August 15, 2013
With Eyes on Syria, U.S. Turns Warehouse Into Support Hub for Jordan
By THOM SHANKER
AMMAN, Jordan — On the outskirts of Jordan’s capital is a corrugated steel warehouse that serves as a testament to the fact that with enough plywood, electrical cable and bottled water, any austere structure anywhere in the world can be converted into an American military headquarters.
The Defense Department is using the warehouse to coordinate support for Jordan’s military as the kingdom copes with a refugee crisis spawned by civil war in neighboring Syria — and to help prepare for what could be done if violence spills across the border.
Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, addressed some of the 273 staff members in the amphitheater-like operations center on Thursday, saying the mission is meant to reassure Jordanians “that, in a very volatile region and at a very critical time in their history, that they can count on us to continue to be their partner.”
Although American humanitarian relief is led by the State Department, the military is helping, too, and has installed a sanitation system for some of the half-million Syrian refugees inside Jordan, as well as surveyed roads and offered assessments for improving supply routes.
On the purely military side, the Pentagon deployed Patriot air-defense missile batteries here, along with F-16s to train with the Jordanian Air Force in patrolling its border and airspace.
The United States also is sharing expertise on chemical weapons — which are a real threat given the size of Syria’s chemical weapons arsenal and the growing chaos inside that country.
The American military support aims to help Jordan create a force so visibly competent that it can deter violence from Syria, although regional news media have speculated that the warehouse is an advance guard for direct American intervention in the civil war.
“We are at our best when we can actually shape events and prevent conflict,” General Dempsey said at the headquarters, officially called Centcom Forward-Jordan.
He declined to predict how long the mission, established earlier this summer, would last, given the unpredictability of events in Syria. He suggested that, with Jordan’s approval, the operation could continue well into next year or beyond.
American correspondents were allowed to visit the site under ground rules that its location not be disclosed. Much of the sprawling warehouse has been turned into office space divided by plywood walls, with vertical air-conditioning units that seemed to be losing a battle with August temperatures.
South Africa: simmering frustration at justice denied a year after Marikana
A year after police shot 34 miners, seen as a turning point in the country's modern history, the view is that nothing has changed
David Smith in Marikana, South Africa
The Guardian, Friday 16 August 2013
Leaning on a plastic chair against his shack, Eric Nontshakaza thanks God as he remembers the meal that may have saved his life. He was among hundreds of striking miners gathered on a rocky outcrop in Marikana on 16 August 2012. His split second decision to dash home to eat meant he escaped the bloodiest massacre by South African security forces since the end of racial apartheid.
"It always comes into my mind that maybe if I didn't come to get food, I would have been one of the victims," he recalled ahead of Friday's first anniversary of the shootings that horrified the world. "Maybe God moved me there. My friends tell me it happened straight after I came to get food."
A year on, democratic South Africa is confronting its darkest day, rewatching television pictures that show workers hurtling forward like a rolling ball of humanity while flak-jacketed police retreat and unleash a furious, crackling rain of bullets. When the clouds of dust settled, 34 men lay dead. One, on his knees, flailed and toppled over in front of the cameras, his last moments revealed to his wife.
The disaster drew comparisons with the Sharpeville massacre of 1960 and the 1976 Soweto uprising, but this has been bitterly described as the first "democratic massacre". The police were serving a black majority government and defending the interests of London-based mining company Lonmin in the world's richest platinum belt. "Never did we believe that our government would turn their guns on our people in such a brutal and callous fashion," said the Markana massacre anniversary organising committee on the workers' behalf.
There was demand for reform, perhaps even revolution in one of the world's most unequal societies. Yet, to date no police officer has been charged, labour relations are in crisis and killings continue in Marikana. There is simmering frustration at justice denied and fear of more bloodshed. Twelve months after this "turning point" in modern South African history, the prevailing view is that nothing has changed.
Nontshakaza, 29, shares his shack with his wife, Nosange, 22, within sight of the outcrop where his fellow miners were mown down by hundreds of rounds of ammunition, some allegedly execution-style. The interior is organised with pride: neat rows of buckets and cooking pans, a kettle, a plastic tablecloth, a laundry basket, a made bed, a lino floor, a photo of Soweto's Kaizer Chiefs football team. Three discarded beer bottles lie in the rough yard outside, where goats ram their heads and lock horns as Nontshakaza, wearing a black T-shirt and jeans and speaking Xhosa through an interpreter, recalls the wage dispute with Lonmin.
"On that day they fenced the whole area where we were sitting," he said. "After some time I came to get food and on my way back I saw workers running all over the place and being shot. Some of them were screaming. The others surrendered, putting their hands up, but they were still shot. There was chaos and I was trying to save my life."
Nontshakaza, who lost a friend that day, continued: "I was shocked because as far as I know we were not fighting anyone, we were just demanding wages. My suspicion is that the police really knew what they were doing. There was no need for them to use violence but they came prepared. We still need to ask the government exactly what transpired that day."
The volatile wildcat strike, in which 44 people died in total, finally ended when Lonmin agreed to pay increases of between 11% and 22%. But Nontshakaza says he still earns only 3-4,000 rand (£194-259) a month, or 6,000 rand including overtime. Like most miners here, he sends most of it back to his mother and six unemployed siblings in Eastern Cape province, leaving little for his own expenses. He and his wife have no electricity and cannot afford 800 rand to connect to communal water taps.
"The money is not enough. You see it's finished and you still haven't done all the things you need to do. Lonmin doesn't listen to us at all. It's a year later and nothing has changed. We are still on low wages and might go on another strike."
The outcrop where the workers gathered a year ago, singing and waving traditional weapons, was hauntingly silent and serene this week. A series of white crosses erected to honour the dead lay in a broken heap below the curving rocks. Electricity pylons dominated the sky and cables hummed overhead. The shacks of a nearby informal settlement glinted in the sun and the surrounding area looked much as it did in August 2012.
"Like a pig sty," said Primrose Sonti, a local activist. "It's the same as it was. It's worse." The field was a filthy sea of discarded bottles and sweet and condom wrappers. Children played in mounds of rubbish as cows, goats and even pigs trotted by, while six dogs lay sleeping in the sun. A makeshift shop sandwich board advertised love charms and remedies for pregnancy problems and tokoloshe – a mythical evil creature.
Thembi Mathumbu has lived in this grinding poverty since 1996 while minerals worth millions are extracted from the earth beneath her feet. "We're suffering," she said. "We have not received anything from Lonmin. It has not done anything to improve our lives."
The 63-year-old witnessed last year's massacre from her yard, a modest host to hens and a small vegetable patch. "There was a police car with a water cannon spraying them and driving over them," she recalled, pointing to a clearing beneath the outcrop. "The last one was killed over there by the same car."
Mathumbu was friendly with two miners from Lesotho who lost their lives. "It was a great pain because we were so close to those people. The wife had a baby and it screamed and screamed until they had to go back to Lesotho."
The next day brought police raids and many women and children got no sleep. "When they saw a person they'd throw teargas, even in our yards," Mathumbu said. "I vomited because of the smoke. We suffered because of that. A lady collapsed from the teargas and was taken to hospital; we heard later that she died. We are very angry because what they did killed a lot of people. The community can never forget what happened."
For some, it was too much to bear. Three months ago the body of Lungani Mabutyana, 27, a rock drill operator, was found hanging from a tree. Chris Molebatsi, a local activist with the Bench Marks Foundation, a corporate social responsibility watchdog, said he is aware of seven suicides in the past year, four of them mine workers. "It's basically a reminder of the trauma of the massacre," he said. "The suicides are telling us the community hasn't recovered from that. It's going to take a long time to heal the wounds."
There have also been several murders in a vicious turf war between supporters of the Association of Mineworkers and Construction Union (Amcu), recognised this week as the majority union after recruiting 70% of workers here, and the beleaguered National Union of Mineworkers (NUM), aligned to the governing African National Congress (ANC). On Monday a woman working for the NUM as a shop steward was shot dead, prompting overnight police raids of hostels. Joseph Mathunjwa, the president of Amcu, claimed that police target his members while allowing NUM supporters to get away with murder. Mathunjwa also criticised an ANC official for referring to Amcu members as "cockroaches" and warned that the government could be planning a "second phase of Marikana", adding: "The writings are on the wall."
It is no surprise that the ANC is bleeding support in the tormented community. Instead many say they will vote for expelled ANC youth leader Julius Malema, who raced to the scene last August while others dithered, and his new Economic Freedom Fighters (EFF) party in next year's election.
