WHILE YOU SLEPT

From EU To El Salvador, Trade Under Threat

This is supposed to be the week that Canada and the EU ink their landmark Comprehensive Economic and Trade Agreement (CETA) after seven years of painstaking negotiations. Hopes are fading, however, due to last-minute objections from Belgium’s Wallonia region.


The French-speaking area’s 3.6 million people represent less than 1% of the EU’s total population. Yet Wallonia’s opposition alone is enough to sidetrack the whole process. Why? Because without Wallonia on board, Belgium as a whole cannot support the massive trade deal. And without Belgium, the CETA, which requires backing from all of the EU’s 28 member states, cannot proceed.


Is Wallonia about to cost the EU a golden opportunity to boost trade and demonstrate its continued relevance after the stunning Brexit blow it suffered earlier this year? Perhaps. But while many observers lament the Belgian region’s obstinance, others say there are good reasons to be wary of CETA.


Chief among Wallonia’s objections is that the deal favors corporate power over local legislation by allowing companies to seek arbitration in cases where their profit-making abilities are limited by host-country regulations. In other words, CETA â€" like most trade deals of its kind â€" allows foreign corporations to sue individual countries via outside tribunals.


This is no idle threat, as the tiny Central American nation of El Salvador can attest. In 2009, a Canadian mining company called Pacific Rim, frustrated by El Salvador’s refusal to grant it an operating license, used a World Bank tribunal in Washington, D.C. to file a $100 million suit. The claim was later increased to $250 million.

Earlier this month, the tribunal finally reached a decision: It dismissed the suit â€" but only after seven years of deliberations that cost the cash-strapped Salvadoran government an estimated $13 million in legal expenses. It is another reminder that globalization, for better or worse, is a game best played with deep pockets.


WHAT TO LOOK FOR TODAY

CALAIS EVACUATION CONTINUES AFTER FIRES

The evacuation and demolition of the Calais “Jungle” continued into early this morning. Some 30 fires ignited overnight by migrants destroyed important parts of the camp, and firefighters had to be protected by police officers after stones were hurled at them, according to French news station BFM TV. According to government figures, 3,242 adults and 772 minors were relocated on Monday and Tuesday, about half of the estimated population in the camp.

ISIS BLAMED FOR CIVILIAN KILLINGS IN AFGHANISTAN

Suspected ISIS gunmen abducted and executed at least 30 civilians in the Afghan province of Ghor, in what is believed to be a revenge attack for the killing of one of their commanders, Al Jazeera reports.

â€" ON THIS DAY

Celebrating the day soccer was born (or football, depending on what side of the Atlantic you're on). Here’s your 57-second shot of history.

VERBATIM

“When Rodrigo Duterte will make a courtesy visit to the Emperor, his behavior during the event could have a major impact,” Itsunori Onodera, a senior lawmaker in Japan said over concerns that the Philippine president might forget his manners and chew gum in front of the Japanese Emperor, when the two meet on Friday. “I trust he understands the consequences and he would not do such a thing,” Onodera added.

â€" WORLDCRUNCH-TO-GO

Feelings of guilt and responsibility are strong among German and Austrian “grandchildren of World War II,” but nowhere is it stronger than in the little northern Austrian town of Braunau am Inn, as author Tanja Hofbauer writes in our Rue Amelot essay section. “Yes, I share a hometown with Hitler â€" and his childhood house is still here. But in case you're wondering: No, my grandparents and great-grandparents never knew him personally.

It does get ugly here once each year, on April 20, when my little town becomes a mecca for all kinds of fascists and neo-Nazis wishing to celebrate Hitler’s birthday. We all stay at home, hope there is no real news to report, and wait for the day to pass as quickly as possible. But over the past few weeks, we've been in the headlines on a regular basis, ever since the Austrian interior ministry announced plans to demolish Hitler’s house. Perhaps you'd think I welcome the idea, but I do not.”

Read the full essay, When You Share A Hometown With Adolf Hitler.

SPAIN FACING BACKLASH OVER RUSSIAN REFUEL

Spain is preparing to refuel a fleet of Russian warships on its way to Syria, where it will bolster the Russian air force’s capacities in the bombing of Aleppo, newspaper ABC reports, citing military sources. NATO and EU officials have condemned the decision.

GAMBIA TO WITHDRAW FROM ICC

Gambia announced yesterday its withdrawal from the International Criminal Court, joining South Africa and Burundi which recently announced similar moves. Justifying the government’s decision, Information Minister Sheriff Bojang said the ICC was “is in fact an International Caucasian Court for the persecution and humiliation of people of color, especially Africans,” and accused it of ignoring “heinous war crimes” committed by Western nations. Read more from Reuters.

â€" MY GRAND-PERE’S WORLD

Worldwide Safari â€" Kruger National Park, 1997

500,000

About 500,000 solar panels were installed every day last year worldwide, and the world's capacity to generate electricity from renewable sources has now overtaken coal, according to a report from the International Energy Agency.

GENDER PAY GAP HERE TO STAY

If the World Economic Forum's latest Global Gender Gap Report is right, women will earn as much as men and represent half of the world’s bosses in about 170 years.

MORE STORIES, EXCLUSIVELY IN ENGLISH BY WORLDCRUNCH

DON’T LICK THAT LICHEN

Biologists working in the Ecuadorian Amazon region have discovered a new species of lichen said to possess strong hallucinogenic properties. Lichen In The Sky With Diamonds?

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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