UK

PENSIONS & RETIREMENTPERSONAL & WORKPLACE PENSIONS

Is my pension safe?


By Mark Benson ·

Following the government's mini-budget, which sparked financial chaos, the question on many of our lips is whether our pensions are safe.

The repercussions of the government's mini-budget in September are still being felt today. While the concept of Liz Truss’s growth strategy has been called into question, it was the unfunded tax cuts that caused panic in financial markets. As markets began to lose faith in the UK government, the pound came under pressure, and the cost of borrowing increased. This has created instability in the pensions sector, but it is vital to put this into context.

Which pension arrangements have been hit hardest?

There are two types of pension, defined benefit (otherwise known as a final salary scheme) and defined contribution (otherwise known as a money purchase scheme). A defined benefit pension scheme guarantees an income in retirement based on your final salary and years of service. The employer must ensure sufficient funds are available to pay member pensions in retirement.

A defined contribution scheme is dependent upon contributions and investment performance. Upon retirement, various options exist, such as drawdown and annuity purchase. Unlike a defined benefit scheme, there is no guarantee of future income with a defined contribution scheme. Your pension investments are literally at the beck and call of the markets and the options available at the time of retirement.

Defined benefit schemes hit by money market turmoil

Defined benefit schemes require a degree of income security to fulfil their retirement pension obligations to members. In theory, gilts (gilt-edged securities) are considered exceptionally low-risk investments, as the government guarantees them. Consequently, this type of investment is very popular with defined benefit schemes focusing on long-term maturity of between 20 and 30 years. So far, so good, but why has recent turmoil impacted defined benefit schemes?

Many defined benefit pension schemes use complex derivatives based on long-term gilt yields to match assets with liabilities. This is known as Liability Driven Investment, a type of insurance requiring pension funds to provide collateral. When markets lost confidence in the UK government, this prompted a sell-off of long-dated gilts and increased government borrowing costs. As gilt yields rose, the pension funds were forced to provide more collateral to maintain their Liability Driven Investment strategy. As a result, many defined benefit pension schemes were forced to reduce their investment in long-dated gilts to raise this capital.

In what quickly became a vicious circle, the more long-dated gilts sold, the lower the price and the higher the yield. As the yield continued to rise, pension funds were required to increase collateral further, raising funds by selling more long-dated gilts. Only when the Bank of England stepped in as a buyer of up to £65billion of long-dated gilts did the selling pressure ease.

Why was the Bank of England so important?

Just before the mini-budget on 23 September, the 30-year government bonds (gilts) yield stood at around 3.5%. However, the contents of the mini-budget prompted a sell-off in the long-term gilt market, with yields increasing to 5% (the government's cost of borrowing). On 28 September, the Bank of England announced plans to intervene and buy up to £65 billion of long-dated gilts until 14 October. In effect, the Bank of England became the buyer of those gilts which the defined benefit pension schemes were forced to sell to raise collateral. There was an almost immediate impact which saw prices recover and the yield on long-dated gilts fall to around 4%. However, in early October, markets began to grow more concerned. By 12 October, long-term gilt yields had increased to 5%. 

Why has the initial recovery reversed?

The Bank of England warned defined benefit pension schemes that they would need to "get their house in order" by 14 October. Forced to react in a relatively short timescale, further selling of long-dated gilts has increased yields, even though the Bank of England is buying up to £6 billion worth of gilts per day during the buyback programme. In what could be seen as a case of the tail wagging the dog, gilt yields have since fallen back slightly, with many investors convinced the government will need to backtrack on tax cuts.

What next?

While the Bank of England buyback programme is expected to end on 14 October, other options are available. As the governor of the Bank of England has said on numerous occasions, they will step in if they feel there is a material risk of financial instability to the UK. This concern prompted the recent support programme, and it is inconceivable that the Bank of England will sit back and do nothing if gilt yields remain stubbornly high. However, amid signs the government may be backtracking on more of its mini-budget proposals, many are starting to see the light at the end of the tunnel.

Are defined contribution schemes impacted by the turmoil?

As there is no certainty of income in retirement from a defined contribution scheme, these schemes will have relatively low exposure to long-term gilts. In lay terms, upon retirement, the value of your pension investments will be used to provide an income based on market prices at the time. Consequently, the impact from the gilt sell-off is considerably less than that for defined benefit schemes. However, market turmoil has affected the price of shares on the London stock exchange, which has impacted the value of defined contribution pension assets.

It is also worth remembering that those approaching retirement may look towards greater income security. In some cases, this may mean a switch to bonds which could include long-term gilts. In a worst-case scenario, those impacted by recent market movements may be forced to consider delaying their retirement until the value of their investments recovers. In this scenario, it is essential to take professional advice from a pension specialist, as you must consider numerous factors.

Are pension funds protected?