The ANC stands accused of colluding with mining firms whereas the EFF has vowed to nationalise mines without compensation. The EFF is expected to steal the limelight at Friday's commemorative rally while the ANC struggles to end exploitation in the century-old mining sector.
Following the massacre, President Jacob Zuma set up a judicial commission of inquiry but, bogged down in numerous delays and wrangles over funding, it has not yet cross-examined any police directly involved in the killings and is fast losing credibility.
Many feel that neither the government nor mining companies have found any answers to the questions raised a year ago on Friday, raising the prospect of more violent strikes and instability to come. Adam Habib, vice-chancellor of the University of the Witwatersrand and author of South Africa's Suspended Revolution, said: "What Marikana brings to the fore is inequality, the relative deprivation that people have. Inequality is South Africa's achilles heel. If we don't address it, it will come to us. A year later, are we any closer to resolving that fundamental challenge? The answer has to be no."
Marikana miners toil long and hard, 1,000 metres underground
A year after police opened fire at thousands of striking workers, miners still battling for a better life above and below ground
See more of Greg Marinovich's mining photographs
Greg Marinovich in Marikana
The Guardian, Friday 16 August 2013
As we approach the coalface, the tunnels get smaller. It is impossible to walk upright and the ground is treacherously uneven. We keep going, the occasional light bulb illuminating low passages leading deeper into the rock.
The atmosphere gets closer, the temperature rises. Sweat begins to roll down faces, darkening armpits. Grease and mud coats our clothes. We are 1,000 metres underground, where the Marikana miners ply their trade. The same miners whose search for better wages ended in carnage a year ago when South African police opened fire on thousands of unarmed strikers. In all 44 people died during the violent dispute, shaking our post-apartheid democracy to its core.
As the anniversary of the massacre nears, I'm down in the tunnels where the miners risk their lives in hot, cramped conditions to dig out the platinum that will be used for profit worldwide in catalytic converters and jewellery.
It takes a while to get this far down. The journey starts at the top of the mine run by the London-based company Lonmin. Miners in heavy duty overalls collect the head lamps they will need for the darkness ahead. We enter massive cages, carrying both equipment and men; a swift drop then an abrupt stop before the steel door opens, spilling us into a spacious cavern.
Then there's a 20-minute walk along well-lit corridors as bright, small locomotives with flashing lights trundle slowly past on rails. A conveyor belt of chairlifts, circling endlessly, takes us down to our destination: level 31.
Down here the rock drill operators, known as RDOs, are king. They have a reputation as the hard men of mining. Lonmin driller Shadrack Mtshamba explains: "You are a man if you are a driller, you are a strong man if you are a driller. If you are not a driller, you are a sissy man."
Without them, there would be no platinum, no chrome, no palladium. Bongani, the team leader, gives the men a pep talk that stresses the need to reach their targets to earn their bonuses. Safety is mentioned, but really it is about performance: the metres of rock that have to be drilled into, blasted, then removed.
Everyone stands back before, bent double, the RDOs begin to drill. Instantly there's a clamour. The noise drowns out all other sounds and hand signals are the only way to communicate. The shock of it, hour upon hour, cannot be anticipated. It is so all-consuming that it feels as if you could lose a finger and not notice.
Mtshamba speaks of the toll it takes, working underground for 10 hours a day: "Going there each and every day [is hard]. It is 1.2m high. We work in this height all day. Everyday, to drill like this and pull the machines and back again, [afterwards] I can't stand up."
Generations of South African miners have toiled in some of the world's deepest mines, often uncertain if they will ever see daylight again, to scratch out a meagre living for their families. Before the Marikana strike drillers earned 4,500 rand (£291) a month, going up to 8,000 rand with bonuses in a good month. Last year's stoppages lasted for six weeks, knocking Lonmin's profits. But for the miners it was worse, forcing them to borrow money from loan sharks at extortionate rates.
When the miners celebrated their "victory", some say the resulting 22% rise was in fact lower, as most of it had been promised in the past.
Even so, it was a boost to many. Mtshamba was able to move out of his single room in a line of corrugated iron shacks, with no water and no electricity, into a breeze block room with electricity and a cleaner pit latrine. He has bought a fridge and a television. But he still feels cheated by employer Lonmin, as well as the previously dominant National Union of Mineworkers.
"It's the union that betrayed us. We are in this deep, deep trouble because of these guys driving those Land Rover cars, X5s, getting a living wage. Someone just sitting in an office outside there gets maximum wage. That's why those guys are forcing us to go to work because all of them are in the gravy train. We just suffer."
Greg Marinovich is an award-winning photojournalist whose investigation into the Marikana killings revealed that police hunted down and killed escaping miners
Polio outbreak in Somalia worsens due to instability
By Agence France-Presse
Friday, August 16, 2013 7:07 EDT
Aid workers in war-torn Somalia are struggling to contain a dangerous outbreak of the crippling polio virus, with rampant insecurity hampering efforts, the United Nations said Friday.
Six years after the Horn of Africa nation was declared free of the virus, at least 105 cases have been confirmed in Somalia, the “worst outbreak in the world in a non-endemic country,” the UN Office for the Coordination of Humanitarian Affairs said in a statement.
“The polio outbreak plaguing Somalia has spread despite significant efforts to curb the disease,” OCHA added.
While some four million people have been vaccinated, getting drugs to more than 600,000 children in southern and central Somalia — areas partly under control of the Al-Qaeda linked Shebab, who block vaccination efforts — is “extremely challenging”, it added.
“The inability to fully access these areas constitute a major threat to the control of the outbreak,” the statement read, warning that “Somalia remains one of the most difficult and dangerous environments in the world for aid workers.”
While over 100 cases of children have been recorded, “the fact that this number of children show symptoms of paralysis means that there are probably thousands more with the virus, who do not have symptoms, but are capable of spreading it,” OCHA added.
Around 10 cases have also been reported in northeastern Kenya, which hosts almost half a million Somali refugees in sprawling camps.
In Somalia, while the bulk of cases are in the southern and central regions, the outbreak has also spread to self-declared independent Somaliland in the northwest.
Polio is spread by person-to-person contact, exacerbated by poor sanitation and a lack of clean water.
Multiple armies are fighting for control of southern Somalia, including rival warlords, Islamist extremists and a rag-tag national army backed by a 17,700-strong African Union force.
Aid workers report growing attacks on their staff.
On Thursday, medical aid agency Doctors Without Borders (MSF) closed all its operations in Somalia after 22 years of working in the Horn of Africa troublespot, warning of growing insecurity and “extreme attacks”.
The pull out by MSF, an aid agency that has earned a reputation for working in the toughest of conditions, will cut health care for hundreds of thousands of Somalis.
MSF blamed “”armed groups and civilian leaders” who it said “increasingly support, tolerate, or condone the killing, assaulting, and abducting of humanitarian aid workers.”
80 percent of Israeli Jews say peace with the Palestinians ‘impossible’
By Agence France-Presse
Friday, August 16, 2013 7:33 EDT
Almost 80 percent of Israeli Jews believe a peace deal with the Palestinians is impossible, an opinion poll found on Friday, two days after the resumption of negotiations in Jerusalem.
Asked whether “this time, we will reach a final agreement that will put an end to the conflict,” 79.7 percent of respondents said no, and just 6.2 percent said yes.
Another 14.1 percent expressed no opinion.
The survey, published in rightwing freesheet Israel Hayom, was carried out by Israeli research institute Hagal Hahadash among a representative sample of 500 Israeli Jews.
Asked about the government’s decision to release long-serving Palestinian prisoners alongside the resumed peace talks, 77.5 percent of respondents said they opposed it and just 14.2 percent said they were in favour.
Israel released 26 Palestinian prisoners on Wednesday hours before the Jerusalem talks, the first of 104 prisoners slated for release in stages depending on progress in the negotiations.
A full 62.9 percent of respondents said they would rather the government announced a freeze on Jewish settlement construction than release prisoners, many of whom were convicted of murder.
In the run-up to Wednesday’s talks, Israel authorised more than 2,000 new settler homes in annexed east Jerusalem and elsewhere in the West Bank.
The last peace talks, in September 2010, broke down over the issue of settlements, which has this time again incensed Palestinian negotiators.
August 15, 2013
Iran’s Parliament Grills, but Mostly Confirms, New President’s Cabinet
By THOMAS ERDBRINK
The proposed cabinet of Iran’s new president, Hassan Rouhani, survived its confirmation hearings largely intact on Thursday after four days of grilling by the conservative-dominated Parliament, which accused some nominees of corruption or sympathies with the outlawed opposition.
