Global Debt Is Beyond Control

BY MEL GURTOV

 JANUARY 4, 2024
Facebook

TwitterRedditEmail

The Washington Consensus

The debt of developing countries is at “crisis” levels, the World Bank has just said. Supporting that view is a New York Times story December 16 headlined “The Debt Problem is Enormous, and the System for Fixing It is Broken.”

The article goes on to explain: “The foundational ideology — later known as the ‘Washington Consensus’ — held that prosperity depended on unhindered trade, deregulation and the primacy of private investment. Nearly 80 years later, the global financial architecture is outdated, dysfunctional and unjust.”

Indeed, the world is awash in government debt, led by the US, Japan, and China, which together account for about half the total. But great powers have many options for handling indebtedness. Small, economically weak countries do not.

What the Times account hints at, but never directly confronts, is the concentrated power of the Washington Consensus. It reflects American and European economic predominance—not just a consensus of the World Bank and International Monetary Fund (IMF) leaderships, in which the US has always had sole veto power, but also the US Treasury Dept. and the global network of financial centers that stretches from New York and Chicago to Frankfurt and Zurich.

Predominance means the ability to dictate terms of loans. Over many years, World Bank and IMF decisions have aimed to condition loans to poor and middle-income countries on their openness to private investment, free trade, and deregulation of state-run agencies—roads, railways, banks, key industries.

Openness translates to opportunities for Western capital to penetrate developing-world economies, often resulting in the hollowing out if not elimination of local private and state-owned business.

Large borrowers must also deal with high interest rates. To ensure repayment, the World Bank and IMF preach austerity: Governments should slash social welfare programs to pay down the debt. Any family deeply in debt would understand the terrible choice facing governments here: Stay on good terms with the bankers by eliminating or reducing subsidies to the poor on food, health care, and fuel.

Consequently, António Guterres, secretary general of the United Nations, says in the Times article: “Even the most fundamental goals on hunger and poverty have gone into reverse after decades of progress.”

A Human Development Crisis

The global debt crisis is really not a new problem, just one that is surging again. As the Times explains: “Pounded by the Covid-19 pandemic, spiking food and energy prices related to the war in Ukraine, and higher interest rates, low- and middle-income countries are swimming in debt and facing slow growth.”

But the Times leaves out the China factor—the billions of dollars in loans to poor countries that cannot possibly be repaid. Sub-Saharan Africa, with about $140 billion in loans, stands out here: Of the top 15 countries that have received China’s loans, only one (Bolivia) is outside that region.

China proclaims that its loans, mainly under the Belt and Road Initiative, come without demands for austerity and with lower interest rates. The BRI has been well received in a number of countries.

But there is no free lunch here and—to mix metaphors—strings are attached, hence the “debt trap.” Recipients of Chinese loans may have to pay back with access to ports and rail lines, extraction of mineral and other resources, use of Chinese labor, damage to the environment, and adherence to Chinese policy views on (for example) human rights and Taiwan.

The debt crisis is one symptom of a development crisis, in which far too many countries do not have the financial resources to support decent conditions of living, from health and food security to environmental protection. Moreover, these countries often are the victims of rich countries’ behavior, as in the case of climate change.

As one source points out, the richest one percent of the world’s population, representing 80 million people, account for about half of global carbon emissions, while the poorest 50 percent, with 3.9 billion people, account for about eight percent of carbon emissions.

Top Down or Bottom Up Models?

For as long as I can remember, the typical solution to the debt problem has been to give developing countries seats at the table where decisions are made, and to convert loans into grants. A seat at the table might help if the major players, starting with the US, were ever persuaded to reduce their voting power.

Even then, it is the loan conditions—the amount of money available, the high interest rates, requirements of local regulations, and terms of repayment—that would still depend on the good graces of the major financial institutions. And those institutions, to put it mildly, don’t believe in being charitable.

As for providing grants rather than loans, well, that day is long gone and would be very difficult in today’s competitive environment to recover. Foreign aid from nearly all countries, particularly in the form of direct grants, has been on the downslide for many years.

The Times report is weakest in failing to report on bottom-up approaches to development in the human interest. Giving aid or loan relief means dealing exclusively with governments that may be corrupt, excessively bureaucratic and incompetent, dominated by the military, and authoritarian—in any of these cases, giving low priority to human security.

Channeling funds to NGOs with successful experiences promoting human development is far more likely to help than providing unworthy governments with debt relief. There are plenty of grassroots development programs that work—for example, in microfinance.

Kiva is one: It provides small loans at very low interest to villagers, usually women, who are eager to start small businesses. The real choice for international financial organizations comes down to this: Do you want to bail out governments or empower people?

Mel Gurtov is Professor Emeritus of Political Science at Portland State University, Editor-in-Chief of Asian Perspective, an international affairs quarterly and blogs at In the Human Interest.

Nobel Peace laureate Muhammad Yunus's battle with the Sheikh Hasina government

Muhammad Yunus, a Bangladeshi Nobel laureate, has been sentenced to 6 months in jail. Why do rights groups see this as a "politically motivated" case, and what is the reason behind the friction between Yusuf and the Hasina government?


Bangladesh Nobel laureate Muhammad Yunus at the Trento Economy Festival in Italy in 2022. Critics of the government say it has tried to harass and vilify the economist. (Image: Getty)

Yudhajit Shankar Das
New Delhi,UPDATED: Jan 4, 2024 

Days before the general election in Bangladesh, Nobel Peace laureate and Grameen Bank founder Muhammad Yunus was convicted and sentenced to 6 months in jail for violation of labour laws. Critics of Prime Minister Sheikh Hasina’s government allege this to be a case of government retribution towards an internationally recognised person. Others, however, see it as a legal case filed by workers.

Why is a simple case of labour law violation being perceived as one that is politically motivated, and what is the reason for the bad blood between Muhammad Yunus and PM Seikh Hasina’s Awami League?

