07/11/2013 03:06 PM
Latvia and the Euro: Meet the EU's Newest Tax Haven
By Stefan Schultz in Riga, Latvia
Latvia will become the common currency area's newest member in January 2014 -- the same time that new tax laws go into effect allowing the country to compete with the likes of Cyprus and Malta. This could further destabilize the European economy.
Rietumu Bank isn't in Riga's best neighborhood. The streets are dusty, and graffiti on one building reads: "If Jesus comes back, we'll kill him again." The city's biggest soccer stadium -- which opens onto a meadow on one side -- is right next door.
This is the scene that bank manager Ilya Suharenko surveys from his top-floor office in the Rietumu Capital Centre. But Suharenko, 30, is optimistic about Latvia's future nonetheless. European finance ministers on Tuesday gave the Baltic country the go-ahead to join the common currency union on January 1 next year. Furthermore, new tax laws are set to go into effect at the same time. These laws, says Suharenko, will put his country "on a level with Ireland, Malta and Cyprus."
"It is a seal of quality for Latvia as a financial marketplace," Suharenko says. "The euro is coming and capital will follow."
Many observers don't share Suharenko's euphoria, though. Riga's planned reform has been designed to transform Latvia into the euro-zone's next tax haven. And it highlights the degree to which rhetoric and reality diverge in the European Union.
Ever since the International Consortium of Investigative Journalists (ICIJ) exposed the vast scale of tax evasion undertaken by multinationals around the world, the European Commission has made combating financial trickery a top priority. Theoretically, at least. In practice, exactly the opposite has happened. "Instead of eliminating established tax havens, we have added a new one to the euro zone," says Sven Giegold, a financial expert with the Green Party in the European Parliament.
Latvia's corporate tax rate is just 15 percent, far lower than the EU average of 23.5 percent. Within the euro zone, only Ireland and Cyprus, each at 12.5 percent, have lower rates. Yet the banking systems in both of those countries have collapsed -- and both have been forced to seek emergency aid money from EU bailout funds.
Bridgehead to Tax Havens
Holding companies -- firms that hold stock of other companies -- enjoy further benefits in Latvia. Since the beginning of 2013, their foreign profits earned via dividends and stock sales have been tax free. Transferring such profits out of country is also not taxed. Furthermore, as of 2014 Latvian holding companies will no longer have to pay taxes on interest and licensing fees they pay to foreign companies.
Such structures allow foreigners to not only park their money in Latvia, but also use it as a bridgehead to transfer money at low cost from Europe to tax havens such as the Cayman Islands. Indeed, Latvian law will impose even fewer limitations and lower fees for such transfers than exist in such countries as Malta, Ireland, Cyprus and the Netherlands.
Markus Meinzer, an analyst with the Tax Justice Network, has already begun calling Latvia a "Luxembourg for the poor."
There have been instances, however, in which Latvia has gone beyond merely offering a variety of legal possibilities to avoid taxes. Formally, Latvia has improved its laws relating to money laundering. But several loopholes still remain, according to an analysis performed by Moneyval, the Council of Europe body focused on combating money laundering and terrorism financing. The report noted that adherence to regulations is not strictly monitored in all cases.
The result is that money with shady origins keeps appearing. In April 2012, the United Nations Security Council determined that Latvia's Parex Bank (which has since changed its name to Reverta) assisted military officers from the Ivory Coast in circumventing international sanctions. The bank refused to comment on the allegations. In mid-June of this year, a different Latvian bank was fined €191,000 ($249,000) for allegedly helping launder hundreds of millions of dollars that were stolen from the Russian government.
Latvia's financial marketplace is primarily attractive to customers from Russia and former Soviet states. Many private and corporate clients from these countries seek to keep their money safe from the kleptocratic elite at home. Others have darker motives.
Connections between Latvia and Russia have always run deep. Every second person in Riga has Russian origins and seven flights a day connect the city with the Russian capital. Even outside Riga, most people understand the Russian language and mentality. "Since the beginning of the 1990s, Latvia has continually expanded its status as a regional banking center for the former Soviet territories," says Tatiana Lutinska of Prime Consulting, a law firm in Rietumu Bank headquarters which manages foreign customers' holding companies.
Thanks to lower tax rates and the euro, interest is growing, Lutinska says. "We are receiving hundreds of inquiries from Russia, Belarus, Kazakhstan and Ukraine. Many want to move their money from Cyprus to Latvia. We are now better than Cyprus," she says.
Others are also trying to profit from the atmosphere of fear which has surrounded Cyprus. Privacy Management Group, an offshore agency headquartered in Cyprus, offered customers special conditions at the end of March for those who wanted to open a new account in Latvia. The offer was made just as the banking crisis was erupting in the Mediterranean island nation. At the time, Nicosia was forced to close the country's banks for 12 days to prevent huge quantities of money from being moved abroad.
For the moment, there is little concern about Latvia's financial health. Bank balance sheets in the country were only equivalent to 128 percent of the country's gross domestic product at the end of last year. The EU average is 359 percent.
Stable Financial System?
But with lower tax rates and impending euro-zone membership, that could soon change. "Latvia's share of fees paid by offshore havens has risen sharply in recent years," says Meinzer of the Tax Justice Network. "This trend is likely to continue." Rietumu manager Suharenko hopes that "at least 10 percent of the capital in Cyprus comes to Latvia" in the next three years.
The EU, by contrast, wrote in its Convergence Report on Latvia in early June that the country's financial system is stable. Latvian Prime Minister Valdis Dombrovskis has also sought to calm worries. "The new tax law was introduced in order to strengthen the competitiveness of our financial marketplace, but it will definitely not create a massive capital influx," he said recently in an interview with SPIEGEL ONLINE. "The law does not conflict with the stability criteria of the euro zone."
In reality, however, the stability criteria do not call for an analysis of the risks posed by the Latvian tax model, despite the problems encountered by Cyprus. "It is a mistake that euro-zone member states only look at inflation and the health of public finances when new countries are admitted to the currency union," says Green Party politician Giegold.
He demands that laws be made consistent with the euro-zone norm. But that doesn't seem realistic. As long as countries such as euro-zone founding-member Luxembourg continue to defend their own financial marketplace, tax havens will continue to be admitted to the common currency area. And they will continue to present even more risks to the already shaken currency.
Presidential intervention plunges Portugal into new bailout crisis
Anibal Cavaco Silva rejects ruling coalition reshuffle and demands Socialists join government to bolster austerity plan
Reuters in Lisbon
guardian.co.uk, Friday 12 July 2013 02.58 BST
Portugal's president has thrown the bailed-out eurozone country into disarray after rejecting a plan to heal a government rift, igniting what critics called a "time bomb" by calling for early elections next year.
President Anibal Cavaco Silva proposed a cross-party agreement between the ruling coalition and opposition Socialists to guarantee wide support for austerity measures needed for Portugal to exit its bailout next year, followed by elections.
The surprise move came just when conservative prime minister Paolo Passos Coelho thought he had overcome a cabinet crisis by reaching a deal to keep his centre-right coalition together.
The decision was a warning shot to all mainstream parties indicating the conservative president does not think any of them is capable of ruling effectively until the EU-IMF bailout is due to expire in June.
"We are in a situation which demands that the political parties leave their comfort zone," said Marina Costa Lobo, a political scientist at the University of Lisbon.
It was hard to predict how political leaders would cope with the president's challenge until they held internal party meetings and consultations with the president, which started on Thursday.
Cavaco Silva was Portugal's longest-serving elected prime minister from 1985 to 1995 for the ruling centre-right Social Democrats and is seen by analysts as valuing political stability above all else. He has often said he does not want to use "the atomic bomb", referring to snap elections.
Under Portugal's constitution, the president has the power to dissolve parliament and call elections.
Cavaco Silva's move drew sharp criticism in a country that has descended into its worst economic slump since the 1970s under the weight of austerity imposed by the bailout.
Portuguese markets fell in reaction to the president's move. Stocks declined 1.7% and 10-year bond yields climbed eight basis points to 6.97%.
"The president of the republic decided to overcome the political stalemate between the parties in the ruling coalition by adding another problem to the one that already existed," wrote daily Publico in an editorial. "He decided to take power."
The centre-left opposition Socialists, who lead in the opinion polls, face the toughest dilemma as they were in power when the country sought a bailout in 2011 and have demanded elections now.
The Socialists held a leadership meeting late on Thursday, after which the party said it was ready to negotiate with other parties to "find solutions". But it made clear it would not enter into government with the current administration.
"It is not acceptable to delay elections and force a commitment from the Socialists on austerity policies that have led the country to a social, political and economic disaster," former Socialist leader Eduardo Ferro Rodrigues said earlier.
He said the president had put the Socialists between a "rock and a hard place".
Cavaco Silva said the coalition government remained in office but did not approve a proposed cabinet reshuffle by the Social Democrats and their junior partner, the rightist CDS-PP party. Passos Coelho was due to meet him later on Thursday.
The crisis was sparked by the resignation last week of foreign minister Paulo Portas, a critic of austerity, threatening the continuation of the government as Portas also leads the CDS-PP.
Passos Coelho held emergency coalition talks and announced on Saturday he would promote Portas to deputy prime minister in charge of economic policy co-ordination to fix the rift.
The plan would have avoided the need for elections in the short-term and allowed the government to rule until its term ends in 2015. Analysts say elections now could have interrupted reforms mandated by Lisbon's creditors.
Still, they say Portugal could be forced to negotiate a second bailout if stability does not return quickly. A bailout review originally scheduled for next week by officials from the European Union and IMF was delayed until the end of August because of the crisis, the government said.
Ireland passes law allowing limited rights to abortion
Bill passes which will allow for abortions only when woman's life is under threat or if she is suicidal
Henry McDonald, Ireland correspondent
The Guardian, Friday 12 July 2013
Irish parliamentarians passed a groundbreaking law early on Thursday allowing limited abortion rights in the republic.
Enda Kenny and his coalition government pushed through the protection of life in pregnancy bill, which will allow for abortions only when a woman's life is under threat if her pregnancy continues or if she is suicidal.
Despite threats of excommunication from cardinals and bishops, the privately devout Catholic prime minister eventually won the vote after a marathon two-day debate in the Dáil.
Members voted by 127 to 31 to legalise abortion in cases of medical emergencies as well as the risk of suicide.
However, pro-choice and anti-abortion groups have already threatened court cases to challenge the new law.
The legislation which passed through the Dáil after 24 hours of tortuous debate will not stop the annual abortion trail from Ireland to Britain.