At the end of the process, which amounted to Mr. Rouhani’s first domestic test, the Parliament rejected three nominees — for the ministries of education, science and sports. Several members of Parliament had accused them of having been close to the 2009 Green Movement that held months of protests against Iran’s leaders.
But all of Mr. Rouhani’s key nominees were approved, most notably the foreign minister, an American-educated diplomat known for his understanding of the West, which suggested that Mr. Rouhani was moving forward in his campaign pledge to seek a more constructive engagement with the United States than his predecessor did.
The new foreign minister, Mohammad Javad Zarif, was a longtime ambassador to the United Nations and spent half his life living and working in the United States.
Bijan Namdar Zangeneh, a former oil minister, was confirmed to that position again. Other nominees for important positions, like the minister of intelligence, Mahmoud Alavi, and the influential and wealthy minister of industry and mines, Mohammad Reza Nematzadeh, were approved by large majorities.
During the confirmation debates, broadcast live on state television, hard-line members of Parliament — whose preferred presidential candidate, the former nuclear negotiator, Saeed Jalili, was humiliated by Mr. Rouhani’s surprise June election victory — took aim at several cabinet nominees. Top candidates, like Mr. Zarif and Mr. Zangeneh, faced intensive scrutiny.
Mr. Zarif was accused by one lawmaker, Ataollah Hakimi, of being “100 percent Western.”
Mr. Zangeneh was accused of improper connections to Mehdi Hashemi Rafsanjani, the son of a former president, Ali Akbar Hashemi Rafsanjani, who is widely regarded as the spiritual father of the incoming cabinet.
“If Mr. Zangeneh is nominated we will again witness the coming of that gentleman, Mehdi Hashemi, the petty thief,” said Mohammad Ali Borzorghvari, a lawmaker, who was apparently referring to corruption charges faced by Mr. Rafsanjani’s son.
In his confirmation remarks, Mr. Zangeneh said that his position would become almost as important as that of the foreign minister, because of the international sanctions that have sharply curtailed Iran’s sales of oil, its most important export. He acknowledged that “sanctions have surely created problems for our presence in the global oil market.”
Mr. Rouhani was considered the most moderate of the contestants who had qualified for the presidential election under Iran’s system, in which an oversight panel of senior ayatollahs vets all aspiring candidates. He faces potential struggles with influential hard-liners in the legislature and other branches of government who could make life difficult for him and his ministers.
“This cabinet will lead your government to a confrontation with Parliament,” Mr. Rouhani was warned by one legislator, Mohammad Javad Qodousi.
Mr. Rouhani argued that he had recruited nominees best suited “to face the current situation” after eight years of nonstop economic problems, which even some conservatives have blamed on poor economic management by the previous conservative administration of Mahmoud Ahmadinejad.
Vocal hard-line members of Parliament, supported by the conservative state newspaper Keyhan, said they were worried that some of Mr. Rouhani’s cabinet choices had supported the Green Movement, which sprung up in 2009 after Mr. Ahmadinejad’s disputed re-election to a second term.
The concern focused mostly on the nominees for education minister, Jafar Mili-Monfared, and science minister, Mohammad Ali Najafi. Both were questioned over whether they had attended student sit-ins or had visited grieving families of protesters killed during riots protesting Mr. Ahmadinejad’s suspiciously lopsided 2009 victory.
The criticisms aimed at both nominees showed how polarized Iran’s political establishment remains four years later, with hard-liners eager to exclude from power those who did not support the harsh suppression of those riots, in which more than 100 people were killed. Both nominees lost confirmation by large majorities.
Mr. Rouhani’s nominee for sports minister, Masoud Soltanifar, a former newspaper editor, was also rejected, although the reasons were not so clear. Analysts noted, however, that all three rejected candidates were for ministries that address youth issues. Hard-liners have long sought control over the science, education and sports ministries, which they say are critical in their aims to socially engineer Iran’s youth toward Islam and their political viewpoints.
Iran’s conservative-dominated Parliament views itself as the guardian of the country’s revolutionary values, and several members of Parliament openly say they do nothing else than follow the orders of the supreme leader, Ayatollah Ali Khamenei. The televised nomination sessions led to much debate among ordinary Iranians, who said they had expected the lawmakers to be more respectful, particularly because Mr. Rouhani had won by an emphatic majority.
“It is shameful they continue to complain of the protests that took place four years ago,” said Mehdi, a teacher who asked that his family name not be mentioned for reasons of security. “What matters now is that qualified people take control of the country, not the Parliament’s ideological obsession with protests.”
Analysts also said that Parliament’s objections did not go down well with most people. “They show themselves as the extremists they are,” said Nader Karimi Joni, the editor in chief of Janat-e Sanat, a reformist magazine.
India Seeks to Overhaul a Corporate World Rife With Fraud
By JEN SWANSON
India's Central Bureau of Investigation looked into the fraud at Satyam Computer Servuces, which became known as India's Enron.European Pressphoto AgencyIndia’s Central Bureau of Investigation looked into the fraud at Satyam Computer Services, which became known as India’s Enron.
MUMBAI, India — In the wake of global scandals involving kickbacks and accounting fraud, one unlikely country, India, is aiming to set a tone in overhauling its corporate oversight laws.
This month, the nation’s upper house of Parliament passed the Companies Bill, 2012, sweeping legislation meant to overhaul auditing, impose stiffer penalties for fraud and create more government oversight of businesses.
The lower house had passed the bill last year. Once India’s president, Pranab Mukherjee, signs it into law, it will replace India’s 57-year-old corporate legislation that critics say had failed to keep up with changes in business practices.
India, a nation notoriously rife with graft and bribery, was partly motivated to pass the legislation in the wake of an accounting scandal that has been called India’s Enron. In 2009, B. Ramalinga Raju, the chairman of a prominent outsourcing company, Satyam Computer Services, confessed to overstating company assets and earnings by more than $1 billion, and then resigned. The fact that one company could defraud shareholders of such a large sum despite regular audits made painfully obvious the need for greater oversight in corporate India.
But some four years after that startling case, little change in corporate laws had taken place until now.
The new legislation will affect all companies doing business in India, regardless of their size, structure or ownership, including the estimated 8,000 corporations listed on three national stock exchanges.
Yet while hopes remain high that the bill will appeal to foreign investors, and kick-start India’s economic growth, nearly a decade of revisions has left a watered-down measure lacking structure. Much of the bill depends on new committees and rules that have yet to be drafted, so legal experts have doubts about its ability to police corporations.
“It started off trying to make things easier for corporates, but somewhere along the line, it became more about corporate governance and transparency,” said Nilanjana Singh, a partner at the Mumbai office of AZB & Partners, one of India’s leading corporate law firms.
Legislators were further motivated to pass meaningful changes after Reebok India accused two former executives last year of embezzling 8.7 billion rupees, or $157 million. Reebok’s parent brand, Adidas, discovered during an audit that its former India managing director and chief operating officer amassed their fortune through years of falsifying sales receipts, faked storage facilities and circular trading.
Reebok India accused two former executives last year of embezzling 8.7 billion rupees, or $157 million.Indranil Mukherjee/Agence France-Presse — Getty ImagesReebok India accused two former executives last year of embezzling 8.7 billion rupees, or $157 million.
Businesses say such problems are rife in corporate India. In a 2012 report by the global consulting firm KPMG, more than half of respondents reported that their companies had experienced fraud or theft in the past two years. Most of the respondents considered fraud an inevitable cost of doing business in this country, and many Indian companies were setting aside a portion of their turnover to offset anticipated losses.
The new legislation will take some time to put in place, but some accounting officials are hopeful that real progress could be made in reforming India’s arcane systems. Nitin Kini, a partner at KPMG in India, said he believed that the bill could only bolster India’s recent economic woes that have included a free-falling rupee.
“Do we live with the current act and be happy with it, or do we look at this draft of the bill?” he asked. “Between the two, the new bill is good. It is a step in the right direction.”
The Companies Bill sets tough sanctions for embezzlement, including mandatory jail time and hefty fines for offenders. To prevent additional cases like Satyam — where Indian auditors failed to notice discrepancies despite auditing the company for years — the measure calls for the mandatory rotation of auditors and their firms.
Among other moves, a new committee, the National Financial Reporting Authority, will be created to prescribe and monitor accounting and auditing standards for the first time.
The Serious Fraud Investigation Office, an agency that played a leading role in both the Satyam and Reebok cases, will be empowered to start investigations and frame charges. Until now, its authority had been limited mainly to inspecting documents and was diluted by the bevy of other investigative government agencies, all of which had overlapping areas of authority.
