G20 Summit Update: US Focuses on Cyber Security

The G20 Summit gathered financial ministers from the nations with the top 20 economies to discuss matters pertaining to the modern global economy. The event was held in Berlin and discussed matters that included the global and digital economy, the importance of investment in cybersecurity for the financial sector, and the encouragement of private investment in African economies to create new opportunities for jobs in economically disadvantaged regions.

G20 Summit Update

The global and digital economy is becoming increasingly networked and attendees of the G20 summit discussed ways that industrialized and emerging economies can become robust and flexible enough to respond to crises. Recommendations related to creating a stable financial architecture, reducing debt and promoting structural reforms were proposed. Attendees agreed that manipulating currency exchange rates and specifically targeting a nation's currency for the purpose of weakening it and gaining a competitive advantage were unacceptable practices. Although lessons were learned from the Great Financial and Economic Crisis in 2008 and 2009, G20 members were concerned that the recovery was unsustainable because not much had changed at a fundamental level.

The G20 summit also discussed the need to bring cybersecurity up to modern standards. Consumers demand the convenience of digitalized access to banking services, but are also concerned about cyberattacks that could result in the theft of sensitive financial data. The possibility of well-organized cyber-heists such as last year's attack on Bangladesh's central bank, in which $81 million was stolen and bank officials were implicated for deliberately leaving its server wide open to attack, was also a concern. While some new technologies and Point-of-Sale options may be useful in addressing this issue, the financial sector has often be slow to adopt new innovations that could reduce its vulnerability to “social engineering” attacks, corruption in its ranks, and clerical error. The attendees of the G20 summit have agreed to jointly fight cybercrime in light of increasingly sophisticated security threats.

G20 attendees agreed that private sector investment could be the most effective mechanism for stimulating the economy of African nations that have been struggling. The Finance Ministers of the Ivory Coast, Morocco, Rwanda, Senegal and Tunisia made presentations with their suggestions for private sector partnerships. Although G20 agreed to shelve any decision until a meeting scheduled for June that will specifically focus on the topic, the attendees were optimistic that the encouragement of foreign investment in African enterprises would provide new opportunities for Africans in economically disadvantaged regions.

What's Controversial About the G20 Summit?

The September 2016 G20 event was reportedly the target of at least 133,254 cybersecurity attacks that were successfully thwarted. It's especially notable that the cybersecurity firm that G20 hired to guard against cyberattacks before and during the event specializes in defending against advanced DDoS attacks designed to significantly hamper the performance of computer networks and especially deny access to web servers.

“Securing an event of the size and prominence of G20 is an enormous undertaking,” said Dr. Richard Zhao, SVP of Global Threat Research for this cybersecurity firm, named NSFOCUS. He went on to describe the attacks as a “non-stop barrage” that indicates an organized campaign to breach G20's network security. He referred to this as worrying, but not surprising, and indicated a fair amount of pride in being able to successfully thwart this barrage.

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Could these cyberattacks be related to controversy surrounding G20? Perhaps news of this barrage of cybersecurity attacks on the summit made members of G20 frustrated enough to sweep aside the U.S.'s attempt to distinguish between hacking for the sake of discovering privately held trade secrets and hacking for the sake of gathering intelligence on foreign government agencies.

It's notable that President Trump was apparently a no-show at this event, which may not be surprising considering G20's traditional stance on free trade. On the flip side, this past weekend's G20 summit did abandon a pledge to support free trade due to pressure from U.S. diplomats. It also scuttled plans to discuss a roadmap to bringing the Paris Climate Accords into force.

Despite the fact that this is a recent reversal of G20's longstanding anti-protectionism and anti-currency manipulation stances, it is often the target of protests from leftists who claim that the summits are simply a PR stunt on the part of financial elitists who do not wish to make any real changes to a centralized financial system. The G20 has also been accused of being ineffective. For instance, member nation Argentina suffers from a hyperinflation problem caused by corruption and mismanagement of its economy. This has left its less advantaged residents scrambling to find alternatives to the Argentine peso, such as bartering and investing in the digital currency Bitcoin. (Yes, Bitcoin is volatile, but it is still more stable than the Argentine peso.) Critics say that the G20 summits could have helped to address problems like this with a greater focus on resolving issues within national governments and the financial industry that can trigger financial crises like Argentina's.

However, these critics have occasionally been implicated in poor behavior while protesting G20. During a 2010 G20 meeting in Toronto, anti-capitalist and anarchist protesters engaged in rioting that led to 1,000 arrests and thousands of dollars in damage to privately owned businesses. In 2012, protesters called for a “Robin Hood tax” that would have added a small tax to international transactions for the purpose of aiding impoverished nations. Astute observers might have said that Robin Hood's main fight was not against “the rich” as such, but against unfair taxation that caused hardship by putting the majority of the tax burden on the impoverished population of the time.

Anyway, that small tax would have added to the typical fees charged by institutions that process international transactions, which already averaged 7.68% globally as of June 2015. This will obviously impact economies that rely heavily on migrant workers who send money home to their families across national borders, such as the Philippines.

Would leftists prefer that the families of these migrant workers receive even less money that they might need to buy food and pay rent, and is it the place of the G20 Summit to make that determination when it could otherwise be focused on making international remittances more efficient and less costly for a migrant worker who sends money home without paying a high percentage of the money he wants to send in fees? Which option would be the most helpful to migrant workers who probably aren't working hard hundreds of miles away from home because they want to?

Although inefficiencies in the financial system are not likely to be solved purely by regular G20 Summits, the fact that they discuss legitimate issues like cybersecurity and the encouragement of private investment in Africa is a good sign that they are already aware of important financial issues in an increasingly global economy. These representatives of the 20 nations with the biggest economies should not be expected to solve all the financial sector's problems on their own, but at least they are discussing weaknesses in the financial sector that could cause meltdowns similar to the Great Financial and Economic Crisis of 2008 and 2009.

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What do you think of the topics discussed at the G20 Summit this year? Let us know in the comments section below.