IMF, EU push for less drastic deficit cuts

Published : 2012-12-30 21:10
Updated : 2012-12-30 21:10

PARIS (AFP) ― The International Monetary Fund and European Commission officials have encouraged France and its eurozone partners not to fixate on deficit reduction targets if it would exacerbate the bloc’s debt crisis.

The head of an IMF mission in France, Edward Gardner, urged officials in Paris last week to consider their 2013 budget targets “in a broader European context.”

The IMF and the EU Commission expect the French public deficit to amount to 3.5 percent of gross domestic product this year.

They do not believe France can reach its 3 percent goal, the eurozone limit, without additional measures that could aggravate an already tenuous economic situation.

“The credibility of the medium term orientation policy” was more important than a specific deficit target, Gardner told reporters.

Loosening the criteria would “be more effective, more credible in a coordinated fashion” across the 17-nation eurozone, he suggested.

In Portugal the public deficit fell at the end of the third quarter to 5.6 percent of GDP from 6.7 percent at the same point a year earlier, while neighboring Spain has promised to slash its deficit to 3 percent by 2014 from a blowout shortfall equal to 9.4 percent of output last year.

Germany expects its budget to be in balance this year, two years ahead of schedule, but IMF head Christine Lagarde has suggested that Berlin ease up a bit in its drive for healthy finances.

Christine Lagarde, managing director of the IMF. (Bloomberg)

“Germany ... and others ... can allow themselves to go a little more slowly than others in the push to straighten out their public finances,” Lagarde told the German weekly Die Zeit in comments published last week.

Her call echoed other European voices that are now arguing for greater emphasis on growth rather than austerity measures.

“The IMF is beginning to understand that the French situation has become dangerous,” economist Marc Touati at the ACDefi consulting group said.

Unemployment is climbing and the economy is still struggling, he pointed out.

The IMF was “trying to prepare public opinion” for missed government targets, Touati suggested.

“This is not really a new position,” Frederique Cerisier at the French bank BNP Paribas said of Lagarde’s recent remarks. She acknowledged however that some international institutions were “placing added emphasis” on the need to cut deficits more gradually.

On Tuesday, the EU’s “fiscal compact,” a hard-won step towards tighter economic coordination agreed as part of efforts to tame the debilitating debt crisis, takes effect.

Finalized in March, 25 of the 27 EU member states accepted a ‘balanced budget rule’ in the compact to ensure that governments would no longer run the massive budget deficits which drove the debt crisis and nearly sank the euro.

But as the European debt crisis drags on and economies flounder, the idea of allowing governments more time to straighten out their finances has gained ground.

European Economic Affairs Commissioner Ollie Rehn said last week that France needed more reforms rather than more austerity.

“Once you have a credible medium-term budget strategy, backed up by reforms, you can have a slower adjustment,” he told French daily Le Monde.

If a 3-percent French deficit remains a valid reference, “what needs to be taken into account above all is the structural budget adjustment effort which France is making with remarkable intensity,” the EU official said.









French officials nevertheless seem determined to stick by their targets.

They insist that the public deficit will be brought down to 3 percent of GDP This year from 4.5 percent in 2012, based on a 2013 growth estimate of 0.8 percent that economists consider overly optimistic.

Friday’s third-quarter growth figures gave them little comfort: official statistics revised growth over that period down from 0.2 to 0.1 percent.

French Finance Minister Pierre Moscovici wrote in the German business daily Handelsblatt that France had a duty to reverse years of budget deficits.

“In the past 30 years, France has not been able to pass a balanced budget.

State debt rose to an unacceptable 1.7 trillion euros ($2.2 trillion) in 2011.

It is our duty to reverse this,” Moscovici said.

On Friday he reaffirmed the goverment’s 2013 growth target.

Cerisier at BNP Paribas warned that France, which is now benefitting from exceptionally low borrowing rates, must be careful how it communicates to markets, if it wants to maintain its credibility.

But, she added: “The fact that we can begin to discuss all that is proof that countries have become more credible with respect to their economic targets.”

India rape victim's body cremated in New Delhi

Published : 2012-12-31 13:36
Updated : 2012-12-31 13:36

NEW DELHI (AP) -- A young woman who died after being gang-raped and beaten on a bus in India's capital was cremated Sunday amid an outpouring of anger and grief by millions across the country demanding greater protection for women from sexual violence.

The cremation took place during a private ceremony in New Delhi soon after the woman's body arrived in the capital on a special Air India flight from Singapore, where she died at a hospital Saturday after being sent for medical treatment.

The tragedy has forced India to confront the reality that sexually assaulted women are often blamed for the crime, forcing them to keep quiet and discouraging them from going to authorities for fear of exposing their families to ridicule. Police often refuse to accept complaints from rape victims, and the rare prosecutions that reach courts can drag on for years.

Security was tight, with no access to the public or media at the crematorium.

Prime Minister Manmohan Singh and Sonia Gandhi, head of the ruling Congress party, were at the airport to receive the body and meet family members of the victim who were on the flight.

Hours after the victim died early Saturday, Indian police charged six men who had been arrested in connection with the attack with murder, adding to accusations that they beat and gang-raped the woman on a New Delhi bus on Dec. 16.

New Delhi police spokesman Rajan Bhagat said the six suspects face the death penalty if convicted, in a case that has triggered protests across India and raised questions about lax attitudes by police toward sexual crimes.

After 10 days at a hospital in New Delhi, the victim, who has not been identified, was taken Thursday to Singapore's Mount Elizabeth hospital, which specializes in multi-organ transplants, but her condition worsened, with her vital signs deteriorating.

Following her death, thousands of Indians lit candles, held prayer meetings and marched through various cities and towns, including New Delhi, Mumbai, Bangalore and Kolkata, on Saturday night to express their grief and demand stronger protection for women and the death penalty for rape, which is now punishable by a maximum of life imprisonment.

Egypt’s president warns over dangers to economy

Published : 2012-12-30 21:13
Updated : 2012-12-30 21:13

CAIRO (AP) ― Egypt’s Islamist president used his first address before the newly convened upper house of parliament on Saturday to warn against any unrest that could harm the country’s battered economy, as he renewed calls for the opposition to join in a national dialogue.