On Monday, Yunus and three of his colleagues of Grameen Telecom were given a 6-month jail term, but the labour court also gave them bail for a month, allowing them time to appeal in a higher court. They have been accused of violating labour laws for failing to create a workers’ welfare fund in the company. Grameen Telecom is one of the several firms founded by Yunus.

YUNUS CASE EMBLEMATIC OF PROBLEMS?

In a country where the government is viewed with suspicion of trying to “throttle opposition voices”, the verdict against the 83-year-old Nobel laureate is being projected as another instance of “erosion of freedoms” and a “bid to silence government critics”. But is that really so?

Bangladesh is headed for an election on January 7, which has been boycotted by its main opposition party, the Bangladesh Nationalist Party (BNP).

Supporters of Yunus, rights groups and activists have termed the verdict “politically motivated”. They blame the “unusual rush” to convict the renowned economist because he is perceived by the ruling Awami League party of PM Sheikh Hasina as a political rival.

“The conviction of Yunus is emblematic of the beleaguered state of human rights in Bangladesh, where the authorities have eroded freedoms and bulldozed critics into submission,” Amnesty International said, reacting to the sentencing of Muhammad Yunus on Monday.

Lawyers who fought for Yunus called the Grameen Telecom case “meritless, false and ill-motivated”. They said it was aimed to “harass and humiliate him before the global community”.

British business tycoon Richard Branson called it “A real miscarriage of justice, a politically motivated prosecution by a government determined to destroy Yunus and his legacy”. American lawyer and rights activist Kerry Kennedy called it "yet another example of the [Bangladesh] government's vendetta against its critics".

Not everyone, however, thinks this to be a politically motivated case.

"There is absolutely no politics in this court ruling and the government has nothing to do with it. This case was filed by workers of Grameen Telecom. The government doesn't have any role to play in it," Muntassir Mamoon, Bangabandhu Chair of Chittagong University, tells IndiaToday.In.

UNUSUAL RUSH TO CONVICT MUHAMMAD YUNUS?

Muhammad Yunus and his microcredit organisation Grameen Bank won the Nobel Peace Prize in 2006 for their anti-poverty campaign.

He is considered to be a powerful force in a country that has seen extended periods of political flux and which is headed for elections on January 7 without its main opposition party, the Bangladesh Nationalist Party (BNP).

Though some say that the prosecution and sentencing of Yunus was a purely legal process and the law took its course, Bangladesh watchers see it as part of a vilification drive against the Nobel laureate.

Professor Asif Nazrul of the law department of Dhaka University tells IndiaToday.In that Nobel laureate Muhammad Yunus has been facing a relentless campaign launched by the Sheikh Hasina government for over a decade now. “There is a continuous attempt at character assassination and the abuses Dr Yunus has been facing are of the extreme level,” he says.

How could it be a case of political victimisation, as claimed by activists and the supporters of Muhammad Yunus, because the Nobel laureate has been convicted by a court of law?

Professor Asif Nazrul explains that the regime in Bangladesh has a tight grip over the judiciary. “Former Chief Justice of Bangladesh, SK Sinha, was ousted from the country for some anti-government verdicts. We have to see the Yunus sentencing from that angle,” he says.

Both the professor of law and Amnesty International pointed out the “unusual rush” to convict and sentence Muhammad Yunus. They questioned the “speed of trial” in the Yunus case.

Labour law cases otherwise move very slowly in Bangladesh. Even the Rana Plaza and the Tazreen Fashion cases, both of which gained international attention for the scale of deaths, are stuck in legal corridors, experts said. While over 1,000 people were killed in the Rana Plaza building collapse in 2013, 117 people died in the Tazreen Fashion inferno of 2012.

“Even in the cases where hundreds have been killed in factory fires, the owners are facing very few cases. But there are over 200 cases against Dr Yunus,” says Asif Nazrul.

Muntassir Mamoon doesn't see any rush in the Grameen Telecom case and says proceedings have been going on for a year now. He also cites the earlier cases in which Yunus got relief from higher courts.

WHY AWAMI LEAGUE CONSIDERS MUHAMMAD YUNUS A RIVAL

Why is Prime Minister Sheikh Hasina and her government being vindictive as is being alleged?

“Muhammad Yunus was viewed by the Awami League regime as part of the 1/11 depoliticisation process,” explains Asif Nazrul.

‘One-Eleven’ refers to the process initiated on January 11, 2007, by which a military-backed caretaker government assumed charge in Bangladesh on the eve of the general election. For two years, it tried to work on what is referred to as the ‘Minus-Two formula’, getting rid of the top two political players -- Sheikh Hasina of the Awami League and Khaleda Zia of the Bangladesh Nationalist Party (BNP).

Muhammad Yunus is said to have been the prime choice for the prime minister’s job of the ‘Minus-Two’ participants. What has to be noted is that Yunus was offered the position of the chief advisor to the caretaker government, a role he didn’t accept.

In 2007, Yunus planned to float a political party and held public meetings but ultimately didn’t end up doing so.

Sheikh Hasina was placed under arrest and given the option to either leave the country or stay in prison. She chose to stay back. In the election that took place in 2008, she formed the government.

“Another reason believed to be behind the targeting of Muhammad Yunus by the Sheikh Hasina government is the charge that he was behind the cancellation of the World Bank funds for the Padma River bridge project,” says Professor Nazrul. He says the accusations were “ludicrous and could never be proved”.

Muntassir Mamoon, however, doesn't deny that the Awami League government reacts politically to Muhammad Yunus, a reference to the Nobel laureate's bid to launch a party during 'One-Eleven' and his political stance.

"The political reaction of the Awami League government is not because of his work as an economist or founder of Grameen Bank, it is a reaction to the political attitude of Yunus," says Mamoon.

The Hasina government started a series of investigations against Yunus and his organisations, including Grameen Bank, after coming to power in 2008.