According to Irish department of health figures released on Thursday, about 4,000 Irish women travelled to British hospitals and clinics to terminate their pregnancies last year. They included 124 who were under 18.
The new law also does not include women who were raped, meaning grim traffic across the Irish Sea for abortions will continue.
Mara Clarke, director of the London-based Abortion Support Network, a charity that raises money to help women afford the £400-£2,000 it costs to travel and pay privately for an abortion in England, condemned the restriction on an Irish woman's right to choose. She said: "Given that the Irish government has now had more than 22 years to legislate on the X case, I'm not sure what the hold up is but then I'm not an expert on Irish abortion law.
"I am an expert in what happens to women when access to abortion is restricted. Even if this law is enacted, only a very, very small percentage of women who need abortions will be able to access them in Ireland.
"Women pregnant as result of rape, women with fatal foetal anomalies, couples who simply can't afford to care for a (or in most cases, another) child, will still be left behind.
"This week alone, Abortion Support Network has heard from a woman whose abusive husband hid her passport so she couldn't travel for an abortion, a woman who considered crashing her car to induce a miscarriage, and a couple whose very wanted pregnancy had catastrophic foetal anomalies – and these were only three of the 10 women who contacted us last week."
Sinn Féin TD (MP) Caoimhghín Ó Caoláin predicted that it was only a matter of time before a case emerged through the courts challenging that aspect of the new bill that criminalises abortion.
Anyone procuring or seeking an abortion could face up to 14 years in prison. He said a case might result from a young woman taking abortion pills who might seek to challenge the penalty.
Independent leftwing TD Catherine Murphy said the criminalisation of women seeking abortions could open up Ireland to fresh challenges in the European court of human rights.
Terminations For Medical Reasons – the campaign group for women who seek abortions because their babies will die if their pregnancies continue – accused the government of lacking courage to include their cases in the legislation.
"We are enormously saddened that their decision means that it could now be years before this is changed in legislation. With each week that passes, more grieving women and couples will have to leave Ireland to receive medical care," a TMFR spokesperson said.
During the debate, the Europe minister Lucinda Creighton was expelled from the Fine Gael parliamentary party. Creighton voted against the abortion law reform and is now expected to lose her ministerial job as well. On her way out of the Dáil, Creighton shook Kenny's hand saying: "I'm very sad, but I genuinely wish Enda Kenny and all the government the very best."
After leaving, she reminded Fine Gael that they had made an electoral promise in 2011 not to introduce abortion into Ireland.
Radovan Karadžić genocide charge reinstated by UN judges
Charge linked to campaign of killing and mistreating non-Serbs at start of Bosnian war in 1992
Associated Press in The Hague
guardian.co.uk, Thursday 11 July 2013 17.51 BST
Appeals judges at the United Nations' Yugoslav war crimes tribunal have reinstated a genocide charge against Radovan Karadžić linked to a campaign of killing and mistreating non-Serbs at the start of the Bosnian war in 1992.
The decision reversed the former Bosnian Serb president's acquittal last year on one of the two genocide charges he faces, but it does not amount to a conviction.
Presiding judge Theodor Meron said appeals judges believe that prosecution evidence presented at Karadžić's trial "could indicate that Karadžić possessed genocidal intent" during a campaign in 1992 aimed at driving Muslims and Croats out of towns and villages claimed by Serbs as their territory.
The decision will draw out Karadžić's trial on charges including orchestrating Europe's worst massacre since the second world war: the 1995 murder by Serb forces of 8,000 Muslim men and boys in the town of Srebrenica.
The ruling in The Hague came on the day survivors gathered in Srebrenica to mark the 18th anniversary of the massacre by reburying 409 recently identified sets of remains exhumed from mass graves.
Link to video: Srebrenica victims laid to rest at memorial 18 years after massacre
Karadžić's trial began in 2009, and prosecutors rested their case last year. Karadžić, who is defending himself in The Hague, called for acquittal on all 11 charges at the end of the prosecution case, saying there was insufficient evidence to convict him.
Judges rejected his request in all but the genocide charge covering the killings and mistreatment of non-Serbs in 1992 – the charge which has now been reinstated.
Karadžić also had argued that reinstating the charge would "disrupt the ongoing trial … and would represent an irresponsible use of public funds," Meron said.
The 68-year-old former Bosnian Serb leader showed no emotion as Meron ordered him to stand in court and told him the charge had been reinstated.
Peter Robinson, an American lawyer helping Karadžić with his defence, said his client was disappointed by the five-judge panel's decision, "but he is taking on board their comments about the crimes and his intent and we are determined to go on and put on a strong case in the defence phase".
**********Srebrenica victims laid to rest at memorial 18 years after massacre - videohttp://www.guardian.co.uk/world/video/2013/jul/11/srebrenica-memorial-massacre-video
On the 18th anniversary of the massacre of 8,000 Bosnian Muslims at Srebrenica, Bosnia-Herzegovina, 409 newly-identified bodies are buried at a memorial service. Thousands gathered in the eastern Bosnian town to commemorate the people who were killed by Serb forces in 1995
Pig Putin's Russia
Russia: misrule of law
Navalny's case shows how prosecutions on criminal charges are proving to be a useful weapon in the Kremlin's armoury
The Guardian, Thursday 11 July 2013 22.21 BST
Russia does not have political prisoners. That was so last century. It does, alas, retain the unedifying spectacle of show trials. Mikhail Khodorkovsky is the highest-profile victim. The oligarch has spent a decade in prison after two consecutive trials (the second more legally questionable than the first) but, just as he is due to be released next year, there are hints that a third case could be on the slipway. The heaviest hint came in the form of a recent documentary from a once-independent but now wholly tainted television channel, NTV, alleging that the oligarch was behind the murder of the mayor of Nefteyugansk in 1998. Vladimir Putin himself has alleged several times that Khodorkovsky has blood on his hands.
But lest anyone forget that the misrule of Russian law applies to all, the country's main opposition leader, Alexey Navalny, faces a six-year jail sentence and a 1m rouble fine on charges that he embezzled 16m roubles worth of timber from a state firm when he was advising the governor of Kirov. The charge is exactly the sort that the anti-corruption blogger himself has levelled against dozens of officials in actual cases of wrongdoing. It goes without saying that this charge is bogus and the result of a political vendetta. Prosecutions on criminal charges are proving to be a useful weapon in the Kremlin's armoury. The six years demanded by prosecutors is below the maximum 10-year sentence, but enough to keep Mr Navalny in jail for 2018, the next presidential election. It also means that he could not run in September's election for the mayor of Moscow, a city whose support United Russia, the main pro-Kremlin party, has lost. Mr Navalny used his closing remarks in his trial last week as a valedictory. The man who called United Russia a party of crooks and thieves, a label that dogged it in the Duma elections in 2011, proved to be up to the occasion. He vowed to destroy the neofeudal system in which 83% of the nation's wealth belongs to 0.5% of the people. It was an overtly political speech to a provincial court in a trial which had nothing to do with Kirov, timber or stolen money.
Mr Navalny is not the sole target of the investigative committee, a Russian version of the FBI. Sergei Udaltsov, a leftwinger who forged ties with the Communist party and helped spearhead mass protests in 2012, also faces up to 10 years in prison for "staging riots". Some 27 people who took part in a demonstration last year on the eve of Pig Putin's inauguration to a third presidential term have also been charged. There is only one purpose of these prosecutions: to stifle dissent. Mr Putin's third presidential term is taking Russia down a familiar historical path. It is one cause of the current exodus of its intelligentsia. It could also have a disturbingly predictable violent outcome.
July 11, 2013
Dead Lawyer, a Kremlin Critic, Is Found Guilty of Tax Evasion
By DAVID M. HERSZENHORN
MOSCOW — The steel cage reserved for the defendants was empty Thursday, which was not surprising since one of them is dead and the other lives in London. As the judge, his voice nearly inaudible, read out his verdict, one of the main defense lawyers paid no attention, tapping nonchalantly on his tablet computer instead.
If the posthumous prosecution of Sergei L. Magnitsky, the lawyer who was jailed as he tried to expose a huge government tax fraud and died four years ago in a Russian prison after being denied proper medical care, seemed surreal from the moment the authorities announced it, the verdict and sentencing on Thursday did not disappoint.
By all accounts, it was Russia’s first trial of a dead man, and in the tiny third-floor courtroom of the Tverskoi District Court, it took the judge, Igor B. Alisov, more than an hour and a half to read his decision pronouncing Mr. Magnitsky guilty of tax evasion.
Mr. Magnitsky was convicted along with a former client, William F. Browder, a financier who lives in Britain and was tried in absentia on the same charges. Mr. Browder, once Russia’s largest foreign portfolio investor, was sentenced to nine years in prison — a sentence that he will almost certainly never serve. Interpol in late May refused a request by the Russian government to track Mr. Browder’s whereabouts, a relatively rare instance of a law enforcement inquiry’s being set aside as politically motivated.
Mr. Browder, who has been barred from Russia since 2005, said in a telephone interview from London on Thursday that he believed that the Kremlin was acting out of desperation.
“Russia is a criminal regime,” Mr. Browder said. “The Russian state is a criminal state. And in order to operate in Russia, you have two options as a businessman: you can become part of the criminality, in which case you become a criminal, or you can oppose it, in which case you become a victim, and there’s no way you can avoid it.”
He added: “We exposed it and opposed it. And as a result, he is dead and I am sentenced to nine years in absentia.”
Mr. Browder said that he would not take any new precautions as a result of the verdict, but that he had long stopped traveling to countries he regards as close to the Russian government for fear of being detained.
Mr. Magnitsky’s death — and the Kremlin’s refusal to hold anyone responsible for either his treatment in prison or the fraud he tried to expose — has drawn international condemnation. It also set off a major diplomatic row with the United States, which late last year adopted a bill named after him that bars Russian citizens accused of human rights abuses from traveling to America or maintaining financial assets there.
Russia retaliated by approving a law putting reciprocal restrictions on Americans accused of rights abuses and barring the adoption of Russian orphans by American citizens.
Mr. Browder has been lobbying other countries to adopt laws identical to the one in the United States. Britain has not yet approved legislation, but its immigration minister, Mark Harper, has said it has taken steps to deny entry to those accused of abusing human rights.
The Kremlin has brushed aside the international criticism as unwarranted meddling in Russia’s internal affairs, and President Vladimir V. Putin angrily dismissed a question about the government’s handling of the case at his annual news conference in December.
“I don’t know the details, but I know anyway that Mr. Magnitsky died not from torture — nobody tortured him — but from a heart attack,” Mr. Putin said, adding that the only question was if he had been given help in time.
