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ARAB TIMES, TUESDAY, JUNE 7, 2011 BUSINESS 39 In this May 24, 2011 file photo, teachers and UK ‘tragedy’ repeat warned PC forecasts cut GM eyes center others demon- strate against proposed budg- Treasury Secretary Timothy Geithner vowed not to repeat Research firm International Data Corp. General Motors says it will invest $130 et cuts, that the mistakes of Britain’s “light touch” financial regulation expects sales of personal computers to million to consolidate global data opera- would eliminate Monday, as the United States and Europe continued to tan- grow 4.2 percent this year, down from a tions to its technical center in the Detroit many teaching gle over banking reforms. previous forecast of 7.1 percent. suburb of Warren. and staff posi- Speaking days after a senior European envoy pointedly The latest projection comes after IDC’s The company says the move will cre- tions and edu- called on the United States to quicken the pace of reform, tally showed PC sales dropped by 1.1 ate 25 jobs. GM will renovate an admin- cational pro- Geithner said Washington did not want to see “another race percent in the first quarter compared to grams through- to the bottom around the world.” last year. istrative building to house the company’s out the Los During a visit to the United States on Friday, EU internal The company says the slow economic computer infrastructure. GM says the Angeles Unified market commissioner Michel Barnier pressed Washington to recovery, competition from smartphones center will help it keep pace as comput- School District, fully implement laws aimed at mending the banking system and tablets and the fact that most house- ers are used more to design vehicles and at district head- — after shoddy practices plunged the world economy into holds in the developed world already for safety, fuel economy and other func- quarters in Los crisis. (AFP) have PCs are holding back sales. (AP) tions. (AP) Angeles. (AP) International, inter-firm cooperation vital Stigma puts many firms off reporting cyber attacks LONDON, June 6, (RTRS): Wary of sure. profile attacks. Sony probably suf- Sarkissian, CEO of security firm new national policies on cyber securi- were losing so much money through alarming customers, many firms never “One of the reasons we do not know fered the worst damage to its reputa- Knightsbridge Cybersystems. ty — such as the new US doctrine fraud it no longer made sense to pass report the kind of cyber attacks suf- the scale of this is that organisations tion, with the personal details of mil- “If you can’t value the cost of the published by the White House — are the problem from company to compa- fered by Sony, Google and others — are embarrassed to reveal the impact,” lions of Playstation users compro- attacks, you don’t know how much welcome, more global coordination is ny,” said Martin Sutherland, CEO of and as long as the stigma holds, tack- BT chairman Sir Michael Rake said in mised and hackers crowing about you can spend to prevent them ... We needed between governments and defence firm BAE subsidiary Detica. ling the growing problem may prove a speech. other data losses. need a way of sharing information firms. “I think cyber is a few years behind impossible. Data theft is a menace that Speakers called for greater trans- Other high-profile victims of hack- anonymously.” “Critical to this is the free passage that.” looms especially large, given compa- parency, but few were willing to dis- ing attempts include defence giant Some argue the answer may be of information, not just between com- But some experts say deterring nies’ increasing reliance on online cuss attacks on their own systems in Lockheed Martin and Internet firm some form of regulation in which panies and also between governments many cyber attacks is often not all that storage. At risk can be cutting-edge detail publicly. Sometimes, experts Google, with security experts in both companies are required to divulge and intelligence agencies,” said difficult. The trick, they say, is to raise copyrights, privileged commercial say, that extends to simply not looking cases pointing the finger at hackers in much more about security breaches. Matthew Kirk, external relations man- their defences to the level where it is information such as tips on takeover for problems. China. Chinese officials angrily deny But in the short term, experts say the ager for UK-listed mobile telecom no longer cost-effective for hackers to bids and — perhaps most crucially for “Companies often don’t understand this, particularly any suggestion of importance of good electronic operator Vodafone. penetrate and they simply seek anoth- a business’s reputation — customers’ the threats and if they do, they hide official complicity. defences is finally getting through. “Understandably, companies are not er target. personal details. it,” said Natalia Kapersky, co-founder But most specialists say that is only “I think we’ve reached a tipping used to sharing information with their Matt Bross, a former security chief Computer security and corporate of Russian software security firm the