In August 2023, 176 Nobel laureates and world leaders, including ex-US President Barack Obama, wrote a letter to the Hasina government over the “continuous judicial harassment” of Muhammad Yunus. They requested that cases against him be withdrawn.

Muntassir Mamoon says the image that Yunus pulled millions out of poverty is a false picture painted by western media. "On the ground in Bangladesh, there is no such feeling for Yunus."

Sheikh Hasina has called Yunus a “bloodsucker" and accused him of using force to recover loans from poor rural women as head of Grameen Bank.

The Grameen Telecom case against Muhammad Yunus might be a plain labour law case filed by workers, but that it is being perceived as part of a "witch hunt" says a lot about the political situation in Bangladesh.

Economic Leap: Croatia's Minimum Wage Doubles to 830 Euros

January 4, 2024, Thursday //



Croatia has ushered in a new fiscal landscape, as nine tax laws come into effect on January 1, boosting the minimum wage to 830 euros, as reported by Croatian Prime Minister Andrej Plenkovic. Highlighting the significant financial strides made during his tenure, Plenkovic noted a noteworthy 100% increase in the minimum wage since 2016, emphasizing Croatia's economic growth and improved standards of living.

Plenkovic accentuated the government's achievements in enhancing social benefits, including amplifying allowances for hundreds of thousands and elevating salaries for an additional 35,000 individuals who were previously not covered by such benefits. The tax reform, a centerpiece of the government's agenda, has introduced comprehensive changes, setting a unique precedent in Croatia.


The package of nine tax laws is designed to bolster the economic and social well-being of Croatians, envisaging heightened social aid for the disabled and parents. Speaking on the impact, Plenkovic underlined that these alterations in wage structures are expected to materialize by April, subsequently enhancing the financial landscape for citizens. Additionally, Christmas bonuses have already surged from 232 euros to 300 euros, a tangible indication of evolving financial policies.

The tax reform's subsequent phases are anticipated to deliver on a critical aspiration for Croatians—augmented wages. Plenkovic pointed out the burgeoning prospects, signaling an impending rise in salaries over the next three months, building upon the momentum set by the recent tax reforms enacted in February. Croatia is witnessing a transformative phase aimed at fortifying its economic framework and uplifting its populace.

Poland’s state-owned media dispute underlines the challenges facing the new Polish government

A dispute over Poland’s state-owned media has shown how problematic the new Polish government’s project of elite replacement could be, writes Aleks Szczerbiak.

Aleks Szczerbiak

LSE

January 4th, 2024

In the week leading up to Christmas, Poland’s culture minister, Bartłomiej Sienkiewicz, sacked the management of the TVP state television company, Polish Radio and the state-owned Polish Press Agency (PAP), together with their supervisory boards, and replaced them with his own nominees. He also switched off the broadcast feed for the ‘TVP Info’ 24-hour news channel.

Sienkiewicz is a member of the liberal-centrist Civic Platform (PO), the largest grouping in the new coalition government which took office in mid-December and is headed up by the party’s leader Donald Tusk, who was previously Polish prime minister between 2007-14.

Polish President Andrzej Duda – who is an ally of the right-wing Law and Justice (PiS) party, which lost power after eight years in office following its defeat in last October’s parliamentary election – condemned the new government’s move as unconstitutional and a flagrant violation of the principles of the “rule of law”. Immediately after Christmas, he refused to sign into law a budget-related spending bill which included 3 billion złoties of funding for the state-owned media. The government lacks the three-fifths parliamentary majority required to overturn a presidential veto.

When the new government originally announced its spending plans, they did not include funding for the state-owned media – which, at that time, were still effectively under the influence of Law and Justice-backed nominees – but, following the culture minister’s dramatic moves, the funds were re-instated. Sienkiewicz responded by putting the three state-owned media companies into insolvency and appointing liquidators to take over their day-to-day running.

Politicisation or pluralism?

“De-politicising” Polish state-owned media outlets was one of the new ruling parties’ main election pledges. They argued that during Law and Justice’s period in office, the taxpayer-funded media outlets, especially TVP’s news and current affairs programmes, had violated their statutory duty to provide services that were pluralistic and impartial, turning the state-owned broadcasters into crude ruling party propaganda channels.

They said that this point had been made repeatedly by international bodies such as the Organisation for Security and Co-operation in Europe (OSCE) election monitoring missions, while the CBOS polling agency found that public trust in state TV’s news output had fallen to its lowest ever levels.

However, Law and Justice supporters argued that the state-owned media helped to bring greater pluralism and balance to a media landscape otherwise dominated by the liberal-left. They said that Polish governments had always sought to influence state-owned media and there was also political bias under previous managements.

Law and Justice argued that, for example, before its 2015 changes to the state-owned media all three main Polish evening news bulletins had (to a greater or lesser extent) an anti-conservative bias. Some Law and Justice supporters acknowledged that after 2015 the pro-government bias became more blatant (and, therefore, arguably actually less effective). However, others argued that state-owned media needed to offer Poles a powerful counter-narrative to provide balance when privately-owned outlets were so overwhelmingly anti-Law and Justice.

Getting around the presidential veto

Nonetheless, even some of the new government’s supporters were frustrated that it did not appear to have any broader plan beyond closing down TVP Info and firing the state-owned media’s management and leading journalists. There was also a fierce dispute about the legality and constitutionality of Sienkiewicz’s actions. Indeed, the government’s critics did not just include Law and Justice but also a number of legal experts and bodies such as the Helsinki Foundation for Human Rights that had been highly critical of the previous administration’s approach to the “rule of law”.

For its part, Law and Justice argued that the statutory body responsible for appointing and dismissing the management of state-owned media was the national media council (RMN), whose term of office runs until 2028. If the new government wanted to change the legal rules for appointing state media authorities, then it needed to amend the media law (as Law and Justice did when it sacked the then-state broadcasting management boards in 2015). Law and Justice also accused the new government of acting in contravention of a so-called “safeguard order” issued by the Polish constitutional tribunal in December obliging it to refrain from making any changes to state-owned media management.