In recent months, Mr. Putin and other Russian officials have asserted that Mr. Magnitsky and Mr. Browder engaged in criminal activity, and the posthumous prosecution seemed intended to cement those allegations as fact. Under Russian law, court proceedings involving dead defendants are normally allowed only to help a family clear a loved one’s name.
The small, sweltering courtroom was filled Thursday with 22 video cameras and dozens of reporters; six guards in black uniforms, flak jackets and berets; four officials from the prosecution; and two court-appointed defense lawyers. Absent any defendants to prevent from escaping, the guards eyed the reporters and camera crews warily.
Judge Alisov stood and held a folio of the decision in two outstretched hands, like a priest reading from a sermon. He could barely be heard and he barely ever looked up, though he frequently repositioned his spectacles.
Despite the long recitation of facts and history, the result was rather simple: Mr. Magnitsky and Mr. Browder had been found guilty of large-scale tax evasion stemming from a scheme in which they fraudulently claimed benefits available to companies that employed workers with disabilities.
Mr. Magnitsky was imprisoned after accusing Russian officials of embezzling $230 million from the treasury. He died in pretrial detention nearly a year after his arrest. While in custody he had received diagnoses of pancreatitis and gallbladder disease and wrote repeated requests for medical treatment, which were refused.
The authorities ruled that he had died of toxic shock and heart failure. One prison official was brought to trial in Mr. Magnitsky’s death, but in a last-minute twist prosecutors switched their view and urged an acquittal.
Mr. Browder and Mr. Magnitsky’s family refused to participate in the case, and the government was ultimately forced to appoint lawyers for both of them. Neither lawyer said a word during the proceedings on Thursday.
There was no immediate comment from the Kremlin on the verdict.
In Washington, Jen Psaki, the State Department spokeswoman, called the verdict an “unprecedented posthumous criminal conviction” and said, “We continue to call for full accountability for all those responsible for Magnitsky’s wrongful death.”
At one point, a Moscow court ruled that the criminal case against Mr. Magnitsky was legal, even though he was dead, because his mother had insisted that her son was innocent in interviews with the news media.
Sergei Magnitsky verdict 'most shameful moment since Stalin'
Russian posthumous trial of tax whistleblower is condemned by head of company defrauded of $230m
guardian.co.uk, Thursday 11 July 2013 14.20 BST
The courtroom cage in Moscow stood empty on Thursday as a judge found the late whistleblower Sergei Magnitsky and his London-based employer guilty of tax evasion in a move likened to Stalin-era justice.
The case against the two defendants – Magnitsky, allowed to die an excruciating death in prison in 2009, and William Browder, banned from entering Russia since 2005 – has come to symbolise the brutality of Russia's system and the penalties incurred by those who uncovering official wrongdoing.
Magnitsky, a lawyer hired by Browder's London-based Hermitage Capital Management fund, uncovered a $230m (£150m) tax fraud scheme run by a host of Russian interior ministry and tax officials using documents stolen in a raid on Hermitage Capital. Magnitsky and Browder were then charged with running the fraud themselves.
Magnitsky was thrown into one of Russia's harshest pre-trial detention centres, repeatedly denied medical care and allowed to die. A presidential human-rights commission later found evidence that he was tortured.
Many of the officials involved in the alleged fraud the lawyer uncovered received promotions and awards.
Thursday's verdict was the culmination of a year-long effort to discredit Magnitsky, and Browder, who has waged a global campaign to punish top Kremlin officials for the former's death.
He successfully lobbied the US government to adopt a "Magnitsky list" that bans officials involved in the fraud from entering the US or keeping bank accounts there. Moscow retaliated by banning Americans from adopting Russian children.
Magnitsky was spared a posthumous jail sentence after a Moscow judge acknowledged that he was already dead. Browder was sentenced to nine years in absentia, and banned from doing business in Russia for three years.
"The Russian government is effectively a criminal regime now," Browder said by telephone from London He he has been living in the UK since being denied entry into Russia after landing at Moscow's Sheremetyevo airport in November 2005 on the grounds he was a threat to national security.
Once Russia's largest portfolio investor, and one of President Vladimir Putin's biggest foreign fans, Browder appeared to have run afoul of the Kremlin after picking up stakes in some of the country's largest state-run companies.
"Doing business in Russia means either you've effectively become part of a criminal regime or a victim of a criminal regime," Browder said.
"There's no way to do business in Russia without seriously compromising yourself or putting yourself in grave danger."
Browder said his and Magnitsky's relatives had refused to take part in the trial. "We didn't want to dignify a clearly illegitimate judicial process," he said.
Speaking of Magnitsky's relatives, Browder added: "As you can imagine, it's one thing to have their son and husband murdered. But it's just beyond sadistic to them to prosecute his corpse."
In an earlier statement, Browder said: "Today's verdict will go down in history as one of the most shameful moments for Russia since the days of Joseph Stalin."
The Magnitsky verdict comes days after a Russian court convicted a dead woman in the first posthumous trial in Russia in decades. Olga Alexandrina was found guilty of causing the car accident that killed her despite widespread evidence that the other driver, a vice-president at Russian oil major Lukoil, likely caused the crash.
Afghan judges free three jailed for torture of child bride Sahar Gul
Three freed despite imprisoning, starving and burning girl sold into marriage as new laws could prevent relatives testifying against each other
Emma Graham-Harrison in Kabul
The Guardian, Thursday 11 July 2013 20.28 BST
Human rights activists have warned of an new assault on women's rights in Afghanistan after judges and prosecutors allowed the early release of three people convicted for the brutal torture of a child bride, and conservative lawmakers made an aggressive bid to prevent relatives testifying against each other.
If successful, the small change – introduced covertly into the criminal prosecution code – would stop the vast majority of cases of violence against women from ever reaching court.
Together with the quashing of three convictions for the attempted murder of the teenager Sahar Gul, it marks an alarming two-pronged assault on women's rights by both those who make the laws and those tasked with upholding them.
"The last two months have really been a parade of horrible for women's rights in Afghanistan," said Heather Barr, Afghanistan researcher at Human Rights Watch, warning that the proposed change to the criminal code would leave most abused women with no legal protection against violence.
"Underage marriage, forced marriage, domestic violence, sale of women – these crimes are almost always committed against women by family members, whether through birth or through marriage."
The 10-year sentences handed down to Gul's tormentors last year was hailed as an important step forward, after her case horrified Afghanistan and prompted a bout of national soul-searching.
Sold as a wife when she was an illiterate 12-year-old, her in-laws wasted little time embarking on a campaign of almost unimaginable torture. They starved her, chained her in a basement bathroom, beat her, burned her with red-hot metal pipes and pulled her fingernails out.
By the end of her ordeal she could no longer walk, and was rescued from her makeshift prison in a wheelbarrow. But last week, according to her lawyer and women's activists, a court ordered the release of Gul's mother-in-law, father-in-law, and sister-in-law saying there was no proof of abuse.
"This was based on the idea that there was no evidence, but the people who would have given evidence didn't know that the hearing was taking place," said Kimberley Motley, a Kabul-based US lawyer who took on Gul's case last week after learning of the release.
Judges ignored the fact that the courtroom was almost empty, with apparently no representation from government prosecutors or the victim, even though both should have been informed under Afghan law.
Sahar Gul, 14, at a women's shelter in Kabul. Sahar Gul at a women's shelter in Kabul, Afghanistan, last year. She was not told about the release of her three in-laws, her lawyer said. Photograph: Kuni Takahashi/New York Times/Redux/eyevine
"Sahar Gul was not told about this," Motley said. "The prosecutor didn't show up or wasn't informed. I believe the only person in court was the defence lawyer for the accused."
The quashing of the conviction was followed by a suspiciously rapid release of the prisoners, just two days later. In Afghanistan there aremany layers of baffling paperwork between an overturned conviction and freedom, that usually take at least a month to complete.
"I cannot see that [process] happening in a legal way in two days' time in Afghanistan," said Motley. "It has taken me a minimum of seven working days to secure the release of clients, and that's when I'm devoting 100% of my time to it. But I don't pay [bribes]."
Judges must firstly put their decision in writing. That letter is taken to the prosecutors, who can mull an appeal for up to 30 days before authorising a release. If they accept the judgment, their signature travels by the rickety postal system to the Central Prison Directoratecentral prison directorate, which attaches another letter to the pile of documents and sends it to the prison where the prisoner is housed, Motley said.
The prison governor must also sign off, and take the prisoners back to the office of the attorney general, who finally signs off again on the release and the prisoner is finally released.
The process means that even if government prosecutors were not told of the original hearing, they must have twice had the chance to appeal or prevent the release, but passed it up.
"This is a systematic failure. This is corruption at the core of the justice system. I don't know how they can justify how this happened to this girl," said Motley, adding that the release would have involved the connivance of three judges and a prosecutor "at an absolute minimum".
The attorney general's office could not be reached for comment on the case.
Sahar Gul only heard about the release when an organisation now supporting her recovery and education tried to chase up whether a date had been set to hear an appeal by her in-laws.
"The lawyer went to court to find out when the trial was, and found out they had been released," said Manizha Naderi, executive director of Women for Afghan Women, which is supporting Gul. "We don't know where they are now … Sahar Gul is very scared, and wants them in jail for the rest of her life."
However terrifying women's advocates find the quashing of sentences for Sahar Gul's tormentors, the legal changes that some MPs are hoping to bring to the country's criminal prosecution code, now travelling through parliament, would have stopped the case even reaching court.
They have added a provision to clause 1 of article 26, which lists people who cannot be questioned as witnesses. "Relatives of the accused" are now grouped with small children, the accused's defence lawyer and others, according to one source who has seen a draft of the law.
Qazi Nazir Ahmad Hanafi, a conservative MP who has been a driving force in efforts to quash a landmark law on violence against women, confirmed to the Guardian that the provision had been added to a draft of the code that recently went through the lower house of parliament. It would still need to be passed by the upper house and signed by the president to become law.
Women's rights activists and female MPs who are outspoken about women's rights said they were not aware of the change, which still has to be approved by the upper house, but the head of the UN's human rights unit warned it could make prosecution of violence against women "almost impossible".
"The state [government] is obliged to protect women from domestic violence wherever it happens and prosecute whoever is committing such crimes including victims' family members," Georgette Gagnon told the Guardian.
It comes weeks after MPs quashed efforts to endorse a law on ending violence against women, arguing its terms against underage and forced marriage were unIslamic. The MPs also made a secret last-minute change to an election law, eliminating quotas of seats reserved for women on provincial councils.