In the nationally televised speech, Mohammed Morsi said the nation’s entire efforts should be focused on “production, work, seriousness and effort” now that a new constitution came into effect this week. He blamed protests and violence the past month for causing further damage to an economy already deteriorating from the turmoil since the fall of autocrat Hosni Mubarak.

In an alarm bell over the economy, the central bank announced soon after Morsi’s speech that foreign currency reserves ― which have been bleeding away for nearly two years ― are at a “critical” level, the minimum needed to cover foreign debt payments and buy strategic imports.

Morsi’s strongly worded address to lawmakers appeared aimed at sending a message to the mainly liberal and secular opposition not to engage in any new protests, depicting unrest as a threat to the priority of rebuilding.

All sides must “realize the needs of the moment” and work only through “mature democracy while avoiding violence,” Morsi told the 270-member upper house, or Shura Council. “We condemn and reject all forms of violence by individuals, groups, institutions and even from the nation and its government. This is completely rejected.”

He appeared to chide the opposition for not working with him.

“We all know the interests of the nation,” he said. “Would any of us be happy if the nation goes bankrupt? I don’t doubt anyone’s intentions. But can anyone here be happy if the nation is exposed to economic weakness?”

The mainly liberal and secular opposition accuses Morsi of concentrating all power on the Muslim Brotherhood, from which he hails, and other Islamists and steamrolling any alternative voices.

The main opposition groups have refused to join a national dialogue convened by Morsi, saying past talks have brought no compromise. They also stayed out of the president’s appointments last week of a few opposition figures to the overwhelmingly Islamist Shura Council, calling the move tokenism.

The bitterness between the two sides was inflamed by the crisis of the past month leading up to the referendum that passed the new constitution. Mass street rallies were held by both the opposition trying to stop the charter and by Morsi’s Islamist supporters determined to push it to victory. Clashes that erupted left 10 dead. The charter was approved by 64 percent, but with a low turnout of around 33 percent.

Civil society groups and the opposition also point to incidents of fraud in the vote they say have not been properly investigated.

Opponents fear the new charter will consecrate the Islamists’ power. The document allows for a stronger implementation of Islamic law, or Shariah, than in the past and has provisions that could limit civil rights and freedoms of minorities.

Morsi has depicted his national dialogue as a chance for all factions to have a voice in planning the next steps and drawing up key legislation to put before the upper house, including a law organizing parliamentary elections. So far, mainly Islamists and only a few small opposition parties are participating.

Liberal former lawmaker Amr Hamzawi said the president’s speech offered no new insights and failed to acknowledge significant opposition to the Islamist-drafted constitution. Hamzawi was among those who walked out in protest of the Islamists’ handling of the draft process earlier this year.

“We need binding mechanisms to amend the flawed constitution, guarantee that the legislative role of the upper house of parliament will be temporary and to ensure fair elections,” he said. “We will not enter into fraud elections each and every time.”

Morsi’s address aimed to set the tone as the Shura Council begins work on a slate of new laws. The upper house normally has few powers but it will now serve as the law-making body until a new lower house is chosen in national elections expected within a few months. Two thirds of the Shura Council members were elected in voting last winter, but few Egyptians bothered to vote, and Islamist allies of Morsi swept the chamber.

The ultraconservative Salafi al-Nour Party, the second strongest party after the Brotherhood’s political wing, suffered a blow this week when its founder and chief Emad Abdel-Ghafour resigned to start a new party, Al-Watan. He took with him around 150 members, including many who were elected to office. The fracturing of the party may bolster the Brotherhood in the coming elections.

In his speech, Morsi repeatedly said it was time to return to “production” and “work.” But he did not give details on an overall economic program, including crucial questions like how the government will tackle a crippling budget deficit or carry out expected tax hikes or reductions of subsidies.

The impending austerity measures are major concerns in a country where some 40 percent of the 85 million population live near or below the poverty line of surviving on $2 a day. Morsi’s government has requested a $4.8 billion loan from the International Monetary Fund to bridge the budget deficit, but talks are on hold after the government reversed plans for tax hikes this month.

Instead, Morsi denounced those who he said were spreading panic about Egypt’s economy, saying the country will “not go bankrupt.” He underlined that banks were healthy, after a rush to buy dollars the past week over fears of devaluation of the Egyptian pound.

“Those who talk about bankruptcy, they are the ones who are bankrupt. Egypt will never be bankrupt and will not kneel, God willing,” he said to a round of applause.

He directly blamed the past month’s violence for Standard & Poor’s downgrading this week of Egypt’s long-term credit rating one level this week to “B-,” six steps below investment grade.

Morsi presented the country’s foreign currency reserves, currently at $15 billion, as up slightly from last year, though he acknowledged they were still down dramatically from around $36 billion in 2010.

After last year’s anti-Mubarak uprising, foreign investment and tourism -- one of the country’s biggest money makers -- dried up. With fewer dollars coming in, the central bank has been spending reserves furiously to prop up the currency and pay for key imports. The slight uptick in reserves from last year is mainly due to hundreds of millions of dollars provided by the Gulf nation of Qatar.

France’s 75% tax rate on rich struck down

PARIS (AFP) ― France’s top constitutional body on Saturday struck down a 75-percent upper income tax rate, dealing a major blow to Socialist President Francois Hollande, who had made it his centerpiece tax measure.

The government vowed to push ahead with the tax rate, which would apply to incomes over a million euros ($1.3 million) a year, and propose a new measure that would conform with the constitution.

The tax rate had angered business leaders and prompted some wealthy French citizens to seek tax exile abroad, including actor Gerard Depardieu who recently took up residency in Belgium.

The Constitutional Council said in its ruling that the temporary two-year tax rate, due to take effect next year, was unconstitutional because unlike other forms of income tax it applied to individuals instead of whole households.

As a result, the council said, the tax rate “failed to recognize equality before public burdens.”

Though largely symbolic ― it would have applied to only about 1,500 individuals ― the Socialists said the tax rate was aimed at making the ultra-rich contribute more to tackling France’s budget deficit.

