In The News

Taiwan Tensions, Zuckerberg’s "Deeply Illogical" Quote, Ali’s Art

Photo of people walking toward border patrol officers as Colombia reopens its border with Venezuela after a 14-month closure to curb the spread of COVID-19.

Colombia reopens the border with Venezuela after a 14-month closure to curb the spread of COVID-19.

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 добры дзень!*

Welcome to Wednesday, where China/Taiwan tensions rise, Mark Zuckerberg responds to the Facebook whistleblower, and artworks by Muhammad Ali (gloves off) sell at auction. Kiev-based news website Livy Bereg also explains why the Pandora Papers revelations about global financial trickery may hit hardest in Ukraine.

[*Dobry dzien - Belarusian]

🌎  7 THINGS TO KNOW RIGHT NOW

• Tensions between China & Taiwan hit new high: Tensions with China are at their worst in 40 years, says Taiwan's defense minister who is urging the island nation's legislators to boost arms spending. Meanwhile, U.S. President Joe Biden said that he and China's President Xi Jiping agreed to abide by the "Taiwan agreement," under which the U.S. recognises China rather than Taiwan.

• Facebook whistleblower v. Zuckerberg: Frances Haugen, a former Facebook product manager, testified before a Senate subcommittee, after the release of thousands of internal documents, and urged lawmakers to regulate the company that she said prioritized profits over the safety of its users. Facebook founder and CEO Mark Zuckerberg called the accusations "deeply illogical." (see our Verbatim below)

• COVID update: New study reveals that the skin condition known as "COVID toe," which affects teenagers and children more commonly, may be a side effect of the immune system's response to fight coronavirus. Meanwhile, Russia reported 929 new COVID-19 deaths in one day, a record since the pandemic began, with the Kremlin blaming the slow pace of vaccinations.

• Australia to stop sending asylum seekers to Papua New Guinea: The Australian government announced it would shut a controversial detention center in Papua New Guinea, where asylum seekers and refugees who attempt to reach Australia by boat were sent.

• California oil spill sparks push to ban offshore drilling: California lawmakers demanded to stop all oil drilling off the state's coast after a pipeline burst and spilled about 3,000 barrels of crude oil into the Pacific Ocean, killing wildlife.

• Nobel Prize in chemistry: This year's Nobel Prize in Chemistry goes to Germany's Benjamin List and Scotland-born scientist David W.C. MacMillan "for the development of asymmetric organocatalysis," a new way for building molecules.

• Muhammad Ali art sells at knockout price: Twenty-six drawings by late boxing legend Muhammad Ali sold at auction in New York for a total of $945,524.

🗞️  FRONT PAGE

Front page of French daily La Croix titled "The pain and the shame" and featuring a photo of a French priest with a Cvodi mask on.

"The pain and the shame," titles French daily La Croix, after a 2,500-page report revealed that 216,000 minors were victims of sexual abuse by the clergy in the French Catholic Church since 1950.

#️⃣  BY THE NUMBERS

564

In the village of Ceyrat in central France, the church bells ring 564 times a day, according to a neighbor who has petitioned for a bit of quiet between 10 p.m. and 8 a.m.. The local movement is now gaining national attention — but also facing opposition from other locals worried about losing some of the village's "soul." Between church bells and roosters crowing all day long, not all is as quiet on the French countryside front as the postcards would have you believe.

📰  STORY OF THE DAY

Zelensky's Ukraine, where the Pandora Papers hit hardest

The global probe of offshore accounts around the world strike at the heart of Kiev's current government and power structure of a ruling class that rose to power on the promise of fighting corruption, including the television-star-turned-President Volodymyr Zelensky, reports Iryna Lysohor in Ukrainian news website Livy Bereg.

💸 Volodymyr Zelensky's successful show business career was created in Ukraine through a hidden financial network of offshore companies. Nine years ago, the popular Kvartal 95 went to TV channel 1+1. Their shows and programs were hits on the channel owned by Igor Kolomoisky, who will later support Zelensky and the team not only as entertainers but also as politicians. According to the Pandora Papers, millions from Kolomoisky went not only to the accounts of Ukrainian companies close to Zelensky and his associates. The money also went where there was warm weather and lower taxes.

🔍 Cases involving high-ranking civil servants are being investigated by the National Anti-Corruption Bureau. NABU detectives are also investigating crimes related to money laundering. The investigation believes that the former owners, in particular Igor Kolomoisky and Hennadii Boholyubov, could have caused billions in losses to the state. But the Security Service of Ukraine was unable to calculate the amount of damage and the case got stuck.

⚖️ What destiny awaits Zelensky? And Kolomoisky? For the latter, this week Kolomoisky is in the United States, where his fate risks being the same as former Ukrainian Prime Minister Pavlo Lazarenko: to wind up in an American prison. For Zelensky, nobody wants to talk about the secret network of offshore companies. Only Borys Shafir, the co-founder of Kvartal 95, responded to a few of our questions. He, unlike his partners, did not go into politics, and now is the owner of a significant part of the offshore business of Kvartal.

➡️ Read more on Worldcrunch.com

📣 VERBATIM

The argument that we deliberately push content that makes people angry for profit is deeply illogical.

— Facebook CEO Mark Zuckerberg responded to the bombshell allegations of former employee Frances Haugen that the company knowingly profits off of misinformation and hateful content. After Haugen's testimony Tuesday in front of a U.S. Senate Commerce Committee's consumer protection subcommittee Zuckerberg wrote a long Facebook post:

"At the heart of these accusations is this idea that we prioritize profit over safety and well-being," the Facebook founder wrote. "That's just not true ... The argument that we deliberately push content that makes people angry for profit is deeply illogical. We make money from ads, and advertisers consistently tell us they don't want their ads next to harmful or angry content."

💬  LEXICON

한류

한류, pronounced "hallyu", meaning Korean Wave, is one of 26 Korean words that have just been added to Oxford English Dictionary. The word describes the increase in international interest in South Korea and its popular culture, and reflects the global success of the country's music, film, TV, fashion and food.

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and 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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