Mokhtar Amiri contributed to this report
July 11, 2013
Siege by Taliban Strains Pakistani Girls’ Schools
By TAHA SIDDIQUI and DECLAN WALSH
GHALANAI, Pakistan — The classroom in Ghalanai, an area nestled amid the mountains of Pakistan’s tribal belt, has the air of a military camp: a solitary tent pitched beside a bombed-out building, ringed by a high wall and protected by an armed gunman.
“We need to assure parents that it’s safe,” said Noor Haider, a local tribal leader who took on school security after Taliban militants bombed the school three years ago.
Extreme measures have become necessary as Taliban militants have pressed their violent campaign against girls’ education in northwestern Pakistan, bombing schools and terrifying pupils and parents.
More than 800 schools in the region have been attacked since 2009, according to government education authorities. But it was a vicious attack last October on an outspoken 15-year-old schoolgirl, Malala Yousafzai, that moved the issue to global prominence.
A Taliban hit man shot Ms. Yousafzai in the head in an attempt to silence her eloquent advocacy of education rights in Swat, a picturesque mountain valley that had been the scene of fierce fighting between the Taliban and the military.
After a medical evacuation to Britain, where war surgeons repaired her shattered skull, Ms. Yousafzai has made a startling recovery. In March, she resumed her schooling in Britain. And on Friday she is marking her 16th birthday by addressing a youth assembly at the United Nations headquarters in New York.
That speech will be the first unmediated public appearance by a young woman who has become an international symbol of teenage bravery and educational activism. Ms. Yousafzai has won numerous honors and been nominated for the Nobel Peace Prize. News of her progress is assiduously followed across the world.
Back in Pakistan, however, the Taliban war on girls’ education continues unabated.
Ghalanai is the headquarters of Mohmand, a hilly tribal agency along the Afghan border where schools have been the targets of more than 100 attacks. Military check posts dot the hilltops, overlooking largely barren land. A female suicide bomber almost killed the leader of a religious party here this year.
The Pakistani Taliban see schools as symbols of both Western decadence and government authority, but their attacks are also intended to deny the Pakistani military the possibility of establishing temporary bases in the buildings. Typically, they strike in the dead of night, planting explosives that topple buildings and shred desks and blackboards.
The authorities have struggled to respond. At the Government Girls Primary School, Mr. Haider started the tent school with help from the United Nations. Otherwise, the government has done little, he said.
And the Taliban continue to exert pressure on parents and pupils. Night letters posted in the town describe girls’ schooling as a “product of the West” and order pious Muslims to shun the schools.
The siegelike situation has led some brave young women to follow Ms. Yousafzai’s example and defy the Taliban edicts. That was the case in Shabqadar, on the edge of Mohmand, where the Taliban decided to send a violent message in December.
Hira Gul, a 14-year-old pupil, was awakened by an explosion at midnight. The next morning she found a pile of rubble where her school had stood. The attack came as no surprise. “This has become very common in our area,” she said.
Her teacher, however, was profoundly affected. For days after the attack, the teacher, Fazeelat Bibi, visited the destroyed school every morning “to cry my heart out,” she said.
She has restarted class in her back garden. But attendance has fallen 75 percent, and Ms. Bibi has started wearing an all-covering burqa to work to avoid attracting the Taliban’s attention.
“Teaching here was never easy,” Ms. Bibi said.
She noted a prevailing conservative mind-set in which education is the preserve of boys. But she added, “Now it’s fear and growing extremism that are making parents keep children at home.”
The attacks on schools are mostly the work of the Pakistani Taliban, who see girls’ education as un-Islamic. The group earned global scorn and revulsion after it proudly claimed responsibility for the attack on Ms. Yousafzai — a claim that, at least briefly, helped rally Pakistani public opinion against the movement.
In Swat, which lies about 50 miles east of Mohmand, deeper in the mountains, some tribesmen have lionized Ms. Yousafzai as a teenage heroine who stood up to the Taliban where many others have faltered. Despite continuing threats, the girls’ school that she attended, which was run by her father, is open and running at full strength.
“We were not expecting the pupils to come back, but they did,” said the school administrator, Iqbal Khan.
Ms. Yousafzai, meanwhile, has resumed her schooling, at Edgbaston High School for Girls in Birmingham, England. Another teenage girl hurt in the October attack recently arrived in England to join her.
“They will not stop me,” Ms. Yousafzai recently wrote on her Facebook page. “I will get my education, if it is in home, school or any place.”
But Ms. Yousafzai’s plight has also provoked some contrary reactions in her own community, ranging from jealousy and suspicion to naked fear. An attempt to rename a government girls’ school after her failed after students loudly protested that, by associating with Ms. Yousafzai, they would make targets of themselves.
In the bazaar, some residents hint at resentment toward the global attention to Ms. Yousafzai. Some complain that it has overshadowed the bravery of other young women. Others indulge in muttered conspiracies about Western intervention.
Some have posted crude abuse on Ms. Yousafzai’s Facebook page alongside the praise for her campaign, calling her a “kanjri” — an Urdu word for a prostitute — or an “American agent.”
“Many people think it is a fabricated drama,” said Ihsanullah Khan, 35, a university lecturer in Swat’s main town, Mingora. “And so many other people have spoken out against militants, or sacrificed their lives. Why are they forgotten?”
Equally, though, the Taliban war on education has strengthened the resolve of Pakistani leaders who see no choice but to stand up against the militants’ cultural and religious dictates.
Mr. Haider, the tribal leader in Ghalanai, said the Taliban had recently kidnapped one of his relatives because he allowed the security forces to draw water from wells on the family’s land.
Since elections in May, Khyber Pakhtunkhwa Province, bordering the tribal belt, has been governed by the party of Imran Khan, a charismatic politician who has a reputation for being soft on the Taliban, yet who has also increased the provincial education budget by 30 percent.
Yet the decision about whether to defy Taliban edicts on girls’ schooling often falls to individual families. The greatest resistance often comes from fearful fathers, said Ms. Bibi, the teacher in Shabqadar.
“They say they don’t want their daughters to become the next Malala,” she said.
Taha Siddiqui reported from Ghalanai, and Declan Walsh from London. Sana ul Haq contributed reporting from Swat, Pakistan.
Malala Yousafzai to tell UN: books and pens are our most powerful weapons
Pakistani schoolgirl shot by the Taliban will address the world body in New York and call for universal free education
guardian.co.uk, Friday 12 July 2013 05.41 BST
Malala Yousafzi, the Pakistani schoolgirl brought to England after being shot in the head by the Taliban, will address the United Nations today.
She will mark her 16th birthday by delivering a speech at the UN headquarters in New York to call on governments to ensure free compulsory education for every child.
It will be the teenager's first public speech since she was attacked on a bus in Pakistan's north-western Swat valley after standing up for her right to go to school in her home country.
She will tell a delegation of more than 500 young people: "Let us pick up our books and pens. They are our most powerful weapons.
"One child, one teacher, one pen and one book can change the world. Education is the only solution. Education first."
The schoolgirl set up the Malala Fund following the assassination attempt by the Taliban in October.
She spent hours undergoing surgery at the Queen Elizabeth Hospital in Birmingham, where surgeons tried to repair the damage caused by a bullet which grazed her brain.
A report released to coincide with her address says 57 million children around the world are not going to school.
The UNESCO and Save the Children study says the number of children of primary school age who are not getting an education has fallen from 60 million in 2008, but during that period the percentage of young people in conflict-affected countries who are not at primary school rose from 42% to 50%.
Save The Children said the report showed that in 2012 there were more than 3,600 documented attacks on education, including violence, torture and intimidation against children and teachers resulting in death or grave injuries, as well as the shelling and bombing of schools and the recruitment of school-aged children by armed groups.
Since the start of the Syria conflict more than two years ago, 3,900 schools have been destroyed, damaged or are occupied for non-educational purposes, the report says.
The report, Children Still Battling to go to School, finds that 95% of the 28.5 million children not getting a primary school education live in low and lower-middle income countries – 44% in sub-Saharan Africa, 19% in south and west Asia and 14% in the Arab states, UNESCO said.
Girls make up 55% of the total and were often the victims of rape and other sexual violence that accompanies armed conflicts, UNESCO said.
"Across many of the world's poorest countries, armed conflict continues to destroy not just school infrastructure, but also the hopes and ambitions of a whole generation of children," UNESCO's director-general, Irina Bokova, said.
Malala, who now attends Edgbaston High School for girls in Birmingham, will present a petition of more than 3 million signatures to the UN secretary-general, Ban Ki-Moon, demanding education for all.
The UN has declared 12 July, her birthday, "Malala Day". The event has been organised by the former prime minister Gordon Brown, now the UN special envoy for global education.
He said: "Getting every girl and boy into school by 2015 is achievable.
"It is only impossible if people say it's impossible. Malala says it is possible – and young people all over the world think it is possible."
Teenagers Sam Whittingham and Millie Wells will represent the UK at the event after winning a national competition to become young ambassadors for the global campaign for education.
Burma jails 25 Buddhists for mob killings of 36 Muslims in Meikhtila
Jail terms, among first for Buddhists in recent sectarian violence, follows attack on school that killed 32 and torching of mosques
Associated Press in Rangoon
guardian.co.uk, Thursday 11 July 2013 19.26 BST
A Burmese court has sentenced 25 Buddhists to up to 15 years in prison for murder and other crimes during a night of rioting, burning and killing in central Burma, after weeks in which it seemed only Muslims were being punished for sectarian violence aimed largely at them.
But the sentences handed down on Wednesday and Thursday did not erase a sense of unequal justice: a day earlier, a Muslim received a life sentence for murdering one of 43 people killed in March in the central Burmese town of Meikhtila.
A wave of violence in the past year in the largely Buddhist country has left more than 250 people dead and 140,000 others fleeing their homes, most of them Muslim. The attacks, and the government's inability to stop them, have marred the south-east Asian country's image abroad as it moves toward democracy and greater freedom after nearly five decades of military rule.
Many of the sentences were handed down on Wednesday, and the toughest stemmed from the deadliest incident of the Meikhtila riots: a brutal mob attack on an Islamic school, its students and teachers that killed 36 people.
Buddhist mobs torched Mingalar Zayone Islamic boarding school, Muslim firms and all but one of the city's 13 mosques after a row between a Muslim and a Buddhist at a gold shop and the burning to death of a Buddhist monk by four Muslim men.
While security forces stood by, a mob armed with machetes, metal pipes, chains and stones killed 32 teenage students and four teachers. Video clips online showed mobs clubbing students to death and cheering as flames leapt from corpses.