The move was welcomed by the French Football League which had expressed concern at the impact on top footballers such as Paris Saint Germain’s Swedish star striker Zlatan Ibrahomovic. LFP chairman Frederic Thiriez said if the measure had reached the statute book there could have been an “exodus of the best players” in the French league.

The 75 percent tax rate was a flagship promise of the election campaign that saw Hollande defeat right-winger Nicolas Sarkozy in May.

Prime Minister Jean-Marc Ayrault told AFP the ruling was a “symbolic but not severe censure” and pledged to ensure the measure was adopted.

“The government will propose a new system that conforms with the principles laid down by the decision of the Constitutional Council. It will be presented in the framework of the next Finance Act,” he said in a statement.







“We want to maintain” the measure “because it symbolizes the need for the effort to be more fairly shared,” he added.

The Constitutional Council also rejected new methods for calculating a separate wealth tax, striking down a provision that would have increased the amount of taxable revenues and capital gains.

Other new measures in the budget were approved, however, including an increase in some upper tax rates to 45 percent and the addition of capital gains to taxable income.

Finance Minister Pierre Moscovici told AFP the ruling “does not compromise” 

budget efforts and said the council had approved “the essential” of the government’s economic policies.

But government critics hailed the ruling as proof the Socialists are pursuing unfair tax policies.

“While the whole world watched us in dismay, Francois Hollande deceived the French into believing that ‘taxing the rich’ would be enough to solve our country’s problems,” said the head of the right-wing opposition UMP, Jean-Francois Cope.

“In reality, discouraging entrepreneurs and punishing the most wealthy until they leave our country inevitably puts the tax burden on the middle class. This moral error was sanctioned today.”

France is struggling to plug a 37-billion-euro hole in its public finances to meet its target of reducing the budget deficit to the EU ceiling of three percent in 2013.

The 2013 budget included 12.5 billion euros in spending cuts and 20 billion euros in new taxes on individuals and businesses.

Critics have said the new tax measures will stifle economic growth, with the French economy already expected to contract by 0.2 percent in the final quarter of this year.

The 2013 budget is based on a government forecast of 0.8 percent economic growth next year ― a figure many economists consider too optimistic.

Hollande has seen his popularity plummet in recent months as the economy stagnates and unemployment mounts.

S. Korea urges Japan to resolve wartime sex slavery

Published : 2012-12-27 16:55
Updated : 2012-12-28 16:07

Responding to Japan's renewed denial of forcing Korean women into sex slavery during World War II, South Korea once again urged Japan Thursday to seek "satisfactory" solutions for the victims.

Tokyo's Chief Cabinet Secretary Yoshihide Suga indicated earlier in the day that the newly launched Japanese government led by Shinzo Abe may review a 1993 statement issued by its then-Chief Cabinet Secretary Yohei Kono on the matter, saying it is "desirable for experts and historians to study" the issue, according to media reports.

The so-called "Kono statement," which acknowledged the forced recruitment of women into sexual servitude and apologized to the victims, has been considered a key element of the basis for relations between the two countries.

"The issue of the comfort women who suffered from Japan's imperial military should be resolved in accordance with the wish of the victims. It caused a tremendous amount of pain to them, and that is an undeniable historical fact," foreign ministry spokesman Cho Tai-young told reporters while answering a question about Seoul's stance on earlier remarks by the Japanese secretary.

"I call on Japan to remember such a fact and the indescribable suffering, and to find satisfactory solutions to meet their wishes," Cho said. 

In August, then Prime Minister Yoshihiko Noda and other senior officials made remarks that there is no documentary evidence showing Japan forced Korean women into sexual slavery during its 1910-45 colonial rule of the Korean Peninsula.

Historians say up to 200,000 women, mostly Koreans, were coerced into sexual slavery at front-line Japanese military brothels during Japan's 1910-45 colonial rule. Moreover, former sex slaves, who are euphemistically called "comfort women," have long testified to the hardships they were forced to endure.

South Korea has pressed Japan to provide compensation and extend a formal apology to the victims, but Tokyo refuses to do so, claiming all issues regarding its colonial rule were settled by a 1965 package compensation deal under which the two countries normalized their relations.

NYSE bell tolls for exchange that fell behind

Published : 2012-12-24 19:54
Updated : 2012-12-24 19:54

The name on the building will remain and the opening bell will continue to ring every trading day. But an era is about to end, sadly, with the agreement by the New York Stock Exchange to sell itself to IntercontinentalExchange Inc.

The contrasts between buyer and seller are stark, and go a long way to explain the deal’s backstory: The NYSE is the world’s largest stock market where the trading floor and colonnaded structure in the heart of Wall Street are symbols of American-style capitalism.

ICE, as the buyer is known, offers mostly electronic futures trading and clearing. For better or worse, the NYSE and its focus on a shrinking equities market is the past, and ICE, which specializes in the booming derivatives business, is the future. The wonder isn’t why the NYSE is being acquired by an arriviste, but what took so long.

Even if ICE keeps the NYSE and its floor intact, as it has promised NYSE officials and New York’s congressional delegation, it is a bittersweet moment for the Big Board. Its roots go back to 1792, when merchants gathered under a buttonwood tree on Wall Street to trade Revolutionary War bonds.

The exchange clung to its trading-floor traditions for too long, although in recent years it bravely tried to transform itself. ICE, based in Atlanta and only 12 years old, is barely out of diapers. What it lacks in sophistication it makes up for with a willingness to throw out the rulebook and experiment with new technologies and trading instruments.

The NYSE’s reputation had faded over the last decade for many reasons, including a scandal in which floor traders were accused of collusion. Former Chairman Richard Grasso’s $140 million pay package in 2003 highlighted the old-boy atmospherics.

Once regulators in 2005 made it easier for low-cost electronic markets to compete, the NYSE bought its own electronic facility and became a public company. In spite of that, market share declined, and today the NYSE does only 21 percent of the trading in its own listed stocks.

ICE, at any rate, isn’t interested in trading stocks. Instead, it’s looking to build up a global derivatives trading operation. To that end, it is eager to get its hands on the NYSE’s London-based futures market, known as Liffe, which is a dominant player in interest-rate futures.

Meanwhile, seismic changes are about to hit markets around the world. Regulations to enforce the Dodd-Frank financial reform law will require trillions of dollars’ worth of derivatives trades to go through clearinghouses, which hold collateral from both parties to a trade to reduce the risk that a default will harm the entire financial system.