However, because of the risk of a presidential veto (Duda remains in office until summer 2025), the new government did not follow the legislative route. Instead, it pushed through a parliamentary resolution calling for decisive corrective action to restore the proper functioning of state-owned media. This cited a December 2016 constitutional tribunal ruling that found fault with aspects of the Law and Justice government’s 2015 takeover of state-owned media, specifically that only the National Broadcasting Council (KRRiTV), and not a government minister, could appoint their management boards.

The government argued that, as the 2016 ruling was never implemented, the provisions of the law establishing the national media council had no binding force and this empowered Sienkiewicz (as the legal representative of the state treasury, the companies’ sole shareholder) to use the powers of commercial law to remove the existing management and supervisory boards and appoint new ones.

In other words, it said that Sienkiewicz was correct to proceed in this way because Law and Justice’s earlier actions were themselves illegal, or at least un-constitutional. The government also argued that the constitutional tribunal’s December “protective order” had no legal validity because one of the members who issued the ruling had been appointed inappropriately.

Sienkiewicz changes tactics

The government’s critics responded that, even if the provisions of the act that empowered the national media council to appoint and dismiss public media managers appeared to conflict implicitly with the 2016 ruling, the constitutional tribunal did not declare explicitly that the council was unconstitutional because it was not considering directly the legislation empowering it. As noted above, it was examining earlier legislation passed when Law and Justice originally took control of the state-owned media at the end of 2015. This meant that the provisions of the law empowering the national media council were still operative.

The government’s supporters invoked the concept of “secondary un-constitutionality”, arguing that the tribunal ruling implied that the law transferring appointment powers to the national media council had no biding force because it violated the same constitutional standards as the one that it ruled unconstitutional in 2016.

The government’s critics, in turn, responded that, even if one accepted that the correct legal interpretation of the tribunal ruling was that the national media council could not appoint these management boards, then these powers should pass to the National Broadcasting Council (which currently has a majority of Law and Justice nominees) as the constitutionally designated body, and not a government minister. Moreover, they pointed out that when the current governing parties were in opposition to Law and Justice, they themselves argued that ministers directly appointing state-owned media management bodies was illegal and unconstitutional.

Indeed, some commentators argued that Sienkiewicz decided to put the state media companies into insolvency because he was not confident that the national court register (KRS), the body responsible for validating changes to the company boards, would confirm his new appointments. By instead appointing liquidators he was felt to have a much stronger legal case.

However, even those commentators who felt that the culture minister was legally empowered to appoint liquidators and by-pass both the national media council and National Broadcasting Council pointed out that they only have very limited powers relating strictly to preparing the businesses for liquidation. All of this further complicated an already complex and contested legal situation.

The ends justify the means?

Some government supporters use a “transitional justice” logic to justify its actions: that constitutional safeguards can (indeed, should) sometimes be ignored when taking steps to restore legal order to institutions that have been corrupted and whose legitimacy is questionable. In other words, that restoring democracy and the “rule of law” sometimes requires un-democratic and un-lawful (or questionably democratic and lawful) means.

However, even if one accepts this analysis of the nature of Law and Justice’s media reforms (which, as noted above, is strongly contested by the party’s supporters) this kind of “democratic coup” framing arguably uses the same (its critics argue, legally and constitutionally questionable) logic that the previous ruling party’s supporters applied to justify its own systemic reforms and elite replacement policies. These, they argued, were necessary to repair the flawed institutions and elites that emerged following Poland’s distorted post-1989 transition to democracy.

Some commentators also argue that even if the takeover of the state media companies was dubious (or even unlawful), it should ultimately be judged on whether it manages to establish more pluralistic and objective media outlets. However, the government’s critics argue that, not only is this once again simply replicating the “ends-justify-the-means” logic that the current governing parties previously accused Law and Justice of, but that the ruling camp has not actually presented any plan or vision of how the state media will be “de-politicised”.

The early indications were, they argued, that “de-politicisation” simply meant changing its management to one that is more sympathetic to the new government, with the previous crude bias being replaced by a softer, more subtle one.

Further polarisation of the political scene

The dispute over state-owned media further polarises an already bitterly divided Polish political scene. The government appears to have calculated that it was worth taking certain risks to give its most radical core supporters, who intensely disliked state media’s political output and wanted decisive action, a sense of moral victory and satisfaction that some kind of reckoning with Law and Justice’s legacy was finally taking place.

For Law and Justice, although the protests in and around the state media offices mainly involved parliamentary deputies and leading figures from the companies’ old guard, the notion that they are, as they put it, defending a free and plural media against an illegal and un-constitutional takeover provides the party and its supporters with a new rallying message.

On the other hand, the manner of the state media takeover puts Civic Platform’s junior coalition partner – the eclectic liberal- and agrarian-centrist “Third Road” (Trzecia Droga), which appeared to offer, to some extent at least, a break with the polarising logic of Polish politics – in a more awkward position.

There is also, of course, a risk that the spectacle of occupied buildings and switching off television signals could disconcert some moderate government supporters who might be concerned that once the rules have been bent (some would say broken) it becomes tempting to continue to do so, perhaps even more blatantly. On the other hand, forcing the Third Way to defend – and, therefore, be implicated in – such controversial actions may, ironically, actually end up binding them more closely to the governing coalition.

Elite replacement is problematic

The new government’s moves to change state-owned media management have set off a legal and political firestorm that is unlikely to settle down in the coming weeks, not least because it is part of its broader project of elite replacement. The un-picking of Law and Justice’s judicial appointments and reforms is likely to be the next battleground in this conflict.