The state-run Keymon daily said eight people – seven Buddhists and one Muslim – were convicted in Meikhtila district court for crimes connected to the school massacre.
Tin Hlaing, a local reporter present during the hearings, told Associated Press that four of the eight were found guilty of murder and causing other injuries, receiving sentences of between 10 and 15 years in jail.
He did not provide details about their roles in the slaughter but said the other four convicted were involved in lesser offences. The Keymon daily said the seven Buddhists received sentences of three to 15 years, but offered no details about the Muslim's case.
Tin Hlaing also said four Muslim men on Tuesday received sentences of at least seven years in prison – with one getting a life sentence – for their roles in the murder of a 19-year-old university student during the unrest.
The district court also sentenced 10 Buddhist men to one to nine years for their involvement in the death of a Muslim man. A township court sentenced six men and one woman, all Buddhists, to two years' imprisonment each for damaging the gold shop.
The Meikhtila district chairman, Tin Maung Soe, said one Buddhist man was sentenced to five years' imprisonment on Thursday for causing grievous harm in connection with the killing of two Muslim men.
Sectarian violence in Burma began in Rakhine state just over a year ago in the west, then spread in March to the central towns of Meikthila and Okkan.
There have been many earlier sentencings, in Meikhtila and elsewhere, but the majority involved Muslim defendants. Tin Maung Soe said most of the 73 people charged with crimes related to the rioting there are Buddhists.
Asked why Buddhists were given lighter sentences than some of the Muslims, Meikhtila district legal officer Khin Win Phyu said the sentences were handed down "based on the testimonies of the witnesses".
"The courts passed their verdict according to law and there is no bias or privilege toward any group," she said.
The state-owned newspaper Myanman Ahlin has reported that close to 1,500 people have been arrested on charges related to sectarian violence, and 535 of them have been convicted. Most of the cases are in Rakhine state, where more than 200 people were killed last year as tens of thousands of Rohingya Muslims were driven from their homes. The paper did not break down the numbers by religion.
About 12,000 people were displaced by the Meikhtila riots. Tin Maung Soe said about 3,500 Muslims and 850 Buddhists are still living in temporary shelters.
He also said three mosques in the town reopened on Wednesday as Muslims prepared for the holy month of Ramadan. Authorities provided security.
Indonesian prison fire: hundreds on the run after deadly riot
Hunt still on for about 150 prisoners, including convicted terrorists, who escaped leaving five dead
Associated Press in Medan
guardian.co.uk, Friday 12 July 2013 09.04 BST
Authorities are searching for scores of inmates, including convicted terrorists, who escaped from a crowded Indonesian prison after prisoners set fires and started a deadly riot at the jail in the nation's third-largest city.
Thousands of policemen and soldiers were deployed around Tanjung Gusta prison to blockade roads linking Medan, the capital of north Sumatra, to other provinces while fire brigades fought the fires on Friday.
About 200 prisoners escaped after the riot late on Thursday in which three prison employees and two inmates were killed.
By Friday security forces had retaken control of the prison after soldiers entered without resistance, prison directorate spokesman Akbar Hadi said.
Officers have rearrested 55 inmates and were still searching for the rest, said local police chief Lieutenant-Colonel Nico Afinta. Three convicted terrorists had been recaptured.
He said the prison employees who died, including a woman, were trapped and killed in an office building that was burned by prisoners during the riot.
Indonesian police spokesman Boy Rafli Amar said 15 prisoners who escaped were believed to be "terrorists". Those 15 are believed to have links to Toni Togar, who is serving a 20-year sentence in a different prison for a series of church bombings in Sumatra in 2000, the Jakarta Post reported on Friday.
The riot appeared to have been triggered by a power blackout that knocked out water pumps, leaving inmates without water since Thursday morning.
The jail was holding nearly 2,600 prisoners but its normal capacity was 1,500, Hadi said.
Witnesses said gunshots were heard from inside the prison, and television footage showed security forces carrying a white body bag into an ambulance from the burning prison. The fire sent flames jumping metres into the air and a huge column of black smoke billowed over the jail.
Hadi estimated about 500 inmates were resisting calls to stop the riot and said an evacuation was planned for the safety of inmates who could become hostages as tensions showed no signs of easing.
Vice minister of justice Denny Indrayana, who is in Medan overseeing the operation, has requested evacuation of all inmates and appealed for those who escaped to give themselves up.
"Legal action will be taken to chase them, and tougher action will be applied to those who refuse to surrender," Indrayana said.
All Manus Island detainees show signs of anxiety and depression, report says
Damning UNHCR report raises further questions about legality of Australian government's policy on asylum seekers
guardian.co.uk, Friday 12 July 2013 09.16 BST
A damning UNHCR report on the state of immigration detention on Manus Island [pdf] has found that every asylum seeker housed in offshore processing facilities on Manus island is displaying "apparent signs of anxiety and depression", once again raising questions about the legality of the Australian government's policy of offshore processing.
A delegation from the United Nations' refugee agency, which did not contain a medical officer, visited the regional processing centre on the Papua New Guinean island last month, meeting with staff and detainees.
It observed that "all asylum seekers on Manus island displayed apparent signs of anxiety and depression" and said that while a torture and trauma counselling team were expected to arrive on at the facility in early July, it was "regrettable that this action is remedial rather than preventative".
The report also praised the "significant efforts" of Save the Children and the Salvation Army as well as the "positive and empathetic" approach of security and government staff for trying to mitigate the effects of long-term detention on asylum seekers.
Their report described a number of conditions inconsistent with international human rights law, including that detention was "arbitrary" and conditions remained "harsh". UNHCR last visited detention facilities on Manus in January, and while the report welcomed the removal of families and children from the processing centre, added that facilities on the island "remain essentially unchanged" with single adult males being housed in a "tent city" in need of repair.
"Conditions remain below international standards for the reception and treatment of asylum seekers," the report says.
The report recognised that processing of asylum claims on Manus was due to start soon, but acknowledged the frustration amongst detainees at the length of wait. It said that the memorandum of understanding between the governments of Australia and PNG, which stipulates the PNG government should make efforts to facilitate the assessment of detainees' asylum claims, had not been met.
The report recommends that: "The governments of PNG and Australia should finalise and disseminate as a matter of urgency clear information to asylum seekers about their legal rights and entitlements, and provide counselling on the procedures which will be followed to assess their claims for refugee status."
It also said that efforts should be made to facilitate more freedom of movement within the facilities' surroundings, as progress so far had been "slow", contributing to the arbitrary nature of detention of asylum seekers housed in the centre.
"The lack of a clear legal framework for freedom of movement is compounded by the remoteness of the location and slow negotiations with the local community," the report said.
Human rights groups have said the report is an indictment on the policy of offshore processing.
Daniel Webb, a lawyer with the Human Rights Law Centre said: "The UNHCR report confirms what the government surely already knows – that its cruel, ineffective and unlawful offshore processing policies are causing grave harm to vulnerable people.
"It's a tragedy that people die at sea when seeking asylum, but it's time the government realised that violating the human rights of survivors is not an effective, humane or lawful policy response. Instead of punishing survivors, we must focus on working with source countries to develop safe pathways to protection for those who need to seek it."
The Department of Immigration and Citizenship recognised some of the criticisms contained within the report. A spokesman for the department said: "The Australian government is aware that conditions in the temporary facility are not to the standard that would be expected of a permanent processing centre."
But, in direct opposition to the some of the report's findings, he added: "All people transferred and accommodated in the Manus Island RPC are being treated with dignity and respect and in accordance with human rights standards.
"The Australian government is working with the government of Papua New Guinea across a wide range of issues to ensure that the permanent facility is established as quickly as possible. For now, every effort is being made to mitigate the conditions in the temporary centre."
Australia's chief scientist sounds antibiotic resistance warning
Report says there is 'a genuine threat of humanity returning to an era where mortality due to common infections is rife'
guardian.co.uk, Friday 12 July 2013 08.35 BST
The growth of antibiotic-resistant infections represents a "looming public health issue" for Australia that requires "urgent" new funding to prevent deaths from minor ailments such as sore throats and cut knees, the country's top scientist has warned.
A report by the Office of the Chief Scientist (pdf) states there is "a genuine threat of humanity returning to an era where mortality due to common infections is rife".
The paper blames the "misuse and overuse" of antibiotics, such as for animal husbandry, for driving up resistance levels in humans.
"Some bacteria are now so resistant that they are virtually untreatable with any of the currently available drugs," the report says.
"If we do not take action to address this threat, humankind will be on the brink of a 'post-antibiotics era', where untreatable and fatal infections become increasingly common.
"In Australia, the increasing number of antibiotic-resistant infections appearing in the community and acquired during international travel represents a looming public health issue."
The report points to a "collapse" in research and development into new antibiotics as an area of significant concern.
"Only one antibiotic that works in a novel way has been discovered and developed for use in humans in the last 50 years," the study says.
"Most companies have now either abandoned the field or are in the process of reducing their commitment. Whilst some cancer medicines are sold for $20,000 a course, we still expect to pay $20 for a course of antibiotics."
Most of the antibiotics currently used in Australia are derived from microbes, such as fungi, viruses and bacteria. While scientists have long anticipated bacteria to evolve resistance, the report points out that this process is accelerating, aided by misuse in animals and the liberal prescription for viral infections in people.
The outcome of this, the chief scientist warns, is a scenario where illnesses such as strep throat infections or minor cuts could prove fatal.
"Antibiotic resistance has the potential to become one of the world's biggest public health challenges, requiring a serious response from our scientists, our industries and the community at large," says professor Ian Chubb, Australia's chief scientist.
Michael Moore, the chief executive of the Public Health Association of Australia, told Guardian Australia it was "brilliant" that the chief scientist had identified antibiotic resistance as a problem.
"There have been warnings from scientists and those in the health fraternity for a number of years, so to have the gravitas of the chief scientist behind this should be a wake-up call for Australia," he says.
"We are already seeing people with antibiotic resistance dying in Australia. Because there is so little R&D in the pipeline, it's likely to get worse before it gets better.
"We are a developed country with good nutrition, immunisation and clean water, so there are other factors to our public health. But we have got into a habit of not worrying about infections because of antibiotics.
"We need clear restrictions on last-line antibiotics so that they aren't used on animals. We also need to look at how often they are prescribed for humans. There needs to be pressure put on pharmaceutical companies for greater R&D, but the government has a role to control when and where antibiotics are used."
July 11, 2013
U.S. and China to Discuss Investment Treaty, but Cybersecurity Is a Concern
By ANNIE LOWREY
WASHINGTON — The United States and China will start negotiating a sweeping bilateral investment treaty, which could open vast sectors of each economy to investments from the other side, officials announced Thursday.