With a defined benefit pension scheme, it is your employer's legal obligation to ensure the scheme is fully funded and able to cover liabilities. In the event of a shortfall, your employer may need to add additional funds to the scheme. Consequently, one of the main risks with a defined benefit scheme is that your employer or ex-employer goes bust. However, the Pension Protection Fund (PPF) was set up in 2005 to protect employee pensions.

If your employer or ex-employer were to collapse, leaving a shortfall in the employee pension scheme, the PPF would step in. The PPF is funded through a mix of:

• Compulsory levy on defined benefit pension schemes
• Transfer of pension fund assets when a scheme fails
• Legal options to recover additional funding from insolvent employers

Consequently, the PPF can guarantee 100% of the pension owed to scheme members already in retirement. Those yet to retire will have 90% of their future pension guaranteed. There is a maximum annual pension limit of £41,461.07, but this will only impact around 0.5% of pension scheme members.

The situation for defined contribution schemes is different. These schemes are administered by parties authorised by the Financial Conduct Authority to operate in the UK. In the event of failure, the funds should already be ring-fenced, with assets moved to another authorised administrator. Where there is a financial loss for the member, they may be able to claim compensation from the Financial Services Compensation Scheme.

Is your pension safe?

The potential knock-on effect of a concerted sell-off in the long-dated gilts market would impact the government, individuals and businesses. The short-term buyback programme announced by the Bank of England offered a degree of support but is not a long-term solution. Amid the danger that some pension schemes would become insolvent, placing massive pressure on the PPF, the government and Bank of England must devise a viable solution. 

The next few days will be crucial for money markets, pension schemes and the UK government. Due to differences in their structure, defined benefit pension schemes have been hit much harder than their defined contribution counterparts. However, even in a worst-case scenario, the PPF will guarantee both existing and future pension payments.

UK
Tory prime ministers have ‘collectively got us into this mess’ – Blackford

Liz Truss should not be in office ‘one day longer’, the SNP’s Westminster leader has said.


Ian Blackford said Tory prime ministers since 2010 have been collectively responsible for the economic turmoil in the UK since Liz Truss took over (Andrew Milligan/PA) / PA Wire

By Lauren Gilmour

The SNP’s Westminster leader Ian Blackford has said Tory prime ministers since 2010 have “collectively got us into this mess”, after Kwasi Kwarteng was replaced as chancellor on Friday.

Speaking to the BBC’s Good Morning Scotland on Saturday, Mr Blackford branded the situation a “shambles” and called for a general election after Liz Truss sacked Mr Kwarteng and parachuted former foreign secretary Jeremy Hunt in to Number 11 in his place.

“We’ve really seen the credibility for financial competence, for financial management of this Government really put to bed,” he said.


I think it makes the point to us that we don't have to rely on another Westminster government dragging Scotland through the mire, that there is an alternative

“Over the last few years, we’ve gone from Cameron, we’ve had Theresa May, we’ve had Boris Johnson, we’ve now had the shambles of Liz Truss.

Demonstrators block Downing Street gates in protest at PM’s climate approach

“None of these prime ministers have acted in the interests of the people of Scotland and collectively they have got us into this mess. It’s not another Tory prime minister that we need. We need away from Westminster, we need independence.”

Mr Blackford joined Labour leader Sir Keir Starmer’s calls for a general election, saying there had been a “whole series” of “shambolic” Tory governments.

He added: “We want the ability to remove this Tory Government.

“But of course, we’ve had a whole series of shambolic Tory governments over the course of the last few years.”

The Ross, Skye and Lochaber MP argued that the situation backed up the arguments for Scottish independence.

“I think it makes the point to us that we don’t have to rely on another Westminster government dragging Scotland through the mire, that there is an alternative and that alternative is Scotland becoming an independent country.

“I think what’s becoming increasingly clear to people is that we need away from this.

“I think what we need to do over the course of the coming weeks, is to have that debate about Scotland’s future and contrast that future of Scotland as an independent country back into Europe – because let’s not forget the damage that Brexit has done – about making sure that we’re driving the investment into the economy, giving people hope that for the families that have children or grandchildren, that they can be safe in the knowledge that this will be a prosperous country, a fairer country, a greener country.

“That’s not what we get from Westminster and that’s the questions that we need to be discussing with people on the doorstep.

Mr Blackford said Westminster “caused” the issues of higher energy bills and rising food prices and said the cost-of-living crisis was “exactly why” a conversation on a second referendum was needed.


“Westminster does cause these problems and that is a real crisis that people are facing.

“Without engaging in hyperbole, there’s a real possibility that many people will even be faced with the issue as to whether or not they can afford to stay in their own home with the increase in mortgage costs.

“But it doesn’t have to be this way. That’s the point,” he added.