The dispute over the state-owned media has shown how problematic this could be if legislation is required to shorten the previous government’s appointees’ terms of office. It will be even more difficult when, like judges, these appointees have constitutionally protected terms of office. Further get-arounds to avoid possible presidential vetoes will once-again leave the new administration open to accusations that it is guilty of the same undermining of democracy and “rule of law” of which it accused its predecessor.

Note: This article first appeared at Aleks Szczerbiak’s personal blog. It gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: Fotokon/Shutterstock.com


About the author

Aleks Szczerbiak is Professor of Politics at the University of Sussex.

Does Japan firm’s Korean forced labour payout set an example? ‘Hitachi Zosen is betraying the nation’

Critics say Hitachi Zosen’s depositing of funds earmarked for forced labour compensation with a Korean court breaks with Japan’s position on the issue

Tokyo continues to instruct Japanese companies not to compensate claimants – even if it one day means the seizure of their assets in South Korea

Julian Ryall

SCMP
Published: 4 Jan, 2024

A major Japanese company has been accused of “betraying the nation” after transferring funds earmarked as compensation for a victim of forced labour to a South Korean court, in defiance of a government directive.

Hitachi Zosen Corp, an Osaka-based industrial and engineering firm, lost a compensation lawsuit in 2019 brought by an unnamed former labourer who was requisitioned during Japan’s colonial control of the Korean peninsula, between 1910 and the end of World War II in 1945.

The company, which was set up in 1881, built a variety of ships for the Japanese military immediately before and during the war, including minesweepers, landing craft and transport submarines.

An undated archive picture from a South Korean newspaper shows Koreans being marched to work under surveillance of Japanese soldiers during Japan’s colonial rule of the Korean peninsula between 1910 and 1945. 

Photo: Dong-A Ilbo via AFP

After losing the case, Hitachi Zosen deposited about 6.6 million yen (US$46,230) with the court, the Yomiuri newspaper reported, as a security to prevent the seizure and liquidation of company assets in South Korea to compensate the former labourer – even though appeals were ongoing.

South Korean’s Supreme Court last week upheld the lower court’s ruling and ordered Hitachi Zosen to pay the plaintiff 50 million won (US$38,150). With all legal challenges now exhausted, the plaintiff has indicated that he intends to collect the funds soon, his lawyer said.

The top court also recently ordered two more Japanese companies – Mitsubishi Heavy Industries Ltd and Nippon Steel Corp – to compensate workers for forced labour, after turning down their appeals.

Japan says Korean court upholding forced labour compensation ‘unacceptable’

21 Dec 2023

Korean courts have previously ruled that the assets of Japanese companies can be seized to compensate former forced labourers, but Hitachi Zosen is the only company known to have transferred funds. This is despite the Japanese government repeatedly stating that the Korean courts were ruling in contravention of a 1965 treaty that normalised diplomatic relations between the two countries and saw Tokyo pay US$500 million in compensation to Seoul for its decades of often brutal colonial occupation.

Japan has consistently asserted that the lump sum covered all claims against the country or its companies, but Korean courts have ruled that individuals do have the legal right to sue firms that employed them as forced labourers.
Since Yoon Suk-yeol became South Korea’s president in May 2022, bilateral relations have improved dramatically and the two governments have held talks on the creation of a foundation that would accept voluntary donations from Japanese and Korean companies to be disbursed to former labourers

But the proposal has been rejected by former forced labourers and their supporters in South Korea, who say the redress should be made by the Japanese companies directly and be accompanied by a clear apology for their suffering.

South Korea, instead of Japanese firms, to compensate families of WWII forced labour victims

The Japanese government continues to instruct domestic companies not to provide compensation to claimants, even if it means their property and assets in South Korea are seized and liquidated. Though this has yet to happen, if it did it would likely cause another major rift between the two countries.

Critics of the Korean courts’ rulings say Hitachi Zosen’s decision to transfer funds weakens Japan’s position and sets a bad precedent for other companies.

“It appears that Hitachi Zosen has gone against the government’s directions and this can only be bad for other companies as it’s a precedent that is negative for their cases,” said Yoichi Shimada, a conservative academic at Fukui Prefectural University.

“If this is accurate, then Hitachi Zosen is betraying the nation, the government and the other companies.”
If this is accurate, then Hitachi Zosen is betraying the nation, the government and the other companiesYoichi Shimada, conservative academic

After the initial court rulings, a number of firms had considered paying the Korean plaintiffs to protect their business interests in South Korea, Shimada said, but the government intervened to convince them to resist the demands.

“Hitachi Zosen has broken that unity and that betrayal is deeply regrettable,” he said.
The Korean courts were packed with left-leaning judges appointed by former President Moon Jae-in, Shimada claimed, adding that if Japanese firms’ assets were ordered to be sold for compensation then Tokyo “will have no choice but to retaliate by imposing some sanctions on Korea”.

In South Korea, the reaction has been more positive, with Kim Sang-woo, a former politician with the left-leaning South Korean Congress for New Politics and now a board member at the Kim Dae-jung Peace Foundation, calling the court’s decision a step forward.

South Korea faces backlash for ‘humiliating’ deal over Japan forced labour row

6 Mar 2023

“It’s good to hear that the courts are making their own judgments in these cases rather than being pressured into a decision by their own government or another government,” he said.
“I think Yoon really is trying to resolve this issue, but Japan is not doing so much to help the situation … That may be because Prime Minister [Fumio] Kishida is under so much pressure from every quarter that he can’t afford to upset anyone any more.”



Julian Ryall never expected to still be in Japan 24 years after he first arrived, but he quickly realised its advantages over his native London. He lives in Yokohama with his wife and children and writes for publications around the world.

OPINION
Who are the likely suspects in the Kerman blasts, and what does this mean for Iran?