Treasury Secretary Jacob J. Lew called the development a significant breakthrough. It represents “the first time China has agreed to negotiate a bilateral investment treaty, to include all sectors and stages of investment, with another country,” he said in a statement.
The treaty talks were announced at the close of a two-day meeting here of high-ranking Chinese and American diplomatic, security and economic officials, part of an annual “strategic and economic dialogue” between the world’s two largest economies.
But concerns over espionage and theft using the Internet have complicated the economic discussions, with diplomats working on those issues this week. Protections against cyberspying would presumably have to be part of any investment treaty, and could be a major sticking point.
The United States has repeatedly warned that the theft of American companies’ intellectual property, often over computer networks, could make businesses hesitant to invest. And the United States has blocked some Chinese investments, fearing that they could facilitate electronic espionage.
“The reality is clear: The technological ties that bind us together also introduce a new challenge to our bilateral relationship,” said William J. Burns, the deputy secretary of state. Mr. Burns has stepped in for Secretary of State John Kerry — whose wife has been ill — at the negotiations this week.
The Chinese have responded to the American complaints with barbed comments of their own. In particular, they have pointed to the revelations of Edward J. Snowden, the former contractor for the National Security Agency who last month leaked details on the United States’ sweeping surveillance of foreigners and Americans.
American officials are angry that the Chinese government allowed Mr. Snowden to leave Hong Kong for Russia, where he has been holed up at Sheremetyevo Airport in Moscow in an attempt to avoid deportation to the United States.
While American officials used carefully hedged words like “constructive” to describe the two days of talks, in private they made little effort to hide their disappointment at the outcomes, saying the discussions were as frustrating as President Obama’s inconclusive meeting with president Xi Jinping last month in California. Even on North Korea, the area where the two countries have begun to speak about similar strategic goals, there was no agreement on how to press for a halt to its nuclear and missile testing, much less how to achieve the longtime aim of de-nuclearlization. American officials have slowly come to understand the degree to which Mr. Snowden’s revelations have changed the balance of power in negotiations with the Chinese.
It was a measure of how little was agreed upon that at a dinner on Thursday night, at the end of meetings, the Chinese and Americans spent much of their time praising their cooperation on a single project: Building a Chinese garden at the national arboretum.
Still, the concerns did not seem to hamper progress on economic matters. American businesses face significant hurdles in investing in China — when they are allowed to invest at all. A bilateral treaty might open the door for American financial, consulting and energy companies to make significant inroads in the Chinese market, which is still growing as the number of consumers expands, if not as quickly as in the past.
Business groups applauded the news about the treaty negotiations. Rob Nichols, president of the Financial Services Forum, a lobbying group in Washington, called it a “significant and welcome step forward for the economic relationship between the United States and China.”
“If the two countries are able to reach an agreement for the United States to gain market access to China’s economy — especially in the financial services sector — it would be a win-win for both countries, businesses and workers.”
The two nations would be able to exempt certain industries, like defense, from a bilateral treaty.
Vice Premier Wang Yang of China said through an interpreter that the United States had “pledged to treat Chinese investment equally and fairly” and would welcome investment from Chinese sovereign wealth funds.
Chinese and American officials also announced a series of bilateral initiatives devised to cut emissions that are a cause of climate change. The moves represent something of a softening of views by the United States and China, the world’s two largest producers of such emissions. The two countries have often been antagonists at international climate change meetings.
But Washington and Beijing agreed this week to work together to reduce emissions of soot and carbon dioxide from heavy vehicles, cut energy use in buildings and factories, publish accurate and timely information on emissions, and promote more efficient energy transmission systems. Officials also said they would work together to find ways to trap, store and reuse carbon emissions from power plants that use fossil fuels.
The agreements are not legally binding and do not set emissions targets, but they do signal a cooperative attitude that could improve the mood at United Nations climate conferences, which have yielded little progress in recent years.
Todd D. Stern, who leads the American climate negotiating team, said that the pacts would not immediately transform the international negotiations, but that cooperation would “project something positive.”
“We have had a pretty constructive relationship with the Chinese over the past few years,” Mr. Stern said in a call with reporters on Wednesday. “But there is always a case for deepening it and developing it more and more in the direction of partnership, and that’s what we certainly hope to be doing.”
John M. Broder and David E. Sanger contributed reporting.
Sierra Leone demands improvements in maternal health
UK backing efforts to force healthcare up Sierra Leone political agenda by harnessing people's power to push for change
Lisa O'Carroll in Freetown
guardian.co.uk, Friday 12 July 2013 11.55 BST
Local communities in Sierra Leone are being encouraged to rate their clinics and demand more from their healthcare services in a bid to cut the country's high maternal mortality rates.
The riskiest thing a woman can do in Sierra Leone is get pregnant; one in every 21 women is at risk of death in child birth. Maternal death rates are falling, but an initiative to speed up progress has just been launched with the backing of the UK's Department for International Development.
The thrust of the campaign is to empower local communities to force healthcare up the political agenda by giving them the evidence they need to fuel arguments for higher standards.
Evidence 4 Action (E4A), a programme led by Freetown obstetrician Dr Mohamed Yilla, is based on the belief that rapid progress is possible, and maternal and baby mortality can be dealt with if everyone chooses to act.
"The issue of babies and maternal health should no longer just be a government issue; it should be of community interest," says Yilla. "The community can bring about the sustainable health system and maintain it."
A native of Sierra Leone, Yilla studied and practised medicine in Aberdeen before returning home to work with E4A, a programme being run in six sub-Saharan countries over five years.
"As a general rule 15% of births will have complications, but in the UK you are in an environment where everything is there to save a woman's life," he says. "You turn the page and go 6,000 miles south, and women enjoy the same pleasure of being pregnant but are facing something that carries a risk of death."
The MamaYe! campaign is an E4A advocacy programme for safer maternal clinics. It evolved in response to a sense that not enough progress was being made to meet the millennium development goals on reducing child mortality and improving maternal health.
The first step on the E4A programme was to bed down a system of data collection in conjunction with the government, establishing which clinics across the country had the basics and which didn't. "It's a very basic checklist: electricity, running water and blood supply. These are things that … save women's lives," says Yilla.
The health ministry already has a reporting structure, set up by the UK consultancy Options in 2012. With the help of E4A, it is running quarterly surveys of clinics; data is shared with all stakeholders in the country's health system, including politicians, community chiefs, aid agencies and NGOs.
"The real power lies in … invoking the response in people to demand more from their health service. Often there is a feeling if someone dies it's God's will. There is a cultural fatalism," says Yilla.
E4A aims to shift that thinking through evidence-based advocacy. It can claim some success in last year's election, when it distributed 5,000 score cards to communities, rating clinics up and down the country.
"People could see, for example, that a region in the south of the country is the least populated but the most well-funded of the lot. They started to ask questions and demand more," says Yilla.
The data was collated from government sources as part of a budget-tracking programme run by E4A in line with the goal of increasing health spending to 15% of the country's annual budget. This target is in line with a pledge made by African heads of state back in 2001, under the Abuja declaration (pdf). Before the general election in November 2012, Sierra Leone's health spend was 7.5%; after the election, it increased to 10.5%. Coincidence?
"Attribution is always difficult, but this advocacy work showed we were way below the budget target and contributed to that increase," says Yilla.
It is estimated that 26% of maternal deaths in sub-Saharan Africa are a result of haemorrhaging – and Sierra Leone collects only a quarter of the blood it needs annually for transfusions.
Part of the advocacy programme is designed to shift thinking about donating blood. To this end, 30 journalists are being trained to improve reporting on the issue and get the message out to men and women that their families' survival could be helped through blood donation.
"Making sure through evidence and advocacy that people have confidence that their clinic is safe, and making sure the communities and government spend enough, that's what we aim to do," says Yilla.
Sierra Leone sits near the bottom of the 186 countries in the UN's latest human development report (pdf), but it has huge prospects – and not because of aid. The mining industry is thriving again in the postwar environment and GDP has soared as a result of iron ore production, according to the African Economic Outlook.
"Sierra Leone is not going backwards. The windfall payments from the extraction industries have not peaked. Harnessing that windfall and making the investment in health should see major progress over the next two years," says Yilla.
Egypt army to get four fighter jets from US
Obama administration agrees to go ahead with F-16 delivery to Egyptian army despite deepening unrest within the country
Patrick Kingsley and Ian Black in Cairo
guardian.co.uk, Thursday 11 July 2013 18.02 BST
US officials have agreed to donate four fighter jets to Egypt's army, in the latest indication of international support for the country's interim government despite growing internal unease at the new regime's management of the power transition.
America's donation of the F-16s suggests the Obama administration is coming to terms with the downfall of the former president Mohamed Morsi, after initially displaying an ambiguous attitude to the military's role in the Islamist's ouster. The US gives annual aid worth $1.3bn (£860m) to the Egyptian army. There were concerns in Egypt that this support might be discontinued in the aftermath of Morsi's departure.
The aircraft donation follows a telephone conversation between the European Union's foreign affairs representative, Lady Catherine Ashton, and Egypt's new interim president, Adly Mansour. It follows the issuing of $12bn in grants and loans from Saudi Arabia, the United Arab Emirates and Kuwait, all conservative Gulf states known for their opposition to Morsi and his Muslim Brotherhood.
It also comes as both Egypt's main secular opposition group and the grassroots movement that prompted last week's military intervention expressed concern over the manner in which the new regime has handled the first days of the post-Morsi era.
The Muslim Brotherhood has continued to refuse to engage with the Mansour-led regime, calling for a mass march on Friday in support of Morsi.
The Tamarod campaign – which brought millions on to the streets on 30 June in protests that led the army to oust Morsi – raised doubts over Egypt's new constitutional declaration, announced on Monday, which will act as a blueprint for Egypt's leaders until a more permanent charter is written.
"We were not consulted on the constitutional declaration and we will submit our amendments to it," a Tamarod spokesman, Hassan Shaheen, wrote on social media.
Among several concerns, the declaration has been criticised for giving both executive and legislative power to Mansour.
The National Salvation Front, the formal secular coalition that had led the opposition to Morsi before Tamarod's emergence, said: "The declaration includes articles that we do not accept, others that need to be amended, and that new articles need to be added". The NSF spokesman Khaled Daoud said Egypt's government should be formed from those who played a key role in the 2011 revolution that toppled Hosni Mubarak.
