Geopolitics

Telegram: Why Russian Courts Can't Really Block The App

Protesters during a rally to support Telegram in Kaliningrad on April, 30
Protesters during a rally to support Telegram in Kaliningrad on April, 30
Vladislav Novyy

MOSCOW — On April 13, a Russian court decreed an immediate blocking of the app Telegram across the country. The decision came after the refusal of Telegram to provide Russian security services with access to users' private messages. The authorities said it was a necessity in the fight against terrorist threats. However, Pavel Durov, founder and CEO of Telegram, declared that the authorities' requirement would not improve Russia"s security, and would violate people's privacy and contradict the Constitution. He said the blockage was illegitimate and promised to do everything possible to prevent its implementation. So what happened next?

It is Roskomnadzor, the Russian communications regulator, that was charged with shutting down Telegram, a technical process of restricting the app was begun on April 16, 2018. The actions resulted in the hindering of functions of third parties but caused almost no problems for Telegram itself. A month has passed since the moment of the blockage of Telegram but Roskomnadzor has not managed to seriously limit access to the messenger. Experts say that further development of the situation does not depend so much on the authorities' actions, but on decisions of Apple and Google, which are still siding with Telegram.

telegram_ceo

Telegram's CEO Pavel Durof at TechCrunch Disrupt SF in San Francisco, U.S. on Sept. 21, 2015 — Photo: TechCrunch

Kommersant spoke with an insider from the industry, who said it was a bad move by authorities to try to start blocking the app right after the court decision. Even just the analysis of such an ambitious task should have taken at least five days. Other experts had voiced similar opinions, including those from the Ministry of Communication who warned Roskomnadzor that the situation might develop unpredictably.

The privacy rights of all internet users are at stake.

The main reason why Telegram manages to evade the blockage is the existence of a constant channel of communication with users' gadgets via push-notifications that are sent from the servers of Apple and Google. Roskomnadzor has already discussed with the operators what methods are available for the blocking of push-notifications that Telegram sends to users. The regulator has also sent Apple and Google demands to remove the Telegram apps from the online-shop, but it hasn't happened yet.

Apple and Google have not explained why they don't fulfill the requirement on Telegram, but for the moment the decision is serving their PR interests. Telegram's Durov has repeatedly declared that the conflict is not caused by the refusal to satisfy the request concerning data of six users suspected of being involved in the April 2017 explosion of the metro in Saint Petersburg. With the privacy rights of all internet users at stake, there are political and reputational risks that can reach around the world.

Kommersant"s source is acquainted with the details of the standoff, and says that it is not only about politics: unlike Linkedin, Telegram simply has "stronger arguments against the blockage." The Russian company is also capable of countering destructive influence alone, by embedded methods of evading blockages that are partly similar to those ones that were patented ten years ago by scholars from the Russian ministry of defense.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
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.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