ICE, already a player in the clearinghouse business, wants a bigger piece of the pie. It will face many competitors, and the strongest will be the CME Group Inc., the Chicago powerhouse that controls 90 percent of the U.S. futures market and is itself the product of a merger.

Just as exchanges are preparing for all of this, regulators must, too. It won’t be long before traders are more interested in getting a slice of risk, such as exposure to fast-growth startup companies or the liquefied natural gas business, and agnostic about the venue or the specific type of instrument.

They may not care much whether they buy or sell a stock, a future, an option or an exchange-traded fund, so long as they are able to get the risk exposure, and with it the anticipated returns.

In this converging world, an exchange that can offer platforms to trade and clear all those instruments might be the big winner. The U.S.’s fragmented regulatory system, in which the Securities and Exchange Commission oversees equities and the Commodity Futures Trading Commission regulates commodities, will have to adapt ― perhaps even merge, as well.

While they are at it, regulators also must get a better handle on so-called dark pools, the trading that takes place off-exchange among Wall Street banks and brokerage firms. The shift in trading away from regulated exchanges is another reason for the NYSE’s decline.

The disaggregation of stock trading makes it less likely that buy and sell orders will meet, resulting in reduced efficiency, higher trading costs and lower returns.

With such a proliferation of players, regulators must be careful to maintain a level field. It’s crucial that all exchanges and clearinghouses meet the same standards of transparency. They should also be required to make market data accessible to all.

It’s widely known that the SEC is more of a micromanager of stock markets than the CFTC is of commodities exchanges. The bond market, meanwhile, barely gets any regulatory attention. The system of checks and balances should be the same no matter what instrument is traded, or where.

For all its drawbacks, the NYSE remains the iconic Big Board ― the forum where the giants of the corporate world are listed. ICE, lacking a global brand, is buying one of the world’s marquee names. It should be careful not to tarnish it.

(Bloomberg)

The price of war with Iran

Published : 2012-12-24 19:57
Updated : 2012-12-24 19:57

WASHINGTON, DC ― One of the greatest challenges that U.S. President Barack Obama will face in his second term is Iran’s pursuit of advanced nuclear technologies. While a nuclear Iran would damage America’s strategic position in the Middle East, action aimed at forestalling Iran’s nuclear progress also carries serious strategic and economic consequences.

Armed with nuclear weapons, Iran would be better able to project influence, intimidate its neighbors, and protect itself. As a result, the United States’ allies in the region would need new security guarantees. But an increased American presence could provoke radical groups, while requiring defense resources that are needed to support U.S. interests in East and Southeast Asia.

Some of Obama’s conservative critics believe that he will allow Iran to develop an advanced nuclear program, provided that it stops short of actually building a bomb. But no American president would want their legacy to include allowing so unfriendly a regime to acquire such a dangerous weapon ― even if doing so meant avoiding greater strategic costs.

Indeed, Obama has repeatedly avowed that he will stop Iran from acquiring nuclear-weapons capability, rather than allow the country to develop its nuclear program and then rely on deterrence, as has been done with other nuclear powers. But such tough rhetoric might create a dilemma for Obama.

If Iran continues on its path toward nuclear arms, war may well become inevitable, whether instigated by Israel or the U.S., or provoked by Iran’s erratic foreign policy. Although the costs of a containment strategy would be significant, the costs of fighting a war would be higher.

Iran has threatened to seal the Strait of Hormuz ― through which 20 percent of the world’s internationally traded oil passes ― if it is attacked. While it would be difficult for Iran to seal the strait for long, if it managed to do so at all, it could easily make passage unsafe with attacks by small boats, sea mines, and missiles launched from coastal mountains.

Furthermore, Iran would likely strike the pipelines in the Arabian Peninsula that would otherwise allow oil to bypass the strait. And several strategically crucial oil-processing facilities are within range of Iranian missiles and special forces, including the Saudi oil-stabilization facility at Abqaiq, which processes seven million barrels daily.

Such a response would immediately cause oil prices to spike ― possibly to $200 per barrel in the short run. A protracted conflict could mean sustained prices of roughly $150 per barrel.

Given that Americans consume roughly 18.5 million barrels of oil daily, a mere $8 increase in the price per barrel would sap $1 billion per week from the U.S. economy, jeopardizing its already-fragile recovery. America has already financed two wars on credit, contributing to a significant fiscal deficit. Another war would eliminate what little hope there is of achieving debt stability without drastic ― and harmful ― spending cuts (or tax increases).

Surging oil prices would also threaten Europe and other major oil-importing countries, including China, India, Japan, and South Korea, thereby lowering or reversing their economic growth. Iran’s own economy, which depends heavily on oil exports, would also suffer.

The conflict would likely drag on, given that the definition of victory in this scenario is ambiguous. Would America win by destroying Iran’s nuclear facilities, even if reconstruction began immediately? What if Iran incited unrest in its neighbors, jeopardizing U.S.-allied regimes in the region? Is a settlement with Iran’s leaders feasible, or is regime change crucial to an American victory? (And, in the latter case, would the U.S. follow its pattern of ousting a Middle Eastern government without a succession plan?)

Regardless of the goal, the end result would be more troops and ships in the region, more resources appropriated to fight new or revitalized terrorist organizations, and more arms for allied countries, many of which are themselves unstable. America’s stake in the Middle East would grow, undermining its attempts to free up assets for its professed “pivot” toward Asia, where it hopes to balance China’s growing influence.

Living with a nuclear Iran would require expensive countermeasures and create significant risks. But going to war to impede Iran’s nuclear ambitions, and containing the subsequent chaos ― including oil-price spikes, increased regional volatility, and reduced American strategic flexibility ― would be far more costly. If Obama stands behind his first-term declarations, the world will pay a very high price.

By Geoffrey Kemp and John Allen Gay

Geoffrey Kemp is director of the Regional Security Program at the Center for the National Interest. John Allen Gay is a program assistant for the Regional Security Program at the Center for the National Interest. They are co-authors of the forthcoming book “War with Iran: Political, Military, and Economic Consequences.” This commentary was provided in partnership with the Carnegie Corporation. ― Ed.