tip of the iceberg, with little con- point,” Melissa Hathaway, a former closest competitors but they are the at credit card firm MasterCard whos intelligence specialists say they are Kapersky Labs. sensus on tackling the problem. US National Security Council cyber ones they need to share with the now chief technical officer for often sworn to secrecy by firms scared While some accuse IT security Firms often understand so little security chief who now heads her own most,” he said. Chinese telecom company Huawei, of the potential reaction of corporate experts of talking up the threat to about the threat facing them that they consultancy, told Reuters at the con- Several security experts pointed to said his approach to stopping hacking partners and investors. boost business, most agree the prob- do not even know how much money ference. the example of the insurance sector, had always been simple. Some companies, said experts gath- lem is on the rise. Hackers — whether they are losing. The difficulty in put- “With the recent breaches ... and where firms share information in a “The aim was to raise the cost of ered at a cyber security conference in criminals, state-linked spies or those ting a price on lost prestige compli- increased reporting of the issues firms way that still largely allows open com- entry so copying a credit card cost more London last week organised by the in between — are all seen increasing cates this further. will be working harder to manage petition. than forging $100 bill,” he said. “If you EastWest Spell Institute, may not in sophistication. “Everyone is getting attacked but no their risks and limit their liability.” “What happened with the insurance raise the cost of entry of a threat, the know the extent of their own expo- Recent weeks saw a host of high- one is talking about it,” said Vartan But global companies say that while industry was that they realised they threat will go another way.” Accord, discord to pursue IMF backs UK deficit reduction Parties maneuvering on debt, health care policy but warns of growth risks \WASHINGTON, June 6, (AP): The threat of a first-ever default by the fed- of low- income children and the dis- abled. And the president just feels Osborne defends economic plan eral government is pushing President that that’s unacceptable.” Barack Obama and Republicans A few moments later, Carney toward a sweeping agreement to cut called the Republican plan “premium LONDON, June 6, (Agencies): The International Monetary economies. These risks include euro zone debt problems, volatile commodity prices, the health government spending and increase the support or privatization or voucher- Fund backed the British government’s plans to reduce the of Britain’s housing market and the amount of spare capacity in the UK economy. Treasury’s borrowing authority. Yet a ization.” budget deficit on Monday, but said tax cuts or more quanti- perennial partisan struggle over the None of these can be considered Finance minister George Osborne welcomed the IMF’s annual economic assessment, Medicare program for seniors’ health terms of endearment, politically, par- tative easing may be needed if growth proves persistently which comes after he dismissed criticism from more than 50 left-leaning economists care drives them apart. ticularly not by Republicans. They over the weekend that his plans risked derailing economic recovery. weak. If the economy grew as expected, the government and Bank of England policy looked Remarkably, the two sides seem say their Medicare plan, developed Britain’s economy is likely to grow by around 1.5 percent in 2011 before about right, the IMF said. “We consider the current deviations from forecast represent determined to pursue both accord and by Rep. Paul Ryan, the House Budget discord simultaneously, sparing the Committee chairman, is designed to achieving growth of about 2.5 percent in the medium term, the IMF estimated. temporary factors and that the current policy mix strikes us as appropriate,” IMF Acting still-wobbling economy from threat- save the program from bankruptcy But it acknowledged that there were major risks to this outlook, as for all big Managing Director John Lipsky told a news conference after the report was published. ened calamity while preserving and preserve it for future generations. Economists saw little change in the Medicare as a political issue in the In the meeting the president hosted tone of the IMF’s assessment of the UK, 2012 elections. for rank-and-file Republicans, Ryan despite the fact that growth had been “I’m willing. I’m ready. It is time and Obama clashed. slower than the IMF had forecast when it to have the conversation” about Bankruptcy made its last so-called Article IV report in deficit cuts and the debt limit, said September. House Speaker John Boehner, urging The congressman told Obama it “All told ... the IMF statement gives Obama to become personally was not leadership to demagogue a the Treasury a useful thumbs-up,” said involved. “It is time to play large good-faith attempt to save Medicare, David Tinsley, a UK economist at ball, not small ball.” when it is clear the program is