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Cybersecurity threats to cost organizations in Asia Pacific US$1.75 trillion in economic losses

As ASPAC's financial services players seek to better engage with customers via platforms, exciting new markets and revenue streams are opening up. Digitization of the business and operating models not only creates business opportunities, but also improves efficiency and reduces the cost-to-serve.

Organizations' security functions are highly engaged with their digital transformation agendas, in ASPAC 67 percent compared to the Americas 59 percent and EMA 50 percent. Technologies like robotic process automation, cognitive, AI and blockchain are starting to demonstrate their value in areas such as broking, insurance underwriting and banking credit risk. Customers recognize the many benefits of digital banking but are also attuned to the downsides of invasion of privacy and will judge harshly any organization that doesn't respect and value their privacy.

Cyber teams should therefore be involved early in digital transformation programs, to ensure that security and privacy are built into systems and controls as an essential element of the way financial services companies do business, with seamless cyber security an integral component of the trust and value proposition.

According to the Consumer Loss Barometer report , a far greater proportion 48 percent of financial services businesses in ASPAC are worried that legacy infrastructure could raise the threat of cyber-attacks and breaches compared to 31 percent in EMA and 18 percent in Americas. The move to the cloud is a telling moment for governance and control of technology, with the opportunity for a clean break from the increasingly unmanageable past.

By drawing a line in the sand and migrating to cloud-based services, like infrastructure as a service IaaS , platform as a service PaaS and software as a service SaaS , enhanced cyber capability and maturity can be accessed from the right suppliers. It's therefore important to consider smarter ways to manage vendors through better controls - including mandatory requirements for cyber-related capability through the selection process. Greater use of automation can help improve monitoring of vendors, while cyber focused data analytics can identify major risks and inform continuous improvement in cyber security.

A successful cyber journey also calls for an investment in people. Seven out of ten security executives in the region report difficulties in attracting and retaining talent - significantly more than in the Americas 51 percent , Europe, Middle East and Africa 52 percent. The increasing economic and strategic weight of Japan and China, for instance, can be seen as a factor which has contributed towards their growing willingness and ability to play more active and stimulatory roles as institutional contributors and even innovators.

At the same time, however, economic growth has afforded many regional governments the option of increasing national defence expenditure. The onset of the —98 Asian financial crisis resulted in a temporary slowing of these startling trends in regional arms acquisitions and, as noted previously, took the wind out of Asia-Pacific security cooperation in the process. However, most regional countries have since resumed increasing defence budgets, giving rise to renewed apprehensions that competitive arms processes if not a regional arms race are currently re-emerging.

As Robert Hartfiel and Brian Job have recently concluded:. In both Northeast and Southeast Asia, resources are being directed towards externally oriented weapons systems, including submarines, surface ships, fighter aircraft, and missiles of all types. This strongly suggests competitive arms processes that are heavily weighted towards types of weapons that destabilize the military balance.

Such a conclusion merits more careful, sober analysis by political decision makers in the region in order to reduce the likelihood of confrontation and conflict. This finding, while unsettling, could also potentially augur well for regional security cooperation. Fourth , the continued persistence of traditional security concerns—such as the prospect of a destabilising arms race—has been complicated by the increasing prevalence and potency of a range of non-traditional security challenges including international terrorism, transnational crime, environmental issues and disease-based threats.

Moreover, as the continuing North Korean nuclear crisis and plight of a perpetually starving North Korean population demonstrate all too well, there is a growing awareness as to the interdependence between these traditional and non-traditional security agendas—a realisation which has, in turn, fundamentally re-cast the dynamics of regional security cooperation. Finally , while still in a nascent phase of its evolution, the desire to realise the potentially powerful idea of an East Asian community has gone some way towards contributing to the growth in regional security cooperation.

At the Track 1 level this has been reflected in the creation of a number of high-profile institutions, including the EAS. It is a trend that is also being mirrored at the Track 2 level, as evidenced over recent years in the establishment of the NEAT and its Japanese competitor, the Council on East Asian Community.

The Asia-Pacific Region

On the agenda were 1 world and regional economic development, 2 global trade liberalization, 3 opportunity for regional cooperation in specific areas and 4 future steps for Asia-Pacific Economic Cooperation. As a result, agreement was reached to hold the meeting on a continuous basis as well as Ministerial Meeting to promote the Uruguay Round. Agreement was reached also on the following principles for promoting cooperation in the region: 1 that cooperation is outward-looking; 2 that diversity is respected and cooperation is expanded by stages; and 3 that participating countries stand equal and be mutually beneficial.