A new judiciary, the National Company Law Tribunal, will be created to allow swifter justice, removing corporate cases from high courts so backlogged that petitions linger there for years. The Company Law Board, a quasi-judiciary panel that also heard cases related to the older act, will be dissolved.
Companies in India will also be required to adopt uniform financial years from April to March. The bill also introduces protections for whistle-blowers, class-action suits, and provisions to prevent conflicts of interest and insider trading.
The new measure allows for greater flexibility in cross-border mergers and acquisitions, but it also requires companies to employ at least one resident director, creating a problem for many foreign-owned companies. Stock buybacks, a favored strategy to bolster share prices that is currently permitted every six months, will be restricted to once a year.
One of the most controversial clauses asks larger enterprises — like those with net profits of at least 50 million rupees, or $815,000 — to donate 2 percent of their net profits to corporate social responsibility programs.
“The problem is that some of the changes they’ve made are quite retrograde,” Ms. Singh said. For instance, the efforts to limit a company’s number of subsidiaries didn’t address substantive problems, she said. “Why should the government should care how a company structures?”
Bharat Vasani, chief legal and group general counsel for Tata Sons Limited, the holding company behind India’s multibillion-dollar conglomerate Tata Group, said the bill had many shortcomings. Among those, he said, it fails to adequately address corporate insolvency, stressing that ailing Indian companies desperately need protections like the Chapter 11 bankruptcy rules in the United States.
Removing the jurisdiction of the High Court was also a mistake, he said, because now the bill depends entirely on the efficiency of the tribunal.
“India’s experience with tribunals has not been very great,” said Mr. Vasani, explaining that they rarely receive the proper infrastructure, financial support or manpower.
“This entire legislation was drafted by the bureaucracy, and they’ve never experienced how corporate India functions,” he said.
And so far, investors in Indian stocks have greeted the passage of the bill with little enthusiasm. The S.&P. B.S.E. Sensex 500-stock index is down 7.55 percent this year, and little has changed since the passage of the bill this month.
But in time, it may pave the way for greater governance, Mr. Kini, the KPMG partner, said. Other provisions prevent the government from interfering in daily business decisions, he said.
“So in that sense, it simplifies how an organization can govern itself, but also puts enough scope for oversight,” he said. “But it will take time.”
August 15, 2013
Vietnam Seeks to Lure Students to Study Marxism With Free Tuition
By THE ASSOCIATED PRESS
HANOI, Vietnam — Market forces are working against college degrees in the ideology of Marx, Lenin and Ho Chi Minh in Vietnam, where the Communist government has resorted to offering free tuition to attract students.
Prime Minister Nguyen Tan Dung recently signed a decree giving free tuition to students who agreed to take four-year courses on Marxism-Leninism and the works of Ho Chi Minh, the country’s revolutionary hero, at state-run universities.
Students have been shunning such degrees because potential employers are not interested in those programs, said Pham Tan Ha, director of admission and training at Ho Chi Minh City University of Social Sciences and Humanities. Degrees in subjects like communications, tourism, international relations and English are more popular because students believe “they will have better chances of employment and better pay when they graduate,” he said.
Under the decree, the state will also pay tuition costs for students who study certain medical specialties, like how to treat tuberculosis and leprosy. Ordinarily, they would have to pay about $200 a year for tuition.
All Vietnamese students must take at least three classes in Marxism-Leninism and Ho Chi Minh studies, but few go beyond that minimum requirement. Although Vietnam is run by Communists, the country embraced market-based policies in the 1980s. More than 60 percent of the country’s 90 million people are under 30. Competition for well-paying employment is intense among the roughly 500,000 graduates who enter the job market each year.
“Studying Marxism and Leninism is rather dry and many students don’t like it,” said Tran The Anh, 23, a fifth-year student. “The number of students studying these courses is very modest because many of them believe that it is difficult to find a job after graduation.”
Phan Thi Trang, a pharmaceutical student, conceded that the subjects might be interesting if she studied them more. But “they are just not applicable to my daily life,” she said.
August 15, 2013
Easy Credit Dries Up, Choking Growth in China
By KEITH BRADSHER
SHENMU, China — As the Chinese economy boomed, few cities soared faster or higher than Shenmu, a community of nearly 500,000 in northwestern China.
Top luxury clothing stores in this city’s downtown were recording as much as $500,000 a day in sales. Tables at the best restaurants had to be reserved weeks in advance. The new Fortune Garden Club for the city’s business elite made headlines by paying $1 million for a king-size mahogany bed, to be used by members and their companions.
But a painful credit crisis is now spreading across Shenmu and cities nearby, as thousands of businesses have closed, fleets of BMWs and Audis have been repossessed and street protests have erupted.
Now the leading purveyors of Western fashions are deserted, monthly sales at restaurants are down as much as 97 percent and the marble entrance to the Fortune Garden Club is shuttered. All but one of the city’s car dealerships have failed.
The owner of the city’s largest jewelry store was detained by the authorities a week ago after creditors found him secretly packing millions of dollars’ worth of gold and jewels into cases and accused him of preparing to flee the city without settling his debts. A top restaurant closed a day earlier, and its owner left town, as have the founder of the Fortune Garden and many other executives.
“It’s an economic crisis just like the United States has had; just like it,” said Wang Ting, an operator of an illegal casino in Fugu, near Shenmu. “There’s no cash, everyone stays home without a job, there’s no way the economy can recover.”
Shenmu, and nearby cities like Ordos and Fugu, are at the leading edge of broader troubles that are beginning to afflict the entire Chinese economy. Across China, growth has slowed. With the slowdown have come rising defaults on loans made outside the conventional banking system, chronic overcapacity in many industries like coal mining and steel production and, in particularly troubled cities like Shenmu, a sharp decline in previously debt-fueled prices for real estate and other assets.
The cracks are showing in many sizable cities like coastal Wenzhou, where informal lending, a big part of so-called shadow banking, has dominated for a quarter-century. Cities with economies linked to commodities with falling prices have also been affected, as more people have defaulted on loans. The biggest, most economically diverse metropolitan areas like Beijing and Shanghai seem considerably less affected, but also have many small and medium-size businesses that depend on informal lending.
Lending has collapsed here in northern Shaanxi Province, where it was particularly speculative and frenzied, and where the local coal industry has also been crippled by steeply falling prices.
As some borrowers began defaulting early this year, worried lenders in the informal sector raised interest rates for small and medium-size businesses, previously 25 to 40 percent a year, to as much as 125 percent a year. The increase set off a much broader wave of defaults in recent weeks, as owners found themselves unable to repay billions of dollars in bad debts, many of them handwritten and hard to enforce in court.
“Almost no one will give you a loan,” said a construction executive who gave only his surname, Xie, as he stood next to his white Toyota Land Cruiser outside a project that had been halted.
Although changes are being slowly introduced, state-owned banks have long been allowed to lend only at low, regulated rates barely above the inflation rate, with the total value of loans controlled by quarterly quotas. All over China, these loans go overwhelmingly to large state-owned businesses, government officials and politically connected individuals, who then relend the money at much higher interest rates to small and medium-size businesses in the private sector that need money to grow.
Liu Linfei, a government official from nearby Yulin, stood on a Shenmu street corner in a T-shirt and shorts on a recent weekend afternoon, outside two high-rise hotels where construction had been stopped just before the windows could be installed. He said he had borrowed 600,000 renminbi, almost $100,000, from a bank shortly before the collapse, at an interest rate of 4.1 percent a year.
Mr. Liu then lent the cash to moneylenders here at an interest rate of 10.4 percent, planning to pocket the difference.
The moneylenders who borrowed from Mr. Liu defaulted, and now he is struggling to repay the bank. “I’m not going to lose my house, because I’m repaying it little by little with money I borrow from my relatives,” he said.
The Chinese are finding it harder to repay loans because the economy is slowing. Most analyses of China’s economy look only at the real economic growth rate, around 7.5 percent this year. But for companies’ sales and profits, which determine their ability to repay debts, what really matters is the nominal growth rate, which is real economic growth plus inflation.
Private sector businesses could afford to borrow at double-digit interest rates because nominal growth of 16 to 23 percent a year from 2004 through 2011 exceeded the rates. But nominal growth slowed last year to 9.8 percent and fell again in the first half of this year, to an annual pace of 8.8 percent.
At the same time, overinvestment led to overcapacity. Dozens of new mines opened around Shenmu in the last decade and older mines expanded. But demand has grown much more slowly than expected for electricity and steel, the two main users of coal.