The NSF statement reflects wider concerns that Morsi's departure – painted by many as a return to the values of the 2011 revolution that ousted Mubarak – instead runs the risk of rehabilitating figures and institutions once closely aligned to the latter's regime.
The police force is one. Their brutality was a major cause of the 2011 revolution, and their reform was one of the revoluntionaries' implicit demands. But the obvious enthusiasm of the police for Morsi's fall has helped to rehabilitate them in the eyes of some. Uniformed officers were seen with anti-Morsi propaganda in the run up to his departure, while police failed to protect the offices of his political allies. Many officers even marched against Morsi, and at some such rallies, protesters chanted: "The police and the people are one hand".
Many Egyptians are offended by the idea that Morsi's removal was a coup not a revolution. But others have suggested that it was at least partly facilitated by Mubarak-era figures, riding the wave of popular dissent against his regime. Morsi's last supply minister, Bassem Ouda, told the Guardian that the extreme, countrywide petrol shortage – which cemented anti-Morsi fury in the week that led to his departure – was aided by interior ministry officials seeking his ouster.
According to Ouda's allegations, Mubarak holdovers in the interior ministry seeking to foment anti-Morsi anger paid thugs "to take over a lot of gas stations in the provinces, and to stop the gas stations from selling products – or to sell it at double its market price".
Continued petrol queues across parts of Egypt appeared to contradict Ouda's narrative. And Cairo petrol station officials said that while last week's extreme shortage may not have been created by Morsi, it was not necessarily the result of sabotage.
"The problem happened in the main storage facility where the fuel first arrives [from abroad]," said Ihab Kamel, a petrol station manager in central Cairo. "The facility wasn't working properly on one day and because of that, coupled with the approach of 30 June, people started to panic and started to fill up their tanks whether or not they were empty. Normally people fill their tanks up every three days – but last week they were filling up, going home, siphoning the petrol into separate containers, and then coming back for more."
But while allegations that government departments helped to facilitate Morsi's departure remain unproved, there are signs that some in government are at least now more willing to do their jobs. Some of the walls that blocked whole streets in central Cairo under Morsi have suddenly been removed. A few blocks away, just hours after Morsi's removal, government officials painted new street markings – while shoppers on the eve of Ramadan commented that police were finally back on the streets after their disappearance as the crisis peaked 10 days ago.
But there is little sense that the country's economic plight is about to improve suddenly.
This week's input of $12bn from the Gulf is intended to boost Egypt's badly depleted foreign currency reserves. Any new government will eventually have to tackle the question of expensive subsidies of food and fuel as the price of negotiating a loan from the International Monetary Fund.
July 11, 2013
Egypt Calls for New Look at Morsi Prison Escape in 2011
By BEN HUBBARD
CAIRO — Egypt’s new rulers gave new credence to a court case against the ousted president, Mohamed Morsi, and members of the Muslim Brotherhood on Thursday over their escape from prison during the uprising that toppled his predecessor, Hosni Mubarak.
The case was transferred from an appeals court to the State Security prosecutor for further investigation. No charges have yet been filed. Its acceptance by powerful prosecutors follows the arrest of many Muslim Brotherhood members and is a new blow to the group by the military-backed government.
The detentions have been criticized by rights groups and the Obama administration, which spent Thursday walking back remarks made early in the day by a State Department spokeswoman, Jen Psaki, seeming to criticize Mr. Morsi as undemocratic and in so doing seeming to validate the military’s move to oust him.
Reuters reported that Ms. Psaki’s counterpart at Egypt’s Foreign Ministry, Badr Abdelatty, interpreted her remarks as a welcome signal that the United States understood “the political developments that Egypt is witnessing in recent days as embodying the will of the millions of Egyptians who took to the streets starting on June 30 to ask for their legitimate rights and call for early elections.”
The Muslim Brotherhood denounced her remarks as hypocritical and further proof of what it has called American endorsement of the military takeover in Egypt.
At her regular State Department briefing on Thursday, asked about the reactions, Ms. Psaki said she had been “referring to all of the voices that have been — we have heard coming — the millions, I should say, coming from Egypt, and how strongly they have voiced their views about his rule.” She added, “But beyond that is up for the Egyptian people to determine.”
The renewed investigation of Mr. Morsi and members of the Muslim Brotherhood dates to the uprising that led to the ouster of Mr. Mubarak in 2011. Mr. Morsi and other Brotherhood leaders were arrested on Jan. 28, and held in the Wadi Natroun prison north of Cairo, until they escaped two days later.
In a telephone call to Al Jazeera television immediately after the escape, Mr. Morsi said that he was among more than 30 Brotherhood members, including 6 other members of its Guidance Bureau, who had been broken out of their cells by people they did not know. Some appeared to be other inmates, while others were dressed like civilians, Mr. Morsi said.
“More than a hundred people made every effort to open up the prison for more than four hours,” Mr. Morsi said. Once out of their cells, they found that “the courtyard was empty, and we only saw the group that for a long time had been trying to break the door.”
The group included a top Brotherhood official, Essam el-Erian, and Saad el-Katatni, who later led the group’s political party and became the speaker of Parliament.
The case languished after Mr. Morsi was elected last year in the country’s first free presidential race, though local news outlets and Mr. Morsi’s opponents accused militants from Hamas, the Brotherhood’s Palestinian offshoot, of freeing their colleagues.
Mr. Morsi has not been seen publicly since his ouster on July 3. It is unclear where he is being held, or whether he and the others will face the charges in court.
His ouster and the subsequent suppression of the Brotherhood have enraged the group’s members and led to a spate of scapegoating attacks by Muslim extremists against Christians they accuse of supporting his fall, rights activists said.
While tensions between the Christian minority and extremist elements in the Muslim majority are not new, attacks have been reported across the country — in the northern Sinai Peninsula, in a resort town on the Mediterranean Coast, in Port Said along the Suez Canal and in isolated villages in upper Egypt.
A priest has been shot dead in the street, Islamists have painted black X’s on Christian shops to mark them for arson and mobs have attacked churches and besieged Christians in their homes. Four Christians were reported killed with knives and machetes in one village last week.
Islamist electoral victories after the revolution that ousted Mr. Mubarak alarmed Christians, and many participated in the protests against Mr. Morsi. But they by no means were a majority of the millions who joined the rallies that preceded his fall.
But that did not stop extremists from blaming Christians for the change in government.
“They thought Christians played a big role in the protests and in the army’s intervention to topple Morsi, so this is revenge for that,” said Ishaq Ibrahim, who has documented the violence for the Cairo-based Egyptian Initiative for Personal Rights.
In some places, Christians were warned not to participate in the anti-Morsi protests.
Fliers distributed in the upper Egypt province of Minya, documented by the rights group, said that “one liter of gas can light up your gold, wood, plumbing, tractor and carpentry shops, buses, cars, gardens and maybe houses, churches, schools, agricultural fields and workshops.”
They were signed “people who care for the country.”
After Mr. Morsi’s ouster, Islamist mobs in the village of Dagala looted one church, burned a building belonging to another and surrounded Christian homes, shattering their windows with rocks and clubs, the group said.
After one Christian man shot at the attackers from his roof, they dragged his wife from the house and shot her. She is in a hospital.
“The police came the day after the events, and they didn’t do anything,” Mr. Ibrahim said. “People prevented the fire engines from coming in so they couldn’t do anything.”
In the village of Naga Hassan near Luxor, Muslim mobs invaded Christian homes and set them on fire. Security forces arrived to evacuate the women, but left the men, four of whom were subsequently stabbed and beaten to death, Mr. Ibrahim said.
One of the men, Emile Nessim, was a local organizer for tamarrod, the “rebellion” petition campaign that collected signatures and called for the anti-Morsi protests.
Sarah Mousa contributed reporting from Cairo, and Rick Gladstone from New York.
07/11/2013 06:11 PM
Corruption and Graft: Brazil Rushes Headlong into Popular Revolt
By Matthias Matussek in Rio de Janeiro
Brazil has experienced an economic awakening in recent years, but democracy has had to race to catch up. With political corruption widespread, protests have spread across the country, exposing an enraged middle class.
The Brazilian democracy was born in the days when Brazilian football was dying. It makes for a tempting lead, but it's only half true. The Seleção, Brazil's national team, actually played better than expected in the Confederation Cup, a dress rehearsal for the World Cup. But Brazilian football also has an easier time of it than democracy. It has rules it has to comply with, and the results are clear. Democracy, on the other hand, is an endless series of trial-and-error, and the rules are constantly changing.
One rule stands out above all others at the moment in Leblon-Ipanema, the most expensive piece of real estate in Rio de Janeiro if not in all of Brazil. Protesters have set up their tents in front of the governor's mansion and they are being asked to stick to the allotted speaking time, a Brazilian version of the Occupy movement. Three minutes, says Bruno, who runs the stopwatch. But then he promptly ignores it.
Over the cliffs, at the end of the bay, the lights of Favela Vidigal are scattered like stardust and a soft breeze is blowing in from the sea. The pungent smell of churrasco wafts over from a food stand. But in front of the tents, people are deeply engaged in heated debates -- just as they are across the country. Brazil has awakened, and the people are demanding to be heard.
In this particular case, the people consist of a few art students, a handful of housewives and some retirees. Luiza, for example, is a jazz singer who lives in the nouveau-riche Barra neighborhood, Bárbara writes poetry and her parents are professors, and Jair, a Rasta from Bahia, swears he will "die for the cause." Everyone applauds enthusiastically, and yet no one knows yet what exactly they are demanding. Formulating those demands is the objective of this group, which they call "Aquárius."
Everyone is given a chance. Young fireman Álvaro, for example, was confined for a few days during the protests, which began in earnest in mid-June, to the Bangu 1 maximum-security prison along with 13 other firefighters. He is demanding to be rehired. He also wants better pay and training for the military police.
'You Can't Educate All of Humanity'
What? The others are astonished. Álvaro explains his remark, saying that better education makes for better people.
"But you can't educate all of humanity. That would take years," Sylvia, a housewife, interjects.
There is a heated argument before the group continues to the next item. Rodrigo says that something ought to be done about the recurring floods in the interior. Lúcio wants the homeless to be allowed to return to the empty buildings from which they were expelled. Retiree Rentao is mainly interested in eating bananas and takes a third while old Lourdes from Vidigal wants her house to be repaired, because the neighbor damaged an exterior wall during a renovation project.
Most of all, though, they want the governor to finally explain why the government is spending so much money to renovate Maracanã Stadium. Officials had initially promised that not a single real of taxpayer money would be spent. By now, though, the government has pumped hundreds of millions into the project.