UK

Former PM Boris Johnson picks up £135,000*** pay cheque for 90 minutes’ 'fireside' chat in America

 OCTOBER 13, 2022
By Guest Contributor - Opinion


Former UK prime minister Boris Johnson has been paid £135,000 for a speech at an American insurance industry conference, writes Philip Braund.

The bumper pay day came only 24 hours after he registered his company – 'The Office of Boris Johnson Limited' at Companies House.

Johnson is expected to earn millions on the public speaking circuit after his departure from 10 Downing Street.

His yearly salary as PM was £164,080.

Apart from speaking, he is looking to return to journalism and complete a long-awaited biography of William Shakespeare.

Johnson spoke at the Insurance Leadership in Colorado Springs.

It was advertised as an “exclusive discussion on global politics and economics”.

He gave a 30 minutes’ talk before having a 45 minutes’ “fireside chat” on stage.

He spoke about Brexit, Ukraine, and the fact he was born in New York.

Also, he chatted about Donald Trump, The Queen, and drinking Emmanuel Macron’s “very fancy” French wine with the then German Chancellor Angela Merkel.

However, he stayed clear of commenting on his successor Liz Truss and the economic maelstrom facing the UK.

Renato Lilienfeld, president, and senior partner in Lilienfeld Corredores de Seguros, Chile’s largest private insurance broker, told The Times:

“It was a privilege, an honour, and a great opportunity to have the possibility to be so close to Mr Johnson in such an open environment.

“I found that he was quite relaxed.

“He spoke about many topics in general about what’s going on in the world, with Ukraine and with economics worldwide.

“He talked a little bit about what he was able to achieve in the years he was working as PM.

“He talked very much about Brexit as well and the reasons behind leaving the European Union.

“He’s still a great believer in Brexit and that Brexit is good for the UK.”

***134,987.12 Canadian Dollar

André Lacroix: I.T.A.S. and the state of Tibetology

Mr Lacroix is a retired College Professor, and author of Dharamsalades.

He also realised the translation of The Struggle for Modern Tibet by Tashi Tsering, William Siebenschuh and Melvyn Goldstein 

.

An international Tibetology conference organised by the I.A.T.S. will soon be held in Prague.
Are you familiar with the International Association for Tibetan Studies?

To be honest, before you told me about it,

I didn't know the International Association for Tibetan Studies, I.A.T.S. in English.

I informed myself this morning on the question and I noticed that it was an association which had been founded in Oxford in 1979, and I say 1979 is strange, it is precisely the year when Deng Xiaoping, wanting to put the Tibetan problem behind him, had organized high-level conferences between representatives of Dharamsala, therefore representatives of the Dalai Lama and representatives of the People's Republic of China. These negotiations finally failed because of the Tibetan negotiators' demands. They wanted to create, it was not a request, it was a claim, to create a greater Tibet which would have cut off China from a quarter of its territory, which obviously was an inadmissible claim for the Chinese representatives.

I also note that a following meeting of this association was held in Narita, Japan in 1989, that is to say the precise year during which the Dalai Lama received the Nobel Peace Prize. There are bizarre coincidences, and I also discovered that it was at this meeting in Japan that the association wrote its statutes, and among these statutes is the fact that the members co-opt each other, which makes me apprehend that the work now held in Prague by this association is not imbued with the most complete objectivity. I'm afraid it's more or less tainted by anti-Chinese feelings.

In your opinion, what is good Tibetology?
Whom do you consider as a model Tibetologist?

Ideally, Tibetology should of course encompass history, the study of texts, the study of the philosophy, myths, legends, religion, religions. Because it is often believed that there is only Buddhism in Tibet, whereas there, the pre-existing religion was the Bön religion, of which there are still obvious traces today. So, all from a perspective that does not mask the geopolitical dimension, because it is certain that since the end, the fall of the Manchu empire, Tibet as been at the crossroads of all the imperialist attempts of the West, the Russians, the British and so on, it has always been part of the Chinese empire which is currently denied by the people of the International Campaign for Tibet. But it is a historical reality.

By taking advantage of the serious difficulties of the young Chinese Republic from 1911, which was a victim of the warlords and then from the struggle between communists and nationalists, the Japanese invasion and so on, China could not maintain its control over this remote Tibetan province. The British took advantage of this to make it a kind of protectorate which was unilaterally declared by the 13th Dalai Lama as an independent Tibet, but it's an independence that has not been recognized by anyone. So when Mao came to power, he simply recovered this province which for a time had escaped control because of the many difficulties of the young Chinese Republic. But, for me, a true Tibetologist, the paragon of Tibetology is Melvyn Goldstein who really is a master who fluently speaks Tibetan, who has been to Tibet dozens of times and travelled it in all directions, he is a very rigorous historian who obviously knows Tibetan who knows the history and has published studies which are really authoritative on the question. So all the little monographs are good to take, which reinforce and nuance, but I find that the essentials on Tibet have been said. In any case, he wrote a masterful book that we can never do without.