(Project Syndicate)

Park and gender gap

Published : 2012-12-24 19:57
Updated : 2012-12-24 19:57

In October each year, the World Economic Forum makes public its Global Gender Gap Report, a report on its survey of gender equality in 135 countries. In the 2012 report, Iceland topped the overall rankings for the fourth consecutive year. It was followed by Finland and Norway.

What was the ranking for Korea, a country which has a separate Cabinet member for the promotion of gender equality ― the minister of gender equality and family ― and elected a woman to the presidency last week? It was abysmally low.

Korea ranked 108th in the survey, one notch lower than last year. The ranking was surely a shame for the 11th-largest economy in the world.

The Ministry of Gender Equality and Family also announces the levels of gender equality in four categories in 16 metropolises and provinces each year. According to the 2012 report, made public earlier this month, the overall gender equality index stood at 49.5 on the 0-to-100 scale, with 100 indicating no presence of a gender gap.

The category that had the lowest gender-equality index, 14.7, was the “representation” of men and women in the decision-making processes in the public sector. That was understandable, given that no women occupied the position of metropolitan mayor or provincial governor.

The woeful gender gap was confirmed in another report ― one made public by the Asia Society in April. Among the findings by the nonprofit organization based in New York was a yawning pay gap. The pay for women was equal to 51 percent of that for men, the lowest in Asia. The corporate executive posts taken by women in Korea accounted for a mere 1.9 percent of the total, the second lowest in Asia after Japan with 0.9 percent.

During the run-up to the Dec. 19 presidential election, the ruling Saenuri Party appealed to members of women’s organizations to help make its nominee, Park Geun-hye, the first woman present in the nation. It claimed she was better positioned to promote gender equality than her male rival from the main opposition party.

One woman co-chair of the party’s election committee said, in a meeting with representatives of women’s groups, that the election of a woman as president should be a starting point for a “revolution” in gender equality.

Still, few would say Park had overwhelming support from women’s groups. On the contrary, she failed to elicit support from one of the largest women’s organizations in the nation, Korean Women’s Association United, not to mention diehard leftist feminist groups. The association’s pre-election remarks on Park were caustic.

It said in a statement: “What remarks did you make and what action did you take when women were forced out of work for no good reason, when the laws on family was being revised, when laws on sexual violence, violence in family were being written, when women were demanding maternity and child-care leave?”

Korean Women’s Association United denounced Park for making no efforts to advance the interests of women, saying she had submitted not a single bill to that effect.

Park overcame the boycott of the association and other women’s groups and succeeded in electing herself to the presidency. But this does not mean that she can afford to ignore the demand for gender equality. Instead, she needs to strive to reduce the gender gap in pay, recruitment and political representation.

Discrimination against women cannot be condoned not just from the perspective of human rights but also for a practical reason. That means wasting much of the national resources that have been channeled into the education of women at a time when a higher percentage of high-school girls are admitted to colleges and universities than that of high-school boys.

Reducing the gender gap and, by doing so, encouraging women to engage in economic activities will be a policy Park needs to pursue actively. By pushing for equal pay and equal job opportunities, she can help solve the long-term problem of labor shortage ― a serious problem for a nation saddled with a population that is graying at a fast pace and a woefully low birthrate that shows no sign of coming near the replacement level.

A good opportunity to demonstrate her commitment to the cause of gender equality will come when she announces her Cabinet lineup. She is urged to nominate as many women as possible for the ministerial posts.

Mayan temple damaged in ‘apocalypse’ frenzy

Published : 2012-12-24 19:53
Updated : 2012-12-24 19:53

GUATEMALA CITY (AFP) ―Tourists flocking to Guatemala for “end of the world” parties have damaged an ancient stone temple at Tikal, the largest archeological site and urban center of the Mayan civilization.

“Sadly, many tourists climbed Temple II and caused damage,” said Osvaldo Gomez, a technical adviser at the site, which is located some 550 kilometers north of Guatemala City.

“We are fine with the celebration, but (the tourists) should be more aware because this is a (UNESCO) World Heritage Site,” he told local media.

Gomez did not specify what was done, although he did say it was forbidden to climb the stairs at the site and indicated that the damage was irreparable.

Temple II, which is about 38 meters high and faces the central Tikal plaza, is one of the site’s best known structures.

Friday marked the end of an era that lasted 5,200 years, according to the Mayan “Long Count” calendar. Some believed the date also marked the end of the world as foretold by Mayan hieroglyphs.

More than 7,000 people visited Tikal on Friday to see native Mayan priests hold a colorful ceremony and light fires as the sun emerged to mark the new era.

Critics complained that the event was really for tourists and had little to do with the Mayans. About 42 percent of Guatemala’s 14.3 million residents are native Mayans, and most live in poverty and endure discrimination.

The ancient Mayans reached their peak of power in Central America between the years 250 and 900 A.D.

Latin Americans rank high in happiness index

Published : 2012-12-23 19:37
Updated : 2012-12-23 19:37

Material wealth may not equate to happiness.

Gallup recently released a poll measuring positive emotions across 148 countries that showed that people in Singapore, which has one of the highest GDPs per capita, were the least happy out of the list. Developed countries Germany and France jointly ranked 47th on the chart.

The nations with the most upbeat attitudes were Panama and Paraguay with 85 percent of respondents answering “yes” to five questions on what positive experiences they had the day before.

Along with the top two countries, the chart’s upper ranks were dominated by the Latin American region including Salvadaor, Venezuela, Ecuador, Costa Rica and Guatemala, which are all low down on the U.N.’s Human Development Index.

By Park Han-na (hnpark@heraldcorp.com)

Japan’s trade deficit widens 37.9% in Nov.

Published : 2012-12-19 20:51
Updated : 2012-12-19 20:51

The Sinotrans Ningbo container ship sails out of a shipping terminal in Tokyo on Tuesday. (Bloomberg)

TOKYO (AFP) ― Japan’s trade deficit in November expanded 37.9 percent on-year to $11.3 billion, a record for the month, official data showed Wednesday, in a worrying sign for the world’s third-largest economy.