The country has many enemies, but few capable of inflicting a tragedy of this scale

ARASH  AZIZI

Two explosions near Qassem Suleimani's burial site in Kerman killed scores of his supporters. AFP

For the past four years, January 3 has been a tense day in the Middle East. It was on this day, in 2020, that the US took a shockingly bold action by assassinating Qassem Suleimani, a powerful Iranian general who masterminded the regime’s interventions in the region.

Now, on January 3, 2024, Iran has suffered one of the worst terror attacks in its history. At the time of writing (the evening of January 3, local time), at least 103 have been killed in two blasts in Kerman’s Cemetery of Martyrs, where Suleimani is buried, amid ceremonies marking the anniversary of his death.

The initial messaging from local officials was confusing. The mayor of Kerman said it was an accidental gas explosion but state media and those linked to the Islamic Revolutionary Guard Corps (IRGC), the powerful militia that calls most of the shots in today’s Iran, quickly clarified that it was a terrorist attack.

One local MP actually said there had been four explosions. Another claimed it was a suicide attack, using a suicide belt, “surely with Israel’s involvement”. But the account was quickly set straight by the two most authoritative state news agencies in Iran, Irna and Tasnim, which reported the blasts were caused by remote-controlled bombs in two briefcases placed at the scene.

The initial messaging from local officials was confusing

No senior Iranian official or state news agency pointed fingers immediately. Writing on X, a Persian-language spokesperson for Israel has, somewhat bizarrely, claimed that this was an inside job by the Iranian regime.

In fact, while Israel has a long track record of operating on Iranian soil, it has usually targeted IRGC figures or nuclear scientists. There is no precedent for it conducting this kind of mass attack on Iranian civilians.

Importantly, Tasnim has reported there were no IRGC generals amongst the casualties or injured, ruling out an assassination scenario. The most senior Iranian official to respond so far is Ahmad Vaihidi, Iran’s Minister of Interior with a long past in the IRGC (he was Suleimani’s predecessor as head of the militia’s external operations wing). Promising a “crushing response”, Mr Vahidi made no mention of the forces behind the attack and said the investigations were ongoing. A similar statement was issued by the head of the judiciary.

Based on the available evidence so far, given the target and the methods used, ISIS, especially its much-feared regional branch in Afghanistan, known as ISKP, are likely culprits behind the attack. Several experts, on both ISIS and Iran, that I’ve spoken to agree on this point, although, at the moment, this is mostly educated speculation.

ISIS has conducted several attacks on Iranian territory before, notably on a holy shrine in Shiraz in 2022 and 2023. According to former BBC correspondent Mehrdad Farahmand, one of the Kerman bombs targeted a museum that used to be a Zoroastrian fire temple, an ancient Iranian faith notoriously hated by ISIS as it is a symbol of pre-Islamic Iran. Still, at the time of writing, ISIS is yet to take responsibility for the attacks, as it usually does. Other domestic or foreign militias could have also committed the attack as Suleimani had no shortage of enemies near or far.

MORE FROM ARASH AZIZI

Iran's interference in the Arab world does nothing to help Palestinians

What's the future of the Iranian regime? Here are three scenarios

Still, whoever committed the Kerman attacks, the ongoing war of Israel on Gaza, which has led to more than 22,000 Palestinian civilian deaths, is part of the broader regional context. Iran and Israel have been locked in a shadow war for years as Tehran is the main military sponsor of Hamas, which initiated the recent round of the conflict by its terror attacks on Israeli civilians on October 7. In the past few months, Israel has been in conflict with several IRGC-backed forces outside Palestine: Hezbollah in Lebanon, the Houthis in Yemen and the Syrian government, whose territory is the site of extensive IRGC operations and has been the target of several Israeli attacks.

With things already unstable before January 3, the year 2024 is now dawning to an ever more tense situation in the Middle East. It is incumbent upon state leaderships in the region to work hard to avoid a broader conflagration – just as was done in 2020.

Published: January 03, 2024

IRAN

Arash Azizi  is a writer and scholar, and the author of the book 'The Shadow Commander: Soleimani, the US and Iran’s Global Ambitions'

How Vietnam turned US-China competition to its advantage

Thanks to its deft diplomatic manoeuvres, Hanoi has found itself in a strategic sweet spot

RICHARD
HEYDARIAN

A vendor stands by his decorations shop in Hanoi in December. Vietnam's economy grew by more than 5 per cent in 2023. AFP

The once-impoverished and war-stricken nation of Vietnam has emerged as a global pivot state, with 2023 being the year in which major investors and superpowers paid more attention to it than ever before.

Vietnam’s diplomatic success has been nothing short of breath-taking. Within a span of few months, it became the only country to serve as a state-visit destination for both US President Joe Biden and Chinese President Xi Jinping. While Mr Biden oversaw the elevation of bilateral ties to a “comprehensive strategic partnership”, Mr Xi ushered in a “golden era” of bilateral relations with his communist brethren to the south.

Just as crucial, however, is the South-East Asian nation’s fruitful wooing of global investors, including Big Tech companies from the West and China. Flushed with increasingly sophisticated investments from overseas, it is gradually building up its own industrial base. Its homegrown electric car dynamo, VinFast, has launched its first dealership in the US, the world’s most competitive automobile market, months after a successful New York Stock Exchange debut.

In August, the barely half-a-decade-old VinFast was the world’s third-most valuable automobile company, beating blue-chip German and Japanese manufacturers. As if that weren’t enough, Vietnam is also intent on building its own semiconductor industry, thus joining the global “Chip War” with gusto. By adopting an adept “bamboo diplomacy”, Vietnam has managed to benefit from both western and Chinese investments.

Crucially, economic boom also allows this non-aligned nation to modernise its armed forces and, accordingly, develop robust deterrence against external aggression. The leadership’s goal is to turn the country into a modern and self-reliant power in the Indo-Pacific.

Historically, few nations have had as turbulent a history as Vietnam. Throughout the past millennia alone, it has had to grapple with several invading empires, including Mongolians, the Chinese and the French.