The meeting agreed to carry out 7 cooperative projects which were review of trade and investment data, trade promotion, expansion of investment and technology transfer in the Asia Pacific region, Asia-Pacific multilateral human resource development initiative, regional energy cooperation, marine resources conservation and telecommunications. It was reconfirmed that the cooperative projects are outward-looking and contribute to the further development of the world economy.

They issued a joint communique to express their determination to conclude the Uruguay Round before the end of , and reached a consensus to start talks with China, Hong Kong and Taiwan over the possibility of their joining in the APEC at the Third Ministerial Meeting or as soon as possible there after. The 3rd meeting is scheduled to be held in Seoul, to be followed by the 4th and 5th meetings respectively in Thailand and the United States. Japan, as a constituting nation of the Asia-Pacific region, will make active contributions to the APEC's cooperative projects to enhance the stability and development of the region.

The cooperative projects should proceed steadily with due consideration to the wide gapps existing in the level of economic development among the countries and to the cultural and social diversity in the region. On the Korean Peninsula, the basic structure of severe political and military confrontation between North and South over the demilitarized zone remains unchanged. It concluded an agreement with the Soviet Union in December to establish consulates in each country albeit under some limited conditions and the efforts led to an ROK-Soviet summit meeting in June Such a change is expected to accelerate the flow of international politics in Northeast Asia and eventually exert a favorable thrust to a peaceful settlement of the problem of the Korean Peninsula.

The political storm subsided after former President Chun testified in the National Assembly in December and Chung Ho Yong the former Minister of Defense , who was in charge of the suppression of the Kwangju incident, resigned as an Assemblyman. Moves toward political reformation, which had been simmering beneath the surface, surfaced all at once.

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The ruling Democratic Justice Party, which failed to win a majority in the National Assembly general election in April , was suffering from the so-called "small ruling party and large opposition" situation that put the party in a difficult position to manage the National Assembly and the political situation. The Democratic Justice Party joined the merger on January 22 giving birth to the ruling Democratic Liberal Party with a comfortable majority.

The Party for Peace and Democracy President Kim Dae Jung , which was left out of the grand coalition of the ruling and opposition parties, was vehemently opposed to the merger. The Government party with a stable majority was beset with partisan feuds and mounting public criticism over the three-party merger.

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A public opinion poll conducted at the end of the same month indicated a sharp fall in the approval rate of the ruling Democratic Liberal Party, even below those of opposition parties. But the growth rate slowed down to 6. Responsible for the turnaround of the South Korean economy were labor disputes that intensified by the democratization process in the country.


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Wages rose steeply while strikes slowed down production. To make matters worse, export price competitiveness declined by the won's appreciation against the dollar. At the beginning of May, the Korean Government faced the "total difficulties," as it was called, or a situation in which a political impasse was compounded by heaps of problems such as soaring land prices and stock market crash.

The South Korean Government has been trying hard to overcome the difficulties: President Roh visited Japan, and materialized a Summit meeting with President Gorbachev of the Soviet Union, and a number of remedial measures were introduced such as the "special complementing measures to control speculative investment in real estate and stabilize commodity prices" and the "stock market stabilizing measures.

The ROK has made eye-opening progress in expanding exchanges and establishing diplomatic relations with socialist countries under President Roh's "Nordpolitik. And when a delegation led by Chairman Kim Young Sam of the Democratic Liberal Party visited the Soviet Union in March , it is believed that a basic agreement was reached with the Soviets to normalize their diplomatic relations in the near future.

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In addition, in March , it established for the first time diplomatic relations with Mongolia, an Asian socialist country. China takes a cautious stance concerning opening diplomatic relations with the ROK, taking into account the fact that North Korea promptly supported the Chinese Government's actions regarding the June 4 incident. Despite trade friction and other problems entailing from its economic growth, the ROK has steadily strengthened its relations with nations in the Free World.

An announcement was made in January that the U.

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But U. A focal point sticking between the two countries will be perhaps the readjustment of their policies over burden-sharing of the expenses relative to the U. President Roh's state visit to Japan, postponed twice for reasons on the Japanese side, took place from May 24 to 26 in He was the second South Korean head of state to visit Japan following former President Chun's visit 6 years ago, in September President Roh's visit has laid problems arising from past history, and contributed greatly to the building new Japan-ROK relations that promote the two countries, the collaboration from a global viewpoint toward the 21st century.

