The Iron Curtain is gone, but the trade in secrets is flourishing as never before.
WHEN five Russian spies were caught in Norway just a few weeks ago, it took plenty of people, not least the country's prime minister by surprise. Surely, said premier Kjell Magne Bondevick, this sort of conduct no longer took place in 1998 in a democratised Russia? Wrong. The notion that espionage is on the brink of extinction is naive to say the least. Despite the collapse of the Soviet Union and the Warsaw Pact, the spy trade has not faded into obscurity. The reality is that the industry is as active as ever, with billions of pounds being funnelled into the budgets of various agencies around the world.

Just how active spies still are has been made apparent in recent weeks with a series of embarrassing blunders. The worst case involved Mossad, the Israeli Intelligence service. Once regarded as the elite of the spy clubs, feared by its enemies, it was responsible for two bungled assassination attempts, one in Jordan and one in Switzerland, which have led to the resignation of Danny Yatom, the head of Mossad, and the blushes of Prime Minister Benjamin Netanyahu's government.

The Russian spy ring in Norway was uncovered as the five members of FSW (formerly the KGB) attempted to get their hands on top secret Nato and Norwegian documents. Norway is the only Nato member state that borders Russia, and the region is home to Russia's vast northern fleet, yet despite an "era of mutual co-operation and understanding between Russia and Nato", some organisations, it seems, have not received the message.

According to Dr Ken Robertson, lecturer in terrorism and intelligence at the University of Reading, a crucial factor (certainly in the case of Mossad) which contributes to these failed operations, is a lack of clarity. "Where the organisation does not have a clarity of purpose, and is not agreed on what kind of security is necessary for the state, for instance, if they are divided over the peace process, then that can make the whole organisation very factional. Organisations that are characterised by factions on the whole are less effective." he says.

"The most damaging aspect to Mossad is was this myth of its near invincibility," says Dr Robertson, "With that myth destroyed, Mossad will find top-level recruitment a little more difficult".

The Russian security apparatus certainly can't be described as having a clarity of purpose. So swift are the changes in its leadership that today's head of foreign intelligence is tomorrow's best-selling author on the pounds 10,000-an-hour lecture tour.

There is, it seems, an odour of incompetence amongst the agencies that gives credence to Hollywood portrayals. Stumbling around in the dark, they fight budget restrictions from their own governments, get blamed for failures by those same governments, face an ever-increasing sophistication and technological evolution in their opponents, and receive no recognition for the missions that succeed.

Britain does not escape unscathed from humiliating incidents either. Last year MI5 held a very public recruitment drive, with advertisements for staff placed in the national press for the first time. It led to thousands of applications to a phone line. Phone Hackers, or "phreakers" broke into the line with a new message indicating the demise of MI5. "Hello, my name is Colonel Botch. I am calling on behalf of the KGB. We have taken over MI5 because they are not secret any more and they are a crap organisation. All the details left will be forwarded to the KGB. Thank you."

(In fact, the quality of the candidates was, to a large extent, not high enough to justify the man-hours involved in wading through the applications).

Despite the recruitment drive, British intelligence, like the secret services of many other western countries, has suffered from budget constraints following the end of the Cold War. Its funds are dispersed between MI5, MI6, and GCHQ. Those holding the purse-strings clearly did see a valid reason for cutting funds, although the cuts have not been limited to the extent one might have thought possible. But what many observers believe is that the cuts have led to bungling - as witnessed by recent events.

The end of the Cold War has also led to a change in modus operandi as well. With the collapse of the former Soviet Union, the situation has become so confused that reliable intelligence information is only possible by getting people on the ground to report back, rather than using satellites or other forms of technology. The countries involved in espionage have also changed. A recently released document by the United States National Counter Intelligence Centre reveals that, overall, activities have increased. "A number of countries pose various levels of threat to US Information. Some are traditional adversaries, while others are long-time allies of the United States, or have traditionally been neutral," the report stated.

Louis Freeh, the director of the FBI, has told the United States Senate that at least 23 foreign intelligence services were actively targeting the United States. "I think that Russian aggression has been unabated even in the post-Cold War. It is escalating. It's a serious and continuing problem. Recent espionage cases involving Russia, South Korea and China are just the tip of a large and dangerous intelligence iceberg."

The area of responsibility for spies has also changed markedly since the end of the Cold War. International crime and terrorism, money-laundering and nuclear proliferation occupy the time of agencies far more than mere military and intelligence data acquisition.

However, a far more serious threat than the traditional espionage activities is the sudden rise in economic espionage by foreign governments. The CIA director, George J Tenet, outlined five key challenges facing the intelligence communities to the US Senate select sub-committee on Intelligence. "At the top of the list I place a set of trans-national issues that threaten the lives of all, while also threatening strategic interests in important ways. These issues include proliferation of weapons of mass destruction, international terrorism, drug-trafficking, information warfare and the fallout from the recent Asian financial crisis."

Indeed, two weeks ago, the FBI called for an increase of $93m for its computer crime unit, with a total budget increase for the fiscal year 1999 of $3bn.

"We do see an increase in foreign economic espionage due to an increasing reliance on technology and commerce, as well as the value of intellectual property", said Lesley Wiser, head of overseas espionage in the Eurasian sector of the FBI Counter-Intelligence Division. "One of our priorities here at the FBI is to identify economic intelligence activities of foreign governments in the United States and to neutralise those activities", she said. "We are spycatchers, and economic security has become part of the National Security Agenda."