Coal prices have dropped by half in the last three years as a result. Now, out of 90 mines near Shenmu, practically the only ones still operating are nine that are state-owned and do not need to show a profit.
The popping of the real estate bubble has been the most serious blow to the local economy. Real estate prices had soared in cities across China. In Shenmu, 1,200-square-foot apartments that sold for less than $20,000 a decade ago reached $330,000 by last winter.
Local real estate brokers say that they are advising sellers to avoid price cuts of more than 10 percent. But local business owners who buy and sell apartments say that deals are now being done for as little as $115,000 for a 1,200-square-foot apartment, a decline of 65 percent.
Public discontent is fueling street protests. Several thousand residents turned out in mid-July for a demonstration in the expensively paved square across the street from city hall, demanding that municipal officials revive the stalled economy. More recently, a smaller group of migrant workers protested, demanding that the local government pay their back wages after construction was halted on a row of high-rise apartment buildings.
Yet a Shenmu merchant, who insisted on anonymity because of local tensions, said that he had a lot of sympathy for officials, who even put up banners on city streets last year warning residents of the dangers of participating in informal lending schemes.
“It’s a national problem, it’s not a local issue,” he said.
Patrick Zuo contributed research.
Powerful earthquake felt across New Zealand
By Agence France-Presse
Friday, August 16, 2013 0:07 EDT
A powerful earthquake shook major cities across New Zealand on Friday, sending terrified office workers diving under their desks but with no initial reports of significant damage.
The 6.8-magnitude quake struck at 2:31 pm (0231 GMT) in the Cook Strait, the US Geological Survey said. It was felt from Christchurch in the South Island to Auckland in the North Island.
The USGS said it hit five kilometres (three miles) east of Seddon at a depth of 10.6 kilometres, close to the centre of a series of quakes last month.
No tsunami alert was issued.
The tremor caused a violent jolt in the capital Wellington, where office workers scrambled for cover, and was followed by a series of sizable aftershocks.
“It certainly has the potential to cause damage,” a seismologist from Geoscience Australia told AFP, noting that a 6.5-magnitude quake in the same area on July 21 had caused damage.
‘This area in particular is very active in the last couple of months. This is a continuation of that activity.”
There have been hundreds of aftershocks since the July quake, with residents fearing a repeat of a devastating quake that hit Christchurch in February 2011, killing 185 people.
Wellington was the scene of the country’s most powerful earthquake in 1855.
That 8.2-magnitude quake caused four deaths and changed the city’s geography, pushing the shoreline out 200 metres (660 feet) as it thrust the harbour floor upwards.
New Zealand is on the boundary of the Australian and Pacific tectonic plates, forming part of the so-called “Ring of Fire”, and experiences up to 15,000 tremors a year.
Venezuelan women get short, sharp shock as hair thieves cut and run
President Nicolás Maduro vows to ban crime and charge offenders, known as the Piranhas, operating in Maracaibo
Virginia López in Caracas
theguardian.com, Thursday 15 August 2013 17.58 BST
Venezuelans already live with spiralling crime rates, rampant kidnapping and one of the highest murder rates in the world. Now they face a new threat: scissor-wielding thieves who target long-haired women and sell their stolen manes as hair extensions.
President Nicolás Maduro has vowed to bring the full weight of the law to bear on a gang of hair thieves, known as the Piranhas, operating in Maracaibo, the country's second city.
"We will capture these people, we will legislate to ban this crime. What sort of aggression is this? Our girls are sacred and we will apply the law with great force," Maduro said on Wednesday. He claimed that the gang originated from neighbouring Colombia.
This latest trend in Venezuela's ever evolving crime scene has caused an uproar in social media, with as many as three new cases reported every day, according to Luis Navas, a police inspector in Maracaibo.
"The clippings began three weeks ago. We receive at least one formal complaint a day, but mainly people are going to Twitter to report the assaults," Navas said.
Most of the thefts occur around shopping malls and in a populous sector of the city called Las Pulgas, and normally involve two or three people – often women – who surround the victim, force her to pull her hair back into a ponytail which they then clip off.
According to Flor Gil, a hairdresser in Caracas, hair extensions are highly coveted, often fetching close to US$800 (£513) for natural hair and $500 for synthetic.
The mayor of Maracaibo, Eveling Trejo de Rosales, told local media that a special contingent of "men and women were being placed to [stand] guard and avoid this happening", but, according to Navas, no plan has been put in place, and no unit has been deployed to guard mall entrances, where the attacks most often take place.
"This is madness! Now, on top of insecurity, kidnappings and food shortages, we're also having to worry about our daughters and wives being victims of hair thieves," Navas added.
Maracaibo, which is close to the border of Colombia, has long battled unsuccessfully with rampant crime, including a high number of murders, kidnappings and contraband along the border.
"The crime is not taken seriously by many, but the truth is that you have a population, mainly women between the ages of 16-35, who now have an extra worry that fuels this life in constant fear, and that's where the real crime lies," Navas said.
August 15, 2013
3 Brazilians Convicted of Gang-Raping American Student
By SIMON ROMERO
RIO DE JANEIRO — A Brazilian court has convicted three men of gang-raping an American student on a transit van, a crime in Rio de Janeiro’s Copacabana seaside tourist district that shocked the nation and focused attention on a surge of reported rape cases in Brazil.
A judge sentenced two of the men — Jonathan Froudakis de Souza, 20, and Walace Aparecido de Souza Silva, 21 — to 49 years in prison each for crimes that included rape, aggravated robbery and extortion, in a ruling issued Wednesday. Another man, Carlos Armando Costa dos Santos, 21, was found guilty of rape and extortion and sentenced to 21 years. A 14-year-old boy who took part in the assault is awaiting trial in a separate court for minors.
The assailants pummeled the face of the American student, 21, breaking her nose and raping her repeatedly in front of her male companion, a French citizen who was tied up and beaten with a metal bar as he witnessed the assault. The victims were forced to use their bank cards to withdraw cash, which was stolen, before the attackers freed them in a gritty area of Rio.
The attack, in late March of this year, drew scrutiny to a wave of rapes on public vans and buses, pointing to the dangers in using public transportation in Brazil’s major cities. In June, fury over an increase in bus fares set off antigovernment protests across the country, with demonstrators expressing anger over deplorable public services and abuses of power by politicians.
After the rape of the American student, a 22-year-old working-class Brazilian woman said she had been raped by the same men in the same van a week earlier, on March 23. Though she had reported the crime immediately, the police failed to investigate, provoking criticism that the authorities failed to take action until an American had suffered the same abuse. “The authorities still seem to be more concerned in dealing with the rape case of a foreigner instead of my own,” the Brazilian victim said in a telephone interview on Thursday.
She said she had been summoned to a hearing on July 24 and was made to wait the entire day before being told that the defendants were not able to appear because a vehicle was not available to bring them to the court. The hearing was rescheduled for Aug. 27; it was unclear when a judge would rule.
“It is utterly degrading the way I’ve been treated by own legal system,” she said, “but I’m comforted a little knowing these criminals will go to prison.”
In his ruling on the case of the American student, Judge Guilherme Schilling Pollo Duarte said the actions of the men during the attack were characterized by a “complete disregard” for the victim.
Despite the long sentences, at least two of the men are unlikely to spend anywhere near their full sentences in prison, even if they are convicted in the separate rape case of the Brazilian victim. Brazilian law limits the enforcement of any sentence, regardless of its severity, to 30 years, and inmates, including those convicted of murder, are often released long before spending so many years in prison.
Haiti police raid warehouses in plastics ban crackdown
Government says raids prove it is serious about enforcing ban on Styrofoam containers and plastic bags which litter streets
Rashmee Roshan Lall in Port-au-Prince
theguardian.com, Thursday 15 August 2013 20.09 BST
Police in Haiti have raided three warehouses in the capital in the first clear indication that the government is serious about enforcing a ban on Styrofoam takeaway containers and plastic bags.
The ban, which came into force on 1 August, is the second time that Michel Martelly's government has tried to limit the plastic rubbish that clogs drains and causes floods, litters the streets and washes up on beaches. A previous attempt last year was largely ignored, and environmental activists fear the government may not be able to enforce it this time either.
But the environment minister, Jean Francois Thomas, said the raid proved "we are serious about a serious problem". The government has promised many more across the country, mainly to seize Styrofoam containers, 80% of which are imported from the neighbouring Dominican Republic.
Haiti is engaged in a trade war with the DR, having banned the importation of chickens and eggs, and some DR Styrofoam manufacturers say the ban on plastics may be a political move.