The trade shortfall came to 953.4 billion yen, marking the fifth straight month of deficit and a widening from a year-earlier deficit of 691.2 billion yen.

Overall, exports fell 4.1 percent while imports edged up 0.8 percent.

Shipments to key trader partner China tumbled 14.5 percent, marking another month where a Tokyo-Beijing territorial row that sparked a Chinese consumer boycott of Japanese goods appeared to weigh on trade.

Exports to Europe ― a key market for Japanese goods ― were off 19.9 percent as demand on the debt-strapped continent sagged.

The latest gloomy data for Japan’s economy comes just days after the conservative Liberal Democratic Party swept to an electoral victory at the weekend.

Hawkish LDP leader Shinzo Abe has pledged to boost infrastructure spending and pressure the Bank of Japan into more aggressive easing measures to reflate the economy.

The central bank starts a two-day policy meeting Wednesday with the yen tumbling in recent weeks on speculation that the BOJ will take some kind of policy action after it meets.

Last week, the bank’s quarterly Tankan survey showed confidence among Japanese manufacturers hit a near three-year low in the final months of 2012, adding to concerns about the already weak economy.

That came after separate data showed the economy contracted in the July-September quarter and possibly in the previous three months, signaling Japan may have slipped into a recession.

The Actual Vote Counting Hasn’t Started Yet in 2012 South Korean Presidential Election As Only the Electronic Counting Was Done

http://2012skpreselection.blogspot.kr/2012/12/the-actual-vote-counting-hasnt-started.htmlThe Actual Vote Counting Hasn’t Started Yet in 2012 South Korean Presidential Election As Only the Electronic Counting Was Done

More households struggling with heavy debts: data

The nation’s household debt has been rising at a slower pace recently, but the number of struggling families has increased, government data found Friday.

According to Statistics Korea, the Financial Supervisory Service and Bank of Korea, the average amount of household debt was 52.91 million won as of the end of March. 

The growth rate was 1.7 percent, a sharp decline from 12.7 percent last year. 

Of the nation’s total households, those with debt made up 64.6 percent, up 1.8 percent from the same period last year. 

The average financial assets of Korean households increased 5.8 percent to 314.95 million won this year. 

Their financial soundness also improved as the debt-to-asset ratio slightly decreased from 17.3 percent to 16.8 percent.

The annual report on household finances has been published for the third time since 2010, amid growing concerns over the risk underlying the high level of household debt in Korea. 

The country’s total household debt reached a record 937.5 trillion won as of the end of September, tantamount to more than 70 percent of the gross domestic product for last year. 

The growth pace of household debt has lately slowed down after the government and regulator introduced various policy measures aimed to curb the rise. The focus of such measures was mainly aimed at debt restructuring through banks for those with high risks of default. 

Also, each household’s disposable income relatively increased, the report said, with the financial debt ratio to disposable income falling 6 percentage points to 103.6 percent. 

The report showed, however, 68.1 percent of households consider the repayment of principal “a burden,” with nearly 26 percent saying it’s “an extreme burden.” 

As of the end of March, the ratio of households’ principal repayment to their disposable income came in at 17 percent, down from 18.3 percent in the tallied period, the report showed. 

By Lee Ji-yoon and news reports
(jylee@heraldcorp.com)

Spy agency official grilled over slander against Moon

Published : 2012-12-16 09:28
Updated : 2012-12-16 09:28

A female national intelligence agent appeared for questioning by police Saturday over allegations that she repeatedly made negative comments online about main opposition presidential candidate Moon Jae-in.

The 28-year-old official from the National Intelligence Service (NIS), surnamed Kim, is suspected of having put anti-Moon comments online over the past three months from an office in southern Seoul to influence the race.

With the presidential election only four days away, the allegation has emerged as a major campaign issue.

On Saturday, the intelligence agent, accompanied by her lawyer, entered the Suseo Police Station in southern Seoul at around 3:00 p.m., police officers said. The interrogation lasted about 4 hours.

"The police asked all the questions that needed to be asked and will decide whether to summon Kim again for more questioning after thoroughly evaluating her answers," an official from Suseo Police Station said.

Kim claimed innocence, saying, "I am falsely accused. I have not put anything online slandering Moon."

"It is regrettable that they are trying to drag me and the NIS, who have kept neutral, into the election," she told reporters as she left the police station.

The main opposition Democratic United Party, which raised the allegations in the first place, accused the NIS of interfering with the election by posting slanderous comments on the Internet about the liberal contender.

The NIS has denied the allegations, voicing "strong regret" over what it said was "malicious propaganda" against it and warning that it may take legal action. (Yonhap News)

Gunman kills 27, including 20 kids, at U.S. school

Published : 2012-12-15 10:06
Updated : 2012-12-15 11:13

School children wait for their parents at the Sandy Hook firehouse following a mass shooting at the Sandy Hook Elementary School in Newtown, Conn. on Friday, Dec. 14, 2012. (AP-Yonhap News)

A gunman killed 26 people, including 20 young children, at a U.S. school where his mother worked Friday as youngsters cowered in their classrooms and trembled helplessly to the sound of gunfire reverberating through the building. The mother was presumed among the dead.

The 20-year-old killer, carrying two handguns, committed suicide at the school, and another person was found dead at a second scene, bringing the toll to 28, authorities said.

The rampage in the northeastern state of Connecticut was at least the fourth big shooting spree in five months in the United States. It was by far the deadliest of the year and most heart-wrenching.

The children were among the youngest victims of a mass shooting in recent history. Frightened students who were rushed from the building by police were told to close their eyes.

``Our hearts are broken today,'' President Barack Obama said, wiping his eyes during brief comments to reporters in one of the most emotional public moments of his presidency. The children killed were just 5 to 10 years old, he said. ``They had their entire lives ahead of them _ birthdays, graduations, wedding, kids of their own.''

The national debate over the issue of gun control in America exploded once again. Obama said the U.S. had been ``through this too many times'' with recent mass shootings and that the country has to come together to take meaningful action, ``regardless of the politics.'' He did not give details.

Police shed no light on the motive for the attack. The gunman was believed to suffer from a personality disorder and lived with his mother in Connecticut, said a law enforcement official who was briefed on the investigation but was not authorized to publicly discuss it.

