower growth and faster inflation. Impacts will flow through three main channels: • Higher prices for commodities like food and energy will push up infla- tion further, in turn eroding the value of incomes and weighing on demand. • Neighbouring economies will face disrupted trade, supply chains, and remittances as well as a historic surge in refugee flows. • Reduced business confidence and higher investor uncertainty will have an impact on asset prices, tightening financial conditions and potentially spurring capital out- flows from emerging markets. Russia and Ukraine are major com- modities producers, and disruptions have caused global prices to soar, es- pecially for oil and natural gas. Food costs have jumped, with wheat, for which Ukraine and Russia make up 30 percent of global exports, reaching a record. Figure 1 shows growing pressures from rising prices for energy, grains, and metals since the invasion of Ukraine, signalling that inflation rates are poised to accelerate. ISSUE 160 APRIL 2022 the BANKING EXECUTIVE 17