"We're not yet sure what we'll use instead of plastic bags," said one Port au Prince supermarket owner. "Perhaps recycled plastic? But it's more expensive."
Port-au-Prince, Haiti's largest city, is awash in rubbish. When it rains, rivers of discarded Styrofoam boxes flow down the streets and plastic bags festoon trees.
There is general scepticism about the government's ability to enforce its decision. "There is little reason to think the new decree will bring about any change, What is the alternative to Styrofoam and plastic? How are people going to carry food home if not in Styrofoam boxes?" asked one business owner.
Thomas insists that his government is determined to wean Haitians off the "bad habit" built up over the last few years of using Styrofoam.
The government says it is still in the process of talking to Haitian business owners to import biodegradable takeaway containers and bags. "We will offer a lot of help, such as lower import tariffs for biodegradable products," said Thomas.
In the past, he said, "Haitians bought food and brought along their own metal containers to take it home. What's wrong with doing that again?"
The question may address the doubts posed by environmental campaigners who point to Haiti's failure to follow the example of Rwanda, which launched a four-year public information campaign before it became the first country in the world to ban bags in 2007.But activists say the action is too little, too late.
The government says it has more ambitious plans than mere bans. Small plastic sachets of purified water remain exempt from the ban and Thomas believes he is creating a scheme for drivers of tap taps, the privately owned public transport system, to collect discarded sachets and take them to a recycling plant. "Everyone earns a little and the streets remain clean, what could be better than that?"
Italy sees summer surge in migrant boat landings
Interior minister calls for collective EU approach to border control as numbers arriving from north Africa more than double
Lizzy Davies in Rome
theguardian.com, Thursday 15 August 2013 17.44 BST
The number of migrants landing on Italian shores this year more than doubled over a 40-day period during July and August, official figures show.
The interior minister, Angelino Alfano, said on Thursday that 8,932 migrants had arrived after perilous sea crossings between July 1 and August 10.
The interior ministry said the total number of migrant arrivals for 2013 now stood at 17,167. Since August last year, Alfano said, more than 24,000 people are recorded as having made it to shore.
In recent weeks the arrivals have become a regular occurrence on the coasts of the islands of Lampedusa and Sicily and of the southern Italian mainland.
Bathers in south-east Sicily on Thursday were reported to have helped the coastguard rescue about 160 migrants whose boat was seen nearing the beach at Morghella, near Pachino.
On Wednesday night another boatload of about 160 people arrived in the port of Reggio Calabria on the southern mainland. On board, according to the Ansa news agency, were 29 young children and numerous minors.
Alfano, from Silvio Berlusconi's centre-right Freedom People party (PdL), said the summer surge had not prompted "an unmanageable emergency". But he appealed to the European Union for a more collective approach to border control on Lampedusa, where more than 8,000 migrants have landed this year.
"The issue of immigration at Lampedusa cannot be considered a national issue," Ansa reported Alfano saying.
The interior ministry figures show that more than 11,000 migrants have crossed the Mediterranean from Libya this year. In recent weeks many of the migrants have declared themselves to be nationals of Syria and Egypt, countries in the grip of bloody violence.
The sea crossing can sometimes prove fatal. In July the UN refugee agency, UNHCR, said it had recorded around 40 deaths in the first six months of this year of people trying to cross the Mediterranean between north Africa and Italy.
Last weekend, six young Egyptian men drowned when they tried to swim a short distance to the Sicilian shore near Catania.
08/15/2013 02:03 PM
Peer Who?: Merkel Kicks Off Campaign by Ignoring Challenger
By Philipp Wittrock in Seligenstadt and Ludwigshafen
Chancellor Angela Merkel has finally hit the campaign trail in earnest, but the incumbent is doing all she can to completely ignore her opponent, Peer Steinbrück. With a solid lead in the polls, the strategy is likely to work.
It certainly wouldn't hurt, Angela Merkel must know that. After all, she worked with the man for several years, back when she was the head of a coalition with his Social Democratic Party (SPD). He was finance minister, and one can only assume that she at least occasionally addressed him by his name.
Now, however, as the campaign heats up ahead of the Sept. 22 general election, Peer Steinbrück has disappeared from Merkel's vocabulary. She has studiously ignored him ever since the SPD chose Steinbrück as its candidate for the Chancellery last September. Even now, with just a few weeks to go before the vote, Merkel has shown no sign of breaking her vow of silence. Not even on Wednesday, when she held her first large rally of this campaign, one of 56 such gatherings on her schedule between now and the vote.
The gathering took place in the small town of Seligenstadt am Main, located in Hesse in the west, where a state vote is scheduled for the same day as the federal election. It is a beautiful town, with a cobble-stoned market square and well preserved, half-timbered houses. Indeed, the idyllic location only served to highlight Merkel's merciless treatment of, or indifference to, her challenger, an approach born of supreme confidence as the campaign enters its final phase.
Her optimism is well-founded. Merkel's conservatives are way ahead of the SPD in public opinion polls and Steinbrück has been able to make no inroads into the chancellor's personal popularity ratings. And the news only seems to improve, particularly on Wednesday with the announcement that Germany's economy grew by 0.7 percent in the second quarter and the euro-zone economy is no longer in recession. Furthermore, the SPD leadership in recent days has once again seemed more focused on infighting than on finding ways to put Merkel on the defensive.
Whistles and Noise-Makers
Still, a handful of SPD members were on hand in Seligenstadt on Wednesday to remind the chancellor that she does indeed have an opponent in this election. Perhaps two dozen of them demonstrated armed with posters decrying mass digital surveillance by the US intelligence agency NSA and with chants calling for Merkel to go. Together with whistles and noise-makers, they made such a din that children nearby covered their ears.
On stage, Merkel did her best to keep her calm. But ultimately, she had little choice but to address the disruption, saying that the state doesn't pay attention to people just because they can scream the loudest.
It wasn't a particularly nice thing to say, but it was the only moment in the rally when Merkel seemed to actually be campaigning. The rest of the time, she appeared to be doing her best to ignore anything that might be construed as a campaign issue. She didn't waste a single word on the NSA affair, mentioning only "security in all directions," adding that that applied to the terrorist threat as well as to the Internet.
Instead, she ran down the list of her government's achievements, praising her coalition for the reduced unemployment rate, budgetary consolidation and the massive expansion of day-care options. She added a couple of elements from the Christian Democrats' campaign platform, such as increased investment in education and research as well as a call for the minimum wage. She allowed herself a brief quip about the Green Party's proposal for a "vegetarian day" and even mentioned the SPD's plan to raise taxes on above average earners.
Stay the Course
But the message, delivered with little emotion, was clear: There is no need to change course. And that, likely, will be enough to earn her a third term in the Chancellery.
It is the kind of campaign that is very much to Merkel's liking. No need to polarize, no need to go on the attack. And very little stress, even if polls indicate that her current coalition, with the Free Democratic Party as her junior partner, may not survive the vote.
In the evening, Merkel took a helicopter to cover the 80 kilometers from Seligenstadt to Ludwigshafen. The atmosphere on the central square of Ludwigshafen, Helmut Kohl's hometown, is much bleaker. But, without the rowdy group of SPD protesters, it was also much quieter. Even then, however, there is one thing Merkel's listeners did not hear: The name Peer Steinbrück.
08/15/2013 05:38 PM
Broken Ladder: Social Justice Becomes Elusive in Germany
By Markus Dettmer and Cornelia Schmergal
It used to be that a rising economic tide in Germany floated all boats. That, though, hasn't been true for some time now as the gap between the rich and the poor has widened. Political parties are pledging to address the issue, but have competing visions of social justice.
Who knows whether he will ever return to this office building. Who knows whether he will ever be allowed to set foot in such a building again -- a place where employees sip their espressos on designer couches and gaze at the sky through a glass ceiling.
Can, the 20-year-old son of Turkish immigrants, doesn't know either, so he pulls out his smartphone and takes a few snapshots. He photographs the shiny coffeemaker, the plants in concrete planters and the paternoster carrying men and women in business dress.
At this point, Can is merely a guest. With his plaid shirt and large headphones dangling around his neck, he still looks noticeably out of place in the Munich offices of the Boston Consulting Group (BCG). He is there because one of the management consultants is his personal coach. The employment office has brought them together, and now they are collaborating on a project: Can's future.
It had looked pretty grim until now. Can had what advisors at the employment office call "difficult starting conditions." He grew up in a neighborhood with many high-rise buildings and very few music schools. He repeated the 5th, 7th and 10th grades and left school with close to a failing grade in math and German. He didn't even bother to send out job applications.