Chinese President Xi Jinping and Vietnam's Communist Party General Secretary, Nguyen Phu Trong, attend a ceremony in Hanoi with their wives last month. AFP

Vietnam’s fruitful wooing of global investors, including Big Tech companies from the West and China, is crucial

In its struggle for survival, it was forced to develop a unique set of state institutions that have few parallels in the region. Practically all major South-East Asian kingdoms relied on a “Mandala” system of governance, namely a central authority exercising power through spheres of influence rather than direct control across a vast geographic expanse.

In Vietnam’s northern regions, however, increasingly sophisticated state institutions began to emerge, thus laying down the foundation for the conquest of southern polities, most notably the Indic Champa kingdom half-a-millennia ago.

Contemporary Vietnam often defines itself in opposition to its much larger neighbour, China. The cliche is that it fought an anti-colonial war against the Chinese for “a thousand years”. But as scholars such as Christopher Goscha have argued, Vietnam wouldn’t become a relatively monolithic and coherent nation-state until more recent times. If anything, various kingdoms in northern Vietnam lived, as eminent historian Keith Weller Taylor explains, in peaceful co-existence with China and were even “dependent upon a successful practice of mimicry” of it.

In fact, Vietnam relied on comprehensive Chinese strategic patronage – first under Kuomintang nationalists and later under Maoist forces – throughout the first half of the 20th century in order to drive away western empires from Indochina. And it was Chinese leader Deng Xiaoping’s market reforms that largely inspired Vietnam’s own post-Cold War “Doi Moi” (Renovation) economic liberalisation policies.

Vietnam’s contemporary strategic outlook, however, was shaped by traumatic events during the second half of the 20th century. At the height of the Cold War, and following a string of victories, it suddenly found itself facing both the West and China almost alone. By the 1980s, its Soviet ally was bogged down in Afghanistan, thus leaving Vietnam in a precarious position.

Following the end of the Indochina Wars, Vietnam had its “Never Again” strategic moment. Accordingly, it adopted a fiercely self-reliant national security doctrine that included “Four Nos”: no alliance with any foreign power; not siding with any superpower against the other; no foreign military bases; and no reliance on military force as a primary instrument of foreign policy.

Its pragmatic post-war leaders prioritised reconstruction and economic development and after decades of reforms, a new generation of relatively liberal leaders went so far as pursuing warmer ties with the West, including the US. The upshot was the full normalisation of bilateral ties with America and the gradual emergence of strategic partnerships with major western economies.

Decades after the Vietnam War, the South-East Asian nation is today an attractive destination for overseas investors. Getty Images

It also adopted a proactive trade policy, signing agreements with the US and the EU, and joining the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This went hand-in-hand with closer security co-operation with the US and the EU.

By building robust ties with the West, Vietnam sought to balance a rising China. When a trade war broke out between the world’s two superpowers, however, it emerged as an unlikely beneficiary. The West began relying more on Vietnamese exports amid its decoupling plans from China. Yet Vietnam also began to become more dependent on Chinese intermediate goods, capital and technology for its burgeoning manufacturing base.

The upshot was the emergence of a global pivot state that triggered a wave of courtship by both Washington, which seeks to enlist Vietnam’s support to hem in China, as well as Beijing, which seeks stable ties. By hosting Mr Biden and Mr Xi in quick succession, Hanoi showed a willingness to maximise ties with both superpowers, but it also signalled a determination to preserve its strategic autonomy.

Its communist leadership is intent on keeping a healthy distance from Washington, lest it risks western-backed colour revolutions at home or provoke Beijing. Economic boom in the past decade has birthed an increasingly large and cosmopolitan middle class. As a result, its security establishment is intent on preventing large-scale pro-democracy protests. No wonder, then, that during Mr Biden’s September visit to Hanoi, Vietnamese leaders enthusiastically welcomed expanded economic co-operation but largely shunned tighter military and political entanglements.

Just two months later, Vietnam hosted top Chinese leaders in order to dispel any suspicion of an alignment with the West. During Mr Xi’s visit, the two countries signed a series of co-operative agreements to maintain economic ties. Crucially, however, Vietnam made it clear it won’t sacrifice its territorial and maritime claims in the South China Sea, where it is at loggerheads with Beijing.

Thanks to its deft diplomatic manoeuvres, Vietnam has found itself in a strategic sweet spot. Large-scale investments from both the West and China are fuelling its rapid economic development. These allow it to not only enhance the welfare of its citizens, thus boosting the communist party’s legitimacy, but also provide significant resources for military modernisation.

Without a doubt, the new year will be filled with many geopolitical challenges, especially growing tensions between the US and China. But if there is one middle-sized country in East Asia that has shown an ability to hold its own in the face of manifold geopolitical challenges, that’s Vietnam.

Published: January 04, 2024,

Richard Javad Heydarian is a Manila-based academic, columnist and author

UK

PRIVATIZED WATER SERVICES

Thames Valley rivers used as overflow for sewage

3rd January 2024
By Bethan Nimmo

BBC

Oxfordshire Political Reporter

Thames Water said many of their sewage treatment works have been impacted by Storm Henk

Sewage has been discharged into rivers at nearly 270 sites across the Thames in one week, data from a water firm has revealed.

Figures from Thames Water show some overflows have been pumping untreated, raw, sewage into its waterways for more than 100 hours.

A spokesperson for the water company said many of their sewage treatment works have been impacted by Storm Henk.

An expert said he is "shocked" the rivers have been used like a sewer.

Thames Water uses the rivers as an overflow for when its sewer systems are overwhelmed by rainfall.

Dr Alex Lipp, an environmental scientist at the University of Oxford, created a website to show where the sewage is being pumped in and where it ends up.

He has been tracking the data released by Thames Water and believes it's been one of the worst weeks for sewage spills in the region.