In reference to the past of the two countries, the Japanese Emperor said at the imperial banquet held in honor of the South Korean President "I think of the sufferings your people underwent during this unfortunate period which was brought about by my country and cannot but feel the deepest regret. The leaders of Japan and the ROK confirmed that both countries would join hands in promoting cooperation in the Asia-Pacific region, the Uruguay Round, and assistance to the developing countries, and that they would take part in the formation of the new world order.

In addition, an agreement on the cooperation in the field of nuclear energy concerning intensification of cooperation in the field of peaceful uses of nuclear energy was signed. Japan and the ROK also agreed to promote exchanges in basic sciences between the two countries, including Japan's technological cooperation in the Center for Evaluation of the Performances of New Materials and in the field of prevention of occupational diseases. Furthermore, both countries signed an agreement on maritime search and rescue and emergency refuge of vessels.

The Japanese and ROK Governments continued to discuss the problem of Korean residents third-generation and after in Japan Note as one of several problems stemming from past relations between the two countries since December , based on the agreement on the legal status of ROK nationals residing in Japan. Both Japan and the ROK are required to make efforts to reduce the imbalance and expand the total trade volume, Many Japanese subsidiaries in the ROK started to withdraw from the country having been unable to cope with steep wage increases and intensified labor disputes.


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In some instances, the closing Japanese companies were involved in disputes with labor unions over terms of the shutdown. Labor union representatives visited parent companies in Japan demanding the resumption of operation of firms in Korea. At last, these problems have been settled amicably thanks to the efforts by the parties concerned. With the ROK's liberalization of its people's travel overseas, exchange and flow of people between the two countries have increased since January The number of tourists between the two countries reached 2 million in total.

In light of such a trend, Japan and the ROK signed the "Note on Simplification of Visa Issuance Procedure," on the occasion of President Roh Tae Woo's visit to Japan, which provides for the waiving of a visa fee and the issuance of a multiple-en-try visa effective for a year. As for the territorial dispute on Takeshima Island between Japan and the ROK, the Japanese Government has repeatedly protested to the ROK Government because it is clear both on legal and historical grounds that Japan has the exclusive rights on the island.

In North Korea, the leadership setup with President Kim If Sung at its center has been maintained firmly, and the preparations for succession of power by his son, Secretary Kim Jung II, have been in progress since the 6th party convention in Recently the evidences have often seen that Secretary Kim Jung If is effectively taking over leadership of the domestic administration across the board.

A matter of discussion now is even the timing of the transfer of power. However, Kim Jung II assumed no other positions in state agencies showing there has been no fundamental change yet in the country's leadership structure. It appears that the North Korean economy is still suffering from difficulties, widening the gap with the ROK. President Kim said in his New Year address that the country's economic goal in was output increases in electricity, coal and metal steel industries as well as light industries and in the field of consumer goods.

Responding to this, the Party's Central Committee meeting held in January decided to "utilize the existing economy, and increase production and economize in every sector of the people's economy as much as possible" as a priority policy for the construction of economy "Struggle for Output Increases and Economization" was adopted as a slogan. North Korea which has been an ally of China and the Soviet Union has traditionally tried to promote close relations with both countries, keeping a balance between them. However, attention is being focused on possible effects of the recent rapid improvement of the ROK-Soviet relations on North Korea's relationship with the Soviet Union.

When the realization of the ROK-Soviet summit meeting was announced a spokesman of the Foreign Affairs Ministry of North Korea warned that the summit would create "a serious political problem that may perpetuate the Korean division," but the statement stopped short of directly criticizing the Soviet Union by name.

Asia/Pacific Peace and Security Issues

As for its relations with China, North Korea expressively supported the Chinese Government's action on the June 4th incident in And when Chinese General Secretary Jiang Zemin returned the visit in March , North Korea showed a posture leaning to China emphasizing the solidarity between the two countries "firmly upholding socialism. This failure on the part of North Korea has given rise to strong concern in the international community, which earnestly desires early signing of the agreement.

Japan has called repeatedly for North Korea to agree to hold dialogue in order to improve relations between them and taken various measures to realize it. Although the Japanese intention has been communicated to North Korea via various routes, no forthcoming response has come from North Korea to date. In light of the accelerating flow of international politics surrounding the Korean Peninsula, Japan is ready to make further efforts to improve relations with North Korea in areas including academic and cultural exchanges.

Regarding the No.