As the grievances add up, one thing becomes exceedingly clear: Democracy is difficult. But the people gathered do agree on one thing: Football is the opium of the people, a sign of immaturity. "If the Seleção stops by in their bus, don't allow yourselves to be distracted," says Bruno sarcastically.
It is not without irony that the popular uprising is taking advantage of a Brazilian football festival. Certainly it also has something to do with the arrogance of FIFA officials, who enjoy themselves around the shimmering pool at the Copacabana Palace. It is enough to remind one of everything that is bad about football: corruption, waste and cynicism.
Vast and Angry
But spending billions for stadiums that no one needs, just to make Brazil look good? Equally questionable is the construction of a stadium in Manaus, deep in the Amazon rain forest, a city without a first-division football club and a place where it is so hot that asphalt melts. The administration of former President Luiz Inácio Lula da Silva decided that almost every Brazilian state should have its own stadium, and the government provided generous funding for the effort -- instead of spending the money on schools, roads and hospitals.
The protests this summer, vast and angry, is the Brazilian parallel to the 2011 Arab spring. It is a leaderless movement organized through social networks, which is its strength. It may not be able to shape politics, but it can certainly exert pressure. It can mobilize the street.
It began in São Paulo on June 6 with a march of only 500 people protesting against an increase in bus fares. Since then, however, it has grown into a conflagration of discontent. On June 17, 200,000 people protested in Rio de Janeiro, Belém and about 20 other cities, and by June 20 some 1.4 million protesters had taken to the streets in more than 120 cities. Protesters danced on the roof of the congress building in the capital Brasília, creating images that have since been broadcast around the world. They are the tour dates of a popular uprising that newspapers are presenting as proudly as they do the victories of the Seleção. The people are agitated, and the political world is afraid.
President Dilma Rousseff has felt that ire directly; she was booed during the opening of the Confed Cup in mid-June and her approval rating has plunged by 27 percentage points. In a hastily arranged televised address, she promised reforms and held out the prospect of a referendum. The bus fare increases were reversed, as was a scandalous draft law that would have given corrupt lawmakers immunity from prosecution. Some €19 billion ($26 billion) in new funding for public transportation was suddenly approved. And now the first corrupt lawmaker, who had managed to delay his trial by three years, has been arrested. The government has been literally tripping over itself recently in its hurry to answer to the people.
Out of Touch
On the other hand, almost 200 members of the National Congress are under investigation. One lawmaker, who is accused of murder, allegedly dismembered his political rival with a chainsaw. Another moved $10 million earmarked for a road construction project to an overseas bank account. A third politician is thought to have ordered the abduction of three priests who had campaigned on behalf of the landless.
Today the Congress is probably the most despised institution in Brazil. The magazine Veja depicts it perched on the edge of a cliff, with lawmakers who look like rats falling into the abyss while demonstrators force their way into the building from the other side. "Brazil has perhaps never before been under the command of people who were quite as arrogant as Lula, Dilma Rousseff and the barons of the PT," writes Veja, in reference to Rousseff's party, the Partido dos Trabalhadores, or "Workers' Party."
In fact, the PT seems to be completely out of touch with reality. The bloated government bureaucracy, with its 39 ministries, consumes €100 billion a year. Rousseff spends €214 each time she visits the hairdresser. Why, people want to know? Has her hair turned to gold since she became president?
At a posh dinner party in the hills of the Jardim Botânico, constitutional law expert Carlos Bolonha bends over his crystal glass and explains how unfeasible the referendum announced by Rousseff is -- and how it would be tantamount to a top-down coup d'état. Venezuela's former left-wing populist president, Hugo Chavez, often used referendums to solidify his power.
These are hard times for the PT. It is in a glass house and cannot be throwing stones. Although the left, the traditional voice of the people, is in power, this traditional alliance has been shattered and trust gambled away since the Lula administration was involved in a bribery scandal. And trust was always its greatest asset.
Returning to Real Life
Now people in the streets are saying that everyone in government is a thief, regardless of his or her party affiliation. Brazilians today are faced with a fundamental breach of trust. A new civil society is defending itself against the very principle of politics, against representation by political parties. They are trying to protect themselves against institutional corruption.
The country's traditional amusements -- football, Samba and Carneval -- are too frivolous for this summer's mood. The dinner-party hostess, a professor, is calling for a modern-day storming of the Bastille. A young businessman is talking about high taxes and the few services that the government provides in return. They all agree that Brazil, a giant and powerful economic engine, has gained momentum in recent years, but that the tracks are rotten, the signal towers are outdated and the personnel is from the era of feudalism.
And it is true. In the gridlocked downtown areas of Rio or São Paulo, cars travel at the speed of horse-drawn carriages, about 18 kilometers per hour (11 mph). Perhaps the country is not going through a revolution, but rather a crisis of modernization.
A doctor with a white beard quotes a saying he saw at a demonstration: "A truly developed country is not one in which the poor have cars, but one in which everyone can use public transportation." As it happens, the overcrowded buses on the torn-up streets of Rio feel like prisoner transports.
The view of the sea from the heights of the coastal road Avenida Niemeyer is achingly beautiful. Volleyball teams are playing on Ipanema Beach below, in front of the Occupy camp. Marcus at the kiosk up here on the avenue is playing the classic song "País Tropical," while an old woman sings along. Is this Brazil disappearing? Is this Brazil suddenly wrong?
Sick to Death of Their Clichés
No. It's just that the patronizing grins that accompanied this aspect of Brazilian folklore in the past have disappeared. Nowadays Brazilians are sick to death of their own clichés.
In Favela Vidigal, a few curves down the road, just across from the Sheraton Hotel where the Seleção is staying, visitors are greeted by an adage, in black on turquoise-colored tiles: "All people are naturally inclined to seek the path to goodness. Everyone is naturally endowed with the same rights." The author is identified as Aristotle.
Pathos and idealism are as much a part of Brazil's sentimental propaganda as its cynical politicians. Such rhetoric is supposed to provide encouragement to those in the slums. There may not be a decent wastewater system, but pure morals -- so goes the message -- are more important.
For several years, however, there has been a different antidote to the misery. The UPP, or neighborhood police. They are responsible for security on what was once one of the most violent hills in Rio. Since the elite troops of the BOPE ended the reign of "Comando Vermelho" and drove out the drug bosses, the hill has become appealing to the middle class. Speculators are buying up property in an area where the views are simply irresistible.
Some graffiti from the old days can still be seen on a wall, depicting one of the drug bosses as a capitalist with a cigar. Now the boss is in prison -- and the boys playing with a couple of fighting dog puppies on the walled football pitch have a low opinion of the police officers who patrol the area with their assault rifles.
The Culture of Jeitinho
"Maybe it's become safer for the tourists and the speculators, but nothing has changed for us," says Felipe, who is dabbing at a bloody nose one of the dogs just gave him. The bosses are gone, says Felipe, but it's still easier to get drugs than bread. Okay, he says, it has become quieter. In the past, snitches were burned to death using car tires. But aside from that?
UPP police officers are frequently rotated so as to avoid corruption. But Felipe doesn't believe the strategy works. Everything will go back to the way it was after the World Cup, he says. Theft isn't just a fact of life at the Congress in Brasília. Everyone takes part in "jeitinho," or the culture of official corruption, and everyone takes his cut.
Marco Túlio Zanini, a young man with a business degree, took a closer look at the BOPE units. In a highly regarded study, he concluded that the special forces troops, -- heavily armed soldiers with a crest consisting of pistols crossed in front of a skull -- are inspired by ideals. "They don't do their jobs for money, they see themselves as missionaries," he says. Devotion, self-sacrifice, esprit de corps. Perhaps it's the only government institution of which that can be said -- yet another indication as to just how far the situation in Brazil has deteriorated.
Still, BOPE has cleaned up in the city under the leadership of Rio's security chief José Mariano Beltrame, an outsider who owed nothing to nobody. Beltrame is clean, and so are his men, says Zanini.
Zanini focuses on the subject of trust, in both business and politics. The last article he published was called "Leadership through Values." But he believes that values have been compromised in recent years as everybody has tried to benefit from the country's economic upturn. And he believes that Lula's leftist party of economic miracles, PT, is to blame.
Exercises in Democratic Awareness
"One can only hope that the protests will continue, because they are an expression of civil society," says Zanini -- important exercises in democratic awareness.
The demonstrations are continuing. Some 6,000 military police gathered to provide security for the Confed Cup final in front of the Maracanã Stadium in early July. There was concern that a few militants would be among the protesters. But the middle class, in particular, has been showing, with its largely peaceful protests, that it wants more than refrigerators and cars. Instead, it wants the rights of a civil society, which include public services in return for taxes paid: a decent healthcare system, roads, public transportation and schools.
Ironically, it was the governing Workers' Party that believed stimulating consumption would be enough. But now the economic miracle is waning. According to the daily newspaper O Globo, government debt is higher than it's been in 18 years, Petrobas, the largely state-owned oil company, is practically bankrupt, and inflation is rising. The people are afraid.
But nothing has moved the public in recent years as much as the "Mensalão" scandal, a criminal operation that, together with the governing PT and government-owned businesses, had bribed several lawmakers to push large, lucrative projects through the Congress.
In a fiery speech, Joaquim Barbosa, appointed to the country's highest court by Lula, demanded that it was time to clean out the pigsty. Barbosa has been celebrated as a hero since then, as someone who stands for the values of democracy. People are saying that he would be elected immediately if he ran for office. By now, 74 percent of Brazilians want those behind the bribery scandal go to prison immediately.
No one from the Occupy tents in Ipanema watched as the Seleção ran onto the pitch in Maracanã Stadium for the finale. Only Jair, the Rasta who wanted to die for his cause, suddenly defected.
There are only two kiosks with TV sets on the Copacabana. At the "Sindicato," on the other hand, a churrascaria on the esplanade, a few dozen fans have gathered. They have hardly had a chance to sit down when Fred, the country's newest football hero, pushes his way into the Spanish team's penalty area and scores an unlikely goal while lying on the grass. Neymar's second goal is spectacular, and the cheering gets louder. The Brazilians are playing well, a lean, imaginative and fast game. They have put the football world on notice that they are back. Once the 3:0 win is complete, the audience is on its feet, cheering frenetically. Football still works in Brazil.
But real life returned as soon as the game has ended.
This is especially true of the endless process of Brazilian democracy. The country's labor unions, which include most PT members, organized yet another day of strikes and marches on Thursday. Brazil's Workers' Party is mobilizing against itself at the moment, so as to resume its position of leadership.
All that remains is to see who wins.
Translated from the German by Christopher Sultan