The attack at Sandy Hook Elementary School, just two weeks before Christmas, was the nation's second-deadliest school shooting, exceeded only by the Virginia Tech university massacre in 2007 that left 32 dead.

This time, the victims were far smaller. Photos from the scene showed students, some of them crying, being escorted by adults through a parking lot in a line, hands on each other's shoulders. Children told their parents they had heard bangs and, at one point, a scream over the intercom. Teachers ordered them to hide in closets or corners.

State police said 18 children were found dead at the school and two later were declared dead, and six adults were found dead at the scene. Police said another person was found dead at a second scene, leading to a total death toll of 28. Gov. Dannel P. Malloy said someone who lived with the gunman died.

A law enforcement official said the suspect, 20-year-old Adam Lanza, was dead from a self-inflicted gunshot wound, and he was the son of a teacher at the school. A second law enforcement official said the mother, Nancy Lanza, was presumed dead.

Adam Lanza's older brother, 24-year-old Ryan, of Hoboken, New Jersey, was being questioned.

The law enforcement official who said Adam Lanza had a possible personality disorder said Ryan Lanza had been extremely cooperative, was not believed to have any involvement in the rampage and was not under arrest or in custody, but investigators were still searching his computers and phone records. Ryan Lanza told law enforcement he had not been in touch with his brother since about 2010.

All three law enforcement officials spoke on the condition of anonymity because they were not authorized to speak on the record about the unfolding investigation.

The gunman drove to the school in his mother's car, the second official said. Three guns were found. Three guns were found _ a Glock and a Sig Sauer, both pistols, inside the school, and a .223-caliber rifle in the back of the car. 

The shooting shocked a tranquil community of 27,000 people in one of the wealthiest counties in the U.S., about 60 miles (96 kilometers) northeast of New York City. News items posted before the shooting on the website of the tiny newspaper, The Newtown Bee, lamented cracked headstones at a local cemetery and asked residents to ``share 2012 memories.''

Anguished parents came running Friday morning.

Robert Licata said his 6-year-old son was in class when the gunman burst in and shot the teacher.

``That's when my son grabbed a bunch of his friends and ran out the door,'' he said. ``He was very brave. He waited for his friends.''

Licata said the shooter didn't say a word.

Stephen Delgiadice said his 8-year-old daughter heard two big bangs, and teachers told her to get in a corner. His daughter was fine.

``It's alarming, especially in Newtown, Connecticut, which we always thought was the safest place in America,'' he said.

Theodore Varga said he was in a meeting with other fourth-grade teachers when he heard the gunfire, but there was no lock on the door.

He said someone turned on the public address system so that ``you could hear the hysteria that was going on. I think whoever did that saved a lot of people. Everyone in the school was listening to the terror that was transpiring.''

Also, a custodian went running around, warning people there was a gunman in the school, Varga said.

``He said, `Guys! Get down! Hide!''' Varga said. ``So he was actually a hero.'' The teacher said he did not know if the custodian survived.

Varga said he tried to kick out an air-conditioning unit in the window so the five teachers in the room could escape, but he only managed to knock out the wood next to it, and the space wasn't big enough for all of them to squeeze through.

He said he smelled gun smoke in the halls as he ran out to escape through a door. Varga then went around to help three other teachers climb out of the window of the first-floor room they had been in.

Mergim Bajraliu, 17, heard the gunshots echo from his home and ran to check on his 9-year-old sister, who was fine. He said she heard a scream come over the intercom at one point. He said teachers were shaking and crying as they came out of the building.

``Everyone was just traumatized,'' Bajraliu said.

Richard Wilford said his 7-year-old son, Richie, said he heard a noise that ``sounded like what he described as cans falling.''

The boy told him a teacher went out to check on the noise, came back in, locked the door and had the kids huddle in the corner until police arrived.

``There's no words,'' Wilford said.

Melissa Makris said her 10-year-old son, Philip, saw what looked like a body under a blanket as he fled the school.

The shootings instantly brought to mind episodes such as the Columbine school massacre in Colorado that killed 15 in 1999.

``I think as a society, we need to come together. It has to stop these senseless deaths,'' Columbine principal Frank DeAngelis said Friday.

Already this year, a gunman killed 12 people at a Colorado theater, and another gunman killed six people before killing himself at a Sikh temple in Wisconsin.

``We have endured too many of these tragedies,'' Obama said. He addressed reporters in the James S. Brady Press Briefing Room, named in honor of the former White House press secretary who was shot in the assassination attempt on Ronald Reagan in 1981. Brady and his wife, Sarah, have become activists for gun control measures.

``If now is not the time to have a serious discussion about gun control and the epidemic of gun violence plaguing our society, I don't know when is,'' one member of Congress, Rep. Jerrold Nadler, said in a statement.

Overseas, there was both shock and sympathy.

In a public statement addressed to Obama, French President Francois Hollande said he was ``horrified.''

British Prime Minister David Cameron said ``it is heartbreaking to think of those who have had their children robbed from them.'' Queen Elizabeth II sent a message Obama saying she was saddened by the ``dreadful loss of life.'' (AP)

N. Koreans jubilant over successful rocket launch Hundreds of thousands of North Koreans gathered in Pyongyang to celebrate the country's successful launch of what the international community sees as a long-range missile earlier this week, North Korea's state television showed Friday. (North) Korean Central Broadcasting Station, monitored in Seoul, broadcast live the celebratory mass gathering held in the Kim Il-sung Square starting at 11:00 a.m. The television said about 150,000 North Koreans gathered in the plaza and nearby areas. Early Wednesday, the North successfully fired off what it claims to be a rocket carrying a "working satellite," a launch which the international community has condemned as a test of rocket technology used to make long-range ballistic missiles. Neither North Korean leader Kim Jong-un nor his powerful uncle Jang Song-thaek were among the many top officials attending the event presided over by Mun Kyong-dok, a party secretary. "Accurately orbiting the Unha-3 carrier rocket, a science technology satellite, built with our own ability and technology, is a gift of loyalty to our party, army and comrade Kim Jong-il and a national feat that accomplished the very dying instruction of the general," Kim Ki-nam, a party head for the propaganda bureau, told the crowd. Another official also claimed in a speech during the event that Kim Jong-un visited the launch site and helped solve problems facing the rocket launch. Similar mass gatherings were organized following the country's previous rocket launches in April and in April 2009. The celebratory mood came as the country prepares to mark the first anniversary of late leader Kim Jong-il's death on Dec. 17. Since the beginning of this month, North Korean media outlets had been carrying commemorative content about Kim Jong-il, but now it has mostly been replaced by the triumphant celebration of the latest rocket launch. (Yonhap)

Moon all out to pull off last-minute upset

Published : 2012-12-14 20:22
Updated : 2012-12-14 20:22

Moon Jae-in of the liberal opposition Democratic United Party on Friday strived to carry, into the election day, his “upward momentum” against rival Park Geun-hye, canvassing in the conservative hotbed of Busan.