The Covid epidemic has disrupted international studies and exchanges, do you think that this epidemic has influenced Tibetan studies?

It is certain that the impossibility of travelling there certainly did not contribute to a better knowledge of the situation on the spot. On the other hand, insofar as many of these Tibetologists are scholars who study texts and so on, who communicate with each other by videoconference, and so on, I don't know if it influenced the studies so much, I don't know, but, of course it's always better to go and see what's going on. As a Tibetan proverb says: better to seeing once than to hear a hundred times, and this is very true, when you go there, you have another, a completely different understanding than when you just read.

What do you think of the new generation of Tibetologist, is there a positive change in their mentality?

Unfortunately no, compared to the great Tibetologists to whom I refer, I am thinking of people like Melvyn Goldstein who probably is the greatest Tibetologist in the world, who fluently speaks Tibetan, who roamed Tibet in all directions and who has a true Geopolitical vision, who has an enormous historical dimension. He is a gentleman who is, I believe, about my age, that is to say, he is an elderly man, I am thinking of Tom Grunfeld and so on. I can't think of anyone precisely, maybe I'm not informing myself well enough, but I do not see a lot of changes.
Maybe Barry Sautman who is younger but in any case I find that, it is also something that struck me, it is that Tibetology, good Tibetology it must be recognized, is unfortunately very often Anglo-Saxon. French Tibetology, for example, is quite lamentable. INALCO, the National Institute of Oriental Language and Culture in Paris, I would say, is a nest, with a few exceptions, of people who do not even hide the fact that they are against Communist China and whose studies are tainted by this anti-Chinese sentiment. It's quite lamentable. I would mention the names of Françoise Robin, Katia Buffetrille, Anne-Marie Blondeau and so on. These are not quite reliable personalities.

What do you think of the many scholars of Tibetan who have never been there? Is it possible for these people to express a real objective opinion?

In my opinion, it must be very difficult. I'm not saying it's impossible, but it would take someone who is extremely curious, who really wants to be informed without prejudice and who is a polyglot, who handles Chinese, Tibetan, English, French, German and so on. So maybe, but does this kind of character exist? I do not know. In any case, it's sure that when you set foot somewhere, you immediately have another vision than what you simply find in books. Myself, when I for first time went to Tibet, I thought, based on the Lonely Planet, a relatively reliable travel guide, this guide was talking about cultural genocide. Then, eyes like saucers when I first set foot there and I saw the omnipresence of monks and so on. I asked myself, but what is this travel guide talking about? And it was from that moment that I started to study, in particular Melvyn Goldstein, who has really done masterful works on the history of Tibet from the origins to the present day, with this quite remarkable aspect on history and geopolitics.

Internationally, the vast majority of experts on Tibet have long believed that the Chinese government has an unfair policy toward ethnic minorities.

Having visited Tibet several times, what do you think?

Unfortunately, experts, often the ones who are called to our media, are experts who are steeped in the Atlantic climate, which means that China remains the number one threat, and I believe everything can be explained by the fact that the United States are slowly loosing their hegemony, they cannot accept it, they therefore need an enemy to try to saving their leadership. They realise well as they are not stupid that this leadership is shifting towards China, they do everything to slow it down. How should I put it? It is a bipartisan struggle where Democrats are as hostile towards China as Republicans.

Do you think the conference in Prague will bring some positive and apolitical results for the field of Tibetology?

I tried to find out what topics were going to be covered but couldn't find them on the internet. I only found the conference timetable and which conference rooms et cetera, but I don't know who is invited to speak.

I don't know what topics will be covered, there will surely be some very interesting topics during this conference, but I cannot tell.

I'm still wary in general of the ambience, which is likely to be quite anti-Chinese.

Pirates are against the new rules on crypto assets which will ban anonymous payments


PUBLISHED ON OCTOBER 14, 2022
By Press Release


On 10 October, the ECON and LIBE committees of the European Parliament voted on a complete ban on anonymous crypto payments. The latest agreement between the European Parliament and the European Council goes even further than the original European Commission’s proposal which was setting the limit at the equivalent of €1000. The new rules will impose an identification requirement for crypto-asset transactions in all amounts. Moreover, all users of hosted wallets will now have to identify themselves, as well as all users who send non-hosted funds to hosted crypto wallets.