Now a consultant is trying to help him, a man "from another world," as Can says, from a world in which people print their Ph.D. titles on their business cards and send their children on foreign exchange programs. From Mondays to Thursdays, BCG consultant Fabian Barthel works on plans for roads and dams in Africa. He spends his Friday afternoons on pro bono work, helping Can find an apprenticeship -- as a sort of personal aid worker. "Can's starting conditions were definitely worse than mine. But it can't be that this shapes the rest of our lives," says Barthel. Or at least this doesn't agree with his notion of justice, he adds.
Won't Change Much
Posters and flyers distributed around Germany provide people like Can and Barthel with an idea of how the political parties define justice. Politicians with the center-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), praise child care subsidies for parents who stay home with their children. The center-left Social Democratic Party (SPD) promises more stable pensions. Lawmakers say that everything that's good about the German system should remain as it is. But that won't change much for someone like Can.
The parties have discovered the benefits using social justice as a campaign tool. The J-word is a common theme in many election platforms. The Greens invoke justice about 60 times while the SPD mentions the word almost 40 times in its program. The Left Party follows close behind. The SPD says it wants to contain what its chancellor candidate Peer Steinbrück, calls "the centrifugal forces in society," by raising taxes on higher-earners. The Greens want to impose a levy on the assets of the wealthy. Their voters support "an equitable distribution of taxes," even if it means reaching into their own pockets, says Katrin Göring-Eckardt, the Green Party's top candidate.
Conservatives, meanwhile, aren't tying the promise of social justice to higher taxes, but to government benefits. They want to increase pensions for older mothers and boost small retirement pensions by turning them into a "life achievement pension." Chancellor Angela Merkel's party also wants to increase the childcare subsidy next year. "Every family is different -- and each family is especially important to us," the conservatives have printed on their campaign posters. The message is clear: We are throwing money at you.
"Social justice is a fancy term that means something different for everyone. That's precisely what makes it so attractive for the parties in the election campaign," says Michael Sommer, who regularly polls Germans on their views about social balance. A project director at the Allensbach Institute for Public Opinion Polling, Sommer has just unveiled a major study in this election year. The parties' strategists would be well advised to read it.
Something Completely Different
About two-thirds of Germans believe that social conditions have become more inequitable in the last legislative period. At the same time, the share of Germans who view the tax system as unfair has increased sharply. Only 21 percent of those polled consider income distribution to be the most important problem. A majority of 57 percent believes that justice mainly signifies a balance of opportunities -- which is something completely different.
The polls coincide with findings among academics. The gap between rich and poor has been widening since the 1980s. But since about 2005, income differentials have narrowed slightly, largely because of the booming labor market, concludes the German Institute for Economic Research (DIW).
In contrast, the barriers between social classes have grown. Between 1996 and 1999, close to 70 percent of people in West Germany managed to work their way up and out of the lowest income bracket. Between 2006 and 2009, however, only 52 percent -- and only 45 percent in former East Germany -- were able to make the same upward move. DIW researcher Markus Grabka notes a "tendency to remain in place," and says: "Upward mobility from the lower edge of society to the center is flagging."
Germany is only moderately successful when it comes to social dynamics. In a recent international comparison of 28 industrialized nations, the Cologne Institute for Economic Research, which is aligned with employers, ranked Germany in 14 place in terms of equal opportunity.
The fact that it has become so difficult to climb from the bottom to the top in Germany also undermines confidence in the economic order, as the German Council of Economic Experts warned about two years ago. Only when there is greater permeability will people from the lower income class "feel sufficiently motivated to invest in their qualification and thus in their social advancement," wrote the five members of the Council. And only when each person believes that he can make it to the top one day will he accept that there are people who make more money.
'Society Is Divided'
But the belief in a better life seems to be disappearing in Germany. Michael Hartmann, a sociologist in the southwestern city of Darmstadt, has studied those who succeed in German society. His sobering conclusion is that those at the top have always been there, and those at the bottom will only rarely make it to the very top. "Society is divided," says Hartmann. "Many people here now believe that their children will be worse and not better off than they are."
The conviction that everyone could make it, as long as he tried hard enough, was one of the founding myths of the old Federal Republic of Germany. In 1957, in the years of the economic miracle, Ludwig Erhard, the first West German economics minister, devised the recipe for success: "Prosperity for All." More than a decade later, Chancellor Willy Brandt enhanced Erhard's material promise with the pledge of upward social mobility. With its notion of education for all, his coalition government sought to create a largely limitless society, in which a person's future was not decided by the circumstances of his or her birth. The goal was that children of blue-collar workers should finally be able to become academics.
It worked for a time. But now a double barrier slows the ascent into the upper levels of society. On the one hand, the divided labor market ensures that entire groups within the labor force are disconnected from the trend toward growing prosperity. On the other hand, the education system is failing when it comes to creating equal starting opportunities for everyone.
The problem begins at birth. "In Germany, the educational opportunities of children depend heavily on their parents' material circumstances," says sociologist Hartmann. And if children are also from an immigrant family in which very little German is spoken, the cycle is already pre-programmed: no German, no high-school diploma. No high-school diploma, no job.
St. Raphael, a Catholic daycare center in Weissenthurm, a town in the western state of Rhineland-Palatinate, serves 115 children. None of the children come from a household in which the parents have university degrees, and four out of five have foreign roots.
A National Disaster Area
Daycare teacher Martina Huckriede has done a lot to make up for the deficits of some of her charges. She has hired additional personnel, as well as four "intercultural specialists." She has even written a quality manual for encouraging language development. Much has improved since then, and yet Huckriede constantly experiences what she calls "a typical career": children with an immigrant background often have language problems and drop out of school. "I'm pleased to hear about every child that ends up going to high-school or completing a great vocational training program."
A child's abilities and talents ought to shape his or her future. Instead, the German education system sorts children on the basis of social background. Of 100 children from well-educated families, 79 reach the upper level of high school, compared with only 43 from non-educated families.
In June the Bertelsmann Foundation, in a discussion of equal opportunity in the education system, concluded that despite minor progress, "social background continues to have a strong influence on educational success."
Education policy is a national disaster area. Instead of focusing on and nurturing problem groups, the cash-strapped states are getting bogged down in a pointless rivalry. Bavaria sends its children to elementary school for four years, while the city-state of Berlin requires six years. Some states are getting rid of lower-tier secondary schools called the Hauptschule, while others are keeping them in place. Some states have their high-school students graduate with the Abitur diploma after 13 years and others after 12 -- or they simply leave the decision up to the schools. And about 50,000 young people a year are still dropping out.
If they're lucky, they'll find a job. But the path to the upper levels of the income scale often remains blocked for them, because the working world widens the social divides in the country even more. Those who are well educated and flexible have access to the best job and career opportunities. Meanwhile, many with few qualifications must make do with jobs in the country's growing low-wage sector, in which professional and material successes are simply no longer an option. And even though the labor market reforms of the SPD/Green Party coalition government helped to reduce poverty in Germany, the key condition of sharing in Germany's growing prosperity is work.
More Low Paying Jobs
Unemployment rose steadily in Germany until 2005, with each new downturn leaving behind a higher number of people without prospects. Then the trend was reversed, and even the numbers of the long-term unemployed shrank. But success has its price. The normal employer-employee relationship, with a secure and open-ended contract, was supplemented with the relentless principle behind the Hartz IV welfare reforms undertaken in the 1990s: Poorly paid work is better than no work at all.
The number of low-paying jobs has grown since then. They include part-time work, temp work and mini jobs. This has reduced unemployment. But the new, flexible jobs formed fewer bridges to traditional forms of employment than anticipated. Even today, the unemployment rate among poorly qualified workers is still close to 20 percent. Those affected are also confronted with anxiety and hardships.
Oliver Schneider is 32. He obtained the entrance qualification for a university of applied sciences and completed a training program as an automobile electrician at Daimler in Sindelfingen in southern Germany. Later on, he moved to a Peugeot repair shop. When one of the employees had to be let go after two years, Schneider was chosen. "I was the youngest and I didn't have a family," he says.
At the end of 2003, the employment office sent him to a temp agency. Since then, Schneider hasn't managed to escape temporary work. When one temp agency let him go, the employment office send him to another one, or sometimes even back to the same agency that had just let him go.
"I've already had at least 30 different jobs in 45 companies," says Schneider. During a recall campaign, he was working as a temp at Daimler again. He has worked as a mover and construction helper, in an office and in factories. "When I had been in a company for a longer period of time, I worked extra hard to be hired full-time," says Schneider. The strategy never worked.