He said there had been 229 sewage overflows discharging simultaneously on Tuesday, which has only been beaten once in November 2023.

 

The water firm said it regards all sewage discharges as "unacceptable" after figures showed almost 270 sites had been impacted in one week

Dr Lipp said it's "upsetting" to see this issue happening and raised concerns about the impact on wildlife.

He explained that alongside the "normal" contents of the toilet, the sewage going into the rivers also contains pesticides, pharmaceuticals and illegal drugs.

"They form a chemical cocktail in waterways. Actually, because a lot of these chemicals are relatively novel, we don't really know the impact these have, especially when mixed together, on aquatic organisms," he explained.

"It is just frankly shocking that in the 21st Century we are just discharging raw sewage, it is upsetting."

'Unacceptable'

Thames Water has been providing real-time monitoring on sewage overflows across the Thames basin since last year.

A spokesperson for the firm said they regard all discharges as "unacceptable" and plans were in place to upgrade 250 of its sewage treatment works and sewers.

They added: "Taking action to improve the health of rivers is a key focus for us and we want to lead the way with our transparent approach to data."

Thames Water is believed to be the first company to provide live alerts for all untreated discharges throughout its region, the spokesperson continued.

They explained: "This 'near real-time' data is available to customers as a map on our website and is also available through an open data platform for third parties, such as swimming and environmental groups to use."

Water company criticised over waterways pollution

Top UK CEOs will make more in the first 4 days of 2024 than the average worker makes in a year, analysis shows

Sawdah Bhaimiya
Jan 4, 2024, 

BI

The median pay of bosses at the top companies in the UKis 109 times more than the median worker pay.

Malte Mueller/Getty Images


The CEOs of top companies in the UK will earn the median annual salary of a full-time worker in just three days.

That's according to analysis of CEO pay and average pay in the UK by the High Pay Centre.
These CEOs take home a median pay of £3.81 million ($4.8 million), per the report.

The bosses of top companies in the UK will have earned more money by 1 p.m. on Thursday 4 January than the average worker makes in a year, a new analysis by the think tank High Pay Centre found.

The research, published on Thursday, analyzed the most recent CEO pay data published in the company's annual reports and combined them with government statistics that show pay levels across the UK.

It found that the wages of CEOs of FTSE 100 companies — an index of the top 100 companies listed on the London Stock Exchange by market cap — will overtake the pay of the average UK worker in just three and a half days, highlighting a disproportionate wealth gap.

Per the report, FTSE 100 CEOs have a median annual pay of £3.81 million ($4.8 million), which is 109 times the median full-time workers' pay of £34,963 ($44,000).

Meanwhile, a partner at one of the UK's most prestigious law firms with an average annual pay of £1.92 million ($2.42 million) would need to work until January 8 to outstrip the pay of the average worker in the UK.

And top bankers – with an average pay of £800,000 ($1.1 million) – would need to work until January 16 to do the same, the report said.

The pay gap isn't much better in the US with CEOs at 500 major firms making 272 times more than employees in 2022, with an average compensation of $16.7 million, according to the AFL-CIO.

Bosses at Britain's biggest companies will have earned more in 2024 than the typical worker will make this year by 1pm TODAY

Some earn much more and will have even bigger pay gaps with workers

By MARK SHAPLAND EXECUTIVE CITY EDITOR
DAILY MAIL
PUBLISHED: 3 January 2024

Bosses at Britain's biggest companies will have earned more by lunchtime today than the typical worker will over the whole of 2024.

Statistics reveal that a typical FTSE 100 chief executive now takes home £3.81million, over 109 times more than the average salary of £34,963.

By 1pm today – dubbed 'Fat Cat Thursday' – some executives will have taken just two-and-a-half working days into January to outstrip the yearly salary of many staff, said the High Pay Centre think-tank.


But some earn much more and will have even bigger pay gaps with workers. The 1pm mark is one hour earlier than when the median worker's annual pay was estimated to have been passed last year.

Among the biggest FTSE, or Footsie, earners last year was Albert Manifold, chief executive of construction group and Tarmac-owner CRH.

Bosses at Britain's biggest companies will have earned more by lunchtime today than the typical worker will over the whole of 2024 (file image)

He was paid £10.4million, 259 times more than his average worker, giving CRH the largest pay gulf of any blue-chip company.

Pascal Soriot, of pharmaceutical giant AstraZeneca, was the highest-earning FTSE 100 chief with £15.3million while Charles Woodburn, chief executive of defence giant BAE Systems, earned £10.7million. Tory MP Bob Blackman asked: 'Can they justify these huge salaries? Are their talents so rare? I struggle to answer that. They are paid far outside what the average individual earns.'

Astonishingly, the figures follow calls from business groups for executives to be paid even more for the UK to compete as a global financial centre.

They included Julia Hoggett, head of the London Stock Exchange, who spoke of a 'lack of a level playing field' between Britain and other countries, notably the US.

Luke Hildyard, High Pay Centre director, said: 'Lobbyists spent much of 2023 arguing that we are too concerned with gaps between the super-rich and everybody else. They think that economic success is created by a tiny number of people at the top and that everybody else has very little to contribute.


Statistics reveal that a typical FTSE 100 chief executive now takes home £3.81million, over 109 times more than the average salary of £34,963 (file image)

'When politicians listen to these misguided views, it's unsurprising that we end up with massive inequality, and stagnating living standards for the majority of the population.'

The figures also showed that chief executives of FTSE 250 companies will need to work until January 10 for their average pay of £1.32million to overtake the annual salary of the typical UK worker.

A partner at one of the 'magic circle' of elite law firms, who earn on average £1.92million, would reach this level by January 8.

A partner at a 'Big Four' accountancy firm, average pay £871,000, would reach the milestone on January 16 as would a banker at one of the FTSE 100 banks.

Those in the top 1 per cent of UK earners, making at least £145,000, will have overtaken the annual pay of the median worker by March 29.