Patrick Breyer, MEP for the Pirate Party Germany and member of the LIBE committee, said: “These rules will deprive law-abiding citizens of their financial freedom. For example, opposition leaders like Alexei Navalny are increasingly reliant on anonymous donations in virtual currencies. Banks have also blocked donations to Wikileaks in the past. The creeping abolition of real and virtual cash threatens negative interest rates and a shutdown of the money supply at any time. We should have a right to be able to pay and donate online without having our financial transactions recorded in a personalised way. There is no justification for this de facto abolition of anonymous virtual payments: Where virtual assets have previously been used for criminal activity, prosecution has been possible based on current applicable regulations. A complete ban on anonymous crypto payments will not have a significant impact on crime. The stated goal of combating money laundering and terrorism is just a pretext to gain more and more control over our private transactions.”

Mikuláš Peksa, MEP, chairperson of the European Pirate Party, said: "In these times of war, it is absolutely crucial to still be able to make anonymous payments to support those that are the most at risk of being persecuted. Today’s decision by some Members in this house is based on fear and misunderstanding of what cryptocurrencies really are and the ground breaking innovations they can bring to society. We should be allowed to do online what we are allowed to do offline. These double standards are outdated. I believe that a ban on anonymous payments in cryptocurrencies simply violates our core privacy rights and, therefore, this type of regulation has no place in our democratic European Union."

Possible extension of Germany's nuclear power at risk - economic ministry


OCTOBER 13, 2022
By EU Reporter Correspondent


The German government on Monday (10 October) failed to approve a draft law to put on reserve two of the country's last nuclear power plants beyond their planned phase-out due to political disagreements, the economy ministry said, complicating Berlin's energy plans for the winter.

Germany had planned to complete a phase-out of nuclear power by the end of this year, but a collapse in energy supplies from Russia because of the war in Ukraine has prompted the government to keep two plants on standby until April.

But disagreements within the German cabinet could jeopardize the possible lifespan extension for the Isar II power plant, a spokesperson for the Economy Ministry said.

"This means that the tight schedule for the procedure cannot be kept," the spokesperson said, adding that the power plant operators were informed of the delay on Monday.

E.ON's (EONGn.DE) Isar II nuclear power plant was supposed to go offline for a week's maintenance from Oct. 21 in preparation for a life extension to March 2023, the company said last month after it reported a leak at the site.

The plant operator needs clarity on the government's plans before starting the maintenance, the Economy Ministry spokesperson said. "The ministry continues to work on solutions," she added.

Monday's decision was delayed due to objections from the finance ministry, a source told Reuters. The ministry is run by the Free Democrats party, which has been demanding a longer lifespan extension for the reactors.

"The finance ministry is of the opinion that the proposed continued operation of only two power plants alone is not sufficient," a finance ministry source said.

BOOK EXCERPT

How Jair Bolsonaro introduced a populist right-wing movement to Brazil – like the one India has too

An excerpt from ‘Strongmen Saviours: A Political Economy of Populism in India, Turkey, Russia and Brazil’, by Deepanshu Mohan and Abhinav Padmanabhan.

Deepanshu Mohan & Abhinav Padmanabhan
Oct 10, 2022 ·

Jair Bolsonaro. | Adriano Machado / Reuters

Jair Bolsonaro grew up during this era, witnessing first-hand the military dictatorship and the resulting resistance. He was born in 1955 into a modest family in which his father was the sole breadwinner. As evidenced by his narratives, his family’s political leanings were towards the military-civil alliance: the family reportedly participated in the 1964 civil-military coup that deposed President-elect Joao Goulart. Bolsonaro himself adopted these inclinations. According to his interviews, he assisted the army in pursuing guerrillas and was advised to enrol in military school as a result. He was admitted to Brazil’s primary military academy in 1974.

Bolsonaro hails from a segment of the population that favoured military rule – a sentiment that can be attributed to the era in which he grew up, when he witnessed the military coup and the country’s economic performance under military rule.

However, this acceptance of the military was not universal, as can be seen from the growing resistance against the military. Bolsonaro was himself becoming a major figure within the military, especially due to his criticism of working conditions and wage differentials among the ranks. Inflation was a major issue, and its effects were felt even in the army barracks. Bolsonaro, who was a captain at the time, published an op-ed in a magazine criticising the army’s low wages – a move which enraged his superiors.

Bolsonaro was later identified as one of the masterminds behind a plot to plant a bomb in the barracks by the same magazine, with the aim of drawing his superiors’ attention to the ongoing problems.

While Bolsonaro denied the claims made in the magazine article, the accusation remained a source of contention throughout his military career. Bolsonaro resigned from the army shortly afterwards. Given this history, he did not leave the army on good terms with his colleagues, which he cites as one of his reasons for entering politics in 1988.

As evidenced by the rise of church-affiliated parties, the role of the Catholic Church in re-democratising Brazil had elevated it to a position of prominence in the country’s political environment. Bolsonaro ran in the Rio de Janeiro City Council elections on behalf of one of these
parties, the Christian Democratic Party. He was elected to Brazil’s lower house, the Chamber of Deputies, in 1990 as a representative of the same party.