head- National Australia Bank. But a few days later, House ed for bankruptcy, according to sev- The new 2011 forecast is slightly Democratic leader Rep. Nancy Pelosi eral participants in the session. below the 1.7 percent estimated in the said, “I could never support any Obama replied it wasn’t leadership IMF’s April set of global economic fore- arrangement that reduced benefits for to shift billions in costs from the fed- casts, and the 2 percent forecast in the Medicare. Absolutely not,” she told eral government to states and indi- September report. CBS television’s “Face The Nation,” viduals who can’t afford it. Lipsky said unemployment remained emphasizing a position she and other Ryan responded that wasn’t what “unacceptably high” and encouraged the Democrats had laid out at their own his plan did, explained it in some government to press ahead with increas- meeting with Obama. detail and drew an ovation from fel- ing the retirement age, cutting public sec- Given the sheer size of Medicare, low Republicans. tor pensions and relaxing planning rules nearly $500 billion a year to provide The Ryan plan retains Medicare in to boost the economy. health care coverage for the elderly, its present form for current benefici- Business Secretary Vince Cable any deal on reducing future deficits is aries and those age 55 and older. warned trade unions earlier on Monday likely to include savings from the For anyone younger, Medicare that the government would legislate to program, if not the benefit cuts many would consist of a government-man- make it harder for them to call strikes if Democrats oppose. dated package of benefits, purchased they opposed this type of plan. on the open market from private Lipsky did not back opposition calls Thought insurers. Federal funds would help for the government to set out a clearer But if any Republican thought that defray the costs for beneficiaries. “Plan B” to slow cuts if growth falters. the White House and congressional Polls and recent events such as the However, the IMF did say that if Democrats might agree to even a unexpected loss of a House seat in growth proved persistently slow and temporary cease-fire on Medicare, strongly Republican district in inflation fell, then the government should they may want to reconsider. upstate New York and criticism from think about tax cuts to help the poor and Boehner and fellow House presidential contender Newt boost investment, and the Bank of Republicans had scarcely left a White Gingrich make clear that the England would need to consider more House meeting with Obama on Republican plan is not favorable quantitative easing. Wednesday when presidential press political terrain for the party. Nonetheless, action to boost the econ- secretary Jay Carney told reporters They are on far safer turf, they omy in a renewed downturn depended on that Obama “doesn’t believe that we concede, when they stress that job British Finance Minister George Osborne (left) shakes hands with John Lipsky, acting head of the International Monetary Fund inflation being under control, the IMF need to end Medicare as we know it, creation is their top goal and spend- (IMF), after a press conference at the Treasury in central London, on June 6. The International Monetary d said Monday it said. to dismantle the program as it cur- ing cuts the surest way to achieve it. saw no reason for the British government to change its economic policy as it seeks to slash a massive deficit. (AFP) rently exists, in order to achieve sig- Even some House Democrats who Inflation nificant deficit reduction.” once talked of wanting to allow more If inflation remained high and growth Within seconds, he said the government borrowing without tak- slow, the government and BoE would be Republican plan for Medicare “puts ing steps to rein in future spending Talk of another Fed buying spree intensifies in a trickier position. While high inflation too much of the burden of deficit voted against legislation last week to due to further temporary spikes in com- reduction on the shoulders of seniors, do precisely that. modity prices could probably be ignored, Fine line between slowdown and stall inflation caused by a shortage of capacity in the British economy would need high- er interest rates. Agrees to assist prosecutors SINGAPORE, June 6, (RTRS): The Federal Reserve would not “close the than in China. Economists are looking for “A narrower output gap would also imply a higher than currently estimated world economy appears headed for sever- door” on purchasing more assets once its just 8.7 percent growth in exports, down structural deficit and therefore would al months of sub-par growth, and there is $600 billion bond-buying program wraps from 24.6 percent in the prior month’s Madoff’s ex-employee guilty no clear source of strength to lead it back to health. After a week filled with disappointing up later this month. Talk of another Fed buying spree intensified last week. “I expect these noises will only get report. The United States and Germany are also due to release their trade figures this require further fiscal tightening over the medium term,” the IMF