The DUP, meanwhile, revved up its assault on Park and her ruling Saenuri Party over illicit campaigning, accusing the conservative camp of attempting to sway voter sentiment through illegal methods.

Presidential candidate Moon Jae-in of the Democratic United Party greets voters during a campaign stop in Changwon, South Gyeongsang Province, Friday. (Yonhap News)

“It turned out that the Saenuri Party established an illegal office and manipulated public opinion in a systematic manner,” said Lee In-young, one of Moon’s campaigning chiefs, on Friday.

“The Saenuri’s act of kicking off an illegal campaign office is a defiance of democracy. The DUP shall not overlook it.”

The National Election Commission decided to indict a Saenuri official identified by his surname Yoon, for secretly running an online campaigning team to post comments in favor of Park.

“Through an all-night investigation, we have confirmed the illegality in Yoon’s organization,” an official of the election watchdog said Friday.

The DUP’s spokesperson Park Yong-jin also demanded that Park apologize, citing the apparent ties between the violator and the ruling party.

The party also accuses the National Intelligence Service of working for the incumbent administration and the Saenuri Party in the election, in violation of laws.

The police and the DUP raided the residence of an NIS employee on Tuesday, suspecting that she had covertly been spreading rumors against Moon. The conservative camp, however, denounced the probe as an exercise of coercion and an infringement of the employee’s human rights.

Moon’s aides also stepped out to counterattack Park, who held an urgent press conference on Friday morning and pledged to root out the DUP’s mudslinging.

“Park should have offered her apology over the scandals but instead, she decided to slander Moon in order to save her own skin,” said Rep. Chung Sye-kyun, the party’s senior adviser and former chief.

Chung also claimed that Moon had turned the tide and that he was gaining the upper hand over Park in their tight two-way race.

The detailed figures, however, may not be revealed as the law bans the announcement of new presidential poll results during the last week before the election.

While his camp officials stepped up their offensive, candidate Moon spent the day in South Gyeongsang Province, or the Yeongnam region, which is considered a key variable factor in next week’s race.

By Bae Hyun-jung (tellme@heraldcorp.com)

Yang, Kim prevent European dominance on first day of Royal Trophy

Published : 2012-12-14 19:47
Updated : 2012-12-14 20:34

BANDAR SERI BEGAWAN, Brunei- Yang Yong-eun and Kim Kyung-tae emerged the sole bright spot for the Asian side, preventing a total route by the Europeans, at the conclusion of the first day of the three-day Royal Trophy golf championship, Friday.

Europe prevailed over Asia 3 1/2 to 1/2, with Henrik Stenson and Gonzalo Fernandez-Castano shutting down Ryo Ishikawa and Bae Sang-moon at the 14th hole, up 5 with 4 holes remaining.

Yang and Kim emerged the sole bright spot for the Asian side out of the four matches in Friday’s foursomes, battling European captain Jose Maria Olazabal and Miguel Angel Jimenez to a draw and earning half-of-a-point for their side, as the day’s play drew to a close and the sun set over the South China Sea at The Empire Hotel and Country Club in Brunei.

Naomichi “Joe” Ozaki said he will rally his players Friday night to prepare them for Saturday’s day of play during a press conference following the game.

"I hope the half of a point Kim and I contributed can inspire our team tomorrow,” Yang said. “We have to inflict on them tomorrow the same sort of damage we suffered today.”

Yang Yong-eun (right) gives Kim Kyung-tae a high five after Kim drives in their ball on to the green of the par-five hole two for a birdie in one of the standout plays of the first day of the Royal Trophy at the Empire Hotel and Country Club in Brunei,Friday. Park Hae-mook / The Korea Herald

East Asia’s first major champion, Yang had confidence that his youthful teammates will not be intimidated by their older and more experienced European rivals.

But age might not have anything to do with it, even though Yang and Indian Jeev Milkha Singh are the only two members of the Asian side that are over 27 years of age.
Four of the younger players are making their Royal Trophy. The youthful Asian Team will be put the test this weekend during the three day tourney’s 6th edition this year.

“I have no worries about my Asian team-mates regarding age or experience – it seems players mature so much younger these days because the amateur and college systems are so good,” Yang said in a Royal Trophy press release on Friday at the start of the tournament.

Teammate Ryo Ishikawa is only 21, but he has already made a name for himself.

Ryo won the Order of Merit in the Japan Golf Tour, and two other members of the Asian team — Bae Sang-moon and Kim Kyung-tae, have done the same thing in their mid-twenties.

Although Wu Ashun of China, Kiradech Aphibarnrat of Thailand and Yoshinori Fujimoto of Japan are young, they all have tournament wins under their belt and have played well in big events.

The new generation of Asian players has seen what Yang and Choi Kyung-ju have achieved, and that makes them hungry for international competition which will help them achieve greater success, Yang said.

The question is whether the young Asian players competing in this year’s Royal Trophy have the right stuff to challenge top tier golfers in the future.

The Royal Trophy originated from the vision of legendary five-time Major winner, the late Severiano Ballesteros, who intended to build a highly competitive international tournament that can provide the same golf growth impetus the Ryder Cup lent to Europe in the 1980s and 1990s.

The “Spanish wizard,” Ballesteros was simply a sporting genius during his years on the Tour and amassed victories throughout the world.

By Philip Iglauer, Korea Herald correspondent

(ephilip2011@heraldcorp.com)