Most people in Brazil endured a series of ups and downs during the 1990s. As industries automated, demand for unskilled labour decreased, resulting in a significant increase in income inequality. The loss of job opportunities soured people’s perceptions of the reforms, prompting them to seek a pro- labour leader in the form of Lula Inacio da Silva. Lula was elected president in 2002, representing his own party, the Workers’ Party. His background as a labour union leader who had organised workers against military dictatorship in the 1970s and 1980s, combined with the name of his party, created the impression of a pro-labour leader. Lula’s election was aided by public expectations based on this impression and his past initiatives.

Lula’s pro-labour stance instilled fear in the business community, which viewed him as an anti- capitalist reformer. However, as can be seen, Lula’s approach to governance was more centrist, signalling an investor-friendly approach. He adopted a balanced strategy, similar to what had been done in the 1990s, when privatisation and cash transfers to the poor were carried out concurrently; and he did so more effectively.

As the economy grew, he increased government spending and created jobs and opportunities for the middle class in particular. Increased job opportunities are a tangible change that the masses can see and feel, which contributed to Lula’s popularity. His appeal was further based on the stability he provided during his tenure. As a result, he was re-elected for a second term in 2006 and the Brazilian economy weathered the 2008 financial crisis under his leadership. During his second term, he expanded the number of social welfare programmes, which further boosted his appeal.

In the subsequent elections, Lula stepped down from office, given that the Constitution does not allow an individual to serve more than two consecutive terms in office. Instead, he supported his protégé, Dilma Rousseff, as the next presidential candidate. Rousseff became Brazil’s first female president with Lula’s support.
Rousseff’s tenure was marked by a return to economic mismanagement and corruption scandals, some of which altered Brazil’s political landscape. As in several other developing countries, decades of inherent corruption had built up Brazilian society’s tolerance towards corruption.

This widescale normalisation of corruption is generally addressed only when large-scale corruption scandals are unearthed. The Petrobras scandal was the first such scandal to galvanise the public and elevate corruption to a major issue. Rousseff, along with a number of other high-ranking government officials and elected officials, was implicated in the scandal, which ultimately resulted in her impeachment in 2016.

The magnitude of the Petrobras scandal and its subsequent impact on Brazilian society can be compared to the series of corruption scandals that embroiled the second United Progressive Alliance (UPA-II) government in India. Like the UPA-II, Lula’s brand of politics proved popular in Brazil for nearly two decades. However, in the aftermath of the Petrobras scandal, his chances of re-election were severely dented and his protégé Rousseff was impeached. This was a major change for Brazilian society, as a large proportion of the youth had grown up during the country’s growth period under Lula.

Their focus had now shifted to the widespread corruption that had festered in society even during the presidency of a beloved leader. The Petrobras scandal also had a significant impact on the economy, due to the magnitude of the organisation. The shutting down of Petrobras’s operations had a major impact on employment, as construction projects around the country were halted and employees were laid off, plunging Brazil into recession.
In light of these factors, by the time the next election came round, the public had lost faith in the prevailing political class, most of whom had been embroiled in the Petrobras scandal. This lack of trust in senior politicians paved the way for Bolsonaro, who – despite a lengthy career in politics – avoided the spotlight and benefited when his peers were implicated in corruption scandals.

Having witnessed one of the world’s largest corruption scandals unfold and one of their favourite leaders implicated, the populace gravitated towards Bolsonaro, whose campaign was built on anti-left
rhetoric, a promise to crack down on crime and an emphasis on Brazil’s Judeo-Christian traditions. Bolsonaro’s campaign emphasised social issues, in contrast to those of his predecessors, which focused primarily on economic reforms.

Bolsonaro emerged as the frontrunner for the presidency due to the public’s dissatisfaction with the current leaders and mass resistance towards the ruling political elite. This trend was similar to how voters shifted towards a ‘left-leaning’ candidate when they voted for Lula after increased privatisation caused job losses.

Bolsonaro’s rise to power and the circumstances surrounding it are aligned with those of Modi, Erdogan and Putin. In each case, one can observe how the prevailing political class lost the people’s trust and support, due to either widespread corruption or demonstrated incompetence (in particular, in failing to address instances of corruption when exposed). This disappointment with the status quo paved the way for the rise of an alternative form of leadership: each of the leaders. in focus was hailed as an ‘outsider’ who alone could resolve the people’s social and economic woes.

Like his counterparts, Bolsonaro exploited this ‘anti-status quo’ sentiment and discontent over the poor design and implementation of neoliberal economic policies to carve a niche for himself as a future leader. Such was the popularity that Lula and Dilma had enjoyed at the height of their tenures that the rise to power of such an extremist figure would not have been possible without the revelations of flagrant corruption scandals and the people’s discontent with neoliberal economic policies that had caused widespread inequalities.