said. Inflation was likely to remain above 4 percent this year before falling back to NEW YORK, June 6, (RTRS): A former investment fraud in history. A Ponzi economic data, the debate is no longer louder as the summer progresses,” week, although the data covers April, not near its 2 percent target by the end of next employee at convicted financier Bernard scheme is one in which early investors over whether the economy has hit a soft Komileva said. Figures due this week May, making it less valuable as a guide to year, the IMF added. If growth strength- Madoff’s firm admitted to adding fake are paid with the money of new clients. patch but how long it will last. will probably provide even more evi- what is happening to the economy now. ened as expected, the BoE would proba- employees to the payroll, part of a plea Lipkin told the judge that from at Friday’s poor US employment figures dence that demand world-wide has faded. For central bankers, the cool-down bly also need to raise interest rates at a deal on Monday to bank fraud and other least 1986, “I created false payroll suggest demand will remain subdued in China reports its May trade figures on takes away some of the rate-hiking impe- gradual pace, it said. Faster growth would charges. records.” As one example, he said that the world’s biggest economy. Europe is Friday, and the only real question is how tus. The European Central Bank and require a faster pace of rate rises. The former payroll manager, Eric in 2008 he was instructed by the firm’s still struggling to put an end to its sover- sharply the pace of growth slowed. Bank of England both hold policy-setting Prime Minister David Cameron’s Lipkin, told US District Judge Laura operations manager, Daniel Bonventre, eign debt troubles. Economists polled by Reuters expect meetings on Thursday, and both are wide- coalition government has faced calls to Taylor Swain in New York that in 22 to put Bonventre’s son on the payroll As for the big emerging economies, the report to show exports rose 21 percent ly expected to keep short-term borrowing slow its programme of deep spending years of employment in the investment even though he did not work at the their inflation-fighting efforts appear to from a year earlier, still solid but a big costs steady. cuts because economic recovery has fal- advisory arm of Bernard L. Madoff firm. have succeeded in cooling growth. step down from April’s torrid 29.9 per- Underneath all the doom and gloom, tered since Britain pulled out of a record- Investment Securities LLC, he conspired Bonventre has also been charged and is Although that was the intended result, it cent pace. there are a couple of reasons to feel more length recession in late 2009. with others to falsify records and deceive free on bail pending trial. means they are not in a position to grow Even in April, there were signs that upbeat about the second half of the year. Finance minister George Osborne has authorities. Under Lipkin’s plea agreement, he will as fast as they did last year. demand was cooling. Commodity prices have come down in brandished the support of international Madoff, 73, and eight others have been cooperating with the office of the Ironically, the country with the bright- US retail sales were lackluster, and fig- recent weeks, which will eventually ease organisations such as the IMF and the criminally charged with running a multi- Manhattan US Attorney and the FBI in its est near-term prospects may be Japan as it ures due on Tuesday are expected to pressure on household budgets. OECD for his economic policies in the billion-dollar Ponzi scheme that col- investigation of the Madoff fraud. recovers from the March earthquake and show euro zone April sales were tepid as In addition, the Institute for Supply face of the criticism from the opposition lapsed in December 2008, shaking up Lipkin, also said in Manhattan federal tsunami. Still, even a strong rebound well. That means businesses may be Management said on Friday that the pace and trade unions. But the government regulators who missed years of warning court that he created false reports to be there may not be enough to lift the global stuck with more inventory than they of growth in the US services sector was surprised last month when the chief signs of the fraud. sent to the Depository Trust Co (now economic clouds. would like, and orders may stay weak. picked up modestly in May, with its economist of the OECD, the Organisation Madoff is serving a 150-year prison called the Depository Trust & Clearing Lena Komileva, a strategist with Taiwan’s May export figures, sched- measures of new orders and employment for Economic Cooperation and sentence after pleading guilty in March Corp) clearing house for buyers and sell- Brown Brothers Harriman in London, uled for release on Wednesday, are higher. The services sector accounts for Development, said there was “scope for 2009 for what is considered the biggest ers of securities. said the weak US jobs data meant the expected to show an even sharper decline about 70 percent of the economy. slowing the pace” of the cuts.
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