November 27, 2011
Georgia could soon be headed for a major political shakeup courtesy of the country's richest man, Bidzina Ivanishvili, who plans in the coming days to unveil a new popular movement called "Georgian Dream." Ivanishvili, the founder and owner of Rossiyskiy Kredit, a Russian bank, plans to launch the movement in the Tbilisi Philharmonic concert hall. There's no guarantee, however, that local authorities will allow Ivanishvili and his followers to enter the public concert hall. Once a government darling, Ivanishvili is quickly becoming a dangerous enemy.
Ivanishvili, known for his enormous financial support for local cultural events, is publicly respected by intellectuals. Until recently, however, he'd been mostly apolitical. That changed in October, when he surprised just about everyone by issuing a statement against the policies of Georgia's president, Mikheil Move. At the same time, Ivanishvili announced plans to found a new political group that will challenge the ruling party in the next elections.
"Mikheil Saakashvili's total monopoly on power, and his constitutional changes, which are clearly an attempt to hold on to power even after the end of his constitutional term, have prompted me to decide to form a political party and take part in the 2012 elections," Ivanishvili said in his October announcement.
This sudden change came as a surprise even to Ivanishvili's close associates. "He always walked on eggshells with the government, was always extremely careful and didn't stick his nose in other people's affairs," said one of his former business partners. "I don't understand what happened…it's all a mystery to me."
Ivanishvili, who turned 55 this year, began his career in Moscow as a computer salesperson, a business that served as a launch pad for a number of Russian oligarchs. After starting his own office technology company, he founded Rossiyskiy Kredit, which is the basis for his enormous wealth.
While in Moscow, Ivanishvili, like most other Georgian businesspeople, was often accused of having mafia ties, a charge that Ivanishvili and his business associates strongly deny. It's a claim also that probably reflects xenophobia rather than facts. Although Ivanishvili has stayed off the political stage, he has wielded political influence. He is reported to have played a key, though invisible, role in Boris Yeltsin's re-election in 1996.
Life in Russia, however, didn't suit Ivanishvili, who according to many of his friends disliked living in Moscow. First he moved to a suburb of the city. But after his brother was kidnapped and there was a kidnapping attempt against his children, he had to surround himself with security at all times. Later he took his family to France, apparently deciding not to return to Russia.
He returned to Georgia in 2004 following the "Rose Revolution" that brought Saakashvili into power. Since his return, he has spent enormous amounts of money on the development of his country. Famously, he even built a water park for the country's children. Even before returning to the country, he was behind the construction of a large, almost overpowering cathedral in Tbilisi. And it was largely with Ivanishvili's money that Saakashvili financed the revolution in the first place. But close relationships with revolutionary leaders often have a sad ending.
Running into trouble
As recently as early 2011, Ivanishvili was forcefully denying any rumors that he would enter politics. But he says that he changed his mind after a conversation with his son, who told him that he was going to enter politics if Ivanishvili didn't do so himself. "My wife and I managed to raise children who grew up in France, but who are better Georgians than we are," he said, adding that his son's words were the last straw.
Since Ivanishvili's entry into politics, he has had several strange run-ins with Georgian authorities. One particularly bizarre example happened recently, when Valery Levin, one of Ivanishvili's business associates, was arrested upon arrival at the Tbilisi airport. Levin was carrying with him documents related to Ivanishvili's planned sale of the Russian part of his business. He also had a copy of "Energy Stone," a weekly magazine on precious stone amulets that is published in Moscow and sold in news kiosks. The magazine was meant as a gift for Ivanishvili's 14-year-old daughter. Based on his possession of the magazine, Georgian authorities detained Levin and accused him of smuggling radio-active stones.
Ivanishvili has another problem: He does not technically have a Georgian passport. According to a press release from the Interior Ministry, Ivanishvili defied the Georgian constitution by obtaining French citizenship (he currently has French and Russian citizenship) after obtaining Georgian citizenship. He was thus stripped of his Georgian citizenship.
Ivanishvili, who hopes to be a peaceful reformer, has reacted to government harassment relatively calmly. He is still hoping to avoid a serious public showdown with Saakashvili. Already he has the support of the Patriarch of the Georgian Church, a key endorsement in what is a relatively religious country. The Patriarch has appealed to the government to reinstate Ivanishvili's Georgian citizenship.
Ivanishvili is a serious political risk for Saakashvili. The changes in the Georgian constitution mean that the head of government in Georgia is also the head of state. That could allow Saakashvili to maintain power after the end of his two presidential terms. But it also means that if Ivanishvili's party wins in the parliamentary elections in 2012, it could ruin Saakashvili's plans. And then the fight would really begin.
Moscow doesn't have a particular interest in who would prevail. Even if Ivanishvili becomes Georgia's leader, Russia does not expect a change in the two countries' relationship. Even though Ivanishvili has said he would normalize diplomatic relations, Moscow does not expect the Georgian position on the disputes in Abkhazia or South Ossetia to change, and Ivanishvili had harsh words regarding Russia's bid to join the World Trade Organization. Regardless of where Ivanishvili made his billions, he is a Georgian first.
Read the original story in Russian
Photo - YouTube
Kommersant ("The Businessman") was founded in 1989 as the first business newspaper in the Russia. Originally a weekly, Kommersant is now a daily newspaper with strong political and business coverage. It has been owned since 2006 by Alisher Usmanov, the director of a subsidiary of Gazprom.
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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.
Yip Wing Sum
October 16, 2021
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
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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