Despite these similarities with his counterparts, Bolsonaro’s approval ratings have declined over the last three years. His poor handling of the COVID-19 pandemic has contributed in particular to this decline While he still retains his appeal among a segment of the Brazilian population, it remains to be seen whether or how he will keep his hold on power – especially since Lula has re-entered politics following the annulment of the corruption charges against himself. Bolsonaro finds himself going up against a political heavyweight such as Lula. It remains to be seen what strategies Bolsonaro will employ to shore up the popularity he gained from the power vacuum that was left by previous leaders – including Lula himself.

Excerpted with permission from Strongmen Saviours: A Political Economy of Populism in India, Turkey, Russia and Brazil, Deepanshu Mohan and Abhinav Padmanabhan, Routledge.

 Brazilian Amazon deforestation breaks September record

Oct 07, 2022 

This file photo shows damage done to the Amazon rainforest in a deforested area near Novo Progresso in Brazil northern state of Para. (PHOTO: AP)

RIO DE JANEIRO, Brazil, (AFP) - Deforestation in the Brazilian Amazon broke the monthly record for September, according to official figures released Friday, triggering calls from environmentalists to vote far-right President Jair Bolsonaro out of office later this month.

In the latest worrying news on the rainforest, satellite monitoring showed 1,455 square kilometers (562 square miles) of forest cover was destroyed in the Brazilian Amazon last month, according to national space agency INPE's real-time surveillance program, DETER.

The area is equivalent to 25 times the size of Manhattan, and the worst for September since the program was launched in 2015.

The previous record for September was also under Bolsonaro: 1,454 square kilometers in 2019.

The figures came as Bolsonaro battles to win re-election in an October 30 runoff against leftist ex-president Luiz Inacio Lula da Silva (2003-2010), who has vowed to work to achieve net-zero deforestation.

Lula -- who also faced criticism at times for his environmental record as president -- won Sunday's first-round election with 48 per cent of the vote, to 43 per cent for Bolsonaro

Bolsonaro, an ally of the powerful agribusiness sector, has faced international criticism for presiding over a surge of destruction in Brazil's 60-percent share of the world's biggest rainforest, a key buffer against global warming.

Since he took office in January 2019, average annual deforestation in the Brazilian Amazon has increased by 75 per cent from the previous decade.

Experts say the agribusiness industry is driving the destruction by clear-cutting and burning forest to turn it to farmland and pasture.

With three months to go, 2022 is already the second-worst year on record for deforestation, at 8,590 square kilometers, according to DETER.

That is second only to 2019, Bolsonaro's first year in office, when 9,178 square kilometers were destroyed. The second- and third-worst years were also under Bolsonaro -- 2020 and 2021, respectively.

"Anyone who cares about the future of the rainforest, the lives of indigenous peoples and the possibility of having a livable planet should vote to remove Bolsonaro," Marcio Astrini, the executive secretary of the Climate Observatory, a coalition of environmental groups, said in a statement.

Bolsonaro's campaign defends his record as "balancing environmental protection with fair and sustainable economic growth."

Jadiyetu Mohamed challenges Polisario leader Brahim Ghali from the European capital


PUBLISHED ON OCTOBER 15, 2022
By EU Reporter Correspondent

During the Committee on Women's Rights and Gender Equality (FEMM) which took place this Thursday, October 13 in the European Parliament, the young Sahrawi Jadiyetu Mohamed - pictured - (Khadijatou) singled out her rapist Brahim Ghali (Chief Polisario separatists) during the hearing titled "sexual violence and rape as an abuse of power".

The case was presented at Press Club Brussels by Mr Willy Fautré, president of the NGO HRWF (Human Rights Without Frontiers). He said abuse of power leading to sexual violence and rape can occur in many contexts. Within the family, in the professional context, in a religious context, in the world of sport, and in the economic and political world.

The case was presented at Press Club Brussels by Mr Willy Fautré

M Fautré explored two areas, the abuse of power by political leaders over women leading to rape and also the brutal power over women in times of war.
Citing two concrete examples concerning politicians.

Jadiyetu Mohamed accuses the leader of the Polisario Front, Brahim Ghali, of rape. “She was then 18 years old. She had been invited by an Italian NGO, “Sahara Marathon” to go to Italy. She needed authorization from the Polisario diplomatic representation in Algeria for the first steps before applying for a visa. at the Italian Embassy. Brahim Ghali blackmailed her, she says a visa in exchange for sex. She refused but was raped. She was told not to make it public because no one would want to never marry her while her brother encouraged her to file a complaint. It took her three years to decide to file a complaint when she was in Spain but the case was closed. "I see that she is in the public and if you need more details, you can ask her" specifies Mr Fautré in his speech to the European Parliament before the MEPs of the Committee on Women's Rights and Equality of Women. gender (FEMM).

