Geopolitics

Meet The Dashing Czech Billionaire Leading The Fight Against Klaus And Corruption

Karel Janecek became a billionaire before 40. Now, as President Vaclav Klaus steps down in a cloud after a decade, Janecek is leading the fight for those who want to clean up Czech politics.

Meet The Dashing Czech Billionaire Leading The Fight Against Klaus And Corruption
Martin Plichta

PRAGUE –Through the office windows of his baroque palace, young billionaire Karel Janecek has a perfect view of the Prague castle. But with his shaggy blond mane and sparkling blue gaze, the 39-year-old has his gaze fixed squarely on March 8th, this Friday, when the Social Democrat Milos Zeman will replace outgoing President Vaclav Klaus, who has been ruling the country for the past decade.

Klaus' wide-reaching presidential amnesty of January 1 set free hundreds of people responsible for major financial infractions, and at the same time ruined the outgoing leader's positive image.

The gesture simply revolted Janecek, who instantly denounced it publicly and launched a petition to sue Klaus for high treason, which was signed by 74,000 fellow Czech citizens.

And now, after two months of hard negotiations, the billionaire managed to convince enough senators to take up the issue that led to Monday's largely symbolic vote to send Klaus before the only institution allowed to judge the head of state: the Constitutional Council.

Senator Eliska Wagnerova, of the leading Czech environmentalist party, has backed Janecek’s move. “This trial would be the right opportunity to set the limits of presidential prerogatives,” she says.

Whatever happens, this campaign has afforded Karel Janecek a sudden nationwide prominence, and won widespread public support. The Czech media can't get enough of the telegenic crusader.

He doesn’t look the part of public rabble-rouser or diehard activist, and Janecek hasn’t always been the President's public enemy No. 1.

Since November 1989, and the wake of the “Velvet Revolution,” Klaus has been considered a key architect of the Czech Republic's move to a free-market democracy. “I have even admired Vaclav Klaus’ economic policy when he shifted from a communist economy to market economy,” he admits.

Klaus in November (David Sedlecký)

When the Prague stock exchange was established, Janecek -- then just 21 years old -- launched along with some classmates the algorithm-based trading company RSJ. The high-frequency trading software they developed was so powerful that the company quickly came to be one of the European leaders in derivatives markets in places like London, Chicago and Frankfurt.

Around the same time, Janecek, who "wasn’t following closely the situation of Czech society," says he discovered how corruption was paralyzing the public sector. Along with several other Czech entrepreneurs, he has helped fund an anti-corruption foundation created by former Prague Mayor Pavel Bem. The foundation grants financial support to people who call out new cases of bribery, as well as those who supply evidence for past cases that had been shelved for lack of political will. Seven people have already received 20,000 euros -- $26,085, a two-year average salary -- for “their courage.”

“Condemning the abuse isn’t enough anymore, society needs to get its values straight,” Janecek says. He proposed a new law meant to encourage independent and respected figures to run for Parliament. The motion received a mixed welcome. “It’s a bit naïve to think that the parties will so easily agree to change a system that favors them,” says political scientist Lukas Jelinek.

No shortage of ambition

Before launching his crusade against Vaclav Klaus, Janecek had roamed the country throughout the autumn, trying to convince his fellow countrymen that “it was this toxic political atmosphere that poisoned Czech society.”

Each time, he says he was met with enthusiasm. Thousands of people turned up to listen to his conferences across the 14 regional capitals. More than 20 years after the “Velvet Revolution,” he wants to ignite a new civic fire to get rid of the abuses of authority on both local and national levels.

Called a “vain, self-proclaimed savior” by Klaus in his annual New Year's address, Janecek refuses to join a political party. “I want to stay independent so I’m not defending a program, but values and behaviors that have a far higher reach than political discourses,” he said.

Still, his lofty ideas may eventually be eclipsed by his own ambition: “I won’t say "no" to a presidential race, for an example must be shown from the supreme authority.”

So there is the blueprint to follow his gaze outside his window: five years to carry out his democratic assault on the Prague Castle.

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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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