In The News

Litvinenko Verdict, Trudeau Survives, Woolly Hybrid

Litvinenko Verdict, Trudeau Survives, Woolly Hybrid

In Panama, places of worship can reopen to a capacity of 80% for people who are fully vaccinated.

Anne-Sophie Goninet and Bertrand Hauger

👋 Demat!*

Welcome to Tuesday, where there's a verdict in the poisoning death of former Russian spy Alexander Litvinenko, Canada's Justin Trudeau scores a narrow victory and mammoths may soon make a woolly comeback. Meanwhile, from Saudi Arabia to Venezuela, we look at how top oil producing nations risk going the way of the dinosaur as the rest of the world adopts renewable energy.

[*Breton, France]

🌎  7 THINGS TO KNOW RIGHT NOW

• Russia "responsible" for murder of ex-spy Alexander Litvinenko: The European Court of Human Rights has ruled that Russia was responsible for the 2006 killing of ex-KGB officer Alexander Litvinenko. The outspoken critic of President Vladimir Putin was poisoned in the UK with Polonium-210, a rare radioactive isotope. In a similar case, the British authorities have charged a third Russian national over the 2018 novichok poisoning of former agent Sergei Skripal and his daughter Yulia in Salisbury.

• Canada's Justin Trudeau narrowly wins: Prime Minister Justin Trudeau won a third term in Canada's snap parliamentary elections, but failed to win the majority of seats he was seeking.

• COVID update: The U.S. is easing its coronavirus restrictions, including reopening to foreign travellers from 33 countries (who are fully vaccinated) after an 18-month ban. Meanwhile, India, the world's largest vaccine producer, will resume vaccine exports from October after a temporary hold last April to cater to domestic demand.

• French-Australian deal was at risk for years: Shedding doubt on France's current shock and outrage, Australian public documents show the French $40 billion submarine contract, recently cancelled by Australia, had been at risk for years due to concerns about delays, cost overruns and suitability. Meanwhile, Australian Prime Minister Scott Morrison said he would not speak with French President Emmanuel Macron about the scrapped deal at the United Nations this week.

• Sudan foils coup attempt: Sudanese authorities have contained a military coup d'etat, state media reported. The country has been ruled by a transitional government since 2019 after the military ousted Sudan's longtime strongman Omar al-Bashir.

• India seizes $2.7 billion Afghan heroin haul: Nearly three tons of heroin from Afghanistan have been seized from the Mundra port in western India in a major bust, officials said. Production of heroin has boomed in recent years in Afghanistan, the world's biggest producer, helping fund the Taliban who retook power last August.

• Guess they've never seen Jurassic Park: Bioscience and genetics company Colossal has raised $15 million to create an elephant/mammoth hybrid within the next six years, using DNA from a frozen specimen.

🗞️  FRONT PAGE

"The names of the Holocaust," titles Dutch daily De Telegraaf, reporting on the inauguration of a new memorial in Amsterdam, which honors the more than 102,000 Dutch victims of the Holocaust. Each brick bears the victim's name, date of birth and age when they died.

📰  STORY OF THE DAY

Can oil-producing nations move to renewables? Grading 7 petrol states

The possibility of transitioning to a greener energy future varies among economies that are fossil fuel-dependent , which represent nearly one-third of the world's population and one-fifth of global greenhouse gas emissions. For some, the question is purely financial; for others, political factors are slowing the shift. Here's a quick tour of some the world's top oil producers, and an on-the-fly grade to gauge how each is facing the energy transition:

🗳️ NORWAY: An Oil-Driven Election May (Or May Not) Break The Cycle

Norway's Labour Party won a landslide victory over the Conservatives last Tuesday in an election heavily focused on the climate crisis and the future of the country's oil industry. However, the anti-oil Greens failed to win enough seats to become a potential kingmaker. Labour leader Jonas Gahr Støre, generally seen as a pro-oil figure, campaigned on the promise of a more fair and equitable Norway following eight years of conservative free-market rule, and has dismissed the idea to put curbs on oil production.

Grade: B

🌳 SAUDI ARABIA: Big Plans From MBS Go Only So Far

Earlier this year, Crown Prince Mohammed bin Salman announced the launch of the Green Saudi and Green Middle East initiatives that will apply a number of ambitious programs to reduce the region's carbon emissions by 60%, and plant 50 billion trees in the world's biggest afforestation project to date. Still, the sincerity of Saudi Arabia's climate commitment was called into question last month as the country sought to whitewash the language in the UN's landmark climate-change report — attempting to replace references to "carbon emissions" with "greenhouse gas emissions."

Grade: C+

🛢️ NIGERIA: Africa's Biggest Petrol Producer Lags Behind

For Africa's top petroleum producer, even before talking about the current urgency to prepare for the energy transition, the country has wrestled for decades with what Michael L. Ross dubbed: "The Oil Curse;" Like other oil-producing countries, the aggregated wealth Nigeria has created has been accompanied by the stunting of both political and economic progress by being so dependent on oil revenues. As Caleb Adebayo noted last month in the Vanguard newspaper, Nigeria is trailing other petrol states in diversifying, only now focused on natural gas, and still unable to provide reliable energy to vast parts of its own territories.

Grade: C-

➡️ Read about the U.S., Venezuela and more on Worldcrunch.com

#️⃣  BY THE NUMBERS

107 years, 300 days

Japanese twin sisters have set the record for the world's oldest living identical twins at 107. Born on Nov. 5, 1913, on Shodo Island in west Japan, Umeno Sumiyama and Koume Kodama lived separately after graduating from elementary school, the Japan Times reports, but reunited in their 70s as they set off on a pilgrimage to the 88 temples on Shikoku Island. The twin sisters now reside in separate nursing care homes.

📣 VERBATIM

Evergrande will walk out of its darkest moment, resume full-scale constructions as soon as possible.

— The boss of the Chinese real estate firm Evergrande sought Tuesday to allay fears that massive debts could lead to a collapse of the company that could spiral into a broader crisis for China's economy. Evergrande Group Chairman Hui Ka Yuan sent a letter to company staff aiming to lift confidence in the embattled firm, and dispel speculations of a "Lehman moment" like the collapse of Lehman Brothers bank in 2008. Investors are waiting to see if the Chinese government would intervene to avoid spillover across the global economy.

✍️ Newsletter by Anne-Sophie Goninet & Bertrand Hauger

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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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