Another well-known case is Toufah Jallow, "crowned in a beauty pageant in The Gambia, who was repeatedly raped by former Gambian President Yahya Jammeh. She now lives in Canada and also fights for justice. Human Rights Watch has published an excellent report on the multiple rapes perpetrated by Yahya Jammeh". Emphasizes in his speech Mrs Fautré.

Before ending his intervention with "The two women will testify in detail this evening at the Press Club Brussels Europe. They will also explain how difficult, if not impossible, it is to obtain justice in their case".

The young Sahrawi Jadiyetu Mohamed, for her part, recalled in great detail the rape case of which she accuses the leader of the Polisario separatists, Brahim Ghali.

"I was only 18, I was a virgin. Brahim Ghali raped me. It's the worst thing that can happen to a woman," Jadiyetu told the Women's Rights and Equality Commission gender (FEMM).

Her case is not the only one committed against girls in the Tindouf camps by officials of the Polisario movement. The criminal organization Polisario, created and financed by Algeria, has repeatedly threatened to commit terrorist acts from the regions of the Moroccan Sahara.

The Polisario remains an organization escaping all control, despite the serious crimes and violations it has committed since its creation. Indeed, the Polisario has made the Tindouf camps a platform to order kidnappings, lootings and arbitrary and terrorist attacks, causing thousands of victims, not only among the residents of the Tindouf camps but also Mauritania, Mali, South Korea, France, Spain and Morocco. Thus, the Polisario has caused victims following armed land operations or by attacks against boats and ships near the coasts of neighbouring countries.

Nearly five decades of violations and inhuman treatment, the most significant of which have been torture and arbitrary executions, have passed in a climate of impunity, where the Algerian redress mechanisms: the only authority responsible for investigating all violations committed on its territory, refused to process or examine any file relating to the violations committed by the Polisario.

The hearing was a great success with the participation also of Ms Katarzyna KOZLOWSKA, social activist, founder and president of the SayStop Foundation and Dr Branka ANTIC-STAUBER, collaborator with organizations supporting victims of sexual violence in Bosnia. It was closed by MEP and Vice-President of the Committee on Women's Rights and Gender Equality (FEMM) Ms Radka MAXOVÁ.

Toufah Jallow, said during her intervention via zoom during the press conference which took place at the Press Club Brussels Europe this Thursday, October 13 that she was raped by the ex-president of the Gambia, Yahya Jammeh at the age of 18. She said she would like him to know that she exists, that she is there and takes back control of this story, with her own truth.

For her part, Jadiyetu Mohamed, a victim of rape by the Secretary General of the Polisario (Brahim Ghali), presented her case to the Press Club Brussels Europe this Thursday, October 13, 2022 alongside Willy FAUTRÉ Founder and Director of Human Rights Without Frontiers and Maître Sophie MICHEZ lawyer at the Brussels Bar.

In her intervention, Jadiyetu explains the facts of what she experienced and what exactly happened on that day in 2010 during her meeting in Algiers with the Secretary General of the Polisario, Brahim Ghali

This happened because I had remained working as a translator in the camps and wanted to be close to my family after so many years.

I wanted to help and collaborate. Unfortunately, they made me pay for it in the cruellest and most miserable way imaginable. This is the abuse I suffered at the embassy [of the so-called “SADR”] from Brahim Ghali (the secretary general of the Polisario, who invited me to supposedly talk to him, then m raped her. Then I came back and I denounced her and I find myself with this.

Unfortunately, I see justice trampled underfoot. As I have said several times in interviews, I no longer expect divine justice because I no longer believe in justice today. How can a cynic and a rapist travel freely and be allowed to enter a territory like Spain where he is pursued by several victims and NGOs.

It is really cruel on the part of Spanish justice. But I'm still here, fighting. she adds

For her part Me. Sophie Michez, Lawyer at the Brussels Bar, in her intervention recalls that she is not surprised by the facts alleged against Brahim Ghali as well as all the members of this movement (Polisario). Dwelled on her experience as an observer during the so-called Gdeim Izik trial in 2017, highlighting Algeria's instrumentalization of the issue of common law detainees in Gdeim Izik. Indeed, the charges for which the defendants were prosecuted related to the formation of a gang, the murders of eleven individuals, having mutilated corpses and for having set fire to public property.

Me. Sophie Michez, moreover, welcomed the procedures that were taken during the trial, which, “contrary to what some allege, confirmed the integrity and correctness of the reference practices”.

In this sense, the speaker declared that what really challenged her at the time was "the disdain for the victims and, even worse, the talent that these different protagonists, under the thumb of the Polisario, to deny the barbarity of the facts for which the Court had been seized".

Before closing the press conference, M Fautré recalled that sexual rape is more and more demanding.

"It is essential that international bodies take the phenomenon seriously, starting by condemning the perpetrators," he added.