Geopolitics

Yes, The Russians Have NSA-Style Internet Spying Too

And it's about to get worse in the country that has granted temporary asylum to Edward Snowden.

Who you gonna call?
Who you gonna call?
Vladislav Novii, Elena Chernenko and Roman Rozhkov

MOSCOW — Who says the NSA is the only one spying on its citizens? The FSB, the Russian successor to the Soviet KGB, already has access to all online traffic that passes through the nation’s Internet service providers. And now, the spy agency may soon begin to implement a controversial directive issued by the Ministry of Communications that would require Internet providers to record and save all digital traffic for at least 12 hours, and give the FSB direct access to the database of those records.

The information that would be recorded includes telephone numbers, IP addresses, the names of users, and email addresses of social network users. Digital network operators say that the project violates the Russian constitution, because it allows for the collection of data without a court decision.

(The collection of data of citizens is of particular interest in Russia after President Vladimir Putin granted temporary asylum to Edward Snowden, the former consultant for the U.S. National Security Agency (NSA) )

In a letter to the Ministry of Communication, one of Russia’s Internet providers specified that “the directive violates rights guaranteed in the Russian constitution,” which protects the right to privacy, specifying that each person has the right to private correspondence in their letters, telephone conversations and other types of direct communication. Recording, using or disseminating the information in that correspondence without the consent of the parties is not allowed.

The letter also says the new requirements violate Russia’s current laws regulating Internet service providers, because the law does not establish a requirement for operators to purchase and use specialized technology for investigative purposes.

The directive in question, which which was first put forward last spring, still has to be approved and registered by the Ministry of Justice, though that is not expected to be a problem. It is expected to take effect at the beginning of 2014.

Google Talk and Skype locations

Under the new regulations, Internet providers would be required to attach special equipment to their networks that the Secret Services would be able to control. Internet traffic would flow through the special device, allowing the FSB to record all data that goes through it and store it for at least 12 hours. In addition to the data mentioned above, the Internet service providers would be expected to provide the physical location for people using Internet telephone services like Google Talk and Skype.

According to Yuli Tai, a partner at the Bartolius law firm, the directive not only violates the Russian constitution, but also many laws involving the criminal code and privacy. “It is already enough that law enforcement agencies have the legal and technological ability to access Internet users’ information,” Tai says. “The unlimited expansion of those abilities leads to a violation of the rights of both ordinary citizens and the subjects of investigations.”

It is also not clear who will pay for the materials and construction of a system to record so much digital traffic. By law, these costs have to be assumed by the government agency, not the service providers. If the government does not specify the source of financing for the project, it will be impossible for Internet service providers to comply with the directive by the July 1 deadline.

According to a Russian government source, Internet service providers have traditionally been expected to pay for the investigative equipment and set-ups, even though by law the government should be responsible for the costs. Some estimates put the price tag at around $100 million per year, though others say it is far less. Our source in the government acknowledges that it could be a prohibitive cost for some small companies. For example, in the United States the government compensates technology companies for expenses related to digital “wiretapping.”

Russia has had a law in place since 2008 that allows the FSB to access all Internet traffic. According to the security director at one Russian Internet company, the new directive will not actually lead to more information being sent to the security services. The main difference, he said, was that now Internet providers are required to store the data for 12 hours, whereas previously they were just expected to transmit everything directly to the FSB.

The Ministry of Communication’s press office said that questions about the law’s financing are premature. The FSB and the Ministry of Finance could not be reached for comment.

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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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