Schneider earns about €1,050 ($1,392) a month, after taxes. The automotive electrician is still hoping for a regular job, but he feels that his chances are slim. When asked about his future prospects, he can think of only one word: "lousy."
Germany is fast turning into a three-class society. At the top are managers with salaries in the millions, business owners with thriving firms and successful self-employed individuals. Then comes the multitude of well-educated and well-trained white-collar workers and skilled craftsmen with high and above-average incomes. Finally, the lower third, consisting of those with few qualifications and people who no longer receive public health insurance or unemployment benefits. They stand little chance of climbing the social ladder.
In the first few postwar decades, even those with low-paying jobs benefited from growing prosperity. Nowadays, those who once formed the core of the workforce are disconnected from rising incomes.
"Especially starting in the mid-1990s, the income gap between poorly qualified and highly qualified workers became wider," says Ulrich Walwei, deputy director of the Institute for Employment Research (IAB). According to IAB calculations, real wages among poorly qualified workers have declined to 1984 levels in the last two decades, while incomes rose substantially among highly qualified workers, despite the crisis and wage restraint.
Those who already have a lot receive even more, while those with no education or training remain at the losing end of the scale. It is a vicious circle that influences social stratification in Germany far more than any tax or healthcare reform.
This is bitter news for politicians. The message is that if they truly wish to make Germany a more equitable place, they have to create more opportunities for advancement, especially in education and on the labor market.
Top of the Scale
But the plans of Social Democrats and Greens to collect more money from the rich and invest it in education are only moderately helpful. A new DIW study shows that the tax reform plans will generate much less revenue than anticipated. Besides, the parties still have other costly promises up their sleeves.
Most of all, the problem can't be solved with money alone. More slots in daycare centers and more childcare workers are ineffective when families don't send their children to daycare centers in the first place. And programming the labor market for advancement requires a new way of thinking among all those involved. What Germany needs are business owners who invest more in continuing education, job placement officers who focus more heavily on poorly qualified workers, and politicians who stop privileging precarious employment circumstances, such as mini-jobs and temp work. "It's time for us to finally take the calls for life-long learning seriously," says IAB deputy director Walwei.
But short-term political successes are difficult to achieve with such protracted restructuring programs.
Instead, citizens interested in justice and fairness are taking matters into their own hands. Consultant Fabian Barthel had eventually had enough of simply looking on as the system kept producing one education failure after another. He joined the "Joblings" initiative, a joint social project of the BCG and the Eberhard von Kuenheim Foundation. Barthel doesn't want "the question of whether one grew up in an educated environment or a social hot spot to determine a person's path in life." That's why he spent weeks coaching Can on how to write job applications and how to respond to questions in interviews.
The problem has already yielded some successes. Can recently completed an internship with an insurance company. He starts an apprenticeship in September, and he has more goals than that. "My dream is to be able to afford a nice apartment in a good neighborhood one day," he says. He likes the upscale Schwabing neighborhood, for example.
That's at the very top of the scale in Munich.
Translated from the German by Christopher Sultan
Russian pole vault star Yelena Isinbayeva slammed for anti-LGBT comments
By David Ferguson
Friday, August 16, 2013 7:10 EDT
Russian pole vault star Yelena Isinbayeva faced outrage Friday from activists and fellow athletics legends after backing Russia’s controversial new anti-gay law and saying competitors at the Sochi Winter Olympics should respect it.
The 31-year-old kicked up a storm on Thursday when she said in Moscow she supported the law signed by President Pig Putin in June which punishes the dissemination of information about homosexuality to minors. Activists say it can be used for a broad crackdown against gays.
“We just live with boys with women, women with boys,” Isinbayeva said at a press conference ahead of the medals ceremony for the pole vault which saw her win her third world outdoor title.
“We are tolerant of all existing opinions and respect all people,” said Isinbayeva, an IOC Youth Olympics ambassador and also an ambassador for the February Olympics in Sochi.
“But they must be respectful of our laws and not promote the ideas of non-traditional orientations on the street,” she added, using the term used by Russian officials to describe homosexuality.
“Propaganda of non-traditional relations would be a great sign of disrespect to our citizens, our country and our laws. Everyone who comes to the Olympics must respect our laws.”
The Russian authorities have said all athletes will be free and safe to compete at the February Games in the Black Sea resort regardless of their sexual orientation but must obey Russian law.
While possibly playing well with a domestic audience, her stance has provoked outrage with American 400 metres legend and world record holder Michael Johnson denouncing her.
“She is very popular over here with a small group of people who are very powerful and who probably buy into that view in this country,” Johnson said in his capacity as a BBC pundit.
“It is very flawed judgement and a very flawed opinion.”
Britain’s 2000 Olympic heptathlon champion Denise Lewis said Isinbayeva may not just suffer a severe blow to her reputation but also to her pocket — though the Russian has decided to take a break to have a baby before deciding whether to return to competition.
“She is clearly not in touch with the rest of the world,” said Lewis who is also in Moscow as a BBC pundit.
“I’m surprised her management didn’t advise her to be a little more cautious with throwing her views out there. This is clearly very damning for her as a global superstar.”
There was a more cautious reaction from Australia’s 100 metres hurdles Olympic champion Sally Pearson, who opened her bid to defend her title on Friday.
“To be honest I only heard about this when I was at the warm-up track,” said the 26-year-old after winning her heat.
“I think that politics and sport do not mix that they should be kept separate and people in both of those worlds should not cross over into the other.
“Should she (Isinbayeva) have said those things? Well it’s up to her. Everyone’s got a right to comment and have a view on things.
“She wanted to do it that way and I guess you have to respect that,” she added.
Rustem Adagamov, one of Russia’s top pro-opposition bloggers, commented that Isinbayeva was appreciated because of her sporting achievements not for her intellectual insights.
“Basically, it’s like this: jumping five metres high with a pole does not make you an intelligent person. OK,” he wrote.”
“Isinbayeva is a great sportswoman but I thought she was more intelligent than this,” Nikolai Alexeyev, one of Russia’s most prominent gay rights activists, said on Twitter.
Isinbayeva’s remarks have been contrasted unfavourably to those by American 800m silver medallist Nick Symmonds before the uproar.
“As much as I can speak out about it, I believe that all humans deserve equality as however God made them,” Symmonds said.
“Whether you’re gay, straight, black, white, we all deserve the same rights. If there’s anything I can do to champion the cause and further it, I will, shy of getting arrested.”
Isinbayeva, who is based in the southern Russian city of Volgograd (formerly Stalingrad), has publicly supported Pig Putin as Russian leader and in the 2012 presidential election campaign was one of a group of top sports people allowed to officially campaign on his behalf.
US athlete Nick Symmonds speaks out against Russia's anti-gay law in Moscow
Runner dedicates silver medal to gay and lesbian friends at home during world athletics championships
Alec Luhn in Moscow
The Guardian, Thursday 15 August 2013
US runner Nick Symmonds became the first international athlete to denounce Russia's law against "gay propaganda" on the country's soil after winning a medal at the world athletics championships in Moscow.
Symmonds dedicated his silver medal in the 800m on Tuesday to his gay and lesbian friends at home and called for lesbian, gay, bisexual and transgender equality, news agencies reported.
"As much as I can speak out about it, I believe that all humans deserve equality however God made them," Symmonds told the Russian news agency R-Sport after the race at Luzhniki stadium.
"Whether you're gay, straight, black, white, we all deserve the same rights. If there's anything I can do to champion the cause and further it I will, shy of getting arrested.
"I respect Russians' ability to govern their people. I disagree with their laws."
In an article for Runner's World this month, Symmonds criticised the law passed in June banning the propaganda of non-traditional sexual relations among minors, but said he would not discuss the subject in Russia.
Symmonds's comments in Moscow could run foul of the broadly worded law, which prohibits statements maintaining the "equivalence of traditional and non-traditional sexual relations". Foreign citizens who violate the law in the media face a fine of 50,000 to 100,000 rubles (£975 to £1,950), arrest for up to 15 days and deportation.
The Investigative Committee, which accepts requests for information only via mail, could not be reached to comment on whether charges will be brought against Symmonds.
Following international calls for a boycott of the 2014 Olympics in Sochi, the International Olympic Committee sought "clarifications" from the Russian government on Friday about how the law would affect the games. Russia's interior ministry confirmed on Monday that the law would be enforced during the event.
Fifa has also asked the Russian authorities for clarification and more details on the law in the runup to the 2018 World Cup in Russia, the organisation said on Tuesday.
• This article was amended on Thursday 15 August to clarify the source of Symmonds' quotes.